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Wednesday, 14 August 2024
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European Business News (EBN), 96-10-21European Business News (EBN) Directory - Previous Article - Next ArticleFrom: The European Business News Server at <http://www.ebn.co.uk/>Page last updated October 21 0900 CETCONTENTS
[01] Deutsche Telekom offering set at DM 25-30 a shareDeutsche Telekom said the price range for the roughly 500 million shares in its initial public offering next month would be between 25 and 30 Deutschemarks ($19.45) apiece.Telekom also said that it would offer private investors in Germany a discount of 0.50 marks a share on purchases of up to 300 shares. Telekom also said it expected to place between 62% and 67% of the initial public offering in Germany. 'We are firmly convinced that this price range very closely corresponds to the market's expectations,' chief executive Ron Sommer said in remarks released before a news conference. A final price for the share issue -- the largest ever in Europe -- is expected to be announced on November 16 or 17. The offer is open to subscriptions from October 22 to November 14. In addition to the approximately two-thirds of the issue being placed in Germany, 13% to 18% have been earmarked for the U.S., Canada and Latin America. A further 8% to 12% will go to Britain, between 5% and 8% to the rest of Europe and a similar amount to the Asia-Pacific. 'With the allocation of one-third of the tranche abroad we will underline the internationality of our flotation,' Telekom finance director Joachim Kroeske said. [02] Hashimoto starts negotiations to form governing coalitionJapanese Prime Minister Ryutaro Hashimoto began discussion with potential coalition partners after his Liberal Democratic Party fell just short of winning a parliamentary majority in general elections.Hashimoto's LDP on Sunday scored 239 seats, 12 short of the 251 it needed to govern alone in the 500-seat Lower House. The prime minister's party dominated Sunday's election on promises to overhaul the policy-making bureaucracy in the Japanese government. But even as the results of the election were coming in, Hashimoto was vague on just how those promises would be carried out. The results of the election mean all but certain re-election for Hashimoto as prime minister and a comeback for the Liberal Democratic Party, which governed Japan alone from 1955 to 1993 before falling amid a series of corruption scandals. The LDP was expected to ask its two minority partners in the outgoing government, Sakigake and the Social Democrats, to stay in the ruling camp while sending feelers to the new Democratic Party, a group of young, reformist lawmakers. The election result dashed LDP hopes of regaining the grip on power it has enjoyed for most of the postwar period. And it signalled more of the political turmoil that has plagued Japan since the 1993 election that put the LDP out of office. The election, held under a new system to clean up politics, had offered Japan the chance to end the lethargy caused by three years of unwieldy coalition wrangling. But analysts say the inconclusive result is likely to lead to more years of politics as usual and hamper efforts to reform the economy and bureaucracy. The messy outcome leaves many unanswered questions about economic policies as the nation, emerging from a lengthy slump, struggles to clear a path to future growth. 'We were not given a clear majority from voters, and we do not have a majority in the Upper House. Our stance is that we would welcome anybody or party (as coalition partners) that will agree with our policies,' said a disappointed Hashimoto. The horse trading, which could last for a week or more, started even before the final results were in. Serjiro Takeshita, Director of Japenese Equity at Deutsche Morgan Grenfell discusses whether or not there will be policy changes in the new Japanese government. [03] German metals union agrees to put 1977 wages on summit's agendaThe national board of IG Metall's metals and engineering union has agreed to discuss 1977 wages with the Gesamtmetall employers association in summit talks that resume today.Union president Klaus Zwickel stressed, however, that agreements must be reached on sick-pay, job security and vacation pay, among other benefits, before the talks can turn to wages. The early start to the 1997 wage round was a condition set by the employers union for continuing negotiations over a sick-pay dispute that broke off last Thursday. The planned early start to the 1997 collective bargaining process would mark the first time in the history of IG Metall that pay talks begin before the current contract runs out. The 1996 contract runs until the end of December. Gesamtmetall had demanded that any talks over sick pay be part of centralized national negotiations over a comprehensive package that also includes vacation and holiday pay, 1997 wages, job security and employer cost savings. IG Metall's national leadership had previously refused to widen the talks beyond the sick-pay dispute, but on Friday Zwickel said, 'The board of IG Metall has received the confirmation from the regional wage commissions that it can attempt to address the issue of a comprehensive package at a coordinated centralized level.' Room for negotiation, however, remains 'very narrow,' Zwickel added. The centralized bargaining marks a change from the traditional format of union wage talks in Germany, which are usually hammered out on a local level, although guided by national officials. Negotiations began Thursday in an extraordinary session to discuss the sick-pay dispute, and neither party was willing to back down from its position. They had subsequently adjourned the talks to discuss among them selves whether a continuation of the negotiations was possible. Gesamtmetall said Friday it won't accept any solution that will place new burdens on its members. Gesamtmetall quoted a spokesman as saying, 'We can't produce any cost increases if we want to stop the dramatic loss of jobs.' [04] Norsk Hydro earnings dropped 27% in the nine monthsIndustrial giant Norsk Hydro said its net profit slumped 27% in the nine months, largely because of lower prices for aluminium and petrochemicals.Hydro said its tax provisions were also higher in the quarter due to increased earnings from offshore oil and gas activities. Norsk Hydro added that it expected the poor market conditions to continue for the remainder of the year leading to a weak result for aluminium operations in the fourth quarter. Norway's largest listed company posted net profit of 4.191 billion kroner ($909 million) for the period. The earnings drop was due ‘to significantly lower earnings for light metals and petrochemicals,' the company said. Norsk Hydro noted that oil and gas operations showed a noticeable improvement on an operating level while earnings from its agricultural business declined moderately. The company suffered ‘a financial strain this year tied to the start up of an ammonia plant in Trinidad after a maintenance shutdown and an upgrade,' said Leiv Nergaard, Hydro's executive vice president and chief financial officer. 'A significant part of this loss represents the reversal of previously recorded unrealised gainsas well as other writedowns resulting from mark to market measurements of future contracts,' the company said. [05] Lilly and Neurocrine to sign drug-development pactNeurocrine Biosciences and drug maker Eli Lilly . are expected to announce today an agreement under which Neurocrine will receive as much as $74m to develop new drugs for obesity and Alzheimer's disease.According to the Wall Street Journal, the agreement provides important financial and scientific backing for new compounds Neurocrine is testing to treat those diseases, which are both linked with depressed levels of a hormone called corticotropin releasing factor, or CRF. Neurocrine is a four-year-old biotechnology company developing drugs for disorders of the central nervous and immune systems. One newly discovered molecule in the CRF family, urocortin, has drawn attention as a powerful appetite suppressant in rats. Urocortin was discovered by Neurocrine founder and chief scientist Wylie Vale and other researchers at the Salk Institute in San Diego. Neurocrine is identifying oral drug candidates that would activate the production of both CRF and urocortin in the brain. 'This approach, while still at an early research stage, would both reduce cravings for food and raise metabolism rates,' without inducing side effects such as anxiety and depression, said Gary Lyons, Neuroscience's president and chief executive officer. Research shows that this approach may also improve memory and cognition in Alzheimer's patients, by normalizing CRF levels in a different part of the brain. Lilly and Neurocrine are part of an increasingly crowded field of big and small drug companies racing to invent new, more powerful, weight-loss drugs. The contest burst into public view last year when Amgen Inc. acquired the rights to Leptin, which is now being tested in over-weight people. More recently, American Home Products and Interneuron Pharmaceuticals launched Redux, which is setting sales records for a new drug. [06] Eurotunnel is planning to cut its staff by 20%Franco-British Eurotunnel is reportedly planning to cut nearly one-fifth of its 3,500-member workforce.According to London's Sunday Telegraph newspaper the job cuts, will be announced Tuesday and are a part of the financial restructuring Eurotunnel agreed to earlier this month with its bank creditors. The job cuts are expected to save about £20 million a year ($31.7 million). Charges related to the staff reductions are expected to be low as many of the workers are on contracts. [07] German M3 money supply grows 8.4% in SeptemberGermany's M3 money supply expanded at a seasonally adjusted, annualized rate of 8.4% through September, decelerating from the 8.7% growth through August, in line with economists' expectations.The main factors helping damp M3 growth were a weakening of bank lending to the private sector and 'livelier' capital formation, the Bundesbank said. However, the Bundesbank noted that bank lending to the public sector as well as foreign cash transactions by domestic non-banks had an expansionary effect on M3 growth. Overall, bank lending to the German economy grew 6.3% in the six months through September, at a slower pace than 7.1% in August. Capital formation increased at an annualized 5.5% in the six months through September, up from 4.6% growth through August. In September alone, capital formation rose by 7.6 billion Deutsche marks, compared with 6.1 billion marks in August. Monetary capital formation acts as a counterweight to credit growth. M3 is calculated using the average level of the fourth quarter of 1995 as the base and consists of cash in circulation, sight deposits, time accounts under four years and most savings accounts. The M3 aggregate is the Bundesbank's preferred leading indicator of inflationary trends in Germany and the only monetary indicator for which it has an official target. [08] Rautaruukki shows 25% drop in nine-month profitsFinnish state-controlled steel group Rautaruukki posted a 25% drop in pretax profit for the eight months as weak economic growth and the winding down of steel inventories reduced demand.Pretax profit fell to 452 million markka ($98.3 million) on a 43% drop in sales to 8.49 billion markka. Looking ahead, Rautaruukki said 'demand for steel is estimated to grow somewhat during the latter part of the year.' Prices for steel products are also seen picking up somewhat. Moreover, the company said that problems that have plagued a domestic steel plant in Raahe should now be over and estimated that steel output in the final third of the year would be above year-earlier levels. Taken together, this means that the company expects turnover in 1996 to climb about 41% to around 13 billion markka. Pretax profit, meanwhile, is seen dropping about 31% to 658 million markka. From the European Business News (EBN) Server at http://www.ebn.co.uk/European Business News (EBN) Directory - Previous Article - Next Article |
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