![]() |
Compact version |
|
![]() |
![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() |
|
![]() |
Wednesday, 14 August 2024
![]() |
||
![]() |
![]() |
|
European Business News (EBN), 97-06-30European Business News (EBN) Directory - Previous Article - Next ArticleFrom: The European Business News Server at <http://www.ebn.co.uk/>Page last updated Mon, June 30 7:10 PM CETCONTENTS
[01] Chinese flag flies over Hong Kong after 156 years of colonial British ruleChina resumed control of Hong Kong early at midnight Hong Kong time (1800 CET), ending 156 years of British colonial rule.The peaceful handover of power was marked at formalities that brought together the heads of state from the U.K. and China. It was witnessed by foreign ministers from around the world and thousands of reporters, all the while covered live on television worldwide. A ceremonial lowering of the British Union Jack and the raising of the red Chinese flag was the official acknowledgement that sovereignty had switched. A terse diplomatic telegram dispatched to London from Governor Patten read simply, ''To the Secretary of State. From the governor of Hong Kong. I have relinquished the administration of this government. God Save the Queen. Patten.'' Britain's Prince Charles gave a short speech and was followed to the dais right after midnight by Chinese President Jiang Zemin. ''This important and special ceremony marks a moment of both change and continuity in Hong Kong's history,'' the Prince of Wales told the assembled dignitaries just before midnight. ''Hong Kong has shown the world how East and West can live and work together.' With a simple ceremony and a switch of flags, Hong Kong was passed from the dwindling British Empire to the world's most populous nation. And in a moment, the territory's 6.3 million people ceased to be British subjects and became citizens of a new entity called the Special Administrative Region of Hong Kong. The Chinese flag finished its ascent up the flagpole eight seconds after midnight. 'China will tonight take responsibility for a place and a people which matter greatly to us all,' Prince Charles said in a speech shortly before the Union Jack came down in front of a global array of VIPs gathered in a hall overlooking Hong Kong harbour. 'We shall not forget you, and we shall watch with the closest interest as you embark on this new era of your remarkable history.' The brief handover ceremony at the convention centre followed a day of parades, speeches, performances and banquets, followed by a night sky bursting with British fireworks over Victoria Harbour. Rain-drenched spectators joined bagpipers in a spirited, emotional rendition of 'Auld Lang Syne' that resonated across the coastline. [02] Queen Elizabeth II stresses Hong Kong's future depends on implementation of 1984 Sino-British accordBritain's Queen Elizabeth, in a message marking Hong Kong's handover to China, stressed on that the territory's future success depended on faithful implementation by Beijing of a 1984 Sino-British agreement.The queen, in a farewell message to be read by Prince Charles who hands back the colony at midnight (1600 GMT) today, also paid glowing tribute to the people of Hong Kong. 'We have no doubt that Hong Kong people can run Hong Kong, as the Joint Declaration promises, and that faithful implementation of the Joint Declaration is the key to Hong Kong's continued success,' she said. The Joint Declaration promises that Hong Kong will retain its capitalistic way of life for at least 50 years after Communist China takes over. The queen said that a shared legacy of friendship, trade and investment, culture and history between Britain and Hong Kong meant she and the British government would take a close interest in the territory's affairs. 'We are confident that the ties between us will not only endure but will continue to develop. In a shrinking world Hong Kong's role as Europe's gateway to Asia and Britain's role as Asia's gateway to Europe will reinforce the bonds between our two societies,' she said. 'For all these reasons my government and I will continue to take the closest interest in Hong Kong and in its development. For many years to come, the Hong Kong connection will command our attention.' [03] Politicking is the order of the day in Hong Kong's final hours before the handoverIn the last hours before its handover to China at midnight tonight, Hong Kong bustled with dignitaries from every corner of the world who were calling for its continued success as the trappings of Britain were pulled down.In the markets, amid a local holiday, offshore trading of Hong Kong stocks gave mixed signals about whether investors will continue to build on the bullishness seen during last Friday's rally and record close for the Hang Seng Index. Jardine Matheson Holdings, a Hong Kong company listed in Singapore, for example, ended trading Monday with a slip of 25 cents to US$7.10. Other shares in the group ended the session higher. The Hong Kong dollar stood virtually still, in activity that the few bankers manning their trading desks described as nearly non-existent. The U.S. dollar was quoted at HK$7.7480. ''It's very dead today, you could say that. There's nothing going on. I'm just told to square positions that need squaring,'' said a foreign exchange dealer on a European bank's treasury desk. Locals and tourists meanwhile packed Hong Kong's streets and shopping malls, finding many harbour-front spots and hotels off limits due to intensive security. Pleasure boats bobbed around the choppy waters of Victoria Harbour, drawing up alongside patrolling British warships that will retreat just after midnight from Hong Kong with the vessel carrying Prince Charles and Governor Chris Patten. British colonial insignias were taken off Hong Kong government buildings Monday and Chinese flags went up around town welcoming the new sovereign, as kilted Scottish troops went through British ceremonies for the final time. Politicking, meanwhile, was the main order of the day for the dignitaries in Hong Kong. The Chinese side stressed its role as the incoming sovereign, with officials from the Western powers aligned with the U.K. commenting that they will be watching how China executes a promise to respect the status quo. Madeleine Albright, the U.S. secretary of state, and Robin Cook, the British foreign secretary, each reiterated their opposition to China's post-handover plans to replace the legislature and to send a wave of 4,000 People's Liberation Army troops into Hong Kong early Tuesday. An official Chinese news report Monday that the PLA had been ordered to take up position immediately at the midnight (1600 GMT) handover threw into doubt the British announcement last week that the Chinese military forces are expected to begin later, arriving by land, sea and air after 6 a.m. local time Tuesday (2200 GMT Monday). 'Signals are very important,' said Albright after meeting British Foreign Secretary Cook. 'This is not the best way to get started.' Tung Chee-hwa, who will be sworn in as Hong Kong's first ethnic Chinese leader just after midnight, spent his day meeting with a number of foreign dignitaries, including British Prime Minister Tony Blair, the U.S.'s Albright and a number of other foreign ministers. 'We want the right type of relation that guarantees Hong Kong's freedom and prosperity,' Blair said after his Tung meeting, declining to reveal specific details of the talks. There is a 'desire on both sides for a new beginning,' said the prime minister. Blair described Tung's reported promise to schedule new legislative elections next May as 'a step forward.' China's Foreign Ministry Spokesman Shen Guofang told reporters that 'Hong Kong's return to China is in the interests not only of the entire Chinese nationality, but it is also very significant for the future peaceful reunification of Taiwan and the mainland.' His bosses, President Jiang Zemin and Prime Minister Li Peng, meanwhile, became the first leaders of modern China to set foot in Hong Kong. They arrived at Kai Tak International Airport late afternoon Monday, about 30 minutes after Governor Patten ceremoniously left his Government House mansion for the last time. As a light drizzle fell, Britain's farewell ceremony kicked off with the royal yacht Britannia as the backdrop on the harbour. After the ceremony's conclusion a farewell banquet will be held. Also later in the evening, Jiang and Li are set to meet with the British prime minister, Blair. The one-hour summit plan has fuelled hopes that Sino-British relations might be on the mend now that the U.K. has a new government in place and colonial rule over Hong Kong is ending. Once sovereignty officially switches at a midnight flag ceremony, protests are likely to get underway at Hong Kong's Legislative Council building. Mostly Democratic Party members, led by Martin Lee, will be protesting China's plan to disband the current 60-member council and replace it with hand-picked one. Lee told reporters that he expects protests to proceed without incident. 'We don't expect any problems. But we can't exclude the possibility that the door will be closed on us because we aren't legislators any more, although our passes were issued until 1999,' said Lee. 'If the doors are closed, I'm not going to break it opened. But a 30-foot ladder will be there and I'll climb up the balcony and make my speech, first in Chinese, then in English,' according to the legislator who will lose his elected seat when the Provisional Legislature is sworn in after midnight. When asked about the chance he'll be arrested, Lee replied: 'I'm going to hope that Mr. Tung has better judgement than that...I have a feeling there will be an anticlimax so that the ladder will not be used.' James T. Areddy, AP-Dow Jones, Hong Kong [04] US home sales, consumer spending and manufacturing reports boost economyNew home sales and consumer spending both perked up in May, the U.S. government reported, suggesting that second-quarter economic growth is slightly stronger than analysts had expected.Also announced today, the Purchasing Management Association of Chicago index of area business activity rose to 61.5% in June on a seasonally adjusted basis from 56.8% in May. In May, the index fell to 56.8% from 57.2% in April. A reading above 50% indicates expansion in the manufacturing sector and a reading below 50% indicates a contraction. The Chicago Purchasing Management Index, often viewed as a precursor to the national report, delivered a major blow to markets. The index rose much more sharply than expected. Renewed worries about inflation pressures have sparked a sharp deterioration of the interest-rate backdrop, which is pressuring stock prices leaving major market averages lower in today's session. Prices of U.S. Treasurys were also lower on the release of unexpectedly strong figures for U.S. home sales and midwest manufacturing. Sales of new, single-family homes, jumped 7.1% in May to an 825,000 seasonally adjusted annual rate, the Commerce Department reported. The increase, the biggest in six months, nearly erased a revised 8.1% decline in April new home sales. The April drop previously was reported as 7.7%. The department also reported that personal income rose 0.3% in May, matching a 0.3% increase in personal spending. While the economy has undoubtedly slowed from the sizzling 5.9% growth rate in the first quarter, it is beginning to appear it has a little more punch than many analysts previously believed, said Stuart Hoffman, chief economist at PNC Bank Corp. ''The economy still has a lot of life in in,'' Hoffman said. ''Some had been looking for GDP at around 1% in the second quarter. That would be hard to square. It now looks like it will be more in the 1.5% to 2.0% range,'' he said. The new numbers, nonetheless, will do nothing to change the near unanimous view that the Federal Reserve policy makers will hold short- term interest rates steady when they meet later this week, Hoffman added. The Fed in March bumped up short-term rates in order to slow the economy down and ward off the possibility of higher inflation. Since then, the economic growth has decelerated and inflation has been virtually non- existent. [05] France suffers biggest monthly unemployment rise since 1993France has suffered its biggest monthly rise in the number of jobless since October 1993 with an overall increase of 1.1%.Despite the rise, the jobless rate remained steady at 12.5%, the same as the revised figure for the month of April, officials said. The latest unemployment rate reflects the jobs situation before the new leftist government overturned the conservatives in parliamentary elections on June 1. Socialist Premier Lionel Jospin was voted in on the promise to cut France's post-war record unemployment rate, then at 12.8%. The national statistics institute in March conducted an annual review of its job surveys and revised unemployment rates retroactively to account for changes in its statistical calculation. Under the previous methods, the unemployment rate had been at 12.8% since February. In June, the official figures for April were revised to 12.5%. The method for calculating the number of jobseekers remains the same. France now has around 3,113,00 unemployed, a rise of more than 32,000 on the month of April, the ministry said. It is 'the biggest increase since October 1993,' Labour Minister Martine Aubry said. [06] NationsBank agrees to acquire Montgomery Securities for $1.2 billionNationsBank said it agreed to acquire closely held investment bank Montgomery Securities for $1.2 billion.The U.S. bank's planned purchase of Montgomery Securities would be the latest in a series of purchases of investment banks by large commercial banks since federal regulations were loosened last year. Montgomery will retain substantial autonomy, the two companies said, and will become part of NationsBanc Capital Markets, a subsidiary that will be renamed NationsBanc Montgomery Securities. Thomas Weisel, chief executive of Montgomery, will become chairman of the unit. NationsBank said it will pay the $1.2 billion in a combination of 70% cash and 30% stock. The company expects the transaction, subject to regulatory approvals, will close in the fourth quarter. NationsBank said it will create a $100 million pool for the long-term retention of key Montgomery non-partner personnel. The pool will be funded 50% by stock options and 50% by cash. [07] UK panel says Barclays need not comment on NatWest speculationBritain's Takeover Panel, which polices City takeovers, has said that Barclays does not have to comment on speculation it was planning a bid for National Westminster Bank.'As far as we are concerned no party has incurred any obligation to say anything under the (takeover) code,' Takeover Panel director general Alistair Defriez said. NatWest had asked it to make Barclays clarify its position. NatWest made the plea because it said the speculation, which first emerged just over a week ago, was damaging its business. Rumours were circulating since it emerged NatWest approached Abbey National to discuss merging, but was rebuffed. Barclays has consistently declined to comment on the speculation. Analysts said it was avoiding making a public statement as it does not wish to be held 'offside' in the jargon of takeovers. If any company makes a statement -- for example denying interest in another -- then the Takeover Panel will deem it unable to then make a bid for between three and 12 months, depending on the circumstances. But analysts said the panel can also say a company is 'offside' if it decides it has had anything to do with fomenting City rumours while at the same time declining official comment. [08] JCI says talks with Lonrho are continuingJCI, a South African diversified mining company, said its executives are still in discussions with counterparts at Britain's Lonrho about ''possible transactions,' after earlier declaring an end to talks of a merger.JCI issued a statement confirming that merger negotiations between itself and Lonrho have been 'discontinued.' However, the company added that ''it has been approached to discuss other possible transactions that could unlock value for shareholders in both JCI and Lonrho.' Marc Gonsalves, a JCI spokesman, said it would be ''premature'' to provide any greater detail on the discussions still taking place between the two companies. Gonsalves said the company has no plans to make any further announcements regarding relations with Lonrho in the near term. A source close to the talks between JCI - the world's sixth largest mining house - and the U.K.-based conglomerate said that, with the plans of an expensive merger rejected, Lonrho has made a new approach to JCI focusing more on a spread of possible asset sales between the two. Initial attention is likely to focus on the South African coal operations owned by both companies. JCI and Lonrho own coal mines on adjacent properties and a union of these operations would create a major force in the global market with an export capacity of 18 million tons a year. There is also the potential for JCI to boost its already considerable gold assets by acquiring Lonrho's gold interests in the region, which comprise a 45% stake in Ghana's Ashanti Goldfields and six small producers in Zimbabwe. [09] Unilever sells John West Foods to HeinzAnglo-Dutch consumer products group Unilever said it's selling its U.K. food unit John West Foods to H.J. Heinz of the U.S. Unilever didn't disclose financial details of the transaction.John West, based in Liverpool, imports, distributes and markets canned products, notably fish. Unilever said it decided to sell John West because its products are no longer considered to belong to the group's priority categories. Unilever expects that John West will be able to develop itself better under the ownership of a company which considers conserved foods a core activity, the company said. In 1996 John West realized sales of 390 million guilders, and employed about 88 people. Unilever noted that John West's activities in Australia, New Zealand and South Africa aren't included in the transaction and will remain part of Unilever. [10] Boeing still faces E.U. scepticism over mergerA likely offer by US aircraft maker Boeing to alter its controversial 'sole- supplier' agreements with three U.S. airlines in an attempt to knock the last major obstacle to its $14 billion buy of McDonnell Douglas won't be sufficient to sweeten E.U. regulators to the merger, EU sources have said.'We have indications that's what they're going to do and it's not enough,' the sources, who requested anonymity, said. While the Commission's main concern with the merger appears to be the sole- supplier accords, it has also clearly identified a range of other consequences of the merger that could boost Boeing's already dominant market position. One prime area of contention is the combined strength the aircraft makers would have in research and development, which the E.U. says would be particularly evident in the spillover on Boeing's civilian business from McDonnell's military activities. E.U. sources also mentioned the increased clout the companies would have in the areas of 'patents and licensing' because of Boeing 'acquiring the know-how of McDonnell Douglas.' The Commission hasn't yet received any formal notification from Seattle- based Boeing that it will modify its exclusive supplier pacts, but officials say it heard the U.S. aircraft giant is planning changes. Boeing has unti 2200 GMT to submit its modifications in writing to the Commission. In the U.S. meanwhile, the Federal Trade Commission is due to issue its ruling on the merger. Sources close to the case say it isn't expected to call for any major changes to the transaction as planned. In Europe, however, EU antitrust chief Karel Van Miert has repeatedly threatened to block the merger. Van Miert's main bone of contention is that Boeing's three agreements - which call for AMR Corp.'s American Airlines, Delta Air Lines and Continental Airlines to buy planes only from Boeing over the next 20 years - demonstrate that the US aircraft giant is abusing its dominant market position and squeezing EU rival Airbus Industrie out of the lucrative American market. [11] El Al says that 1997 loss will be $35 million, much less than expectedEl Al Israel Airlines expects to end 1997 $35 million in the red, considerably less than management's earlier forecast of a $45 million loss.Last year El Al lost $83 million. Spokesman Nachman Kleiman denied a report in the daily Haaretz that passenger reservations for July and August were weak. 'That's not true,' he said. 'Revenues and profit have improved since May and we now believe the airline will lose $35 million instead of the $45 million we originally thought,' he said. Kleiman also denied the company had decided to halt service to Sofia and was examining cancelling routes to Bucharest and Barcelona. 'We are stopping flights to New Delhi but no decision has been taken at this time regarding other destinations,' he said. In the wake of Federal Express Corp's inauguration of direct flights to Israel, he said El Al would launch a new cargo service on July 1. El Al's 'Air Cargo Express' will provide guaranteed direct delivery overnight for cargo of up to 500 kg (1,100 lb) between Israel and Rome, Paris, London Frankfurt and Amsterdam. Kleiman said El Al was looking into the possibility of bringing in strategic partners for the service. [12] Scottish & Newcastle pretax profit jumps 20%U.K. brewing and leisure group Scottish & Newcastle reported a 20% rise in full year pretax profit to £372 million in 1997. The previous year's profit of £156.9 million included an exceptional charge of £150.8 million for reorganisation costs.The results marked the first full year contribution from Courage, which was acquired in August 1995, although the addition wasn't enough to offset declining beer volumes. S&N Chairman Sir Alistair Grant said, 'in the first half of the year we saw a loss of market share with our beer volumes down 3% compared to the market decline of 1%. In the second half of the year our beer volumes fell by 1.5% in a market down by 1%.' But S&N's integration of Courage has provided costs savings of £46 million since August 1995, with £37 million in 1996/97 and a further £24 million expected in 1997/98. Operating profit for the division increased to £177 million from £121.4 million in the previous year. S&N Finance Director Derek Wilkinson pointed to economic recovery in the southern half of the country as a driver of Courage's performance, adding that although the northern half 'is coming back', its recovery is at a slower rate. S&N's Fosters lager increased volumes by 12% and has passed the major sales level of 2 million barrels of annual sales, while, in the premium lager segment, Kronenbourg and Beck's have been star performers. John Smith's remains number one in the ale market with almost 200,000 barrels sold, and 2% ahead of its nearest rival in market share. Looking at the group as a whole, the Finance Director said capital spending 'will increase this year, particularly in retail,' revealing that S&N plans capital expenditure of £300 million in 1997/8 with around half spent in retail. Capital expenditure across the group hit £270.1 million for the year ended April 27, 1997. [13] Corporate and Economic BriefsThe Purchasing Management Association of Chicago index of area business activity rose to 61.5% in June on a seasonally adjusted basis from 56.8% in May, according to a press release. In May, the index fell to 56.8% from 57.2% in April. A reading above 50% indicates expansion in the manufacturing sector and a reading below 50% indicates a contraction.Dutch steel manufacturer Hoogovens said it has sold its 50% stake in Dutch subsidiary Brabant Alucast to a non-listed Italian steel company Stampal. The Dutch company didn't say how much it expects to make on the deal nor why it's divesting the interest. Brabant Alucast will be merged with a new firm, Euralcom. Denmark's first quarter 1997 gross domestic product fell a seasonally adjusted 0.1% from the previous quarter according to figures released by Danmarks Statistik, the national statistics agency. In non-seasonally adjusted terms, Denmark's first-quarter GDP rose 2.4% from the same quarter a year earlier. Both figures were below market expectations. Local economists had expected GDP to post a 0.7% rise from the previous quarter and also to increase 3.6% from the first quarter of 1996. Finland's total output of goods and services increased by 8.0% in April 1997 from the same month a year earlier, Statistics Finland said. After adjustment for seasonal variation, output in April was 0.5% higher than in March and all branches of industry saw output growth. Beiersdorf, the German specialty chemicals group, said its group sales rose 6.6% in the first five months of the year. Beiersdorf didn't, however, specify the total revenue figure for the period. From the European Business News (EBN) Server at http://www.ebn.co.uk/European Business News (EBN) Directory - Previous Article - Next Article |
![]() |
![]() |
![]() |
![]() |
![]() |