Visit the Cyprus News Agency (CNA) Archive Read the Convention Relating to the Regime of the Straits (24 July 1923) Read the Convention Relating to the Regime of the Straits (24 July 1923)
HR-Net - Hellenic Resources Network Compact version
Today's Suggestion
Read The "Macedonian Question" (by Maria Nystazopoulou-Pelekidou)
HomeAbout HR-NetNewsWeb SitesDocumentsOnline HelpUsage InformationContact us
Thursday, 28 March 2024
 
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), 97-03-05

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 5 1700 CET


CONTENTS

  • [01] Price of gold tumbles on news Switzerland plans to revalue and sell gold reserves
  • [02] Germany's economic growth weakened in the fourth quarter
  • [03] Credit Suisse swings to a loss on restructuring charges
  • [04] B.A.T posts disappointing earnings after heavy environmental insurance claims in the U.S.
  • [05] Thomson-CSF swings to net profits of $131.2 million
  • [06] Chirac 'shocked' by Renault method in closing Belgian factory

  • [01] Price of gold tumbles on news Switzerland plans to revalue and sell gold reserves

    The price of gold has dropped in European trading on news that Switzerland will sell the precious metal over ten years.

    Swiss National Bank Chairman Hans Meyer said the sales, worth 'several billion' Swiss francs, would not have to disrupt the gold market and had no implications for the stability of the Swiss franc.

    He said the planned foundation would be financed with a substantial proportion of valuation gains achieved on SNB gold reserves, now valued at around 12 billion Swiss francs. It was news that the official gold reserves would be revalued that sent gold tumbling on the international markets.

    Meyer said that a realistic, though cautious view of the situation would indicate that 'several billion francs could be transferred in gold to the foundation.' That would allow investments yielding several hundred million francs a year annually.

    The foundation would invest the capital at its disposal and use the income to achieve its objectives, he added.

    The foundation would manage these reserves and Cabinet envisages that several hundred million Swiss franc profit a year could stem from the gold management. The profits would be distributed evenly between domestic and foreign beneficiaries.

    The money would help 'victims of poverty and catastrophes, of genocide and other severe breeches of human rights such as, of course, victims of the Holocaust,' he said.

    Switzerland has been under intense international pressure to pay compensation to the heirs of Nazi victims for assets they claim were never returned by Swiss banks.

    Several investigations are under way to determine the amounts unaccounted for and to re-examine the role of Switzerland as an island of democratic neutrality in the middle of a continent controlled by Nazis and fascists in World War II.

    [02] Germany's economic growth weakened in the fourth quarter

    Germany's economic growth showed a 'clear weakening' in the fourth quarter, the Federal Statistics Office said in reporting that gross domestic product in the final 3 months of 1996 was unchanged from the third quarter.

    In addition, Germany's industrial output fell in January, but the decline was due to a dramatic 25% slump in construction activity. Stripping out the building sector, industrial production actually rose in the month.

    The government was quick to try to reassure the markets that the fourth quarter GDP data 'in no way means new growth weakness' and that the country would meet both its economic growth goal for the year and the Maastricht criteria for European monetary union.

    The Germany Economics Ministry said that 'over the course of 1997, the economic recovery tendency will continue again much more,' amid a host of favourable economic conditions in Germany. The new data doesn't threaten the basis for its 1997 forecasts, it added.

    The government expects GDP to grow 2.5% in 1997. On an annual basis in the fourth quarter, GDP grew a real 1.9% from the year earlier.

    Economics Minister Guenther Rexrodt said stressed that 'it's important that the spark of improved demand and production perspectives now spread more to domestic investment...This is an essential precondition for the creation of jobs and finally for domestic demand to gain momentum,' he said.

    Meanwhile, industrial output slid 1.7% in January from December, largely because of a 25% slump in construction activity. The German Economics Ministry said that drop resulted from 'temporarily effective influences' such as unusually cold weather during the month. However, the ministry also said that there was also a general weakness in the building sector.

    Adding to the construction slump was the fact that many construction projects in eastern Germany were completed in 1996 to take advantage of large write-off allowances for construction investments there that were reduced on Jan. 1, 1997, the ministry added.

    Stripping out the construction component, however, output actually rose 1.3% on the month. On an annual basis, production rose 1.7% from the year earlier.

    In western Germany, January production fell by 0.5% on December and was up 1.2% on the same month a year earlier.

    Output in the former communist east, however, was down a sharp 13.4% but up 2.7% on a year ago. Building in the region slumped by a staggering 35.7%.

    The two sets of data were released just one day before February unemployment figures are scheduled to be disclosed. Economists are expecting that data to show another post-war record of 4.32 million on a seasonally-adjusted basis, up about 20,000 from January.

    Slow growth and rising unemployment are boosting government outlays while cutting tax revenues. The squeeze fuels fear that Germany won't meet the guidelines to qualify for the planned European single currency, a prospect that could scrap the project.

    Many economists believe the Germany economy remains sluggish in the current quarter, as evidenced by labour market weakness. But they say the weak mark should help fuel exports and reinforce growth starting in the second quarter.

    Despite continued economic sluggishness, economists see almost no chance of the Bundesbank cutting interest rates soon.

    Price rises have accelerated in recent months, and the weak mark is a potential inflationary factor.

    [03] Credit Suisse swings to a loss on restructuring charges

    Credit Suisse swung to a huge loss last year after taking charges for restructuring and the introduction of a new method for managing credit risk, but the bank said the current year has started positively.

    The Swiss banking group posted a 1996 loss before minorities of 2.43 billion Swiss francs ($1.63 billion) last year, compared with net profit of 1.54 billion francs the year earlier.

    Turning to the current year, Chairman Rainer E. Gut said '1997 so far started positive and thus we are confident we our goals are attainable.'

    But the company also said that it had a good deal of work ahead, especially in quickly transforming the measures it had already adopted into lasting cost reductions. Consolidated gross profit last year rose to 12.89 billion francs from 11 billion francs in 1995. Operating profit after tax before minorities fell to 1.79 billion francs from 1.81 billion francs in 1995.

    Credit Suisse said it will leave its dividend unchanged at 4 francs a share.

    [04] B.A.T posts disappointing earnings after heavy environmental insurance claims in the U.S.

    B.A.T Industries said 1996 pre-tax profit fell slightly below analysts' expectations due to heavy provisioning for its Eagle Star insurance subsidiary.

    B.A.T said its pre-tax profit grew 5% to £2.5 billion ($4 billion), slightly below the investment community's consensus forecast of £2.57 billion. In a statement, Chairman Lord Cairns said the company's growth has slowed since last year's 'dramatic' expansion.

    But Cairns said both B.A.T's tobacco and finance businesses have an 'excellent' future. 'Our twin goals are to improve the long-term growth prospects of our businesses and to increase shareholder value,' he said.

    The chairman also said the company continues to evaluate its corporate structure to enable it to meet those goals. B.A.T has come under market pressure to spin off its finance business, which last year made a pre-tax profit of £1.18 billion, excluding exceptional charges - reflecting 3.3% growth in general business and 15% growth in life insurance and investment.

    Cairns said B.A.T's pre-tax profit figure included an 'exceptionally high' charge of £160 million in provisions for its Eagle Star insurance subsidiary. The provisions cover U.S. environmental claims, B.A.T said.

    The strength of sterling against the dollar in last year's fourth quarter also played a role in reducing B.A.T's earnings, the company said.

    Although the company uses average exchange rates, rather than year-end exchange rates which would have had a higher negative impact, B.A.T said 'the overall impact of exchange rates was to moderate the growth in profit.'

    B.A.T's shares fell 3.4% in early London trading.

    'On balance, the results may be a shade disappointing,' said Panmure Gordon & Co. equities strategist Ian Williams.

    However, traders said U.K. tobacco analysts are currently meeting with the company, so any share-price move may be reversed later in the session.

    According to one equities trader, the fact B.A.T is considering spinning off its finance business could be taken positively.

    [05] Thomson-CSF swings to net profits of $131.2 million

    Thomson-CSF reversed last year's loss and swung into the black in 1996, posting a net group profit of 745 million French francs.

    Looking to the year ahead, the French defence electronics group said that given an order book filled to over 67 billion francs at the end of December, it expects a rise in sales in 1997, excluding acquisitions and divestitures. Thomson-CSF will be privatized in a direct sale, the details of which are expected to be announced soon.

    Turning to net profit expectations, Thomson-CSF said its 1997 net profit will depend largely on the capital gain realized should the company's 17.4%- stake in Franco-Italian chipmaker SGS-Thomson be sold. Such a sale is seen as likely after the Thomson-CSF privatization.

    Thomson-CSF noted that after adjustment to eliminate the effects of changes in the group's structure and exchange rate fluctuations, 1996 sales were flat from their 1995 levels.

    Operating profit in 1996 rose 5.6% to 2.07 billion francs due to ongoing restructuring programs aimed at improving competitiveness, the company said.

    The company added that it would raise its dividend to FF2.80 from FF2.60 a year ago.

    [06] Chirac 'shocked' by Renault method in closing Belgian factory

    French President Jacques Chirac was ''shocked by the method'' with which Renault announced the closure of an assembly plant in Belgium, the French government spokesman said.

    Prime Minister Alain Juppe also said, ''The method used was not the right one. There needs to be an alternative solution which respects European community and national laws,'' said spokesman Alain Lamassoure after the weekly cabinet meeting.

    Juppe will meet later today with Renault Chairman Louis Schweitzer and Renault secretary general Michel de Virville to discuss the issue.

    The state owns 46% of Renault, after having reduced its stake from 52% last summer.

    French Industry Minister Franck Borotra said earlier Wednesday that both the French government and Belgian Prime Minister Jean-Luc Dehaene knew of Renault's plans to close its Belgian plant ahead of the announcement last Thursday.

    The row over the plant closure and other planned job cuts has highlighted the dilemma faced by French carmakers as they try to improve competitiveness while under government pressure to save jobs.


    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 © 1995-2023 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 Wednesday, 5 March 1997 - 18:15:14 UTC