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PHOENIX STEEL RECEIVES OFFER FOR CLAYMONT MILL

<Phoenix Steel Corp> said a group of investors offered to buy its Clayton steel plate mill for eight mln dlrs and the assumption of a bond obligation. Phoenix did not disclose the indentity of the investors. Phoenix was forced to close the Clayton mill last month. The company said the offer represents a major step in restructuring the company. Reuter 

NORTH AMERICAN PHILIPS <NPH> SELLS DEBENTURES

North American Philips Corp is raising 100 mln dlrs via an offering of debentures due 2017 yielding 8.809 pct, said sole manager Morgan Stanley and Co Inc. The debentures have an 8-3/4 pct coupon and were priced at 99.375 to yield 125 basis points over the off-the-run 9-1/4 pct Treasury bonds of 2016. The issue is non-refundable for 10 years. A sinking fund that starts in 1998 to retire five pct of the debentures annually can be increased by 200 pct at the company's option. Moody's rates the debentures A-2 and Standard and Poor's rates them A-minus. Reuter 

KEANE INC <KEAN> 4TH QTR

Shr 17 cts vs 15 cts Net 229,000 vs 201,000 revs 10.5 mln vs 9.9 mln Year Shr 21 cts vs 55 cts Net 283,000 vs 766,000 Revs 40.4 mn vs 39.7 mln NOTE:1985 shares adjusted to reflect the distribution of one share of Class B common stock for every two shares of common stock held of record as of July 1, 1986. Reuter 

SAVIN <SVB> NOTE CONVERSION ENDS

Savin Corp said the first period for the exercise of the special conversion right for its zero coupon convertible senior notes due February one, 1996, has expired. Savin said about 1,767,000 shares of its common stock will be issued as a result of the conversion. The share certificates issued through the conversion will be distributed to noteholders beginning March six, Savin added. Reuter 

MERIDIAN DIAGNOSTICS <KITS> GETS FDA APPROVAL

Meridian Diagnostics Inc said it received approval from the Food and Drug Administration to market a test to detect a disease which drains fluids from the bodies of AIDS victims. The company said the test detects Cryptosporidium SP in stool specimens. The disease can result in life threatening loss of fluids, the company added. Reuter 

SENATE COMMITTEE POSTPONES BANK BILL VOTE

The Senate Banking Committee has postponed until March 10 its meeting scheduled for tomorrow to act on a bank regulation bill. A committee aide said the postponement was requested by Republican members who wanted more time to look over a revised draft version of the bill which was just introduced. That version of the bill would allow non-bank banks to continue activities in operation as of March 5, but would prohibit them from starting other financial services. The previous draft bill would have banned non-bank bank activities started after July 1, 1983. Reuter 

REAGAN TO VISIT ROME, BERLIN DURING SUMMIT TRIP

President Reagan will visit Rome and West Berlin during a trip to Europe in June to attend the Venice summit meeting of the major industrialized countries, the White House said. The announcement said Reagan and Nancy Reagan would be in Rome from June 3 to 6 as the guests of President Francesco Cossiga and would have an audience with Pope John Paul II on June 6. After the June 8-10 summit, Reagan will travel to West Berlin on June 12 to participate in the city's 750th anniversary and will meet West German Chancellor Helmut Kohl in Bonn before returning home the same day. Reuter 

VIACOM <VIA> MERGER EXPECTED IN 60 TO 90 DAYS

Sumner Redstone, president of National Amusements, Inc, predicted he can win regulatory approvals to wrap up the 3.4 billion dlr acquisition of Viacom International Inc in 60 to 90 days. Redstone, 63, catapulted himself into the big leagues of entertainment early today when a group of Viacom managers and their financial backers decided not to top National's bid. "We've had counsel working for some time in every region where Viacom has cable televison systems" Redstone told Reuters in a telephone interview. Redstone also said "Viacom is committed to working very closely with us to obtain approvals." Viacom has been seeking approvals for transfer of its broadcast licenses and cable systems since September when its management group first advanced a buyout plan. But Redstone turned the situation into a spirited bidding contest which was capped by the announcement this morning that Viacom's independent directors on behalf of Viacom entered into a defintive merger agreement with National. National is a family business which operates a chain of movie theaters. It is dwarfed by Viacom. Redstone said he was weary after talks dragged on through the night but also excited at the prospect of running a leading electronic media company. He noted that the number of motion picture admissions in the U.S. has shown no growth in 15 years. Of nine satellite television channels operated by Viacom, four are motion-picture oriented pay channels. Redstone said exclusive contracts with pay television networks are the emerging trend. "Up until recently you could see any motion picture on any pay channel," Redstone said. He noted Viacom has exclusive agreements with two studios and plans to sign a deal with a third company next month. Redstone said the management group's investment bankers will be paid what is due for termination of its merger agreement. Such fees could total about 30 mln dlrs. "That will be a company expense," Redstone said. He said BankAmerica <BAC> Corp has had numerous inquiries from lenders who want to participate in a 2.25 billion dlr financing for the deal. BankAmerica will provide 592 mln dlrs. After the merger, Viacom will be a subsidiary of National but 17 pct of the company will be in public hands. Reuter 

BRITISH AIDE CRITICIZES U.S.PROTECTIONISM

A senior British official said that protectionist bills being considered by Congress could trigger retaliation by the European Community (EEC) and threaten the global trading system. Paul Channon, secretary for trade and industry, said if Congress passed legislation to curb textile imports, which would hit EC shipments as well as shipments from major Asian textile producers, "the community would have to retaliate." His comments echoed those made yesterday by Belgian Trade Minister Herman De Croo, who said if the bill passed, the community would retaliate by imposing taxes on U.S. exports. Channon made his remarks at a news conference after two days of talks with Reagan Administration officials and members of Congress. De Croo was also in Washington for trade talks. Channon said there was a greater protectionism sentiment in Congress since his visit here last year as Congress and the Administration tried to find ways to reduce the U.S. trade deficit, which last year hit a record 169.8 billion dlrs. Channon also called for greater EC-U.S. cooperation to force Japan to open its markets to foreign goods. Channon said Japan's trade surplus is causing everyone problems - its surplus with the United States last year was 51.5 billion dlrs and with EC nations, 16.7 billion dlrs. "The more united pressure there could be, the better," he said. Channon also called for increased U.S.-EC cooperation to avoid trade disputes. He said the two sides narrowly avoided a confrontation earlier this year over lost grains sales when Spain and Portugal joined the community and its liberal imports regulations were tightened to conform to EC standards. "But if both sides drew back from the brink that time," he said, ""it does not mean that they would do so on another occasion." Channon added that "There is increasing reesentment in Europe over the U.S. tactic of negotiating under the pressure of unilaterally imposed deadlines." He said other potential conflicts are already in sight - alleged European government subsidies of Airbus aircraft and taxes on fats and oils - and "the commuity and the United States must therefore learn to manage their relations better." He said another bill to let the United States retaliate against a nation if that nation's market was not open to U.S. goods would bypass the trade pact GATT (General Agreeeement on Tariffs and Trade) as an arbiter of trade practices. He said foreign trade law should be judged by GATT and not by the United States, adding "if the (trade) law is to be interpreted by the United States and not by the GATT, what is to happen to the rest of us?" reuter 

OMNIBUS COMPUTER LOAN NOT CALLED

<Omnibus Computer Graphics Inc>, which earlier said it is in default of certain provisions of its line of credit, said its Canadian banker has indicated a willingness to work with the company and has not called Omnibus' loan. Omnibus earlier said negotiations are underway to provide additional financing. Reuter 

YEUTTER SEEKS STRONGER TAIWAN, S.KOREA CURRENCIES

U.S. Trade Representative Clayton Yeutter said he hoped the U.S. dollar would continue to decline in relation to the currencies of Taiwan and South Korea as a way to improve the U.S. trade picture. Testifying before the House Appropriations subcommittee which must approve his agency's 1988 budget, he said, "In my judgment economic factors justify a continued decline." Asked by a committee member if he expected a further decline, and how much, Yeutter said the Taiwan and South Korean currencies should be adjusted to reflect "positive factors" in their economies. Reuter 

YUGO FEBRUARY CAR SALES BREAK RECORD

<Yugo America Inc>, a unit of <Yugo NV>, said it sold 5,059 cars in February, the first month in which sales topped 5,000. Yugo said the February's sales were 21.2 pct higher than sales in January and 191.4 pct above the 1,736 cars sold in the same month last year. Yugo said it has sold a total of 9,233 cars so far in 1987. Reuter 

SENATE PANEL APPROVES EXTENDING DAIRY COMMISSION

The Senate Agriculture Committee approved a bill that would extend for one year the life of the National Commission on Dairy Policy. The dairy commission, mandated by the 1985 farm bill, is set to expire at the end of the month. The bill would extend the date by which the commission must submit its report on dairy policy to March 31, 1988. Congress charged the commission with examining the federal price support program for milk and alternatives to the program. Reuter 

NL INDUSTRIES INC <NL> SET REGULAR PAYOUT

Qtly div five cts vs five cts prior Pay March 31 Record March 16 Reuter 

CHINA SUGAR OUTPUT SEEN LOWER -- USDA

China's 1986/87 sugar crop has been revised to 5.26 mln tonnes (raw value), down four pct from the previous forecast and five pct below the previous season, the U.S. Agriculture Department said. In its World Production and Trade Report, the department attributed the decline to relatively poor profitability of sugar, causing harvested area of cane and beets to decline seven pct from 1985/86. Beet sugar production for 1986/87 is now estimated at 837,000 tonnes, five pct less than earlier forecast and down five pct from the previous season, while cane output is projected at 4.423 mln tonnes, down four pct from previously forecast and five pct below the previous season, it said. Reuter 

GENERAL HOST <GH> SEES YEAR LOSS

General Host Corp said it will report a loss from continuing operations and a sharp decline in net income for the year ended January 25, 1987, due to substantial operating losses in its Frank's Nursery and Crafts unit. For the year ended January 25, 1986, General reported net income of 29.7 mln dlrs. The company said it discovered problems in its unit's computerized accounts payable system. It said results of its other nursery and craft unit, Flower Time Inc, are not affected. It said its accountants are investigating the problem, which will delay release of its full-year results. Reuter 

UAW, AMC <AMO> SET NEW LABOR TALKS

The United Auto Workers and American Motors Corp agreed to resume talks on a new labor contract for the company's threatened Kenosha, Wisc. assembly plant despite a breakdown in talks last weekend, UAW vice-president Marc Stepp said. Stepp told reporters that issues which caused the talks to break off are being discussed between the two sides and that a main table bargaining session has been scheduled Friday in Milwaukee. France's Regie Nationale des Usines Renault has a controlling stake in American Motors. Stepp said the union intends "to exert full efforts" to reach an agreement that would keep the plant in operation past 1989, when AMC has said production will end unless the UAW grants concessions on labor costs. The UAW leader said the company and the union agreed in principle in 1985 to pattern a future contract covering some 6,000 Kenosha workers after lower-cost UAW contracts covering Mazda Motor Corp's new U.S. plant in Michigan and the New United Motor plant in California operated by Toyota. Stepp said there is such deep hostility between the company and union locals in Milwaukee and Kenosha that communication between them is very difficult. But he said it is possible to reach agreement on a new contract to save the jobs of UAW members at AMC's Wisconsin operations despite the impasse. AMC has said it will resume talks, but only for 24 hours to ascertain whether the union was willing to agree to the concessions it wants. The Kenosha plant builds AMC's Renault cars and a line of Chrysler Corp <C> vehicles under a contract assembly deal. Reuter 

VICTORY MARKETS INC FILES TO OFFER DEBENTURES

<Victory Markets Inc> said it filed a registration statement with the Securities and Exchange Commission relating to the proposed public offering of 60 mln dlrs principal amounbt of subordinated debentures due 1999. Proceeds will be used to repay outstanding indebtedness of the company and to repay a portion of outstanding loans. Victory Markets Inc owns and operates a chain of 88 retail supermarkets and conducts a wholesale grocery business in central and northern New York State. Reuter 

SYNTEX <SYN> SETS RAPID STREP THROAT TEST

Syntex Corp said its diagnostics subsidiary has introduced a rapid, antibody-based test to diagnose strep throat infections, called AccuPoint (T) Group H Strep Test. A Syntex spokesman said the test has received Food and Drug Administration approval and is now available nationwide for use in hospitals, doctors offices and laboratories. The company said it is the first of ten diagnostic tests being developed for Syntex by Murex Corp. Others include detection of pregnancy, ovulation and sexually transmitted diseases. Reuter 

MEDTRONIC INC <MDT> SETS PAYOUT

Qtly dividend 22 cts vs 22 cts Pay April 30 Record April 10 Reuter 

CAROLINA POWER <CPL> TO REDEEM PREFERRED STOCK

Carolina Power and Light Co said it will redeem on April 22 all two mln shares of its 2.675 dlr preferred stock, series A. The company said it will pay 25.75 dlrs a share plus accrued dividends of 15.6 cts. The redemption, Carolina Power said, will substantially reduce its operating costs. Reuter 

CENTRAL BANCSHARES <CBSS> UNIT UNVEILS SYSTEM

Central Bancshares of the South's Central Bank of the South said it unveiled a realtime trading floor providing the staff with instant access to U.S. financial markets. The company said the system, the first in Alabama, is in its investment banking division. The company said the staff receives immediate notification of prices changes, market data and a summary of securities or bonds in inventory. The trading floor consists of workstations intergrating personal computer and mainframe capabilities, telephone and intercom systems, and multiple information services. The trading room format was created by Rich Inc, a subsidiary of Reuters Inc <REUT>. Reuter 

QUANTUM <QTMCU> RECEIVES PATENT NOTIFICATION

Quantum Diagnostics Ltd said it received notification from the U.S. patent office that a patent would be issued on its analog image processor as of March three. Reuter 

LOUISVILLE GAS AND ELECTRIC CO <LOU> DIVIDEND

Qtly dividend 65 cts vs 65 cts Pay April 15 Record March 31 Reuter 

DOME<DMP> DEBT PLAN LIKELY CIRCULATED NEXT WEEK

Dome Petroleum Ltd's plan to reschedule debt of more than 6.1 billion Canadian dlrs will likely be detailed to a group of 56 major creditors on Monday or Tuesday next week, a company spokesman said. Circulation of the complex plan to reschedule the company's debt was delayed to incorporate late changes resulting from discussions with Dome's lenders, spokesman David Annesley told Reuters in response to an inquiry. Annesley said Dome expects its debt will total between 6.3 billion and 6.5 billion dlrs by June 30, 1987, when it hopes to implement the debt plan now under negotiation. Annesley said Dome Petroleum would issue a statement outlining the company's debt rescheduling proposal following release of the plan to lenders. Dome Petroleum previously said it hoped to submit the debt plan by mid-February in order to win agreement in principle from creditors prior to June 30. The group of major lenders have agreed to defer a substantial amount of debt payments until June 30 under an interim agreement that links payments to secured lenders with cash flow generated by assets backing the loans. Annesley also said there was no change in the status of legal actions initiated by six Swiss noteholders who are seeking interest and principal payment on their unsecured debt. Together, the noteholders are owed about 520,000 Swiss francs, and their legal action places a total of 300 mln Swiss franc denominated debt in default. Annesley said the company's next scheduled appearance in a Swiss court to defend against the actions is set for March 16. Dome Petroleum's 1986 fourth quarter and year earnings will likely be reported at the end of March, he also said. Reuter 

GEORGIA GULF <GGLF> FILES FOR SHARE OFFER

Georgia Gulf Corp said it filed with the Securities and Exchange Commission for a secondary offering of 4.8 mln shares of common stock, which will be sold by General Electric Co's <GE> General Electric Credit Corp unit and Georgia-Pacific Corp <GP>. The company said four mln of the shares will be sold in the United States and 800,000 shares will be offered abroad. Goldman, Sachs and Co is the sole manager of the underwriting syndicate for the offering, it added. Reuter 

<OKUMA MACHINERY WORKS> BUILDS PLANT IN U.S

State Commerce Secretary Claude Pope said Japan's Okuma Machinery Works LTD will build a multi-million dollar manufacturing machinery plant here. He said the plant will be the company's first in the U.S. and will employ approximately 150 people. He said start-up date is set for late this year. Reuter 

PAN AM WORLD AIRWAYS TO CUT MANAGEMENT COSTS BY ABOUT 180 MLN DLRS ANNUALLY

POLLARD SENTENCED TO LIFE IN PRISON IN SPY CASE

Confessed spy Jonathan Pollard was sentenced today to life in prison for passing thousands of pages of top-secret U.S. military documents to Israel. Pollard, a former Navy intelligence analyst, was sentenced for his role in what prosecutors described as one of the most serious breaches of security in U.S. history. Pollard, a 32-year-old American Jew, claimed he was acting out of concern for Israel's safety and the belief that U.S. officials were withholding intelligence from Israel. Reuter 

DINGELL URGES SEC TO SEEK MORE DISCLOSURE

House Energy and Commerce committee chairman John Dingell, D-Mich, said the Securities and Exchange Commission should step up its enforcement of regulations which require companies to disclose corporate fraud and waste. Dingell made the comment at the start of a hearing on alleged overcharges by TRW Inc on its defense contracts. He said the SEC seemed to have stopped demanding such disclosures, which are required by securities laws. "In the wake of the foreign bribery cases in the 1970s, the SEC instituted a vigorous program of self-policing, using external auditors, investigators, and counsel. It should do so again," Dingell said. Reuter 

CENTRAL BANCSHARES <CBSS> UNIT UNVEILS SYSTEM

Central Bancshares of the South's Central Bank of the South said it unveiled a realtime trading floor providing the staff with instant access to U.S. financial markets. The company said the system, the first in Alabama, is in its investment banking division. The company said the staff receives immediate notification of prices changes, market data and a summary of securities or bonds in inventory. The trading floor consists of workstations intergrating personal computer and mainframe capabilities, telephone and intercom systems, and multiple information services. The trading room format was created by Rich Inc, a subsidiary of Reuters Holdings Plc <RTRSY>. Reuter 

KAISER ALUMINUM <KLU> RAISES PRODUCT PRICES

Kaiser Aluminum and Chemical Corp said it is increasing prices for a broad range of common alloy coil, flat sheet and plate products. The company said prices to distributors and direct customers on shipments of new orders placed March 4 and after will be increased by four to eight cts per lb. Kaiser said the increases are due to increased demand and the need to set prices relative to the cost of primary aluminum. Reuter 

HUNTERDON <HUNT> SETS DENTAL VENTURE

Hunterdon Pharmaceuticals Inc said it formed a joint venture with <Chesapeake Biological Laboratories> and <E.B. Michaels Research Associates> to develop C31G, a substance that may be useful in the treatment or prevention of plaque. The substance, tested in pre-clinical trials at the University of Pennsylvania, also has other uses as an anti-fungal or anti-bacterial agent, the company said. It said Chesapeake Biological, a private company, owns 55 pct of the venture, E.B. Michaels 10 pct, while it holds the remaining interest, and the patent for C31G. Reuter 

U.S./USSR TRADE IMBALANCE CITED AS PROBLEM

U.S. purchases of Soviet products must increase before the Soviet Union will buy more U.S. goods, a Soviet trade official told Reuters. "American exports (to the Soviet Union) depend on Soviet exports to the United States," said Albert Melknikov, deputy trade representative of the Soviet Union to the United States. "One should not forget that it is impossible only to buy from the United States. We must be able to sell our products to the United States as well," he said in an interview. The Soviet trade deficit with the United States totalled around two billion dlrs in 1985, Melnikov said. Reuter 

ROBERTSON UPS CAPITAL WIRE<CWCC> STAKE TO 12 PCT

New York investor Julian Robertson and several investment partnerships he controls said they raised their stake in Capital Wire and Cable Corp to 481,800 shares, or 12.2 pct of the total, from 430,200, or 10.9 pct. In a filing with the Securities and Exchange Commission Robertson and his Tiger, Jaguar, Puma and Tiger Management Co entities said they bought 51,600 Capital Wire common shares between Feb 3 and 17 at 13.25 dlrs a share. Robertson said his group has spent a total of 5.9 mln dlrs on its investment in the company so far. Reuter 

TWA <TWA> TANGLES PIEDMONT <PIE> SITUATION

Trans World Airlines Inc complicated the bidding for Piedmont Aviation Inc by offering either to buy Piedmont suitor USAir Group or, alternatively, to merge with Piedmont and USAir. Piedmont's board was meeting today, and Wall Street speculated the board was discussing opposing bids from Norfolk Southern Corp and USAir. The TWA offer was announced shortly after the Piedmont board meeting was scheduled to begin. TWA offered to buy USAir for 52 dlrs cash per share. It also said it was the largest shareholder of USAir and threatened to go directly to USAir shareholders with an offer for 51 pct of the stock at a lower price. TWA also said it believed its offer was a better deal for USAir shareholders than an acquisition of Piedmont, but it said it alternatively would discuss a three-way combination of the airlines. Market sources and analysts speculated that TWA chairman Carl Icahn made the offer in order to put his own airline into the takeover arena. "We're just wondering if he's not just trying to get TWA into play. There's speculation on the street he just wants to move onto somthing else," said one arbitrager. "We think TWA might just be putting up a trial balloon." Analysts said the offer must be taken seriously by USAir, but that the airline will probably reject it because the price is relatively low compared to other airline deals. They also said Icahn must prove his offer credible by revealing financing arrangements. "They need to show their commitment and their ability to finance. I think it's a credible offer," said Timothy Pettee, a Bear Stearns analyst. "I think it's certainly on the low end of relative values of airline deals," said Pettee. Pettee estimated 58 dlrs would be in a more reasonable range based on other airline mergers. USAir stock soared after TWA made public its offer. A spokesman for USAir declined comment, and said USAir had not changed its offer for Piedmont. USAir offered of buy 50 pct of that airline's stock for 71 dlrs cash per share and the balance for 73 dlrs per share in USAir stock. USAir closed up 5-3/8 at 49-1/8 on volume of 1.9 mln shares. Piedmont, which slipped 1/2 to close at 69-5/8, also remained silent on the TWA action. Piedmont has an outstanding 65 dlr cash per share offer from Norfolk Southern Corp. Norfolk Southern declined comment, but said it stuck with its offer for Piedmont. Norfolk owns about 20 pct of Piedmont and opened the bidding when it said it would propose a takeover of Piedmont. Some analysts said Icahn may be trying to acquire USAir to make his own airline a more attractive takeover target. "Icahn I think had wanted to sell his airline and there were no takers. I think the strategy might have called for making his investment more attractive. One way to accomplish that specific objective is to go out and acquire other airlines," said Andrew Kim of Eberstadt Fleming. "I don't know whose going to buy them, but at least this way it becomes a much more viable package," said Kim. But Icahn's financing ability for such a transaction remains in doubt, in part because of TWA's heavy debt load. Wall street sources said TWA has some cash with which to do the offer. The sources said Icahn has not lined up outside financial advisers and plans to make his own arrangements. Icahn earlier this year abandoned plans to buy USX Corp <X> and still retains 11 pct of that company's stock. Some Wall street sources said the financier's USX plan was impacted by the cloud hanging over his adviser, Drexel Burnham Lambert Inc, because of Wall Street's insider trading scandal. Industry sources also predicted USAir might reject the TWA offer on price and financing concerns. "It's littered with contingencies and it doesn't even have a financing arrangement," said one executive at another major airline. But the executive conceded a merged TWA-USAir would be a strong contender with USAir's east coast route system and planned west coast presence from PSA. USAir could feed the intenrational flights of TWA, which has a midwest presence in its St. Louis hub. Adding Piedmont, dominant in the southeast, to the mix would develop an even stronger force. The combined entity would also have TWA's pars reservation system. Such a merger would be complex and analysts said it would result in an airline iwth an 18 pct market share. Reuter 

FOREST OIL CORP <FOIL> 4TH QTR

Shr loss 29 cts vs profit eight cts Net loss 2.0 mln vs profit 568,000 year Shr loss 1.37 dlrs vs profit 88 cts Net loss 9.3 mln vs profit 6.0 mln Reuter 

USDA TRANSMITS FARM PROPOSALS TO CONGRESS

The Reagan administration officially submitted to Congress its proposals to cut back U.S. farmers' income deficiency payments, decouple planting decisions from income support levels and accelerate reductions in loan rates, Senate staff said. The recommendations, first outlined last January in President Reagan's fiscal 1988 budget blueprint, were transmitted to both houses of Congress as legislative proposals. It was not clear which lawmakers might introduce the measures. The most controversial proposal in the package would make 10 pct annual reductions in target prices for major commodities. A number of legislators have predicted the target price proposal will not move in Congress. The package also would offer the so-called 0/92 option to producers of 1987-90 crops and raise the annual permissible reduction in loan rates to 10 pct from 5 pct. Under 0/92, a producer is guaranteed at least 92 pct of his deficiency payment regardless of how much he plants. Reuter 

YEUTTER PLANS TRADE TRIP TO CHINA THIS SUMMER

U.S. Trade Representative Clayton Yeutter said he plans a July trip to China to discuss trade issues including China's admission to the General Agreements on Tariffs and Trade. Yeutter told a congressional hearing it was possible China could be a member of GATT before the end of the year. "They are making major moves to becoming a full scale member of the world economy," he told the House Appropriations subcommittee which oversees his agency's budget. Depending on how the negotiations go on the terms of China's GATT membership, Yeutter said he could put the final touches on the U.S. part of the agreement during his trip. The admission of China to GATT, which is the multinational group of nations which negotiates international rules on trade, would offer both potential export markets and potential competition for U.S. industries, he said. "That has a lot of potential as well as risks for U.S. business," Yeutter said. "I think China will develop into a fine market for us," he added. Reuter 

PAN AM <PN> TO CUT AIRLINE MANAGEMENT COSTS

Pan Am Corp said its Pan American World Airways unit will reduce management costs by 20 pct, or about 80 mln dlrs, through job cuts, salary freezes and other measures. Pan Am also said it has asked its labor unions to help lower costs by an additional 180 mln dlrs. The airline said it will eliminate 464 managment positions and freeze all management salaries, a move that will save 30 mln dlrs a year. An additional 50 mln dlrs of expenses under management's control will also be cut, it said without offering details. Pan Am said it is seeking a 20 pct pay cut from its unions. Pan Am vice chairman Martin R. Shugrue said in a statement, "Management is leading the way, but with 40 pct of our operating expenses represented by labor costs, we must have the cooperation of our labor unions if we are to make additional improvements to our 1987 operating plan." Shugrue asked Pan Am's unions to begin negotiations on the pay cuts immediately. Reuter 

ALLIS-CHALMERS PROPOSES RESTRUCTURING, TO CONVERT SOME DEBT TO COMMON

RIO COFFEE TRADE PREFERS NO PACT TO QUOTA CUT

The failure of talks to introduce new coffee export quotas within the International Coffee Agreement, ICA, was preferable to the alternative of Brazil having a sharply reduced quota, as had been proposed, President of the Rio de Janeiro Coffee Trade Association Carlos Calmon said. He told Reuters proposals to reduce Brazil's quota to 25 pct of the world share from 30 pct at present were unacceptable as the country has large stocks and a good harvest is expected. "Brazil has the capacity to export 20 mln bags this year," Calmon added. Calmon said, assuming a 58 mln bag global ICA quota, Brazil's share under the proposals would have been 14.5 mln bags, of which soluble would have accounted for 2.0 mln, leaving just 12.5 mln bags of green coffee for export. "It's a pity the talks broke down, but for Brazil this was better than such a quota reduction," he added. In 1985 Brazil exported 19.6 mln bags of soluble and green coffee, including about two mln bags to non-members. A severe drought and marketing problems cut exports last year to under 10 mln bags. Calmon estimated stocks as of January 1 at 18 mln bags, of which 5.0 mln have already been sold for export. The harvest this year should be around 30 mln bags, he added. The latest Brazilian Coffee Institute estimate for last year's harvest is 11.2 mln bags, although many traders believe it was higher than this. Reuter 

ISRAEL TENDERS TONIGHT FOR CORN AND/OR SORGHUM

Israel will tender overnight for 33,000 long tons of U.S. sorghum and/or 22,000 long tons of U.S. corn for April shipment, private export sources said. Reuter 

HALLMARK STORES SELLS SECURED BONDS

Hallmark Stores Inc is raising 137.13 mln dlrs through a three-tranche offering of secured bonds, said lead underwriter Salomon Brothers Inc. A 31.63 mln dlr issue of bonds due 2001 was given an 8-1/4 pct coupon and priced at par to yield 112 basis points over comparable Treasury securities and a 40 mln dlr offering of bonds due 2006 was given an 8-3/4 pct coupon and par pricing to yield 115 basis points over Treasuries. The final tranche totals 65.49 mln dlrs of bonds due 2011. The securities were assigned an 8-7/8 pct coupon and par pricing to yield 131 basis points over Treasuries. The entire Hallmark offering is non-refundable for 10 years. The three tranches have average lives of 12.1, 17.8 and 22.7 years respectively, Salomon Brothers said. Moody's Investors Service Inc rates the securities Aa-3 and Standard and Poor's Corp rates them AA. Reuter 

U.S. CABINET COUNCIL SET TO MULL FARM ISSUES

The Reagan administration's cabinet-level Economic Policy Council is scheduled to meet Friday to discuss, among other issues, the status of agricultural legislation, administration officials said. The officials said discussion of a U.S. Agriculture Department wheat export subsidy to the Soviet Union was not on the agenda. Matters not on the agenda, however, can be brought before the council, the officials said. Grain trade officials have speculated that USDA would make a wheat export enhancement offer to Moscow, but USDA officials have said the matter is not under active consideration. USDA today transmitted to Congress a package of legislative proposals, including bills that would cut target prices and speed up loan rate reductions. Reuter 

UNICORP AMERICAN CORP <UAC> 4TH QTR NET

Shr 13 cts vs 70 cts Net 1,538,000 vs 8,614,000 Revs 16.4 mln vs 19.6 mln 12 mths Shr 89 cts vs 2.43 dlrs Net 10.3 mln vs 29.8 mln Revs 56.2 mln vs 83.8 mln Note: 1986 net is before preferred dividend payments and includes after-tax gain from sale of real estate properties of 12.9 mln dlrs. Reuter 

BANNER <BNR> COMPLETES REXNORD SHARE PURCHASE

Banner Industries Inc said it completed the previously announced purchase of Rexnord Inc <REX>. It said it owns 96 pct of Rexnord's outstanding following the purchase of all Rexnord's common validly tendered pursuant to its 26.25 dlr per share cash tender offer ended February 27. Banner also said it received 310 mln dlrs pursuant to a credit agreement with <Citicorp Industrial Credit Inc> and the <Bank of Nova Scotia> and 260 mln dlrs from an offering made through Drexel Burnham Lambert Inc. The merger of Rexnord with a subsidiary of Banner will be copmleted before mid-May, the company said. Reuter 

U.S. REAFFIRMS OPPOSITION TO EC OILS TAX PLAN

A meeting among government agencies today reaffirmed the strong opposition of the United States to a proposed new tax on vegetable oils and fats in the European Community, U.S. trade officials said. Representatives of the major government agencies agreed at a trade policy review group meeting, which includes officials of the deputy secretary rank, to continue diplomatic pressure on EC member states. "We (all agencies) are together on this," said one U.S. trade official. One source said the U.S. would continue to make clear to member states and to the EC commission that if Brussels proceeds with the vegetable oils tax "there will be a great cost." U.S. officials said no formal list of European products on which the U.S. might retaliate, has yet been drawn up. "I don't think we're at that point yet," said one trade official, adding that the EC has only begun deliberations on its farm price package. Suzanne Early, assistant trade representative, told Reuters the interagency meeting was to discuss U.S. strategy on the vegetable oils issue. Asked about retaliation, she said "sometimes its better not to be specific." U.S. trade representative Clayton Yeutter Monday warned another major transatlantic trade row will develop if the EC proceeds with the vegetable oils tax. Reuter 

<CCL INDUSTRIES INC> 4TH QTR NET

Shr 15 cts vs 18 cts Net 4,500,000 vs 5,300,000 Revs 156.7 mln vs 152.0 mln YEAR Shr 72 cts vs 1.11 dlrs Net 21.7 mln vs 33.0 mln Revs 695.4 mln vs 653.5 mln Note: Shr profit relates to class B non-voting shares. Reuter 

IOWA BANK BECOMES 34TH TO FAIL THIS YEAR

The deposits of the failed First State Bank of Rockford, Iowa, were assumed by First Security Bank and Trust Co of Charles City, Iowa, the Federal Deposit Insurance Corp (FDIC) said. The FDIC said it acted after First State, with 15.1 mln dlrs in assets, was closed today by Iowa Banking Superintendent William Bernau. It was the 34th U.S. bank to fail this year, and the 12th agricultural bank. To facilitate the transaction, the FDIC said it would pay the assuming bank 4.1 mln dlrs and retain assets of the failed bank valued at 4.8 mln dlrs. Reuter 

EIA SAYS DISTILLATE STOCKS OFF 3.4 MLN BBLS, GASOLINE OFF 100,000, CRUDE UP 3.2 MLN

CHRONAR <CRNR> CLOSES 20 MLN DLR PLACEMENT

Chronar Corp said it received a total of 20 mln dlrs through the completion of a private placement of its stock, long-term debt and associated warrants with the Sheet Metal Workers' National Pension Fund and an affiliate of <Harbert Corp>. It also said the fund and Harbert Solar Inc, the affiliate, now own about 16 pct of Chronar's common. Chronar also said it expects to report a loss for the year of about 4.5 mln dlrs on sales of about 12 mln dlrs compared with a loss of 513,153 dlrs on revenues of 10 mln dlrs in 1985. Reuter 

(G.T.C. TRANSCONTINENTAL GROUP LTD) 1ST QTR NET

Shr 11 cts vs nine cts Net 2.1 mln vs 1.6 mln Revs 60.8 mln vs 32.9 mln Avg shrs 19.7 mln vs 17.2 mln Note: period ended January 31. REUTER Reuter 

U.S. CAR SALES UP 6.7 PCT IN LATE FEBRUARY

Sales of new cars by the U.S. auto industry rose 6.7 pct in late February from the weak levels of a year ago, but industry giant General Motors Corp <GM> was an exception with an eight pct drop. The figures represented a slight recovery for the industry from weak mid-February sales, but the eight domestic-based car manufacturers still saw sales fall 9.1 pct for the full month from last year. GM, whose sales have been weakening for several months, took only 48.1 pct of domestic car sales in the February 21-28 period compared with 55.7 pct a year ago, when sales for the entire industry were depressed from the ending of major marketing incentive campaigns. At the same time, rival Ford Motor Co <F> said its car sales in the period rose 29.3 pct and Chrysler Corp <C> was up 11.3 pct. The industry leader's slide was even more marked for the full month as GM took only 37 pct of all car sales in February, including imports, compared with 43.5 pct a year ago. Industry analysts said the 198,818 domestic-make cars sold in the seven selling days of late February represented a seasonally adjusted annualized rate of 7.0 mln units while the 556,953 sold in the month were at a 7.4 mln annual rate. Last year, the industry sold a record 11.44 mln new cars, including 8.2 mln domestic makes. But consumers have taken a breather since then and car sales sales have been weaker in 1987 due to tax-induced heavy buying in December, a lack of widespread sales incentives and intermitent bad weather, analysts said. GM sales vice-president C.N. "Bud" Moore said in a statement that his company's sales "began their recovery from the low point reached in January, and we expect the improvement to continue in coming months." Anne Knight, automotive analyst for Paine Webber and Co, told Reuters that GM's sales were weak, but added: "I think sales will get better in the spring." "GM may make more production cuts in view of the weak sales, but this may be a strike year so they might try to build inventories," she said. In a further effort to revive sales, GM said its Oldsmobile, Pontiac and Buick divisions would offer many of their new car lines through April 30 with discount loan packages at rates ranging from 3.9 pct for 24-month contracts to 9.9 pct for 60-month deals as an alternative to cash rebates. Among the smaller U.S.-based manufacturers, Japanese-owned American Honda <HMC> said its late February car sales rose 96.2 pct from last year while Japanese-owned Nissan <NSANY> was up 35.9 pct. German-owned Volkswagen of America fell 42.5 pct, American Motors Corp <AMO> plunged 62.5 pct and Japan's Toyota <TOYOY> sold 1,082 domestic makes compared with none a year ago before it started domestic production. Detroit's late February truck sales were generally positive with GM up 10.9 pct, Ford up 48 pct, Chrysler gaining 46 pct and AMC's jeep sales off 4.0 pct. Imported cars sales, released monthly, were estimated at 219,300 in February, a 0.4 pct rise from last year and 28.3 pct of the overall car market. That was lower than January's 31.4 pct share but above the 26.3 pct share a year ago. Reuter 

PIEDMONT AVIATION RECESSES MEETING WITHOUT TAKING ACTION ON MERGER PROPOSALS

EIA SAYS DISTILLATE, GAS STOCKS OFF IN WEEK

Distillate fuel stocks held in primary storage fell by 3.4 mln barrels in the week ended Feb 27 to 128.4 mln barrels, the Energy Information Administration (EIA) said. In its weekly petroleum status report, the Department of Energy agency said gasoline stocks were off 100,000 barrels in the week to 251.5 mln barrels and refinery crude oil stocks were up 3.2 mln barrels to 333.0 mln. The EIA said residual fuel stocks fell 2.2 mln barrels to 37.9 mln barrels and crude oil stocks in the Strategic Petroleum Reserve (SPR) were up 700,000 barrels to 516.5 mln. The total of all crude, refined product and SPR stocks were unchanged at 1,575.1 mln barrels, it said. Reuter 

KEMP URGES REAGAN TO OPPOSE STOCK TAX

Rep. Jack Kemp, a New York Republican, urged President Reagan to oppose any legislation to impose a tax on stock transactions. In a statement Kemp called the tax "a money grab to permit Democrats to begin another government spending spree." "I call upon President Reagan to signal immediately that he will veto any tax increase on stock transfers," Kemp said. He added that the tax would punish the 50 million stockholders. House Speaker James Wright, a Texas Democrat, has asked congressional tax analysts to look at a 0.25 to 0.5 pct tax on stock trades along with other tax proposals to help reduce the federal budget deficit. Reuter 

CANADA CENTRAL BANK HEAD SEES MODERATE GROWTH

Bank of Canada Governor John Crow said he expects the Canadian economy will grow moderately in the coming year, despite the near flat growth in the final quarter of 1986. "We see moderate growth," Crow told a news conference following presentation of the central bank's annual report in the House of Commons today. He said there were positive signs of growth in the economy, particularly the drawdown of business inventories in the fourth quarter. Yesterday, Statistics Canada reported gross domestic product expanded a slight 0.2 pct in the quarter. Crow reiterated the bank's previous statements that inflation remains a major priority in setting monetary policy and said only zero inflation would be acceptable. Canada's inflation rate is currently hovering around the four pct mark. The governor said Canada's banking system remains sound despite recent concern about exposure by the country's banks in debt plagued countries such as Brazil. "It (the debt problem) is not a happy development but I think it can be overplayed in terms of its impact," Crow told reporters. Reuter 

IMPORT TAX LIFTED ON CAPITAL GOODS

Argentina's Idustry and Foreign Trade Secretary announced the lifting until December 1989 of import taxes on capital goods not produced in the country. Roberto Lavagna in a news conference also said Argentina would create a special programme for promoting industry and was studying a system of temporary, automatic and generalised admission of goods from neighbouring Brazil. Lavagna said the measures were in line with an adjustment in economic policy to stall a new upsurge in inflation. The government last week froze prices and wages and devalued the Austral six pct against the dollar. Reuter 

ALLIS-CHALMERS <AH> PROPOSES RESTRUCTURING

Allis-Chalmers Corp said it asked lenders and other groups to approve a restructuring plan that would cause a dilution of the company's existing common stock. The company said it would sell all of its businesses other than the American Air Filter business, make a public financing of more than 100 mln dlrs and pay part of the currently outstanding debt with the proceeds. Under the plan, which was presented to institutional lenders, the company's unions and the Pension Benefit Guaranty Corp, "substantial amounts" of institutional debt would be converted to common stock of the restructured company. Allis-Chalmers said it will exchange existing preferred stock for common. The exchange of the institutional debt and preferred stock for common equity will cause a "resulting dilution of the existing common stock," Allis-Chalmers said in a statement. Under the plan, holders of existing common would hold about 15 pct of the restructured common stock. Holders of existing preferred would hold about 35 pct of the new common. Allis-Chalmers said its only alternative to the plan is bankruptcy. The restructuring must be approved by creditors, common and preferred holders,and present and former employees. Allis-Chalmers said a bankruptcy filing "appears to represent the company's only alternative if agreement upon the terms of the plan cannot be reached." The spokesman said in response to an inquiry that he was not aware of any extraordinary charge against earnings that would result from the restructuring. "It is too early to talk about a charge" because the plan must still be approved by the lenders and unions, he said. Also under the plan, payments to Allis-Chalmers' private lenders would be deferred. Trade payables and obligations incurred in the ordinary course of business will be met. Payment of health benefits for active and retired employees would be made "at substantially reduced levels." Allis-Chalmers, once one of the leading farm equipment companies, sold all of its farm equipment operations to Deutz of West Germany for 107 mln dlrs, leaving the company with businesses in lift trucks, air conditioning, fluids handling and solid materials processing. Last year, Allis-Chalmers sold the lift truck business to AC Material Handling Co of Columbus, Ohio. Under the restructuring plan, Allis-Chalmers will sell its solid materials processing and fluids handling businesses. Solid materials processing, which makes equipment to crush stones for highway construction, accounted for 288 mln dlrs of Allis-Chalmers's total 1985 revenues of 886 mln dlrs. The company will also sell its fluids handling operations, which makes pumps and valves. That business accounted for 196 mln dlrs of the company's 1985 revenues. Allis-Chalmers in 1986 reported a net loss of 8.6 mln dlrs, or 1.09 dlrs a share. In 1985, the company lost 168.4 mln dlrs, or 12.27 dlrs a share. The company's last profit was in 1980, when it earned 52.4 mln dlrs on sales of 2.1 billion dlrs. Reuter 

AMVESTORS FINANCIAL CORP <AVFC> 4TH QTR NET

Oper shr profit 11 cts vs loss 27 cts Oper net profit 662,625 vs loss 774,002 Revs 43.9 mln vs 18.4 mln Year Oper shr profit 37 cts vs loss 37 cts Oper net profit 1,487,796 vs loss 1,119,626 Revs 150.1 mln vs 51.7 mln NOTE: 1986 4th qtr and yr oper net excludes 6,134 dlrs and 720,500 dlrs or 20 cts per share, respectively, for realized investment gains. 1986 qtr and yr oper net also excludes 102,300 dlrs and 257,300 dlrs, respectively, for tax loss carryforwards. 1985 4th qtr and yr oper net excludes realized investment gains of 449,920 dlrs or 15 cts per share and 897,949 dlrs or 30 cts per share, respectively. 1985 4th qtr oper net also excludes a loss of 42,820 dlrs for carryforward. Reuter 

PIEDMONT <PIE> TAKES NO ACTION

Piedmont Aviation Inc said its board meeting recessed today without taking action on proposals to combine Piedmont with other corporations. Piedmont has received opposing bids from Norfolk Southern Corp and US Air Corp. Earlier today, Trans World Airlines Inc offered to either buy Piedmont suitor US Air or, alternatively, to merge with Piedmont and U.S. Air. IN a prepared statement, Piedmont said there would be no further announcements concerning this situation today. The company declined to say when the board would meet again. Reuter 

YEUTTER CONCERNED ABOUT U.S. EXPORT PICTURE

U.S. Trade Representative Clayton Yeutter said he expects imports to fall soon but he was concerned about the lack of improvement in U.S. exports given the dollar's decline in the last 18 months. "I'm convinced we're about to see an improvement on the import side. I'm more concerned about the export side," he told a House Appropriations subcommittee. Part of the blame goes on other countries which have not generated the economic growth to increase demand for U.S. goods and part to some U.S. companies which are not generating competitive exports, he said. Reuter 

FORMER TRW<TRW> EMPLOYEE SAYS FIRM WAS UNETHICAL

A former TRW Inc controller told a Congressional hearing that the company had acted unethically in its defense contracts with the government. "It is my contention that the company called TRW is not ever vigilant and highly ethical as a defense contractor. TRW only pretends to be an honest citizen when that scheme best fits their financial interests," Larry Eagleye said in testimony at a House Oversight subcommittee hearing. Eagleye was a controller at TRW's compressor components division in Cleveland. Subcommittee chairman John Dingell, D-Mich, said he did not understand why the Defense Department had taken no action against TRW even though it admitted in the 1984 report that it had substantially overcharged the government for military aircraft parts. "In 1984, TRW officials admitted to the Defense Department Inspector General that they had evidence of two sets of books and other problems in one of the company's divisions in Cleveland and that there had been substantial overcharging of the federal government on various military aircraft parts," Dingell said. "For example, by falsifying its books and records, TRW inflated the price of a military engine blade by two to three times higher than the price of a virtually identical commercial engine blade," Dingell said in a statement. Eagleye and two other former employees filed a suit against TRW last year charging the company with overcharging the government. The Justice Department later joined the suit. "While employed by TRW and while under investigation by TRW, I disclosed to TRW's legal department and higher management, many flagrant and obvious violations of law, company policy and ethical conduct. None of this evidence was included in TRW's (1984) report to the government," he said. Reuter 

PENTAGON DELAYS PLAN TO BUY EUROPEAN MISSILE

The U.S. Army has delayed plans to buy a European anti-aircraft missile to help protect U.S. ground forces from Soviet attack helicopters, Defense Department officials said. The Army has been considering buying some British Rapier missiles or French and German Roland missiles as a stop-gap partial replacement this year for the flawed U.S. Sgt. York Division Air Defense (DIVAD) gun which was canceled in 1985. Despite recent indications by the service that it intended to buy the missiles soon, defense officials told Reuters a final decision had been suspended because some Army officials favored a more versatile gun-missile combination. The gun-missile combination would open the competition wide to U.S. firms. "The missile option is on hold now and no decision has been made," said one of the Pentagon official, who asked not to be identified. "There is some sentiment to take things more slowly and see if we can avoid a stop-gap system until we can come up with an integrated system of our own," said another official. Army Lt. Col. Craig McNab said, however, that Ronald and Rapier "are not out of the picture by a long shot." There has been strong sentiment in the Army to reject a missile only and to opt for a more versatile combination gun and missile system mounted on a tracked vehicle. Such a move would throw the competition wide open to U.S. firms, including General Electric Co <GE>, Boeing Co <BA>, FMC Corp <FMC> and Martin Marietta Corp <ML>. But some Pentagon officials have expressed fears that an "off-the-shelf" gun-missile combination could not be fielded quickly enough. Defense Secretary Caspar Weinberger canceled the Sgt. York gun, made by Ford Motor Co <F> Aerospace and Communications Corp, after the Pentagon had already spent 1.8 billion dlrs on the system and then decided it could not shoot down attack helicopters at the proper range. The Army later expanded the division air defense concept, announcing it would divide the system into five different components for the 1990s at a cost of more than 10 billion dlrs, including a missile and gun-system combination on a tracked vehicle. Reuter 

TRW <TRW> RESPONDS TO CHARGES BY EX-EMPLOYEE

TRW Inc, responding to allegations by an ex-employee that it was unethical in defense contract dealings, said it had previously informed the government of the billing problems. "We heard nothing of substance as far as allegations by former employees that were not related to findings that we had reported to the government of misdeeds at our compressor components group," a TRW spokesman said. The spokesman said the company conducted an internal investigation and presented the findings to the government beginning in late 1984. Reuter 

INTERNATIONAL BORROWING REACHES RECORD IN 1986

Record high borrowing of 376 billion dlrs in 1986 on international capital markets was supported by a large volume of debt refinancing and growing integration between national and international markets, the OECD said. The Organisation for Economic Cooperation and Development (OECD) said in its latest Financial Market Trends report the 34 pct rise over 1985 volume was accompanied by major changes in the relative importance of the instruments used in international financing. Straight bond offerings, equity related securities and euro-commercial paper programmes as a share in total financing rose to their highest level this decade. The markets for floating-rate notes and for note issuance facilities declined. The OECD said another striking feature of international capital markets in 1986 was the unprecedented concentration of lending to the OECD group of western industrialised countries, which accounted for 90 pct of total borrowing. Factors behind the heightened pace of activity included a notable decline in interest rates which boosted borrowing through the flotation of fixed-interest securities. This in turn was stimulated by growing familiarity with new techniques such as interest rate and currency swaps. Stockmarket buoyancy supported the expansion of equity-related bond issues and favoured the expansion of a rapidly expanding market for euro-equities. A slowdown in net demand for funds by sovereign borrowers was more than offset by a large volume of refinancing operations induced by improved market conditions and stronger debt management policies. Growing integration with national markets meant the arrival of a large number of new players on international markets. It added the development of a smoothly-functioning market for short-term euro-notes made committee and non-underwritten issuance facilities an increasingly popular alternative to traditional forms of bank lending. Turning to 1987, the OECD pointed to indications of a possible slowdown of international markets' expansion and possibly less easy borrowing terms in a number of market areas. It said many market participants saw little scope for a further decline in long-term rates and anticipate a slowdown in the pace of fixed-rate activity in the months ahead. It saw little reason for a turnaround in the decline in demand of recent years, although it was likely more borrowers would try to make use of cost-reducing opportunities provided by the market for euro-commercial paper. "It remains to be seen however to what extent the ECP market will be ready to absorb a significant volume of paper from lower-rated borrowers," the report said, adding that any major advance in the euro-note market's absorptive capacity would require a significantly broader investor base. Reuter 

NYMEX OUTGOING CHAIRMAN SEES MAJOR CHANGES

Trading in energy futures on the New York Mercantile Exchange will change dramatically over the next five to 10 years as the market matures, according to outgoing chairman Michel Marks. "Energy futures trading is going through a tremendous period of transition that will last five to 10 years," Marks said, adding that volume will soar, international participation will increase, and activity of producing countries, major oil companies, and speculators will grow. Marks steps down as chairman after an nine-year tenure when board elections are held March 17. He will continue as chairman of a long-range planning committee at NYMEX. "The priority of the next 10 years is operational efficiency versus the last 10 years when it was new product development," said Marks. Marks said it is imperative for NYMEX, which is running out of trading space, to process greater volumes expeditiously in order to handle the growth in volumes and new contracts that are already planned. Marks said crude futures volume could more than double by the end of the decade to 250,000 contracts daily and combined products volume could soar to 100,000 contracts a day. Much of the increased activity will come from the international sector, according to Marks. "That's a huge growth area," he said, adding that it will run the gamut from foreign producer countries to foreign independent operators. He said it would be difficult to develop a futures contract based on an internationally traded crude although he previously said the exchange is exploring that possibility. "Trying to develop a futures contract in any other crude besides West Texas Intermediate will be a tough task" he said. Marks said it is more likely a futures contract based on an international product rather than an international crude will be developed since the products market is more diverse. He said previously the exchange is studying the possibility of developing a non-U.S. deliverable products contract. Other sources of growth for U.S. energy futures are the major oil companies, which already trade on the NYMEX, and institutional funds such as investment houses, pension funds, and insurance companies, Marks said. "The commodities markets have become financial markets and should pursue a partnership with financial intermediaries," Marks said. He said speculators will increase their share of the energy futures markets in the coming years from the current share of about 30 pct. Hedgers, as a result, will lose some of their 70 pct share. Reuter 

NBI <NBI> INTRODUCES NEW PRODUCTS

NBI inc said it has reduced prices of on its 5000 series publishing workstations by 30 pct and has introduced a new electronic publishing workstation, a mini-computer and an image scanner at the Corporate Electronic PUblishing Systems Show. All of NBI's 5000 Series are included in the new pricing including the Integrated workstation formerly priced at 14,490 dlrs and the pro publisher formerly priced at 15,490 dlrs. Reuter 

PHILIPPINE, ARGENTINE DEBT TALKS CONTINUE

The Philippines and its bank advisory committee completed a second day of talks on the country's request to reschedule 9.4 billion dlrs of debts, bankers said. They declined to disclose details of the negotiations, but said it would be unrealistic to expect an outcome until next week at the earliest. Talks with Argentina over 2.15 billion dlrs of new loans and a multi-year rescheduling also continued in New York, with the Citibank-led advisory committee making a counter-proposal to Argentina's original offer. Bankers remain hopeful that an agreement can be reached by the middle of the month. Reuter 

HOUSE TRADE BILL DRAFTING POSTPONED

The House Ways and Means trade subcommittee postponed until next week its opening session to start drafting major changes to U.S. trade laws, a committee aide said. The subcommittee had not yet completed the preparatory work to start writing the legislation, the aide said. Reuter 

<LUMONICS INC> YEAR LOSS

Oper shr loss 20 cts vs profit 66 cts Oper net loss 1,995,000 vs profit 5,820,000 Revs 65.2 mln vs 53.0 mln Avg shrs 9,891,000 vs 8,811,000 Note: 1986 loss excludes extraordinary loss of 2,413,000 dlrs or 25 cts shr including corporate reorganization, discontinuing of U.S. operations and inventory writedown of U.S. subsidiaries vs yr-ago loss of 3,140,000 dlrs or 36 cts shr. Reuter 

HCC INDUSTRIES <HCCI> QUARTERLY DIVIDEND

Qtly div three cts vs three cts Pay March 27 Record March 16 Reuter 

REGAL <RGL>, BELL PETROLEUM IN REORGANIZATION

Regal International Inc said it proposed to submit a plan of reorganization with the U.S. Bankruptcy Court under which it will acquire Bell Petroleum Services INc's by paying out all of its creditors and issue one share for each shares of Bell's stock. This proposal has been amended from a previously rejected offer of .50 Regal share for each Bell share. Regal said its will pursue the acquisition without the support of Bell's management. Bell Petroleum filed its Chapter 11 petition in November 1986 and has not, as yet, filed a plan of reorganization but has only sought an order extending the exclusive order, according to Regal. Bell Petroleum President Ed Runyan said the company is evaluating Regal's latest offer and evaluating other alternatives. Runyan said Bell is meeting tomorrow with another potential suitor. Reuter 

SOUTHLAND <SLC> UNIT RAISES CRUDE PRICES

Southland Corp's Citgo Petrleum Corp said it raised the contract price it will pay for all grades of crude oil by one dlr a barrel, effective today. The increase brings Citgo's posted price for West Texas Intermediate to 17.00 dlrs a bbl. West Texas Sour is also now priced at 17.00 dlrs/bbl, and Light Louisiana South is posted at 17.35 dlrs/bbl. On February 25 Citgo lowered its crude postings 50 cts to 1.50 dlrs per bbl, and cut WTI one dlr to 16.00. Reuter 

MAZDA MOTOR CORP REPORTS LOWER U.S. SALES

Mazda Motor Corp of Japan reported car sales in the U.S. during February of 10,049, down from 19,448 during February last year. The company said year to date car sales in the U.S. totaled 21,092, down from 38,441 a year earlier. Truck sales in the U.S. totaled 8,558 in February, down from 9,693 a year earlier. Year to date U.S. truck sales totaled 16,917, compared to 18,341 a year ago. Reuter 

<WESTERN SECURITY BANK> 4TH QTR NET

Shr profit ten cts vs loss six cts Net profit 43,000 vs loss 26,000 Year Shr profit 46 cts vs profit 12 cts Net profit 193,294 vs profit 51,029 Assets 44.4 mln vs 25.3 mln Deposits 40.0 mln vs 21.4 mln Loans 25.3 mln vs 15.2 mln Reuter 

RECENT U.S. OIL DEMAND UP 2.1 PCT FROM YEAR AGO

U.S. oil demand as measured by products supplied rose 2.1 pct in the four weeks ended February 27 to 16.39 mln barrels per day (bpd) from 16.05 mln in the same period a year ago, the Energy Information Administration (EIA) said. In its weekly petroleum status report, the Energy Department agency said distillate demand was down 2.1 pct in the period to 3.37 mln bpd from 3.44 mln a year earlier. Gasoline demand averaged 6.60 mln bpd, up 2.4 pct from 6.44 mln last year, while residual fuel demand was 1.47 mln bpd, up 1.9 pct from 1.44 mln, the EIA said. Domestic crude oil production was estimated at 8.38 mln bpd, down 8.7 pct from 9.18 mln a year ago, and gross daily crude imports (excluding those for the SPR) averaged 4.11 mln bpd, up 36.9 pct from three mln, the EIA said. Refinery crude runs in the four weeks were 12.21 mln bpd, up 2.2 pct from 12 mln a year earlier, it said. Year-to-date figures will not become available until March 26 when EIA's Petroleum Supply Monthly data for January 1987 becomes available, the agency said. Reuter 

SECURITIES GROUP FAVORS NEW BANK POWER FREEZE

The Securities Industry Association endorsed legislation expected to come before the Senate Banking Committee tomorrow imposing a moratorium on new powers for commercial banks. Robert Gerard, managing director of Morgan Stanley and Co, told reporters his group, which mainly represents investment banking firms, supported committee members who want the Federal Reserve Board to postpone action on applications by three bank holding companies seeking new powers. "The Fed ought to hold those applications in abeyance pending congressional review," Gerard said. The legislation before the committee would recapitalize a federal desposit insurance fund for savings and loan associations and prohibit new nonbank banks. Gerard said the securities association had no position on nonbank banks. The association wants Congress to undertake a comprehensive study before changing the Glass-Steagall Act, which separates commercial and investment banking activities, Gerard said. Until the study is completed, the Fed should not act on the applications by Citicorp, J.P. Morgan and Co. and Bankers Trust New York Corp to underwrite and deal in securities, he said. The study was likely to show substantial benefits from continuing the separation of commercial and investment banking, he said. Gerard said the group believes a proposal by House Speaker Jim Wright for a tax on securities was unjustified and would hurt individual investors and beneficiaries of pension funds that invest in securities. "It may reduce the volume of activity, but the tax is a tax on the saver and investor," Gerard said. In addition, a U.S. tax would drive business from the United States to other countries, he said. Reuter 

COFFEE PRICE DROP NOT AFFECTING COLOMBIA'S DEBT

the sharp fall in international coffee prices will not affect colombia's external credit situation, finance minister cesar gaviria told reuters. "our foreign debt is high, but we can pay, and I hope the foreign banking community will maintain its position toward us," he said. He said the current decline on world coffee markets was not totally unexpected and would have no immediate bearing on colombia's financial state, which he described as sound. Gaviria said the decline in coffee prices could mean a loss of 1.5 billion dlrs in revenues for 1987. The conservative party and the country's largest trade union called this week for the debt to be rescheduled following the price drop. Colombia, the only major latin american country not to have rescheduled its external public debt, has a total foreign debt of 13.6 billion dlrs. Reuter 

GULF STATES <GSU> ASKS FOR REQUIREMENT REMOVAL

Gulf States Utilities Co said it asked the Public Utility Commission of Texas to remove a condition that it secure a line of credit before the emergency rates can be put into effect in the Texas service area. The commission granted it a 39.9 mln dlrs interim rate increase February five, contingent upon Gulf States obtaining a 250 mln dlr line of credit. A motion for rehearing will be considered at as commission meeting on March 11, it said. Gulf States said it is concerned the credit line requirement will give potential lenders an advantage that would be damaging to the company. Reuter 

USDA WOULD SCRAP COTTON, RICE, BEAN PRICE FLOORS

The package of proposed farm policy changes that the Reagan administration sent to Congress today includes a provision that would eliminate minimum price support levels for upland cotton, rice and soybeans. The package, obtained by Reuters, also includes a provision, outlined in advance by USDA officials, that would increase the annual permissible cut in the basic price support levels for all major crops to 10 pct from five pct. Under current law, the basic support prices for upland cotton, rice and soybeans between 1987 and 1990 cannot be cut below 50 cents per lb, 6.50 dlrs per hundredweight and 4.50 dlrs per bushel, respectively. USDA's intention to propose scrapping price floors for cotton, rice and soybeans had not been disclosed previously. Reuter 

GATT SETS UP PANEL ON CANADIAN HERRING, SALMON

The ruling GATT Council today set up a formal dispute panel to examine a U.S. complaint that a Canadian law prohibiting export of unprocessed herring and salmon was discriminatory. David Wood, official spokesman of the General Agreement on Tariffs and Trade (GATT), told a news briefing the decision was taken after bilateral consultations failed to resolve the row. U.S. Ambassador Michael Samuels charged during the Council debate that Canada was trying to preserve domestic jobs by insisting that herring and salmon be processed at home. Robert White, Canada's deputy chief of delegation, replied the law was in line with GATT rules, and was for conservations reasons. But he agreed to setting up the dispute panel. Reuter 

EXCHANGE BANK <EXCG> SEES BANK INDUSTRY SHAKEOUT

Opportunities for medium-sized banks to compete in the face of the increasing centralization of the financial services industry may be dwindling, according to John Rau, president of the Exchange National Bank of Chicago. "We're going to see a continued shaking-out of the banking industry," Rau told Reuters after a speech to securities analysts and investment advisors. Rau said Exchange National Bank has concentrated its resources on financial services for medium-sized Chicago and Midwest businesses, asset-based lending to middle-market companies, and sales and trading of financial services. "Most commercial banks depend on relatively low cost consumer deposits for their income. We decided to move our franchise into a less susceptible niche," Rau said. "Nichemanship is a very difficult thing, especially in urban areas where inevitably banking franchises are mass-market oriented," Rau said. "The odds are against other banks doing what we have done." Exchange National Bank is the principal subsidiary of The Exchange International Corp. With total assets of 1.9 billion dlrs, it is Chicago's fifth largest bank. Net income totalled 10.2 mln dlrs or 1.10 dlrs a share in 1986, up from 7.7 mln dlrs or one dlr a share in 1985. Reuter 

SOUTH AFRICAN FOREIGN RESERVES UP SHARPLY

South Africa's total gold and foreign assets rose by 700 mln rand in February to 6.2 billion rand after rising by almost one billion rand in January, Reserve Bank Governor Gerhard de Kock said. De Kock, interviewed on state-run television, gave no breakdown of the reserves. He also said that to curb inflation, salary increases would have to be below the inflation rate. The state must set an example by keeping wage increases below the inflation rate, he said. Consumer prices rose by 16.1 pct in the year to January. Reuter 

WTC INTERNATIONAL <WAF> SETS SOUTH AFRICA TRUST

WTC International N.V. said it has sold its affiliates in South Africa to an independent trust, created to continue the operations in that country. The purchase price was about 8.4 mln dlrs, represented by a ten-year interest-bearing note, payable annually at 11 pct, to be paid by the trust out of proceeds from the South African operations, the company said. WTC said its board concluded in view of the social, political and economic situatin in South Africa, it was best to separate the company from its interests there. Reuter 

MOST BOLIVIAN CENTRAL BANK EMPLOYEES RESIGN

about 1,000 bolivian central bank employees, more than 80 per cent of the workforce, accepted management terms to quit today, a union leader said. "none of the employees who have decided to resign from the institution is prepared to work again in the bank, unless many of the economic and social conditions improve," bank workers leader mario galindas told reuters. The centre-right government of president victor paz estenssoro had approved a restructuring plan which envisaged at least 600 redundancies, about half the bank's workforce, in line with its policy of streamlining the state sector. Galindas said the bank needed at least 800 employees to keep up its present functions. The bank agreed to pay a 5,000 dollar bonus to every employee who resigned, as well as the legal redundancy terms of three months salary plus one for every year worked. Reuter 

SURINAM GOVERNMENT TO DISCUSS ECONOMIC CRISIS

Surinam's military government opens a four-day congress tomorrow to discuss the country's deepening economic crisis, the official Surinam News Agency reported. Acting Prime Minister Jules Wijdenbosch will open the meeting which is being attended by government officials, political leaders and heads of labor unions. Surinam's economy has suffered a sharp downturn in recent months as a result of guerrilla activities led by former soldier Ronny Brunswijk, who is seeking to overthrow the government of Commander Desi Bouterse. The guerrillas have forced the shutdown of most of Surinam's vital bauxite and aluminum industry, creating a foreign exchange crisis and food shortages. Reuter 

IVORY COAST SAYS COFFEE PRICE FALL SHORT-LIVED

Ivory Coast today predicted that the present coffee price crash recorded after the collapse of the recent International Coffee Organisation (ICO) meeting in London would not last long. Commenting on Monday's failure by producer and consumer nations to agree on new export quotas needed to tighten an oversupplied coffee market, Ivorian Agriculture Minister Denis Bra Kanon told reporters that traders would eventually be obliged to restore their positions. "I am convinced the market is going to reverse by April," he told a news conference here at his return from the failed London talks. Robusta coffee beans for May delivery ended the day in London down about 50 sterling at 1,265 sterling a tonne, the lowest since 1982. Bra Kanon estimated at at least 535 billion CFA francs (1.76 billion dlrs) the overall loss in revenues earned by Ivory Coast from all its commodities exports this year if the slide on the world markets continues. He disclosed that his country - the world's biggest cocoa producer and the third largest for coffee -- would spearhead an African initiative to reach a compromise formula by the end of next month. Ivory Coast has been chosen by the Abidjan-based Inter-African Coffee Organisation (IACO) to speak on behalf of the continent's 25 producer nations at the London talks. "An initiative from IACO is likely very soon," he said without elaborating. "Following the London collapse, we have immediately embarked on a concertation course to avoid breaking an already fragile market," he said. Questioned by journalists, the minister said President Felix Houphouet-Boigny estimated for the moment that his government would not be forced to reduce the price guaranteed by the state to Ivorian coffee-growers for the current season. Last year, the West African nation announced that the coffee producer price would stay at 200 CFA francs (65 cents) per kilo. Bra Kanon said that his country would strive to diversify its agricultural production to avoid beeing too dependent from world market fluctuation. A communique read over the state-run television tonight said that during today's weekly cabinet meeting, the veteran Ivorian leader reaffirmed "his faith in Ivory Coast's bright (economic) future" despite the commodities price slide. The Agriculture Minister also announced the government decided to earmark a sum of 7.5 billion CFA francs (24.71 mln dlrs) to support the country's small farmers. Financially-strapped Ivory Coast, long regarded as one of Africa's showpiece economies, is going through difficult times following the sharp slump in the world price of cocoa and coffee. Ivory Coast's real gross domestic product is expected to grow only one pct this year compared to five pct in 1986, according to a recent Finance Ministry estimate. Reuter 

N.Z. CURRENT ACCOUNT DEFICIT NARROWS IN JANUARY

New Zealand's current account deficit narrowed to 180 mln N.Z. Dlrs in January from 203 mln, revised from 207 mln, in December and 305 mln in January 1986, in a smoothed measurement, the Statistics Department said. Unsmoothed figures show a deficit of 162 mln dlrs for January against 107 mln, revised from 75 mln for December 1986 and 575 mln in January 1986. The smoothed series -- adjusted to iron out random fluctuations -- shows a widening surplus on merchandise trade to 46 mln from a surplus of 33 mln, revised from 43 mln dlrs in December and a 71 mln deficit in the a year ago period. Exports were 905 mln dlrs against 929 mln, revised from 971 mln in December and 816 mln a year earlier, while imports fell to 858 mln from 895 mln, revised from 928 mln in December and 888 mln in January 1986. Unadjusted merchandise figures show a surplus of 53 mln dlrs vs 141 mln, revised from 203 mln surplus in December 1986 and a 323 mln deficit a year earlier. The deficit on invisibles on unsmoothed figures eased to 215 mln dlrs from 248 mln, revised from 277 mln in December and 252 mln in January 1986. The smoothed deficit on invisibles fell to 226 mln from 237 mln, revised from 250 mln in December and 234 mln in the year ago period. REUTER 

BUTTES GAS AND OIL <BGO.P> FILES BANKRUPTCY PLAN

Buttes Gas and Oil Co said it filed a plan of reorganization in a U.S. Bankruptcy court handling its Chapter 11 bankruptcy case. The company said the plan wll provide for distribution of cash, promissory notes and stock among 12 classes of creditors and equity interests. Reuter 

CHARTS SIGNAL BULLISH BREAKOUT IN DEBT FUTURES

The rally Wednesday in U.S. interest rate futures left the Treasury bond contract above the top of a three month trading range which signals a bullish chart breakout, financial analysts said. In addition, sluggish U.S. economic data and little sign that the economy will pick up its pace in the near future may be enough to send bond futures to all-time highs, the analysts said. "The market is paying more attention to the weakened state of the economy right now," said Refco analyst Mike Connery. Connery said the four pct drop in January U.S. factory orders reinforced sentiment that first quarter economic growth will be slow. Connery and other analysts noted that talk of a cut in the Lombard rate after sluggish West German industrial production figures also provided some support. "The domestic economies of the major trading partners of the U.S. may deteriorate to such an extent that they will be forced to ease," thus paving the way for a more accomodative U.S. credit policy, added John Michael, analyst at First Options of Chicago. Michael pointed out, however, that trimming the U.S. trade deficit -- the ultimate aim of the recent meeting of major industrial countries -- may not necessarily aid bond prices. "The surplus (for exporters to the U.S.) is bullish for bonds because they (exporters) have a lot of dollars. Rather than translate those into their own currencies and suffer exchange rate risk, they buy dollar-denominated instruments," Michael said. Indeed, futures traders with cash bond connections said some of the late strength in the bond market resulted from buying by Japanese interests. But the analysts said the heavy buying in futures occurred after the June bond broke above stiff resistance at 101-2/32. "The breakout is pretty important," said chartist Leslie Keefe of Technical Data Corp of Boston. "Not only did bonds close above recent highs but they were also above the sideways pattern we've been in for the last three months." Also positive on a technical basis was the fact that the June bond contract held chart support early near 100-4/32, and that the rally occurred on heavy volume, Keefe said. Keefe said the next level of significant chart resistance will be at 101-24/32 to 101-28/32. Furthermore, "we still have the April (1986) highs to contend with," which in the nearby contract is 105-15/32. Michael said the breakout projects gains to 103 in June T-bonds and "there is an outside chance to reach 106." Keefe warned, however, that confirmation also is needed from other technical indicators such as relative strength indexes and short-term momentum indicators. "Without them, sustained strength is in question," Keefe said. Reuter 

N.Z. WRITES OFF MEAT PRICE STABILISATION DEBT

New Zealand agreed with the Meat Producers Board to write off 1.03 billion N.Z. Dlrs of debt incurred on behalf of farmers under the Meat Price Stabilisation Scheme, Finance Minister Roger Douglas said. Douglas and Agriculture Minister Colin Moyle said in a joint statement the agreement concludes one of the major refinancing arrangements announced in the July 1986 budget, which removed subsidies from the farming sector. The write-off applies to debt occurring prior to October 1985, when stabilisation payments for sheepmeat ceased under an industry restructuring which allowed private marketing. REUTER 

PRESIDENT REAGAN SAYS ARMS FOR HOSTAGES WAS MISTAKE, ACCEPTS RESPONSIBILITY

REAGAN ADMITS IRAN ARMS OPERATION A MISTAKE

President Reagan, fighting to regain public confidence in the wake of the Iran arms scandal, admitted tonight that the clandestine operation wound up as an arms-for-hostages deal and, "It was a mistake." "When it came to managing the NSC (National Security Council) staff, let's face it, my style didn't match its previous track record," Reagan said in a television address to the American people. "I have already begun correcting this," he added in his prepared remarks. Reagan's speech, widely regarded as critical to his hopes of repairing his presidency, was his first detailed response to last week's scorching Tower commission report on the secret sale of arms to Iran and diversion of profits to U.S.-backed contra rebels in Nicaragua. Reagan said he had been silent on the scandal while he waited for the truth to come out and admitted, "I've paid a price for my silence in terms of your trust and confidence." He said that a few months ago, he told the American people he did not trade arms for hostages in the 18-month covert operation. "My heart and my best intentions still tell me that is true, but the facts and the evidence tell me it is not," Reagan said. "There are reasons why it happened, but no excuses. It was a mistake," he said. Reagan again said that the original Iran initiative was to develop relations with those who might assume leadership in a post-Khomeini government. "It's clear from the Board's report however that I let my personal concern for the hostages spill over into the geo-political strategy of reaching out to Iran. "I asked so many questions about the hostages' welfare that I didn't ask enough about the specifics of the total Iran plan," he said. The commission, headed by former Republican Sen. John Tower, said Reagan's "intense compassion" for Americans being held by pro-Iranian groups in Lebanon had resulted in an unprofessional and unsatisfactory policy. It portrayed 76-year old Reagan as a man who did not know or care much about the wide-ranging, probably illegal activities of his National Security Council (NSC) staff, which hatched the operation. Reagan said he endorsed all of the Tower commission's recommendations about the running of the NSC, adding, "In fact, I'm going beyond its recommendations, so as to put the house in even better order." He noted that he had appointed former Senate Republican leader Howard Baker as his new chief of staff and said he hoped Baker would help him forge a new partnership with Congress, "especially on foreign and national security policies." He said his new national security adviser, Frank Carlucci, was rebuilding the national security staff "with proper management discipline." Reagan said that almost half the NSC professional staff now consisted of new people. He said that FBI Director William Webster, his new nominee to head the CIA, "understands the meaning of 'rule of law'". Reagan also announced that Tower had agreed to serve as a member of his Foreign Intelligence Advisory Board, which acts as a watchdog on the nation's covert activities. But he said that he had issued a directive barring the NSC staff itself from undertaking covert operations -- "No ifs, ands, or buts." Tonight's speech was a far cry from Reagan's initial strong defense of his Iran policy. In a televised speech last November 13, Reagan called charges that he ransomed hostages and undercut the U.S. war on terrorism "utterly false." As recently as two months ago in his State of the Union speech, Reagan said that "serious mistakes were made" but defended the basic policy as one that had worthy goals. By contrast, tonight's speech had an apologetic tone that was a marked departure from Reagan's usual upbeat, confident demeanor. He said he took full responsibility for his own actions "and for those of my administration." "As angry as I may be about activities undertaken without my knowledge, I am still accountable for those activities. As disappointed as I may be in some who served me, I am still the one who must answer to the American people for this behavior," Reagan said. Reagan said the message that the nation should move on had come from Republicans and Democrats in Congress, from allies around the world -- "and if we're reading the signals right, even from the Soviets." His remark seemed to be a reference to a new Soviet willingness to reach an agreement on eliminating medium-range nuclear missiles in Europe. Reuter 

REAGAN SAYS IRAN POLICY RECORDS IMPROPERLY KEPT

President Reagan said improper record keeping of meetings and decisions made on the Iran arms initiative led to his failure to recollect whether he approved arms shipments by Israel before or after the fact. In a televised address to the American people Reagan said he is still upset that no-one kept proper records -- a complaint made by the Tower commission. The arms shipment was made in August of 1985 by Israel. "I did approve it; I just can't specifically say when," Reagan said. Reagan added: "Rest assured, there's plenty of record-keeping now going on at 1600 Pennsylvania Avenue (the White House)." The timing of Reagan's approval of the Israeli shipment is important because it could determine whether the sale violated various laws, including the Arms Export Control Act. Reuter 

REAGAN'S REMARKS HELP GOLD TO RECOVER IN HONG KONG

Gold rose by about 50 U.S. Cents an ounce, following a statement by President Ronald Reagan that the arms-for-hostages deal with Iran "was a mistake," dealers said. Bullion rose to 409.40/90 dlrs from an initial low of 408.90/409.40. This compares with the opening of 409.00/50 and New York's close of 410.00/50. Dealers noted mild short-covering in the metal after some initial selling by local investors. Trading was fairly quiet this morning partly owed to the slow U.S. Dollar activities, they added. However, Reagan's remarks had only a short-lived bullish impact on the gold price, which is now stabilising at 409.10/60 dlrs, dealers said. On the local market, the metal traded in a narrow range of 3,800 and 3,805 H.K. Dlrs a tael against yesterday's 3,778 close. REUTER 

TAIWAN ISSUES MORE CDS TO CURB MONEY SUPPLY GROWTH

The central bank has issued 7.08 billion dlrs worth of certificates of deposit (CDs), bringing the value of CD issues so far this year to 93.29 billion, a bank spokesman told Reuters. The new CDs, with maturities of six months, one year and two years, carry interest rates ranging from 3.9 to 5.15 pct. The issues are designed to help curb the growth of the M-1B money supply which has expanded along with Taiwan's foreign exchange reserves, the spokesman said. The reserves reached a record high of more than 51 billion U.S. Dlrs Wednesday. REUTER 

IRAN REPORTS OFFENSIVE AS IRAQ THREATENS AIR RAIDS

Iranian troops are fighting on two widely separated fronts in a new offensive in the mountains of Kurdistan in northern Iraq, Tehran's IRNA news agency said. Baghdad war communiques made no mention of fresh fighting on northern or southern sectors, but a military spokesman threatened a resumption of air raids on Iranian towns. IRNA, monitored by the BBC in London, said Iran had seized several strategic heights in the northern assault, which started on Tuesday. It said at least 2,000 Iraqi troops had been killed, wounded or captured. The offensive is in the Haj Omran area of Kurdistan, scene of fierce fighting in 1983. Tehran radio reported last night that Iranian forces were in control of four mountain areas, bringing several Iraqi towns with troop concentrations within artillery range. In the south, IRNA said, Iranian forces captured several Iraqi defence posts east of Iraq's second city, Basra, in a drive north along the Shatt al-Arab waterway. Today is the end of a two-week-long Iraqi moratorium on air raids declared on condition that Iran stop attacking Iraqi territory and shelling its towns. Iraq's war spokesman said Iran had kept up its attacks and had made "boasts of illusory victories." REUTER 

ITALIAN PRESIDENT FACES PROBLEMS CHOOSING LEADER

President Francesco Cossiga meets political leaders to discuss how to form a new government following the resignation of Prime Minister Bettino Craxi. Craxi's Socialist Party has said it will not serve under Foreign Minister Giulio Andreotti, who has been prime minister five times previously and whom the majority Christian Democratic Party has said it wants to take on the job again. The Socialist Party, the second biggest in the outgoing five-party coalition, said it would accept only Ciriaco De Mita, Christian Democratic Party secretary, or the party's president, Arnaldo Forlani, for the job of prime minister. Political sources said talks are likely to be difficult and could take several days due to rivalry between the two leading parties. In Craxi's 3-1/2 years as prime minister, the Christian Democrats have become increasingly irritated at being denied the prime minister's job. The sources said early general elections are likely unless agreement can be reached. Cossiga is due to meet former presidents before holding talks with party leaders, including the opposition Communists and the junior coalition members -- Republicans, Liberals and Social Democrats. After the consultations, Cossiga will name a prime minister-designate who will try to form a government. REUTER