trec.sample.xml

<document>
<DOC>
<DOCNO>5000</DOCNO>
<PROFILE>_AN-CFBA3AF8FT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / World Stock Markets (America): Growing optimism lifts Dow
Jones to record high
</HEADLINE>
<BYLINE>
   By PATRICK HARVERSON
</BYLINE>
<DATELINE>
   NEW YORK
</DATELINE>
<TEXT>
Wall Street
US STOCK MARKETS turned early weakness on higher bond yields into a
record-breaking performance yesterday as the Dow Jones Industrial Average
finished above 3,400 for the first time in its history, writes Patrick
Harverson in New York.
At the close the Dow was up 16.33 at 3,413.21, a near 40-point recovery from
its low of the early morning. Among other indices, the more broadly based
Standard &amp; Poor's 500 rose 1.93 to 417.25, the Amex composite rose 0.15 to
394.84 and the Nasdaq composite ended 3.21 higher at 588.37. Turnover on the
NYSE was 181m shares.
The dominant factor of the morning was bond prices, which fell almost a full
point at the long end (pushing the yield back up to nearly 8 per cent in the
process) as Treasury investors interpreted a strong May purchasing managers'
report as reducing the chances of another interest rate cut by the Federal
Reserve.
The selling in the equity markets, however, could not be sustained, and amid
growing enthusiasm about the outlook for the economy, share prices advanced
across all fronts late in the session.
The car sector led the way higher, with all three of the big car markers
rising as investors continued to anticipate a recovery in their fortunes.
General Motors rose Dollars 1 3/4 to Dollars 41 5/8 in turnover of 3.3m
shares, Ford added Dollars 1 7/8 at Dollars 46 3/8 in 2m shares, and
Chrysler advanced Dollars 1 3/4 to Dollars 19 3/4 as 1.9m shares changed
hands.
Chrysler received an additional boost from Salomon Brothers, the Wall Street
broking house, which raised its earnings outlook for the group and predicted
profits in both the second quarter and the full year 1992. Salomon set a new
price target for Chrysler stock of Dollars 25 over the next 12 months.
After the opening of trading was delayed because of an imbalance of orders
on the sell side, Commonwealth Edison fell Dollars 1 1/2 to Dollars 31 1/2
in the wake of a warning from the broking house, Kidder Peabody, that the
company's current divided rate might be cut.
Citicorp climbed Dollars  3/4 to Dollars 19 3/8 after Morgan Stanley
upgraded the stock from a 'hold' to a 'buy', citing dramatic strides in
cost-cutting, peaking problem real-estate assets in North America and an
expected boost to earnings from strong franchises in emerging markets.
Waste Management rose Dollars 2 3/8 to Dollars 38 in heavy trading on the
news that the Supreme Court had ruled in favour of the group's subsidiary
Chemical Waste Management, which had challenged a special fee levied by
Alabama on out-of-state hazardous waste.
Canada
TORONTO Stock prices closed higher in moderate trading. According to
preliminary data, the TSE 300 rose 16.05, or 0.47 per cent, to close at
3,403.98. Advancing issues edged declines 276 to 259.
Volume of 22.8m shares was up from Friday's 20.3m, and trading value rose to
CDollars 303.3m from CDollars 223.8m.
Eight of 14 stock groups closed higher, led by the transportation group, up
2.2 per cent.
Laidlaw B, the most-heavily weighted stock in the group, rose  3/8 to 12 1/4
. Financial services gained 1.5 per cent and gold was up 1.0 per cent.
Industrial products also closed higher.
Magna International A tumbled 1 1/8 to 32 5/8 . The company said it plans to
issue 3.2m class A shares at CDollars 32.25 a share.
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 41
</PAGE>
</DOC>
<DOC>
<DOCNO>5001</DOCNO>
<PROFILE>_AN-CFBA3AF7FT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / Foreign Exchanges: Dollar rises on US indicators
</HEADLINE>
<BYLINE>
   By JAMES BLITZ
</BYLINE>
<TEXT>
THE DOLLAR staged a recovery in late European trading on the foreign
exchange markets yesterday following signs of strong US manufacturing growth
last month, writes James Blitz.
Potential dollar buyers grew confident after the National Association of
Purchasing Management's index rose at its fastest pace in almost four years
to stand at 56.3 in May from 51.3 the month before. The survey's employment
index also jumped to 49.1 from 43.9 in April, its highest level since April
1989. The dollar closed at DM1.6100 in London, after a previous close of
DM1.6070.
However, there was still uncertainty in a number of traders' minds about the
scope and pace of the US economic recovery. The April figures for personal
income and consumption released yesterday were both weaker than expected.
These showed a 0.1 per cent rise in personal income in April, and a 0.3 per
cent rise in consumption.
According to Mr Neil MacKinnon, chief economist at Yamaichi International in
London, yesterday's indicators may effectively add up to an ill omen. 'The
real danger is the mismatch in output gains and personal consumption,' he
says. 'If the increase in manufacturing output is not matched by personal
consumption there will be a build-up of stocks that will lead to a cut in
production in the third quarter.' Other economists believe that the market
needs more time to decide whether to invest in dollars. 'The market will
look at money supply figures on Thursday and the non-farm payroll on
Friday,' said Mr Nick Stamenkovic, an economist at DKB International in
London. 'Until we get signs of a stronger recovery the dollar will remain in
narrow ranges.'
Yesterday's good figures for business confidence in the US failed to
restrain the dollar's losses against the Japanese yen after the Bank of
Japan intervened to strengthen its currency for the fourth day running.
Analysts reckon that the BoJ has spent Dollars 500m in intervention
operations in the last four days, as it tries to reduce its huge trade
surplus in the run up to the summit of the Group of Seven leading industrial
nations in July. In late Asian trading, the BoJ pushed the dollar below
Y127, its lowest level for four months. By the end of the European trading
session, the dollar stood at Y127.40, after a previous close of Y127.70.
The Danish krone was well underpinned as the latest polls showed that Danes
will vote 'yes' in today's referendum on European economic and monetary
union. The krone remained at the foot of the European Monetary System's
grid, but at minus 34 per cent of allowed swing below its central Ecu rate,
after Friday's close of minus 37 per cent.
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 35
</PAGE>
</DOC>
<DOC>
<DOCNO>5002</DOCNO>
<PROFILE>_AN-CFBA3AF6FT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / Money Markets: Short rates softer
</HEADLINE>
<TEXT>
SHORT-TERM rates in the sterling cash markets ended slightly softer
yesterday after the Bank of England took what appeared to be an
accommodating position in its money market operations.
Most of the period rates remained unchanged, with everything from 4-month to
9-month Libor once again ending at 10 per cent, and 1-year Libor at 9 15/16
per cent. But 3-month Libor, a key indicator of where interest rates are
moving, ended at 10 1/32 per cent, down  1/16 per cent on Friday's close.
Short term clearing bank certificates of deposit were also slightly softer,
with 1-month CDs ending at 9 29/32 per cent from a previous close of 10 1/32
per cent, and 3-month CDs ending at 9 7/8 per cent from 9 31/32 per cent.
The softening of rates was partly due to the small size of the shortage
forecast by the Bank of England. At Pounds 750m, this was far smaller than
those of last week, which amounted to Pounds 7.6bn over four days. Dealers
said that the Bank of England had also taken an accommodating stance,
inviting offers of bills in the early round.
However, the market was extremely slow to remove the shortage, with several
dealers putting the blame on a shortage of bills.
As one dealer put it, the market is currently being squeezed between two
phenomena. On the one hand, there is the usual slowing down of the economy
over the summer, which means that few bills are being offered to the Bank of
England. But there are also large shortages to be taken out, mostly due to
the large number of gilt issues being offered by the Bank.
As a result, the Bank purchased only Pounds 86m of Band-1 Bank bills at 9
7/8 per cent in its early operations yesterday. The forecast was later
revised to a shortage of around Pounds 900m before taking account of the
early operations.
The Bank then purchased Pounds 75m of Band-1 Treasury bills at 9 7/8 per
cent, and Pounds 10m for resale to the market on 22 June at an interest rate
of 9 15/16 per cent.
In the afternoon, the Bank purchased Pounds 20m of Band-1 bank bills at 9
7/8 per cent. The Bank provided late assistance of around Pounds 345m.
The cost of overnight funding jumped to 11-10 1/2 per cent at one stage and
closed at 9 3/4 per cent.
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 35
</PAGE>
</DOC>
<DOC>
<DOCNO>5003</DOCNO>
<PROFILE>_AN-CFBA3AF5FT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / World Commodities Prices: Market Report
</HEADLINE>
<BYLINE>
   By REUTER
</BYLINE>
<TEXT>
London's robusta COFFEE market saw early gains erased in the afternoon,
leaving the September contract unchanged from Friday's close. Dealers said
there was little follow-through buying interest after Friday's advance in
New York. The market could now settle down to trade in a narrow band ahead
of the first set of negotiations for a new coffee pact on June 22-26.
Dealers discounted some unconfirmed talk of cold weather in Brazil. LME
trading was mainly influenced by fluctuations in the sterling/dollar
exchange rate, with most metals ending below their highs. Three-month TIN
touched a 20-month high of Dollars 6,460 a tonne after European trade buying
touched off short covering and buy stops. While profit taking eventually
pared gains, chartists are still looking for a near-term target of Dollars
6,500. Nymex PLATINUM futures were firmer at midday as the fundamental front
continued to look bright. Analysts cited continued concerns over the
availability of physical supply, particularly in Europe, as well as
perceptions that European car companies are coming to market. The EC set the
end of this year as the deadline for new models of gasoline-powered cars to
have catalytic converters.
Compiled from Reuters
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 30
</PAGE>
</DOC>
<DOC>
<DOCNO>5004</DOCNO>
<PROFILE>_AN-CFBA3AF4FT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / Commodities and Agriculture: Fresh 'mad cow' study urged
</HEADLINE>
<BYLINE>
   By DAVID OWEN
</BYLINE>
<TEXT>
MR DAVID Clark, the UK shadow agriculture minister, is to call for an
independent report into 'mad cow' disease, saying that the incidence of
infection is continuing to rise.
According to Mr Clark, there has been a weekly average of 631 new cases in
Britain in the four months to end-April 1992, compared with 437 last year.
This constitutes an increase of 45 per cent.
He plans today to table a parliamentary written question asking Mr John
Gummer, the agriculture minister, to convene a committee of independent
scientific experts to publish a report on the disease.
'In the pre-election period, the government was trying to con us that the
disease would start declining soon,' he said.
According to Mr Clark's figures, a total of 55,300 cases of bovine
spongiform encephalopathy (as the disease is more properly termed) has now
been diagnosed, with the heaviest concentration in south-west England.
The ministry of agriculture yesterday did not dispute that the incidence of
infection was continuing to rise but said the number of new cases was
expected to peak very shortly.
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 30
</PAGE>
</DOC>
<DOC>
<DOCNO>5005</DOCNO>
<PROFILE>_AN-CFBA3AF3FT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / Commodities and Agriculture: CIS metal output lower than
estimated, says report
</HEADLINE>
<BYLINE>
   By KENNETH GOODING, Mining Correspondent
</BYLINE>
<TEXT>
LEAD and zinc production in the states comprising the former Soviet Union
has been nowhere near the level most western estimates suggest, claims the
Commodities Research Unit, the London-based consultancy.
It says lead mine output has been less than half the 490,000 tonnes widely
estimated by western analysts. Zinc mine production has been less than
two-thirds the previously estimated 870,000 tonnes.
The CRU bases its estimates on fieldwork and personal contacts within the
former Soviet Union. Metal production figures are still state secrets and
are not published by official sources in Moscow.
The consultancy's estimates suggest that the former Soviet Union was the
third largest producer of mined copper in 1990, after Chile and the US, with
an output of almost exactly 1m tonnes - not far short of figures given by
other western analysts.
'In spite of a policy of self-sufficiency under the former communist regime,
the Soviet Union was not self-sufficient in mine production of copper, lead
or zinc,' says the CRU in a special report produced in association with
Mekhanobr Institute, a technical research organisation based in St
Petersburg.
'More than 100,000 tonnes of copper in concentrates were imported from
Mongolia in 1988-90; imports of lead concentrates were recently as high as
12 per cent of smelter production, although they fell in 1991 because of the
shortage of foreign exchange; imports of zinc concentrates were more than 8
per cent of smelter production in 1990, but have also fallen since then.'
The CRU blames lack of investment in mine development and declining ore
grades for the weak state of the Soviet industry. It suggests that pollution
is of serious concern at all the Soviet copper, lead and zinc smelters and
is now starting to restrict production.
It suggests, however, that Russia and Kazakhstan, the republics dominating
base metal production in the Commonwealth of Independent States, 'could
become very attractive areas for investment by western mining companies.'
The Copper, Lead and Zinc Industries of the former USSR, Pounds 12,000 from
the CRU, 31 Mount Pleasant, London WC1X 0AD.
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 30
</PAGE>
</DOC>
<DOC>
<DOCNO>5006</DOCNO>
<PROFILE>_AN-CFBA3AF2FT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / Commodities and Agriculture: Ekofisk oilfield back to full
production
</HEADLINE>
<BYLINE>
   By NEIL BUCKLEY
</BYLINE>
<TEXT>
NORWAY'S EKOFISK oilfield was back in full production yesterday, less than a
week after being shut down following a fire in an air filter on one of its
platforms.
Phillips Petroleum, the field's operator, said Ekofisk was producing at
slightly above its usual output of 250,000 barrels a day, because of a small
build-up of pressure while the field was closed. The nearby Valhall and Hod
fields, linked to Ekofisk by pipeline, were pumping a combined 114,000 b/d,
up from their normal 100,000.
Gas supplies from Ekofisk to a consortium of European buyers via Emden in
Germany had also resumed.
NPD, Norway's oil industry watchdog, ordered the closure of the field on
Monday of last week pending clarification of the cause of a brief fire in
the air filter of a gas turbine.
Phillips said yesterday that the incident was the result of human error,
which led to a small explosion in the turbine following routine cleaning.
The company is changing the alarm system on its turbines as a result.
The fire occurred only hours before a planned maintenance shutdown that
would have closed the field for about 90 hours. Had the Ekofisk closure
lasted for an extended period, there were fears that this might have
affected production from the giant Statfjord and Gullfaks fields, with
combined output of more than 1m b/d.
The Ula and Gyda fields, which are also tied into Ekofisk, were not yet
producing because of maintenance work, Phillips said, but were expected to
be back on-stream soon.
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 30
</PAGE>
</DOC>
<DOC>
<DOCNO>5007</DOCNO>
<PROFILE>_AN-CFBA3AF1FT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / Commodities and Agriculture: US silver mine closes because
of low prices
</HEADLINE>
<BYLINE>
   By BARBARA DURR
</BYLINE>
<DATELINE>
   CHICAGO
</DATELINE>
<TEXT>
DEPRESSED SILVER prices have prompted Asarco, the big US mining group, to
close temporarily its Galena silver mine in Northern Idaho. The mine, which
produced 3.3m troy ounces of silver last year, will be placed on a
care-and-maintenance footing.
Silver prices are at their lowest in real terms since the late 1960s and
there is little expectation in the market that they will turn around soon.
Asarco holds a 37.5 per cent interest in Galena's profits and Hecla Mining
Company has a 12.5 per cent interest.
Coeur d'Alene Mines Corporation, the mine's owner and from which it is
leased, takes 50 per cent.
Lower metals prices shaved Dollars 100m off Asarco's last year's earnings of
Dollars 46m and they have continued to bite into this year's. The company,
which has spent heavily to expand, is keen to improve operating results.
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 30
</PAGE>
</DOC>
<DOC>
<DOCNO>5008</DOCNO>
<PROFILE>_AN-CFBA3AF0FT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / Commodities and Agriculture: Mr Koskov's copper-bottomed
business plan - One of Russia's small but growing band of entrepreneurs
talks to Kenneth Gooding
</HEADLINE>
<BYLINE>
   By KENNETH GOODING
</BYLINE>
<TEXT>
VLADIMIR KOSKOV is offering holidays in Spain and Lada cars to encourage
people to collect the copper scrap that he says is liberally scattered
across Russia. Collectors are rarely interested in roubles, he says. So
student collectors can earn eight days in Spain for every half a tonne of
old copper they deliver. He has also bought 100 Ladas, each to be swapped
for four and a half tonnes of scrap.
Mr Koskov is one of a small but growing band of Russian entrepreneurs
battling a system that is proving resistant to change. Copper is central to
his plans for the future. He sees the metal as a certain way of converting
roubles into hard currency. But there is the little matter of obtaining
export licences.
He is certain his company will eventually get the licences it needs.
However, the situation is complex because the old bureaucracy knows there is
money to be made from the bribes for favours done when something is in
demand. 'The old system bred a criminal mentality,' Mr Koskov suggests. So
licences are for absurdly small amounts of copper, from 1,000 to 5,000
tonnes. The more licences to be issued, the greater the bribe opportunity.
Some will be issued by the Ministry of Foreign Economic Relations and some
by the regional authority in Ekaterinburg. The rest will be auctioned off to
the highest bidder at commodity exchanges.
Mr Koskov is a mild-mannered man of 40. He was head of automation at a
defence equipment manufacturing establishment before starting his own
business in 1988. This was a small consultancy co-operative involving seven
other people from the local polytechnic and the defence plant.
He had his first taste of the opportunities offered by exporting when he
swapped 100 Russian guitars for two computers. The guitars were to be sold
to students at Cambridge in England and Mr Koskov simply gave them to
someone who was about to take off from Moscow airport to London. 'There were
some problems with customs officers at Moscow,' he recalls with a smile.
'But I said, where is it written that an aircraft passenger can't take 100
guitars?'
Today his Teknesis group of companies, based in Ekaterinburg, has a wide
range of interests but the most important one at the moment is collecting
Russia's copper scrap and having it re-refined into metal suitable for
export.
He says that last year Teknesis exported about 10,000 tonnes of copper (as
well as 10,000 tonnes of aluminium, some tungsten and molybdenum). This year
he hopes to get licences to export 75,000 tonnes of copper from Russia.
Teknesis also has a deal with the Balkhash and Upper Pyshminsky refineries
in Kazakstan to sell all their production, perhaps 150,000 tonnes.
To put this into context, the former Soviet Union's net copper exports moved
above 100,000 tonnes for the first time only in 1989. Last year, as the new
Commonwealth of Independent States exported everything possible to raise
desperately-needed hard currency, net exports are estimated to have reached
312,000 tonnes.
Mr Koskov is storing copper in a warehouse at Le Havre, France, where it can
be used as collateral for loans from the Credit Lyonaise bank as well as
providing a buffer stock to ensure a smooth supply to customers. He says a
quality guarantee is given by the Societe General Surveillance of Geneva. He
has set up companies in France, England and Switzerland to handle his export
business, which he claims now has an annual turnover of about Dollars 100m.
Metal sales are organised by his London office. He describes the copper
operation as 'an enabler'. It is simply a way of raising the hard currency
he needs to push through ambitious plans for his business in Russia. He is
using the hard currency raised to import computers and other equipment into
Russia. His aim is to link the main business centres there through one or
two computer head stations eventually using about 30,000 terminals. He also
hopes Russia's newly-developing commodity exchanges will be linked via this
system and suggests that this link should help to stabilise the prices of
some goods.
There tend to be gluts of goods in some parts of the republic, particularly
at the ports, and severe shortages in others. Mr Koskov believes an
integrated commodity exchange system would reflect the overall situation
more accurately.
Teknesis is also setting up business centres in, initially, five cities
(Ekaterinburg, Moscow, St Petersburg, Khabarovsk and Novosibirsk) aimed
particularly at western companies that would prefer to move in when all the
equipment - telephones, computers, furniture and so on - is installed and up
and running - Mr Koskov is even offering Renault limousines as part of a
package for companies needing to ferry people to and from airports.
In spite of Russia's economic problems, he hopes to sell about 1,000 of
these business centres at 9m roubles each, or Dollars 65,000 or 70 tonnes of
copper. He says that, once the price is paid, he can guarantee an office
will be ready for occupation in 45 days.
Mr Koskov also is building up his copper business in Russia. His company is
supplying the Kazakhstan smelters - from a plant in Omsk - with a flotation
agent, needed in the refining process. The new agent, he claims, reduces
emissions of sulphur dioxide (one of the causes of acid rain) by 10 to 20
per cent.
He recently started to supply the flotation agent and scrap copper to the
huge Norilsk nickel-copper combine. Norilsk needs scrap for its smelting
process and in return Koskov is willing to buy refined copper for 300,000
roubles a tonne instead of the 70,000 roubles the Russian state export
agency would pay.
He is also selling copper to a pipe producer at Revda, near Ekaterinburg,
which in turn is exporting his products to France.
Mr Koskov says he set up his Swiss company to manage the group's finances
because the Russian banking system has virtually collapsed. According to his
statement of account, the Bank for Foreign and Economic Affairs owes his
companies Dollars 500,000 in hard currency. 'But the bank has no money. The
state took the money.'
He complains that, until recently, any person with hard currency and
apparently well-off was assumed by most Russians to be a criminal, part of
Russia's Mafia. That is now changing, he suggests. 'People are now beginning
to realise there are good as well as bad ways of making money.'
But the entrepreneurial spirit is still hard to detect in Russia. Mr Koskov
says he knows of only a handful of other Russian entrepreneurs and tells an
anecdote to illustrate his point.
A year ago he approached the management at the defence plant where he once
worked offering to help. They were not interested. But recently they called
him back. 'The plant was at a standstill. The managers were just sitting
there, twiddling their thumbs, waiting for something to happen.' He asked
them if the plant could produce car bodies if it was given a contract. Yes,
said the managers, but there was no capital and, even worse, they had to
dispose of 6,000 surplus missiles.
Mr Koskov had to point out that there were tons of valuable alloys, ounces
of precious metal and hundreds of expensive components to be reclaimed from
this missile stockpile.
Many other people in Mr Koskov's position would have taken the profit and
retired, perhaps to a sunnier climate. Why does he press on, combatting a
system and enduring the chaos?
He does not pause an instant before replying: 'It is sad for any man to see
his mother dying - Russia is dying and it is very painful for me'.
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 30
</PAGE>
</DOC>
<DOC>
<DOCNO>5009</DOCNO>
<PROFILE>_AN-CFBA3AFZFT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / International Capital Markets: Mexico embraces the
international financial markets - The share offerings and foreign listing
which have made an impact on the country's business methods
</HEADLINE>
<BYLINE>
   By DAMIAN FRASER
</BYLINE>
<TEXT>
IN THE past 12 months around a dozen Mexican companies have become
significant players in the international financial markets, issuing billions
of dollars in new stock and, in some cases, acquiring listings on Wall
Street.
Just a few years ago such events in Mexico would have been thought of as
laughable. Not surprisingly the speed and extent of the changes are having a
profound effect on Mexican business methods.
The share offerings have been spurred by the large financing needs of
industry which needs badly to catch up after a decade of weak capital
investment if it is to make the most of the proposed free trade pact with
North America.
The trend started in May 1991 when the Mexican government sold 14 per cent
of Telmex, Mexico's telephone monopoly, for Dollars 2.17bn, most of it in
American or Global Depository Receipts.
In all, Mexican companies placed about Dollars 4.8bn of stock at home and
abroad last year. This year Dollars 3.6bn has already been raised and a
further Dollars 2bn could be in issue before the year is out.
Companies as diverse as Telmex, Vitro, Mexico's largest industrial
conglomerate, and ICA, the construction company, are now listed on the New
York Stock Exchange, with more to follow.
Foreign investment in Mexican ADRs is now short of Dollars 20bn.
In part, the rush to sell stock abroad reflects the phenomenal rise of the
Mexican stock market and the desire of existing owners to cash on the high
earnings multiples being offered: and the issues have had to be
international since the Mexican stock market is far too small to absorb all
the paper on sale. The more so since more than Dollars 11bn of Mexican
savings have been used up to buy the country's privatised banks from the
government.
Most Mexican companies were starved of capital during the 1980s. They are
now having to invest heavily in a re-shape in order to compete under
Mexico's relatively open trade policy, and prepare for a North American free
trade area.
With foreign banks reluctant to lend directly, Mexican business has been
forced to tap foreign money through equity or bonds.
At the same time the large public offerings of Mexican stock are forcing
Mexican companies to face the discipline of the domestic and international
equity markets, and meet much tighter reporting requirements.
This marks a particularly profound change in management styles. In the past,
even some publicly owned Mexican companies were treated as little more than
personal fiefdoms, an approach which helped put many of the country's
largest companies into virtual bankruptcy in the early 1980s.
Mexican companies, prodded by the finance ministry, can see the benefits of
giving up their freedom to run companies as they wish: going public, or
being listed on foreign markets, cannot just reduce the cost of capital, but
attract foreign partners that might otherwise shun a third world company.
Mr Arturo Trevino, the director general of Gigante, the supermarket chain,
suggests that had it not been for his company's public listing, its joint
venture with the US's largest wholesaler Fleming could not have gone ahead.
Similarly, Mr Hugo Jaime Garcia, who is head of banking relations at Vitro,
says that his company's presence in global capital markets, while perhaps
demanding in terms of investor relations, 'reduces the aspect of Mexican
risk'.
</TEXT>
<PUB>The Financial Times
</PUB>
<PAGE>
London Page 29
</PAGE>
</DOC>
<DOC>
<DOCNO>5010</DOCNO>
<PROFILE>_AN-CFBA3AFYFT</PROFILE>
<DATE>920602
</DATE>
<HEADLINE>
FT  02 JUN 92 / Government Bonds: Strong purchasing data trigger selling of
Treasuries
</HEADLINE>
<BYLINE>
   By PATRICK HARVERSON and SARA WEBB
</BYLINE>
<DATELINE>
   NEW YORK, LONDON
</DATELINE>
<TEXT>
A MUCH stronger-than -expected National Association of Purchasing
Management's report triggered heavy selling of US Treasury securities
yesterday, although late in the day prices recovered from their lows.
In late trading, the benchmark 30-year government bond was down  21/32 at
101 7/32 , yielding 7.887 per cent. The short end of the market was also
markedly weaker, with the two-year note off  5/32 at 99 23/32 , yielding
5.259 per cent.
The rise in the NAPM's index for May from 51.3 the previous month to 56 was
bigger than analysts' forecasts (which had centred around 54), and sparked
an immediate sell-off as hopes for another interest rate cut from the
Federal Reserve dwindled further.
The purchasing managers figures indicated the economic recovery may be
advancing at a faster pace than bond investors initially realised. The data
suggested that Friday's employment report for May could show an improvement
in labour market conditions.
UK government bonds ended the day lower, taking their cue from the US
Treasury bond market.
The benchmark 11 3/4 per cent gilt due 2003/07 fell from its opening level
of 118 9/32 to trade at 117 31/32 by late afternoon, yielding 9.07 per cent.
Short-dated gilts slipped by around  1/32 of a point, dealers said. The
Liffe gilt futures contract fell from its opening of 100.02 to end the day
at 99.23, but volumes in the futures market were lower than normal with
about 15,000 contracts traded.
The latest tap stock - the 9 per cent Conversion stock due 2000 - continues
to overhang the market, and dealers estimate that only about Pounds 200m of
the total Pounds 800m has been sold since it was issued on May 22.
The market will be watching today's final money supply figures for April
which are expected to provide details of exactly how much stock the Bank of
England sold after the April 9 general election. According to earlier
estimates, the Bank sold about Pounds 4bn of gilts immediately after the
election.
THE main European government bond markets slipped yesterday, following the
US Treasury bond market's lead and in the absence of significant economic
news on the domestic front.
German government bond futures drifted from their opening level of 87.87 to
end at 87.70, having traded in a narrow range of 87.69-87.89.
The Danish government bond market saw some profit-taking ahead of today's
referendum on the Maastricht Treaty on European Monetary Union.
In view of the most recent batch of opinion polls, traders expect Denmark to
ratify the Treaty, and the Danish bond market has already started to
discount a vote in favour.
Some traders reported switching out of Denmark into Belgium, a market which
has under-performed in recent days.
The yield spread of the Danish bond due 2000 over the 9 per cent Belgian
bond due 2001 narrowed from 16 basis points to 10 basis points yesterday.
A stronger yen against the US dollar helped to boost Japanese government
bonds yesterday, but the fall in share prices and the halt in the yen's rise
prompted profit-taking, and the bond market closed lower on the day.
The Bank of Japan intervened in the foreign exchange markets selling dollars
to boost the Japanese currency. The yen opened at Y127.15 in Tokyo trading
yesterday, against Y128.15 at Friday's Tokyo close, and strengthened to
Y126.6 in the afternoon at the peak of the central bank's intervention.
Traders noted some profit-taking as the yen slipped to reach Y127.15 against
the dollar at the end of the day. The yield on the benchmark No 129 opened
at 5.475 per cent, ending in Tokyo trading at 5.50 per cent. The yield moved
to 5.515 per cent in London following the initial weakness in the US
Treasury bond market and the yen's failure to continue its strengthening
against the dollar.
Dealers noted the No 144, which matures in 2001 and has a 6 per cent coupon,
may soon take over as the new benchmark bond as the three separate No 144
issues are combining to form a single large issue.
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<PUB>The Financial Times
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London Page 29
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