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CONTEL CORP SAYS IT EXPECTS LOWER SECOND QUARTER, YEAR NET

Bally Manufacturing Corp said it called for optional redemption of its outstanding Series E increasing dividend preferred stock on August 1 at 50 dlrs a share. The redemption price will be payable on August 1. The regular quarterly dividend of 1.50 dlrs a share will be paid August 1 record July 15. Reuter

BALLY <BLY> TO REDEEM PREFERRED SHARES

Shr 12-1/2 cts vs 12-1/2 prior qtr Pay July 15 Record July 8 Reuter

FIRST AMERICAN FINANCIAL CORP <FAMR.O> PAYOUT

Contel Corp said its expects to report second quarter earnings that are lower than last years 74 cts a share and 1987 earnings from continuing operations that are about 15 pct lower than last years 3.04 dlrs per share. Donald Weber president and chief executive officer of Contel said that lower than expected revenues higher than anticipated costs to complete certain contracts and one-time expenses are behind the lower earnings projections. As such Weber said Contel has begun to evaluate strategies budgets and operating direction in each of the companys divisions with renewed emphasis on maximizing shareholder value. Weber added that Contel is holding discussions with &lt;Comsat> on an agreement to terminate the previosuly proposed merger between the two companies. Weber added that the results of the evaluations of certain parts of the company may be reflected later this year in a combination of one-time gains or losses not in the anticipated lower earnings. Webber said however that he was encouraged by the continued strength of Contels telephone businesses and the strong showing from certain of the companys non-regulated sectors. But he added that results for other parts of the company will still be unsatisfactory. Reuter

CONTEL <CTC> SEES LOWER 2ND QTR, YEAR NET

Venezuelas government tomorrow presents a 1988 budget proposal for 183.432 billion bolivars based upon an oil price of 16.35 dlrs per barrel finance minister Manuel Azpurua said. Azpurua told reporters after a cabinet meeting the new budget projects ordinary income of 149.925 billion bolivars and extraordinary income of 34.186 billion. Oil revenues are expected to produce 92.014 billion or 61 pct of the total. The finance minister said the oil revenue projection is based on an average price of 16.35 dlrs per barrel in 1988. Venezuelan oil through the first half of 1987 has averaged 16. 20 dlrs per barrel according to the state oil company Petroleos de Venezuela S.A. Reuter

VENEZUELA BUDGET SEES 16.35 DLRS OIL PRICE

Hartmarx Corp is in excellent financial condition and expects record earnings in the second half of fiscal 1987 Chairman John Meinert said in a statement. The company reported earnings for the second quarter ended May 31 of 8265000 dlrs or 40 cts a share on sales of 248.3 mln dlrs compared to earnings of 2255000 dlrs or 11 cts on sales of 245.4 mln dlrs in the 1986 quarter. First-half earnings increased to 19.4 mln dlrs or 94 cts from 10.6 mln dlrs or 51 cts in 1986. Reuter

HARTMARX <HMX> SEES RECORD EARNINGS

Moodys Investors Service said it downgraded American Healthcare Managements outstanding 80 mln dlrs of 15 pct subordinated notes to Caa from B-1. Moodys said that noteholders now have the option to accelerate payment of the issue as early as July 15 1987. The rating had been under review since April. The agency noted the company earned three mln dlrs in the first quarter after taxes. However Moodys said the firm violated covenants in its in its bank credit agreement as a result of substantial asset writedowns and an operating earnings decline both of which were announced in April. Reuter

AMERICAN HEALTHCARE <AHI> DOWNGRADED BY MOODY'S

Gencorp Inc and Continental AG of Hanover West Germany jointy announced they signed an agreement for Continental to buy Gencorps General Tire Inc subsidiary for 650 mln dlrs in cash. Under the agreement the companies said Continental will acquire General Tire including its related domestic and foreign operations and Gencorp will retain liability for the medical benefits of retired General Tire employees who retired on or before November 30 1984. The sale is expected to be completed on or before November one and is subject to meeting certain conditions. Continental is Europes second largest tire producer. Last year the company had sales of 2.6 billion dlrs with 1.9 billion dlrs generated by its tire operations. Last year General Tire had operating profits of 79 mln dlrs on sales of 1.1 billion dlrs and Gencorp had operating profits of 130 mln dlrs on sales of 3.1 billion dlrs. GenCorp spokesman Rip Tilden said the company will retain about 100 mln dlrs in liability for its former General Tire employees under the agreement. Tilden said Gencorp will use the proceeds from the sale to reduce its 1.5 billion dlr debt. In April GenCorp sucessfully thwarted a takeover by a partnership formed by AFG Industries Inc &lt;AFG> and Wagner and Brown with a restructuring program that included the purchase of up to 54 pct or 12.5 mln shares of its common at 130 dlrs a share for a total of 1.6 billion dlrs As part of the restructuring GenCorp also said it planned to sell its tire business the bottling operations of its RKO General Inc subsidiary and RKOs remaining broadcast properties to focus on the companys aerospace and automotive components businesses. Tilden said Gencorp expects to realize about 850 mln dlrs in after tax proceeds by the end of 1987 as a result of sale of several pieces of the nonbroadcast assets of the company including general tire. The price paid for General tire would not cause us to reevaluate that estimate said Tilden. General Tire employs 10000 people worldwide and has four tire manufacturing plants in the U.S. and one in Canada. In a statemnet A. William Reynolds GenCorp chairman said the sale of General Tire represents a critical accomplishment in our plan to restructure GenCorp. Reynolds also said GenCorps previously announced sale of its other businesses are proceeding satisfactorily. Among the pieces of Gencorps empire that remain to be sold are its RKO bottling operations. GenCorp agreed to sell RKOs KHJ-TV station to Walt Disney Co &lt;DIS> for 217 mln dlrs. That deal awaits approval by the Federal Communications Commission. GenCorp also received 257 dlrs after tax from the sale of RKOs WOR-TV. Reuter

GENCORP <GY> TO SELL GENERAL TIRE

The U.S. Department of Housing and Urban Development (HUD) said it backed an eventual severing of the link between the government and the Federal National Mortgage Association -- better known as Fannie Mae. But the department in a long-awaited report requested by Congress in 1984 shied from setting a timetable for the giant housing finance institution to end its government ties. Instead it said specific recommendations would come in a second report to be issued jointly by Fannie Mae and HUD by Oct. 1. The basic policy directive underlying FNMAs history has been consistent -- a gradual movement toward fully private status. There appears to be no need to change that policy the HUD report said. Any change in Fannie Maes status would be up to Congress. The HUD report said the options open to Congress ranged from doing nothing to full and immediate privatization. Whatever option is selected the combination of the favorable economic environment FNMAs recent move to financial health the current strength of the housing market and the evolution of FNMAs role in the mortgage market from contributor to competitor would all indicate that the time is ripe for a positive move toward privatization the report concluded. Fannie Mae operated as a part of the federal government from the time it was created in 1938 until 1968 when it was rechartered by Congress and put under private ownership with government backing. However it was always intended that FNMA would eventually become fully private the HUD report said. Fannie Maes critics including some Reagan administration officials espousing a free-market philosophy say government sponsorship of the agency allows it to compete unfairly with private lenders and investors. But its backers claim mortgage rates would be pushed up as higher agency costs were eventually passed on to home buyers. Fannie Mae was created by Congress to make capital available for housing by buying mortgages from lenders and packaging them as securities to sell investors. Reuter

U.S. HOUSING DEPT. BACKS PRIVATIZING FNMA <FNM>

The House of Representatives passed a resolution urging President Reagan to negotiate a world-wide treaty to reduce the use of chlorofluorocarbons which are depleting the earths ozone layer. Chlorofluorocarbons are chemicals used in aerosol sprays refrigeration air conditioning foam insultation fire extinguishers and cleaning solvents. They were banned in the United States and Canada in 1978 but are still widely used in Europe and Japan. The ozone layer of the atmosphere protects the earth against ultraviolet radiation from the Sun. Scientists have warned that if chlorofluocarbons continue to deplete the ozone layer the additional ultraviolent radiation striking the earth will cause a higher rate of skin cancer. The non-binding resolution was passed by voice vote. Reuter

HOUSE RESOLUTION URGES TREATY TO PROTECT OZONE

Shr loss 79 cts vs profit 30 cts Net loss 2.1 mln dlrs vs profit 675935 dlrs Revs 5.5 mln dlrs vs 9.1 mln dlrs Note:the year ended March 31. The companys full name is Advanced Institutional Management Software Inc Reuter

ADVANCED INSTITUTIONAL <AIMS.O> YEAR LOSS

Moodys Investors Service Inc said it affirmed National City Corps long-term debt ratings and those of its major subsidiaries National City Bank and BancOhio National Bank. Some 200 mln dlrs of issues are affected. Moodys action followed the announcement by National City Corp that it would add a special provision of 55 mln dlrs to its loan loss reserve primarily reflecting developing country loan exposure. Affirmed are the A-1 rating on National Citys senior notes the AA-2 rating on National City Bank for long-term deposits and the A-1 BankOhio long-term deposit rank. Reuter

MOODY'S AFFIRMS NATIONAL CITY CORP <NCTY> DEBT

Kellwood Co said it signed a definitive agreement to acquire Robert Scott Ltd Inc David Brooks Ltd Inc and Andrew Harvey Ltd of Dedham Mass. Terms were not disclosed. Combined sales of the three companies in 1986 were over 50 mln dlrs it said. The deals are expected to be completed by July 31 Kellwood said. Reuter

KELLWOOD <KWD> BUYING THREE COMPANIES

Moodys Investors Service Inc said it affirmed 1.2 billion dlrs of debt of The Bank of New York Co Inc and units. Affirmed were the parents A-1 senior notes and preferred stock A-2 subordinated capital notes and prime-1 commercial paper. Also affirmed were The Bank of New Yorks Aa-2 long-term deposits and prime-1 short-term obligations. Moodys cited the firms announced 135 mln dlr addition to the loan loss reserve as a reflection of exposure to borrowers in less-developed countries. The addition adjusts the firms financial statements to reflect economic reality it said. Reuter

BANK OF NEW YORK <BK> DEBT AFFIRMED BY MOODY'S

Bell Canada owned by Bell Canada Enterprises Inc said it will reduce long distance rates in Canada by an average of between two and eight pct in line with a ruling by Canadian regulators. The company said it does not expect any change to net revenues. The company said it will cut rates for calls within Ontario Quebec and parts of the Northwest Territories by an average of between two and three pct and by an average eight pct for other parts of Canada effective Wednesday. The changes will decrease the charges for longer distances and increase shorter distance rates Bell Canada said. The Canadian Radio-television and Telecommunications Commission ordered Bell Canada to reduce its phone rates because it said the company which has a monopoly in certain areas was making more than the allowable rate of return. Reuter

BELL CANADA <BCE> UNIT DETAILS RATE REDUCTIONS

FIRST REPUBLICBANK CORP SAID IT WILL ADD 325 MLN DLRS TO LOAN LOSS RESERVES

A.H. ROBINS SAYS RORER GROUP MERGER PROPOSAL MERITS FURTHER CONSIDERATION

Two leading Senate Republicans have urged the White House to name Commodity Futures Trading Commission (CFTC) Commissioner Kalo Hineman to replace outgoing Chairman Susan Phillips congressional sources said. Senate Republican leader Robert Dole (R-Kan.) and Sen. Richard Lugar (R-Ind.) ranking minority member on the Senate Agriculture Committee both have endorsed Hineman for the top CFTC post the sources said. In addition Lugar has urged White House Chief of Staff Howard Baker to recommend Mark Sullivan White House associate personnel director as CFTC commissioner they said. Phillipss departure July 24 will create a vacancy on the five-person commission and require the White House to appoint a new chairman. Earlier this month Sullivan emerged as a leading candidate to replace Phillips according to industry and congressional sources. But Sullivans lack of experience in commodity markets has been cited as a liability by industry representatives. Hineman a Kansas farmer has drawn support from Dole and other members of the congressional Agriculture Committees who are eager to have farming interests well represented on CFTC. Reuter

SENATE REPUBLICANS BACK HINEMAN FOR CFTC POST

Standard and Poors Corp said it upgraded Heritage Communications Incs senior debt to BB-minus from B-plus and subordinated debt to B from B-minus. About 400 mln dlrs of debt is affected. S and P also said that Tele-Communications Incs preliminary BB-minus rating on a 250 mln dlr shelf registration of debt and B rating on 505 mln dlrs of subordinated debt are affirmed. The rating agency said the action reflects the acquisition of Heritage by Tele-Communications subject to a June 30 vote by Heritage shareholders. Reuter

S/P UPGRADES HERITAGE COMMUNICATIONS <HCI> DEBT

Mitsubishi Semiconductor America Inc a subsdiary of &lt;Mitsubishi Electric Corp> said it plans to invest 36 mln dlrs to expand its Durham N.C. semiconductor operation. The company said it will build a building adjacent to the companys memory chip assembly plant and test center in N.C. The expansion will allow the subsidiary to fabricate the silicon wafers used in producing Application Specific Integrated Circuits (ASIC) chips the company said. Construction is expected to begin in July with operations planned to start in early 1988 the company added. Reuter

MITSUBISHI SEMICONDUCTOR PLANS U.S. EXPANSION

Digital Communications Associates Inc said it agreed with Fox Technology Inc &lt;FOXT.O> to buy its Fox Research Inc unit for a cash payment and the assumption of liabilities of around 10 mln dlrs. The company said part of the agreement includes payment of up to an additional 6.5 mln dlrs based on the performance of the unit in the year following the closing. The company said the deal is expected to be closed in mid-August. Fox Research develops makes and markets local area networks for personal computers. Reuter

DIGITAL COMMUNICATIONS <DCAI.O> BUYS FOX UNIT

Tennessee Senator Albert Gore seeking to become the youngest president in U.S. history entered the 1988 presidential race today with a pledge to return respect for the law and common sense to the White House. Gore a four-term member of the House of Representatives and a Senator since 1985 became the sixth official entrant in the race for the Democratic nomination. Public opinion polls show him running near the bottom against the other declared candidates. Reuter

SENATOR GORE ENTERS PRESIDENTIAL RACE

Standard and Poors Corp said it has placed Reichhold Chemicals Incs BBB-minus rated subordinated debt on Creditwatch with developing implications following Dainippon Inc and Chemicals Incs unsolicited bid for Reichhold. About 60 mln dlrs of debt is affected. S and P said that if Dainippon is successful it is likely to discontinue its surveillance of Reichholds debt since sufficient credit information probably will not be available. A similar approach exists with respect to Polychrome Corp which was acquired by Dainippon several years ago. Reuter

S/P REVIEWS REICHHOLD CHEMICALS <RCI> RATING

A.H. Robins Co said its board has concluded that the merger proposal submitted by Rorer Group Inc &lt;ROR> merits further consideration. At the request of the board Rorer has agreed to extend until 1800 EDT July 2 its deadline for response from A.H. Robins. After Rorer announced its second bid for the company last Thursday analysts forecast that the Robins family which holds control of the company would vigourously oppose any merger. But the analysts added that Robins desire to emerge independent from two years of bankruptcy proceedings may be thwarted by some Robins shareholders who perceive a merger as a more expedient way of dealing with the companys Dalkon Shield related liabilities. After a failed first attempt earlier this year Rorers latest merger plan calls for a share swap worth about 720 mln dlrs. Rorer would also set up two trusts to cover the estimated 1.75 billion dlrs in liabilities to deal with about 320000 claims by women who suffered maladies from the use of the Dalkon Shield interuterine device. Reuter

A.H. ROBINS <QRAH> TO CONSIDER RORER OFFER

Pakistani government allowed freer cotton and rice export in a three-year new trade policy aimed at narrowing the countrys yawning trade gap. Commerce and Planning Minister Mahbubul Haq said in a televised speech the government had also decided to allow duty-free import of cotton yarn to make the textile industry more competitive and to link bulk tea imports to the export of Pakistani products. Cotton and rice are Pakistans main exports which have been handled exclusively by state corporations since early 1970s. But Haq said now the private sector would also export cotton and rice along with the corporations which meets a long-standing demand of the local traders. The duty-free import of cotton yarn has been allowed to bring down prices and help the local ancillary industries compete effectively in the world market he said. Haq said the new policy effective from the fiscal year 1987/88 beginning on July 1 would be for three years but reviewed every year. It was a departure from the previous practice of announcing trade policies for a single fiscal year and Haq said it would enable the businessmen to plan their market strategies over a longer period. He said an export credit of 250 mln dlrs had been provided for the export of engineering goods to selected third world countries on soft credit terms. Pakistans 1986/87 exports at 3.6 billion dlrs 18.2 per cent more than in the previous year and imports at 5.23 billion dlrs compared to 5.63 billion dlrs in 1985/86. He said the government policy was to rationalise and streamline import controls. It has been observed that due to restrictions on imports specially on raw materials and intermediate goods local industry has been suffering for want of necessary inputs he said. Prices have been on the increase and quality of goods produced has been low. This restrictive policy also gave rise to smuggling and hampering of exports. He said that to correct this situation 136 items had freed from import restrictions. Previously Pakistan has met its trade gap largely from remittances from its nationals working abroad mainly in the Gulf. However the remittances have begun to fall after the drop in oil prices in recent years leading to the spectre of a balance of payments crisis for Pakistan. Reuter

PAKISTAN UNVEILS NEW TRADE POLICY TO BOOST EXPORTS

First RepublicBank Corp said it will add 325 mln dlrs to its loan loss reserve for the second quarter. The company said the move which is being made to cover loans to developed countries will result in a loss of around 313 mln dlrs in the second quarter ending June 30. First RepublicBank Corp said the increase in its loan loss reserve will lead to a loss for the full year. Figures for last year are unavailable as the bank was formed in June this year after a merger of two Dallas-based banks RepublicBank Corp and InterFirst Corp. The company said the 325 mln dlrs provision will increase its reserve to 1.1 billion dlrs out of which it will allocate 275 mln dlrs to cover its loans to 18 developing countries. The company said it took the action in light of recent action taken by other major banking organizations on developing country loans. Reuter

FIRST REPUBLIC <FRB> ADDS TO LOAN LOSS RESERVE

A U.S. decision ending a forty-year tax treaty covering the Netherlands Antilles was unlikely to have a major impact on the Eurobond market tax experts said. Most U.S. firms stopped using financial subsidiaries incorporated in the Netherlands Antilles to sell to the Eurobond market in July 1984 the experts said. But the decision affects Eurobonds issued before July 1984 involving principal worth an estimated 30 billion dlrs and will probably mean those bonds will be called before their maturity date they said. Since most of the bonds are currently trading at a premium calling them in early will mean a loss in market value for the bondholders according to a Treasury official who asked not to be identified. The official said the Treasury Department was currently unsure about the impact of the move on the Eurobond market. We are monitoring the situation and receiving reports from investors and issuers the official said. Earlier the Treasury said it notified the Netherlands of the termination of the treaty effective January 1 1988. For years U.S. firms seeking to avoid a 30 pct withholding tax used financial subsidiaries incorporated in the Netherlands Antilles to sell Eurobonds which are bonds issued abroad by an overseas financial subsidiary. But most companies have since taken advantage of a 1984 change in the law known as the exemption for portfolio interest that allows them to sell directly in the Eurobond market and avoid the withholding tax. The 1984 tax change sharply reduced the number of U.S. companies using the Netherlands Antilles to sell Eurobonds said Steven Hannes of accounting firm Touche Ross and Co. Ending the tax treaty will mean that some foreigners investing in the U.S. through the Netherlands Antilles will lose tax benefits and probably change their portfolios Hannes said. He said the decision would mainly affect foreign investors who sought tax advantages because they reside in countries which do not have a tax treaty with the United States. These investors typically reside in countries in the Middle East Central and South America he said. Some of them may withdraw their U.S. investments or seek tax relief through the Netherlands itself or Switzerland but the choices are limited Hannes said. It is conceivable their investment may stay here. They would bear some of the tax that has not been borne in the past Hannes said. U.S. domestic bonds are not affected by the change. U.S. companies with Eurobonds issued through the Netherlands Antilles are expected to call them early to avoid the tax liability a Treasury Department spokesman said. But they could refinance at lower rates because of the general decline in interest rates so the Department does not expect U.S. firms to be hurt by the decision the spokesman said. Negotiations between the United States and the Netherlands continued without success since the late 1970s. The differences centered on U.S. concern over residents of third countries avoiding U.S. taxes by using the treaty with the Netherlands Antilles. Reuter

LIMITED IMPACT SEEN FROM U.S. TAX ACCORD ACTION

Citicorp has extended its reach into the California market with Citicorp Savings acquisition of 50 of Sears Roebucks &lt;S> Sears Savings Bank branches bringing its presences to 143 branches in 101 communities CitiCorp Savings said. Thrift industry analysts said the move approved by the Federal Reserve board today is a plus for Citicorp and shows its serious intent to penetrate the California market. The acquisition mostly extends Citicorps reach into Southern California where 34 of the 50 branches are located. Citicorp Savings was predominantly in Northern California. This marks our first major expansion in California particularly in the south said Citicorp Savings President Edward Valencia in a statement. Thrift industry sources said they do not see a major near-term impact on the Southern California thrift market but do expect Citicorp to be a more aggressive competitor than Sears was in that market. We do believe they will be a better competitor than Sears said James Stutz Executive Vice President of Home Federal Savings and Loan Association &lt;HFD> based in San Diego. Banking industry sources said the move is viewed as groundwork to establish Citicorp throughout the California market well before the 1991 law change that will allow it to operate as a bank in the state. They said Citicorp is likely to convert the branches to banks at that time. In the near-term however analysts said with seven billion dlrs in assets Citicorp Savings is still not a major force in the thrift market against such large California thrifts as Home Federal Great Western Financial Corp &lt;GWF> H F Ahmanson and Co &lt;AHM> Golden West Financial &lt;GWD> and Great American First Savings Bank &lt;GTA>. Reuter

CITICORP <CCI> SAVINGS EXTENDS CALIFORNIA REACH

The International Monetary Fund said it approved a 48 mln dlr loan to assist Ecuador in meeting its foreign exchange needs following the earthquakes that struck in March. The loan which the IMF provides countries under special circumstances is equal to 25 pct of Ecuadors quota or economic standing in the Fund. The IMF said that according to recent estimates the earthquakes will hurt the countrys balance of payments this year because of the loss of oil revenues due to destruction of part of the oil pipeline. REUTER

IMF APPROVES 48 MLN DLR LOAN TO ASSIST ECUADOR

BCI Holdings Corp said holders of a majority of its debt securities approved an amendment consenting to a distribution of certain assets of the company clearing the way for BCIs planned reorganization. Under the previously approved reorganization BCI will be divided into two companies including a newly-formed publicly held non-food company E-II Holdings Inc. BCI Holdings which acquired Beatrice Cos Inc in April 1986 will remain a privately-held primarily food company. Consent of the debt securities holders was necessary to distribtute shares of E-II common stock plus 57.4 cts a share to BCI shareholders and warrant holders BCI said. Shares will be distributed when a registration statement with the Securities and Exchange Commission becomes effective. Holders of 11 pct Ten Year Senior Notes who consented to the amendments will receive 12.50 dlrs in cash for each 1000 dlrs principal amount of debt securities. Consenting holders of the other three issues of debt securities will receive 10 dlrs in cash per 1000 dlrs principal amount BCI said. Total principal amount outstanding is 2.5 billion dlrs. Reuter

BCI HOLDINGS GETS CONSENT FOR STOCK DISTRIBUTION

Star Technologies Inc said that a settlement of a 1985 shareholder lawsuit has produced a 1.3 mln dlr charge which the company recorded in its fourth quarter earnings. The company said it will pay the settlement with company stock subject to court approval. To reflect the settlement therefore the company said it has revised its fiscal fourth quarter ended March 31 earnings by 1.3 mln dlrs or nine cts per share on a primary basis. As such the company said it is recording a net loss of 580000 dlrs or four cts a share versus the net income of 740000 dlrs previously reported. For the year to date ended March 31 net income was reduced to 1.4 mln dlrs from the 2.7 mln dlrs previously reported on May 28. The class action suit filed in a federal district court charged the company with various violations of federal securities laws with regards to the companys initial public offering in December 1984 and certain subsequent filings. Reuter

STAR TECHNOLOGIES <STTX.O> REVISES 4TH QTR NET

Indiana National Corp said it expects a loss of four mln dlrs for the second quarter ending June 30 against a profit of eight mln dlrs in the same year ago period. The company said this will result from an addition of 23 mln dlrs to its foreign loan reserves in tandem with banking industry action. It said it expects a loss for the first six months of eight mln dlrs. This compares with a profit of 17.3 mln dlrs in the first six months of last year. Reuter

INDIANA NATIONAL <INAT.O> SEES 2ND QTR LOSS

Contel Corps telecommunications equipment unit is the most likely candidate for sale by the Atlanta-based telecommunications company Wall Street analysts said. Executone is at the top of the list said one analyst referring to Contels loss-riden telecommunications equipment unit. The question is who would take it? he added. The company forecasting a 15 pct drop in 1987 operating earnings over last year said late today that it is reviewing all operations in an effort aimed at maximizing long-term stockholder value. Analysts also said Contels federal systems division which has been hit with several executive defections may also be put on the block. Contel officials declined to comment on the possibility of selling any operations. However the company indicated in a statement that it was closely evaluating the telecommunications and federal systems units. Reuter

CONTEL <CTC> UNIT SALES SEEN BY ANALYSTS

Belmoral Mines Ltd said it agreed in principle for the 26 mln dlr sale of four mln units priced at 6.50 dlrs each to investment dealer McLeod Young Weir Ltd subject to board and regulatory approvals. Holders will be allowed to exchange the units after September 15 1987 for one common share and one common share purchase warrant of Belmoral the company said. Each warrant holder will have the right to purchase one Belmoral common share for 8.50 dlrs before January 15 1990. McLeod Young Weir plans to resell the units to institutional and private investors mainly in Europe Belmoral said. Reuter

BELMORAL <BME.TO> SETS 26 MLN DLR UNIT ISSUE

Shr profit two cts vs loss two cts Net profit 123000 vs loss 104000 Revs 12.5 mln vs nil Note: 1987 period includes 112000 dlr extraordinary gain. Reuter

ROYAL GOLD AND SILVER CORP <RGS.TO> SIX MTHS NET

Scott Paper Co one of the leaders in the tissue and coated paper business said it expects 1987 earnings to be between 5.75 dlrs and 6.25 dlrs a share within the range proscribed by most Wall Street analysts. We have put together five or six years of pretty respectable growth and three consecutive years of record earnings and I see no reason why this growth pattern should be interrupted Scotts chairman and chief executive officer Philip Lippincott told Reuters in an interview. Last year the company reported earnings of 4.96 dlrs a share reflecting the impact of a a strike at its Mobile Alabama plant. Earlier today Lippincott outlined his bullish growth scenario for analysts emphasizing that the company is dealing with the growing capacity in the industry by developing new products and modernizing plants. He said that capacity increases in the industry particularly tissue paper have stymied price hikes but Scott has boosted sales by providing more distinctive products that meet the needs of consumers. Scott Paper has shown tremendous growth in the last five years but I think that improvement is largely unappreciated by the market said analyst Sherman Chao of Salomon Brothers who noted that the stock is selling at a relatively low price/earnings ratio. They have been striving for a return on equity of 14 to 17 pct but today they were talking about a much higher objective. They are raising their financial objectives Chao said. Sales of consumer products increased about four pct last year and showed growth of about five pct pace in the first quarter eclipsing the overall industry wide sales pace of less than two pct Lippincott said. The most favorable thing I came away with today is that their Sommerset Maine plant which makes number four coated paper is sold out through September. That means their coated paper business is looking particularly good said Lawrence Ross of PaineWebber Group Inc. Analyst George Adler of Smith Barney was equally optimistic. They dont have anything that is going to set the world on fire right now but I am at a loss to find anything negative either Adler said. He said Scott Paper is continuing to gain market share by emphasizing their strategy and developing distinctive products. Lippincott also noted that the company stands to gain from the depressed level of the dollar. The bottom line impact of a lower dollar was about 15 cts a share in 1986 and we could have a similar impact this year he said. Reuter

SCOTT PAPER <SPP> SEES IMPROVED EARNINGS

Canada Development Corp &lt;CDC.TO> said it agreed to sell its 25.2 pct interest in CDC Life Sciences Inc to Caisse de depot et placement du Quebec the provincial pension fund manager and Institut Merieux a French biological laboratory company for 169.2 mln dlrs. It said the caisse and Institut Merieux will each buy 2.75 mln common shares of the company for 30.76 dlrs a share. It said following the transaction the caisse will hold about 19.3 pct of CDC Life Sciences. Canada Development said the purchasers do not plan to acquire the remaining publicly-held shares. Reuter

CDC LIFE SCIENCES <LSI.TO> STAKE SOLD

A U.S. judge denied Bristol Meyers Incs request to halt Abbott Laboratories &lt;ABT> planned supply of AIDS tests to the Red Cross a spokeswoman for Abbott said. Judge Joyce Hens Green of the U.S. District Court in Washington D.C. rejected Bristol Meyers request for a temporary restraining order against Abbotts contract set to begin July one to supply the AIDS tests and tests for hepatitis to be used on blood donated to the Red Cross the spokeswoman said. She could not immediately provide Greens reasons for the ruling. A Bristol Meyers spokesman was not immediately available for comment. Reuter

BRISTOL MEYERS <BMY> LOSES AIDS TESTS CASE

APL Corp said it sold 1250000 shares of Porex Technologies Corp it owned for 40.6 mln dlrs and pending federal approval will use the proceeds to buy 1.5 mln shares and certain notes of Fischbach Corp &lt;FIS> that APLs Pennsylvania Engineering Corp affiliate owns. Victor Posner is chairman of APL and Pennsylvania Engineering. After buying the Fischbach shares API said it will own about 54.3 pct of Fischbachs voting securities assuming conversion of all convertible debentures held by APL. APL said it planned to buy the Fischbach shares from Pennsylvania Engineering at market value and to use proceeds to make a secured demand loan to Pennsylvania Engineering. APL said it planned to purchase 470000 dlrs principal amount of Fischbachs 8-1/2 convertible subordinated debentures and 4.5 mln dlr 4-3/4 pct convertible subordinated debentures. APL also said that Pennsylvania Engineering and the holders of Pennsylvania Engineerings senior notes and senior secured notes in a face amount of about 56 mln dlrs also agreed that proceeds received from the sale of Fischbach notes and stock will be used to fully satisify its oligations under the notes. Reuter

APL CORP SELLS 1.3 MLN SHARES OF POREX <PORX.O>

Dixons Group Plc said shareholders at a special meeting of Cyclops Corp approved the previously announced merger of Cyclops with Dixons. Under the terms of the merger Dixons said the remaining public Cyclops shareholders are to receive 95 dlrs a share. Dixons also said the previously announced sale of Cyclops steel and nonresidential construction businesses to a former Alleghany Corp &lt;Y> subsidiary is expected to be completed June 30. After the sale Cyclops will retain its specialty retailing business and change its name to Silo Inc said Dixons. Reuter

CYCLOPS <CYL> HOLDERS APPROVE DIXONS MERGER

Ste-Genevieve Resources Ltd said it increased its cash takeover bid for Sullivan Mines Inc shares to 7.25 dlrs a share. It did not give the original bid. The offer is for a minimum five mln common shares and a maximum six mln shares the company said. It gave no further details. Reuter

STE-GENEVIEVE UPS OFFER FOR SULLIVAN <SUM.TO>

Prospects appear slim for a summer meeting between U.S. and Soviet officials before the two countries enter the final year of their bilateral grains agreement Agriculture Department officials said. The two sides usually try to meet as each new year of the agreeement approaches although the last meeting was delayed up to last February. However any delay this year should not endanger the fifth year of the grains agreement that extends through September 1988 USDA officials said. It will be difficult to pull together the people for the meeting during July an aide to USDA undersecretary Daniel Amstutz said. Since the last meeting was only around four months ago the next talks could still be a couple more months he said. There has been grain industry speculation that the USDA will offer Moscow another wheat subsidy during the next marketing year. But USDA officials said even if consultations were held soon a subsidy offer would probably not be made. I doubt that there would be any subsidy offer this summer or before the next agreement year begins a USDA source said. Citing limited subsidy funds and uncertainties about next years crops he said There are too many variables now. It would be uncharacteristic of us to make an offer now. Under the nonbinding pact Moscow has agreed to purchase a minimum of nine mln tonnes of U.S. grain per year. Soviet and U.S. officials normally meet in the summer before the start of a new agreement year to discuss grain quality shipping logistics and production outlooks. Reuter

U.S./SOVIET GRAIN MEETING UNLIKELY THIS SUMMER

GE CREDIT SAYS IT WILL BUY KRAFT INC'S D AND K FINANCIAL CORP

Shr five cts vs one ct Net 299869 vs 54775 Revs 5.7 mln vs 5.2 mln Note: period ended April 30. Reuter

WALL AND REDEKOP CORP <WRK.TO> THREE MTHS NET

ALZA Corp said it has notified the State of California Regional Water Quality Control Board of a plan to remedy groundwater and soil contamination it detected at a site in Stanford Research Park. A preliminary water sample showed water apparently contaminated some years ago with the industrial solvent chloroform. The company said the contamination does not affect drinking water or water used its operations on the site. The plan is expected to cost a maximum of 750000 dlrs the company said. Reuter

ALZA CORP <AZA> SETS CONTAMINATION PLAN

The Justice Department said it asked the government to proceed cautiously on a plan allowing the nations two largest intercity bus companies to merge their operations a move one of the firms said may derail the deal. Justices opposition to quick federal approval of a bid by Greyhound Lines Inc to take immediate control Trailways Corp prompted Greyhound to threaten -- in a brief filed with the Interstate Commerce Commission (ICC) -- to drop the merger plan. Greyhound officials told Reuters late today the company hoped for ICC action on the merger by tomorrow. Greyhound Lines will go forward with the transaction only if it is permitted to assume immediate unconditional control of Trailways operations and to integrate them with its operations Greyhound said in a filing with the ICC the federal regulatory agency which has the final say over mergers of interstate bus companies. But Justice had said in an earlier filing with the ICC that it wanted the agency to move slowly on the plan and to turn down Greyhounds request to begin operating Trailways immediately. The department has just begun to receive relevant information on Trailways financial condition and is in the process of assessing the correctness of the companys allegations acting Assistant Attorney General Charles Rule said in comments submitted to the ICC. Greyhound announced June 19 that it wanted the ICC to let it begin operating Trailways immediately while continuing to evaluate the merger for possible antitrust problems. Greyhound said it would pay 80 mln dlrs for many of Trailways terminals buses and garages. The two companies said in papers filed with the ICC that Trailways could collapse in a matter of days. They said Trailways owed suppliers more than six mln dlrs with another six mln dlrs due June 30. The suppliers they said could force Trailways into bankruptcy at any time. Trailways also owes a consortium of banks 76 mln dlrs and the consortium has threatened to call the loan if Trailways fails to pay the interest due June 30 they said. Reuter

JUSTICE OPPOSES QUICK GREYHOUND-TRAILWAYS MERGER

Lockheed Corp said NASA selected it to develop and design software for the Space Station in a contract with a potential value of more than 200 mln dlrs. Lockheed said the contract will continue into 1993 when assembly of the station in a 200-mile earth orbit is scheduled to begin. Reuter

NASA SELECTS LOCKHEED <LK> FOR SPACE STATION

The Federal Reserve Board said it approved Sovran Financial Corps application to retain shares in Sovran Insurance Corp of Bethesda Md. Sovran controls banks in Maryland Virginia and the District of Columbia and last year acquired Suburban Bancorp which controlled an insurance subsidiary. Insurance industry trade groups objected to Sovrans application but the Fed ruled that Sovran was entitled to retain indirect control over Sovran Insurance under special grandfather exemptions to the prohibition against banks engaging in insurance under the Garn-St Germain bank law. Reuter

FED APPROVES INSURANCE ROLE FOR SOVRAN <SOVN>

Elsinore Corp said it deposited 5795833 dlrs with Manufacturers Hanover Trust Co the trustee of its Elsinore Finance Corp units 15-1/2 pct senior mortgage bonds due 1999. The deposit represents the balance of accrued and unpaid interest on the bonds thorugh June 30 1986. Elsinore Corp has guaranteed payment on the bonds. Payment of this amount about 50.40 dlrs per 1000 dlrs principal will be made on July 14 to shareholders of record July 13. Reuter

ELSINORE <ELS> SETS DEPOSIT ON BONDS

Qtly div 24 cts vs 24 cts Pay August 14 Record July 24 Reuter

AMERON INC <AMN> SETS QTLY DIV

Harcourt Brace Jovanovich Inc said it sold 4805432 shares of its common at 10.25 dlrs a share to an employee stock ownership plan as part of its previously announced recapitalization plan. Harcourt said the shares sold are not entitled to a special dividend previously declared under the plan. It said the shares will be entitled to vote at a special meeting of shareholders scheduled for July 23. Reuter

HARCOURT <HBJ> SELLS SHARES TO ESOP

More leading U.S. manufacturers plan to increase the proportion of their U.S.-based production vis-a-vis their overseas output over the next two years according to a Boston University School of Management survey. The Manufacturing Roundtable 1987 study showed 32 pct of manufacturers plan to shift output to their domestic plants from their overseas ones or simply increase the production in their U.S. plants. That was up from 19 pct expecting to make that shift in 1986 and only 12 pct in 1984. The Boston University survey canvassed 207 firms. The largest group of those surveyed 44 pct planned no changes in their U.S./overseas operations while 23.7 pct said they would boost the ratio of overseas output the poll said. Jeffrey Miller professor at the School of Management and director of the Roundtable Survey said that exchange rates favored plans toward increased domestic production. But he added that increased competitiveness seems to be behind the move towards greater production in the United States. Whats peculiar about this group is that its the most successful in terms of profitability decreasing costs and increasing quality he told Reuters in an interview. Those companies increasing offshore production are at the opposite end of the spectrum he said not meeting the production goals they set for themselves. He cautioned that the survey was skewed towards large unusually profitable businesses representing a diversity of industries and regions. The typical respondent was a large manufacturing division with sales of about 200 mln dlrs. Reuter

SURVEY SEES U.S. MANUFACTURERS SHIFTING OUTPUT

Allied-Signal Inc and Schlumberger Ltd jointly announced that Schlumberger had acquired Allied-Signals Neptune International unit. Terms werent disclosed. Atlanta Ga.-based Neptune which makes water meters and flow measurement equipment had sales last year of 80 mln dlrs. Reuter

ALLIED-SIGNAL <ALD> SELLS TO SCHLUMBERGER <SLB>

The Federal Home Loan Bank Board said it closed down the insolvent United Federal Savings and Loan Association of Durant Okla and turned its insured deposits and other assets and liabilities over to a newly created federally chartered thrift. It said the failed thrifts four offices would reopen tomorrow under Bank Board management. United with assets of 9.31 mln dlrs was closed because it had substantially dissipated its assets and earnings due to federal law violations and unsafe and unsound practices the thrift regulatory agency said. The Bank Board faulted the failed thrift for its large holdings of substandard loans made in 1984-85 due to imprudent underwriting policies and controls on loans for construction and other purposes throughout the United States. It also charged the thrift had violated federal rules governing conflicts of interest loans to a single borrower and changes of control. The thrift was the 27th federally insured savings and loan to be closed down by the bank board so far this year. Reuter

U.S. BANK BOARD TAKES OVER INSOLVENT THRIFT

American Century Corp said its Commerce Savings subsidiary received 42.8 mln dlrs in complete redemption of certain properties in Aspen Colo that Commerce foreclosed on in April. American said the amount represents the amount that Commerce bid for the properties in the April foreclosure sale plus interest since the date of foreclosure. The properties consist of a 12-acre hotel and condominium development site at the base of Aspen mountain and other sites. They were sold to the former chairman of American Century John Roberts Jr in January 1985 for 53 mln dlrs. Reuter

AMERICAN CENTURY <ACT> COMPLETES REDEMPTION

Shr 64 cts vs 40 cts Net 5597000 vs 3426000 Revs 83.5 mln vs 47.4 mln Six mths Shr 1.15 dlrs vs 60 cts Net 10 mln vs 5201000 Revs 147.6 mln vs 91.5 mln Reuter

LENNAR CORP <LEN> 2ND QTR MAY 31

The U.S. Defense Department said it has given preliminary approval for Egypt to produce the M-1A tank the main battle tank of the United States. The State and Defense Departments said talks were going on between the two countries dealing with Egypts ability to build the tank and protect its high technology secrets. The U.S. Army signed a contract four weeks ago to pay General Dynamics Corp &lt;GD> 3.5 billion dlrs over the next four years to build 3299 of the tanks. Pentagon officials who asked not to be identified told Reuters Congress probably will not be officially notified of any final plan until after October 1. Congress would then have 30 days to veto Egypt as the first foreign co-producer of the M-1A. U.S. defense officials said Congress could approve the plan because Egypt is the only Arab country which has signed a peace treaty with Israel. But they said the issues of technology transfer and a possible loss of U.S. jobs could raise problems for the plan while Israel would also be expected to lobby against any production agreement. Reuter

U.S. COULD APPROVE EGYPTIAN M-1A TANK PRODUCTION

Finance ministers from the 13-member Caribbean Community (Caricom) approved a draft agreement for a new export credit facility in an effort to stem the steady decline in interregional trade. The Caribbean Export Credit Bank scheduled to begin operations January 1 1988 will be headquartered in Barbados. Its initial capital of 17 mln dlrs will come from Caricom member governments private sector donors and the Caribbean Development Bank. Capitalisation is projected at 60 mln dlrs with foreign aid including soft loans from international institutions. Caricom leaders are attending their annual meeting and high on the agenda is how to stop the decline in inter-regional trade which dropped by a third last year. Reuter

EXPORT CREDIT BANK FOUNDED BY CARIBBEAN NATIONS

Digital Communications Associates Inc &lt;DCAI.O> said it has entered into an agreement to acquire substantially all the assets of Fox Technology Incs Fox Research Inc subsidiary. The company said it will assume about 10 mln dlrs of Fox liabilities with a provision for a further 6.5 mln dlrs based on the future financial performance of Fox during the one year period following the closing of the deal. It said the acquisition is subject to approval by Fox shareholders and is expected to close in mid August. Reuter

DIGITAL <DCAI.O> TO ACQUIRE FOX <FOXT.O> UNIT

Pakistan announced a new tea import policy saying 70 pct of imports will in future be made through the state Trading Corporation of Pakistan (TCP). Commerce Minister Mahbubul Haq said in a television broadcast that no more than one-third of the remaining 30 pct allocated to the private sector would be permitted to come from any one country. The new policy was announced some three months after the government suspended import licences and ordered an inquiry into tea purchase policy. Traders said the move was designed to put pressure on Kenya which provided some 48 pct of Pakistans 75-80 mln kilo annual tea imports to buy Pakistani manufactured goods in exchange. Liptons and Brooke Bond two units of Britains Unilever Plc control 95 pct of Pakistans hard-pack tea market traders said. Haq who is also Planning Minister was outlining a new three-year trade policy from the start of financial 1987/88 on July 1. Reuter

STATE TO CONTROL 70 PCT OF PAKISTAN TEA IMPORTS

General Electric Cos GE Credit Corp said it agreed to buy all of the capital stock of Kraft Incs wholly owned subsidiary D and K Financial Corp. Terms of the acquisition were not disclosed. D and K with assets of more than one billion dlrs is one of the leading U.S. companies involved in the leasing of fleets of cars according to GE Credit. Jim Ahtes a spokesman for GE Credits outside public relations firm Manning Selvage and Lee Inc emphasized that the terms of the acquisition had not yet been approved. Reuter

GENERAL ELECTRIC <GE> TO BUY KRAFT <KRA> UNIT

&lt;Industrial Equity (Pacific) Ltd> (IEP) the Hong Kong-listed unit of Brierley Investments Ltd &lt;BRYA.WE> said it has lifted its stakes in British oil company Ultramar Plc &lt;UMAR.L> and U.S. Firm &lt;Ogelbay Norton Co>. IEP told the Stock Exchange it now holds 36.03 mln Ultramar shares representing 13.07 pct of the issued capital. It holds 388600 shares in Ogelbay representing 11.68 pct of the Delaware-based company. No other details were available. REUTER

IEP LIFTS ULTRAMAR AND OGELBAY NORTON STAKES

Japan May unemployment record 3.2 pct (3.0 pct in April) - official

Japans seasonally adjusted unemployment rate rose to a record 3.2 pct in May the worst level since the government started compiling unemployment statistics in 1953 the governments Management and Coodination Agency said. The May rate surpassed the previous record of 3.0 pct marked set in January and April this year. It was also up sharply from 2.7 pct a year earlier. Unadjusted May unemployment totalled 1.91 mln people up from 1.90 mln in April and 1.62 mln a year earlier. An agency official blamed industrial restructuring and the strong yen for the rise in unemployment. The seasonally adjusted male unemployment rate in May rose to a record 3.2 pct surpassing the previous record 3.0 pct set in July 1986. This compares with 2.9 pct in April and 2.7 pct a year earlie. Unadjusted male unemployment totalled 1.12 mln up 180000 from a year earlier. The female unemployment rate in May was unchanged from April at a record 3.1 pct. A year ago the rate was 2.8 pct. Unadjusted female unemployment rose 100000 to 790000. The yens appreciation continued to affect employment in manufacturing industries and the total employed in May fell 210000 or 1.5 pct from a year earlier to 14.10 mln. REUTER

JAPAN UNEMPLOYMENT RISES TO RECORD 3.2 PCT IN MAY

Miyazawa says there are no plans at all for G-5 or G-7 talks

AUSTRALIAN ALL ORDINARIES SHARE INDEX DROPS 416.9 POINTS IN FIRST 45 MINUTES

Japanese Finance Minister Kiichi Miyazawa said the Group of Seven (G-7) nations still support the Louvre Accord to stabilise currencies. He also told a news conference following a cabinet meeting that the Group of Five (G-5) and G-7 do not have any plans to meet for talks. The Finance Minister further said that overseas stock market plunges will not lead to a freefall in the Tokyo stock market. There is no special worry about the stock market in Tokyo he added. Miyazawa said the Tokyo stock market should not be gravely affected by the downturns of markets in New York and London because there is a clear sign of an economic recovery in Japan and stability of exchange rates. Asked if the U.S. Had contacted Japan after the stock market plunge in New York Miyazawa said there was not any contact. REUTER

MIYAZAWA SAYS G-7 STILL SUPPORTS LOUVRE ACCORD

Tokyo stock index slumps 918.86 points to 24,827.70 after 66 minutes' trade

Miyazawa says Baker's remarks were aimed at just reaffirming Louvre agreement

HONG KONG STOCK EXCHANGE TRADING SUSPENDED UNTIL NEXT MONDAY - EXCHANGE

Japans Finance Minister Kiichi Miyazawa said that remarks by U.S. Treasury Secretary James Baker on Sunday that some nations were not abiding by the spirit of the Louvre Accord were just aimed at reaffirming that agreement. The agreement to cooperate in stabilising currencies was reached in Paris in February this year. The finance minister made the remark at a news conference which followed a morning cabinet meeting. REUTER

BAKER REMARKS AIMED AT CONFIRMING ACCORD-MIYAZAWA

Tokyo's stock index falls 1,336.00 points to 24,410.56 after 87 minutes

An explosive device blew up in the Philippine Congress building early on Tuesday a congressional security official said. He said no-one was injured in the blast which damaged a telephone booth on the second floor at about 0825 local time (0025 GMT). Captain Rosalo Ylagan head of congressional security said the device could have been a home-made bomb or a large firecracker. The explosion was being investigated he added. No congressmen were in the building at the time. REUTER

EXPLOSION IN PHILIPPINE CONGRESS, NO INJURIES

Japan said it understood why the U.S. Attacked an Iranian oil platform on Monday. Japan deeply concerned over the increasing threat to the ships navigating in the Gulf understands the circumstances that have led the United States government to take these measures the Foreign Ministry said in a statement. The statement added that the threat to free and safe navigation had increased after the missile attack on a U.S.-flagged tanker in Kuwaiti territorial waters last Friday. REUTER

JAPAN UNDERSTANDS U.S. ATTACK ON IRAN OIL PLATFORM

Tokyo stock index ends morning trade 1,873.80 points down at 23,872.76

World oil prices would remain stable despite the U.S. Attack against Iranian oil platforms and growing tension in the Gulf Venezuelan Energy Minister Arturo Hernandez Grisanti said on Monday. He described the situation as extremely tense but said Gulf military activity would not significantly affect prices because supply and demand were roughly equal. Demand for OPEC crude in the final quarter of 1987 was 18.5 mln barrels per day (bpd) and the groups members were now pumping above 18 mln bpd he told a news conference. Hernandez Grisanti said the supply/demand balance was precarious and prices were in danger of falling from their current average of about 18 dlrs per barrel if overproduction continued. Three or four members of the 13-nation Organisation of Petroleum Exporting Countries were overproducing in an exaggerated manner above their assigned quotas he said. OPECs overall ceiling is 16.6 mln bpd. REUTER

VENEZUELA SEES FLAT OIL PRICE DESPITE U.S. ATTACK

Canon Inc &lt;CANN.T> said it will stop making Japanese language word processors with retail prices below 50000 yen and consign production instead to &lt;Kyushu Matsushita Electronic Co Ltd> a 51.75-pct owned unit of Matsushita Electric Industrial Co Ltd &lt;MC.T>. A Canon spokesman said the move reflects intense price competition as Canon Casio Computer Co Ltd &lt;CACT.T> and others compete in the growing market for low-end processors. Canon will focus production on more expensive and sophisticated models which have more generous profit margins he said. REUTER

CANON STOPS PRODUCTION OF LOW-END WORD PROCESSORS

Japan to take wait-and-see stance on Tokyo stock movement, senior official

If the dollar goes the way of Wall Street Japanese will finally move out of dollar investments in a serious way Japan investment managers say. The Japanese the dominant foreign investors in U.S. Dollar securities have already sold U.S. Equities. But if the dollar falls steeply which did not happen yesterday Japanese investors will definitely try to withdraw significant funds from U.S. Shares said Akira Kawakami deputy manager of Nomura Investment Trust and Management Co Ltds international investment department. An unstable lower dollar would also affect Japanese investment in U.S. Bonds. Japan-U.S. Interest rate differentials which currently look wide enough mean nothing in the absence of dollar stability said Kawakami. U.S. Bonds could benefit due to a gloomy economic picture following the estimated huge losses in stocks by major U.S. Institutional and individual investors he said. The effect should be to rule out any U.S. Interest rate rise. But most Japanese investors in U.S. Bonds are still wiating to see if the dollar really is stable he said. The dollar was holding firm at above 142 yen on Tuesday morning. Although Japanese investors sold huge amounts of stocks in New York yesterday most are still looking for chances to lighten their U.S. Stock inventories Hiromitsu Sunada manager of Meiji Mutual Life Insurance Cos international investment department said. Their sales helped send Wall Street stocks down 508 points to 1738 the markets biggest percentage drop since 1914. Investment in U.S. Stocks and bonds is difficult considering the dangers said Katsuhiko Okiyama deputy general manager and chief adviser of Yamaichi Securities Co Ltds fixed income securities marketing group. Japanese investment at home could start to pick up once markets have stopped reacting to Wall Street the managers said. The Tokyo yen bond market is likely to stabilise in one or two weeks which is what investors have been waiting for. The bottom for yen bonds should be around a 6.3 pct yield for the 5.1 pct 89th bond they said. The basic background which has supported the stocks and bonds markets has not changed said Norio Okutsu assistant general manager of Nikko Securities bond department. But new outflows of funds to the U.S. Will be decreasing. However this was already evident three months ago he said. REUTER

IF DOLLAR FOLLOWS WALL STREET JAPANESE WILL DIVEST

NEC Corp &lt;NIPN.T> will supply &lt;Matra-Harris Semiconducteurs SA(A)> (MHS) of France with manufacturing technology for 16-bit microchips used in microcomputers an NEC spokesman said. MHS a joint venture between Frances MATRA &lt;MATR.PA> and Harris Corp &lt;HRS> of the U.S. Will manufacture and market globally a microcomputer based on NECs Micron PD 78312 and Micron PD78310 chips. MHS will pay NEC an undisclosed sum for the technology. REUTER

NEC TO SUPPLY CHIP TECHNOLOGY TO FRANCE

The Finance Ministry will take a wait-and-see stance on Tokyo Stock Exchange movement although it is gravely concerned about the sharp fall in stock prices a senior Ministry official said. The official who declined to be identified told reporters the 7.3 pct drop in Tokyo stock prices this morning was caused primarily by psychological factors following the 22.5 pct fall in New York stock prices overnight. He said the Ministry is in close contact with the Tokyo Stock Exchange but has no plans yet to take any specific measures regarding the fall. REUTER

JAPAN TAKES WAIT-AND-SEE STANCE ON STOCKS-OFFICIAL

The outlook for Mexicos economy and stockmarket remains optimistic despite the markets worst-ever fall of 52671.56 points on Monday the president of the Mexican stock exchange Manuel Somoza said. He said the 16.51 pct drop in the exchanges index reflected a totally emotional reaction to Mondays fall on the New York stock exchange and was not a reflection of a new crisis for the Mexican economy or the stockmarket. He was speaking at a news conference here on Monday. We think that after the psycological effect the market will tend to stabilize itself Somoza said. Somoza said he based his optimism on the relatively bright outlook of the Mexican economy due to increased income from oil and non-petroleum exports record high foreign reserves and government efforts to promote a modernization of the industrial sector. The U.S. Economy is not the same as the Mexican he said. He did not say when he thought the market would stabilize. He said traders had originally expected the market to level out on Monday after last weeks profit taking pulled the index down 44207 points. News of the enormous problems in New York which reached Mexico City before the local market opened caused a flurry of selling on the Mexican exchange Somoza said. The stockmarket had risen 629 pct over the year by the end of September. Somoza said Mondays light volume of 15.3 mln shares compared to an average of 53 mln was an indication the days drop was not a sign of a major collapse. He also denied rumours that the days loss was the result of government and brokerage house manipulation. REUTER

MEXICAN STOCKMARKET HEAD SEES NO CRISIS AFTER FALL

Asian cocoa producers are expanding output despite depressed world prices and they dismiss suggestions in the London market that their cocoa is inferior. Leading cocoa producers are trying to protect their market from our product said a spokesman for Indonesias directorate general of plantations. Were happy about our long-term future. Malaysian growers said they would try to expand sales in Asia and the United States if Malaysian cocoa was not suitable for European tastes. They were responding to comments by London traders that large tonnages of unwanted cocoa beans from Malaysia Indonesia and Papua New Guinea (PNG) were helping to depress cocoa prices. London traders said the Asian cocoa was considered unsuitable for western palates because of an acrid odour and a high level of free fatty acids. Ng Siew Kee the chairman of Malaysias Cocoa Growers Council said Malaysia should expand its sales to Asia and the United States if it did not produce a type suitable for Western Europe. A spokesman for the PNG Cocoa Industry Board said the London market was mistaken if it linked PNG cocoa with high-acid Malaysian and Indonesian beans. When the market is declining buyers seize on anything to talk down prices the spokesman said. He said that PNG could sell whatever cocoa it produces. PNG exported 33000 tonnes of cocoa in the 1986/87 cocoa year ending September 30 of which nearly 50 pct was exported to West Germany 16 pct to the U.S. And the rest to the Netherlands and Britain. The Indonesia spokesman an Agriculture Ministry official who wished not to be identified said Indonesia had no problem with quality and would continue to expand sales. He described criticism of the quality of Indonesian beans as trade politics and said Jakartas traditional links with Dutch buyers meant it did not have any difficulty with exports. Indonesia and Malaysia Asias two biggest commodity producers are expanding cocoa output and are both outside the International Cocoa Organization (ICCO). Officials have said Malaysian production is expected to total 150000 to 155000 tonnes in calendar 1987. This is up from 131000 tonnes in 1986 partly because of the end of a three-year drought in Sabah the countrys largest cocoa growing area. Production of Indonesian cocoa beans tripled to 31600 tonnes in calendar 1986 from 10284 tonnes in 1980. Output is projected to rise to 50000 tonnes in 1988 from 38000 tonnes this year as young trees mature. Both Malaysia and Indonesia are low cost producers and traders said they could last out low prices longer than West African countries. According to one Kuala Lumpur trader world prices would have to fall another 1000 ringgit per tonne (about 250 stg) to make cocoa production in Malaysia uneconomic. Some traders believe the main quality problem is with harvesting and fermentation techniques. One trader said Malaysian cocoa is virtually indistinguishable from West African output if treated in the same way but this is not possible on the larger Malaysian estates. REUTER

ASIAN COCOA PRODUCERS EXPAND DESPITE CRITICS

Tokyo stock index down 2,210.19 points to 23,536.37 in early afternoon

Japanese Prime Minister Yasuhiro Nakasone was quoted by Kyodo News Service as saying he was watching the stock market situation. We must watch things a little longer. New York is down 22 pct London 10 pct while compared to this Japan is seven pct down Kyodo quoted him as telling reporters. Asked if he agreed with analysts who called the stock sell-off Black Monday Nakasone said: Compared with times past economics have changed completely. He rejected a comparison between the present situation and the stock market collapse of 1929 and the recession which followed. REUTER

JAPANESE PREMIER SAYS HE WATCHING STOCK SITUATION

Malaysias national oil company Petronas has advised the government to raise crude oil output to 540000 barrels a day (bpd) in 1988 from a current 500000 bpd a senior company official said. We have the capacity to produce the amount Rastam Hadi Petronass Vice-President for Upstream Sector said. The government will announce its decision on Friday when it unveils the countrys budget. Malaysia raised output this month to current levels from 420000 bpd after reviewing the world oil market. In May Malaysia cut output to 420000 bpd from 459000 in response to a call by OPEC to boost prices. REUTER

MALAYSIA ADVISED TO RAISE CRUDE OIL OUTPUT IN 1988

Sumita welcomes U.S.-West German joint confirmation of Louvre accord

Tokyo stock index slumps 14.9 pct to close at 21,910.08

Sumita says world stockmarkets excessively concerned about economic future

Bank of Japan governor Satoshi Sumita said he welcomed Mondays U.S. And West German joint confirmation of their commitment to the Louvre accord. Sumita said in a statement that world stockmarkets were excessively concerned about the economic future. The Bank of Japan will continue to adhere to a system of policy coordination based upon the Louvre accord of February he said. The accord called for stability in foreign exchange rates. Exchange rates generally are regaining stability and the economies of industrialised nations are heading for a steady recovery he said. REUTER

SUMITA WELCOMES U.S.-JAPAN AGREEMENT ON LOUVRE

The Reserve Bank of New Zealand said there was no evidence to suggest the fall in share prices had affected financial stability and it would maintain its firm monetary policy. Governor Spencer Russell said in a statement the central bank did not accept arguments that the battle against inflation should now take a low second priority after the sharemarkets plunge. Russell said the bank had two statutory responsibilities -- to implement the governments monetary policy to bring down inflation and to ensure the financial sectors stability. Unless the bank is directed otherwise the firm monetary policy will continue because it is very much in the national interest that it do so he said. And there is yet no evidence available to the bank to suggest that the fall in share prices has affected the stability of the financial sector. The Barclays share index fell a record 504.75 points to 292526 on Tuesday a decline of 14.7 pct. REUTER

NEW ZEALAND WILL CONTINUE FIRM MONETARY POLICY

Tokyo Stock Exchange has no plan to suspend trading on Wednesday-president

Tokyo Stock Exchange to ease margin requirements, exchange president says

Japan September M-2 plus CD money supply rises 11.1 pct year on year (Aug 11.0)

BAKER HEADS HOME AFTER CUTTING SHORT EUROPE TRIP - SWEDISH FINANCE MINISTRY

Tanzania has arranged to sell 53000 tonnes of maize to Malawi Mozambique and Zaire radio Tanzania said. The radio said the grain would be delivered soon but gave no details about the value of the sales. Tanzania is expecting a record maize harvest of 2.3 mln tonnes in the 1987/88 financial year ending June up from a bumper crop of 2.1 mln in 1986/87. REUTER

TANZANIA SELLS MAIZE TO MALAWI, MOZAMBIQUE, ZAIRE

About 60000 tonnes of harvested raw cotton may be spoiled by rain in Tanzanias northern Shinyanga region because it is stored in the open or in crude village sheds radio Tanzania reported. The cotton worth one billion shillings cannot be moved to ginneries in the region because most mill warehouses are full. Many mills are not working because of a lack of spare parts it added. Agriculture Ministry officials have forecast a 1987/88 cotton harvest of about 200000 tonnes down from 215000 in 1986/87. REUTER

TANZANIAN COTTON THREATENED BY LACK OF STORAGE

Tokyo Stock Exchange president Michio Takeuchi said the exchange has no immediate plans to suspend trading to cool off panic stock selling. However he said Tokyo may consider such a measure if the London and New York exchanges are closed overnight. I dont think it will happen he added. He also told reporters the exchange will relax margin requirements effective on Wednesday to encourage stock buying. Takeuchi said the sharp fall in stock prices was mostly due to psychological factors. We need to keep close watch on market movement but we expect the market will stabilise soon he said adding that individual investors should remain calm. It is advisable to wait for an autonomous recovery of the market he said. The margin requirement in cash will be reduced to 50 pct from 70 pct while the margin collateral requirement in equity will rise to 70 pct from 60 pct effective on Wednesday he said. Takeuchi also said the exchange has no specific plan to take coordinated action with the New York and London exchanges to help stabilise stock prices. The drop on Wall Street was caused by various factors but was primarily the result of a correction of overvalued share prices he said. The current stock price plunge cannot compare with the Great Depression as the economic environment is very different he added. The exchange has not changed plans to introduce stock futures trading next year despite press reports that the Wall Street fall was linked with futures trading he said. REUTER

TOKYO STOCK EXCHANGE WILL NOT SUSPEND TRADING

President Corazon Aquino said the Philippines was closely monitoring interest rates in the wake of Mondays record drop on Wall Street and steep declines in Manila and other Asian stock markets. We will monitor these developments closely and will continue to hope that they do not precipitate large declines in economic activity around the world Aquino told a meeting of 13 major Philippine business groups. The Philippines as a trading country in the world economy depends on the continued health and growth of both the world economy and the world trading system she said. The Manila Stock Exchange composite index plunged 105.49 points or 11.79 pct by the midday close to 789.54 depressed by the record 508 point fall of the Dow Jones industrial average on Monday. The Philippines in addition as a large borrower nation is affected by developments in interest rate levels around the world and will carefully monitor the impact of these developments on interest rates on gold and on commodity prices Aquino said. We welcome the statements from world leaders that urge calm in the present difficult situation she added. REUTER

AQUINO SAYS MANILA WATCHING INTEREST RATES CLOSELY

Nissan Motor Co Ltd &lt;NSAN.T> said it has started to market a remodelled version of its four wheel drive (4WD) Safari vehicle in Japan. Nissan said in a statement it hopes to sell 250 vehicles a month in Japan. It also plans soon to start exporting 3400 vehicles a month to the Australian Middle East and Asian markets under the name Patrol a spokesman said. It will sell the vehicle in Europe sometime in the future with shipments from &lt;Motor Iberica S.A.> its Spanish unit. The volume for Europe will be set later. REUTER

NISSAN STARTS TO MARKET REMODELLED 4WD VEHICLES