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Business in Asia Today


Hong Kong exports sharply down
HONG KONG - In November 1998, the value of Hong Kong's re-exports decreased by 8.2 percent over a year earlier to HK$97.9 billion (U.S.$12.63 billion), domestic exports by 15.8 percent to HK$15.1 billion and the value of imports decreased by 14.4 percent to HK$113.8 billion, according to figures released by the Census and Statistics Department.

Comparing Nov. 1998 with Nov. 1997,decreases were recorded in the value of re-exports to Japan (-16.5 percent), Germany (-14.1 percent), the mainland of China (-12.5 percent), Taiwan (-12.4 percent), Singapore (-9.6 percent) and the U.S.(-2.3 percent). For the first eleven months of 1998 taken together, the value of re-exports, at HK$1,066.9 billion, was 6.3 percent lower than that in the same period in 1997.

Moody's lowers rating of bankrupt GITIC
NEW YORK - Moody's Investors Service lowered the ratings of Guangdong International Trust & Investment Corporation (GITIC) for its outstanding foreign currency debt and deposits to Ca.

The downgrade was based on the announcement by GITIC's former board of directors that GITIC and its three major subsidiaries will file for bankruptcy under China's Bankruptcy Law, and that the repayment of GITIC's debt will be decided through bankruptcy proceedings.

According to the ratings agency, the latest development is likely to resultin a lower recovery rate for GITIC's foreign creditors than previously expected.

Japan's smaller businesses remain enmired
Small and medium-size businesses remained mired in woe in the October-December quarter of 1998, the Ministry of International Trade and Industry said in its business conditions survey released Monday.

The diffusion index (DI), determined by subtracting the age of firms with worsening business performance from those whose performance is improving, stood at -53.1, the same as the previous quarter and an all-time low since the survey began in 1980.

Although the DI for the January-March quarter is seen improving slightly to -46.9, MITI officials warned against taking that small gain at face value, believing that the current tough business conditions were going to continue.

Yamaha secures U.S.$220m credit line
TOKYO - Yamaha Motor Co. (TSE:7272) announced that it has set up a commitment line of U.S.$220 million with a syndicate of five domestic and six foreign banks.

The line will allow the motorcycle maker, a U.S. subsidiary, or a European financial subsidiary to choose loans in yen, dollars or euro. The credit line will be the first of its kind in the world, a Yamaha managing director said.

It is expected to stabilize the company's cash flow, halve unnecessary cash and deposits on hand, and reduce interest-bearing liabilities.

Global sales of flat displays set to increase 70% by 2002
TOKYO - Sales of flat displays will likely reach 2.62trillion yen (U.S.$23.7 billion) worldwide in calendar 2002, up 70 percent from 1998, high-tech industry research company IDC Japan predicts.

Total global display sales are likely to grow 22.4 percent to 6.35 trillion yen by that time, the firm said. Last year's combined display product sales are estimated at 5.19 trillion yen worldwide, of which flat display sales accounted for 1.50 trillion yen, down 0.5 percent from a year earlier.

Flat displaysales are expected to recover sharply from 1999 onward, however, posting an average 11.7 percent growth each year until 2002.

DaimlerChrysler sets up local holding company in Japan
TOKYO - DaimlerChrysler AG has recently set up a wholly owned local holding company in Tokyo. The move is designed to streamline decision-making by creating a single Japanese unit to deal with the parent company and facilitate the development of new businesses.

The holding company, capitalized at 8 billion yen (U.S.$72.5 million), will take over all the shares and nearly all the staff of Mercedes-Benz Japan Co. The new company has also acquired all the outstanding shares of a Daimler-affiliated consultancy, as well as 51 percent stakes in three other Daimler group companies, bringing to five of 12 the number of Daimler group businesses in Japan under its wing.

Philippine telecom leaders join forces
MANILA - Leading Philippines cellular telephone provider Smart Communications Inc. and Pilipino Telephone Corp. (Piltel) are set to coordinate their operations.

The two companies now have a common investor after Smart's major stockholder Metro Pacific Holdings Corp. bought a substantial share in Philippine Long Distance Telephone Company (PLDT), which owns 58 percent of Piltel.

However, the approval of Congress is necessary as the two are holders of different franchises. PLDT senior vice-president for corporate affairs Antonio R. Samson said that while there may not be a formal merger between the two companies, Piltel and Smart will coordinate in various areas of operations.

India's order for switches goes to Siemens
NEW DELHI - The Indian Department of Telecommunications (DoT) has placed two orders worth Rs 2.35 billion (U.S.$55.3 million) for local line switches and digital electronic automatic exchange switches with the German telecom major Siemens Public Communication Networks.

The orders were placed after Siemens offered the lowest bid in the two global tenders floated by the department. The company will supply 1.69 million local line switches in a Rs 1.60 billion order, while another 295,000 lines of the digital trunk automatic exchange (D-Tax) lines would be supplied under a Rs 750 million order.

The two orders are part of the network modernisation of the department and have been delayed since the tenders were opened in August 1997.

Indian ordinance opens land to development
NEW DELHI - The Indian government has issued an ordinance repealing the Urban Land Ceiling Act to boost housing activity and development of the infrastructure sector through free availability of land.

With the ordinance, 0.2 million hectares of land would be available immediately for development with the help of the private sector.

The ordinance incorporates an important provision that will allow cases in courts under the original law to continue. The ordinance comes into immediate effect in the northern states of Punjab and Haryana since their legislatures had passed resolutions empowering parliament to repeal the act in those states.

Kumho Life sells 60% stake to U.S.'s Hartford
SEOUL - Kumho Life has sold a 60-percent stake for U.S.$100 million to Hartford Life of the U.S. A memorandum of understanding was signed between the two firms in Seoul, the first such deal involving a local life insurance firm since the International Monetary Fund (IMF) extended bailout loans to Korea in 1997.

Kumho also plans to increase its paid-in capital by $100 million and issue subordinated bonds to the extent that its shareholdings would be 50 percent of total oustanding shares, raising its cash holdings to international standards.

Kumho Group will still retain management control of its insurance affiliate, set up in 1988, with assets totaling 575 billion won (U.S.$490million), and 2,800 employees.

(Asia Pulse)


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