World Briefs

Sri Lanka Raises Taxes, Loans

Sri Lanka has raised a national security tax by one per
centage point and announced that it is issuing treasury bills to meet expenses in the battle against Tamil Tigar guerrillas.

Junior finance minister G.L. Peiris told the Sri Lankan parliament that the 5.5 percent National Security Levy is being raised to 6.5 percent and that the government hoped to raise an additional US$ 33 million from the move. The government was also raising money from the debt market by issuing US$ 135 million in treasury bills.

Prices of cigarette and liquor have also been raised by 5 to 10 percent in the hope of collecting an additional US$ 20 m from increased taxes on tobacco and liquor.

China-Taiwan JV

Son of Chinese president Jiang Zemin, Jiang Manheng,
and Taiwan’s Formosa Plastics Group Chairman, Y.C. Wang, have formed a US$ 6.4 billion semiconductor joint-venture in China. According to a report in China Times, approval has been given to build three 8-inch and three 12-inch water plants in Shanghai. The paper also said that OK Electric Industry Company from Japan would provide the technology for the venture, which is one of the largest investment projects in China.

WPP to Be Largest Ad. Firm

Britain’s WPP Group PLC would become the world's
largest advertising and marketing company under terms of an agreement in principle which, sources claim, it has reached to buy Young and Rubican Inc.

The deal which is valued at US$ 4.7 billion in stock and would be the richest ever in the consolidating advertising industry, is still subject to approval by boards of both companies and their shareholders. The two advertisement powerhouses share numerous major clients such as Ford Motor Co., Mattel Inc., Kraft Foods and Sears, ReaBok and Co.

Toyota’s Profits Rise, Honda’s Fall

While Toyota Motor Corp., the biggest Japanese
automaker, claims that it has made a record breaking sales performance this year, the third largest Japanese automaker, Honda Motor Co., has said that its profits for the fiscal year has fallen for the first time in 6 years.

Toyota has posted a net profit of 406.8 billion yen (US$ 3.7 billion) this year, a rise of 14.2%. According to Toyota President Fujio Cho, while sales in Japan jumped 12.9 percent to reach 2.17 million units, overseas sales topped 3 million vehicles for the first time, helped largely by the success of the new Yaris in Europe and its local outputs in North America.

Honda’s profit, meanwhile, is revealed to have fallen 14 percent for the year to 262.42 billion Yen (US$ 2.4 billion) from 205.05 billion Yen (US$ 2.8 billion) a year before. Sales during the year went down 2.1 percent to US$ 56.3 billion from previous year’s sales of US$ 57.5 billion.

Honda has blamed the rise of the Yen over the dollar for its downslide in profits since about half of all its Accord and Civic sedans are sold in North America.

ANZ Sells Grindlays to StanChart

Melbourne-headquartered Australia and New Zealand
Banking Group Ltd. (ANZ) announced its agreement to sell its Grindlays businesses in Middle East and South Asia (including Nepal) and also associate Grindlays Private Banking business to Standard Chartered PLC of Britain for US$ 1.34 billion. The transfer is to be effected in July, 2000.

It is rumored that earlier bidders for ANZ’s international business included Citibank and Development Bank of Singapore.

According to bankers, one reason for the ANZ group opting out of businesses outside Australia and New Zealand is the protracted legal battle with India’s National Housing Bank as a fallout of the 1992 securities scam which could result in ANZ having to cough up US$ 335m (IRS 1500 crore). "The transaction is a substantial step in our strategy to reduce group risk and complexity," said ANZ chief executive John McFarlane, in a statement.

Meanwhile, the acquisition has made the London-based StanChart the biggest foreign bank in India with most of Grindlay’s 870,000 customers being from India. The move follows StanChart’s recent purchase of controlling stakes in Nakornthon Bank in Thailand, Metropolitan Bank in Lebanon and acquisition of the global trade finance business of UBS AG. Based on total assets, the combination of the two businesses will place StanChart as the leading international bank in India, Pakistan and Bangladesh and second in Sri Lanka and UAE, a statement issued by Standard Chartered said.

Druk Air Orders New Planes

Druk Air (Royal Bhutan Airlines) has placed orders
for two Avro RJX-85s aircraft, becoming the first client of this new Regional Jet. Delivery of these 82-seater, two class aircraft, which are scheduled to arrive in Novermber 2001 and January 2002. With this, Druk Air will be able to operate longer routes and carry higher passenger loads as well as allowing the airline to fly non-stop to Bangkok and Hong Kong, it is stated.

Druk Air flies from Paro - the only Bhutanese airport - to Bangkok, Calcutta, Delhi, Kathmandu and Dhaka. RJX-85s is product of BAE systems (formerly British Aerospace) and the new model jet was first launched in March, 2000. With this sale to Druk Air, the order book for BAE craft, which include Bae 146, Avro RJ and Avro RJX, has reached 375, the company has informed.

By Business Age Reporters