Business and City in Brief

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Hedge funds under review by G7

Finance ministers of the leading industrial countries decided yesterday to review risk-taking in financial markets to establish whether it posed a threat to the world's financial system.

Group of Seven ministers, some of whom voiced concern at the impact of highly leveraged hedge funds and derivatives trading during weekend talks, were yesterday joined by four smaller European countries in calling for the review.

Lopez evidence

German prosecutors have found clear evidence that Jose Ignacio Lopez de Arriortua, now head of production at Volkswagen, took secret documents from General Motors when he moved last year. According to two German newspapers, Mr Lopez will soon be charged with industrial espionage by the state prosecutor's office in Darmstadt.

Lloyd's hits back

Lloyd's of London criticised an analysis of the insurance market that cast doubts on the feasibility of establishing NewCo, the company intended to assume all Lloyd's pre-1986 liabilities. Randolph Fields, an insurance analyst seeking a PhD from London Guildhall University, said he had identified a pounds 1.4bn shortfall in the reserves set aside to meet the old year liabilities. He also estimated that Lloyd's faced a shortfall of at least pounds 11bn on the reserves needed to pay asbestos and pollution claims.

Trader sacked

A second Kidder Peabody bond trader has been caught mis-stating big losses and has been dismissed by the Wall Street firm. Neil Margolin, 29, was quietly sacked last Friday after admitting he had hidden dollars 10m worth of losses trading in interest-rate swaps. The Wall Street securities firm said Mr Margolin's dismissal was not related to that of Joseph Jett, the US treasuries trader whose alleged phantom trading cost the firm dollars 350m.

Shield expands

Shield Diagnostics, the disease- testing company floated last September, is doubling in size by acquiring Porton Cambridge from Porton International.

Forte favoured

Management of Meridien, the hotels group being sold by Air France, said it would prefer to be taken over by Forte, which has bid around Fr1.8bn ( pounds 209m). Accor, the French leisure group, has put in a rival offer.

Cable TV float

General Cable, the British cable television subsidiary of Compagnie Generale des Eaux, is planning a June flotation expected to value the company at about pounds 400m. General Cable, which has interests in franchises in London, Windsor, Birmingham and Yorkshire, is one of several cable companies expected to come to the market this year.

World Markets

New York: Better-than-expected company profits and sharply lower interest rates powered the Dow Jones Average 57.10 higher to 3,705.78 by the close.

Tokyo: The yen's continued rise restricted trade. The Nikkei average lost 255.25 to 19,709.14.

Hong Kong: Prices edged lower in very light turnover. The Hang Seng index fell 20.74 to 9,136.11.

Sydney: Closed (Anzac Day).

Bombay: A day of narrow-range trading pulled the index down 5.77 points to 3,800.97.

Johannesburg: A late recovery inspired by optimism about the elections took the overall index 28 points higher to 5,068.

Paris: Shares slipped back at the start of the May account, affected by profit-taking in the bond market. The CAC-40 index surrendered 18.88 points to 2,116.29.

Frankfurt: Pressured by a sharp fall in bonds, the DAX index gave up 11.7 points to 2,202.22.

Zurich: Financial issues led the market downwards on the uncertain interest rate outlook. The SPI dropped 9.71 to 1,792.52.

London: Report, page 26.

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