Business and City in Brief

EC bankers oppose premature rate cuts

European Community central bankers warned in Basle of the contradiction between the EC's attempt to go for growth and its ambitions for a single currency.

Premature interest rate cuts and higher government spending were not the right way to boost the European economy, the committee of governors of EC central banks said in a report apparently at odds with one delivered on Monday by finance ministers. 'There is an urgent need to improve the mix between fiscal and monetary policies in a number of states,' they warned.

Maxwell payout

Pensioners robbed of more than pounds 400m by the late Robert Maxwell are to benefit from a scheme that will make the first payouts to creditors of the Maxwell empire since it collapsed in November 1991.

The scheme is being put forward by Arthur Andersen, administrator of the Maxwell private companies. From July, Andersen will pay dividends of about 20p in the pound to creditors of companies dragged into administration when the Maxwell empire crashed.

Assets stolen from pension funds were used as collateral for loans to Maxwell private companies.

SmithKline warning

Bob Bauman, chief executive of SmithKline Beecham, warned that US attempts to save money on drugs might undermine investment in research and development. SKB announced first-quarter sales up 26 per cent at pounds 1.5bn and pre-tax profits 12 per cent higher at pounds 306m. Earnings rose 14 per cent to 7.5p a share, or 11.2 cents an equity unit. The interim dividend is 2.533p a share, or 4.896 cents an equity unit.

US homes slump

Construction starts on new US homes and apartments slumped in March to the lowest levels since mid-1992, hampered by bad weather in much of the country, the Commerce Department said. The annual rate of starts on new homes fell 4.6 per cent to a seasonally adjusted annual rate of 1.134 million units after a downward-revised rise of 1.5 per cent in February.

UTA no longer

The Unit Trust Association has changed its name to The Association of Unit Trusts & Investment Funds to signal that it now represents the interests of members with offshore operations. Members are meeting Stephen Dorrell, financial secretary to the Treasury, today to press for new regulations to allow open-ended investment companies to be set up in the UK.

Steel production down

European Community crude steel production fell 4.6 per cent to 11.8 million tonnes last month compared with March 1992, the International Iron and Steel Institute said. US production fell 1.3 per cent to 7.2 million tonnes in the same period while Japan's output rose 3.8 per cent to 8.6 million tonnes.

Airlines lose pounds 3bn

World airlines made a net loss of more than pounds 3bn on international scheduled services last year, the International Air Transport Association said.

World Markets

New York: Profit-taking in blue chips overshadowed dealings, but late bargain-hunting enabled the Dow Jones average to recover more than half of early losses to end at 3,443.49, down 23.50.

Tokyo: Arbitrage selling in the last half-hour pulled the Nikkei average down 283.91 to 19,828.43.

Hong Kong: Cautious trade ahead of the resumed Sino-British talks on the colony's future left the Hang Seng index nursing a 41.61- point fall at 6,638.54.

Sydney: Bank shares were among the pacesetters as the All Ordinaries added 7.2 points to 1,703.6.

Johannesburg: Gold shares ended sharply higher though off their best levels, helping the overall index to 3,581, a 23-point gain.

Tel Aviv: Shares erased early losses to close higher, with the blue chip index up 1.95 at 213.25.

Paris: Selling by US investors added to the market's weak trend. The CAC-40 dipped 19.58 to 1,949.33.

Frankfurt: In thin trade the DAX index eased 6.19 points to 1,687.11.

Zurich: Activity centred on the industrial sector. The broad SPI gained six points to 1,344.3.

Milan: The MIB lost 0.43 per cent to 1,155.

London: Report, page 26.