Wall Street, it seems, is completely sold on this one Even Warren Buffet, the investment guru, is besotted. Putting aside his traditional aversion to mergers of any sort, Mr Buffet has been quoted as saying that the Disney/Capital Cities link-up makes more sense than any deal he has ever seen. The new orders balance has remained around 50 – pointing to no change – for the past three months.Like its American older brother, the survey showed a reduction in price pressures. The index, closely watched by the Federal Reserve, gave a reassuring signal that inflationary pressures are weak. Mark Cliffe, international economist at HSBC Markets, said: “This is more evidence that inflation is still under control.”Britain’s Purchasing Managers’ Index, showed a slight rise in output last month, but confirmed that the trend in growth has slowed.Output, orders and quantities purchased all rose modestly last month, but overall the activity index suggest that the rate of expansion has slipped to its lowest since the end of 1993. The June advance came entirely from non-residential projects.Three components of the NAPM activity index exceeded 50 last month – production, new orders and supplier deliveries.

The association said the jump in orders to the highest level since February was the most significant element.In addition, the separate prices component fell below 60 for the first time since January 1994. It showed its strongest gain for nine months, up 0.9 per cent to $520bn at an annualised rate Spending on housebuilding fell for the sixth month in a row. There was a particularly sharp jump in new orders, a leading indicator of future activity.Josh Feinman, an economist at Bankers Trust said: “The index provided more confirmation of a bottoming in the manufacturing sector and signs of a turnaround.”Separate evidence of a rebound in the economy came from figures for contruction spending in June. The first economic statistic for July spooked the Treasury bond market, taking more than a point off the benchmark long bond. Wall Street fell in sympathy, with the Dow Jones index down 29 points at 4,673 at midday.
For the first time since April, the NAPM overall activity index climbed to 50.5, above the dividing line of 50 between growth and recession. A new factory is being built in the US, and the development of the Rover offered many promising ways to soften the exchange rate impact.BMW is already committed to a massive investment programme in new Rover models, and is likely to build new “niche” cars and a vehicle suitable for launch in the US in the next century.However, in the short term Rover is likely to become more closely involved in BMW’s efforts to develop the international spread of the group’s buying, assembly and distribution operations.Rover’s profits were not disclosed, though analysts said the company, which launched its new 400 series in the first half, probably contributed little.BMW said that while its car sales would grow, a model change-over with the launch of a new mid-range 5-series car later this year meant the rate of growth would be less than in the first six months.”Our result for the full year will not just depend on volume growth but also considerably on the development of exchange rates,” the report said.. The company, like its German rival Daimler-Benz last month, warned of the worsening impact of exchange rates and the need to further internationalise its operations.
BMW reported increased interim post-tax profits up 5.2 per cent to DM305m (pounds 98m) Sales, excluding Rover, rose 11.6 per cent to DM17.66bn.

With the inclusion of Rover, sales were DM23.32bn.The company said that “movements in exchange rates will have a big effect on results for 1995″, which caused a rush of profit downgrades by German analysts.BMW said it wanted to take eevery measure to reduce in a lasting way the medium-range effect of changes in exchange rates. No firm decision on who, if anyone, should be sued would be taken for some months, he added.More dramatic still is Mr Stone’s suggestion that the noteholders may have a basis for suing the Bank of England. No legal advice has yet been sought, he said, but there are preliminary grounds for believing there is a case.When the loan notes were issued in 1994, the Bank had already allowed Barings to breach the rule banning banks from exporting more than 25 per cent of their capital to subsidiaries abroad without permission.”This breach was not contained in the memorandum for the notes,” said Mr Stone. If it had, he added, potential investors would have been well advised to “run a mile”.”I believe Eddie George [Governor of the Bank of England] and Brian Quinn [executive director in charge of banking supervision] should find a finely polished sword and fall upon it,” he concluded.. More than pounds 100m was paid last year, although Nick Leeson’s undisclosed losses would have wiped out most of Barings’ profits.A spokesman for Ernst & Young confirmed that the administrators were investigating all possible claims that might swell the pot for creditors.But he stressed that “these are very early days”. When ING rescued the bank in May, just pounds 5m was set aside to pay off their notes.Jonathan Stone, the chairman of BPNAG, said yesterday that his group had asked Barings’ administrators, Ernst & Young, to investigate whether a claim over the bonuses could be launched.Barings paid its staff total bonuses of over pounds 200m in the past three years.

The Barings 9.25 per cent Perpetual Noteholders’ Action Group (BPNAG), which is urging legal action against some former Barings executives, is also considering suing the Bank of England for statutory breach of duty.
BPNAG was formed by theholders of pounds 100m of Barings loan notes after the bank crashed this spring. The bank took over Tokyo Kyowa and Anzen Credit under a bailout organised by the Bank of Japan Total bad debts at Cosmo could be as large as 200bn yen. The Tokyo municipal government will have to contribute up to 20bn yen to the bailout after the run on Cosmo. The rate of withdrawals fell sharply yesterday, but 20bn yen were still withdrawn, compared with 60bn on Monday.
Photograph: Reuters. JDirectors and staff of Barings may be asked to return some of their multi-million-pound bonuses because they were based on fictitious profits. Busy tellers at the Cosmo Credit Union in Tokyo deal with depositors wanting to withdraw savings. The Tokyo Kyoda Bank, established in January to deal with two failed credit unions six months ago, looks set to absorb Cosmo, suspended from further trading on Monday.

I think there’s a better than even chance that someone else comes to the party.”Best known for such heavy items as gas turbines and nuclear generators, Westinghouse also owns a string of television and radio stations. However, there are not the obvious opportunities for synergy between it and CBS as between Disney and ABC.Despite being home for the past year to the popular late-night funny- man David Letterman, CBS is also not the same kind of catch as ABC. Once known as the Tiffany channel for its high ratings and programme quality, it has been in the dumps recently, lagging far behind both ABC and NBC in number of viewers.Pleading with Congress to dilute the deregulation bill, Mr Clinton complained that “instead of promoting open access and diversity of content and viewpoints, it would allow fewer people to control greater numbers of television, radio and newspaper outlets in every community”.Among other things, the deregulation bill would relax limits on individual companies’ ownership of television and radio stations in America. For the same reason, there was speculation that others may rush in to try to outbid Westinghouse for the network.