Business Briefs

Reported by Star-Bulletin staff & wire

Monday, August 30, 1999

Schuman Carriage wins GM franchises

Schuman Carriage Motors Inc. has been awarded General Motors Corp. franchises for the GMC truck and Oldsmobile brands. Schuman, known for its long-time representation of GM's Cadillac and Buick brands, said it will have the additional vehicles on its property on Beretania Street by mid-September. Tony Group's existing franchises for GMC trucks and Oldsmobile remain in effect at its Aiea facilities. The Schuman operation creates an additional outlet in Honolulu, the dealers say.

Philip Morris raises cigarette prices

NEW YORK -- Philip Morris Cos., the world's largest tobacco company, said it raised U.S. cigarette prices to distributors by 18 cents a pack to help boost its profit and pay for rising taxes and legal settlement payments. The increase, which starts today, averages 11 percent for Philip Morris's premium brands such as Marlboro and Virginia Slims as well as its discount cigarettes. Philip Morris will use 4 cents of the price increase to raise its earnings, Bloomberg News reported. It's the first time a price increase will flow directly to the company's bottom line since the tobacco industry initiated talks to settle lawsuits filed by states, said Credit Suisse First Boston analyst Bonnie Zoller. "Investors' confidence in the U.S. tobacco industry should be restored," said Zoller, who rates the shares "buy." "People still like to smoke and they will pay for it."

Boeing machinists seen accepting deal

SEATTLE -- Boeing Co.'s machinists are likely to approve a new three-year contract after the world's biggest aircraft maker offered generous terms to avert a crippling strike, analysts and workers said.

Union leaders on Saturday urged the rank-and-file to accept the contract after Boeing offered wage increases above the industry average. It also withdrew controversial proposals to cut health-care benefits and to schedule shifts on weekends, according to Bloomberg News. Boeing's 44,000 machinists will vote on the offer Wednesday.

Of Mutual Concern

News for mutual fund investors


Goldman Sachs losing business in Japan funds

TOKYO -- Goldman Sachs Group Inc. has lost one-fifth of its mutual fund assets in Japan this year as investors withdrew money from its mainstay bond funds and turned to rivals' equity products.

Goldman's losses result from its dependence on bond funds, which account for about three-quarters of the 1.3 trillion yen ($11.25 billion) under management. The assets declined from 1.6 trillion yen as Japanese investors, betting the decade-long slump in the economy and equity markets bottomed out, moved into stock funds.

While the New York-based investment bank has stumbled in trying to expand its stock offerings, it's also urging investors to hold bonds in their portfolios, diversifying holdings as U.S. investors have for decades.

Gabelli offering seeks out-of-favor stocks

RYE, N.Y. -- Gabelli Asset Management Inc., which oversees about $18 billion of assets, opened the Gabelli Blue Chip Value Fund last week to invest in out-of-favor stocks.

Gabelli money manager Barbara Marcin, who arrived in May from Citigroup Inc.'s fund-management unit, manages the new fund, which opened with an initial $100,000 in seed money. Marcin was previously head of "value" investments at Citibank Global Asset Management, where she helped oversee mutual funds and separately managed accounts.

The Blue Chip Value fund's top 10 holdings include Allstate Corp., the second-largest car insurer, Cendant Corp., whose businesses include hotel-franchising and direct marketing, Mattel Inc., the world's No. 1 toymaker, and General Motors Corp.'s Hughes Electronics unit. Rye, N.Y.-based Gabelli offers 26 other funds.

Blackrock rolls out two muni-bond funds

NEW YORK -- Blackrock Financial Management has rolled out two new closed-end municipal bond funds, while shelving plans for a New Jersey fund.

Blackrock, a unit of PNC Bank Corp., raised $100 million for a national muni-bond fund and $26 million for a Pennsylvania fund last week. With the addition of leverage from a secondary class of shares, the funds will be worth about $200 million.

The funds were marketed aiming for tax-exempt yields of 61/4 percent for the Pennsylvania fund and 6 percent for the national fund, said Kevin Klingert, managing director of Blackrock's long-term muni-bond funds.

The company, meanwhile, shelved plans to raise cash for a New Jersey fund because it realized yields on its national fund would be higher for New Jersey residents than a separate state fund. Closed-end funds have a fixed number of shares that trade on an exchange where their price fluctuates according to investor demand.

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