Business Briefs

Reported by Star-Bulletin staff & wire

Monday, November 1, 1999

Cheap Tickets plans $20 million buyback

Cheap Tickets Inc. said today its board of directors authorized the company to spend up to $20 million to repurchase its stock, buying on the open market from time to time when the price seems right.

The Honolulu-based seller of discount travel tickets has 24 million shares outstanding.

Cheap Tickets' shares closed up $1.62 today at $17.62 on the Nasdaq stock market.

Third Bubba Gump to open in Hawaii

The Bubba Gump Shrimp Co. will open its third Hawaii restaurant, a 7,200-square-foot outlet on Alii Drive in Kailua-Kona, on Nov. 13.

Earlier Bubba Gumps were opened in Lahaina and Honolulu. The company has six restaurants on the mainland.

Building contracts rise 74% for isles

Contracts signed in September for future construction in Hawaii were worth $258.1 million, a 74 percent increase from $148.3 million in September 1998, according to the F.W. Dodge division of the McGraw-Hill Companies.

Nonresidential contracts more than doubled in value to $151.1 million, from $60.4 million in September 1998.

September residential contracts were up 9 percent at $42.8 million, from $39.2 million, and nonbuilding contracts, for streets, highways, airports etc., were up 32 percent at $64.1 million, from $48.7 million.

For the first nine months of 1999, total contracts written for future Hawaii construction equaled $1.4 billion, up 14 percent from $1.2 billion in the 1998 period.

In other news . . .

Aloha Airlines has moved its downtown Honolulu ticket office into United Airlines space at 1001 Bishop Street, next to Tamarind Park. Aloha, which is a codeshare partner with United, previously had a separate downtown office on the other side of the street at 1046 Bishop.

CHICAGO -- General Growth Properties Inc., the owner of Ala Moana Center and the second-largest shopping-mall company in the United States, said it acquired a mall in Houston for $133 million. The Chicago-based real estate investment trust acquired the Baybrook Mall from RREEF USA Fund-III, a pension fund. General Growth said a $95 million, 10-year loan was used to fund a majority of the purchase price.

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Of Mutual Concern

News for mutual fund investors

SEC may modify rules for some mutual funds

WASHINGTON -- The Securities and Exchange Commission plans to issue new guidance on how mutual funds should value securities that rarely trade, a move that could prompt more funds to use market pricing. The SEC plans to issue a statement later this year or early next, updating its policy on when and how funds can use their own valuation methods amid concern some funds are inflating the value of their assets.

"People have complained that the guidance that we gave didn't give them enough flexibility and they've gone ahead and forged their own paths," said Doug Scheidt, associate director at the SEC's division of investments management. "Some have done an appropriate job and some arguably haven't, we'd like to straighten them out."

Under SEC rules, funds that invest in securities that rarely trade, such as loans, some derivatives, bonds and equities, can use their own valuation methods. It will be the first time in 20 years that the SEC's changed its guidance on the so-called "fair valuation" of funds.

Liberty hires manager for All-Star Equity fund

BOSTON -- Liberty Asset Management Co., a unit of fund company Liberty Financial Cos., has hired TCW Group Inc. to replace Wilke/Thompson Capital Management Inc. and take over investing about $240 million in growth stocks. The decision to switch managers was made after evaluating the firms' people, performance, investment process and philosophy, said Mark Haley, a vice president at Boston-based Lamco. Los Angeles-based TCW assumed responsibility for 20 percent of Lamco's $1.2 billion in assets today. Four other managers invest equal amounts of the fund.

Lamco, which was formed in 1986, is the manager of the Liberty All-Star Equity Fund, a $1.2 billion closed-end fund traded on the New York Stock Exchange and employing multiple advisers to invest the assets. Closed-end funds have a share price, which investors pay to buy the funds on the open market, and a net asset value, which is the underlying value of the assets the fund holds.

Merrill Lynch trying to stem withdrawals

NEW YORK -- Merrill Lynch & Co., the biggest U.S. brokerage, named a committee to tighten control of its $515 billion asset management business as below-average performance caused investor withdrawals in the United States and United Kingdom.

Merrill Lynch Asset Management President Jeffrey Peek will run a management committee comprising the heads of its U.K.-based Mercury Asset Management unit -- Carol Galley and Stephen Zimmerman -- and Terry Glenn, a Merrill executive vice president. "Merrill has had difficult times and it's putting in place a process that should help, but historically committees don't run businesses as well," said Geoff Bobroff, an investment management consultant in East Greenwich, R.I.

Fidelity's Magellan makes Tyco a top-10 holding

BOSTON -- Fidelity Investments' $92.2 billion Magellan Fund, the world's biggest mutual fund, increased its holdings of technology stocks and added Tyco International Ltd. to its top-10 holdings in September. Tyco, the world's biggest maker of electronic components, replaced AT&T Corp. among the fund's biggest holdings. However, it may no longer be on the list because its shares plummeted last month after an analyst report -- denied by the company -- that it's inflating earnings.