www.stuff.co.nz 28 January 2003

TOKYO: Japan's trade surplus rose by an unexpectedly small amount in December, with higher oil prices pushing up the cost of imports and exports showing weakness in what could be a worrying sign for the struggling economy.

The Ministry of Finance said yesterday that the customs-cleared surplus rose 19.9 per cent from a year earlier to 791 billion yen ($NZ12.40 billion).

But exports fell 7.3 per cent from November and the rise in the surplus was lower than a median forecast of about 40 per cent to 920 billion yen by economists polled last week.

Economists said rising oil prices due to a looming conflict in Iraq and a crippling strike in Venezuela were partly to blame for the smaller-than-expected surplus, but added that exports - one of Japan's few economic bright spots - were also a concern.

"The trade gap was narrower than our forecasts due to a steep rise in imports, mainly because of the rise in oil prices," said Takeshi Minami, a senior economist at UFJ Tsubasa Securities.

"The outlook for the domestic economy remains bearish, as today's figures give clear evidence that exports are falling."

The futures market price of Brent crude has surged to above $US30 ($NZ55) per barrel from below $US23 in mid-November, and could head even higher if a US-led war against Iraq breaks out.

With Japan depending heavily on Middle East oil, the price rises helped push up imports by 1.2 per cent from a month earlier and by 14.1 per cent from a year earlier to 3.769 trillion yen .

Separate data from the Finance Ministry showed that the value of Japan's customs-cleared imports of crude oil totalled a preliminary 492.858 billion yen in December, up a hefty 51.3 per cent from a year earlier.

Despite falling from the previous month, exports rose on a year-on-year basis for the ninth straight month, gaining 15.1 per cent to 4.560 trillion yen.

A rebound in exports helped drag Japan out of its worst postwar recession early last year and had appeared to be holding up, despite a pause around the third quarter of 2002.

But the overall economy, beset by persistent deflation, a mountain of corporate bad loans and puny domestic demand, has failed to maintain its momentum.

"Looking at the export volumes... they're still pretty strong. Total export volumes were up 13.5 per cent on the year, and exports to Asia were also very strong," said Matthew Poggi, an economist at Lehman Brothers.

"So while our forecast calls for somewhat slower external demand, it doesn't look like it's showing up in the trade numbers just yet. But certainly it's a concern going forward," he added.

For the whole of calendar 2002, the trade surplus rose 51.3 per cent from the previous year to 9.930 trillion yen, with exports up 6.4 per cent and imports down 0.6 per cent.

Industrial production figures out later this week are expected to show that output shrank in the October-December period for the first time in four quarters, boding ill for GDP figures for the period due out on February 14.

Some economists say Japan may be heading into its fourth recession in a decade, although the consensus view is for a period of meagre growth for at least the first half of this calendar year.

A major risk to that scenario is the looming US-led war in Iraq.

By raising the price of the imported oil Japan depends on, a conflict in the Gulf could damage growth prospects. Expectations of a war have already weakened the dollar against the yen, making Japanese exports less competitive.

The yen was around 117.90 yen per $US by mid-morning yesterday. Its climb from around 125 yen in early December has brought frequent threats of intervention from Japanese Finance Ministry officials.

Reuters, 01.27.03, 10:54 AM ET

CARACAS, Venezuela, Jan 27 (Reuters) - Venezuela's stock market, restarting trading after an eight-week suspension during an opposition strike, jumped 10.43 percent Monday due to the impact of foreign exchange adjustments on market leaderCANTV <TDVd.CR> (nyse: VNT - news - people), the country's biggest telecoms company, traders said.

The Caracas stock index <.IBC> rose 836.22 points to 8,851.39 points from the 8,015.17 points close it had registered last Nov. 29, the last trading day before the strike started Dec. 2. The strike shuttered operations at the Caracas exchange.

Exchange authorities decided last week to restart stock trading which had been suspended during the 57-day-old strike. The strike was launched by foes of leftist President Hugo Chavez to demand that he resign and hold early elections. The strike, which has slashed the country's vital oil exports, is continuing.

Traders said that Monday's rise was due to a 22.68 percent gain by CANTV, whose shares are also traded in dollar-denominated ADRs on the New York Stock Exchange. In Caracas, the telecoms company's stock traded at 3,024 bolivars a share, while in New York the ADRs were trading at $10.64 each.

Battered by the impact of the crippling opposition strike, Venezuela's bolivar currency has fallen 28 percent against the U.S. dollar since the start of the strike and the government has suspended currency trading prior to introducing foreign exchange controls.

www.thekcrachannel.com

POSTED: 10:11 a.m. EST January 27, 2003

Gas prices are up, an analyst says, at least in part on fears of a war on Iraq.

The cost of a gallon has risen nearly 1.5 cents over the past two weeks, according to analyst Trilby Lundberg.

The average weighted price for gas nationwide, including all grades and taxes, is about $1.52, according to the Lundberg Survey of 8,000 stations.

Along with the Iraq situation, the general strike in Venezuela is contributing to the increase, as is the intense cold on the East Coast, which is prompting some refiners to produce more heating oil.

AAA's analysis says that the average price for a gallon of unleaded gas is $1.47, almost six cents higher than a month ago, and 25 cents higher than a year ago.

www.forbes.com Reuters, 01.27.03, 9:01 AM ET

UNITED NATIONS - As U.N. arms inspectors prepared to give the Security Council a crucial report on Iraq, U.S. and British officials said they had the proof Baghdad was hiding banned weapons, laying it open to attack. Hours before the Council session in New York, due to start at 10:30 a.m. (1530 GMT), the United States made clear it would go into battle alone against Baghdad if it could not muster support among a deeply divided international community. BAGHDAD - Iraq said it was up to Washington and London to avoid a military showdown and accused U.S. Secretary of State Colin Powell of lying when he charged Baghdad with developing banned weapons. DAMASCUS - Tens of thousands of people took to the streets in some Arab capitals to protest against a possible U.S. war on Iraq, labelling U.S. President George W. Bush a "butcher" and his administration "arrogant".

SEOUL - A South Korean presidential envoy held talks with North Korean officials in Pyongyang in an attempt to ease the crisis over the Stalinist state's nuclear ambitions.

JERUSALEM - Prime Minister Ariel Sharon's right-wing Likud party kept its commanding lead in final opinion polls published on the eve of Israel's general election, but looked set to struggle to form a stable coalition.

ABIDJAN - Gangs of youths, some swinging machetes, blocked streets in Ivory Coast's main city and pulled foreigners from cars in a third day of protests at a peace deal they say was imposed by former colonial power France.

LONDON - War fears sent stocks and the dollar tumbling and propelled gold to its highest level in six years as markets across the world fretted ahead of a key U.N weapons report on Iraq.

TEHRAN - Iran's top security body has decided to free the country's foremost clerical dissident from house arrest following fears over his health, a government source said.

BRUSSELS - Sweden said France should not invite Zimbabwe's President Robert Mugabe to a summit in Paris next month because it would contravene the European Union's sanctions against his regime.

LONDON/SEOUL - A resilient two-day-old computer worm continued to hobble the Internet, infesting computer networks in Europe, Asia and America and stoking fears it will slow data transmissions for a few more days.

CARACAS, Venezuela/PORTO ALEGRE, Brazil - Foes of Venezuelan President Hugo Chavez clamored for early elections to vote him out of office, while the former coup plotter hinted he might be forced to take up arms again if his leftist "revolution" was defeated.

new.stockwatch.com 2003-01-27 06:00 - News Release

HOUSTON, Jan. 27 /PRNewswire-FirstCall/ -- Environmental Safeguards, Inc. (BULLETIN BOARD: ELSF) said today that it signed a contract to process various waste streams at a facility owned by Rineco Chemical Industries, Inc., a privately owned concern located in Benton, Arkansas.

Environmental Safeguards said it is using its own proprietary Indirect Thermal Desorption (ITD) technology and equipment, manned by its own trained personnel, to complete the project.

James S. Percell, chairman and president, stated: "This is a reflection of our continued marketing efforts in the industrial arena."

The Company's patented ITD technology uses a heat jacketed rotating chamber that vaporizes hydro-carbons and hydrocarbon derivatives from contaminated materials, and a condenser that liquefies the vapor into hydrocarbon liquids of better than 99% purity, for reuse. A single ITD unit can process one to 10 short tons of waste per hour, depending on its content. In addition to the United States, soil remediation and hydrocarbon recycling operations have been successfully conducted in Mexico, Colombia, Venezuela, Scotland and the U.A.E. Since becoming fully operational six years ago, the Company has processed more than 750,000 tons of contaminated waste, recovering in excess of 15 million gallons of hydrocarbon fluids.

The Forward Looking Statements or Projections contained herewith involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed and, accordingly, should be read in conjunction with the Company's 10-K for the year ended December 31, 2001, with particular reference to Information Regarding and Factors Affecting Forward Looking Statements in the Management Discussion and Analysis of Financial Condition and Results of Operations.

Environmental Safeguards, Inc.

CONTACT: RF Hengen Inc., +1-908-508-9000, for Environmental Safeguards, Inc.; or James S. Percell, Chmn & Pres of Environmental Safeguards, Inc., +1-713-641-3838