"We hope the U.S. will engage in efforts to maintain foreign-exchange stability so we don't have to succumb to the temptation to sell off U.S. Treasury bills."
--Japanese Prime Minister Ryutaro Hashimoto, in remarks that--after stocks skidded--an aide said were misinterpretedEDITED BY LARRY LIGHTReturn to top
A LARRY KING SHOW YOU NEVER SAW
TALKMEISTER LARRY King recently had a guest on his CNN set who paid him to help promote a business venture. The interview wasn't broadcast on Larry King Live. But the business, a proposed group of personal-help clubs called the Resource Forum, showed a tape of it at the venture's Atlanta launch. The King spot appears to give Resource Forum the cachet of national TV exposure, even though it never aired.
The episode is another embarrassment for CNN. Reporter Jonathan Karl recently had to ask Visa to pull an ad he appeared in. CNN President Tom Johnson O.K.'d the King segment yet now admits fouling up. "I didn't know this was a commercial pitch," he says. "This is totally unacceptable and against policy." King, who won't comment, donated his $2,500 fee to his heart-patients charity.
The 8 1/2-minute segment looks like a regular interview in King's New York studio. His guest, Resource Forum chief Allan DeNiro, says King never endorsed the biz. King does say on the tape: "I reallylikethis idea." The spot was shown to 400 prospects for Resource Forum, which plans 300 clubs offering career and personal counseling for a $1,000 entrance fee and $39 a month. DeNiro wrote Johnson that the spot would screen just once.
The imbroglio started when DeNiro, former human- resources head at CNN's parent, Turner Broadcasting System, wrote Johnson asking for a King interview to be shown at "a private conference" on "the decline in employer-employee relationships" and other "support systems."EDITED BY LARRY LIGHT Brad WolvertonReturn to top
MAKING A MARKET OUT OF SNIFFLES
WALL STREET LATELY IS securitizing willy-nilly. It sells bonds backed by the upcoming payments, called receivables, for everything from delinquent child support to David Bowie's royalties. Among asset-backed securities, what's getting attention now? Health care, a largely untapped--but growing--area with billions in receivables.
Smith Barney created a buzz on the Street last year by securitizing drugstore receivables in an $80 million private placement for the Pharmacy Fund, which administers bill payments electronically. A $120 million secondary offering is on tap for the fall.
The Pharmacy Fund is eyeing a major expansion further into the medical field. Executives say they are in talks with one of the nation's largest hospital chains to let its bills be packaged into securities. Pharmacy Fund says it is also negotiating for similar ventures with a leading medical laboratory and a huge doctors' consortium.
Lots of Wall Street firms are eager to jump in on this deal or others. Executives at Lehman Brothers say the firm is vigorously pursuing health-care securitizing. In particular, Lehman hopes to bring to market a nursing-homes and home health-care deal by the end of 1997.Lisa Sanders EDITED BY LARRY LIGHTReturn to top
NOW, ANYONE CAN BE AN OIL SHEIKH
FOR YEARS, SAUDI ARABIA'S stock market was closed to investors outside the Persian Gulf region. But in early August, the first closed-end fund permitted to invest in Saudi Arabia will begin trading on the London Stock Exchange.
Managed by Saudi American Bank, a Riyadh-based Citibank affiliate, the Saudi Arabia Investment Fund will be the only way foreigners can buy into the oil-rich kingdom's petrochemical and other industries. Judging by early investor interest, the $250 million initial offering may not be enough to meet demand, says a bank official.
The Saudi bourse has a lot going for it--a sizable $50 billion market cap, an advanced computerized trading system, and bargain stocks selling at less than 13 times earnings. The launch of the fund is only one of a series of financial reforms that could transform the cloistered Saudi economy. For example, Riyadh seeks to join the World Trade Organization.
Why the changes? The world's largest oil exporter can no longer offer jobs for all because of low oil prices and $60 billion in Gulf War bills. So the kingdom hopes opening the spigots of foreign investment will reverse soaring youth unemployment, with its potential for destabilization.John Rossant EDITED BY LARRY LIGHTReturn to top