The Los Angeles Times from Los Angeles, California • Page 58

INSIDE THE MARKET SOVIET TALKS Will Offering Cool Interest in Other Issues? MY tKNEST A. iSCHONBEBGEK, Time. Staff WrUcr The ficrtci nim i irriK' wily about. fVXV (T0 truck about 301V XU car every year. A polble source trouble with the Kuittan, is the traditional Ford policy of holding onto at least a piece of their operations in other count tries.

VI'Mltll '-art ''f- ttm fnMti Uh rtir inn ilir lf vpur, many difficult? ho withdraw lhlr drpfMlM in rrinvc'l In HfvcMrtirril Irfinds and other erurlli which offered higher yield. Almost all experienced the withdrawals to some extent, but some were tetter prepared financially than others. Now, O'Brien said, the recent drop in interest rates on competing investments has made savings accounts more attractive to investors. Consequently, enjoyed a deposit increase last month of about $500 million. O'Brien noted that the FSLIC has $2.3 billion of liquid assets and $2.7 billion in reserves with which to reimburse depositors if any should fail.

And most troubled associations solve their problems through merger rather than liquidation, he said. t'ir Iwidv and Helit- lilt pfiy will fine iiT miltr HIlUi Jil.mf ll.iyi i Ki nno ii( ilim lh" )i I I in Mrwciw, IhiI. hr know If trip In Togllalll I planned. The Togllattl plant, now more than a year behind Is designed to eventually produce 60,000 Soviet versions of the Flat 12-1. Production is now scheduled to begin in November.

Hayes said Kord would lend a sympathetic ear to any proposal the Russians might make. "The company has taken the view that East-West trade is a jolly good thing. The more trade there is the better for everybody concerned," he said. Hayes said the Soviet Union represents a fertile market for any foreign maker. There has been a tremendous public demand for a privately owned car, one that the government could not begin to satisfy, even with the Togliatti plant at full BUYINO A HOME? $45 Can tav you a lifetime of headachM expense Let a Qualified Expert Inspect tin-Roofing, Plumbing, Muting, Electric, Basement and Structural Conditions' for Any Major Defects Before You Buy.

A Written Report is included, with the Insnection. CmMmmI rem Wh Faae iw tithtr enfiMiitfn r-rtvwl in ttw Hwvfct V.num Sunday nlghl. Th othpi- executive re llobert 8tevenon, of Ford'u International operation, and Herbert Ml.ch, virn president iu charge of engineering. The Ford executives met for an hour Monday morning with Vladimir Kirillin, chairman of the state committee for science and technology, overlord of the Soviet Union's research and development programs. It was Kirillin who invited Ford to come to the Soviet Union.

The committee is the prime Soviet agency for hunting up foreign expertise and equipment for Soviet industry. Ford was unavailable for a meeting with Western newsmen at the U.S. embassy, but Hayes filled them in on the meetings. "Nobody got down to details," said Hayes. "There were no specific Russian proposals, and Ford did not come here with any.

He is here simply to listen, and is listening to anything they have to say." Besides more discussion Houses Over 125,000 $851 IVATTTMAL IHOMEINSraQQN I SERVICE" "Helping th Horn Buywr LFC Financial No Problem Now, U.S. Says l.VC Financial the lx Angeles savings and loan holding company, been removed from federal regulators' 1 i of most worrisome institutions, it was learned Monday. Reached in Washington, Director Robert B. O'Brien of the Federal Savings Loan Insurance Corp. said LFC's recent annual report and concurrent federal examinations yielded figures that were "much better than anticipated." Late last month LFC disclosed that it suffered a $5.9 million loss in 1969.

The loss arose from a million reserve set up to cover expected losses in disposing of real estate which LFC acquired, through foreclosure. The holding company, which has assets of $1.07 billion and owns Equitable Savings Loan was put together after the late Bart Lytton was forced to resign from Lytton P'inancial Corp. in 106S. Watching 11 Others O'Brien also disclosed Mondav that 11 with assets "of about $700,000 remain on the FSLIC's list of "probable candidates for assistance." None of those associations is located in California, he said. "We here in Washington are keeping a wary eye on several associations." O'Brien said, "but general economic conditions are making us far more optimistic about those areas of possible trouble than we were a few months ago." Aero is thm Nation (213) 698-9950 LOS ANGELES Atlanta- Boston- Phi lodetphia- St.

Loui-San Fronciico-Wathiooton, D.C-Belli ETROPOLITAX APR. 14 MSI IT GAGE Napa Valley Ranches NAPA Christian Brothers Winery has purchased three Napa Valley ranches-north of Napa for a total of about $1 million. Money mem io Funds Available $2,150,000 for JOINT VENTURES COMMERCIAL AND INDUSTRIAL R.E. From carpeting to fabrics add style and comfort to Detroit's 1970 models. can buy a unit of one bond plus two warrants (with an estimated market value of $12.00 to each $13 now) for $120.

Bonds, once aimed basically at institutional investors, had long sold in minimum units of $1,000. As he and some others see it, this means the little guys will be taking some money from lower-yielding savings accounts, as well as from stocks. The chief bond trader for a major bank also takes a cautious view: "On the offering, for one, am going to wait it out and buy (the bond) if it gets cheap enough (in the aftermarket). I think its price is going to have to ease (the offer) and so is the whole bond market. As to stocks, I think it also bodes badly for them near term.

It's sopping up a lot of monev that might have gone into the bond market and diverting money from stocks and savings accounts." His reason for expecting lower bond prices: expects 40 to 50 of its shareholders to take the rights to the offering. But I'm not so sure it will sell out. I think you'll see half of it in the street before long (up for sale) and institutional investors might be. interested at a discount." Brilliant Move How about what the offering does for directly? "It was a brilliant move," says the banker. If interest rates go up.

got its money cheap, as he sees it. If interest rates go down, could be expected to sell more stock to the public and sink the proceeds into retiring the 3 '4 bonds. James Wohlpert. analyst with L. M.

Rosenthal national brokerage firm, sees the act as a "brilliant example of corporate financing." Many corporate bond issues of lesser caliber went only partly sold in recent months. This might show others how to raise cash no small problem for corporations lately. Wohlpert doesn't expect other triple-A companies to necessarily have to top the 34-plus-warrants deal of His reason: since the issue is not being sold through underwriters, but directly to shareholders. merely wanted to be sure it would go over. "It didn't have to give what it did.

But it wanted to. mostly hecause this is such an enormous issue (the biggest corporate financing ever). Sees Pressure on Stocks Kred Millett, analyst with Goodbody a large brokerage chain, also feels the deal doesn't necessarily force a return to peak yields of several months ago. But he does" feel that "what normally would be considered stock money might be going into bonds. I'm inclined to think it will put pressure on stocks in general." William X.

Scheinman of Mack, Bush-ncll Edelman, New York brokerage firm, looks at it quite ominously, expecting at least 700 on the Dow Jones industrial average vs. Monday's close of 7S3.0O. "Certainly this (the offering and upcoming ones) is going to take money out of the market." Indeed, he insists, common stocks are riskier now in terms of the relative attraction of bonds than when the Dow average was at 872 in November and even when it was at 974 last May. "On occasions when a like situation has prevailed, money has invariably been drawn out of common stocks which have thereafter precipitously declined," he says. There was some concern on Wall Street Monday that the waves from the cuiTent deal might douse what little ardor there is for stocks in general right now.

The degree of potential effect on stock prices is being widely debated, of course. Kut at the extreme negative end there are those who believe the stock market will wither quite a bit more. In essence, they contend two things: How can the stock market stand the competition from high bond yields? Who'll be eager to buy stocks when, In addition to high bond yields, investors can pick up some equity bonus like the two warrants attached to the 34 bonds? New Market Challenge "At a minimum, let's say there's a new challenge to the stock market," declares Henry J. Kaufman, economist and partner of Salomon Bros. Hutzler, major New York-based brokerage firm.

"Bonds are in a much more competitive position vis-a-vis stocks than at any time in the postwar period." But Kaufman is not at the gloomy extreme regarding stocks. "Stocks have already, made some adjustment, you know. The market is down quite a bit. How much more might it adjust? That's very debatable." A longer-term effect, says Kaufman, will be that exercise of such waiTants will add to the supply of stocks. However, to him it's not cut and dried what the proliferation of this trend would do to stocks in general.

But some observers have little doubt. Bearish Ramification Eliot Janeway, economist, says the ramifications are "very bearish" for stocks. He expects a recurrence of warrant offerings by major firms. As these are exercised, the supply of stock will increase diluting the nation's corporate profits just that much. He expects utility stocks to take a "knock on the head" following their recent, two-month rally.

Why? "They rallied on the assumption that yields had passed their peak." This in turn should hurt bank stocks, he adds, inasmuch as they are often bought for their dividends and if utility stocks drop, bank stocks will have to slide to close the yield gap. Janeway contends yields will go still higher this year as corporations discover they have to offer more and more to attract investors. "The 34 on set a floor?" Offerings Waiting Tn addition, he says, many firms will wind up throwing in "equity kickers" to make sure the offerings go across. And, he asserts, there's a host of major corporations in the wings with offerings, waiting until the deal is out of the wav. The corporate bond calendar averaged $1.1 billion in offerings per month last year.

The calendar for the next four weeks is $1.3 billion not including the offering. A very significant aspect of the package, states Janeway, is that "corporations are going to Main Street in S100 lots" in other words, actively seeking out the small investor. A shareholder of $1,665,000 for LOANS on MEDICAL BUILDINGS AUTOMOTIVE TEXTILES feWestPoint Pepperell METROPOLITAN MORTGAGE CORPORATION 505 Shatto Los Angeles 90005 (213) 385-3661 San Fernando Valley (213) 881-5444 FIRST WITH THE NEW IDEAS III! events like traveling across the country with your family are important to Blue Cross, too. That's EHBBDT jgEj why we provide you with an I.D. card thafs recognized by more than BLUE CROSS OF SOUTHERN CAUFORNIA 4777 Sunset Boulevard, Los Angeles, California 90027 Please send ma more information on Blue Cross health care coverage.

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Psychiatric benefits. Call Blue Cross. Or send in the coupon. Let us tell you more. Zip- If group: Name of employees INDIVIDUAL Age GROUP -213- Business People been named a director of the National Assn.

of River Harbor Contractors John J. Burke is now chairman of Universal Ac-ceptance Corp. Charles A. Peterson has been elected chairman of American Funding Beverly Hills. Peterson will also retain his post as president and chief executive officer of the Orin H.

Knowlton Jr. has been appointed vice president of Canoga Electronics Chatsworth subsidiary of Canoga Industries, Los Angeles Elmer R. Slavik has been elected a director of EPD Industries, Long Beach. Slavik is president of the California hospitals owned by Healthcare Corp. of Boston.

B. Bradbury Clark, a partner in the law firm of O'Melveny Myers, has been elected a director of the Southern California Water Co. Robert W. Snorf has been appointed president of the Hinson division. Royal Industries, Pasadena George J.

Vasila has been named resident manager of the Sheraton-Universal Hotel, Universal City. David May has been named vice president in charge of operations of the five Hungry Tiger Restaurants Warren S. Russell, chairman of the Mil-ford Co. of California. Lo Angeles, has been elected chairman of the Wine Spirits Wholesalers of America while David Fox, president, Alfred Hart Co-was elected a director of the same association.

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