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19870408 COUPON CUT ON KEIHANSHIN REAL ESTATE WARRANT BOND The coupon on the 25 mln dlr equity warrant eurobond for Keihanshin Real Estate Co Ltd has been set at 2-1/8 pct compared with the 2-1/4 pct indication, lead manager Daiwa Europe Ltd said. The exercise price has been set at 810 yen per share which represents a premium of 2.53 pct over today's closing price of 790 yen. The exchange rate was set 146.30 yen to the dollar. The five-year deal is priced at par and guaranteed by the Sumitomo Bank Ltd. REUTER 3; 19870408 IRAQI TROOPS REPORTED PUSHING BACK IRANIANS Iraq said today its troops were pushing Iranian forces out of positions they had initially occupied when they launched a new offensive near the southern port of Basra early yesterday. A High Command communique said Iraqi troops had won a significant victory and were continuing to advance. Iraq said it had foiled a three-pronged thrust some 10 km (six miles) from Basra, but admitted the Iranians had occupied ground held by the Mohammed al-Qassem unit, one of three divisions attacked. The communique said Iranian Revolutionary Guards were under assault from warplanes, helicopter gunships, heavy artillery and tanks. "Our forces are continuing their advance until they purge the last foothold" occupied by the Iranians, it said. (Iran said its troops had killed or wounded more than 4,000 Iraqis and were stabilising their new positions.) The Baghdad communique said Iraqi planes also destroyed oil installations at Iran's southwestern Ahvaz field during a raid today. It denied an Iranian report that an Iraqi jet was shot down. Iraq also reported a naval battle at the northern tip of the Gulf. Iraqi naval units and forces defending an offshore terminal sank six Iranian out of 28 Iranian boats attempting to attack an offshore terminal, the communique said. Reuter 3; 19870408 SUMITOMO BANK AIMS AT QUICK RECOVERY FROM MERGER Sumitomo Bank Ltd <SUMI.T> is certain to lose its status as Japan's most profitable bank as a result of its merger with the Heiwa Sogo Bank, financial analysts said. Osaka-based Sumitomo, with desposits of around 23.9 trillion yen, merged with Heiwa Sogo, a small, struggling bank with an estimated 1.29 billion dlrs in unrecoverable loans, in October. But despite the link-up, Sumitomo President Koh Komatsu told Reuters he is confident his bank can quickly regain its position. "We'll be back in position in first place within three years," Komatsu said in an interview. He said that while the merger will initially reduce Sumitomo's profitability and efficiency, it will vastly expand Sumitomo's branch network in the Tokyo metropolitan area where it has been relatively weak. But financial analysts are divided on whether and how quickly the gamble will pay off. Some said Sumitomo may have paid too much for Heiwa Sogo in view of the smaller bank's large debts. Others argue the merger was more cost effective than creating a comparable branch network from scratch. The analysts agreed the bank was aggressive. It has expanded overseas, entered the lucrative securities business and geared up for domestic competition, but they questioned the wisdom of some of those moves. "They've made bold moves to put everything in place. Now it's largely out of their hands," said Kleinwort Benson Ltd financial analyst Simon Smithson. Among Sumitomo's problems are limits placed on its move to enter U.S. Securities business by taking a share in American investment bank Goldman, Sachs and Co. Sumitomo last August agreed to pay 500 mln dlrs for a 12.5 pct limited partnership in the bank, but for the time being at least, the Federal Reserve Board has forbidden them to exchange personnel, or increase the business they do with each other. "The tie-up is widely looked on as a lame duck because the Fed was stricter than Sumitomo expected," said one analyst. But Komatsu said the move will pay off in time. "U.S. Regulations will change in the near future and if so, we can do various things. We only have to wait two or three years, not until the 21st century," Komatsu said. Komatsu is also willing to be patient about possible routes into the securities business at home. Article 65 of the Securities and Exchange Act, Japan's version of the U.S. Glass-Steagall Act, separates commercial from investment banking. But the walls between the two are crumbling and Komatsu said he hopes further deregulation will create new opportunities. "We need to find new business chances," Komatsu said. "In some cases these will be securities related, in some cases trust bank related. That's the kind of deregulation we want." Until such changes occur, Sumitomo will focus on such domestic securities business as profitable government bond dealing and strengthening relations with Meiko Securities Co Ltd, in which it holds a five pct share, Komatsu said. He said Sumitomo is cautiously optimistic about entering the securities business here through its Swiss universal bank subsidiary, Banca del Gottardo. The Finance Ministry is expected to grant licences to securities subsidiaries of U.S. Commercial banks soon, following a similar decision for subsidiaries of European universal banks in which the parent holds a less than 50 pct. But Komatsu is reluctant to push hard for a similar decision on a Gottardo subsidiary. "We don't want to make waves. We expect this will be allowed in two or three years," he said. Like other city banks, Sumitomo is also pushing to expand lending to individuals and small and medium businesses to replace disappearing demand from big business, he added. The analysts said Sumitomo will have to devote a lot of time to digesting its most recent initiatives, including the merger with ailing Heiwa Sogo. "It's (Sumitomo) been bold in its strategies," said Kleinwort's Smithson. "After that, it's a question of absorbing and juggling around. It will be the next decade before we see if the strategy is right or wrong." REUTER 3; 19870408 U.K. MONEY MARKET DEFICIT FORECAST AT 250 MLN STG The Bank of England said it forecast a shortage of around 250 mln stg in the money market today. Among the main factors affecting liquidity, bills maturing in official hands and the take-up of treasury bills will drain some 505 mln stg, while bills for repurchase by the market will remove around 194 mln. In addition, a rise in note circulation and bankers' balances below target will each drain around 110 mln stg. Partly offsetting these outflows, exchequer transactions will add some 690 mln stg to the system today. REUTER 3; 19870408 U.K. MONEY MARKET GIVEN 53 MLN STG ASSISTANCE The Bank of England said it provided the money market with 53 mln stg assistance in the morning session. This compares with the bank's estimate of a shortage in the system of around 300 mln stg which it earlier revised up from 250 mln. The central bank made outright purchases of bank bills comprising 46 mln stg in band three at 9-3/4 pct and seven mln stg in band four at 9-11/16 pct. REUTER 3; 19870408 U.K. MONEY MARKET GIVEN FURTHER 166 MLN STG HELP The Bank of England said it provided the market with further help totalling 166 mln stg during the afternoon. In band one, it bought 31 mln stg of treasury bills and three mln stg of bank bills at 9-7/8 pct, while in band two it bought 69 mln stg of bank bills at 9-13/16 pct. In addition, it bought 63 mln stg of band three bank bills at 9-3/4 pct. This brings the total assistance by the Bank so far today to 219 mln stg against a liquidity shortage it has estimated at around 300 mln stg. REUTER 3; 19870409 <EMCOR> COMPLETES SALE OF STOCK TO INVESTORS Emcore said it completed the sale of 4.1 mln dlrs of stock to Citicorp Venture Capital Ltd, Concord Ventures of Dillon Read and Co and private investors. Reuter 3; 19870409 <TRUMP PLAZA> 4TH QTR NET Net profit 2,529,0