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e m s * 


jjy gp Ameri can trade 

Rediscovering 
the neighbours 



Corporate ethics 

Cleaning up 
business behaviour 



Mortgage-backed bonds 

Perils of exotic 




instruments 

Pag* 13 




TOMORROW'S 

Weekend FT 

The Old Lady’s 
new battlefield 


FINANCIAL TIMES 


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Salomon Brothers 
reports second 
quarter $41 Om loss 

s^unties brokiog firm, into a heavier than expec- 
ted second-quarter loss of *uom before tax. ™T 

!? T25? 0, 0,0 P™ 1 group, with a quarterly net 
■kj®* ot_$ 2-08 a share. In the same quarter 

or vast year, net income amounted to 9433m, or $3,32 
a snare. Although the group warned Wall Street of 
its poor second quarter two weeks ago, the scale of 
losses surprised analysts. Page 15 

Blalr now UK Labour party leaden Bri tain 's 
opposition Labour party elected Mr Tony Blair as 
its new leader by a decisive margin, giving him a 
clear mandate to push the party further into the 
political centre ground. Page 14; Smith’s legacy. 
Page 8; Joe Rogaly, Page 12 

Sony, the consumer electronics company, said it 
was halting production at its plant at Atsuta, out- 
side Nagoya, where it produces printed circuit 
boards for video cameras, because of a decline in 
the domestic market. It will consolidate domestic 
production at its other Japanese plant Page 14 

Brady investment in Pern: A company formed 
by former US Treasury secretary Nicholas Brady is 
to invest in Peru's commercial hanking sector, 
rated a high risk while it awaits a Brady plan to 
reschedule its debt Page 3 

AT&T: The largest US telecommunications group 
reported solid second-quarter profits of $1.13bn, 
bringing first-half earnings to $2J22bn. compared 
with, a $5.8bn first-half loss a year ago- The improve- 
ment was due to strong revenue growth in long dis- 
tance telpon mmnnlrflHnp s , equipment manufactur- 
ing and financial services business. Page 18 

Intern a ti o n a l court planned: The first step 
towards an international court to try crimes such 
as genocide, war crimes, terrorist acts and drugs 
trafficking was taken with the adoption of draft 
statutes by the United Nations International Law 
Commission. Page 4 

Israel closer to returning Golan: Israel sent 
further signals to Syria that it was preparing public 
opinion for returning the occupied Golan Heights, 
making a “deep and painful” withdrawal in return 
for security, peace and normal relations. Page 4 

US plats for spy chip abandoned: The 

Clinton administration has abandoned its efforts to 
force the computer industry to introduce a semicon- 
ductor known as a clipper chip, which would have 
let intelligence services eavesdrop on the informa- 
tion superhighway. Page 3 

Ecuador parliament rejects telecom sale: 

The Ecuadofean-gqvernment suffered a severe blow 
to its privatisation programme with parliament's 
rejection of a bill to allow the sale of shares in the 
state telephone company, Bmetel. which is worth 
an. estimated SL7bn. Page 3 

Northwest Airlines, the fourth biggest US 
carrier, reported a turnround from net losses of 
$136-2m Last time to net profits of $7L3m for its first 
full quarter since returning to the stock market In 
March. Page 18 

Overseas Inv estm ent boost tor UK Jobss 

Overseas companies created a record 28,727 new 
jobs in the UK last year through inward investment 
projects, and helped safeguard a farther 67,372 Jobs, 
Michael Heseltine, trade and industry secretary, 
said. Page 7 

ED&F Han, one of the world’s largest agricultural 
commodity traders currently owned by 100 of its top 
managers, is p lanning a stock market flotation in 
September which is expected to value the company 
at about £450m ($697m). Page 21 

US request on Haiti: US ambassador M adeleine 
Albright said she was seeking United Nations 
approval for a US-led force to use “all necessary 
means” to restore democracy in Haiti. 

WeHcome, UK pharmaceuticals group, reported 
pre-tax profits up 12 per cent at £182m ($282m) for 
the four months to June 30. John Robb, chairman 
and chief executive, said the company had shown 
impressive growth which he expected to continue 
for the rest of the year. Page 15; Lex, Page 14 

Kmart, the troubled US discount store group, 
performed an about-turn by saying it was selling its 
21.5 per cent in Coles Myer. the Australian retailer, 
for A$126bn (US$924m). It had been denying reports 
of the sale as recently as last month. Page 15 

S Africans back at Lord’s: Tbe South Africans, 
emerging from sporting isolation with the end of 
apartheid, began their first cricket series against 
En gland for 29 years. At the end of the first day at 
Lord's they were 244 for six, with captain Kepler 
Wessels making 105. Page 7 


EU parliament averts crisis over president but signals power struggle ahead Telegraph 

Santer wins Chairman 

grudging 
endorsement 
from MEPs 


I By Lionel Barber in Strasbourg 

| 

The European Parliament 
grudgingly endorsed the appoint- 
ment yesterday of Mr Jacques 
Santer as the next president of 
the European Commission, avert- 
ing a confrontation with EU gov- 
ernments committed to the Lux- 
embourg prime minister. 

After a nerve-wracking debate 
in which MEPs demanded to be 
treated as equals to the EC’s gov- 
erning Council of Ministers, the 
Parliament voted by 260 votes to 
238 to support Saltier's nomina- 
tion, with 23 abstentions. 

Mr Santer, looking relieved, 
told MEPs in Strasbourg: “I think 
the European Parliament has 
shown itself worthy of the pow- 
ers that have been given to it" 

The lukewarm endorsement 
ends a period of uncertainty 
about the succession to Mr Jac- 
ques Delon, but It heralds a 
broader power struggle between 
the parliament and other institu- 
tions, expected to come to a 
head in 1996 during the 


European parliament comes 
of age Page 2 

Editorial Comment .—Page 13 

Maastricht treaty review. 

After the vote, MEPs seemed 
pleased at delivering an unam- 
biguous warning to member state 
governments to consult it in 
future, but mildly relieved at 
avoiding an institutional crisis. 

The Maastricht treaty gives 
MEPs the right to be consulted 
on the Commission president- 
designate, as well as the power to 
reject the Commission president 
and his team after they present 
their programme for the next five 
years to the Parliament later this 
year. 

Yesterday, during a debate 
when Mr Saltier’s fitness for the 
job was questioned, the Parlia- 
ment turned the right of consul- 
tation into a de facto vote of con- 
fidence. 

Mr Santer, 57, a Christian Dem- 
ocrat and prime minister of Lux- 



chairman 
in sharp 
attack on 
Cazenove 


Luxembourg prime minister Jacques Santer at a press conference in Strasbourg at the European 
Parliament, which narrowly voted to approve his nomination as European Commission president f*mw 


embourg for 10 years, squeezed 
through only with support from 
Greek, Portuguese, and Spanish 
socialists who were reluctant to 
upset their national party 

leaders. 

He was also backed by the neo- 
Eascists from Italy, and won over- 
whelming support from fellow 
Christian Democrats. Many 
MEPs voiced unhappiness that 
Mr Santer had emerged as a com- 
promise candidate after Britain's 
veto last month of Mr Jean-Luc 
Dehaene, the Belgian prime min- 
ister backed by France and Ger- 
many. One Dutch MEP called 
him “a man of the past”. 

Asked if his choice represented 
the lowest common denominator. 


Mr Santer replied: "I'm a com- 
mon denominator of course 
because 1 was chosen by the 12. If 
Tm the lowest, I don't know. You 
have to judge me on my actions.” 

Mr Klaus KinkeL the German 
foreign minister, predicted Mr 
Santer would be a first class suc- 
cessor to Mr Delors. He acknowl- 
edged weaknesses in the selec- 
tion process, and pledged to 
consult more closely with the 
European Parliament 

Before the vote, Mr Santer gave 
Parliament an outline of tbe pri- 
orities the Commission would fol- 
low during his five-year term 
which runs with the newly- 
elected Parliament from January. 

Mr Santer said EU leaders 


should bridge the gulf with Euro- 
pean citizens, many of whom 
boycotted List month’s European 
parliamentary elections. It was 
vital to convince the public in 
member states that European 
integration was unavoidable. 

In his speech, he stressed the 
need for new economic growth in 
order to tackle endemic unem- 
ployment which was undermin- 
ing European society. He also 
called for a “new stimulus’’ to 
integration. 

Looking ahead to tbe 1996 
Maastricht review conference, he 
said the EU would have to exam- 
ine Its structures and working 
practices to prepare for enlarge- 
ment to the East and South. 


IBM earnings rise surprises Wall Street 


By Louiso Kehoe in San 
Francisco 

International Business Machines 
surprised Wall Street yesterday 
with higher than expected second 
quarter earnings as expenses 
were sharply reduced and reve- 
nues increased slightly. 

ft said demand for mainframe 
computers was strong, but it still 
faced serious problems in its per- 
sonal computer operations. IBM 
also said it had raised the target 
for cost redactions, which could 
resalt in further job losses. 

Mr Lou Gerstner, chairman 
and chief executive, said: “I'm 
pleased with our continued prog- 
ress. We are stifl far from where 
we need to be, but we are show- 
ing steady improvement" 

IBM’s share price gained $5% to 
$61 by midday in New York. 


Mat earnings ($hn) 

. 4JQ<— 


i*? >« ■ '! ‘i 
. 19BZ as 94 

Sowe«.BM 

Second quarter earnings of 
3689m, or $L14 per share, were 
well above analysts’ estimates of 
4580 cents per share. Daring the 
same period last year, IBM 


Bundesbank raises 
hope of fall in rates 


By Christopher Partes 
in FrjmkfiHt 

Mr Hans Tietmeyer, the 
Bundesbank president, yesterday 
reinforced expectations that Ger- 
man interest rates could fall 
again in the autumn by suggest- 
ing that growth in money supply 
is less than unadjusted figures 
suggest and that inflation is 
hgafting in the right direction. 

Mr Tietmeyer, speaking after a 
midyear review of the bank's M3 
measure of money supply, indi- 
cated that the German central 
bank was relying less than usual 
for policy guidance on its volatile 
M3 indicator. The distinction 
between money which could 
potentially fUel infla tion (the nor- 
mal M3 constituents) and funds 
invested for the long-term had 
become less clear, he said. 

But the Bundesbank would not 
give up M3, he stressed. It was a 
part cf Germany’s "stability cul- 
ture”. Experience showed the 
link between the measure and 
future inflation to be intact, 
while yesterday's review of alter- 
natives had shown them to be 
“second-best solutions", he said. 

A review of possible modifica- 
tions to presentation and inter- 
pretation would continue until 


December when the 1995 M3 
growth target was due to be 
fixed. Meanwhile, trends in pub- 
lic spending policy, wage agree- 
ments and near-term inflation 
were important factors guiding 
policy, he suggested. 

“As long as other sources make 
us confident that future price 
developments are moving in the 
right direction, deviations from 
the M3 target path can to some 
extent be tolerated," Mr 
Tietmeyer said. 

The consumer price index, cur- 
rently rising at 3 per cent, was on 
the right track, and there were 
signs of further flattening, he 
said. Recent increases in raw 
materials prices were being 
countered by the relative 
strength of the D-Mark against 
the US dollar, he added. 

Although a statement from the 
bank warned that lingering 
excess liquidity in the M3 figure 

would give grounds for concern, 

Mr Tietmeyer claimed the mea- 
sure had been growing at an 
"adjusted” annual rate of around 
6 per cent for the last three 

months. 

This is close to the bank's 

Continued on Page 14 
Lex, Page 14 


CONTENTS 


reported a loss of $40m, or 8 cents 
per share, before restructuring 
charges that brought net losses 
to $8bn or $14.10 per share. 

Revenues for the quarter were 
$15.4bn, an increase of 3 per cent 
over last year's figure of $14.6bn. 
Sales of computer hardware sales 
rose 3 per cent, but software rev- 
enue was flat Revenues were Oat 
in tbe US ($5Jbn) and Europe 
($55bn) while sales in the Asia 
Pacific region picked up 14 per 
cent to $2&m. 

"The earnings improvements 
have come a bit faster than we 
thought " said Mr Jerry York, 
chief financial officer. “But we 
still have to finish the expense 
reduction programme and get the 
revenue really growing." 

Total expenses declined by 18 
per cent in the quarter and 8,000 
jobs were eliminated. Research 

Italy fails 
to decide 
economic 
policy 

By Robert Graham in Rome 

Hopes that tbe Berlusconi 
government would reach a quick 
comprehensive agreement on 
economic policy collapsed last , 
night over serious differences on 
spending cots and how to raise , 
funds to hold down the budget j 
deficit 

The major casualty was the | 
much-promised shake-up in the 
costly state pensions scheme pro- 
posed by tbe Treasury and 
designed to save at least 
L8,DD0bn ($5.l7bn) next year. 
After serious reservations from 
Mr Clemente Mastella, the 
labour minister, and threats of a 
major confrontation from the 
unions, tbe cabinet indicated it 
was willing to let the matter rest 
until September. 

Failure to agree on pension 
cots was accompanied by a row 
among the mam partners in the 
rightwing coalition over the 
introduction of a pardon for peo- 
ple who have constructed build- 
ings built without proper per- 
mission and without paying the 

Continued on Page 14 


and development spending was 
reduced by almost 21 per cent to 
$l.lim , while general expenses 
were down 12 per cent at 53.9bn. 

Last year, IBM said it intended 
to cut expenses by $7bn, from 
1992 levels, by 1996. To date, 
expenses are down S4.8bn. 

Mr York said IBM had 
increased its expense reduction 
goal to $8bn. It still plans to 
reduce its workforce by a further 

20.000 by the end of this year to 

215.000 and further job cuts now 
appear likely in 1995. 

In IBM's traditional mainframe 
computer business, demand 
exceeded supply. 

“We are sold out on main- 


frames well into the fourth quar- 
ter." said Mr York. Revenues con- 
tinue to decline as a result of 
price cuts, but the rate of decline 
has slowed. 

IBM's approximately $i3bn per- 
sonal computer business, how- 
ever, is facing serious problems. 
Revenues declined in the US, Mr 
York said, although there was 
“decent growth in overseas mar- 
kets" and overall revenue growth 
was about 5 per cent In contrast, 
Compaq Computer, IBM's stron- 
gest PC rival, this week 
announced 55 per cent growth in 
quarterly revenues. 

Lex, Page 14 


By Raymond Snoddy and 
Robert Peston 

I Mr Conrad Black, chairman of 
The Telegraph Group, has 
launched an unprecedented pub- 
, lie attack on Cazemive, the most 
discreet and illustrious of British 
stockbrokers, for the manner in 
which the firm withdrew from 
. the Telegraph account. 

Mr Black described faaenove's 
abrupt resignation Inst month ns 
broker to the Telegraph as "scan- 
dalous and dishonourable". 

The resignation followed the 
row over Hollinger. Mr Black’s 
Canadian company that controls 
the Telegraph Group, selling 
£73m worth of shares to institu- 
tions in May. a month before the 
weekday cover price or the Daily 
Telegraph was cuL 

On the day the price cut was 
unnounrod. Telegraph shares fell 
by 191p to 349p, enraging inves- 
tors who had bought the shares 
through Cazenove at 587p barely 
a month before. 

The Stock Exchange has 
cleared Mr Black of any impropri- 
ety. 

Mr Black says he was given 
two hours' notice of Cazenove’s 
decision even though he believed 
after talking to senior Cazenove 
staff they would “not do any- 
thing provocative" and would not 
withdraw abruptly. He believed 
there would be a natural parting 
or the ways once the dust had 
settled. 

Cazenove had a great name. Mr 
Black said, but on this occasion 
the firm’s behaviour had been 
“absolutely outrageous". 

Mr Black's comments were put 
yesterday to the stockbroking 
firm's new senior partner. Mr 
Mark Lovedav. who said he 
would not respond to any of the 
allegations. 

Apart from the abruptness of 
the decision, Mr Black is angry 
that an unnamed senior Caze- 
nove official told the Financial 
Times that it was the first time 
in recent memory the firm had 
voluntarily resigned as stockbro- 
ker to a company. 

This, Mr Black said, had the 
effect of "poisoning the wells" 
and of “inflicting the maximum 

Continued on Page 14 
Lex, Page 14 
Black reveals anger. Page 15 


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2 


FINANCIAL TIMES FRIDAY JULY 22 1994 


NEWS: EUROPE 


Kok aims 


to break 

Dutch 

deadlock 


By Ronald van <fe Krol 
in Amsterdam 


The Netherlands’ last chance 
to come up with a new govern- 
ment before autumn rests 
firmly on the shoulders of Mr 
Wim Kok, the country's outgo- 
ing finance minister and long- 
time leader of the Labour 
party. 

At the request of Queen Bea- 
trix, Mr Kok is working in 
secret on a government pro- 
gramme which he hopes will 
break the impasse following 
inconclusive general elections 
on May 3. 

The fruits or his labours, 
begun two weeks ago. are 
expected to be revealed on 
Monday. If his ideas are 
accepted by a majority of MPs, 
Mr Kok could emerge as the 
next prime minister of a new 
coalition, succeeding Mr Ruud 
Lubbers, the country's veteran 
leader who has kept the gov- 
ernment ticking over as a care- 
taker premier since May. 

But if the Labour party 
rejects the proposals, Mr Kok 
might find he has manoeuvred 
hims elf into a job as leader of 
the opposition. 

The challenge for Mr Kok - 
to write a government pro- 
gramme single-handedly - is 
unusual as Dutch coalitions 
are normally created through 
direct talks between parties. 

In May's elections the two 
biggest parties, the Christian 
Democrats and Labour, lost 
heavily to the right-wing Liber- 
als and D66, a left-of-centre 
party. This fragmentation 
means that at least three par- 
ties will be needed to form a 
government majority, in con- 
trast to the outgoing two-party 
coalition of Christian Demo- 
crats and Labour. 

Queen Beatrix, decided to 
appoint Mr Kok as a neutral 
“informa tear” above party pol- 
itics in early July, with his 
appointment coming days after 
a six-week attempt to form a 
government between Labour, 
the liberals and Dee failed. 

However, it is looking 
increasingly likely that Mr 
Kok's efforts may yet result in 
an historic ■‘purple" coalition 
between the three parties. 

The term ■'purple" comes 
from mixing the party hues; 
Labour's “red", the “Tory-blue" 
of the Liberals and the green 
logo of D66. But the term also 
implies a coalition that would 
exclude the Christian Demo- 
crats from power for the first 
time in modem Dutch politics. 

The first attempt to form a 
government between Labour, 
the Liberals and D66 was scut- 
tled by disagreement over 
future spending cuts. 

The parties had reached 
broad consensus in other areas 
but stUl needed to find addi- 
tional spending cuts. Labour 
argued that savings should be 
found within ministries while 
the Liberals insisted that 
greater economies should be 
made in the country’s social 
welfare system. 

On Tuesday night. Mr Frits 
Bolkesteiu. Liberal leader, 
emerged from talks with Mr 
Kok to say the Labour leader 
was prepared to take certain 
employees’ insurance schemes 
out of the public sector and 
leave them to employers. This 
could be a concession to the 
Liberals’ demands for radical 
changes in social security. 

At the same time. Mr Jac- 
ques Wallage. Mr Kok’s deputy 
in the Labour party, revealed 
that the expected shortfall la 
the social security budget over 
the next four years could be 
only F11.2bn (£444ml rather 
than the FI 3bn that was 
assumed last montb. This 
could, reduce the need to make 
sharp cuts in social spending. 

Mr Kok expects to reveal all 
to a politics- weary country 
next week. If his solo efforts at 
forming a government fail, 
however, the search for a new 
coalition could easily stretch 
into the autumn. 


THE FINANCIAL TIMES 
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MEPs issue wake-up call to Twelve with narrow vote for Santer 


Europe’s new parliament shows 
it means to be taken seriously 


T he European parliament 
came of age yesterday. 
Casting aside a reputa- 
tion for low attendance and 
long-win dedness. newly elected 
MEPs staged a thoughtful 
debate on the nomination of 
Mr Jacques Santer which cul- 
minated in a nerve-wracking 
climax. 

The narrow vote in flavour of 
Mr Santer. the Luxembourg 
prime minister and one-time 
MEP. should serve as a 
wake-up call. Governments 
(and national parliaments) who 
would like to condemn the par- 
liament to irrelevance will 
have to adjust to an institution 
which is determined to be 
treated as an equal partner 
alongside the Council of Minis- 
ters and the Commission. 

Mr Gqs De Vries, leader of 
the Liberal group, echoed a 
widespread sentiment at this 
week's inaugural parliamen- 
tary session Strasbourg. "We 
are determined not be taken 
for granted. The net result of 
today's vote will be greater 
parliamentary influence over 
the Commission.'’ 

The relief on Mr Santer's 
face in victory suggests that he 
senses the potential shift in 
power so too, Mr Klaus Kin- 
kel German foreign minister, 
who promised to consult more 
closely with the parliament in 
the choice of future presidents 
of the Commission, a post 
which remains the mist power- 
ful nan-elected executive job in 
Europe. 

British officials were more 
cautious. They recalled that, in 
1979, the newly-elected Euro- 
pean parliament, the first 
elected by universal suffrage, 
voted down the EU budget. 
This vote was also a muscle- 
flexing exercise aimed at creat- 
ing a crisis with the Council of 
Ministers, but it did not lead 
immediately to new powers to 
control expenditure. 

The parliament's threats of 
provoking an institutional cri- 
sis have periodically led to 
accusations that its members 
are pursuing “Duke of York" 
tactics, marching its troops to 
the top of the hill and retreat- 
ing at the first whiff of cordite 
from the Council of Ministers. 

Only a few months ago. 
MEPs backed off from threats 
to delay enlargement because 
the Council refused to stream- 
line voting procedures to make 
decision-making easier once 
the European Union takes in 
Austria, Finland, Sweden and 
Norway as members next year. 

Many suspected that criti- 
cism of the nomination of Mr 
Santer to succeed Mr Jacques 
Delors as Commission presi- 
dent was empty talk, too - 
though an early warning of 
trouble came on Tuesday when 
MEPS used the Maastricht trea- 
ty’s powers to cast the first- 
ever vote of rejection against a 
Council of Ministers' decision 
to liberalise the voice telecom- 
munications market by 1998. 

Two days later, the parlia- 
ment tackled the Santer nomi- 
nation. It was encouraged by a 
selection process for the Com- 
mission president which was at 
best ham-fisted, at worst a 
quick-fix which produced the 
lowest-common denominator 
candidate. 

The process began last year 
with Chancellor Helmut Kohl 
of Germany vetoing Mr Ruud 
Lubbers, the Dutch prime min- 
ister, on personal grounds; it 
continued with Prime Minister 
John Major of the UK vetoing 


Yesterday’s meeting marked turning point for 
Strasbourg assembly, writes Lionel Barber 



Pauline Green, Socialist group leader in the parliament, gestures to a colleague during debate ap 


WHERE MR JACQUES SANTER STANDS ON THE 
UNION’S BURNING POLITICAL ISSUES 


Will the real Jacques Santer please stand up? 
Those listening to the Luxembourg prime 
minister perform this week before the 
European parliament might easily find 
themselves confused about his political credo, 
particularly his views on economic and political 
integration in Europe, writes Lionel Barber. 

In Britain, where the governing Conservative 
party risks splitting over this issue, the 
question is vital. Just where he stands - and 
how he differs from Mr Jacques Delors, 
outgoing Commission president - is of intense 
Interest 

The question has taken on even greater 
importance since Mr Santer insists that he is no 
different from Mr Jean-Lac Dehaene. the 
Belgian prime minister and fellow Christian 
Democrat who was vetoed by the British at last 
month's European summit in Corfu. 

So here is a rough guide to Mr Santer’s 
political views as revealed during statements 
and questioning daring this week's inaugural 
session of the European parliament in 
Strasbourg. 

□ Mr Santer supports federalism, but not on 
the “Napoleonic model” which means 
centralising power in Brussels, like (he British 
(and the Germans), he favours “subsidiarity", 
the principle of devolving decision- maltin g to 
the lowest appropriate national, regional and 
local level. 

□ Mr Santer shares the Anglo-German concern 


(hat some Euro-laws can damage the 
competitiveness of industry. He would like to 
continue auditing such legislation, though at 
national and European leveL He also is an 
unabashed free-trader. 

□ Mr Santer likes the Maastricht treaty’s social 
chapter, unlike Mr John Major, who proclaimed 
Britain's non-participation as one of the 
triumphs of the Maastricht treaty negotiations. 

□ Mr Santer is adamant that he will not use 
subsidiarity to roll back EU environmental 
laws, and be does not like the Maastricht 
treaty’s innovation of opting out of treaty 
obligations affecting the rest of the EU. 

□ Mr Santer supports strongly the idea of a 
single European currency complementing the 
single European market, but, in line with 
Germany, he insists that Maastricht's 
convergence criteria must be applied 
rigorously. 

He refuses to be drawn on whether he is 
committed to loose governmental co-operation 
on foreign and security policy and judicial 
affairs, or whether he favours a deepening of 
co-operation through a community approach, 
perhaps by extending majority voting. 

This will relieve Mr Major who is insistent on 
resisting efforts to streamline dedsi on-making 
and weaken the power of national vetoes. But 
Mr Santer made clear, too, that be sees the 
Maastricht treaty’s powers in common and 
security policy as “evolutionary”. 


Prime Minister Jean-Luc 
Dehaene of Belgium last 
month to shore up his own 
position with Eurosceptics in 
his own Conservative party; 
and It ended with Mr Kohl 
producing Mr Santer last week 
as the candidate who, by his 
own admission, would have 
happily remained in Luxem- 
bourg. 

The debate on the Santer 
nomination suggests that new 


forces are at work, unleashed 
by an influx of MEPs eager to 
take advantage of expanded 
powers which the parliament 
gained in the 1991 Maastricht 
treaty. One such power gives 
members the right to be "con- 
sulted” on the Commission 
president-designate, as well as 
the right to vote down the 
president and his chosen team 
later in the year. 

Until yesterday, most observ- 


ers compared rejection of the 
Commission president-desig- 
nate to the equivalent of press- 
ing a nuclear button. But more 
than half of the present parlia- 
ment are new and determined 
to make their mar k. 

Many, such as Mr Michel 
Rocard, former French prime 
minister, or Mr Piet Dankert, 
former Dutch minister for 
European affairs, have no hesi- 
tation about lobbing political 


grenades. Others, such as Mr 
Bernard Tapie, the maverick 
businessman and leader of a 
new populist Socialist group in 
his native France, are natural 
performers. 

Ms Pauline Green, the for- 
mer British policewoman who 
now heads the powerful Social- 
ist group, ridiculed the selec- 
tion process. The European 
Union lectured the rest of the 
world on democratic rights, 
“but these same countries are 
willing to connive at some of 
the most squalid, shabby and 
ill-judged practices to pot in 
place the president of the Euro- 
pean Commission.”. 

Many members argued that a 
vote for Mr Santer would be 
equivalent to condoning Mr 
Major’s veto. Echoing wide- 
spread criticism of the UK Con- 
servative government, Mr Roc- 
ard said British objections to 
Mr Dehaene had nothing to do 
with vital national interests 
and therefore amounted to an 
abuse of the power. 

Mr Gerhard Schmid, hpart of 
the German Socialists, had no 
qualms about suggesting that 
Mr Santer simply lacked the 
stature and imagination for the 
top job in Brussels. Quoting 
the German philosopher Ernst 
Bloch, he declared: “We need a 
president who is prepared to 
dream about the future." 

Mr De Vries wound up the 
debate by declaring that the 
selection process had been 
akin to a cattle-market; Mr 
Santer was the tenth choice; 
and he lacked the kind of inspi- 
rational leadership which Mr 
Delors had shown during his 
near 10 years in Brussels. "Jac- 
ques Santer will turn out to be 
more a man of the past than a 
man of the future," he said. 

Yet other MEPs, particularly 
the tiny Luxembourg contin- 
gent and fellow Christian Dem- 
ocrats, sprang to Mr Santer’s 
defence. They noted that he 
had been a top-notch prune 
minister of the Grand Duchy 
fix' 10 years, and that he had 
contributed effectively to both 
the Single European Act and 
the Maastricht treaty. 

But it was Mr KinkeL speak- 
ing for the German presidency, 
who made the most effective 
contribution. Germany, he 
said, had fought hard to 
expand the powers of the Euro- 
pean parliament. Was the 
reward now to be a decision to 
torpedo the Commission presi- 
dent-designate, the unanimous 
choice of the 13 member state 
governments? 

“Do you want to punish 
Europe, punish the people of 
Europe? Give Jacques Santer a 
chance," he declared. 

His appeal succeeded, albeit 
narrowly and only after a 
bizarre alliance of forces came 
to Mr Santer’s rescue. In the 
final count, the lucky Luxsem- 
bourger needed support from 
the Spanish Socialists (who did 
not want to upset Prime Minis- 
ter Felipe Gonzalez) the Greek 
Socialists (who felt similarly 
about Mr Andreas Papan- 
dreou), and the neo-fascists in 
the parliament to squeeze out 
the 22-vote majority. 

This ad hoc alliance under- 
lines that the new parliament 
is likely to be unpredictable 
and not easily intimidated. The 
next few months will see fur- 
ther tests of strength with the 
Council, tempered only by the 
knowledge that parliaments 
need to show responsibility, 
too, if they are convince the 
outside world of their maturity 


EU debate simmers through summer 


Hugh Carnegy on the issue which is disturbing Sweden’s near sacred holiday season 



It is July and it 
has been unex- 
pectedly and 
gloriously hot. 
There has been 
a flurry of anx- 
iety over the 
alarming state of the public 
finances, but not much else 
to disturb a nation that 
customarily takes to the water 
and the woods to make the 
best of an all-toa-short sum- 


EUROPEAN 

DMRY 


mer. 

Yet, even during the near- 
sacred July holiday, the Great 
Debate under way in Sweden 
over whether to vote in a refer- 
endum in November to join the 
European Union is never far 
away. 

It is to be found high up in 
the Arctic circle, where the 
sun shines brightly at mid- 
night, but where temperatures 
are not so hot (The last day of 
the sktiing season at Riksgran- 
sen on the Norwegian border 
was June 26.) And it is to be 
found as for south as you can 
get, in Skane, where the rich, 
rolling farmland lies less than 
20km across the Oresund from 
Denmark. 

For Sweden. neutral 
throughout the century's great 
conflicts and once the proud 


pursuer of a middle way 
between Soviet socialism and 
flat-out capitalism, the decision, 
whether to join the EU is a real 
watershed and is widely per- 
ceived as such. 

At the risk of evoking stereo- 
types, Swedes are engaging in 
a national debate over the 
issue that is Impressively ear- 
nest and far-reaching. 

The referendum campaign 
has been somewhat confused 
by the campaign for the gen- 
eral election, which comes 
first, in September. But If any- 
thing, this has encouraged the 
two sides in the EU confronta- 
tion to get in extra campaign- 
ing during the summer, before 
the election campaign takes 
centre-stage. 

The Swedish Federation of 
Industries and the Swedish 
Employers' Federation have, 
for example, joined forces to 
send out no fewer than io cam- 
paign buses across the country 
from May to July to get their 
pro-EU message across. Not to 
be outdone, the No to the EU 
campaign has chartered a boat 
to cruise among the harbours, 
islands and lakes where so 
many Swedes retreat for the 
holiday. 

Early this month in the min . 


ing town of Klruna. the coun- 
try's most northerly city, one 
of the Industry buses (actually 
a custom-built 40ft lorry 
trailer) pulled up for a couple 
of days in the main square. 


The decision 
whether to join 
the EU is a 
real watershed 
and is widely 
perceived 
as such 


Equipped with a dizzying array 
of at least 50 different books, 
leaflets and information sheets, 
volunteers fanned out into the 
streets to look for converts in 
an area where the No camp is 
firmly in the ascendant. 

Even among those who 
declare they have made up 
their minds, the willingness to 
come on to the trailer to dis- 
cuss the issue is remarkable. 
On a sleepy Sunday in Klruna 


167 people stopped to take up 
the debate. 

Their concerns range from 
the mainstream worry that 
Sweden will lose its indepen- 
dence by joining, through 
worries about the cost of mem- 
bership to the fear - appar- 
ently widespread - that thou- 
sands of German hunters and 
tourists will trample the trea- 
sured Swedish countryside into 
mud. 

"People are very open here, 
even though most of them are 
negative. They are prepared to 
discuss the issues," says Anne 
Flonneau, a Frenchwoman 
now living in Sweden who is in 
charge of the Kiruna truck. 
As if to prove her point, she 
launches into a lengthy argu- 
ment with a local trade 
union leader who Is strongly 
anti-EU. 

She does not change his 
mind, but says: “What we don’t 
want is people saying *1 don't 
know, so Fll vote No'. We want 
them to have the information." 
The cry “I need more informa- 
tion" is heard everywhere. Yet 
Swedes probably now have 
more Information available to 
them explaining the issues 
than any Union citizen. Every 
public library is packed with 


EU material there are govern- 
ment telephone hotlines and 
both sides in the debate are 
churning out enough propa- 
ganda to strip Sweden of its 
forests. 

Still there is little sign of 
Euro-indigestion. In Skanflr, a 
seaside resort on the southern 
tip of Sweden, volunteers from 
another pro-EU industry bus 
set up at a funfare. They can- 
vassed holidaymakers rushing 
to the alcohol monopoly to 
stock up on booze before it 
closed for the weekend. 
Nobody seemed to mind being 
interrupted. 

Mr Roger Gustafsson, a 
self-employed businessman on 
holiday in the town, is inclined 
to vote No. But he eagerly took 
away a fistful of leaflets after a 
chat with one of the canvass- 
ers. "I am basically against the 
EU. We - you and 1 - will have 
nothing to say, the politicians 
will decide everything," he 
declares. 

But he adds: “I could be per- 
suaded to vote Yes - if I am 
sure Sweden will still be able 
to decide the thing s that are 
important for Sweden. I need 
more information. I've only 
just started to get the informa- 
tion." 


EUROPEAN NEWS DIGEST 


Astra faces EU 


ban on top drug 


The German medicine institute, responsible for licensing 
drugs, has called for a EU-wide ban on the injectable version 
of Losec, the top-selling product of the Swedish pharmaceuti- 
cals group Astra. The ElTs committee for proprietary nwrii^. 
nal products will meet cm Monday in Brussels to discuss the 
issue. 11m German Institute is concerned that Losec, an anti- 
ulcer medicine, could cause blindness in some rases when 
administered by injection. Between 40 and 50 incidents have 
been reported, according to Astra. Losec is the group’s most 
important product and saw sales in all its versions last year of 
$L7bn. Sales this year have increased by about 40 per cent, 
making it one of the world's fastest growing medicines. 
Astra’s B shares fell SKrl to SKrl61 ($21) yesterday. 

The German institute has questioned only the Injectable 
version of Losec, not the pill form which represents about 97 
per cent of all sates. However, intravenous versions account 
for a higher proportion of sales in Europe. Astra said it was 
looking forward to having the opportunity to defend the safety 
record of Losec, one of the most significant competitors to 
Glaxo 's top-selling medicine Zantac. Paul Abrahams, London 


Bosnia map approval retracted 


The international peace plan for Bosnia disintegrated further 
yesterday when Bosnian Seri) leaders foiled to give their 
unconditional acceptance and the Bosnian president retracted 
his previous approval Mr Radovan Karadzic, Bosnian Serb 
leader, left Geneva after the sponsors of the plan - the 
international “contact group" made up of the US, Russia, UK. 
France and Germany - refused further meetings with bam, 
snubbing his attempt to renegotiate the plan before giving an 
answer to it Meanwhile, in Sarajevo Mr Alga Izetbegovic, 
Bosnian president withdrew his previous unconditional 
approval of the plan, saying that in view of the Serb rejection 
his government now wanted to add conditions of its awn. 

Before leaving Geneva the Bosnian Serb delegation released 
the text of the declaration cm the {dan adopted by their 
“parliament" an Tuesday. This requested more details on a 
range of issues, from constitutional arrangements to the lift- 
ing of sanctions, and added ominously that “further worts is 
required on the proposed map”. Eduard Mortimer , London 


Italian steel chief ‘paid bribes’ 


Mr Alberto Falck. owner of the biggest family steel concern in 
Italy, is reported to have admitted paying LSOQm ($3221300) In 
bribes to members of the Guardla th Finanza, the financial 
police, to soften their controls of his group’s balance sheet 
The steel magnate is cooperating with magistrates following 
the Issuing of an arrest warrant last week by Milan magis- 
trates investigating alleged corruption in the Guardia di Fin- 
anza in Lombardy, according to Ansa, the national news 
agency. Mr Falck was one of 49 people issued with a warrant 
on charges of alleged corruption at the moment when the 
Italian government bad approved the controversial decree, 
since revoked, limiting the use of preventive detention. Hie 
was placed under house arrest His confession emerged as 
Milan magistrates resumed work this week in the wake of the 
Berlusconi's government's climb-down on the decree. Robert 
Graham, Rome 


Polish TV licences awarded 


Poland yesterday awarded the first 12 regional TV licences to 
NTP Phis, a Warsaw-based consortium led by Independent 
Polish Television (NTP) and Central European Media Enter- 
prises (CME). NTP Plus will initially transmit programmes 
terrestrially to an area which includes Warsaw, the capital 
and roughly one third of the Polish television audience. It 
plans to set up regional TV stations in Warsaw and three 
other cities with an investment of up to $5Qm. NTT is headed 
by Mr Mirosiaw Chojeda, a Polish entrepreneur. CME is 
privately owned; its main shareholder is Mr Ronald Lauder, 
heir to the Estee Lauder cosmetics group fortune, backed by 
US and Canadian businessmen. Poland, with its population of 
39m people, is the largest TV market in central Europe. 
Anthony Robinson, London 


Eko Stahl sees August sale 


The Treuhand privatisation agency hopes to sell Eko Stahl 
eastern Germany’s loss-making steel mill, by the end of 
August to one of the five potential buyers that have shown 
interest since Riva, the Italian steel maker, puled out of a deal 
two months ago. Mr Hans Kramer, a Treuhand board member 
told employees at Eko Stahl in the state of Brandenburg, that 
the agency would today approve a financing and investment 
package for the steel mil to see it through the second part of 
this year. The Treuhand has lined up five potential buyers 
These include CockerQl Sarnbre. the Belgian-based steel pro- 
ducer, the Hegemann Group which is based in Bremen, a 
Hamburg consortium, and companies from Russia and Ifai- 
akhstan. Judy Dempsey, Berlin 


DIW revises German forecast 


DIW, the Berlin-based economics institute, cast aside its ear- 
lier gloomy predictions about the German economy and fore- 
cast growth of about 2 per cent for 1994 and 1995. In its 
half-yearly report the Institute said the economy would grow 
by L5 per cent in western Germany and by 8J> per cent in the 
five eastern Linder, a surprising turnaround from forecasts 
earlier this year. While five of the country’s Independent 
economics institutes presented their April repots predicting 
growth of 1.5 per cent for the year, the DIW had predicted zero 
growth for western Germany and 05 per cent for the economy 
as a whole. Explaining the revision of its figures, the institute 
said the spring interest rate cuts came as a surprise. It stfli 
expects a downturn, a so-called “double-dip”, later this year 
but this would not affect the forecast growth. Michael Linde- 
marm . Bonn 


ECONOMIC WATCH 


French trade surplus continues 


Franca 


Vfetole trade balance (FI)- Or) 
30 — - 


20 


10 


10 



-20 


1990 91 
Sourca: Dataafraam 


92 93 




4pr9SMajr 


France's external trading 
account continued to show a 
surplus during May of 
FFr7.5bn (£900m). according 
to the latest statistics from 
French customs. The May fig- 
ure confirms the recent 
upward trend in the French 
w-nnnmy and h rings Frances 

total trading surplus t° 
FFr30.6bn for the first five 
months of 1994. This Is in line 
with the government's fore- 
casts for a target surplus of 
FFrlOObn for the whole year. 
The booyant trading account 
reflects a continuation of ths 
strong export performance of 
French companies. The level 


of exports rose to FFrl07.4bn in May against FFrlQ4t® m 
April However, import activity, which fell sharply last year 
when the recession began, is now returning to normal levels. 
The value of imports coming into France i ncreaa *~J? 
FFr99.4m during May. its hi ghes t, level since November 1393- 
Alke Rawsthom, Paris. , 

Industrial production In the Netherlands rose 2.1 per cent m 
May from April, on a seasonally adjusted basis, the 6° ve rP' 
ment Central Bureau for Statistics said yesterday. Seasonally 
adjusted industrial production was 2.6 per cant higher than m 
May 1993. . 

Italian consumer prices rose 05 per cent month an 
and 3.5 per cent year on year in July, according to 
data from nine leading Italian cities excluding Rome, colissea 
by the city of Bologna. 





I -. V 
1 1 5 1 


t 3. 



Sap*. . 









... 





'•it • . 


t fc , , 




FINANCIAL TEWES 


FRIDAY JULY 22 1994 



Ex-US Treasury secretary’s company buys into bank 

investment in Peru 


NEWS: THE AMERICAS 


By Sady Bowen in Lima 

A canpany formed by former 
US Treasury secretary Mr 
Nicholas Brady is to invest in 
Perus commercial banking 
sector, rated a high risk while 
it awaits a Brady plan to 
cbedule its debt 

A dearth of foreign financ- 
ing, while the plan is being 
negotiated, has kept local 
interest rates extremely high 
and commercial banking 
operations lucrative. 

Through his private US com- 
pany, Darby Overseas. Mr 
Brady is participating in a Cay- 
man Islands-registered consor- 
tium which on Wednesday 
acquired one of Peru’s two 
state-owned banks. 

The consortium. Interna- 
tional Financial Holdings 
(IFH), this week picked up 
Interbanc, Peru's fourth largest 
commercial bank, for $5lm. 
IFH is pledging to spend S30m 
more on modernisation an * 
capital expansion. 



Brady: year-odd company 


The auction had been expec- 
ted to attract five or six bids, 
with the government saying it 
wanted to attract a big interna- 
tional bank. However, the two 
front runners - Spain's Banco 
de Santander and Chile’s 


Banco 0 "Higgins - dropped out 
late last week. 

Sale day brought three bids, 
two of them from local groups, 
at or only marginally above 
the $45m base price, which 
banking experts had consid- 
ered low. 

Immediately after the sale. 
COPRI, the government priva- 
tisation commission, handed 
out a press release saying IFH 
had bought Interbanc, and giv- 
ing details of IFITs sharehold- 
ers. In addition to Darby Over- 
seas, the consortium is 
reported to include Bechtel 
Enterprises. Shetland Securi- 
ties, and sharehol ders lfokpri to 
Chile's Banco Osomo and a 
private pension fund from 
Chile, Provida. 

Under the bidding condi- 
tions, a bank had to p arti c ipat e 
or provide technical advice or 
assistance. Banco Osomo itself 
is not part of the consortium, 
but the involvement of some of 
its shareholders was consid- 
ered sofficient. 


Darby Overseas was set up a 
year ago by Mr Brady, his chief 
aide at the Treasury, Mr Hollis 
McLoughlin, and Mr Daniel 
Marx, Argentine finance under- 
secretary. who has since 
resigned to become managing 
director of Darby Overseas. 

IFH’s purchase will be 
largely financed through a 
$6Qm (£3&.7m) private place- 
ment of notes, to be handled by 
Morgan Grenfell, acting as 
IFH’s financial advisers- The 
notes will be convertible to 
Interbanc shares at the end of 
five years. Deutsche Bank is 
underwriting the issue. 

The prime mover behind 
IFH, specially constituted to 
bid for Interixinc, is Mr Carlos 
Rodriguez Pastor, Peru’s econ- 
omy minister in the early 
1980s. Mr Rodriguez Pastor has 
already participated in Peru's 
sweeping privatisation process: 
he has a stake in the Peruvian- 
Mexican consortium which 
bought Aero pern, the former 
state-owned airline. 


Ecuador parliament 
rejects telecom sale 


By Raymond Goffit In Quito 

The Ecuadorian government 
has suffered a severe blow to 
its privatisation programme 
with parliament's rejection of a 
bill to allow the sale of shares 
in the state telephone com- 
pany, EmeteL which is wrath 
an estimated $1.7bn (£Llbn). 

Opposition parties claimed 
the reform was unconstitu- 
tional since the constitution 
states that the telecommunica- 
tions sector should be con- 
trolled by the state because of 
Us strategic importance to the 
economy. 

The opposition also objected 
to the government’s decision to 
see the legislation through on 
the fast track, which, they 
said , allo wed tfrpm insufficient 
time to analyse it. 

However, the government 
argued that as long as the state 
was in regulatory control of 
the sector, the constitution 
allowed for private-sector oper- 
ation of telecommunications. 

The state modernisation 


body, Conam, insisted that 
reform efforts would continue 
despite the hoi’s defeat 

Ecuador's privatisation pro- 
gramme has been criticised for 
poor management ari ^ under- 
pricing. However, the latest 
setback comes only a week 
after the successful sale of the 
country's second largest 
cement company, Cementos 
Selva Alegre, which had 
improved the programme’s 
Image. 

The Spanish cement giant 
Uniland, bought 51 per cent of 
the state's shares in Cementos 
Selva Alegre for $40m, on 
b ehalf of the consortium. Fin- 
la tam. 

With only eight in 100 citi- 
zens having a telephone t™», 
Ecuador has one of the most 
backward telecommunication 
systems in l-atm America. The 
investment required to install 
lm more telephone lines and 
improve the infrastructure is 
estimated at $l.4bn. Telephone 
lines go for as much as $1,000 
on the black market. 


US plans for spy 
chip abandoned 


By Ken Warn In Washington 

The Clinton administration 
has abandoned its effort to 
force file computer industry to 
introduce a semiconductor 
known as a clipper chip, which 
would have let intelligence 
services eavesdrop on the 
information superhighway. 

The drip, developed by the 
National Security Agency, 
would have made it possible 
for users of personal comput- 
ers to scramble or encrypt 
their communications, but 
would also have allowed tew 
enforcement or security agen- 
cies to tap in. 

The administration’s change 
of mind emerged in a letter, 
released this week, from Vice 
President A1 Gore to Represen- 
tative Maria Cantwell, whose 
Washington state district is 
home to Microsoft computer 
software company, which 
vehemently opp o sed the dip- 
per chip. 

The chip remained the 
desired standard for telephone 


communications, Mr Gore’s 
letter said, but not for com- 
puter exchanges. The adminis- 
tration would continue to 
work with the industry on a 
voluntary encryption stan- 
dard, he said. 

The policy shift “is a signifi- 
cant victory both for US soft- 
ware companies and the future 
of the global information 
superhighway”, said Mr Rob- 
ert HoHeyman. Badness Soft- 
ware Alliance president. 

The industry has opposed 
both the clipper chip and 
curbs on exports of encryption 
programs, which the intelli- 
gence comm uni ty claims ham- 
per its security work overseas. 
Civil liberties groups said the 
drip violated privacy. 

The security of the informa- 
tion sup erhi ghway is a grow- 
ing issue in the US. Hackers 
have gained access to sensitive 
but unclassified government 
mid military communications 
networks connected to the 
Internet, the New York Times 
reported yesterday. 


Latin Americans rediscover 
their neighbours’ markets 


Companies are looking next door 
as protectionism gives way to 
competition, writes Angus Foster 


Latin 
American 
countries, for 
decades forced 
by trade barri- 
ers to look 
beyond their 
THE NEW neighbours. 
ECONOMIC redisccrver- 

ORDER “C 0116 «“***► 
er's markets. 



Protectionism is slowly being 
replaced by competition and 
governments are withdrawing 
from economies. As a result 
big private companies are 
starting to think of the region 
when they make their plans. 

Brahma, Latin America’s 
biggest brewer, is expanding 
beyond Brazil, where it has a 
SO per cent market share. A 
factory opens in Argentina in 
January to serve southern 
countries such as Argentina 
and Chile. Earlier this year 
Br ahm a bought Venezuela's 
second-largest brewer, Cervec- 
era National, which will give 
access to important northern 
markets such as Colombia. 

Mr Marcel Herrmann Telles, 
Brahma's chief executive, says 
the company will move into 
other countries in the conti- 
nent once it has built up sales 
through exports. 

“The idea is for Brahma to 
become the brand name for all 
of Latin America,’' he says. 

The shift towards regional 
rather than national thinking 
has two main motors. First, 
regional trade groupings are 
lpariing to closer cross-border 
ties. Second, increasing per- 
sonal wealth is improving cul- 
tural links via television and 
foreign holidays for the middle 
classes. 

Mercosur, the most impor- 
tant trade grouping to have 
developed so far. has led to 
rapid increases in cross-border 
trade and investment among 
its four members, Brazil, 
Argentina. Paraguay and Uru- 
guay. Trade between the four 
countries has more than dou- 
bled since the agreement was 
signed in 1991 and reached 
about $8bn last year as tariffs 
have been reduced. 

Mercosur’s success has had a 


marked impact on exporters in 
Brazil, Latin America’s biggest 
economy, who have tradition- 
ally relied on US and European 
markets. Exports to Mercosur 
partners, which accounted for 
4 per cent of Brazil’s total 
exports in 1990. reached 14 per 
cent of the total last year. The 
proportion of exports to the US 
and European Union, mean- 
while, have fallen from 24 to 21 
per cent and 31 to 26 per cent. 

Brahma’s expansion into 
Argentina has been helped by 
Mercosur, especially because or 
reduced bureaucracy and cus- 
toms procedures. But the com- 
pany’s overseas push was at 
fust prompted by some very 
B razilian circumstances. 

Until recently Brazil's gov- 
ernment set price ceilings on 
beer, which limited the compa- 
ny’s profits and investment. 
The removal of price controls 
in 1990, one of a number of 
measures adopted by former 
presideat Fernando C-ollor to 
liberalise Brazil’s markets, 
allowed Br ahm a to restore 
profitability. But it coincided 
with a steep recession, which 
lasted until last year and led to 
declining beer sales. 

“We therefore had the time 
and the resources to look at 
the rest of the world.” says Mr 
Telles. “We thought our com- 
petitive advantage lay in l^tin 
America where the Brahma 
name had resonance, so we 
started exporting to Argen- 
tina." 

B rahma started selling 
canned beer to Argen- 
tina in 1990. Two years 
later it switched to exporting 
1 -litre returnable bottles, a sys- 
tem described as “logistically 
almost Impossible" by Mr 
Telles and which involves the 
return to Brazil of tony loads 
of empty beer bottles. Even so, 
Brahma claims a 7 per cent 
share of the Argentine market, 
which it hopes to increase once 
the new brewery opens. 

Mr Telles says Brahma’s 
expansion makes sense 
because of a similarity among 
the region's beer markets. 
With the exception of Brazfl. 


Selling closer to home 


Argentina 
Exports to (Sbn) 
1.5 


1.0 


U5 


1900 1M1 

Source. MF 


Braza 
Exports to iSbnj 
~ 3.0 


Paraguay 

□ 

Brazil 

□ tf 

Argentina . 


5S. ■ 

' v\ ' 





.1 2-0 


i i.o 


1992 


where three brewers are in 
often vicious competition, the 
main markets are dominated 
by near monopolies. These 
companies oftcD owe their pre- 
eminence to government buck- 
ing and a traditional lack of 
concern for competition. They 
include Quilmes, which has 
more than 60 per cent of the 
Argentine market, and Empre- 
sas Polar in Venezuela with a 
90 per cent market share. 

Brahma believes it can com- 
pete because consumers and 
distributors increasingly want 
competition to improve the 
quality and range of products. 

Governments are also less 
interested in blocking competi- 
tion to defend national compa- 
nies. Argentina, which has 
been opening its economy 
since 1991. has not reacted 
against Brahma's gain in mar- 
ket share, says Mr Telles. This 
is probably also because 
Argentina’s beer market has 
grown rapidly, so that domes- 
tic brewers have not lost sales. 

“There is a process of open- 
ing. both commercial and cul- 
tural, going on in Latin Amer- 
ica. Certainly a few years ago 
it would not have been possi- 
ble." says Mr Telles. 

Further progress may be 
erratic. While there are simi- 
larities between markets, there 
are also huge differences. Ven- 
ezuelans like to drink beer on 
the streets and in small bottles, 
the latter so that it does not 


1990 1091 1992 


warm up ton quickly in the 
heat. Argentines prefer to 
drink from larger bottles at 
home, and increasingly buy 
their beer in supermarkets 
rather than bars. 

“It's no good trying to use a 
standard formula for these 
markets, neither in terms of 
taste, packaging or distribu- 
tion." Mr Telles says. 

In spite of the growing trade 
links, a single regional group- 
ing still looks a long way off. 
Brazil's still uncompetitive 
economy is likely to delay the 
other Mercosur countries, 
which arc obliged to negotiate 
trade treaties collectively, from 
linking with the US ami 
Mexico in rite North American 
Free Trade Association. 

Countries such as Chile may 
be candidates to join both 
groups. But other countries, 
such as Colombia and Vene- 
zuela. appear ready to join nei- 
ther. 

Instead, a series of some- 
times inter-linked free trade 
areas and bilateral trade trea- 
ties. several of which exist, are 
likely to continue. These could 
slow further tariff reductions 
and cross-border competition 
between areas, forcing compa- 
nies to think in terms of inter- 
linked sub-regions. 

This article is the sixth in a 
series on the recovery in Latin 
America. Previous articles 
appeared on June 2-1 and 30. 
and July 5. 12 and 15 






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FINANCIAL TIMES FRIDAY JULY 22 1994 


★ 

NEWS: INTERNATIONAL 


Israel closer to 


giving up Golan 

Syria given strong signals of a 'deep and painful’ 
withdrawal as Christopher heads for Damascus 


By Julian Ozarme 
In Jerusalem 

Israel yesterday sent further 
strong signals to Syria that it 
was preparing Israeli public 
opinion for returning the occu- 
pied Golan Heights, as Mr War- 
ren Christopher, US secretary 
of state, prepared to fly to 
Damascus during bis current 
Middle East mission. 

Mr Yossi Sarld, the Israeli 
environment minister, who has 
played an important role in 
Arab-Israeti peace talks, said 
the Jewish state would have to 
make a "deep and painful” 
withdrawal from the Golan in 
return for security, peace and 
normal relations. 

Mr Sarid also said he 
believed an Israeli-Syrian dec- 
laration of principles for peace 
would be concluded this year. 

Mr Sarid's comments under- 
lined the shift in Israel's posi- 
tion since Mr Shimon Peres, 
Israeli foreign minister, said 
last week Israel now recog- 
nised Syrian sovereignty over 
the entire strategic heights. 


Mr Peres also referred to a 
1967 secret cabinet resolution 
calling for negotiations with 
Syria on the basis of the Inter- 
national border of 1967. 

Until last week Israel had 
refused to commit itself in pub- 
lic to a full withdrawal from all 
the Golan land seized in the 
1967 Arab- Israeli War, although 
privately many senior politi- 
cians have said they fully 
understand that President 
Hafez al-Assad of Syria would 
not settle for anything less. 

Several Labour party politi- 
cians close to Mr Peres are 
now seeking to annu l the 1981 
law which annexed the Golan 
Heights. 

Mr Peres sought to reinforce 
overtures to Damascus yester- 
day during a trip to Cairo to 
brief President Hosni Mubarak 
of Egypt on recent peace devel- 
opments. “It is essential for 
Israel to have peace with 
Syria... We cannot leave any 
open wounds," he said. “The 
peace process will be com- 
pleted when it will be full and 
comprehensive." 


Mr Christopher yesterday 
met Mr Yassir Arafat, Chair- 
man of the PLO, in Gaza to 
stress the importance of trans- 
parency and accountability In 
the release of hundreds of mil- 
lions of dollars of aid to the 
embryonic Palestinian self-rule 
authority. 

Mr Christopher's visit has 
been marked by a flurry of 
Arab-Israeli diplomacy, with 
meetings between Israel and 
Jordan before the summit on 
Monday in Washington 
between Ring Hussein of Jor- 
dan and Mr Yitzhak Rabin, 
Israeli prime minister. 

The Israeli -Jordanian meet- 
ings decided continuous bilat- 
eral negotiations over borders, 
water and security in Jordan 
and in Israel; monthly summits 
at foreign minister level; accel- 
erated joint economic projects 
ahead of a formal peace treaty 
anti an undertaking by Jordan 
to prepare for the suspension 
of the boycott of Israeli goods 
and companies. 

A Riviera to replace the razor 
wire. Page 6 


Two sentenced in 
Japan bribe case 


A Japanese court gave two 
former officials of a construc- 
tion company suspended 
prison terms yesterday for 
bribing a regional governor to 
win a contract. Renter reports 
from Tokyo. 

The Tokyo district court ver- 
dict was the first conviction of 
executives in a string of con- 
struction scandals. More than 
a dozen officials from various 
companies and several local 
government leaders have been 
arrested on suspicion of cor- 
ruption since last year. 

The Tobishima executives 
were found guilty of handing 
YlOm ($101,300) to Fm'io Takeu- 
chi, then governor of Ibaraki 
Prefecture, at a Tokyo restau- 
rant on January 2S, 1991. 


The money was in return for 
Takeuchi granting Tobishima 
part of a Y38bn dam project at 
Oyama near Tokyo, the court 
said. 

Sukemasa Uera, 86, former 
honourary chairman of Tobish- 
ima, was given a suspended 
prison term of two years. His 
son Soichiro Uera, 59, former 
vice-president, was sentenced 
to one year and six months, 
also suspended. 

Presiding Judge Kenjiro Tao 
said their criminal liability 
was serious, given the effects 
of their action on society. But 
he said the sentences were 
suspended because the two 
men had repented. 

Mr Takeuchi, 76, is being 
tried separately. 


Household 
spending 
may rise 

By William Dawkins In Tokyo 

Japanese households spent 
less in May for the fourth con- 
secutive month, but a surge in 
sales of beer and air condition- 
ers due to an unusually hot 
summer may revive consump- 
tion. The latest household sur- 
vey by the government’s man- 
agement and co-ordination 
agency shows a L7 per cent 
drop in consumer spending in 
the year to May, to an average 
of Y316.080 (£2.060) per house- 
hold. 

Household spending rose for 
four months until February, 
but then moved into reverse in 
line with Increased weakening 
in the labour market 


UN lawyers take steps 
to set up criminal court 


By Frances WHBams in Geneva 

The first step towards 
establishing an international 
criminal court to try such 
crimes as genocide, war 
crimes, terrorist acts and drug 
trafficking was taken yester- 
day. with the adoption of the 
court's draft statutes by the 
United Nations International 
Law Commission. 

Mr Janies Crawford, an. Aus- 
tralian lawyer who chaired 
negotiations on the statutes, 
said such a court would avoid 
the “second-class justice” of ad 
hoc tribunals set up after 
crimes have been committed 
and before charges against 
individuals have been brought. 

The UN Security Council last 
year set up a war crimes tribu- 
nal for former Yugoslavia and 
a similar tribunal has been 
proposed to try perpetrators of 
genocide in Rwanda. 

The court's statutes are due 
to be debated by the UN Gen- 
eral Assembly later this year. 
If approved, the way would be 
clear for negotiations to put 
them into international treaty 
form. Among crimes over 
which the court would have 


jurisdiction are genocide, 
aggression by one state against 
another, crimes against 
humanity and violation of 
Geneva Conventions on con- 
duct in wartime. 

It would also try "exception- 
ally serious crimes of interna- 
tional concern" involving 
breaches of international trea- 
ties that outlaw torture, apart- 
heid, hijacking and hostage- 
taking, and other interna tion- 

Plan to deal with 
genocide, war 
crimes, terrorism 
and drugs 

ally recognised crimes such as 
drug trafficking. 

Mr Crawford said the court 
could have jurisdiction over 
such cases as the Lockerbie 
airliner bombing. Libya has so 
far refused a Security Council 
demand for the accused to be 
extradited to stand trial, on the 
grounds they would not get a 
fair hearing. 

But except for genocide and 
cases initiated by the Security 


Council, the court could try 
suspects only if the country 
holding thorn and the country 
where the crime was commit- 
ted agreed that it should. 

Mr Viaden Vereshchetin, 
Russian chairman of the com- 
mission, stressed yesterday the 
court was intended to comple- 
ment national justice systems 
and to act In cases where 
national procedures were not 
available or effective. 

Under the draft statutes, the 
court could issue warrants for 
arrest and detention of sus- 
pects. They would have the 
right to silence, the right not 
to incriminate themselves and 
the right to a public trial 
with legal defence of their 
choice. 

If they are found guilty, the 
court could impose a prison 
term or a fine, but not the 
death penalty. Prisoners would 
serve sentences in a designated 
country. 

The court would have its 
own Independent prosecutor 
and consist of IS judges elected 
by treaty members, with a 
seven-person appeals chamber. 
Five judges would be selected 
to hear each trial. 



S Korea 
shipyard 
violence 

Striking shipyard workers 
scuffled with security guards 
yesterday as a dispute at 
South Korea's largest ship, 
builder, Hyundai Heavy Indus- 
tries, boiled ova- into violence 
Reuter reports bom SeouL ’ 

Witnesses said 3.000 work- 
ers and security guards tus- 
sled near the mala gate of 
Hyundai Heavy’s shipyard as 
the strikers tried to break bar- 
ricades to enter the yard in the 
southeastern city ofUlssn. 

There were injuries on both 
sides, the witnesses said. 

The government is expected 
to invoke emergency powers to 
settle the labour dispute over 
wages and a demand for a say 
in management of the com- 
pany, a unit of the mammoth 
Hyundai Group, a labour min- 
istry official said. The strike 
has lost the company $2ilm in 
sales. 


Standard Chartered to continue to investigate alleged payments 


Coin was passed on to consultant 


ByRobert Poston In London 
and Christine HOI in Kuala 
Lumpur 

A $10,000 gold coin which 
Standard Chartered gave to a 
Malaysian former deputy 
finance minister disappeared 
after he had passed it an to a 
Malaysian-based consultant, 
the international bank said 
yesterday. 

Standard Chartered has been 
investigating the disappear- 
ance of the coin as part of its 
probe into allegations that 
employees of its Mocatta gold 
trading division may have 
made payments to officials in 


the Philippines and Malaysia 
to win business. 

The bank said yesterday 
that in 1991 it had given the 
coin to Mr Abdul Ghani Oth 
man, the then deputy finance 
minister who is now Malay- 
sia's youth and sport minister. 
Hie had been given the coin as 
a "sample”, during discussions 
with Mocatta on whether Mal- 
aysia should impose a 10 per 
cent tax on gold imports, 
according to a Standard Char- 
tered banker. 

At the time, the bank was 
considering setting up a 
bonded warehouse for gold m 
Malaysia. Mr Abdul said that 


during the meeting with 
Mocatta he had been shown a 
sample of gold coin which was 
to be used to ascertain 
whether it was legal tender or 
gold bullion. "If the gold coin 
was considered legal tender, 
then it should not be taxed." 

On Tuesday, the Financial 
Times disclosed that the coin 
had disappeared. Standard 
Chartered has now been told 
by Mr Abdul Ghani that he 
returned it to Dr Stephen Goh, 
who was a consultant to 
Mocatta based in Koala Lum- 
pur. Mr Goh has told Standard 
Chartered that he misplaced 
the coin. Standard Chartered 


said Mr Goh had recompensed 
the bank for it 

“That is the end of the mat- 
ter," Standard Chartered said 
yesterday. However, the bank 
is continuing to investigate 
other alleged payments by 
Mocatta employees to officials 
in the Asia Pacific region. 

Dr Mahathir MnhawmH, Mal- 
aysia's prime minister, said 
yesterday Standard Chartered 
had a right to investigate the 
matter, and that his govern- 
ment would not comment until 
the investigation was com- 
pleted. 

The disclosure of Standard’s 
investigation into the disap- 


pearance of the coin came at a 

sensitive time for Anglo-Ma- 
layslan trade relations. The 
UK foreign office Is hopeful 
that Malaysia will soon ttft a 
ban on UK participation in 
Malaysian government con- 
tracts, which was imposed In 
February because o( Malaysian 
fury with British press reports 
of the Pergau Dam alleged 
arms-Ior-ald deal and allega- 
tions of bribes offered to 
Malaysian politicians. 

Mr Abdul said it had been 
"presumptuous on the part of 
the British media to say that a 
Malaysian minister could be 
bought with one gold coin.” 



Manager gets 9 years in 
$448m Indonesian fraud 


An Indonesian court sentenced a former bank 
manager to nine years in prison yesterday in a 
loan fraud case that has cost a state bank more 
than $448m, AP reports from Jakarta. Mean- 
while, the prosecution demanded Ufe imprison- 
ment for the Chinese businessman whose com- 
pany took out the loan from the state-owned 
Bank Pembangunan Indonesia. 

Questions have also been raised about the 
roles of senior officials including President 
Suharto's chief adviser, but they are not on 
trial 

Mr Maman Suparman, 48, former manager of 
the bank's South Jakarta branch, was found 
guilty of receiving a 256m rupiah ($119,069) bribe 
from businessman Mr Eddy Tanzil and Illegally 
converting documents to help him obtain the 
loan and use it improperly. 

The South Jakarta District Court also Sued 


Mr Suparman 15m rupiahs and ordered that his 
house and land be confiscated. 

His lawyers said they would appeal. 

“There was no evidence found during the trial 
that Suparman has received bribery in connec- 
tion with the loan,” said Mr Danny Kaliamang, 
who led a six-member defence team. 

The prosecution bad demanded a 13-year sen- 
tence for Suparman, the first person to be tried 
in the case. At the Central Jakarta District 
Court, Mr Hamid Bachmid. the prosecutor, 
demanded Ufe imprisonment for Tanzil, who 
obtained a $430m loan In 1991 for bis Golden 
Key Group for a petrochemical plant. 

Mr Bachmid said the loan was not used as 
intended, causing a loss to the state of $448. 8m, 
including unpaid interest. Also on trial is Mr 
Towil Haryoto, a former president director of 
the bank. Two other directors are awaiting trial. 


Nigeria moves 
closer to deal 
with oil strikers 


By Paul Adams in Lagos 

Nigeria's military government 
appears ready to seek a com- 
promise on the industrial and 
pay demands of striking oil 
workers if they drop their 
political demands and return 
to work. 

In a meeting in Lagos sched- 
uled for today, Mr Umaru 
Baba, the junior oil minister, 
will meet representatives of 
both the jnstm unions and the 
operating companies. 

The government hopes that 
by satisfying the unions’ eco- 
nomic and industrial de m a n ds , 
they will end their two-week 
strike and await a solution to 
the political crisis. 

There were signs at a meet- 
ing with the government and 
employers on Wednesday that 
the junior workers union, 
Nupeng. was willing to end the 
strike In return for settlement 
of two pay disputes with 
employers, information on the 
whereabouts of their general 
secretary Mr Frank Kokori, 
and assurances that the gov- 
ernment will restore on indus- 
try investment and move 
quickly towards democratic 
rule. 

Nupeng provisionally agreed 
to pay offers on Wednesday. 
The union, whose members 
have received no pay since the 
strike began, appeared to 
soften their stance and said 
they would consider returning 


to work if the oil companies 
attended today’s meeting and 
confirmed that government 
was increasing investment. 

The senior staff association, 
Pengassan, said yesterday it 
would attend the meeting if 
invited but would not compro- 
mise on either Its political or 
economic demands, pengassan 
Insisted that the dispute could 
be resolved only by meeting 
the head of state. General Sani 
Abacha. 

The strikers are de mandi ng 
that the military leave govern- 
ment and make way for Mr 
Moshood Abiola, widely 
regarded as the winner of last 
year’s annulled presidential 
election, who Is in prison fac- 
ing treason charges for declar- 
ing himself president last 
month. Mr Abiola'3 trial is doe 
to start on July 28 in Abuja. 

The strikers are al so pro test- 
in g against the government’s 
under-investment In the oil 
industry, which has led to pay- 
ment arrears to the multina- 
tional oil companies in Nigeria 
of about $700m throughout this 
year, plunging the industry 
into recession. 

The oil companies operate 
joint ventures, which are 60 
per cent owned by the govern- 
ment. They have sharply 
reduced development and . 
exploration and, until the g 
strike, were investing only m ' 
activities essential to 
production. 


Simon Holberton on monetary developments on the eve of a debt issue that matures after the handover 


Hong Kong and Beijing let money do the talking 


M r Joseph Yam, governor 
of the Hong Kong Mone- 
tary Authority, the colo- 
ny's central bank, pores over a 
chart showing the yields on Hong 
Kong government bonds compared 
with other borrowers. 

What they tell him is that 
whereas the yields on Hong Kong 
government debt of less than three 
years' maturity are lower than, say 
US government paper, yields on 
Hong Kong paper maturing after 
three years are higher. 

"I suppose there is concern about 
inflation, the outlook for interest 
rates and some residual worries 
with politics and policies," says Mr 
Yam. 

On Monday investors will be ten- 
dering for another HKSSOOm (£41m) 
or the authority's bonds. What 
make these of special interest Is 
that they mature nearly a month 
after China resumes sovereignty 
over Hong Kong on July 1. 1997. 

As such, they, and the ones to 
follow, will become a bellwether of 
investor confidence to ti® colony. 


along with its more visible stock 
market. If the issue on Monday goes 
well, the authority plans to intro- 
duce a five-year bond later in the 
year. 

Hong Kong's government debt 
market is just four years old and 
already dwarfs the colony’s stock 
market. There are HK$43bn bonds 
in issue, but turnover approaches 
HK$20bn on most days. This com- 
pares with a stock market at Us 
most active of around HK$8bn a day 
and currently languishing around 
HK$3bn a day. 

That this activity occurs at all 
seems to defy economic and diplo- 
matic logic. The Hong Kong govern- 
ment has no fiscal need to borrow, 
its budget has been in surplus for as 
long as mast can remember. More- 
over, in the Sino-Brltish memoran- 
dum of understanding (MQID which 
paved the way for Hong Kong to 
build a new airport the colonial gov- 
ernment was limited to borrowing 
no more than HK$Sbn. 

The logic that has been at work Is 
the logic of the markets. Monetary 



Yam; yield watcher 


Hong Kong: 
the cost of credit 

HKS & USS> debt instruments 
yteW curves (% per annum) 



0 1 1 1 — 1 1 1 1 1 1 

183466768 10 
1997 

Years to maturity 

SouravHKMA 


reform in 1988 necessitated the 
establishment of a short-term 
money market, after which it was a 
short step to issuing instruments 
with longer maturities. 

Mr Yam admits that the MOU has 
been disregarded on this score. He 
expects that at the handover there 


will be, with the approval of the 
Chinese government, at least 
HK$40bn of debt still due to mature 
after the change in sovereignty. “It 
just shows you how pragmatic they 
are," he says. 

The authority has kept China 
informed of its plans every step of 


the way and because of that it has 
won Beijing’s support for the con- 
tinuation of the borrowing pro- 
gramme after 1997. 

“This is not political reform but 
monetary reform and both sides 
recognised that there was no prob- 
lem. On the monetary side the 
scope for differences of opinion Is 
very small. Stability and prosperity 
is the aim and monetary stability 
will contribute to it.” says Mr Yam. 

He says he had qualms about the 
government borrowing when It was 
first mooted five years ago, but he 
recognised that changes to the regu- 
lation of banks made borrowing 
necessary. In 1988 the government 
took responsibility for influencing 
the level of interest rates in the 
inter-bank money market, hence 
the introduction of short-term 
money market bills. 

After that it was just a matter of 
time before instruments with longer 
maturities were issued. As the mar- 
ket has grown, so too has the 
sophistication of the authority's 
role in Hong Kong's money market. 


Last year it Introduced a "dis- 
count window” at which banks are 
able to make good short-term cash 
deficiencies by selling a portion of 
their Hong Kong government debt 
portfolios. Moreover, as the author- 
ity has issued longer-term bonds, a 
retail investor market has devel- 
oped. 

No matter how good the authori- 
ty’s relations with Beijing, China 
nonetheless presents special prob- 
lems for an institution trying to 
establish Hong Kong's separate 
identity in the world of interna- 
tional finance. 

For one. there is Hong Kong's 
credit rating after 1997. Mr Yam 
lists a string of arguments why 
Hong Kong should be treated differ- 
ently from the mainland, not the 
least being its guarantee of auton- 
omy in financial affairs. But he is 
having a difficult time persuading 
the credit rating agencies. 

Another issue is the ownership by 
mainland Interests of a large part of 
Hong Kong’s money supply. 
Already more than 20 per cent of 


the colony’s physical stock of notes 
circulates In southern China. 

Mr Yam’s main oonceffl. however, 
is the HK$48bn (as of April) of Hong 
Kong dollars deposited in the colo- 
ny’s banks by mainland banks. * 
rapid conversion of this mon ey ^ 
US dollars could put a large Jag 
on the HK dollar’s link with the ua 


rency. . M 

Who controls this money a® 
mat to us,” he saysjwth 
teretatement -If It'sbylmg™^ 
then I’m not worried- But tf » 
the centre (Chinese gown®® 11 
i, for policy reasons, they 
it to control it." .. WonJ? 
that were the case, lb® hot® 
ig*s promised fmanctal 
r would be in Jeopardy-Ou 
e, however, Mr Yarn doa 
eve these funds are 
trol of the Chinese pivarmna» 
think it’s a reflection dtj& 

tics rather than pdgj ^ 
-but for a man wbo»J“ 

: is the preservation 

itiity he maintains a wa ^““ 
,iu flnurs. 



FINANCIAL TIMES FRIDAY 


JULY 22 1994 



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FINANCIAL TIMES FRIDAY JULY 22 1994 


NEWS: WORLD TRADE 



Japan puts 
conditions 
on backing 
Taiwan’s bid 
to join Gatt 

By Laura Tyson 
hi Taipei 

Taiwan's trade negotiators 
yesterday met their Japanese 
counterparts in Tokyo to seek 
Japan's support for Taipei's bid 
to Join the General Agreement 
on Tariffs and Trade. During 
the talks. Japan requested con- 
cessions and set conditions 
which Taiwan said could 
aggravate Taipei's growing 
trade deficit with Japan. 

Japan insisted on three con- 
ditions for granting its support 
to Taiwan’s Gatt entry bid. 
according to local newspaper 
reports. 

Japan urged Taiwan to: elim- 
inate restrictions on imports or 
Japanese cars and locomotives: 
amend regulations favouring 
European and American com- 
panies in government and 
state enterprise purchasing 
and in the awarding of major 
infrastructure contracts; and 
lower tariffs and import 
restrictions on manufactured 
Industrial products. 

Taiwan has drawn up a five- 
year plan to curb its trade defi- 
cit with Japan, economics min- 
ister Mr Chiang Pin-kung said 
yesterday. Under the plan, the 
government will promote Tai- 
wanese products and sales in 
Japan and cut imports of Japa- 
nese products by obtaining the 
technology and capital needed 
to manufacture products 
locally. 

Mr Chiang said he would 
raise the issue of Taiwan's defi- 
cit during a ministerial meet- 
ing of the Asia-Pacific Eco- 
nomic Co-operation (Apec) 
forum scheduled for October in 
Osaka 

“We need co-operative mea- 
sures from both the govern- 
ment and the private sector in 
Japan such as tariff cuts and 
support for Taiwan’s industrial 
upgrading," Mr Chiang said. 

The bilateral trade deficit 
was $14.42bn (£9Jbn) in 1993 
and is forecast to top ?16bn 
this year. 

Taiwan has said it wants to 
join Gatt by the end of this 
year in order to become a foun- 
ding member of the World 
Trade Organisation which 
supersedes Gatt on January 1. 


Julian Ozanne on plans for a Jordan-Israel-Egypt tourist triangle on the Gulf of Aqaba 

A Riviera to replace the razor wire 


T he mayor of Eilat, Mr 
Gabi Kadosh, points to 
architects' plans, aerial 
photographs and drawings of 
m ul ti-mil lion-do liar projects 
adorning his office. 

There is a polo club, a sports 
centre, hotels, marinas, artifi- 
cial lagoons and a regional 
tourism university. But the 
drawing that most inspires Mr 
Kadosh is of a residential 
development around lagoons 
and canals straddling the 
Israeli-Jordanian border, now 
the site of land mines and coils 
of razor wire. 

Israelis hope one of the 
quickest changes to follow the 
historic summit between King 
Hussein of Jordan and Israeli 
prime minister Yitzhak Rabin 
in Washington on Monday will 
be opening of borders, boosting 
tourism and trade and paving 
the way to regional co-opera- 
tion and joint p lanning 
Nobody wants these changes 
more than the tourism and 
municipal officials in Eilat, 
where there are grand dreams 
of building a Red Sea tourism 
triangle between Eilat, the Jor- 
danian port of Aqaba and the 
tiny Egyptian resort of Tabs. 
In their enthusiasm, nffiriaia 
say they envisage a “Middle 
East Riviera” in the desert 
which will also operate as a 
free trade zone. 

Some of the grandiose pro- 
jects. such as a desalination 
plant, may remain on the 
drawing board for a long time. 
But opening the border and 
funding limited infrastructure 
projects is certain to fuel an 
investment boom in the Gulf of 
Aqaba, where Mr Kadosh says 
Israel and private companies 
are already investing $500m 


(£322m) this year in infrastruc- 
ture, new hotels and tourist 
facilities. 

Among the most attractive 
projects to both sides are a 
paved 14km Taba-Eilat-Aqaba 
promenade snaking around the 
Gulf of Aqaba, shared use of 
airports, ports and roads, joint 
management of water, waste 
and sewage and cooperation to 
combat industrial pollution 
and preserve the delicate 
marine environment 

“The only way to survive in 
the world today is to be part of 
something bigger and to co- 
operate with your neighbours." 
says Mr Dov Sharf, the town 
dole. “Both sides have to be 
satisfied. We can help the Jor- 
danians a lot and they help 
us." 

An obvious example is 
shared use of airports. Eilat, 
which receives at least 500,000 
visitors a year, has a small air- 
port which cuts the town in 
frnif and cannot receive jumbo 
jets. The town would like to 
close the airport or shorten it 
for internal flights only, and 
use the large Jordanian airport 
at Aqaba, which operates at 10 
per cent capacity, for charters 
and international fli ghts 

The municipality has devel- 
oped a proposal for a separate 
exit terminal for siflat from the 
Aqaba airport similar to the 
separate exits at Basle airport 
to France and Switzerland. 
Under this arrangement Israel 
would pay Jordan for airport 
services. 

Co-ordination in pollution, 
environmental production and 
town planning is also vital in 
an area short of land and 
developing rapidly. 

Two projects are almost cer- 


tain to be among the first in 
the wake of the summit In 
Washington - a $45Qra toll 
road linking Egypt to Jordan 
via Israel and the phased open- 
ing of the border, first to for- 
eign tonrists and then to 
Israelis and Jordanians. 

The road has been planned 
for more than a decade but has 
been held up pending progress 
in peace talks. Israel wants to 
construct a 14km tunnel from 
Ras el Naqeb in Egypt to Ein 
Evrana, 17km north of Eilat on 
the Israeli-Jordanian border. 
Such a tunnel would avoid 
traffic congestion to Eilat and 
lessen security and customs 
difficulties for transit traffic. 
Trucks and buses destined for 
Jordan and Saudi Arabia 
WOUld have a fast r-hannel 

T he road would link, for 
the first time, Jordan 
and Saudi Arabia with 
North Africa for cargo and 
commerce. Israel hopes much 
of the money would come from 
foreign private investors and 
would like Saudi Arabia to 
participate. 

Much of the traffic on the 
road would be North African 
pilgrims to Mecca who now 
have to take the ferry from 
Nuweiba, in the Egyptian 
Stoat to Aqaba. At the height 
of the flnnnal pilgrimage, at 
least 4,000 people are ferried 
across the Red Sea every day. 

Opening the borders to tour- 
ism is also a easy first step 
with obvious economic bene- 
fits. Once foreign tourists ean 
cross between Eilat and Aqaba, 
the two countries can market 
combination packages and 
develop joint promotion cam- 
paigns overseas with a “peace" 


package which mi gh t include 
the Red Sea, Jerusalem, Petra, 
the Dead Sea, Wadi Rum and 
the Negev desert for the price 
of one air ticket. With Egypt in 
a regional tourism association, 
Cairo, Luxor and Aswan would 
all be reachable. 

The tourist boom is already 
unfolding to Eilat. The 590m, 
370-room Royal Beach Hotel, 
part of the Isrotel chain, has 
just opened. At least eight 
hotels are under construction 
to join the existing 43 hotels 
with an average occupancy last 
year of 85 per cent The tour- 
ism ministry says Eilat will 
double its hotel rooms to 12,000 
within five years. 

In October, the city will open 
a $5m artificial lagoon develop- 
ment on the north beach and 
break ground on a $6m 
regional tourist management 
university and a $5J>m sports 
centre which it hopes will 
attract international teams 
from Europe seeking a warm 
winter tr aining location. 

Government and municipal 
development, combined with 
the prospect of an opening of 
the Israeli-Jordanian border, 
will fuel further private-sector 
investment The biggest Israeli 
development will be in the 

Timna Valley, site Of anrient 
copper mines, 28km north of 
Eilat. Mr Sol Kerzner, the 
South African hotel tycoon, 
has proposed to build a $450m 
Holy Land “Sun City” if the 
government grants him a con- 
cession for a complex of casi- 
nos, at present banned in 
Israel. A French consortium 
hag also tabled plans for a mas- 
sive resort development as has 
a sister company of Disney- 
land. 



US renews pressure on China over intellectual piracy 


By Jeremy Kahn in Washington and 
Guy do Jonquldres in London 

The US yesterday renewed pressure 
on Beijing to open its markets and 
stamp out technological piracy, ahead 
of a General Agreement on Tariffs 
and Trade meeting next week which 
is due to discuss the terms on which 
China would re-join the body. 

Ms Charlene Barshefsky, deputy US 
trade representative, said in Beijing 
that China must open its markets 
wider to US services industries. 


notably insurance and tele- 
communications. 

The US is also demanding that 
China crack down on abuse of intel- 
lectual property rights, which US 
industries say currently costs them 
almost $lbn (£600m) annually. 

Ms Barshef&ky, who is in Beijing for 
negotiations with Ms Wu Yi, China’s 
foreign trade minister, is pressing 
China to close 26 factories which the 
US says are using pirated technology 
to produce compact discs for export 

US officials have been concerned by 


the discovery of discs throughout 
south-east Asia and to Canada The 
factories am make up to 75m rifrre a 
year, Ms Barshefsky said. 

The US government last month 
gave China six months to enforce 
laws to protect mteDectual property 
such as trademarks and copyrights. 
Without improvement, China faces US 
trade sanctions on 2800m worth of 
exports. 

Ms Barshefsky said her taifcg with 
Ms Wu were “constructive," though 
progress to opening up China to for- 


eign goods was progressing slowly. 

This week - after weeks of delay - 
the first shipment of US apples 
arrived in Shang hai Though Ms Bar- 
shefsky was pleased China was 
accepting more foreign agricultural 
goods, she said it was “ unacce ptable" 
that China was importing apples from 
only one US state, Washington. 

Ms Barshefsky also criticised recent 
sta tement s by China that it plans to 
offer a “final” set of concessions, 
which were not open to further nego- 
tiation, at next week’s talks in 


Geneva on its application to re-join 
Gatt She said Beijing’s approach was 
“not productive” and “a recipe 
designed not to reach agreement”. 

• AP adds from Bering: The Chi- 
nese cabinet has responded to US 
pressure by agreeing to meet regu- 
larly to discuss intellectual property 
ri ght infringements, an nfflriai news- 
paper said yesterday. 

The China Daily ™id the cabinet 
aimed to draw attention to infringe- 
ments and had called on state-run 

media to hi g hli g ht them 





Daewoo wins 
$ 208 m water 
supply order 
in Libya 

Daewoo of South Korea 
yesterday said it had won a 
5208m (£l34m) contract from 
Die city of Benghazi in Libya 
to undertake water supply, 
sewage and drainage works 
and lay pipes to absorb rain in 
the city's Slawl area, AP-DJ 
reports from Seoul. 

Separately, Daewoo Corpora- 
tion, the trading arm of the 
conglomerate, said it had won 
a 530m order from Malaysia’s 
real estate developer,' Selangor 
Dredging group, to build a 27- 
storey buildtog complex. 

Alcatel in China 

Alcatel Australia, a unit of 
Alcatel Alsthom of France, has 
signed contracts valued at 
A$56m (£26. 6m) to provide 
telecommunications equip- 
ment to China, AP-DJ reports 
from Canberra. 

The company will supply 
and install digital switching 
exchanges to the autonomous 
regions of Tibet and Nfagzia 
and the province of Gansu. 

Thai steel move wait 

The Thai government is con- 
sidering allowing more hot 
and cold-rolled coil steel mak- 
ers Into Thailand, despite an 
agreement to preserve Sahari- 
riya Steel Industries* monop- 
oly until 1999, AP-DJ reports 
from Bangkok. 

The Thai Board of Invest- 
ment was supposed to have 
decided this week whether to 
rescind Sahaviriya’s protec- 
tion, but it deferred the deri- 
sion until next month. 

Toshiba venture 

Toshiba Battery, a unit of 
Toshiba Corporation, plana to 
start producing nickel-metal 
hydride rechargeable batteries 
in the US with Doraoell Inter- 
national of the US and Varta 
of Germany, Reuter reports 
from Tokyo. 

The three companies will 
form a joint venture in the US 
at the end of 1994, or at the 
beginning of 1995, and plan to 
start producing batteries by 
the end of 1996. A total invest- 
ment of about YlOtm (£6$gJ 1 n-. 

will be necessary to start pro- IRC f ,1d : % 
doction, Toshiba said. a a » • * 


in Fi'ii! 


ipons 













|Uh;. 


FINANCIAL TIMES FRIDAY JULY 22 1 994 




Heseltine hails 
innS record inward 






investment jobs 




r * i j v \ 
s ti \ v 


By Andrew Baxter 
and OBBan Tett 

Overseas companies created a 
record 28,727 new johs in the 
HE last year through inward 
Investment projects, and 
helped safeguard a farther 
67.372 jobs, said Mr Michael 
Heseltine, trade and industry 
secretary, yesterday. 

The new jobs total is up 40 
per cent on 1992/3. while the 
number of inward investment 
projects - new or expanded 
operations and acquisition g — 
rose 25 per cant to a record 404. 
according to the anmipj report 
of the Invest in Britain Bureau. 

The report was viewed by 
the government as further con- 
firmation that the UK wel- 
comes more overseas compa- 
nies than any other country in 
Europe, in spite of increasing 
competition from the rest of 
the European Union. 

The total number of jobs cre- 
ated or safeguarded by inward 
investment was 96,099, up 
sharply from 59,271 in the pre- 
vious year. But officials 
pointed out that about 30,000 of 
the 67,372 saved jobs were 
linked to BMW's takeover of 
Rover. 

The report says foreign 
owned enterprises now 
account for 17 per cent of all 
UK manufacturing jobs, 23 per 
cent of net output and 33 per 
cent of net capital spending. 

Among new investments in 
1993 was the £15m being spent 
by Fujitsu Fulcrum Communi- 
cations, which makes fibre- 
optics equipment on a Euro- 
pean headquarters at Birming- 
ham Business Park; and a 
£3.5m European headquarters 
at Gillingham Business Park 
for Hochikt a Japanese pro- 
ducer of fire detection systems. 

Nearly half or 183 of the 404 
investment projects were made 
by US companies, up from 128 


Sinn Fein Re-think 
response urged on 
‘wins IRA rail work 
backing 9 sell-off 





By Tim Co one 
in Dublin 

The IRA military leadership 
has apparently endorsed pro- 
posals to be put to a special 
delegate conference of its 
political wing Sinn Ffifa this 
weekend. The party’s defini- 
tive response to the Downing 
Street declaration is to be 
made at the conference, which 
will be held to Donegal this 
Sunday. 

In a statement published 
yesterday to An Phoblacht, the 
weekly newspaper of Sinn 
Fdin, the IRA army council 
said: “We encourage Shm F4in 
as it continues to strive for the 
creation of a viable peace pro- 
cess. We note also the effort of 
others to this regard." 

The Ston Ffefa national exec- 
utive is to present proposals to 
the co nf erence on the party’s 
response to the UK-Irlsh decla- 
5 ration, which win provide the 
focus for debate. The IRA 
statement appears aimed at 
reassuring the conference that 
there is a unity of purpose 
between the IRA army council 
and the Sinn F£tn leadership. 

The IRA statement said it , 
had “a vested interest in sec- | 
□ring peace" and that it would 
maintain "a positive and flexi- 
ble attitude to developments 
in the peace process". It also 
reiterated its adherence to 
“republican objectives which 
include the right to national 
self-determination*. 

Downing Street responded 
brusquely to yesterday's state- 
ment, saying it did not “mea- 
sure up to" a permanent cessa- 
tion of violence which was the 
only thing it was interested to. 

The key Issue emerging from 
the conference will be whether 
there is any statement or hint 
that the IRA should suspend 
its military operations. 

There have been growing 
expectations that the IRA was 
prepared to countenance an 
extended ceasefire In the late 
summer or autumn, to spite of 
the intensification of its 
operations in recent weeks. 

Both governments have 
recently reiterated that a tem- 
porary ceasefire will not be 
snffldq nt for Ston F6in to be 
admHfed to direct talks. 


By Charles natchdor. 
Transport Correspondent 

Civil engineering contractors 
are urging the government to 
rethink its plans to privatise 
the companies which carry out 
£lbn worth of maintenance 
and track renewal work for the 
railways. 

The Federation of Civil Engi- 
neering Contractors, which 
represents 300 of the largest 
companies in the sector, said 
that it wanted the government 
to break up British Rail’s infra- 
structure services division into 
smaller units. 

The maintenanrB companies 
to be put up for sale have con- 
tracts worth between £80m and 
£12Qm a year so could only by 
bought by a handful of the 
largest contractors, said Mr 
Maurice Webb, industry direc- 
tor of the federation. 

The federation is pressing for 
them to be broken up into 
smaller units starting at £50m 
worth of contract value so the 
smaller contractors could bid. 
It fears that the present pro- 
posal would lead to the trans- 
port construction sector being 
d omina ted by a small number 
of very huge companies. 

“At present the number of 
companies which could bid 
would be limited to the top 10 
or 12 contractors," Mr Webb 
said. Most of these very large 
contractors are federation 
members but Mr Webb said it 
was acting for the smaller and 
medium-sized companies. 

The federation held a prelim- 
inary meeting with Mr Roger 
Freeman, transport minister, 
on Wednesday, toe day be was 
moved to the ministry of 
defence. It hopes for a further 
meeting with Ms successor, Mr 
John Watts. 

The department of transport 
said there were no plans to 
alter the present arrangements 
for privatising BR’s infrastruc- 
ture activities. The federation 
is also concerned at the gov- 
ernment's plan to split m a int e- 
nance work from track renewal 
contracts when it privatises 
the infrastructure companies. 
It wants bidders to be allowed 
to buy companies which carry 
out both maintenance and 
track renewal. 


V 


reutersiooo 

24 bourn a day-o rtySIO g a rnonW 
nyporCOM mb*#* 


NEWS: UK 


in the previous year. Invest- 
ments by German companies 
slipped from 51 to 45, while 
Japanese projects rose from. 21 
to 30. 

Meanwhile, the UK’s Central 
Statistical Office said yester- 
day that British exports to 
countries outride the European 
Union rose to record levels in 
the second quarter of this year. 

The total value of exports to 
non-EU countries between 
April and June was a season- 
ally adjusted £15-57bn, a rise of 
L5 per cent compared the pre- 
vious three months, and 10 per 
cent compared to the same 
period a year ago. On a 
m onthly basis, exports rose to 
£527bn in June, from £5.09bn 
in the May. 

Exports to North America 
grew at the fastest rate of the 
sectors in the last quarter, ris- 
ing 6.5 per cent, compared to 
toe first quarter, and 15 per 
cent compared, to the second 
quarter of 1993. 

Exports to toe world's other 
leading industrialised coun- 
tries in the Organisation for 
Economic Co-operation and 
Development grew by 6 per 
cent in the three months to 
June, quarter on quarter. 

• UK car production this year 
is likely to reach a 21-year high 
if export trends indicated by 
industry statistics yesterday 
are sustained. 

Production for export in 
June, at 48,213, jumped by 
more than 20 par cent for toe 
second month in succession, 
strengthening the industry's 
hopes that Continental 
Europe’s car market recovery 
is accelerating after one of its 
sharpest recessions an record. 

With record sales being fore- 
cast for August, toe export per- 
formance helped lift total car 
output in June by 7.7 per cent, 
to 145,078, compared with the 
gamp month a year 


S Africa 
back at 
the crease 

South Africa returned to the 
home of cricket yesterday for 
their first Test mafoh s paine* 
England for 29 years, Jim 
Kelly writes. 

A capacity crowd at Lord’s 
cricket ground fa north Lon- 
don gave Gary Kirsten and 
Andrew Hudson a standing 
ovation as they walked out to 
begin an historic iunfapf 
Tire last time the two coun- 
tries met at Lord’s Neil Arm- 
strong’s walk on the moon was 
still four years away. A ticket 
cost 75p - compared with £33 
yesterday. The first four days 
of this match have been sold 
out for several mouths. 

South African President Nel- 
son Mandela was not able to 
witness the end of the last 
chapter fa his country's sport- 
ing isolation due to Ms recent 
cataract operation, but was 
represented by his deputy, 
Thabo Mbeki. 

But the homecoming was 
not as successful as the South 
Africans would have liked, 
struggling to 76 for two at 
lunch. They finished the day 
at 244 for six - with captain 
Kepler Wessels making 105 
only to faD shortly before the 
close, brilliantly caught by 
tumbling wicketkeeper Steve 
Rhodes off the bowling of Dar- 
ren Gough, who finished the 
day with three for 43. 



Water tests find 
just 1% fails to 
meet standards 


_ ■ » 

Sonto Africans Gary Kirsten, left, and Andrew Hudson make history at Lord’s cricket ground in 
London as they walk out to open toe batting in the first Test match a gainct En gland for 29 years 


By David Lascefles, 

Resources Editor 

Tap water in England and 
Wales is good and getting even 
j better, according to the govern- 
meat inspector. 

Mr Michael Rouse, who 
heads the Drinking Water 
Inspectorate, said that 3.5m 
quality tests last year found 
sub-standard water in only 1.1 
per cent of cases. Each of these 
was later investigated but none 
was found to pose a danger to 
the health of consumers. 

Mr Rouse criticised the 
media for putting about “ill- 
founded scare stories" on 
water pollution. This resulted 
in people who could ill-afford it 
buying expensive bottled water 
whose quality was not moni- 
tored as closely as tap water, 
he said. 

Mr Robert Atkins, the envi- 
ronment minister, has sent a 
copy of the report to Mr loan- 
nis Poleokrassas. the EU envi- 
ronment commissioner in 
Brussels. He said yesterday 
that the UK was the only EU 
member state which produced 
an independently audited 
report on drinking water qual- 
ity. and he urged Mr PaJeokras- 
sas to encourage other mem- 


ber states to do the same. 

Mr Rouse's report comes at a 
time when water companies 
are defending themselves 
against criticism of fast-rising 
charges. Next week, Ofwat, the 
water industry's economic reg- 
ulator. is due to announce new 
ten year price controls which 
arc expected to impose tougher 
limits on future increases. 

The water companies wore 
quick to seicc yesterday's 
report as evidence that their 
investment in quality is paying 
off. Janet Longdon, director of 
the Water Services Associa- 
tion. said: "The quality of 
water is at an nil ■time high. At 
26p per day for the average 
household, the cost of top qual- 
ity water is excellent value for 
money." However she said that 
Ofwat could not iiapuse price 
controls which prevented the 
water companies meeting their 
obligations to provide high 
quality water. 

Enforcement action was 
taken against water companies 
over breaches of regulations in 
213 cases, but there were no 
prosecutions. The decision 
whether to take a case to court 
rests not with the Inspectorate 
but with the Environment Sec- 
retary. 


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FINANCIAL TIMES FRIDAY JULY 22 1994 


NEWS: UK 


‘Time for Britain to talk a new language of social justice,’ says Labour party leader 

Blair pledges 
to build on 


Smith’s legacy 


By Kevin Brown 
Political Correspondent 


Mr Tony Blair accepted the 
Labour leadership with a pow- 
erful speech setting out his 
vision for the party and his 
confidence that it can return to 
government at the next gen- 
eral election after nearly two 
decades out of office. 

With bus voice audibly 
strained by the emotion of the 
occasion, Mr Blair said John 
Smith had shown the British 
people that public service was 
“stfll an ideal that can breath 
hope into a politics grown 
weary and cynical " 

Urging the assembled del- 
gates to restore pride to the 
party, he said the leadership 
election was proof of the par- 
ty’s ability to change with the 
times. 

‘There was a time, wasn't 
there, when such an election 
would have been watched with 
trepidation by our Mends and 
glee by our enemies; now it is 
an advertisement for Labour." 
he said. 

Mr Blair paid tribute to Mrs 
Margaret Beckett, the interim 
leader, Mr John Prescott, the 
successful candidate for the 
deputy leadership, and Mr Nell 
Kixmock, the former leader, 


who had made Labour “electa- 
ble once more.” 

Mr Blair attacked the gov- 
ernment for tailing to correct 
the “mistakes” of is years in 

government, and urged Mr 
John Major to call an early 
general election. 

But he also promised to root 
out complacency in the Labour 
parly in a crusade to win the 
nation's trust for a "mission of 
national renewal." 

He promised help for all 
those who could not help them- 
selves, and promised to create 
a country with no corner 
“where we shield our eyes in 
shame and look away because 
we dare not contemplate what 
we see." 

Mr Blair said it was “time to 
talk a new language of social 
justice, of what is just and 
unjust, fair and unfiair, right 
and wrong. 

Some Tory backbenchers 
admitted yesterday that Mr 
Blair would pose a s ubstantial 
new threat to them. “He is an 
effective communicator whom 
we will have to watch very 
carefully," said one. 

Demonstrating this in a pow- 
erful passage. Mr Blair con- 
trasted unemployment, home- 
lessness. the growth in 
government by quangos, crime. 



Tony Blair finds himself in the camera's eye after the announcement that he had won the election 
to become leader of the Labour party with less than three years to the next general election 


drugs and poverty with soaring 
executive salaries. 

But he warned that Britain 
had to come to terms with 
change in technology and work 
patterns, which affected the 
whole country, not jnst the 
poor and unemployed. 

The party could provide 
opportunity and security in 
this world of change, but only 
by taking its historic principle 
of solidarity and comm- 


unity and applying it afresh 

“It cannot be done by a 
return to the past, or staying 
with the failed policies of the 
present It will not be done 
either by seeing society as 
state control, central power or 
sectional interests." be said. 

This would TTiwan re ptaring 

the choice between the crude 
free market and the command 
economy with a partnership 
between government and 


industry; creating a modern 
welfare system for a nation at 
work Farther than cm benefit; 
returning power to local gov- 
ernment; and embracing the 
European Union as committed 
Europeans. 

“The challenge of the Labour 
party is not just to govern but 
to inspire, not just to show 
how politics matters to us. but 
what it do for them," he 
said 


Reshuffle exposes differences on Europe 


By James Bfitz and Roland Rudd 


Left-of centre Tory MPs were yesterday 
quick to criticise the appointment of Mr 
Michael Portillo as employment secre- 
tary, arguing that the job would give 
him a strong platform from which to 
pursue his right-wing agenda. 

As MPs digested the full details of the 
prime minister's changes. pro-European 
backbenchers privately expressed anxi- 
ety that Mr John Major had decided to 
give Mr Portillo one of the three key 
economic portfolios in the cabinet 

As one prominent rank-and-file MP 
put it “The prime minister would have 
been better advised to have given Mich- 


ael a department outside the key eco- 
nomic area." 

But another Tory left-winger feared 
that there would be so little for Mr 
Portillo to do at Employment - a 
department whose future had been 
regarded by some as under threat - 
that be would have more time to pursue 
his right-wing agenda. 

However, right-wing MPs were 
equally vehement about the appoint- 
ment of Mr Jeremy Hanley, a pro-Euro- 
pean with liberal views, as party chair- 
man. 

Mr Hanley was criticised by right- 
wingers for being “soft" on public 
spending and nuclear disarmament, 


and for having less intelligence than 
some of his predecessors. 

“He may be very good at raising 
morale at rubber chicken Tory din- 
ners," said one right-wing conservative 
MP. “But he does not have the sharp 
brain that is needed for national TV 
appearances." 

The anti-federalist European Founda- 
tion - run by Mr Bill Cash, the Euro- 
sceptic MP - was also critical of some 
of Mr Hanley's more pro-European 
views. “We will be asking Mr Hanle y 
whether he will reflect the sceptical 
party line over Europe" said one Euro- 
pean sceptic. 

Despite the mutual recriminations 


over Mr Portillo and Mr Hanley, other 
cabinet ministers were wimmg to terms 
with their new departments. 

Mrs flfllian Shephard, the new Educa- 
tion secretary, initiated a rapproche- 
ment with teaching unions following 
two years of strained relations under 
Mr John Patten, her predecessor. 

Officials were reported to be tele- 
phoning a wide variety of teaching 
organisations, incl uding the National 
Association of Head Teachers, to 
arrange meetings over the summer. Mrs 
Sheppard was already laying the 
ground-work for a speech to be made to 
the Professional Association of Teach- 
ers conference. 


Britain in brief 



Ministers to 
divest from 
Lloyd’s 


Ministers will have to divest 
themselves of direct 
inv es tme n t in Lloyd's 
Insurance market under new 
rules announced yesterday. 

Prom next year ministers 
who are underwriting 
members of Lloyd's will have 
to arrange thedr syndicate 
participation solely through a 
Members Agent Pooling 
Arrangement- equivalent to a 
unit trust. 

The revised government 
procedures were disclosed by 
Mr John Major in a written 
answer to Mr Jacques Arnold, 
Con s erv ati ve MP for 
Gravesham. It comes in the 
wake of criticism of Tory MPs 
involvement in Lloyds. 

The cross-party co mmittee 
on MPs’ interests recently 
issued a strong rebuke to 11 
Conservative MPs, including 
former prime minister Sir 
Edward Heath, for failing to 
declare fan details of their 
involvement in the Lloyd's. 

Government officials believe 
the new procedures win have 
the effect of reducing 
ministers' exposure to over or 
under performance by any one 
syndicate. 

This is because a MAPA 
must consist of at least 30 
syndicates and have no more 
than 7.5 per cent of its total 
capacity on any one syndicate. 
Although MAPA members will 
still be subject to unlimited 
liability, officials say 
ministers are less likely to 
face huge losses and will no 
longer be direefly i n volved in 
Lloyd's investment 

Under the old rules 
ministers wnW Kmypfn d their 
underwriting selectively. 

The prime minister, 
chancellor of the exchequer. 


Meanwhile, a top-level 
Commons inquiry which could 
lead to far-reaching changes in 
the rules governing MPs’ 
outside interests got under 
way at Westminster yesterday 
as MPs packed their bags for 
the summer recess. 

The powerful Committee of 
Privileges met privately for 
about an hour in a discreet 
House of Commons 
committee-room. 

The meeting came less than 
24 hours after Labour 
backbenchers failed in an 
attempt to ensure that the 
inquiry into the so-called 
“cash for questions" affair was 
conducted solely by MPs with 
no outside business interests. 


expectations of strong growth 
in the developing countries, 
led by China. Europe's 
economic outlook has also 
improved, reflecting stronger 
than anticipated exports and 
business confidence so for this 
year. 

The company expects UK 
growth will accelerate to 3.1 
per rent next year from a 
forecast 2JS per cent is 1894. 
Britain's recovery Is then 
expected to lose momentum 
with growth slipping to 2.7 per 
cent In 1996 and 2£ per cent 
In 1997. By contrast Oxford 
Economic Forecasting predicts 
world growth of -L2 per cent in 
1996 and 4 per cent in 1997. 


r ; * . 

« • V. 


il!\ 


! ? : i 


'I*' 


k 


B&D set for 
restructuring 


Forces ‘will 
keep readiness’ 


Black & Decker is to create 180 
new permanent jobs at its 
Spennymoor, County Durham 
plant as a result of 
restructuring of its European 
power tools manufacturing and 
the launch of new products. 

ft is also to offer 120 
Spennymoor employees on 
nine-month a year contracts 
permanent foil-year jobs. 

Under the restructuring, 
announced early this year. 
Black & Decker is shutting its 
plant at iimburg, near 
Frankfort, which employs 480, 
and consolidating production 
of virtually all its consumer 

power tools for the European 
market at Spennymoor. 
Germany's high employment 
overheads were a key factor in 
the reorganisation, aimed at 
reducing product costs to 
compete against Far East 
competition. 

The new jobs will take 
employment at the company's 
Spennymoor operations to 
more than 2^)00. Most of the 
new ports will be offered to 
workers already at the plant 
an short term contracts, and to 
jobseekers on its lengthy 
waiting list. 


Mr Malcolm Rlflrind, Britain’s 
defence secretary, insisted 
yesterday that the cuts he 
announced last week would 

not affect the fighting strength 
of UK forces and that (hey 
would still be capable of 

mnimti-ng a campaign irimflan- 

to that in the EaUdanris war. 
Appearing before the 

parliamentary defence select 

committee, Mr Rifkind denied 
that the cuts put the Treasury 
first. He said that in addition 
to tiie £750m a year of cuts 
which would go to the 
Treasury in 1997, about £100m 
of extra savings had been 
identified which would go to 
the forces. 

Some £90m is to be spent on 
establishing a joint-service 
rapid reaction «nmmanii 

centre, which will coordinate 
activity between groups such 
as the parachute brigade and 
the Royal Marines, he said. 


Record for 
Potter picture 


Forecasts see 
quicker growth 


and secretary for trade and 
industry are not allowed to be 
underwriting members. 

The total losses suffered by 
Lloyd’s 30,000 or so traditional 
individual backers, known as 
names, have totalled £7iflm in 
tbe four years to 1991, the last 
year for which accounts are 
available. 


Oxford Economic Forecasting, 
an independent UK supplier of 
wwinmy; Rpalyuis, gi gaads the 
world economy will expand by 
more than 4 per cent this year, 
almost double last year's rate, 
with growth quickening to 
about 4.4 per cent in 1995. 

It said the forecast, which is 
Car more optimistic than the 
current consensus, reflects 


A Beatrix Patter picture 
yesterday fetched a world 
record £24,200 at auction in 
London. 

The pen and ink painting of 
The Guinea Pig Gardeners wag 
bought by American Justin 
Schiller who last month 
dominated a Potter 
memorabilia sale in Wiltshire, 
spending more than £300,000. 

Today he returned to Britain 
to buy the “guinea pig" 
picture for a price which 
London auctioneers Christie’s 
confirmed as a world record 
for a single Potter iDostratku 
at auction. It had been 
estimated to fetch up to 
£ 20 , 000 . 



If 

rainforests arc 
being destroyed 
the rate of thousands 
trees a minute, how can planting -tiS * 
just a handful of seedlings make a difference? 

A WWF - World Wide Fund For Nature tree 
nursery addresses some of the problems taring people 
that can force them to chop down trees. 

Where hunger or poverty is the underlying cause 
of deforestation, we can provide fruit trees. 

The villagers of Mugunga. Zaire, for example, eat 
papaya and mangoes from WWF trees. And rather than 
having to sell timber to buy other food, they can now 
sell the surplus fruit their nursery produces. 

Where trees are chopped down for firewood, 
WWF and the local people can protect them by planting 
fast-growing varieties to fomi a renewable foe! source. 

This is particularly valuable in the Impenetrable 
Forest. Uganda, where indigenous hardwoods take 
two hundred years to mature. The MarUamia fofw 
trees planted by WWF and local villages can be 
harvested within live or six years of planring. 

Where trees arc chopped down to be used for 
construction, as in Panama and Pakistan, we supply 
other species that arc fast-growing and easily replaced. 

These tree nu [series are just pan of the work we 
do with the people of (he tropical forests. 

WWF sponsors students from developing countries 
on an ageo forestry course at UPAZ University in 
Costa Rica, where WWF provides technical advice on 
growing vegetable and grain crops. 


Unless 
help is given, 
soil is exhausted 
very quickly by “slash 
and burn" farming methods. 
New tracts of tropical forest would then have 
to be cleared every two or three years. 

This unnecessary destruction can be prevented by 
combining modern techniques with traditional 
practices so that the same plot of land can be used to 
produce crops over and over again. 

In La Planada, Colombia, our experimental bum 
demonstrates how- these techniques can be used to 
grow a family’s food on a small four hectare plot. 
(Instead of clearing the usual ten hectares of forest.) 

WWF frcldworkere are now involved in over 100 
tropical forest projects in 45 countries around die world. 

The idea behind all of this work is that the use of 
natural resources should be sustainable. 

WWF is calling for the rate of deforestation in the 
tropics to be halved by 1995, and for there to be no 
net deforestation by the end of the century. 

Write to the Membership Officer at the address 
below to find out how you can help us ensure that 
this generation does not continue to steal nature's 
capital from the next. It could be with a donation, 
or, appropriately enough, a legacy. 


& 


WWF World Wide Fund For Nakre 

(foRBcrly Vrxid Wi UUfc Fmd) 


International Secretariat, 1196 Gland, Switzerland. 


FOR THE SAKE OF THE CHILDREN 

WE GAVE THEM A NURSERY. 



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FINANCIAL TIMES 


FRIDAY JULY 22 1994 


9 


MANAGEMENT 


i * 


■IT 

p Ni« 


The search for 
universal ethics 

Tim Dickson on the launch of a 
new set of business principles 


A n international ethics code 
- stressing the need for 
moral values in business 
uecision making - will be for. 
maliy launched in Switzerland 
this weekend. 

The Canx Round Table's seven- 
pmnt Principles for Business con- 
tarns nothing which will surprise 
enlightened companies. However, 
rt is thought to be the first time a 

of tbis has 

attracted influential supporters 
from Europe, Japan and the US. 

Signatories include Syuzaburo 
Kaku, chairman of Japan’s 
Canon, John Charlton, managing 
director of New York’s Chase 
Manhattan Bank, and a group of 
senior executives from the twin 
cities of Minneapolis /St Paul. 

The aim of the CRT initiative is 
to set "a world standard 
which business behaviour be 
measured”, a benchmark which 
will help more individual compa- 
nies devise their own codes. “We 
seek to begin a process that iden- 
tities shared values, reconciles 
differing values, and thereby 
develops a shared perspective on 
business behaviour acceptable to 
and honoured by all,” say tbe 
authors in their introduction. 

CRT, which meets annually in 
the Swiss village of Caux-snr- 
Montreux, was formed in 1986 by 
Frederik Philips, former Presi- 
dent of Philips of Eindhoven, 
Olivier Giscard DTLstaing, vice- 
chairman of the Insead business 
school at Fontainebleau, France, 
as an attempt to reduce then 
escalating trade tensions with 
Japan. The group is concerned 
with “the development of con- 
structive economic and social 
relationships between the partici- 
pants' countries and with their 
joint responsibilities towards the 
rest of the world”. 

The Principles are said to be 
drawn from two ethical tradi- 
tions: the Japanese philosophy of 
kyosd described by Canon’s Kaku 
as “living and working together 
| for the common good of m ankind " 
and “human dignity” which 
refers to the sacredness or value 
of each person as an end, not sim- 
ply as a means to the fulfilment of 
others’ purposes or even majority 
prescription. 

“What we didn’t know at the 
beginning," explains Neville Coo- 


per, chairman of the Top Manage- 
ment Partnership, a former execu- 
tive director ofSTCanda founder 
of the UK’s institute of Busing 
Ethics, “was whether we could 
reconcile the three different 
approaches. The Americans te"* 
to emphasise company rather 
than state responsibility for com- 
munity affairs, tbe Japanese p ixy 
more importance on the Imx 
rather than on the individual, 
while in Europe there is a strong 
tradition of individual rights”. 

The CRT document, which owes 
a debt to The Minnesota Princi- 
ples, a statement of business 
behaviour developed by the Min- j 
nesota Centre for corporate 1 
responsibility, comprises seven 
general principles and a number 
of “stakeholder" principles. 

It affirms the responsibilities of 
business towards a range of stake- 
holders (for example, customers 
and employees as well as share- 
holders) and to tbe countries in 
which they operate. Suppliers and 
competitors should expect busi- 
nesses “to honour their obliga- 
tions in a spirit of honesty and 
fairness”. 

Business behaviour should be 
governed by a spirit of trust 
which goes beyond the letter of 
tiie law, while domestic and inter- 
national rules should be 
respected. Other principles 
require companies to promote 
“the progressive and judicious" 
liberalisation of trade, “to protect 
and, where possible, improve tbe 
environment” and to avoid illicit 
operations. 

Cooper believes the case for cor- 
porate ethics is much more widely 
accepted than it was seven years 
ago and reckons, for instance, 
that one in three leading UK com- 
panies now has its own code. 
“People say an ethics code can’t 
make you ethical but then it’s 
only a tool, just as a hammer 
doesn’t build you a house.” 

He insists that statements of 
practice are an important way to 
clear up ambiguities for the "ju- 
nior people” in an organisation. 

Copies of the Principles for Busi- 
ness can be obtained from Caux 
Round Table Secretariat, Amalias- 
traat 10, 2514JC The Hague. The 
Netherlands. Tek (070) 360-5260. 
Fax: (070) 361-7209. 



Waste not, want not: along the shores of Worthtagton Lakes, impressionable seven-year-olds we taught how to save water 

Lessons for 

water babies 

John Authers looks at a project which helps schools 

N orth West Water is tak- resisted the temptation to ram what it was doing without arous 
ing an extremely home its brand identity. Its logo is the ire which glossy commerci 
long-term approach to scarcely visible in its education cen- might have provoked, 
water conservation. tre. According to Allder. the com 


N orth West Water is tak- 
ing an extremely 
long-term approach to 
water conservation. 

It has set up its own folly-fledged 
“school” by the shores of Worthing- 
ton Lakes, a reservoir near Wigan, 
to which it invites children from 
local primary schools for day-long 
sessions in the importance of water 
and its conservation. 

The entire project is funded on a 
scale which few companies outside 
the utilities sector could dream. The 
Impressionable seven-year-olds who 
attend are unlik ely to waste water 
a gain 

The teacher, a water company 
employee, tells them how much 
water goes Into an average bath, 
and then to gasps from the pupils 
shows them this is 119 litres. They 
are even more astonished when she 
demonstrates that a shower will 
only use nine litres. 

This turns to amazement when 
they are told that if they are 
naughty about the way they brush 
their teeth and leave the tap run- 
ning, they could use up to 18 litres. 

In the long term, these lessons, 
repeated to a different school in the 
area each day, should reduce the 
amount of water which is wasted in 
the north west 

While a public relations exercise 
to a large the company ha«- 


resisted the temptation to ram 
home its brand identity. Its logo is 
scarcely visible in its education cen- 
tre. 

Teachers’ responses are positive. 
Pupils have a day out and a valu- 
able learning experience tied to the 
national curriculum. As the 
expense is met by tbe company, it is 
an excellent deal for schools. 

North West Water has taken a 
lead, but all the water companies 
have launched big Investment pro- 
grammes since privatisation. They 
have gone far beyond the crudest 
educational links, which provide 
companies with good publicity in 
return for resources and now pro- 
vide schools with a package which 
teachers are happy to use. 

Severn Trent Water, which is 
opening a regional network of edu- 
cational centres similar to Worth- 
ington Lakes, admits that they are 
aimed primarily at solving its image 
problem. According to Derek Allder, 
who co-ordinated the programme: 
“Post-privatisation we weren’t the 
most popular of companies. We 
were seen as a virtual monopoly. 
The profitability of the company 
was denounced, while our infra- 
structure investment was ignored." 

It was therefore vital for a com- 
pany facing this kind of criticism to 
prove itself a good corporate citizen. 
It also needed a way to show people 


what it was doing without arousing 
the ire which glossy commercials 
might have provoked. 

According to Allder. the compa- 
ny's defence is that it would not feel 
able to bring schoolchildren (or 
adults at visitors’ centres) on to 
their sites unless they were confi- 
dent their business would with- 
stand scrutiny. As he put it, used 
car dealers are not likely to launch 
their own education programme. 

Sir Desmond Pitcher, chairman of 
North West Water, take*; a similar 
view: “Our business is so bound up 
with the day-to-day lives of our cus- 
tomers, that it is vital we are 
closely involved with the communi- 
ties which we serve. 

“The education programme 
allows us to communicate directly 
to children and teachers. There is 
SO much miginffi r matirm about OUT 
industry that this rnwrniiiniratinn is 
the most effective way to open peo- 
ple’s eyes to the real issues and 
challenges we face.” 

The newly privatised water com- 
panies may each have monopoly 
status in their own areas. But their 
massive spending on educational 
and community programmes sug- 
gests that they do not feel able to 
abuse that status. In their education 
programmes, they seem to be pro- 
viding more direct help to state 
schools than any UK industry. 


Peter Aspden on a post-graduate 
course with a difference 

A philosophical 
approach 


I t is the glossy prospectus 
which first suggests that there 
Is something different going 
on here. Atmospheric 
photographs of droplets of water 
disturbing a calm surface, shafts 
of sunlight defining a clearing in 
a cave, hazy landscapes, verdant 
Springs; it conld be a campaign 
leaflet from the Green party or 
the programme for a performance 
of Beethoven’s Pastoral 
Symphony, but surely not tbe 
outline for a new post-graduate 
management course. 

Yet Lancaster University's 
Master of Philosophy in Critical 
Management, launched in April, 
has a few more surprises up its 
anything-bnt-plnstriped sleeve. 
Tbe l-i students on tbe present 
programme were greeted with a 
two-week introductory comae on 
epistemology and tbe problems of 
philosophy, about as far as yon 
can get from the vocational 
emphasis of most management 
degrees. 

Slowly, throughout the 
three-year, part-time course, they 
will be introduced to a variety of 
ethical, cultural and even 
religious discussions which more 
frequently lurk In tbe corners of 
university philosophy 
departments, often destined to 
fade into abstraction and 
irrelevance. 

For Jonathan Gosling; 
codirector of the programme, 
these issues are too important to 
be left to such a fete. “We were 
prompted by tbe conclusion that 
at the very heart of management 
Ue all kinds of philosophical and 
ethical questions. And we are 
catering for a demand that is 
already there - out of every MBA 
class of 25, for example, there are 
always two or three who want to 
question what rationality is, and 
how reasonable it is to assume so 
much about it 
It is tiie “critical” in tbe 
programme's tide that best 
defines its aims. Julia Davies, the 
other codirector, says the course 
aims to go beyond the “flavour of 
the month" feeling about much 
management education. 

“A lot of management rhetoric 
uses an almost religions language 
to dress up what is in effect 
materialistic. The ‘market’ often 


takes tbe place of God, and by 
calling people 'customers’, they 
not only feel ‘empowered’, but 
they are made to think they are 
doing some kind of good. We aim 
to be critical or such rhetoric, and 
determine to what extent it rests 
on illusions.” 

Gosling denies suggestions that 
the course constitutes an 
ideological critique of 
management - “we are not out to 
destroy anything, we believe good 
management is critically 
important (o society” - but there 

is a hostility in the department to 
the ’guruficatlon’ which has 
continued to dominate the 
subject's literature. 

Robert Cbia. a lecturer in the 
Management School, says 
fashionable concepts such as 
Total Quality Management or 
zero-based budgeting emerged 
from radical approaches to 
problem-solring. “But people get 
hooked on tbe system instead of 
the style of thinking behind it" 
He thinks nothing of peppering 
his lectures with philosophers 
such as Jacques Derrida or 
Roland Barthes, balanced with 
anecdotal examples from the 
business world. “It strikes a 
chord - we manage to cut 
through the crap of academic 
pretentiousness. What I try to 
show is that abstract ideas are 
artnally not all that abstract" 

Gosling, in the meantime, is 
confident of the future of courses 
such as the Lancaster M Phil. “It 
attracts the kind of person who 
may already have an MBA. but 
finds nothing to relate to in 
something like pore philosophy." 
Current students include the head 
of organisational development of 
the German health insurance 
company, AOK; a brand manager 
for Philip Morris in Japan: and 
the human resources director of 
Romania's economic development 
agency. 

Gosling also feels he and his 
colleagues have caught something 
of the Zeitgeist. “There is less 
security and more vulnerability 
around now, which the 
traditional MBA. with its 
assumption of ever-onward, 
ever-upward, does Uttle to cater 
for. We can provide a notion of 
mortality.” 



PEOPLE 


BUSINESSES FOR SALE 


asaasafr 


Ligon strides out 
for Levi Strauss 


Levi Strauss UK, the clothing 
manufacturer, has appointed 
its second female general man- 
ager. Janie Ligon will take 
over at the start of next month 
from her US compatriot Jann 
Westfall, who has done the job 
for four years and returns to 
headquarters in San Francisco. 

Ligon win be based at Levi's 
head office in Northampton, 
and will be responsible for all 
Us business in the UK and 
Ireland. 

With the company for 14 
years, her previous role was 
national sales manager (wom- 
enswear) for Levi Strauss 
North America, covering the 
US, Canada and Mexico. She 
has much deeply involved In 
moves to improve links 
between the manufacturer and 
its stockists, both in terms of 
staff and technology. Her aim 


Insurance moves 

■ J ulian Cusack, md of 
Wellington Underwriting 
Agencies, has been appointed 
to the board of WELLINGTON 
UNDERWRITING HOLDINGS. 
Andrew Hussey and Roger 
Sedgwick Rough, formerly 
directors of Murray Lawrence 
Members Agency, have been 
appointed directors of 
Wellington Members Agency. 

■ Rafael Miqueleiz and David 
Way have been appointed to 
the board of FENCHURCH 
Insurance Brokers. 

■ Stephen Gordon and 
Malcolm Nightingale have 
been appointed to the board, 
and Christopher Stevenson 
company secretary of 
RELIANCE NATIONAL 
INSURANCE Co (UK). 

■ Margo Black has been 
appointed a divisional director 
of E.W. PAYNE'S overseas 
division; she moves from 
Munich Re. 

■ Andy Dyble, group finance 
director for Skandia Life 
Assurance (Holdings). Skandia 
Life and Professional Life, has 
been appointed to the board of 
SKANDIA LIFE ASSURANCE 
(HOLDINGS). 

■ Kevin Dean has been 
appointed a director of CMl's 
Isle of Man operation. 

■ Eric Galbraith, formerly a 
director of Bowring. Marsh & 
McLe nnan, has been appointed 
md of ROYAL BANK 
Insurance Consultants on the 
retirement later this year of 
Norman Paterson. 


was to manage and coordinate 
better the whole cycle from the 
manufacture through to the 
sale of garments so as to max- 
imise retail sales. 

Levi Strauss hopes she can 
bring that expertise to its UK 
and Irish operations. 

Ligon has also worked hard 
on expanding electronic data 
interchange (EDI), or the 
exchange of sales data between 
the manufacturer and its retail 
outlets - seen as being an 
important trend in retailing for 
the 1990s. 

She was previously director 
of operations in the US, and, 
from 1986 to 1991, merchandis- 
ing manager for women’s jeans 
worldwide, having held a num- 
ber of posts in prec edin g years. 
Before joining Levi Strauss she 
was business planning man- 
ager at Del Monte, and a man- 


agement consultant with 
McKinsey in Chicago. She hag 
an MBA from Northwestern 
University in the US. 

Ligon will be hoping to build 
on the success of her predeces- 
sor, Jann Westfall, who has 
achieved an increase in sales 
in each of the past four years 
in a difficult jeans market, and 
has done much to build up 
Levi’s brand image with the 
help of a high-profile, Europe- 
wide yfli' tiohig c&mp&i^n. 



Lord Young, executive 
chairman of Cable & Wireless 
and a former Trade and Indus- 
try Secretary, is to become 
president or tiie National Fed- 
eration of Enterprise Agencies. 

The organisation speaks on 
behalf of 130 enterprise agen- 
cies throughout England 
which provide business ser- 
vices to small and medium 
sized enterprises. 

The agencies are coming 
under some budgetary pres- 
sure as funds supporting their 


support services are being 
diverted into tbe Single Regen- 
eration Budget which the gov- 
ernment hopes will improve 
the coherence of its inner-dty 
regeneration policies. 

Michael Heseltine, a succes- 
sor of Lord Young at the DTL 
is keen for the Enterprise 
Agencies to integrate with 

Training and Enterprise Agen- 
cies and Chambers of Com- 
merce into the government’s 
one-stop-shop Business Link 
network. 


Non-executive 

directors 

■ Tony Coleby. retired 
director of the Bank of 
England, and Peter Gammer, 
chairman of Sbandwick, at 
HALIFAX BUILDING 
SOCIETY. 

■ Tony Frendo. a former 
director of Argyll Group, and 
Stuart Hollander, a former md 
of Aquascotum Group, at 
STAFFORDSHIRE 
TABLEWARE. 

■ Chris Ingrams, chairman 
and chief executive of CIA 
Group, and Lard Lane of 
HorseU, retired senior partner 
of B DO Bin der Hamlyn, at 
CHRISTIE GROUP. 

■ Baroness O’Cathain has 
resigned from SEARS. 

■ Liam Kane, chief executive 
of Caledonian Publishing, at 
the SCOTTISH NATIONAL 
TRUST. 

■ Anthony Westropp, 
chairman of the Britton Group, 
and Stuart Henderson, 
phatrfnnn of SLD Holdings, at 
MARLING INDUSTRIES; Mark 
Sketchley has retired. 

■ Sr Peter Carey has retired 
from CABLE AND WIRELESS. 

■ Martin Duffy has resigned 

from CRP LEISURE. 

■ John Renyt has resigned 
from GOVETT ORIENTAL 
INVESTMENT TRUST. 

■ Dieter Hermann has 
resigned from MELVILLE 
GROUP. 

■ Marvin Jaffa, former 
pres i dent of the R.W. Johnson 
Pharmaceutical Rese arch 
Institute, at CHIROSCIENCE 
GROUP. 

■ David Carruthers, a director 
erf T&N. at RUBICON GROUP. 

■ Godfrey Whitehead, framer 
senior partner erf Coopers & 
Lybrand, South Coast at 
PEGASUS AIRWAVE. 

■ Anil Puri, former md of 
Lithopak and J.S. Duxbury, at 
parent MELTON MEDES. 

■ Jim Park (below), former md 
of ICI Films, at ALTRO 
GROUP and at BORTHWICKS, 
from where Dennis Carey has 
retired. 



Tin JoMAdmWWahw Racetan ftraty R Hods and Dadd R Wlfcn oter tar sd& he button and assets 
at this weS-Knwm photography and (and suveying ftrni located fri Banmfl. near HJncfetey. LfiieasfMsfttre. 

Principal tortures of Dm business Include; 

• leasehold premises In Bawefl Bid Mltehom. Surrey composing office and laboratory occommodaSon 

• eefcMsftBd contract customer 

• annual turnover oppcmfrnataly £3 mffllon 

• 4 camera carrying aJraaB. 

For tuiftw delate, please contort the JoW Adminhtailtve Rnriw. Dodd R WMun or Graham Wottofl rt 
Coopers* Lytxand, 43 Temple Raw. Birmingham. Telephone; (021) 200 4000. Fax: (021) 200 4040. 
Or. at the company, telephone: (0455) 841540. tax; (0455) 841785. 

Caeacn n Lytrcnd a xAorinl by ihr lassse at Chartered AcceereaBU m Engtord aad Wda m cany on lavnanem Balm. 


i 


FORK LIFT TRUCK 
DISTRIBUTOR 

Suuih East Based company 
established in industry for many 
yenrs. Turnover £0.5 million (ram 
sales, serv ice and rental contracts, 
established workshops and very ! 
stronp eustwnewservice base. Good 
reputation in industry » iib strong 
management structure. Trading i 
profitably. 

Write to: Bov B32S7. Financial Tunes. 
Oor Southwark Bridge. London SE1 q HL 


FOR SALE 

Long established 
wholesaler of food and 
provisions. 

Turnover in excess of £lm. 
Freehold premises 
in London. 

Owners wish to retire. 

Please write to Box B3267. 
Financial Times, One Southwark 
Bridge, London SE1 OHL 


FINANCE OPPORTUNITY 
300 FLATS IN OSLO; NORWAY. ALL LET OUT. 

One of onr long established customers in Oslo is selling out this 
project because of resunctorfiog tbe ccunpany/group. This is a well 
maintained and completely rented-out complex of Oats with high 
profitability and low risk. Average sire of each fiat is 56 m2. Price 
suggestion NOK 80 MOL 

Coopers 

&Lybrand 

HavuelagereL 0151 OSLO, Norway. 


bleby & Shorland 


By Ortfci ol DJ*. Kiyc of Qwfertl A D. Bailey ol EnW & Yoon* 
kiaU^Uamri 
Batter OB (UKI Liar tod 

FOR SALE BUTTER (ML PROCESSING PLANT 

Stamd at Swtadoa. Wttsfaire 
Cmprtdagot 

CaaritMOB tom etera; nsttag «■; prewrtw* phR fasUlog tasks daring asks; 
hwl eat —grm h*t pt—pu aroifuqt | ii n i| i. wen dyer, befln: air co on»um., qc. eg. 
Foitterde&b from the Agents 


^SKSSTactTmi 0734-508611 


FOR SALE 

U.S.A.- HQ USTOK/DAILAS/FT. WORTH 

?0 -ytar cm consscy. v*"® ito a saoo l*aae jna pas rattrtnvn ags seats w art company 
WEU. ESTABLISHED • EXCELLENT CREDIT • EXCELLENT REMIT JtTtOH 
1000 Ngh «ollri buamo poduong atarm w . pus b amen nun tat of mute 
OMtapnM Lvd. il ■«« ntfitMuiy iam >n BWf 

FLOS; I Property iMpM Csrcany 
wn Erf Alto earn a tone sock <us s.'snoonoot 
MKRS/ARNTS ProuctM win a 10 % coommn 
Straus cownceijiAL nans mv fax <7131 


Appear in die Financial Times on Tuesdays, Fridays and Saturdays. 
For farther information or to advertise in this section please contact 
Kari Loyntoo on 071 873 4780 or Lesley Sumner on 071 873 3308 


FINANCIAL TIMES 

rmw i BicCiunt 


FOR SALE 

Distributor - Bathroom Products 

A unique opportunity to expand into South East England. 

Our dint Is weU csdHi&hcd (or many years covering SE England with c idling and 
first class products and tapotumt distritrorioa rights. Repeal huugeu a a significant 
pan of sales in excess of £600,000 pa. Sales increases and profits continued 
throughout Ibc recession, 

Due to impending retirement, the Directors wish to sdL The Chief Executive is 
willing to continue with ibe new owners lor up to a year to ensure a full professional 
handover. 

Priced bx £300,000 nett asset value this tepic a ent v a fine opportunity 10 acquire and 
fanher develop a well ta»wu and respected disn*aHK in SE EtigLiwl 
Please reply in writing ice 

David Cole Asaodales. 2 Cow Lane, Boshey. Watford. Herts WD2 3 EL 


PRIVATE 

COMPANY 

cJG2milHon turnover 
engaged in Manufacture and 
Contract Packaging of a 

range of products in the 

toiletries and household field. 
Located in Southern England 
with excellent workforce, 
facilities and premises. 
Highly profitable business. 
Retirement Sale. 

Principals only 

Write Box B3272, Knuriil Tines. 
One SoudiwaiL Bridge. Loodtn SE1 9HL 


LEGAL 

NOTICE 


ITO.nTCMI.EHP 

A Pram by Uothy CaNc pic. wtwac i* gim m | 

office AinaJk Place. Ediaboiib. for 

conJirauiMi of redaction oi >lutc p realms 
Account Ini Sees presented to ibc Coutl at 
Smioa. Ob Taniiiy. l*ib July 1094 ibc 
Vacalna Judge pmaoranl u mkr 

dw Pairka u> be Uiontcd ua ibc Walls Of 6001 
ami lo he advertised once in the Edinburgh 
Caucnc ml neb of ibc ^ Rouoal 

Hmca newspaper*. Tla: Order funher alhnrad rf 
parties chasing aa bans! lo tofec Aaswos a 
the PetUina. If mi advhed. aiiMa I J days after ■ 
Sadi iaiinatiDD and idvrriiscmeni. Tkii 
rfvaitaemrm is made in pnmianac of that onto 

■ad any Absumi in the Peum dwahl be todnd 

within 14 day* hereafter. 

Ihadw * Wfeoo. CS. Sahkt Court. 

3) Calk Tones, Eifalnugh. 

SoliciKn Tor ihe Pdltunrre. 


APPOINTMENTS 

SALES ASSOCIATE 

Leading ImemMtaaa! investment finn requires a saks associate in increase sties <rf 
U.S. Government Bad and U-5. Mortgage products to doe lop rdatianshfak 

trth potential clients m Eastern Europe and assoc, client needs for present and future 
R>ed Income aud aha capfail markets products. Applicants, aged 25-30 and educated 
10 MBA level should have 2-3 yestf relevant work experience preferably gained m gw 
U5. and Eastern Europe, extensive knowledge ol U.S. mortgage and Umncial 
products worldwide, contacts in the Uk. and Eastern Europe, strong annlwticnL 
communication and imcipersotial skills. Salary circa £34.000 (base}. 

««» write in nrktat mtfdam. endtamgJunaariculamHau.10 

BaiA2H9. FaaaaaniBus, One Saelhtfmk Bridge, LomtoaSEI 9BL 






10 


FINANCIAL TIMES FRIDAY JULY 22 1994 


TECHNOLOGY 



Step into the store 
of the future. Just 
inside the doorway 
is a kiosk contain- 
ing an interactive 
computer terminal 
that will become 
your personal guide to the store, 
showing you what is on offer, giv- 
ing information on products in 
attractive audio-visual displays, and 
eventually taking your order, and 
payment. 

Multimedia, the combination of 
sound, moving and still pictures, 
graphics and text on a computer 
screen, has long been seen as one of 
the most exciting new technologies 
for retailers. It is potentially a pow- 
erful tool for communicating with 
customers and improving service 
and sales. 

Unlike many technological 
changes in re tailing which have 
occurred behind the scenes, multi- 
media is a highly visible way of 
using technology to enhance the 
customer’s shopping experience. 

Until now, the reality has lagged 
behind the vision. Retailers have 
been cautious about exploring the 
possibilities of multimedia, regard- 
ing it as a solution waiting for a 
problem. 

However, Don Jackson, a consul- 
tant specialising in multimedia with 
ICL Retail Systems in the UK, says 
following demonstrations of multi- 
media given by ICL earlier this 
year, 48 retailers from several coun- 
tries have expressed interest 
“At last the technology has 
caught up with the hype," he says. 
“Retailers are recognising and 
accepting the benefits. We could see 
gignifieflrit movement next year.” 

He adds that the progression from 
electronic points of sale, the biggest 
retail innovation of the 1980s. to 
electronic points of service, is a log- 

The most important 
benefit of multimedia 
is likely to be to 
enable retailers to 
carry wider ranges 

ical and natural one. 

Crude forms of multimedia have 
been around since the early 1980s, 
when computers linked to laser 
discs began to be used in shops to 
provide visual displays. 

What makes modern multimedia 
systems more attractive to retailers 
is the ability to integrate them intn 
their logistics and distribution 
systems, and to makp them interac- 
tive. That gives customers the 
opportunity to control information 
displayed on the screen rather than 
watching a pre-recorded sequence. 

The in-store kiosk assists custom- 
ers in selecting their purchases and 
eliminates problems caused by store 
assistants having inadequate know- 


Neil Buckley concludes a series on electronic retailing 
by looking at multimedia’s unstoppable rise 

Reality catches 
up with vision 


ledge of products, by offering cus- 
tomers far more information than 
could be retained in the head of 
shop staff- 

Moreover, by including a video 

camera in the terminal, the screen 
could display an image of what a 
particular garment, for example, 
would look like on a customer, and 
show the garment in a range of 
colours or sizes. The system could 
also be programmed to suggest 
alternatives if an item was out of 
stock, or additional purchases 
linkpd to the TnaiTi purchase. 

A more advanced version of the 
multimedia kiosk would a 

credit card reader to allow custom- 
ers to pay for goods and a link com- 
municating the order to the stock- 
room, and if necessary triggering 
re-order of items from the manufac- 
turer. 

It might also record the custom- 
er’s choice, as well as the alterna- 
tives considered by the customer 
and the length of time spent looking 
at different parts of the catalogue, 
to allow the retailer to build up a 
profile of the shopper’s preferences. 
This could be linked to a loyalty 
scheme, whereby regular shoppers 
would receive “smart” cards which 
they would insert into the multime- 
dia kiosk, allowing the system to 
“recognise” them, greet them and 
offer discounts or inform them of 
special offers. 

The development of multimedia 
kiosks opens up other possibilities. 
They could, for example, be placed 
in shop windows or outside stores, 
to allow customers to lords through 
the catalogue and even place orders 
outside shop opening hours. Kiosks 
could be removed from the store 
altogether, and placed in areas of 
high customer traffic such as air- 
ports. railway stations or even 
office reception areas. 

From there, it would only be a 
short leap to customers being able 
to access the systems from their 
homes, once sophisticated digital 
communications networks are 
developed. “There are retailers who 
look on current multimedia systems 
as a stepping stone to proper, inter- 
active home shopping systems,” 
says Jackson. 

In addition to allowing stores to 


j THOUGHT we LEFT HVM 
k G3WPOTER £AM£ BUT HE SE0W 
TO SPENT €12/000 



r 


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MM 


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provide better service, and under- 
stand their customers better, the 
most important benefit of multime- 
dia is likely to be to enable retailers 
to carry much wider ranges. 

As customers grow accustomed to 
using multimedia, retailers might 
be able to reduce and eventually 
abandon display items altogether, 
storing products in a stockroom 
with customers picking up their 
orders from service points. That 
would allow greater ranges to be 
sold from the same, or less, floor- 
space. 

For the moment, examples of mul- 
timedia being used in retailing 
remain isolated. 

Woolworths in the UK has experi- 
mented with a system called MV+ 


offering a 15,000-item catalogue of 
home enter tainmen t products anri 
giving the customer the chance of 
browsing and listening to or view- 
ing clips before purchasing them. 

Ford is one or several car manu- 
facturers introducing interactive 
terminals into showrooms to allow 
customers to see their chosen car in 
the colour and with the specifica- 
tions they want 

Comsys of Belgium has developed 
a system already being used by 
some Belgian hairdressers to enable 
customers to choose a hairstyle 
from a database of 4,000 styles and 
see an Impression of how it would 
look on thgm. in Denmark, estate 
agents are using m ultimedia kiosks 
to present information about prop- 


erties on the market 

At London’s Heathrow Airport. 
Galleria 21 has installed 24 multime- 
dia kiosks for duty-free shopping 
designed by the John Herbert Part- 
nership. and using multimedia tech- 
nology developed by AT&T. 

One of the most advanced test 
programmes so for has been by 
Argos, the UK catalogue retailer. It 
Introduced eight multimedia termi- 
nals into stores last autnron, and is 
insfa»nhig another 12 this summer. 

Argos’ catalogue-based format 
itself naturally to multimedia, 
and the system, known as Impact 
(Interactive Multimedia Project - 
Argos Customer Terminal) offers 
both an electronic version of the 
catalogue and payment facilities. 

Geoff Robinson, director of infor- 
mation systems, told a retailing 
rpnfpr»»n<y earlier Hits year that the 
project had been a success, produc- 
ing positive reactions from custom- 
ers and staff, and achieving signifi- 
cant sales Increases. 

However, he added, usage rates 
by customers were only half the 
rate hoped for as It was often 
quicker to go through standard tills 
if the queue was short, the termi- 
nals were not promoted heavily 
e pnng h or put in sufficiently promi- 
nent positions in the store, and the 
software was sometimes too slow 
and not pirating enough. 

Argos says it has tried to rectify 
these problems with its second gen- 
eration of terminals, but its experi- 
ence demonstrates the complexities 
of getting the most from retail mul- 
timedia systems. 

Multimedia is also likely to be 
more beneficial in some areas of 
retailing than in others. Those with 
most to gain are likely to be fashion 
stores and health and beauty 
chains, high street hanks and sell- 
ers of complex and expensive items 
such as electrical and electronic 
goods retailers, and travel agents. 
The technology is expected to make 
less of an impact in grocery retail- 
ing. although it could be used for 
menu and recipe suggestions and to 
guide customers around stares. 

Julia Schofield, of Julia Schofield 
Consultants, an IT specialist which 
has formed a partnership with ICL 
to develop multimedia for retailers, 
says getting multimedia systems 
right requires strong software 
design and systems Integration 
skills. “These must be focused on 
clearly defined and achievable 
goals, so that the return can be 
measured,” shp adds 

Retailers most have a very clear 
idea of what they want multimedia 
technology to do for them, she says, 
and make sure their system 
achieves that But the technology 
already exists to enhance both the 
ease and excitement of shopping, 
and is waiting for retailers to use it 

Previous articles have appeared on 
June 9. 16 and 23. July 1. 8 and 15- 


Worth Watching -Vanessa Houlder 



Giving a voice to 
car navigation 

The strains of map-reading while 
driving thr ough an nrvfamiHar 
city could be eased when 
Amerigon, a Californian 
company, introduces a 
voice-operated car navigation 
system later this year. 

Its AndioNav system, which 
connects to a car’s compact disc 
player, will provide recorded 
voice directions in response to the 
driver’s spoken commands, which 
are transmitted throngb a 
microphone clipped to the driver’s 
son visor. 

The system, which uses digital 
map data converted to an audio 
compact disc format, is able to 
Identify the origin of the trip, its 
destination and the fastest route. 
It uses map data, produced by 
Etak. a Californian subsidiary of 
News Corporation; which covers 
the US and metropolitan areas hi 
Europe and Japan. 

Amerigon: US 8189321200 


Worm’s eye view 
of pollution 

Ea r thw o rms are being used to 
detect the long-term effects of 
environmental pollution. 

Scientists from the UK’s 
Natural Environment Research 
Council believe information from 
earthworm cells provides a 
simple, effective technique to 
assess the presence of heavy 
metals, dioxins and other 
potentially harmful chemicals. 

Body fluid cells are taken from 
earthworms In contaminated 
areas. The cells are then exposed 
to a dye that is absorbed by the 
cells’ lysosomes. If the earthworm 
has been exposed to pollutants, 
the dye Is released rapidly; in 
normal earthworms, tire dye is 
released slowly. 

This type of “biomarker” 
technique is useful in cases where 
traditional chemical analysis 
cannot provide a comprehensive 
or accurate enough assessment of 


the long-term effects of a cocktail 
of contaminants, particularly hi 
seas, lakes and rivers. 

The earthworm work is one of 
the first applications of 
biomarker techniques on land. It 
has helped in the assessment of 
the environmental impacts of 
waste products horn gold mining 
in Africa. 

Natural Environment Research 
Council: UK. 0793 411551 

Turned on to 
description IV 

UK broadcasters are launching a 
trial of a system which will make 
tetevisicm programmes more 
accessible to people with sight 
problems. 

Over the next four months, a 
number of programmes on ITV 
and the BBC will be broadcast 
with a data signal carrying an 
audio commentary describing 
what happens in the programme 
during gaps in the dialogue. 

The Audetel system uses set-top 
receivers which transmit the 
commentary through headphones 
or a loudspeaker. 

The system was primarily 

developed to give people with 
sight problems greater access to 
television but it is also intended 
to appeal to other viewers who 
want to follow a programme 
while doing something else. 

The system has been developed 
by a consortium Including the 
Age & Cognitive Research Centre 
at Manchester University, BBC, 
ITC, ITV Association, Motorola 
and the Royal National fasti tnf» 
for the Blind. 

BBC: UK, 081 576 1619 


Purer products for 
haemophiliacs 

Bio Products Laboratory* part of 
the National Blood Service, has 
launched a highly purified blood 
product for the treatment of 
haemophilia. 

Replenine is a concentrated 
form of purified Factor IX. the 
dotting agent needed by people 
with haemophilia B to prevent 
bleeding. The Factor IX in 
Replenine is 10,000 times purer 
thaw in the original plasma from 
which it is manufactured- 

The purification is based on 
metal chelate chromatography, a 
process that uses copper to 
capture Factor IX from the 
plasma, while minimising damage 
to the protein. 

Bio Products Laboratory: UK. 081 
9051818 



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OBITUARY 


CROOK. THE REV‘D CANON Dr dote 
Mtctiaal Donovan Creak PRCS. on 5L 
Peter'S Day, touted by the Hites of the 
Churth, and tasted fet SL Pairs Ctthedraf 
Churchyard, Island of St. Hslana the 
following day. FHCS 1956; sometime 
Senior UedlcaJ Officer. North Borneo 
(Sabah); ordained Deacon 1086. Priest 
19B6, Assistant Priest, Diocese of Sl 
H elena, 1JHS&-&4; Hon Canon. SL Pars 
CatfwM. SL Helena. March 1994. Adhor 
o) Sujjeon t) Bomea/Frtast to SL Hate na 

pass. 


I nstitutions began measur- 
ing the performance of 
their property portfolios 
about 25 years ago. Their 
office investments have since 
enjoyed only two short spurts 
in which they have out-per- 
formed shops and industrial 
property, in the early 1970s and 
the late 1980s. These were the 
two wildest speculative booms 
this century. Both ended in 
decline in the general property 
market and disaster for office 
investments. Otherwise offices 
have persistently underper- 
formed retail and industrial 
property in both capital and 
rental values. 

There are two main reasons 
why the rotten record of offices 
is taking so long to be recog- 
nised - large lot sizes (which 
institutions understand) and 
depreciation (which most do 
not). UK institutions have 
swung from inertia to hyperac- 
tivity over the past decade in 
their allocation of assets 
between property and other 
areas of investment 
In the early 1980s. most self- 
managed funds gave no sign of 
having any policy on what the 
property proportion of total 
assets should be. Now institu- 
tions have moved to the other 
extreme. Many seem to look no 
more than a year ahead; there 
is thus pressure to pour large 
sums into property in a hurry 
when it “looks right”, as has 
happened over the past year. 
Fund managers under pressure 
chase lumpy investments, usu- 
ally big office blocks. 

Once the bloom comes off 
the property rose (a process 
which started recently in the 
UK when the cold winds blew 
from the bond markets) and 
the asset managers want to cut 
back on property, the selling 
pressure then becomes greatest 
on the same big office blocks 
which have been used to force 
money into the market on the 
way up. 

Offices have a worse 
long-term record than the mar- 
ket as a whole, and are more 
volatile than the other sectors. 
They provide spectacular prof- 
its for the few developers and 
dealers who get their timing - 
right Meanwhile the institu- 
tions predictably got their tim- 
ing wrong in the last upturn, 
with their two heaviest years’ 
spending on office develop- 
ment occurring just as the bub- 
ble burst in 1988 and 1990. 

Investors always underesti- 
mate the costs of office depred- 
ation and changing occupa- 
tional requirements. These are 
much higher than for shops, 
and slightly higher than for 
industrial/ warehouse property. 


One for the 
gamblers 

Office investment is a triumph 
of hope over experience, writes 

Matthew Oakeshott 


OK offices; rooms with tittle return 









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will have suffered slowing 
income growth, and possible 
extra capital expenditure and a 
capital loss on the final valua- 
tion as well, since the yield on 
which the 25-year-old property 
is valued win have moved up 
sharply - say, to 9-lfl per cent 
if prime yields on new offices' 
are still 6-7 per cent. 

Offices are overpriced, and 
institutions are over-invested 
in them on any assessment of 
their long-term record. Though 
institutions have been net sell- 
ers of office investments 
according to Investment Prop- 
erty Databank, a research 
group, over the past nine 
years, and the office proportion 
has fallen from two-thirds in 
the early 1970s to two-fifths 
today, offices are still the larg- 
est sector in most portfolios. 



* W- 

'■*=c Cs 


•I;.,.;, 


f- it* .. f? ; - ^ 

S To! return 

R*tu8 - 

OWco 

Industrial - 

K pa Dac 1980-93 

lO.Sfc • 

84396 

12.496 

% pa Deo 1970-80 

15.79ft 

14J896 

172096 

I c -v : n MKSSm! 




% pa to June 1994 1 year 

79.696 

15.396 

'211996 

5 yearn 

-1.896 

-6396 

1396 

15 years 

6-7% 

• 33% 


1 Rental •, a . •. -? crcv.lii 




% pa to May 1994 5 yeas 

4X1% 

-8.0% 

-0.496 

. - . 10 yeas 

' 9.8% 

4396 

e.7% 

25 yeas' 

11-296 

8 -0% 

83% 




Investors therefore need at 
least as thick a cushion of run- 
ning yield on offices as on 
industrials to compensate for 
the much higher long-term 
holding costs compared with a 
typical high street diop, where 
the value is mostly in the land. 

Well located shops do not 
depreciate, but offices and 
industrial properties always 
have done, since the building 
element represents a big part 
of the total value. No matter 
how well designed, b uilding s 
do wear out and the way peo- 
ple work in offices changes 
even foster. This hits the office 
investor, as an example of a 
new office building let on a 25- 
year lease shows. 

The investor buys his shiny 
new office at a prune (low) 
yield - say. 8 per cent or 7 per 
cent now. For the first few 


years, the rental value grows 
in line with rents in other new 
offices; perhaps even at the 
second rent review (after 10 
years) growth is still maintain. 
ing that pattern. But by the 
third rent review (after 15 
years), obsolescence of both 
kinds is beginning to take its 
toll, with the rent rise lagging 
new office rents by, say. l per 
cent a year, with a further 1 
per cent a year lag by year 20, 
and another 2 per cent a year 
in the run-up to the end of the 
lease after 25 years. 

Then the investor has a 
building with no guarantee of 
future income, where the ten- 
ant may be prepared to stay 
but win be in a strong position 
to demand either refurbish- 
ment from the investor, or a 
rent below new state-of-the-art 
offices, or both. The investor 


T his weighting reflects 
a triumph of hope 
over experience. In 
the early 1370s, yields 
on office and shop investments 
were s imilar , industrial yields 
were 2-3 per cent higher to 
allow for depreciation and 
obsolescence. In the past few 
years, office yields have moved 
above shop yields, with the gap 
about 1% per cent at present 
As the evidence of poor office 
rental growth and ever-increas- 
ing depreciation costs piles up, 
office yields should, move 
above industrial/warehouse 
yields and stay there for the 
foreseeable future. ^ 

In any other market, an 
investment sector with as poor 
and risky a record as offices 
would stand on the lowest rat- 
ing and highest yield. In prop- 
erty, tradition and inertia can 
spread fundamental changes 
like this out over many years. 

But investors' downgrading of 
offices is under way and may 
accelerate, as their approach to 
property investment grows 
more like their techrriQues Is 
equity and bonds. 

Today, institutions can col- 
lectively reduce their office 
weightings very fast so long as 
overseas buyers, with their fix- 
ation on Large London offices, 
don’t wake up in time. You 
may even find a bigger fool » 
buy your office in a few ye* 1 ® 
if you buy or develop it today- 
but all the evidence of 
25 years points dearly to retail 
and industrial property “in- 
tently performing better than 
offices. Offices are for gam- 
blers, developers and mwoK- 
men, not serious long-ter® 
investors. 

The author is a ■&***£[ 

OUM. an investment manage- , 

mem firm ->V-. \ •• ,-. 



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^AYI UL V221994 




ARTS 




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All change in game of musical chairs 

Antony Thorncroft says London's orchestras are having trouble findin g new musical directors 





Ihe PhDhannonia con- 
fine this week that 
the contract of its 
Urnc-i ^ mxuic Erector Gtri- 

d«*'r On to>»8 £ ““tf 1 

* Cr *Mi what 

; - . ®n hi had been known informally for 


' Jrci 


was a 


Although Sinopoli 

pert showman, and brought 
V ; : : “ lr =qts^^ *** orchestra a valuable 

' . ■’ Qgttract with DGG, 








his idiosyncratic interpreta- 
tions of the great romantic 
symphonies had not always 
charmed the critics. 

. ’Has means that two of Lon, 
' :Ij “ ® on ? “ ur m stn orchestras are 
■‘micJIn se e kin g music directors. last 
*** LP0 Parted com- 

■f- *■„ 


- Lr- fcQ 


Pany with the equally contro- 
versial Ptanz Welser-Mtist, a 
Young Turk who also fafofl to 
win round the critics. What is 
going wrong and where are the 
orchestras to find successors? 

IF you have any bright ideas 
they would be delighted to 
hear. There is a scarcity of top- 
flight conductors at the 
moment, and those with suffi- 
cient musical aprt «wwrn»ria| 
weight are reluctant to come to 
London. It is iwcm win g appar- 
ent that the Art Council's 
ill-fated attempt last year to 
kill off one or two T/mdon 
orchestras in toe quest tor a 
super-orchestra has cast a pan 

ova" the city's musical seem. 


To outsiders the long-term 
future of an the orchestras 
seems uncertain. Who wants to 
take cm bands erf financially 
stressed and worried musicians 
in a city where competition is 


and fickle, and where there is a 
chance that the orchestra 
could go befly-up within a year 
or two. Best to day put in a 

North American or European 
city where you are cock of the 

walk. 

Both orchestras, which share 
residency at London's South 
Bank Centre (although the 
LPO has pole position), 
urgently need a good music 
director to give a shape and 


authority to their work. 

All the great orchestras of 
recent years - Berlin, Chicago, 
Cleveland - have been associ- 
ated with great conductors 
such as Karajan, Solti, Dcdrn- 
AnyL Who win rescue the LPO 
and the Fhflharmonia? 

Unfortunately the ™m they 
both wanted, the brilliant 
young Mariss Jansons, has 
turned them down: perhaps he 
has his eyes fixed cm St Peters- 
burg. The alternatives seem 
lacklU8tre in «* w npiii ' l«wi 

The Fbflhanaonia tew* dose 
links with Christoph von 
Dohn&nyi and John Eliot Gar- 
diner, but the former is too 
firmly at Cleveland 


to want the ha ggl e Of Tnnitnn 
and Gardiner is best suited for 
occasional visits than as a per- 
manent force. The Philhar- 
mnua might consider Nikolaus 
Harnoncourt, but no quick or 
obvious answer is on the hori- 
zon. 

The LPO could well be seek- 
ing its future in its past and 
might get tn prfhpr a gain with 
Bernard Haitink, its former 
music director who is now 
styled president 

His years at Covent Garden 
are drawing to an end and 
Haitink would be a safe pair of 
hnjt bat is he the man to 
excite a new. younger, audi- 
ence? The LPO would probably 


love someone who has demon- 
strebly lifted the reputation of 
an orchestra, such as Charles 
Butoit at Montreal, but can it 
afford him, and would be want 
to come? 

Ironically, while the two 
London orchestras agonise, a 
laaijing regional orchestra, the 
Bournemouth Symph ony , thte 
week nipped in quickly and 
secured one of the brighter 
young talents. Yakov Kndz- 
berg, as its principal conduc- 
tor. 

Krefeberg. a 34-year-old Rus- 
sian, might well have been toe 
man to liven up London if toe 

orchestras had been faster on 

their feet 


Musical 


1 i 

* 




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•<■<•■ ; 

> .-* • • 


Patsy's 
star 
shines 
brightly 

Ti 

"■emophilfe* m 


. :• ; 

. W ,1.. “l 

'• !»«■!!. Re" 


Y 



his is becoming very 
predictable. You. enter a 
theatre auditorium to 
toe cast already h a m min g 
on stage. Their eyes light 
' the sight of an audience 
and they tump down into the 
stalls to greet ft with many a 
, udw*? “howyadomg" and “glad to 
*>•. - aSJS “e ya”. Eventually they re-as- 
v semble and yet another bio- 
musical begins. 

to fact, Patsy Cline, A Musi- 
cal Tribute is better than 
most, mainly because it has an 
impressive star, Sandy Kelly, 
playing Patsy and partly 
because it concent rate s an toe 
. music - there are more than 
• 40 songs - and sketches in the 

•--Wei short life of tins country icon 
with as much detail as a 
leader in The Sun. 

ft ts hard to deny that get- 
ting herself killed in a plane 
crash at the age of 81 was a 
shrewd career move for toe 
singer: ft ensures an untar- 
nished reputation and fhat her 
records sail well - although, 
as to-hoMifettme when- she 
was signed to a typic- 
ally Machiavellian producer, 
Patsy fails to eqjoy the royal- 
ties. 

Su r prisingly Marvyn Cram’s 
pr o du ction raata« Htfle of the 
dr ama erf her death, ft excels, 
however, in projecting the 
other great characteristic of 
Cline, a stunningly resonant 
voice, so different from toe 


•“•toastti 


s ' r * : ‘W38fe 
'•^vViSapg 


a? 


° ; -7TL 



ftapresaive startonu Sandy Kdly catcfaea the heirfbreeik. of file coontry ringer's voice in Tafsy Qta^, A Musical Tribute* 


usual country whine, ft makes 
a Cline recording instantly 
recognisable to fids day and 
enabled her to beeome toe first 
female singer to move from 
the country charts to file pop. 

Cftne spent most of tor Me 
on stage so ft is acceptable 
that the set is a rough-up of 
the Grand Ole Opry in Nash- 


vffle and most of fim large cut 
of musicians who periafficaDy 
— with hit and fn**— — 
lapse twto mainly por- 
fraytog toe men who cifaa 
dtasbed over to reach the top. 

The show has toured the 
country far months which pro- 
vides a good ensemble fed but 
the performances are work- 


manlike when set against 
Sandy Kelly. She catches fim 
hear tbr eak in Cline’s voice 
with emotional perfection and 
toe tortured ballads - 
“Crazy", “I fall to Pieces”, 
“ Swee t Dreams” — crane out 
newly minted. 

George Hamilton IV (the 
“IV” embroidered on his 


waistcoat is the giveaway) 
gives her generou s selfeffac- 
tag support as a narrator who 
actually knew Patsy Cline. 

Go see the monad for the 
salty Kelly and far file music, 
the short, escapist, tuneful, 
country songs which seem so 
refreshingly innocent com- 
pared with modern grunge. 


Do not expect much in the 
way of character development 
or in-depth of fho 

Nashville music scene of the 
1950s. 

Antony Thorncroft 


The Whitehall Theatre. 


B 


It 


fttWf" 



filed as the battle of the great 
piano rockers, the 24-date BiDy 
JoeL-Elton John US stadium 
tour brings together two confident 
superstare ambling through 20 years 
of their repertoire. 

The four-storey high set depicting 
the American War <rf Independence 
with Redcoats and tricomed 
Americans conveys less of the regal 
atmosphere than the shield atop fim 
proscenium with the legend “Heart 
andSouT flanked by toe British Hon 
American eagle. 

The paired grand pianos onstage at 
Philadelphia’s Veterans Stadium, 
where the tour started with three 
shows, were closer together than the 
two performers, despite a warm 
embrace at the start 

EHm John acted the shy guest, put- 
ting lusty tangs behind the songs 
with Httie audience eye contact Hie 
had been invited to join the show by 
Joel, ostensibly after a decade-long 


Clash of the piano greats 

Frank Lipsius sees the start of a concert tour that brings 
together two of rock's giants, Elton John and Billy Joel 


courtship, but the dual hflfing was 
timed to coincide with a crowded 
summer of superstar stadium tours by 
Pink Floyd, Barbra Streisand and the 
Eagles, as well as the packa g ed events 
Woodstock *94 and ToYlapalooza fin, to 
fourth year as a Woodstock far alter- 
native rock acts). ... 

John started with his first hit, 
“Your Song”, followed by Joel singing 
“Honesty”. John did Joel's “New York 
State of Mind” saying that they had 
agreed to sing ram of each other's 
son^. This made Joel sound insincere 
in ids effusive intro to John’s “Good- 
bye Yellow Brick Road”. 


When they took their toms sepa- 
rately, they sang truncated but gener- 
ous sets of their greatest hits. Return- 
ing together for the finale, they 
moved beytmd the predictable with an 
oldies medley and a duet of the Bea- 
tles' “Hard Day’s JBght”.. 

John used to make his body rever- 
berate with the intens i ty of his fin- 
gers pounding the keyboard. In fids 
concert toe piano still pounded rart: 
jangling bsrmonies, but Ids expres- 
sion was placid. BRs range of emotion 
was embodied in a modest costume 
change from a loose gray suit to a 
white linen jacket and finally a bine 


satin jacket Even his spectacles were 
modest yellow-tinted half-frames. It 
was positively demure by Elton’s 
standards. 

John got the audience to their feet 
with “Philadelphia Freedom” , but fim 
20-to60-yearold crowd sat fra the rest 
of th«» hour-long set, which 
his current number-one hit from The 
Lion Sing, “Can You Feel the Love 
Tonight”, performed like a music 
video to the film’s animated sequence. 
The ftwinw a caug ht hhn at his most 
animated during “Baby, You’re the 
One” gesticulating to his crew to turn 
his monitor down. 


Joel was far more the showman. He 
soon removed his loose-fitting grey 
suit jacket and rolled up the sleeves 
of his black T-shirt, swinging the 
microphone stand as he strutted 
across the stage. 

His good spirits seemed only 
spurred an by a sudden crisis when 
his drummer, who had been food poi- 
soned, left the stage. Joel quickly 
filled in with John’s drummer, whom 
he instructed before each song - beck 
to the audience, arms flailing, 

Joel reached deep into his reper- 
toire for songs such, as “Billy the 
Kid", but he kept the audience on 
their feet singing the words. 

These were obviously Billy Joel 
fans, happy to get a look at Elton 
John and have a 3'A-hour performance 
from the two pforai rocking greats, 
but they were there for the one whose 
finale “Piano Man” sent them out 
wing in g fain f jip sweltering summer 

•night. 


Music/David Murray 

Kronos goes 
against grain 


H ugely hyped as usual, 
the Kronos Quartet are 
playing the Barbican 
this week. They are the string 
quartet who sprang to feme in 
the early 1970s, by performing 
in extravagant designer gear, 
cultivating “crossover” music 
(sometimes between classical 
and pop, more often between 
classical and ethnic) and 
playing rather wen. 

Or rather, they are almost 
not that group - their leader 
David Herrington is the sole 
remaining member of the origi- 
nal team. Presumably the 
Kronos “idea" survives tran- 
sient personnel 
The Zeitgeist blows unpre- 
dictahly, and super-sharp cos- 
tumes now look naff. These 
days, Kronos dresses down 
while trading as always upon 
MgirrtT'g — blue for 
sincere rumination, red for 
exc i tement , perpetual darkness 
In the auditorium. Most of 
Tuesday's programme was on 
that level of sophistication, 
and any four competent side- 
men could have delivered most 
of it with minimal rehearsal. 

The jazz clarinettist Don 
Byron's There Goes the Neigh- 
bourhood, for example, set 
solos over mildly dissonant, 
rocking accompaniments, labo- 
riously written out far quartet 
Jen Hassell did much the same 
in Pono da Costa (African- 
based, but with Brazilian per- 
cussion for the players to man- 
age), anp fiwr iwiwnlmrinn^ and 

ffirukazu Hiraishi too in Pris- 
matic Sotmdscape (sub-Takem- 
ttsu). 

Kronos had also commis- 
sioned three arrangements 
from the late Raymond Scott’s 
commercial work - sprightly, 
but too tame on mare strings - 
and invited Ingram Marshall to 
rewrite his 1982 Fog Tropes, 
which blended live brass. with 
recorded foghorns, for strings 
instead: thus wrecking the 


bland ami also revealing a seri- 
ously incompetent composer. 

The string-quartet medium is 
not God-given, but rests upon 
its base in Haydn and on what 
successive composers have 
made of it - Mozart, Beeth- 
oven, Schubert, Schoenberg. 
Bartdk, Elliott Carter. Dialogue 
and argument are the whole 
point: four individual string 
voices can be just enough to 
encompass a small world of 
intense «nwwt«ton- 

To reduce the players to uni- 
form, faceless accompanists is 
not to “extend” the medium, 
but to diminish it radically. On 
Tuesday evening, the only 
works that told were Dmitri 
Yanov-Yanovsky’s lugubrious 
mini -concerto lira chang (a kind 
of cimbalom) and Peter Scut 
thorpe’s From Ubtrr, & respect- 
ful, old-fashioned celebration 
of the one-note didgaridoo 
(David Coulter). 

It was reassuring on Wednes- 
day to find that the (current) 
Kronos team can sound Hke a 
quartet They played all four of 
Alfred Schnittke’s introspec- 
tive works for the medium, 
thoughtfully and searchingty. 
In the Third and Fourth Quar- 
tets - the ram freighted with 
melancholy recalls old Russian 
chorales and folk-stuff, the 
other with no more than a few 
major/minor triads - the 
Kronos team were a model of 
grave, delicate sympathy. 

Truth to tell, Harrington’s 
own part sounded under- 
powered against the rest of the 
trio. His fine, tant Une was too 
light and unauthoritative for 
Sdhnittke’a purposes; it never 
grabbed us. 

Though electronic enhance- 
ment is second nature to the 
Kronos. one should not count 
Upon it to do the job. Schnittke 
still writes for a “classical” 
quartet, and for all their vir- 
tues the Kronos Quartet is still 
wmiwthfag law; thaw that. 


A thundering 
start to Proms 


T he label Mahlerian is 
often used too loosely, 
yet it seems appropriate 
for Tuesday's Prom conducted 
by Simon Rattle. 

Besides the Adagio from 
Mahler’s Tenth Symphony, the 
programme included Berg's 
early AJtenberg Lieder and 
Shostakovich’s Fourth Sym- 
phony, a work over which the 
Austrian symphomisfs spectre 
inmtui large. 

Rattle a nd “h is” City of Bir- 
mingham S ymph ony Orchestra 
have a reputation in Mahler’s 
last work. Here Rattle con- 
ducted - from memory - the 
opening movement with a liq- 
uid, flowing baton, shaping the 
CBSO's smooth strings in pas- 
sionate arches of melody. He 
buflt up the sonorous, organ- 
like climax massively, and 
maintained the intensity in fim 
music’s dying phrases. 

Much in the five Altenberg 
Lieder reveals Berg’s musical 
roots in Mahler - but not the 
startling orchestral opening, in 
which complex ostinatos con- 
jure up the sn o wstorm of the 
first poem. Rattle conducted 
with incisive clarity, revelling 
in the colourful sonorities hut 
occasionally smothering the 
soprano soloist. Heather 

Harper. 

Miss Harper - who has come 


cut of retirement to sing in two 
Proms thin year — showed her 
affinity with the music: she 
made each of Berg's concen- 
trated phrases (the seme is a 
model of economy) tell, and 
found lyricism in the searching 
lines. 

Shostakovich’s baffling 
Fourth Symphony is seldom 
played. In an act of self-censor- 
ship, the rampomr suppressed 
it for 25 years; had it been 
premiered in 1936 as scheduled, 
its revisiting of Mahler's emo- 
tional world would almost cer- 
tainly have brought down 
Stalin’s wrath on Shostakovich 
(si gnifi cantly, one of the com- 
posers approached to complete 
Mahler's Tenth, though he 
declined). 

Another suggestion of Mah- 
ler was in the sheer size of 
Shostakovich’s orchestra, and 
here the CBSO flexed its collec- 
tive muscle with shattering 
results. From the thrusting 
opening chords, this was high- 
voltage Rattle, but he rather 
overplayed the work’s quirki- 
ness that can obscure the 
anguish bottled up inside. 

Above all, this was a perfor- 
mance that brought h om a the 
horror that the still-idealistic 
Shostakovich was glimpsing. 

John Allison 





■'I • f* f 


I Exhibitions Guide 

AMSTERDAM 

Van Qogh Museum Van Gogh's 
Self-Portrafts: 20 paintings and two 

drawings dating from his stay in 
Paris 1886-7, Ends Oct 9. Daily 
nfrsmuMum Bowers and Plants: 
flora and fauna In five centuries of 
prints and drawings. Ends July 31. 
Closed Mon 

Royal Mace The Fountain erf 
Paflas; this Impressive marbte 
statue, made In 1660 by the 
Amsterdam sculptor Artus QuelBen, 
Is on show together with related 
paintings, drawings and terracotta 
models. Ends Aug 28. Daily 
BERLIN 

ARM Museum The Last Days of 
Humsnfty: 600 photos, posters. 
Paintings and drawings BJustrating 
Artiste" responses to the First World 
War, and including work by 
Bedeuam, KokoKhka, Dlx, 

Picasso, Chagall and Wyndham 

Lewis. Bids Aug 28. Closed Mon 
KunstforomTbe Ideal and Nature: 
Watercolours and drawings from the 
Munich Lenbachhaus 1789-1850. 
Ends Sep 4. Dafly 


^jhralm-Patate Berfti Painting 
from Btechen to Hofer a selection 
of the most Important 19th raid 
early 20th century paintings from 
Berlin gaflerfes, starting with the 
German Ro man tic artist Kari 
Btechen and continuing through the 
Btedermeter period, German 
Imp r ess i onism. Beckmann and 
other expressionists, raid on to the 
Neue SachRdbkeit Closed Mon (tef 
238 0900) 

Haus tier Kutturen derWsft 
Tanzania - mastarworics of African 
sculpture: 400 works from the 19th 
and 20 th centrales. Ends Aug 7. 
Closed Mon 

BONN 

Kunst- und Aussteflungshatie The 

Century of the Avant-Garde in 
Central and Eastern Europe: 700 
works by 200 painters and 
sculptors, offering a thematic (jide 
to the main artistic developments of 
foe past century. Ends Oct 16. 
Closed Mon 
BRUSSELS 

Palate da Boaux-Arts Robert 
Smithson: retrospective of foe 
American artist, one of the founders 
of Land Art Ends Aug 28. Closed 
Mon 

COLOGNE 

Wafiraf-Rtehflrtz-Miastmi 
Impressionist Marfwworf® from 
Geneva: 40 paintings from the 
period 1880-1900. Ends Sep 4. 
-Closed Mon 

Jasef-Hatamcft-Kimsthalle 
Heaven and Hen In the Middle 

Ages: 200 paintings, docranents 
and artefacts illustrating the 

medieval view of death and the 

afterlife. Ends Aug 28. Da3y 
□(JON _ 

Musfe Magnln Sculptors’ Designs 
1850-1950: a survey of 


developments ki sculptural art from 
Daumier, Degas and Rodin to 
Giacometti and Picasso. Ends Sep 
11. dosed Mon 
ES8EN 

V*a HOgel Paris - Belle Epoque: 
an evocation of the period from 
1880 to 1910 with paintings, 
drawings, posters, photographs, 
glass and furniture. Ends Nov 13. 
Daily 

FRANKFURT 

8cMm KunsttwBe Goethe and Art 
300 paintings, drawings and 
sculptures ranging from antiquity till 
Goethe's death In 1832, and 
Including work by David, Schinksl, 
Caspar David Friedrich, Claude 
Lorrain, Constable and Turner. Ends 
Aug 7. DaUy 

Deutsches Archftektramuseum 

European Architecture of the 
Present Day: an exhibition mounted 
in cooperation with the Fundacto 
Mies van der Rohe In Barcelona. 
Bids Oct 10. Closed Mon 
HAMBURG 

KunathaAe Masterworta from the 
Guggenheim Collection: 60 
pointings by Picasso, Braque, 
Dubuffet, Bacon, Chagall, 

Kandinsky and MW. Ends Sep 25. 

Ctoeed Mon 

LAUSANNE 

Musfo d*Art Contemporsfci 
Contemporary Picasso: 80 works 
1946-1971, Including 30 paintings 
raid a dozen sculptures. Bids Sep 
25. Oafly 

Musde Olympkjue kfeo: 41 
sculphves covering tea entire 
career, plus 13 prints from the 
1960e and 70s. Bids Sep 4. Dally 
Fondatton de rHe n aftage 
Zborowskfs Painters - ModigBani. 
Utrillo and Soutine: 100 works 
conjuring the aesthetic favoured by 


the earty 20th century Parisian art 
dealer. Ends Oct 23. Closed Mon 
Muifin dee Aria Do craalife 
Contemporary Studk) Glass from 
Japan: 100 works created in the 
pest two years by 23 artists. Ends 
Aug 14. Closed Mon . 

LONDON 

Hayward Gtetery Bonnard at Le 
Bosquet Ends Aug 29. Da&y 
(advance booking 071-928 8800) 
Tate Galery FL& Ktaj 
retrospective. Ends Sep 4. Daly 
Marlborough Fine Art AB. Kitaj, 
recent pictures and graphics. Bids 
Aug 2a Closed Sun 
Victoria and Abert Museum Pugin 

-A Gothic Passion: retrospective of 
the 19th century British designer. 
Bids Sep 11. Deity 
National Gaiety From Caspar 
David Friedrich, to Ferdinand 
Hodler, A Romantic Tradition - 
Paintings and Drawings from foe 
Oskar Reinhart Foundation. Ends 
Sep 4. Daily 
Royal Academy of Arts 
Impressionism to Symbolism - The 
Belgian Avant-Garde 1880-1900. 
Ends Oct 2. Da3y (advance booking 
071-240 7200) 

British Museum German 
Printmakkig in the Age of Goethe. 
Ends Sep 11. Indan Paintings and 
Drawings from the Collection of 
Howard Hodgkin. Ends Aug 21. 
Greek Gokk JeweSery of the 
Classical World- Ends Oct 23. DaBy 
MADRID 

Centro de Arte Reka Sofia 

Gerhard Richter: 100 works by one 
of the key figures in contemporary 
German art Bids Aug 22. Closed 
Tuas 

MUNICH 

Haus der Kraist Ban Vftah .400 
works exploring the finks between 


Kandinsky, Klee, Arp, Mild and 
Calder. Ends Aug 14. Closed Mon 
Kunsthafla dor 

Hypo-Kirfturatlftung B Dorado: 

300 gold and ceramic treasures 
from pre-colonial Columbia. Ends 

Sep 4. DaBy 

Stadtmuseum Pa ul Stra nd: the first 
major European exhibition devoted 
t o the celeb rated American 
photocpapher, who died in 1976. 
Bids Aug 7. Closed Mon 
Vila Stuck Dream Time - 
IJukunpa: Art of the Aborigines of 
the Austrafian Desert Bids Oct 16. 
Opens next Mon 
NEW YORK 

MetropoRtan Museran of Art 

Petros Christos: 22 paintings by the 
15th century Netherlandish master, 
renowned for the jewot-Sce 
luminosity of his work. Ends July 
31. Picasso and the Weeping 
Women. Ends Sep 4. The 
Annenberg Collection of 
Impressionist and 
PosUmpresstontst Masterpieces. 
Ends Nov 27. Dal - The forty 
Years. Bids Sep 18. Ctoaed Mon 
Museum of Modem Art From 
Manet to Picasso - Masterpieces 
from the David and Peggy 
Rockafefler Collection. Ends Sep 6. 
British Drawiigs 1890-1990. Ends 
Sep 13. Closed Wed 
PARIS 

Grand Palate The Origins of 
Impre ssi onism 1869-68. Ends Aug 
8. Closed Tues 

Centre Georges Pompidou Joseph 
Beuys retrospective. Ends Oct 3. 
Closed Tues 
Mua6s rfOrsay Nadar, 

Photographs 1854-65: Nadar was a 
friend Of writers and painters. . • 
whose portraits raised photography 
to the category of creative art. Bids 


Sep 11. Closed Mon 
• Cartas musdes available at all 
metro stations and museums, to 
avoid queering at 60 museums 
including the Louvre, Musde 
d’Orsay and Versailles. 

SPEYER 

Hl sto riach eB Mu seum der Plate 
Romanov Tsarist Treasures: 200 
pieces from the St Petersburg 
Hermitage, including jewellery, 
objets d’art paintings, furniture and 
costumes, coRacted during three 
centuries of Romanov rule In 
Russia. Ends Aug 14. Daily 
STOCKHOLM 

N atio na hnuseum Swedish Glass 
pre-1900 and Today: an exhibition 
focusing on glass for the table, 
fndudlng a Kungsholm goblet from 
the lata 17th century. Ends Sep 4. 
Closed Mon 
VEMCE 

Anticht granai deSa repubbtica 

China in 220 BC - The Warriors of 
XTan: ten of foe 7,000 Hastes 
terracotta soldiers who guarded the 
tomb of Emperor Qin SNhuangcfl in 
cent ral China, along with copies of 
war chariots and weapons 
discovered In one of this century's 
most dramatic digsu Bids Sep 1 1 . 
DaBy (the old granary on the tip of 
the Gtudecca) 

Palazzo Grass! Renaissance 
Architecture from Brunelleschi to 
Michelangelo: 250 works from 
European and American public 
collections. Bids Nov & Daily 
VIENNA 

JQrfisches Museum Max 
Oppenheimer (1885-1954): 
retrospective of one of foe most 
neglected figures in early 20th 
century Austrian art. Ends Sep 18. 
Closed Sat 

Kunsthfetorisches Museum 


Albrecht DQrer a selection from the 
museum's collection of work by the 
earty 16th century German master. 
Ends Oct 3Q. Closed Mon 
KOnstierhaus Art and Dictatorship: 
an exhibition comparing 1-fitter's, 
Stalin's raid MussoDnTs ideas of 
degenerate art in paintings and 
sculpture. Ends Aug 15. DaUy 
WASHINGTON 

National GaBray of Art Wfflem cte 
Kooning’s Paintings: 75 works by 
America’s Influential abstract 
expressionist Ends Sep 5. From 
Minimal to Conceptual Art - Works 
from the Vogel Collection: 90 
drawings, photographs, paintings 
and sculpture by conte mp orary 
artists, including LnWftt, Christo. 
Flyman, Beuys and Flavin. Ends 
Nov 27. Recent Prints and 
Sculpture from Gemini G.EL: a 
selection of work from the 
acclaimed contemporary art 
workshop in Los Angeles. Ends Oct 
2. Ornament in European Graphic 
Art 1300-1800: more than 90 prints, 
drawings, illustrated books and 
decorative objects. Ends Aug 21. 

One of the jewels of tiie permanent 
collection, Jan van Eyck’s 
Annunciation, has returned to public 
view after a two-year restoration. 
Dally 

National Museum of American Art 
Thomas Cole: 70 works by the 
father of the Hudson Rhrar school 
of painting. Bids Aug 7. May v«ux 

Walcott 50 watercolours by the 

earty 20th century nataraltet, 
explorer and artist Bids Aug 29 

DaBy 




12 


FINANCIAL TIMES FRIDAY J ULY 22 1 994 


s 


omething unusual is 
going on in the rarefied 
world inhabited by the 
UK's most senior gener- 
als, admirals and air marshals. 

They are not complaining as 
loudly as ought have been 
expected about the govern- 
ment's latest economy drive, 
which will cost the defence 
establishment more than 18,000 
jobs and leave the forces even 
smaller than predicted by the 
end of the decade. 

But this does not mean that 
the atmosphere at the top of 
Britain's armed forces is free 
from anxiety. While generally 
accepting the cuts announced 
last week, the top brass is con- 
cerned about the next round of 
reductions which - despite offi- 
cial protestations to the con- 
trary - is widely expected 
within three years. 

They take some comfort 
from the fact that the mea- 
sures announced by Mr Mal- 
com Riflrind. defence secretary, 
fell hardest on civilian employ- 
ees of the defence ministry, 
who lost 7,100 jobs. Service 
chiefs will shed few tears about 
the tr imming of a civilian bur- 
eaucracy to which they lost 
power in the 1980s under Mrs 
Thatcher. 

Mr Riflrind even won some 
friends in the forces by plan- 
ning the MoD cuts after wide 
consultation across the ser- 
vices. and restoring to the ser- 
vice chiefs some of the respon- 
sibilities they lost under his 
predecessors. 

As one distinguished general 
privately commented: “There 
is real hope now that the prin- 
ciple of delegation to the ser- 
vice chiefs will now be applied 

- and there is quiet rejoicing 
about the reduced size of the 
Ministry of Defence." 

The other main victim of the 
cuts is the Royal Air Force, 
which will shed 7,500 jobs, as 
activities such as maintenance 
and training, previously under- 
taken by airmen, are taken 
over by civilians. But even air 
force chiefs - who claimed to 
have warded off much deeper 
cuts than were finally decreed 

- have acknowledged the RAF 
was overmanned, compared 
with such formidable air pow- 
ers as Israel and Sweden. 

So the job losses decreed by 
Mr Rifkmd have been accepted 
with relatively little complaint 
Yet oddly enoug h , the minis- 
ter’s accompanying “sweet- 
ener” of a £5bn weapons pro- 
curement package has not laid 
to rest the forces' fears about 
Britain's fighting strength in 
the medium term. 

Virtually all the decisions 
announced by Mr Rifkind - 
some £2.4bn worth of firm 
orders (for tanks, minehunters 


Some fight 
left in them 

Bruce Clark on reaction to the 
latest round of UK defence cuts 

: UK armed forces: cutting the fat 


■00Q toined 
300 



Souctt MHaBjroTtMMM 


and ammunition) and 5&5bn in 
potential orders (for frigates, 
submarines and cruise mis- 
siles) - were confirmations of 
purchases already announced 
in principle. 

The MoD now admits that it 
could not have afforded the 
items on its shopping list 
unless its newly announced 
drive to cut unnecessary costs 
and staff jobs bad been so 
wide-ran g in g . 

This principle of trading 
weapons purchases for job 
losses has worrying implica- 
tions for the other procure- 
ment decisions to which the 
government is committed in 
principle but for which it has 
not earmarked precise sums. 

These “decisions in princi- 
ple'’ include the commitment 
to buy 250 Eurofighter aircraft 
for at least £9bn from the year 
2000; 12 new-generatlon frig- 
ates for a total of about £3bn; 
and in the immediate future, 
new attack helicopters. 

In practice, the government 
may not be able to afford these 
systems unless it is prepared to 


make further economies in per- 
sonnel anti o th e** military over- 
heads. 

Mr David Clark, Labour 
defence spokesman, reckons 
that by 1998-99, there win be a 
£&5bn shortfall between avail- 
able revenues and total defence 
Spending mmwiftmpntjf “Thp 
dfffpnffp ministry knows this to 
be true, but is keeping it 
quiet,” he maintaiiM 

Fears over the looming 
shortfall are shared by many 
senior officers. 

Mr Riflrind dismisses t he se 
concerns. He claims that even 
after last week’s cuts, Britain’s 
fighting capacity remains 
unimpaired or even enhanced. 
This view is supported by the 
reputation enjoyed by the UK’s 
farces at home and abroad. The 
army’s stock has surged as a 
result of its performance in 
Bosnia, where a tiny UK force 
of 3.000 men has played a cru- 
cial role in bringing relative 
normality to the lives of hun- 
dreds of thousands of people. 

This has been achieved by 
the army's employment of the 


old-fashioned - not to say 
imperialis t - skills of bluff and 
brinkmanship in the handling 1 
of conflict; and it has won the 
army some new friends in 
unfamiliar quarters, beginning 
with the Labour party. 

The army’s influence In Nato 
is also at a high point UK offi- 
cers run the showpiece of the 
affiance: the Allied Rapid Reac- 
tion Corps, which brings 
together the forces of up to 12 
nations for any purpose, from 
humanitarian aid to high-in- 
tensity tank warfare. 

Bat as service chiefs are 
aware, the UK’s prowess in 
military affairs rests on thin 
ice. The latest round of cuts 
win leave the ice a little thin. 
ner; and the next round could 
bring the forces to breaking 
point. 

Prestigious as it is, engage- 
ment in Bosnia is stretching 
thp forces to the limits of their 
capacity. For example, the 
deployment of ships in the 
Adriatic is close to exhausting 
available navy resources. 

Only by the skin of their 
teeth were the UK forces able 
to transport one extra battal- 
ion to Rnsnfa earlier this year. 
The operation involved 36 
flights by the RAFs ageing 
fleet of Hercules transporters, 
and the use of three of the 
navy's five lawdmg ships , pne 
of which was sent for overhaul 
this week. 

An acutely embarrassing sit- 
uation could arise if the fioyt 
Bosnia-type crisis breaks out in 
the next two years when the 
forces are in the middle of a 
painful transfer from military 
to civilian logistics. Mr Mirimpl 
Clark, of London University's 
Centre for Defence Studies, 
says the g o vernment is taking 
a “calculated risk” that it will 
not be wrong-footed by an 
unexpected crisis. 

The UK’s last two wars - in 
the Falklands and the Gulf - 
were unpleasant surprises and 
left in amTthpuppu s the conven- 
tional wisdom of the moment 
about defence needs. 

In both conflicts, the govern- 
ment benefited from good luck 
In the Gulf, thp farces h«H just 
pnnng h time to prepare their 
weapons for battle, and the 
war was short enough to avoid 
difficult questions about 
ammunitions supplies. 

Politicians may have forgot- 
ten the role of lode and the 
dangers of assuming it will 
hold; but generals and admi- 
rals have not While they have 
adopted a relatively low-key 
response to the current round 
of cuts, they warn that further 
sacrifices in manpower and 
weaponry would incur risks for 
which they will not be held 
responsible. i 


Joe Rogaly 

Starter guns ’n’ 


roses 



When Mr John 
Smith died, it 
seemed plain 
that if the 
Labour party 
elected Mr 
Tony Blair as 
his successor 
we would have 
to consider voting centre-left 
It has. and we are. Consider- 
ing, that is. The electorate will 
do a great deal of considering 
over the wwning two to three 
years. It is likely to be pres- 
ented with an agonising 
choice, between a reformed 
Labour party that it can proba- 
bly trust and a stabilised Con- 
servative government that may 
be stale and untrustworthy, 
but is at least a known quan- 
tity. The Liberal Democrats 
will be squeezed. 

If the election was held next 
Thursday many of us would 
faikp a ch a urp on Mr Blair. The 
temptation would be over- 
whelming. Turfing the present 
government out would be like 
removing tight shoes. As to 
1996-97, who knows? The cam- 
paign, which we shflfl have to 
endure for 24 or maybe 30 
months, starts now. It is going 
to be one hell of a game of 
poker. In one of the key pots 
the hole card will be covered 
by the flat paw of Mr Eddie 
George, governor of the Bank 
of England- 

The quasi-independence of 
the Bank is something new in 
post-1945 politics. Management 
of the economy is no longer 
solely a matter between the 
prime minister and/or the 
chancellor, as it was in the 
Thatcher-Lawson years. The 
publication of the minutes of 
discussions on monetary policy 
between Mr Kenneth Clarke 
and Mr George gives the latter 
huge influence. This is not a 
consequence of Mr Clarke’s far- 
sighted statesmanship. It hap- 
pened because when the 
elected politicians ran affairs 
the policy crumbled in their 
hands, as in 1988 and again on 


Black Wednesday. If, as he 
surely win, Mr George argues 
strongly for an increase in 
interest rates during the next 
few months he will be almost 
impossible to resist, particu- 
larly if he carries Mr Clarke 
with him. Mr John Major may 
protest that raising the cost of 
mortgages could damage his 
government’s health. Tough. 

The prime minister does 
show some strong-isb cards. 
On Wednesday he tidied his 
cabinet, and made extensive 
changes lower down. Let us 
just say, “fine”. We do not 
need to spend time on the mer- 
its of one set of nonentities as 
against another. Nonentities? I 
exclude Mrs Gillian Shephard, 
the new educa- 


the top job. For the moment, 
however, both are in place. The 
run of political misfortune has 
not quite come to an end, but, 
in spite of the apparent willing- 
ness of a couple of Tory back- 
benchers to sell parliamentary 
questions at a grand a time, it 
seems to be dribbling out 
There are other not-so-bad 
cards in Mr Major’s hand. The 
recession is over, although the 
voters stubbornly refuse to 
recognise this. Perhaps too 
many personal bank balances 
are still receding. The Trea- 
sury is aware that it will be 
called upon to forecast a suffi- 
cient recovery in the public 
finances to allow for tax cuts 
in the Budgets of 1995 or 1996. 

Against that 

the Conserva- 
tive party lied 

held next copiously 

about zts 
on 


tion secretary. T . _ , 

She is sensible. If the election WHS 
a real person. I 

expectations Thursday ma n y of instincts 


there. The rest 
of the list is too 
dull to rehearse 
at the begin- 
ning of the 
political holi- 
days. There 
will be plenty 
of time to 
debate the merits of shooting 
this or that grey squirrel when 
the season resumes in the 
autumn. Here is the executive 
summary: the purpose of the 
reshuffle was to win the favour 
of the Tory party, and keep 
order among backbenchers by 
feeding their dreams of prefer- 
ment. It has apparently 
achieved that. 

Partly for this reason, Mr 
Major seems likely to stay in 
office. His party Is still divided, 
but he has constructed a Euro- 
pean policy that minimises 
those divisions. It may not last. 
The European sticking-plaster, 
like his premiership, ts a prod- 
uct of the continued support of 
the foreign secretary and the 
chancellor. The former will 
probably retire next year; the 
latter is a recognised rival for 


us would take a 
chance on Blair. 
The temptation 
would be 
overwhelming 


taxation in 
1992. Same vot- 
ers may 
remember this 
next time. 

Mr Blair is 
ostensibly bet- 
ter placed. He 
shows aces up 
and presumably has more in 
the bole. His victory yesterday 
demonstrated that the Labour 
party is now the property of 
the modernisers, and he their 
master. He won the votes of 60 
per cent of the members of the 
Westminster and European 

parUamunfai , ahnnst as hi gh a 

share of constituency party 
members’ support, and more 
fhan half the trade imfon bal- 
lot We can, however, discard 
the latter. It is history. With 
less than a fifth of these eligi- 
ble bothering to take part, the 
vote of iraim members was an 
anachronistic appendage to 
what was otherwise a remark- 
able democratic primary. 

The new leader’s acceptance 
speech was suitably Inspiring. 
It could have been drafted in 
Little Rock. Mr Blair's cam- 


paign is reminiscent of Presi- 
dent Clinton's. The new, tele- 
genic, young leaders offer hope 
and renewal after the bumbl- 
ing years of Bush/Maior and 
the earlier, fearsome, reigns of 
Thatcher/Reagan. Mr Clinton 
as presided is not an encour- 
aging role model, but the way 
he ran for office has one over- 
whelming advantage. He won. 

It is customary to demand of 
Mr Blair that he produce some 
specific, costed policies. It may 
be that just as it is the job of 
commentators ami his political 
opponents to ask this of him, 
so it is in his and Labour’s 
interests to resist, to withhold 
hostages to fortune. His speech 
yesterday was bis, not ours. It 
was addressed to his party, rea- 
sonably enough, and to the 
wider anxieties of middle 
England. “The task of national 
renewal is to provide opportu- 
nity and security in this world 
of change,” he said. There were 
cruDchier nuggets: “we do not 
want people living in depen- 
dency on state handouts” and 
“we will not run the quango 
state of the Tories with differ- 
ent managers, we wOl get rid 
of It and return power to local 
people.” 

This first big set-piece speech 
pleased his audience of Labour 
and union digni tries. Their 
applause expressed a degree of 
unity of purpose traditionally 
reserved for Tory leader-wor- 
ship gatherings. There was no 
old-style, horse-and-buggy, 
nationalising, taxing, high- 
spending socialist blather in it 
Mr Blair talked, as the best 
Conservatives do. of “one 
nation”. He referred, as busi- 
ness leaders do, to Labour's 
“mission”. He rejected “the 
student gospel of Marxism” It 
was an impressive start In due 
course, someone must call, so 
that we can see the rest of his 
cards, face up. 

Joe Rogaly will resume Ms col- 
umn in September 


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From Professor Geoffrey 
Maynard. 

Si r. Professor Wynne Gocfley 
and Mr William Milberg 
(Letters, July 18) appear to 
overtook the simple fact that 
the US's foreign indebtedness 
will continue to rise as long as 
its domestic saving is insuffi- 
cient to match its domestic 
investment. The US’s trade 
problem (if there is one) lies in 
the country’s low propensity to 
save, not in an overvalued 
exchange rate. 

Geoffrey Maynard, 

Investcorp. 
bwestcorp Bouse, 

65 Brook Street, 

London W1Y 1YE 


TV lead 


From Mr David Docherty. 

Sir, ITVs claim of a 50 per 
cent increase in its lead over 
BBCl misrepresents the facts 
(*TTV claims advance over Sky 
channels", July 20). The 
reverse is true. Hie gap so far 
this year has narrowed. BBCl 
has held its ground against the 
ever- widening choices offered 
by satellite and cable and ITV 
has lost some share. 

Moreover, BBCl has 
achieved this stability with a 
much more diverse schedule 
than ITV - in which religion, 
current affairs, challenging 
documentaries, and music pro- 
grammes retain a secure place 
in peak-time. As a footnote, 
your story also ignores the fact 
that the terrestrial channels 
take a 65-70 per cent share in 
cable and satellite homes. 
David Docherty. 
head of planning 
and strategy. 

BBC Television, 

Television Centre. 

Wood Lane, London W 12 7RJ 


Aid to Air France 
will hit emergence 
of low-cost airlines 


From Afr John Parr. 

Sir, We here disturbed to 
read the report by Emma 
Tucker and John Ridding on 
Air France’s bid for further 
state aid (“Brussels set to bat* 
state aid for ailing Air France", 
July 21). 

The further propping up of 
this carrier will do as much 
harm to air transport users as 
it will to competitor airlines. 
Under pressure from the 
French government. Air 
France is flying routes that are 
not economically viable given 
Us cost structure. This not 
only undermines the profitabil- 
ity of current competitors but 
also deters the emergence of 
new low-cost airlines. 

It is vital that the Commis- 
sion requires Air France to 


make big cuts in capacity. In 
markets which are not over- 
shadowed by a state-supported 
carrier we are now witnessing 
a significant number of new 
services, often provided by new 
regional airlines. 

These carriers must be able 
to establish themselves now, as 
air travel growth resumes, if 
they are to stand any chance of 
longer-term survival The pro- 
vision of more state aid can 
only hinder them and will for 
the foreseeable future deny 
users the frill benefits of liber- 
alisation. 

John Parr, 
director general, 

Axr Transport Users' Council, 
5th floor, Emgsway Bouse, 

103 Kmnsuxw. 

London WC2B 6QX 


Mail idea misses point 


From Mr Frank Knowles. 

Sir. David Parker’s argument 
C “Personal View, July 14) that 
higher postal delivery costs in 
rural areas should lead to 
higher charges for people liv- 
ing in the country seems to 
miss an essential element in 
the postal service - it is the 
sender of the letter not the 
recipient who pays the postage. 
Are the increased delivery 
costs to be borne purely by 
people sending letters to the 
country, or is he suggesting 
that a rural dweller sending 
mail from the country to a city 
should pay more based on 
increased collection costs? 
There are good economic rea- 
sons for keeping a uniform let- 


ter rate, not least the signifi- 
cant costs saved by the sim- 
plicity of the system, which Mr 
Parker seems to ignore. 

Mr Parker also suggests that 
“those who would prefer a bet- 
ter service are given no oppor- 
tunity to pay for it unless they 
resort to expensive premium 
services such as Datapost.” 
Surely Datapost is a shining 
example of applying the cost- 
based charging system. If the 
Post Office can offer a “better” 
service without charging pre- 
mium prices or cross subsidis- 
ing other operations 1 for one 
will be a satisfied customer. 
Frank Knowles, 

Druce Croft, 

Qavermg, Essex CBU 4QP 


Subsidised elegance - but can you bank on it? 


From Mr David Sowers. 

Sir. it is obvious that Clem- 
ent Crisp considers that one 
purpose of government subsi- 
dies to the arts is to foster gra- 
cious living (“The decline and 
fall of elegance”, July 18). But 
if the objective is to ensure 
that the audience at the Royal 
Opera House is dressed in a 
style that is appropriate to the 
faded elegance of that Victo- 
rian building, surely it would 
be inefficient to give the man- 
agement of the opera house a 
larger subsidy: experience sug- 
gests that it would spend the 
extra money on more lavish 
productions rather than 
cheaper seats, or fewer sales of 
drink and food. 

Subsidies to the audience are 
more efficient than subsidies to 
the managers, and In this case 
they should be related to the 
audience's dress. The Royal 
Opera House, and other thea- 


tres, should be awarded addi- 
tional subsidies so that they 
can offer discounts on ticket 
prices to those who guarantee 
to attehd in appropriate 
clothes. 

Such discounts could be 
graded to the standard of dress 
worn - say 25 per cent off for 
evening dress and 15 per cent 
for suit and tie, with special 
discounts for those who wear 
clothes from a list of desig- 
nated tailors and designers. 

The National Lottery would 
be the obvious source of funds 
for such additional subsidies. 
What would be more appropri- 
ate than to take money from 
the proletarians who are likely 
to be the biggest users of the 
lottery, because they are too 
thick to calculate the odds 
against winning, and give it to 
those people who appreciate 
the finer things in life. It is, 
after all, the principle behind 


the government’s existing 
plans to use revenue from the 
lottery to increase its support 
for the arts. 

David Sawers, 

Crosby. 

10 Seauiew Avenue, 

Angmenng-onSea, 

Littlehcrmpton, 

West Sussex BNl6 1PP 

From Mr Malcolm London. 

Sir, Re discussion on “Ihe 
decline and fall of elegance”, 
the governor of the Hank of 
England, Eddie George, is pho- 
tographed (July ifl> emerging 
from a meeting on Monday 
with the chancellor of the 
exchequer at 11 Downing 
Street, wearing a blazer and 
flannels. Next week, shorts and 
an Hawaiian shirt? 

Malcolm London, 

St Andrea’s House, 

20 st Andrew Street, 

London EC4A SAD 


A route to 
give more 
power to 
the people 

From Mr Pool Myhrvang. 

Sir, In a representative 
democracy, individuals are 
elected by the will of the peo- 
ple. This responsibility may 
often create dissatisfaction 
among the very people the rep- 
resentatives have been elected 
to represent In light or this, 
Charles Leadbeater and 
Andrew Adonis, in their article 
“Power to the people" (July 
15), put forward persuasive 
arguments for greater involve- 
ment of the electorate in the 
decision-making process. 

Appropriately, in a world 
where information flows freely, 
technology is available to 
allow electronic voting and, ' 
most importantly, the voting . 

population are highly educated ■ 
individuals very much capable 
of taking many of the deci- 
sions, a case for stronger influ- 
ence of direct democracy is 
present. Leadbeater and 
Adonis’ remedies, however, 
will not do much to resolve the 
problems. True, voter vetoes to 
the form of referenda will 
induce a greater degree of 
responsibility of the represen- . 
tatives, but this suggestion, . 
along with the two others, 
voter juries and voter feed- 
back, are rather more likely to 
fuel the already destructive • 
tendency of voters' resentment 
of politicians. This will exacer- '- 
bate further the efficiency of 
derision-making. Hie first pro- 
posal will have this effect y 
through leaving decisions open 
to reversal as the veto will, by 
definition, be imposed post-de- 
cision. The second one will let > 
a body which is very likely to 

be totally unrepresentative of 
the population advise on deci- 
sion-making, only to be "over- 

ruled" by the representative 

body. r 

A better approach would be > 
to introduce a clear division m • 

powers between the people and 

the representatives, and lettbe ,• 
derisions be made irreversibly ... 
by the people in those area* 
they are given the power to do 
so. Ideally, these powers would .. 
cover areas where represents- .. 
lives today have the power to 
prevent the transfer of, « ?veQ 1 
increase, their own powers- 
This would, for example, be i 
relevant in a transfer of a \ 
national parliament's powers 
to a supranational body. The . 
people should, furthermore, 
have a strict procedure under .. 
which they can transfer more y. 
powers to or from their own . 
han ds > 

Paal Myhrvang, 

Postboks 163, 

Nedre Torke, 

2801 Gjarvik. ; ; 

Norway 




financial times 


FRIDAY JULY 22 1994 


l? 


financial times 

Te I To7| r R^%^J| thWarl Brid S e ’ London SE1 ™L 
Tel. 071-873 3000 Telex; 922186 Fax: 071407 5700 

Friday July 22 1994 


Slender thread 
in Strasbourg 


Mr Jacques Santer, narrowly 
confirmed yesterday as the nest 
president of the Brussels Commis- 
sion, has been trying to muster 
support from a wide variety of 
quarters. Last week he declared 
Ms attachment to decentralised 
decision-making and EU enlarge- 
ment. This week, speaking to the 
European parliament before yes- 
terday’s vote, he emphasised his 
hacking for economic and mone- 
tary union and EU social policy. 

Since he was nobody’s first 
choice, it is not surprising that Mr 
Santer's espousal of well-meaning 
Euro-orthodoxies failed to fire par- 
liament’s full-hearted enthusiasm. 
After the mismapa garnent of the 
succession to Mr Jacques Delors, 
governments should now be in no 
doubt of the flaws in the method 
of selecting the person who repre- 
sents Europe w ithin the co ntine nt 
and on a wider stage. When Mr 
Santer’s successor Is chosen, pre- 
sumably in 1999, it must be 
through an open rather than a 
closed elective process. 

By upholding Mr Santer’s 
appointment, yesterday's vote has 
none the less rescued European 
leaders' credibility. This will have 
been a particular relief to Chancel- 
lor Helmut KohL Hie chief cham- 
pion both of Mr Santer and of giv- 
ing the parliament more influence, 
Mr Kohl could have been badly 
damaged bad the cup used to 
anoint Strasbourg with power 
been flung back in his face. 

Yet the narrow margin also 
emphasises the slender thread on 
which the EU’s constitutional 
arrangements are hung. Having 
won “codecisian" rights with the 


Council of Ministers, the parlia- 
ment has much more say over 
European legislation. It is still 
only at the beginning of learning 
bow to deploy this extra clout. In 
view of increased parliamentary 
fragmentation after last month's 
elections, its difficulties in acting 
predictably and cohesively should 
not be underestimated. 

The assembly has still a long 
way to go in making itself less 
remote from and more account- 
able to European electorates. 
These aims will not be served if it 
gives further evidence of the sort 
of debatable judgment already dis- 
played in its veto on Tuesday of 
telec omm unications libe ralisati on 
More clashes with governments 
may be in store, for instance in 
the budgetary field, where many 
MEPs’ desire for more spending to 
combat unemployment may col- 
lide with finance minis tries' 
attempts to cut fiscal deficits. 
Unless MEPs reserve their dis- 
plays of muscle for Issues of genu- 
ine merit, parliament could 
become its own worst enemy. 

A test of Strasbourg’s mettle 
centres on the preparations for the 
1996 conference to review the 
Maastricht treaty. Since no gov- 
ernment at present wants to take 
a high-profile role here, parlia- 
ment has an ideal opportunity to 
map out an agenda that would 
take account of electorates’ scepti- 
cism about some Maastricht aims, 
yet would also allow the EU to 
become both wider and more inte- 
grated. Taking the lead in the 1996 
debate would be the best way for 
parliament to play a constructive 
part in shaping Europe’s fixture. 


Atlantic sinks 


It is hard to believe that the 
financial collapse of Atlantic Com- 
puters - which also caused the 
demise of its parent, British & 
Commonwealth - was only four 
years ago. The story, so tren- 
chantly retold yesterday in a DTI 
report, belongs to a distant age. 

The chief protagonists in the 
Atiantic/B&C tale are the late 
John Poulston, the founder of the 
computer company who died in a 
motor-racing accident, and John 
Gunn, who for a while trans- 
formed B&C into a seemingly 
dynamic financial services group. 

Mr Fouiston and his successors 
constructed an elaborate house of 
cards out of Atlantic, which was 
founded in 1975, came to the stock 
market in 1983 with a value of 
£40m and was eventually sold to 
B&C in 1988 for EMSm. 

Throughout its history, ques- 
tions had been raised about 
whether Atlantic's profits were 
being inflated by inappropriate 
accounting policies. Yet it was not 
until 1990 that the truth emerged, 
when it collapsed with a defi- 
ciency in excess of £90m. 

As the DTI inspectors say, if the 
group had used prudent account- 
ing policies, it would probably 
never have been able to report a 
profit throughout its existence. 
Yet between 1983 and 1988, it 
reported aggregate pre-tax profits 
of £127. 6m. 

This deception was made possi- 
ble in part because of the inade- 
quacies of accounting rules, many 
of which have since been 
reformed- However the inspectors 
believe a more important factor 


lay with the City firms, in particu- 
lar Spicer and Pegler, Atlantic's 
auditor, which too readily placed 
confidence in half truths provided 
by Atlantic directors about poten- 
tial leasing losses. 

B&C’s directors, notably Mr 
Gunn, the chairman, and Peter 
Goldie, the chief executive, are 
also blamed for acquiring Atlantic 
without having a sufficiently deep 
understanding of it After the deal 
went through. Mr Gunn, Mr Gol- 
die and the finance director, Mr 
Rusty Ashman, quickly learned 
about Atlantic's appalling finan- 
cial condition, but then prevari- 
cated for months before disclosing 
the disa-ster to outside sharehold- 
ers. Though the inspectors say 
that they did not act dishonestly 
or seek to defraud anyone, the DTI 
is probably right to seek their dis- 
qualification as directors. 

Though the market conditions 
which allowed Atlantic to prosper 
are long passed, the report uncov- 
ers one area of City of London 
practice which needs urgent 
reform. BZW, which was B&C’s 
merchant bank adviser, allowed 
its name to be used to endorse the 
wisdom of the Atlantic takeover in 
B&C’s letter to shareholders about 
it. Shareholders take comfort 
when such assurances are given 
by a merchant bank, yet the level 
of investigation which a merchant 
bank carries out when giving such 
an endorsement is minimal. BZW 
did not even carry out the normal 
minimum - but the inspectors 
suggest that even If it bad, it 
might not have uncovered the 
truth about Atlantic. 


Serb conundrum 


be fate of the latest peace plan 
ir Bosnia is unfolding in a pre- 
triable way. Neither side likes it, 
ut the Bosnian government 
xepted it in order to avoid being 
lamed for its failure. The Bos- 
ian Serbs have not accepted it, 
lit have played for time by 
smanding clarifications, in a 
lanncr re minis cent of the IRA. 
The authors of the plan - 
rttain. France, Germany, Russia 
id the US - are agreed in finding 
ie Serb response unsatisfactory, 
it not on how to react to it The 
S. backed on this point by the 
U mediator, Lord Owen, is 
rging the contact group to stand 
no and penalise the Serbs as the 
calcitrant party. The Russians, 
icked by the UN mediator Thor- 
ild Stoltenberg, believe that 
ace depends on finding answers 
i at least some of the questions 
te Serbs have raised. 

No doubt there will be talks on 
iese issues, formally or inf or- 
ally, between now and July 30 
ben the contact group is due to 
eet at foreign minister level. But 
ie US is surely right to warn 
jainst failing for the Serb tactic, 
ace again the “International 
i mmuni ty" has a credibility 
oblem, which will only be made 
arse if, because of its internal 
visions, it allows yet another 
«dline to be ignored with 
ipunity. 

Part of the trouble is that the 
urn fan Serbs are shielded by two 
vels of intermediaries. First 
fire is Serbia itself; in the person 
President Milosevic. Although 
i carries a heavier weight of 


responsibility than any other sin- 
gle person for the whole Yugoslav 
tragedy, many people involved in 
the diplomatic process, including 
notably Lord Owen, have con- 
vinced themselves that he is now 
genuinely anxious for peace and 
able to bring the Bosnian Serbs to 
heel if only he is given time and 
treated with respect This dubious 
proposition should not be taken 
cm trust If Serbia wants to escape 
feeling the world's displeasure 
itself, it must either deliver tire 
Bosnian Serbs' assent to the pro- 
posed settlement or cooperate in 
visiting the world's displeasure on 
them. 

The second level Is the Rus- 
sians, whom many western lead- 
ers are anxious to “keep on hoard” 
because of their supposed influ- 
ence over the Serbs. Much the 
same reasoning applies to them: if 
they cannot demonstrate their 
influence by delivering Serb 
assent to the peace plan they have 
themselves helped draw up, their 
objections to measures aimed at 
coercing Serbia into a more co-op 
erative attitude should be brushed 
aside. 

Among those measures, lifting 
the arms embargo on Bosnia has 

become “a last resort” even for the 

US defence secretary. A more 
credible deterrent against Serbia 
must be the threat to confine it 
indefinitely to the fringe of the 
world community and the world 
economy, so long as it supports 
the forcible exclusion of the Bos- 
nian majority from their homes. 
Serbia may not be defeated mili- 
tarily, but it can be quarantined. 


T ake a $150Qbn financial 
market, a handful of 
ambitious Investment 
banks, and a group of 
incautious investors 
willing to risk their for someone 
else’s) money. Add the latest high- 
tec wizardry Wall Street has to 
offer. Then sit back and wait for 
external events to take their course 
- an unexpected rise in interest 
rates, for instance. Suddenly, you 
have the ingredients for a market 
upheaval, 1390s style. 

The US's market in mortgage- 
backed securities, by which many 
home loans are financed, has pro- 
vided just such a spectacle in recent 
months. The latest victim. UK 
drugs company Glaxo, indicated 
last week that it had lost about 
£100m from investments in this and 
other risky maikets. It joins a long 
list of others which have suffered 
significant losses on the market - 
from US investment fund Askin 
Capital (which has lost a large part 
of its SSQQm capital and been forced 
to file for bankruptcy) to a US sub- 
sidiary of Bank of Montreal (whose 
losses reached $51xn), and Kidder 
Peabody, the investment b ank 
owned by General Electric. 

The debacle not only raises ques- 
tions about risk assessment on Wall 
Street but threatens to spill over 
from the financial into the real 
world. The impact of the upheavals 
in the mortgage-backed securities 
market on other bond markets may 
have slowed US economic growth 
by forcing up long-term interest 
rates, though the precise effects are 
incalculable. As Wall Street’s fin- 
gars have been burnt, families in 
the US have found it more expen- 
sive to buy their first homes. Some 
investors in US mutual funds (simi- 
lar to UK unit trusts) - which have 
played the market will have lost a 
.■anal] amount of their na pit^i 
The damage mortgage-backed 
securities has caused seems strange 
given their seemingly humble pur- 
pose of providing money for people 
to buy homes. Rather than the cash 
coming directly from a financial 
institution such as a bank, it is pro- 
vided by investors who buy bonds. 
Mortgage payments by home own- 
ers cover the interest and principal 
payments on the bonds. By pooling 
thousands of such domestic mort- 
gages, Wall Street has created a 
mnlti-billion-doUar market which Is 
now reckoned to account for more 
than $L500bn, or about half of all 
home loans in the US. 

Problems have arisen because the 
evolution of these products has not 
Stopped there. Since the late 1980s, 
the mortgage-backed bond market 
has been subjected to the sort of 
financial engineering which has 
made a new generation of Wall 
Street traders rich. The theory 
behind the re-engineering was sim- 
ple: why not mould the bonds into 
Instruments which would match the 


No longer as 
safe as houses 

Richard Waters on the repercussions of losses made in 
the US market for securities based on home loans 

Mortgage-backed securities: trouble in homes 



New home loans ($bn) 
1000 


| j Total volume 


Of which 
refinancings 


Mortgage-backed bonds ownership fifon) 
tan 1092 

1993 

- Bartea * 

• 277 

306 

337 

Ufa insurance companies 

185 

244 

268 

-‘Pension Mid* 

'157 

.173 

194 

Mutual funds 

79 

IOS 

123 

Savings and loans 

157 

156 

163 

Others 

385 

420 

427 

Total 

1240 

1404 

1812 



1885 88 87 


SBt*ncMMBIwBvitanAMdMM*Aiianc» hum MmKnga Swwrtaa 


needs of particular groups of inves- 
tors more closely? 

This task was achieved with the 
help of technology developed in the 
market for derivatives - complex 
financial instruments whose value 
is based in part on that of an under- 
lying market. Bonds were pooled 
and their interest and principal 
cashflows divided to create new. 
more exotic financial products. 

After the most attractive parts of 
the bonds have been made into new 
instruments, the remainder - 
known as “toxic waste" - is sold 
cheaply to risk-hungry investors, 
retained by the investment bank, or 
perhaps thrown together with odds 
and ends left over from other pools 
of mortgages to create mare new 
instruments (some known as 
“kitchen sink bonds”, a bit of 
everything has been thrown in). 

All these reconfigured mortgage- 
backed bonds go under the n«mp of 
collateralised mortgage obligations 
(CMOs). By some estimates, as 
much as a half of all mortgage- 
backed bonds have been converted 
into CMOs. Because they are some- 
times heavily geared, their price 
can move sharply with changes in 


interest rates, giving investors more 
bang for their bucks. 

If that was the end of the story, 
there would be little to distinguish 
mortgage-backed securities from 
other fixed income instruments. But 
the market has a unique feature: 
when interest rates fall, home own- 
ers may pay off their loans and take 
out a new loan at a lower interest 
rate. When rates are high, they 
probably won't pay them off at all. 

A failure, by those who design 
and invest in the products, to pre- 
dict what homeowners would do in 
the unusual nnanrini market condi- 
tions since last summer has 
wreaked havoc. 

The problems began at the peak 
of last year's bond market rally. 
Against most expectations, 
long-term US bond yields fell to his- 
toric lows, as investors grew confi- 
dent that inflation (the bond-buyer’s 
worst enemy) was no longer a 
threat. Mortgage rates fell with 
them. That unleashed a wave of 
mortgage-refinancing by home own- 
ers on an unparalleled scale. 

The complex computer pro- 
grammes used to construct and 
value CMOs did not predict that 


H 91 12 93 M 


people would behave in this way. 
By paying off their old loans at 
such a rapid rate, homeowners 
played havoc with bond prices. 
CMOS took the brunt of the pain: 
"Interest only”, or IO. bonds (cre- 
ated out of the interest payments 
from mortgage-backed securities) 
fell furthest, os investors lost thoir 
expected future interest payments. 
The shock waves were felt from the 
bond-trading floor at securities 
house Salomon Brothers all the way 
to a string of small municipal 
authorities in Ohio, which had 
bought IOs. 

This spring, it was the opposite 
story in the mortgage-backed bond 
market. As US bond yields rose 
along with short-term interest rates 
(in turn pushing up mortgage rates) 
homeowners stopped paying off 
their old loans. The Mortgage Bank- 
ers Association estimates that the 
value of mortgages refinanced, 
which reached $550bn in 1993, will 
fall to just $150bn this year. 

With the level of refinancing 
lower than expected, investors have 
suddenly found that bonds which 
had an expected life of, say, two 
years, are unlikely to be repaid 


until much later. The average dura- 
tion of bonds in Salomon's mort- 
gage-backed bond index has jumped 
from 3.2 years at the beginning of 
February - to more than 5 years. 

One indirect result has been a 
barrage of selling in the US govern- 
ment bond markets. As the dura- 
tion of mortgage-backed bunds rose, 
many investors sold long-dated gov- 
ernment bonds to hold down the 
average duration of their portfolios. 

The actions of regulators may 
have worsened the impact. US 
banks are under pressure to show 
their CMOs at market value in their 
accounts. That means that if prices 
are volatile, there is less incentive 
to hold such bonds. 

Some regulatory pressure has 
been more direct. Worried about the 
losses that some supposedly safe 
mutual funds have taken on com- 
plex financial instruments, the 
Securities and Exchange Commis- 
sion. which regulates US invest- 
ment markets, wrote to mutual 
fund managers earlier this month to 
warn of the (Lingers. These funds 
should work out a way to "dispose 

of the securities in ;m orderly man- 
ner. consistent with the interests of 
the funds' shareholders." the SEC 
said. 

The CMO debacle has revealed 
some of the shortcomings in the 
way modem financial markets oper- 
ate. Dealers and investors alike put 
much trust in the ability of comput- 
er-driven analyses to predict what 
would happen to prices in different 
market conditions. As things turned 
out. their assumptions were wrong. 

A lsu, they failed to take 
account of the risk 
inherent m tailor-made 
financial instruments 
for which there is no 
ready market. The lack ui a market 
accentuated the price falls. And the 
fact that many unsophisticated 
investors, such as local government 
treasurers, were sucked into the 
market, is testimony to the poor 
controls in their organisations and 
the willingness of investment banks 
to sell complex securities to people 
who do not really understand them. 

Nor are regulators and policy 
makers blameless. They failed to 
pay enough attention to innova- 
tions in the CMO market at an ear- 
lier stage, and when finally prodded 
by losses, may have over-reacted. 

Like all market upsets, this one 
has created opportunities for con- 
trary investors. Other markets have 
seen turn-abouts: the US junk bond 
market, pronounced dead at the end 
of the 1960s. roared back to life with 
a record year in 1993. Investors who 
bought junk bonds at knock-down 
prices have made their fortunes. 
The same is true of some CMOs. for 
those brave enough to buy them. 
But in the current climate, there 
are few takers for toxic waste. 


The great transition robbery 



Personal 

View 


Of more than 30 
countries in the 
Soviet-socialist bloc, 
few have made a 
good start on stabi- 
lisation and transi- 
tion to the market 
Only eight 
Poland, the Czech 
Hungary, Slovenia, 


Republic, 

Estonia, Latvia, Lithuania and the 
surprise-case, Albania - have con- 
trolled inflation, stabilised their 
currencies, liberalised prices and 
international trade, and privatised 
the bulk of small retail and service 
outlets. Most of them are also see- 
ing a tumround from negative to 
positive economic growth. 

So why have the others not done 
the same? The simple answer is 
that powerful elites do not want 
reform. As central command disap- 
peared, the old Soviet “patriarchs" 
- directors of enterprises and state 
farms, and local political bosses - 
gained autonomy. At first, the 
expected reform measures - privati- 
sation. opening up of markets to 
foreign competition and diminution 
of subsidies - threatened their sta- 
tus. Where reform measures were 


undertaken quickly, those members 
of the elite who survived were 
forced to behave roughly tike com- 
petitive capitalists. Elsewhere, 
delays in proceeding with reforms 
gave them time to transform them- 
selves into monopolist-capitalists. 

Under the in-between economic 
arrangements, the state provides 
subsidies and cheap credits, alleg- 
edly to keep the economy going and 
people on the job. This not only 
causes inflation. It also provides the 
directorate with influence and with 
fiends to engage in side operations, 
such as purchasing titanium, mag- 
nesium or petroleum cheaply, 
obtaining licences from their old 
colleagues, and then selling the 
commodities abroad at a tidy profit. 
This causes materials shortages, 
corruption, capital flight, an inflow 
of Mercedes-Benz cars and popular 
discontent 

The patriarchs partially assuage 
discontent by ensuring workers 
have jobs and receive enough to 
survive. Nevertheless, the discon- 
tent finds an outlet, with workers 
saying: “You pretend to be paying 
us less even than in Soviet times: 
and we pretend even less to be 


working.'* The result is more absen- 
teeism, less effort and even less pro- 
duction. More worrisome, invest- 
ment in production capacity is not 
taking place, since commercial 
operations are Car more profitable. 

Having been given the time to 
recover from the shock of commu- 
nism’s overthrow, the old-new elites 
now find it in their interest to go 
neither back to state command, nor 
forward to competitive markets. 
Ftom a socialist-patriarchal society, 
where the elite's promise was "you 
have entitlements, while we have 
privileges", the lagging countries 
have moved to a rentier-patriarchal 
society, where the elite says “you 
are still assured of minimal entitle- 
ments, while we profit maximally 
from the hew opportunities". 

The frequent characterisations of 
the result as a corrupt society, with 
a few wealthy rob her- barons, 
express the moral indignation of the 
people. But beyond moral judg- 
ments, a for more important conclu- 
sion emerges: the new rentier-patri- 
archal elites are. in general, 
opposed to further reform. They are 
unlikely to look kindly upon mea- 
sures to break up monopolies, raise 


rates of interest, curtail easy cred- 
its, or liberalise prices and trade, all 
of which would undermine their 
privileged position. 

Popular opposition to further 
reform is increased by two contra- 
dictory perceptions. Since the elites 
share a small part of their gains 
with workers, the latter support 
thorn in lobbying for preferential 
treatment. At the same time, the 
monopolistic capitalism people 
observe and abhor is mistaken for 
the competitive capitalism advo- 
cated by reformers. Consequently, 
popular resentment is directed 
against market reforms. 

Economies do not disintegrate 
overnight, so this limbo can con- 
tinue for a long time. Might the 
elites realise they are killing the 
goose that lays golden eggs and so 
support reform? There is a chance, 
but only for partial reform. 

At some point, they will recognise 
that excessive cheap credit and sub- 
sidies cause inflation, which hurts 
even the new capitalists in the long 
run, since it eats away at the pro- 
duction potential or the economy. 
Soon - in some cases already - 
privatisation, even of large-scale 


enterprises, will also be in the inter- 
est of the new capitalists, since they 
can become large shareholders. 

If competition were allowed to 
sort out the efficient capitalists 
from the inept, this would help the 
economy. But this is a big ‘if. The 
elites may see stabilisation and pri- 
vatisation as in their interest, but 
are unlikely to consider liberalisa- 
tion in the same way. since it would 
threaten their cosy monopolies. 

The best-case scenario is one of 
an economy that is privatised, 
monopolised and highly regulated 
by government. As in many Latin 
American and African examples, 
what is likely is not successful sta- 
bilisation, but a series of failed 
attempts. It is natural to hope for 
something better. But wherever the 
opportunity to move forward 
quickly has been lost, the reality 
may be that the transition is frozen. 

Oleh Havryiyshyn 


The author is alternate executive 
director for Ukraine at the Interna- 
tional Monetary Fund 


Observer 


Clothed in 
secrecy 

■ So what will Central Intelligence 
Agency director James Woolsey be 
wearing today? Fridays at the CIA 
are now “dressing-down” days. Not 
more rec riminatio ns over the 
Aldrich Ames spy debacle, but an 
experiment in casual dressing. 

It's the latest effort by Woolsey to 
alter CIA culture from that of a 
closed, white male fraternity, into 
something a little more, wefl, 
rwgnal- 

Sopporters of this trend, now 
creeping across US life, claim it 
enhances team spirit and 
productivity. Others suggest that 
since most people slack on Fridays 
anyway, they may as well look the 
part. 

Woolsey says the spooks may 
wear red suite or stand on their 
head for all he cares - just so long 
as they do a good job. 

But even thnn gh a renowned 
demon on the ballroom floor, 
Woolsey is unlikely to turn up 
today in his patent-leather danci n g 

pomps. Too slippery by for .. . 


Shuffle off 

■ At last, good news for the UK's 

Tory government The annual 
report from the Invest in Britain 
Bureau - part of the department of 
trade and industry - yesterday 

showed a record number of new 


jobs created by inward investment 
last year. 

How satisfying for Tim Sains bury 
who, as junior minister at the DTI 
wrote the report’s foreword. Only 
one hiccup. Sainsbury was a victim 
of John Major’s government 
reshuffle - and thus absent from 
the presentation. 


Great scorel 

■ Not all Brazilians are delighted 
with the triumphant re tom of the 
national soccer team. Osiris Lopes, 
head of Brazil's Interna] Revenue 
Service, says he's resigning because 
the players and their hangers-on 
brought back an Aladdin's cave of 
US consumer goods - and were not 
required to pay the normal import 
taxes. Their booty - some 12 tons - 
includes freezers, video recorders, 
gymnastic equipment, computers 
and a photocopier. 

One of the main planks of the 
Brarihan government current 
economic reform programme is a 
crackdown on tax-dodging. This 
latest event, says Lopes, is “the last 
straw". 


Chirac snaps 

■ Jacques Chirac is no stranger to 
the front covers of French 
magazines', as former prime 
minister, present mayor of Paris 
and prospective presidential 
candidate, be graces them 
continually. But it’s strange to see 



This veto looks like the work 
of a professional’ 

him apparently fore-dodging - by 
vaulting over a Metro turnstile on 
the front cover of this week's Le 
Ntnaxl Qbservateur. The headline? 
“The France that Cheats". 

Chirac is not named on the cover 
or the accompanying story, which 
argues that tax evasion, fare 
dodging and other Addles are now 
commonplace in France. But it’s 
him all right. 

His office says it was taken “in 
good humour" 18 years ago during a 
Metro equipment breakdown, when 
a younger Chirac leap-frogged over 
a ticket turnstile. 

Chirac doesn't see the joke. He 
has accused Le Nbuvel Observateur 
of “serious violation of 


press ethics” - and is suing. 


Eyeballing 


■ At last. Britain and China begin 
to see eye-to-eye over Hong Kong. 
Don’t get your hopes up, though. 

It seems governor Chris Patten 
intends donating his corneas - after 
his death - to an international 
medical organisation, which 
operates a firing eye hospital. 

Oddly enough. Zhou Nan, China’s 
de facto ambassador to Hong Kong, 
apparently made the same pledge 
yesterday while visiting the same 
flytoe eye hospital - built into a 
DC-lO airliner - at Hong Kong's Kal 
Tak airport 

They really should be grafting at 
higher things. 


Short circuiting 

■ The Kafka esq ue problems 
besetting Russia's ailing enterprises 
have taken a new twist Normally, 
energy suppliers are the main 
victims of non-payments. But one of 
the country’s biggest oil producers 
had its electricity cut off on 
Wednesday - for not paying bills of 
Rbsl50bn. 

The Siberian oil giant. 

N izhnevarto vskneftegas , says 900 of 
its oil wells have stopped 
production after the electricity 
authorities cut it off. A special oil 
and fyel ministry commission is 
now heading east from Moscow to 
settle the dispute. 


Nizhnevartovskneftegas reckons 
it in turn is owed more than 
Rbs300bn - some Si 50m - for 
unpaid oil bills. 

What was that about paying 
pipers and calling tunes? 


Well-informed 

■ Charles Cox, head of public 
sector business at the UK 
information technology company 
Hoskyns, has never concealed his 
criticisms of the government's 
approach to contracting-out and Its 
failure to deliver the potential 
benefits. 

Many others in the IT world 
agree, but have kept quiet, fearing 
that to speak out would count 
against them. 

But having the courage of one's 
convictions doesn't always land you 
in hot water, Hoskyns has just won 
the contract for providing all IT 
services at the DTL 


Thumper's home 

■ Was there a subliminal message 
In the necktie worn by John 
Prescott's aide, lan McCartney, at 
yesterday's big bash in London to 
anoint Tony Blair as new leader of 
the Labour party? 

The MP for Makerfield's tie 
incorporated the cartoon character 
Bugs Bunny, in deference to the 
new deputy Labour leader's 
nickname. Thumper. 

And its label? "Loony Toons". 




14 



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Youngest-ever leader wins mandate for move to political centre 

Blair to head UK Labour party 


By PhiOp Stephens, 

Political Editor, in London 

Britain's opposition Labour party 
elected Mr Tony Blair as its new 
leader by a decisive margin yes- 
terday, giving him a clear man- 
date to push the party further 
into the political centre ground. 

The 41-year-old successor to Mr 
John. Smith, who died in. May of a 
heart attack, seized the opportu- 
nity to pledge a “war against 
complacency” in the party. He 
won an immediate pledge of loy- 
alty from his newly elected dep- 
uty, the more traditionalist Mr 
John Prescott 

Promising to drive forward the 
process of “modernisation'’ and 
echoing the themes of President 
Bill Clinton’s 1992 US presiden- 
tial campaign, Mr Blair said 
Labour must eschew the old dog- 
mas of both right and left 


Instead it would present the 
electorate at the nest general 
election with a new left-of-centre 
agenda based on economic regen- 
eration and the restoration of 
Britain's social fabric. 

The youngest-ever Labour 
leader told supporters at a Lon- 
don rally that the ruling Conser- 
vative party had “lost the 
□atinn's trust". But Labour had 
still to work fbr and earn that 
trust by launching a “crusade for 
change”. 

Mr Blair’s victory with an out- 
right majority of 57 per cent 
across the three sections of 
Labour’s electoral college was 
accompanied by a comfortable 
win in the race for the deputy 
leadership by Mr Prescott 

Mrs Margaret Beckett, who 
took over as interim leader from 
Mr Smith, was defeated in both 
contests. She immediately 


pledged her loyalty to the new 
leaders, indicating she would be 
seeking a senior post alongside 
Mr Blair and Mr Prescott after 
elections for the shadow cabinet 
team later this year. 

Mr Blair’s victory coincided 
with the first meeting yesterday 
of Mr John Major's reshuffled the 
new cabinet, reshuffled on Tues- 
day by Mr John Major, UK prime 
minister. 

The new Labour leader will 
delay until after the shadow cabi- 
net elections his a planned 
shake-up of Labour's foam, but 
he is already studying changes to 
the party’s cumbersome policy- 
making machinery. 

As Mr Jeremy Hanley, the 
newly appointed Conservative 
party chairman, attacked Mr 
Blair as “all style and no sub- 
stance”, senior ministers said the 
government's strategy would 


now be to hi ghl ight the "clear 
water” which remained between 
the two parties on the economy, 
taxation and Europe. 

But in his acceptance speech 
the new Labour leader left no 
doubt of the direction he intends 
to travel in an effort to end the 
run of four general election 
defeats which have led to more 
than 15 years in the political wil- 
derness. 

Labour would embrace the 
market economy but buttress it 
with a partnership between gov- 
ernment and industry; it would 
end the dependency of the poor 
by promoting employment rather 
than welfare; and it would extend 
high standards in education to all 
schools. 

Blair pledges to build on Smith’s 
legacy. Page 8 
Joe Rogaly, Page 12 


Sony closes circuit board 
plant as Japan demand falls 


Qy Mfchfyo Nakamoto in Tokyo 

Sony, the consumer electronics 
company, said yesterday it was 
halting production at a plant in 
central Japan because of a 
decline in the domestic market 

The plant at Atsuta, outside 
Nagoya, is one of two in Japan 
where Sony produces printed cir- 
cuit boards for video cameras. 
The company will consolidate 
domestic production at its other 
Japanese plant 

Meanwhile, Matsushita, the 
world’s largest consumer elec- 
tronics company, said yesterday 
it was advancing plans to reduce 
its administrative staff by 30 per 
cent 

The group win aim to make 
about 6,000 staff cuts by the end 
of fiscal 1996 rather than the end 
of fiscal 1997, as originally 
planned. 

The cuts are part of Matsush- 
ita's plan to improve its profit-to- 
sales ratio from 1.5 per cent in 
1993 to 5 per cent by the end of 


1996. 

The announcements by Japan’s 
two leading consumer electronics 
companies hi ghlig ht - Hu> difficul- 
ties the industry feces after sev- 
eral years of falling profits and 
efforts to cut costs and restruc- 
ture. 

The domestic environment has 
changed dramatically from the 
days when manufacturers expec- 
ted rising demand for a wide 
array of products. 

The maturing of the market, 
coupled with demands for 
cheaper products and a flood of 
low-priced imports from Asian 
countries, has triggered a sharp 
fell in prices. 

Sony's move marks the first 
tune in Its recent history that 
production has been halted com- 
pletely at a plant “The Atsuta 
plant is feeling the effects of 
lower demand in the camcorder 
market” a Sony official said yes- 
terday. 

The plant faced other concerns, 
such as insufficient space to 


expand, a lack of abundant water 
needed to wash printed circuit 
boards, and its age; the facility 
was opened in 1973. 

The move also highlights 
Sony’s need to develop more 
innovative products that can trig- 
ger market demand. In video 
cameras, for example, the group 
blemished its imng p as an inno- 
vator when it followed Sharp, a 
smaller company, in launching a 
video camera with a built-in 
screen. 

Matsushita, meanwhile, feces 
pressure to streamline its vast 
administrative workforce, which 
numbers 20,000 across seven 
group companies. The group's 
Large staff has become a symbol 
of how it has grown into a corpo- 
rate dinosaur, out of touch with 
market realities. 

Japanese consumer electronics 
makers such as Matsushita and 
Sony will have to move swiftly, 
analysts believe, to restructure 
their operations to meet the 
demands of a new era. 


Italy coalition split on economic policy 


Continued from Page 1 

appropriate fees. As tension 
between partners in the govern- 
ment coalition grew, a fist-fight 
broke out in the chamber of dep- 
uties between a League deputy 
and a one from Mr Silvio Berlus- 
coni's Form Italia. They had ear- 
ner indulged in a slanging match 
over the way each party had 
behaved in the withdrawal of the 
decree on preventive detention. 

Because of the differences the 
government is now likely to do 
little more than repeat the 
already announced broad eco- 
nomic targets for the 1995 bud- 
get without folly explaining how 
the money will be found to 
bridge the budget deficit 

Mr Lamberto Dlni, the trea- 
sury minister, last week said the 
deficit would be held down to 


Ll40,000bn, or equivalent to Just 
below 9 per cent of GDP. This 
will be done by finding some 
L30.000bn in spending cuts and 
Ll5,000bo in new revenues. The 
key areas Identified for spending 
cats were pensions and health. 

The main new revenues will be 
an amnesty on a backlog of &2m 
disputed tax assessment cases 
and the pardon on Illicit build- 
ing. Both items will come into 
effect this year and will cover 
the L5,000bn shortfall In the 
1994 budget revenue projections. 

Hie postponement of any seri- 
ous discussion on pensions is 
likely to be viewed negatively by 
the financial markets. Pension 
cuts are widely seen as the test 
of tbe Berlusconi government’s 
resolve to restore Italy's public 
finances to the criteria laid down 
by tbe Maastricht treaty. 


Yesterday, Mr Mastella, who is 
also responsible for pensions, 
was reported to have said the 
maximum realistic sum to be 
raised from changes in pensions 
was L4.000bn. 

He opposed the more drastic 
Treasury proposals to raise 
immediately the retirement age 
to 65 for both men and women 
from tbe current 55 for women 
and 60 for men. 

Differences over the illicit 
building pardon have been sim- 
mering for more than a week. 

Mr Silvio Berlusconi, the 
prime minister, tried unsuccess- 
fully to bridge them at a special 
session with his two main coali- 
tion partners - Mr Umberto 
Bossi, the leader of the populist 
Northern League, and Mr Gian- 
franco Fini, head of the neo-fas- 
cist MSI/National Alliance. 


Bundesbank 
raises hopes 

Continued from Page 1 

target range of 4-6 per cent, 
which has been far exceeded so 
far this year. Hie unadjusted M3 
growth rate for June was 11.3 per 
cent 

Yesterday's decision to fix the 
Interest rate for securities repur- 
chase agreements at 4.85 per cent 
for the four weeks of the s umm er 
break, following a variable rate 
of 488 per cent this week, was 
not a signal that rates elsewhere 
would Ml. Mr Tietmeyer said. 

Mr Johann Wilhelm Gaddum, 
vice-president, said the fixed 
“repo” rate was in line with cur- 
rent market rates and expecta- 
tions. However, yesterday's state- 
ments will raise hopes for a cut 
in the internationally sensitive 
discount rate, last reduced in 
mid-May to 45 pm - cent 

According to Mr Tietmeyer 
that cut, aimed at widening tbe 
gap between long and short rates, 
and attracting the liquidity log- 
jam in M3 into long-term depos- 
its, appeared to be showing its 
first signs of success. 


Cazenove 


Continued from Page L 


damage on the company’s reputa- 
tion." 

Mr Black added: “They took 
the line of least resistance and 
scurried out the bade door into 
the tall grass. 

“Any company using Cazenove 
as a broker or an adviser should 
take note of this. The fact is in 
this business you have to have 
same reasonable level of reliabil- 
ity from people you are paying to 
serve you." 

Cazenove, which continues to 
concentrate on its traditional 
business of providing advice to 
companies on share issues rather 
than becoming a more broadly 
based investment bank, is widely 
regarded as successful but profits 
and partners' earnings are a 
closely guarded secret 


FT WEATHER GUIDE 


Europe today 


it wHl continue sunny and warm. Temperatures 
should reach about 30C from northern Germany 
to central France and Italy. Spain will be very 
hot with local temperatures above 35C. A small 
disturbance will develop this afternoon over 
Spain arvd southern France, causing isolated 
thunder storms this evening. Thunder storms 
may also develop in Switzerland and Austria. 
Scotland and Ireland will be relatively cool with 
temperatures staying around 1 7C in north-west 
Ireland and along the western and northern 
coasts of Scotland. England will have sunny 
periods and temperatures around 26C. A small 
depression tracking eastwards over Greece wiH 
cause thunder storms in northern Greece and 
Bulgaria. 

Five-day forecast 

Temperatures will rise further to over 30C. The 
depression over southern France will move 
north-east, causing heavy thunder and rain in 
northern France and, later, in Belgium, the 
Netherlands and Germany. The sun wifi return 
but rising temperatures will increase the risk of 
afternoon thunder showers. 


TODAY’S TEMPERATURES 



Situation at 12 GMT. Temperaums maximum tor day. Forecasts by toeteo Consult ottho Nettwriands 



Maximum 

Bepng 

thund 

34 

Caracas 

tair 

27 

rare 

fair 


CeWu3 

Bflftasr 

fair 

19 

c*dW 

cloudy 

22 

Frankfurt 

sun 

Abu Dhabi 

sun 

38 

Belgrade 

thund 

28 

CasabtoKa 

sun 

27 

Geneva 

thimd 

Accra 

cloudy 

27 

Berlin 

sun 

30 

Chicago 

sun 

26 

Gibraltar 

sun 

Algiers 

sun 

34 

Bermuda 

sun 

33 

Cologne 

tor 

32 

Glasgow 

fair 

Amsterdam 

Hr 

29 

Bogota 

shower 

19 

Dakar 

ate 

29 

Hantaxg 

sun 

Athens 

fair 

33 

Bombay 

rain 

29 

Dates 

fair 

34 

HsfsinH 

fair 

Atlanta 

thund 

33 

Brussets 

sun 

30 

DoW 

doudy 

37 

Hong Kong 

rate 

B. Aires 

faff 

12 

Budapest 

thund 

31 

Dubai 

sun 

39 

HonofiAj 

fair 

BJwn 

cloudy 

24 

CXhagen 

sun 

24 

OuMn 

doudy 

20 

Istanbul 

fair 

Bangkok 

shower 

32 

Cairo 

sun 

37 

Dubrovnfc 

fair 

31 

Jakarta 

fair 

Barcelona 

sui 

28 

Cape Town 

site 

18 

Edinburgh 

far 

21 

Jersey 

cloudy 


Latest technology in flying: the A340 


Lufthansa 


Karachi 
Kuwait 
L Angeles 
Las Palmas 
Lima 
Lisbon 
London 
Lus-boug 
Lyon 
Madeira 


fair 
Site 
sun 
fair 
Cloudy 
dowdy 
doudy 
tin 
Hr 
fair 


ZB Madrid 
32 Majorca 
29 Malta 

31 Manchester 
20 MariBa 

28 Melbourne 
22 Mexico City 

29 Miami 

30 Mlfri 
30 Montreal 
30 Moscow 
19 Mirich 

32 Nairobi 
05 Naples 
2 $ Nassau 

27 New York 
18 Nice 

25 Nicosia 

28 Oslo 

30 Rads 

31 Perth 
25 Prague 


thund 

sun 

3U1 

Mr 

doudy 

ttr 

far 

fair 

fair 

shora 

rate 

fair 

fair 

Ihtsid 

shower 

s hower 

sun 

sun 

sun 

sun 

doudy 

sun 


34 Rangoon 
31 Reykjavik 

30 Rio 

22 Rome 

31 S. Frisco 
12 Seed 
22 
31 

31 Strasbourg 

30 Sycteey 
18 Tangier 

29 Tel Aviv 

23 Tokyo 

31 Toronto 

32 Vancouver 

30 Venice 

29 Vienna 
36 Wssaw 

24 Washington 

30 Wdfrtgten 
20 WWpeg 
29 kulch 


drzzl 

doudy 

faff 

Hr 

fair 

am 

fair 

far 

sun 

sun 

fair 

sun 

rain 

doudy 

an 

an 

sun 

sun 

shower 

shower 

shower 

ft* 


30 
13 
26 

32 
22 
34 

31 

27 
31 
16 

28 
34 

29 

27 
31 

30 
30 

28 

33 
7 

27 

27 


THE LEX COLUMN 


Wellcome’s cool reception 


Wellcome might have hoped that its 
results would be better received if it 
produced more of them. Unfortu- 
nately, its second set of interim results 
only confiised the market Some 
impressive sales figures for Zovirax 
were overshadowed by (he accounting 
complexities and esam of AvriAptinnai 
reorganisation costs. Wellcome’s 
shares again retreated on tbe famflfor 
litany of worries about the expiry of 
Zovirax’s patent; the growing threat of 
the rival drag, Famvir; the l ack of 
a strong drugs pipeline to maintain 
the sales momentum. 

None of these concerns can be 
quickly dispelled. But perhaps the 
more important issue confronting 
Wellcome will be how successfully it 
can develop an OTC version of Zovi- 
rax. The tie-up with Warner-Lambert 
gives Wellcome the wherewithal to do 
tbe job. But it is still too early to tell 
fbr sure. In the meantime. Welcome’s 
shares will be kept warm by their 
yield. Wellcome’s £600m cash idle and 
its ratnmitmawt to run down dividend 
cover from 2.7 times also hold an 
appeal. If WeDcome eventually fells to 
build a strong OTC Zovirax franchise 
or is not lucky in developing newer 
products, then the logic for merger 
wiQ grow inescapable. There may be 
some sense in deepening the associa- 
tion with Warner-Lambert But it 
would be extraordinary if other cash- 
rich drugs groups did not cast an envi- 
ous eye over Wellcome given its grip 
on the anti-viral field. That suggests 
there may be greater long term value 
in Wellcome than the market is cur- 
rently prepared to recognise. How 
quickly that potential can be released 
- and who will do so - win remain 
unclear for some time to come. 

IBM 

Everybody knew that IBM was mas- 
sively overweight But few expected 
that the computer giant could cut its 
fat quite as quickly as it has. For the 
second time in a row, quarterly profits 
have outpaced investor expectations. 
Earnings per share in the three- 
months to end-June at $1.14 were 60 
per cent higher than consensus fore- 
casts. Mr Louis Gerstner, who took 
over as Big Blue's rh airman and chief 
executive last year, had more good 
news on cost-cutting yesterday. The 
group's original 1992 target of lopping 
off $7bn of costs by 1996 has been 
raised to $8bn. 

While the stringent diet is both nec- 
essary and welcome, ft is the rela- 
tively easy part of IBM’s strategy to 


FT-SE Index: 3095.1 (+17.9) 


WoBcomo ' 

Share -prlce retativa to the 
fT^Se-A AB-Share trafax ‘ 
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return to health. Tbe more difficult 
part win. be to change the group’s cul- 
ture so it becomes fester-thinking and 
faster-moving. Otherwise, its market 
share win continue to be gobbled up 
by more dynamic rivals such as Com- 
paq. Yesterday’s results provide little 
evidence that it is winning this battle. 
The rate of decline in revenues from 
mah’ifwnnas , its traditional stronghold, 
did slow. But it was still a decline. 
Performance in the faster-growing per 
sonal computer market was disap- 
pointing. Sales in tbe US were flat, 
with the only growth coming from, 
international markets. Compaq, by 
contrast, reported a 58 per cent jump 
in second-quarter sales earlier this 
week. Unless Mr Gerstner can find 
new sources of revenue, the only 
option will be to keep hacking away at 
IBM’s costs- Big Blue may then be 
profitable but terribly shrunken. 

Bundesbank 

The Bundesbank still managed a 
small surprise yesterday even if its 
failure to cut the discount rate or 
amend its money supply target were 
widely expected. The slightly unsettl- 
ing aspect of its council meeting was 
the iipriniim to fix the money market 
repurchase rate at 485 per cent until 
after the summer holiday recess. That 
is only three bads points below the 
present level and is a dear indication 
of the central bank’s cautirm on rate 
cuts. 

Admittedly the bank could not 
afford to continue cutting the repur- 
chase rate by three or four basis 
points a week without using up nearly 
all its leeway during the holiday 
period. Speculation about a discount 


rate cut as soon as the recess was over 
would then grow unbearable. From 
that perspective, fixing the repurchase 
rate makes technical sense. But there 
is no escaping the conclusion that the 
Bundesbank wants to avoid being 
bounced into a discount rate cut as 
soon as the recess is over. It would 
prefer to wait for more evidence of 
failing inflation and money supply 
growth. That is natural, as the bank 
has to watch for the impact on the 
bond market of any decisions it makes 
on interest rates. But the message of 
indifference to the dollar's fete could 
hardly be more explicit That the dol- 
lar actually rose yesterday was thus 
baffling. In contrast to Wednesday, it 
was helped by supportive comments 


on the other side of the Atlantic from 
Mr Alan Greenspan of the Federal 
Reserve and Mr Larry Summers of tbe 
US Treasury. But while the central 
hanks dither on interest rates, the cur- 
rency still looks vulnerable. 

Telegraph 

If Cazenove thought its resignation 
as Mr Conrad Black's broker would 
put an end to its embarrassment over 
its role in placing a large slog of the 
media magnate’s Telegraph shares, it 
was mistaken. Mr Black’s reputation 
was badly damaged by the defection. 
His extraordinary broadside in an 
interview with the FT seems designed 
to knock Cazenove’s reputation In 
return. 

It is unlikely that investors who 
bought the shares will have much 
truck with Mr Black's arguments. The 
Telegraph’s decision to join the news- 
paper price war shortly after the share 
placement left them nursing huge 
losses. Cazenove’s resignation was a 
damage limitation exercise apparently 
designed to placate investors' wrath 
and so protect its valuable share plac- 
ing franchise. 

The danger for Cazenove Is that Mr 
Black's accusation that the broker 
“scurried out of tbe back door into the 
tall grass” could unsettle its other cus- 
tomer base - corporate clients. If Mi- 
Black’s interpretation of events is 
accurate. Cazenove was not too fussed 
when first told that the Telegraph 
planned to slash its cover price. It was 
only after it experienced the full force 
of the City's revulsion at what had 
happened that it resigned abruptly. 
Cazenove may, of course, have full 
answers to these criticisms. But so 
long as it maintains its famed policy of. 
not c ommenting about its business, 
doubts will remain. 







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CommodMes prices 34 

DMdends announced, UK 22 
EIIS eurenof rates 42 

Eurobond prices 20 

Red barest indices 20 

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FT-SE Actuaries races 35 


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London share service 38-37 

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Managed lunds S8ntos 38-42 
Money markets 42 

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Recentisams. UK 3S 

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US Merest rales 20 

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FINANCIAL TIMES 


COMPANIES & MARKETS 


©THE FINANCIAL TIMES LIMITED 1994 


Friday July 22 1994 


SHEffiFRAME 

Specified 

Worldwide 

MgL&Pias&eslimIlGd 

Tel: 0773 852311 


IN BRIEF 


Metall Mining 
grows impatient 

Metall Mining, the international mining arm of 
MetangeseUschaft, Is growing impatient at delays in 
tne sale of a 50.1 per cent controlling stake in itself 
held by the ailing German industrial group. Page 16 
Telefdnica hi GTE talks 
Tdef&nica, Spain's national telecoms operator, is 
set to eng a ge in talks next week with GTE, which 
could lead to the US operator taking a minority 
stake in Telefonica’s international arm. Page 16 

Saudi banks slow down 

A marked slowdown in the second-quarter results 
of Saudi Arabia's commercial hqp irs indicate the 
kingdom's post Gulf war hanw-ng boom has drawn 
to a close. Page 17 

Caterpillar reaches a record 

Caterpillar, the US heavy equipment manufacturer, 
reported record second-quarter profits of $240m, or 
$2.36 a share, on economic recoveries at home and 
abroad which sharply boosted sales. Page 18 

Strong growth for AT&T 

AT&T, the US telecommunications group, saw sec- 
ond-quarter profits of SL13bn, or 83 cents a share, 
against last year’s Sl.Olbn, or 74 cents restated to 
account for accounting changes, thanks to strong 
revenue growth from its long-distance telecommu- 
nications, equipment manufacturing and fmam-fai 
services businesses. Page 18 

Reshuffle at Coca-Cola 

Coca-Cola, the US soft drink group, annonnwri a 
management reshuffle that effectively anoints a 
successor to Mr Roberto Gdzueta, chairman and 
chief executive. Page 18 . 

Lac shaken awake 

Lac Minerals has for long been near the top of min- 
ing analysts' list of companies in need of a wake-up 
call. That loud call came on July 7 when Lac 
became the target of US$L4bn takeover offer by 
Royal Oak Mines, the Vancouver-based gold pro- 
ducer. Page 19 

Up-to-date fai Milan 

Milan's stock exchange plans to round off its mod- 
ernisation process with the introduction later this 
year of stock index futures, -a move which will bring 
it into line with the rest of Europe. Page 20 

Shoprite shares halved 

Shares in Shoprite, the Scottish discount food 
retailer, halved in value yesterday alter the group 
issued a profits warning and said it was “severely 
curtailing” its store opening programme for this 
year. Page 21 

Benefiting from vehicle safely concern 

First Technology, which supplies sensors and crash 
dummies to the car industry, increased profitabil- 
ity, thanks to mounting concern over vehicle safety. 
Page 21 

Coffee and cocoa lift LCE 

The London Commodity Exchange made a pre-tax 
profit of £lm ($L55m) in the financial year ended in 
March, after soaring coffee and cocoa futures prices 
led to a 22 per cent upturn in trading activity. 

Page 34 

Companies in this issue 

31 21 Lee Refrigeration 21 

AT&T 19 Levim Strauss 9 

Abitibl -Price 19 Man (H3&F) 21 

AJ-RahjJ Banking 17 Merck n 

Anglo American 17 Metal Mining 16 

Arab National Bank 17 MetaUgeseflaschafi 16 

Mvitlc Compute,. * » 19 

Bank of East Asia 17 2 

Btachem Pharma 17 35 

***• Saint-Louis 16 

Brit & Commonwealth 23 Salomon 15 

“ Saudi American Bank 17 

British Airways 35 Saudi Arabian Inv Bk 17 

Brown .& Jackson 21 Saudi British Bank 17 

Caterpillar 19 sawfl French Bar* 17 

Cazenove 16 Sautfl HoUandi Bank 17 

CeUtech 17 SavMe Gordon 21 

Coca-Cola 19 Securicor 21 

Colgate-Palmolive 19 ShdR Transport 35 

Dana Exploration 21 Shoprite 21 

Eastern Electricity 36 Slme Dartoy 21 

Ednburgh Java Trust 21 Southend Property 21 

S brief 21 Synwgen 17 

First Technology 21 TeJafGnfca 16 

GTE 18 Tetegraph 16 

General Aarcarera 16 V 

S 

S&sSS 3 " 1 V Lambert 19 

*■* Z! Waste Recycling 21 

Holders Technology 21 WeJfcoma 35 . 15 

Kmart YRM 21 

Lac Minerals 19 Yorkshire Beet 36 


Salomon hit by securities losses 


By Patrick Hprv&son 
In New York 

Plunging stock values and a 
fall-off in trading and underwrit- 
ing activity drove Salomon 
Brothers, the securities broking 
firm, into a heavier than expec- 
ted second quarter loss of S4l0m 
before tax. 

This left Salomon, the parent 
group, with a quarterly net loss 
of S204m, or 82.08 a share, in the 
same quarter of last year, net 
income amounted to 8433m, or 
33.32 a share. 

Although the group warned 
Wall Street of its poor second 


quarter two weeks ago, the scale 
of Salomon Brothers' losses sur- 
prised analysts, who had been 
expecting a figure nearer $300m. 
In the second quarter of 1893, the 
firm earned 8783m pre-tax. 

The near $1.2bn difference 
between the results of this latest 
quarter and the same quarter a 
year ago illustrates the volatility 
of profit flows on Wall Street. 
The big firms such as Salomon 
Brothers, which trade actively 
for themselves and with big insti- 
tutional customers, are particu- 
larly vulnerable to large swings 
in their earnings. 

The poor results are also a 


stark indication of how the 
slump in international finamWai 
markets this year, prompted by 
rising US interest rates, has 
taken its toll on the securities 
industry. 

Earlier this week, Merrill 
Lynch and Lehman Brothers, two 
other big Wall Street houses, 
announced sharply lower profits 
for the second quarter, and oth- 
ers are expected to follow suit 
later this month. 

Salomon said that the bulk of 
the losses at its brokerage unit - 
829lm of the $4l0m - were attrib- 
utable to client-driven business, 
where the value of its securities 


Bruce Jacques and Richard Tomkins report on 
the troubled store group’s latest about-turn 


Kmart tries to turn the tide 

Kmart relative to S&P department stores sector 
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[ Kmart, the troubled US discount 
store group, yesterday performed 
an abrupt about-turn by anno un- 
cing that it was selling its 2LS 
per cent stake in Coles Myer, the 
Australian retailer, for A$L26 bn 
(8824m). 

As recently as last month 
Kmart had attempted to dampen 
speculation that it was thinking 
of sellin g the holding by announ- 
cing that reports to that effect 
were Incorrect and unfounded”. 

Days later, however, the specu- 
lation was given fresh impetus 
when angry Kmart shareholders, 
frustrated at the company's poor 
performance, threw out its plans 
to raise money by selling minor- 
ity stakes in its four specialty 
retailing subsidiaries in the US. 

The proceeds were supposed to 
help pay for the modernisation of 
the core US discount stores. 
When the plan was voted down, 
attention switched back to the 
Coles Myers stake. 

The speculation had been 
depressing the Coles share price, 
and Kmart suggested yesterday 
that Coles’s directors had taken 
matters into their own bands. 

Kmart chairman, Mr Joseph 
Antonini, said Kmart’s board had 
analysed various alternatives for 
the investment. “Kmart has 
decided to be responsive to the 
approach from Coles Myer and 
give them the opportunity to 
complete this transaction which 
we believe Is in the interest 
of both companies," he said. 


1994 Joseph JtntaaW chief feocuft* 


Kmart to sell 
Australian stake 
to raise $924m 


A Kmart spokesman said the 
deal had no bearing on what 
would happen to Smart's spe- 
cialty retailing operations. Share- 
holders want Kmart to sell them 
outright so that it can concen- 
trate on putting its ailing dis- 
count stores to rights, but 
Kmart’s board has yet to decide. 

The sale of the Coles stake will 
be undertaken in two parts, both 
conditional. First, Coles plans to 
buy back and cancel nearly 10 
per cent of its own capital at 
A84J55 a share, costing A$587m. 

Second, Coles has undertaken 
to try to find a purchaser for the 
remaining 1L45 per cent Kmart 
stake through Barclays de Zoete 
Wedd Australia (BZW). the 
investment bank, also at A&L55 a 
share, valuing the parcel at 
A8672m. This part of the deal will 
involve the purchase of a Kmart 
subsidiary which owns the 11.45 
per cent Coles parcel. 

Coles Myer said yesterday that 
BZW had Indicated its willing- 
ness to consider being nominated 
as the third party purchaser”. 


BZW chairman, Mr Tim Cram- 
mond added: “BZW believes there 
wOl be an appetite for the shares 
in the market and will be seeking 
to place the shares with a wide 
cross section of investors.” 

He added that “should BZW 
decide to purchase Kmart Hold- 
ings it is likely to seek to sell the 
underlying shares.” Selling the 
parcel at the nominated price my 
not be easy as Coles Myer Bhares 
dosed at A£L30, down 2 cents, on 
Australian stock exchanges yes- 
terday. 

Meanwhile, Standard & Poor's, 
the ratings agency, announced it 
had placed the company's tong 
and short-term debt rating on 
creditwatch with negative impli- 
cations, noting company's heavy 
capital expenditure programme. 

The transaction would substan- 
tially raise Coles Myer’s gearing 
ratio which stood at just under 50 
per cent at June 30 last year. 
Directors described this yester- 
day as inalrinp better use of the 
company's under-leveraged bal- 
ance sheet. 


UK criticises directors and 
auditors over B&C collapse 


By David Wiehton in London 

Mr John Gunn, former chief 
executive of British & Common- 
wealth Holdings, faces disqualifi- 
cation as a director after a highly 
critical Department of Trade and 
Industry report into the acquisi- 
tion that led to the UK financial 
services group's collapse four 
years ago. 

Mr Michael Heseltine, OK trade 
and industry secretary, is making 
a court application to have Mr 
, Gunn and five other individuals 
involved in B&C*s £400m (8800m) 
acquisition of Atlantic Comput- 
ers in 1988 disqualified. 

The report was less critical 
than expected of the two compa- 
nies' financial advisers, including 
NJVf. Rothschild and Barclays de 
Zoete Wedd, although it strongly 
critidBed the work of Atlantic’s 
auditors Spicer & Pegler. 

B&C collapsed in 1990 with 
debts of £L5ta after writing off 
against its investment in 
Atlantic, a computer leasing com- 
pany, -which the report concluded 
had probably never made a profit 
siTiRft it was formed in 1975. 

The report published yesterday 
criticised Mr Gunn and two fel- 
low B&C directors, Mr Peter Gol- 
die and Mr Andrew Ashman, for 
failing to alert other board mem- 
bers or shareholders when they 
learned of a £16Qm “Mack hbto" 
in Atlantic’s accounts in April 
1989. 

They were also criticised for 
publishing a “grossly mislead- 
ing” set of accounts afterwards. 



Not ha the driving seat: John Gunn 

■ Atlantic’s rise 

■ Flawed leases 

■ Writs fly 


Auditors criticised 
Advisers’ role 

Pages 22 and 23 


The inspectors added, however: 
“We are satisfied that they were 
acting in what they perceived at 
the time (albeit in our view erro- 
neously) to be the best interests 
of b&C and that they did not act 
dishonestly in the sense of seek- 
ing to defraud any person.” 

The other individuals facing 
disqualification are Mr David 
McCormick, who was a director 
of Atlantic at the time of the 
acquisition, Mr Nicholas Kenn- 
edy Scott, who was finance direc- 


tor, and Mrs Sien Yen Cheng Kai 
On, Atlantic's chief accountant. 

Mr Gunn said, he was “aston- 
ished” at the report which was “a 
shoddy piece of work” containing 
“material inaccuracies”. He is to 
“vigorously defend” the disquali- 
fication action. 

He also de fended the decision 
not to alert shareholders. “We 
were running a company based 
on the confidence of lenders and 
market participants and took a 
prudent approach,” 


inventories plunged and trading 
and underwriting activity 
dropped sharply- The inventory 
losses are believed to have been 
particularly heavy to the mort- 
gage-backed securities area. 

Salomon Brothers has also 
struggled with its proprietary 
trading business, where losses 
totalled S119m. 

The one brigbt note in the 
group results was the perfor- 
mance of the Phibro oil trading 
unit, which recorded a pre-tax 
profit of 882m. up sharply from 
the S3m profit of a year ago. 

For the first six months, the 
group ran up a net loss of 5138m. 


or Sl-54 a share, compared with n 
net profit of $331 rn. or £152. 

• Dean Witter Discover* the 
securities broking and credit card 
group, reported second quarter 
net income of S206L9m. up 32 per 
cent from a year ago due primar- 
ily to a big increase in earnings 
at its credit services division, 
which includes the Discover card 
business. The group's securities 
unit bucked the Industry-wide 
trend of declining earnings, post- 
ing quarterly profits growth of 11 
per cent os rising asset manage- 
ment fees offset lower commis- 
sion and investment banking rev- 
enues. 


Black reveals 
anger at rebuff 
by Cazenove 


By Raymond Snoddy In London 

It Is more than three weeks since 
Mr Conrad Black's Telegraph 
group suffered an enormous 
blow to its pride when Cazenove 
resigned as stockbroker to the 
company. Talking for the first 
time about Cazenove ’s action it 
is clear that Mr Black's anger at 
being publicly rebuffed by one of 
London’s most respected brokers 
is growing. 

“They gave ns less than two 
hours’ notice that they were 
withdrawing from the account,” 
said Mr Black. 

.”11107 left and they did the 
maximum possible damage to 
our reputation as a company," 
he added. There does, however, 
appear to be considerable sup- 
port among City institutions for 
Cazenove’s action. 

Cazenove withdrew as Tele- 
graph's broker In the wake of 
controversy in the City over the 
group. On May 19 Institutions 
bought I2im Telegraph shares 
at 587p a share bnt Just over a 
month lata- when Mr Black ent 
the cover price of The Dally Tele- 
graph in response to Mr Rupert 
Murdoch's cut-price limes, the 
group's share price dropped by 
191p to 349p. A Stock Exdumge 
investigation quickly cleared the 
Telegraph of wrongdoing. 

Mr Black claims that Cazenove 
were told in May that he was not 
pleased with the performance of 
Cazenove in the original share 
sale and it was made clear before 
the price cut row that “perhaps 
an orderly, amicable parting of 
the ways in the course of the 
summer would be to order”. 

The Telegraph chairman said 
that on Wednesday June 22 a 
senior official of Cazenove, Mr 


David Wentworth-Staoley, was 
given a full briefing on the 
planned cover price cut. Caze- 
nove, according to Mr Black, 
said there would be controversy 
and downward pressure on the 
share price but “they absolutely 
assured us that they would not 
find it particularly embarrassing 
and It would oot particularly dis- 
comfort them”. 

After the cover price cut and 
the share drop Mr David May- 
hew. “an exceedingly senior 
Cazenove official", told Mr Black 
the price cut had embarrassed 
the house and its clients bat 
added, according to Mr Black, 
that Cazenove “will not do any- 
thing provocative and we will 
not withdraw abruptly”. Mr 
Black was therefore shocked to 
be given what he raid was two 
hours' notice of the withdrawal. 
He said an agreed statement was 
issued saying it was a mutual 
arrangement. 

“We were basically moving 
them out anyway bat not that 
day for obvious reasons. Then an 
unnamed Cazenove official was 
quoted in the Financial Times 
bannered across the front page 
saying that they had never in 
living memory withdrawn from 
an account like this.” 

Mr Black said: “This famous 
firm just scuttled out the back 
door into the tall grass. That is 
just not the behaviour one would 
expect of Cazenove. 

“I think Cazenove will pay a 
heavy price for having deserted a 
reputable client in a damaging 
way when in fact that client 
committed no impropriety and 
has been absolved by every rele- 
vant and interested party Includ- 
ing Cazenove itself." 

Lex, Page 14 


Wellcome 
confident 
of further 
growth 

By Paul Abrahams 
in London 


Wo Hco me. the L^K 
pharmaceuticals group, yester- 
day announced a 12 per cent 
advance in pre-tax profits to 
£182m (S2*2m> for the four 
months to June 30. 

Sales increased 13 per cent 
Tram CtflOm to gtSUm. but were 
nattered by the inclusion of reve- 
nues from the Warner Wellcome 
Consumer Healthcare joint-ven- 
ture. Underlying sales growth of 
prescription products w;ls 7 per 
cent, reaching JuV»8m. 

Mr John Robb, chairman and 
chief executive, said margins had 
been maintained and he expected 
double-digit growth tn continue 
for the rest of the year, while 
margins would remain hi the 28 
to 32 per cent range. 

Wellcome surprised analysts 
with a larger than expected £52m 
exceptional charge to restructure 
its consumer operations. Mr Robb 
said there would be no further 
exceptional items related to the 
Warner Wellcome venture. The 
shares fell lOp to 605p. 

Zovirax, the anti-herpes com- 
pound and Welcome's top-selling 
drug, generated sales of £270m. 
up 17 per cent. US sales increased 
27 per cent to £lQ6m. which Mr 
Robb described as a tremendous 
achievement. Only 3 percentage 
points of growth had been 
achieved through price increases. 

Zovirax sales in Europe were 
up 9 per cent at £90m, but suf- 
fered price cuts equivalent to 
three percentage points. Japa- 
nese sales were up only J per 
cent at £55 m. because of doctors' 
fears of prescribing anti-viral 
medicines after a competitor's 
product killed a number of 
patients. Sales were now recover- 
ing. said Mr Robb. 

Sales of Retrovir, the HIV and 
Aids treatment also known as 
AZT. fell 15 per cent to £62m. The 
drug is still struggling with the 
Anglo-French Concorde trial pub- 
lished last year which questioned 
Its effectiveness to patients who 
were HIV-positive but without 
symptoms. 

Mr Robb said he was not overly 
concerned about the US Food and 
Drug Administration advisory 
committee’s delay in considering 
Zovirax as a non-prescription 
drug. 

Earnings per share rose 11 per 
cent to I2.7p. The second interim 
dividend per share was 53p. 

The company reported second 
interim results because it is 
changing its financial year-end 
from August to December. 

Lex, Page 14 


This announcement appears as a mailer of record only 


3i Group pic 

is pleased to announce the Final Closing of 

3i EUROPE INVESTMENT PARTNERS 

A private equity fund dedicated to investment 
in unquoted companies in Continental Europe 
with total committed capital from 
3i Group pic and 8 international institutions of 

ECU 330,000,000 
(US$ 410,000,000) 


FUND MANAGER 
3i Group pic 
91 Waterloo Road 
London SE1 8XP 
United Kingdom 


INVESTMENT ADVISER 
3i Europe pic 
London, Barcelona, 
Frankfurt, Lyon. 
Madrid, Milan, Paris 


Tel: (+44)71 928 3131 
Fax: (+44) 71 401 8019 

July 1994 

It Gimp pk b tcgulaicd in die conduct of tnveaunera bocincax hy SIB 







16 


FINANCIAL TIMES FRIDAY JULY 22 1994 



INTERNATIONAL COMPANIES AND FINANCE 


Metall Mining impatience 
over controlling interest 


By Bernard Simon on Toronto 

Metall Mining, the inter- 
national mining arm of Metatl- 
gesellschaft, is growing 
increasingly impatient at 
delays in the sale of a 50.1 per 
cent controlling stake in itself 
held by the ailing German 
industrial group. 

Metaligesellschaft has indi- 
cated that it plans to spin off 
its stake in Metall through a 
public offering as part of 
efforts to improve its liquidity. 
Metall and its financial advis- 
ers are eager to take advantage 
of the recent surge in copper 
prices to go ahead with the 
sale. 

M The market is indicating 
that it would be receptive," one 
Toronto securities dealer said 
yesterday. 


Metallgeselischaft's stake in 
Metall has a market value of 
about C$465m (US$336.9ra). The 
main stumbling block how- 
ever, is a convoluted arrange- 
ment involving Me tail's 35 per 
cent stake in Norddeutsche 
Affine rie, one of Europe's larg- 
est copper smelters. 

Metall is also understood to 
be frustrated at recent manage- 
ment changes at Metallgesell- 
schaft’s head office in Frank- 
furt, which have blurred lines 
of communication. The discus- 
sions on Metall's future also 
involve numerous creditors to 
whom M e tali geae Use haft has 
pledged its Metall shares as 
collateral. 

"There are more than two 
parties and each has its own 
agenda," one person familiar 
with the talks said. 


Metall's partners in Nord- 
deutsche Affinerie are MIM, 
the Australian mining group, 
and Degussa, the German 
metals company. Metall 
acquired its interest from 
MetallgeseUschaft last Septem- 
ber as part of a rationalisation 
of the German parent’s metals 
business before its present 
troubles surfaced. 

MIM and Degussa demanded 
assurances at the time that the 
Canadian company's stake 
would revert to Metallgeseil- 
schaft if the seemingly healthy 
German group were to sever 
its ties with Metall. Metall- 
geseUschaft would be obliged 
to pay Metall a fair market 
price Tor the assets. 

Metall has so Ear been unable 
to obtain a waiver of this 
arrangement from its partners. 


Saint-Louis in Spanish stake talks 


By Alice Rawsthom in Paris 

Saint-Louis, the French food 
and paper group, has begun 
negotiations to double its stake 
in General Azucarera, the 
Spanish sugar company, from 
the present level of 10 per cent, 
according to Mr Bernard 
Dumon, chairman. 

Mr Dumon has confirmed 
that Saint-Louis was in talks to 
buy the holding in General 
Azucarera owned by Banco 
Central Hispanoamericano, the 
banking group. If the deal goes 
through the French group 
would emerge with just over 20 
per cent or General Azucarera, 
which has annualised sales of 
FFrl5hn ($2T9m). 

The General Azucarera deal 


forms part of Saint-Louis's 
plans to expand its activities 
over the next few years. The 
French group, which made net 
profits of FFr717m on sales of 
FFr34 16bn in 1993, is already a 
force in the European sugar 
market through its G6n6rale 
Sucridre subsidiary and in 
paper due to its interest in 
Aijo Wiggins Appleton. 

However, Mr Dumon said he 
hoped to double Saint-Louis’s 
annual sales over the next six 
years. He estimated that the 
group could currently afford to 
spend between FFr7bn and 
FFrSbn on acquisitions, includ- 
ing FFr2.5bn in surplus cash. 

"It's highly likely that we 
will stage a si gnifican t acquisi- 
tion as we have in the post." 


said Mr Dumon. “But we must 
be patient." 

The proposed increase in the 
General Azucarera stake is 
seen as the first stage in this 
expansion programme. Mr 
Dumon also envisaged estab- 
lishing Saint-Louis as a force 
in the eastern European sugar 
market with projects already 
under way in the Czech Repub- 
lic and Poland. 

However, the chairman said 
that Saint-Louis might con- 
sider raising capital by selling 
its stake in Danone, the French 
rood group which recently 
changed its name from BSN. 
Saint-Louis currently owns a 
2.39 per cent holding in Dan- 
one, which has a stock market 
value of FFrl^bn. 


BBV expands despite 14% decline 


By Tom Bums In Madrid 

Banco Bilbao Vizcaya plans to 
spend Ptal5bn (3116m) opening 
250 urban bank branches in 
Spain before the end of next 
year despite a 14 per cent first- 
half fall in its net consolidated 
profit 

The expansion, which will 
lift the group's network to 
nearly 3,000 branches, indi- 
cates BBV’s ambitions to keep 
a strong share of the domestic 
deposit base despite its failure 


to outbid Banco Santander in 
the auction for Banesto, the 
fourth- ranked Spanish bank, 
last April. 

BBV’s six-month profit fall to 
Pta38.3bn was blamed on 
exceptional bond market losses 
that analysts estimated could 
have touched PtaSObn. The 
group's core banking business, 
in contrast, showed a healthy 
62 per cent rise to Pta220.9bn 
in its net interest margin. 

Spending restraints which 
kept personnel costs to a rise 


of 0.8 per cent and brought 
overall expenditure down by 
0 2 per cent allowed the group 
to increase its operating 
income by 18 per cent to 
Pta87.3bn. 

BBV expects to recover part 
of its debt market losses, and 
also loan provisions, in 
the second half of this 
year and is confident that it 
will post similar year-end 
results to 1993 when its net 
profits rose by 2.3 per cent to 
Pta71bn. 


Telefonica hu ms with talk of alliance 


T eleffinica, Spain’s 
national telecoms opera- 
tor, Is set to engage in 
talks next week with GTE, 
which could lead to the US 
operator taking a minority 
stake in Telefonica's interna- 
tional arm. The outcome will 
have a significant bearing on 
the global battle between the 
largest international telecoms 
companies. 

In addition to GTE, Telefon- 
ica will be talking to Uni- 
source, the European joint ven- 
ture grouping the Dutch, 
Swedish and Swiss national 
operators that It formally 
joined earlier this month, and 
also to AT&T, the US 
long-distance group that in 
June forged an international 
venture with Unisource. AT&T 
and Unisource could bath be 
invited to take small stakes in 
Telefonica Intemacional SA 
(Tisa), the international subsid- 
iary. . 

For AT&T and Unisource. 
the prize is way into Latin 
America. In the last five years 
TelefOnica has built Tisa into 
the dominant operator in the 
fast-growing Latin American 
market. A strategic partner- 
ship between Tisa and GTE 
could lend critical support to 
the AT&T-Unisource alliance 
as it takes on international 
rivals - notably the $5 Jbn alli- 
ance between British Telecom- 
munications and MCI of the US 
- in the battle to become ‘‘one- 
stop" telecoms providers to 
multinationals . 

With a market capitalisation 
of between 36bn-$7bn and an 89 
per cent rise in its first quarter 


profits this year to 830.8m, Tisa 
is the jewel in Telefonica's 
crown. 

Its Latin American ventures 
started with the bargain base- 
ment purchase of a 20 per cent 
stake in Entel Chile in 1989 for 
348m. The biggest recent acqui- 
sition was the record $2bn paid 
to acquire 35 per cent of Peru's 
CPT-Entel last March. Tisa has 
exploited its roots in a common 
Hispanic culture to snap up 
opportunities in Latin Amer- 
ica. 

Tisa groups stakes in 2Q dif- 
ferent companies. Including 


local and long distance opera- 
tors, data transmission and 
mobile telephone units 
and yellow pages franchise 
holders. As one Telefonica offi- 
cial put it: "Before we were the 
wall-flower. at the party but 
now, dressed as Tisa, everyone 
wants to dance with us." 

Tisa's strategy has been mas- 
terminded by a close-knit 
troika of Telefonica's chair- 
man. Mr Cdndido VelAzquez- 
Gaztelu. Mr Germftn Ancochea, 
the group's chief executive, 

and Mr Innlri RanKIlana, Tisa 
mana g in g director. The three 
are frequent travellers 
to Latin America, which they 
view as the natural stamping 
ground for the Spanish group 
and the launch pad for its ele- 
vation to the high table of 
global telecommunications 
operators. 


TelefOnica owns 76.2 per 
cent of Tisa, with the Patri- 
monio del Estado, the Spanish 
government’s portfolio, holding 
the remaining 23.8 per 
cent. 

Telefonica is attracted to 
GTE as a partner for its man- 
agement expertise as an opera- 
tor in all the main US markets 
- national, local, data and cel- 
lular. The two companies have 
co-operated extensively in 
CAITTV. the Venezuelan opera- 
tor. A GTE-Ied consortium, in 
which Tisa is as a minority 
shareholder, took a 40 per cent 


stake at the privatisation of 
CANTV in 1991. 

Telefonica believes that its 
links with AT&T, through Uni- 
source, are not incompatible 
with a GTE partnership. A 
Telefonica official said the two 
alliances were "complemen- 
tary" because GTE is primarily 
a local operator, like Telefon- 
ica, serving mostly small cus- 
tomers in specific territories, 
whereas AT&T is a long- dis- 
tance traffic carrier with par- 
ticularly strong links to the 
Large corporate sector. The 
logic behind an agreement 
with AT&T is that the US giant 
will help handle Tisa's global 
traffic. 

A GTE alliance would com- 
plement Telefonica's member- 
ship of Unisource for the same 
reasons. By joining the Dutch, 
Swedish and Swiss venture. 


Telefdnica believes it gains 
access to European-based mul- 
tinationals. The official said: 
“We simply don't have in 
Spain any Unilevers. Astras 
and any Nestles; we have 
many more lines than the 
other Unisource partners but 
we haven't got their sort 
of clients." By hooking 
up Tisa to Unisource. TelefOn- 
ica expects to manage a 
profitable link between Euro- 
pean business and Latin Amer- 
ica. 

According to Mr Juan Cucto, 
chief analyst at the Madrid 


broking house Ibe insecurities, 
which this week issued a 
report on Tisa, the package put 
together by Telefonica's strate- 
gists will outstrip in terms of 
business volume the alliance 
between BT and MCI, the sec- 
ond largest US long-distance 
operator. It would also 
be a serious rival to 
the other putative interna- 
tional alliance, that between 
the French and German state 
operators and Sprint, the third- 
largest US long-distance opera- 
tor. 

Telefonica's current thinking 
is to sell an initial stake of 
around 10 per emit of Tisa to 
GTE by issuing new equity in 
the subsidiary. This would 
raise some 96Q0m-$700m, avail- 
able to increase its investment 
in Latin America in partner- 
ship with GTE. Privatisations 


in Bolivia, Colombia, Ecuador 
and Nicaragua are on the hori- 
zon, and Telefonica is explor- 
ing prospects in Cuba and in 
Brazil. 

The company's balance sheet 
will be bolstered by the forth- 
coming disposal of its 20 per 
cent stake in Chile’s Entel, 
now worth some 3200m, Mow- 
ing a ruling by the local anti- 
trust commission which has 
forced Tisa to choose between 
its holdings in Entel and in 
CTC, the other Chilean opera- 
tor, in which it holds a 43 per 
cent stake bought from the 
Bond Corporation for 3468m In 
1990. 

The nature of the involve- 
ment in Tisa by AT&T and 
Unisource remains unclear. 
They might become strategic 
shareholders through an 
equity issue similar to that 
envisaged for GTE. Alterna- 
tively, the Spanish govern- 
ment's Patrimonio del Estado 
might dispose of all or part of 
Its Tisa shares in their favour. 
The Spanish state still holds a 
32J per cent stake in Telefon- 
ica. which could be reduced in 
due course. 

T elefonica is anxious for 
the alliances to be as 
“hard” as possible, 
which on international form 
implies an equity exchange to 
underlie any operating and 
marketing agreement. How- 
ever, one of the few certainties 
is the determination of Telefon- 
ica to retain a 51 per cent stake 
in its subsidiary. Tisa is its 
golden egg; it is not prepared 
to see it pass into other hands. 


GTE may take a minority stake in the Spanish group’s 
international unit, write Tom Burns and Andrew Adonis 


Outokumpu raises A$22m 
from sale of holdings 


Norwegian shipowner cuts 
forecast after halfway slide 


By Christopher Brown-Humes 
in Stockholm 

Outokumpu, the Finnish 
mining and metals group, has 
raised A$22m (US$l6m) from 
the sale of minority stakes in 
three Australian base metal 
ventures to Pan continental 
Mining. 

The disposals are in line 
with the group's strategy of 
rationalising its minority inter- 
ests. Proceeds will be used to 
develop its other Australian 
activities, including the Forres- 
tania and Honeymoon Well 
nickel projects in western 
Australian and the Panorama 
zinc project in the Pilbara 


region of western Australia. 

The main transaction 
involves the sale of Outo- 
kumpu's 25 per cent stake in 
the Thalanga zinc, lead and 
copper min e in Queensland. 
The F innis h group is also sell- 
ing a 25 per cent stake in Mt 
Windsor, an exploration proj- 
ect, and a 24 per cent stake in 
Lady Loretta, an undeveloped 
zinc resource. 

Pancontinental aims to end 
up with 100 per cent control of 
afi three projects, after sepa- 
rately buying out another joint 
venture partner. The Austra- 
lian group says the total cost 
of the moves will be 
AS42m. 


By Christopher Brown-Humes 

Leif Htiegh, one of Norway's 
top shipowners, has reduced 
its forecast for 1994 after first 
half profits after financial 
items slumped to NKrl29m 
($ 19m) from NKr213m. 

The company blamed a 
weaker contribution from its 
car carrying activities and a 
bigger-than-expected loss at 
Cool Carriers, a newly- 
acquired refrigerated cargo 
operation. It also said that 
a dry-docking programme for 
some of its liner vessels had 
taken more time than antici- 
pated. 

The group expects profits 


after financial items of around 
NKr200m for the full year, 
NKrlOOm less than earlier fore- 
cast Net profits are expected 
to be NKr250m. 

First-half freight revenues 
expanded to NKri.46bn from 
NKrL22bn, but operating prof- 
its fell to NKr76m from 
NKrl76m. Net profits were 
NKrl42m, compared with 
NKr339m. However, the 1993 
figure included a NKr258m 
profit from the sale of two car 
carriers. 

HOegh’s second quarter 
profit after financial items was 
NKi36m on freight revenues of 
NKr740m. Net profit was 
NKr48m. 


Signet faces 
calls for capital 
reconstruction 

Signet the UK jewellery group 
formerly known as Ratners, 
yesterday faced calls for a capi- 
tal reconstruction from two 
groups of disaffected share- 
holders, writes Tim Burt in 
London. 

The investor groups, both 
representing preference share- 
holders. demanded action to 
overhaul the share structure 
and raise fresh capital for the 
company. Pressure for a 
restructuring has grown since 
Signet's announcement earlier 
this year of annual pre-tax 
losses of £85.4m ($ 132.37m) and 
a sharp increase in preference 
dividend arrears. 



3 




ill 


111 








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iui 


financial times 




Friday july 22 1994 


— companies and finance 

Saudi banking boom nearing end 

By Marie Nicholson 


iiiiiiiiiiiiiiiKiiiiiimiiiiiHiiiiiiiiiiiifitfiiiiiiiiiiiiiiiiiiiimiiiiifiiiMiiiiii! 


Oj.,. 



By Marie Nicholson 
m Cairo 

First-half figures for the 
majority of Saudi Arabia’s 
commercial banks show profits 
generally moving ahead, but 
agns of a marked slowdown in 
the second-quarter indicate the 
kingdom’s post-Gulf war bank- 
ing boom has drawn to a dose 
Bankers and economists in 
the kingdom say the results 
show tighter liquidity across 
the market, with deposits fiat 
assets up by little more than 5 
per cent, operating costs rising 
and provisions also higher. 

With, the Saudi government 
determined to cut public sector 
spending and the recent rise in 
oil prices yet to filter through 
to an economy still feeling the 
effect of the crude price slide of 
late last year, bankers and 
economists say bank profits 
look set to remain under pres- 
sure. “It's the most testing 
time for the Saudi banking 
market since the mid-1980s," 
said one economist 
Among the latest results, 
, ^ Saudi American Bank. 30 per 

‘ Fall in gold 

mine profits 
hits Anglo 
American 

By Mark Suzman 
— — ^ in Johannesburg 

^ Ijfj, South Africa's Anglo American 
... *1 f group, the world’s biggest gold 
*■ •* ,|S mr u producer, has reported attrib- 
utable profit from its gold 
‘ ** v ‘•iMrilf- 0111165 down sharply in the 
June quarter, declining 31 per 
cent to RlKLlm ($49.40nrt from 
R2632m the previous quarter. 

The poor results, which fol- 
low the trend set by other lead- 
ing South African gold produc- 

- ers, were largely the result of 
lower production levels as a 

. result of labour unrest and 
unscheduled public holidays 
because of the April elections. 

Although an improved spot 
price led to a higher average 
gold price received, at R43.462 
. per kilogram compared to 
' R41.621 per kilogram in the 
March quarter, it was more 

- than offset by an 8 per cent 
rise in average unit costs to 
R33.923 per kilogram from 
R3I.482 per kilogram. Total 
production dropped to 57,683kg 
from 61295kg. 

Profits were further hit by 
the one-off transitional levy 
imposed by the government on 
all South African companies to 
help finance the costs of the 
election. This led to R21.4m in 
additional tax being paid for 
- - the quarter. Without the levy, 
p | attributable profit would have 
gj | only decreased 23 per cent 
j | Freegold, the group's biggest 
; | mine, had the worst results. Its 
§ attributable profit Dell 58.4 per 
| cent to R47.7m compared with 

i “ BllAfim in the March quarter 
and gold produced fell to 
L D 23.982kg from 25272kg- Free- 
ff S gold was also hit by a lower 
0 average yield at 4.16 grammes 
**5*^ per tonne from 423 grammes 
per tonne. 

Similarly, at Western Deep, 
attributable profit dropped 382 
per cent to R29m from R47.4m 
and at Vaal Reels total produc- 
tion fell to 16,889kg from 
17,928kg. However. Elan- 
dsrand's total production only 
dipped slightly to 4,183kg from 
4280kg, while Ergo, which 
reclaims gold from worked out 
~ mine dumps, managed to raise 

r- attributable profit from 

Rl5-59m to R 1528m. 


cent owned by Citibank. 
^Ported an 11 per cent rise in 
first-half earnings over 1993, 
with net profits up to SR522m 
($1 40.87m). AJ-Rabji Banking 
and Investment, formerly the 
kingdom’s biggest money 
changer, reported a 16 per cent 
increase in net profit to 
SB434hl 

Saadi Arabian Investment 
Bank* the kingdom's smallest, 
has reported a 21 per cent rise 
in the half to SR39m. 

However, Saudi French 
Bank, 31 per cent held by 
Banque Indosuez, said its first- 
half earnings were up only L3 
per cent over 1993 to SRl75m, 
while Saudi British Bank, 
which is 40 per cent held by 
Hong Kong and Shanghai Cor- 
poration, also reported a sli ght 
rise in earnings of just over l 
per cent to SR1952 over a year 
earlier, according to unaudited 
figures. 

Saudi Holland! Bank, 40 per 
cent owned by ABN Amro, the 
Dutch bank, said first-half 
earnings had increased LG per 
cent to SR93.6m. 

Only two banks have had 


outright profit falls for the first 
h alf , with JUyad Bank report- 
ing a 12 per cent decline to 
SR374m over last year. Arab 
National Bank posted an 8 per 
cent decline to SR216m for the 
period. 

However, more than half of 
the banks to have issued 
results so far show marked 
declines in earnings for the 
second quarter compared with 
the first Bankers and econo- 
mists in the kingdom attribute 
this partly to exchange rate 
losses taken as a result of the 
dollar's recent weakness and to 
falls in world bond and equity 
prices. 

Analysts also cite the con- 
traction in public sector activ- 
ity as a factor, with the Saudi 
government committed to cut- 
ting all government depart- 
ments's spending by 20 per 
cent for the 1994 fiscal year. 

Cuts are bring made largely 
by cancelled or postponed pro- 
jects and often through 
delayed payments by govern- 
ment agencies to private sector 
contractors, according to hank- 
ers in the kingdom, who say 


A tale of two strategies in 
the biotechnology sector 

Celltech’s deal is a dream come true but Synergen 
lost a high-risk gamble, says Daniel Green 


I n the space of four days, 
the biotechnology sector 
has demonstrated why it is 
a high-risk, and occasionally 
high-reward, industry. 

On Monday. Colorado-based 
Synergen announced it was 
abandoning research on its 
main product, laying off half 
its 630 staff and putting the 
company up for sale. 

Yesterday, the UK’s Celltech 
achieved what is a bio technolo- 
gist’s dream: a collaborative 
deal with the biggest US drug 
company, Merck, that could 
net it more than Jioom a year 
from the start of the next 
decade. 

The difference between the 
two companies runs deeper 
than the quality of their 
respective drugs. Each fol- 
lowed a profoundly different 
corporate strategy: Synergen 
decided to go it alone and Cell- 
tech to collaborate with phar- 
maceutical companies. 

The choice between the two 
is exercising to the manage- 
ment of many biotechnology 
companies . The de risions that 
they take will determine the 
shape of the sector and its rela- 
tionship with the entire health- 
care business. 

The Celltech deal has the 
financial complexity that is 
typical of the biotech sector. 
The company benefits in three 
tangible ways: 

• It is to receive cash pay- 
ments of up to £3L5m ($48m) 
over five years related to the 
progress in developing an 
asthma treatment code-named 
CDP840; 

• Merck will pay for clinical 
testing of the ding. Phase i 
trials on healthy volunteers 
have been completed. CDP 840 
must now enter the ter more 
expensive phases n and m 
where it is given to th o usa n ds 
of patients; 

• Celltech will receive 
“double-digit royalties" on 
sales into a market worth more 
than wbn a year. It has the 
option of contributing to phase 
III trials and triggering a profit 
sharing scheme that would 
take the effective royalty rate 
to more than 20 per cent 


These potential sums are 
huge to a company such as 
Celltech. which has a market 
capitalisation of £i35m. 

Just as importantly, the deal 
represents a vote of confidence 
from Merck which, as far as 
investors are concerned, might 
to have a better idea of how to 
evaluate a prospective drug 
than any stock market analyst 
Celltech'8 shares jumped more 
than io per cent when the deal 

Was announced 

Progress for 
Glaxo/Biochem 
Pharma drug 

Biochem Pharma, one of 
Canada's largest biotechnol- 
ogy companies, is taking a 
drug it is developing with 
Glaxo, Europe’s biggest phar- 
maceutical c o mpa ny , into the 
last stage of clinical trials, 
writes Daniel Green- 

Trials so far have shown 
Lamrvudine to be ter superior 
to existing treatments for hep- 
atitis B, said Dr Francesco Bel- 
lini. president of the Montreal 
company which is hoping to 
launch the drug in 1997. 

The deal with Glaxo gives 
the UK company marketing 
rights outside north America, 
with a joint venture operating 
in Canada and Biochem selling 
alone in the US. 


Synergen, by contrast saw 
its share price almost halve on 
Monday when it said it would 
abandon its sepsis treatment 
AnfriL 

The pain was all the worse 
fin* the years of effort and more 
than $100m that the company 
had sunk into the drug: the 
failure came at the end of the 
phase m trials. 

Synergen had built its own 
manufacturing plant and 
engaged sate* and Ttmrfcgfing 
teams. It was spending money 
at a rate - known in the bio- 
tech sector as the bum rate - 
of S80m a year. 

Celltech's bum rate is about 
£8m a year, and this outflow 


HK bank results disappoint 


S> By Simon Hofeerton 
4 h Hong Kong 


... £. 





Sj Bank of East Asia. Hong 
* Kong’s third largest listed 
rf. bank, has rep or ted disappoint- 
- ing gr o wth in first-half earp- 
i bags, with profits for the six 
months to June only 12 per 
cent ahead of the interim stage 
last year, at H K$222 . ? . m 
(US$28. 76m). 

The result, struck after a 
secret transfer to inner 
reserves, were lower than ana- 
lysts had expected. The market 
was looking for growth in the 
region of 18 per cent to 20 per 
emit The directors declared an 
interim di vidend of 272 cents, 
up 25 per cent on the interim 
payout last year. 

The results were seen as the 
harbinger of a lacklustre 
reporting season for the rest of 
Hong Kong’s banks. 

Analysts said that other 


listed banks in Hong Kong usu- 
ally take their lead from Bank 
of East Asia in deciding the 
tone of their own profits 
announcements. 

In keeping with Bank of East 
Aria’s past practice, however, 
it provided no details of its 
operations. A review by Mr 
David Li. chief executive, did 
say, however, that a residential 
and commercial property 
development the bank is 
undertaking had got off to a 
good start 

Analysts said they thought 
the sale of apartments from 
this development could con- 
tribute up to HK$40Qm to the 
bank's gaming s in the second 
half of the year. 

They noted that the bank 
booked about 80 per cent of its 
total net earnings for 1993 in 
the second half of the year and 
that a similar pattern may 
repeat itself this year. 


** ITu i 3s 

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Petroleum Argus Oil Market Guides 

Petroleum Argus 

CALL 'vCV.' for UrTner Ce?a'=!s m T.< 55DB7 


:na 


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Q KT DATA FROM JIO A DAY O 
© SferiSOFTWAHEQUBE O 
Cafl London QT 44 + (0) n 231 3556 
tar tout guMo and Stgnrtptwetet- 


The report, however, which 
has most interested banking 
analysts was the one produced 
by Merrill Lynch, the US secu- 
rities house, for Bank of East 
Asia's recent HK$lbn bond 
offering. This gives the first 
breakdown Cor analysts of the 
bank's financial position. 

It shows that residential 
mortgages accounted for 44 per 
cent of tiie the bank’s total 
loans to 1993. This is above the 
level recommended by the 
Hang Kong Monetary Author- 
ity, the colony's central bank. 
Mortgages have, however, 
declined as a share of loans 
since 1991 when they 
accounted for 47 per cent of 
lending. 

The report also gives figures 
for the hank’s bad and doubtful 
debts. Bank of East Asia has 
HK$542m of loan loss provi- 
sions on total loans of 
HE$322hn. 

MONSANTO COMPANY 

Half-yearly report will be 
available from 1st August by 
application to Corporate 
Administration Monsanto p.I.c. 
Monsanto House, Chineham 
Court, Chineham, Basingsiole, 
Hampshir e. RG24 0UL- 

Tel: 025657288 

Fax: 0256 54995 


should be cut hy more than 
half by the staged payments 
from Merck. 

The difference is deliberate. 
“Synergen bet the company." 
says one senior Celltech execu- 
tive. “We don’t want to do 
that" 

That philosophy may sound 
eminently sensible, but until 
recently it represented a 
minority view to the industry. 
Most took the view that bio- 
technology was inherently a 
high-risk business and that, 
therefore, there must be huge 
rewards in prospect to attract 
investors. 

They pointed to California's 
Amgen, the biotech sector’s 
one unequivocal success story. 
Amgen went it alone. It now 
has two; drugs in the world top 
25 and is forecast by stockbro- 
ker Lehman Brothers to have 
two of the top five by the end 
of the decade. 

However, the list of foiled 
aspirant Amgens is getting lon- 
ger. 

The biggest apart from 
Synergen was Pennsylvania's 
Centocor, which two years ago 
dropped development of its 
septic shock drug, but not until i 
it had invested in manufactur- 
ing plants and sales and mar- i 
hating teamfL I 

Centocor’s fate shattered 
many illusions about the bio- 
tech sector and engendered a 
scepticism that still restrains 
investors. 

Increasingly, biotech compa- 
nies are seeking an alternative 
to the Amgen, Synergen, Cen- 
tocor approach. Many, includ- 
ing Cefftech. have picked on 
Chiron, the number three US 
biotechnology company. Chi- 
ron has built its success an a 
series of alliances with big 
name drug companies. They 
include Germany's Schermg, 
Switzerland's Ciba, Sweden's 
Pharmacia a nd Johnson and 
Johnson of the US. 

A biotech company entering 
into such collaborations aban- 
dons the dream of becoming a 
giant pharmaceutical group. 
But it is a move that, as this 
week’s events show, has its 
attractions. 

Trizec’s debt 
restructuring 
plan approved 

By Be rna r d Simon 
In Toronto 

An Alberta court has approved 
Trizec’s debt-restructuring 
plan despite objections from 
the property developer’s junior 
debenture holders. 

The plan, which has been 
under negotiation for almost a 
year, is scheduled for imple- 
mentation from July 25. How- 
ever, the ritKRp_ntmg creditors, 
consisting mainly pf US "vul- 
ture funds’ have indicated that 
they plan to appeal the court 
ruling. 

Under the plan, control of 
Trtzec win pass from Toronto's 
Bronfman family to Horsham, 
the investment company con- 
trolled by entrepreneur Mr 
Peter Munh. and Argo Partner- 
ship, a fund managed by New 
York’s O’Connor Group. 


L 15% 

off electricity 

| 021423 3018 

i Power line 


I m * WtfttH of r ro , ^ 


the government appeals to be 
“doing its best” to meet its 
spending target 

According to Mr Henry 
Azzam, chief economist at 
National Commercial Bank, 
lending to the private sector 
remains firm, with all the 
hanks to have reported so for 
showing bigger loan portfolios 
. with the Saudi American 
Bank's having increased by 25 
per cent 

“In the domestic economy 
the demand for bank loans 
remains firm and marg ins are 
fi rmin g," he says, adding that 
continued growth in the pri- 
vate sector looked set to 
improve hank figures slightly 
to the next two quarters. 

Some of this lending, though, 
reflects cover to companies 
stretched by delays in govern- 
ment payments. 

“Banks will be looking more 
closely at the quality of their 
lending over the next few 
months," says one banker, who 
said there would also be 
increased pressure on banks to 
increase provisions over the 
next six months. 


A 

Amoldo Mondadori Editore S.p.A. 

Lit. 990,000,000,000 
Offering of 

66,000,000 Ordinary Shares 

of nominal value Lit. 1,000 each 
by 

Amoldo Mondadori Editore S.p.A. 

and 

Silvio Berlusconi Editore S.p.A. 

Global Coordinator Co-Global Coordinator 

Mediobanca-Banca di Credito Finanziario S.p.A. Banca Commercials Italians S.p.A. 

Institutional Offering 

Italian Region 

Mediobanca-Banca di Credito Finanziario S.p.A. Banca Commerciale Italians S.pA. 

Banca di Roma S.p A CARIPLO - Ca«a di Risparmio delle Provindc Lombards S.p.A. Credito Italianu S.p-A. 
Isbtuto Bancario San Paolo <6 Torino ARCA SIM Banco Ambrosiano Vcneto Ciobci^u Warburg SIM 
Isrituto Mobil iarr Italiaao S.p.A. Moore dri Paschi di Siena RASFIN SIM Albertini Sc C SIM 
Banca Nasonate dd Lavoro S-p-A. Prune Investment Management SIM 

United Kingdom Region 
S-G .Warburg Securities 
Cazenove & Co. 

Barclays de Zone Wcdd Lind ted Nat West Securities limited Paribas Capital Markus 
N M Rothschild and Smith New Conn J. Henry Schroder XXbgg 6c Co. Limited 

Continental Europe Region 
Paribas Capital Markets 


CS First Boston Deutsche Bank S.G. Warburg Securities 

ABN AMRO Bank N.V. Banca Commerciate Italians (Suisse) Banco Central Hispano 
G e Monegasque de Banque Credits nsoh-Bankvnrin 

Enskilda Corporate Generate Bank Lazard Frfcres et Cic Sodcii Generate 


BHK-Bank 


Rest of the World 
S.G. Warburg Securities 

Beat; Steams 8c Co. Inc. CS First Boston Daiwa Europe Limited Indosua Capital 
Morgan Stanley 8 e Co. Intern ational 

Italian Public Offering 

Mediobanca - Banca di Credito Finanziario S.p-A. Banca Commerciale ltaliana S-p-A. 

Banca di Roma S.p A. Credito lealiano S.p.A. Banca Nazionale del Lavoro S.p.A. 

CARIPLO - Cassa di Risparmio delie Provindc Lombarde S.p.A. Istituto Bancario San Paolo di Torino 

Banco Ambrosiano Veneto Isrinno Mobiliarc ItaCano S-p.A. Monte dei Paschi di Siena 
Banca Popolare di Milano Banca Naaomlc defl’A g rico tana Banco di Napoli Banca Popabit di Breach Credito Agrario Breariano 
Banca iT Amenta e <fksBa Banca Popolare Commerrio e Indiana Banca Popolare di Verona Banca Popolare Venera Banca Agricob Milanese 
Banca Antonhna Banca di Legnano Banca Popolare di Lodi Banca Toscana Banca Popolare di Ber gamo - Credito Vamino Banco di Sardegna 
Cretfcn Ra myi ob Banca Agricola Mantovam Banca CRT Casaa di khpaimio ih Torino Banca Popolare Vicentma Cmsa di Bhpannio di Pa rt na r Piacenza 
Banca Mrnamdc || « 1 - 1 "- Smt, Monte Banna -- Popolare ddTHinEu Romagna Banca Popohrc di Ancona Ram-. Kipolin di I*™ 

Bans Popolare di Novara Ba n co di Chhvari e deUa Riviera Lqpire Banco S. Gcminhoo c S. Prorpero Cana di Rkpormio di Udine c Potdcnooe 
Oedito Emilia no Banca Popolare di Asolo e MoatebeBuna Cassa <6 R is p a r m io di Cwieo Credito Commcrcule Banca Brignooc 
B a n ca di Cr edito del Piemonte Banca C. S rrinhaml in 6c C Banca Popohrc di Soodrio Banca Popolare Frhihdna Banca San Paolo di Brescia 
Banca del Fudao Broca Sella Banco San Marco Credito Anjgjaso Credito Lombardo Credito VdccDinese Efi banca RASFIN SIM ARCA SIM 
Giiibcfgia Wkrbmg SIM Prime In wwm e m Management SIM Albenmi & C SIM CabotoSIM Akins Attnno SIM Emocassc SIM Enromobiliarc SXM. 
Gomba AzxotB 6c Co. SIM M£a6cCo.SIM PasSn Securities SIM Hnamhria Indosuez SIM EPTASIM CJ.MO.MM 
I n wnnnbfl h ra S I M pA Sofipa SIM Bern SIM BSI SIM CoTdpSIM Fm-ecoSIM 

International Advisor 
S.G.Warbnig Securities 

mmmimmmimimimnmnmmimmmmmmmmmm 


VXLLE DE STRASBOURG 


Construction de PHemicycle du Pa demerit Europeen 

AVIS D’APPEL D’OFFRES DE FINANCEWENT 
(NOTICE OF INVITATION TO TENDER - FINANCING) 

La Society d’Amenagement et d'Equipement de la Region de Strasbourg 
(S.E.RLS.) lance une consultation publique en vue d’obtenir une deuxifeme 
tranche de flnancement couvrant 336 millions d’ECUS d’investissement. 
L’appel d'oftres fait fobjel d'une publication au supplement du Journal Offi- 
ciel des Comrounaui6s Europ6ennes en date du-14 juillet 1994, N 8 133, 
page 100. Les modal itos de participation de I'appel d’oRres y sonl iudiqu6es. 
Date limite de reception des offres: Lundi 29. aoflt 1994 & 18 heures. 

S.E.R.S. - 10. roe Oberlin - F - 67080 STRASBOURG Cedex 
T616pbone :■ (33) 88 37 88 88 - T616copieur: (33) 883788 99 




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Vtel Rsete Exploration and 
ftfinlng Company Limited 

Rag. Na D5ri7XMlS 

Western Deep Levels Limited 

Rag. Ng. 67W2MMB 
RWaWe«f6l3i#iiU«n| 

Copies of the above men- j 
honed companies’ interim 
reports have been issued 
today and are avaHabla from 

the London Secretaries: 

Angto American Corporation 
oT South Africa Limited, 

19 Charterhouse Street, 
London EC1N 6QP. 


21 Mr 129* 


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FAR EASTERN TEXTILE LTD. 
US$BOJOOO.OOO * per cent. Ronds du* 2006 

Pursuant to Section &2 of the Indenture dated as of October 7. 
1991 (the "Indenture*), among Far Eastern Textile Ltd. 
II he "Com pany"). Citibank, N.A., London Branch as Principal 
Paying Agent and Citicorp Trustee Company Limited as Trustee, 
relating to the Issuance by the Company o( US$50,000,000 
aggregate principal amount of 4 per cent. Bonds due 2006 
lihe' Bonds’), we hereby notify you that the Conversion Price has 
been adjusted from NTS39 .69 par share to the newly adjusted 
Conversion Price of NTS37 per share and will taka affect on July 
23, 1994, the ex-dividend date. This adjustment is based on the 
declaration of 111.418.662 shares in tha form of the stock 
dividends of 1993. These stock dividends are funded by tho 
Company's capital surplus in the amount of NTS1.114.l85j62a. 

Juty2Z 1994 

ByrCasrANAMnt^ftayingBndCOmsniOnAgeN 

onbMfofhraEhnTMfettt 


MERRILL LYNCH EQUnTY/OMVERTIBLE SERIES 
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69. Emit D’Exfc L-2933 Luxembrorg 


StactoUen arcintamed dW dans of (he MerrUl Lyndi Eqdo/Caarenibk Saks - PAOrlC 
EQUITY PORTFOLIO arc being offered fftt nk uct 27ifc Inc 1994 aad dull becoow 
jvaMie after the Initial Oflang Period eadiag 00 2&h July 1994 tor cosueiaaa n few 4^ 
Angnt !W4aUai described in on upriuedpraspeanadamf Jane 1994. 

As cram 15th July I»1 ■ redeaiprioo of Ac Shwa of ihe Merrfll Lynct Eqrifv/CoBnitibk 
Series - LATIN AMERICA PORTFOLIO and of Ihe Marin Lynct EqatyCoevatifck Sate - 
DRAGON PORTFOLIO as tosger be subject ta Ibc Tedeoquioa fee described in rbc 
ft nepe fl w. 

The Boeri of Diieeiiiee. 


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London WCZR1HB 


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London SWtXBHL 
Teh +71 248DDQS 

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18 


FINANCIAL TIMES FRIDAY JULY 22 1994 


★ 

INTERNATIONAL COMPANIES AND FINANCE 


Coca-Cola reshuffles top managers 


By Richard Tomkins 
hi New York 

Coca-Cola, the US soft drink 
group, yesterday announced a 
management reshuffle that 
will be seen as effectively 
anointing a successor to Mr 
Roberto Goizueta, chair man 
and chief executive. 

He is Mr Douglas Ivestor, 47, 
currently head of Coca-Cola's 
North American operations. 

He has been appointed to the 
number two position as presi- 
dent and chief operating officer 
- a role that has been vacant 


Charge holds 
back Colgate 
Palmolive 

By Richard Tomkins 

Colgate-Palmolive, the US 
consumer products group, 
posted net income virtually 
unchanged at $1428m in the 
second quarter. The group was 
hampered by a fall In profits In 
North America and a $5 .2m 
charge for the sale of a non- 
core business. 

World- wide unit volume 
grew by 9 per cent, driven by 
strong increases in Europe and 
the developing world. Group 
sales rose 7 per cent to JLSbn, 
and would have risen by 9 per 
cent without the adverse effect 
of shifts in exchange rates. 

However, volume slumped 
by nearly 9 per cent in North 
America in spite of the intro- 
duction of new products. Col- 
gate-Palmolive said its goods 
were still being bought in the 
same quantities but the retail 
trade had sharply reduced 
stocks. 

Net Income in the compara- 
ble quarter was 5142.4m. 

Colgate-Palmolive said the 
latest figure would have been 4 
per cent ahead without the spe- 
cial charge. 

Polly diluted earnings per 
share, lifted by aggressive 
stock repurchases that reduced 
issued equity by 8 per cent, 
rose by 7 per cent to 87 emits 
from 81 cents. 

Net income In the first half 
rose to $232.1 m from $283Jhn, 
excluding the effect of account- 
ing changes last time. 

Colgate- Europe achieved 16 
per cent unit volume growth, 
although about 5 percentage 
points of that came from acqui- 
sitions. 


since Mr Donald Keough, the 
previous incumbent, left on 
reaching retirement age in 
April last year. 

Mr Goizueta has been chief 
executive of Coca-Cola for 13 
years, and under normal com- 
pany policy would have 
stepped down on reaching his 
65th birthday in November 
1996. 

Last April, Coca-Cola's board 
announced that it had asked 
Mr Goizueta to remain as 

chairman and chief executive 

for an indefinite period, but 
this foiled to dampen specula- 


By Richard Waters 
in New York 

After-tax profits at Monsanto, 
the US chemicals group, 
climbed 29 per cent in the sec- 
ond quarter of the year. Its 
chemicals group benefited 
from the economic upswing in 
the US and Searle. its drugs 
company, shook off losses from 
the year before. 

Net income of $258m, or $2.19 
a share, was ahead of market 
expectations and compared 
with $200m, or $1.66 a year ago. 

In the chemicals area, Mon- 
santo’s operating profits rose 
to $103m from $75m on sales 
down to $926m from $933 m, 

thanks mainly to deman d in 

the US automotive, housing 
and home furnishing markets. 
The beginning of economic 


By Frank McGurty in New York 

General Dynamics, the US 
defence contractor, yesterday 
reported second-quarter earn- 
ings of $56m, or B8 cents a 
share, up 3.7 per cent, saying 
that its pared-down operations 
had showed steady improve- 
ment in the second quarter. 

The results underscored the 
success of the cutbacks which 
were largely completed this 
spring with the sale of its 
Space Launch Systems arm. 

The figures for the continu- 
ing businesses, which were 
slightly better than analysts 
bad predicted, compare with 
net income of $54m, or 85 
cents, in the corresponding 
1993 quarter. 


tion about who would eventu- 
ally succeed him. 

Barring dark horse candi- 
dates. the two men widely 
regarded as front-runners were 
Mr Ivestor and Mr John 
Hunter, 56. head of Coca-Cola’s 
international operations. But 
under yesterday’s reorganisa- 
tion Mr Hunter will be left 
reporting to Mr Ivestor, the 
younger of the two. 

Mr Ivestor has previously 
saved as group chief financial 
officer and head of Coca-Cola’s 
European business as well as 
running Coca-Cola North 


recovery in western Europe 
and cost -cutting also contrib- 
uted to the improvements, the 
company said. 

Searle, which reported a 
$37m operating Ices a year ago, 
returned a $3m profit in the 
latest quarter on a 9 per cent 
improvement in sales, to 
$415m. The sales growth came 
from Ambien. an insomnia 
drug, and Daypro and Arthro- 
tec, two treatments for arthri- 
tis. 

For the six months as a 
whole, net income rose to 
$452m on sales of $L3bn, from 
$341m on sales of $AZta a year 
before. 

• Warner Lambert saw its 
drugs sales foil by 3 per cent in 
the second quarter, although 
sales overall grew by 7 per cent 
to $185bn on strong gains from 


Revenues were up nearly 10 
per cent at $82Qm. 

The 1994 results exclude a 
one-time net gain of $15m from 
the disposal of the space divi- 
sion, acquired by Martin 
Marietta for $208m. The year- 
earlier figures take no account 
of a $9m non-recurring gain 
and reflect a two-for-one stock 
split in April. 

Mr James Meflor, who took 
over as chairman and chief 
executive two months ago, 
attributed the solid perfor- 
mance in part to efforts to cut 
costs and boost productivity. 
The group’s cash b alanc e was 
$988m at the end of June, up 
from $71 lm three months ago. 

General Dynamics once pro- 
duced a wide array of weapons 


America. In his most recent 
position he has been credited 
with producing strong growth 
in profits from the US market. 

Mr Andrew Conway, bever- 
age analyst at Salomon 
Brothers, the Wall Street secu- 
rities house, said Mr Ivestor 
was considered to be a 
long-tom strategist 

Coca-Cola said Mr Jack 
Stahl, chief financial officer, 
would become head of Coca- 
Cola USA, and Mr James 
Chestnut, vice-president and 
controller, would succeed Mr 
Stahl 


consumer products, particu- 
larly in the US. 

The lower pharmaceutical 
sales wore due to a 9 per cent 
foil in the US as Lopid. a lipid 
drug, faced competition from 
generic alternatives on the 
expiry of its patent 

Consumer products sales in 
the US jumped 20 per cent as 
the company saw the benefits 
of an agreement under which 
it is selling Wellcome products 
in the US. 

Net income of S197m, up 
from $190m a year before, and 
earnings per share of $1.47, up 
from $1.40, were broadly in fine 
with market expectations. For 
the half year. Warner Lambert 
recorded net income of $387m 
on s ales of $3bn, compared 
with $372m on sales of $2Bbn a 
year before. 


the manufacture of only sub- 
marines and tanks. 

The electric boat division 
was recently awarded $130m in 
start-up funding to build a 
third Sea wolf-class attack sub- 
marine for the US Navy. At the 
armoured vehicles division, the 
company said yesterday, there 
was progress in settling a 
month-long strike by 2,000 
workers. 

For the first six months of 
the year. General Dynamics 
posted net earnings of $126m, 
compared with $748m in the 
1993 period, when it booked a 
$64Sm net gain on the sale of 
its Tactical Military Aircraft 
business. Revenues were flat at 
$1.6bn. 


Strong sales 
growth lifts 
Caterpillar 
to $240m 

By Patrick Harverson 

Caterpillar yesterday reported 
record second-quarter profits 
of $24 0m, or $2^36 a share, as 
the US heavy equipment man- 
ufacturer benefited from eco- 
nomic recoveries at home and 
abroad, which have sharply 
lilted sales of the group's prod- 
ucts. 

In the same quarter a year 
ago, the group earned $67m, or 
66 cents a share. 

However, the strong quar- 
terly results are overshadowed 
by a long-numing dispute with 
unions over labour practices 
which resulted last mouth in 
14,000 members of the United 
Autoworkers Union walking 
out on strike. 

The industrial action, which 
started as a series of short 
strikes but escalated in the 
final week of June into a 
full-scale strike, had no impact 
upon second-quarter earnings, 
said Caterpillar. 

The group also predicted 
that a continuation of the 
strike would not harm its 
earnings greatly later in the 
year. 

Sales of the group's products 
in the US, which account for 
just over half of Caterpillar’s 
total sales, jumped 25 per cent 
between April and June to 
3I.8bn, a result of both 
increased demand and higher 
prices. 

Overseas sales rose 23 per 
cent to $l.68bn, thanks to 
gains in Asia, Latin America 
and among former members of 
the Soviet Union. 

However, sales to fibe Middle 
East area foil during the quar- 
ter. 

Caterpillar’s financial prod- 
ucts division* reported a $2m 
decline in pre-tax profits to 
$14m. 

This was the result of a $4m 
charge the group was forced to 
take to cover the introduction 
of mark-to-market acco untin g 
of interest rate derivatives 
products purchased by 
Caterpillar Financial Serv- 
ices. 

Yesterday's results had 
little impact on Caterpil- 
lar's share price, which 
rose $% to $108% in early trad- 
ing on the New York Stock 
Exchange. 

Recovery 
continues 
at Northwest 

By Richard Tomkins 

Northwest Airlines, the fourth 
biggest US carrier, yesterday 
reported a tnraround from net 
losses of $ 136.2m last time to 
net profits of $71-3m for its 
first frill quarter since return- 
ing to the stock market in 
March. 

The company attributed the 
improvement to an 8.5 per 
cent increase in revalues to 
$2.27bn, combined with a 
slight decrease in operating 
expenses, down to $2.07bu 
from $2.08bn. 

Second-quarter operating 
profits rose to $207.8m from 
$19 2m. Folly diluted earnings 
per share were 67 cents, com- 
pared with losses of $2.42 last 
time. 

For the six months to June, 
the company reported a turn- 
round to profits of $89. 6m 
from losses of $236 .5m. 

The quarter was the fourth 
consecutive period of profit- 
ability for Northwest at a time 
when most other big US air- 
lines have been showing losses 
or very small profits. The com- 
pany said this was the first 
time it had reported four con- 
secutive quarters of net profits 
since 1989. 

It wes helped by an agree- 
ment with its labour unions 
under which employees agreed 
to exchange $886m worth of 
labour concessions for a 33 per 
cent stake in the company 
(down to 26 per cent following 
the initial public offering). 

Northwest has been restruct- 
uring its routes and flights in 
an attempt to cut out loss- 
malting services and increase 
profitable flying. The number 
of available seat miles fell by 
1.8 per cent to 21.391m. 


Microsoft 


By Louise Keboe, 
in San Francisco 

Microsoft, the world’s largest 
computer software company, 
announced strong growth in 
sales and earnings for Its 
fourth quarter. The results 
were boosted by a surge in 
sales of personal computer 
operating systems programs. 

On Saturday, Microsoft set- 
tled anti-trust complaints by 
reaching an agreement with 
the US Justice Department and 
European competition authori- 
ties to modify the terms on 


In worldwide oil and gas, 
companies seeking strategic advice 
and superior execution 
across their capital structure 
can rely on one firm. 


JPMorgan 


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Monsanto beats expectations 


General Dynamics up 3.7% 

systems but is engaged now in 


AT&T in black midway 
after solid second quarter 


By Patrick Harverson 
in New York 

AT&T, the largest US 
telecommunications group, 
yesterday reported solid sec- 
ond-quarter profits of $U3bn, 
or 83 cents a share. In the same 
quarter a year ago the group 
earned $1.0lbn, or 74 cents 
restated to account for 
accounting dhangnq 

The second-quarter profits 

took first-half 1994 gamings to 
$2.22bn. A year ago. AT&T 
reported a first-half loss of 
$5.Sbn, but excluding the 
impact of accounting changes, 
earnings in the period totalled 
$1.94bn. 

The improvement in second- 


quarter results was attributed 
by AT&T to strong revenue 
growth from Its longdistance 
telecommunications, equip- 
ment manufac tu rin g and finan- 
cial services businesses. Total 
revenues in the quarter were 
$17.7bn, up 8.7 per cent from a 
year earlier. 

The results were well 
received by investors an Wall 
Street, who bid up the compa- 
ny’s stock PA to $53% on the 
New York Stock Exchange in 
early trading. 

AT&T’s core long-distance 
business posted a 5 per cent 
increase in revenues to 
gULMlm. 

The accelerating pare of eco- 
nomic activity, plus strong 


sales of new consumer ser- 
vices, lifted calling volume 7 
per cent during the period. 

Revenues from the group’s 
products and systems division 
climbed 19 per cent to frLflbn, 
with network telecommunica- 
tions products and systems 
sales in the US and overseas 
growing sharply, and the com- 
puter business (formerly NCR) 
posting a profit on strong 
equipment sales. 

Although rentals and other 
services revenues declined 
slightly to $1.69bn, earnings 
from the financial services 
business, which runs equip- 
ment financing, leasing and 
credit card services, jumped 23 
per cent to $723m. 


Slumbering Lac Minerals 
receives a wake-up call 


The gold producer is fighting a bid, writes Bernard Simon 


L ac Minerals has for 
many years been near 

the top Of mmirigr ana - 

lysts’ list of companies in need 
of a wake-up cafi. 

Its board of directors is 
heavily tilted towards retirees 
and professional men. Its exec- 
utive chairman, Mr Peter 
Allen, has an imperious style 
which has won few friends in 
the investment community. 

That loud call came on July 
7 when Lac, the Toronto-based 
gold and base-metals producer 
which has been widely critic- 
ised for tardiness, became the 
target of a bid. 

An audacious US$1.4bn take- 
over offer was launched by 
Royal Oak Mines, the Vancou- 
ver-based gold producer whose 
pugnacity makes it the antithe- 
sis to Lac. 

By the time Lac delivered its 
response early this week, the 
directors had tripled their esti- 
mate of its gold reserves and 
given the go-ahead to invest 
$600m over the next three 
years in new projects. 

Mr Jim Pithlado, a non-exec- 
utive director and retired head 
of Canada's biggest securities 
dealer, said the board had 
“complete confidence” in Lac’s 
management. 

However, he acknowledged 
that “there’s a feeling that we 
should be telling our story a 
little more firmly and a little 
more aggressively in the mar 
ket place". 

Royal Oak, with projected 
1994 gold output Of 375,000 
ounces, is only about one-third 
Lac’s size. 

Its four low-grade mines in 
Canada are minnows compared 
with the Lac empire, which 
stretches across the US, Can- 
ada and Chile. As the hid for 
Lac shows, Royal Oak seldom 
backs away from a soap. 

Ms Peggy Witte, its tena- 
cious president, is a US-born 
mining engineer with a reputa- 
tion for putting crippled mines 
back on their feet by cutting 
costs to the bone. 

She kept the Giant Yellowk- 
nife mine in the Northwest 
Territories running for a year 
during one of the most bitter 
and violent strikes in Canadian 
mining history. 

Although Ms Witte can take 
credit for rousing Lac from its 
slumber, Royal Oak remains a 
long-shot to win the takeover 
battle. 

‘You've got to be out of your 
tree to accept the Royal Oak 
offer," says Mr Peter Miller, 
analyst at Yorkton Securities 



Peggy Witte; a reputation for 
rescuing crippled mines 


in London. Almost three-quar- 
ters of the bid lyimpriras Royal 
Oak shares, which Mr Pithlado 
dismissed as “paper of ques- 
tionable value”. 

Much of tiie $40m-$50m a 
year in cost savings which Ms 
Witte claims she can squeeze 
out of Lac would be offset by 
interest charges on the $70Qm 
in long-term debt which Royal 
Oak would take on to finance 
its bid and augment working 
capitaL 

The combined company's 
earnings could be wiped out 
for years by the amortisation 
of almost $lbn in goodwill, 
which under Canadian 
accounting rules would not 
qualify as a tax deduction. 

T he chances of the com- 
bined company paying a 
dividend in the near 
future without a large increase 
in the gold price, are nfl. 

The increased reserves and 
new projects announced by Lac 
this week - assuming they 
come to fruition - raise further 
questions about the value of 
Royal Oak’s offer. 

Estimates of proven and pos- 
sible reserves have been lifted 
from 8.6m to 13.5m ounces, 
plus “additional geological 
resources” of 13.5m ounces. 
The increases come largely 
from exploration projects at 
two properties in northern 
Chile, Red Mountain in British 
Columbia, and from mines in 
Ontario and the US. 


board has approved construc- 
tion of a $llflm mine at Red 
Mountain with an expected 
annual output of 225,000 
ounces a year from the end of 
1996. 

It has given the go-ahead for 
the $168m La Nevada mine in 
Chile, whose target production 
is 200,000 ounces a year. A new 
vein, with estimated reserves 
of lm ounces, has been discov- 
ered at the El Indio mine in 
Chile. 

Lac has stepped up explora- 
tion outside North America 
over the past year or so, con- 
centrating on Australasia, Swe- 
den and Niger. 

The Royal Oak bid, which 
expires on August 9, is 
unlik ely to be the last word in 
the Lac story. Royal Oak said 
this week it was highly scepti- 
cal of the sudden increase in 
Lac’s gold reserves. “Royal 
Oak has always acknowledged 
Lac's world-class assets, but it 
has questioned Lac’s manage- 
ment of those assets,” Ms Witte 
said. 

Lac’s shares are widely held, 
mainly by North American 
institutions. 

Several shareholders have 
stepped up the pressure by ten- 
tatively depositing their shares 
with Royal Oak. But most 
observers expect a better offer 
to materialise. A Canadian 
analyst came away from a Lac 
briefing in Toronto last Mon- 
day with the firm impression 
that the company was for salt 

Mr Pithlado confirmed that 
Lac’s financial advisers were 
exploring other strategic 
options. He declined to be more 
specific, nor to say whether 
Lac was likely to survive in its 
present form. 

Several other gold producers 
may be interested in Lac, and 
be more acceptable to its man- 
agement and shareholders 
than Royal Oak. 

At the tig) of Mr Idler's list 
is Camhior, the Montreal-based 
gold producer whose properties 
in Quebec and Latin America 
would make a good fit with 
Lac. 

Other possible candidates 
within North America include 
American Barrlck, Battle 
Mountain, Amax Gold and 
Pegassus Gold. South African 
mining houses eager to expand 
abroad may take a serious 
look. 

The betting in the invest- 
ment co mmuni ty is that if Lac 
doesn't survive in its present 
form, nor will some of its direc- 
tors and managers. 


In the past 10 days. Lac’s 

Abitibi-Price cuts second-term loss 


By Bernard Simon In Toronto 

Abitibi-Price, the world's 
biggest newsprint producer, 
suffered another loss in the 
second quarter, but scraped 
together its first operating 
profit in almost a year. 

The Toronto-based company 
reported a net loss of C$1 7.7m 
fUS$12.6m), or 19 cents a share, 
down from C$19.8m, or 29 
cents, a year earlier. 

The latest figures include a 
C$5.2m charge stemming from 
the expected closure of a news- 
print machine at Grand Falls. 
Newfoundland. 

Interest expenses rose 


Sharply. Operating profit from 
continuing operations was 
C$2.9m, against a C$1 0.8m 
loss. 

Sales rose by 12 per cent to 
C$51&6m, mainly due to higher 
volumes. 

Mr Ron Oberlander, chief 
executive, predicted higher 
prices and further cost-cutting 
should produce better results 
in the second half. 

Abitihi painted an encourag- 
ing picture of the newsprint 
market 

A 7 per cent cut in discounts 
was implemented earlier this 
year in North America and 
another 6 per cent reduction 


has been announced for mid - ( 
August 

Newsprint consumption at 
US daily newspapers was 48 
per cent hi gh nr in May than a 
year earlier, while customer 
inventories have fallen by 
about a quarto-. 

Offshore consumption has 
also gr ow n, with Abitibi’s ship- 
ments rising by 93^00 tonnes 
during the second quarter com- 
pared to a year earlier. 

Newsprint and ground*** 1 
paper output climbed to L2® 
tnnnfis in the first half, u® 1 
l.lm tonnes a year earlier. Sec- 
ond-quarter production was up 
16 per cent 


lifted 24% by buoyant PC area 


which it sells operating system 
licences to PC makers. 

It said the settlement would 
have no material impact on 
earnings. 

Second-quarter revenues 
were $L29bn. up 24 per cent 
over the $1.04bn for tine same 
period in 1993. Net income was 
8362m, or 59 cents a share 
(restated to reflect the compa- 
ny’s two-for-one stock split in 
May), compared with 8265m. or 
43 cents. 

Income includes a $30m 
reversal of part of a third-quar- 
ter $12Qm charge, relating to a 


Los Angeles court order that 
Microsoft pay damages to Stac 
Electronics for patent infringe- 
ment. Last month, Microsoft 
reached a settlement agree- 
ment with Stac. Net income for 
the fourth quarter would have 
been $342m, or 56 cents, with- 
out the gain. 

For the year, revenues were 
R65bn, up 24 per cent from 
$3.75bn in fiscal 1993. Net 
income rose 20 per cent to 
gl.lSbn from $953m. Earning s 
per share were $1.88, compared 
with $187 last year after the 
stock split 


ng the litigaboo 
i the settlement, a** 
Or the year was 
1 $1.98. 

completed ourl«J 
re year of “ 
igs growth,” raW 1 "J 
Srice-presideDt® 


'££**** 
eacbri an aU-wn® 
L per cant wtfj “J 
13 months. 
he widely nsedj£ 
ystem, were par** 



FINANCIAL TIMES FRIDAY 


JULY 22 1994 



The Republic of Kazakhstan 

through its affiliates Kazakhstanmunaigaz and 

Terigizneftegaz Production Association 

and 


Polar Lights Company 

KoMnaHHH floaapHoe CuflHwe 

a joint venture between Conoco Tirnan-Pechora Ltd. 
and GP Arkhangelskgeologia 

Chevron Corporation 

through its wholly owned subsidiary 

Chevron Overseas Compcuy 

have formed 


as. S200 3 ooo,m 

Project financing for the Ardalin Field 

in 'liman- Pechora, Russian Federation 

Tengizchevroil 

a limited liability partnership registered in 
the Republic of Kazakhstan 


Funds provided or guaranteed by ■ 

European Bank for Reconstruction and Development 

Internationa] Finance Corporation 

Overseas Private Investment Corporation 

to develop the Tengiz and Korolei » oil fields 



J. P. Morgan Securities Inc. acted as financial advisor 
to the Government of the Republic of Kazakhstan, 

Kazakhstanmunciigaz , and Tengizneftegaz 


J.P Morgan Securities Inc. arranged the financing commitments 
and acted as financial advisor to Polar Lights Company 

JPMorgan 


JPMorgan 

April rm 


September 1993 


Orenburgneft Production Association 


Uzbekneftegas 

and 


and its affiliate 

Crystal Oil Company 


Uzvneshneftegas 

have formed 


have undertaken initial development of 

A/O Buzuluk Crystal 

* a limited liability company registered 
in the Russian Federation of States 


The Bukhara Refinery 

to develop the Pokrovskoje and Pronkinskoje oil fields 


Morgan Guaranty Trust Company acted as financial advisor 
to Uzbekneftegas in assessing initial development 
proposals for the refinery project 

J. P Morgan Securities Inc. acted as financial advisor 
to the Orenburgneft Production Association 



JPMorgan 


JPMorgan 

September 1993 


November 1993 


1 JP Morgan 


oi wt J.P. Mnrpn fc Co. krapninl J-P Ntogan SeairHcs fat 


Mrmbrrarc to »u. fcy M«p» C-^ntyT™. m-utarrfU-Sfil. 




20 


FINANCIAL TIMES FRIDAY JULY 22 1994 



INTERNATIONAL CAPITAL MARKETS 


US Treasuries fluctuate within narrow range 


« New York 


J^^asuiy bonds fluctuated 
JJ™ a hanw range y ester- 
^ymomlng, buffeted byshajp 
Scents in the dollar aS 
interpretations of a 
r w , «. economic survey. 

hiidday, the benchmark 
■w-year government band was 
with the yield 
to 7.54 per cent At 
the short end, the two-year 
was A tower at 99%, to 
yield 64M9 per rp^ 

Bond traders were keeping a 
closer eye on the foreign 
exchange markets than in 
recent sessions. The fresh 
attention was prompted by 
repeated warnings from Mr 
Alan Greenspan, the Federal 
Reserve chairman, that a 
depressed US dollar was a 
threat to the economy. 


On Wednesday morning, the 
Fed chief told a Senate com- 
mittee that the dollar’s weak- 
ness could lead to higher infla- 
tion by increasing the cost of 
imported goods and. In tom, 
domestic products which com- 
pete with them. 

With the linkage between 
the currency and bond markets 
reinforced, the dollar's slide in 
the wake of the Bundesbank’s 
derision to forgo a cut in inter- 
est rates did not sit well with 
Treasury traders. Bonds fell 
steeply, but later recovered as 
the dollar rallied on supportive 
comments by Mr Lawrence 
Sommers, a US Treasury 
undersecretary. 

With the dollar's vagaries 
back to centre stage, the July 
survey of business conditions 
by the Federal Reserve Bank of 
Philadelphia provided a fleet- 
ing diversion. Immediately 
after the report’s release at 


10pm. bonds lurched down- 
ward as traders focused on a 
big jump in the prlces-paid 
component. 

However, closer examination 
of the survey revealed a pat- 
tern of moderating growth in 
the region mitigating the infla- 
tionary implications of the 


GOVERNMENT 

BONDS 


prices data. That perception 
allowed bonds to move back to 
near their opening levels by 
early afternoon. 


B Germany largely led yester- 
day's European bond market 
action, supporting prices in 
most markets after the Bundes- 
bank announced it was leaving 
key interest rates unchanged. 

Investor activity remained 
low, however, and is expected 


to become even thinner in com- 
ing weeks as policy-makers 
and investors go on holiday. 
“It's been pretty dead In the 
futures and deadly dead in 
cash." said a Frankfort dealer. 

At its last meeting before its 
month-long week recess, the 
Bundesbank's central bank 
council left official interest 
rates unchanged and set fixed- 
rate securities repurchase 
agreements at <L85 per cent for 
the next four weeks. 

After slipping immediately 
after the announcement, bunds 
soon recovered and finned sig- 
nificantly. The September 
bund future fell to a low of 
93.48 but closed at 94.08, np 0.40 
point on the day. 

The short end of the carve 
remained relatively soft on 
widespread disappointment 
that the B undesbank had only 
shaved three basis points off 
the repo rate, most traders 


having hoped for a fixed-rate 
repo at -L80 per cent or less. 

However, the long end was 
boosted by a sense that the 
Bundesbank was remaining 
true to its anti-inflation stance 
in leaving rates unchanged, 
and that it would lower them 
again on further weakening in 
M3 money supply growth. 

"Not cutting rates before the 
break leaves easing hopes 
Intact, which will support the 
market during the summer," 
said a trader. 


data and the continuing Senate 
testimony of Federal Reserve 
chairman Alan Greenspan. 


Milan bourse plans 
stock index futures 


By Antonia Sharpe 


B French government bonds 
followed German bonds higher 
but underperformed them 
slightly, allowing the 10-yeax 
yield spread to widen to SI 
basis points from 46. The Sep- 
tember notional bond future on 
Matif rose 0.12 points to 11720. 


fl UK gilts closed little 
changed but up from earlier 
lows, pulled higher by strength 
in the German market and by 
retail buying, traders said. The 
September long gilt futures 
contract on Liffe ended at 
103%, up £ on the day. 

Today’s attention will be on 
the release of second-quarter 
UK gross domestic product 


B Italian bonds ended a vola- 
tile and largely futures-driven 
session rightly higher, boosted 
mainly by the strength in the 
bund market 

However, they also underper- 
formed German bonds amid 
uncertainty ahead of the Ital- 
ian cabinet's presentation of its 
long-term budget plans after 
the market closed. The Italian 
10-year yield spread over Ger- 
many widened some 16 basis 
points to 399 basis points. 


Argentina targets Swiss retail 
investors with schilling offering 


By Graham Bowfey and 
Tracy Corrigan 


The Republic of Argentina 
entered the Austrian shilling 
market for the first time yes- 
terday with a small eurobond 
offering worth Sch750m. 

The three-year bonds, priced 
to yield 220 basis points over 
the 7K per cent Austrian gov- 
ernment bond due 1997, with a 
relatively high coupon of 8 per 
cent, is designed to appeal 
mainly to Swiss retail hives- 
tors but lead manager Credi- 
tanstalt said domestic institu- 
tional investors had also 
expressed interest 

Previous eurobond issues by 
the Republic of Argentina have 
not performed well this year, 
dealers said. The spread on 
Argentina’s D-Mark bonds 
launched last month via Deut- 


sche Bank, has widened to 260 
basis points from 220 basis 
points at launch. 

In the dollar market. Federal 
Home Loan Bank System’s 
global offering of two-year 
notes was priced yesterday at 
10 basis points over the compa- 
rable Treasury yield, in the 
middle of the indic ated range. 


INTERNATIONAL 

BONDS 


Lead managers Lehman 
Brothers and Morgan Stanley 
said around 60 per cent had 
been placed outside the US. 
reflecting the success of inter- 
national roadshows in promo- 
ting the issuer, which has not 
tapped the international mar- 
ket since the mid-1980s, to 
international investors. 


Other dealers reported a 
mixe d reception from investors 
outside the US, with some say- 
ing that the spread of 10 basis 
prints offered little scope for 

any ti ghtening - 

However, by the end of the 
day the deal was quoted at 10 
basis points over on the bid 
side. 

Despite predictions that the 
market is about to enter a sum- 
mer hill, two more borrowers 
are preparing large offerings. 

Sears Roebuck, the US 
retailer, is preparing a 5750m 
to $lhn offering of asset-backed 
securities, while the European 
Investment Rank is taking bids 
from banks for a Y50bn to 
YlOObn three-year offering. 

A fall in the UK government 
bond marks* in early trading 
yesterday hampered the 
launch by Cre'dit Local de 


NEW INTERNATIONAL BOND ISSUES 


Amount 

Coupon 

Prica 

Matrady 

Fto 

Spread 

Book Mire 

Bocttjwrt 

118 00UAI18 

m. 

% 



% 

tap 


Empnreas lCA«t 

75 

(ai) 

99*5H 

Aug. 1996 

(L41R 

- 

||_« a ■ r. ,1 »L-in.il 

Mflrm Ljmcn HsamaDonav 

YEN 

Mtsubfshl CorpJTrrencsM 

llbn 

2.40 

10022 

Nov. 1995 

a>6 

_ 

Menu Lynch MsmJkral 

STBRUNQ 








CMdtt Local da Franca 

100 

925 

99*3R 

Dec. 1998 

025R 

+27 (8K-98) Goldman Sachs ML 

CANADIAN DOLLARS 

General Scctatc CapL Canada 

100 

9.125 

99ASR 

Aug2001 

(L30R 

♦15 <0 

Barcfoys do Zoois Wedd 

AUSTRALIAN DOLLARS 

S8C Austnrita 

100 

675 

101*85 

Aug. 1997 

1-fiO 

_ 

Swiaa Sank Carp. 

AUSTRIAN SCHILLINGS 
ReptAAc of Argenbna 

750 

aoo 

100.67 

Aug. 1997 

1*0 

_ 

CradttarretaK-BartcverJn 

MONO KONG DOLLARS 
Homes-1, Class Alfd# 

620 

(dl) 

10a 00 

Sep2003 

040 


Goldman Sachs (AJJ 

Homes-1. Class A2fc£ 

280 

(el) 

100.00 

Mar 2009 

0*0 

re 

Gokfcnan Sachs (AalJ 

Homas-1. Class B {« 

100 

(«) 

100*0 

OCL2013 

uncfscL 

- 

Goldman Sachs (Asia) 

SWISS FRANCS 


Milan stock exchange plans to 
round off its modernisation 
process with the introduction 
later this year of stock index 
futures, a move which will 
bring it in line with the rest of 
Europe. 

The Italian stock exchange 
council and Banca Commer- 
ctale Italians (BCD yesterday 
signed an agreement enabling 
the transfer of the BCI 30 con- 
tinuous index of Italy’s most 
liquid and highly-capitalised 
shares to the exchange Due to 
be re-named MIB 30, it will be 
the reference index for deriva- 
tive instruments in Milan. 

Mr Attilio Ventura, stock 
exchange chairman, said a 
futures market was indispens- 
able for a well-functioning 
bourse. Trading is expected to 
start on November 28 and will 
be conducted on Milan’s “tele- 
xnatico” screen-based system. 

Analysts welcomed the 
arrival of futures trading in 
Milan, which they said would 
reduce volatility in the cash 
market and facilitate the hedg- 
ing of positions in Italian 


stocks. "Investors will use 
futures to speculate rather 
than the underlying stocks," 
said Klelnwort Benson’s Mr 
Enrico Ponzone. 

Italian stock options will 
continue to be traded by open- 
outcry until next spring, when 
they are due to be transferred 
to the telematico. 

The change from open-outcry 
to screen-based trading has 
been at the heart of the 
bourse's modernisation pro- 
gramme, which included inves- 
tor protection legislation and 
plans to shorten settlement 
from one month to five days. 

Despite some Initial techni- 
cal difficulties, stock trading in 
Milan is now totally on-screen 
and has greatly improved turn- 
over, price transparency and 
investor confidence, all pre- 
requisites for the Italian gov- 
ernment's privatisation pro- 
gramme. 

Daily turnover reached 
I^OOObn In April in the after- 
math of the general election. 
Turnover has since fallen to 
around Ll.OOObn a day but is 
still well above levels recorded 
last year. 


r*"» -> » -a 

I OIL'S. 


Citibank repackages part < 
of HK property portfolio 


By Sman Hdberton 
In Hong Kong 


Crttft Local de Franca 


Final terms and non-collabla urfass noted The yield spread (over retew* government band at launch is supplied by the lead 
manager. (Fteattny rate note. Ft fixed la-ofler price: fees are shown at tlw re-offer level 4 Calotte on coupon dafae from Aup*G * 
per. el) 3-ntth Lbor +Z25bp. b) Short 1st coupon, c) Over totetpotated yWd. d) Average flta 12 yra. <n) l-mth Hbor +30bp. e) 
Average fife: 4.1 yra. el) 1-mtn Hbor +175Bp. t) Araage Mac 14 yra. ft) 1-mtfi Hbor +600bp. 


France of a ElOom four-year 
eurobond issue. 

Syndicate managers said 
that Hwmand for the dea l had 
also been hit by the closure of 
the Belgium bond markets yes- 


terday for National Day. 

Aimed mainly at continental 
European retail investors, the 
bond was priced to yield 27 
basis points over the 6 per cent 
gilt due 1999. This spread wid- 


ened to about 33 basis points in 
later trading. Goldman 
the lead manager, admitted 
that placement of the issue had 
been affected by the closure of 
the Belgian market 


Citibank yesterday became the 
first bank in Hong Kong to 
repackage part of Its residen- 
tial property loan portfolio for 
sale to investors, when it 
announced a HKJlbn offering 
of mortgage-backed securities. 

The bulk of the issue has 
already been placed with insti- 
tutional Investors in Europe, 
Hong Kong, China and Japan, 
said Mr Timothy Kelly, head of 
Hong Kong retail banking. The 
issue is expected to be com- 
pleted by July 27. 


The mortgages will be pur- 
chased from Citibank by 
Homes-1. which will finance 
the purchase through the issue 
of HK51bn in securities. 
Homes-1 will Issue three 
tranches of securities. 

Mr Kelly said the HKJlbn of 
mortgages represented a small 
percentage of the bank's port- 
folio, but it gave the bank 
another tool with which better 
to manage its balance sheet, 
liquidity, and funding of 
assets. 

Goldman Sachs (Asia) and 
Citicorp International are joint 
ipari managers. 


Condi.' 


rro. :: T 


WORLD BOND PRICES 


mn 4/r s 


BENCHMARK GOVE R NM E NT BONDS 

Hod Day's WMk Month 

Coupon Oats nice change Yield ago ago 


Italy 

■ NOTIONAL ITALIAN GOVT. BOND (BTP) FUTURES 
(LIFFE)' Lba 200m lOOths of 100% 


FT-ACTUAMES FIXED I NIE H ES T DUNCES 

Price tndteea Thu Day 1 * Wad Accrued 

UK carta Jul 2l change % Jut 20 interest 


— Low coupon yMd — — MmSubi cotton yWd High coupon yfahf — : '” PW ' 

Jii 21 JJ 20 Yr. ago JuJ 21 JJ 20 Yr, ago Jul 21 Jul 20 Yr. ago 


Amtrafia 9.000 09AM 

Belgium 7550 04AM 

Canada ‘ 0500 00/04 

Denmark 7X00 12AM 

Franca BTAN 8X00 05/38 

OAT 5500 04AM 

Germany Treuhand 8.750 OGAM 

Italy 8*00 01/04 


8*00 01/04 


06*200 

96.7000 

83.0000 

8X6700 

104.7500 

8&O30O 

98.8100 

88.5000 


9.62 9.59 9.60 

739 7.79 7.97 

9.15 9m 924 
7.91 8.17 8.18 

653 &S0 71Q 

7.25 7*8 7*7 

6*0 6*8 893 


Open Settprtca Orange High Low EsL vof Open hit 

103.75 10444 +0.51 10420 10325 34117 75831 

102.66 102*4 +OL51 10240 10245 20 110 


10.44f 10J18 KL33 


■ ITALIAN GOVT. BOND (BTT^ FUTURES OPTIONS fLFFE) Ura200m IQOtha of 100% 
State CALLS PUTS 


1 Up to 5 yean (24) 

2 5-15 years (22) 

3 Over 15 yam (9) 

4 h ra dST M btoa (B) 

5 AB stocks (61) 


6.40 5 yra 
7.58 15 yra 
ail 20 yra 

7*6 InacLf 
7.30 


Mlatloii 6% — 

JJ 21 JJ 20 Yr. i 


MMotl 10% 

JJ 21 JJ 20 Yr. ago 


Japan No 118 

4*00 

06/09 

104.7070 

-0.18G 

3-67 

ara 

3.75 

No 164 

4.100 

12/03 

9&3960 

-aim 

4*4 

4.40 

4.41 

Nethertanda 

5.750 

01/04 

92*400 

+0.240 

8*2 

6.79 

7*5 

Spain 

&000 

05AM 

85*000 

- 

10L36 

10.31 

10*8 

UK Gita 

8*00 

08/99 

82-11 

-1/32 

7*7 

7.78 

825 


6.760 

11/04 

89-22 

- 

824 

&08 

8*6 


9*00 

10/08 

105-10 

-1/52 

8*5 

8.18 

8*9 

US Treasray * 

7250 

05AM 

100-02 

+202 

724 

727 

7.08 


6260 

08723 

84-26 

+202 

7*5 

7*7 

7.41 

ECU (French Gov!) 

8.000 

04AM 

88*200 

+0.170 

7.70 

7*6 

&01 


Price 

Sep 

On 

Sap 

Dec 

6 Up to 5 yaara £2) 

187.32 


187.32 

1*2 

2*3 

Up to 5 yrs 

3.61 3*0 

2.83 

2*1 

2*0 

2.02 


10400 

1*2 

2.72 

1.78 

3.88 

7 Over 5 yaara (11) 

172*1 

+0.08 

172.47 

0.46 

325 

Over 5 yrs 

3*4 3*4 

3.44 

3*4 

3*4 

326 

.. 

10450 

1*7 

2*2 

2*3 

4.18 

a AB stocks (13) 

17324 

♦0.07 

173.12 

0*6 

3.16 






JJ 

10500 

1*0 

233 

228 

4.48 







— SreartU — 



— 15 ereor vtaUI — 

' 

-SSWTiMd 



EM. Vj. mi era* era Pun idol Prado* <tey« opan ht. eras 36307 rim 2917s 


Debentures and loans 


21 JJ 20 Yr. ago J J 21 JJ 20 Yr. ago JJ 21 JJ 20 Yr. ago 


9 Oeba & Loans (78) 


131-62 +0.28 13125 2*1 

1 are Mown above. Capon Bands Low: 0K-71M4; 


5X4 9.33 9-36 8*6 929 8.32 

Mafeare 9%-umik Hjc fIM'end mar. t ybhL y« Yore Id riffle. 


London ctofflifl, T+ow York mH-doy 

f Oran PocWJng wtHuktog tax a us par oats payable by 1 
Price* US, UK hi 32nd*. otm in dadmd 


YWda: Local nrafcet stendred. 


Spain 

■ NOTIONAL SPANI8H BOND FUTURES <M0=F) 


SomrlMIMMW 


US INTEREST RATES 


Trewoy BBs and Bond YUds 


Open Sett price Change High Low EsL troL Open bit 
90.70 90. 78 -0.05 91.05 90.42 50.728 103,418 

9045 90.44 -044 9045 9000 3 564 


FT FIXED INTEREST INDICES 

-My 21 JJy 20 JJy 19 JJy 18 July IS Yr ago Low* 


GILT EDGED ACTIVITY DIDICES 

JJy 20 July 19 July 18 Jufr IS July 14 


fat tnab ai nervation- 


OnereoB 

421 

tajear 

607 

One ontt 

429 

4-42 

Twee par 

As year 

6® 

606 

Sh —ft 

One year 

4*2 

541 

UMM> 

»*ar 

7X1 

151 


Govt Secs. (UK) 9X45 33.71 83-89 94.03 93.91 97.97 107.04 9099 GBt Edged bargains 132.1 1283 125.5 137-9 1032 

Ftaed Interest 111.75 112.07 112.31 112.43 112-39 117.11 13327 107-33 8-day average 126.4 127.6 121.5 112-3 1004 

' lor 198*. QoimnsT SeaaOlaa Ngh ainae m i p toflo n. 127.40 (a'i/05). tom 49.18 (371/7% Rrari terereat Ngti tines aaip a to on: 13387 (21/1/9*) . lew 6083 (Vt/TS ) . Soda 10Ct Government SocuWaa 13/1 O' 
ZB and Read Manet 1928. SE adMtv Moaa rabeaed 1974 


BOND FUTURES AND OPTIONS 


France 

■ NOTIONAL FRB4CH BONO FUTURES (MATIF) 


■ NOTIONAL UK GB.T FUTURES (UFFET £50*00 32nds 100% 

Open Sett price Change Ugh Low EsL vol Open inL 
Sap 103-07 103-02 - 103-16 102-16 87809 113847 

Dec 101-29 102-08 - 102-00 101-29 273 1241 


FT/ISMA INTERNATIONAL BOND SERVICE 


■ LONG GOT FUTURES OPTIONS (LJFFQ 250.000 64ths of 100% 


Lifted «« fee tatoat Mamtatond bonds tar which there Is at adeqitoa seconday nwKat tfflaat 
feared Bkf Offer chg. vfcu 


prices ATM pn an JJy 21 
bared EM Offer Chg. 


ift i; 
•tyoi'n: , ... 


feaued BU Offer 



Open 

Sett prica 

Change 

High 

Low 

Eat vcL 

Sep 

iia*a 

11720 

+0.12 

11722 

116.42 

184.194 

Dec 

116.12 

116*6 

+0.14 

11824 

115*2 

1*48 

Mar 

115.40 

115*4 

+0.14 

115.44 

115.40 

48 


■ LONG THW FRENCH BOND OPTIONS (MATIF) 


Strike 

Price 

Areg 

- CALLS ~ 
Sep 

Dec 

Aug 

— PUTS — 
Sep 

Oec 

115 

- 

- 

- 

0.14 

0*2 

1*4 

118 

1.40 

2.14 

2*1 

025 

1*3 

2*0 

117 

0 65 

1*3 

- 

0*3 

1.45 

- 

118 

027 

1*0 

1*8 

- 

- 

- 

119 

0*7 

0*7 

1*2 

- 

2.45 

- 


State 


■ CALLS 


- PUTS 

- U*. DOLLAR STRAIGHTS 






Ltttod Khgtbm 7% 97 

— 55® 

103 

90% 


8*7 

NbeyNal Treasury 8 (DC 

10® 

93% 

94% 

-% 

am 


Price 

Sep 

Dec 

Sep 

Doc 

Meat Nad Treasuv 6% 03 

10® 

91% 

91% 

-% 

787 

Wotamoan tti fin 7 ® 

- 10® 

96% 

89% 


7.19 

Aimes tries 11% 97 C 1® 

108% 

108% 


70S 

I..., 

103 

1-32 

2-38 

1-28 

3-23 

AbotaPrcwWce 7^96 

10® 

101% 

101% 

-% 

723 

YtattBakO \5 

-20® 

23% 

23% 

4% 

7*6 

Btth !*()«% 23 1 

-150 

00% 

®% 

-% 

1 <LW 


104 

1-01 

2-12 

1-81 

3-60 

/snare 8% ® 

-4® 

105% 

105% 

-% 

732 

Wcrld8a*5% ® 

-30® 

92% 

92% 


699 

Derma* 0%96£ 

- a® 

95% 

95% 


am 


105 

0-43 

1-52 

2-39 

4-38 

Bank J Tokyo 8% to 

. 1® 

102% 

103% 

-% 

673 

Wert) Bar* 8% 00 

-1250 

112% 

T12% 


617 

0B*97e 

.837 

105% 

M5% 


70S 

■3 io Vl 

&B. vo L tore, Cato 0544 Pus 2990. Previous day's open ire., Cato 64080 Pffla 61168 

Be^lun 51^03 

10® 

85 

85% 

-% 

782 







Hdfex 10% 97£ 

. 1® 

1® 

106% 

-% 

7J2 







BFCE 7% 97 

. ISO 

102% 

102% 

-% 

676 

SS833 FRANC STRAIGHTS 






Hatoat 10% 97 £ 

.5® 

105% 

108% 


838 







fttohGfeOTI 

ISM 

10% 

11 

-% 

656 

Aden 0e> Bank 6 10 

— 1® 

101% 

102% 

-% 

585 

WaBCHoktogslUSamC 

-1SJ 

111% 

IC.% 


am 







CznadaSBB 

10® 

104 

104% 

-% 

625 

ABtta4%® 

- 10® 

96% 

98% 

-% 

486 

Italy 10% 14 £ 

.4® 

109% 

110% 

-% 

938 



EsL vd (Dial, eras (7,637 Am 83.051 . ftavlaua Oaf opan W. Cato 1S7S3B Puts 372ft8t. 

Germany 

■ NOTIONAL OBIMAN BUND FOTUWE8 (UFFE)' 0M26CL000 IQOtha of 100% 

Open Sett price Change ttigh Low EsL vc* Open Ira. 
Sep 93.69 93.92 +0.24 94,22 9348 187148 170301 


Ecu 

■ ECU BOND HJTUWES (MATTE) 

Open Sett price Change High Low EsL voL Open inL 
Sep 85.00 85.18 +0.18 8524 85.70 1^53 6,002 


84.74 +0.18 


■ US THEASUHY BONO FUTURES (C8T) SIOO/MO 32nds of 100% 


9310 9325 


+026 93.40 


■ BUND FUTURES OPTIONS (LH=FQ DM250.000 patois of 100% 


Strike 

Price 

Aug 

Sep 

CALLS — 
Oct 

Dec 

Aug 

Sep 

PUTS - 
Oct 

9350 

ass 

1*6 

1.19 

1*7 

010 

083 

1.44 

9400 

022 

096 

095 

1.33 

030 

1.04 

1.70 

9450 

0.08 

0.71 

0.74 

1.11 

0.86 

1*9 

1.99 



Open 

Latest 

Change 

Hfeh 

Lore 

EsL vdL 

Open tot 

Sep 

102-18 

102-14 

-0*8 

102-21 

102-08 

437*79 

387,438 

Dec 

101-28 

101-20 

-0-07 

101-27 

101-15 

3*20 

59*91 

Mar 

- 

101-04 

- 

- 

- 

135 

4*01 


Effl wt total. Cjto saw Puts 17901 rwoua Oaf span hL Cato 293787 Pure 28S564 


■ NOTIONAL MEDIUM TERM GERMAN QOVT. BOND 
(BOBLKUFFE}* DM2S0200 100ms of 100% 


Open Se« price Change High 
98.71 -0.02 


EsL vj Open «*. 
0 76 


Japan 

■ NOTIONAL LONG TSflH JAPANESE QOVT. BONO FUTURES 

tUFFE) VI 00m IQOtha of 100% 

Open Close Change Hfeh Lore EsL vJ Open InL 
Sep 109J8 10972 109.48 2345 0 

Dec 10300 100 77 1Q6.56 335 Q 

■ UFFE waffl oc a traded on APT. At open Intara at Cpa. are tar pravtaua d%. 


| UK GILTS PRICES j 

-Yield-. — 1994 — 

Mote M Had Prica E + or- Mg|t low 

Yltod -1904- 

rioter U Rad Prtoa C ♦»- Mtfi bav 

-YWd- —19M_ 

riota* HI (2) Prices +re- regh Lore 


Short*" (Urea * fe Are Yaar^ 
Tm IOocUv 1B9+H_ IflOO 

Ecu i2‘h*1004 12.42 

TreB9pcl99*tt Iffl 

i?pc 1995 llAI 

EbASbc fin 90-95 HO 

laupcteu 9.R 

Trea T2kpc l99S*t — 1 1.77 

I4KI99G 12.64 

ISItK imtf 1136 

&*l3«.pc iMfiti 11.93 

Cmanfcn lOpe 1W6 — 342 

Tm Cm Tk 199714 — isn 
Tim 13lt|K 1»7». — 1167 

Enfi hmjpc iwr ara 

rnmst,pc swrft — km 


fish ISpc 1997 1242 


Trias 7ta 1996ft — 7.37 


- too 
S.10HXSW 
5.17 101 A 
321 103 
316 W4 
S.70I04UK 
ft 06 (OBA 

6271I0JJ11 
684 I14,« 
867 111, 1 . 
7JM 10SA 
TO* 99ftti 
7.16 113AM 
7J6I07HN 
7J3 103,1 
784 130ft 
7.78 lOffi 
7.73 96ft 


UBA 

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-a 112/. 
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100C 2003 812 

Trim II >2iK 200 1-4 10417 

FtoC^aijpeW^ — „ 4.» 

Q»Mtioa9%pc20lH— U4 

litas ftps 20M8 752 

Corn 9 ■] pc 2005 ftftl 

Tram tzhpe 2005-5 10.10 

7%JK 20360 aw 

8B3N2-6tt 825 

Tin I Uipe 2003-7 899 

TlW 8^3307# &40 

ISljpcW-a 1033 

TlttofecaiOB# 854 


■00 nwii%pc2ooi- 

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8(6 109% 
K93 114% 
7.15 74% 
841 107ft 
824 69% 

636 1070 
872 123% 
834 8513 

843 m 
874I17JJB1 
*36 101,1 
874 130% 
834 105% 


-A 127A 
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-it m% 

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2SCW (673) 245 172 19911 203% 187J{ 

4%pe-96^ — (135.6) 257 336 108% -A 113A 108A 

3%pc-01 (7631 335 278 167/, +1ft I7G% 163% 

2‘iSC '03—4785} 346 181 101A -5 173% 156A 

4%pe"04# — (1359 246 278 <08% -A 116% 107% 

fell (69.S) 252 178 1S7U -V. 184ft 165 A 

2%W08 (TUI 160 103 151% 168', 148% 

2%K'H (74$ 204 26415S%il -A 175% 154% 

2‘iSC‘l3 mz 106 1*4129% J -A 146% 126% 

2%peT8 (01.6) 106 206 137ft -ft IS7A 134% 

2%0c*3) (83.0) 171 187 131ft IBji 136% 

2‘ ttW S7T) 170 303 10BB -A \7&L toy, 

— (1281) 172 180 USA a) — 123ft 105% 

Proapocbre rad ratfenrCon rats on profectod Motion of (1) igft 
and ft) 696. (b) Flguta In pormihaaet shore RF1 ban for 
mdeaditg ffe 0 mentha prior to Issue} and haw bean fe 

refect rebasng of BPI hi lOO in January 1987. ConvreJon tore- 
8945. RP1 for Nmomfaa I860; Ml* arc tar Jure 1994: 144.7. 


Cheng Kong fin 5% 99 - 

Q*re6*j 04 

C<xrtS Eucpo 886 

Credl Fonder 9% 99 

Dbhikh5%« 

East Japen Ratoay 6% 0* . 

ESC 8% 96 

EK8%98 

BB 7% 98 

BB9%97 

Bk de FiancB 9 99 

EuaCmefft 96 — 

BHn Bank Jvan 8 02 _ 
BpM Dsv Cop 9% 96 — 
FedeMMitiMort7X004 ~ 

Finland 8% 97 — 

fimji Bport 9% 95 

Fad Mater CreM 6% 98 — 
Gen See Cfetial 9% 98 — 

GHkC 9% 98 

hd»Japaiftt7% 97 _ 

WaAmreDw 7% 98 

Ur 6% 29 

Japan Ow Bk 8% 01 

Kansf Bee Par 10 96 

Kate Bee Ptrew 6% ID — 

LTC8 fin fl 97 

Ma&Jfet Sac 7% 02 

Norway 7% 87 

OKBto7%a3 

Q*a KarttJha* S' 1 01 _ 

TWesCaaflda 7% 96 

Forajgal5%03 

Oiabee Kyth) S% 98 

Qrt»eR«998 

Sataduy«%98 

SAS 10 99 

SNCFBlj90 

3pah 6^ 99 

State Bk N9W 6% 9S 

Sweden 5J2SS 

9Mddi EjportBTj 98 

Tokyo Bac fan 6lf 03 _ 
Tokyo Msbcpois B% 96 — 

Toyota Motor 5% 38 

Urtod Kngtn 7% 02 

WaUBtok6%99 

MMfBa*8%97 


500 90% 90% -% 834 Oowei Eunpa 4% 98 


1000 87% 


afi3 Derenak4% 99 . 


. 250 100 100% 


100 102% 103% -% 851 SB 8% 04 

300 108% 108% -% 734 Bee de France 7% OS . 


1000 97% 97% -% 477 


. 300 106 106% 
.100 110 111 


,1000 86% 97 -% 803 firfend 7%99 

_ 600 91% 91% -% 7*8 Hpntt Mokr Ri 8% 97 . 

. 183 103% W3% 083 Uhnd7%00 


. 300 106 10B% -% SM 


JjanOarBK700£ 
Land Secs 0% 07 £ _ 
Ontario 11% 01E — 
Fmragan8% 03 C _ 


.200 93% 94 a« 

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. 100 110 110% -% 907 jY" | i;r. 

230 98% 98% -% ftU ! ., 


_ 100 187% 103% -% 646 Kobe 6% 01 

.250 102% 102% -% 642 Ontario 6% 03 

1(00 107 107% -% 800 Q*a«H»rti>50B . 


.100 108 

. 100 106 


200 105% 106% -% 7*9 SNCF7W 


.240 105% 106% -% 5l41 

400 108 103% 5.79 

. 100 80% 81 A 611 


3000 89% 

- 200 103% 


104% 

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Vtorid BankS® 

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99% 


614 

102% 

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782 

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1000® 

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432 


SMBnTMJ11%a9e 150 110% 111% -% 671 -3^ 

Tokyo Bee Power 11 01 £ ISO 110% 110% -% 688 . ‘ *'• 

/Obey Nafcnti 0 66 NZI WO 83 64 +% 80S • ^ , 

TCNZHn9% 02 KZ| 75 101% 102% 4% 602 . -W .. 

Qredt Local 6 01 fFr 7000 82% 92% -% 735 'lltti.m 

Bk da Frence 8% 22 Hr 3000 103% t07% 6« ^l»r; 

9679% 97 EFr 4000 11H% W8% 679 j* 


.200 103% 103% -% 884 

. 200 101% W2% -% 7.13 Japsi Oav » 5 to . 


83 93% -% 4.75 


- 200 102% 102% -% 651 Japan Dw Bt 0% 01 . 

xm 82% 82% -% 8*7 NppanTel Td 5% 9B . 


.500 104% 1(M% -% 752 fkxvojr 5% 97 

- 350 105% >05% -% 650 SNCF0%OQ 

13B0 66% BB% -% 6l74 Scan 5% 02 

.200 101% 102% -% 7.12 Sweden 4% 98 

1000 97% 97% -% 7*9 VforM BarfcSV* 02 


. 100000 104 104% 4.K) 

120000 112 112% -% 450 

-50000 105% 106% 3*4 

.150000 104% 105 -% 240 

-30000 111% 111% -% 438 

.125000 107% 107% 462 

. 150000 102% 102% 3*2 


. 1000 101 % 101 % -% 866 

.3000 97% 97% -% 7*6 OTH81 STRAIGHTS 


. 250000 104% 106 -% 454 


_200 «S% ',(&% -% 7.48 Gerfnarcey»9%«Uf 1900 197 ItB 730 

_200 101% 101% -% 855 KBDauttadMft*a%a3lft_3000 102% WJ% 811 

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— 150 108 108% -% 713 MdiOJmbia >096 CS SOD 102% 102% -% 868 

— 1500 96% 96% -% 730 SB 10% 08 C$ 130 104% K6% -% 0*4 

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.2500 98 I 4 98% OCK Gen 0 k C apital 10 96 CS . 

-TOO 103% KD% -% 636 KlWHfinlOOICS 

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.200 103% >03% -% 659 a*rt>0O3C$ 

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1509 98% 96% 


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ISO 90% 90% -% 884 

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1500 105% 105% -% 7.18 Qu*acPtwlO%38CS 200 100% 103% -% 658 

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FINANCIAL TIMES 


FRIDAY JULY 22 1994 


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COMPANY NEWS: UK 


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disappointing t r ading performance and store openings curtailed 

Shoprite shares halve pj£ V v 
to 30p on warning 


By N08 Buckley 

Shares In Shoprite, the 
Scottish discoont food retailer 




• ^ ‘VTi; 

: :. • ?J?. 
*_» . ■ 


■ — J — aiua 

the group issued a profits 
warning and said it was 

severely curtailing- its store 
opening programme for this 
year. 

The statement - which came 
less than two months after the 
group revealed half-year profits 
substantially below market 
expectations - knocked the 
shares down from 60p to aop. 
They reached a high ctf243p in 
February. 

Mr. Charles Good, lwmagmg 
director for Scotland, said trad- 
ing had remained “extremely 
difficult" since the interim 
announcement, and *gia« hi*A 


not reached their anticipated 
levels. ‘ 

“On the cost ade we have 
made very big strides and our 
proble ms are not on that 
front", he «»fl “Margin man- 
agement has ai«n been good. 
The problem is fhri our 
tra d ing performance has been 
disappointing.” 

As a result, profits for the 
year to October were expected 
to fen “significantly short of 
expectations" given at the time 
of file interim result, when 
Shoprite said they were Bkeiy 
to he about the same level as 
last year. 

Shoprite has also decided to 
reduce its opening programme 
tor this year strictly to those 
stores to which it is already 
committed, and expects to 


open % farther 24, taking the 
chain to 107. That wfll make 44 
total openings for file year 
compared with the 50-plus pre- 
viously eapected. 

The group has also begun 
moves to dispose of its portfo- 
lio of non-core assets, which 
have a book value of about 
flftn. 

Mr Good said a marketing 
and promotion campaign 
de s ign ed to counter the price- 
catting initiatives of super- 
store rivals had been delayed 
but was about to begin, and 
was expected to produce an 
apHft in sales. 

Initia tives to cut o verhea ds 
jnipm uw trwiTghK dnVUSb 
better product mix and buying 
would continue, and the 
board had - initiated a 



*/ _■ -wot' 


v. w-* •** * . 
1 • t .— • ■■ 


strategic review, he added. 

The group had also renegoti- 
ated itS bayifrrnp fariHifag fol- 
lowing the failure last month 
of a sale and leaseback deal on 
II of its stores on to a “secured 
and an demand basis* pending 
completion of the strategic 
review. 

The company expected to 
begin uffigntiriirme for the pro- 
vision of revised fanflMes after 
the review. 


Telemetrix shows 35% fall to £5.2m 


By Tim Burt 

Telemetrix, the UK-based 
supplier of specialised elec- 
tronic components, yesterday 
blamed a price war in North 
America for a 35 per cent 
decline in interim profits. 

Pre-tax profits fell from 
£7-9m to £5 .2m for the six 
Tncnrthw to June 30; the group 
said zt was a victim of a 17 per 
cent decline in average US 
component prices in the sec- 
ond quarter. 

GTl Corporation, the 58 per 
card-owned US subsidiary and 
largest division, endured the 

Goode 

Durrani 

recovers 

By Peggy HoBtoger 

Price Increases and strong 
demand for hire vehicles 
helped Goode Unrrant, the 
industrial hnMhtg co mpany , to 
more than doable profits 
before exceptional* from 
£4»5m to £9.6ra for the year to 
April 30. 

Turnover fen by 42 per cant 
to £101m, largely due to dis- 
posals. Sales from continuin g 
businesses rose by 11 per cent 
to £64.Gm. At the pretax level 
profits came out at £l0.6m, 
against losses of £ 15.4m. 

Mr Michael Waring, chief 
executive, said the group's 
strategy of focusing on the 
pi ii nmw-riol vehicle and equip- 
ment hire business had been 
vindicated. 

Since the year end, there 
had been signs of increased 
activity. Most important the 
equipment and storage hire 
businesses had pushed- 
throogh rate increases far the 
first time in many years. 

As a result the final fivi- 
dend is increased by 17 per 
cant to Slip, for a total XI per 
cent higher at Bp (5.4p). 

Northgaie, the commercial 
vehicle rental group which 
contributes about 80 per cent 
of toe group's pre-tax profit 
had held 4 per cent price 
increases last year. A further 4 
per cent rise was i ntr oduced 
this year. Operating profits in 
this divirion rose by 77 per 
centtomm. 

Ifr Waring said there was a 
tread ' among customers 
towards hiring a greater pro- 
portion of their fleets. 

Goode Dun-ant's equipment 
hire division increased opiat- 
ing profits by 90 per cot to 
£915,000 while the housebuild- 
ing division, which has been 
pegged for disposal, held pro£ 
its St £710,000 (£705J)00). 

Earnings were I4£p. against 
losses of 3L2p- Excluding the 
£20m to exceptional and non- 
recurring items taken in 1993, 
earnings rose from 54Jp to 
12. 7p. 


brunt of tote downturn. Operat- 
ing profits fell from. 09.7m to 
H2m(£2.7mX 

Although demand for net- 
working components supplied 
by Valor, GTTs Tnafri subsid- 
iary, grew by 25 per cent, turn- 
over in North America was vir- 
tually unchanged at £*&3m - 
representing the bulk of the 
group total of £85i5m <£615m). 

Mr Tim Curtis, chief execu- 
tive, accused US c om p et i tors of 
seeing fywrrpm i pn f c at unsus- 
tainable margins, but f-krfmpH 
that Telemetrix was strong 
enough to sit oat toe price war. 

"Our competitors are pricing 


in a sttqdd way, it cannot last 
But GTI must move its product 

mix from lower to higher mar- 
gin “ 

The company has also 
increased capacity to meet 
growing demand, by opening 
new plants in the Philippines 
am! China. 

Failing profits in North 
America were oflset partly by 
an improved performance by 
Zeiex and Trend, the two 
wholly owned UK subsidiaries. 

Zetex increased operating 
parofits from v* 95m to VI *rn, 
while Trend’s contribution 
rose by 48 po- cent to £975400. 


Mr Curtis said both compa- 
nies bad enjoyed improved 
margins and were benefiting 
from sales of innovative prod- 
ucts to ft* ndcBate hr eti 
teleconmimricatiocs sectors. 

Increased cash generation by 
the UK companies helped lift 
bask reserves from £9-31m to 
cn awn- Mr Curtis said 
funds would be used for prod- 
uct development and tecfanol- 
ogy acquisitions in markets 
such as Germany. 

Earnings per share fell to 
34p (3.8p) and the company 
continued its practice of not 
paying an i n i W i m dividend. 


Hill & Smith ahead to £1.74m 


By Graham DaOer 

ffm & Smith • TTnlrlfnga the 

West Ifidhmdshased building 
products and steel fabrications 
company, announced a 17 per 
cent expansion in inter im prof- 
its as it buftt upon a steady 
showing in the first quarter. 

Pre-tax profits for the six 

months to March 31 ar w reiii lM d 
to £1 7 4m a gainst fl 4ftm .Sales 
ad vanced by n commensurate 
amount to ffl&Tri, an imp rove- 
ment that took place wholly in 
flii> sarnmii quarter, according 
to Mr J ohn S flk, chairman 

The turnover advance, how- 


ever, led to the figure for debt- 
ors rising to £23.Bm at the 
period mil, up from viaim at 
September 30. This, coupled 
with the decision to buy for- 
ward in steel and zinc, saw 
gearing rise frean 1&5 per cent 
to 34 per cent dnring the same 
period, a fthnn g b it had since 
fallen , Mr Silk said. 

Building products for the 
him sing sector and manhole 
covers for the c ommu n l carions 
industry.' benefited from 
increased activity to show “sig- 
nificant improvements’* inf 
profits, he «ddaH J although bet- 
ter maigins in ilrsfnapt prod- 


ucts in the UK were partly off- 
set by reduced sales in France. 
' Increased volumes helped 
the steel stockholding side to 
swing into a modest profit, 
while the barrier and fencing 
operation mahTtarnad mar gtna 
despite declining demand. 
Forging foiled to show any 
im p rovement on its previous 
showing to spite of a "reason- 
able order book", Mr Silk said. 

Tie jntHrini dividend Is 2jp, 
an effective inoeqse of 10 per 
cent following the 1-far-lfl scrip 
issue in March, covered L67 
times by earnings of S.51p 
&99p) pa* share. 


Boots 
rises 4% 
in first 
quarter 

ByNeSBuddey 

Boots, the chemist, retailing 
and pharmaceuticals group, 
confirmed the picture of 
moderate recovery in retail 
sales with news tkai its saks 
were up 4A per cent in the 
first quarter of its financial 
year. 

Some analysts were 
disappointed by the figures - 
particularly a 53 per cast fall 
in total sales at Do It All, the 
MY joint venture with WH 
Smith - and tlm shares aided 
la’Ap down at S22p. 

The rise of the fell, howe ve r. 
was mid to be largely due to a 
programme sale of retail 
stocks by an in stituti onal 
investor. 

Str Christopher Benson, at 
bis last animal meeting as 
chairman befo re ifwaing ov er 
to Sir Michael Angus, said 
sales were satisfactory in a 
"difficult if improving envi- 
ronment". 

Total sales at Boots the 
Chemists were up 4A per cent, 
with Hke-for-Uke sales, which 
exclude new store openings, 
up 2£ per cent 
High-margin health and 
beauty and personal care prod- 
ucts were us S ner eeuL and 
although sales of toiletries had 
been affected by poor weatho- 
In June, they recovered In 
July. 

Among the other retailing 
businesses. Boots Opticians 
! lifted sales &9 per cent, Hal- 
fords 7.6 per cent, and QxU- 
drens World 19.4 per cent | 
However, sales at AG Stan- 1 
ley, which operates the Fads 
hnrp p decorating stores, w ere 
down 0.4 per cent, and Do It 
AH was down 5A per cent to a 
DIY market described as 

“dun*. 

On ft* phWlBllf*llttHll« |Ma | 
the prescription drags busi- 
ness Increased sales 6.4 per 
cent, helped by a strong 
performance from Synthrohl, 
the thyroid tre at ment, to the 
US. 

Boots Healthcare Interna- 
tional, the over-the-counter 
drugs business, »i«* improved 
sales by 6.4 per cent 
However, sales at Boots Con- 
tract Manufacturing fell 3.6 
per cent, largely due to the 
withdrawal of the Maimplnv 
heart drug which it was 

mamlfarfnHp g Iggt JEST. 


B& J loss deepens after 
restructuring costs 


Dana Exploration raises 
l£2.17m and makes buy 


By Andrew Boiger 

Brown & Jackson, the owner of 
the Poundstretcher chain of 
discount stores which was 
recently rescued by Pepkor, 
the South. African retail group, 
showed pre-tax losses of £12.7m 
for the six months to June 30. 

The deficit, £1.3m greater 
Hum last thnp t fadndfld profes- 
sional costs of £L4m far the 
fiuaucifll restructuring. Turn- 
over from continuing 
operations was little changed 
at £STm- 

Pepkor, which could inject 
up to £5&2m in return far a 63 
peer cent stake in B&J, said it 
had started its own review of 
the business. Changes had 
already been made to reduce 


costs, increase stock densities 
and improve net margins. 

Financial difficulties since 
the year-end had led to some 
suppliers delaying supplies, 
severely affecting customer 
service levels. 

Losses per share were cut 
from 2^p to 2P- 

3i raises Ecu330m 

3i, the recently floated venture 
capital group, said yesterday it 
ha djate ed Ecu33Qm <E26ttn) for 
its first fund to be invested in 
small and medium sized pri- 
vate companies to continental 
Europe. At file fast dosing to 
February, 3i had raised 
Ecu30Qmfca: theftmd. 


Dana Exploration, the 
Dublin-based metals explora- 
tion group, is acquiring TM Oil 
Production, a company 
involved in oil and gas explora- 
tion and pro du ction activities 
in Russia. The purchase fol- 
lows an option entered into 
last October. 

Consideration win be met by 
the allotment to the vendors of 
75m new wiiiinn y Dana shares 
following completion, with 
either a further issue of 20m 
new shares or payment of 
6450,000 (£296,000) within 90 
days of completion, at Dana’s 
election. . . 

Dana is also raising about 
T £>-1 7m (£2JL5r n) through an 11- 
for-5 rights issue of 52.4m new 
ordinary shares at 5p each. The 


proceeds will provide tending 
for the enlarged group. 

The issue is fully underwrit- 
ten by T Hoare, with Money 
Markets International as bro- 
ker. 

At fiie same time the com- 
pany announced pretax losses 
of BOA207 for the U months to 
December 31, being entirely 
administrative expenses. For 
the year to January 1993 there 
were profits of I£122m after 
exceptional credits of I£12toL 

Losses per share woe 0.76P. 
compared with, oarmongs last 
timeof 15A2p. 

TM Oil's has an agreement 
with a group of Russian 
companies to develop and pro- 
duce oil reserves in western 
Siberia. 


Waste Recycling £5.5m buy 


Waste Recycling Group, which 
tramp to the marke t to March, 
plans to acquire a landfill and 
waste disposal business for 
SSAmcash. . 

The group, which intends to 
finanM the deal through a pla- 
cing and open offer, also 
reported a pre-tax profit of 
£346,000 for the period from 
February 21 to June 30. 

The acquisition of the land- 


fill and waste disposal activi- 
ties at Buckden, Huntingdon, 
from Hunts Refuse Disposals 
includes a virgin site of about 
3.25m cu m licensed to accept 
non-hazardous waste. 

Waste Recycling is raising a 
net £5£5m through a placing 
by Marshall Securities of 9.72m 
new ordinary shares at 65p 
each, with a Wbr-5 clawback 
by eligible shareholders. 


The shares fell lp to 70p. 

An extraordinary meeting is 
planned for August is to seek 
approval for the initiative. 

Waste Recycling has pro- 
vided consultancy advice to 
Hunts since 1963. 

to the four-month period at 
Waste Recycling, sales were 
£966,000. Earnings per share 
were lAp. There is no interim 
dividend. ■ 


ED&F Man plans September float 


By Dmtd Wghton 

ED&F Man, one of the world's largest 
agricultural commodity traders, is pfen- 
ning a stock market flotation in September 

winch is ex pe cted to value the company at 

about £450m. 

Currently owned by 100 of its top man- 
agers, the company plans to raise between 
nan and £100m in new money with east- 
ing Shareholders selhng no more than 15 
per cent of their holdings. 

For most of its 200-year history Man was 

primarily a sugar trader, but since the 
1980s it has broadened its food interests 
mm built a large financial services busi- 
ness. It is a leading trader in commodity, 
energy «nH financial futures in Ijmd c p, 
Chicago and New York and o ne of the 
world's largest managers and distributors 
of futures funds, with more than Jlhn 


Mr Harvey McGrath, managing Erector, 
said the two rides of the bu si ne s s fitted 
naturally together. “Both are about mart 
aging market risk." 

Although it trades commodities as a 
principal, the company does not take 


long-term positions and Mr McGrath said 
it had largely ehmtoated flie sensitivity of 
its earnings to prices. 

Pre-tax profits jumped from £&5m to 
£66.7m in the year to March, with the 
contribution from agricultural products 
more than doubling to £3S.to. This 
reflected recent investment in primary 
processing and distribution of products 
from cocoa to nuts. ■ 

A lthoug h the company has a strong bal- 
ance sheet the flotation should enable' it to 
obtain a higher credit rating which wfll 
Improve its ability to offer clearing ser- 
vices to financ ial futures. 

It wfll also be able to redeem |60m 
(£39m) of preference capital which was 
jflgqftd to Philip Morris to 1991 to part 
payment for a 45 per cent stake in tiie 
Smiw which had. been sold to its 
Jacobs Sucbard subsidiary in 1967. 

The flotation, by way of a placing amd 
public offer sponsored by Scbrotos wtth 
.T«maa capel as brokers, wfll value the 
stake of Mr Michael Stone, chairm an, at 
between £20m and £2Bm, while MrTJanny 
BwwnWmn, who heads the US operation, 
will have shares worth more than £30m. 



Harvey McGrath: both sides of the 
tmsiness are about managing market risk 


YRM losses 
deepen to 
£2.84m 

Shares to YRM fell 5p to 17p 
after fl** bufldtog ffegig n con- 
sultancy reported its second 
consecutive annual loss and 
a gain paftmyi Jfs final dividend. 
. On turnover down from 
£L4Am to £9 .7m, pre-tax losses 
for the year to April 30 deep- 
ened from. £lASm to £2 -84m. 

After a tax reftmd of £163j000 
(£315,000) the retained 106S was 
£2.68m (£L7m) and per share 
2037P (12A8p> 

Directors said that competi- 
tion and fee tendering for 
available projects remained 
intense, and the need to reduce 

overheads had led to further 
redundancies involving costs 
Of £420,000 <£358,000). 

YRSTs overdraft fatality has 
recently been extended to 
November and the anifitars do 
not intend to qualify their 
opinion an the group's finan- 
cial statement s in th is respect 

They do, however, intend to 
make reference to fonrtamentel 
uncertainty relating to the 
| going ramt w n i basis and to the 
. .Hotel Praha project, again 
witho ut qualification of their 
opfotou. ■ 

EMef 

EXbief, the Birmingham-based 
toanufecturer of photograph 
and handbag frames, clocks 
and mirrors, yesterday 
announced a sharp reduction 


Car safety fears behind 
First Technology advance 


By Andrew Bolgar 

Mounting concern over vehicle 
safety helped First Technology, 
which supplies sensors and 
Crash dnrnmtofl to the car 
industry, Sharply increase prof- 
itahiEty. 

Pre-tax profits jumped by 76 
per cent to £4Jm in the year to 
April 30. Sales were 31 per cent 
higher at £84m. with overseas 
safes ac c ounti n g for 89 per cent 
of the totaL 

The shares rose l«p to 319p. 

The autmnotive electronics 
iflvislon, whidt accounts fts- 75 
per of jtf T i fi ia and turn- 
over, benefited from strong car 
sales to America and file rapid 
growth of new business in 
Europe. Sales were up 43 per 
cent 

The graq» said its fori cut- 
off sensors were bring fitted by 
Plat, Feugeot/Cttrofei and one 

Other "nrunwad numnfaeln i m, 

which together could eventu- 
ally add up to a total of 5m 
vehicles a year. 

The safety and' crash divi- 
sion, whkh supplies dnrnmfes 
to manufacturers, increased 
profits on only margtnafly-in- 
creased sales. The group said 
the current year tori started 
welL New product launches 

tnrhiA^ rirflrf ih n wi iiht mrt a 

pregnant woman. 

First Technology said that in 
North America and certain 
parts of Europe, todudfag the 
UK. key economic indicators 
looked good for the medium 
term. In most markets, the eco- 
nomic position was finely 
poised between recession and 
the first signs of recovery. 

Mr Fred Westlake, chairman, 
said: “Overall, we believe the 
outlook is more encouraging 
than it has been for a consid- 
erable period of time." 

He said the group was inter- 
ested to developing its sensor 








New designs are provided to satisfy growing concern tor safety 


business to Japan - probably 
through a joint venture or Uo- 
ansing arrangement with a 
fecal manufacturer. 


by 61 per cent to 17.3Sp 
(10.75p). A final dividend of 
Z5p makes a total for the year 
of &5p (lp)- 


Car safety trends seem to be 
going First Technology’s way. 
nnij an Increasing tuwubw of 
European manufacturers are 
joining fiie US leaders in fit- 
ting the group’s fuel cut-off 
sensor to their vehicles. The 


fall to gearing from S3 per cent 
to 19 per cent means the group 
can even consider making 
acquisitions again, although 
only closely related business 
would be considered. A more 
immediate prospect Is expan- 
sion through a joint venture in 
Japan, where the group cur- 
rently has no exposure. Fore- 
cast profits of £4. 7m put the 
Shares on a prospective multi- 
ple of 16 - In line with the 
sector. Given the orders out- 
look, they look good value - 
and the group's niche market 
position could also make it an 
attracti ve acquisition target 


Sime Darby sets its sights on 
Europe with purchase of Lee 


By CaroSne Southey 

Sime Darby, the Malaysia- 
baaed iwnglmwHito unit biwi of 
south-east Asia’s biggest multi- 
nationals, announced its first 
foray info manufacturing to 
Europe with the proposed 
acquisition of Lee Refrigera- 
tion, the West Sussex-based 

r efrigm fit inn pi| nipwii>nt mftirn . 

Lee's main shareholders with 
51.97 per cent of its equity, 
including the trustees of 
the estate of Mr Charles 
Parley, the company's founder, 
the trustees of the Parley 
Family Trust, and Candy 
Holdings, have accepted the 
cash offer of 358p per share. 


which values the company at 
£2L7m. 

The offer represents a pre- 
mium of 2L4 per cent over the 
middle market price of 295p 
per Lee share. 

Mr Nik Mohjuned. group 
chief executive of Sima Darby, 
said Lee’s white goods brand 
name would c omplement the 
company’s operations and pro- 
vide it with manufacturing 
capacity to Europei He added 
that Stale's ftianriai resources 
would enable Lee to expand Its 
product range and penetrate 
new markets. 

Mr Don Durrant, Lee finance 
director, said the deal would 
allow Lee to implement its 
planned Siam investment to 


new plant and machinery over 
the next three years. 

Lee reported pre-tax losses of 
£838J)00 to 1993 against losses 
of £ ZJBBm the previous year on 
turnover of £37m (£4lm). It 
employs 930 workers. 

Although Sime hay extensive 
international exposure, includ- 
ing divisions to Malaysia, Hong 
Kang, Singapore, the Philip- 
pines and Australia, the acqui- 
sition prorides it with its first 
manufacturing base to Europe. 

Sime operates 200 companies, 
employing 30,000 people world- 
wide. It reported pre-tax profits 
of M$840m (£2l5m) against 
MJ755m on turnover of MJ7bn 
(M|6.2ha) to the year to June 
301993. 


Saville Gordon jumps to £5.6m 


By Paul C hoosoilyh t , 

MkSands Correspondent 

Shares of J Savflie Gordon, the 
property group with merchant- 
tog interests, yesterday rose 5p 
to 68p following the annoonoe- 
ment of more than doubled 
pretax profits and its first divi- 
dend increase for five years. 

Pretax profits for file year to 
April 30 advanced from £&35m 
to £5.&n. 


Earnings per share were SAp 
(L4p). Although the final divi- 
dend was unchanged at L7p, 
the total far the 12 months was 
2.7p, against 2L2p for the previ- 
ous four financial years. 

Turnover on . continuing 
operations rose to £30.6m 
(£23. Lm). The progress was 
helped by a rise of nearly £3m 
to £J.8.7m to sales of pipgH nft 
equipment, the resumption, 
after a year’s absence from the 


NEWS DIGEST 


to annual losses after the 
improvement shown in the 
tori half was sustained after 
the Christmas period. 

On turnover ahead from 
£3.74m to £4JL9m, the pre-tax 
deficit for the year to April 30 
was cut from £592,000 to 
£257,000. 

Losses per share were 2p 
&3p). 

Holders Tech 

Shares to Hokka-s Technology 
Ml by 32p to 147p after the 
USMquoted distributor of high 
precision tools and specialist 
materials reported pretax prof- 
its for the six to May 

31 down 39 per cent at £1521)00, 
against £251,000. 

The result was despite an 11 
per cent rise in turnover to 
gtsim (gi-ftjim). 

Earnings per share were &3jp 
(&39p). The interim dividend is 
matotetoedat^. 

Southend Property 

Exceptional profits from the 
sale of a subsidiary and associ- . 
ated - companies enabled ; 
Southend Property Holdings to 
report pre-tax profits of £5.03m , 
for the year to end-March, j 
against £513,000. 

During the year, net asset 
value increased slightly to 
94>3 p, the ccanpauy said. The 
shares added 5p to close at 70p. 

Operating profit advanced to 
Sj&faa, agatost mjTm which 
included £295,000 from discon- 
tinued activities. However,' 
there was a profit of £334m 
(£36,000) on sales of invest- 
ments to subsidiaries and asso- 


ciates, offset by a loss on. dis- 
posal of investment properties. 

The safes mean that for the 
first time in many years the 
figures from non-property 
activities will not now be con- 
solidated. to the year under 
review the figures included 
only six Tnrmthg from Mt Mar- 
tin Gold Mines. 

Turnover was £22. 2m, com- 
pared with £31.8m which 
included £4. 19m from discon- 
tinued activities to non-prop- 
erty tra din g. 

Earnings per share were 
4J3p (losses 0.58p). A final divi- 
dend of USp is recommended 
for a total of 2.4p (4J25p). 

Edinburgh Java 

Net asset value- per share of 
Edinburgh Java Trust stood at 
4&9p at June 30. agabmt 6L39p 
six months earlier and 8&3p at 
end-June 1993. 

The company incurred a defi- 
cit of £88,000 COAO 00) for the 
period, giving losses per share 
Of 02833P (O.Q9Q8p). 

The trust, managed by Edin- 


market, of property trading 
sates at £4-lfen, and increased 
property rental income as rent 
reviews produced higher reve- 
nue. 

This year's rental income 
should be higher following the 
purchase of a shopping centre 
and a portfolio from NFC, 
while demand is increasing on 
the msrehanttog side. 

Net asset value advanced to 

5&3P (47.4p). 


burgh Fund Managers, was for- 
merly known as EFM Java 
Trust; its investments are con- 
centrated in Indonesia. 

Eliza Tinsley 

Aggressive perking helped Eliza 
Tinsley Increase sales 7 per 
cent to the year to the end of 
March. 

Turnover for the USM-quoted 
hardware manufacturer rose 
from £15 Jm to £16-2m t though 
trading margins were squeezed 
- operating profits improved 6 
per cent to £922,000 (£867,000). 

After a reduced Interest 
charge, pre-tax profits rose 12 
per cent, from £713,000 to 
6801,900, with earnings per 
share up 8 per cent at 7.18p 

(6.62p). 

Increased seasonal stocking 
was offset by improved debt 
collection, leaving gearing vir- 
tually unchanged at 21,4 per 
cent 

The final dividend la 
unchanged at 3.G5p, making a 
total of 5.6 lp (5.45p) for the 
year. 


DIVIDENDS ANNOUNCED 


First Technology fln 

Goode Dunamt - -fin 

m a Smith Int 

Holders Tech § int 

Savtte Gordoa fin 

S ou thend Prop I&i 

IMtvm At 

Weflcome . ,i-ht 
YRM fln 


Cones - 

Curent . Dale of ponding 

payment payment dMdend 

25 Oct 7 i 

3JB Sept 14 325 

2-T Sept 26 1A1* 

2 Sept 9 2 

: 1.7 Oct 28 ■„ 1.7 

Oct 3 2.73 

3jB 5 Oct 3 3£5 

SJt* Oct 4 . . 


Total Tom 

far lest 

year 

15 1 

8 5.4 

- 5£4* 

fi 

2.7 Z2 

ZA A 25 

5 l 81 545 

17 J 
nfl CL5 


DhUenda shown pens per Ww« not lOn Incnmsad capita •fiadydent 
^nw*jgfcr«tp ta 5USM stock, ^srand inwm 








22 


* 


FINANCIAL TIMES FRIDAY JULY 22 1 994 


BRITISH & COMMONWEALTH COLLAPSE; THE DTI REPORT 



John Gunn built British & Commonwealth Holdings into a company worth £2.5bn in a few furiously busy years in the 
1980s. But his purchase of Atlantic Computers, a deeply flawed company, proved his undoing. B&C crashed in 1990 with 
£lbn in liabilities. Suits and counter-suits against advisers are seeking some £3.5bn in compensation 


The pyramid structure that got out of control 


ATLANTIC'S RISE 


By Simon Davies 


The most extraordinary feature of 
the collapse of Atlantic Computers 
was that it did not happen earlier. 

Founded in 1975 by two computer 
industry colleagues, it grew into a 
£500m business within 12 years, but 
the commercial core of the business 
was fundamentally rotten from the 
start 

By the time British & Common- 
wealth bought into Atlantic for 
E408m in 1888, Ur Vernon Davies 
had long lost interest in the busi- 
ness and the more aggressive Mr 
John Foulston had been killed in a 
motor racing crash. 

But the pyramid sale structure 
was out of control and could only 
be propped up by some highly ques- 
tionable accounting policies, and an 
obsessive emphasis on increasing 
the level of sales, at any cost 

One of the more disturbing 
details to emerge from yesterday’s 
report Is the extent to which profits 


were propped up by “imprudent” 
^q-nimting between 1983 and 1988, 
the inspectors conclude. 

Atlantic reported pre-tax profits 
of £127.6m. If prudent policies had 
been followed, it would not have 
been able to report “any significant 
profits during that period". 

Atlantic was formed after Mr 
Foulston and Mr Davies spotted a 
niche in what was the boom sector 
of tiie latter half of the 1970s - 
computer leasing. 

The two men had worked 
together at Memorex UK for four 
years, and initially set up a consul- 
tancy and peripherals supplier, but 
thpn moved into leasing. 

At the time, lessors of substantial 
computing systems were faced with 
the choice of long-term leases, 
which provided cheap finance, but 
offered no ability to upgrade during 
a period of rapid technological 
change. The alternative was a 
far more expensive short-term 
lease. 

Atlantic devised the Flexlease. As 
the report states: “the raison d’etre 


of Flexlease was the aversion of 
both lessors and lessees to the risks 
inherent in residual investments in 
computes, and the apparent suc- 
cess of Flexlease lay in the feet that 
Atlantic was prepared to assume 
those risks.” 

The flaw to this equation was 
that, whether or not it was actually 
aware of the level of its risks, it 
certainly never revealed them, and 
its liabilities snowballed. 

The man in control of the group 
was undoubtedly Mr Foulston. He 
was nominally in charge of the 
sales side of the business, but he 
increasingly dominated its entire 
strategy. 

Mr Len Jagger and Mr Ian Skip- 
per, the businessmen who took a 90 
per cent stake in Atlantic in June 
1982, told the inspectors that their 
main consideration was “the 
energy, ambition and determina- 
tion” of Mr Foulston. 

Mr Davies handled company 
finances, despite having a sales 
rather than accounting background, 
but despite being in the shadow of 


his powerful partner, the report 
concludes that both men kept a 
tight control over the business. 

On the face of it they were 
immensely successful. The com- 
pany made profits of £L2m, rising 
to more than £5m by 1983. The two 
men cashed in from the share 
sale to Messrs Jagger and Skipper 
in 1982, and retained extremely 
valuable stakes in the company. 

In reality, however, the business 
was profitable only in so Ear as it 
reported its maximum potential 
profits without recognising any of 
its substantial liabilities. 

When Atlantic leased out a com- 
puter system, it booked a profit on 
the difference between the cost of 
the system and the sale price to the 
finance company that lent the 
money. 

There was no acknowledgement 
of the liabilities inherent in the 
Flexlease, which enabled lessors 
either to swap the leased computer 
system for another after three years 
(a flex), or to terminate the lease 
after five years (a walk), or both. 


The report estimates that the 
company’s “Walk" liabilities 
amounted to £160m by early 1989. 

The extent of its problems was 
not entirely hidden at the time. 
Competitors had pointed out the 
flaws, and a report by Price Water- 
house at the time of the 1982 
buy-out by Mr Skipper and Mr Jag- 
ger raised numerous concerns over 
tlie nature of the teases. 

One year later, the company was 
launching a full London flotation 
valuing it at £55£m. The offer was 
L9 times subscribed. 

The prospectus was extremely 
misleading. The inspectors claim 
that Mr Davies and Mr Foulston 
“deliberately deceived” the finan- 
cial advisers as to the prevalence of 
“Walk" options. 

They claimed these covered about 
5 per cent of Atlantic's leases, when 
the actual figure is estimated at 
between 60 and 90 per cent The 
balance sheet contained no provi- 
sions for any of its break-options. 

In addition, Atlantic had intro- 
duced a critical, but highly ques- 


tionable, accounting policy towards 
these leases. 

At the end of the lease period, 
Atlantic had an option to take the 
computer equipment for a nominal 
sum. 

It attached a net present value to 
that option, based on current esti- 
mates, and not only wrote that 
value into its balance sheet at the 
time the lease was signed, but 
recognised it as a profit 

The unpredictability of computer 
resale values should not have sur- 
prised Atlantic, since it had taken a 
£966,000 provision against stock 
writedowns on obsolete IBM mod- 
els - this was taken in its 1980 
results, and helped emphasise a 
trend of rising profits. 

The recognising of the residual 
value on these leasing deals was of 
fundamental importance to Atlan- 
tic's balance sheet It accounted for 
60 per cent of 1981 profits and 74 per 
emit of those in 1982, building an 
earnings base on very uncertain 
foundations. 

The nature of Atlantic’s potential 


liabilities, from the Flex and Walk 
elements of its leases, pot immen se 
pressure on Atlantic to increase 
sales, and encouraged by Mr Fouls- 
ton, sales staff took increasing risks 
to secure a deal. 

Mr Davies had sold Cl9m of his 
shares in the flotation, and he even- 
tually sold out of the business in 
May 1986 for a further £13m. 

Mr Foulston became increasingly 
dominant, but in a more competi- 
tive market, staff were offering 
deals that were described as sui- 
cidal in terms of their potential lia- 
bilities, but which propped up 
short-term earnings. 

However, by 1987, Mr Foulston's 
interest in motor raring was taking 
up more of his time - he owned 70 
per cent of Brands Hatch Leisure, 
which operated the raring brack. 

When he died in a motor raring 
accident In September that year, 
there was no management team in 
place that could replace him. It was 
only a matter of time before the 
inherent flaw in his Flexlease 
destroyed the company. 


Never quite became ‘one of us’ 


Leasing liabilities 




1 



MAVERICK GUNN 


By David WtgMon 


Mr John Gunn, the man who 
presided over Britain's biggest 
ever financial collapse, has 
never quite fitted the 
part. 

His downbeat style and air of 
moral seriousness always set 
him apart from the other flam- 
boyant dealmakers who built 
and lost empires in the 
1980s. 

Yet few could match the 
scale of his achievements or 
the disaster which came in 
their wake. 

In a few heady years he 
expanded British & Common- 
wealth into a financial services 
group worth £2Jibn only to see 
it collapse leaving debts of 
£lbn. 

The son of a Cheshire rail- 
wayman. he has never been 
quite accepted as “one of us” 
in the City, although at the 
height of his career he was the 
toast of the town. 

In his quiet determination 
and confidence in his own abil- 
ities be has much in common 
with his cricketing hero 
Geoffrey Boycott, the York- 
shire batsman. 

After studying German at 
Nottingham and Friburg 
Universities, where he met his 
German wife and developed an 
interest in the country's litera- 
ture and stamps, Mr Gunn 
started his career in the 
foreign exchange department 
of Barclays Bank in Manches- 
ter. 

Eventually frustrated by his 
lack of promotion he moved to 
London and Astley & Pearce, a 
small money broker. 

Some 11 years later he cre- 
ated Exco to buy Astley from 
its main shareholder, Astley & 
Pearce. 

Backing came from the 
wealthy Cayzer family, whose 
formidable reputation as canny 
investors has only been 
enhanced by their association 
with Mr Gunn. 

Exco was floated on the 
stock market in 1981 at a value 
of £60m. Five years Later, after 
a string of acquisitions, it was 
worth £500m. 

In 1985 Mr Gunn walked out 
after disagreements with his 
boardroom colleagues. Lord 
Cayzer, who had done very 
well out of Exco. offered him a 
job at British & Common- 
wealth, the conglomerate con- 
trolled by the family's Caledo- 
nia Investments. 

Once the UK’S largest ship- 
ping company B&C had devel- 
oped into a highly diversified 
holding company into which 
the Cayzers were trying to 
breathe new life. 

In 1986 Mr Gunn became 
chief executive, having con- 
vinced the family that the 
group should concentrate on 


financial services. 

“I can do what I want more 
or less, subject to the agree- 
ment of the rest of the board,” 
Mr Gunn said at the time and 
used that freedom for a £2bn 
acquisition spree. 

His first move was to buy 
Exco for £637m. Less than a 
year later he spent £560m on 
Mercantile House and then 
strengthened B&C’s presence 
in fund management by adding 
Oppenheimer in the US to its 
own Gartmore Investment 

ManagPiw»nt in the UK. 

“We are looking to build up 
the largest n on-hanking finan- 
cial services company in the 
UK," he said. But as Mr Gunn 
celebrated that year’s film pay 
cheque the Cayzers were 
looking to sell. 

In October 1987 B&C agreed 
to buy back 25 per cent of Its 
shares held by Caledonia 
Investments for £427 5m. 

The deal was based on a 
share price of 475p and was 
struck just days before the 
stock market crash. 

The shares quickly dropped 
by more than 150p and contin- 
ued to fall steadily. Three 
years later they were worth- 
less. 

In April 1988, at the age of 
46, he received the Guardian 
Young Businessman of the 
Year award. As so often hap- 
pens, this marked the peak of 
his career which started going 
badly wrong three months 
later with the £400m 
acquisition of Atlantic Comput- 
ers. 

It is still debatable what 
would have happened to B&C 
had it not bought Atlantic. But 
there is no doubt that it would 
have experienced serious 
financial difficulty in the reces- 
sion. 

Mr Gunn had constructed a 
group highly sensitive to inter- 
est rates with a large amount 
of floating rate debt 

As the economy slowed Mr 
Gunn tried to shore up the bal- 
ance sheet with disposals. 

“I am not much good at any- 
thing else apart from doing 
deals,” he said at the time. 

But he proved less adept at 
selling companies that buying 
them. 

An agreement to sell Exco to 
Mr Gary Klesch's Quadrex fell 
through. The failure recently 
led to a successful claim for 
£172m by B&C's administrators 
against Samuel Montagu. The 
merchant bank had provided 
assurances that Quadrex had 
funds to pay for the deal which 
never materialised. 

In 1990, B&C raised £ 1.40m 
from the sale of Gartmore. 
which recently returned to the 
stock market 

However, when it was forced 
to writeoff £550m as a result of 
the collapse of Atlantic, the 
balance sheet could not take 
the strain. 


Its bankers attempted to 
mount a rescue but when the 
Securities & Investments 
Board ordered firms to remove 
money from the British & Com- 
monwealth Merchant Bank 
there was no option but 
to call In the admin- 
istrators. 

At the time it was widely 
assumed that there would be 
little left for creditors, let alone 
shareholders. But the adminis- 
tration has been more success- 
ful that expected. 

The flotations of Celltech 


and most recently Exco have 
brought in more than origi- 
nally projected and creditors of 
the group finance subsidiary, 
owed more than fiTQQm, could 
eventually get 29p in the 
pound. 

The final figure will depend 
on the string of legal actions 
the administrators have 
started. Creditors of the mer- 
chant hank have already been 
repaid In fulL 

Since the collapse Mr Gunn 
has develop a new career as a 
"business angel" investing in 


and helping small co mpa ni e s. 
He also has two non-executive 
directorships at public compa- 
nies. Midland & Scottish 
Resources and Glenchewton. 

He said yesterday he would 
continue to pursue these inter- 
ests at the same time as rigor- 
ously defending himself 
against the disqualification 
action. 

“In my career I have been a 
director of literally hundreds of 
companies and only had one 
problem.” was his comment 
yesterday. 


Hopes rise of resolving legal tangle 


WRITS FLY 


By John Mason 


The DTI report into Atlantic 
Computers looks set to have a 
substantial impact on the com- 
plex raft of legal actions 
spawned by British & Com- 
monwealth’s disastrous acqui- 
sition. 

A welter of large-scale litiga- 
tion - with over TO claims and 
counter-claims totalling well in 
excess of £3bn - has been 
prompted by the affair. Most 
leading London law firms are 
involved in acting for some- 
body caught in the legal cross- 
fire. The litigation, should it 
ever reach court, would prove 
exceptionally complex, 
exhausting and expensive. 

The report is now being 


closely studied by the lawyers 
concerned. The amending or 
even dropping of some of the 
actions is considered possible. 

Yesterday, both lawyers and 
their clients were refusing to 
comment publicly on the possi- 
ble impact of the report on 
their individual legal actions. 
However, there was private 
agreement that it could act to 
partially resolve what is rap- 
idly becoming a legal mess. 

“Clearly there is now a need 
to reexamine the whole situa- 
tion in the light of the report.” 
said one participant in the 
legal battles. 

In its conclusions, the report 
makes little or no criticism of 
the professional advisers 
involved in the acquisition of 
Atlantic Computers by B&C, 
apart from Spicer & Oppen- 


heim the computer company's 
auditors. 

This lack of criticism could 
affect one of the largest actions 
outstanding - that brought by 
Ernst & Young, the British & 
Commonwealth administra- 
tors. against Barclays de Zoete 
Wedd, the securities arm of 
Barclays. In this action, the 
administrators are suing BZW 
for approaching filbn. The 
auditors are alleging BZW was 
negligent in carrying out its 
role as adviser to B&C over the 
acquisition. 

Ernst & Young have also 
brought the other main claim 
in the welter of litigation - a 
similar filbn action against for- 
mer Atlantic directors includ- 
ing Mr David McCormick, the 
former chief executive, Mr 
John Tompkins, his predeces- 


sor and Mr John Gillum, a for- 
mer Atlantic chairman. In both 
cases, the writs have been 
issued, but the actions are still 
in their very early stages and 
no date has yet teen fixed for 
them to reach court 

It was these claims by Ernst 
& Young which effectively trig- 
gered the flurry of other writs, 
as other parties responded by 
launching their own actions to 
protect themselves or credi- 
tors. 

BZW responded to the 
administrators’ claims by 
mounting its own series of 
actions. These are against 
OC&C, Coopers & Lybrand. 
NM Rothchild and Spicer & 
Oppenheim. along with three 
former Atlantic directors, Mr 
Tompkins, Mr Nicholas 
Kennedy-Scott and Mr 


McCormick. BZW has yet to 
put a figure on the scale of 
these claims. 

In further actions, Price 
Waterhouse, the Atlantic 
administrators, are suing Spi- 
cer & Oppenheim and former 
directors of the computer com- 
pany - again for sums 
approaching a total of filbn. 

It will be some months 
before the impact of the DU 
report on the mountain of liti- 
gation becomes clear. 

But, as one Litigant put it: “It 
has become horrendous. Every- 
one is going around in circles. 
We have got to find a way of 
simplifying this, otherwise we 
will be arguing for years. The 
DTI report will clarify some of 
the issues. It could trigger 
more claims, but hopefully it 
may simplify this mess.” 


that led to downfall 


FLAWED LEASES 


By Simon Davies 


The heart of Atlantic 
Computer’s dramatic rise and 
fall was the Flexlease, which 
provided the basis for almost 
all of the group's computer 
leasing business. 

Flexlease was designed to 
give a company the benefits of 
failring a long-term lease over a 
computer system, together 
with the flexibility to break 
that lease at what appeared to 
be a minimal extra cost 

The basic lease had an aver- 
age life of six years, and com- 
prised an agreement between a 
bank or other funder, and the 
party acquiring the system. 


' However, there was a sepa- 
rate management agreement, 
whereby Atlantic provided an 
opt-out for the lessor. Under 
some agreements, the system 
could either be returned to 
Atlantic in exchange for the 
replacement equipment (a 
flex), and in others it could be 
terminated (a walk). 

The Flex was generally trig- 
gered after three years, and the 
Walk after five years. An 
increasing number of leases 
included both options. 

Atlantic’s sole means of miti- 
gating losses from this area 
was by sailing the machinery, 
and generating a profitable 
replacement lease on a Flex. 

Since the foil in the value of 
second-hand computer equip- 


ment was more rapid than the 
outstanding lease obligations, 
this was a dangerous tie-up. 

Atlantic had a hidden 
weapon: the Flex agreement 
was worded so as to be, in the 
judgment of the investigators, 
legally unenforceable by the 
customer. 

While it enabled an early 
break “at no penalty”, it also 
allowed for the interpretation 
that subsequent losses could 
be recovered through the 
terms of the new lease. 

Ultimately, the only way 
Flexlease could remain profit- 
able was by ensuring sufficient 
new sales to cover its balloon- 
ing liabilities. The collapse of 
the company that devised it 
was all but inevitable. 


Catalogue of errors 
and misinformation 



B&C’S COLLAPSE 


By WBSam Lewis 


The end came quickly for 
British & Commonwealth, 
shortly after it realised the 
huge burden it had acquired 
with Atlantic Computers. But 
before Mr David McCormick, 
Atlantic Computers’ chief 
executive, alerted B&C direc- 
tors, he sold shares in the 
group, the DTI inspectors 
report 

On April 12 1989, Mr 
McCormick, telephoned Mr 
McFadyen, a partner in 
accountancy firm Moores Row- 
land in Jersey. 

Mr McCormick, who joined 
Atlantic in 1986 and was 
appointed chief executive after 
Its acquisition by B&C, had 
built up a holding of 1.2m 
shares in B&C through Fun- 
dinco, a company controlled by 
trustees for the benefit of him- 
self and his family. That after- 
noon he instructed Mr McFad- 
yen to sell 500,000 shares. The 
deal, which raised approxi- 
mately film net, came after Mr 
McCormick had become aware 
of a contingent liability for 
Atlantic "for in excess of £30m 
to £40m", say the DTI Inspec- 
tors. Information concerning 
the sale has since been referred 
to the DTL 

The same week, Mr 
McCormick told colleagues 
that Atlantic’s liabilities were 
substantially higher than the 
£30m to £40m. Mr Nicholas 
Kennedy Scott, then a director 
of Atlantic and B&C, and Mr 
Adrian Howe, later to become 
Mr McCormick's personal 
assistant, were told that Atlan- 
tic’s gross liability was £160m, 
none of which had been pro- 
vided for in Atlantic's 
accounts. 

The information "was the 
first clear disclosure to B&C 
that Atlantic faced serious 
problems”, the report says. It 
marked the beginning of the 
end for B&C. 

Two years earlier the two 
senior directors of B&C, Mr 
John Gunn and Mr Peter Gol- 
die. had been regarded as suc- 
cessful and experienced in cor- 
porate acquisitions. 

During the 1980s. B&C was 
transformed from a broadly- 
based industrial group to a 
financial services business. It 
was a transformation achieved 
on the back of substantial bor- 
rowings when interest rates 
were relatively low. B&C was 
also committed to buying out, 
over a short period, the inter- 
ests of the Cayzer family, for- 


mer controlling shareholders. 

B&C imposed minimal head 
office control on divisions. Tills 
"hands off” management phi- 
losophy “may have had its 
merits”, says the report, but “it 
also poised a serious risk for 
B&C if the business manage- 
ment of any of its divisions 
had not been thoroughly 
researched and understood 
before acquisition". 

For B&C the attraction of 
Atlantic was that it would 
replace the earnings of Brtcom, 
which it bad sold in 1988. It 
saw Atlantic as a strong finan- 
cial services group with sub- 
stantial overseas interests, and 
Atlantic’s accounts indicated 
that it had strong cash and 
fast-growing profits. 

But the inspectors conclude 
that B&C completed the deal 
without having a clear under- 
standing of the Flexlease, by 
which Atlantic conducted most 
of its leasing business. 

“The root cause of Atlantic’s 
failure lay in the lack of com- 
mercial viability of its core 
product, the Flexlease, and the 
way in which Atlantic 
accounted for profits and failed 
to make provision for the con- 
tingent liabilities associated 
with the Flexlease," the inspec- 
tors say. 

B&C was told by Atlantic on 
several occasions that it was 
not exposed to residual risks, 
and never seriously questioned 
those assurances. The report 
primarily blames Mr John 
Tomkins, Atlantic's chief exec- 
utive. and Mr Kennedy Scott 
for the misrepresentations. 

The report also highlights 
the “ill-defined” relationship 
that B&C had with its external 
advisers. BZW and Outram, 
CuIUnan & Co, a firm of strat- 
egy consultants. “B&C appears 
to have teen looking to BZW 
for advice of a fond that BZW 
believed was not within their 
remit" The inspectors suggest 
that there should have been a 
detailed letter of engagement 
between BZW and B&C. 

The inspectors also say that 
BZW should have adopted a 
more independent and critical 
stance in appraising the thor- 
oughness of B&C’s enquiries, 
enabling them to recognise the 
shortcomings. 

B&C’s derision to go ahead 
with the deal was also influ, 
enced by the feet that Atlan- 
tic’s published accounts had 
been given unqualified audit 
reports by Spicer & Oppen- 
heim, as well as by a flawed 
OC&C valuation report of 
Atlantic. 

The valuation contained “a 


jrious, but readily detectable, 
rror which was not noticed by 
&C, BZW or OC&C”: its defi- 
ition of operating cash flows, 
[t appears to us that the valu- 
tion of Atlantic prepared by 
C&C had a material Influence 
a the B&C principal directors' 
ecislou to proceed further 
ith the acquisition negotia- 
ons the Inspectors state. 

“In our (minion this financial 
Isaster for B&C and its share- 
alders would have been 
raided if B&C had adopted a 
tiorough professional 
jproach to its pre-acquisition 
iqu tries.” B&C acquired 
tlantic at the beginning of 
eptember 1988 for about 
108m- 

Within seven months, three 
rectors of B&C - Mr Gunn, 
ir Goldie and Mr Rusty Ash- 
ian. finance director - had 
sen told of gross liabilities 
ttimated at £160m in the UK 
ad US. They first learnt cf it, 
scording to the inspectors, 
lortiy after B&C had issued a 
relimlnary announcement of 
a 1988 results, but before sig- 
ature of either Atlantic’s or 
SC’s 1988 accounts. 

The three men resolved that 
le 1988 accounts of B&C 
mold not be amended to pro- 
ide for Atlantic's Liabilities; 
lat Spicer, Atlantic’s auditors, 
id Deloitte Haskins & Sells, 
&C's auditors, should not be 
ild; and also that the matter 
lould not be disclosed to the 
st of the B&C board. 

As a result, Atlantic’s pub- 
shed accounts for 1988 were 
grossly misleading'’ and the 
spectors conclude that Allan; 
c “in all probability had 
;ver made a profit”. 

It was not until late July 
189 that the whole B&C board 
as informed of Atlantic’s con 
agent liability problem, and 
was only after the appoint- 
ent of Mr Mark Wood as 
anaging director of Atlanta 
i March 1990 that B&C 
oally set about a realistic ana 
jjective assessment of Atjafr 
c’s business for the “Jr 
me”. Mr Wood reported twe 

duties of up to £160® wa! ; 
quired if Atlantic was tosur- 
ve, B&C could not provwe 
ich funds. _ „ ■„ 

“The decision was 
ir view reasonably, to 
tlantic into admlnistratK®- 
b inspectors 

j the response of B&C* “Jr 
-ement to tbe conhneent “T 
lity problem as “much too 
i, much too late”. ^ 
Soon after. S 

fcC itself waft into admu^ 




••• in- ., 


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U’Vi-A, 


FINANCIAL times FRIDAY JULY 


22 1994 


Ci ‘ ‘ i . 


of 


BRITISH & COMMONWEALTH COLLAPSE: THE DTI REPORT 


iabilities 

« (iownf. 


DTI censure offers 
insight into auditing 


By Andrew Jack 

Yesterday’s DTI report on the 
accountants involved with 
Atlantic Computers and Brit- 
ish & Commonwealth includes 
a powerful criticism of one 
firm, and strong remarks about 
two others In a rare insight 
mto the audit process. 

Singled out for most criti- 
cism is Spicer & Oppenheim. 
now part of Touche Ross, 
which became auditor to 
Atlantic in preparation for the 
company’s float in 1983. and 
remained in place until June 
1989. 

The DTI inspectors say that, 
in a report produced in 1983, 
the firm failed to cany out suf- 
ficient investigative work as 
specified in their terms of ref- 
erence, and did not take ade- 
quate steps to verify the infor- 
mation provided to iflem . 

They criticise Spicer's report 
on Atlantic's working capital 
forecast at the time of the com- 
pany's takeover by B&C in 
1988. They say no account was 
taken of Atlantic's trading and 
funding difficulties and that 
the firm did not follow up con- 
cerns raised in a report by a 
subsidiary auditor on the pos- 
sible need to provide for losses 
on lease contracts. 

During 1983 to 1987. Spicer 
planned its audits without suf- 
ficient understanding of the 
risks of the company, relied 
too heavily on Atlantic's own 
accounting control systems 
when it knew their weak- 
nesses, and did not consider 
sufficiently carefully the 
recommendations about risks 
identified by KPMG Peat Mar- 
wick, auditor of several subsid- 
iaries. 

The 1988 audit placed exces- 


sive reliance on Atlantic's 
internal controls, did not jus- 
tify the introduction of a 
higher level of “materiality'’ 
beyond which concerns would 
have been flagged, did not set 
adequate objectives and was 
"poorly conducted” In a num- 
ber of areas. 

The inspectors say stock was 
not properly confirmed, a 
planned circular of debtors not 


was any collusion with 
Atlantic. But they stress 
that the firm was respon- 
sible for the audit and should 
have designed procedures to 
identify and address the areas 
of risk. 

Touche Ross distanced itself 
from the conclusions of the 
report last night and stressed 
that matters relating to Spicer 
were "ring-fenced". It is 


C ln our view Spicers’ failings had their origin in 
Spicers' inability to establish credibility and influ- 
ence with Atlantic at the very beginning of their involve- 
ment in the days of Mr [John] Foulston. [Go- to under of 
Atlantic], This led to a passive relationship in which 
Spicers would be challenged rather than consulted. 
From the outset Spicers did not have a sufficient 
understanding of Atlantic’s business, and in particular of 
FlexJease and its attendant risks. Spicers faded to 
develop their knowledge and understanding of the busi- 
ness at the same pace as the business itself developed. 
This lack of understanding hindered the effectiveness of 
Spicers' audit procedures such that by 1988 there were 
significant failures in the approach and conduct of the 

audit ' 5 DU report 


carried out, incorrect conclu- 
sions drawn from reconcilia- 
tions between equipment and 
lease income, and sections of 
the audit file not adequately 
reviewed or detailed to show 
significant problems met dur- 
ing the audit 

The inspectors suggest that 
Spicer was inclined to accept 
problems as not material and 
include them in the post-audit 
letter, rather than raise them 
with Atlantic before providing 
audit clearance. 

They conclude that the 
Spicer audit was conducted in 
good faith and that there was 
no evidence to suggest there 


believed that the engagement 
partner at Spicer for Atlantic 
had not joined Touche when 
the two firms merged in 1990. 

Spicer said last night “The 
partners disagree with much of 
what the inspectors say about 
them. They do not believe that 
anything Spicer did caused the 
collapse of Atlantic or B&C to 
buy it. The real stray is not 
about them but about corpo- 
rate governance." 

The DTI Inspectors also 
considered the role of three 
other firms of accountants. 
Rowland Nevill, now prat of 
Moores Rowland, was instru- 
mental in the formation of 







Atlantic in 1975 and acted as 
auditors of the company until 
1982. 

The inspectors concluded 
that recollections from so long 
ago were hazy, that the com- 
pany was in its infancy and 
that a balanced and objective 
assessment of the audit would 
be impracticable. 

They considered the role of 
Deloltte Haskins & Sells, now 
part of Coopers & Lybrand, 
which was auditor of B&C dur- 
ing the period of its involve- 
ment with Atlantic. 

They expressed “surprise" 
that Deloitte relied so heavily 
on Spicer’s audit of Atlantic's 
accounts when they should 
have been aware that the com- 
pany was a high-risk audit. 
They said a careful reading of 
Spicer's audit files should have 
alerted Deloitte to deficiencies 
in the accounts. 

There was no criticism of 
Deloitte 's role in the 1989 
interim statement, nor of its 
review of Atlantic’s accounting 
policies following its acquisi- 
tion - since they were 
instructed by their client not 
to complete the review. 

KPMG, which took over as 
auditors of Atlantic from Spi- 
cer in 1989, identified the prob- 
lem of Atlantic's exposure to 
potential liabilities early on 
and were justified In accepting 
the assurances of the compa- 
ny's directors that the expo- 
sure was dealt with, the inspec- 
tors say. 

However, they say there was 
"an unfortunate lack of clar- 
ity” in framing its audit opin- 
ions, which did not communi- 
cate its reservations in a way 
that was picked up by Spicer. 
The inspectors blame "lack of 
perceptiveness” on Spicer’s 
part rather than criticising 
KPMG on the matter. 



'¥>a ^di*- - i^s 






, l r. 1 7“ -A' ' 



'Jilt rr WM 







Atlantic Computers* former headquarters in Staines, scene of extensive pilfering in April 1990 wben staff were made redundant. 
According to one director: “Stuff Just walked out of the door customer lists, PCs worth thousands. £500 to £1,000 prints, anything 
that wasn’t physically locked down.” As be spoke a woman emerged from the building carrying a painting towards her car 

Financial advisers criticised 


ADVISERS’ ROLE 


By Nonna Cohen 

Barclays de Zoete Wedd, the 
UK-based merchant bank, was 
criticised yesterday by the 
Department of Trade and 
Industry for its role as the 
financial adviser to collapsed 
British & Commonwealth in its 
bid to acquire Atlantic Com- 
puters - a bid which proved to 
be B&Cs undoing. 

BZW’s role is now the sub- 
ject of a series of writs, and it 
in turn has issued writs, in 
connection with events at 
Atlantic Computers and B&C. 

The thrust of the DTTs criti- 
cism of BZW is that even pro- 
fessional investors could have 


been misled into thinking that 
BZW endorsed B&C’s view that 
the purchase was a wise move. 
The circular asking B&C share- 
holders to approve the Atlantic 
acquisition said: “Your direc- 
tors. who have been advised by 
Barclays de Zoete Wedd. 
believe that the acquisition of 
Atlantic is in the best Interests 
of stockholders." 

BZW told the DTI that this 
could not be taken as an 
endorsement of the board’s 
decision and said its role had 
been limited to offering finan- 
cial advice. The DTI concluded 
that on this more limited area 
- essentially a co-ordinating 
and facil itating role in a bid - 
“we have seen nothing to 
suggest that BZW did not per- 
form these functions in a 


wholly satisfactory manner." 

Although the UK Takeover 
Code requires the target com- 
pany to obtain independent 
finan cial advice on behalf of 
shareholders, there is no obli- 
gation on the part of acquiring 
companies. BZW bad argued 
that this role was understood 
by merchant banks in the City. 

However, the DTI concluded 
that the wording of the circu- 
lar would have led most profes- 
sional investors to assume it 
had actually taken a view on 
the merits of the acquisition. 
The report noted that BZW 
invoiced B&C for £600,000 in 
connection with arranging the 
bid and an additional £400,000 
for other matters including “an 
appraisal of Atlantic”. 

The DTI concluded that BZW 


had adopted “an. Insufficiently 
robust approach” during its 
investigation of Atlantic. 

The DTI also criticised Out- 
ram Cullman & Co. the strat- 
egy consultants now’ owned by 
Coopers and Lybrand. for their 
role in evaluating the benefits 
of the buy. 

While noting that GC&C bad 
warned B&C that its analysis 
was hindered by the refusal of 
Atlantic to supply key informa- 
tion. it failed to reiterate that 
at a B&C board meeting where 
the decision to acquire Atlantic 
was made. In its defence. Coo- 
pers said the firm had expected 
B&C to undertake further due 
diligence and it had not real- 
ised that the meeting was the 
one where the decision to buy 
Atlantic would be taken. 


m ei 


** * 4} 

l Uii\ 



v ; -MBUttL L.’ ^ m'm 


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24 


FINANCIAL TIMES FRIDAY JULY 22 1994 


RECRUITMENT 


Jobs: Young finance directors are breaking into the top echelon of directorships 

Initials that stand for main board advance 


T he youngest Turks in UK 
boardrooms are likely to be 
linguists with at least a 
brace of qualifications to go with 
their drive and ambition, according 
to a study into the board composi- 
tions of big companies. 

Kom/Ferry Carre/Oban Interna- 
tional, the executive search com- 
pany, identifies what it calls a “new 
breed of executive” in its research, 
covering more than 1,000 directors 
in 154 companies. The survey sam- 
ple, drawn from The Times 1000 list 
of the UK’s largest companies, has 
produced discernible trends in the 
composition of boardrooms, which 
may include some useful pointers 
for recruiters. 

One of the most striking features 
Is the emergence of MBAs as an 
Increasingly prevalent qualification 
among directors. The report found 
that 10 per cent of executives under 
the age of 50 had MBAs. 

Many of the younger and more 
highly qualified directors, said the 
report, are fluent In at least one 
foreign language and have practical 
experience of working overseas. 
Only two years ago a similar body 
of research found that fewer than 1 
in 5 UK directors had a second lan- 


guage. Unfortunately the survey did 
not produce an overall languages 
comparison this year but intends to 
have another look next year. 

Some 71 per cent of directors in 
companies with £lbn annual turn- 
over and above, compared with 83 
per cent in last year's sample, had 


A trend away from accountancy 
qualifications seems to be emerging 
among finance directors. Among 
the 35 finance directors surveyed In 
the £lbn-plus companies, just over 
half had accountancy qualifications 
and just less than a quarter had 
MBAs. 

In previous years accountancy 
qualifications had dominated to a 
much greater degree over a smaller 
number of MBAs. This swing in 
emphasis amo ng q ualifications is 
even more apparent in the report's 
analysis of directors by generation. 

Only 5 per cent of chairmen, dep- 
uties and chief executives over the 
age of 50 in the sample had degrees, 
compared with 61 per cent of degree 
holders among their younger coun- 
terparts. While the older generation 
had the edge on legal qualifications, 
younger directors bad more accoun- 
tancy qualifications and MBAs. 


One figure that bucked this trend 
was the greater percentage of 
finance directors aver the age of 50 
with accountancy qualifications 
than in the younger age group. 

Michael Brandon, the Korn/Ferry 
director who co-authored the report, 
says this does not mean that 
finance directors are becoming less 
qualified. Quite the opposite. Many 
of the best qualified of the older age 
group, however, appear to be have 
gone on to the top job in companies, 
so fewer of the highflyers are repre- 
sented in this group. 

The findings also show how 
finance directors are becoming 
younger and increasingly mobile. 
Two-thirds of the sample 35 from 
the biggest companies had been 
recruited from outside the organi- 
sation and nearly a quarter of the 
same group were under 45. 

Directors, generally, under the 
age of 50 were more likely to have 
more than one qualification, the 
report found. 

Other findings included an 
increasing preparedness among 
companies to buy In foreign talent 
to strengthen their understanding 
of overseas markets. 

The 1994 UK Board of Directors 


Study costs £99 and can be obtained 
by contacting Michael Brandon tel 
(0) 71 312 3100. 

Research leads 
recovery 

Advertised demand for executive 
continues to show a steady upward 
trend, according to the latest quar- 
terly survey by MSL International, 
the recruitment consultant 

The MSL Index of advertised 
demand for executives, which, its 
compilers say, has unfailingly pre- 
dicted the ups and downs of the 
British economy for more than 
three decades, has risen again in 
the second quarter of the year. 

The inrfPT - a 12-month running 
total that irons out seasonal vari- 
ances - now stands at 79 against 
the 1959 base figure of 100. 

After hitting an all-time low in 
the second quarter of 1992 and Lan- 
guishing there to the miritnp of 
year, the number of senior Level 
appointments began to rise and the 
latest figures show a rise for the 
fourth consecutive quarter. 

Ian Lloyd, MSL International’s 
managing director, said: "The latest 


figures tell us that the recovery is 
firmly established." 

Recruiting has been particularly 
strong in research and development 
and in marketing and sales, both 
areas which reflect confidence in 
long term business prospects and 
investment for growth. 

Activity in accounting and 
finance on a par with recruitment 
in marketing leads Lloyd to 
conclude that investment is being 
tempered with a greater degree of 
caution and control than in the 
1980s. 

Recruitment in high technology 
industries is showing the largest 
sectoral rise: increasing 12 per cent 
on the last quarter ami 89 per cent 
over the same quarto: in 1993. while 
advertised demand in the retail sec- 
tor has fallen 32 per cent in the 
quarter and is down U per cent on 
a year ago. 

The graphs on the right show the 
sector and industry changes and the 
movement in the indpr. This still 
has some way to go before it 
reflects executive recruitment levels 
throughout most of the 1980s. 

Richard Donkin 


MSL index 

Change compared with previous quaftoBtyear, by fob catoQOiy (9(9 


80 


2nd quarter 1994 


■ 96 change G2.-Q1 1994 , 
□ 96 change Q2 1994:1993 ; 



Rnance Gari Prod RID Sates' IT .(totonnet-MK: Total 

fttgt /design /Mctg 

lOO Ctan flacrenpaiifowltopwvkaa - A , i 

Industry by Mushy anafysb, 2nd quarter 199* 



Energy - ReuD 

M8t» Index vakje(l959» 1001 : 

1S0 Moefrig annual total of qua rterly 


Food/drWt Others 


Total 



Senior Equity Analyst 

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♦ Play lead rdc in developing wodd class research product. 

♦ Direct work of local analysis. Train graduates. 


♦ Produce own rated research maierial on Thai market. 

QUALIFICATIONS 

♦ Experienced analyst, preferably graduate. Rigorous 
training 1 in any sector or market in major research or 
fund management house. 

♦ Mature, confident, with first dass written English skills. 

♦ Eager to work in developing market. Fixed two year 
contract No previous Thai or Far East experience 
necessary. 


Please send lull cv, stating salary, ref CN2864, to NBS, 54 Jermyn Street, London SWIY 6 LX 


NB SELECTION LTD 
a BNB Resource! pic company 



LONDON 071 493 6392 
Aberdeen 0224 638080 « Birmingham 021 S3 4666 
Bristol 0272 291 M2 • Edinburgh 031 220 2400 
Glasgow 041 204 4334 • Leeds 0532 453830 
Manchester 0625 539953 • Slough 0753 819227 




CAN I TAKE $100m RISK ON THIS NAME? 

NOW!!! 

If you can accurately respond to this kind of request for counterparty credit 
approval and not go wobbly at the knees call Ron Bradley, the City's Leading 
Credit, Risk & Research Recruitment Consultant. Working together with 
traders/sales persons/clients, you will help to structure transactions so as to 
minimise the counterparty risk for one of the world's leading investment banks. 
This is a high profile job, evaluating credit-worthiness for a wide Tange of 
European counterparties and capital markets products. Salary, bonus and 
banking benefits will reflect your degree, business qualifications and language 
skills!!!! 

Jonathan Wren & Co. limited. Financial Recruitment Consultants 
No. 1 New Street, London EC2M 4TP Telephone 071-623 1266 Facsimile 071-626 5259 


JONATHAN WREN EXECUTIVE 


Our goal tato 
become the best 
financial sendees 
company In the 
world. We believe 
five corporate 
values -customer 
focus, respect for 
'ea£h''bthaivf^tt' ^ 




Nvftheijrtinke 
Chase the provider 
of choice, the 


Developing a Worldwide Client 
Base for Corpor ate Trust Services 

City base 

* Developing a worldwide client base through 
creative research, prospecting and confident 
response so opportunities and leads. 

* Approaching sdccted new prospects. 

* bailing with Chase's business unis in order to 

support the effective delivery of services. 

* Helping m develop sales and relationship plana. 

In addition to a good degree and at least on years’ 
sales experience in a similar environment, we 
will be looking for evidence of creativity and 
analytical skills, client focus, self motivation and 
management parental. Multi-lingual skills would be 
an added advantage. 

The negotiable salary is supported by an attractive 
benefits package including car allowance, subsidised 
mortgage, non-contributory pension and 
performance re l a ted bonus. 

Send your CV to the Resourcing Manager, Chase 
Manhattan Bank NA, Woolgatt House, Coleman 
Street, Lo n don, EC2P 2 HD. Please quote reference 
OL47/94/FT on both your application and envelope. 
Cbsing date 3 August 1994. 

CHASE M A N H A T T A N. 


Attractive salary 4- banking benefits 

The Chase Manhattan Corporation, with over $1QQ 
billion In assets, is a global financial services 
company accessing all the important wotU markets 
for dienes 3S they raise capital invest, move and 
manage their financial assets 
Chase is committed to hill participation in the 
world's capital markers on behalf of in issuing and 
investing cummers. Internationally, its activities 
Span the Euromarkets and selected local capital 
markets for defat, equity underwriting, trading and 
sales. Chase is also a major player in the syndicated 
loan markets. 

A small, dynamic corporate crust unit sells a 
tbaaad range of corporate oust services to investment 


v-7 -£ ■ agTjjBfkfc iuuen. Intermediaries and other organisations 

p gj fc gil qMfaBH . r?! _. . hlfoc International capital maikect- 

.-.r • - -^yhOTCbt&iderabie success Is due to the emphasis on 

Se mMer SftGKt, fecuS and marker visibility Coupled 
with die autonomy afforded to each of the individual 
CAdjnclbb^s - giving them exposure to the 
ipng^of capital market instruments and the 
.. 4 ct 3» participate in new product 
indjSpaaBRt tj|th leading securities houses. 

we are looking for a senior sales 
brief will encompass 


Investment of 


choice and the 


c. .T-yrre-i-- 



PROFIT FROM THE EXPERIENCE.™ 


O 

CHASE 



TRAINEE 

MANAGER 

2 individuals aged 
23-35, with sound 
academic background 
required. Experience not 
necessary but the ability 
to assimilate on both a 
technical and 
conceptual level is 
essential- Potential to 
progress to senior 
managers with full 
profit participation in 
2 to 3 years. 

Call: John Groszek 
on 071-240 4943 


Executives in 
Corporate Finance 

c.£30,000 plus bonus: London 


The Corporate Finance group of Price Waterhouse is a market 
trader in the areas of mercers, acquisitions and joint ventures, 
finance raising, public company work, project finance, 
privatisations and competition. We work wSh blue chip clients 
on an international scale. 

As a result of recent, newly won assignments and ambitious 
expansion plans, we are now looking for a number of 
executives to help expand our team of professionals bi our 
City of London offices. Our Executives work In mutti- 
dlsdpBnary teams on a wide variety of assignments as wed as 
hewing to win new work. 

Successful candidates will have a degree and are fikely to 
have a relevant qualification, to be aged 25-30 and to come 
from a variety of backgrounds, inducting merchant banking. 


As well as possessing a high degree of technical competence 
in your chosen field, we will expect you to be adaptable, to 
team quickly and possess social and influencing stalls which 
will complement our team working ethos and impress efients. 

Starting salary wffl be circa £30,000 plus attractive bonuses 
depending on performance, together with other competitive 
benefits. Career development and promotion opportunities 
are excellent with the prospect of partnership for our very 
best performers. Secondments to other PW offices both in 
the UK and overseas are also possible as are assignments to 
other companies and financial institutions. 

To apply please send full CV to Charles Madeod at 
Price Wbterhouse, Southwark Towers, 32 London Bridge Street 
London SE1 9SY, or call him on 071-939 3165 fora 
preliminary discussion. 


Price Waterhouse 

Corporate Finance 




Price Waterhouse Is authorised by the institute ol Chartered Accountants In England and Walas to carry on investment business. 


Financial Risks 



ln$uTaTK$&j: 

& 


As part of our rapid expansion programme throughtout the UK wc are now 
recruit professional staff to Join our Financial Risks Group which 
.iput of I ggp dott, Manchester^! Bir mingham 




Rollins Hudig Hall is one of 
the world's 
brokers 

consixtianH 
multi-billion dollar 
financial services 

Corporation, RHH bos d RHHisth 

global presence with over 

Ipping busines 

avian coud^^Sfoliows therefore chat-fluency In other European 


to hear from quality 
, Busin 

rience in th 
gained with 
m indusufijggi 
might be q 
with tdevanls8g&. 


1 0,000 staff operating out 
of 250 offices In 35 different 
countries. 




including Account 

:t 

receivable 
Institution or 
c6 us, however so too 
specialists, or others 

on the European continent 

taking an increasingly active role 


StfFrancc, Gerr^n^Netherlands. Italy, Belgium and 
Tpfollows therefore thatrffoenev In other Eurooean 


i?piB3guages would fa^ajfenificam and hit 




you would like to talk to us about the future, pf^ 


i write and tell us what 


In the UK the company is 
one of tbe fastest growing 
organisations in its field. 


z* sort of role you would like and enclose a detailed CV. 



Rollins Hudig Hall 


Helen Conway, Director of Personnel, 

Romos Hudig Hall Limited, 

Briarcliff House, KIngsmead, Faraborough, Hampshire GU 147 XE. 









. : i 


tNANClAL TBVIEs 


FRIDAY JULY 22 1994 


25 


I * 


- • JLa 

; -it. . nielli lap 






r 


SENIOR CORPORATE BANKERS 


CONTINENTAL EUROPE 


LONDON. EXTENS IVE TRAVEL 

• Lading UK-based international bank offering a 
broad range of banking products and services 
*rougb a weH-estabiishcd global network. 

strategy focused on key multinationals 
wuh substantial trade and invesnnent flows, 
cs P c cfeil5 r *n emerging markr-tc 

• As a resuk of a new strategic initiative, a number 
of corporate relationship professionals are now 
needed to focus on a select group of major 
European multinationals. 

• Each individual will have country responsibility 
for dev eloping relationships. Territories will include 
Germany, France. Benelux; Italy, Switzerland and 
Scandinavia. 


Hose apply tn wiMqg quoting Ret 776 
wMi fuB career and sabry details ecu 
Made Vaodliomc 
W hlirtwari \ ifrfrrt 

■45 TObeck Street. London W1M7HF 
H± 071 6178736 


PACKAGE CJ&80,000-£100,000 *■ BENEFITS 

• Experienced international banker from a first 
class fi n a n cial institution. Broad product knowledge. 
Strong record of developing business in Continental 
Europe, particularly in one of the specific countries 
where the Bank wishes to drive its strategy, or 
alternatively outstanding corporate relationship 
experience in the Far East. 

• Highly motivated and resultsorientated. Ability 
and stature u> operate at the most senior levels. 
Likely to be a European national and/or fluent in at 
least one other European language. 

• Future career prospects within the Bank are 
excellent. 


Whitehead 

SELECTION 
is l 





Assistant Treasurer Europe 

Grenoble (France) 


Becton Dickinson b a leading medical technology 
company thac employs 3,900 people in Europe and 
1 8,000 worldwide. The company manufactures and sells 
a broad range of medical supplies, devices and 
diagnostic systems for the health care industry, medical 
research institutions and retail- The European 
headquarters are based in Grenoble, in the foothills 
of the French Alps. 

The Assistant Treasurer Europe will report direedy to 
the European Treasurer providing specialist expertise in 
cash and currency exposure management, with emphasis 
on the optimisation of financial resourcing for all 
European subsidiaries. 

Key responsibilities will include on a European basts the 
management of cash flows and related maximisation of 
opportunities in the foreign exchange and 
money markets, supporting operating 


r y I* 


Michael Page International 


management in the funding of major investments and 
the further enhancement of cash management systems. 

There will be a significant liaison with operating 
subsidiaries, financial management and the 
US Corporate International Treasury Department. 

Candidates should be graduates, aged 30+ with a 
minimum of five years experience in an international 
treasury operation- The successful candidate will work 
with a small central team and must become a focal point 
for European financial management- Excellent 
communication skills and a definitive “hands-on” 
approach are essential for this role. 

Interested applicants should forward a comprehensive 
curriculum sitae and current salary details to Florence 
Nony, Michael Page International, 3 boulevard 

Bineau 92594 Levallois-Perret, Cedex, France 
(quoting reference FN 105421- 


liUisnaticnal Recruitment Cocsultsno 
London Paris Amsterdam DoMeUoff Sydney 




Eurobond Sales 


London 

Our clienr is a leading international banking 
group with an enviable reputation for 
excellence. A committment to the 
development of its presence in the European 
fixed income markets has created an 
opportunity for a Eurobond specialist to join a 
successful and entrepreneurial sales desk. 

The successful candidate will have a solid 
grounding in the European fixed income 
markets with at least 2 years Eurobond Sales 
experience. A proven track record in sales 
with an existing client base or the ability to 
develop one are essential. Fluency in 
another European language would be a 
distinct advantage. 


£ Excellent 

This is an ideal opportunity for an individual 
who wishes to join an expanding team which 
is committed to sustainable growth. 

The successful candidate is likely to 
demonstrate entrepreneurial flair and a high 
level of professionalism combined with a good 
level of market knowledge. 

Interested candidates should phone Gavin 
Starling or Paul Wilson on 071 831 2000 or 
write to them enclosing a detailed curriculum 
vitae at Michael Page City, Page House, 
39-41 Parker Street, London, WC2B 5LH, 
quoting reference 195993. All applications 
will be treated in strictest confidence. 
Fax 07 1 405 9649. 


Michael Page City 

Iruerrutiona! Recnilnnenr Conuiftanu 
London Pari Anuttldia D nmctrfnr f Sydney 






Investment 
Positions 


South Africa 

Old Mutual employs one of the top investment 
teams in South Africa with £22.2 billion under 
management. Standards of excellence in 
research, dealing and portfolio management are 
important as is a culture of professionalism and 
high achicvemenL 

Due to expansion, we currently seek accom- 
plished Portfolio Managers and Analysts (equity, 
bond and derivatives) capable of demonstrating 
flair, originality of thought, high levels of 
commitment and professional ability, as well as 
a strong educational background. 

A significant performance-based remuneration 
package will be negotiated with successful 
candidates. 

Those interested should send a comprehensive 
Curriculum Vitae in strict confidence on telefax 
+ 27 M 783 0229 or c/o Cathy Dowsley, PO Box 
1725, Portlands 2121, Republic of South Africa. 


f*£|| 

OLD 


MUTUAL 


Corporate Fimmce/M&A 
GermanJFrcnch Specialists 
To £ 60,000 + benefits 

Our cbttU, a ImJihk tvrni.. h** Jn «vuW»» lic-ii 

limr and track rxvord. Dur h* ihv timtniurtl itctvj*? iB 
berdw M&A artiviiio it urgent Iv mwl> bo*h rtvi'd* 
and German tr jnMctiiw 

You u- ill be MBA qualified with an civi'llent jcjdemiij - 
bar Lb round i2.i minimum » and have !•? yeJr- Jim. 
experumop in the Fri-nah c* Orman markets An assertive 
team pilling persona Uri i* .1 nevesuiv. 

The succe-.stui rand (dates will work ck'Mf!*' with 
international client- and bo invoked in all jsfwMti o: 
traR.-4-tianr-. Huenoi in FrvHi.h and Gorman in addition to 
English K cv*Titijl. 

Structured Finance - Talented Modellers 
c£30,000 + banking benefits + bonus 

Can you sun ivc and rloun-h m a highly stimularm*; ard 
constant!) chanRinc environment ' Are vou .1 mperb 
tuunnal nuxhdler looking for a now challcnso’ li *’• read 
on. 

Our client. a leaduiH l.-s» mvisinu-ni bank 1* lookjnt; tar 
additions 10 lb broad Iv Ki-<i1 -tnulun'd hsuiKi 1 warn 
You should bo - 

■ F.umbar with cash flow modelling and ideally tvnd 
mathematics. 

■ An enthusiaMiC Ic.im pkiver 

• Well cdur.ued lii or aboi e) rhP iJeal. 

This iipj'ivtumre presents lent; term career development it 
an environment di'toned to ewelkuce 


Please contort Janlaa Harper or Christopher .Squire on 
urn 5SJ 007.1 (dj« > or 1 07li oZ2 45X5 iciflilap & Mekadil. 
Or Miitr unit 16-18 New Briefer Street. Im l M EL'JV *Al . 
Fax; (0711 JS5390S 


BADENOCH A CLARK 

recruitment specialists 


Project Manager 

Wholesale Finance 


More than any ocher martet, (he City is characterised by rapid business change and 
technology development. Our client can claim a unique record in this martet, bedding and 
delivering business solutions which arc of mission critical significance to some of the 
w odd’s largest financial institutions and which address technology and business issues of 
unparalleled complexity. 

For project management professionals, these roles will prove both stimulating and 
demanding in equal measure. As the key customer interface on proj ects typically valued 
between £500K -£10m, you will be under considerable pressure to control and co-ordinate 
wide ranging project activities to ensure that workable, fully integrated solutions are 
delivered on time and to budget 

Your broad understanding of hardware and software platforms, databases, communication 
tec h no l ogies and supplier management should therefore be complemented by a proven ability 
to manage substantial project resources and high level user relanor&irips. You must be able to 
demonstrate a track re cor d in the delivery of Inge scale IT prefects, cither within a major 
Gty organisation or for a solutions provider specialising in the wholesale finance market. 

You'll be joining a co m pany with a creative and energetic culture where flexibility, 
adaptability and open communication are key requirements. Future prospects for the 
business and os people are exceptional. 

To apply, please forward your CV quoting rtf. MD3SOO to Scree O'Brien at Maaratkm Daria, 
Satisbury Bouse, Blowouts, Hertford. Herts SCI41PU. TeL 0992 552552 Fax: 0992 5OS30 1. 


City!M3 


Package to 
£55,000 + Car 
+ Benefits 



Macmillan Davies 


LONDON ♦ HERTFORD • BRISTOL • LEEDS * MANCHESTER • BIRMINGHAM * CARDIFF 


Treasury Desk Consultant 

Exchange Consulting Group is an established name in City recruitment. We offer our clients a multi- 
disciplined service including Advertised Assignments, Concigency Recruitment, Selection Assignments and 
Retained Partnership Agreements. Due to expansion of our business we seek an additional Consultant to join 
our Treasury Desk’ which is responsible for the recruitment of dealers and salespeople in FX, Money Markets 
and Derivative Products. An initial business base is available to be developed by the new incumbent. 

Candidates are likely' to have a minimum of 2 years' experience as a City recruitment consultant (in any 
product area) or may be graduates who have joined a bank or broker as a trainee in FX, Money Markets or 
Derivatives and now wish 10 change career direction. This career opportunity is likely to appeal to those who 
wish to work In a meritocratic environment requiring a mixture of interpersonal skills and commercial aptitude. 

The ability to work as pan of a team whilst managing your own business portfolio is 
j essential. 

Please contact Trish Collins or Veronica McPake on the number below to discuss this 
opportunity in detail. This is a salaried position which also carries a performance related 
bonus. 


EXCHANGE 

Consulting Group 


Exchange Consulting Group, 13 St SsrttMn’s Lane, London EC4JV 8AL. 

Telephone: 071 929 2383. Fax 071 929 2805. 


*Bsks 


Eurobond Trader 


London 

Our client, a leading banking institution, is 
looking to strengthen its Bond Trading Team 
with the recruitment of an experienced and 
talented trader. The bank has a prominent 
position in the global market place, a 
very strong capital base and an 
excellent reputation. 

The ideal candidate: 

• Will display a minimum of 2-3 years bond 
trading experience and a proven track record 
in market making AUD or CAD Eurobonds. 

• Should display knowledge of quantitative 
hedging techniques. 

This is an excellent opportunity for a HI 


AUD$/CAD$ 

£ Excellent Package 


highly motivated individual to join an 
expanding organisation which is committed to 
further growth and development. 

The successful candidate will have foil backing 
to develop a highly profitable and successful 
trading operation. 

Salary will not be a limiting factor for the right 
individual- Interested candidares should call 
Gavin Starling or Paul Wilson on 071 831 
2000 or wrire to them enclosing a detailed CV ar 
Michael Page City, Page House, 39-41 Parker 
Street, London, WC2B 5LH, quoting 195996. 

a All applications will be treated in the 
strictest confidence. Fax 071 405 9649. 


Michael Page City 

International Recnisnncni Corailiana 


ASSISTANT 

INVESTMENT 

MANAGER 


Based in the City 


London & Edinburgh 



A pail of the giant ITT Corporation and with origins dating bock to 1 094, ITT 
London & Edinburgh enjoys an enviable reputation within the UK insurance market, 
benefiting from the support and security of its parents, 

An opportunity has arisen for on experienced individual to assist in the overall 
management of the Group's assets. Reporting to the Investment Director, you will be 
primarily invoked in the management of a mainly sterling bond/cash portfolio with a 
collective value of over £1 billion, having specific responsibility for some funds within 
this. You will also assist with the management and continued development of 
investment Systems. In helping to ensure thol investment income objectives ore met, 
you will be responsible for furthering the quality of management information and 
providing accurate and up to date performance measures. 

Degree-qualified in a mathematical/ science related discipline, you should 
ideally combine two to three years experience of investment markets {notably bond 
markets] with a high level of numeracy and excellent financial judgment, plus 
experience of mathematical modelling and programming. You will now be looking to 
brooden your ca ree r potential in a high profile role within a major financial 
environment. 

In return for your experience and abilities, you can expect on excellent salary 
package together with □ comprehensive range o! financial company benefits. 

Initially please write, enclosing your full CV t«- Jadnta Gillies, ITT 
London & Edinburgh, The Warren, Worthing, West Sussex BN14 9QD. 

We are an Equal Opportunities Employer. 











FINANCIAL TIMES FRIDAY JULY 22 1994 


Assistant Director 
- Marketing 

Bond Division 

Competitive salary + benefits 







■yism 




•ffmm 




SSWUi&v $£ * ; "' 3j/.':V J 




e/vt 


We have an opportunity for someone in 
their eaiiy/mid 30s who can demonstrate 
a sound record of work cm medium 
term debt transactions and syndicated 
loans at an international bank. 

This is a senior appointment and it is 
unlikely that anyone with less than 
5 years’ experience in a bank which 
has been prominent in these markets 
will have the qualities sought. The 
ability and a strong desire to market a 
range of the Bank’s related products 
are essential. 


After about 18 months, it is expected 
that the further development of this 
business will be from the US and a 
transfer to New York at that time 
should, therefore, be anticipated. 

A competitive salary and a foil range of 
benefits will be provided commensurate 
with experience. 

Please write, enclosing a detailed CV 
and indicating your current remuneratioa 
package, to: Mr Adrian Bell, 

Vice Chairman. Hambros Bank Limited. 
41 Tower Hill. London EC3N4HA. 


Prudential Portfolio Managers Ltd., the largest investor in the UK. and the 
investment subsidiary of the Prudential Corporation^^fc|«sitions available 
for graduates with experience within its research area.ff^S^ 


Company Research Analysts \ 

\ 

Two opportunities exist within our re 

function is to provide accurate anrfjMi’i&e inform. 



G 


Mil 


currently, or haw 
l background to fulfill 


HAMBROS BANK LIMITED 


function is to provide accurate aptf i&fcigspit 
investment decisions. Your v 

understanding and analysis of ydusrWssigne 
views on industry prospects and share price? 
then entails communicating recommendattfg 
writing, to the UK fond 
upon original research 
with industry and its managemenL^^i.:'^:^ 


AmMWTMXNTS ADVERTISING 
. *ppeafa<fccUK«6tian 
■ (fray Wedaevdjy A Tbsn&7 
■fid tatbs faMaMSonl afidoo emy PtUaj 
• ?or ka&a nfaroclon 


team, whose 
ta^lkhat guides our 
to =jjK§jvide in depth 
re, formulating 
ns. ThgSrole 
tally and in 

ased < 


You may eith 
industrial 
following tala: 

Chemical and Oil Analyst 

Property and Building & Construe 

A dear, enquiring mind, team orientation, communis 
the ability to act on your own initiative will be essenti 

We offer a high competitive salary to reflect y< 
i financial sector benefits^.,., 


I s 

4 i Analyst-; 

t skills and M 
■ all positions!#? 


Please sene 
Anne Taylor, 
Managers Lt< 


Tuif^w^Wd a coverir 
net Department, Prudes 
London® 


Prestigious French-owned International Bank 

2 Capital/Money Market Analysts 

Paris-based 

One of the moat prestigious french-owned I nt r rMtlnnal Katilr^ with a major presence in the gt"h»1 
and Money Markets and an active market-driven research unit requires the following: 

International Money/Bond Analyst Bond Analyst: Trading Strategies 


To analyse developments w ldiiu E uropea n Money 
and Government Bond Markets, in collaboration 
with analysts In the bank’s European network, 
covering DEM, FRF, ECU, BEF, DKK, SEK&ITL. 
To formulate and disseminate a strategic view 
internally and externally. To cover Central Bank 
policy. Inter-market spreads, impact of c ur r en cy 
movements and economic data on rates etc. To 
contribute to regular bulletins and ad hoc 
commentaries. 


To identify and monitor short term trading 
within the European Bond Markets, in 
collaboration with the Paris sales, trading and 
research 

To fo r mul ate yield cur v e and mter>mafket «p rM <l 
strategies, in liaison with proprietary traders, 
narketmiken and salespeople based in Paris and 
throughout the European network. To 
communicate these strategies to the various 
European eriefl/traefing teams. 


Can d i d a tes, aged early 20’s to mid 30’s, with a good quantitative first degree, ideally a second d^ree and a 
minimum 18 months prior experience, should be sound on theory and its applications. 

They should also be cmnfbttahle with the use of FCTs and modelling md, preferably, have prior ei parienc a 
of the dealing room e nv ir onm ent. A level of spoken french, which wfll quickly serviceable, is a 

prerequhne. 

These positions offer excellent career prospects foe ambitious young pe nfrminrmlii seeking to move to the 
hub of a mqjor international Institut i o n. They also offer a competitive lenmnetation within a 

congenial w or k in g environment. 

Interested candidates should contact Andrew Stewart, at BBM Selection, on 071 248 3653 or write sending a 
detailed CV to the address below. AU applications treated m the strictest confidence. 


76, Walling Street, 

London EC4M9BJ 


HEAD OF 
DERIVATIVES 
OPERATIONS 

Major International Bank 
Salary Fully Negotiable 


Teh 071*248 3653 
Fax: 071*248 2814 


Harrison Willis City has been retained to work exclusively on 
behalf of one of the world's leading financial institutions to 
help them locate a suitably experienced individual to take - 
responsibility for their derivative operations group. This is a 
new position which has arisen to help ensure the successful 
implementation of an ambitious expansion plan. 



The successful applicant wifi assume 
full responsibility for the day to 
day running of the organisation's 
structured derivative products 
operations in London which cover 
sophisticated OTC products. You 
will also be responsible for the 
development and implementation 
of a cohesive risk management 
system. 

(t is envisaged that the successful 
candidate will presently be 
employed at a similar level within a 
major bank or securities operation 
and have at least five years relevant 
experience. An innovative 
approach coupled with excellent 
communication and presentation 
skills are essential. This hybrid role 
will also require you to support 
other trading groups including 
fixed Income, Emerging Markets, 
Currencies and Commodities. - 


This is an excellent opportunity for 
an experienced individual to join 
a dynamic and forward thinking 
Bank that has seen rapid growth 
over a short space of time. 

If you feel that you have the 
ambition and commitment to 
take up this unique and exciting 
opportunity, please send a 
detailed Curriculum Vitae to 
Colin Jones at Cardinal House, 
39-40 Albemarle Street, 

London W1X3FD. 

(Fax: 071-491 4705J' 

HARRISON 

^WILLIS 


LONDON • READING • CUHOfORD • ST. ALBAN5 
(JXSIUDGE • BRISTOL • BIRMINGHAM 


Coopers 

&Lybrand 


Coopers and Lybtaod invites applications for the position o( Executive 
Director of a newly established bank based in a Caribbean off shore 
financial center under a three year contract. Salary and benefits are 
negotiable depending on the candidate’s qualifications. 

Qualifiglkag: 

■ MBA (or equivalent) bom an internationally recognized University 

■ A minimum of 8 years cap. in international banking and finance 
• Strong maoagancnl background. 


Directing, supervising and coordinating the activities of the bank in: 

■ Providing banking and investment services to international clients; 

* Marketing, advertising and public relations; 

• Financial management; 

■ Personnel management; 

■ Establishing and maintaining relationships with correspondent banks. 
Candidates are invited to submit resume to: 

Coopers & Ly brand 
Gregory Bnflding, Nevis St 
St Jobs’s Antigua, West Indies 
Fax* 809462-3465 


The Top Opportunities Section 

a PPeaR every Wednesday. Bar advertising information call: 
Philip Wrigky 
0718733351 


INDONESIA 
EQUITY SALES 

WJL Carr, the leading international stockbroking 
house specialising in Asian Equities is looking 
for a motivated individual to join its London 
team to specialise in Indonesian equity sales. 

Candidates should have an established track 
record selling Asian equities into a European 
client base, as well as a good knowledge and 
understanding of Indonesia's financial markets, 
economy and culture. 

Renumeration will be attractive and 
competitive. 

Please send your CV to: 

Tricia Naiang W'hCARR 

Administration Manager Banqwsindonez Group 
W.L Carr (Far East) "Wfc 
122 LeadenhaU Street iWW 

London EC4V4QH T f™ # 


m 

PRUDENTIAL 

Portfolio Managers 


PROJECT FINANCE 
ADVISORY 


£ Excellent Package 

Our client one of the world’s largest and most 
prestigious international banks, is a leading provider of 
project financing and advisory services to sovereign, 
institutional and corporate clients worldwide. 

To enhance its extensive project finance capabilities 
our client Is now seeking a project financier with a 
proven track record in this area. 


The successful candidate will possess the following 
skills and qualities: 


City Based 


• a minimum of 2/3 years relevant project finance 
experience gained with a leading player; 

• graduate level education, aged 25-35; 

• in-depth analytical and financial modelling skffls; 

• enthusiasm with the ability to make a positive impact 
on the team and with efients. 

if you have the necessary skills and experience and are 
willing to meet the challenges of this role, please call or 
write to RICHARD LYONS or SEAN CARR. AH applications 
will be treated in foe strictest confidence. 


CORPORATE TREASURY 

EUROPEAN SALES AND MARKETING 

LONDON BASE PLUS EUROPEAN TRAVEL 

On behalf of a prime US bank we have been retained to identify an experienced corporate treasury sales and marketing 
professional to liaise with European corporates and branches and the Regional Treasury function in London. 

Job Description Candidate Profile 

+ Liaise between European branches and London + Probably aged 25-35, preferably educated to degree 


Treasury function. 


level possessing commercial outlook. 


♦ Market treasury products to UK and European ♦ Fluency in French essential with working 


corporates. 


knowledge of German. 


♦ Maintain existing and develop new treasury + Sound knowledge of Treasury products and 

relationships. off-balance sheet financial instruments. 

♦ Provide advice on FX exposure management + a team player with excellent communication and 

♦ Periodic travel to Europe visiting branches and interpersonal skills, 

corporates treasurers. ♦ Strong sales and marketing bias. 


Please send a curriculum vitae in confidence to ROY WEBB, Managing Director, or telephone for an initial discussion. 



Private Client Investment Manager 

Birmingham 


Sbakcspeares are seeking to recruit an experienced rood man age r (minimum S 
years experience), to trie icaponwhflfty for the mtmgwnaa t and development of 
Ihetr Investment Management Department, esBbUabed 1988 (over £30m imdcr 
man a gement ), re p o rti ng J l woly to Gbe partners. 

The Ideal owtBifaie wfll be a member of the Securities Institute and famffiar with 
■be ethos of law firm. Investment skills and the ability to develop a business trill be 
required. 


Please send yoor C.Y. to: 
N.Q. Cmheoh, Shakes 
10 Beuens EDO, 
Mp n i ngfc— i H25RS. 


Shakespeare 

SOLICITORS 


FUTURES DESK DEALER 


An International Bank is seeking an experienced futures dealer to 
complement their expanding Treasury area. 

The successful candidate should possess 3-4 years trading experience 
in German Bonds and Gills in a Rank 

Competitive remuneration with excellent opportunity for career 
progression. 

Interested and suitably qualified candidates are invited to said their 
CVs by August 4th 1994, to BarA21IS, Financial Times, 

One Southwark Bridge, London SE1 9HL 


Tin 


I A leading European financial institution its fully fledged London-based Investment 
I with offices hi the major European financial banking operation which is presently aedve 
I centres seeks to appoint a Director-Sales for in the European privatisation programme. 

Director - European Equity Sales 


London 

Based 


RICHMOND 

t e 1 r e t i o a 


The position has arisen as a its nil of an 
internal promotion. The (Inn Is looking for 
someone who is capable of generating 
significant commission whilst managing a 
committed sales team. In addition, in the 
longer term the firm would expect the 
successful candidate to be able to provide 
significant strategic input into the direction 
and future growth of the firm. 

Candidates should possess a minimum of 
3 year's experience with a major institution 
and a proven record or achievement In cross- 
border equity sales and servicing of key UK 
institutional investors. 

Specific experience of the larger Continental 
European markets would be an advantage, 
as would knowledge of other European 


langnages. Above all. candidates most 
have excellent communication add 
present* i ion skills and be able to establish a 
high level of credibility with clients, peers 
and subordinates. 

The company offers an excellent 
compensation and benefits package, 
including significant bonus potential, pins 
the opportunity to work in a non- 
bureaucraric dynamic team environment 

Please respond by fax or letter, Incladiag full 
CV and salary details, to Michael Phlllipps at 

Richmond Selection, Garrard House, 
31-45 Gresham Street, London. £Q 7 DN. Engfand- 
Tel: +44 71 796 4254 Fax: +44 71 796 4255 













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FINANCIAL TIMES 


FR JDAY JULY 22 1994 


Fixed Interest Sales-UK 


Bond Division 


London 


Competitive salary + benefits 


Hambnw Bank is expanding its 
Domestic Sterling Fixed Interest 
business and is seeking a Salesperson 
to join Us small, professional team. 
The product is Non-Gita Fixed 
Interest issues to sell to UK 
institutional investors. 

The successful applicant will be a 
graduate/MBA with 3-5 years’ 
directly relevant experience. A 


persuasive communicator, who is able 
to think laterally, you will have good 
numerical and analytical skills. 
Opportunities for career progression 
are excellent. 

Please write, enclosing your CV and 
details of your current remuneration 
package, to: Charles Aibtithnoc, 
Director, Hamhros Bank Limited, 

41 Tower Hill, London EC3N 4HA. 


HAMBROS BANK LIMITED 


FLEMINGS 

FLEMING PRIVATE ASSET MANAGEMENT 

■ 

The company is a wholly owned subsidiary of Flemings and 
looks after the private cheat interests of the Group in the UK by 
providing a comprehensive range of investment services to 
individuals, trustees and private charities. Due to our business 
expanding rapidly, we wish to recruit the. following: 

■ 

Investment Manager to look after discretionary High 
Net Worth clients. The ideal candidate will be a graduate with 
at least five years’ experience of managing afmtlar clients. 
Candidates mint have a sound knowledge of international 
markets and excellent communication skills. 

■ 

Research Analyst to join select team which supports the 
investment managers. Candidates must be graduates with at 
least two years’ experience of analysing UK companies and 
sbould have strong communication skills. 

'Assistant Investment Manager to support existing 
team. Candidates should have at least two years’ experience of . 
private dtem^fovesUneormanagment.. , : 'd&Afc. v*.ClC 


Competitive salaries will be negotiated and a first class 
package of benefits will be provided. 

... ■ . 

Please write, enclosing a full cv and details of current 
remuneration to: 

• 

Ann Marfy, 

Personnel Officer, 

RO BERT FLEMING & CO. LIMITED, 

£5 Copthall Avenue, London, EC2R 7DR- 


Strategic Quantitative Analyst 

City Excellent salary + banking benefits 

Our Hu»nr is the global investment advisory and fund mana ge m ent business of one 
of die world’s largest banking and financial services organisations. With offices in the 
world's key centres, it enrrendy manages over US$30 bOHon of assets fora 

wide tangs of boih institutional and retail diems. 

They now wish to r e crui t a Strategic Quantitative Analyst to assume a senior role 
within their Tactical Asset Allocation/Derivatives unit. Your role will encompass 
responsibility for the development and updating of the Equity Market Index and 
Fixed Inc ome valuation models based upon quantitative tech n iq ue s. . . . 

You must have pr oven experience in using quantitative techni ques, co mbin ed with a 
macro economic AQ1 seL Exc el le nt commumcadon skills are e ssential for the role, 
due to the b»gh degree of customer contact and die integral nature of the function 
within the investment process. 

Qar client win offer an excellent salary and benefits package assoc iat e d with a world 
leading financial o r ga nis a ti on. 

Please ap pl y in writing, enclosing a full rarmcahnn vitae and quoting reference 039A, 
to the Response Manager, B ar ker s Response & A ss e sa m e n r,'3Q Famngdon Street, 
London EC4A 4EA. 

Your co wM boforvoardad to tkis cUant only. Pleas* indicat* *xy company 
to which your details should not be sent. 


LONDON TIB. tn-aM MTS 
MBSTOL ■ BIRMINGH AM 
NOTTINGHAM -MANCHESTER 
GLASGOW • EDINBURGH 



SPOT FX ET 0,000 

Wb are making experien ced foreign e xc h ange dcriera oa behalf of a respected 
European bosk tv lake atrtKgic potUaw eu a proprietary teas. CsiuMbIbs 
« ged will kawi *penl U leo»t 4 yenm Man aettre b«nk with a coot&ent . 

record «f profitsWity- 

CORP0RATI FJC *50,000 

Poritiwu are .vafinHe on expanding sales desks of boding banks « London 
Ur dealers with ability to develop ft maintain relationship* with food 
managers and financial institution*. Graduates with at least 5 years 
in • ,fanilar capacity with eseeQeat pricing ft advisory skill* win 
be shown preference* ' 

CURRENCY OPTION* ■ *75,000 

Major international bank seeks a self-motivated dealer to eahM ° c E ,u 


aaO K aTMHNTADVgia-BtNQ 


Bna 


FORE X 1 Selection 


I:. /.'< 


a proprietary basis hi the Interest Rate Riak area, Instrument range 
indude FRA’s. Swaps. Fntvns ft Options In aujorramndea. A stahb 
earner record with a recognised market player it prerwjnwiN. 


?lcor.<- toll Art'lioiiy fit'r.: or 
wri'K in confidence coorint; 
ret: iilO -3 ' ■ 

Tel: 071 - 36 “/ 036 T 
04> C-Ornh-ll.. 

London SC 3 V 370 . 


Investment 

Analysts 

Kleinwort Benson Securities is a major UK securities 
house with highly regarded research which is 
distributed internationally to institutional cheats. 


Composite Insurance Companies 
Wfe are looking for a qualified actuary probably aged 
27-32, with several years' experience of working in the 
general insurance field Excellent analytical snus are 
required together with strong written and oral 
communication abilities and a high degree of ambition 
to be a top-rated analyst 

For an initial discission in confidence, please contact 
Roger Harvey C LA on 071956 8096 

Food Retailing 

As a well qualified graduate, MB A or ACA you are 
likely to be aged around 25-30 with a thorough 
understanding orretailing. This could have been gained 
within the industry for example through strategic 
planning or business development as an analyst or 
through corporate advisory work Strong analytical 
written and communication skills are essential as is 
the desire to produce research which will 
become ecco yit i e dL 

For an initial discussion in confidence please contact 
Geoffrey Carr on 071 956 6565. 

Or if your prefer please write enclosing a 
comprehensive CV to; 

Ms Carol Partington, fkrsonnd Department 
Kleinwort Benson Securities Limited. BO. Box 560. 

20 Fenduzrdi Sreet London EOP3D& 


Kleimvort Benson 
Securities Limited 


INTERNATIONAL 
BANKING SPECIAUSTS 

A major international bade is seeking specialists with around 

South African investment l « n H i» y i m im 

Eastern European 
Banking Specialists 

You should ideally be an ethnic Eastern European with a 
recognis ed business degree and some experience of Investment 
banking in the West Busmen fluency m Eogfiab b essential 
together with it lent one of the frriknring languages — Czech. 
Mbk Russtee, German. Ref2324 

South African Corporate 
' Finance Professional 
We we seeking someooc with fanlepdi k n owle dg e of the South . 
African h o wnre se u i kmiu eiR to handle a ngMjy g rg uteg corporate 
Stance portfofio. Fluent In Afrikaans, you will needanAocquntmqv 
quaBfieation or MBA and ideally altnmriedge of the Inr Reflfira 
ttyau fhinV jnu mstrli flir i litrris. phssr ■iiti milli i full nr 
qiwdng the appropriate rrierence, to: Abtstair l^oo. Confidential 
Reply Handliig Service. Asaod^es in A tha ti akm. 5 St John's Lsdb. 
London EClMffiH. 

Applications will indy b* st*t to thh ditxt but pltcse ixdicaU any 
ampanyto wkkkyosr dttmh should not bt/orwardaL 


SING 



I. D. E. A. 

"the essence of market intelligence* 

BOND STRATEGIST 

LD.fLA.the premier on line analytical service seeks a 
senior Bond Strategist to join its global research team in 
London, Tbe ideal candidate should have experience in 
an analytical and/or trading role in the credit markets 
and is comfortable with working in a fast paced 
environment. Responsibilities include writing and 
coordinating credit market commentary in conjunction 
with oar team of analysts/economists, contributing to 
the formulation of IDEA medium and longer term 
forecasts and enhancing the development of IDEA 
products to tbe fixed income and credit markets. 
Widespread client and media coverage are also 
encompassed within the position. 

In exchange a competitive package is offered. 

Please forward your CV to Mike Gallagher at 
IDEA Ltd, Lincoln House, 296 High Holbom, London, 
WC1V 7JH or phone 071 430 2888 


HEAD OF DEVELOPMENT 
OFFICE ' 

Tba Duvwlopment Office ia « central part ofthe Natioaal GaBery, 

raising private money in siq>posrt at ill the Gallery's activities, 
taetorimg exMbititms, btrildnig prqject a , picture purchase aad 
staff costa, it seeks donations from companies, individuals and 
trusts, and robs schemes fat curponiteand individual 
be ne facto r s. It handles the GaHty^ pro gramme of grants. 

The Head of the Office wffl [day a creative role within foe 
Gafleay and in cultivating denon. Thcrole requires flair, 
hnagmatioa. and energy, sympathy with the GaUeiy’s objectives; 
an ability to work with a wide range of people; and good 

management skills. Fundraising experience and familiarity with 
busmeesand the arts are essential. 

Salary could stmt, Car the right person, around £40,000 a year, 
■with pension on top. The eppubstmanb' will be initially far 8 
yean, with the poaribHily of extesafoa. 

For farther details and an appEuarfioa farm, to be returned by 30 
August, please contact Card Hall. 'Dw National Gallery, London 
WC2N SDN (telephone: 071-389-1712). 

The National Gallery isan Equal Opportunities Employer. 

NATIONAL- 


GALLERY 



TF client 

TIONSHIP MANAGER 


Greek Market 
London 


Exceptional package 


The Citibank Private Bonk is one the world's largest and mast r ep u ta b le, offering 
its darts the Ml resource of an unparalleled global network. 

laqvte We now seek a highly motivated Greek spectate! to hood a p ro fe s s i ona l team 
ifam rail iff) bosad m London praviefing odvica ond support to Knondofly sophisticoted Gresfe 
efiertx. The obje di v o : to build profit through building effective rofabonsFilpt. The 
m * r to method: there is considerable autonomy to develop and implement your own 
Jo ®‘“ ,4oU ^ strategies for success. 


Aged be tw e a n 28 -36. you will speak fluent Greek, and here a reasonable qra»fr 
af English. While you may not have a background in private banking, you wifl hove 
a sound knowledge of banking products, proven marketing skills ond the abifty to 
commurtcato efiBdiveJy. Success wS oho depend on high levels of setf-motivotkin 
and integrity. 

This is a rare opportunity which demands the skills of on exceptional intfividuaL 
Consequently, the rewords are high - a generous basic salary wtH be comple- 
mented by a significant performance-related bonus and fuH banking benefits. 


•onfchfl Group, 
411 MfSqmn, 
Laedort W1X SNA. 


THE CITIBANK PRIVATE BANK 

CmBANdO 


H 


^Liability 


c£65,000 + Benefits + Car 


Central London 


Abbey National is one of the most innovative companies in ibe highly competitive financial 
services sector, pioneering a number of fixed interest rate products. 

Our Croup Bisk department is the focus for risk policy creation across the Company, it b> 
pivotal to the successful management of iht Group's interest rate exposures arising on 
shareholders' capital and the fixed mortgage portfolio, and provides advice and direction un 
interest risks in the balance sheets of the Company's growing European subsidiaries. 

As Had of Asset & Liability Management, you will have responsibility for developing the 
policy and operational frameworks necessary for the control of interest rate and liquidity risk 
across the Group. 

This win involve working with the Market Planning function and Abbey National Treasury 
Services on funding structures and prepayment hedging; identifying opportunities for product 
development; devising risk reports for the Board; and developing risk management software 
and off-the-shelf models to measure and manage risk. To assist you in these tasks, you will 
have the support of your own team of risk professionals who will be the focus for risk 
expertise and advice within the organisation. 

For this demanding, high profile role, you will need at least four years’ asset and liability 
experience gained within a major banking operation. This will have given you on extensive 
understanding of risk management techniques (induding risk modelling) and their practical 
application . together with a thorough knowledge of the derivative markets and interest rate 
and liquidity risk management. An accomplished communicator, it is essential that you also 
passes proven team leadership skills. 

The attractive salary will reflect experience and ability and will be supported by a full range of 
financial sector benefits including profit share scheme and car. To support a healthy work 
environment. Abbey National, has a no smoking policy. 

Please write with full CV to Anne-Marie Nedd. Personnel Department, Abbey National Pic, 

Abbey House, Baker Street, London NW1 6XL 

In pursuing oar policy of equality of opportunity for all. Abbey National positively welcomes 
applications from every section of the community. 


f NATIOr 


NATIONAL 

Promoting Success Through Equality 


CAPITAL MARKETS DOCUMENTATION 
£35 - £50,000 (according to experience) 

Our client is a leading investment bank with an outstanding reputation for 
servicing UK and Europeanadivities ina wide range of swaps and derivative 
products. Ideally legally qualified, aged to 35yrs, with good academic 
qualifications, you will have 3-5 yettrs experience ofcompleting and negotiating 
documentation In support of a highly professional sales & trading team. You 
will probably be currently working in a major bank earning not less than 
£30,000 base salary, bonus and benefits* 

If you are interested in this position, please write, enclosing your co, to— 
Helen Highet, Senior Consultant 


Jonathan Wren ft: Co. Limited, Financial Kecrultmcnt Consultants 
No. 1 New Street London ECZMCTPTeL 071-623 1266 Fax. 071-626 5259 


IONA I MAN U KLN I \ I C IT I V I 


FX AUSTRALIAN 
DOLLAR DEALER 

Citibank provides a comprebensivo range of financial produds ond services 
to corporate, tnsfiMional and individual customers globally. 

Our Foreign Exchange team, based in London, is recognised to be one of 
the world leaders, dealing across 1 36 currencies. 

We now seek an Australian Dollar Dealer to develop our preseme m the 
interbank market. Key responsibilities of the role will be to provide 

competitive pricing to our customer base and liaise doseiy with the GtihrmL 
Global Network of market makers. 

The ideal candidate must be a graduate with approximately foe 
wperieiK^of trading the Australian Doflor. People management experience 



Hrere write, w£h- 
anv (fools, to 
JoanmlM, 
Human famm 
Mar, 
GflxtocNA, 
336 Skoal 
tendon WC81HBL 


CmBANCG 

ftwq wl ip urfiulBu oip l o i a i 










28 


FINANCIAL TIMES FRIDAY JULY 22 1994 



BARING 

A SSL" M A N A G - M EAT 


EMERGING MARKETS 
ADMINISTRATION MANAGER 

City 

Baring Asset Management is a respected participant in the global investment 
market, renowned for the highest standards of service and a policy of 
pragmatic diversification, perhaps the most crucial elements of which are the 
emerging markets. 

We are currently seeking an Emerging Markets Administration Manager to join 
us and provide an investigative reporting and assessment service on all 
administrative aspects of investment in these markets to all BAM companies. 
This calls for someone with a thorough understanding of investment manage* 

- ment, global settlements and markets, who is able to report on operational 
requirements and provide sound guidance for the decision making processes. 
The heart of the brief is to maximise efficiency and minim ise risk by the 
provision of accurate and timely information. Highly developed judgmental 
skills, a high degree of literacy and the ability to debate and influence at all levels 
are therefore essential, as is the consummate professionalism needed to earn the 
respect and trust for this newly created role. 

This therefore represents an opportunity for a person with considerable talent 
and confidence who is able to absorb and interpret information quickly, and to 
maintain an overview of global proportions whilst being able to focus on 
specifics such as locale, trends, external influences and the enormous variety of 
factors affecting fledgling areas. It also commands a salary and benefits package 
commensurate with a role that offers the chance to have a real and tangible 
impact on a crucial area of BAM's development. 

In the first instance, please write with a foil CV explaining why you 
feel you match the specification to: Peter Phillips, Chief Executive, 
Rada Recruitment Communications Ltd, 195 Euston Road, London NW1 2BN. 
Closing date for applications: 1st August 1994. 


UK/EUROPEAN EQUITY SALES 


DYNAMIC US HOUSE 

Are you energetic, focused and reward 
driven? If so, our client, a dynamic and long 
established US brokerage house will provide 
you with the challenges you need. 

Selling UK/Euro equities to your client 
base, you will be aged 27 or more with at least 
5 years' experience. 

State-of-the-art trading technology and 
impressive global coverage will enable you to 
maximise your earning potential. 


TOP FIVE GLOBAL BROKERAGE 
We have been retained to recruit a talented 
UK/European equity salesperson who is 
currently selling to UK institutional clients. 

Supported by excellent sectoral research 
and strong primary business, you will be 
aged between 28-45 with at least three years’ 
experience selling to UK institutions. 

Your drive, commitment and team skills 
will be highly rewarded. 


Telephone Chrys Lytras or send/fax your CV in confidence: 
Thomas Cole Kinder lid,, 

1st floor, 43/44 Albemarle Street, London W1X 3FE. 
TeL-(07l) 355-1575 Rnc(071) 355-1574 


Thomas Cole Kinder 

Executive Search and Management Consultants 



APPOINTMENTS 

ADVERTISING 

to tbc UK edition 
every Wfvfarsday & Unnatoy 
audio ibe lntcmadooal adilkn every 
Frid ay 

Foe liiftirrii-.f*w» 

please ca& 


Andrew StMoymtU m 
vtimm* 


I Opportunities at Deutsche Bank I 

L 


JLou have 4 years' professio- 
nal experience in developing 
complex EDP applications in 
investment banking, treasury 
or MIS. You are hi miliar with 
the quantitative analysis 
methods in the financial world 
(securities analysis, statistics) 
and with the leading products 
in the money and capital 
markets. You have experience 
in data and function modelling 
and are already acquainted 
with a UNIX systems platform. 
You would like to participate 
in the development of forward- 
looking i n form a tion and control 
systems in the financial sector. 


you feel this description 
fits you, are highly motivated, 
have a good command of 
English and are able to work 
independently as well as in a 
team, you could be our new 
Systems Developer in our 
Organisation and Operations 
Divirion at Head Office near 
Frankfurt. Our Investment 
Banking Systems division 
develops, among other things, 
comprehensive risk and 
treasury information systems. 
This system is based on an 
.open* systems platform and 
uses the latest methods and 
tools. 


Systems Developer 

Risk Management 


As Germany's largest 
private bank and one of the 
world's leading international 
financial institutions, we can 
offer you more than you may 
think. For example, a varied 
and interesting range of perso- 
nal training opportunities on 
and off the job and attractive 
professional advancement 
prospects. In addition, we 
offer a performance-related 
salary with a competitive 


benefits package. 

Please send your application 
along with certificates, 
references and your desired 
salary to: 

Frau Cornelia E. Hulla, 
Deutsche Bank AG, 

Personal (Zentrale), 
AHted-Herrhausen-Allee 10, 
D-65755 Eschbom. 


Let's talk about it. 


Deutsche Bank 


IZI 


Economic Development Agency 

Whilst the City Council is looking ahead with confidence to 
achieving Unitary Authority Status in 1996, it has nevertheless 
decided that a restructuring in actvanoa is necessary to meet 
its existing ambitious aims and objectives to confirm Hull as 
England's Northern Euro-Port and to enhance its status as a 
leading local authority and Regional Centra. 

The Economic Development Agency has been created as part 
of a new initiative in the Council to promote and develop both 
existing and new business opportunities for the City and is 
looking to appoint an innovative and entrepreneurial Head of 
this newly created Agency. 

Head of Economic Development 
Agency 

£34,305 - £37,737 EDA 1 

The Head of the Economic Development Agency will be 
responsible for effectively managing the Agency in order to 
boost Hue's economy and development 
You will also be responsible far: 

• Creating and monitorfng new business opportunity 
policies, strategies and plans; 

• Liaising with existing and potential efierns and outside 
bodes: 

■ Providing information, advice and consultancy 
services on economic development matters. 

You must havK 

• A minimum of 5 years economic development 
experience at senior level with a successful track 
record of achievement. 

• Subst anti al committee experience. 

• A final relevant degree, efiptoma or professional final 
quafification by examination. 

• Substantial experience of working with the private sector. 

• ExceBertconvnurilrratkx^ analytical and negotiating 
skits. 

• Strong leadership and team bufldng skills. 

• The sfcffrty to anticipate change and be sensitive to new . 
ideas and trends. 

The ability to speak at least one other Euro-Unton language is 
desirable. 

A generous relocation package of up to £6,243 plus full 
removal expenses to this relatively inexpensive part of the 
Country are avaBabta. 

The post also offers a subsidised lease car or interest free car 
toon. 

Application forms and 
ftvtfwr details are wafaMo 
from the Dkector of Human 
Rasourcea, Municipal Offices, Trfppatt 
Street, George Street, Hufl. HU2 8AA, 
telephone (0463} 595207 (24 hour 
a ro irertnq service} to whom they 
should bo rationed by Friday. 6th 
August 1994. 

An Equal Opportunity Employer 



Geologist, 

Computer Services 


BHP, one of the largest and most successful natural resource companies in the world, needs a computer 
support/GIS person with a geology background for our Exploration office in London. 

The successful candidate will be responsible for conducting training and providing support for geological 
computer software, coordinating system use and database building among overseas locations, monitoring 
developments of geological surveys and international agencies and advising management on computer 
applications, policy and purchases. 

Proficiency with DOS, Windows and UNIX/IRIX for configuring, tuning and maintaining systems 
operation is required. Talent for working with plotters, scanners, digitizers and experience with Techbase, 
AntoCad and ARC products is desirable. 

Applicants should have university level education in geology or a related discipline, preferably with some 
practical field experience in minerals and an understanding of maps. Formal training or acquired mastery 
of cartography and geography is required. 

No phone calls please. 

Apply to: Gonzalo Bravo 

BHP Minerals International Exploration Inc. 

Brook House, 229 Shepherds Bush Road 
London W6 7 AN, England 
FAX No: 44-81-563-0427 


European and Indian Sub-Continent 
Capital Markets 
Competitive Package 

Our client, a leading independent (JK securities 
house is expanding its European and Emerging 
markets (Africa and Indian Sub-Continent) Capital 
Markets team in London. 

The new incumbent will join a truly international 
team advising clients across the world. They are 
seeking someone with experience covering both the 
European and the African and Indian sub-continents 
to complement their existing team. 

The successful candidate wilt- 

• Have prior experience of international banking 
and corporate finance 

• Have a good knowledge of Europe, Africa and 
the Indian sub-continent having lived or worked 
in these areas 

• Be a UK qualified ACA (first time passes) aged 26 
to 28 

* Have a Masters degree with an international and 
management focus ( 2 i minimum) 

* Be highly computer literate 

* Speak at least 3 European languages 

The position offers excellent opportunities for career 
development and impressive rewards. 

Please contact Richard Pooltj or ZAc Ide on 
(071) 583 0073 (day) or (071) 565 0187 (evenings & weekends). 
Or write u ns at 16-18 New Bridge Stiwt London EC4V «AU. 
FKc (071)3533906 


BADENOCH 8. CLARK 

recruitment specialists 


OPPORTUNITIES IN FRANKFURT 

Frankfurt remains one of the world's leading and most visible financial centres. We are retained 
by several leading global investment banks/securities houses who wish to employ new staff to 
sustain their current expansion. A significant number of vacancies exist, from junior through to 
director levels in the following areas: 

FIXED INCOME TRADING & SALES To DM250,000 

A number of our dients seek experienced Fixed Income Traders and Salespeople; to join their 
expanding operations in Frankfort. You must demonstrate at least 3 years active experience, 
proven sales (with appropriate diem lists) and trading skills along with excellent interpersonal 
stalls. Ref: TM322. 

SWAPS AND OPTIONS PROFESSIONALS To DM250,000 

We have a number of global investment banks who are currently expanding their operations In 
Germany and seek experienced Swaps and Options Traders and Marketers. You should possess 
a nwwnum of 3 years experience In either Interest Rale, Currency. Commodity or Bond derivative 
products. Ref: TM323. 

EQUITY AND EQU ITY DERIVATIVE SALES DM80 - 200,000 

In order to fadlitate their planned expansion in Germany, a number of our dients, all major 
financial institutions, seek experienced equity and equity derivative salespeople. You will be 
able to demonstrate an impressive track record of developing profitable client relationships as 
well as the ability to attract new dients. Those candidates covering the UK Continental Europe 
and South East Asia would be of particular interest Ref: TM321. 

TREASURY MANAGEMENT DM1 20 -160,000 + Benefits 

Two roles have been identified at (fivisional level, the first involves development of the off balance 
sheet function induding FRA, Bonds and Swaps and running a team of seven staff. Ybu will also 
develop a Risk Management Strategy. The second role will support the first Ref: JA106. 

PRODUCT' CONTROL/TRADE SUPPORT DM95 - 125,000 + Benefits 

AAA rated global investment bank has several opportunities for experienced accountants who 
can demonstrate prior knowledge of either fixed income, equities or commodities gained 
within public practice or investment banking. The work combines P&L reporting with risk 
.analysis. Ref: JA109. 

INTERNAL AUDIT/POLICY CONTROL DM80 - 120,000 

Expanding division of a prestigious US House requires five qualified individuals at various 
levels to develop reporting structures for the capital markets and internal accounting divisions. 
Excellent training is provided. Ref: JA121. 

Applications are invited from both German nationals and EEC citizens seeking permanent 
careers in Frankfurt. Fluency in German is useful though not essential. Excellent prospects 
exist and salaries will be competitive. To discuss these career opportunities please contact 
fonatkan Astbury (evenings & weekends 071-702 96721 or Tony Marshall (evenings & 
weekends 0708 733007} on 071-629 4463 quoting the appropriate reference number. 


HARRISON 
^WILLIS 


AMSTERDAM 

Dutch Equity Sales 

Our client has a long established name In the Dutch market with an 
excellent reputation (or equity research. As an Integrated part of a 
major international securities house they now seek a high calibre 
individual to further develop their sales of Dutch equities. 

The role will involve Joining a successful sales team based In 
Amsterdam whilst liaising closely with the general European team In 
London. The task will be to provide a direct service on the Dutch 
market and increase sales with UK based institutions. 

Candidates should be in their late 20s or early 30s with at least three 
years Institutional equity sales experience, possibly gained as a 
European equity generalist but ideally as a Dutch specialist. Knowledge 
of the Dutch language will be an advantage but Is less important than 
demonstrable sales ability. 

For an initial discussion in confidence please contact us quoting 
reference 4967 at 210 Cousin Lane, London, EC4R 3TE. Telephone 071 
236 7307, or Fax 071 489 1130. 

STEPHENS 

SELECTION 


1 A STEPHENS GROUP CONSULTANCY 
I Leaden Edlnbagfc far Yarii Hong Knag 


PYRFORD INTERNATIONAL PLC 

Worldwide Investment Managers ^ 

Career Opportunity - Equity Potential 


PT1FOKD 

INTERNATIONA I 



[Hi 






* 

We are looking for a special person - someone with the ability to effectively communicate PyrfortTs 
investment process and strategy to an audience of dients, potential clients and investment CTwyuimma. 
Applicants may presently be employed in an Investment management company, a firm of consulting 
actuaries or related discipline. Prior marketing, experience is not essential but commitment to success 
is. 

It is essential that the successful applicant have the ability to perform within a small committed team 
and require minimal supervision. The role can be tailored lo meet the individual's special talents and 
ambitious and provides a platform for a solid career path amongst a dynamic group of people. 
Remuneration will be sufficient to attract the right person. An equity incentive is also offered. 

The Company 

Pyrford is an independent, small and growing global investment manager specialising in the pension 
fond area. Employing 27 people in total the company has five worldwide locations and operates an 
integrated investment management service with a distinctive product. 

Please write wuh full CV and daytime telephone number to: 

Bruce L Campbell, Group Chief Executive 

Pyrford International Pic, 79 Grosvenor Street, London . England W1X 9DB 




< > I 


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FINANCIAL TIMES 


FRIDAY JULY 22 1994 



i'KDAM 


lna: 1 > Sai,s 




Junior Fixed Income Fund 
Manager 

London c.£30»000 + benefits 

f ‘txwerful, global investment manager wjfo offices in the world’s key 

ofbothi n ^f ' , Cm T CDd5 : over US$30 biffion of funds for a wide range 

inrfn atrJ ^ji ? 1 ^ 00 ' 8 ^ CljentS. Wttfa the polarisation of the fund mawagfmfrnT 

nn«n'^Lj CTO ^ obai Providers and small niche players, they are uniquely 

irwestt*^! "*1 * multi ' m ^ rkei ’ multi-product business able to deliver tailored 
investment solutions. 

ongoing development of die business, they now need to recruit a Junior 
v_ , °onie Fond Manager. Your role vrifl entail-. research and analysis in European 
markets; the day-to-day management (initially im^er supervision) of a number 
oi mui u-cmtenc y bond portfolios; contributing to the formulation of global fixed 
rncorne straogy; and supporting the activities of the global fond income team in foe 
servicing of e x isti n g diems and new business develop ment 

You will be a graduate, ideally in your mid~20s, with ar least 3 years’ experience in 
cial martets, and s om e experience in fixed income fund management, either in 
a research or fund managem ent role. You must have proven analytical a keen 
attention to derail and be a strong team player. 

This is an exciting role for a well motivated anrf p roa c t i ve individual in a challenging 
environment. Remuneration will include a competiti ve base salary and the benefits 
associated with a leading organisation. 

Please apply in writing, enclosing a full curriculum vitae and quoting reference 040 A, 
to the Response Mana g er , Barkers Response & Assessment, 30 Farangdon Street, 
London EC4A4EA. ’ 

Your co uhH be forwarded to this client only. Please indicate arty company to 
which your d etail s should not be sent. 


LONDON TKL *71-*K OStS ' 
BRISTOL - HIKMINGHAM 
NOTTINGHAM - MANCHESTER 
GLASGOW ■ EDINBURGH 



RESPONSE HANDUNO 


GRADUATE KBCKLHTMHNT 
HMP1XJYHB COMMUfflOVnCMS 


BRmSH-AMERICAN 
CHAMBER OF COMMERCE 
CHIEF EXECUTIVE OFFICER, New York 

The British-American Chamber of Commerce in New York and London is a fast 
growing private sector organization which provides services to the transatlantic 
business community and a forum for the promotion and discussion of transatlantic 
trade and investment issues. It has a membership of 700 corporations represented by 
3,500 executives in the New York and London areas and has professional staff in 
both cities. 

The BACC is a key member of the recently created British- American Business 
Council and works closely with the Council's transatlantic Advisory Board 
comprising the chairmen and chief executives of major British and American 
companies. 

Responsible to the Board of the BACC for the overall management of the operations 
in New York and London, the CEO will lead the continued development of the 
Chamber, its contribution to the Britisb-American Business Council, and the 
provision of relevant services to its members. Candidates will be expected to 
demonstrate high level communication and marketing skills in addition to general 
management ability and the diplomacy required to run a voluntary organization 
composed of senior international executives. Significant transatlantic business 
experience, preferably in a service business, plus a high degree of energy and 
enthusiasm, will be essential for this position. A base salary up to $160,000 plus 
benefits will be offered. 

Applications and recommendations for this senior appointment should be made to: 

Peter M. Felix, CBE 

Chief Executive Offioer 

The British- American Chamber of Commerce 


52 Underbill Avenue 
New York, NY10022 


Tel: (212)661-4060 
Fax: (212) 661-4074 


Swiss Bank 
Corporation 


Global Fixed Income Portfolio Management 

Private Banking 

Swiss Bank Corporation is one of the world's leading international 
investment banks. Its Private Banking Division offers investment advice and 
discretionary management on a global basis to a sophisticated client base 
of high net worth individuals. A meed income professional la now required 
to strengthen the London based investment team. 

The primary focus of the rote will be the management of international client 
portfolios In the global bond markets. Additionally, the successful 
candidate will be expected to work closely with the marketing team 
involving direct contact with clients on occasion. 

Candidates should be graduates with at least three years experience in 
International fixed income. Ideally gained within a private banking or an 
institutional hind management environment Excellent co mmuni cation 
skills, both oral and written, are essential together with the necessary 
gravitas and maturity to relate to high net worth clients. A competitive 
remuneration package Is ottered. 

For an Initial discussion in confidence please contact us quotlngreference 
4959 at 20 Cousin Lane, London EC4R 3TE. Telephone 071-236 7307 or 
Fax 071489 1130. 

STEPHENS 

SELECTION 


! A STEPHENS GROUP CONSULTANCY] 
I lata Edtaborab New Yoffc Hoag Knag I 


marketing PROFESSIONAL ___ 
interest rate derivative products 


London 


wiihrepresenudoo in o>rer 60 couimies.SocfeteG4nertk! in tbe UK provides banking tnd 

tavegmcniacNiccaDdscrriccs to corporate and in stimt tonal chc n B, 

Hie Position TbesucttssfiilcandldaiewiUbcresponsibiefOTiafcsofiniaT estgiccIc ri 


The Team 


Hie marketing professional «iD be pan ofiheSoci^ Generate group'; 


Qualifications 


i minimum of two years 


rmuteringeapcrienccin feierastratt derivative praduc& 
PleMMldyoorcMKrclelsia!' in confidence ax IfiutacB'nca.'tad of Hi Bnl nI l * soun:es t 

SodeleGcncnlc.60Gnwoclll“ch Sweet, InndonEOVOHD. 


EUROPEAN EQUITY 
STRATEGIST 

A leading global investment bank has created a new 
position within its Economics and Equity Strategy team. 
The position is based in London, and will offer the right 
person enviable career prospects and the opportunity 
to work with a team of talented and established 
professionals. 

The successful candidate will be educated to Masters 
Degree level, have a strong economics or financial 
background, and a minimum of two years work 
experience in financial market analysis. He or she will 
possess excellent quantitative skills and tremendous 
enthusiasm for the macro analysis and forecasting of 
Europe's equity markets. Thera is also a requirement for 
a high level of written and verbal presentation skills. 

if you fit this description, and would relish such an 
opportunity, please send your detailed CV, with 
covering letter and any relevant examples of work, to 
Box Number A2118, do The Financial Times, Number 1 
Southwark Bridge, London SEX 9HL 


INTERNATIONAL 
TRADE FINANCE 

Doe to a clear commitment lo International Trade Finance in the 
Emerging Markets, this established European Bank requires an 
additions] specialist in executing and structuring complex deals. 
Current expertise with the fall range of products, negotiations 
and the ability to Market and build Customer Relationships is of 
prime importance. 

Yon will be a pro active fully credit trained Corporate Banker 
who is looking for a decisive career step which will lead into 
Management. You should have at least 2 years experience 
specialising on Trade Finance, aged 26-33, of graduate calibre, 
PC spreadsheets and languages helpful. Excellent salary package 
will be offered to the successful candidate. 

For further details please call Mike Blundell Jones 
on 071 404 6292 or write to 
Absolute Recruitment Lid., 
Staple Inn Bnildings North. 

tfABSOZ VTB ^*"5 

o RECRUITMENT Fax: 071 404 6273 


L twdftRjW* * »-*v 4-» f W* 



Global Asset Management (GAM) provides professional 
investment expertise to investors around the world. 

Currently managing approximately 58 billion for investors. 
GAM, with offices worldwide, offers a dedicated commitment 
to performance in portfolios using GAM's mutual funds which 
harness a blend of in-house talent and sub-contracted outside 
professionals. 

GAM USA is currently seeking an addition to its Private 
Client Portfolio Management staff iu the New York office. The 
position is responsible for managing portfolios of existing 
clients and developing new business. Knowledge of 
international investments as well as excellent Interpersonal, 
communication, analytical and administrative skills are required. 

Interested candidates should submit a refiune to: Clark B. 
Winter, Jr., President, Global Asset Management (USA) Inc., 
135 East 57lh Street, 25th Floor. NY. NY 10022 


\ 


FRENCH SPEAKING INTERNATIONAL 
EQUITY SYNDICATE EXECUTIVE 
To £30,000 + Banking Benefits 

Outstanding opportunity font bffingus] executive to work for thfe major bonk. Liming 
with sates teams based in France. UK, Europe, ihc USA and Japan you will be 
informing djem of changes in banes and receiving teeduefc. There b direct dieni 
optima as eil as contact with counter pans ia ini creational homes. No day will be the 
samel A hanking background b essential (preferably SFA registered and with sales 
soppon or sr nl B mrnK experience). Long term pros p ects are exceptional. 

• 


aggsww -nwmmmm 


Tet 071-734 3380/071-355 1975 


Fax; 071-499 0568 


IpjpiiS 5 


Tochnical Analyst 


Major US House seeks a dynamic, txrideri, N^iy mobbed riMdual t> snk ndft 
to norntatr trades. The kfed casta# mud poena diw and Mtabn, at least 3 
least aperients and bo 2WCL Gcrtad Stephen Donrwfan on 071-2471875. 


Far East Eccncmsts 


From ESOK- 


SuartTopHtwBBasBEhasaatitiwdairifitqieriBradEaiiiarbbtapDBltansIn 
Tokyo 2nd Hong Kbug. Ooifta Ssptan Dometan an 071-217 1875. 


Ccrccrste Finance- 


Several Top Houses require experienced graduates in Corporals Finance, 
ftqjea Rnanca U A A - Prhafeafion - among rtaftete. Optimal Age 25 to 35. 
Contact Costa Kanefas on 071 -247 1675. 




Tip Oy Hanes require Money Mata* safes people towkaf a# CJ*„ CD* Hepos 
tit Ptritore wattto urge tan Juries to Saw toitL Eropean taguageB would te 
a deinb adnxage In some cases. Haase cd tort OComor. 


Fixed income Sales :o Switzerland 


Uajor investment Houses require experienced sties people tar Swiss coverage. 
Phase cal Marti ODomr. 


Senior Sale-s 


Ow dent a Top hvastmau House seeks an experienced candktato to l» based In 
London. Musi be atie to speak Korean. The successful person *9 be Being 
CapM Market product; to a dent base h to UK. Plsase cal Sue Stows. 


Derivatives Market mo 


Several top names In the CUy require experienced kvMduats invohrad with 
fcwatred prated West/ agtetawm 25^ ard a can 

be advantageous h some cases, ftese cal Mm Stone. 


Fixed Income Seles 


Several bating Houses seek experienced mfi-product sabs people ta cover LK 
(nstaufiomd Accounts. In some cases Van spedaSstB are required Please cal 
RttmdWud. 




Several Top (kaffly Banks oe swUng Gorammwt Bond Traderavtih 2-3 years’ 
experience. Empfeft being Gotrenjf.Span and Ba^PteasactiB^Wanl. 


Laatfog&iq>ean9afcsaefeeRappi3tiwfeanUmniol3yea[E , Qiipaience 
to tottnaionti bond nates (Qri Bends and Euros). The successful candfcfete 
kka^y ml spatitluenlPiencfi end irdfaly be timed to Pai& Cal Andrew Stone. 


REPO SALES/TRADING; FIXED INCOME SALES TO 
GERMANY, SCANDINAVIA, FRANCE etc; FUTURES SALES; 
EQUITY SALES: SWAPS TRADING; EMERGING MARKETS 
SALES/TRADING: EXOTIC OPTIONS TRADING; 
ORIGINATIONS MARKETING; CAN $ TRADING; US 
TREASURY SALES/TRADING; FRN SALES/THADING. 

For iurtter detafla please cal on 071477 6488 or sentfax your CV to us. 
AfiappHrattorearetraiWtnthetiitaB^ 

For enqniitof outside buafawn haunt rafl 0BMH1831 

CAMBRIDGE APPOINTMENTS 

232 Shoreditch High Street. London El SU. Rut no. 071-377 0887 


Vie*.: r.ie'c*tan: Bark ,5 a Lonaon- 
base-j .i':e-na:.oral morananr Bonk 


xkf'Co. c<*nudcrv West Deutsche rniatneic lor uo 

LartoesMrti ■Ej-omIAG. Ari>cn -s The Role 
m sum envnea a,- vvesueutsene Kov tr&uonjupiii 


! Sales Manager | 

1 1 

i Emerging Markets j 


The Global D>itnbuticn Unit ic. a Soier, Managei ro 

jam trw lejn'i Lenoori and contnbum to tho promoti-sn of 
thti Bank as ono of inn top pijvuis .r t*io emivging tc>nd 
maiKwit lor U3l<n AmcfiC.in ioouov. 


ana SudMw,idetnsche 


Tna DijvQiQpirtS Cuunirw Finance 
Group i^CFG' >5 nsm in LCinacm 
with IC’Cai offices >n Aicentine. 
Brazil, Chue. Me-uco ana 
venecue'a. ana represenut on m 
Nev< York Its Global Oivnnulian 
Uni; has respcnsibiiinr lor sates .tnfl 
rnarkeT-ng of Latin Arrwi.cjn aeni 
prodjcrs. JokOlopment of iiuesiw 
reiatiOnshiOS pricing arc 
placemen: or new issues and 
placing structured products in the 


KOV (fi&DonsiB'Mv will Dn lor the c'ucijn’i'rit of ni*v» 'ys.uos an-d 
seconds:, reia'to: debt :r. EuioiKon tmitriciai insti'ut<ens 
fTiKlucts iri^ipdn eurebc^d;. morn-* ma-Kix instruments ipca* 
CuiiuiKv insiruntents B'-id proBrja.,: .imj r.trtitt'j'tti 
t-ansactons (including (o, ei.t. ji-u .»nd if.-i-l hflckni (i.iniacncinsi 
Thu individual w<n also t?c ri-spor-'.iblo loi ■ Svni tfoveldiwril 
with crikate twnl inp giCupn. t«n.i rn.va.;>'*r- .rod ■i»i.iil«itienJ | 
■nvi.isler:: m EuroDtr. 

The Candidate 

Appmcanc-. will chi of prdOuaTo cal’Llit' wii'i 7-:i (i.i^rn.T.;g 

of (ni'O incortiC sales, and q coniisooiiiVrnj client w •* «?ti' 

u-piiinmco m tfnimD<ng nuiiols wuul.i r*i» nsolul jnc I.iyvi W 
piOfiCHTOCy dll flOvuntu^n 

Package 

Saiaty* *'11 ho ,*cn»»(iri;uiW \v(h stilis .iiul with lull 

tank in,; bt.rHkf.is ttemu*. p.i,niMnls and ■ iib-.e.nrons cw.-er 

(MO^iif'.icn Aiil in upvii pni(cuUkii;ii iihimti:. ci.vre 

Doing :.iKoo tufumo and nn«\ ciienl I ul.ll-.'f’ ii.p*. 

P'tusu Opphr inC5nl.ii*ni/i i'-n closing .1 Ini' >: «. to Mrs Jul-d Ur^OkS 
MorvKfui FersonrH.'! \WM Murdianl Bank L.rtl. 1 , 1 . 1 . .11-30 
CibCOCHiildi Slil'nl LCtVtM' llrl ij *t TTO WUtl 

W West 

1^1 Merchant Bank 


INVESTMENT CAREER 
OPPORTUNITIES 

IN SCOTLAND 


THE COMPANY 


Based in Perth and one of the UK's major insurance companies. General Accident pic employ around 25.000 
people in 45 countries worldwide with a branch network throughout the UK. 

As one of tho UK's leading financial institutions, we are major fend managers in our own right with over CTbrv 
of funds under management from Perth. 

The growth of the companies funds under management and in particular the overseas equity investments has 
created two positrons that we now seek to fffl. 


THE JOB 


Fund Manager 

A top quality individual aged mid 20s to mid 30s with at least 5 years experience oi major equity markets re 
sought tor a key role in the Overseas Equity section. Applicants should be at least Associate members of the 
IIMR or equivalent 

Analy st 

An excellent opportunity also exists ter an ambitious high potential individual to work as an analyst in die 
Overseas Equity section. Applicants should be at least Part 1 qualified IIMR or equivalent. 

We have deliberately set a wide experience range for both positions as we can offer a great deal in gaining 
experience and developing skills. Our emphasis in selection wU favour quality and die potential lor personal 
development within a dynamic environment. 

Starting salary will be related to experience and wil be very competitive. 


THE BENEFITS 


The company offers a first class benefits package which includes performance related pay, subsidised 
mortgage, profit sharing scheme, norveentributory pensions scheme and assistance with relocation expenses 
where applicable. 

The purpose built Head Office further provides excellent working facilities including an extensive sports 
complex. 

Please apply in writing with full Curriculum Vitae and present salary delate by 29ih July, 1994 to: 

Doreen Fell 

GA Investment Management Services Ltd AfW 

General Accident, Affler 

Pitheavfis, Perth, 

Scotland PH2 QNH General Accident 




INTERNATIONAL TREASURY MANAGEMENT 

We are looking to strengthen our team by recruiting a 

PORTFOLIO MANAGER 
for International Fixed Income 

Responsibilities 

The successful candidate will manage the Sandoz Group's foreign-cmTency bond portfolio. 
He/she will devise an investment strategy on the basis of his/her assessment of the money, 
capital and foreign -exchange markets and implement it in collaboration with the Group 
Treasurer. Derivative instruments are also used to achieve the desired investment strategy 
and the corresponding extent of interest-rate and currency exposure. Primary responsibility 
for the selection of the respective investments will lie with the Portfolio Manager. 

Requirements 

Candidates should have a university degree, e.g. in economics or mathematics, or formal 
training in banking, plus several years' experience in banking or industry. Some knowledge 
of German, initiative, and negotiating skills are further attributes, with the ideal age around 
30-35. 

The position will be located in London, following 6-12 months' induction at corporate 
headquarters in Basle. 

Applications in writing, should be sent to: 

Sandoz International AG 
Personal dienst. Ref. 4203, 

Postfach, CH-4002 Basle - 

Tel. +41 61 324 40 76 (Ms Baumli) A SANDOZ 


A medium size Swiss private bank specialised In the management of 
mutual funds and in assets of high net worth Individuals seeks a 

Senior European Equity Portfolio 
Manager/Analyst 

based in Zurich 

The successful candidate will work together with a team of experienced asset managers. He 
or she will have specific responsibility for certain geographic areas, including the UK and will 
be a member of the asset allocation committee. Skids in developing quantitative models and 
in technical analysis are required. 

Candidates should hold a higher university degree, have at least seven to ten years 
management experience In European markets, and be in their mid, late 30s. Important 
attributes include strong analytical and communication skills, independence of thought and 
the abfflty to wortc as part of a highly motivated team. 

Pot this position competitive base salaries will be complemented by a performance-related 
bonus plan. Please send a tun CV with a recent photo, details of your current remuneration to; 

BaxA2114> Financial Times, 

One Southwark Bridge, London SET 9HL 

















30 


FINANCIAL TIMES FRIDAY JULY 22 1994 


I 


Opportunity for Returnee to Jordan 


The United Nations Relief and Works Agency far 
Palestine Refugees in the Near East (UNRWA) 
wishes to recruit a Senior Auditor (BDP). 

The Job will principally comprise EOP auditing 
including evaluation of the operating environment 
And application systems, technical support for and 
training of audit staff, analysis and design of computer 
assisted audit techniques, evaluation of software 
packages and financial and operational audits. 
Essential qualifications indude: 

University degree in computer science or related 
field; membership in a professional body of 
accountants; ten years auditing experience wiih a 
mix between EOP auditing/security and financial, 
operational program auditing; experience with PCs in 
a LAN and distributed computing environment; 


working experience in both the user and computing 
areas; and experience in training staff. 

This senior local staff post in Amman, Iordan, carries 
an attractive and competitive package of salary and 
benefits. In certain circumstances, appointment and 
separation travel may be payable and a limited 
amount of personal effects may be shipped on 
certain conditions. 

Applications should be addressed to: 

The Coordinator 

UNRWA Headquarters Brandi (Airman) 

P.O.Box 700 

A-f 400 Vienna, Austria 

or faxed directly to Amman, Jordan (No. •• 9626 - 
826177) not later than 1 5 August 1994. 


UNITED NATIONS 


NATIONS UNIES 


GRANDFIELD LTD 


Grandfieid is a specialist corporate and financial public relations consultancy, 
formed last July by an MBO of an old established firm, which is now 
wholly-owned by its Directors. 


We are moving shortly to new offices in the City, and we now wish to recruit 
experienced people able to make a significant contribution to meeting our 
clients' communications challenges. 


Candidates may come from a wide range of backgrounds. While these will 
include communications consultancy and in-house positions, they may also 
involve careers in merchant banking, the securities industry or the media. 
Intelligence, and a high degree of written and verbal skills are prerequisites, 
together with a desire to participate in the growth of a business. 

Grandfieid offers ail its staff a performance -orientated remuneration package 
which at the highest level may include access to equity. 


If you want to help build on our initial success, please write to: 

Brigid Wilkins, Grandfieid, 4-12 Lower Regent Street, London SWlY 4P£. 


EQUITY DERIVATIVE SALES 


We are an independent firm of broken providing value-added services m leading financial itsuliiiions in UK and Coniine nlal 
European equity derivatives. One to expansion, we seek a canadidatc who will have a minimum of (wo yean experience in a 
similar rale and should be able (o oomm aureate effectively with fund managers and traders alike. The ability to generate original 
trading and hedging ideas will be required, as will tbe ability to increase existing levels of business. Our need is for an individual 
who can work as part of t team and who is results orientated. Previous experience of LIPFE, MATIF, 0TB, etc. and OTC 
products would be preferable. Knowledge of a European language is desirable. 


TRAINEE EQUITY DERIVATIVE SALES 


This position would suit a recent graduate (Econotnica/Btoiness/Maths) or an individual with City experience wishing to 
progress into derivative markets. The ability to grasp new ideas &. concepts quickly will be essential- Computer skills 
would be an advantage. 


Please send C.V. aad covering letter to 
I^o Bum riiMflidi, Sfwwfaf Swndtlw Ltd. 
BeB Court House 

II BtomlMd Stmt, Loudon EC2M 7AY 


Spinnaker 

occunn« 


HEAD OF FINANCE 


SW1 


£28-30, OOO 


The new post of Head of Finance has been created following a restructuring of 
this prestigious Society's administration. Reporting to the Deputy Executive 
Secretary, the job holder will be responsible for the maintenance of the 
Society's financial records, managing the computerized accounting system, 
integrity of the financial controls, budgeting, forecasting, the production of 
accounts and the provision of management information and accounting ser- 
vices to Officers and other senior managers. 


The successful candidate will be a chartered accountant who is an experienced 
manager with good interpersonal and problem-solving skills and who has the 
ability to communicate effectively orally, in writing and in committee. 
Experience in the public sector or a not-for-profit organization would be desir- 
able. 


Further details from Nicketa Davies, 071-839 5561, ext. 313. Closing 
date for applications, comprising a c.v., salary history and letter indi- 
cating how you will suit the post, by 8 August 1994. 



c l7ze < 7loi/a / c Society 


Financial Controller 


Competitive Package 


Shropshire 


We are a market leader in the manufacture of materials for the FMCG 
sector. Entrepreneurial in style with a heavy emphasis on effective 
teamwork, the company wishes to appoint a Financial Controller to take 
a frontline rale in a small management team responsible for the day-to- 
day control and direction of the company. 


As the senior financial manager in Europe, you will be engaged in tasks 
ranging from effective management reporting to the analysis and 
evaluation of company performance and profitability. 


Flexible and team orientated in outlook, you will have the necessary 
technical skills to make a significant input to the general management of 
the company. 


If you are a qualified accountant with manufacturing industry experience 
gained in a small to medium sized organisation, we would like to hear 
from you. An ability to speak German or French would be advantageous 
though not essential. 


Please write, with full career and salary details, to Managing Director, 
Trigon Packaging Systems (UK) Ltd, Stafford Park 9, Telford, 
Shropshire, TF3 3BZ Telephone No. 0952 290471 Fax. 0952 290950 


SENIOR 

CORPORATE TRADER 


FOREIGN EXCHANGE SALES 


Prudcntial-Bache Forex (UK) Limited are seeking an experienced 
market professional to join their London-based dealing team as a Senior 
Corporate Trader. 

This is a senior position and ideally candidates should be aged between 
28 and 35. Applicants will have a minimum of 5 years experience in the 
industry and a proven track record in Foreign Excha nge Sales. The 
successful applicants will be able to demonstrate a high level of 
personal motivation and ambition, as well as possessing strong 
presentational and communicative skills. 

Day to day duties will indude servicing the existing client base but 
great emphasis will be placed on developing new business 
opportunities. 

A complete and thorough knowledge of spot markets is essential. 
Experience of technical analysis. Futures and Options markets is 
desirable. 


Competitive package i or the right applicant 

Please reply in writing eradosing your Curriculum Vitae to: 


Personnel Department 
Prudential -8 ache Forex (UK) Limited 
9 Devonshire Square, London EC2M 4HP 

P rudent ia l- Bache Fwexi g 

(UK) Lanced V 


APPOINTMENTS WANTED 


Corporate Finance/M&A/ 

Development Capital 

UK merdunt bunker, MBA, reMdent tor 12 yrare in France with g »p e n < m of croca- border 
GxpMatePfaunxand Development Capital activttte* seek* irtanstmg opportunity on a 

foO-hme or consulting basis. 

FuD mobility ivirtun Europe. 

Write BoxA2ii2, financed Ttnea, 

One Southwark Brtdga, London SEt 9 HL 


MBA BSc. (earn), 27 

seeks a potfbon as an Eaecutir* Ambtanl 

to a Maruging Director /Entrepreneur. • 
English, German It SpanWi OucuL 
working knowledge in Frendv • excellent 
cmununicoOcxi Ir presentation sklUs * 

p n gBp t air mobile. 

Fax on 071 40V737B or write to Boa A21 1 7, 
Financial Timm. One Southwark Bridge. 
London SEl 9HL. 


RUNNING INTO 


PROBLEMS? 


Independent trouble-shooter, 
(NL-46), MBA-fin. background. 
IS years of interim-/ 
consulting jobs. 

Any challenge - Europe 
Fax: NL-34978188 


Desperately 
Seeking Banking 


Chartered Surveyor. 27, seeks 
challenging new position m property 
finance with a Merchant or 
1 Investment Rsnlr Skills include but 
not limited tin 


TROUBLESHOOTER 
Specialist in Getting 
the Job Done 


* Excellent knowledge of the UK 
property market especially Central 
Londo n 

■ Strong financial modelling and 
analytical stalls 

■ Detailed knowledge of innovative 
property financing 

* Property investment and 
development background 

■ Motivated, eaagctic&icsohite 


Having completed a programme 
of divestment for major PLC well 
experienced Chief Executive now 
seeks new challenge from abort 
or tong term assignment in UK or 
Europe. Hands on invotvemem 
at the highest levels in 
Tnamifart m ing_ construction and 
motor vehicle distribution. 


Write to Bax A2103, Financial Times, 
One Southwark Bridge, 
London SB l 9HL 


Phone or Fax 0920-460350 


Wagon Industrial Holdings pic a a broadly bued engineering group with 
more thm ifiOOempSoym stover 3Q locations in the \JK and Europe. Our mam 
activities an m storage and retaS equipment engineering and automotive 
products. 


Group Management 
Accountant 

Attractive Salary + bonus + car . Telford 


Based a our Tefford Head Office, tea « a (Ml track appointment vtech 
has arisen following internal promotion and which offers real career 
development opportunities. 

Reporting to the Group financial CpntroNer you will, as a member of a 
small professional team, provide support to the Group Executives to enable 
them to monitor and enhance the performance and proftabity of operating 
subsidiaries. Other key taste wffl involve the integration of acquisrtiorB and 
the development of activity based coaling methodologies across the Group. 

You will probably be a graduate ACMA, ideally aged early to mid 30\ 
with a sustained record of high achievement hi a manufacturing environment. 
A wSlingness to travel and work at a variety of locations in tee UK end 
mainland Europe is essential Preference wffl be given to careftfetes with 
experience in implementing activity based costing management systems. 

WO offer an attractive salary, bonus, car and a comprehensive range of 
benefits inducing relocation assistance in ap pr o pria te tinunstances. 

Ptoase nod a fid CVgMng sabry Malt and coming letter stating 
reauros why you shniU Iw aalacted to; Afan Hodsoa, Group pBfsoonsi 
Execsthro.HagMbdostrialHoidfogspJx^HaMaseKoasaLHate&eU, 
Tefford, Shropshire, TF74PB. 


NEWLY QUALIFIED ACA 


Package : Circa £25K + Benefits 


Based at Docklands head office. Woodchester Credit 
Lyonnais pic, part of CrSdit Lyonnais Group, is seeking to 
appoint a Profit Planning/Technical Accountant. 
Responsibilities will include pricing strategy in the 
financial markets, being influential in ensuring compliance 
with the latest technical standards issued by both 
accounting and other statutory bodies and the evaluation of 
new products and opportunities. 


The successful candidate must have an extensive 
knowledge of budgeting and taxation, excellent technical 
ability, a high level of numeracy and comprehensive 
communication skills. 


The position will provide considerable interest for an 
ambitious person who is prepared to develop the role in a 
successful and expanding company. 


Please note that a no-smoking policy operates throughout 
the company, please apply in writing, enclosing your C.V. 
to the Personnel Dept, Woodchester Credit Lyonnais pic, 
Woodchester House, Selsdon Way, Docklands, London 
E14 9GL 


WOODCHESTER CREDIT LYONNAIS 


GREEK EQUITIES 
SENIOR RESEARCH ANALYST 


Our firm, a leading Greek Brokerage House, member of the Athens Stock Exchange, 
is seeking to recruit a senior analyst for Hs highly regarded multi member team of the 


recearch and analysis depart 
pany analysis for its internal 
The chosen candidate, id 
age limit will have||||nirm| 
listed shares. Kncjj gfa elp 
beneficial and flgS|| ij||oi 


rent to take responsibility for producing In depth com- 
pi clientele. 

illy a graduate in finance or related subjects with no 
of two years prior experience in the analysis of Greek- 
talysis in US, European or Emerging Markets stocks is 
English and Greek is required in order to effectively 
xxmm* w Europe or 


fiance In ac- 
|n particular 
i/or Banking 
Actively with 


clients and other team members is a must Strong interpersonal and public speaking 
skills are also required in order to assist with the firm's international marketing. 

The position provides a high internationally competitive salary and benefits packa- 
ge, including significant bonus potential. Career prospects are excellent To apply, in 
strict confidence, please write enclosing a copy of your curriculum vitae and recent 
photo to Mr. Alexander Moraitakis at the following address/fax below. 


NUNTIUS Hellenic Securities SA 

2 KOLONAW SQUARE, 106 73 ATHENS GREECE, 
TeL (301) 3624 902-5, fax: (301) 3637 893 / 3636 100 



CLIENT INVESTMENT REPRESENTATIVE 


The Company is part of a major International Private Bank operating in 19 locations 
worldwide. 


Our Investment Department currently has an opening for a Client Investment 
Representative who will be part of a team located in Guernsey, Channel Islands. 

Our requirement is for a talented and proactive professional with at least 10 years 
investment management experience and more recently at senior level. Ideally 
candidates should have a recognised degree plus IIMR or CFA equivalent professional 
qualifications. 

You will be primarily responsible for maintaining and developing our private banking 
client investment management relationships and will also have marketing and new 
business responsibilities for our investment management service. 

Hie successful candidate will be offered a competitive remuneration package including 
relocation and housing and will enjoy the benefit of living and working in a low tax, 
attractive offshore financial centre. 


If you feel you meet all the above criteria please write enclosing a detailed Curriculum 
Vitae to: 


Paul Doyle 
Managing Director 
Courts & Co (Guernsey) Limited 
P O Box 16, Coutts House 
Le Truchot, St Peter Port 
Guernsey GY1 4 AH 


DIRECTOR OF RESOURCES 


f w 


LONDON SE1 


£36K 



Our Client is the Institution of Environmental Health Officers now occupying new offices 
In Southwark dose to Waterloo station. 


An experienced, qualified accountant/manager Is required to work closely with the Chief 
Executive and control the financial, personnel and rr services. This appointment wffl 
involve advising on the formulation of corporate policies and directing their 
implementation; it wffl also indude all aspects of property management 
Applicants must be able to demonstrate: 

• current responsibility for alt aspects of managing a finance and accounting 
function with a small team; 

• confidence in dealing at Board level internally and with financial institutions, 
lawyers, etc. externally; 

• flexibility of approach and speed of response; 

• maturity, reliability, and strong team management skate; 

• femBlarity with spreadsheets and databases. 

Please write enclosing CV with an Indication of current salary to Michael Leaney. 


Morison Stoneham 


Management Consultants Limited 

806 Setobury House, 31 Fnabray Circus, London EC2M 5SO 

Morison Stoneham and the 1EHO are equal opportunities employers. 


Senior Financial Analyst 


c. £25K + finance 
sector benefits 

Birmingham 


Our client is a long-established and 
highly successful UK wide financial 
service organisation. 

Working as parr of a small team 
providing a. financial consultancy 
service to (he Executive, you will be 
responsible for the development of 
Executive and Management Information 
Systems throughout the organisation. 
The production of financial reports for 
budgeting and forecasting purposes, on 
both a planned and ad-hoc basis will be 
a key (ask. as will the development of 
profitability measures for field based 
profit centres. 


You should be a newly or recently - 
qualified CIMA/ACA who can 

demonstrate extensive experience in the 
development and use of PC based 
systems for accounting applications. A . 
good knowledge of the latest Windows* 
based applications software is essential, 
os is possession of the first class 
interpersonal skills required for success 
in this rapidly changing environment. 

Relocation assistance wiH be available if 


appropriate. 

If you can rise to the challenge, please 
send a full cv which will be forwarded 
to our client unopened. (Address to our 
Security Manager if listing companies to 
which it should not be senL) 

Ref: B9724/FT, PA Consulting Group. 
Advertising and Communications, 

6 Highfield Road. EdgbastOrt, 
Birmingham 815 JDJ. 


1 J\ Consulting 
JLfm. Group 


Craning Business Advantage 

Ettsariw Rcwiwmcra • Human Reroute Cwtateuiey - Advertising ami CaanwBlcvioM 



Sottish 


»r< 


c£ 50,000 


Car 


Benef 



ut/V, 



APPOINTMENTS ADVERTISING 

Appears in the UK edition every Wednesday & Thursday and in the International edition every Friday. ... 

For information on advertising in this section please call: ^ ^ 

Philip Wrigley an 071 873 3351 & Gareth Jones on 071 873 3779 









FINANCIAL times FRIDAY JULY B ,9*4 


51 


ACCOUNTANCY COLUMN 


2- 



Uncertain returns from a 50-year investment 

Pratap Chatteijee on why the the IMF and World Bank are coining under greater scrutiny from their backers 


«li 


F ifty years ago today, represen- 

£r ° m 44 CQun ^ies 
signed an agreement at thp 
Mount Washington hotel in the for- 
ests of the White Mountains in Bret, 
ton Woods in the US. which led to the 

tWQ ? most Powerful 
usatutimis on the planet; the World 
Bank and the International Monetary 

They dispense over S30hn in funds 
every year to countries in Asia 
^Latin America and the former 
Soviet bloc, the largest source of new 
money for these countries. 

But how effectively have these 
funds been spent? If we are to take 
the word of the institutions, very 
effectively. If we are to believe a new 
coalition of social and environmental 
groups that sprang up this year - 
called “50 years is enough” - or crit- 
ics on the libetarian right, such as the 
Cato institute, the institutions are the 
main source of poverty and environ- 
mental degradation In their bomwer 
countries. 

Two years ago, Willi Wapenhans, a 
former vice-president of the World 
Bank, was commissioned to pvammp 
its existing portfolio of L8Q0 projects. 
The results showed that 37.5 per cent 
of the bank's loans had foiled to meet 
their own minimum estimation of an 
economic rate of return. 

Bank staff promptly replied that 
their standards were higher than 
most They could not explain why the 
failure rate had risen by 150 per cent 
over the previous decade. “This pres- 
sure is not temporary, it is attribut- 
able to deep rooted problems which 
must be diagnosed and resolved.” 
wrote Wapenhans. 


The Wapenhans review made two 
comparisons: it compared staff 
appraisal reports, which are issued 
before a loan is made, to project com- 
pletion reports, which are written up 
after the last penny has been paid 
out, as well as looking at reviews con- 
ducted by its operations evaluation 
department. 

What they had not looked at was 
how valid were the figures used in 
these reports and how timely they are 
in order to ensure that there is some 
way of correcting problems before it 
is too late. This process has now 
begun and the first report that has 
come back is less than encouraging. 

The Financial Reporting and Audit- 
ing Task Force, headed up by George 
Russell, a financial adviser in the 
World Bank's central and operational 
accounting division, shows that over 
60 per cent of the audits of its projects 
are not received within the grace 
period of four to nine months after 
the fiscal year ends, "making it incon- 
sequential for project management 
purposes," according to the reviewers. 
And 7 per cent are not received at alL 

A fifth of those received have a 
qualified, adverse or rtisHaftna/i opin- 
ion: the auditors believe that either 
additional information Is required 
before the a adit can be signed, the 
audit is misleading or there is insuffi- 
cient information for the auditor to 
judge the audit. 

In addition. Russell's team report 
that the "format of the (financial) 
information received often does not 
allow for, (l) comparison with staff 
appraisal reports, (2) linkage of physi- 
cal achievements with project expen- 
ditures. and (3) reconciliation 


with bank disbursement records". 

Why Is this so? Interviews with 
members of the team reveal that in 
many countries, particularly in 
Africa, the government auditors have 
no clue about bow to prepare proper 
fjnafyfoi statements. 

Even within the World Bank itself 
at its headquarters in Washington, 
the Importance of proper financial 
reporting has been downgraded The 
Wapenhans taskforce pointed out that 
in 1980, the bank had 270 financi al 
specialists of which 29 per cent were 
considered experienced. By 1992. it 
discovered there were 190 specialists. 
30 per cent less, of which a mere 22 
per cent were considered experienced. 


Ai 


s for the International Mone- 
tary Fund, its critics say that 
while It provides Interested 
parties with statistics galore, it leaves 
out the most crucial information. Jef- 
frey Sachs of Harvard University, who 
has advised a dozen countries from 
Bolivia to Russia on their economic 
policies, told a recent Congressional 
hearing there was no way to judge the 
performance of the Institution 
because nobody knew any more than 
its most general recommendations. 

“1 must say that the IMF resisted in 
a number of cases the very measures 
which tinned out to be enormously 
successful after the fact and then the 
IMF is able to say, after the fact, we 
supported those policies because there 
is no documentation to say to the 
contrary,” he said. 

Between 1980 and 1989. 241 struc- 
tural adjustment programmes were 
put in place in 36 countries. As 
the United Nations Children's Fund 


(Unicef) points out. over the same 
period, three quarters of these coun- 
tries in Africa, Asia and Latin Amer- 
ica experienced marked declines in 
their per capita income. 

This discrepancy in performance 
evaluation is about to change. Using 
advice from activist groups like the 
Environmental Defense Fund and 
International Rivers Network, the 
Senate has drawn up a list of mini- 
mum conditions the IMF must meet if 
it wants more money from the US. 

Under these recommendations, the 
IMF must encourage borrowing coun- 
tries to give them permission to pub- 
lish the Article IV agreements, which 
are the details of policies that the IMF 
wants the country’ to follow, the 
recent economic development papers 
and the policy framework papers for 
each country as well as the letters of 
intent. 

To underscore their impatience 
with the IMF. the Senate slashed con- 
tributions to the IMF's Enhanced 
Structural Adjustment Facility from a 
requested SlOOm to S25ro next year. 
The House of Representatives went 
further and recommended giving the 
IMF nothing at nil. 

Karin Lissakers, the US executive 
director on the IMF's board, who as 
the US representative controls 18.3 
per cent of the votes in the institu- 
tion, says she hopes to get the rest of 
the board to agree to make these 
changes. Last week the IMF said that 
it was trying to put some of the poli- 
cies into effect by Its annual meeting 
in Madrid in September. 

Will this make a difference? The 
hank was persuaded, by similar pres- 
sure from activists last year through 


the US Congress, to give out more 
information through a new "public 
information centre" and to set up an 
independent inspection panel to 
review complaints. The pone! will 
come into existence next month, but 
the information policy has been in 
place for six months. US Congress- 
man Barney Frank called a hearing 
last month to review progress. 

Testifying before Frank was Lori 
Udall of ERN. She said: "Since 1989 the 
bank has had an information policy 
that states the general presumption in 
favour of disclosure of information in 
the absence of a compelling reason 
not to disclose. Despite this presump- 
tion. In practice the bank has consis- 
tently restricted almost every type of 
information regar ding bank projects." 

Fifty years on, if it is not possible to 
evaluate the success of these institu- 
tions, how are they are able to sur- 
vive? First, they have sovereign guar- 
antees that ensure that the World 
Bank and the IMF have to be paid 
back and that their debt cannot be 
rescheduled. Second, without their 
stamp of approval, no country can 
receive international credit. 

Thus the World Bank and IMF can- 
not fail no matter what recommenda- 
tions they make to countries. Thing? 
might be very different if these guar- 
antees were withdrawn and they were 
forced to compete with the private 
sector they are so eager to espouse. At 
the very least, governments should be 
entitled to know whether they are get- 
ting their money's worth. Fifty years 
of opaqueness is enough. 

The author is global environment edi- 
tor for Inter Press Service in Washing- 
ton DC. 


Ispettore 

Finanziario 

Torino • Ouimo siipendio e Benefits 


II nosho dierue i urn conspcuta imIluu di uru 
important orjynizzazicr.e buunnica, leader nel 
propno sclicrc cd alia nccrca dl un Ispciiore 
nn.inzuna 11 candnfjic s»na jilt dirciir liipertdcnze 
deShmimniM ratcre delegate per qujnto riguard.t gii 
.upeui (inanzuu, e jmffuiY.*u jUn \ i ienUbiU. Lj 
gesiiow d.n e l! per-tfiule. bwrjnJo per mu >lVku. 
ludet neil-i pieduzicme c w^mawrcL'ilc^Jliiriw J: unj 

-<r.e di pri><iol!i camrrwrci.ili ■: Ji it-r.-uTO per ii 
vendiu al deiMglw Si imiu dr uiij Jtiu in arm.* dv 
qede di un buuraio di circj | 7H miluidi, cun se Je 
nei pieiM d: Torino 

i candidaii inieresuii Jevuno p.^.-eder* un Y-tiimJ 

canasetnm della lingua iialunae d<\rac .wt: 

hi-orato per a!cun; .inm in Iraiu per iiii.uonM>iULi 
di un gruppo hriUnnK^ o.uneiiL'jnu 
II candidate presidio -ura un rcniahile quj|ili>.jto. 
cap.ru di dimoiliaie uru crcr-ocme jhiliu ndi.i 
gesitcnc iuurcuru 

Si ollrono oinmi campen-^i. Ira cut uno --.ipcndio b.i*< 
molic inierc.ssamc. un pie mm di rendimcnio cd uru 
Ycllura Veiti anche oiler u un yenerosr* ioiUnbuio 
per le speM: di iraslcrimemo >1 pxega di invwre !a 
propna candidal ura in lingua ingle:*, -.petiiicando 
quanto ddla propna camera con ivponde at uidetn 
denagli cd acdudendo un curnuiluni viu- St 
assicura b truss irru nser'utccjj 
Indmzzne e spcdiic a. 

JPW Advertising, Ginfidenii.il Reply. 

Ref. I i(V. S Si Georges >.ird, Civile 
Street, ramham, Surrey GUO 71 AV 



Group Financial Controller 


Major Pic 


c.£80,000 + Benefits London 

High profile role for outstanding controller in British based, international group. 


THE COMPANY 

♦ Large UK listed pic with extensive international 
interests focused on small number of profitable 
sectors. 

♦ Lean, devolved corporate culture with emphasis on 
team work and lack of bureaucracy. 

THE POSITION 

♦ New position following extensive organisational 
changes. 

<► Key role at centre of the group. Report to Group FJD. 
Encompasses full range of controller activities. 


♦ Work closely with individual businesses to champion 
excellence in financial control. 

QUALIFICATIONS 

♦ Graduate, qualified accountant. Extensive control 
experience at divisional or group level in strong, 
financially managed group. 

♦ Success in implementing tight reporting and control 
systems for diverse businesses with international 
dimension. 

♦ Team player. Hands-on. Ambitious for further 
development. Personality to challenge and inspire. 


Please send full cv, stating salary, ref HN2872, to NBS, 54 Jermyn Street, London SWIY 6LX 


NB SELECTION LTD 
a 8NB Rcsomtcs pk cornpmy 



LONDON 071 493 «« 
Aberdeen 0224 638080 * Birmingham 021 233 4656 
Bristol 0272 291142* Edinburgh 031 1202400 
Glasgow 041 204 4334 ■ Leeds 0532 453830 
Manchester 0625 539953 -Slough 0753 819227 


FINANCIAL 

DIRECTOR 

Bedfordshire 

c£50,000 
+ Car + Benefits 


Having successfully managed and grown a range of 
businesses within a specialist area of the transportation 
sector, this well established and highly regarded company 
is now poised to further compound on it's achievements 
to date by appointing an outstanding individual to play a 
key role in development and growth. 




As Finance Director, you will 
ensure that appropriate financial 
systems and controls are in 
place to facilitate controlled 
expansion. You will spearhead 
a function responsible for the 
production and analysis of 
both management and financial 
reporting as well as the provision 
of a full forecasting and budgeting 
process designed to measure 
performance and efficiency 
across the business. 

You will handle a variety of ad 
hoc projects including work 
with the Managing Director on 
the commercial direction of 
the company from both an 
organic and acquisitive basis. 
You will be a qualified graduate 
accountant with at least 3 years 
commercial experience gained 
within a fast moving business 
environment, where you can 


demonstrate a record of success 
and achievement Personal 
characteristics are of primary 
importance: first rate 
communication skills both 
written and oral and a high 
level of enthusiasm and energy 
tempered with diplomatic and 
assertive qualities. 

Interested candidates should 
write promptly to Michael Herst 
or Charles Austin enclosing a 
full curriculum vitae quoting 
ref. MH464 at Cardinal House, 
39-40 Albemarle Street, 

London W1X 3FD. 

HARRISON 

^WILLIS 


LONDON • READING • GUILDFORD • ST ALBANS 
UXBRIDGE • BRISTOL > BIRMINGHAM 
BOLOGNA • COLOGNE ■ LISBON • MADRID ■ PARIS 


Finance Director 


FMCG 

£40-50,000 + Options + Benefits 

Established, innovative consumer products business with impressive 
growth record. Plans for substantial expansion and a listing. 


London 


THE COMPANY 

♦ Very profitable; £20m forecast turnover. 

♦ Activities span market creation, product development, 
sourcing, sales and distribution. 

♦ Highly respected in the industry. Blue chip retail diem 
base. 

THE POSITION 

♦ New post at Board level. Contribute at strategic level 
as group moves towards flotation and acquisitive 
growth. 

♦ Responsible for production of accurate and timely 
financial reports. Review and develop MIS to support 
business decision making. 


♦ Evaluate and implement brand acquisitions. Support 
contract negotiations. 

QUALIFICATIONS 

♦ Graduate chartered accountant with Big Six pedigree. 

♦ Financial management experience within quoted 
FMCG company, ideally in food and drink sector. 

#" Strong commercial bias with an understanding of 
marketing. Well developed MIS knowledge. 

♦ Foreign trade and forex exposure useful. 

♦ Dynamism and excellent interpersonal and 
communication skills mandatory. 


Please send lull cv, stating salary, ref N287I, to NBS, 54 Jermyn Street, London SWIY 6 LX 


& 


NB SELECTION LTD 
i BMB Resources pic mn^xury 



f-B-5 


LONDON 071493*092 
Aberdeen 0224 63 8080 • BiiminRhiin O’ 1 233 465b 
Bristol 0272 291 142 • Edinburg 031 2M 2400 
Glasgow 041 204 4334 ■ Leeds 0532 453830 
Manchester 0625 539953 - Slough 0753 SI9227 


Lazard Brothers & Co., Limited 

AUDIT MANAGER 

Attractive Remuneration Package 


An exceptional Chartered Accountant, with the 
potential for significant development, is sought 
by Lazard Brothers, a leading British merchant 
bank. Conducting business worldwide with a 
current staff in London of around 630. the 
company has a reputation for the provision 
of a first class service in the fields of corporate 
finance, investment management, banking, 
money broking and capital markets to a 
demanding 'Blue-Chip' clientele- 

You will be responsible for the conduct of 
operational reviews in respect of Lazard 
Brothers’ banking, asset trading and money 
broking businesses. To this end you will 
undertake risk analyses; evaluate systems, 
methods and procedures: report findings: 


make recommendations, and implement 
agreed changes with the objective of enhancing 
efficiency, accountability and ultimately 
profitability. 

To be considered for this first class opportunity, 
you should be able to demonstrate excellent 
communication skills and possess at least three 
years’ post qualification experience gained in 
the audit of treasury/capitai markets operations 
in a bank or in a Top 6 practice. 

To apply, please send your CV to our advising 
consultant, Chris Persson, at Executive 
Connections Ltd, 43 Eagle Street, London 
wem 4AP (fox 071 872 0083) or telephone 
him on 071 242 SI 03. 


IDIRECTORS 


SEEKING A NEW ROLE/ 


ft * B. ■rvww.y tMriine outplacement and career management consultancy, Umagxtc < 
ifLL lusorer 15 years’ experience of managing career change for senior executives and 
jp#' many of Britain's largest companies. 

% Bv accessine over 6,000 unadvertiaed vacancies a year, mostly at 540 - £3 50,000 p-a. 

H iir./S^^dicnc, Wid. «1 nwto 

s ■■ jmcrMcx, makes recommendations from its candidate bank without charge. 

INTEREXEC ^ 


Internationa] Transport Group 

seeks 

FINANCIAL CONTROLLER 

Candidates should have background in banking or 
accountancy and relevant experience, age 28-50, 

English as working language. Location: Far East. 
Attractive terms. 

Applications, in confidence, with full C.V. by 
FAX to +44 (0) 71 253 1472 or to; DWJ Advertising Ltd 
(Ref: M283), 104-110 Goswell Road, 

London EC1V7DH 


APPOINTMENTS WANTED 


F.CA. (37) 

English Chartered 
Accountant seeks a 
senior finance/geoerai 
management position, 
based in Essex/London 
area. Just completed 4 years 
overseas experience. 

Write in confidence to 
23BoxA2H0 , Financial 
Times, One Southwark 
Bridge, London S El 9HL 


Financial Controller 

British Chartered Accountant, 41, Big Six-trained, 
currently with highly successful German subsidiary 
of U.S. direct selling ffneg group, PC and 1MB 
AS/400 literate, hands-on experience of GAAP 
reporting and financial modelling, wishes after two 
years in France and nine years in Germany 
to return to U.K. 

Please write to Box A2109, Financial Times, 

One Southwark Bridge. London SE1 9HL 







FINANCIAL TIMES FRIDAY JULY 22 1 994 


European 

Financial 

Analysts 

£ 23 , 000 -£ 29,000 

This client is a fast moving entrepreneurial, high profile American consumer 
products group, instanHy recognisable as a market leader in its field. In Europe 
it has marketing operations in 12 countries generating a turnover of 
approximately $200 million and is extending its operations. 

There are now two vacancies in the European headquarters for financial 
analysts to work with top finance staff and general management on a 
combination of financial analysis and financial control for me European 
operations. Responsibilities wifi include monthly reporting; budgeting and 
forecasting; identification and analysis of trends and sensitivities; and major 
project analysis, with the dear abjective of enhancing the corporation's 
financial performance. 

Applicants should be business graduates, MBA's or accountants who are 
self starters, motivated by achieving and gaining objectives. Good 
interpersonal and communication skills are important, in particular the ability 
to communicate facts to non finance executives. Prior experience should 
include financial analytical work in an FMCG or other product led 
multinational. Familiarity with US business culture would be beneficial. 
Location - East London. Age guideline - mid to late 20' s. 

Please reply in confidence quoting Ref L564 to: 

Brian H. Mason, ]l yl q ^ 

Mason & Nurse Associates. 1 

l Lancaster Place. Strand. 

London WC2E 7EB. O, ]\]f IfCP 

Tel: 071-240 7805. iX 1 N VAl UV 


Selection & Search 


APKttNTMENTS 
ADVERTISING 
appearsin the 
. UK editioii every 
WecfoeSday & 


•' and in the 
International edition 
.." . every Friday 

farther ~ 
.. . . information ; 

. please call: 

v- Gareth Jones 
^19718733779 

Andrew 
SkarzyBski 
' on . 8718734054 

Pbffip Wrigley 

y c«07I 873 : 3351 

Joanne Gerrard' 
on 071 873 4153 

■ 

■on 071 873 4027 

KacS^Hieks 
011071873 4798 ‘ 


Finance Director 

Midlands c£45,000 + Car + Benefits 

Our client is a medium sized vehicle rentai company, with a national network of corporate operations and 
franchises. The company is privately owned, having been recently purchased by its management, and has 
embarked upon a major expansion plan to develop new products and services. 

Reporting to the Managing Director, the Finance Director will contribute strategically to the company's 
development through the provision, analysis and evaluation of appropriate financial information. The rote 
will also entail the management of an accounting function, as well as continually upgrading financial 
reporting controls and systems, including ail aspects of information technology. 

Candidates must be qualified Accountants with several years experience in a senior finance position, 
preferably within the vehicle rentai and leasing sector. Strong IT skills are required, along with point of sale 
system experience. Candidates must be commercially aware, profit orientated, hands-on and good team 
members. 

This is an outstanding opportunity to join a fast-growing and ambitious company operating in a highly 
demanding environment The prospects for personal development are excellent along with the longer term 
potential for equity participation. 

Applicants should write, enclosing full career and salary details, quoting reference B/489/94, to David Gibbs. 


KPM& Selection & Search 

Peat House. 2 Cornwall Street. Birmingham B3 2DL. 


11 FINANCE DIRECTOR 

ENVIRONMENTAL SERVICES 
£50K plus salary, + benefits + car 


Bucks 


OUH CLIENT 

Environmental Services Company 
Current sales in excess of £40 million 
Substantial planned growth 
Market Leader in its field 


THE ROLE 

Maintaining integrated financial controls 
Catalyst in organisation and management change 
Business planning & forecasting 
Teambuilding to stay in line with growth 


CANDIDATE CRITERIA 

A self-starting FCA with a proven track record in a commercial/financial post having 
shown excellent man management skills, as well as superior communications skills and lateral 
thinking abilities. 


GROUP TAX MANAGER 


OPPORTUNITY TO MAKE MAJOR IMPACT IN QUOTED PLC 

HOME COUNTIES c .£60,000 + CAR * BENEFITS 


• Sizeable quoted group with substantial 
businesses in the UK and several Continental 
European countries. 

• Fxryprirm-al opportunity CO fattfary and aftagp 
a comprehensive tax planning/compliance 
programme for the 80 companies in die UK tax 
group. 


• ACA aged thirties, cither direct from the tax 
department of a ‘Big 6‘ firm or with subsequent 
experience as part of an international pic. 

• Computer literate with ‘hands oa" experience 
In UK compliance, corporate reorganisation and 
Continental European tax regimes. 


• Bgspnnsihilftto* infhttig the TTK ~ • Self starter with a high degree of energy and 

group and reviewing the group’s international tax ambition, able to work as part of a closely knit 
efficiency, playing a. leading role in reorganisations team without a large headcount. Resourceful, 

and ensuring the efficiency of a subs tantial disposal confident and able to successfully balance strategic 
programme. and “hands on" activity. 


Please apply in writing quoting Rc£ 777 

wkh m and <nhiy drtall| |qj 

I'figriBtto 

WitiiiiwMi sdccM oo r im Ui ^ 

43 WcSacck Street, London WIJH 7HF 
T«± 071 637 8736 



GROUP INTERNAL AUDITOR 


MULTI-SITE SERVICE SECTOR GROUP 


HOME COUNTIES 


• Highl y dcomttaHse d multi-site, multi-division 
service sector group, with activities across Europe. 
Turnover exceeds £300m. 

• New position as an integral member of the group 
manag ement team. Brief is to introduce a proactive, 
business orientated internal anritr programme, 
working closely with group and divisional financ ial 
staff. Audit Committee of the Board and external 
auditors. 

• a highly visible role calling for a broad contribution 
to the financial effectiveness of the group wfth scope 
for promotion to a line financial position, UK or 
overseas, in the medium remv 


Tteue apply in wilting quoting let 778 
■■ t i l i career and stay details to: 

MgdBaca 

W MBbnd Selecti o n »»*"< 

43 Wclbedc Street, London WIM7BF 
Tctcm 637 8736 


c. 450,000 + CAB. + BENEFITS 


• ACA aged 30-40, trained in a major accountancy 
firm, with ax least two years experience in a 
substantial group which has divisions both in the UK 
and abroad. Exposure to service industry is desirable. 

• An internal auditor who is sohition-driven, rather 
than just a critic, and is able to apply commercial 
judgement in identifying areas for further attention. 
Proven experience in financial and systems audits. 
Computer literacy will be essential. 

• Personal qualities wifi Include excellent 
communication skills, the ability to tactfully educate 
divisional management as to best practice, energy and 
initiative, and a structured, systematic approach. 
Language folk would be distinctly advantageous. 





Ambitious Financial 
Controller 

Salary mid £30’s + Car + Bonus + Benefits 



The world is entering a new era in food retail. The “hard 
discou n t* concept, limited-line stores selling basic consumer 
items at discounted retail prices, have swept Europe and the 
UK market has already shown major demand. 

The Carrefour Group, who sales topped 123 billion FF in 
1993, brought hard discounting to the UK last year and 
opened 6 stores in the south of England through its subsidiary 
Erteco UK Limited. It is planned that 20 stores will be 
operating by year end, with similar numbers opening each 
year thereafter. • 

Ambitious plans for the future means thar a strong finance 
function is essential. As a result, a financial controller for 
Erteco is being sought, whore ability and drive can match 
that of the Group. 

The Financial Controller will manage a small team and be 
responsible for all management and financial 
accounting. You will report direct to the Managing 


Director but will also be responsible for repotting to the 
parent company and so the ability to speak French is 
preferable (but by no means a prerequisite). 

You will be a qualified accountant aged between 26-32. 

Big 6 trained and have worked in a commercial environment 
(though not necessarily retail) for 2 to 4 years. Probably 
frustrated in your current role, you will be keen to grasp the 
reigns of authority and cake a step up to corurolterahip- 

Petsonal qualities will determine success; you must be 
ambitious, mature and not afraid of hard work. You must be a 
commercial accountant, your focus being the business and 
not blinkered by accounting. 

If you have the will to succeed there are real possibilities of 
progression within the company. 

Interested candidates should send their CV to Jo Baker, at 
Mlchad Page Finance, Page House, 39-41 Parker 
Street, London WC2B 5LH. quoting refi 196600. 



Michael Page Finance 

Specialists m Financial Recruitment 

London Brinot Windsor St ASmos Lcatherbead Binniogba 
Nottingham Manchester Leeds Gfaugow & Worldwide 



Please send full CV, deariy stating your current earnings and responsibilities 
in confidence quoting Reference No. GGS42 to Project Assignment Ltd at either: 


Project Assignment 


199 8ishopsgate 
London, EC2M 31 1 


The Friston Business Centre 
Aldeburgh Road, Friston, Suffolk, IP17 1NP 


Financial Controller 

Major UK Charity c £35,000 London NW3 



TH£ ANTHONY NOLAN 
HONE MARROW TRUST 


The Amhony Nolan Bone Marrow Trust manages the World's first and ro date largest independent register 
or potential bone marrow donors and it is the driving force behind the European Marrow Donor Information 
Service. 

Every year thousands of people with bone marrow diseases such as leukaemia, aplastic anaemia and immune 
deficiency syndrome reach a stage when only a unrelated bone marrow transplant can save them. The 
continued work of The Anthony Noian Bone Marrow Trust is helping to salt those people worldwide. 

In L986 the chanty had a turnover of £400,000 and supplied 14 donors for transplant. In 1993 the turnover 
was over C5 .000 .000 and more than 200 donors were supplied for transplant. 

The increasingly competitive nature of the charity sector together with more rigorous demands imposed by 
recent charity legislation requires the recruitment of a commercially experienced qualified accountant 

The role will involve working closely with the Chief Executive. 

Responsibilities will include the running and control of the finance function and the continued development 
of the accounting and management systems. You will also be expected to make an ongoing contribution to 
the wider business, general managpmeni and other commercial and fund raising issues within the Trust. 

Interested applicants should contact 
, Andrew Fisher, Parkwell Management Consultants Ltd 

3 Catherine Place, Westminster SW1 g 6DX Tel: 071 133 5207 Fax: 071 233 5205 



Financial 

Controller 

Top foreign bank looking for a 
qualified professional to run 
London accounting depL The 
ideal candidate will have 
5-10 years experience in a 
banking environment and wtD 

have extensive knowledge of 
VATs. badgering and Strategic 
Planning. Excellent opportunity, 
Fax CY to tire Stales ou 
0101 883 886 6325 


ACCOUNTANT 

Qualified. 24-35. Some 
experience FMCG 
essential. 
London. £29<mfai. 
071-583 1861 after 1 p.m. 

Janet. 

Angel International 
Recruitment 
50 Fleet SL 
London EC4Y 1BE 


Outstanding Retail 
Opportunity 

Europe 

to £37,000 (+ Tax effective savings) Relocation + Car + Benefits 


Our client, established in 1980, has become synonymous with 
young, lively fashion (for women, men, youths and kids) with 
a sales distribution network in 33 countries. Consistently 
profitable, the company and its people are brimming with 
confidence; that’s why their clothes have so much appeal? 

To further develop the brand it is now necessary to build on 
its efficient wholesaling operations by developing a retail 
network - combining high street outlets, franchise and 
shop- in-shop operations across Europe. The initial 100 
outlets are already reading and are providing a great base 
for future success. 

As Financial Controller (Recall) you will be part of a small, 
experienced, multi-disciplinary team managing the set up of 
the retail network. Remit systems will need ro be developed 
in tandem. As a senior finance manager, you will be expected 
to provide commercial solutions with energy and 
enthusiasm. Some European navel will be 


necessary in the first instance and so a farther European 
language is an advantage, bur nor essential 

Candidates, aged between 27-35, will be qualified 
accountants who can demonstrate a successful record of 
achievement within a dynamic clothing retail environment 
Excellent communication and project management skills, 
combined with strong systems experience are a prerequisite. 

The position is based at the Head Office in Voorachoten. a 
Hibuxb of The Hague land just 20 minutes from Amsterdam) 
but it is an English speaking company and so Dutch is 
not required. 

This is a superb opportunity for an enthusiastic financial 
professional who really wants to make their mark in retail. 

Interested candidates should send their CV to Jo Baker, at 
Michael Page Finance, Page House, 39-41 Parker 
Street, London WC2B 5LH, quoting refi 195942. 


Michael Page Finance 

Specialist* In Financial Recndrwnr 
Lmloa BrtKoi Windsor 9c Aibsm Lcedierbcail Birmingham 
Nottingham Manchester Leeds Gb*gow& Wocidwkie 




m&g&S&r 





















FINANCIAL times 


FRIDAY JULY 22 1994 


33 


c. £ 60,000 plus 
outstanding bonuses 


Global Consulting Firm 


Manchester 
or Leeds 


Senior Consultant 


worldwide SXJ <xcssftd, profitable and growing international partnership with over 30 offices 

structure' En & a f ed ^ **^8 clients in their strategic planning processes with particular emphasis on 
organisation and resourcing. Clearly established as Che International market leader, this firm 
JJ considerable scope for personal development, outstanding rewards for achievement and the 
satisfaction of working at a senior level with many of the world's top organisations. 

the role 

■ Member 0 f a high calibre, specialist team with 
Individual responsibility for the management and 
development of a number of key blue-chip client 
relationships. 


WorWng with clients to solve change management 
problems and the human resourcing issues 'arising 
from business decisions and their impact on people 
management. 

Contributing to the strategic growth of the firm. 
Joining practice groups and client management 
teams to enhance customer service and develop 
new business opportunities. 


THE QUALIFICATIONS 

■ Probably early 30s - early 40s, graduate education, 
ideally professionally trained In finance, or with a 
business qualification, and systems literate. 

■ Experience will include successful periods with 
substantial financial practices and/Dr consultancies, 
together with line management exposure. Should 
have strong inclination towards analysing and 
solving people- related issues. 

■ Outgoing, positive and ambitious, a forceful 
character combining consultative diplomacy with 
the drive to achieve and create competitive edge. 


Leeds 0632 307774 
London 07! 493 1238 
Manchester 06l 499 1700 


Spencer Stu.irt 


The Top 
Opportunities 
Section 

Advertise your 
senior 

management 
positions 
to Europe's 
business 
readership. 
For information 
please contact: 
Philip 
Wrigley 
071 873 3351 


Financial Assistant (mba/aca) 
to Group Finance Director 


London 


Competitive salary + benefits 


A Career opportunity has arisen for a 
Financial Assistant to support our Croup 
Finance Director. 

Responsibilities wifi include undertaking 
projects and research activities on behalf 
of die Finance Director as well as 
contributing to the work of the main finance 
functions during key accounting periods. 

The successful applicant wifi be a graduate, 
MBA/ACA, with 1-2 years' post 
qualification experience, will have an 
exceptional grasp of commercial issues, 
including a knowledge of the financial 
sector, excellent oral and written 


communication skills and will be familiar 
with PC based computer modelling 
techniques. Highly organised, you will have 
commitment, drive and the ability- to work 
both independently and within a team. 

Opportunities for career progression arc 
excellent and arc likely to he w ithin the 
central finance function or in an 
operational role. 

Please write, enclosing your CV jnd details 
of your current remuneration package, tu 
Mrs C.M. Lambert. Assistant Director. 
Hambros Bank Limited. 

41 Tower Hill. London ECJN 4HA. 


HAMBROS BANK LIMITED 


POURSHINS PLC 

GROUP FINANCE DIRECTOR 


WEST LONDON 


32-45 


c. £50,000 + BENEFITS 


As a key player within the food services sector, POURSHINS PLC Is 
looking to develop its business further, having consolidated Its 
position over the last 3 years within the UK and continental Europe. 

You will be responsible for all aspects of the Croup’s 
Financial Management and Control, Strategy Formulation, Systems 
Development, Budgeting, Planning, Tax and' Treasury 
Management and to ensure the necessary financial information is 
available to run the business. 


The successful applicant will be a graduate qualified 
accountant with a European outlook, a sense of humour and 
a strong manufacturing background comfortable operating at 
board level. 

Strong technical and analytical skills are essential, as Is 
the ability to adopt a hands-on approach to management. The 
ability to tbink logically and to communicate at ail levels 
is essential. 


ROBERT WALTERS ASSOCIATES 


The position will involve travel to the Group's Inter- 
national Operations and knowledge of a foreign language would 
be advantageous. 

Interested applicants should write, enclosing an updated 
CV to Giles Danbeney at Robert Walters Associates, 
25 Bedford Street, London WC2E 9 HP. Alternatively, telephone 
him on 071 379 3333 or fax 071 915 8714. 


MAJOR US INVESTMENT BANK 

MANAGER - TECHNOLOGY AUDIT 


CITY 


c£5 5,000 + BENEFITS 


Being one of the leading Globa] Investment Banking 
and Securities Trading Institutions, this organisation 
has an established reputation in most major markets, 
particularly the issuance of securities, structured 
products and secondary market trading. The Audit 
function has both business and systems responsibilities 
and is seeking to recruit a high calibre individual to 
head the specialist EDP Audit team. 

Working closely with the European Director of 
Arnlk, and technology amEtora in other global locations, 
the successful candidate will plan and co-ordinate 
technology audit projects across all the European 
business units. 


A major investment programme Is underway within 
the bank to facilitate the introduction of complex global 
information systems. The main focus of the role will be 
to assess the adequacy of controls and procedures for 
implementing these system developments within the 
European business units. Responsibilities will include 
the management and future growth of the EDP audit 
team, providing effective solutions and analysing the 
results of Investigations with senior front office and 
finance staff. Extensive exposure to all sales, trading and 
investment banking areas is envisaged 

The requirement is for a senior technology audit 
specialist with at least 5 years' post qualification 


ROBERT WALTERS ASSOCIATES 


experience in a large US or European financial 
institution. A background in the review of financial 
systems with an understanding of the securities market 
is essential; specifically VAX/VMS or UNIX 
client/server platforms. As the perspective of the 
whole department is atypical of the traditional view of 
audit, the interpersonal skills to motivate staff and 
develop strong relationships with the business 
units are paramount. 

Interested candidates should call Stephen Gnat 
at Robert Walters Associates on 071-379 3333 
(confidential fax 071-915 8714), or write to him at 
25 Bedford Street, London WC2E 9HP. 


YOU CAN ADVERTISE 
YOUR SKILLS IN THE 
FINANCIAL TIMES 
RECRUITMENT 
PAGES FROM AS 
LITTLE AS 
£90 + VAT. 


Looking 

for 

a Career 
Change? 


Ftm TUBiwa details puke 
esaner 

Phhjp Wkqley OH 
TBi 071-473 3351 fur 071- 
8733084 BRsrvmnwsTOHiH 
at FauacuL Tims, Rco wn aw 
Advertoiik, ifawna Oat 
Sctomam Bridge, Ltnrot 
SE19HL 


Great Ormond Street Hospital For 
Children NHS Trust | 

And The Institute Of Child Health j 

Director of Finance j 

Substantial Salary and Flexible I 

Benefits Package j 

Great Ormond SUeet Hospital tor CMMihi NHS Trust (G0S Trust) is aieSMich and j 
development and postgraduate teaching hospital woffling In partnership with [ho J 
institute Of Child Health. Tlw core ol our activity Is specialist. multi-disciplinary ! 
unto lor which we have an unmalctud range of paedunic specbVUes and 
children's bmHy sendees. 

The Trust was established and entered the NHS martlet on the 1 April 1994 Wo luvo 
an im usually complicated contracting poffloflo. a budget ol over £100 mdhon and 
1.800 stall We ateo have Special Trustees, who lundrahe substantially to enable us 
m extend our research and development. 

napes! 

With the forthcoming retirement ol the present Director ol Finance, we are now { 
seeking to appoint a successor responsible to the Chief Executive lor ail aspects of 
tin Trusts financial activities and for the manaaement ot the Special Trustees' iimds. 
The post is at the Item ol shaping and sustaining the renowned work ol the hospital. 

It demands an exceptionally capatrie person and a quaWted accountant with senior 
financial management at board level. 

If you would Ike an informal discussion please contact 
Sir Anthony Tippet, Chief Executive on 071 405 492S 
before 29th July 1094. 

Applications in the torm of Curriculum VHaa. Intruding 
the names and addresses of two referees should be sent 
to Caroline Corrigan. Personnel Department Great 
Ormond Street Hospital for Chfldren NHS Trust, Great 
Ormond Street London WC1N 3JH. 

An information pack Is avaoabie from Angela Lewis. 

Personnel Department on 071 405 9200 extension 5174. 

Plena quote Rafareuta Ho; 13SMP. 

dosing date; 15th August 1994. 



Appiirtttux u from 

jt<b sharers ji* 
uvL't w. 


British Mediterranean Airways 

FINANCIAL CONTROLLER - Circa £30-35,000 per annum 

Based at our offices near Heathrow Airport, we are an airline that is starling 
commercial scheduled passenger operations In August. 

We urgently need to appoint a Financial Controller reporting lo the 
Managing Director who: 

• Is enthusiastic 

• Can develop a smaU effective and forward looking finance function 

• is Independently minded and assertive 

• Is numerate and computer literate 

• Possesses strong communication skifls 
■ Strong analytical skflfo 

• is 30-40 years old 

• Operates with a hands-on approach 

• Has service industry and tight budgetary control experience 

To provide: 

• Timsty, independent, financial and management reporting 

• A significant contribution to the management 

• Positive Input towards optimising business performance 

Candidates must be qualified accountants preferably Chartered of 
graduate calibre and have substantial hands-on experience in a fast 
moving business environment. Akins experience may be helpful. 

Please apply to Jacqueline Muir-head. Personnel Manager, British 
Mediterranean Airways Limited. Bookham Lodge, Stoke DAbemon, Surrey 
KT11 30J. 



FAST TRACK OPERATIONAL 
AUDITORS 

NEWLY/RECENTLY QUALIFIED 


c £27,000 + car 


Bracknell, Berks 


Ocean Group is a leading supplier of international freight forwarding, contract 
distribution services, support vessels to the worldwide offshore oil industry and 
environmental services in the UK and US. Employing 11,000 people worldwide and 
with an annual turnover of £1 billion the Group continues to increase productivity and 
profitability: to further improve its current market position, emphasis is placed upon 
achieving excellence together with the selection and development of management 
teams. 

Due to internal promotions. Ocean’s international corporate audit function is again 
actively seeking two exceptional young accountants. Reviewing operations on a global 
basis, the roles involve working with local management in order to improve- the 
efficiency and profitability of the business. Special investigations, secondments to 
overseas operations and ad hoc projects also form part of the outstanding training. 

Demanding and challenging, the roles require a high level of self motivation, 
mana gement potential, business acumen and communication ability. As newiy/recently, 
qualified ACM. candidates should offer up to 18 months post qualification expeneoa, 
having trained with a larger accountancy firm with a mulu-national client basc.The 
roles will involve substantial world-wide travel, and a working knowledge of at Inst 
£ Wage in addition to English is desirable. Career opportunities wuh die 

Group are excel lent. 


I 'Vt-!\R\TU , K MruSTOCK 


Warwick McLintock Ltd • Search and Selection 
Suite 2. EBC House, Kew Road, Richmond, Surrey TW9 -NA 
Telephone: 081-940 4900 Facsimile: 081-940 6524 


Investment Analysts 

European and 
Latin American Equities 

Onrcb’ait, a major British securities firm, has a number of 
“■‘ c unri es for j nv * CTm nr ar»»tyiirgf bn fr* ff xparating rVu tmauai 
European and Larin American departments. 

Candidates should be aged 23-28. They should have a good 
university degree. They are likely now m be wotting for a 
major accountancy firm (maybe having recently completed 
their crams). They may also be wodring for a major 
i nv e stm ent in qjtmw 1 - Fluency in German and/or French is 
a p xm e qu iii re for the Continental E ur opean depart m e n t 
and fluency in Spanish aud/or Portuguese i prereq u isite 
for the Latin American de partm ent. 

This b a career opportunity and calls for confident, 
presentable, highly numerate mrfividuib with finst-dass oral 
anri wr it te n anwwminit*aftn]ri drillc 

Please apply to Jock Coons, Career Plan Ltd, 33 John's Mens, 
London WCIN2NS. Tefc 071 242 S775. Fas 071 831 7(23. 



1 Personnel Consultants 


Qualified 

Management Accountant 

Expanding building maintenance company in 
Walthamstow area. Experience in high volume, 
low value transactions required. 

To develop managerial performance 
and costing information. 
Salary negotiable. 

CV to Bax All 11, Financial Times, 

One Southwark Bridge, London SE1 9HL. 



c£30k + Car 





FINANCIAL 
CONTROLLER 

Milton Keynes Area 

A very' successful British pic offers an exciting and challenging 
opportunity fora highly motivated CIKiA who can combine 
personality and outstanding interpersonal skills with inherent 
commercial acumen. 

Based at a manufacturing unit in the Milton Keynes area, you 
will assume full responsibility for the financial control of a 
major part of the business. This will involve leading the existing 
accounting team and - vitally - analysing and interpreting the 
information they provide before liaising with relevant members 
of senior management in order to provide solutions to problem 
areas. 

This position, reporting directly to the Managing Director, 
invoh'es joining a young and dynamic team and demands a 
Management Accountant PLUS! A forceful, energetic character 
with Bair, imagination and natural leadership skills Probably 
30/45, certainly qualified, computer literate and with 

management accounting experience in a manufacturing 
environment. You will also be ambitious as a future Financial 
Directorship could be on offer lo a high achiever. 

Please apply in writing only with full CV to Appointment 
DGiza, DfS Advertising, PO Box 28, Shepley, Huddersfield 
HD8 8YY, Wfest Yorkshire 

Applications will bo forwarded direct to our client. Please 
identify any companies to whom you do not wish to apply. 

Our client is an EquaJ Opportunities Employer. Applications are 
welcome from women and men. 


FT/LES ECHOS 

The FT can bdp joa rcadi addiBonaJ reoden a France, Ow Uol with ibe French busmen newspaper, Lc* Edvn, jivea you a 

wrique reenuonenj xtvenaipg Opportunity to capital be on ihc FTS fiurapean raadcobip iad » furd** csrgd Freaci botlaea iMrtiLftr 

tal«m*rian on rates uul farther deuib please if kphooe 
PUBp WrfeW on 071 873.3351 
















34 


FINANCIAL TIMES FRIDAY JULY 22 1994 


★ 

COMMODITIES AND AGRICULTURE 


Russia’s al uminium exports as high as ever 


^ Kenneth Gooding, 

MWng Correspondent 

Russia has trimmed Its 
aluminium output but its 
exports of the metal are as 
lugh as ever, according to sta- 
tistics provided yesterday by 
trade delegates at a meeting of 
the big aluminium producing 
countries in Canberra 
Nevertheless, those involved 
- Australia Can ada, the Euro- 
pean Union, Norway, and the 
US as well as Russia - pledged 
to continue support for the vol- 
untary agreement that aims to 


cut up to 2m tonnes from 
world alumininm production 
for two years so as to bring the 
market back into balance. 

Analysts said that outcome 
was to be expected as alumin- 
ium prices had risen nearly 50 
per cent from last November’s 
8-year lows. The three-months 
delivery price closed at 
$1,532.50 a tonne on the Lon- 
don Metal Exchange yesterday, 
and at that level nearly every 
producer is profitable. 

The Anthony Bird consul- 
tancy group estimates in its 
latest Al umini um Analysis 


that operating costs at western 
smelters are averaging $1,135 a 
tonne while Russian costs are 
$1,234. "Although Russian 
costs are rising, at today's 
prices even the Russians can 
make money.” 

Bird suggests the industry 
has had “an Impressive suc- 
cess " in im plementing the pro- 
duction cuts but it expects no 
more of them. Neither does Mr 
Nick Moore, analyst with 
stockbrokers Grd Mmnett He 
points out that the latest Inter- 
national Primary Al uminium 
Institute statistics show the 


average dally rate of produc- 
tion at western smelters in 
June was the lowest for 46 
months. “Currently the indus- 
try jg operating at an annual 
rate of 14.174m tonnes - an 
impressive 143m tonnes lower 
than the all-time peak of 
15406m tonnes seen in Decem- 
ber, 1992,” be adds. 

Data released in Canberra 
Show Russian al uminium out- 
put in June was 6.4 per cent 
lower than in November at 
220400 tonnes against 236400 - 
equivalent to an annual cut of 
about 195,000 tonnes and well 


below the 500,000 tonnes the 
Russians hoped to achieve by 
August Russian exports in the 
first five months were about 
800,000 tonnes, equivalent to 
an annual rate of LSm tonnes, 
roughly the same as in 1993. 

The Canberra delegates 
warned in their communique 
that the al uminium market 
balance was “still delicate”. 
And Bird says: “If aluminium 
prices continue the torrid pace 
of recent weeks and anticipate 
too much too soon, the recov- 
ery could fade before it has 
properly begun”. 


Latin Americans hope to heal divisions over banana quotas 


By David Scanlan In San Jose 

Latin American banana 
producers, long divided over 
import quotas in Europe and 
distressed over fallin g world 
banana prices, took a step 
toward burying the hatchet in 
a day-long meeting here on 
Wednesday. Representatives 
from eight banana-producing 
countries agreed to set up a 
working group and meet again 
in Nicaragua on August 3 to 
end the dispute and try to 
boost banana prices. 

One of the options the group 


will be considering is a cut in 
production to reduce supply 
and raise prices. The group 
will also try to improve effi- 
ciency within the banana 
industry, offi cials said. 

“We’re optimistic," said 
Costa Rican president Jose 
Maria Figueres, “that we can 
find a consensus position". 

Unlike the other T-atin Amer- 
ican staple export - coffee - 
bananas have been floundering 
at 10-year price lows on the 
international markets. In the 
US, banana prices have been 
hovering around US$440 for an 


18.14kg case, the lowest in a 
decade. Prices were about $5J50 
at this time last year. 

In Europe meanwhile prices 
are at 5-year lows oE about $6 a 
case, down from their usual 
$13 to $15 range. Producers 
blame oversupply and dwind- 
ling demand for foiling prices. 

The falling prices have 
helped bring the Latin Ameri- 
can banana producers 
together, despite a bitter dis- 
pute over Import quotas 
imposed by the European 
Union in 1993. The EU imposed 
the measures as part of the 


Lome preferential trade con- 
vention, under which the EU 
imports bananas from former 
colonies of Britain and France 
in Africa, the Caribbean and 
the Pacific. Producers in the 
former colonies can’t compete 
with their Latin competitors, 
who run more efficient, 
mechanised plantations. 

Germany, Europe’s largest 
banana consumer, has been 
particularly angry about the 
quotas and filed a complaint 
earlier this year with the Euro- 
pean. Court demanding a free 
market in hflnanfl.q. 


This year’s import quota was 
2.1 tonnes. It rises to 2.2m 
tonnes in 1995. Four Latin 
countries accepted the quota 
system - Costa Rica, Colombia, 
Venezuela and Nicaragua. The 
remaining countries opposed 
the limits, including Gua- 
temala, Ecuador, Mexico, Hon- 
duras and Panama. 

But Ecuador’s foreign trade 
minister Mr Diego Paredes said 
on Wednesday that he was 
optimistic the that Latin coun- 
tries could find common 
ground on the quota in 
coining weeks. 


Price surges lift LCE into profit for first time since 1987 


By Deborah Hargreaves 

The London Commodity 
Exchange made a pre-tax profit 
of Elm in its last financial 
year, which ended in March, 
after soaring coffee and cocoa 
futures prices led to a 22 per 
cent upturn in trading activity. 

The rise in business after 
two years of declining or static 
volumes led to the first operat- 
ing surplus at the exchange 
since 1987. This was paid out to 
members as a rebate. 

fn the 1992-1993 Finan cial 
year, the exchange made a 
small profit of £218,000, after 
recovering from the debacle in 
property futures which cost it 
Elm in lawyers and accoun- 
tants foes. 

“When I got to the exchange, 
it was in survival mode 


because so many members 
were going out of business and 
the exchange had over- 
stretched itself with high over- 
heads,” said Mr Robin Wood- 
head, chief executive, who 
joined the LCE 18 months ago. 

Six new members have 
joined this year, however, all 
of which are financial institu- 
tions or their subsidiaries, 
reflecting the growing interest 
in commodities among the 
hanlring community. 

The end of the world reces- 
sion and worries about the 
resurgence of Inflationary pres- 
sures have revived investment 
Interest in commodity markets. 
At the same time, frosts in Bra- 
zil, which damaged the coffee 
crop, and a growing structural 
deficit of cocoa have underpin- 
ned price rises. 


Coffee prices have more than 
doubled this year and reached 
their highest level for eight 
years. The cocoa market has 
touched a 6V*-year peak. 

At the LCE, this has turned 
into a year of record volumes: 
in the last financial year the 
exchange traded the highest 
number of contracts ever. 

Mr Woodhead says the 
exchange's balance sheet is the 
strongest it has ever been. It 
has reduced Its overheads by a 
third to £8m a year, cut staff 
levels by a third and pared 
back the number of contracts 
tt trades from 27 to 13. 

“We've decided to focus on 
our core products of coffee, 
sugar and cocoa and direct our 
resources so that we provide as 
much benefit to those markets 
as possible.” Mr Woodhead 


stresses he is not going to get 
carried away with developing 
new products without the sup- 
port of his members. 

“Our history of new con- 
tracts is not very good, so 
we’ve reversed that: we’ve got 
rid of soya, lamb, pigs, a redun- 
dant sugar contract” 

Instead of the razzamatazz 
often associated with the 
exchange when it was called 
London Fox (standing for 
Futures and Options 
Exchange), Mr Woodhead is 
concentrating on building a 
fully comprehensive statistics 
database at the request of 
some members. 

At the same time, the 
exchange has to demonstrate 
that it can operate profitably 
in all market conditions. Its 
finances have been helped by 


the upt urn in its core markets, 
but it needs to break-even at 
much lower volumes. The 
restructuring programme 
means the exchange now needs 
to trade 13,000 contracts a day 
to break-even, compared with 
20,000 three years ago. 

Mr Woodhead believes that 
the trading environment in the 
wake of the General Agree- 
ment on Tariffs and Trade set- 
tlement will increasingly free 
up prices for agricultural com- 
modities, giving opportunities 
for futures contracts. But this 
could be a long time coming. 

In the meantime, he is 
looking to upgrade the LCE’s 
electronic trading system to 
boost its capacity and is work- 
ing with other London futures 
exchanges to upgrade their 
common clearing system. 


Albanian agriculture faces 
struggle in the free market 

Geoff Tansey examines the condition of the farming 
sector after a counter-revolutionary land share-out 


I n Albania, they joke “What 
did you get in the land dis- 
tribution? I got one hectare 
and 10 bunkers”. 

It refers to the many hun- 
dreds of thousands reinforced- 
concrete mushroom-like 
defence bunkers built by a 
paranoid regime that finally 
collapsed in 1391. They greet 
you on landing at the airport 
dot the fields and hillsides all 
over the country and take up 
valuable space in the tiny new- 
ly-created private forms - aver- 
age size L4 hectare. 

Behind the joke lies a total 
transformation of Albanian 
agriculture in the past three 
years, perhaps greater than in 
any other farmer eastern Euro- 
pean country. 

Mr Da Ut Karamnna, an ex- 
wine technologist, in Babji vil- 
lage in the hills of central 
Albania received 0.8 ha, scat- 
tered in several parcels, and 
one big bunker (most are 
small, one to two person 
affairs) In the fanrf privatisa- 
tion. He does not regard the 
bunker as an annat but makes 
the best of a bad job by hous- 
ing his eight sheep and seven 
goats in it 

A radical reform distributed 
the 70 per cent of the land for 
merty worked by 600 agricul- 
tural cooperatives to the vil- 
lagers living on It and gave the 
workers on the rest, in the 120 
state farms, the right to form it 
privately. By law, the total 
amount of land associated with 
a village should be divided 
equally among the inhabitan ts 
Usually, each family got some 
good land, some less good and 
some poor. In some areas, how- 
ever, it was distributed accord- 
ing to ownership patterns 
before the communist take 
over and disputes still rage In 
some places over ownership. 

Amazingly, Mr Daut says he 
has had a cow for many years 
- despite a law passed in 1976 
forbidding villagers to keep 
livestock - not so much as a 
chicken. Everything had to be 
kept and managed in the com- 


munes’ facilities. 

When the old regime col- 
lapsed, most of these common 
facilities were smashed up In a 
widespread, popular burst of 
anger at all that represented 
the old order. The livestock 
were distributed to the 400,000 
form families created following 
the collapse. 

The transition was not easy, 
nor is it complete - land sales 
are forbidden as titles have not' 
all been given out Yet, from 
being the most isolated com- 
munist country in Europe, 
Albania has become perhaps 
the most ardently free market 
oriented. 

When the previous regime 
collapsed agricultural produc- 
tion slumped, precipitating a 
major food crisis. The coun- 
try’s 34m people, with a 1993 
per capita GDP of US$330, 
received over $1.4bn in aid 
between 1991 and 1993, accord- 
ing to the Albanian Economic 
Tribune, much of it emergency 
food aid - almost $700m in food 
and distribution costs in 
1991-92 alone. 

A gricultural production 
is climbing back up 
after a foil of almost a 
quarter in 1990-9L By the end 
of 1993, some 16 different 
donors had agreed to provide 
almost $238m in project fund- 
ing to Improve agriculture. 
About $70m had been spent by 
the end of 1993, according to 
the 1993 Agriculture and Food 
Statistics of Albania produced 
by the Ministry of Agriculture 
and Food. 

The aim is to create a mar- 
ket-based food system. Every- 
where, people have to learn 
how to run a small form busi- 
ness and have problems mar- 
keting what is produced - as 
the previous distribution sys- 
tem has collapsed and few food 
companies operate. They also 
need market tnfnrmfltinn and 
more knowledge of how to 
farm more efficiently. 

Most formers were workers 
In the old regime and have lit- 


tle if any experience with live- 
stock, for example, which are 
mainly looked after by women. 
Reaching them, is essential to 
improve dairy production and 
village cheese making, says 14s 
Rebecca Balogh, director of the 
small Land O Lakes dairy 
development project She and 
her team have organised some 
260 village women as volunteer 
key leaders, each of whom 
works with 15 women in her 
village, to Improve mDk qual- 
ity, animal health and cheese 

making 

In the mountain village of 
Guri i Bard he in central 
Albania, Mr Hamid Murad and 
his family struggle to plough 
their 800-square metre patch. 
They plant maize for fodder 
while other villagers gather 
leafy branches from trees in 
the surrounding hills for win- 
ter feed. Everywhere farmers 
harness up any animal they 
can - horses, donkeys, bull- 
ocks, even cows - to work 
their land as tractors are 
scarce and expensive. 

Officials also face difficult 
adjustments. The ministry has 
been reorganised with support 
of $3m under a UN Food and 
Agriculture Organisation proj- 
ect It now has to provide the 
kind of technical and market 
information useful to small 
formers through radio and TV, 
the only media to reach them. 

An essential need in situa- 
tions like Albania's is to pro- 
vide business advice to form- 
ers, forming association and 
food businesses, believes Mr 
Sergio Giorgi. FAO adviser to 
the agribusiness advisory unit 
He is working with a formers 
association - ‘co-operative’ is 
not a politically-co rre ct term in 
the new Albania - established 
three years ago on a family 
bass, to set up an accountancy 
system and financial control 
He is also advising the first 
wholesaler buying local pro- 
duce and selling to transport- 
ers and state agriprocessing 
plants, moving about two 
tonnes a day. 



Iliton 

jpected 





COMMODITIES PRICES 


BASE METALS 

LONDON METAL EXCHANGE 

(Prices from Amalgamated Metal Trading] 

■ ALUMINIUM. 99L7 PURITY (S per tome) 


Cash 

Close 1505-8 

Previous 16175-05 

HgMow 

AM Official 15075-85 

Kerb dose 

Open tnL 283.171 

Total daly turnover 45.267 

■ ALUMINIUM ALLOT (5 per tome) 

3 mtto 

1632-3 

1542-4 

1542/1618 

1532-2.5 

1520-1 

Close 

1507-17 

1530-36 

Previous 

1520-30 

1540-50 

Hghrtow 


154071530 

AM Official 

1510-20 

1530-40 

Kerb dose 


1530-5 

Open W. 

2533 


Total dariy turnover 
■ LEAD (S per tome) 

413 


Close 

585-6 

600-1 

Previous 

591-2 

005-6 

High/tow 


808/592 

AM Official 

581-15 

595-55 

Kerb dose 


596-6 

Open Int. 

41,740 


Total date turnover 

4.774 


■ MCKEL (S per tonne) 


Close 

6290-300 

8385-90 

Previous 

6340-S 

6436-40 

rt^irtow 

6250 

6440/6348 

AM Official 

6250-55 

6350-55 

Kerb ckwo 


6380-70 

Open tet 

58542 


Total daBy turnover 
■ TM& per tarewt 

12.426 


Close 

6345-55 

6420-30 

Previous 

5416-25 

6490-500 

Mfch/lciw 


5460/6350 

AM OffldM 

6340-50 

5405-10 

Kerb dose 


5340-50 

Open fnt. 

18.617 


Total dafiy turnover 

2.395 


■ ZMC. spectel high grade (3 per tonne) 

dose 

0785-7.6 

1001-2 

Previous 

983-4 

1006-7 

rtflhflow 


1000/995 

AM Official 

978-8 

1002.5-3.0 

Kert> ctoao 


385-8 

Open mt 

101,737 


Told dally turnover 

22,129 


■ COPPER, grade A {$ per tonne) 


Ctasa 

2531-3 

2539-40 

Previous 

2533-4 

2538-9 

High/low 

2522/2521 

2543/2516 

AM Official 

2520-21 

2527-8 

Kerb chna 


2524-5 

Open Int 

225.498 


Total doBy turnover 

64572 



■ LME AM Official CA rets: 1-5510 

LME Ctoatng E/S rate; 1.5412 

Spot 1 5395 3 Mhs 1.538a 6mte15375 9 nHhs:15383 

■ HI OH QHAD6 COPPER (COM EX] 



Oafu 
Ores efnags 

Ogh 

taw 

Opm 

U 

Vd 

jm 

114.80 

*005 

115.15 

11400 

1551 

262 

Mg 

114.65 

4MB 

115.30 11450 

838 

24 

5«P 

115.10 

-OPS 

11020 

11435 

32063 

6032 

Oct 

114.70 

■a io 

115.03 

11445 

423 

88 

H» 

11430 

-005 

- 


245 

. 

Use 

113.85 

- 

(14.75 

11130 

10276 

778 

Total 





52205 

4009 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
{Prices SUppted by N M Rnthachfltfl 


Odd (Troy OZ.) 
Close 
Opening 
Morning fte 
Afternoon fix 
Day-a High 
Day's Low 
Previous dose 
Loco Lde Mean 
1 month , 


S price 

386.10- 38800 

385.10- 38600 
385.40 

MS on 

386.70-387.10 
38400-38500 
386.80-387 00 


C equhr. 


248.047 

250.097 


Precious Metals continued 

■ GOLD COMEX (TOO Ttay oz^ SAroy taj 

Sett Day's Open 

prim dungs Ugh has W W. 
Jut 384.1 -1.1 385 l0 3850 10 10 

Ao« 384J -1J 387.1 3842 69,883 27AM 

Sep 3058 -10 - - - - 

OO 387.4 -10 390.1 387.2 60 4 250 

Dec 3904 -1J 3935 3883 39*19 8417 

FM 3945 -15 3885 394.4 9582 1. 221 

TeM 15334 38*50 

■ PLATINUM MY M EX (5C Troy oz.; 4/tro y czj _ 

JM 
Oct 
Jin 
*pr 
■tot 
Oct 
Total 

■ PALLADIUM NYMBt (100 Tioy acz S/tray oz.) 

Sffi 147.25 *0.15 14750 14850 4,700 308 

Oca 14850 +0.15 14750 14650 941 150 

Mar 14850 +0.15 14750 14750 189 54 

TOW 5510 010 

■ S8.VER COMEX flOQ Troy ozj CentaAroy ozj 


GRAINS AND OIL SEEDS 

■ WHEAT LCE (E per tonne) 

Salt nay's Opss 

price Lfaau gn Ogb Loir H 
Sep 104.15 - 10450 10450 382 

*Jt 105.15 +0.15 10600 10525 2541 

Jan 107.15 +0.15 10750 107.40 1.483 

tear 10850 +0.15 100.40 10850 

Stay 11050 +020 111.15 11050 

11255 +005 11320 11350 


SOFTS 


Tetri 


633 

622 

146 

5863 




Salt 

u*r» 



Opes 



m 


pries i 

drop 

m 

Law 

hit 

ttoi 


31 

Jd 

1088 

-8 

1001 

1079 

412 

148 

teg 

107 

Sfe 

1099 

-5 

1103 

1088 

16833 

1274 

Oct 

48 

DCC 

1108 

- 

1113 

1098 

30297 

1.792 

Dec 

10 

Mar 

1126 

-1 

1130 

1119 

28.990 

1224 

Mi 

44 

May 

1134 

-1 

1134 

1131 

10010 

90 

ter 

- 

Jul 

1138 

■1 

- 

- 

3250 

38 

Jm 

230 

Total 




184774 

5278 

TsU 


■ WHEAT GST (5,000bu min; canta/eoib bushel) ■ COCOA CSCE flO terwm; 4/tamm) 


MEAT AND LIVESTOCK 

UV E CATTLE CME (40000^8; CmH/lba) 

Salt Day's Open 

price cfnwgn Ugh Leer U M 

69.475 +0750 60750 66500 23,703 4J02 

71575 +0575 71.950 71.225 23519 3528 

71525 +0375 71.425 70960 12A7B 1,785 

70526 +0125 70750 70400 9508 487 

71575 -OtOO 72.100 71500 5543 351 

80425 -0025 86250 68275 1,150 18 

75280 10347 
■ UVE HOQ8CME (4QOOOPM; centsriba) 


4132 

■2.4 

4170 

4140 

296 

158 


334/6 

■4/2 

3284) 

324/D 736 

1700 

Sap 

1478 

-11 

1500 

1472 38050 7088 

JM 

46050 +0775 48000 45J75 

480 

306 

415.8 

-24 

4200 

4150 21 <482 

2.724 

Dec 

3388) 

-3 « 

341/D 

337/4 95025 24040 

DSC 

1521 

-8 

1548 

1518 17081 

2,438 

tag 

45.400 +0700 45000 44J50 

9,470 

2,181 

4iai 

-Z4 

4220 

4180 

2013 

a 

MW 

3434) 

•441 

346/D 

342/4150065 34.140 

tear 

1551 

-5 

1570 

1548 8,158 

430 

Oct 

41.225 +A425 41.425 40.750 

9083 

2.011 

4220 

-Z4 

- 

- 

1204 

70 

May 

338/4 

-4*4 

339/4 

336/4 32085 

4,445 

MW 

1571 

■5 

- 

- 2055 

4 

0ao 

41.100 +0000 41.100 40050 

4043 

547 

4260 

-Z* 

- 

• 

1 

- 

Jd 

322/0 

-I/O 

323/4 

321/D 1085 

480 

JM 

1581 

-5 

- 

- 2044 

36 

Feb 

40075 +0075 40000 4a 150 

1060 

252 

4300 

-2.4 

- 

- 

1 

- 

Dae 

332/0 

■1/8 

- 

- 3079 

260 

Sen 

1811 

■a 

- 

- 1092 

2 


39025 +0325 30975 30700 

948 

m 





25088 

2fia 

TOM 




283070 85085 

Total 




7705710082 

Tetri 


27,188 

5088 


■ MAIZE CBT (SJWO Benin; oants/56fc buaheg ■ COCOA QCCO) (SORWtanne) 


■ PORK BELLES QflE (4O0OQba; oante/bri 


JM 

522.7 

-50 

5270 

5270 185 

41 

teg 

-■W31 

-60 

- 

- 

- 

sm 

5250 

-80 

5385 

5245 78050 11,477 

Dec 

5320 

-80 

540.5 

5320 24.408 

1007 

Jan 

534.1 

-60 

- 

35 

- 

tear 

5406 

■60 

5530 

5450 6033 

55 

Total 




122079 12011 

ENERGY 





■ cnuOE OH. NYMEX (42.000 US goBs. Vbarr«8 


latent 

Dura 


Opes 



price 

eftaogs 

Ugh 

low 1st 

VM 

8* 

19.28 

+007 

1938 

1905 12588 30232 

Oct 

1809 

+005 

1909 

1802108033 62045 

■ev 

18.79 

+005 

1507 

1802 46066 

14585 

Dec 

1887 

+005 

18.75 

1852 31090 

4057 

Jan 

18.59 

+004 

1805 

1850 39004 

4043 

Feb 

I80S 

4009 

1858 

1857 23001 

1071 

Total 




400745 124052 

■ CRUDE CM. IPE (S/borreQ 




Latest 

oar* 


0pm 



price 

tfvnpi 


tmr 1 st 

M 

Sap 

1709 

+O.I3 

1702 

1702 68.493 17563 

Oct 

17.48 

+000 

1708 

1703 20081 

3073 

Hav 

1707 

+0.03 

17.42 

17.15 10083 

511 

Dec 

1707 

+001 

1704 

1705 14079 

1,121 


•7.21. 

•fljRL 

•7. 7*. 

•7.16. SflWL 

282. 

Fab 

1608 

■0.13 

1608 

1806 2541 

147 

Total 




127062 23027 

■ HEA7WG (ML Unfit (42000 US gM&i C/US gafe) 


Latest 

Day's 


Dpsa 



P*e 

dtange 

a* 

law U 

1M 

teg 

4806 

+0L22 

5O0O 

4855 20021 

10025 

Sop 

50.40 

+0.12 

5055 

50.03 25081 

6.447 

Oct 

5100 

+002 

SI .65 

51. 10 11.173 

2056 

No* 

5ZJ30 

+002 

5250 

6104 iam 

769 

Dec 

5140 

+0.17 

6309 

53.10 20042 

1022 

Jm 

5400 

+0.17 

34. TO 

5190 12.490 

283 

Tote 




124089 23,125 

■ QAS OIL K S/tane) 




SMI 

Oaf* 


Opes 



pries 


Mgb 

IMS U 

HU 

teg 

15300 

+025 

15400 

15205 26,177 

5094 

Sop 

156.75 

+000 

15700 155.00 15584 

2004 

Oct 

16000 

+0-75 

18000 

15600 12013 

1044 

NO* 

161.75 

+005 

16250 16000 9001 

1.141 

Dec 

163.75 

+050 

16373 

16305 15.027 

440 

Jm 

164.75 

+025 

165.08 

16305 7,099 

300 

Tote 




12014 10080 

■ NATURAL GAS NYMEX (10000 moflbL; Stam&u.} 


Latest 

Bay* 


0pm 



price 

Change 

H* 

Low tat 

Vat 

Asg 

1041 

-0060 

1000 

1025 12041 

16043 

Sfe 

1050 

-0030 

1080 

1005 16012 

iiTfl 

Oct 

2014 

■0024 

2030 

1060 10066 

1,148 

Nor 

Z.12B 

-0023 

2.140 

2.100 9043 

857 

Dec 

2045 

-0013 

2255 

2025 14067 

1096 

Ju 

2230 

-0013 

2X0 

2035 9.775 

443 

Total 




109062 28001 


« UNLEADED OASOUNE 



WKB lanung ■ wwv 

-u.401 6 months . 

4.48 

MYMK HZ 000 US gafe; c/US gritt) 


,_409 12 manta 

—4.16 

— 4.89 


latest 

isks 

cSmgs 

Mgb 

0p« 
tmr tat 

Vol 

pAroy oz. US eta equfa. 


5400 

+0.42 

5405 

9306 30088 

12065 

339.70 

82600 

Sap 

5405 

+032 

9400 

5400 30080 

8066 

34300 

531.80 

Oct 

5300 

+007 

5340 

5200 10079 

2028 

348.16 

63806 

Kfe 

5100 

+007 

5105 

51 JO 8024 

636 

39905 

55405 

DM 

5800 

+0.17 

56.70 

56.10 5,126 

646 

S petes 
390-333 
3960039908 
90-03 

252-255 

68-91 

Jm 

Total 

5506 



- titri 

tw 

123 

2S096 


Sep 

Dec 


TOW 


215/D -3/2 217/D 21445 5505 5505 

218/D -2/2 Z1SIB 217/8250435 92535 

227/2 -2/D 22910 2Z7/D 593510 123,130 

233/4 -2JO 235M 233/0109580 30490 

237/4 -2/0 239/2 237/2 30480 5,345 

23972 -3AJ 241/4 23B/2 35580 4585 

1JK2HMS07O 


■ BARLEY LCE (E par tonne) 



10105 

+000 

1D20O 

10200 

117 

99 

Mw 

103J8 

+0.05 

tOOJS 

10135 

483 

28 

Jm 

10400 

+0.15 

- 

- 

2a 

- 

tear 

106.15 

+000 

• 

- 

38 

• 

Mfe 

107J5 

+075 

- 

- 

1 

- 

Tetri 





TO 

1*7 

■ SOYABEANS CUT ftOQOhu srin; cmtaflOD bufeeO 


577/0 -an soon 5730 2050 4050 

Sap 5680 -4/2 572/0 5820122.100 63050 

Mw 568/0 -1/2 56V4 554/D 88,475 15,165 

Jsn 8S4/4 -9S 58B/D 961/0341,165 12M8D 

Mar 672/4 -W SKIQ 58W6 47,715 4010 

May 578/4 -1/2 B8W0 575/4 17015 2045 

Total 6S20» 230,1* 

■ SOYABEAN OIL C8T (BO.OOatw oents/Mt 


2399 

+004 

24.15 

2363 

68 

627 

Sap 

2304 

+005 

24.10 

2300 

13206 

6.780 

Oct 

23.42 

+009 

2300 

2306 

19,719 

4088 

Dec 

2308 

+007 

mw 

9 ? a? 

12,777 

1006 

Jm 

2315 

+006 

2318 

2200 351242 

6.491 

tear 

2320 

+005 

nx 

220 & 

3£2fi 

429 

Trial 




98003 21042 

■ SOYABEAN MEAL C8T (100 tans; VIon) 


Ate 

174.9 

•10 

1780 

1740 

215 

STB 

Sap 

174.4 

-00 

1780 

1730 23079 

7030 

Od 

1720 

-OS 

1740 

1720 

17,496 

2086 

1e*B 

b 

- 

‘TToCa 

■rrfli 

"VSffo 

"7®» 

Jm 

1730 

- 

1740 

1720 

27,191 

4093 

Mw 

1750 

+00 

1750 

1740 

2005 

510 

Total 





88003 18030 

■ POTATOES LCE pVtoono) 




Mw 

900 

. 

. 

. 

. 

. 

Mar 

1050 

- 

w 

- 

- 

- 

Apr 

2238 

+10 

2270 

2240 

1,177 

133 

May 

250.0 

- 

- 

. 

- 

- 

Jm 

1070 

« 

- 

- 

- 

- 

Tote 





1,171 

133 

■ FRBGHT (BffPEX) UCE (SIO/liKtaK point) 


Jul 

1434 

+4 

1434 

1434 

547 

46 

Aug 

1356 

-1 

1360 

1359 

804 

94 

Sep 

1306 

. -12 

1375 

1387 

140 

% 

0(3 

1403 

+2 

1410 

1400 

437 

14 

Jm 

1415 

+5 

- 

- 

283 

7 

Apr 

1427 

-11 

- 

- 

102 

- 

Tetri 





2099 

187 


Don 

Free 





BH 

1429 

1429 






Waal 

Qffiancy developmenta have tended do push 
up Mme prices In the wool sector n Europe. 
There a not only a snail recovery In the US 
deter, but a relatively nearer BtrangtherS n g m 
the Australian doOar. European adjustments 
abo tend to push up pricing ter IndMduri 
terns. Apart Item trite, there is earns buhtu 
earring In trie proaaring secure. Orders hav* 
bean corrong through ermUcaBy. usually for 
aim weights at Mw prices, but ooCArianaly 
enough has been sold to have en effect cm the 
prices one or two feme are quoting. This can 
oppiy ih the British wool sector, where ■ good 
auction Is expected reset week. There watt 
again goad demand far suckpte woof, and the 
monthly quota (aider the Qamaut schedule has 
now been precOrafly aborted for July, August 
and September. 


Jd 79 

Mk-. 


Prfce 

112351 


110158 


10 dv 

■ COFFEE LCE (S/toone) 


.NM 


Mb 

m Mm 


JM 

3623 

+120 

3540 

3490 

516 119 

Sap 

3634 

+121 

3885 

3470 20075 4038 

Mw 

3618 

+113 

3860 

3460 

8.439 1088 

Jm 

3600 

+120 

3615 

3440 

10.692 05a 

Mar 

- 3595 

+110 

3595 

342S 

3092 376 

May 

3580 

+100 

3480 

3470 

874 9 

TMM 





43054 7064 

■ GOFFS ■C CSCE (970OOM8; oentsribg 

Ste 

229120 

+806 23300 21500 22089 S05B 

Dm 

23105 

+800 23025 21000 12,114 2094 

Mar 

raw 

+600 23850 22300 

5037 5Z8 


23700 

+900 

24000 

22400 

1015 88 

JM 

23800 

+900 23270 23270 

328 77 

*•0 

24000 

+600 


- 

39 

Tetri 





4100511075 

■ COFFEE (ICO) {US cents/jpound) 


JM 20 



Pries 


Pm*, fey 

Coapi fefly 


. 19301 


203.77 


15 fey average . 


. 18602 


1872H 

■ No7 PHH4UM RAW SUGAR LCE (certsflba) 


Oct 

1230 

+0.14 

1220 

1200 

1200 

51 

fea 

1102 

- 

- 

- 

- 

- 

■te 

1107 

+0.04 

- 

- 

90 

- 

Tate 





1080 

81 

■ WHITE SUGAR LCE (S/tome) 



Oct 

31800 

+1.70 

31800 

31500 

10078 

498 

Dec 

314.10 

+1.40 

31200 31200 

S69 

IS 

Mar 

31200 

+100 31300 

31080 

3385 

135 

•***. 

UJ0O. 

-run, U25fl. uatn. 

HU- 

iR. 

*te 

31100 

+1.10 

- 

- 

345 

. 

oct 

299.10 

+100 

- 

- 

171 

- 

TMM 





16019 

683 

■ SUGAR ii' CSCE (112000 Kb; centaffiB) 


Oct 

1100 

+6.02 

1108 

1100 68090 6215 

Mar 

11.73 

+608 

11.78 

1103 

70370 

1270 

May 

1103 

♦004 

1108 

1187 

6.466 1.535 

JM 

1103 

+603 

1106 

1180 

2015 

95 

Oct 

11.42 

+603 

1109 

1106 

1.152 

135 

Mar 

11-39 

+603 

- 

- 

158 

182 

Total 




108058 9007 

■ COTTON NYCE {500008b; centaAte 


Aig 

7090 

+105 

- 

. 

S 

4 

Qtt 

7000 

-0.40 

7100 

7000 

eon 

938 

Dec 

70.25 

■005 

7070 

7005 30066 2091 

Mw 

71.47 

■003 

7105 

71.40 

7.167 

182 


7222 

■0.41 

n 06 

7225 

4229 

109 

JM 

7305 

+L2S 

7300 

7300 

2,407 

188 

TMM 





53,787 3068 

■ ORANGE JUICE NYCE (ISLOOOtls; Centa/ttxD 

Sfe 

91 J3 

+095 

9300 

9QJ0 14,401 

1027 

Nov 

9405 

+085 

9600 

9400 

3094 

662 

Jm 

9805 

+050 

8050 

9780 

4027 

487 

Mar 

10140 

+600 10225 

10200 

2394 

81 

Hay 

104JG6 

+600 

10480 

10480 

718 

17 

JM 

10805 

4000 

- 

- 

184 

- 

TMM 





25083 3284 


VOLUME DATA 

Open Interest end Vbhena data shown far 
contracts traded on COMEX. NYMEX, COT, 
WCE. CME. CSCE and PE Crude OB are oho 
day In arrears. 


INDICES 

■ REUTERS (gate: 18/8/31=100 


■M 21 Jul 20 month ago yew ago 
2VJ5JQ 2156.1 20020 17tR4 

■ CRB Rutoaa (Bear 4/B/Sfe*1QO) 


•U 20 Jut IB month ago year 
23150 234 JO 23087 


ear ego 
217.41 


33500 +0500 33500 32.475 
32J75 +0550 32500 32500 
44125 +0825 44550 43550 
43525 +0975 43500 43500 
44500 +0500 44500 
45500 +0.700 45500 44700 


75 

1524 


89 
4888 
3,130 425 

114 6 

48 3 

27 3 

0110 2533 


LONDON TRADED OPTIONS 

Strflw price $ tame — Cote Puts — 

■ ALUMMUM 


(99.796) LME 

Sap 

Dec 

Sep 

Dec 

1525 

46 

77 

55 

81 

1660. 

36 

67 

69 

96 

1575 

27 

57 

85 

110 

■ COFFER 





(Grade A) LME 

Sap 

Doc 

Sep 

Dec 

2500 

88 

115 

55 

106 

2560 - _ ... 

63 

S3 

80 

135 

2800 

43 

74 

110 

165 

■ COFFEE LCE 

Sap 

Nov 

Sep 

Nov 

3600 

288 

485 

264 

560 

ftKn 

285 

449 

281 

594 

3700 

245 

434 

311 

829 

■ COCOA LCE 

Sep 

Dec 

Sep 

Dec 

lOOO 

108 

147 

7 

39 

1QSO 

68 

116 

19 

58 

1100 

39 

90 

40 

82 

■ BRENT CRUDE IPE 

Sep 

Oct 

Sep 

Oct 

17DQ 

70 

85 

28 

SO 

1750_ 

56 

71 

48 

- 

ism 

28 

40 

73 

116 


LONDON. -SPOT MARKETS. 

■ CRUDE OIL RDfiJpwbarrei/Sep) +or- 


Dubel 

J16.37-6.42w 

+0.115 

Brent Blend (dated) 

SI 7.44-7.45 

+0-126 

Brent Bfend (Sop) 

317.64-7.05 

+0-125 

W.T.I. ft pm eat) 

Si 808-909*. 

+0005 

■ «L PRODUCTS NWE prompt dafivery OF (tonne) 

PramJum QasoSne 

SI 88-188 

+1 

Gas 08 

SI 52-153 

♦2 

Heavy Fun! OB 

398-100 


NaptatB 

SI 65-169 


Jet fad 

3165-166 

+000 

ftriofaun Argus Btwwfta 



■ OTHER 



Gold (per troy aztf 

538600 

-0.70 

S8vw (par tray oz)l 

53300c 

+10 

Platinum (per troy oz.) 

*411.75 

-4.75 

Pafiodkxn (per troy oz.) 

$145.05 

-aio 

Copper (US prod.) 

11900 

-1.0 

Lead (US prod.) 

37.75c 


Tin (Kuala Lumpur) 

1305m 

-0-08 

Tin (Now York) 

346J50C 

-600 

are (US Prime w.) 

Una. 


Cattle (tare wdgtujl® 

110l32p 

-007* 

Sheep (Dvu wolghl)t4© 

9409p 

-109- 

Pigs (tare weighqc 

70.62p 

-406* 

Lon. day sugar (raw) 

*301.6 

-2.7 

Lon. day sugar (wte) 

33430 

-30 

Tate A Lyle impart 

£3070 

-2-0 

Barley (Eng. feed) 

£106.751 


Main RJS No3 YeOow) 

41430 


Wheat (US Doric Neath) 

£180.0 


Rubber (AubW 

SI.OOp 

+20 

Rubber (SapiV 

80.00p 

+30 

Rubber KLRSSNol Aug 

3330m 

+20 

Coconut CM (PMQ§ 

S6750Z 

-&0 

Pobn 08 (MMayJ§ 

4505.0q 

+30 

Copra (PfiBfi 

4405 


Soyabeans (US) 

E174Uq 

-20 

Cotton Outlook -A' Index 

81.70c 

-000 

Wbottepa (B4a Super) 

425p 

+4 


q Aug. 


£ pw toons unkna oBwwtaa stum. 

r rtnggJl/kg. m Uatmtan oantaAq. ■ 

Sap. > Sop . V London ftiynfcnL § CT Ftonu 
ftfflteti mattat etas*. * Sheep (Live might pm 
<3wng* on vnok. paMmi prlcmO Prion on fa 
out (fay, 



CROSSWORD 


No.8,512 Set by DANTE 



ACROSS 

1 He is entitled to a share of 
whatever is left (2-4) 

4 Potential pile boss may make 
(8) 

9 Country with a president, an 
ex-anion leader (6) 

10 Drink made Noel tipsy (8) 

12 Host of parasites seen on the 
move (8) 

13 A sweet’s round and in Layers 
( 6 ) 

15 Victoria thumbed by Jack for 
a lift? (4) 

16 In touch certainly and hold- 
ing one’s share of the deal 
(4-34) 

19 Where soldiers serve one may 
well find bull (2A5) 

Tflj *Stn*KJi aromdi’ ojOaing rumd lu- 
cent (4) 

23 Settle concerning Interest (6) 

25 Joins the embassy staff (8) 

27 Cinerama developed In the 
States (8) 

28 Spot the dog is in, free from 
danger (6) 

29 Words which carry convic- 
tion? (8) 

30 Give rating a note to take 
between ships (6) 

DOWN 

1 Neat petticoat in. primrose (7) 

2 From such a tool may come 

wholesale destruction (9) 

3 Anne is hopping mad (6) 

5 Does wrong, gets lines (4) 


6 Pull up in pain when learning 
the hard way (8) 

7 Nawab’s new address in 
Africa? (5> 

8 Jewel of the small type (7) 

11 On the first of May Blaine 
changes her name (7) 

14 Lavish praise (7) 

17 The poor may find it accom- 
modating (4-5) 

18 News flash causing a fur- 
rowed brow? (8) 

19 Hostile Incursions where the 
fleet lies at anchor? (?) 

21 Effusive oil-producers? (7) 

22 Sports trunks? (6) 

24 Not smiling back (5) 

26 Dust one may well find on the 
bathroom shelf (4) 


Solution (MS 11 



- 




o 


,r **Stea 






eu Ui Sl 

■ tl'Oi* 


financial times 


FRIDAY JULY 22 1994 



CROSSWORD 


S5 ss 


?rz 


.- «_ arz rr 

W: ft 

S3£ 2» J*U*» 


fegs « 5® ;g n 
S JSi s-i * 



« ac mm a 


s b a- 

t* £ ? 
5 V . i 

*?:s 

«!& 
c S' 


Strong close as the Footsie challenges 3,100 

Bu Tmtu DiJ«u< “ 


FT-SE-A Alt-Share Index Equity Shares Traded 


S5M5SSKSS— *!SL. 
1,000 - • — 


By Terry Byland, 

UK Stock Market Editor 

The currency markets came to the 
rescue of a lethargic UK equity sac 

S r y ? s ?[ day - D oUar stocks rose 
sharply late in the session as the US 
currency turned higher after the US 
Sec*«*iy toW Congress 
* he Chnton administration 
wanted a strong dollar and recog- 
nised that a renewed drop in the 
currency could threaten global 
recovery. 

The FT-SE 100 Index, which, had 
moved uncertainly earlier as the 
Bundesbank left key interest rates 
unchanged, made a determined, 
albeit finally unsuccessful, run for 
the 3,100 hurdle in the final hour of 
trading. Shell Transport, British 
Petroleum, Glaxo and SmithKline 
Beecbam were all in demand - even 


though Wall Street was a shade 
easier at the London close. 

The final reading showed the 
FT-SE 100 just off the day’s best at 
3,095.1 for an advance on the ses- 
Sion of 17.9 points. The FT-SE Mid 
250 Index gained 133 at 3.6009 as 
optimism spread beyond the dnTiwr 
stock sectors. 

For most of the day share prices 
moved erratically, with company 
trading statements providing many 
of the features. At the opening, mar- 
kets in London were under the 
shadow of the overnight setback on 
Wall Street, and the concern over 
US interest rates revived on 
Wednesday by the appearance 
before Congress of Mr Alan Green- 
span, the chairman of the Federal 
Reserve. 

A weak start saw the market 
down by 16 points on the Footsie 


and although some recovery was 
soon made, shares drifted off again 
after the Bundesbank left its key 
rates unchanged at its last meeting 
before the summer recess. Markets 
were pleased to hear that the Bund- 
esbank was not easing its anti-infla- 
tion ataww although this did little 
to ease the renewed uncertainty 
over global interest rate prospects. 

Company trading statements gave 
a somewhat negative lead to the 
market. Wellcome shares fell 
sharply in spite of higher profits as 
invekors away from the dis- 
closure of lower sales of Retrovir, 
the group's widely known anti-Aids 
treatment. Boots, the high street 
retailer and chemist, also gave 
ground as the annual meeting 
brought no news on plans to sell 
the pharmaceuticals divisions. 

Outside these special situations. 


trading volume was thin and the 
market lacked enthusiasm, or even 
direction. Little attention was paid 
to the announcement t ha t Britain's 
trade deficit with non-EU countries 
had dipped to £495m in June, com- 
pared with market forecasts of a 
£700m plus deficit Nor was the mar- 
ket greatly interested in the out- 
come of the leadership elections of 
the UK opposition Labour party, or 
in the reshuffle of the Conservative 
government. 

It was left to the upswing In the 
dollar to provide the impetus 
behind the late improvement in the 
London stock market Trading vol- 
ume increased as the Footsie moved 
steadily into positive territory- By 
the end of dealing, Seaq volume 
stood at 607.6m shares, still well 
short of the 679.7m of the previous 
session. On Wednesday, retail, or 


customer, business was worth 
£1.57bn, again at the high end of 
this year’s daily averages. 

The September contract on the 
Footsie gave the lead to equities, 
and futures trading served to 
strengthen the boost gives to busi- 
ness in the Footsie 100 stocks by the 
gain in the dollar. Half of yester- 
day's equity business was in Foot- 
sie-listed stocks, with the non- 
Footsie sectors playing a less active 
role than of late. 

Strategists, while commenting 
that the market was showing signs 
of moving into its summer lethargy, 
saw the late advance in share prices 
as an indication of underlying confi- 
dence. Any prolonged recovery in 
the US dollar would be likely to 
inspire strength in bond markets, 
and provide the basis for an 
advance in equities. 



Sana FTQapfcft 


■ Key Indicators 
Indices and ratios 

FT-SE 100 3095.1 

FT-SE 7Ad 250 3600.9 

FT-SE-A 350 15516 

FT-SE-A Afl -Share 1 S45.30 
FT-SE-A AB-Shara >i eld 3.6-1 

Best perfo rm ing sectors 

1 Water 

2 CHI Exploration & Prod 

3 Electricity 

4 Lite Assurance 

5 Utilities 


+17.9 FT Ordinary index 2402.5 

+13.9 FT-SE-A Won Fins pro 19.51 

+8.3 FT-SE lOOFut Sep 3114.0 

+7.92 10 yr CM yWd &3S 

(3.86) Long snlt/eourty yid ratio- 2-21 

Worst perform tog sector* 

.. +1 .9 1 Rtnalcra. General 

.. +i.8 2 Building Materials — 

.. +1.7 3 Breweries - — 

.. +1.6 4 Media 

..+1.4 5 Merchant EartVs 


+10.9 
(19.39) 
+4&0 
(835) 
p.1 9) 


• 0.8 
-Q.6 

_,...-0.4 

- 0.4 

-0.3 


Billiton 

news 


Traders scrambled for Shell 
Transport as a shortage of 
stock was compounded by 
strong speculation that the 
long awaited $lbn sale of the 
company's metals business 
might be no more than days 
away. 

Negotiations over the sale of 
Shell’s Billiton metals business 
in South Africa to Gencor have 
hung over the market for more 


than a year. A further delay 
was announced at the begin- 
ning of July. 

Yesterday the company's 
official comment was: “We are 
expecting a conclusion to the 
deal shortly. n But insiders «*id 
they believed it would be 
signed by the end of next 
week. 

Ms Irene Himona, oils ana- 
lyst from SGST. said: “It looks 
like they are getting their act 
together on rationalisation. 
They will get rid of a loss- 
malting division and can rein- 
vest elsewhere.” She added 
that although it was too early 
to adjust forecasts, successful 
use of the cash could add 
£l5Qm to profits. 


EQUITY FUTURES AND OPTIONS TRADING 


A firm opening on Wall Street, 
together with a squeeze In the 
second half of the session, 
helped stock index futures 
reverse an earlier slide, writes 


Joel Kibazo. 

After opening at 3,078, the 
first part of the day was 
marked by a slide in the 
September Footsie contract. 


■ FT-SE 100 INDEX FUTURES JJFFEj £25 par fufl Index point 


(AFT) 


Open Sett price Change 
30784 3114.0 +38.0 

3095.5 3124.0 +38.0 

■ FT-SE «P 2B0 INDEX FUTURES QJFE) 


Sap 

Dec 


Mgh Low EsLvol Open W. 

3129.0 3066.0 13314 40104 

3124.0 3092.0 140 17S8 

£10 per Ml Index point 


Sep 


35604 3600.0 +13.0 36004 25800 


4425 



■ FT-SE MH> 250 IHPBC RJTUHE3 (OMUQ £10 per ftjtl ttdan point 
Sep 3800.0 

XI open vtaaat agues ■» to pataa day. t Exact w*m shewn. 


■ FT-SE 100 INDEX OPTION (UFFE) (TOM) £10 perlrt Index point 

2900 2950 3000 3060 8100 3160 3200 2260 

CPCPCPCPCPCPCPCP 
AID 218 8*2 172 14 131 22^ S3 35*2 6Uz 53fe 38 Sir* 21 1154 10 1554 

Sep 23142041914284 194 41 117 5B 884 774 634 103 434 133 29 170 

Oct 2«3 32 265 4341684584 137 75 1884904 8441224 64 1924 47 18&4 
Hot 2584 424 2224 S5416B4 894 KB4 894 12B4H04«341364 834 166 6341964 
Oect 272 564 201 81 143 122 974 178 

CBM 6983 Pub 2983 

■ BUBO STYLE FT-SE TOO INDEX OPTION (UFFE) £10 partUi Index point 

2925 2975 3025 3075 3125 3178 3226 3275 

1914 <04 1484 184 1104 27 75 424 48 S4 28 864 154 1334 74 1734 

2104234 171 33 136 464 U2 634 74 85 514 112 3441444214 161 

2224 38 1534 86 884 110 594 166 

2534 » 1884864 13141324 88 187 

289 814 22541144 171 1564 12B420&4 

CBM 1,587 FWs 1.489 * UntatyKg Mb Mb Premiums dm m tend no MM prices, 
t Long <btof cq*i mufti 

■ EURO STYLE FT-SE IflD 250 B4DEX OPTION (OMUQ £10 per fat Max point 


3450 8500 3550 3800 3880 

M 14 414 844 61% 604 874 

Cafe 0 Pub o SeBtomert prices art Mum m Mae at ODpn. 


FT - SE Actuaries Share, indices 


3700 


3750 3800 


Meanwhile, dealers said a 
line of shares bought as part of 
a programme trade early in the 
day added to the pressure and 
prompted some traders to buy 
back stock and close out bear 
positions. 

There was also support from 
an upbeat T T-rar-rmi^n ri ati n n \jy 
Nomura early in the week. The 
shares jumped 14 to 73&p on 
active turnover of 5.6m. 

Airways alert 

Turnover in British Airways 
rose to a hefty 12 m to malca it 
the day’s most heavily traded 
stock as the shares relin- 
quished 3 to 431p on fears of 
increased losses at USAir and 


with traders c&sappointed by 
the Bundesbank's decision to 
leave interest rates unchanged, 
ft feU to a tow of 3.068. 

But improving bonds, a 
stronger dollar and the good 
start to trading in the US came 
to the rescue of September in 
early afternoon trading. James 
Capel was reported to have 
been a good buyer, as was 
UBS. That strong demand 
brought about a squeeze in the 
last hour of trading which saw 
September advance to the 
day's peak of 3,120. 

Profit-taking to the dosing 
minutes saw the contract finish 
at 3.114. up 38 from its 
previous dose and around 12 
points above its fair value 
premium to cash of around 6 
points. Volume wss 13,314 
lots. 

Turnover in traded options 
improved to 34,612 contracts 
from Wednesday's 27,216. 
Among the index options, the 
FT-SE 100 option saw 8,193 
lots transacted and the Euro 
FT-SE 3,122. 

Hanson was the busiest 
stock option with 6,059 lots 
dealt, ft was followed by 
Laamo at 3,852 and Shell at 
2,571. Lad broke and British 
Gas were also busy. 


The UK Series 




□s/s Year 

D ft. 

Earn. 

P/E 

Xd ad). 

Total 


Jui 21 

crigeK JU 20 JU 19 JU 18 ago 

yteid% 

ytekrtt. 

ratio 

ytd 

Rstisn 

FT-SE 100 

3095.1 

+06 30772 30913 3082JJ 2820.1 

4.03 

601 

1708 

7003 

H59.0C 

FT-SE BBd 280 

3600-9 

+4L4 3587.0 3574.4 356tL3 32005 

303 

375 

2003 

80,37 

133305 

FT-SE Mki 2S0 w Inv Trusts 

3604.7 

+0.4 35892 3578.1 35620 3214,7 

3.58 

602 

19.40 

B380 

133233 

FT-SE-A 350 

1568a 

+05 15503 19545 15495 14VL2 

309 

606 

1808 

3317 

119311 

FT-SE SftwBCsp 

1813.48 

+02 1809.10 1804.49 100041 1631^2 

3,10 

406 

30-78 

3104 

1397.65 

FT-SE fenstiCsp ex tint Trusts 

178326 

+03 1778.15 1774JJ5 17703 6 1632.41 

308 

4.70 

2 8M 

32.73 

137702 

FT-SE-A ALL-SHARE 

154SJ0 

+05 153708 154095 1S36.11 1399/44 

304 

040 

18.63 

3404 

120338 

■ FT-SE Actuaries All-Share 









Day's Year 

D*v. 

Earn 

P/E 

Xdadt 

Total 


JU 21 

cftga% Jul 20 JU 19 JU 18 ago 

yieid% 

ytakrit 

nolo 

ytd 

Return 

10 MNBML EXTRACnONfie} 

272SJ0 

+1.3 2691^6 2687.83 2657.66 214070 

303 

400 

2934 

47^41 

108340 

12 Extractive Industries**) 

3883.06 

+OJ 3859^9 3844J7 3805^3 3138.10 

307 

317 

2431 

5434 

1062.36 

15 CM. WeQrQtadp) 

2679 64 

+ia 2643.06 263688 260606 2067.70 

044 

4.42 

28.19 

50L54 

1087.41 

IB 01 ExOtoration & Proddl) 

198488 

+18 195017 197081 1981.18 177400 

2.43 

1J23 

80001 2034 

113806 

20 GEN MANUFACTURERS^®*) 

200SJ6 

+06 109432 199054 199094 177200 

3.78 

402 

2608 

4402 

101389 


1185.00 

-02 118092 117058 117034 102030 


4.48 

PBftfj 

2064 

92052 


lBBaiO 

-06 2001.77 20ri1^8 2016.44 IBIOSO 

309 

401 

3142 

4308 

98101 

S3 ChenftWs(229 

2433.85 

+06 2420.37 2416S7 2419.10 211700 

381 

398 

39 aa 

5833 

107003 


2008.44 

♦1J2 198550 197VJ3 1992J» 185730 

402 

406 

2045 

5000 

101361 


190057 

+1.1 188014 1877-56 188077203100 

305 

801 

1831 

5312 

92700 


1896.77 

+06 168104 1882-7B 1674.71 166900 

2.99 

401 

2377 

3318 

1078OS 

27 Engineering. Vehtateafl^ 

2353^4 

+1.1 232733 233013 2333.12 183300 

405 

320 

8203 

42.03 

112318 


2867.92 

-02287204 286207 288002 224200 

203 

502 

2345 

4801 

112004 

29 Textta 8 AooaralCtB 

1685.75 

♦OO 168048 168601 1884.14 177800 

394 

604 

20.42 


94321 


30 CONSUMER 00008(97} 

31 Bron*rtoeri7) 

32 Spirits. Wines & Ctders(lOJ 

33 Fbod Manufacturer's) 

34 Household GoodsflSfl 

36 Heetti Care(2T) 

37 Ptnrmaceutlcat9(12) 

38 Topaocofl) 

40 8ERV1CES(E20) 

41 OtaMxtforepI) 

42 Letaura a HcWa(24) 

43 Me<Sa(38) 

44 RetaOora. Food(17) 

45 Rotates. Genertt(45) 

48 Support SenrtcoefrKJ) 

49 TRmspoiltlB) 

51 Other Services & Budneaag) 
60 ummEspe) 

62 Bectrictty(l7) 

64 Gas DtatttxiUcmpQ 

66 Tel u coucnu ni cationsffl 

68 W«arfl 31 

69 NON^WAWCIALS H W a 

70 FMAfiCIALS(1<K} 

71 BentopO) 

73 maranceflT) 

74 Lite A98txance{6) 

75 Meictait BanfcstB) 

77 Other Rnanctal(24) 

79 Pmpertv(41) 


2687.78 

+OO 265734 268738 286738 257350 

434 

707 

1545 

7137 

91011 

2244.36 

-0A 2254,38 225603 2240.48 199930 

431 

7.71 

1386 

8323 

100304 

278531 

+03 277804 279375 2800-52 266300 

338 

632 

1376 

8846 

93318 

221600 

+03 2212.73 220734 221 1 .09 214310 

432 

739 

1403 

6372 

82700 


-00 2432.00 2435/40 243400 2191 OO 

362 

709 

1371 

52.16 

68366 

182934 

+37 1613B5 160375 159305 1871.10 

301 

311 

6312 

3239 

94039 

gRRgafl 

+1 .0 285209 287351 M343B 274200 

433 

708 

1319 

5001 

90136 

357705 

-03 366833 3594.72 3B45O0 386130 

380 

932 

1139 12733 

79074 


+31 196305 196700 196341 176100 

313 

314 

1064 

3377 

96394 


+0.8270339 271311 273344 266330 

3 PH 

646 

18-22 

5330 

93601 


+0.1 2127.76 213393 213345 181370 

345 

408 

2314 

2743 

103700 

289231 

-04 290334 291708 290938 231940 

232 

316 

22.69 

4018 

99034 


+IO 168039 167240 1658.92 176S30 

377 

947 

1304 

4035 

101008 


-0.8 170135 171100 169370 149430 

309 

644 

1022 


88301 


+0.7 156338 158388 155438 163200 

207 

604 

19.64 

24.79 

95311 


+00 2373.98 236532 237378 207300 

351 

430 

2363 

3063 

931.84 

116313 

. 118401 116140 115392 1191.70 

431 

2.63 

64.74 

1816 

983.40 


*14 227136 227837 228378 211370 

407 

315 

14.95 

5001 

87379 


♦1.7 221366 2202.13 2163.44 178430 

407 

1033 

1034 

7224 

932.70 


+1.4 163346 1854.15 187396 192600 

646 

* 

t 6379 



+13 2015.15 203409 203398 19^.10 

405 

7.72 

13.78 

1083 

85205 


♦13 172635 171303 1702.14 164370 

363 

1332 

822 



187318 

+03 1882.86 168315 156001 150648 

382 

318 

1901 

3318 

117253 


2162.77 

2753.16 

1240.22 

242333 

2800-53 

1894.29 

1585.68 


+0.12161-08 2179.43 210R13 205140 
_Oj 2780.48 2801.65 2763.34 247360 4.18 862 12.75 7368 815-40 

>0 4 1236-06 1263.04 121067 1444.90 561 11.65 966 3863 83863 

+16 238466 236696 238549 250760 5.13 760 1667 8297 819.96 

-06 2810L1O 2807.77 278067 2585.80 368 11.79 958 6960 8405? 

-06 18S7-20 187568 185464 1572.40 366 861 1*62 4592 100B.« 

+rt S 1BB1.10 1578.78 1S89J4143a20 3^)0 366 32^4 3567 90334. 


M WVESTM6HT TRUST3(123} 
89 FT-SE-A ALL-SHAH^B82) 


2768.69 


, 276929 27B060 2748.70 235860 


154560 +06 153768 154065 1538.11 1389.44 


2.17 166 

364 8 M 


5361 3865 
1563 3464 


ajg.32 

120568 


Open 


FT-SE too 306 

FT-SE Mid 250 359 

FT-SE-A 350 154 

Tlnw of FT-S£ 100 Wflll *01Mi Lo* ftowm 



10 JM 

1100 

1200 

1300 

1400 

1000 

1310 

wgtVday Ltmkw 

30836 

35833 

1644.7 

3072.1 

3588.6 

16435 

3072.9 

39901 

15400 

30737 

3582.6 

15405 

30608 

35801 

1647.7 

3070.7 

33935 

15433 

3085.5 

3585.7 

15544 

30303 

38002 

1559JI 

3097.5 

38009 

15504 

3061.1 

3582-2 

15436 


Opan 960 l0 -°° 1IJ0 


1300 

1300 

1400 

1300 

1310 

Cfosa 

Ptmdot* 

Change 

11392 

28237 

1737^ 

2771 a 

11302 

2819.5 

17431 

27830 

11330 

28239 

17431 

2759J 

1139^ 

28406 

1747-8 

27745 

11415 

2861 a 

17574 

27942 

1141.7 
28575 
17565 

2787.8 

11432 

2929-0 

1724.1 

27D5J) 

-15 

+324 

-74 


FMmaceutieM 
Water 

Banks — - 

4ri*taw InfonnMen on (he 

■“ — - 



state aid tor a European rival. 

BA holds a 24.6 per cent 
stake in USAir, which reported 
improved second-quarter net 
profits late on Wednesday. 
However, sentiment was hit 
yesterday by a press report 
suggesting that the higher 
profits disguised “its dreadful 

plight" 

Further concern arose from 
reports that the European 
Commission was about to 
agree a state aid package for 
rival Air France of about 
FF20bn, around 60 per cent of 
BA's market value, a move 
seen by some as distorting 
competition. 

Mr Zafar Khan at Strauss 

Turnbull said, however, that 


TRADING VOLUME 


■ Major Stocks 


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AM** Nseonet 


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BA had little to fear from 
stiffer competition since “it is 
one of the lowest cost airlines 
in Europe". 

Boots upset 

A disappointing agm state- 
ment , together with a large 
te chnical sell programme, sent 
drugs and retail outfit Boots 
tumbling. The stock later ral- 
lied, but Still finis hed a busy 
session 13‘/> down at 522p, hav- 
ing touched Slip at one stage. 
Turnover was a weighty &2m, 
the highest this year. 

Boots’ first-quarter high 
street retail sales came in 
below market expectations, as 
did a 5.6 per cent decline at Do 
It All, the home improvement 
business. But it was the lack of 
news on the expected sale of 
the group’s drugs division 
which caused most disappoint- 
ment among analysts, who 
accelerated this week’s trickle 

Of downgrades in Mtlriparim 

of the event 

However, although special- 
ists expect the sale - which is 
likely to fetch up to £lbn - to 
be earnings dilutive, some 
believe this may be offset by a 
£500m special dividend from 
the cash-rich company. 

Boots’ Do It All partner 
Wff. Smith slipped 7 to 473p. 
as stores analysts predicted the 
need for a further ra«h injec- 
tion for the troubled business. 
B&Q owner Kingfisher. IB 
weaker at one point yesterday, 
recovered to end the day only a 
penny adrift at 501p after 3.5m 
traded. 

P harmarenttcalK group Well- 
come saw its share price 


NEW HIGHS AND 
LOWS FOR 1994 

NfMHRMSpQ. 

awmwa « custom hi Am#,, choocals 
(1) MPK. DMIMBUTORS R 
Polar. HXCTRMC « ELECT EOUP a CWW 
> ii niiiiiyuomi m noMi rr nn 


MO&MHQUSB«OU»QOOeaiD< 

arinesTMon-mum n o«ty t«. mc_ eru 
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nr-r ,, i, rrr nnnrTTUT 

manni n i j nan in m i ■ i i niniji 
Japan CTTC me. Wite. MEDIA m Menu B«*o. 
Pima. PAPER 8 PACXO flj S+DO. 
NETAUn, FOOD p) Urm (IK DETMLERS, 
OENBUL P) Han at Fmv. WORT 
SERVB p) AcmnA Busnaa Pact Umpaii, 
lnc_ IkXTUS 6 APPARB. p| Wanawn, 
AMEfOCANB |1) friar ill toe.. flOOXH 
AFRICANS PI SASOL. 


OS.TS PI RANKS MS toyM B* Of SooCand. 
■uanaw 6 CNtm a fMna. Tay Htonar, 
CHEMCALS (3) pMta, Engatoam. 
DaTTOBUrORSPI Hwcrjs. hotomTocn. 
UM Svptaa. EUCTONC 8 OBSt EQUP P) 
BnriMrpa, NoOa MT. TaMiwn. 
teODMERMa CQ OS. OBC toll. 

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PJ Orton Me. HEALTH CARE pi Beapak. 
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TOII8TS n Chtor ton. T«. FlamtoB CHnaaa tov. 

Scoeah doam Wia, T1«ogmo«w Pda tac.. 
MVESnCMT COMPAIKS (11 Senran Sn4r 
Wnte. LEISURE A NOTB.3 CJ) Bik* to* 0» 
BoMar. MIC hriuaMaa. Prem ten Cobl. 
MBNA m Mmrtfon Ank, CRL 
EXPU3RAT10N 6 PROO (Q AkM Po+vtMn. 
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MOO p| DayL PROPBUT fO Hflnrw 
Cawftypkla. London hteM. PM MUga. 
YRM, RCTASERS, FOOD p) SMpran, 
RCTALBtS, OBCHAL (1) OS, SUPPORT 
SOWS (Q UrtuMQr, nOCIKES S APPAREL (4) 
10. 


IRAIOPaRr PI OBnongniKL AMOSCAMS PI 
FtoeMcaftoO. 

marked down sharply as deal- 
ers anticipated heavy profit- 
taking following the announce- 
ment of interim figures 
restated to adjust to a calendar 
year-end. 

The exceptional charge of 
£5Bm was Slightly highpr than 
anticipated and sales of Retro- 


vir, the anti-Aids treatment, 
were down 16 per cent as a 
result of the findings of last 
year’s Concorde trial. The com- 
pany also stamped firmly on 
recent takeover or merger 
speculation which had added 
around 50p to the share price. 

However, profits rose 12 per 
cent to £182m over four 
months and sales of Zovirax, 
the herpes treatment and Well- 
come’s best-selling drug, rose 
15 per cent over 10 months. 
The shares clawed their way 
back from being 17 down to 
close 10 off at 605p. 

News and electronic informa- 
tion group Reuters Holdings 
fell 9 to 46>p in spite of the 
stronger dollar, which would 
tend to support the shares of 
internationally traded stocks. 
Bemusement increased when 
dealers noticed the shares 
remained weak even after 
some large lines of stock were 
placed at 478p. It appeared that 
Goldman Sachs might have 
been selling actively via the 
inter-dealer broker system. 
Turnover was unusually heavy 
at &2m shares. 

The regional electricity com- 
panies frees) were again promi- 
nent as investors’ appetites 
continued to be whetted in 
advance of the regulatory 
review expected early next 
month. Eastern forged ahead 
26 to 640p, East Midlands 16 to 
623p. Midl ands 19 to 640p. Man- 
web 20 to 7l3p and Yorkshire 
24V# to 626%p. 

Mr Andrew Wheeler at Nat- 
West Securities said he 
believed the recs still had an 
upside of a further 10 per cent 
in the run-up to the review and 


beyond. -The review will be 
harsh, but the companies will 
be able to cope with that, we 
an- still predicting 6 per 
real dividend growth mr ft* 
rest of the decade. “ 

A second profits warning 
from Shoprite in as many 
months saw the shares lose 
half their value to close at 30p. 

Brewer and retailer Whit- 
bread slid 9 to 543p. The com- 
pany was said to be denying 
foreign press reports that it 
was negotiating to buy Swiss 
company Moevenpick, a restau- 
rant and hotel group. 

British Steel hardened 2 to 
ifiB'jp with Urn shares traded 
as ihe market appreciated 
news that the company is to 
raise its prices for strip and 
plate products in September. 
British Aerospace benefited 
from a recommendatio n by 
several brokers to switch from 
Rolls-Royce into BAe. The for- 
mer gamed 12 to 505p, while 
the latter held at 192‘.#p. 

Recommendations from 
Kleinwort Benson and BZW 
boosted conglomerate Tomkins 
S to 231 p. 

Biotechnology company Cell- 
tech jumped 18 to 209p on news 
that it will collaborate with 
Merck, of the US, on asthma 
treatment 

Speciality chemicals group 
W. Canning gained 16 at 194p 
after the company announced 
a £93u disposal. 

MARKET REPORTERS: 

Peter John, 

Christopher Price, 

Joel Kibazo. 

■ Other statistics. Page 90 


LONDON EQUITIES 


UFFE EQUITY OPTIONS 


Option 


RISES AND FALLS YESTERDAY 




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12 

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r«B> 

420 

11 ®ft 

36 

13 24ft 32ft 

Ladbrohs 

160 

13 26ft 

2B 

2>i 

Bft 

12 

(168) 

180 

3 10ft 

17 ' 

13ft 

22 23ft 

UUBscUh 

300! 

27ft 

37 

O 

2ft 10ft 13ft 

(322 ) 

330 

7ft ZBft 

28 

14 2SM28M 

Opto 


Sap 1 

Dae I 

to 1 

Bap' 

to 1 

fer 

ton 

140 ' 

10ft 

15 

17 

8M 14ft IBM 

n«o) 

too 

Jtt 

7 

9ft 23ft 

28 29ft 

Opto 


Art 1 

■a* 1 

Fab 1 

lug 1 

BO* 1 

Feb 


Cafe Pub 

Mg Mo* FM tag Nov Feo 


C259) 

lAUO 

n«i 

Lucas M 
n«> 

P 5 0 
rw7) 


nan 

Praoeaa 

rsi2) 

RIZ 

rass) 


rsz7» 
r am ms* 
rest) 

Taco 
r«i t 


n« i 


M MS GOO 19 45 B3M 15 3B 51 

(•506 > ss) n a « » n on 

MT MS «0 1S28K 41 13 2SM29N 
C«S ) 480 3 13 23H 46M 51H SOS 

BtR 360 21 30 X7W 3tt 13H 17 

C37B ) 390 4 16 2214 16 29K32H 

MTtaHI 390 8H UaHlSh 22 MM 
r*1 ) 420 1 8 13 43 44H 5DH 

CBte) £(8 «QK# 36 3*14S» 1? 

C«39 ) 490 3 IB 2S» 26 36H 38H 

EbMoiBk 600 4554 6814 79 3H 19 Z7H 

rS»J 660 13M4VH52Z2H 40 4BM 

BMihS 43 29 » tt Hi 12 16 

T444 ) 460 4H17HZmi9M 32 3SM 

EC 2602P29M3Z1M8M9M 

rm ) 290 8 17 au 8 ISM IBM 


MO «125K29V1 1V» 8W 3* 
260 Sh 14 18 15 18H 

134 11 IB - 2 8M - 

154 2 8tt - 15 19M - 

180 14 22 MH 2i» 11M 14 
200 3% 12 15 1315 23 25ft 
G50 38H 55 0 7 30ft 38ft 

700 8ft 28ft 45 31ft 59 66ft 
160 13 22 24ft 3 8 12 

200 3 lift 15 13ft 19 23 

300 17ft 25ft 32 t 14 17 
330 3ft lift 18 21ft 31 33ft 
850 a SSft 71ft 16ft 42h 50ft 
NO 8ft a • 51 71 76 
500 34ft 49 99ft 4ft 20ft 27 
550 0 23ft S2S»48ft 55 

240 » 30ft 36 2ft 12 13ft 
260 8ft IB 25ft 9 21ft 23 
240 8ft 18 23ft 6ft 15 l>ft 
260 2 8 14ft 21 27ft 30ft 

163 12 21 24 2ft 8 11ft 
200 3 lift 13 lift 17 20ft 

354 18 27 - « 14ft - 

384 4 13 - 21ft 31 ft - 

■M OB J» JU Od Jan 
950 28ft 58 71 4ft 24ft 36 
1000 3 31 45H 34ft 51 61 
460 34ft 47ft 82 I 8ft 16ft 
500 5 23ft 28ft I3M 25ft 35 

tap fee Mb Sep One Kar 
390 23 32ft 44 Oft 19 27ft 
420 9ft 18 30 32 36ft 45 
30 3ft 6 S 3ft 5 8 

35 7 8ft 4ft 7 8 9 

500 SSft 80 73ft 6 14ft 23ft 
560 Tl SBft 45ft 28 36 47 
300 Mft a 41 lift 18 18 
330 9 18 28ft 29 33 35ft 

280 14 » & 11 18ft 21 
300 6 11 14ft 24 32 34 

ISO M 23ft Z7 I Oft 13H 16ft 
200 7 15 16ft 21ft 24ft 27ft 

160 13 17 21 6ft 9ft 11 
160 4ft 8 12ft 19ft 22ft a 
120 IZft 18ft a 5ft 8ft 12 
130 7ft 12 W» 10ft 13ft 17 
420 SIM 41 48ft 12ft 19ft 24ft 
460 12 a 30ft 33ft 4ift 40 

360 a a 41ft 13 16ft 22ft 
380 13ft a Z7 9 32ft 37ft 
170 7ft 11 13 5ft 8ft iBft 

T30 3H 6ft Oft 12 14ft 16ft 
200 a a 3Sft 3ft B 10ft 
2a 18 17 22ft 12 17 19ft 



Rises 

Falls 

Same 

British Funds ... 

Other Fixed Interest 

Mnerai Extraction — 

3 

2 

66 

143 

40 

65 

1 

54 

117 

34 

4 

12 

80 

391 

116 

Conaurrer Qoods — 

Services 

91 

81 

332 

□bines _. 

28 

7 

10 

Rnanctala 

101 

74 

194 

Investment Trusts - - 

82 

82 

292 

Others ... 

59 

37 

39 

Totals 

625 

552 

1470 


Data Mad on mow comoenlm wad on too un don Shan Santos. 


TRADITIONAL OPTIONS 


C"U»* Bdom, QU8, Jupiter TjmdaH. Sutor WtS. VMsoUJBtc. Puts: J*4llter TvrtcML Puts 
& Cafls: Untan PSA. Shea. 


C3BBI 

OpdM 

BM 

fSTO) 


LONDON RECENT ISSUES: EQUITIES 

tssua Amt mm. Ona 

pm paid cop 1804 pries 

p up gmj High Low Stncfc p +/. 


N* Oh. Gre 
Jv. cov. yfcj 


WE 

not 


C481 ) 

QpOas 

Mtwy R 

P400J 

taMtM 

C30J 


rS48» 
8te On* 

C313) 

BriSA SB 
C280) 

OfcDRS 

C1B4 J 


nM> 

Loato 

r«»i 

M tassr 

C4371 

Sent Fssv 

C3W ) 

Scan 

H21 ) 

Forte 

(TIB) 

Tamac 

C158) 

Them 36 

C106B 

IS 

ran ) 

TcmHta 

T230) 


IX 

F.P. 

32.7 105*2 

99*2 BoBe Gttrri Stwi C 

10512 

+1 

_ 

_ 



§40 

FP. 

1X5 

45 

37 jOocure 

37 

-4 

_ 

_ 



105 

FJ». 

9P6 

118 

IX Bloomsbury to 

118 

+2 

WN2-94 

2.7 

32 

iu 

150 

F.P. 

17.2 

IX 

IX CPL Aromas 

IX 


LN3.0 

2^4 

2.4 

ISlI 

18 

F.P. 

555 

31 

21 Camsfl 

X 

-I 

_ 



IX 

FP. 

56.6 

111 

X Chesterton kvB 

111 

42 

RMU 

10 

87 

lie 

220 

F.P. 

109J3 

225 

220 Eutidotar 

224 


WN&S 

09 

4.7 

17.5 

175 

FP. 

247.6 

203 

IX Ext© A/L 

201 


L8.4 

SL2 

53 

109 

- 

FP. 

- 

35* 

30*i Five Arrows Wts 

32V 

+4. 




- 

FP. 

SOS 

res 

238 ideal Hardware 

253 


N84 

IO 

4 2 

109 

104 

- 

FP. 

53.1 

IX 

161 JBA 

151 


LN2j4 

4.1 

19 

- 

FP. 

- 

77 

63 JF Ft Japan Wrts 

70 





3 

FP. 

1.73 

3*4 

3 John ManalMd 

3'+ 


__ 




120 

FP. 

3X4 

IX 

124 Norcor 

124 


W458 

20 

4.8 

10£ 

IX 

F.P. 

688 

X 

94 OH Mutual SA 

98 




- 

F.P. 

6.16 

45 

43 Do Warrants 

44 





“ 

23 

FP. 

108 

31 

29 Ortfe 

29 





" 

- 

FP. 

174 699*+ 

807*4 Oryx Fund 

699*4 +61. 

_ 



" 

- 

F.P. 

117.5 

X 

91 Schroder Japan Q 

B4 

t»2 

_ 



" 

- 

FP. 

120 

48 

42 Do Warrants 

48 






FP. 

44.6 

92 

88*2 Scudoer Latin 

X 


_ 



“ 

- 

F.P. 

602 

44 

42 Do Whs 

43 






IX 

FP. 

240 

99 

98 SWros HY Smfr C 

X 




“ 

“ 

- 

FP. 

1.13 

14 

11 5th Country hkns 

14 

+1 

_ 



” 

IX 

FP. 

352 

97 

97 TO Boo Gin Ptg 

97 


_ 




- 

FP. 

- 

14 

8*2 TO Prop Wris 

ll*a 





“ 

272 

fp. i«ia 

F.P. 2.72 

295 

X 

280 3) 

29 Tops Em Witt 

291 -31* 
3d 

N664 

1.1 

20 


IX 

F.P. 

fP. 

F.P. 

22.4 

53.6 

510 

ICC 

IX 

49 

X Universal Ceramic 
129 VQ 

34 VUeoLogro 

102 

IX +1 
37*2 *9b 

LN3.75 

WNSO 

10 

10 

49 

59 

14i 

12J 

140 

F.P. 

840 

IX 

148 Yalta Bros wine 

IX 


too 

2J 

23 

204 


C605 ) 
Opton 


140 24ft 

m a 

1050 41ft 
110022ft 
200 12 
220 4ft 
220 18 
240 7ft 
600 34ft 
no is 
M 


27 31 3 

15ft IBft 11 
OSftSIft 46 
48ft 83ft 77ft 
17 21ft 11 
fift 13ft SSft 
22 ZB 9 
13ft IBft 21 H 
SSft 88 31 
22 48ft 64 
Ott JM XI 


7 9 

16 19 

sift re 

90ft 105 
IS 1BH 
a 3i«» 
13 ISM 

a a 

44 52ft 
74 82 

Oct Jn 


RIGHTS OFFERS 

tasus Amort Latest 
price paid Ranua 
p up data 


IBM 

High Low 


Stock 


tarn 550 43 58ft 88 2 25ft 33ft 

PS88I GOO 8SH 43 18ft Sft 60ft 
HOC7Sp*a 700 45 78 98 4 34ft 49ft 

(*739) 750 11 52 73ft 21ft ED 75ft 

Rooters 46210ft 31 - 6 23ft - 

C*66 ) 475 5 25 - 13 23ft - 

Optfan taB ■*" Fta tag Hor Ftt 

ftfetam 180 18 23ft 27ft 2 8ft 12 
ng) ao 413ft 19 lift 19 22ft 
‘ IMrtywp mutty pcee. PranSuns ahom tm 
basso on ccstoB ctisr pricas. 

Mr 21. Tea) oamra at 34.487 CaAc zsjes 
Ate 10,062 


47 

Ni 

19B 

410 

Ml 

18/B 

- 

NO 

13® 

40 

rt 

25® 

120 

NJ 

1/8 

13 

Nd 

23® 

24 

W 

2W7 

TO 

as 

18® 

9 

Nl 

3® 

15 

Nl 

2S n 

IX 

IW 

14/7 

73 

Nl 

5/8 


8pm 

54pm 


S’ipm 

39an 


125pm 61pm 
5pm 2 *+ pm 
Son IBpm 
l%pm iftpm 


3pm 

13pm 

4*pm 

7pm 

26pm 

3pm 


2pm 

3ptn 

\pm 

9pm 

*4pm 


jAmtartey 

Cater Also 

Oats 

ExcoiDur 

Rrwflst 

Gmycoat 


ftsamm & Brehtt 
Paramoum 
Qi4gon) 
recarito 

WWtaCaydLDn 


RNANCIAL TIMES EQUITY INDICES 

« *** TB Aliy 16 Yr ^ 


OrtSnory Shsrt 


582 5.83 4*03 


FT GOLD MINES INDEX 



JU % cbg 
2D ntg 

JU JU Tear 

19 18 ago 

tat tit 
yWd % 

52 Htab 

agb in 

taUltaashtoTC 

107151 +19 

19SU8 194814 182922 

013 

238790132298 

talatifli 

Norm ABerlra ( 12 J 

294297 +1.1 
280994 +99 
159396 +19 

291034 3014,05 26a43 
258054 2S3928 8 8092 
157895 154086 1B5090 

453 

199 

091 

344080 190223 
301399 1893.18 
ana pt OSMB 


Copjrtgt*. The FlcncM Tknm Lkrtert 1984. 

Ffeoss ft baefcaa tow wfer of com p sntos. Bala US Dotes. Boss vatote loaua Sinan. 
Pisdaeam toft UM htec Ji% 2t: 8822 daft OengK 4L1 pokm; Yor ago: 2UQ 
Lam prims tn uotbUSs tor Me atom. 


2402J5 

Ord.dhr.yWd 4.18 ... 

Earn. ytd. 9t tuH SJB 5.64 5 62 s* S03 

RtE ratio not 1606 18.90 1808 1800 1890 . 

1971 19 - 65 1073 «- 71 19^ 

■For 19M. tMtoay Bhss mom atom cvnpfotlan nwi 2713A wm. .***7 
n (tommy Share Max bam one ^ an ” ***** 4W sanito 

Ordnary Share hourty dtangaa 

opm. _BJ» 1000 liao 1280 13 to hm 1 CUM) laj M Htf, 


2379J* 23784 2383J 238ia 2385a 2382^ 23681 23884 

Jliy21Jtiy2g MrT 2 * 7 ** 

SEAQ bargama 23.518 25^62 g ate , i. 

EcMty turnover (Emff 1S7Q.7 1574.1 *^677 _ 

EW banner - 30,169 3?SI S I? 545 ^ 

Shares traded (n«T 586a gSz 38339 30, 

t Euftdng fttm+iMriwi buntaan and owraaae tumvw, 673^ ^ 


Yr, 



































































































FINANCIAL, TIMES FRIDAY JULY 22 1994 






















































































































































































































FINANCIAL TIMES FRIDAY JULY 22 1994 



























































































































































































42 


FINANCIAL TIMES FRIDAY JULY 22 J 994 


CURRENCIES AND MONEY 


MARKETS REPORT 


POUND SPOT FORWARD AGAINST THE POUND 


Buba fixes repo rate 


The Bundesbank council 
yesterday left Gentian official 
interest rates unchanged, but 
surprised the market by fixing 
the repo rate at 488 per cent 
for the nest four weeks, writes 
Philip Gmaith- 

By freezing the Level of short 
term interest rates, the central 
bank has allowed itself to 
depart for its summer recess 
without having to return to a 
fever pitch of interest rate 
speculation. The council meets 
next on August 18. 

The dollat held up well to 
the news, with analysts 
describing the price action as 
noticeably more positive t han 
recently. 

The general consensus 

r emains , however, that the dol- 
lar is enjoying an upward cor- 
rection, within an overall 
downward trend that remains 
intact, rather than a reversal 
of the trend. 

The dollar finished in Lon- 
don at DML576, more than two 
pfennigs up on a low for the 
day of DM1.555. Against the 
yen it finished at Y98.685 from 
Y98.76 on Wednesday. 

The D-Mark remained little 
changed in Europe after the 
Bundesbank’s decision. It 
closed in London at FFr3.428 
against the French franc, from 
FFr3.427. 

■ Mr Hans Tietmeyer, the 
Bundesbank president, made 
clear that the purpose of the 
fixed rate repo was to curb 
market speculation about the 
outlook for rates. 

Had this course not been fol- 
lowed, the next Bundesbank 
council meeting would have 
been the subject of Intense 
speculation about a fall in offi- 
cial rates. With the repo rate 
currently at 488 per cent, 38 
basis points above the 450 per 
cent discount rate, a few more 
weeks of 2-3 basis paint cuts 
would have take thin margin 
perilously close to the 25 basis 
points minimum which the 
Bundesbank likes to maintain 

Analysts pointed out that the 
council had essentially pur- 
sued a holding action. “They 
can go away and enjoy their 
holidays and come back with a 
clean slate," said Mr David 
Coleman, treasury economist 
at CIBC in London. 

This was endorsed by Mr 
Tietmeyer who said that the 


Oermany 

14-day Repo rata, % 

■ ao« 



• RO - 


45 •— r* — 1 * L - 

J*i 198* 

Sonag O a l a atraa m . 


Jut 


■ ram* in ! 


York 


M 21 
ten* 
I non 
a mo 

I IT 


1.5385 

1.337a 

1.5308 

1.5335 


— Pm. due-" 

1X80 

1X52 

1X43 

1X07 


fixed repo was not a signal for 
rates in any direction. 

Mr Jeremy Hawkins, chief 
economist at the Bank of 
America in London, said the 
move did not signify a bottom 
in German interest rates. 
Indeed, with, the Bundesbank 
signalling that it may consider 
changing the way it measures 
M3 growth to a monthly ann- 
ualised change, the possibility 
exists that Germany will see 
both M3 and inflation falling 
early next year (Indirect tax 
increases will fall out of the 
calculation in January). 

Given that these are the two 
key monetary indicators the 
the Bundesbank watches, there 
are grounds for stQl expecting 
lower rates. 

Euromark futures traded 
briskly after the Bundebank 
meeting. The December con- 
tract traded 50,000 lots to finish 
at 95.09 from 95.12. 

■ The dollar had a better day, 
despite the Bundesbank’s deci- 
sion to freeze rates which 
might have been considered 
bearish for the dollar. Dealers 
attributed the improved price 
action to an absence of long 
term sellers. Most investors 
with long dollar positions who 
wanted to sell had done so in 
the course of the currency's 
sharp fall from DM1.67 to 
DM1.52. 

Mr Hawkins commented: 
"There are signs that, around 
the DM1.55 level, there is a 
good deal of genuine support 


for the dollar. It is becoming 
more resilient to bad news." 

Also contributing to an 
apparent shift in sentiment are 
the more explicit statements of 
Concern from leading financial 
officials about the dollar. First 
up was Mr Alan Greenspan, 
the Fed chan-man, who evinced 
more concern than previously 
about the weakness of the cur- 
rency daring his Humphrey 
Hawkins testimony. 

He was followed yesterday 
by Mr Larry Summers, the 
Treasury undersecretary. Pres- 
enting the Treasury's semi-an- 
nual report to Congress on for- 
eign exchange, he said a firmer 
dollar “would have important 
economic benefits for the 
United States." 

Reminding the Administra- 
tion Ihnt their sins Of mwi«inn 
and commission may have con- 
tributed to dollar weakness 
was no less a figure than Mr 
George Soros, the influential 
American financier. He said 
nervous world finawriai mar- 
kets reflected a lack of direc- 
tion and concern by leading 
industrial nations. “It's time 
for the authorities to pay atten- 
tion," he added. 

Mr Mark Austin, treasury 
strategist at Midland Global 
Markets, said the Administra- 
tion was probably more con- 
cerned about the impact of a 
weak dollar on domestic finan- 
cial markets, rather than the 
level of the dollar in itself. 

The Bundesbank's rate deci- 
sion spilled over into the 
futures market where the 
December e urodo llar contract 
slipped on LIFFE to 9415 from 
9424 

■ Sterling continued its recent 
pattern of tracking the dollar. 
The UK currency shrugged off 
a good set of trade data to close 
lower against the dollar at 
$1.5375 from $1,549. It was little 
changed a gainst the D-Mark, at 
DM2.4231 from DM2.4259. 

The Bank of England pro- 
vided ffifiZm ps pistanra to UK 
money markets after declaring 
a £700m shortage. 

MOTHER C U R RENCIES 

X 21 £ S 

twig*r mire • isms> ioijbio • im m 

he 2731.00 - 273300 174M0- 175000 
Korn* 0.4550 • 04574 029V • 02974 

ftfcfld 344903 - 345508 224400 - 224700 
ItaSfe 3121.13 - 312738 203000 - ZQ4JM 
UA£ 5X81 - 5JS9S 18715 - 36735 


Ai 21 


dosing 

Orange 

Odfeffar 

Of* Hfid 


mkJ-port 

on day 

spread 

high 

tow 

Europe 







Austria 

(Sch) 

17.0624 

-00071 

530 • 718 

17.1 T89 109807 

Belgium 

iBFri 

468518 

-0.1328 

142 - ass 

500270 49.6650 

Danmark 

(DKd 

65169 

-00033 

122 - 215 

9-5366 

9.4736 

Finland 

(FM) 

60285 

-02067 

182-388 

8.0460 

75880 

Franca 

(FFr} 

82064 

-00037 

989 - 129 

83191 

82681 

Germany 

(DM) 

2.4231 

-00028 

215-247 

£4323 

2.4108 

Greece 

(OH 

368.156 

-0713 

808 - 505 

387.268 364073 

hd tod 

OQ 

1.01X 

+0.0008 

128 - 142 

1.0158 

1-0066 

Itriy 

H 

2417.91 

+1A5 

SSS - 827 

2421-23 240622 

Luxembourg 


492519 

-0.1328 

142 - 836 

500270 49.6850 

Netfttrianda 

(Ffl 

2.7188 

-00029 

173 - 188 

2.7247 

2.7059 

Norway 

INK* 

10-5825 

-00093 

775 - 874 

106031 

104827 

ParTugd 

(Eh) 

248222 

-0.780 

687 - 156 

249.674 247.993 

Spain 

(Pta) 

199275 

-0095 

733-017 

2001232 198X1 

Sweden 

(SKrJ 

11.960B 

-0067* 

511 - 704 

12L0513 11.9257 

Swttzertend 

(SR) 

22484 

-0.0044 

450 - 478 

2.0498 

25355 

UK 

B 

- 


- 

- 

. 

Ecu 


12880 

-aooi3 

673 - 687 

1.2712 

1-2632 

SOW 

Americas 

- 

0241056 


- 

■ 

- 

Agenttta 

(Peso) 

1-5358 

-00112 

352 - 383 

15494 

15343 

Brad 

NO 

1.4322 

-0006 

294 - 350 

1.4393 

14294 

Canada 

(CS> 

211189 

-02211 

178 - 200 

0145! 

2.1178 

Meodco (New Paso} 


-ppnoQ 

270 - 381 

52713 

02270 

USA 

Si 

i23re 

-00115 

370 - 380 

155(3 

15363 

PacMcAAddhr East/Atrtca 





Austraia 

(AS) 

2-0811 

-00127 

897 - 925 

2.1073 

2.0891 

Hong Kong 

(HKS) 

11.8775 

-0.0882 

729 - 821 

11,9835 115680 

fadfa 

W 

482372 

-03514 

157 - 588 

406640 482050 

Japan 

W 

151.728 

-1X7 

625 - 831 

152.930 151.400 

Malaysia 

(MS) 

3-9837 

-00335 

816-857 

4.0163 

59816 

NawZadand 

(NZS) 

2X48 

-00282 

426 - 472 

2-5633 

2X26 

mipplnea 

(Pes^ 

405133 

-03017 

157- 108 

409108 401157 

Saud Arabia 

(SR) 

5.7663 

-00428 

XI - 684 

55177 

5.7820 

Stogapore 

(SS) 

22220 

-00178 

204 • 235 

2.3409 

25203 

8 Africa (Com.; 

l F) 

5.6542 

-00458 

500 - 583 

5.7007 

5.6500 

S Africa (Fln.1 

P) 

62726 

-0.0287 

649-902 

7.0118 

65549 

South Korea 

(Won) 

1237.15 

-1045 

638 - 784 

124757 123038 

Taiwan 

OS) 

409568 

-028 

395 - 777 

415204 409324 

ThaBand 

<W) 

38278V 

-0-3012 

482 - 039 

38.7200 385770 


One month Itam months One year Bar* of 
Rote %PA Rate *PA Rate %PA &g. Index 


17JB88 

05 

17.053 

05 

. 

. 

1145 

465469 

0.1 

49.8819 

-05 

495919 

-Ol 

1108 

95239 

-as 

9539 

-09 

9.584 

-0.7 

1105 

- 

- 

- 

. 

. 

- 

825 

03105 

-08 

85155 

-OA 

8589 

Ol 

109.6 

2.4228 

Ol 

2^212 

05 

2.4 

1.0 

126.6 

15136 

-02 

15144 

-04 

1018 

-05 

1045 

2424,61 

-03 

243078 

-3.1 

2490.01 

-3.0 

78.1 

495489 

ai 

48.^19 

-05 

*95910 

-ai 

110.6 

2.7178 

03 

zrte 

0.4 

25941 

09 

1204 

105793 

05 

1059 

-05 

10578 

ai 

885 

ZX.552 

-85 

2S3.832 

-73 

- 

- 

- 

30032 

-2.7 

201.18 

-25 

204.18 

-2.1 

96.1 

115823 

-25 

100328 

-2 A 

12-2533 

-2A 

735 

2.045 

09 

2.MI5 

15 

25108 

1.4 

120.4 

■ 

- 

- 

■ 

- 

- 

79.0 

15688 

-05 

15702 

-07 

15714 

-05 


2-1205 

-09 

2.1246 

-1.1 

2.1517 

-1.6 

88.1 

15368 

05 

1.6359 

04 

15323 

05 

63.1 

2.0911 

ao 

2-032* 

-02 

2.1105 

-09 

_ 

115738 

04 

115725 

02 

11.8796 

0.0 

- 

151X3 

oo 

150563 

Ol 

146503 

3 A 

1815 

25488 

-15 

25666 

-15 

25788 

-15 

- 


tfiOR neo lor Jul 20 BKMtihr roraoda In Pocnd Spot table crty B«a las On* dacfcn O ttacea. r anted f— am no t d toi cBy quoted to Hit tiwttol 

but me mt*ed by arrant Interest max Staling nd« cakaiatad by Baa Bank et Enrtana Bonn neragd 1885 -> lOttSJd. OOar Old HhM in taffi Us and 
8 m Qatar Spot ttttoa delved ten TIC WU/SBUTSIS CLOSKG SPOT RATES. Sana wttuea He mulcted by ttw F.T. 


DOLLAR SPOT FORWARD A 


•M 21 


Ctoaing 

midpoint 


ChSign 
on day 


BkVoltor 

spread 


Day's arid 
high low 


Rata MPA Rata MPA 


Ona year Morgan 
Hate MPA Index 


Austria 

(Sc« 

11.0975 

*00775 

Belgium 

(BFr) 

32.4240 

*0154 

Denmark 

(JDKr) 

6.18B8 

*00397 

Finland 

(FM) 

52218 

*05343 

Franca 

(Fft) 

5.4025 

+00375 

Germany 

(0) 

15760 

*00098 

Greece 

(DO 

238.150 

t-15 

briand 

ra 

15172 

-00126 

Italy 

(U 

1572.83 

*■1257 

Luxembourg 

(LFi) 

32^240 

+0134 

Netherlands 

(H) 

1.7682 

*00112 

Norway 

(NKr) 

65829 

*00448 

Portugal 

(Es) 

161.900 

♦07 

Spain 

(Pta) 

130500 

*09 

SuredHi 

(SKi) 

7.7794 

*0014 

BaAmrianti 

ISFO 

15310 

*0-007 

UK 

(Q 

15375 

-05115 

Ecu 

- 

1-2126 

-05077 

SORT 

- 

1 .45252 

- 

Americas 

Argentina 

(Paso) 

09969 

*05001 

BrazO 

PO 

09315 

*0003 

Canada 

(CS) 

15782 

-05034 

Mexico 9*a« Pescft 

3j4Q33 

-05006 

USA 

(9 

- 

. 

PadBcMUiaa East/ Africa 


Aueturia 

(AS) 

15601 

*00018 

Hong Kong 

(HKS) 

7.7232 

*05002 

tnda 

(Fte) 

315738 

*0005 

Japan 

m 

98.6850 

-0.075 

Malaysia 

9*> 

25910 

-00025 

NewZaafand 

(NZS) 

1.G653 

-00065 

PhRppines 

Peso) 

203500 

- 

Soud AlMda 

(SR) 

3.7504 

- 

Sngapore 

(SS) 

15102 

-00004 

S Ahteatpom) 

P) 

3.6775 

-00023 

S Africa (FH) 

« 

45350 

*0515 

South Korea 

(Won) 

804550 

-05 


000 11.1075 
380 32.4640 
02043 
52363 
5.4075 
1-5815 
300 238200 
ITS 1.5357 
300 157000 
380 32-4840 
1.7714 
08984 
000 162.000 
oso mi oo 

7.7955 
13340 
1.5513 
1.2266 


908 

268 

050 

765 


684 

839 


831 

315 

380 

128 


10-9470 

32.0790 

6.1113 

5.1535 

53320 

1.5560 

235550 

1.5128 

1662/40 

320790 

1.7457 

6.7630 

160.100 

128200 

7.7007 

13137 

1.5363 

1.2101 


11.1007 

-04 

11.1012 

-Ol 

114313 

08 

1044 

32.444 

-07 

32^89 

-08 

32544 

-04 

1007 

01958 

-15 

02068 

-1.1 

02438 

-05 

1055 

55248 

-07 

5.2273 

-04 

55683 

-09 

774 

5.4076 

-1.1 

5.4145 

-09 

5.3875 

05 

1064 

15788 

-05 

15764 

-Ol 

15883 

08 

1007 

Z»5 

-15 

23927 

-15 

242.65 

-15 

895 

15162 

08 

15142 

05 

15073 

07 

_ 

1577.68 

-35 

158048 

-35 

1624.83 

-35 

76.7 

32-444 

-07 

32-489 

-08 

32.544 

-04 

1007 

1.7688 

-04 

1.7878 

Ol 

1.7804 

04 

10S5 

06864 

-06 

85909 

-05 

6.8884 

02 

908 

163.13 

-9.1 

18017 

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1725 

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945 

130385 

-3.4 

13152 

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13358 

-25 

815 

7.7964 

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75329 

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75874 

-2.7 

706 

15307 

03 

15233 

05 

15168 

1.1 

1065 

15368 

05 

15358 

04 

15323 

03 

874 

15111 

15 

1509 

1 2 

15208 

-07 

- 


09989 03986 
09330 09300 
1.3833 1.3786 


605 


200 

915 


000-000 
502 • 506 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

Ju4 21 BFr DKr Rr DU 


NKr 


Pta 


SKr 


SFr 


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tSOfi oe hr M 30. BUM* apreeds 
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7.7281 7.7247 
31.3775 31.3700 
96-8300 97.8500 
25830 25880 
15617 15528 
28.6000 261000 
3.7506 3.7502 
15107 15085 
3-8790 3.6830 
45450 £5250 
605.600 801200 

285485 266350 268598 -09 269998 -OS 
245800 24.9600 25.0325 -3.5 25.16 -32 

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15834 

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04136 

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• 

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■ 

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907 

15604 

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15611 

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864 

7.725 

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7.7267 

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7.7407 

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31.4568 

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31.6038 

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98.48 

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98.035 

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9543 

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1515 

25816 

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25705 

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2444 

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14681 

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1.6834 

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07558 

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1257 

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2.19872 

2.18045 

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0.753 

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7.43679 

752766 

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47.12 

8494 

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2.669 

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192.854 

197.010 

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2043 

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0.407 

971.1 

1.092 

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150188 

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2445 

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4.157 

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1210 

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41.88 

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2458 

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11.88 

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1.288 

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179019 

191257 

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£493 

3422 

1.144 

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WORLD INTEREST RATES 


MONEY RATES 

July 21 Owe 

right 

One 

month 

Three 

mttn 

Stx 

mths 

One 

ye* 

Lon*. 

Inter. 

Ob. 

rote 

Repo 

rate 

Belgium 

5 

Sli 

516 

SVt 

SH 

7A0 

£50 

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5 

516 

5* 

61* 

64 

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450 

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Franca 

5* 

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8% 

5K 

S3 

5.10 

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975 

week ago 


64 

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64 

910 

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£80 

455 

4.85 

455 

4.95 

0.00 

4.50 

£91 

week ago 

£88 

4.B5 

£90 

£90 

5.05 

900 

£50 

451 

Ireland 

5 

54 

SH 

64 

6% 

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- 

025 

week ago 

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84 

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64 

61* 

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625 

»aly 

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81* 

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81* 

814 

84 

94 

- 

750 

aoo 

Netherlands 

£85 

£80 

£82 

4X 

5.12 

- 

925 

- 

week ago 

455 

450 

4.82 

550 

550 

- 

65S 

- 

Swftmtand 

4 

44 

414 

4*b 

414 

6.625 

3.50 

- 

week ago 

4 

44 

414 

41* 

41* 

6.825 

350 

- 

US 

*i 

454 

4* 

54 

S3 

- 

350 

- 

week ago 

41 

4Vi 

4Q 

514 

514 

— 

350 

- 

Japan 

2 

24 

24 

24 

2u 

- 

1.75 

- 

week ago 

2 

24 

21* 

21* 

24 

- 

1.7S 

- 

■ S UBOfl FT London 

fail it ■ n.iiwr 

HWvWm rainy -■ 

41* 

48 

514 

51* 

_ 


_ 

week ago 

- 

41* 

43 

5% 

51* 

- 

- 

- 

US Doltar CDs 

- 

453 

4.80 

4.90 

5.44 

- 

- 

- 

week ago 

- 

£33 

4.70 

5.02 

5.02 

- 

- 

- 

SDR Linked Da 

- 

31* 

34 

3* 

4 

- 

- 

- 

week ago 

- 

3)* 

31 

3* 

4 

- 

- 

- 


■ uara mowtw buhomkbk wruraa gjFFq* oMim powa gf 100% 


Strike 

Price 

Aug 

- CALLS - 
Sep 

Oct 

Aug 

— pure — 
Sop 

Oct 

1.475 

7.18 

722 

751 

- 

028 

059 

1500 

451 

527 

962 

013 

085 

1.12 

1525 

2.73 

948 

985 

055 

126 

123 

1550 

125 

2.11 

251 

151 

2.43 

901 

1575 

044 

1.17 

156 

914 

99* 

451 

1500 

0.10 

060 

120 

529 

5X 

620 



Open 

Sec price 

Change 

rttfi 

LM 

EsL vat 

Open toL 

Sep 

0520 

9916 

-0.03 

8521 

8914 

38338 

173819 

Dec 

9913 

96.08 

-053 

9914 

9904 

50253 

177584 

Mar 

04.9S 

94.82 

-052 

94.97 

9453 

36885 

152836 

Jun 

9459 

8457 

-051 

94.71 

XX 

29083 

92733 

■ THRSB MONTH EUROURA HTXTC FUTURES (UFFE) LI 000m points 0« 1009* 


Open 

San price 

Change 

High 

LOW 

Esl vai 

Open tot 

Sep 

9122 

91X 

-0.01 

91.41 

9128 

6117 

31856 

Dec 

9152 

0155 

-051 

91.11 

9098 

3604 

46741 

Mar 

9071 

0059 

-051 

9075 

9052 

1225 

12313 

An 

9023 

9022 

- 

9027 

90.15 

597 

10490 

m THREE MONTH BURO SWIS 

8 FRANC 

FUTURES (UFFQ SFrlm paints Of 1001* 


Open 

Sett price 

Change 

High 

Low 

Est vat 

Open tot 

Sap 

95.77 

9975 

551 

8978 

8970 

4300 

22436 

Dec 

9983 

9551 

- 

9553 

9955 

1966 

10190 

Mar 

9942 

9941 

- 

9942 

9527 

655 

10036 

Jun 

9914 

9910 

-0.02 

9914 

8910 

228 

2033 

■ WHEN MONTH ECU FUTURES (LIFFE) ECulm points of 100** 



Open 

Sett price 

Change 

Hgh 

Low 

Esl vd 

Open bit 


9458 

94.05 

■052 

9458 

9451 

1895 

11385 

Dec 

9986 

83X 

-052 

8359 

8351 

678 

6905 

Alto 

9967 

8962 

-0.04 

0357 

8359 

603 

4472 

Jun 

8328 

9934 

-051 

3326 

9325 

288 

1097 


ECU iMwd Oa odd ratoc 1 mdc sg; 3 rmht S3: 8 mto 0 ; 1 yea: 8K. S U80R b—ba nft Stop 
rata ara aflmd am kr SiOm quoted to Bw mart** br lour latoanca taH at 1 1an sacn mNno 
dm. The tmka HW Cirt m u Trust. Bank <t Tttcyo, BHdoya and Natond IWnianbiiMi. 

IM rates era shorn tar dw Oomoaok ftlanoy Rena. US t CDs and SDR Latind Oapeab (Dal 

EURO CURRENCY INTEREST RATES 

Jul 21 Short 7 days Ona Three 


■ UBE fiduraa boded on APT 


■ IMRES MOHIH ■URODQLLAR (IMM) Sim poMa at 100% 


nance 


month 


months 


Six 

mantis 


Ona 

year 


Belgian Franc 

5.V 

-4H 

5.‘. 

-4)8 

5 V 

5*1 

sh - 

5* 

5%- 

54. 

Ah 

- 6 

Donah Krone 

sh 

-519 

A 

-Sh 

5U 

sA 

tf* 

-8 

6*8 - 

sh 

ta- 

6ft 

D-Mark 

4* 

-43J 

4% 


48 

413 

4Q- 

4U 

43 - 

4H 

lk- 

4ft 

Dutch Guid» 


1-4 

4* 

- 4*s 

4k 

4fi 

4i2 - 

4\ 

4{J- 

47, 

sh 

-5 

French Franc 

5,1 

-9,1 

s& 

- sft 

5A 

Sli 

5%- 

Sh 

54,- 

5*8 

53 - 

5ft 

nartuguess Esc. 

121, 


12 - 

1th 

12l| 

I2*i 

121,- 

12*. 

1 9h 

- 12 

ISh - 

114. 

Spanish Peseta 

7*2 

-7,4 

7*2 

-??* 

7» 

7ft 

712 - 

7ft 

®»V - 

73 

Bh‘ 

sh 

Staring 

4 h 

'4% 


-*h 

5i 

-5 

5ft- 

5*9 

5H- 

5J3 

6ft- 

6 ft 

Swfcu Franc 


■3% 

4% 

-3\ 

4d 

4 ft 

4*4 - 

4*8 

4% - 

4l| 

4*7 - 

<h 

Cat. Ddlor 

S* 

-SJg 

54. 

■ Sh 


54, 

6ft- 

6ft 

- 

A 

TS- 

7h 

US Oder 

41. 

-419 

4& 

-4A 

4>2 

-Pa 

4B- 

4ft 

sh - 

sh 

53.- 

Sh 

kalan Ura 

9- 

Jh 

8.1 

■At* 

*& 

«A 

M- 

aft 

8 «- 

All 

94- 

9ft 

Yen 

2 1 * 

-2A 

2*9 

- 2iV 

2*9 

2 ft 

2ft- 

2ft 

2ft - 

sh 

211- 

2U 

Asian SStog 

3% 

-3% 

3% 

-3li 

4.’« 

4ft 

■ 

4*8 

5ft- 

5ft 

sa- 

5ft 



Open 

Latent 

Change 

»gh 

Low 

Est. vd 

Opan tot 

Sep 

9£S5 

94.82 

•004 

9£86 

9£80 

164^23 

431.626 

Dec 

X.18 

94.13 

-006 

XI B 

94.12 

298.120 

431X8 

Mar 

0348 

8 X88 

•0.06 

83.93 

S3X 

143,420 

320271 

■ US TREASURY BILL PUTURKS 0MM) Sim per 1001* 



Sep 

05 JO 

8929 

-(US 

95 JO 

9X28 

X279 

22J804 

Dec 

X.74 

X73 

-a 03 

94.75 

X.71 

956 

8X7 

Mar 

9£48 

9£46 

-OJE 

94.48 

X46 

71 

1.625 


M Upon Rbes ngx are tar prertow day 

1CW10W8 (UFFQ OMlm pobna of 100* 


Suit Mon rbm an cd for tho US Datof and Van. oflm too days' notoa. 

MOWTU PB9QH FUTURES (MATIF? Parts Intcrtwik offend rata 


Strike 



CALLS “ 


— 


PUTS 


Pncs 

Aug 

S«P 

Oct 

Dec 

Aug 

Sep 

Oct 

Dec 

9500 

0.16 

018 

018 

0.23 

0.01 

(US 

ore 

0.14 

0525 

001 

OX 

007 

0.11 

0.11 

0.14 

023 

027 

0550 

0 

0.01 

0.02 

0.05 

OK 

036 

043 

046 

EH. vd tottt. Cola 8IS6 Pito 5061. Pi wen <laf 9 spro *«. C/*s 230004 Pitis 15442B 




Opan 

Sett price 

Change 

High 

Law 

EsL vat 

Open tm. 


94 34 

94.30 

-0.06 

94.37 

9427 

17311 

48232 

Dec 

0424 

94.19 

-007 

9428 

94.14 

15.033 

38269 

Mar 

94.07 

6£03 

-0.06 

X.06 

9X96 

7^15 

31.626 

Jui 

3328 

9X82 

-007 

9X88 

93.75 

XI 49 

23X8 

■ 1HRB MONTH 

EUMDOUJIH (UFFQ- Sim potots cMOOS* 




Opan 

Sort price 

Change 

HQh 

Law 

Esl vai 

Open toL 

Sep 

9423 

XX 

-OM 

XX 

X.83 

95 

2873 

Dec 

94.16 

X15 

-are 

xie 

X13 

260 

1914 

Mar 

9X91 

8X90 

-ore 

93.91 

93.91 

142 

1X1 

An 

9X61 

B3*1 

-007 

93.61 

9X60 

re 

314 


■ P1WO SWISS FRAHC opiums (UFFQ SR 1m pfllntt atlOOM 

SW«) CALLS '—■■■■ PUTS 

Rice Sep Dec Mar Sap Doc Mar 

9575 611 0.15 022 611 059 656 

9600 603 607 ' 0.13 628 0.46 672 

9623 601 a 04 0.08 651 056 692 

9oL vcL total, Cals 0 Puts 250 Renton dV» open I*. CWa 1205 Pua 1126 


Praaton dayH wU Cato 18514 PuM 16172. Rat. dnr^i epm Inu Cbto ezaXI Pus S0A9S9 


UK INTEREST RATES 


LONDON MONEY RATES 

Jul 21 


Otar- 

night 


7 day* 
nobce 


Ona 


Three 


Sbc 


Ona 

year 


htertw* Starftag 6* - 4% 5>*-4% 5A-4fi SA-6& 5^-5^ f *% -8 

SftrtnflCOB - - 5A-4fi 5l«-6i 6U-641 5*1-59 

Treasury Bto 4fl - *fi 4» - 4JJ 

Bai* BUS 4» - « 5 - 43 « - 5,', 

Local aultwfty dupe. 4fi - *H 4^ - 4H SA - <3 B& - 4« Sh - SU SU - 5|J 

Discount Market daps 6 - 4% 4{J - 4H 


UK ettartag bank base laodkig rata 5>4 per cent (ram February 6 1994 

Up to 1 15 3-6 68 


9*12 


Certs o* Tax dap. (E100.00C9 1*2 4 3\ 

Cara ol Tax dre- itatar CIOOWO M i l jpc. Oap ottta wrhd rg f i lor cath ypc. 


3\ 


3% 


■ THRBB WKWITH STEHUWQ HTTliBB (UFFE) C600500 pdrita ol 100* 


Open Sett price Oimge High Low EeL vd Open W. 

Sep 9456 9456 *5-01 9450 9453 8088 108662 

Dec 9682 9351 -601 9355 8356 19687 140287 

Ms 3356 93.33 -0.03 33.% 8357 11281 88603 

Jun 9250 92.78 4.M 9251 92.73 0023 51487 

Ttodad on APT. A1 Open Maett Sfi*. u Jar prootaui day. 


■ SHORT STBMJBO OWIOMS (UFFE) £500500 partis of 100* 


B«ra 

Price 


_ , f-ft! |P ^ 





Sep 

Dec 

Mar 

Sep 

■— PUTS — — ■ 
Dec 

Mar 

9450 

014 

007 

028 

are 

0.66 

123 

9475 

003 

003 

003 

022 

087 

1.45 

9600 

0 

OOI 

002 

044 

1.10 

1-60 

Eb. «d Ms. Cab 10990 Puts MO. Previous day* opoi 

felt. CeOs 224206 PJ3 209477 



BASE LENDING RATES 


Actam&Canpary — 555 
AJfedTrusl8art(.-.._525 

A® Bar* a as 

OHnyAnabacher 525 

BarAalBarada 525 

Banco Bibao vtzeaya. 525 

Bar* d Cyprus.... 52S 

BankdlrdtoTd...- — 525 

Bankdkrifa... 525 

BarAufSaotend 525 

BerdaysBadi -625 

Brl Bkd MWEaa 525 
•Brarai Sh^ley & CO Ltd 525 
CLBorANodafand— 525 

Ota* NA 525 

Oydesdata Bank 

The Coepa^n BartL 625 

QxitsACo 625 

Cre«Lycmala S25 

OypnB Pop^w Bonk _525 


% 

OmcanLaario — 525 

Bbhh Baric Umted — 825 
RnanctalAGenBeric- 6 
•Robert B*ring&Cc_ 625 

Gkcbaik — 525 

•OAmessMatai 523 

HaUb BWk AQ 2U1Ch .525 

•Hantoog Bank -625 

Harterio J Gen kw Bk. 625 

MIS towel -526 

riHooraBCb 525 

Hcngkcng & Shanghai 525 
Jtdan Hodge Bak..— GJS 
•Leopdd Joseph & Sons 525 

Uoyds Baric -Sa 

MaghrajSartclJd 525 

RflOMBank 525 

* ftftxrt Baritog S 

NaMacaitatar — S25 

•FtaBnxrws 525 


* Rogdughe Guacantoa 
Capoakyi Lkritad tana 
tongaradhorlsedea 

a banUig yadautert 8 
floyaJ Bk d Scatand _ S2S 
•&rih&Mknn Sees. 525 

TSB 525 

DUhkedBkcfKiMB^ 526 
UnkyDuri Bank Pm 525 

VltetemTitat 

v »tewy^riaw..-625 
YortcariraStb* 525 

* Member* or Lorelon 
investment Banking 
A330drikr 

* toadnMotiaian 


UOB SUPER ECU FUND MANAGEMENT COMPANY SJK. 

Sedfti AjMnyma 
(eeMgaMaliee) 

3b, Boriaraid da Frtoce Bareli L-I7M LeafadtoeM 
RC I eynwhnere 8 No. 27.704 


AVIS AUX PORTEURS DE PARTS 


Le CtaMdl iTAdmiaatrettaa de UOB Siqw Bee Pm* MuagoDKat Cboqany 5A» Sodft6 de 
Geatfoa da RMb Gammae de Pbcameat laxenbouqpob UOB 5UPBI ECU FUND, a ddridt 
told join 1994 Je mcoro fin ft Ttafividoli a de procAkr ft in liquUatiaa do Condi ptteit 
Caafonatmeu i ranfcto 21(3) dc la W loxanboargeobe do 30 mu* 1988 relative an 
opekmes de pUocreere ccDacdC hndadoe * le ndei dm pans soot UeenfiM ft patir de «* jonr. 
La Soctato de (kmtitn, UOB Super Ecu Fund Management Company 5A, intrevtandre 
caaanc UQUU3ATHUR ei la tkpdduioa k iera sons Ckbk Ante nfpankiun an BSPECCS de 
rbcdf net dn foods. « poizti dc puts de dtiqiie pttttdpani, 3 pnair do 12 septoadae 1994, 
Ixa nnntanis qul nWot pta t* ridaotts le 30 sepowbre 19H Raet la due de la ritoie 
de la liquldaltaD. •cronr dfposto mjpria dc la Cibae dcs Cbenpadons i Lnx e mfromg an 
profit dee ayantodroit, jiMqu3 la data de preacripiioa. 

Certify sincira et coafonae 
UOB Soper Bco Raid Ma na g e ment Cbroproy SA. 

lit|tu^ *^ ir 


United Ovecaeaa Bank 
( Lb«nhou tg)&A. 
Baeqoe Mpaslnire 


F. Cborroo 
Atkaimantear 


G. Men 
Adminimteor 


55>- 


Manufocturen Hanover 
Corporation 

U.S- $100,000,000 
Floating Rate Subordinated 
Note* doe 1997 
bi occndancc nttfe iho provfaiont of 
dm Note*, notice b hereby given that 
die More* will rany an huerwr rare ct' 
®i% per annum for the period Zlir 
July* 1994 to 2 Is October. (994 aricb 
a coupon amount of (J.g. $1H.(? 

far (he US. $10,000 dcnoadsaclem 
and U5. J3,)54.17 far die U.S. 
S2S0.D00 denote madon and will be 
payable cm 2 i* October, 1994 agamic 
anaender of Coupon No. 37. 


D Bnkuilhai 

Company, London Agent Bank 


S100, 000,000 
Floating rate notes 1996 

Notice is hereby given that fi)r 
the intend period from 20 Jaty 
to 29 October 1994 (fie notes 
wltt cany an interest rate of 
SJ375% per annum baeres 
payable on 20 October 1994 Utiti 
amount toS/35.48 per SU}, 000 
noteandB.3S4.79perm0.0Q0 
note. 

Agent Morgan Guaranty 
Trust Company 

JPMorgan 



The eaenilal (out iui ihe Mttaut inwiur 

Market-Eye 

London stock excwahqr 



1 iISCEQSnmI 

Wo mage teoas up to 90% Leu to Value. 
Most oorapediivcaad Hex itrie terms far 
quality UK coemercisl property St 

propertyJ 
FINANCE | 

U Ptac 071 499 6379 

Cttttacc Richard too GOtzee 



‘Cf^fl-S'KutMrcVio’ 


















FINANCIAL TIMES FRIDAY JULY 22 


WORLD STOCK MARKETS 




m 



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+15298B 10EG.39 


+8 702 

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__ 

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625 00 

taro 

-1 182 

115 03 

roro 

-4 838 

7BO 20 


+10 8920 4940 1J0 
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+8 880 

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+0 070 

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— 


m 


m 


INDICES 




[2.70 1050 19 
1990 IS 09 
396 235 39 
394 293 39 
696 <97 62 
090 9 19 

ttJO II 19 
790 CL 76 19 
— Kit) 10.40 19 
-.10 1920 73.10 1 9 
993 396 3.14 09 
491 lit 39 
620 398 16 
129 093 39 


19001970 QL7 
015 441 _ 


-3 015 
- 91,110 
-10 1JW0 


’2’Sp 

31V *71*. 2lV 

14 914 13V 

mm 




34 S2413V 

■an -*m m 

',i - w »,s 

saagSj 

mm 


*S j.sa'a 

jo a 

20 20 ZD 

Is 

ft ft 

t8V +VMV17*! 


4+, 


"■SS3S 

ags 

djfgM 
1! S 

- h m 

,/t *’fiS!K 

s siaia 


ss.-skk: 

14V +V?55 MV 
20** -*+££*& 



113 90.60 27 
... 180 115 26 

-4 M6US9617 


ID +**S1»»| 


2ih jjSr? 
«*» AM K 


slttl 

38 +3 33 9th 

■sr^-a % 

MO +10 396 360 
12 -4,3US 1* 

gsga 

sv -V » 3V 

I III 


as 


3S 


US INDICES 






19 .' 

HW* 

Low 



M(Mafa(i/Mq 
« tettfl/l/80} 


M 18614531896683250040 16/2 

20402 207 KB 20774 04000 3/2 
10153 1 GB 9 L 8 10279 1 X 3018 3/2 


cuaiumootonQ 4124a 41273 413.10 «us 2 a 

Tata] Me*piW} 107155 107598 1072J9 122225 V2 


(4 142891 14094 0 KZ 0 S 02 
M 403869 304794076000 197 


•• Ba20(l/I«TJ 

Bod 

Bowp6PBn2«3} 

UMatalOfcfflwq 
d canwiBfiM^ 
i FWUdSS < 4 / 1 / 83 } 
GUV 

owancn/iaaoi 


M 3S2B05 384195 *7080 ISO 

U 4181.74 4200.14 460080 230 

u 1053.17 186799 2J6L6B 1/Z 


36067 22U 

WIUB 6C 


328006 20 M 

3BSB80 24A 
10037 207 


Fmancn/raaq U ooa* 43545 405790 4/z 

CDprtaaNfiq3/U83} 37480 37150 37048 4RU8 2S 

■ '• KKQnmQVIOSq 16169 16175 1611.1 1K290 4E 


rc gtyiy u M 2210857 22S03O MBt17 82 

OBURkte^lIK) 4295 4239 420D «U» 3U1 

CBS M Sr £nd 83) 2701 2800 2605 2M0O 3VI 

C*. 40 (1/708) 203020. 205494 202771 30004 3/2 

U6«V 

000 SE04priiB9 111452 110691 106598 127130 282 

MrtC&teP/IW 2B48L54 28B3L4B 2E6S98 3X837 4/1 

ftrtgU 

BTMiarn 27369 27404 27SZ3 323006 10(2 

»XffpanCW79 55195 55403 5499B 6(191 4/1 

SaUfeJIOfEl 

JSE 694 (289/78) 20640V -21110 20059 233LB0 4/1 

JSEM.(28B/78} B3B3JJV 63509 83689 075790 159 

dote 0no 

KomQua(4/l8»r 83635 83607 93095 STUB « 


174090 14 a 
844090 W1 


.-’■ SOF 25091/1290) 
CW40PI/CH7) 


13205 135896 236071 Wfl « 
205378 204372 205293 2*093 32 


RC/Manpi/KXq 80058 80424 80052 0)027 18R 
O — XdMS) 22764 22B9L2 2Z705 MOOD 26 
out fflvuwTjj zmao 21300s 21207a sanji iss 


NgmCD«&H/Mnr 83535 83607 93005 STUB 22 
MOUSE (9Q/UMS) 30434 30440 30592 30631 31/1 
Mnwttfien (1/937) 144520 144590 143540 10B3J0 319 


MUd* 372727 374891 375543 3B703B 33305 307636 4122 

PVI) (W pi/lW (2/7/3Z) 

Ham &ad> 8791 9778 8748 18681 9643 11627 5463 

pvn (us) nan os? o/kwd 

UMPoa 158691 160608 1803-13 186226 151692 18622S TZ32 

m can ®aw canon 

U*lta 13294 183.17 18290 22793 T7071 25046 1050 

On P49) (71/SB3) OMffl) 

□J tad. Day* W(* 876693 | 1- [ ]p - illuff) 

Dw* Ugh 876040 078393 ) Lorn 373047 074631 ) (ac ting) 


45190 45396 4S522 4BM 43602 46280 440 

en m paw cuwo 

52643 52992 53044 BBO50 5T095 930180 392 

(82) P 1/4 pam puna 

4451 4480 4592 4004 (193 4046 894 

tun m caw onto* 

21070 25093 25144 36791 243.14 S7I 448 

on m paw ps««a 

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44 


FINANCIAL TIMES FRIDAY JULY 22 1994 


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1 11 2 2 2 

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030 1.1 16 2186 27% d26% 26% -1% 

47 211 27% C 27% *% 

10* 11.4 12 3G 19% 16 16% 

15899 25% 24% 25% +1 


35 25% Aflac 
20% 16% Alxnun 
4 1% Atom he 
40% 38% AbPiC 
33% 27%ArtnaFn 
38% Ifttepsln: 
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36% 21% WTdi 


104 104 1B4 


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25% 19% AlcnAI 030 13 65 5585 

60% 49% AJeoSI 1.00 1.7 Iffl 901 

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22% MAinAI 0.10 03 36 2719 

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035 13 31 553 19 18% 18% 

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028 13 15 52 22% 21% 21% 

038 1.4 14 80 19% 19% 19% 

044 1.5 ?1 1118 27% 27% 27% 

030 1.2 65 5585 24% 24 24% 


1.00 1.71A1 901 59*4 58% 59% 
0.70 27 4 261 25% 25% 25% 

O10 05 38 2719 19% 18% 19% 

048 24 18 822 20% 20 20% 

104 7.8 11 1499 21 20% 21 


28% 70% AtofjP 
18% 13% flflaa Don 
25% 20Artgan 
4% 1% Anar 
27% 17% Arts C& 
10% OAhrad 
27% 21% AH Mi 
40% 33%«Sg 
29% 24 Altai Op 

8% 4% Artush 
29 21% Aluotax 
82% 8*% Alena 
30% 20% Aba Qp A 
11% S% Amenta 
8% 6% Am Precis 
8% 6% Afltafid 


070 27 4 251 25% 25*2 25% 
010 05 38 2719 19% 18% 19% 


134 7.8 11 1499 


016 1 0 13 2740 15% 

0.40 1.8 15 MB 24% 

7 IS 2 

1.64 7.9 21 184 21 


15% 16 ♦% 

24 24% +% 

20 % 20 % 


258 9% 9% 9% +% 


134 54 14 11 23% 23 23% 

067 1.0 7 4255 38% 35% 35% -%. 

038 34 18 1S24 26% 25% 26% +1 

24 1296 6% 6% 8% 

11 4152 ifiS% 27% 29% +1% 

1J0 20125 3439 90% 79% 80% 

40 4355 22% 21% 22% 4% 

096 124 591 8% 7% -% 

025 16 24 40 7 7 7 -% 

0.08 1.1 6 2785 7% 7% 7% +% 


20 Ament IM 046 23 14 IS 


31 20%AmRarrick QlO 0.4 3t 5533 
6% 29% AfnBma 200 6.1 9 1013 


52% MAoxtdta 080 12 21 788 51% 51% 51% 

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23% 19% Am Cap CV* 1 OB 53 0 13 20% 31% 20% 

60% 42% AmCyan 135 11 34 Z789 59% S 59% 

37% 7% Art Pw 2.40 00 15 1037 3D 28% 29% 

33% ZS% AraEnjK 090 34 1112091 26% 25% 26% 

28% 24% AmGarf l.lfl 4.0 25 1837 29% 20% 28 


23% 19% Am CapC 
60% 42% AmCyai 
37% 27% ArtPw 
21% 25% AraEape 
29% 24% AmCarf 


9% G% An Grata 077 120 807 6% 

27% 22% Am HBD Pr 230 97 B 229 23% 

20% 16% AmHarXge OS 39 10 II 17% 

55% AuHuiW 292 52 11 2531 56% 


1 AmHamge 066 39 10 


2% 2% Am Hurts 
18% 81% AmM 
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34 i9AmPreol 


0.75300 B 25 2% 
046 05 15 4638 91% 


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23% 23% -% 
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56% 56% 4% 
2% 2% 

90% 90% -% 

<17% 7% -% 


040 10 8 1764 


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27% 21 AmSsx 048 1.0 71751 25% 


24% 24% 
21 % 22 % 
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16% 11% Ametak 074 10185 287 16% 16% 16% 

81% 50% Amoco 220 27 16 7875 81% 59% 59% -1% 

9% 6% AmpcoPIl e 010 1.4 5 147 7% 7 7 

4% 3% Amec InB 012 14 U 6 3% 3% 3% 

33% 2B%Amauuh 1.40 40 10 541 30% 30% 30% 4% 
4% 2%Araonp 9 612 2% dZ% 2% -% 

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31% 23% Aiming 25 46» 2B% a 25% -% 

29% 24J 2 & ¥ eifca 094 16 23 44 26% 25% 26% 

S&% 47% Antaeh 1.44 26 23 3245 50% 50% 50% +% 


26% 2S%fcWPpaP! 267106 3 25%d2S% 


13 1181 20% 819% IS 


18% 14% Armor* in 044 27 IB 73 16% 15' 


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10% 9%Apa»MulF 072 72 81 9% 

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7% 4 AppkJMaO 1 429 5 

22% 16% AppIPwA 012 06 34 6 21% 


27%22%Arai0n OlO 04 17 2079 
90% *3% ArcoBwd 250 56 20 136 
Bl5 46%fcioca45P46Q9.fi [1QQ 


6% *%Amra 
29 23% Anm21P 210 68 


33% 33% 

26 5B% -% 
9% 0% 4% 

19% 

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21 21% 4% 
24% 24% -% 

45% 45% 4% 
47 <7 

6 6 % 


57% 43% AmWW 


45% 33% Amur Bee 
7% 4% Artra Gip 


7% 4% Artra Grp 
33% 23% fcvtahd 
30% 2T%Aaure 


108 15 39 1072 
14 1531 


2 23% 23% 23% -% 
50% 51% 4% 
35% 33% +% 


078 30 13 474 
Q40 1J 94 2154 


3 IS B% 8% 8% 
3 474 24 23% ffl% 



3D% Z1%fcWW 0.40 U 94 2154 3DVf 28% 30M +1*2 

31% 22% AsMd Card 040 1.4 11 108 38% Z7% 28% 41% 

44% 33% AshOH I DO 26 12 1072 35% 34% 35 % 

26% 16% Ash Pee F 027 16 123 17% 17% 17% -% 

3% 1% tea km 02811 2 3 384 2% 2% 2% 

37 31AK* Gas 012 04 31 60 31% 31% 31% +% 

57% 49% ATST 162 26 15508 53% 53% 53% 4% 

253% 226% M Ben Z ZS 1.1 7100 259% 299% 259% 40% 

38% 33% Attn Gas 208 86 14 75 34% 34% 34% 

9% 5% ArttoSu 028 56 6 12 5% 5% 5% 

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1tt%92%N8Wi 5.50 51 85 2832 109% 108% 108% -% 

10 4% Ate 0 55 5 % 5% 5% -% 

20*4. 17% Atmos Engy OS 4.9 8 30 18% 17% 18 -% 

12% 8% AOMsAOR 034 37 10 2298 9% 9% 9% 


24% 17 %tag* 

12% 8% Austria Fd 
55% 47%Art*a 
20% 13% Awnco 
19 7% Antal 
45 30% AWW 
61% 48% AnndA 
14% 10% ApknQug 
7% 5% Ate 


016 07 38 373 22% 22% 22% -% 
OlO 10 382 B% 9% 9% 

OS 16 23 1398 52% 51% 52 -% 

044 29 11 7 15% 15 15 

OW 05 1 1777 8% 8 8 -% 

OS 16 17 959 32% 32% 32% -% 

)J» 11 16 1313 58% 57 56% 41% 

10 108 u 1Q% 10% 

22 1008 6% 5% 6% 4% 


38% 31% BCE 
9% 8% BET AM 
5% 3 Batmen 

17% 16% tear Fern 
22% 17 Start! 

27% 21% Bate Ek; 
30% 24% BaKp 
15% 8% BUM 
9% 

25*2 20%B3HGE 
20% 13% 

38 30%ere0no 
29% 19%BancRnb 
25% 20% Borcanv 
11% B% BJWMCaWH 
34% 27 Bornttma* 

1% 1% BancToas 
83% 49% Bandag 
50% 38% BonfcAm 
98 85 Bar* Btd 

28% 22% BKtaSl 
49% 46% B* BOStl P 
32% 25B**NVl 
50% 47% BonMm A 
95 81 BXkfcnB 

84% 64% BUM'S 
38% 3D Betas 
30% 22% BardiC R>x 
37% 29% BamaiGtp 
4B'| 39% Bar®. 


12% 8% teas 
53% 34% Bauacn 


27 21% Bate 
26% 23% Bar St Gas 
22% 19% Bd Tr 1838 
23% 16% Bar 5m 


50% 47% BsdSHA 
37% 27% Barrings 


37% 27% Barrings 
28% 23Bac*Ranki 
43 34% BecM) 


7 9226 581 

10 28 13 

37 8 648 
24 67 

22 49 40W 
16 23 90 

24 21 501 

08 13 338 
II 502 

68 12 1766 
1.0 30 487 

37 II 8368 
10 231 

SO a J77 

7 2 4 16 

31 a 53S 

62 13 

13 18 148 

33 10 4366 
63 ;100 

14 11 2220 

85 5 

3 7 5 2565 
47 64 

73 0 
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38 99 148 

26 19 571 
40 50 53 

16 II 1T06 
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28 13 2826 
18 37 3348 
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8.3 8 

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59 2100 

1.9 23 14 

1.6 21 1581 
1-6 14 1707 


33% 34 

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21% 20% 21% 
24% 24% 24% 
25% 35% 25% 
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7 6% 6% 

22 % 22 22 % 
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33% 32% 33*4 
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23 22% 22% 
ID B% 10 
33*; 32% 33% 
1% d1% 1% 


54% 54 54% 

48% 47% 40% 


88 88 88 
25% 25 25% 

46% 48% 46% 
30% 29% 30% 
40% 48% 48% 
S3 82% 82% 
64% d63% 64% 
34% 34 34 

22% 22% 22% 
35% J4% 35 

45% 44% 45% 
10% 10% 10% 
35% 34% 35 

26% 26% 26% 
24% 2»% 24% 
2U% 20% 20% 
16% HIE 16% 
48 48 48 

33 32% 33 

25% 24% 25 

42% 4; 42 



NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


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048 14475 107 14J S «% 

ai8 ,J 32 172 W ’3% 13*8 T% 

24 24 B43 7D% 69% BS% -% 

30 5088 61% 80% 80% -1% 
iS . 12 93 3% 3% 3% 

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076 27 168988 28% 27% 28 +% 
050 3J9 9 785 12% 12% 1Z% ,% 


24 27 13 ^ ,3 ^ i3% +*• 
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m lAaitesp o«n9 is b% b% b% *% 

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11% 6% ACM Mai 1.08122 153 9 3% 0% ■% 

g B% 8ACMMarap1B72 19 86 B% 8% 0% 

B% AcmaOv 044 19 14 10 11% 11% n% .% 

8% Acme Bad 5 57 8 7% 7% -% 

28% 23 Acorrfla 060 2J 13 12 a% 26% 26% >% 

8% 5%A dan 038 « 2 161 9 B% 6% 

15% 11% Anson 90 1797 11% 11% 11% 

18% 16 1 ! Adjma Erpr 040 23 0 41 17% 17 17% +% 

64 46% Ad Iflcm 300 S3 463 54% 52% 54% +1% 

31% IB% AAtfc 300116 11 9574 25% 24% 25% +1% 

6% 5 Aata3t Grp 016 3.1 B IS S% 5% 5% 


1 072 AH 86 8% 0% 8% 

044 19 14 19 11% 11% 11% -% 

5 57 B 7% 7% -% 

080 2J 13 12 26% 26% 26% +% 

038 4.1 2 161 9 Ms 6% 


1804 WL W Ste 

lOgh imte* Bh % E IBs MW 

7% 5 taflPr x 038 5 l2 3 0 6% 

99% 49Be8MI 278 00 18 5858 86% 

19% 14% Bedh 040 25 14 48 16 

63% 53 BofStn 276 46 28 3494 80% 

SS 40%BdOA 080 14 20 86 44 

2S% 20% BemB 054 23 2fi 389 24 

B3 57% Bend* OP OO 74 noo 58% 
40% 34% Bend 1 52 4.0 12 isa 36% 

36% aJ%flonoHcn A 047 15 19 131 31% 

1% |2 BenffM B OW 40 4 114 % 

19% t4%Bmrfr 0« 11 23 1Z7Z 15% 
i7B50l5llU Bnttf 40 317001 

10% 8 Barry tar 040 42180 49 0% 

37% 19 Boat Buy 14 4377 23% 

28% 26% Beth St 2. 280 9.1 17 27% 

55% 51% WdmPf 500 33 7100 54 

24% 16% Bans* an 14 B 275B 21% 

53% 42% BetzL 1.44 13 21 218 43% 

16% 12BW&I » 1130 12% 

21% l2Bkmn OlO 06 18 112 12% 


6% 6% 4% 

55% 55% -% 


38% 38% -% 
30% 31% 4-1% 


i7B5Oi5i00Battt 
10% 6 Barry tar 

37% 1® Baal Buy 

26% J6%Be0ia2 
05% 51% BaddsnPf 
24% lB%BemSl 
53% 42% Betel. 
16% 12Bm&l 
2i% i2Bbonrit 


32% MBmhpaS 0« 14 55 1220 25*2 
22% 16 %BDgcK 040 23 17 4018 17% 


22% 18 Back H PL 142 84 II 72 1 ft 

10% 8%Bk*n*Aftra73 U 158 W 

8% 6%BUdiMkx 075105 393 7*i 

18% 6% Bt*n*Hpx 0.70 B.0 1178 83 


48% 37*2 tack 1.25 03 22143 T 38% 

31% 23% Baca OlO 04 » 7021 23% 

6% 6%Bkn(3dpi 012 14 24 0% 

28% 19% BMC Hd IB 220 28% 

50% 42% Baaing 1.00 22 12 4269 40% 

27% 19 BOOeC 0.60 24 61105 Z5% 

21% 10% BoB B S H 008 QB a 141 10% 

17% 9% BordnCnm 260152428 2262 17% 
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27% Bmair 0 80 22 14 2307 u27% 

31% 18% Bran Fnp . * ; 772 26% 

34% 30BFE Prop 240 78 7 92 38% 

90% 88% Brigs 1.84 25 12 203 73% 

33% 19% Brinurint 19 2470 23% 

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74% 5S% Brfcr 1.77 27 15 119 66% 

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18% 11% Baden 


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27% 27% -% 
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12 % 12 % -% 
24% 25% +% 
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19% 19% -% 
8 % 0 % -% 

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18% U% Baden 
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27% 20% Boiolr 

31 % 16% Bran i Fn? 

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33% 19% Brinhorim 
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76% 55% BP 


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51% 51% ft 
60% t»% ft 
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75% 75% 

23% 23% 

23% 23% -% 

60 60% ft 
24% 25% ft 


25% 17% BmMk 044 10 43 5824 24% 

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19% 16% Burnham Pc 100 11 22 120 17% 


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31% ft 
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37 ft 

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25 19%CUSEn 
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17% 14 CPI Cap 

82% 71 CSX 

27% 19% CIS Cap 


048 10 20 144 27% 27% 27% ft 

2.00 07 15 303 309 307 307 *1 

018427 0 50 1J % % 

072 13 11 979 22 21% 21% ft 

29 412 61% 061 61% ft 
06 20 18 1999 49% 48% 49% ft 


056 12 19 1101/17% 17% 17% ft 
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040 10 21 57 027*2 27% 27% 


18% CddBURa 064 13 IB 1975 20 1ft 

82% Cautobwi 26 1431 104% 103% 

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58% 40% CBMC 1.04 20 26 246 53% 52 

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15 10% CD! Gap 34 27 14 13% 13% ft 

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27% 22% OMOpeta 
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56% 40% OWe Fund 
19% 11% 0*0- 
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65 163 6% <6% 5% -% 

7 297 37% 37% 37% ft 

48 5 3ft 33% 3ft 

100 21 5 5835 47% 47 47% ft 

104 24 19 4069 75% 74 75% -% 

104 41 22 4813 73% 72% 73% 

090 118 1798 7% 7% 7% 

246 80 11 43 29% 29% 29% 

080 46 17 227 17% 18% 17% 

1.72 7.8 75 370 22% 22% 22% 

036 10 15 800 20% 20 20% 

400 2820 U4% 3% 4 

100 70 10 174 27% 2ft 26% 

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21 3799 27% 2ft 25% 

180 1 5 1013014 41 39% oft 

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27% 21 One Gas 1.72 7.8 

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28% 29-jS Zft -% 
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22% 22% 22% ft 

20% 20 31% ft 

114% 3% 4 

27% 2ft 26% -% 
22 % 22 22 % 

27% 2ft 26% -% 

41 39% 4ft ft 
25% 3% 25% ft 
83% 882% 82% ft 
94% 94% 94% ft 
14 1ft 1ft -% 
14 1ft 13% ft 
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11% 11% 11% ft 

64% 63% 64% ft 
19% 19% 19% 


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120 13 8 218 3ft 36 38% 
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102 4.0 15 1909 48% 47% 48% 


102 4.0 15 1909 40% 47% 48% t% 
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202 84 9 4B7 28 27 \ 27% ft 

0.12 00 46 5596 39% 38% 38% -% 

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11% 10% Cam HPt x 110109 
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29% 24% Crane 075 20 16 74 29% 26% 26% 

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33% 19% frnflx 8 1429 21 20% 20% t% 

49*2 30% Crafn 100 I* 13 530 46% 48% 46% ft 

12 9%CKM 1 16105 13 749 11 10% 11 ft 


29% 24% done 
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5*2 5% ft 

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11% 11% ft 

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8% 8% ft 

28% 29 

14% 14% 

67% 67% 

42% 42% *Z% 
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33% 33% ft 
9% 9% ft 
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16% 16% ft 
30 30% ft 
24% 24% ft 


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108 £7 It 290 29% 29% 29% 

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23% 19% Entebbe 044 
32% 23% Edison Bn> 104 
24% iftEtfMlds 058 


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29% 20% Manhal 6 440 21% 20% 21% ft 

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45 




JPTNANCUJL TIMES FRIDAY JULY 22 1994 


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NYSE COMPOSITE PRICES 


NASDAQ NATIONAL MARKET 


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Md AH II 3621307 42% 35% 40% -1% 

Wdtanfc 052 11 3454 20% 29% 29% ft 
HriM&ata 099 9 35% 35% 35% ft 

MbrH 052 21 351 29% 28%' 29% ft 
MBa 477 24% 23% 24% ft 

Wtthcta 17 855 13% 12% 12% -% 

MnUteW 482457 19% 18% 19% +% 

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AMEX COMPOSITE PRICES 


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GbrintCp 400 37100 22% 21% 22% ft 
tew he 1209484 4 3% 3% ft 

Genome 61 m 29% 28% 29% ft 

OtoOeGt 040 8 459 14% 13% 14% ft 

Odtagtf. 01212 TO 17 1B% 17 ft 
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Ml 7mA 0363*1 382 »% m ft 

MhCanOI 020 10 5 B 8 8 ft 

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NMR 12 10 8% 8% ft 


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r1_ j. SJWCotp £10 9 37 Sft da 36% 

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Cttgwie 2S 93029 10% «% 10% ft 

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tatenCmxQBI a 48 28% 28% 2ft ft 

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CbaffS 009 17 718 12% 11% 12% ft 

taqane 5 597 ft 7% 7% ft 

CaUpr 8 334 19% 18% 19% 

CBlCp IB 139 10% 10 10% ft 

Omtacar 4 778 11% 10% 11 -% 

0*1 Hd 1.12 12 650 32% 31% 32% -% 

(taei sir rezioo lo%dio% n»% 
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HBOS CO 018 a 5806 28% 27% 28% ft 
Iktofinr 1818*3 20% »% 19% ft 

Marine 009 SO IX 12% 12% 12% ft 
Haetedya ID 269 8% 6% ft ft 
Hachtagar OW 1923008 12% 11 11% ft 
Mtod 96 1ft ft 9% 

HeMTtff 6 25B IS 1*% IS 
Htttf 072 13 4» 20% 19% 19% 
HagmSyi aisaiOOl 7% B% 7% +1% 
Hriogh 47 503 10% 10 10% ft 
Han* Bari on 8* 32 £1 20% 20% ft 


ctapwrl on 8 794 21% 21% 21% ft HomaOfcl 072 28 251 H21 20 2D% 
CtamSh 009 13 1267 9% 9% 9% -4 0*Bda 044 19 15 27% 2ft 27% 


42 47 08% 84 6% 

15 in 104 10% 10% -1% 

1 290 % d% % 


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UktowWA 5 40 2% 2% 2% +% 

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Untanw are 7 Mi 7 ft 

UBCaU 92 237 28% 28% 2ft 

Wacom* 133987 38% 36% 38% +1% 

WacoM 5402 33% 32% 33%. ft 


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46 


WORLD STOCK MARKETS 


FINANCIAL 


Friday July 22 1994 




,?» 


AMERICA 


EUROPE 


IBM results 
lend support 
to the market 


Wall Street 


The focus of US equity inves- 
tors shifted back to corporate 
profitability yesterday morn- 
ing, but disappointment from 
United Technologies somewhat 
offset a pleasant surprise from 
IBM, unites Frank McGurty in 
New York. 

By 1 pm, the Dow Jones 
Industrial Average was 7.76 
ahead at 3,735.03. The more 
broadly based Standard & 
Poor's 500 was up 0.68 at 452.28. 
even though declining issues 
on the Big Board outnumbered 
advances by 1,065 to 858. Vol- 
ume was moderate, with 161m 
shares traded on the NYSE by 
early afternoon 

In the secondary markets, 
the American SE composite 
was off 0.32 at 432.68, and the 
Nasdaq composite slipped 0.11 
to 712.66. 

After a session rattled by 
fresh uncertainty over interest 
rates, investors started to con- 
centrate again on how compa- 
nies performed in the second 
quarter, amid the pressure of a 
tightening monetary policy. 
There was enough favourable 
news on offer to allow the mar- 


NYSE volume 

Daily (mBton) 

330 iT 

volume 1993 
260,100.000 



July 1904 

ket to reverse its slide and post 
a slim gain 

On Wednesday. Federal 
Reserve chairman Mr Alan 
Greenspan had triggered a 21- 
point decline in the Dow indus- 
trials by telling a Senate com- 
mittee that it remained an 
open question whether the cen- 
tral banker needed to lift rates 
again to squeeze out inflation- 
ary pressures in the economy. 

Yesterday there was conflict- 
ing evidence on the effect of 
the Fed’s more restrictive 
credit conditions. 

The July survey of business 
conditions by the Federal 
Reserve Bank of Philadelphia 
suggested that growth in the 
region was moderating but 
prices paid by businesses were 
an the rise. 

Despite that unfavourable 
news, bonds were not a signifi- 
cant factor influencing stocks 
yesterday. After a brief down- 
turn, the Treasury market was 
holding steady through the 
afternoon in actum which mir- 
rored movements by the dollar. 

In turn, investors in the 
stock market were left free to 
sift through a fresh pile of cor- 


S Africa seeks direction 


Johannesburg was mixed, with 
some support appearing for 
industrials while the broad 
market tended softer In search 
of fresh direction. 

The overall index finished 26 
lower at 5,556, industrials 
moved forward 4 to 6.363 and 
golds lost 28 at 2,084. 

Among industrials attract- 
ing demand. Barlows added 50 
cents at R32.25 in turnover of 
R6.5ai- SAB rose 25 cents to 


R86. Iscor gave back some of 
its recent hefty gain, slipping 
10 cents to R3.S0. 

De Beers and Anglos lost 
ground oo the back of Wall 
Street tolls, De Beers dipping 
50 cents to R109.25 and Anglos 
falling R4 to R235. 

Sappi improved 25 cents to 
R52 and Sun bop rose R1 to 
R3Q.5Q. Kloof declined Rl to 
R57 and Vaal Reefs was R3 
cheaper at R408. 


Late strength in dollar helps underpin bourses 


porate results. Among them, 
the most impressive perfor- 
mance belonged to IBM, which 
confounded analysts by post- 
ing second-quarter earnings of 
SL14 a share, against forecasts 
of 73 cents. The stock surged 
85% to 861 in heavy volume of 
about 4.5m shares. 

The buying enthusiasm 
spilled over into other com- 
puter related issues, helping to 
stem losses set off earlier in 
the week by weaker than 
expected results from Compaq, 
Intel and Lotus Development 

On the Nasdaq, Apple was 
$1% ahead at $27% and Cyrix 
put on $1% at $34%. Intel 
regained $1% at $58. 

Tandem Computer added $1 
at $13% after Us chairman said 
that the company would beat 
analysts' forecasts when it 
announced its results after the 
dose of trading. 

Among the blue chips, how- 
ever, the upturn in IBM's shar e 
price was balanced by a sharp 
downturn in the value of 
United Technologies’ stock. It 
dropped 5 per cent, or $3%. to 
$63, even though the compa- 
ny's earnings had improved 32 
per cent in the quarter. 

By contrast. Sears Roebuck 
continued to improve, rising 
$1% to $47%. while most retail- 
ing issues held steady. 

Canada 

Toronto was easier at midday. 
The TSE 300 composite index 
lost 13.60 to 4,168.14 in turn- 
over of 19.29m shares. 

Only forestry and precious 
metals shares escaped the gen- 
eral downtrend that took 12 of 
Toronto's 14 sub-indices lower 
at midday. Declines outpaced 
advances by 302 to 221, with 
291 issues holding steady. 

The precious metals sector 
added 61.83 at 9.554.58 on 
firmer prices, pushed up by 
inflation fears. 

Mexico 

Mexican shares opened weaker 
due to higher local interest 
rates and anticipation of sec- 
ond quarter earnings. The IPC 
index of 37 top shares was 
down 1L41 at 2,199.54. 

Telmex slipped 0.66 per cent 
in its L shares, with the tele- 
phone company’s ADRs in New 
York down $% at $54%. 

Brazil 

Shares in SSo Paulo were down 
0.6 per cent In light trade as 
investors remained worried 
about liquidity problems in the 
h anking system. 

The Bovespa index of the 56 
most active shares was off 247 
at 40.139 in turnover of 
R$122.9m. 

Brokers said there were 
rumours that some financial 
institutions were faring diffi- 
culties in liquidating fixed- 
income operations, in spite of 
the central bank’s reduction in 
the discount rate late on 
Wednesday. 


The Bundesbank's decision not 
to make any movement on the 
discount and Lombard rates 
should have come as no sur- 
prise to the markets and, in 
the event, most of them 
remained resilient There was 
some satisfaction at the 
announcement that the repo 
rate was fixed for the coming 
four weeks, but the main cause 
for late strength was attributed 
to the rise in t he dollar. 

FRANKFURT saw the Dax 
index toll 25-35, or LI per cent, 
to 2,113.30 in the official ses- 
sion, which closed before the 
Buha went public. 

In later trading there was a 
marked improvement as the 
index settled at 2.119.94. Turn- 
over amounted to DM5.6bn. 

BZWs global strategist, Mr 
Michael Hughes, said that with 
evidence that money supply 
growth was coining under con- 
trol he was now reversing his 
recommendation for German 
bonds and equities. 

Consequently, BZW had 
upgraded bonds to neutral 
from aggressively underweight 
and downgraded equities from 

ASIA PACIFIC 


neutral to underweight. “The 
outperformance of German 
equities over bonds was facili- 
tated by excess liquidity com- 
ing into the German economy." 
he said. “As this withdraws we 
would expect the relative per- 
formance to change." 

The banking sector was pres- 
sured yesterday as some inves- 
tors became nervous ahead of 
results due from Deutsche 
Rank and Co mm era banfc next 
week, with reports that they 
could be disappointing. Deut- 
sche recovered in Ibis trading: 
having closed at DM721. the 
stock was finally a net DM8.50 
off at DM726. The story was 
repeated at Commerzbank, 
DM337.50 in the official and 
down DM130 at DM33830 in 
the Ibis. 

ZURICH continued its recov- 
ery, with the day’s half-year 
figures from Sulzer helping to 
consolidate a more positive 
view of the corporate outlook. 
The SMI index advanced 17.1 to 
2,579.4. 

Sulzer appreciated SFr20 to 
SFr905. with news that orders 
in the first six months of 1994 


FT-SJE Actuaries Share Indices 


Jul 21 
Houty (tango 


Open 


THE EUROPEAN SERIES 

1030 11.00 1X00 1300 (too 15.00 Owe 


FT-SEoansklOO 136S26 13BMD 1368.18 1387 M 136*. 47 136556 13605* 137154 
FT-SE6rtteS*2S) 140157 1402.67 14Q1D8 1404.77 1*05-20 1401*2 1*08.58 1*07.95 


Jol 20 


M 19 


Jtf 18 


Jd 16 


Jul 14 


FT-SE Euntnxk lOO 1387.56 1381.71 1348.11 13*002 1337.33 

FT-SE Euratiack an 140757 1*045* 139157 139205 1374.18 

Bssi 1060 aflUMO); «D • 13H5*: 3D0 • l*0SJB lartr 1® ■ 138151 200 - 13» 17 


increased b; 3 per cent in 
Swiss francs and per cent in 
local currency terms proving 
better than some analysts had 
expected. 

Nestle picked up a further 
SFr26 to SFrl.170 in continued 
response to its better than 
expected first-half figures ear- 
lier in the week. The shares 
have risen 6 per cent over the 
last two sessions. 

Roche certificates continued 
their improvement, adding 
SFr50 at SFrS.400. Their slide 
Last week after disappointing 
figures had unsettled investors 
and led the market lower. 

Elsewhere, Brown Boveri, 
which posted strong gains ear- 
lier in the week, saw profit- 


taking which left the shares 
SFri2 lowe r at SFri.122. 

AMSTERDAM moved closer 
once again to breaking through 
the 400 iTiark . the AEX index 
finishing up 1.24 at 399.04. 

DSM and Akzo made good 
gains, FI 4.60 and FI 2.60 respec- 
tively, to FI 141.30 and 
FI 205.20. Kleinwort Benson 
favours the chemicals sector, 
giving it a 36 per cent over- 
weight holding In its model 
portfolio, although this is sub- 
stantially less than the 76 per 
cent holding it favours for con- 
sumer goods, which includes 
both Polygram and Philips. 

Hie investment bank said 
that these weightings reflected 
the “cyclical bias which we 


emphasise as being key for 
exposure to the European eco- 
nomic recovery”. 

PARIS recovered Its balance 
after earlier declines, helped by 
late strength in fixtures. The 
CAC-40 Index added 10.06, or 
(15 per cent, at 2,053.78, having 
dropped to a day's low of 
2,023.11. Turnover was FFrtbn. 

Eurotunnel claimed a 2.7 per 
cent rise, the shares ending 65 
centimes up at FFr34.55 on 
news that a US investment 
fund had lifted its stake. 

Michelin, up FFrl at FFr254, 
has been upgraded to “buy" by 
James Capel, which reused its 
forecasts, based on the view 
that new products were per- 
forming well. 

MILAN shrugged off the 
day’s political tensions and 
edged ahead as it awaited fur- 
ther budget details from a cabi- 
net meeting after the market 
closed. The Comit index rose 
3.61 to 720.11. 

Telecommunications stocks 
overcame early hesitancy 
which foDowed comments by 
Mr Lamberto Dint, the trea- 
sury minister, who said there 


was no fixed timetable for their 
privatisation. Stet closed L65 
higher at L5345, while Sip was 
L75 ahead at 14560. 

STOCKHOLM moved very 
slightly lower on profit-taking 
following rises over the last 10 
sessions. The AffSrgvirlden 
general index eased 0.1 to 
1,445.2. 

The forestry sector contin- 
ued to outperform as rumours 
of further increases in pulp 
and paper prices resurfaced. 
Stora moved ahead SKr4 to 
SKr400, while M0D0 added 
SKi5 at SKr345. 

MADRID was unable to 
make any headway, the gen- 
eral index softening 0.06 to 
30L34. 

Banco Bilbao Vizcaya rose 
Pta45, or 1.6 per cent, to 
Pta2,‘950. On Wednesday, the 
tank announced a 17 2 per cent 
toll in first-half pre-tax profits, 
but analysts said the result did 
not look so bad if losses in 
trading operations were 
excluded. 

Written and edRad by John Pitt 
and NKchacd Morgan 


1 - 


Nikkei falls despite optimism on economic recovery 


Tokyo 


Prospects of an economic 
recovery and expectations of 
buying by public funds were 
ignored, and share prices lost 
ground on selling by invest- 
ment trusts and institutional 
investors, writes Emiko Tera- 
zono in Tokyo. 

The Nikkei 225 average was 
off 157.84 at 20,622.92 after 
a day’s high of 20,767.65 and 
low of 20,608.72. Volume came 
to 258m shares, a gainst 310m. 
and equities declined through- 
out the day amid a lack of par- 
ticipants due to prevailing 
uncertainty over the course of 
the yen. 

The Topix index of all first 
section stocks slipped 13.51 to 
1,651.98 and the Nikkei 300 lost 
2.67 at 299.55. Declines led 
advances by 771 to 249, with 
167 issues unchanged. In Lon- 
don the ISE/Nikkei 50 index 
eased 0.86 to 1,337.88. 

Investors did not react to 
Wednesday's Bank of Japan 
quarterly economic report 
which concluded that the Japa- 
nese economy was headed for 
recovery owing to rising con- 
sumption. fiscal stimulus and 
growth in overseas markets. 

Meanwhile, the release of 
Y 1.000 bn in postal insurance 
money on Wednesday, of 
which 50 per cent is expected 
to be placed into the stock 
market over the next few 
months, also failed to boost 
share prices. 

Traders said that while 
investors were still nervous 
over currency fluctuations, 
prospects of buying by public 
funds prevented selling. “There 
is likely support around the 
20.500 level.” said one Japanese 
broker. 

High-technology exporters 
were lower on small-lot selling 
by domestic institutions. Mit- 
subishi Electric dipped Yll to 
Y698 and Sony Y60 to Y5.950. 

Reports that utilities would 
continue to pass on the bene- 
fits of the high yen by cutting 
rates hit electric power and gas 
companies. Tokyo Electric 
Power, for instance, receded 
Y30 to Y3.000. 

Hopes of increased capital 
spending boosted Komatsu, the 
construction machinery maker, 
in the morning session. How- 
ever. later profit-taking eroded 
the gain and the stock, the 
most active issue of the day, 
dosed a net Y8 down at Y945. 
Daifuku, a factory equipment 
maker, put on Y30 at Yl.360 
and Kato Works, a truck crane 


company, firmed Y8 to Y746. 

Speculative trading sup- 
ported Tomoegawa Paper, 
which rose Y80 to Y566, while 
Oriental Yeast advanced Y80 to 
YL.360 on the second section. 

In Osaka, the OSE average 
declined 120.73 to 23,085.08 in 
volume of 45m shares. 

Roundup 

There was a mix of perfor- 
mances among the region’s 
markets yesterday. 

Baring Securities turned 
more bullish on Asian equities 
yesterday. Reuter reports from 
Singapore. Mr Alan Butler- 
Henderson forecast that Hong 
Ko ng and Thailand would lead 
a rally which could last 
between six to nine months, 
based on chart analysis. 

He expected the Hang Seng 
index to climb to 9,800-10,600 
by end-September, and to 
11.000-12,000 by end-Decemben 
while he estimated that the 
SET index would rise to 1.550- 
1,650 by end-September and 
to 1,700-1.850 by the end of 
the year. 

TAIPEI finished at its high- 
est level since June 1990, with 
paper stocks leading the rally, 
while plastics halted three 
days of falls to resume an 
upward momentum. 

The weighted index ended 
103.40, or L6 per cent, up at 
6.577.70, its best close since 
June 7, 1990. But turnover fell 
to T$91.5bn from Wednesday's 
T$l05J)bn- 

Papers led the gains on 
hopes of a rise in pulp prices, 
with Chung Hwa Pulp and 
Taiwan Pulp both advancing 
by the daily 7 per cent limit 
to T$48.40 and T$3a30 respec- 
tively. Among plastics, China 
Petrochemical strengthened 
T$2iM to T$37 j4Q. 

SHANGHAI saw a sell-off of 
large-capitalisation stocks and 
the blue chip Pudong which 
took the A share index down 
35 per cent to Its lowest finish 
since early 1993. 

The index dropped 13.67 to 
380.95 in thin turnover of 
Yn237m, against a daily aver- 
age of around Yoiba in the 
first five months of this year. 

The A index has lost 76.8 per 
cent from its peak in February 
last year, pressured by the 
rapid expansion of new listings 
and heavy issuances of state 
bonds. In the past three 
months alone, the A index has 
slid more than 800 points. 

In Shenzhen, the A index 
weakened 1.4 to an all-time 
closing low of 9751. 


FT- ACTUARIES WORLD INDICES 


Jointly compiled by The Financial Times Lid.. Goldman. Sachs & Co. and NaWeet Securities Ltd. In conjunction with the Institute of Actuaries and the Facility of Actuaries 

NATIONAL AND 































nni 



Figures in parentheses 

US 

Day's 

Pound 



Local 

Local 

Grass 

US 

Poud 



Load 


show mxnber ol Knea 

Dollar 

Change 

Sterling 

Yen 

DM 

Currency % cho 

Ohr. 

OcAsr 

SWtog 

Yen 

DM Currency 52 weeh 62 week 


(K slock 

index 

46 

Index 

index 

Index 

Index 

on day 

YWd 

Index 

Index 

Index 

Index 

Index 

«Qh 

Law 

(approx) 

Australia (68) 

. ..- 174.93 

0.5 

167.44 

10021 

1*2.44 

1580)1 

ai 

349 

174.08 

165.46 

i0a»7 

140 91 

157.85 

189.15 

13856 

13X25 

Austria 07).... 

188.17 

-as 

180 11 

117.47 

1S3J2 

153.12 

-02 

1.04 

189-67 

18027 

118.72 

163.52 

153.41 

185.41 

154 S3 

154. S3 

Betgxxn (371 

171 87 

-0.5 

184.31 

107.17 

139 7B 

136£1 

02 

4.05 

17245 

163.01 

107.95 

13059 

13035 

17067 

14352 

14954 

Canada (106) 

- — 127.57 

-0.3 

122.10 

79,6* 

103.87 

127.62 

-02 

2.65 

127.91 

121.58 

80.07 

103.53 

127.94 

14031 

12054 

12450 

Denmaih (33)...., 

— Z722B 

0 A 

260.61 

169.68 

221.70 

227.75 

0.9 

1.30 

271.24 

257.81 

16S.7B 

219.55 

225.69 

275.79 

20758 

214.13 

Finland (241 

158.70 

-03 

151.90 

99 07 

129.22 

172.78 

02 

082 

16920 

151.32 

99.86 

128.66 

172.36 

159.20 

9042 

10004 

France (97) 

175.84 

-0.6 

16831 

109.77 

143.16 

147.98 

-02 

3lG3 

17085 

168.19 

na76 

14323 

14026 

185-37 

15092 

161.24 

Germany 

144.85 

-02 

138.64 

90.43 

117 94 

117.94 

a* 

1.75 

145,13 

137.95 

9085 

117.47 

117.47 

147X7 

112.69 

11754 

Hong Kong 156) 

373.11 

0.7 

357 13 

232.92 

303.81 

370.04 

0.7 

021 

370,87 

352.32 

232.02 

30003 

387.82 

60056 

271.42 

27459 

Ireland (1*) .. 

.201.90 

0.9 

193J6 

128.04 

164.40 

185.97 

13 

323 

20002 

190.12 

12021 

161.91 

18X56 

20933 

15750 

16151 

Italy (61) 

88.01 

18 

84.2* 

54.94 

71.66 

10234 

1.7 

1.48 

8063 

82J4 

54^2 

70.12 

100 At 

97.78 

57.68 

6095 

Japan (4881.. - — 

18814 

03 

160.94 

104.97 

136.91 

104.97 

ai 

0.73 

167 hB 

153.29 

104.90 

135.65 

104.90 

17010 

124.64 

149.94 

Malaysia ©8) 

— *75.35 

0* 

454.39 

296.76 

38707 

*74£1 

aa 

1.72 

471.46 

44012 

29011 

381.81 

47091 

621.83 

333.86 

33358 

Medco (18) 

.... 1901.74 

-1.2 

1820.28 

118751 

1548.48 

7077.61 

-i.i 

1.W 

1924.78 

1829 45 

72O4.0Q 

1557.92 

7154.01 

26*706 

1516.57 

1652.41 

Nettarland (27) ... 

......207-24 

-ai 

198.30 

T 29.38 

188.75 

166.19 

0.8 

3.42 

20748 

197.19 

129.86 

167.93 

16021 

207.48 

16015 

165.15 

New Zetland (14) 

- ...69.25 

2.0 

6028 

43.23 

5636 

61.10 

1£ 

3.81 

67.90 

6484 

4200 

54J96 

80.15 

77.59 

51.97 

5157 

Norway p3) 

— 205.83 

0.7 

197.01 

128.49 

167.80 

191.04 

1.1 

1.73 

204.41 

18429 

127.95 

165.45 

189.03 

207.35 

156.74 

15082 

Singapore (44) 

.......348.56 

1.1 

331.72 

216.35 

282.20 

Z41.2S 

1.1 

1.75 

34288 

325.91 

214.63 

27704 

23071 

37092 

247.08 

247.08 

South Africa (56) 

.288.92 

0.8 

276.54 

180.37 

235.25 

28544 

0.7 

222 

286.71 

27051 

179.46 

232.06 

28356 

2SZ84 

175.93 

206^6 

Span 1*2) 

14257 

-1.1 

13OJ0 

88.82 

1 75.85 

139.15 

-aa 

4.14 

143.83 

138.71 

9003 

110*2 

139.93 

155.79 

11033 

120.72 

Sweden (36) — 

.215.il 

-0 3 

206.11 

134.43 

175J4 

2*7.55 

0.6 

1.62 

215.95 

20526 

135.17 

174.80 

245.98 

23135 

168.75 

172.04 

Switwriand W71.._ 

158.42 

0.9 

151.6* 

98.90 

129.00 

130.04 

1.8 

1.87 

15093 

149.16 

9023 

127.02 

127.74 

17656 

72C.48 

124.83 

United Kingdom (20*).. ... 

— .. 194.34 

-1.1 

18001 

121.32 

1502* 

186.01 

-04 

406 

196.40 

188,68 

12204 

15097 

186 68 

214.96 

172.26 

172.S1 

USA (5191. — .. 

18*-35 

-as 

178.45 

115 09 

150.11 

184.35 

-05 

2.91 

185.19 

17002 

115.92 

14089 

18019 

196.04 

178.95 

183.14 

EUROPE TOJ)„ 

171.01 

-0.4 

18369 

106.78 

13*25 

i53.ee 

02 

3.03 

171.88 

183.18 

107.48 

138.96 

15033 

17058 

1*352 

14003 

Nordic (116) .... 

.21384 

-O.l 

204.68 

133.49 

174.12 

209.17 

0.7 

1.42 

21X96 

20O36 

133.93 

173.18 

207.77 

22030 

16059 

164.04 

Paahc Bfl3m (7*9) 

176.4* 

a* 

187.32 

109.52 

142-85 

114 67 

0.1 

1.0* 

174.75 

168.10 

109.39 

141.45 

114.51 

17088 

134.79 

15350 

Euro-PacJflc (1*69) 

173.45 

O.l 

18001 

1(S .28 

14123 

130.40 

02 

1.87 

17033 

164 7S 

10600 

14059 

130.16 

17089 

14086 

149.28 

Norm America (6T5) 


-0.4 

173.08 

112.® 

147-24 

100.45 

-0.4 

090 

181.63 

172.84 

113.69 

147.02 

18125 

19Z.73 

175.67 

170 S3 

fomjpo E*. UK (516) ........ 

.... 154.53 

aa 

1*7.90 

96.*7 

125.82 

134.08 

06 

2.43 

15452 

148.B7 

9072 

12007 

13X32 

157.47 

12009 

12550 

Pacific £*- Japan tffiov 

—...248.95 

0.7 

236.29 

156.41 

202-71 

22187 

0.6 

2.87 

247.14 

3K81 

154,70 

20005 

221.52 

29021 

185.72 

165.72 

World Ex. US (1652) 

17*25 

at 

166.78 

108.78 

141.88 

133.62 

0-2 

1.00 

174.15 

165,62 

109.01 

140.96 

13X*0 

174.76 

14858 


World Ex. UK (1967) — 

174.86 

0.0 

167.38 

109.18 

1-12-37 

145.30 

OD 

2.05 

17*86 

16022 

109.47 

141.55 

145.92 

176.56 

15096 

15081 


Wtfci Ex. So. M. I2112J 175.89 

World Ex. Japan (1700) 133.42 


- 0.1 

-0.3 


16835 

17S.57 


109.80 

114.51 


1*8.54 

175435 


-a.i 

- 0.1 


22A 
2 SZ 


178.11 

184.01 


187.38 

17*90 


110*4 

115.18 


1*256 
148 a* 


14063 

173-22 


17X56 

19020 


1585* 

16651 


159.83 

187.35 


HWWaM Index (2171) 176-58 -0-1 168.<g 1 m2* 1*3.78 1*9.56 -0.1 Z2£ 179.78 16a.(H liaes 1*3.10 149.63 17847 15845 180 06 


Time* LknBad. OtXfinan. Sacra M Co. and WtiH** 
Lauat pnea torn (Vnafaaia Mr am edtton. 


ling. JB87 


HONG KONG had an initial 
fall cut back as a wave of bar- 
gain hunting pushed the Hang 
Seng index back above the 
9.100 benchmark. The index 
ended 71.16 down on balance at 
9,117.66. after losing 160 points 
at one stage. 

Much of the profit-taking 
was attributed to renewed wor- 
ries about rising US interest 
rates, while lower than expec- 
ted Bank of East Asia results 
accelerated selling. 

Bank of East Asia retreated 
HKS1.10 to HE $32. 30 after 
announcing a 12.1 per cent rise 
in net profits for the first half 
of 1994, compared with market 
expectations of a 20 per cent 
increase. 

The news fuelled profit- 
taking in HSBC, which fell 
HK&.25 to HKS89.25, while its 
Hang Seng Bank subsidiary 
dipped 50 cents to HK$54^0. 

SINGAPORE was easier as 
investors sold amid worries of 
higher US interest rates, 
although the underlying mood 
was said to be still positive. 


The 30-share Straits Times 
Industrial index dosed 2286, or 
1 per cent, lower at 2£08.5L 

SEOUL remained in the dol- 
drums and stocks closed lower 
for the seventh consecutive 
session, although low-priced 
small-capitalised counters, 
lightly weighted on the index, 
attracted some interest The 
composite Vnflwr declined 1.32 
to 93535. 

KUALA LUMPUR lost 1.3 per 
cent in a decline led by tolls in 
Tenaga Nasional and Telekom 
Malaysia. The Composite index 
gave up 1&36 to 996-36. 

Tenaga and Telekom, which 
account for more than a third 
of the composite index, fell 30 
cents and 50 cents respectively 
to M$13.10 and M$19- 

MANILA lost ground for the 
second day in a row as inves- 
tors continued to take profits. 
The composite index ended 
1&92 down at 2,648.54 in vol- 
ume of 499.12m shares worth 
772.8m pesos. 

Metropolitan Bank and Trust 
was the day's top gainer, ris- 


ing 1.4 per cent to 690 pesos. 

Losers outpaced rises by 33 
to 24. San Miguel, the coun- 
try's hugest food and beverage 
conglomerate, posted the big- 
gest decline, sliding 2.7 per 
cent to 90 pesos. 

PLOT and PNB defied the 
downtrend, the former clim- 
bing 1.3 per emit to 1,520 pesos 
and the latter 5 per emit to 420 


SYDNEY closed broadly 
lower, hit by weakness in mar- 
kets elsewhere and accompan- 
ied by a toll in futures prices. 

The All Ordinaries irate* reg- 
istered a toll of 29.4 at 2,049.2, 
after a low for the day of 
2.04&2. The September futures 
contract lost 40 at 2,057, after 
touching 2,054. 

Coles Myer ended 2 cents off 
at AS129, after rising to A*L52 
earlier. Brokers said the news 
that Kmart planned to sell its 
21 per cent stake in the com- 
pany removed a long term 
problem from the share price. 

Banks fell in line with 
renewed pressure on bond 


prices, with NAB shedding 18 
cents to A$l0.96 and ANZ 17 
cents to A$4D9. 

WELLINGTON buckled 
under the weight of selling 
from one large foreign portfolio 
to close weaker on the day. 
The NZSE-4Q capital index lost 
18.74 at 2,036-20 in turnover 
worth NZ$157m. 

Volume was the highest seen 
in several months, but brokers 
explained that there had been 
a degree of duplication as a 
portfolio bad been sold to one 
Wellington-based broker, who 
sold to clients and cm to the 
open market. 

BANGKOK fell back on prof- 
it-taking amid expectations of 
higher interest rates. The SET 
index surrendered 21.58 to 
1,342.01 in moderate turnover 
of Bt9.88bn. 

Banks and finance issues 
dominated trading but most 
tolls were limited. The bank 
and finance sectors retreated 
1.72 and 2.51 per cent respec- 
tively. The two accounted 
together for Bt4£6bn turnover. 




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