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:u^f|fe^BVis?ness;' 6 1994 


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Schneider boss 
released from 
Belgian prison 

Didier Pineau-Valencienne, chairman of French 
industrial group Schneider SA, was last night 
released from prison in Brussels, where he bad 
been held since May 27 after being arrested on 
charges of fraud and swindling. The case arose 
from complaints Sled by minority shareholders 
in two subsidiaries of Schneider in Belgium. 

South Korea on alert for terrorists: Police 
in South Korea were placed on alert to guard 
against possible terrorist attacks from North 
Korea in connection with the dispute over interna- 
tional access to nuclear sites. Page 16 

R Watson and Sons, UK actuarial consulting 
firm, is in talks about “an allian ce" with US-based 
benefit consultants Wyatt and Co. Page 16 

British Airways is stepping up its role in the 
modernisation of the Chinese air transport industry 
through joint ventures and other partnerships 
with regional carriers. Page 16; BA to oppose 
French Hunts, Page 3 

Alexander & Alexander, the US insurance 
broker, is to get a 5200m capital injection from 
the country's biggest property/casualty insurer, 
American International Group, as part of a plan 
to revive its ailing finances. Page 17; Lex, Page 16 

Wellcome, UK pharmaceuticals group, is to 
remove accountants Touche Ross and appoint 
Coopers & Lybrand as sole global auditor and 
lead tax consultant from next year. Page 17 

Vodafone, UK mobile communications group, 
said it expended to make no cuts in mobile tele- 
phone tariffs this year and dared its rivals to 
cut theirs. Page 17; Lex, Page 16 

Mefra and Securitas, Finnish and Swedish 
groups, unveiled a plan to create one of Europe's 
leading companies in locking and access control 
systems. Page 17 

German and Spanish accord on EU: 

Germany and Spain committed themselves at 
their s ummi t in Schwerin, eastern Germany, 
to close co-operation in planning for the next 
European “great leap forward”. Page 3 

South Africa to prate human rights: South 
Africa is to set up a “truth commission" to probe 
h uman rights abuses under apartheid but those 
who prove their crimes were politically motivated 
might be pardoned. Page 6 

Yemeni ceasefire breached: Southern Yemeni 
warplanes bombarded northern forces, hours 
after a ceasefire by the north took effect 
Page 6 

Kashmir gunmen kidnap Britons: Two 

Britons, including the 16-year-old son of a former 
Financial Times correspondent, have been kid- 
napped in Indian-held Kashmir by Moslem militants 
demanding the release of three jailed guerrillas. 
Page 6 

UK m in ist e r warns over Malaysia: Calls 
for retaliation against Malaysia are likely to 
increase unless Kuala Lumpur moves to lift a 
ban on giving public sector contracts to British 
companies, the UK's trade minister said. Page 9 

Pakistanis warned of sacrifices: Government 
leaders have warned Pakistanis to be prepared 
to make sacrifices in order to pave the way for 
long-term growth when the annual budget is 
unveiled tomorrow. Page S 

Concern over Argentina's trade deficit 

Argentina's trade deficit widened sharply in the 
first four months of the year, raising concern 
over the country’s export competitiveness and 
the sustainability of its fixed exchange rate. Page 8 

IMF clears way for Philippine debt talks: 

The International Monetary Fund will grant the 
Philippines a S630m “exit facility" by the end 
of June, freeing the new “tiger cub” of Asia for 
debt negotiations at the Paris Chib. Page 7 

Quebec separatists threaten banks: Quebec 
separatists are threatening to withdraw business 
from banks and securities firms that draw attention 
to the economic costs of a possible breakaway 
from Canada by the francophone province. Pages 

Middle Eastern economies slump: The 

overall growth rate for the economies of the Gulf 
and other leading Middle Eastern states slumped 
to an aggregate 3.5 per cent in 1993 from 6.8 per 
cent the previous year. Page 6 

Ulsterman wins racial abuse case: 

A 36-year-old Ulsterman was awarded £5,902 ($8,853) 
by an industrial tribunal in Nottingham in central 
England for suffering racial abuse at work. Page 
9 


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Jobs crisis strategy agreed 


By Peter Norman, Economics 
Editor, in Paris 

Ministers from the world's 25 
leading industrialised nations 
yesterday backed a wide pro- 
gramme of policies aimed at 
reducing the ranks of the 35m 
unemployed in their countries. 

The ministers, in Paris for the 
annual meeting of the Organisa- 
tion for Economic Co-operation 
and Development, endorsed an 
OECD report containing more 
than 60 recommendations rang- 
ing from encouraging entrepre- 
neurship to laws that 

discourage hiring of labour. 

The organisation also calls on 
governments to “reassess the role 
of statutory minim um wages” as 
an instrument for redistributing 
earnings. 

The measures will be used by 
individual OECD member states 
to fashi on policy programmes to 
be implemented with the help of 
the Paris- based organisation. Mr 
Bertie Ahem, the Irish finance 
minister, who chaired yesterday's 


Industrialised nations back suggested OECD 
measures to reduce the 35m unemployed 


meeting, said there was “a strong 
desire among minis ters to under- 
take the policy options outlined”. 

There was an emphasis in the 
measures on improving training 
and education programmes. 
“With the change in labour mar- 
kets, you are an apprentice all 
your life,” Mr Ahern said. 

The decision to launch an 
international employment strat- 
egy reflects the realisation that 
the indns trial world's recovery 
from recession will not be suffi- 
cient to restore the high levels of 
employment of the 1950s and 
1960s. 

A communique issued after the 
meeting underlined that the min- 
isters had agreed to embrace 
change. Recent technical 
advances and the expansion of 
trade and Investment “create 
vast new opportunities for the 


Page 4 

■ Risk to democracy and 
world trading system 

■ Rejecting the unthinkable 
and the unacceptable 

Editorial Comment .—Page 15 


OECD countries to expand 
employment”, it said. 

But this required the industria- 
lised countries “to he perma- 
nently innovative and able to 
adjust, constantly improving 
their economic efficiency". To 
lower unemployment, the minis- 
ters agreed that comprehensive 
reforms of their labour markets 
and other structural reforms 
were essential. 


They pledged that their coun- 
tries would: 

• nurture entrepreneurship; 

• ease regulations that dis- 
courage private initiatives; 

• improve education and 
training systems; 

• improve the functioning of 
labour markets to achieve a bet- 
ter match between the supply 
and demand for jobs; 

• make employment services 
more effective, giving high prior- 
ity to “active labour market poli- 
cies” designed to put people in 
touch with jobs; 

• change laws and regulations 
that discourage hiring of labour. 

At the same time, the ministers 
agreed that the industrial coun- 
tries should maintain “an ade- 
quate social safety net" for those 
who could not adapt to change. 

Mr Ahem insisted the OECD 


countries were “not talking about 
unravelling the welfare system, 
taking away the basic rights of. 
workers or undermining 
long-standing collective agree- 
ments”. 

However, the organisation pro- 
poses strict guidelines to prevent 
unemployment benefits acting as 
a disincentive to work. It also 
suggests that, over the medium 
term, collective bargaining agree- 
ments should be made more flexi- 
ble so employers can renegotiate 
terms in times of difficulty. 

The report acknowledges that 
the industrial world will continue 
to create low-wage, low-skilled 
jobs. But it underlines the impor- 
tance of training to enable people 
to cope with technological 
change and greater competition. 

Recognising that the US had a 
problem in creating too many 
low-paid jobs, Mr Robert Reich, 
US labour secretary, said it 
would be impossible to increase 
productivity “without a substan- 
tial investment in training and 

learnin g *. 



Sprint in talks with French and German companies 


Global telecoms tie-up 
planned by US group 


US president Bill Clinton in Paris after meeting prime minister 
Edouard Balladur. "We reaffirmed our determination to work 
together very closely on the question in Bosnia.” be said. Pen™. «■ 


By Martin Dickson In Now York 
and Andrew Adonis hi London 

Sprint. the large US 
telecommunications group, con- 
firmed yesterday that it was dis- 
cussing a global partnership with 
Franca Telecom and Deutsche 
Telekom, both of which might 
take equity stakes in the com- 
pany. 

Deutsche Telekom confirmed 
the talks arr 1 sad it would make 
an announcement in the next few 
days. 

A deal would constitute the 
second significant US-European 
telecoms alliance, coming a year 
after the launch of a $5 -3bn tie-up 
between British Telecommunica- 
tions and MCI. the second largest 
US operator. 

Leading international telecoms 
operators are all attempting to 
position themselves as service 
providers to multinational com- 
panies amid rapid growth in 
global communications traffic. 

If the deal goes ahead, analysts 
expect AT&T, the largest US 
operator, to renew its efforts to 
forge a European partnership to 
bolster its “Worldsource” ven- 
ture. launched last year. 

Sprint's announcement came 
24 hours after the company said 
it had terminated talks about a . 
full merger with Electronic Data 
Systems, the computing services 
subsidiary of General Motors, 
although the two said they would 
continue to discuss some form of 


W German economy grows in 
first quarter by 2.1 per cent 


By Christopher Parties in 
Frankfurt and Michael 
Undetnarm in Bonn 

Western Germany’s economy 
turned in the first quarter with 
2.1 per cent growth after 12 
months of sharp decline, the fed- 
eral statistics office said yester- 
day. 

The rise was fuelled by strong 
exports and good weather for 
construction, which were behind 
a fall in unemployment, and a 
surge in consumer spending. 

The result showed the economy 
was on the road to recovery, the 
office said, although analysts and 
industry warned the pace of 
growth was unlikely to continue. 

Mr G On ter Rexrodt. economics 
minister, said in Paris that pan- 
German growth for the full year 
might now exceed his forecast of 
up to 1.5 per cenL although no 
dramatic decline in unemploy- 
ment is expected. 

The Organisation for Economic 
Co-operation and Development 
this week revised its 1994 Ger- 


man growth forecast from 0JS per 
cent to 1.8 per cent But Mr Peter 
StihL president of the DIHT trade 
and industry association, said the 
early improvement owed more to 
optimism than facts. 

He expected only a 1 per cent 
improvement for the year. His 
caution echoed warnings from Mr 
Hans Tietmever. Bundesbank 
president, that the mood was bet- 
ter than the situation warranted. 

While good economic news 
may improve the government 
parties' electoral chances, 
employers and the central bank 
are eager to damp expectations of 
a rapid recovery which could 
generate renewed inflationary 
pressure. This fear has prompted 
concern about interest rate rises. 

German-based observers said 
cuts in disposable incomes were 
now choking off private demand, 
public spending was still 
restrained, and prospects for the 
rest of the year depended largely 
on exports. GDP in the first quar- 
ter rose 2.1 per cent compared 
with the same period last year. 


and was up a seasonally-adjusted 
0.5 per cent on 1993's last quarter. 
The figures were enhanced by 
special factors, but showed the 
first positive year-on-year change 
since the last quarter of 1993. the 
statistics office said. 

Mild weather contributed to 4.7 
per cent growth in construction 
output and the pre-Easter shop- 
ping rush, which fell in April last 
year, showed up in a 1.7 per cent 
rise in private consumption. 
Exports increased 5.4 per cent 
and imports rose 2.7 per cent, 
while public sector demand 
remained 12 . per cent below last 
year's level. 

The quarter had one more 
working day than last year, and 
after adjustment. GDP increased 
1.6 per cent on the year. 

For the third consecutive 
month, unemployment fell in 
May. taking the unadjusted rate 
in the west from 8.4 per cent to 
S.l per cent and from 16.2 per 
cent to 15.4 per cent in the east. 

Lex, Page 16 




Empean Mews 

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Leader Page 

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tiBnasonJ Maws 

.4-a 

Letters 

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FT World tebsates <0 Tracnonal Opoonv. 40 

Foreign EMhanjK 36 _ 

— QM Mart jM5 X Lcndon 86 29 

M Equity Opfcons *0 WJ| Strew _ 37-40 

— 19.19 M. Sana Service 20 

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Money MjrVeta 36 - 

— ^..TB PectM toots 40 u,u * 

- _C9 Share m tan o aor 3031 ■ Maw Zealand 25-27 


© THE FINANCIAL TIMES LIMITED 1994 No 32.367 Week No 23 LONDON - PARIS - FRANKFURT - NEW YORK - TOKYO 


alliance. Sprint is the third larg- 
est long-distance and interna- 
tional carrier in the US, with a 
market share of just under 10 per 
cent. 

It also has large local and cellu- 
lar telephony interests and 
earned S480.6m from continuing 
operations last year on revenues 
of $11.4bn. 

It said yesterday that the 
proposed partnership with the 

Sprint warms up for race 
to link telecoms .....Page 19 


European companies would con- 
centrate mainly on providing 
“seamless, global telecommunica- 
tions services to business cus- 
tomers". 

France Telecom and Deutsche 
Telekom signed an Eculbn 
(9l.l6hn) alliance last December, 
geared particularly at the inter- 
national data market 

It has been actively seeking a 
US partner over the past year 
and is known to have been in 


talks with AT&T. The talks 
envisaged France Telecom and 
Deutsche Telekom making 
minority equity investments in 
Sprint through purchases of a 
new class of Sprint stock at a 
premium. 

The company declined to elabo- 
rate on the potential size of the 
investment, but analysts specu- 
lated that it mi ght involve sev- 
eral billion dollars. 

Shares in-Sprini, which has a 
market capitalisation of more 
than $13bn, rose $% to S38X in 
morning trading in New York 
yesterday. 

The final form of any deal 

Would remain problematic un til 
the fixture status of the French 
and German operators is deter- 
mined. Deutsche Telekom is in 
the throes of an uncertain priva- 
tisation process, and the French 
government has yet to decido 
whether to proceed with privati- 
sation of France Telecom. 

Unless both companies move to 
the private sector, it may not be 
possible to exchange equity 
stakes. 


EU faces 
snub as 
Austrians 
prepare 
to vote 


By Ian Rodger to Vienna and 
Hugh Camegyin Oslo 

The European Union is 
threatened with another humilia- 
tion as Austrians vote in a refer- 
endum this Sunday on whether 
to join the EU. 

A positive outcome seemed 
assured only a few days ago, but 
the battle has suddenly become a 
ctiffhanger, with the latest opin- 
ion polls indicating that voter 
intentions are evenly split and 
many gtm undec id ed 

As in the Maastricht treaty rat- 
ification refere ndum campaign in 
Denmark two years ago, anti-EU 
forces have won wide public sup- 
port in the past few days by con- 
juring up images of a centralis- 
ing. bureaucratic government in 
Brussels that would ride rough- 
shod over Austrian interests. 

Brussels would force Austria to 
build nuclear power plants 
against its will and would allow 
other EU countries to siphon off 
water from its Alpine reservoirs. 
EU opponents say. 

Meanwhile, the pro-EU forces 
in Austria have been unable to 
find ways to paint the Union as 
an inspiring or effective organisa- 
tion. On tiie contrary, for many 
Austrians there is daily evidence 
of the ineffectiveness of EU for- 
eign policy in the large flow of 
refugees from neighbouring 
regions of the former Yugoslavia. 

Mr Alois Mock, the Austrian 
foreign minister who has cam- 
paigned passionately for joining, 
admitted yesterday that the vote 
would be close and a positive 
result could not be guaranteed. 

However, Mr Franz Vraxdtzky, 
the Chancellor, was slightly more 
optimistic, saving he expected a 
dear and unambiguous vote, but 
acknowledging that it would “not 
be an Overwhelming result”. 

A rejection erf the EU would be 
another snub forthe centralising 
tendency of the Union that has 
been the hallmar k of the presi- 
dency of Mr Jacques Delors. Such 
a snub would be magnified If a 
negative vote In Austria encour- 
aged voters in Finland, Norway 
and Sweden, who face EU entry 
referendnms in the autumn, to 

Continued on Page 16 
Austrians in a fever over EU 
referendum. Page 2 



bysharing 



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tor more information about Kepublie ."National Bank, 
call 1 300 REPl Bi.IC. < mtide the l .S. (2i2; 221-uO.m. 

Republic National Bank 


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im^ANCIALTtMES WEDNESDAY JUNE 8 1994 


NEWS: EUROPE 




QUESTIONS 
ON EUROPE 


Not long ago, a Yes vote seemed assured; now it’s far from certain, writes Ian Rodger 

Austrians in a fever over EU referendum 


tfs Madeleine Petrovic 

Green puts 
case for 
staying on 
outside 

Madeleine 
Petrovic, leader 
of the Green 
Club in Aus- 
tria, is a fam 
graduate and 
former official 
in the Austrian social affairs 
ministry. She was elected presi- 
dent of the Green Alternative m 
Vienna in 1987 and to the 
national parliament in 1990. 

Q; Austrians vote in a referen- 
dum on June 12 on whether to 
join the European Union. Why 
do you oppose Austrian mem- 
bership of the EU? 

A: We are not fundamentally 
a gainst it We want to chang e 
the EU. especially the Maas- 
tricht treaty. There are differ- 
ing views among Greens about 
how best to do this. Some 
think we should join and thgn 
try to change it from the 
inside. We have evidence that 
it is possible to chang e the EU 
from outside. 

Accession by Austria would 
be a good thing only if the Aus- 
trian government were willing 
to push for change in the EU. 
The EU is like a big ship that 
has sailed into dangerous 
waters. It needs a mobile little 
tug boat to get it oat. We 
would like Austria to play that 
role. But the present govern- 
ment will not push for change. 
Q: What do yon think needs to 
be changed? 

A EU environmental policy is 
not strong enough to stop the 
negative actions of member 
states. 

Q: Hasn’t the EU shown sensi- 
tivity to Austrian concerns by 
agreeing to help finance a rail 
tunnel through the Brenner 
pass? 

A: You cannot solve the transit 
problem with tunnels and 
bridges. Up to now, all the 
technical improvements that 
have been made have not been 
enough to prevent the growth 
of traffic. We get the impres- 
sion that the EU does not see 
the real issue. The people want 
traffic to decrease. 

Q: The government says the 
EU has also offered Austrian 
farmers a reasonable transi- 
tion arrangement. 

A: EU agricultural policy is 
completely contrary to the 
notion of sustainable develop- 
ment. It is wrong to transfer 
the multinational industrial 
model to agriculture. We 
should produce locally as 
much as possible. 

Q: Do you fear economic dam- 
age if Austria does not join? 

A: The economic effect would 
be marginal. We are already in 
the European Economic Area. 
Q: What da yon think will be 
the result in the referendum? 
A People do not trust the gov- 
ernment. They know it Is 
impossible for the EU to have 
only good points. Austrians 
have a strong tendency to 
decide in the day or so before a 
vote. Of course, we are going 
to respect the result, but the 
government will not iT it loses. 
It will stage a second referen- 
dum. 

Q: What would be the impact 
in the EU of a rejection? 

A The EU is in a very fragile 
state. Its leaders do not see 
what young people expect the 
Union to do. If they took a sin- 
gle step in the right direction, 
then young people would be 
enthusiastic. Now. instead, we 
have disaffection and indiffer- 
ence. 



EUROPEAN 
ELECTIONS 
June 9 and 12 


In the 
European 
Union, toma- 
toes must be 
square, choco- 
lates are made 
of blood and 
cucumbers are 
aQ radioactive. 
These are 
among the 
scare stories 
put about in 
Austria in the 
past couple of 
weeks as cam- 
paigning towards the country's 
referendum this Sunday on 
joining the EU has reached an 
extraordinarily fevered pitch. 

According to the results of 
two polls published this week, 
sentiment has become finely 
balanced, with 31 per cent of 
those who have made up their 
minds in favour of joining and 
the same number opposed. An 
astonishing 38 per cent are still 
undecided. 


Etf a giia rtt uiw 


If Austrians decide not to 
join the EU, Swedes, and Nor- 
wegians, who vote in refaren- 
dums in the autumn, might 
easily follow, leaving the 
Union's expansion strategy in 
tatters. 

Anti-EU sentiment in Aus- 
tria has recovered dramatically 
since early March when the 
successful conclusion of entry 
negotiations left the country in 
a pro-Europe euphoric state. 

Polls tftan as much 

as a 25 point lead for the 
pro-EU campaign. That 
momentum was soon dissi- 
pated when Britain and Spain 
held up ratification of the 
treaty over the arcane issue of 
voting weights in the council 

Of minis ters. This was just 

annfhor demonstration of the 
meaningiess wrangles that par- 
alyse the Union, anttEU forces 
in. Austria exulted. 

But, until a few days ago, 
polls continued to show that a 
small, but comfortable, major- 


ity of Austrians would vote in 
favour of joining the Union. 

The motley collection of 
extreme right-wingers, fanners 
and some lafHfih Greens who 
formed the opposition looked 
completely overwhelmed by 
the lmfflaH ranks of the coun- 
try's political, business and 
union leaders. 

And the fundamental eco- 
nomic and security arguments 
for joining the EU. while not 
inspiring, were difficult to 
refute. In post cold war 
Europe, it is no longer dear 
who, if anyone, would guaran- 
tee Austria's security unless it 
becomes part of the Union. 

The country’s economy is 
already dosely integrated with 
those of neighbouring EU 
countries, especially Germany 
and Italy. While membership 
will not mate a big difference 
in Austria’s growth prospects, 
there is general agreement that 
inward investment would he 
weaker if Austria did not join. 


"We believe that 90 per cant 
of Austria’s workers will barn- 
fit from membership, and the 
rest wiQ be protected by spe- 
cial measures,” Mr Heinz Vog- 
ler. president of the federal 
chamber of labour, says. 

But these arguments were 
forgotten when the scare sto- 
ries started appearing. Apart 
from the silly ones mentioned 
above which appeared in tab- 
loid newspapers, there have 
been more substantial ones 
carefully tailored to Austrian 
sensitivities. 

One legal expert discovered 
that, once tnsiriB the EU, Aus- 
tria could not prevent its 
neighbouring countries from 
draining the Austrian Alps for 
their water requirements. Mr 
J&rg Haider, charismatic leader 
of the extreme right-wing Aus- 
trian Freedom party, promptly 
put up posters warning that 
joining the Union meant the 
country would lose its water. 

Hum a cons tit uti onal lawyer 


.\.(%6di(bSdn as % of GDP = ! 


Exports as % of total exports’. 


Farm workers as % of total 
workforce gates* figures} 



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EU farmers try to come to terms 
with the new political landscape 


M r Jean-Claude Debaudre, a Nor- 
mandy dairy former, wQl be vot- 
ing in this week's European 
elections to stop a foreign invasion. 

"Hie borders are a sieve. Products like 
meat are coming into western Europe 
from Poland and the Czech Republic with- 
out health checks.” says Mr Debaudre, 
who is also president of the Normandy 
formers’ union. "Sanitary conditions are 
very different in eastern Europe and 
they’re patting those in western Europe at 
risk. We want real frontiers, on price and 
safety grounds.” 

Low-cost east European producers are 
not the only targets at which he wants his 
MEP to take aim. Currency fluctuations 
following the breakdown of the European 
monetary system have created "distor- 
tions” in competition between member 
states, he says. 

While British formers enjoyed a 60 per 
cent rise in their incomes last year, prices 
far French wheat producers dropped by up 
to a quarter. That is why Mr Debaudre 
favours a single currency, or at least 
tighter regulations. "Farmers are very con- 
cerned about this. We want our candidates 
to commit themselves to It.” 

Short-term Inequities, perceived or real, 
are high on the agenda at formers’ meet- 
ings with prospective MEPs. In both 
Britain and Denmark, for example, produc- 
ers claim bitterly that they alone stick by 
the rules, filling in mountains of forms to 
comply with increasingly complex form 
policies agreed in Brussels, while competi- 
tors elsewhere in the EU cheat and get 
away with it 

But the elections also come at a time 
when the industry is deep in debate - and 
intensely worried - about the longer-term 
future of agricultural policy. 

Mr Jens Jakob Jakobsen, a large dairy 

farmer with 112 cows in Gangsted, north- 
ern Denmark, is arranging a series of farm 
visits for his local Euro-candidate, Ms 
Karen Rils Jorgensen. Farmers on the sur- 
rounding hills are much more interested 
in the election than people unconnected 
with the land, he believes. "How can we 
say we don't care when so much of our 
future Is set in Brussels?” 

His neighbours will turn out in force to 
talk to Ms Jorgensen, but they do not 
expect the young lawyer to have all the 
answers. "Who can fceO what will happen, 
even in the next six months? We're all a 
little uncertain about the outcome of com- 
mon agricultural policy reforms and tire 
Gatt," Mr Jakobsen explains. 

The 1992 reforms of the CAP introduced 


direct payments to formers as compensa- 
tion for cats in price support. This made 
the size of the subsidies more transparent 
and highlighted the cost of the CAP, 
which, this year amounts to Ecu36.5bn 
(£28bn), or half the total EU budget Pres- 
sure is an for further reductions in sup- 
port when the reforms end in 1996, ami 
formers know it 

Many also believe the sharp decline in 


The industry is deep 
in debate - and 
intensely worried - 
about the 

longer-term future of 
agricultural policy, 
write Alison Maitland 
and Deborah 
Hargreaves 


the agricultural workforce - which has 
dropped by 26 per cent in the past decade 
- has lessened their lobbying power. Even 
in member states like Ireland, where 
nearly 14 per cent of the labour force is 
still farm-based, producers are aware they 
can no longer take taxpayers' money for 
granted. 

There are strains within the industry. 
Professor Wyn Chant a specialist in agri- 
cultural policy at Britain's Warwick Uni- 
versity. says that about a third of EU 
formers are efficient enough to feel they 
could compete if subsidies were reduced or 
eliminated. "The others recognise they 
would be forced out of business if subsi- 
dies did not continue,” he says. 

That split in their constituency helps 
explain why some fawning organisations 
have produced European election manifes- 
tos demanding open-ended support from 
the taxpayer, while others accept the need 
for radical reform. 

For Mr §joerd Miedema, who runs a 
computerised dairy operation with 60 cows 
in Friesland, the Netherlands' main dairy- 
ing region, the question is: what kind of 
reform? Given the high costs he feces to 
comply with environmental regulations, 
he does not want subsidies to be limited to 


in Salzburg said that member* 
ship of the EU, including Eura- 
tom, would Invalidate Aus- 
tria's law outlawing the 
construction and operation of 
nuclear power plants, in spite 
Of a comforting side letter in 
the entry treaty- From there, It 
was hut a short step for EU 
opponents to rfaim that Brus- 
sels would force the country to 
build nuclear plants. 

Last week, toe Socialist-Con- 
servative coalition govern- 
ment, which is leading the 
pro-EU campaign, took fright, 
realising that the scare cam- 
paign was having an impact 
Now the government too, has 
become somewhat extravagant 
in its bairns 

Mr Ferdinand Lac in a, 
finance minister, threatened 
last week that taxes would 
have to be raised if the country 
stayed outside. On Wednesday, 
Mr Otto Habsbnrg, a descen- 
dant of the former Austrian 
monarchy, was trotted out to 


say that the old Austrian idea 
of bringing people together in 
pefli cft could only be realised in 
the EU. 

On Sunday, Mr Alois Mock, 
the foreign minister who is 
recovering from a back opera- 
tion, rose from his hospital bed 
to plead emotionally with his 
countrymen in a television 
interview to vote in favour. 

He warned that a No vote 
would greatly weaken Austria. 
“We wouldn’t go hungry. Our 
country is strong. But we 
would suffer many disadvan- 
tages - above all the next gen- 
eration.” 

Ordinary Austrians seem put 
off by the increasingly shrill 
tone of toe campaign, as is 
shown by the large number of 
voters even at this 
late stage. One Vienna banter 
said this week: “One day when 
I talk to people, I get the 
impression that it will go 
through. The next day, I get 
toe opposite impression.” 


Europe looms 
small in UK 
voters’ eyes 


keeping inefficient producers on marginal 
farmland. "You'll get all kinds of formers 
doing it as a hobby” he says. “That’s not 
producing real money for the rural econ- 
omy.” 

Mr I4 am Foley is also an 1 efficient dairy 
producer, but he forms in County Cork 
and is a senior official in toe Irish Farm- 
ers’ Association. The priority in Ireland, 
he says, is to concentrate payments an 
preventing rural decline. 

He will he voting with one eye on New 
Zealand, where agricultural subsidies were 
withdrawn virtually overnight in 1984. 
Fear that the Gatt deal liberalising world 
trade will eventually force the EU into 
open competition with highl y efficient, 
low-cost food exporters is uppermost in 
many Irish formers’ minds. 

"The large, efficient Irish producer could 
Uve with that, but the 35,000 dairy forms 
in Ireland would quite quickly be reduced 
to 10.000 In a totally free market,” he says. 
"New Zealand, dairy farms have an aver- 
age herd of 160 cows. The average in 
Ireland Is 25 to 30 cows. The social conse- 
quences are very, very serious for this 
country.” 

He is also worried about the impact on 
peripheral member states if east European 
countries join the EU. "The Germans are 
the main contributors to the EU budget 
and it will be more beneficial for to 
contribute to the economies of the east,” 
he says. "That will mean far less money 
from the EU coming into a country Hke 
Ireland through structural funds.” 

If subsidies are to continue as a way of 
propping up rural economies, then Mr 
Foley expects public pressure to ensure 
that environmental conditions are 
attached to them. 

Mr Willy Gorlach, the German agricul- 
ture spokesman for the Socialist group in 
the last European parliament, argues that 
support should be targeted at formers who 
adopt less intensive, "greener” methods. 

Standing for re-election, Mr Gorlach 
attacks the way toe current CAP reforms 
oblige farmers to leave 15 per cent of their 
arable land idle as “set-aside” while allow- 
ing intensive cropgrowing to continue an 
the remaining 85 per cent “It's not just 
the farmers’ task to produce food,” he 
says. "People should recognise that form- 
ers have to produce toe landscape, they 
have to protect nature, they have to pro- 
tect our drinking water. As long as prices 
for food products foil because of overpro- 
duction, we need payments for fanners so 
they can respond to society’s demands for 
landscape and nature.” 


By PtuEp Stephens, 

Political EdRor 

To the pvfanE one can gauge 
the prevailing mood of an 
electorate. British voters prefer 
the sceptical vision of Europe 
offered by Mr John Major’s 
Conservative government. But 
they will vote over whelming ly 
for the opposition Labour and 
liberal Democrat parties. 

Perhaps more so than in any 
other European Union nation, 
the domestic record of the gov- 
ernment, rather than the 
future shape of Europe, will 
decide the outcome in 
. tomorrow’s European elec- 
. tions. 

No-one in toe British politi- 
cal establishment donbts that 
the governing Conservatives 
will suffer heavy losses. The 
question is whether it win be a 
defeat or a disaster. 

Opinion pollsters’ best guess 
is that by the time the votes 
are counted on Sunday evening 
the party’s representation in 
the Strasbourg assembly will 
he cut from the present 32 to 
anything between six and 20. 

Of the total 84 seats in main- 
land Britain, Labour can 
expect to win upwards of 50 
and the Liberal Democrats 
anything from three to a 
dozen. 

The projections are precari- 
ous. The past few days have 
sear signs of a pick-up in sup- 
port for the Conservatives. 
Britain’s first-past-the-post 
electoral system ensures the 
winner invariably secures a 
disproportionate number of 


But it also means that a 
small swing, as little or 2 or 3 
per cent of the vote, will decide 
tits outcome in many seats. 

Whatever the precise figures, 
Mr Major can credibly argue 
that the defeat will be despite, 
rather than because of, the 
essentially hostile approach 
to further European integra- 
tion which bag been the hall. 
mark of the Conservative 
campaign. 

Britain has never been a 
nation of enthusiasts for 
Europe. But the legacy of a 
deep recession and the bitter 
arguments over toe Maastricht 
treaty have reinforced instinc- 
tive hostility to the idea that 
the rest of Europe might know 
best 

Mr Major's campaign has 
played to that mood. His 
emphasis on toe preservation 
of the national veto in key 
areas of policy-making and on 
his gove r nment’s opt-outs from 
the social chap ter and mone- 
tary union have struck a chord 
with a large slice of the 
electorate. 

The idea of a multi-track, 
multi-speed Europe in which 


Britain «mi proceed at its cho- 
sen pace has allowed the 
Conservatives to paper over 
the worst splits in his own 
party. 

Eurosceptics have seized on 
it as evidence they are winning 
toe argument - that Britain 
will opt out of further moves 
towards integration at the 1996 
intergovernmental conference. 

The prime minister’s rheto- 
ric has provided further suc- 
cour. The Tory party’s enthusi- 
asts (and thee are still many) 
take comfort from the fact 
that Mr Major has given no 
binding commitments about 
Britain’s stance at that confer- 
ence. 

Mr Major’s problem is that 
while the style of his cam- 
paign, with its exaggerated 
claims of 8. threat to British 
sovereignty, may solidify the 
core Conservative vote, most of 
the electorate will be more 
influenced by his dismal 
domestic record. 

A painfully slow economic 
recovery, the largest tax 
increases in recent memory, 
and a divided government 
unable to set a coherent policy 
agenda, do not provide the 
ingredients for electoral suc- 
cess. 

The voters are in the mood 
to punish Mr Major for his bro- 
ken promises. 

Despite the disruption 
caused by the death last month 
of its leads-, Mr John Smith, 
the Labour party has focused 
its camp ai g nin g effort almost 
entirely on this domestic 
agenda, branding the prime 
minister a weak leader at the 
bead of a directionless govern- 
ment 

On issues European Labour 
Is now more "positive” than 
the Conservatives - committed 


to the social chapter and in 
favour of, if rut enthusiastic 
about a single currency. 

However, it has been careful 
not to shout that fact from the 
rooftops. 

The liberal Democrats, long 
the most pro-European of 
Britain’s mainstream parties, 
have adopted the same tank 
Mr Paddy Ashdown, their 
leader, has toned down his 
commitment to a single cur- 
rency and promised a referen- 
dum if the 1996 conference 
leads to a significant shift in 
sovereignty. 

Instead, the Liberal Demo- 
crats have concentrated their 
fire on domestic issues. 

Overall, the result has been a 
campaign that has d enied the 
voters a rational debate on 
Britain’s relations with its 
European partners. 

Whoever wins, Europe win 
he the loser. 


Battle for Moscow moves from street to balance sheet 


M oscow has become 
the site of a furious 
battle over privatisa- 
tion in Russia. 

Mr Anatoly Chubais, the pri- 
vatisation minis ter, has called 
on the country's president and 
prime minis ter to “punish” the 
mayor of Moscow for “under- 
mining toe foundations of Rus- 
sian statehood”. Hie accuses 
Mayor Yuri Luzhkov, an old- 
style manager with a populist 
touch, of trying to replace the 
government’s radical privatisa- 
tion policies with his personal 
control over enterprises In toe 
Russian capital. 

In three weeks vouchers 
entitling every Russian citizen 
to a share of state property 
expire. Mr Chubais has 
launched his assault on Mr 


Leyla Boulton on the mayor’s attempt to short-circuit privatisation 


Luzhkov before the next stage 
of privatisation. From July 1, 
enterprises will be sold for 
money only and Mr Luzhkov 
wants to wwirp- sure that that 
money ends up in the city's 
coffers rather than those of the 
government. 

Moscow is not only impor- 
tant as a showpiece of toe gov- 
ernment’s reform policies, but 
the capital is a leading indus- 
trial centre in its own right 
Despite claims by Mr Luzhkov 
that Moscow was among the 
top privatising areas, figures 
from his own office show that 
it was 20th in a list of 88 
regions, having privatised less 


than half toe companies it was 
supposed to have sold off 
under the government’s pro- 
gramme. 

Mr Luzhkov’s “special” plan 
for privatisation in Moscow 
would enable the mayor's 
office -and that means the 
mayor because all important 
decision in toe city administra- 
tion are taken by him -to 
dictate what happens to 
enterprises after they are pri- 
vatised. - 

This includes instructions 
that new owners would be enti- 
tled only to profits over and 
above those made by a com- 
pany before it was privatised 


and that only the mayor's 
office would be able to decide 
whether enterprises could be 
bankrupted or liquidated. 

Mr Luzhkov claims that 
enterprises auctioned off so far 
have been sold to speculators 
and that the government’s 
ambitions sell-off of half of 
Russian industry has not 
yfeMed any benefits. 

On April l Mr Luzhkov 
suspended toe registration of 
joint-stock companies, a pre- 
condition for their privatisa- 
tion according to toe govern- 
ment’s sell-off method. This 
has consisted of auctioning off 
enterprises for vouchers, as 


quickly as possibly, in order to 
get toe state out of toe econ- 
omy while minimising opportu- 
nities for corrupt officials to 
decide who gets what 

At the end of last month, at 
Mr Chubais’ request Mr Victor 
Chernomyrdin, toe mime min- 
ister, gave Mr Luzhkov a three- 
day deadline to resume the reg- 
istration of joint-stock compa- 
nies. Bat on Thursday last 
week, Mr Luzhkov suggested 
that the instructions were not 
to be taken seriously. 

Last month, he suspended 
land sales in the capital say- 
ing the government needed 
land to generate revenues for 


the city budget 

The main reason Mr Luzh- 
kov has been able to get away 
with so much is pohtLcaL Hav- 
ing been loyal to President 
Boris Yeltsin in all his con- 
flicts with the Russian parlia- 
ment the mayor of Moscow is 
seen as an essential ally for 
any Kremlin ruler should toe 
country’s power struggle ever 
return to the streets of the cap- 
ital. 

Nor has Mr Luzhkov hesi- 
tated to take his struggle to the 
streets and to factory* shop- 
floors. In a direct challenge to 
the government’s policies, he 
gave Rbs30bn ($i5m) to "save” 


Zfl, an ailing Moscow truck 
manufacturer which had 
closed its gates for several 
weeks. While the government 
had proposed that 231 reorgan- 
ise and use its land holdings to 
raise new capital, Mr Luzhkov, 
who always says the city Is boo 
broke to pay its doctors, teach- 
ers, and police properly, found 
no trouble financing support 
for Zfl, which happens to be 
run by an old political rival of 
Mr Yeltsin's. 

Mr Luzhkov, who rejects 
suggestions that he plans to 
run for president in elections 
scheduled for 1996, denies that 
his motives are political. He 
says simply that the govern- 
ment must take into account 
factors that make Moscow dif- 
ferent 


More daring was Mr. Clin* 
ton’s praise of the Gatt agree- 
ments, before a parliament 
that less thaw 18 mnnfcha ago 
unanimously denounced US 
agricultural demands in the 
Uruguay Round negotiations. 

"France played an absobxtety 
pivotal role” in the negotia- 
tions, the president said. “} 
know it was difficult I know it 
required statesmanship', he 
said, but it had now opened the 
door to economic growth and 
jobs. Mr Clinton reiterated that 
his goal was to get the Gatt 
agreements ratified by the US 
Congress thin year. 


THg FINANCIAL TIMES 

ESS*!,!?.' 11 * Financial Tma 

OmbH, NiT yfawynpirta «UJ3 Fp 

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RafpoBsibie Editor Ridnrd Lambert, do The 
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UK. SurctlaideM of tbe Tisixt 

(Europe) Gnhtl are The Financial TtW* 

KSSLw FT. (Germany 

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R«j5*nGod« I. Editor; Ridmd Lambert. 

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DENMARK 

phone 33 U 44 41, F*i 33 #3 0 31 


Clinton 
backing 
for strong 
Europe 

By David Buchan fei Parts ■ 


President Bill - Clinton 
yesterday appealed to the west- 
ern allies to stay the comae 
they had set themselves in fry- 
ing to bring peace to Bosnia, 
and promised US backing for a 
stronger Europe. 

In his first speech to a Euro- 
pean parliament, he tdd the 
French national assembly that 
"America will remain engaged 
in Europe and, despite troop 
reductions, will keep a strong 
force here". 

Seeking to dispel traditional 
French suspicions of US 
motives, he said that “America 
wishes a strong Europe, and 
Europe should wish a Strang 
America”, and the entire trans- 
atlantic alliance benefited 
when "America and Europe 
stand together”. French MPs 
gave him a standing ovation at } 
the end of a speech that seems 
likely to reinforce recent 
improvements in the long-frac- 
tious relationship between 
Paris and Washington. 

On Bosnia, Mr Clinton coun- 
selled patience. While "we 
must understand that we .do 
not have total control over 
events in every nation”, it was 
"important to recognise what 
has been done there”. The war 
had been contained to Bosnia 
and had not spread to tin air, 
he said, and he paid tribute to 
France's leading role in the UN 
peacekeeping force that had 
enabled humanitarian aid to 
get through. 

The US backed yesterday’s 
UN proposal for a four-month 
ceasefire, and with Russia’s 
recent “very positive” diplo- 
matic help hoped-for results. 

As the first US president to 
address the French parliament 
since President Woodrow Wil- 
son did so in 1919, Mr Clinton 
took a broad historical sweep 
to contrast how western 
democracies had initially fafled 
to check fascism in the 1930s, 
but had held together in toe 
face of Soviet communism. 
After the latter’s collapse, “we 
have now arrived at this cana- 
ry’s third point of decision". 

"We must set our sights on a 
strategic star”, he said. "Let - 
that star be the integration and ” 
strengthening of the broader 
Europe”. He said he had 
strongly welcomed the Nato 
decision in January “to let 
Nato assets be used by the 
Western European Union” arm 
of the European Union, which 
France Is keen to build up. 

He also applauded the fact 
that some 19 countries had 
shown interest in forging 
“partnerships for peace” with 
Nato, though he said he recog- 
nised the desire for some cen- 
tral European countries to join 
Nato, a possibility about which 
France is not en thusias tic. 

The spread of market eco- 
nomics was another essential 
means of integrating the wider 
Europe, Mr Clinton said. He 
appealed to western Europe to 
open its markets to goods from 
the east because “if our new 
friends are not able to export 
their goods, they may instead 
export instability, even against 
their own will”. 

France hai; in fact modified 
its opposition to eastern Euro- 
pean imports, partly in defer- 
ence to its dose ties with Ger- 
many a relationship which Mr 
Clinton also described as the & 
linchpin of west Europe rarity. 



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Bri£lsH r iirways is . planning to challenge the French 
gov&mssid is the European Commission in Brussels as well 
8$ thnfugh.thfi French courts If it.goes ahaarf with proposals to 
Hfflit the sfea of ^aircrait and flight frequencies on services 
fpcm/Lfflflbn to Q riy ai rport m Paris. Although BA will start 
operating seEricaa from London Heathrow to Qriy on Monday, 
Sir GaBft; M a rsh all. BA's chairman^ yesterday said that the 
proposed r^trictjoss at Oily were “fitegai" and would be 
BA, Erance bowed to European Ccmwiisafow and 
UK ^vernment .pressure last month to open Orly to OK 
ahhn&hCBnpQtitioQ. But Mr Bernard Bosson, the French trans- 
port minister, saH' UK airlines would be restricted to four 
.flights a day ahd that Only Larger aircraft with more than 200 
aeftt&cbdld nsd-Orly at peak morning and everting hoars. He 
false -add that BA-«nd its French affiliate. TAT, would be 
terms of frequencies. Although BA 
inferids.t d^^ wfcto- daily services, to Orly this summer, it 
pfans fo-operate. extra flights this winter tn defiance of the 
ftehph proposal to;Hmit frequencies, from London. 

^fr Golih.also safcLBA would soon file an objection with the 
gijqrepead;C6mnds&^ to French government plans to inject 
TTBSCfei CEl33te0in additional state aid to Air France. Paul 


EUB0PEAN.*4EWS digest 



to oppose 



second strike 

TjalonsatAir Inter; the main domestic carrier in. the Air 
Frte« jrtupiTfls May called. Umr second 24-hour strike in 
Bu^ weeks to protest at the lack of “concrete” assurances at 
thelr^iay-and job: security, will not suffer as a result of new 
au s teri ty Measures For Air France. But the strike, called 
to pre® Air-Inter' s case fin: more autonomy -within the Air 
pranceArooP." was-Less widespread than the first one. halting 
about 50 : per cent of flights yesterday. Meanwhile, the French 
g oveni ngnt has warned the European Conjnjisslon that if 
BaisBda s4aips.it injecting FB*r20bn into Air France and 
thereby forces toe" airline into liquidation, the 'total cost to the 
French ‘-taxpayer would be even greater, amounting to 
FTiato?T!ihwas revealed by the Commission in its formal 
jiotmcemmt. h^t Friday of an inquiry Into the-Alr France deal, 
nyrii^BrasBels said in view of the airline’s debts and losses 
cnhid not he -equated with the “rational" decision of a private 
.fttfSton David. Buchan. Paris. 

Rjissiaa-Ulcraine tensions ease 

Tensfooff between Ukraine and its Russian dominated region 
^jf-fiihnei ‘eosed-further. yesterday when Kiev announced it 
Waiff pursue a “policy of flexible deadlines in response to 
Mkitefea’Br; diplomatic concessions last weekend. Head of the 
qfrawfim wAgotiatmg team, Mr Volodymyr Bthutkevich, said 
teSlanyfMtiow against Crimea’s pro-Russian leadership will 
be'pbsbtotteduntil- June 15, a date which could further delayed 
tf^seg^^aid^oimtiime to proceed productively. The initial 
f breakthrough was achieved late Friday night when Crimean 
^aegpriafins, many of whom have Aladvocated independence 
ftm^tBpralne. f and reunification with Russia in the past, sur- 
prisingly hacked down and signed a pro-Ukrainian commum- 

- ^U^pommunigcre, Crimea recognizes “the territorial integ- 
f rft^^fealne, ^ which Crimea is apart” and “the suprem- 
" l 'ei'Ukcainian Constitution over all Ukrainian terri- 
fiwt) sides, meeting on the Crimean paminsuia, also 
a permanent joint working group to resolve 
tbrfrUHjBfy" differences. Jill Barshay, Kiev 

Litde r progress at Bosnian talks 

T^eodem of Bosnia’s warring sides yesterday congregate in 
geneva foe a second day of talks on a propo^d ceasefire but 
did not meet face to feoe piomisir® little hope of an agree- 
’^oaiL After : separate meetings with; the rival leaders, Mr 
:Yesushi Akiwflil, top US) official in former Yugoslavia, said the 
folks would be adjourned for a later date unless the main 
protagonists made a “real effort” towards an agreement As 
bote sides quarreled over how long the proposed truce should 
test, fighting was reported between Serb and government 
farces in northern Bosnia. 

In Serbia, in a thinly-veiled attack on Bosnian Serb leaders. 
President Zoran Lific of Yugoslavia, technically- head of the 
Yugoslav federation but seen as a puppet of Serbian President 
Slobodan Milosevic, yesterday said his country will not be 
"dmggedinto war” and that “millions of Yugoslav citizens” in 
Serbheld areas in Bosnia “cannot be hostage to one leader”. 
Laura SUber, ; Belgrade 

Germany considers tax cuts 

The. German, government appears to be considering corporate 
tar cuts in response .to pleas horn industry. A working on 
local authority toves group comprising federal and local gov- 
emment officials bad -identified levies on working capital and 
opera thig profits as special burdens on industry. Mr Franz- 
Christoph Zeifier, state secretary in the finance ministry said 
yesterday. However, he rejected as “false” press reports that 
Boon planned to increase value added tar to cover the loss of 
reronue.'Mr Zeltier was responding to a story in Stem maga- 
zine, quoting from what it cfojras? to be secret ministry min- 
utes, 1 teat the government wanted to “clarify in principle the 
possfbiftty of reforming corporate taxes.”GWsfopher Parkes. 
Frankfurt;; 

Reassurance by Dutch chain 

Albert Heijn; the biggest Dutch supermarket ch ai n , said yes- 
terday that It would continue to sell Omo Power, a new 
generation of washing powder manufactured by Unilever, after 
receiving "assurances about the detergent from the Anglo- 
Dutch convener products g^oup. The powder, called PerslI 
Power In Britain, is at the centra of a highly public dispute 
b^Weeh Onilercr and its US rival Procter & Gamble, which 
-has ehai^ed-thstt tee drtergent damages clothing. Albert Heijn 
'said ft . would compensate any customers who were dissatisfied 
with tte pmeto if they could prove the detergent was bought 
in cH>e ci its;6lS supermarkets. Ronald Van de KroL Amster- 


ecg^mic Watch 


SeftiqkLfoa:: Spanish economy 

An unexpected growth in imports halted the improvement in 
tee currerd -adco m ri of Spain's balance of payments in ApriL 
Ths mcmthly shortfall wra marginally higher than the previ- 
cas Aprfi: at Pta22Shn desplte a sharp rise in income from 
tourism aod other services.' 'Bat the accumulated deficit for the 
Hast four months was stUl 30 per cent lower than the same 
p^jod tetfrear At PtaSTStm (£L82b»), according to provisional 
Bank of Spate figtees. This reflected a 39 per cent upsurge in 
exports Andean hytyafmd surplus from services and transfers. 
TwnWsi.re^ta'were 20-per cent up. Some analysts believe 
teat . despte -tite latest f^ures this year could still produce a 
currml foiypiys, the first since I%6. the year of 

$^’4 &cbesgfa& to the EU. Spain's gold and foreign currency 
pro' . OMantefiV decreased by $394m in May to !4iKra, 
8h0^ttS^ M ^ediT!fl of J^3m since the beginning of the 

w 

UMvi- Mhtft w ^w tnrfgc was up 3.4 per dent m February 
fronj a jMO r ' earifag the state statistical institute, Istnt, reported 
yesterday.Tn Frfffmi r y large retail chains registered a 3£ per 
cent' sates jd&ei'^whila medium-sized - retailers posted an 
Associated Press. Rome 

» .MOTr caf^8te6.kL&5dit rose by 3L6 per cent year-ou-yi^r to 
w , »:^TO ; ri3fide6, after a 12 pear cent increase in April, 
•“«»^to^itoteiQhal figures from the vehicle manufacture 
essodajton ANFAC. 

•^putoh! .€oaston«: -price inflation is expected to hove 
^ tetefat 4 yearoteyrar rate of £8 percent in May, 
a poll of bank economists. 


NEWS: EUROPE 


Spain joins drive for EU ‘great leap forward’ 

Quentin Peel reports from a German-Spanish summit designed to give impetus to European unification 


Friendship flourished because of Gonzalez’s loyalty, says Kohl 


For Helmut Kohl and Felipe Gonzdlez, 
their meeting over the past two days In 
the faded splendour of Schwerin, the for- 
mer capital of the grand dukes of Meck- 
lenburg in east Germany, had dear sym- 
bolic significance, writes Quentin Peel 
from Schwerin. It was the first time the 
German chancellor had held top-level 
talks with a fellow government leader in 
east Germany. Bat it was more than that 

The e xt rao r dinarily good personal rela- 
tionship between the two, the Spanish 
Socialist and the German Christian Demo- 
crat, has flourished precisely because Mr 
Gonzdlez was the only west European 
leader who unhesitatingly supported the 
German unification. For the German 
chancellor, where his colleagues stood on 
the question of unification has become a 
touchstone for personal relations. 

It is increasingly clear that the faihtre 


of Mr Ruud Lubbers, the former Nether- 
lands premier, to back the unification pro- 
cess four years ago. is the most important 
single reason why Mr Kohl is not support- 
ing him to become the next president of 
the European commission hi Brussels. 

Mr Kohl spelt oat his appreciation of 
Mr Gonzalez’ loyalty in glowing terms 
again yesterday. He pointed out how few 
those world leaders were, bade in 1989 
and 1990, who had been so positive. 

In private, he names only four: Mr 
George Bash, the former US president; Mr 
Brian MuLroney, the former Canadian pre- 
mier Mr Mikhail Gorbachev, the former 
Soviet leader; and Mr Gonzalez. 

One significant exception is President 
Franpofa Mitterrand of France, who was 
cleariy dubious about unification until 
fate in the process. But the Franco-Ger- 
man relationship is too Important to 


allow that to cause more than a shadow 
between the two. 

The ontright opposition of Mrs Mar- 
garet Thatcher, who was publicly cool and 
privately vitriolic abont unification, has 
r«i«»d far more lasting bitterness. 

Mr Kohl mentioned Mrs Thatcher’s 
opposition yesterday, to underline his 
appreciation of his Spanish colleague. 

“Some women colleagues have written 
it in their memoirs,” be said. “If you read 
what Mrs Thatcher says, you can see she 
thinks it was all a terrible mistake. So 
yon can see how important it was that 
Felipe Gonzfilez supported the process. 

“You belong to those who, tn many crit- 
ical talks, explained again and again that 
German unity was not a thing for the 
Germans alone, but was a good thing for 
tee Europeans, and for the free world,” he 
told the Spanish premier yesterday. 


Spain will join France and 
Germany in a co-ordinated 
drive in the European Union 
over the next 18 months to 
ensure that the 1996 conference 
on institutional reform - the 
follow-up conference to Maas- 
tricht - takes further clear 
steps towards European inte- 
gration. 

Chancellor Helmut Kohl of 
Germany, and Prime Minist er 
Felipe Gonzalez of Spain, both 
passionate believers in the pro- 
cess of European unification, 
mmmittpri themselves at their 
summit in Schwerin, in east 
Germany, yesterday to close 
co-operation in the planning 
process for the next European 
"great leap forward". 

Spain wifi also be involved 
with France and Germany in 
carrying through a clear pro- 
gramme of EU priorities during 
their three consecutive six- 
month. presidencies, beginning 
with Germany on July l. That 
will include European-wide 
policies to tackle unemploy- 
ment, new measures to support 
the emerging democracies of 
central and eastern Europe, 
and a parallel programme of 
assistance to the countries of 
northern Africa. 

In spite of differences of 
detail on questions such as the 
German initiative for deregu- 
lation in the EU. bor- 

rowing powers of the European 
Commission, the German 


Christian Democrat and the 
Spanish Socialist leaders both 
stressed the overriding need to 
give impetus to the ideal of a 
united Europe in the wake of 
post-Maastricht disillusion- 
ment 

In several hours of tdte^-tete 
talks, , the two also sought to 
agree on a common slate of 
candidates for a whole series of 
top European and interna- 
tional jobs to be decided in the 
comin g weeks, iru-iiiHing the 
future president of the Euro- 
pean Commission. 


“He should be someone who 
can get things done, and who 
can persuade everyone to agree 
on common action,” Mr Kohl 
said alter a joint press confer- 
ence in the Schwerin castle, 
former home of the grand 
dukes of Mecklenburg. He 
refused flatly to name any 
names, aH-hnug h he is widely 
believed to favour the candi- 
dacy of Mr Jean Luc Dehaene, 
the Belgian premier, against 
the rival candidacy of Mr Ruud 
Lubbers, the former Dutch 
prim o minis ter. 


Mr Gooz&lez has previously 
given public support to Mr 
Lubbers - before it became 
clear that Mr Dehaene was an 
alternative. He also maintains 
that the future commission 
president should be a former 
prime minister, which would 
rule out the candidacy of Sir 
Leon Brittan. the senior Brit- 
ish commissioner in Brussels. 

There is now speculation in 
Spanish circles that Mr Gonz- 
alez might switch his position 
in exchange for support for Mr 
Enrique Baron, the former 


president of the European par- 
liament, to become the next 
secretary-general of the West- 
ern European Union. 

At their press conference, 
however, the two government 
leaders insisted that there 
would be no public talk on the 
jobs list - which includes the 
secretary generalships of Nato 
and the OECD, the European 
council of ministers, and the 
head of the future World Trade 
Organisation - until a deal 
was done at the forthcoming 
EU summit in Corfu. 


"We both agreed that we 
would talk intensively with as 
many colleagues as possible In 
order to reach the greatest pos- 
sible degree of unity on a 
name,” Mr Kohl said. “It would 
not help to discuss it in pub- 
lic." 

Their message instead, only 
days before the European par- 
liament elections, of their abso- 
lute common commitment to 
European integration, in spite 
of their ideological differences. 

“From a European perspec- 
tive, everything is allowed 
which positively influences 
European policy." Mr Kohl 
said after a day of bilateral 
consultations. “From my point 
of view, Europe includes the 
British isles,” he added, appar- 
ently concerned that his ideas 
might offend the UK. 

He said that the main 
themes of the forthcoming Ger- 
man presidency, which would 
now be developed in conjunc- 
tion with France and Spam, 
would be the whole field of job 
creation and European compet- 
itiveness, extending the field of 
common foreign and security 
policies. They would also 
include developing common 
policies on immigration, law 
and order, fighting drug traf- 
ficking and organised crime, 
and “everything which belongs 
to the theme of preparing the 
1996 conference to follow up 
the Maastricht treaty". 


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FINANCIAL TIMES WEDNESDAY JUNE 8 1994 


NEWS: OECD UNEMPLOYMENT REPORT 


Risk to democracy and world trading system 


©IC-EE 


mm 


The Organisation 
for Economic 
Co-operation, and 

Development 

(CECD) has 
laboured hard for 
two years to pro- 
duce its jobs report 
And the document that was pres- 
ented to the press and public yester- 
day is just the tip of the iceberg of 
its efforts. Some 50 pages long, it 
makes a deliberate attempt to avoid 
economic jargon. Perhaps because 
of this, it goes some way to making 
clear just how dangerous an d dam- 
aging the current high levels of job- 
lessness are in the industrialised 
nations. 

The organisation says that 39m 
unemployed in the 24 nations cov- 
ered in the report “represents an 
enormous waste of human 
resources, reflects an important 
amount of inefficiency in economic 
systems and causes a disturbing 
degree of social distress.” 

Underemployment in the form of 
Involuntary part-time work, short 
thwa working mid the discourage- 
ment of job seekers from looking for 
new employment could add 40 to 50 
per cent to the jobless total. 

“Today’s unemployment is caus- 
ing riamag a in ways that cannot be 
measured by the sheer numbers,” 
the report says. “It brutes with it 
unravelling of the social fabric, 
including a loss of authority of the 
democratic system and it risks 
resulting in the disintegration of 
the international trading system.* 1 
Although the report ducks the 
issue of a link between unemploy- 
ment and crime, it notes that unem- 


ployment is associated with health 
problems, lowers self esteem, is. 
demotivating and creates insecurity 
and resistance to organisational and 
tgrfirriwii change . 

The central problem, according to 
the OECD, is an insufficient capac- 
ity among the industrialised 
nations to adapt to change. This 
must be rectified if the OECD mem- 
ber countries are to overcome the 
jobless problem. 

The study makes clear that 
Europe’s weak employment growth 
but high productivity and the US 
experience of creating large num- 
bers of low skilled, low productivity 
jobs over the past two decades are 
two sides of the same coin. Neither 
pattern of job creation is desirable. 
Only Japan has adjusted relatively 
well to such changes as globalisa- 
tion and the spread of new technol- 
ogies but it too is now having to 
deal with substantial problems. 

The OECD stresses that Europe 
faces a much more difficult task 
than the US or Japan. 

Europe has to deal with rigid 
labour markets, a failure to encour- 
age entrepreneurship and private 
sector jobs, and social security 
systems that in many cases hamper 
the creation of new jobs. 

Most European countries also 
have a poor record in the high-tech 
industries. 

Although. Germany and Sweden, 
along with Japan, are considered 
leaders on the use of information 
technologies for advanced manufao- 
luring, most European countries 
have failed to increase the share of 
production and exports taken by 
high tech products. On this seme. 


IfflgfHteOmofofly manufacturi n g 

Employment Rw w i M comparat iv e 

Are % ot ton* mwfeeturinp 
employment Jn19p1.' 

t' ■ i 


totiT&axS 1992 



Japan has been wen ahead, creating 
a 4 per cent increase in manufactur- 
ing employment in the 1970s and 
1980s. US manufacturing employ- 
ment increased L5 per cent over the 
same period while in the European 


Union countries it fen by a fifth. 

At first nig**, the UK appears to 
have boosted its comparative 
advantage in high tech products 
But this reflected a Ml in Britain's 
mariret share for low and medium 


tech products in the 1980s and not 
growth in its sales of high tech 
products. 

The importance of adapting to 
new technologies explains why 
there is great emphasis an improv- 
ing and life- time learning in 
the OECD's long list of policy 
recommendations. In this way, peo- 
ple can adapt to she or more job 
changes in a working life. 

The report sets out to slay some 
misconceptions and the ifea that 
there are any quick fixes. There is 
no evidence that technological 
change is destroying jobs. The idea 
of “jobless growth”, popular a cou- 
ple of years ago, sans wrong. It 
also takes issue with the Idea that 
imports from low wage countries in 
Asia are responsible for much of 
today’s unemployment “In practice, 
most of the competition in OECD 
countries comes not from low-wage 
countries but foam the OECD coun- 
tries themselves." 

The OECD's message is that 
change will have to be promoted 
throughout its member economies 
and societies to overcome unem- 
ployment There can be no taboo 
areas: social se curity systems and 
labour markets and scone cherished 
rights will have to come under 
review. 

The report notes at one point 
that: “To many, change is wrench- 
ing " But in his introduction, Mr 
Jean-Claude Paye, the OECD secre- 
tary general, observes that trying to 
slow the pace of change “would 
only malm delayed adjustment more 
painful". 



Peter Norman Jean-Claude Paye: foster pace of change needed 


A 60 point strategy for putting people back to work 


T he OECD's jobs study 
has one unambiguous 
message: that high 
unemployment can only be 
tackled by restoring the capac- 
ity of economies and societies 
to adapt to change. 

In trying to tom this goal 
into a practical strategy, the 
Paris-based organisation has 
produced around 60 specific 
recommendations. It has set 
out to design policies that 
encourage people to work and 
keep to a minimum the num- 
ber of people who will have to 
rely wholly on the dole. 

Not all policy ideas apply in 
equal measure to all countries. 
Most are addressed to govern- 
ments, but the OECD says that 
in many cases action to 
increase employment lies with 
employers, trade unions and 
individual workers. 

The 4)ECD recognises that 
most governments are 
strapped for cash. In calling for 
appropriate macro-economic 
policies, it urges them to cut 


budget deficits and improve 
the quality of public spending. 

To promote jobs growth, this 
means shifting resources from 
subsidising existing companies 
to encouraging new start-ups 
and moving foam income sup- 
port for unemployed to “active 
labour market measures” to 
get them back to work. 

The specific recommenda- 
tions on structural policy are 
given below in slightly con- 
densed form and grouped 
under eight broad headings 
used by the OECD: 

• To enhance the creation 
and diffusion of technological 
know-how*. 

Invest in the creation of new 
knowledge through, basic scien- 
tific research and help compa- 
nies gain access to such know- 
ledge. 

Promote and strengthen 
mechanisms for international 
co-operation to gain economies 
of scale and avoid duplication 
of Rid). 

Reduce uncertainties that 


impair the creation and diffu- 
sion of new technologies. Mea- 
sures could include promoting 
multilateral agreements on 
intellectual property rights and 
standards, Introducing trans- 
parent ’rules on government 
support for strategic technolo- 
gies and ensuring a sound 
legal framework for spreading 
know-how. 

Ease the absorption of new 
technologies in companies 
through, for example, making 
better use of public procure- 
ment and removing regulatory 
barriers to new information 
infrastructures. 

• To increase working time 
flexibility: 

Remove obstacles in labour 
legislation that impede flexible 
working time arrangements. 

Extend part-time work to the 
public sector. 

Move from the household to 
the individual as the base for 
income tax. 

Reduce or remove “non-neu- 
tral” fiscal incentives to early 


retirement of workers. 

Realign policies to give older 
workers more opportunities to 
stay in work. 

• To nurture an entrepre- 
neurial ft Hi imte 

Lower start up costs and sim- 
plify compliance rules to boost 
new company start-ups. 

Help small businesses to 
grow by improving informa- 
tion and advice on such mat- 
ters as business planning, 
equipment and access to train- 
ing and R&D. 

Identify and cut out unwar- 
ranted regulatory hTiparirmprita; 

to small businesses gaining 
access to credit 

• To increase wage and 

labour cost flexibility: 

Reassess the role of statutory 
minimum wages as a method 
of redistributing incomes. If 
countries decide to keep a legal 
minimum wage to combat pov- 
erty, they should index it to 
prices rather than average 
earnings and ensure sufficient 
differentiation of wage rates by 


OECD UNEMPLOYMENT 
PROJECTIONS* 



1993 

1994 

1995 

us 

&8 

6L3 

5-3 

Japan 

Z5 

2.9 

2-8 

Germany 

8-9 

10.0 

10.0 

OECD Europe 

10.7 

11.7 

11.8 

Total OECD 

8 J ? 

8-5 

QJ3 


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area and. region to prevent 
minimum wages hitting youth 
employment or jobs in low pro- 
ductivity areas. 

Reduce non-wage labour 
costs, especially in Europe, by 
cutting taxes on labour. 

Reduce or remove provisions 
in the structure of tax and 
social security contributions 
that discourage hiring or 
part-time employment 

.Reduce direct taxes on the 
low-paid where this would 
boost demand for workers, 
while protecting their incomes. 

Refocus, as a medium-term 
measure, collective bargaining 
to cover framework agree- 
ments that would leave 
employers free to respond flexi- 
bly to market trends. 

Introduce “opening clauses" 
that would allow collective 
agreements covering many 
workers to be renegotiated a 
lower levaL 

Increase competition in prod- 
uct markets through such 
means as deregulation and pri- 


vatisation. 

• To reform employment 
sec urity provisions: 

Prevent dismissals on unfair 
grounds but allow firings if 
needed on economic grounds. 
Loosen mandatory restrictions 
an dismissals in countries 
(such as Spain) where they 
hinder new hiring. 

Allow fixed-term contracts 
but keep the mandatory protec- 
tion for such contracts rela- 
tively light. 

• To expand and enhance 
active labour market policies: 
Improve public employment 
services by integrating place- 
ment and counselling, unem- 
ployment benefit payments 
and management of labour 
market programmes. 

Ensure benefit claimants 
stay in regular contact with 
employment service and elimi- 
nate employment service 
monopolies. 

Maintain training for the job- 
less in economic downturns, 
but target training pro- 
grammes in hue with labour 
market needs. 

Allow the labour market 
authorities to buy and sell 
training places for the unem- 
ployed and involve employers 
in design and execution of 
training programmes. 

Target job creation measures 
at groups where unemploy- 
ment could do great harm, 
such as long-term unemployed 


youths. Measures could include 
special employment subsidies 
for high unemployment 
groups. But pay on job-creation 
programmes cfo-miri be low and 
training linked to temporary 
employment programmes in 
the public sector. 

• To improve labour force 
skills: 

Improve initial education. Mea- 
sures could include provision 
of pre-school training for those 
from disadvantaged back- 
grounds, measures to reduce 
early school-leaving, greater 
involvement of parents in 
schools and better incentives 
to motivate teachers. 

Improve school-to-work tran- 
sition. Measures could include 
greater partnership between 
industry and schools, new 
forms of apprenticeship, new 
national skill standards, effec- 
tive career guidance at school, 
a better balance between aca- 
demic and technical and voca- 
tional studies and a “training 
wage" low enough to encour- 
age companies to offer many 
training places. 

Improve incentives for compa- 
nies and workers to invest in 
continued learning. Measures 
could include training credits 
for adult workers or accoun- 
tancy changes that would 
make the value of skills dear 
to companies and workers. 

• To reform unemployment 
and related benefit systems. 


Restrict unemployment insur- 
ance benefit entitlements in 
countries where these last a 
long time, to the period of 
intense job search. 

Reduce the amount of dole 
where it is high relative to a 
claimant’s previous post-tax 
income. 

Restrict benefits of indefinite 
duration for employable peo- 
ple. 

limit support for collective 
short-time working to compa- 
nies in temporary difficulty. 

Adjust benefits to ensure 
low-paid workers are better off 
when in work, that spouses of 
the unemployed have an incen- 
tive to take part-time work, 
and that long-term unem- 
ployed only receive benefit If 
they take part in "active 
labour market programmes”. 

Improve information about 
claimants available to the 
employment services. 

Make employers pay some of 
the cost of lay offs. 

Attack benefit fraud. 

Seep a local financing ele- 
ment in assistance benefits to 
discourage the view that bene- 
fits are costless to the local 
economy. 

The OECD Jobs Study. Sub- 
scription details from OECD 
Publications, 2 rue Andre’-Pas- 
cal, 75775 Paris Cedex IS. 

Peter Norman 


Rejecting the unthinkable 
and the unacceptable 

An earlier version of this year’s OECD report linked 
long-term joblessness with the rise in crime and drugs abuse 


The OECD jobs study is like a 
Rorschach ink blot, in which 
different people see different 
things, says Mr Robert Reich, 
the US labour secretary. 

Mr Reich was responding to 
questions about whether the 
political tone of the document 
had changed since its earlier, 
January, draft The US labour 
secretary believes it has not 
changed significantly but, from 
long experience of OECD 
reports, he knows that there is 
something In it for everyone. 

The OECD has always been a 
strongly pro-market organisa- 
tion but it is broad enough to 
reflect a spectrum from rela- 
tively interventionist social 
market ideas to purer free mar- 
ket ones. 

This report has certainly 
been through various muta- 
tions. Last year, at the instiga- 
tion of Mr Jeandaude Faye, 
the OECD secretary-general, 
OECD economists were invited 
to “think the unthinkable” 
about whether unemployment 
could be reduced by fiscal 
expansion, protectionism or 
even reducing the pace of tech- 
nological change. 

Not surprisingly, such 
approaches were rejected. And 
the final draffs have empha- 
sised the “middle-way” - com- 
bining labour market flexibil- 
ity with efficient welfare to 
work measures and improved 
training - which forms the 
new consensus running 
through the Detroit Jobs Sum- 
mit earlier this year, Mr Jac- 
ques Delors’ European Union 
white paper of last December, 


and even the recent Male lec- 
ture by Mr Kenneth Clarke, 
UK chancellor. 

There have been a few minor 
changes in the past few 
months. The January draft 
explicitly linked long-term 
unemp loyment to rising levels 
of crime drug abuse and 
also called for higher taxation 
on capital to off-set reductions 
in non-wage labour costs. Nei- 
ther point has found its way 


employment protection legisla- 
tion and minimum wages, and 
a relatively draconian 
approach to unemployment 
benefit - fits with the govern- 
ment’s de-regulatory approach. 

The UK’s Family Credit ben- 
efit for the working poor is 
also explicitly praised and the 
passage on public employment 
services could have been writ- 
ten in the UK’s department of 
employment. 


Agricultural subsidies in the 
Industrialised world barely 
declined last year in spite of 

government pledges to reduce 
them, the OECD report e d yes- 
terday. 

In its latest annual review of 
agricultural policies and trade, 
the OECD estimated that com- 
bined transfers to agriculture 
from consumers and. tax pay- 
ers in its member countries 
fell by less than 1 per 
cent to just over $335bn 


last year compared with 1992. 

The OECD said the reform of 
agricultural policies in its 
member countries had been 
“limited and uneven". 

Total farm support increased 
last year in the US, the Euro- 
pean Union and Turkey and 
was little changed in Finland, 
New Zealand and Switzerland. 
Farm support, measured in 
national currencies, fell else- 
where in the OECD. 


Into the final draft. 

On the other hand the scepti- 
cism towards levies on employ- 
ers to generate a higher level 
of training has also disap- 
peared and training levies are 
listed as one of the possible 
routes to a better trained wok- 
force. 

There is certainly plenty for 
the UK government, towards 
the free market end of the 
spectrum, to welcome in both 
the January draft and the final 
version. 

The micro-economic stress 
on flexibility - with qualified 
hostility towards strong 


One other aspect of policy 
singled out by the OECD - low 
non-wage labour costs - is 
something which the Conser- 
vative government cannot 
claim credit for as Britain has 
always paid for welfare 
through general taxation 
rather than through pay-roll 


And UK government econo- 
mists did have some worries 
particularly on the vagueness 
about who pays for the ambi- 
tious training plans and about 
the idea that employers should 
pay something toward the cost 
of lay-offs. 


Those closer to the social 
market end of the spectrum - 
including most trade union 
centres, left of centre political 
par ties a nd the EU - welcome 
the stress on social consensus, 
lifetime training, and th» cri- 
tique of the social conse- 
quences of the US labour mar- 
ket model. 

Mr John Morley, head of the 
employment task force at the 
European Union, said: “The 
OECD places a slightly differ- 
ent stress but the basic mes- 
sage is very similar to that of 
the Delors white paper. Both 
documents stress that there 
are disadvantages and advan- 
tages in all models, policy is 
about steering a path through 
these things." 

But Mr Morley, in an implicit 
criticism of the UK govern- 
ment, adds: “The real chal- 
lenge is to avoid the burden of 
job creation being borne only 
by those in the weakest posi- 
tion in society." He believes 
that the OECD report, with its 
stress on avoiding social exclu- 
sion, will help in that cause. 
The study certainly stresses 
that labour market dynamism 
must be combined with social 
objectives but they must to 
designed in nays that do not 
have job-killing side effects. 

The danger for the OECD in 
being all things to all men is 
that governments and lobby 
groups will simply pick out 
what they want in order to 
reinforce what they are 
already doing. 

David Goodhart 








FINANCIAL TIMES WBDNRSnAV JUNE 8 1994 


5 


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1 . 


O n any typical Sunday, 
a strip along Route 246 
just south of the Tama 
river is lined with cars block- 
ing the traffic hpartinp out of 
Tokyo to the countryside. 

The congestion is caused by 
shoppers who come to World 
Flower, a discount flower shop 
In search of potted lilies, roses 
and orchids which are sold at 
50-80 per cent discounts on 
retail prices seen in the count- 
less, independent flower shops 
throughout the country. 

Back north across the river, 
a men's apparel shop adver- 
tises T-shirts for Y490 (£3.12). 
one-tenth the price at a posh 
Tokyo department store. 

Gone are the days when high 
prices were assumed to equate 
with better quality and stores 
competed to flaunt extrava- 


Japanese are 
increasingly price 
conscious, 
reports Michiyo 
Nakamoto 


gance. Instead, value-for- 
money is what today's consum- 
ers look for; bargain-hunting 
bas become acceptable. 

“Consumers have become 
very sensitive to prices, there 
is no doubt about that." says 
Mr Hldeolri Yajima at Jusco, a 
leading supermarket operator. 

The Japanese media is call- 
ing it a revolution in values, as 
consumers discover for the 
first time that the high prices 


of goods, many of which have 
long been fixed across the 
nation, can actually fall as a 
result of market forces. 

While the greater price-con- 
sciousness has its roots in the 
country's long recession, it has 
been sanctioned by recent gov- 
ernment pronouncements on 
the need to bring down Japan’s 
high consumer prices. 

Earlier this week. Prime 
Minister Tsutomu Hata 
pointed to the huge differen- 
tials between prices in Japan 
and other industrialised coun- 
tries. and called for govern- 
ment action to reduce the dis- 
parity by half, mainly by 
deregulating markets and 
improving access to imports. . 

His stance echoes Japanese 
government policy in the mid- 
1980s when foreign pressure on 


Japan to reduce its current-ac- 
count surplus by stimulating 
the domestic economy led to 
similar railin g against Japan's 
high prices and calls for 
deregulation and market-open- 
ing steps. But this time, devel- 
opments in the market place 
and social changes are making 
it likely the trend towards 
lower prices will run deeper 
and wider than before. 

Apart from the large number 
of discounters sprouting 
throughout Japan, supermar- 
kets are going all out to cut 
prices to remain competitive. 
They are developing their own- 
brands and relying more on 
imports, often cheaper than 
domestic products. 

The spread of low-priced 
imparted goods has bit the 
prices of domestic goods. The 


popularity of low-priced 
imported beer bas been a fac- 
tor behind a recent price-war 
involving domestic beer, for- 
merly sold at the same price 
everywhere in the country. 

Aggressive price-cutting by 
retailers has more than wiped 
out a recent rise in the beer 
tax and Jusco says beer sales 
went up 30-50 per cent last 
month as a result. 

A survey by the Ministry of 
International Trade and Indus- 
try shows the prices of many 
goods are actually lower than 
conventional retail price fig- 
ures would suggest, as a result 
of widespread price cuts and 
the growing availability of low- 
priced goods. 

At the same time, consumer 
perceptions about what consti- 
tutes a reasonable price for 


products have changed dramat- 
ically since the bubble years 
when people thought nothing 
of paying Yi.ooo for a 100- 
graznme steak or a bouquet of 
three roses. Spreading aware- 
ness among the Japanese pub- 
lic that cheaper imported 
goods are jnst as good as those 
made at home has helped 
change views of bow much cer- 
tain goods should cost. 

With a record number of Jap- 
anese travelling abroad, there 
is also a wider familiarity with 
overseas prices and a greater 
reluctance to pay more for the 
game goods at home. Another 
development likely to ensure 
the trend for lower prices 
sticks is the change seen 
among Japanese manufactur- 
ers. 

Japanese brewers are tying up 


with foreign partners in a bid 
to lower their costs. Hitachi, 
the electronics company. Is 
considering launching a range 
of low-price consumer electron- 
ics with simpler functions, 
allowing the company* to 
reduce costs. 


_ • Percent 

Car makers such as Toyota 
are also la unching vaiue-for- 
money cars which have 
trimmed tbe fancy gadgets to 
reduce costs. "Lower prices are 
no longer just a passing trend,” 
assorts Mr. Yajima. “They are 
common sense.” 


Bright spots 
seen in Japan 


Dalai Lama 
urges west to 
back Tibet 


By WiH lam Dawkins in Tokyo 

The Japanese government's 
Economic Planning Agency 
yesterday slightly upgraded its 
outlook, saying the economy 
remained stagnant overall but 
showed some emerging bright 
spots. 

The agency's change in tone 
in its latest monthly report 
comes a day after the Organi- 
sation of Economic Coopera- 
tion and Development 
upgraded its forecast for the 
Japanese economy, from 0.5 
per cent to a still weak 0.8 per 
cent growth in GDP this year. 
Last month the EPA said the 
economy was generally slug- 
gish, in a record 37 months of 
decline. 

The OECD and EPA’s 
changes reflect the gradual 
impact of previous govern- 
ments' four economic stimula- 
tion packages, worth Y45,000bn 
($428bn) over the past 18 
months. 

The EPA highlighted a 
smaller-than -expected fall in 
industrial production in May 
as a bright sign. “It is too early 
technically to declare the econ- 
omy baa reached bottom, but 
my impression is that it has," 
Mr Yoshio Terasawa, EPA 
director-general said. 

This latest EPA survey adds 


weight to market expectations 
that the Bank of Japan's Tan- 
kan quarterly study of busi- 
ness confidence, tbe country’s 
most authoritative indicator of 
the short-term economic out- 
look due out on Friday, will 
show a broad improvement. 

Over the past few months, 
the EPA has used more pessi- 
mistic language to describe the 
economic outlook than most 
private-sector forecasters, yet 
at tbe same time stuck to an 
official forecast of 2.4 per cent 
GDP growth this year, seen by 
most private-sector economists 
as unachievable. 

But Mr Hirohisa Fujii, 
finance minister, yesterday 
said the government must seek 
to hit the official target by 
passing this year's budget and 
implementing steps to stimu- 
late demand, such as the one- 
year income-tax cut agreed by 
the last government 

The budget for tbe year 
starting in April, delayed by 
Japan's internal political wran- 
glings, is expected to clear par- 
liament this month. 

New stimulus packages or 
monetary measures will be 
unnecessary, so long as the 
budget is passed, Mr Maseru 
Hayaml, head of the Japan 
Association of Corporate Exec- 
utives, said. 


The Dalai Lama, concerned about 
mounting pressure on him to aban- 
don a policy of non-violence towards 
Beijing, appealed to the west yester- 
day to try to influence China about 
the future of Tibet, Reuter reports 
from Brussels. 

Addressing Belgian MPs daring a 
three-day visit to Belgium, the exiled 
Tibetan spiritual leader said he had 
failed so far to get anywhere with 
China. 

“In Tibet some people think we 
should use more violent means. This 
(view) may even be growing, but I do 
not think this is the right approach,” 
the 1989 Nobel Peace Prize winner 
said. “I want you to use all of your 
influence to make sure tbat tbe Chi- 
nese government accepts negotiations 
with the Tibetans," be said. 

The Dalai Lama has sought talks 
with Beijing since 1979 when para- 
mount Chinese leader Deng Xiaoping 
said that “except for the indepen- 
dence of Tibet, all other questions 
can be negotiated”. He has proposed 
that Tibet be given internal auton- 
omy with China looking after foreign 
policy and defence. 

The Dalai Lama told the MPs he 
would like to bold a referendum to 
find out if non-violence still had sup- 
port among bis followers. 

The Dalai Lama said he was not 
interested in entering politics in 
Tibet, pointing out that many Tibet- 
ans would have problems accepting a 
religions leader as a politician. 


Pakistanis warned of sacrifices 

Farhan Bokhari reports on the background to tomorrow’s budget 



Bhutto: added pressure to weigh defence needs ap 


G overnment leaders including 
the prime minis ter, Ms Ben- 
azir Bhutto, have warned 
Pakistanis to be prepared to make 
sacrifices, for the sake of long- term 
growth, when the annual budget is 
unveiled tomorrow. 

The budget, for the fiscal year 
beginning on July l. follows economic 
growth of about 4 per cent, up from 3 
per cent the previous year but below 
the target of 7.4 per cent. Official esti- 
mates show the inflation rate at 10.5 
per cent, again an improvement on 
the 11 per cent of the previous year 
but above the government's target of 
8 per cent 

Exports and Imports bave both 
fallen and the agriculture sector, 
which makes the largest contribution 
to the economy has grown by only 2.6 
per cent, largely because of the 
destruction of more than a third of 
this year’s cotton crop by a virus. 

However, there are some brighter 
spots. The government claims that 
this would be the first year in almost 
a decade that the budget deficit would 
remain within its target, in this case 
5.4 per cent of gross domestic product, 
following several years of rampant fis- 
cal indiscipline. This compares with 
nearly 8 per cent in the previous year. 

Foreign exchange reserves have 
risen to almost $2bn from last sum- 
mer’s low of below $300m. 

Independent economists say 
improvements in the budget deficit 
and the reserves are important posi- 
tive factors for international financial 


institutions. Earlier this year, Islama- 
bad signed loans worth ?L36bn with 
the International Monetary Fund and 
agreed to accept conditions including 
lower bank borrowings by the govern- 
ment, improvement in reserves and a 
lower deficit 

"Our key priority is to attain macro- 
economic stability. We consider it a 
prerequisite for future growth," says 
Mr V.A. Jafarey, the prime minister's 
adviser on finance, who is de facto 
finance minister. “We consider tbat 
previous attempts at accelerating 
growth tailed because macroeconomic 
stability was not ensured.” 


Among planned measures are a wid- 
ening of the scope of the existing gen- 
eral sales tax in order to boost reve- 
nues. The government's intention to 
lower tariffs over the next three years 
is forcing the country to wean itself 
from reliance on duties on exports 
and imports. “We have to find ways to 
tax consumers .and also encourage 
industrial growth as well as trade,” 
says a senior officiaL 
Some businesses have already 
begun opposing the move, arguing 
that with a large black economy and 
smuggling flourishing, only legitimate 
businesses would be hit hard by the 


sales tax which would mean higher 
prices at retail outlets: 

Last year, a parliamentary commit- 
tee found that up to RslOObn ($3-34bn) 
worth of smug glin g tnlnae place WHtth , 
year. In addition, some businesses 
argue tbat with large scale corruption 
in the tax department, the new tax 
would provide further opportunities 
for bribery. 

Mr Tahir Khaliq, a businessman 
and former preadmit of the Karenhj 
Chamber of Commerce and Industry, 
riflinw; that iteirw which are tawfl end 
up being sold at a price of up to 50 to 
60 per cent higher than smuggled 
goods. If the tax collector is not hon- 
est, people take advantage of that and 
misuse the system,” he says. 

Mr Haroon Rashid, president of the 
KCCI, wants the “unorganised sector" 
- a reference to the black and infor- 
mal economy, to be taxed like other 
businesses so that the sales tax would 
be considered to be fair. 

Other issues related to the count- 
try’s macroeconomic structure are 
also being debated. Almost two-thirds 
of the budget goes towards debt servi- 
cing and funding the defence forces. 
The recent derision by India, Pakis- 
tan's arch enemy, to raise its defence 
budget by up to 20 per cent has put 
added pressure an the government of 
Mis Bhutto to look closely at the coun- 
try’s defence needs. However Ms 
Bhutto said this week that Pakistan 
would not try to match the TmH«w 
defence budget increase. 

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6 


FINANCIAL TIMES WEDNESDAY JUNE S 1994 


NEWS: INTERNATIONAL 


Middle East and Gulf 

rates halve 


growth 


By Mark Nicholson bi Amman 


The overall growth rate tor the 
economies of the Gulf and 
other leading Middle Eastern 
states more than halved in 1993 
from its level the preceding 
year, slumping to an aggregate 
35 per cent horn 65 per cent, 
according to a newly-published 
report by the Economic and 
Social Commission for Western 
Asia, the Amman-baaed United 
Nations agency. 

The ESCWA study, which 
covers the seven Arabian Pen- 
insula states and Egypt, Iraq, 
Jordan, Lebanon, and Syria, 
lists low oil prices, poor export 
performances, continued sanc- 
tions on Iraq’s economy, politi- 
cal uncertainties in Egypt and 
Yemen and "the generally 
depressed state of regional 
cooperation" as the chief fac- 
tors in the decline. 

Only two states, Yemen and 
Qatar, recorded negative 
growth rates in 1993, the report 
says, but weak oil prices 
helped cut aggregate GDP 
growth for the Gulf Coopera- 
tion Countries (Saudi Arabia, 
Kuwait, Oman, Bahrain Qptar 
and the United Arab Emirates) 
to a rate of 35 per cent from 
75 per cent in 1992. 


More positively, the report 
notes that economic reforms 
"gained momentum", particu- 
larly in Jordan, which recorded 
6 per cent growth in 1993 and 
where both inflation and 
unemployment were substan- 
tially reduced, and Egypt, 
which the report says showed 
growth the same year of 15 per 
cent. But it says delays in 
Egypt’s implementation of 
reforms and disagreements 
with tiie IMF and World Bank 
have had a “negative Impact 
on economic growth and the 
state of investors' confidence". 

The report also notes the 
positive effects of Lebanon's 
stabilisation policy - which it 
raTia "implicitly in line" with 
IMF recommendations - and 
Syrian policies which, it says, 
are "aimed at gradually open- 
ing up and deregulating the 
economy”. Both Lebanon and 
Syria showed improved growth 
in 1993 over 1992, the study 
says, with rates rising to 7 
from 5 per cent and to 6 from 5 
per cent respectively. 

However, it says that gener- 
ally positive growth, rates have 
failed to arrest inrrea«ring dis- 
crepancies within the coun- 
tries it covers: “The majority of 
the poor and rural population 


continues to be deprived and 
marginalised in most countries 
of the ESCWA region." 

ft notes, in particular, that 
despite Jordan's relatively high 
growth rates in 1992 and 1993. 
the number of fanrfli<« failing 
below the poverty line has nev- 
ertheless risen to 215 per cent 
of households in 1993 from 18.7 
per cent in 1989. 

The report estimates the 
total external debt of the 
ESCWA region to have grown 
to $186bn (£l24bnj from $180tm 
over the period, representing 
62 per cent of aggregate GDP 
in 1993. And while it says 
Egypt and Jordan, In particu- 
lar, have recently improved the 
terms of their debt repayment, 
the report notes the region's 
external debt constituted 115 
per cent of total developing 
country debt, while exports of 
goods and services from the 
region comprised just 5.6 per 
cent and 65 per cent respec- 
tively of the aggregates for 
developing countries overall. 

The ESCWA study also indi- 
cates the continued inertia in 
the development of inter-re- 
gional trade, flows of which it 
says fall slightly in 1993 to just 
10 per cent of the total for the 
countries covered. 


Jordan shuffles cabinet 
as peace talk hopes grow 


By James Whittington 
n Amman 


Jordan yesterday announced a 
cabinet reshuffle in expecta- 
tion of a fresh phase of peace 
negotiations with Israel. Prime 
Minister Abdel Salam al-Majali 
is expected to keep his post but 
officials say new faces will be 
brought into other key posi- 
tions to “reinvigorate" the gov- 
ernment and its efforts in the 
peace process. 

The change camp amid opti- 
mism from the Jordanians that 
a breakthrough in its peace 
talks with Israel was immi- 
nent On Monday. Jordan and 
Israel restarted direct talks in 
Washington on their peace 


agenda signed in September 
last year. 

O fficials in Amman said they 
expected the two sides to agree 
to set up a joint committee to 
examine the countries’ land 
dispute. The border between 
Jordan and Israel has never 
been formally recognised: both 
sides are said to see the need 
to settle territorial issues 
before moving to others such 
as water, economic co-opera- 
tion and refugees. 

It was not clear last night 
who would appear in the new 
cabinet The lower house of 
parliament has been calling for 
representation of MPs at cabi- 
net level, as in previous gov- 
ernments, but a former minis- 


ter said this “was doubtful". 

The last cabinet reshuffle 
came after the kingdom held 
its first multi-party elections 
last November. Since thm^ the 
government and parliament 
have hart frequent fitanri-nffa 
The cabinet has come in for 
criticism over its handling of 
talks with the Palestinian Lib- 
eration Organisation on future 
economic ties between Jordan 
and the West Bank. 

One framer prime minister, 
Mr Ahmad Obediat, Raid the 
old cabinet lacked dear poli- 
cies; he blamed its members 
for the uncertainty in the king- 
dom. The new cabinet, it is 
hoped, will be able to restore 
confidence in the peace talks 


Bombed Aden goes about its business 


By Eric Watkins m Aden 


T wo north Yemeni warplanes hit 
the Aden Oil r efiner y with clus- 
ter bombs, sending a massive 
column of black smoke and flickering 
Grange flame hundreds of foet into the 
air. 

The attack, an Sunday, was the third 
and most intensive air raid on the city 
In a week and brought home forcefully 
tiie war that has raged out of view for 
more tha^ a month. But Adenis, lfira . 
many other people under fire, are not 
cowering. They are angered by the 
attacks on their homes and most 
remain determined to resist what they 
perceive as aggression from the north. 

Aden is a sprawling town, its popula- 
tion of bgff a million clustered in and 
around the barren rocks of ancient vol- 
canoes. The heart of the place is Crater, 
a veritable malting pot of races and 
nationalities that teem through its 
sweltering streets. 

Up Bazaar Street mm-Thanta are sell- 
ing everything from boxes of Ribena to 
bottles of exclusive French perfume. On 
the pavement, intent young men work 
with small screwdriv as and tweezers. 


Southern Yemeni warplanes 
bo m barded n o rt h er n forces yestaday 
morning, hours after a ceasefire by 
the north took effect, a top northern 
official said, AF reports from Sanaa. 
Planning Minister Abdul Karim 
el-Eryani declined to say whether the 
bombardment meant the north would 
now consider the ceasefire invalidated. 


repairing watches while yon wait 
There is no sign of anxiety as people 
saunter to and fro in search of bargains. 

in another rfjgfrr jct of the town, 

people have been without water for five 
days. No one knows quite why, nor do 
they stop to wonder about it much. 
nhflriran in their hundreds are on the 
streets with bright yellow plastic bot- 
tles and makeshift wheelbarrows, dis- 
patched to water wells dug in the 
streets. Two hoys race, laughing as 
their empty yellow bottles tumble on to 
the road. 

“Yes, we are having problems. The 
military has commandeered our buses 
and that makpc getting to work diffi- 
cult," says one office manager in the 
Tuwahi district. 


“But we «wne as we can and do what 
we fvm We are not afraid. We are sure 
that our defences wifi hold. We are vay 
proud of what they have done so far," 
he says. 

It is more than a month since north 
Yemeni military forces began their 
drive an Aden and other parts of the 
south. General All Abdullah Saleh, the 
northern leader, has since frequently 
h rtagtpri of arriving in the city to chew 
qaL, the privet-like leaves everyone in 
the T nnH munches to keep awake in the 
afternoon. 

“General Saleh has made many 
appointments, but he's so for foiled to 
arrive,” notes a secretary. 

About 20 miles north of the city, a 
dozen southern troops settle down for 
j imrh it is rice and grilled c hi c ken , 
spread in huge platters on the concrete 
floor. They loan Hwar AK-47s against 
the walls and begin to take their food 
by the handfuL Northern artillery 
shells rip through the air. crashing 
nearby. The soldiers continue their 
ip*»fli, barely looking up as the walls 
shake around them. 

Last week rate of the most ferocious 
battles of the war was fought here, the 


burned out remains of a southern army 
remp only the most visible sign of the 

struggle. 

But there are more ghastly re mind -.' 
ere. Southern troops point to the copse 
of a northern soldier, bis face respect- 
fully covered in a chequered headctoth. 
Other corpses of northern soldiers are 
buried en masse in makeshift graves 
alongside the road. The stench of death 
rises from the road where southern 
troops stand ready for a new northern 
offensive. 

“Our defences will hold," says a spin- 
dly old man to Crater. Perhaps they 
will. Northern troops massed to tha east 
have been held off for nearly six weeks, 
as have other soldiers driving in from 
the north and west 

Smoke still rises above the refinery. a 
reminder of the north’s destructive 
power. But southern pilots, defying 
incoming northern shells, continue 
their sorties, taking off with clockwork 
precision every 10 minutes throughout 
the morning. 

Meanwhile, traffic in the city carries 
on in an orderly manner, directed hy 
po licemen wearing pale green uniforms 
and sparkling white hats. 


‘Truth commission’ to be set up 


S African rights 
probe planned 


By Patti Waldmek 
Johamostxrg 


The South African gove r nment 
is to set up a “truth commis- 
sion" to probe human rights 
abuses under apartheid, but 
those who prove their crimes 
were politically motivated 
might be pardoned. Justice 
Minister DuDab Omar said yes- 
terday. 

Mr Omar the commis- 
sion of eminent and respected 
South Africans would examine 
abuses by the previous white- 
dominated government as well 
as by his own African National 
Congress (ANC), now the lead- 
ing party in the coalition gov- 
ernment of national unity. 

“The fundamental issue for 
all South Africans is to ramp 
to terms with our past on the 
only moral basis possible, 
namely that the truth he told 
and that the truth be acknowl- 
edged,” he told a Cape Town 
press cnnfafrpfnne . “We cannot 
forgive on behalf of victims. 


The identity of the victims and 
what happened to tham and 
the Identity of perpetrators 
must be made known.” 

However Mr Omar left many 
important questions unan- 
swered, including whether the 
commission wo uld hold public 
hearings, whether its finding s 
would be published and 
whether those who committed 
abuses would have their iden- 
tity concealed in the interests 
of national reconciliation. No 
decision bad yet been taken on 
these issues, he said , and no 
definition of a political crime 
had been agreed, though he 
said persons who committed 
“heinous crimes" might not be 
considered for pardon. 

This was understood to be a 
reference to the convicted 
murderers of former ANC 
laadpr Chris Nani assassinated 
last year in the country's most 
notorious political killing Mr 
Omar said some 13,000 people 
had already been pardoned for 
offences ranging from mexnber- 



Oman questions unanswered 


ship of an illegal organisation 
to racially motivated massa- 
cres, most of them from the 
black liharaHnn movements. 

In fixture, amnesty would be 
linked to the acknowledgement 
Of human ri ghts violations. 

Human rights monitors say 
tens of thousands of people 
including children were tor- 
tured and detained without 
trial and hnnHwwte killed under 
apartheid. No amnesty would 
be considered for offences after 
December 5,- 1993, when the 
final round of multi-party 
democracy talks began. Omar 
said the commission would sit 
for up to two years. 


Kashmir gunmen 
kidnap Britons 


By Alexander NfooB, 
Asia Editor 


Two Britons, including the 
16-yeaiM>ld son of a former 
Financial Times correspon- 
dent, have been kidnapped in 
Indian-held Kashmir by Mos- 
lem militants demanding the 
release of three jailed guerril- 
las. 

The gunmen set upon Mr 
David Housego, former New 
Delhi correspondent of the FT 
and now a Delhi-based busi- 
nessman, his wife Jenny and 
younger son Kim as they were 
trekking on Monday with Mr 
David Mackie, a British video 
director. 

Kim Housego and Mr 
Mackie, who is 36, were 
abducted. Mr and Mrs Housego 
yesterday returned to Srinagar, 
summer capital of the Indian 
state of Jammu and Kashmir, 
and contacted the authorities. 

The In dian army was alerted 
and photographs of the cap- 
tives distributed. However, 
there was no indication of any 
contact between the Indian 
authorities and the mil Hants. 


Mr Housego said the captors 
appeared to be mostly Pattons 
who spoke both Pashto and 
Urdu, suggesting that at least 
some of them were from Pakis- 
tan. He was given a note in 
Urdu demanding the release of 
three men who are known to 
be members of the Harkatol 
Ansar militan t group, includ- 
ing its leader, Mr Mohammed 
Sajjad. All are in Indian cus- 
tody. 

Some Pathans, who live In 
north-western Pakistan and 
Afghanistan, have joined Kash- 
miri Moslems in their rebellion 
against Indian rule In Kash- 
mir, where xnost of the popula- 
tion are Moslems. Thousands 
of popple including many civil- 
ians, have died in fighting over 
the past four years. 

The Foreign Office, which 
was last night monitoring the 
situation, said the British High 
Commission in Delhi was plan- 
ning to send an official to Sri- 
nagar. 

Mr Housego left the FT in 
1992 to establish a Delhi-based 
textile manufacturing and 
export business. 


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FINANCIAL TIMES WEDNESDAY JUNE 8 1994 


7 


NEWS: WORLD TRADE 


UK seeks to 
reverse toy 
import curbs 


Boom time for smugglers’ paradise 

Farhan Bokhari on the contraband business on Pakistan’s border with Afghanistan 



Tribesmen shop for refrigerators, televisions and air conditioners at Hayatabad market outside 
Peshawar in northern Pakistan. All the items for sale are smuggled goods 


By Guy de J enquires. 
Business Editor 

The UK Department of Trade 
and industry has taken the EU 
Council of Ministers to the 
European Court of Justice in 
an attempt to annul the Coun- 
cil's decision earlier this year 
to place stringent quotas on 
imports of teddy bears and 
other toys from China. 

The DTi's legal action fol- 
lows complaints by European 
toy Importers that quotas are 
severely damaging business. 
Though Bri tain opposed the 
decision to impose the curbs, it 
was outvoted by ll to I. 

The European Commission, 
which drew up the original 
quota proposals, said it was 
“surprised" by the legal action, 
because ways were already 
being sought in Brussels to 
soften the impact of the curbs 
on the European toy industry. 

EU member governments 
regularly challenge Council 
decisions in the court after 
they have been overruled. 

Bat legal experts said the 
DTI action was most unusual 
because it dkl not allege that 
the Council had misused its 


The European Union said 
Sooth Africa would be admit- 
ted to the generalised system 
of preferences shortly and a 
range of other accords with 
the country, including a for- 
mal trade treaty, were likely 
to follow soon afterwards, 
writes Mark Suzman in Johan- 
nesburg. 

Earlier this week Mr Erwan 
Fou6r6. the European ambas- 
sador, said he expected South 
Africa to be added to the GSP, 
a concept developed by the UN 
Conference on Trade and 
Development 


treaty powers. 

Instead, the DTI argues that 
the Council “failed to exercise 
discretion properly" by ignor- 
ing objections from European 
toy manufacturers. It also says 
an EU-wide quota was unnec- 
essary, because only Spain had 
demanded protection against 
toy imports from China. 

Toy Manufacturers of 
Europe, the main industry 
association, said the quotas 
would cut EU toy imports from 
China this year by about Ecu 
l.8hn at manufacturers’ selling 
prices to half the level forecast 
before they were imposed in 
February. 

It said that at least 300 jobs 
would be lost in Europe and 
that toy manufacturers, many 
of whom sourced products and 
components In C hina , would 
suffer falls in sales and profits. 

The association said that 
though it bad lobbied ail 12 
governments before the deci- 
sion was taken in February, 
the Council had acted without 
taking account of the damage 
the import curbs would cause. 

The curbs mainly affect 
stuffed animals, non-human 
figures and die-cast vehicles. 


Under it developing nations 
are granted virtually tariff- 
free access to the European 
market for manufactured and 
semi-manufactured goods, 
within the next month. 

EU foreign ministers agreed 
in principle to the move in 
April but waited until after 
the elections to formalise it 

Mr Fqu£t£ also said that the 
EU had already made repre- 
sentations to the new South 
African government on a 
future trade agreement and he 
expected a final deal to be 
reached relatively quickly. 


M r Mohammad Shafi 
leans across his shop 
counter and points 
towards a small 'Peacock' 
brand Chinese television lying 
in a comer. 

“You won't ever get it as 
cheap as here" claims the 
sturdy, tali tribesman, whose 
shop Is lined with a large vari- 
ety of electronic goods such as 
air conditioners, refrigerators, 
stereo equipment and fancy 
electronic telephones. 

Mr Ffoji Mohammad, another 
shopkeeper nearby shouts at 
two or his assistants, who arc 
off-loading a fresh consignment 
of electrical goods which 
arrived in a truck before sun- 
rise, using a mountainous 
track to conveniently evade 
police check-posts along the 
road leading to the border. Mr 
Mohammad wants the consign- 
ment of refrigerators to be 
placed neatly outside his shop 
before customers arrive. 

Both shopkeepers are among 
hundreds of businesses at Hay- 
atabad market outside Pesha- 
war, Pakistan's northern fron- 
tier town, whose fortunes have 
risen as smuggling has flour- 
ished In this country in the 
past 12 to 15 years. 

The market has much more 
to offer for ail clients such as 
expensive crockery, unstitched 
cloth, Italian shoes, perfumes 
from Paris and even aphrodisi- 
acs neatly packed In tiny 
square boxes with instructions 
in Chinese and Russian, hid- 


den under labels in English. 

The market and other simi- 
lar sites across the country are 
catching the eye of a growing 
number of businesses who are 
opposing the government's 
plans to introduce a VAT-style 
general sales tax. 

At a time when markets 
such as Hayatabad freely sell 
goods without charging any 
addition taxes, other busi- 
nesses say the sales tax would 
break their back because it 


would further encourage their 
clients to buy smuggled goods. 

“Whichever government has 
come, the menace of smuggling 
has only grown," laments Mr 
Tahir Khaliq, a top business- 
man In Karachi, Pakistan's 
southern most city and the 
country's business capital. 

In over a year, one of Mr 
Khaliq's company has pro- 
duced just over 1,000 Teacock’ 
televisions, although he had 
initially planned to assemble 


and sell twice that many. 

Mr Khaliq traces his troubles 
hack to a place such as Hayata- 
bad, over 1.600 km away, where 
shopkeepers can easily beat his 
prices. 

“Our customers are being 
offered the same goods at up to 
60 per cent of our price, and 
the goods are even delivered at 
their doorsteps,” claims Mr 
Khaliq, referring to the well-or- 
ganised smuggling trade, 
reputed to have an annual 


(£ 2 .isbn). 

The smuggling business 
flourishes in part due to wide- 
spread corruption in the police 
and taxation departments. 
Moreover, Pakistan's agree- 
ment to provide transit facili- 
ties for imports by businesses 
based in neighbouring Afghan- 
istan is widely abused. 

Yet, companies in remote 
places there place orders for a 
large number of refrigerators, 
freezers and so on. “Why is 
that so," asks a senior govern- 
ment official. He says Paki- 
stani smugglers in collusion 
with Afghan businesses take 
the imported items to cross the 
Afghan border using the tran- 
sit facility, and then bring 
them back using remote moan- 
tain tracks. 

Privately, senior officials say 
the government is considering 
ways to curb the traffic in 
items for which there is little 
or no demand in Afghanistan. 
But it has to act fast and final- 
ise its proposals before next 
summer, when a 30-year-old 
bilateral trade agreement 
comes up for renewal 

But the same officials also 
acknowledge that a solution is 
difficult, «p»waiiy as Islama- 
bad does not want to erode its 
diplomatic influence over 
Afghanistan, which, it has 
gained since it began backing 
the Islamic mujahideen resis- 
tance to the Soviet occupation 
in 1979. 


UK wins 
big HK 
contracts 

Hie building boom in Hong 
Kong shows little sign of 
slackening for British compa- 
nies with the award of two fur- 
ther orders for construction an 
projects worth a combined 
£U0m, ($l65m) writes Andrew 
Taylor, Construction Corre- 
spondent- 

Tarmac in a joint venture 
with K uma gm Gumi, the large 
Japanese construction com- 
pany, has won a £55m contract 
to design and built a new rail 
tunnel under the harbour Unk- 
ing Hong Hong island with the 
West Kowloon peninsula. 

The project. Involving a % 
mile, twin-track immersed 
tube tunnel, will form part of 
a link with the new airport at 
Chek Lap Kok near Lantern 
M—i. Work on the tunnel is 
to start immediately and Is 
due to be completed early 
1998. 

Taylor Woodrow, another 
UK group, in a separate deal, 
has won the contract to man- 
age the £60m redevelopment of 
Kowloon station, from the 
Kowloon Canton Railway Cor- 
poration. 

$200m VAT loss 
from piracy 

West European governments 
lost at least 8200m (£133m> in 
1993 through VAT avoidance 
because of computer software 
piracy, according to figures 
published this week, writes 
Alan Cane. Their losses wore 
small, however, compared 
with those of the major soft- 
ware companies who conserva- 
tively lost a total 8737m 
according to the Software Pub- 
lishers Association, with a fur- 
ther 8430m lost by software 
distributors and retailers. The 
total loss of $1.3bn comes dose 
to equalling the |t.6bn of soft- 
ware sold legitimately by soft- 
ware publishers in western 
Europe last year. 

The SPA comprises most of 
the world's major software 
houses, principally US-owned, 
including Microsoft, Lotus and 
Apple. It has been campaign- 
ing vigorously against coun- 
terfeiters, securing court 
orders to enter offices and con- 
fiscate suspect disks and com- 
puters. 


Way clear for Philippines debt talks 


By Nancy Dunne In Washington 

The International Monetary Fund will 
grant tbe Philippines a 8630m (£41 8m) 
“exit facility” by the end of this mouth, 
enabling U to start on debt negotia- 
tions with the Paris Club of creditors, 
according to Mr Rizalino Navarro, the 
Philippines trade and investment secre- 
tary. “Then we'll bo on our own." he 
said. 

Although soft loans will still be 
needed, tbe country’s coffers are flush 
with foreign exchange. Reserves are at 
a high of $7.2bn and the equal of four 
months of imports which, he says, is 
“getting on the high side". 

Galvanised by the country's widely 
praised fast-track power programme 
and a new enthusiasm of the capital 


markets, Mr Navarro was In Washing- 
ton to guard Filipino interests in tbe 
Generalised System of Preferences 
which gives tariff-free status to 
selected imports from developing coun- 
tries. 

The US has also removed the Philip- 
pines from its “priority watch list" of 
countries whose laws or enforcement of 
intellectual property statutes are lax. 
This paves the way for increased high 
technology production facilities, Mr 
Navarro said. 

The government of President Fidel 
Ramos has moved on several fronts to 
boost trade and investment A new law 
expands the scope of permissible build- 
ope rate- transfer deals. 

The previous concentration on 
energy and transportation has been 


expanded to include solid waste man- 
agement, information technology, data 
base networks, health and education 
facilities, and any infrastructure proj- 
ect authorised by the government 
It is also comprehensive in the types 
of arrangements permitted. A public 
utility franchise requires that 60 per 
cent of equity in the operating corpora- 
tion must be domestically owned. How- 
ever, among new options, foreign com- 
panies can now build a facility, lease it 
and transfer it or rehabilitate a project, 
operate It and transfer it 
The previous 12 per emit ceiling on 
equity returns has been replaced by a 
“reasonable returns” requirement to be 
set by market conditions. 

The impact of tbe law, along with a 
new valued added tax, has been to spur 


project approvals from $3JSbn last year 
to S9bn In the first five months of this 
year. 

Banking legislation, signed by Presi- 
dent Ramos two weeks ago, is also 
expected to boost trade and invest- 
ment It will allow the entry of 10 new 
foreign banks to the c o u nt ry - four 
others have been there for more than 
50 years when the door to new entrants 
has slammed shut I 

“There is a lot of interest from the 
US, Japan, Europe and other Aslan 
countries,” Mr Navarro said. Ranks 
usually bring their clients, who bring 
more investment and facilitate trade. 

The hope is that the now capital and 
foreign competition will drive down 
interest rates nets, now at 18 per cent 
for borrowers. 


EU trade boost 
for South Africa 


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FINANCIAL. TIMES WF.ONESDAY JUNE 8 .994 



NEWS: THE AMERICAS 


Separatists 
warn Quebec 
institutions 


By Ber na rd Simon in Toronto 

Quebec separatists have 
caused controversy in Cana- 
da's investment community 
over the past week by threat- 
ening 1 to withdraw business 
from banks and securities 
firms which draw attention to 
the economic costs of a possi- 
ble breakaway by the franco- 
phone province. 

The threats come amid ner- 
vousness in financial markets 
about the forthcoming Quebec 
election, which is expected to 
be held in September. 

The separatist Parti Qu6b6- 
cols (PQ} is well ahead of the 
ruling Liberals in public 
Opinion polls. If it wins, the PQ 
has promised to hold an 
independence referendum 
within a year of coming to 

office. 

Mr Jacques Parizeau, the 
PQ's leader, urged Quebeckers 
to shun Bank of Montreal one 
of the biggest financial institu- 
tions in the province, after the 
hank’s chief economist warned 
that the PQ would create M a 

great HImI Of fiear" in flnxnmal 

markets if it treated an elec- 
tion victory as a mandate to 
launch independence negotia- 
tions. 

A similar warning last week 
by Wood Gundy, a Toronto- 
based securities dealer, elicited 
a veiled threat from the PQ 
that the firm risked exclusion 
from underwriting the prov- 


ince's bonds, if the separatist 
group comes to power. 

The political uncertainty has 
contributed to a widening gap 
between Quebec and other 
Canadian bond yields, as well 
as rising spreads between 
Canadian and US government 
bonds. Foreigners hold an esti- 
mated 25 per cent of Canadian 
public-sector debt 

The spread between Quebec 
and federal government 10-year 
bonds has grown in the past 
month from 85/100ths of a per- 
centage point to about 1.03 
points. 

By contrast bonds issued by 
the province of Alberta now 
yield only 50 points above fed- 
eral government issues. 

PQ leaders hope to reassure 
Quebec voters that a break- 
away will be relatively pain- 
less, since an independent Que- 
bec would continue to benefit 
from the North American free 
trade agreement and from 
close economic ties with the 
rest of Canada. 

An economist at one domes- 
tic bank said yesterday that it 
was Impossible to make an 
accurate forecast of Quebec’s 
economic prospects under an 
independence-minded govern- 
ment 

But he noted that uncer- 
tainty among foreign investors 
about the future shape of Can- 
ada “is inevitably going to 
cause some dislocation in 
financial markets.” 


Firebrand ignites Mexican poll 

Damian Fraser on the opposition candidate threatening continued rule by the PRI 


A few months ago he was 
dismissed as a right- 
wing eccentric with a 
loud voice. Now Mr Diego 
Fernfindez de Cevallos, presi- 
dential candidate of Mexico’s 
conservative opposition, is 
mounting a serious challenge 
to the governing party’s 65- 
year bold on power. 

Public support for Mr Fern- 
andez de Cevallos, the candi- 
date of the National Action 
party, has surged after his 
clear victory in the televised 
debate between the three main 
candidates. In less than a 
month, he has moved from 
third place to being close to or 
ahead of Mr Ernesto Zedillo, 
the ruling Institutional Revolu- 
tionary party (PRD nominee, in 
opinion polls. 

A trial lawyer and experi- 
enced parliamentarian, Mr 
Fernandas de Cevallos has 
proved a Ear more engaging 
and colourful speaker than his 
sombre rivals. Easily identified 
by his sprawling beard and 
cigar, his confrontational but 
good-humoored style has 
turned him into something of a 
folk hero for Mexicans looking 
for an alternative to the cold 
technicians who have ran the 
country for the past decade. 

His description of Mr Zedillo 
as a “good little bay with high 
grades who has not passed the 
test of democracy” may have 
done more to define the PRI 
candidate than months of gov- 
ernment propaganda. His with- 
ering attacks on Mr Cuauht- 
emoc Cardenas look to have 
finished off the presidential 
ambitions of the candidate of 
the left, once considered the 
strongest of the two opposition 
nominees. 



An engaging and colourful Fernandez de Cevallos: ‘We have 
finished the myth that the candidate of the PRI is invincible’ 


Mr Fern&ndez de Cevallos 
still feces considerable obsta- 
cles in his quest to unseat the 
PRI, and even some supporters 
acknowledge that he has at 
best an outside chance of vic- 
tory. With memory of the 
debate fading, there are 
already signs that his support 
is beginning to soften. 

The ruling PRI is better 
organised than the PAN, has 
more money and is backed by 
the television networks, the 
unions, big business and the 
farmers' organisations. Polls 


show that voters are more con- 
fident of its ability to manag e 
the economy and worried 
about political instability that 
might follow a change in gov- 
ernment 

The PAN’s core support is 
the urban middle-class, and 
even within that group many 
are suspicious of its conserva- 
tive, pro-church views on 
social policy. The party is 
hardly represented in the rural 
parts of Mexico, where 30 per 
cent of Mexicans live, a weak- 
ness not reflected in the opin- 


ion polls, which generally 
exclude voters in the country- 
side. 

But the surge in popularity 
of the combative Mr Ferndndez 
de Cevallos has revealed the 
vulnerability of the PRI and 
the volatility of the electorate. 
Even if Mr FemAndez de Ceval- 
los does not win the election, 
he could draw enough votes to 
prevent the PRI winning 
majority control of the Con- 
gress, forcing it to govern with 
the support of the opposition 
for the first time. 

Apart from his success in the 
debate, Mr Fern&ndez de Ceval- 
los ’s campaign has benefited 
from discontent with the gov- 
ernment, fuelled by economic 
stagnation and political tur- 
moil that, began with the peas- 
ant revolt in Chiapas over New 
Tear. He has cleverly posi- 
tioned hlwwwIF as the nanrilriate 
of change, but who unlike the 
leftist opposition, can maintain 
political and social order. 

“We have finished the myth 
that the candidate of the PRI is 
invincible,” Mr Fern&ndez de 
Cevallos said in a recent inter- 
view. “All of society is 
demanding nhang a , Indicating 
that the moment of the PAN 
has come.” 

His message of conservative 
and cautious political reform 
may have been given a boost 
by the assassination of Mr Luis 
Donaldo Colosio, the former 
PRI presidential candidate. The 
murder of the PRI candidate, 
along with recent kidnappings 
and an increase in drug-related 
violence, appears to have 
shifted public opinion to the 
right, helping Mr Fern&ndez de 
Cevallos at the expense of Mr 
C&rdenas. 


Unlike Mr C&rdenas, Mr 
Fern&ndez de Cevallos 
approves of most of the pro- 
market economic policies of 

the current administration. If 
elected, he says would fully 
open sectors such as banking 
to foreign capital, allow limited 
private investment in the pro- 
tected petroleum industry, 
introduce more competition in 
telecommunications and broad- 
casting, and decentralise fed- 
eral powers to the states. 

But compared with the 
detailed positions put out by 
Mr Zedillo, Mr Fera&ndez de 
CevaHos’s proposals are vague, 
nnH among his small team of 
advisers there are no 
well-known economists or busi- 
nessmen. In some economic 
policies, he is probably to the 
left of the governing party, 
keener on protecting small 
businesses from the effects of 
free trade and, for example, 
supporting a controlled devalu- 
ation of the currency of about 
20-25 per cent 

To reassure voters worried 
about his lack of administra- 
tive experience, Mr Fern&ndez, 
de Cevallos says he will invite 
members of other parties to 
join his government. Advisers 
to Mr Fern&ndez de Cevallos 
encourage rumours that Mr 
Pedro Aspe, the finan ce minis- 
ter, will be asked to remain in 
his job if their candidate wins 
the presidential election 

Mr Aspe has yet to comment 
on such rumours. But if the 
campaign remains close, the 
pressure on him and other 
well-trained officials in the 
governing party to distance 
themselves from the firebrand 
candidate of the centre-right 
opposition is sure to grow. 


Concern over exports as Argentina trade deficit widens 


By John Barham and Stephen Fkfler 
In Buenos Aires 

Argentina's trade deficit widened 
sharply in the first four months of 
the year, farther raising concern 
over the country’s export competi- 
tiveness and the sustainability of its 
fixed exchange rate. 

Latest figures show the deficit 
grew nearly five-fold to $2.4bn 
(£L59bn) from $50 Dm in the same 
period last year. But analysts expect 


a deficit of about |7bn for the year, 
roughly double last year’s trade 
gap. Argentina has ran a trade defi- 
cit nearly every month since Mr 
Domingo Cavallo, economy minis- 
ter, pegged the currency to the dol- 
lar in April 1991- 
But he denied the trade figures 
were alarming because they showed 
on the one hand a sharp increase In 
exports of manufactures and on the 
other a large inflow of capital 
goods. 


The deficit was due mainly to 
sluggish exports of agricultural and 
industrial commodities. 

Investment was 28 per emit higher 
in the first quarter compared with a 
year ago, while consumption grew 
only 4 per cent, Mir CavaBa added. 

“For the first time ever, invest- 
ments have resulted In productivity 
gains allowing an increase in 
exports despite growing domestic 
demand.” 

In the past, when the economy 


grew, as it is now, exports felL Now, 
said Mr Cavallo, “exports of manu- 
factures are showing an increase of 
28 per cent, achieved through an 
increase In productivity. I have no 
doubt Argentina will have a greater 
ability to export owing to increases 
in productivity." 

He emphasised that a large pro- 
portion of the imports were com- 
posed of capital goods, indicating 
companies were investing more a nd 
laying tile foundations for a strong 


export sector. In the first quarter, 
government figures show imports of 
capital doubled to $L53bu. 

However, analysts complain gov- 
ernment statistics are poor, mating 
it hard to corroborate this. They 
suspect the government is over-esti- 
mating the volume of ea pftai goods 
imports. 

Mr Francisco Macri, president of 
Socma, one of Argentina’s most 
powerful Industrial groups, said 
yesterday: “There are few imports 


of capital goods and more imports 
of consumer goods and this is not 
good.” 

Mr Macri, whose companies build 
nearly half the cars made in Argen- 
tina, claimed car imports alone last 
year were worth $3bn. 

Despite the disappointing trade 
figures. Inflation continues to felL 
In May, retail prices rose 0-3 per 
cent, bringing the 12-month figure 
to 3.4 per cent, the lowest In 41 
years. 


US-Japan 

banking 

accord 


The US and Japan agreed 
yesterday to include hanhfyg . 
and other financial services tn 
negotiations to pry open Japa- 
nese markets to more Ameri- 
can goods, AP reports from 
Paris. 

Mr Mickey gantor. US Tirade 
Representative, said the trad- 
ing partners also decided to 
discuss ways to ensure the 
protection of copyrights, 

patents and other intellectual 
property. 

The new sectore win be part 
of so-called framework talks, 
whieh are aimed at improving 
American access to Japan's 
tightly closed markets. 

The two nations recently 
broke a three-month deadlock 
to get negotiations going 
again. 

The original sectors - still 
under negotiation - are can 
and car parts, medical equip- 
ment, telecommunications 
products and insurance. 

Mr Kantor said negotiators 
held talks yesterday In Paris 
on financial services bat he 
had no report of the outcome. 

There will also be talks on 
films and other audiovisual 
products. 

Chilean trade 
surplus grows 

Chile posted a S95-2m (£63m) 
trade surplus In the first two 
weeks of May. bringing this 
year’s accumulated surplus to 
3334.2m, the Central Bank 
reported yesterday. AP reports 
from Santiago. Last year, Chile 
posted a $6&2m deficit from 
January to mid-May. 

Government officials attri- 
buted the unexpected contin- 
ued surplus mainly to recov- 
ery in world markets of the 
prices for some key Chilean 
export products, Including 
copper, fruits and fish meal. 

Intervention in 
Haiti ruled out 

The Organisation of American 
States has ruled out military 
inter v e nti on to restore democ- 
racy in Haiti, bat is expected 
to ban commercial flights and 
tighten economic sanctions, 
officials said yesterday, Reuter 
reports from Belem, Brazil. 


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FINANC IAL TIMES WEDNESDAY JUNE 8 1994 


NEWS: UK 


Calls for retaliation against trade sanctions set to increase, says minister 


Malaysia warned over ban 


By Kieran Cooke 
to Kuala Lumpur 


Calls for retaliation against 
Malaysia are likely to increase 
unless Kuala Lumpur moves to 
Uft a ban on giving public sec- 
tor contracts to British compa- 
nies. Mr Richard Needham, 
trade minister, said yesterday. 

Mr Needham said at the end 
of bis second visit to Malaysia 
in a fortnight that a Lifting of 
the ban was likely within six 
weeks- “They have said in 
principle they are going to take 
it off. But the longer they leave 
it the more likelihood there is 
of retaliation on the British 


side and the more voices win 
be raised against it." 

Malaysia imposed the ban at 
the end of February after a 
report in the Sunday Times 
alleged that Wimpey. the Brit- 
ish construction company, had 
been involved in negotiations 
to offer bribes to Dr Mahathir 
Mohamad, the Malaysian 
prime minister. 

Dr Mahathir's government 
had also been angered by the 
controversy surrounding a 
British loan for the Pergau 
dam project At the time the 
ban was imposed, Malaysia 
said hundreds of millions of 
pounds worth of contracts for 


British companies could be 
affected. A LTK-Japanese con- 
sortium that had been given 
the contract for project man- 
agement of a £3bn airport 
being built outside Kuala Lum- 
pur has been one of the main 
casualties of the Malaysian 
government's action. 

Mr Needham has played a 
central role in trying to per- 
suade the Malaysians to lift the 
ban. Two weeks ago he pro- 
posed a Malaysian-British 
forum to promote cooperation 
on trade, investment mid tech- 
nology transfer. “We have a 
long relationship with Malay- 
sia, but the better you know 


someone when you have a row, 
the worse it will be," he said. 

Some Malaysian exporters 
are concerned the ban could 
ricochet on their business. Mal- 
aysia ts lobbying the European 
Union for an extension of trad- 
ing privileges under the gener- 
alised system of preferences. 
Mr Needham said Britain sup- 
ported continuation of Malay- 
sia's preference status. 

The system allows Malaysia 
preferential tariffs on its 
exports. More than 15,000 
Malaysian-made Proton cars 
are exported each year to 
Britain, where they are sold for 
less than in Malaysia. 



to build 

long-term 

relations 


Diesel supplier wins £660m deal 


By Paul Ctieeserlght, 
McSands Correspondent 


FG Wilson Engineering, the 
Northern Ireland diesel electri- 
cal generating set manufac- 
turer, has signed an agreement 
worth more than £660m to buy 
diesel engines from Perkins, 
the East Midlands supplier, for 
the next 10 years. 

The deal Is one of a series of 
long term contracts which Per- 
kins has signed with big cus- 


Britain in brief 


ft 


. 


Ulsterman 
wins racial 
abuse case 


A 36-year-old man from 
Northern Ireland has been 
awarded £5,902 by an 
industrial tribunal in 
Nottin gham , in the East 
Midlands, for suffering racial 
abuse at work. The case may 
have an important impact on 
how British employers treat 
their Irish employees. 

Mr Trevor McAuley 
(pictured after the hearing) 
was the subject of sustained 
anti-Irish remarks by some 
of his workmates. Be was 
often called a "typical thick 
Paddy” and was the subject 
of derogatory remarks about 
the Irish “almost every day”. 
The tribunal agreed 
unanimously that he had 
suffered “stress and 
humiliation”. 

“This is the first time such 
issues have been put before 
an industrial tribunal,” said 
Mr Herman Ouseley, chairman 
of the Commission for Racial 
Equality, "We know from 






regular complaints made to 
us that Irish people suffer 
abuse day after day. We hope 
that they will be able to use 
this result to secure a change 
in attitude on the part of their 
employers." 

Mr McAuley, a machinist 
in a small family business, 
was dismissed three days 
before the end of his first two 
years’ employment at the 
company, which preventing 
him from brin g in g an unfair 
dismissal charge. 

Mr Dan Taylor, his former 
employer, said be did not 
agree with the tribunal's 
verdict “I cannot afford 
commercially to appeal 
against It," he said. “But this 
case is another nail in the 
coffin of British 
manufacturing. We should 
not have to be dealing with 
matters like this but getting 
on with the job.” 

Hr McAuley, who has 
worked in England for 20 
years, said he had been the 
subject of anti-Irish abuse 
before in his working life bat 
not in such a persistent form. 


Beaches fail 
hygiene test 


Seawater at popular beaches 
such as Blackpool and 
Mbrecambein north-west 


tamers. They include: Caterpil- 
lar, the construction equip- 
ment group; Volvo Peuta, 
the marine engine company; 
Hanomag, the plant manufac- 
turer; and most recently Mas- 
sey Ferguson, the tractor 
maker. 

The new agreement makes 
WUson, Europe’s largest gener- 
ating set manufacturer, one of 
the biggest of Perkins's 600 
customers. The engines will 
power between 9) per cent and 


England is still below 
European hygiene standards, 
a European Commission report 
has found. 

Of 457 UK resort areas tested 
For pollution last year. 80 per 
cent reached the levels 
expected by the commission, 
one of the lowest rates in the 
European Union. 

However, the commission 
said that the whole of Britain’s 
holiday coastline was expected 
to meet the cl eanlines s 
standards by the end of next 
year. 


Summaries 


via computer 


A computer company will 
today launch software that 
can analyse the content and 
meaning of the English text 
it reads. 

Oracle, the US software 
company, has developed 
ConText, with a 600,000 word 
dictionary and up to 1,000 
pieces of linguistic data 
available on each word. The 
company says ConText can 
Identify the s trongest overall 
themes in a document and 
automatically produce 
summaries. 

Oracle said: “Think of 
ConText as an electronic 
assistant able to automatically 
wade through mountains of 
textual data, ranging from 
electronic mail and the daily 
newspaper to voluminous 
legal contracts or an electronic 
version of the Library of 
Congress, and return 
information specifically tuned 
to your needs.” 


Polly Peck 
asset sale 


Administrators to Polly Peck 
International, the collapsed 
conglomerate formerly 
controlled by Mr Asil Nadir, 
expect to sell its main 
remaining assets in the next 
year. 

Mr Chris Barlow of 
accountants Coopers & 
Lybrand, joint administrator, 
said the group's holdings in 
electronics groups Vestel and 
Sansui were likely to be sold 
in the next few months. 
Advisers have been retained 
to assist with timing and price, 
and preliminary estimates 
suggest that more than 5100m 
may be raised. 


Unfit housing 
condemned 


A “boosing underclass" is 
being created in Britain with 
more than 1.5m people forced 
to pay rent for homes that are 
unfit for habitation, the Royal 
Institute of British Architects 
said in a report The institute 
blamed lack of coherent 
government policy and warned 
that the longer repair work 
was delayed, the higher the 
eventual repair costs. 


Cola wars 


J Salnsbury. the UK’s largest 
food retailer, is firing another 
shot in the “cola wars" with 
the Launch of a TV advertising 
campaign for its own-label 
Classic Cola. 

Unabashed by complaints 
last month from market leader 
Coca Cola, which forced 
Sainsbury to change the can 
design of its new cola, the 
retailer will run an 
advertisement from Saturday, 
featuring an US basketball 
player and American cars, 
and playing on the 
product’s “American" taste. 


90 per cent of Wilson’s generat- 
ing sets, produced at the rate 
of 17,000 a year. 

Mr Tom Wilson, managing 
director of the privately owned 
company, paid the agreement 
was “a consolidation of several 
strands of deals which existed 
in the past”. It embraces joint 
product development, the 
scheduling of sales and “just- 
in-time” delivery. 

Wilson’s is 83rd in the latest 
list of the FT’S Top 100 Export- 


ers. About 90 per cent of its 
output, all manufactured in. 
Northern Ireland, is exported. 
In the year to last August, it 
bad sales of El 41m and made 
after tax profits of £13m. Its 
biggest single market is China, 
which provides 14 per cent of 
Its business. 

Perkins will manufacture the 
engines at its Peterborough 
and Shrewsbury plants and 
ship them to Wilson's expand- 
ing factory at Larne. 


Pressure from shareholders 
could hamper banks' efforts to 
build supportive long-term 
relationships with large com- 
panies, Sir Denys Henderson, 
chairman of Imperial Chemical 
Industries, warned yesterday, 
writes John Gapper. 

Speaking in T/mdmt at the 
International Monetary Confer- 
ence, a meeting of senior exec- 
utives from 103 large banks, 
Sir Denys said that banks 
should take a “long-term sup- 
portive" stance towards cus- 
tomers. 

“I suspect that the pressure 
on under-performing hanks to 
improve their shareholder 
value will grow, which znay 
make even the most tolerant 
more critical of clients’ 
performance than In the 
past." 

He said a long-term support- 
ive stance “through (air and 
foul weather alike” was normal 
in Asia-Pacific, particularly in 
Japan and Germany, bat less 
prevalent elsewhere. 

Sir Denys criticised some 
banks for being more inter- 
ested in “peddling the deal of 
the day” than preserving objec- 
tivity in the advice they 
offered to companies on how to 
improve their performance. 


The government came under pressure yesterday 
to reopen the public inquiry Into the loss of the 
bulk carrier Derbyshire following (he discovery 
of wreckage in the area where it went down, 
writes Charles Batchelor. 

The 189,000 tonne vessel became the largest 
British vessel to be lost at sea when it sank to. a 
typhoon off Japan in 1380 with the loss of Us 
entire crew of 44. Parts of a wreck have been 
found nearly three miles down by a survey 
vessel chartered by the International Transport 
Workers* Federation. 

Mr Jimmy Knapp, general secretary of the 
RMT shipping union, called yesterday for the 
government to bold a public inquiry and to 
fond the continued search for wreckage. “We 
have argued for over 13 years that our mem- 
bers perished because their ship sank as a 
result of the vessel having inherent structural 
design faults, ” be said. 

The department of transport said it would 
consider any new evidence, 

A public Inquiry held in 1387-1988 found that 
the vessel had probably been overwhelmed by 
the forces of nature and that the possibility of 
s tr uc t ural weakness was low. Families of the 


crew and marine experts were dissatisfied with 
hiwsa fin dings. 

The Derbyshire may have been the largest 
vessel of its type to sink but it was not the 
only one. Dry bulk carriers have a poor safety 
record with at least 84 lost between 
1991-1993. 

A survey by the International Association of 
Diy Cargo Shipowners published In February 
found that human error was the most common 
cause of vessels going down, rather than struc- 
tural failure or damage from the elements. 

Dry bulk carriers are the workhorses of the 
marine world with more than 5,000 in service 
carrying cargoes such as coal and ores. They 
frequently receive rough treatment in harbour 
with heavy cargoes being dropped into their 
holds and pneumatic hammers being used to 
dean hold sides. 

“They are the Gnderellas of the shipping 
industry, 11 said Mr Qnis Horrocks, secretary 
genera] of the International Chamber of Slip- 
ping. “They do not carry passengers. Unlike 
tankers they have no. major pollution potential. 
It Is a question of bring out of right, out of 
mind.” 



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Nederlanden 

Bank 


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BUSINESS AND THE ENVIRONMENT 


nN-NOAl ™»S WEDNESDAY JUNE 8 199*' 


Eco-index charts A 


corporate efforts 


Hilary Barnes examines the growth 
of in-house environmental reports 


N ovo Nordisk, the Danish 
health care and industrial 
enzymes group, has 
developed a new tool for use in 
corporate environmental analysis, 
an environmental performance 
Indicator or “eco-prod activity 
index”. It was included In the 
group's first corporate 
environmental report, a detailed 
42-page production published 
recently. 

The index enables ns to make 
precise environmental 
comparisons from year to year,” 
says Steen Riisgaard, a Novo 
Nordisk director. It also enables 
the group to set measurable goals 
for improvements in performance. 

Riisgaard heads the group's 
bio-industrial division, which 
operates the fermentation 
facilities for the production of 
enzymes and the health care 
division's insulin and human 
growth hormones. These facilities 
produce most of Hie group’s 
waste. 

Hie concept of the index was 
welcomed by John Elktagton, 
partner in the UK environmental 
consultancy SustainAMIity. 
which last year published Coming 
Clean, a survey of corporate 
environmental reporting. 

Elkington and his colleagues 
have provided a verification of 
Novo Norilsk's report as “a fair 
and honest reflection” of the 
company's policies. He gave the 
report high marks in comparison 
with reports by other companies. 
He described the index as “very 
useful" and hoped other 
companies would adopt the Idea. 

The index is derived by dividing 
the volume of output sold by the 
volume of inputs, such as water, 
energy, raw materials and 
packaging* The index rises if the 
company is successful in 
producing more per unit of input 
Taking 1990 as the base year 
(=100), the index shows an 
improvement on the raw 
materials side of 19 per cent for 
water of 31 per cent for energy 
of 33 per cent and for packaging 
of 19 per cent The group has set 
specific targets for annual 
improvements in each of the 
indexes of 4 or 5 per cent a year. 

The Danish group claims to 
be fiie world’s biggest producer 


of insulin, used to treat diabetes, 
and industrial enzymes, which 
have a wide variety of 
applications - in detergents, for 
breaking down starch into sugar, 
extracting juice from grapes and 
giving jeans a stone-washed look 
without using pumice stones. 

The group uses 214,000 tonnes 
of raw materials. 3.4m gigajoules 
of energy, 4m coble meters of 
water, 7,700 tonnes of packaging 
materials and distributes 6L300 
tonnes of products. The 
eco-productivity index Is only 
one aspect of the group's efforts 
to achieve “sustainable 
production”. 

A second crucial factor is the 
achievement in recycling waste 
products. About 40 per cent of 
the water used at Novo Norilsk’s 
main production facility in 
Kalnndborg, Denmark, is 
recycled, mainly by selling it to 
formers with sludge from the 
fermentation tanks. 

However, before the water 
reaches Novo it has already been 
used for cooling in an oil refinery, 
which passes it on as process 
steam to a local power utility. 
Only then does it arrive at Novo 
Nordisk - an example of 
industrial symbiosis, which 
economises on water resources 
from a nearby lake. 

Some 43 per cent of liquid waste 
was recycled in 1993, either as 
sludge for fertilising fields or 
as pigfood (inputs for 
fermentation include soya meal, 
sugar and maize flour) compared 
with 25 per cent in 1990. 

It was with mixed feelings that 
Novo Nordisk undertook to 
provide a corporate environment 
report, says Mads OvBsen, group 
chief executive. The group has 
a long history of seeking to be 
a good global citizen on 
environmental questions; and 
the feet that Novo Nordisk is 
based in a country where 
environmental conactonsnssa is 
well developed and environmental 
legislation is rigorous, has 
stimulated the group’s interest 
in file issue. 

But, says Oviisen, a detailed 
environmental report also 
provides information of use to 
competitors, prompting Internal 
apposition to the report plan. 


A battle is raging in the US 
Congress over legislation 
which could determine the 
future of the country’s 
mining industry. At the heart of the 
debate is a law which allows miners 
to gain title to public lands for a 
nominal fee: a maximum of 35 
(£3w30) pm- acre. Under the law any- 
one, from individuals to interna- 
tional conglomerates, is guaranteed 
the right to excavate, as long as 
proof of substantial harirock min- 
eral deposits is famished 
Mining industry proponents 
believe the sector should continue 
to receive breaks in the interest of 
maintaining and creating jobs. 
“What's at stake here is nothing 
less than the survival Of mining in 
this country says Jack Gerard, 
representative for the Mineral 
Resource Alliance, an industry 
organisation. “If we make mining 
too expensive, we will drive the sec- 
tor overseas." 

Environmentalists, however, 
accuse the industry of hitching a 
free ride on the bads of taxpayers 
and wreaking ecological havoc. 
They want a revision of the law 
which will demand compensation 
for use of tbe land and enforce 
tougher environmental regulations. 

At least some modification to the 
law is expected by early next year. 
Two versions are currently being 
floated in Congress. The Senate bSL 
favoured by the mining Industry, 
would impose royalties of 2 per cent 
on minarak extracted. The House 
bill, favoured by environmentalists, 
would impose royalties of 3 per cent 
and impose stricter ecological stan- 
dards. 

The law which has environmen- 
talists on the warpath was created 


Plans to revise an 1872 law on mineral excavation 
rights are fuelling a row between the US mining 
industry and the green lobby. Victoria Griffith reports 


Rich seams in a 


Wild West war 


Visions of how 
western lands should 
be managed in 
modem America 
diverge dramatically 


in 1872, when the US was a very 
different country- The federal gov- 
ernment wanted to speed up settle- 
ment of the Wild West and created 
the mining law to encourage pros- 
pectors to try their luck on the 
great frontier. Visions of how west- 
ern lands should be managed in 
modem America, however, diverge 
dramatically between environmen- 
talists and the mining industry. 

Environmentalists see corpora- 
tions ravaging the land without 
paying the government just com- 
pensation. “Pollution from a copper 
mining site in Butte, Montana, 
extends 100 miles downstream in 
the Clark Fork river,” says Philip 
Hocker, president of the Mineral 
Policy Centre, an environmentalist 
group in Washington DC. 


“The mining company left the 
tailings sitting there and every time 
the river rises, it kills off fish,” 
Hocker says. “Or take Summltville, 
Colorado, where the mining com- 
pany Galactic Resources poisoned 
17 miles of river. It went bankrupt 
and US taxpayers had to pick up a 
3100m dean-up bilL” 

Proponents of the law, however, 
see entire communities being 
revived by minin g activity. “In 
Challis, Idaho, a molybdenum mnw 
has just opened up again, and 
turned what was a modem day 
ghost town into a thriving commu- 
nity ” says Idaho’s Senator Larry 
Craig, who has sponsored the 2 per 
cent royalty bilL “The new school 
win open this fail, houses that sat 
idle for years are being sold, and 
the mine has created about 350 to 
500 new jobs.” 

The storm over the mining - law is 
part of a wider debate over the use 
of some 500m acres of land owned 
by the federal government in the 
western part of the country. Hie 
Clinton administration has 
launched several attacks on com- 
mercial use of public land s inc e it 
came into power, including 
attempts to raise grazing fees for 
livestock and the blockage of lum- 
ber extraction. 

The president’s approach on the 
public lands issue has met with 
mixed success. Industry is outraged 
over attempts to prevent the use erf 
public land, while environmental- 
ists are furious that the administra- 
tion has not gone further to protect 
the areas. 

The Clinton administration’s first 
attempt to throw out the mining 
law foiled. Interior Secretary Bruce 
Babbit had tried to prevent Canadi- 
an-based Barrick Gddstrike Mines 
from gaining title to 1,800 acres of 
public lands containing about SlObn 
in gold deposits in Nevada. On May 
16. a federal judge, citing the min- 
ing law. ordered the secretary to 
hand over the title. 

“This is tbe biggest gold heist 
since the days of Butch Cassidy ” 
says Babbit of the court rale. “But 



Abandoned mining wastes St Fisher Creek near Yolowstone National Park 


these folks stole it fair and square.” 

Environmentalists are particu- 
larly concerned about damage to 
water sources. Substances likp mer- 
cury, which can. poison fish sup- 
plies, are often used to extract the 
mptflis Toxic acid mine drainage, 
triggered by the exposure of ores to 
air, can also cause severe problems, 
especially if it reaches the ground 
water. Ecologists also complain 


about the air pollution created by 
smelters and the surface 
devastation mining ran cause. 

Mining proponents say ecologists 
are hitting the industry at a time 
when it has already been weakened 
by slack metals prices. “At a time of 
low world prices, the mining sector 
cannot afford onerous royalties,” 
says Linda Findlay, director of gov- 
ernment relations for the copper 


mining group Phelps Dodge. "We 
need to go where it’s most advant* 
kbous to mine , and If it gets too 
Mostly in the US. well move our 

business overseas.” 

Other supporters of min ing on 
public lands cite the need for metals 
and minerals supplies for national 
security reasons. “We cannot afford 
to be entirely dependent on other 
countries for our mineral supplies,” 
says Senator Craig. 

The mining industry's trump 
card, however, is jobs. The 8 per 
cent royalties which would be 
imposed by the House bill would 
cost between 35,000 and 45,000 jobs 
in the sector, say proponents of the 
1872 law, and more jobs would be 
shed in support sectors. Environ- 
mentalists claim these figures are 
bloated, but there is no question 
that the jobs issue has garnered 
much support for public land min - 
ing from western state representa- 
tives and senators. The 8 per cent 
royalty bill is a save-the- 
environment-to-heck-with-the- 
jobs approach,” says Craig. 

The Congressional battle which 
will ensue over the next few months 
is expected to be fierce. Royalties 
are only part of the debate The 
House bill would give the federal 
government the right to block min- 
ing entirely, if activities cause more 
than -minimal disturbance to the 
environment’'. Mining companies 
are also nervous about toug her rec- 
lamation standards and the bill’s 
insistence that cutting-edge technol- 
ogy be used whenever possible to 
minimis e ecological damage. 

Although industry is solidly 
opposed to the House WH, it may 
emerge victorious. Public opinion 
has been rallying behind the revi- 
sion. “Our strategy is to try to cre- 
ate public indignation over the 
issue,” says Kathryn Hohmann, 
director of public lands of the Sierra 
Club, an environmentalist group. 
“We’re trying to get the message 
out that people are tearin g up 
public lands, and they're doing it 
for free.” 

The mining industry believes it 
has been the victim of misinforma- 
tion. Tbe propaganda doesn’t take 
into account that a lot of public 
lands are already protected through 
the national park system." says 
Jack Knebel. p resi de nt of the Amer- 
ican Mining Congress. “This is not 
about mining Yellowstone.” How- 
ever, Knebel concedes that the sec- 
tor may be losing on tbe public rela- 
tions front. “It will be an uphill 
battle for us as for as public o pinion 
goes ” he says. 

That the 1872 law will stand as it 
is seems doubtfuL Mining compa- 
nies will almost certainly be forced 
to pay something for the use of pub- 
lic lands in the future. What is 
uncertain is how high royalties will 
be and whether tougher environ- 
mental standards will be enforced. 


D-DAY 


50 YEARS 
AGO THEY 
WERE THERE 


NOW THEY 
NEED US.. 


v 


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WHEN 


HOUR OF NEED 


NEEDED 








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'VI, 






The Army Benevolent Fund provides help 
to any man or woman and their families if they 
are serving or have served in the British Army 
and are in real need. This help is given in two 
ways: through grants to supplement Corps or 
Regimental aid and by financial support to over 
70 national charities providing for the special 
needs of those in distress. 

Our overall aim is to bring help to the many 
cases where state assistance is inapplicable, 
inadequate or unable to meet the 
immediate need. 

Your donation, covenant or legacy will 
provide invaluable assistance for those who 
served their country 

Please help them in their hour of need. 




41 Owen's Bate London SOT 5HH 


Charity No. ?1)645 j 




J* 1 *** “ »**■* »i tei ourteMm and Our tan and ctrtnua to proems. 
» Bor d mate Mscoofluitton to hafp noseodtwn «ton n mod. 


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12 


FINANCIAL TIMES WEDNESDAY JUNE 8 1994 


MANAGEMENT 



tancwrtha thmtara past and praaenb Atoert Efostain. Jack Welch of General Bectric of the US, Edwin Land of Pttarofd and Ludano Benetton of the Hafian dotting group 

Use your intuition 

Rationality is in retreat as a business tool, writes Christopher Lorenz 


E instein once declared: "I 
never discovered anything 
with my rational mind." 
On another occasion, he 
riflimw! that “imagination is more 
important than knowledge”. In 
practice, he used a combination of 
reason and intuition. 

Edwin Land, the founder of Polar- 
oid, the 08 photography group, 
worked in very similar fashion. So, 
in many respects, do innovative 
modem leaders such as Ingvar 
Kamprad, founder of Swedish-based 
furniture retailer Dsea, the Benetton 

family of the rtwHan ditHriry group, 

and even some ultra-numerate 
Americans - notably Jack Welch of 
General Electric of the US. They use 
intuition not just occasionally, to 
generate "visions” for their compa- 
ny's future strategy, bat also in 
everyday decision making. 

Yet, for more than 30 years, a 
management world whose prime 
task should be the creation of busi- 
nesses has treated intuition as a 
dirty word. Marginalised by the rise 
of “scientific", ultra-rational man- 
agement - especially in strategic 

analysis and planning - intuition 

became associated with a discred- 
ited, uninformed style of manage- 
ment known as “seat-of-the-pants” , 
Bat now. as companies search for 
ways of creating more businesses. 
and with excessive rationality in 
retread after more than a decade of 
strategic planning disasters, intu- 
ition is making a comeback. 

The problem is how to integrate it 
with the rigour and deep under- 
standing of markets, technologies, 
strategy and competitive behaviour 
which managers need at a time of 
global competition, complexity. 


uncertainty and rapid change. 

In the last few months two books 
have been published which extol 
the virtues of intuition, try to 
ggpiain it, and advise how it can be 
exploited. 

One, called Intuition - The New 
Frontier of Management", comes 
from three authors connected with 
the International Institut e for Man- 
agement Development in Lausanne. 

Among the many findings of the 
book - and of a nine-country inter- 
national survey which it contains - 
is that Japanese managers are 
much more intuitive than they real- 
ise (or admit), while Swedes are for 
fr sfl so than they think Americans 
and Britans rate pretty high objec- 
tively, and know it The study 

';f : *. / jw iw it ud i fe' Ap 

..^.raEASjOti ^ 

byPariMv>fawbiiu«iran<l ton K, 

. AsaLEW^SKaLLfcxMtfv*’ 

s * short-tboi i 

( coM Ct ani i 

v "» ,„ r v. N .> ./•*• -• 

shows that women are far more 
i n tu itiv e than pmi, 

The other book** comes from 
Henry Mintzberg, a Canadian pro- 
fessor known worldwide for his 20- 
year campaign against the excesses 
and failures Of much past planning-. 

As Mintzberg demonstrates, most 
of the influential corporate plan- 
ning literature of the past 30 years, 
from the pioneering Igor Ansaff in 
the 1960s to Harvard's Michael Por- 
ter in the 1980s, - extols pure ratio- 
nality in place of "gut feel”. 


The IMD book, written by an 

Indian ravpipany managing director, 

Jagdish Parikh, with two academ- 
ics, Friedrich Neuhauer and Alrien 
T-arilr. tr fe fl tn evpjflfti in ample lan- 
guage what intuition is - and is not 
- and suggests practical ways of 
using it profitably. 

In the past, it argues, managers 
sometimes resorted to intuition 

h orem fia of jnadaqinitp data qt Tnfrrr- 

matinn. Now computers chum out 
so information that the use cf 

intuition is essential in order to 
make sense of it quickly. Conven- 
tional mental activities - absorp- 
tion of information, retention and 
reasoning - are now inadequate. 

As Parikh and his co-authors 
argue, it is an in nov a tive, largely 


•’ ■ '*• 




: - ;*■ ,«* 

Intuitive, grasp of the evolving 
global marketplace which has trans- 
formed businesses such as Sony, 
the consumer electronics company 
and car makers BMW and Honda, 
rntn giants. Creativity of this kmd 
seldom results from convergent, 
analy tical thinking , they mririterin 
It is mare the result a f divergent 
thinking, nnd highly intuitive 
approaches. 

Managers' recognition cif this is 
hampered by, emnng other things, 
people's inability to agree on tile 


nature of mtnitkro. Both Mintzberg, 

and Pa rikh and hi* cO-aUthOTS, Cite 

a wide range of confusing defini- 
tions (see panel). But at least Par- 
ikh and co are certain of what intu- 
ition is not: instinct, impulse, 
ing e n ui ty, inspiration, intellect. 
Intelligence or wishful thinking. 

On the basis of their broad defini- 
tion cf the term, they describe vari- 
ous taffhniqnaa for enhancing man- 
agers' innate intuition, and 
applying it in practice, especially to 
the thought process involved in 
creating a corporate "vision". By 
flnmparipnn they give only sketchy 
advice on how intuition can be 
applied in everyday practice. They 
align fail to d eal adwpately With the 
question of how managers can dis- 
tinguish informed intuition from 
ignorant “gut feel'’. 

More than half the L30Q senior 
and top managers covered by the 
surv e y rfaft mad to use intuition and 
logic or reasoning in roughly equal 
measure. But this was not borne 
out by the objective evidence which 
the survey gathered through & com- 
plex questionnaire. More accu- 
rately, a large minority of 40 per 
cent said they used logic and rea- 
soning more than m tuition. 

The survey showed that age 
makes H&8 differ ence to a manag- 
er's intuitive ability. But the 45 to 
59-year-olds were rated slightly 
higher than others. 

On the other hand, top managers 
scored less weQ in objective tests 
than their senior colleagues, but 
thought themselves superior. 

* Blackwell £35 

** The Hue and fall of Strategic 
Planning. Prentice HalL £1935 


David White looks at Gillette's controversial 
decision to close its Seville factory 

A boss’s life at 
the sharp end 


E very day Alberto Morales 
goes to his office at a 
factory near Seville and 
stays inside until it is time to go 

home. He no longer visits the 
sboplloor. even though he is the 
boss - or rather, because he is 
the boss. 

Two bodyguards, ordered by 
Morales’ US superiors, wait 
outride to accompany him off the 
premises. His house is under 
24-hour guard. 

life for the general manager 
of Gillette’s Spanish 
manufacturing subsidiary has 
been like this since the morning 
of March 18 when he told the 
works couno] toe company had 
decided to dose the factory. 

Gillette is abandoning the 
Seville facility, employing about 
250 people in the industrial zone 
of Alcald de Guadaira, m order 
to c on centra te European 
razor-blade production at 
m swq gfli , west of London, and 
Berlin. The announcement- 

recalling the row early last year 

over Hoorn's plans to move 
vacuum-deans* production from 
eastern France to Scotland - has 
provoked, bitter protests. 

The Andalncia regional 
government contested the legality 
of the move- The Spanish industry 
ministry described it as “a 
provocation”. And one senior 
labour ministry official Boated 
the idea of a Gillette boycott 
Spam’s labour laws allow for 
collective redundancies on certain 
specified grounds, but Gillette’s 
move did not seem to correspond 
to any of them. Recently approved 
reforms, designed to make toe 
rules more flexible, will allow 
authorised cutbacks for reasons 
of reorganising production. Senior 
government officials insist that 
this is intended to cover 
reorganisation within Spain, not 
cross-border transfers. 

The Seville closure is part of 
a "reaBgnment 1 * announced by 
the Boston-based consumer 
products group in January, 
affecting 2,000 of its 34,000 
employees worldwide. The lost 
jobs, mostly outside toe IKS, are 
expected to be replaced fay jobs 
elsewhere, including China, 


Russia and Poland, where Gillette 
has new ventures. 

Gillette does not justify the 
Seville decision on grounds of 
new technology or economic 
problems: “The reason for closure 
is not that it is unprofitable.” says 
Morales, “bat that it is 
superfluous." 

The plant, which enabled 
Gillette to exploit what was then 
a highly protected Spanish 

market, still makes the 

old-fashioned double-edge blades, 
(he only Gillette plant in Europe 
still to do so. It has two other 
tines, (he twin-blade disposable 
razor known in Europe as Blue 
It and in toe US as Good News. 


HE ORD£WEJ> THE 
*Se/lU-ECUT*».. 



and the GIL the original 
twin-blade fixed razor head. 

Morales, an engineer who joined 
the plant 20 years ago, was called 
to London to receive advance 
notice of the plan for Seville. “It 
was a surprise,” he says. “I always 
knew the factory would end up 
being dosed, but 1 thought it 
would happen little by little. In 
two or three years the factory 
would have died by itself." 

TP 1 ” fiw»W hinutrff 

in the firing line. “I Uve in this 
office, " Morales says glumly. He 
has not even tried venturing into 
the mum part of the factory, 
where production has been going 
on as normal. “It is better to 

maintain calm,” he reckons. 

He says he has been the target 


of personal attacks from 
employees but does not want to 
go into details. This is, aflertU, 
toe place he has spent his whole 
career, with (he exception of two 
years at Gillette headquarters 
in Boston. 

Morales "had to accept" the 
US management’s decision to 
dispense with the Spa nish 
operation. Having accepted the - 
role of executioner, he is not 
optimistic that Gillette will 
provide a suitable alternative post 
when it is over. "I know they 
could only offer me somewhere 
like India," he says, evidently 
not keen on toe idea. “In Europe ' 
I don't fit. I am a factory manager; 
and there are two factories in 
Europe." 

Morales says Gillette 
concentrated its modernisation 
effort in the US and Ge rmany 
because of government support 
“Here we have not had any 
government subsidy," he says. 
Improved production methods 
have left Weworth and Berlin 
with excess capacity. 

Gillette has already reduced 
its Seville workforce by about 
60 per cent since toe mid-1980s, ... . 
getting rid of activities in the 
group’s perfume and 
writing-instrument divisions. 

To avoid lengthy administrative 
procedures, Spanish companies 
tend to offer the maximum 
redundancy compensation of 45 
days’ pay per year's work. 
Gillette’s standard package has 
added to this an extra Ptalm for 
every five years’ seniority. 
Morales hints it may pay even 
more this time to achieve a 
negotiated settlement. 

It took more than two months 
of confrontation before the works 
council agreed to hear the 
company's preliminary otter (on 

May 25). The open-ended proposal 
includes a retirement plan, 
outplacement services and a range 
of Insurance polities. 

Like a ship's captain. Morales 
wffl be toe last to leave. He will 
stay on until next year to 
liquidate the company. Then, at 

54 and after six yean as general 

manager, he expects to be oat 
on the street 


On track and 
heading in the right 
direction 



DePfa-Bank can look back at a successful 
financial year for 1993. As Germany’s largest 
mortgage bank and one of the leading issuing 
banks in Europe, we are able to show our share- 
holders a continuing and convincing level of 
profits. We cater for public sector authorities 
throughout Europe and our wide range of pro- 
perty-related services makes our group a partner 
you can rely on. 


The DePfa-Bank Group: 

1993 

% change 

Balance sheet total 

DM 111.271 m 

+ 20% 

New loan commitments 

DM 33,362 m 

+ 40% 

Total loans outstanding 

DM 99278m 

+ 18% 

Primary sale oF securities 
including loans taken up 

DM 32£09m 

+ 84% 

Securities outstanding 
including loans taken up 

DM 90,107m 

+ 23% 

Operating profit after loss provision 

DM (93 m 

+ 10% 

Proposed dividend for 1993 

20% 

(1992: 18%) 



For further information and a copy of our annua! report 
contact: DePfa-Bank, Head Office, PaulinenstraBe 15, 
D-65189 Wiesbaden, Fax: + 49611348546 

DePfa-Bank 


= Deutsche Pfandbnef-und Hypofhekenixmk AG 


PEOPLE 


Non-executive 

directors 



Sir Marcus Fox (above), 66, 
Tory MP and chairman of the 
party’s 1922 committee, has 
joined the board of Pubmaster, 
the pub retailing arm of to e 
heavfiy-indebted Brent Walker 
group. 

Sir Marcus’ appointment as a 
non-executive director is a fur- 
ther sign that one of Britain’s 
biggest pub-owners is likely to 
be floated on Che stock market 
over the next year or two. Last 
year it made operating profits 
of ai.lm on sales of jeuxtm. 
Pubmaster chairman John 
Brackenbury, 58, said that Sr 
Marcus has an impressive 
track record in industry as 
well as in politics. 

■ D avid T ucker has resigned 
from PITT ARDS. 

■ James Lang, a corporate 
financ e director in Inch cape, at 
The FLEMING FAR EASTERN 
INVESTMENT TRUST. 

■ William Ropuer has 
resigned from ROPNER. 

■ Hams Werdettn, ceo of 
Sophns Berendsen, as 
viOMhainnan of RENTOKIL 
rm (he resignation of Kibe 

Christensen. 

■ Lord Gregson has retired 
from FAIREY. 

■ Sir Christopher Harding has 
resigned from SLOUGH 
ESTATES. 

■ Peter Batchelor, retired 
director at Vauxhall, Harry 
Fryer, md of Sema Group's UK 
operations, and John Rose, a 
director of Rolls-Royce, at 
EURODOLLAR (HOLDINGS). 

■ Tony Orton, retired director 
of Marks & Spencer, at 
UNITED FRIENDLY GROUP. 

■ Leonard Cowhurn, retired 
deputy chairman of William 
Hill, at STANLEY LEISURE 
ORGANISATION. 

■ Michael Sayers, former 
corporate finance partner at 
Norton Rose, at EMESS; 

Adrian White has retired. 

■ Jack Shepherd has retired 
from SPIRAX-SAKCO. 

■ tor Ian McLeod has retired 
fromSEEBOASD. 


Peacock leaves for 
New York and BZW 


Ian Peacock, 46, who has spent 
19 years with Ktemwort Ben- 
son, is moving to New York to 
be cohead of merchant bank- 
ing in the US for BZW. Bar- 
clays Bank’s investment bank- 
ing arm. 

Barclays Bank has had a che- 
quered history in the US. Just 
over a year ago it gave BZW 
strategic responsibility for the 
group’s US operations, includ- 
ing day-today management of 
its large corporate lending. The 
reorganisation was in response 
to an increasing trend for large 
companies and institutions to 
raise funds from equity and 
bond markets rather than 
through bank borrowing. 

Peacock’s move to BZW fol- 
lows a reorganisation at Kleto 
wort Benson and a chance air- . 


port encounter with Graham 
Pimlott, 44, a former colleague, 
now chief exec utive of mer- 
chant banking at BZW who has 
recently taken on an expanded 
role within Barclays. 

BZW does not disclose the 
size of its US banking business, 
but it is known to be many 
times larger than the £2bn or 
so that Peacock was jointly 
responsible for at KB. Peacock 
ran the marketing drip of KB’s 
North American banking busi- 
ness between 1984 and 1987 
before returning to the UK to 
be joint head of the group’s 
lending operation. In his new 
role he will be pri marily 
responsible for BZW’s bank 
finance and s tr uc t ure d finance 
products in the US. The other 
co-head of merchant banking 



in the US is Malcolm Le May, 
36, who joined BZW in 1991 
after stints at Drexel Burnham 
and Morgan GrenfelL 
Peacock is the latest ex- 
Kteinwort Benson banker to 
move to BZW. The best known 
is Sir Martin Jacomb, who 
spent 17 years with KB before 
helping form BZW in 1986. 
When Pimlott quit KB in 1989 
he took with him Callum 
McCarthy, who now heads 
BZW’s Japanese business. 



Brian Lar combe (above), 
finance director of Si, has been 
elected chairman of the British 
Venture Capital Association, 
replacing Ron HoDidge, man- 
aging director of Lloyds Devel- 
opment Capital. The position 


rotates annually. 

The 40-year-old Larcombe 
joined Si in Manchester in 
1974 and spent 18 years on the 
investment side of the busi- 
ness before being appointed 
finance director in 1992. 


■ The appointment of Ann 
Taylor to head the competition 
division at Oftel, the telecoms 
regulator, is the latest in a 
series of senior female appoint- 
ments to the body charged 
with overseeing the industry. 

Taylor succeeds Anna 
Walker, who was last month 
appointed to succeed Bill Wlg- 
glesworth as deputy to Don 
Cnricksharik, the director-gen- 
eral. Her appointment gives 


women a 5-4 majority on 
Oftel ’s senior management 
tea m , with one post vacant 

Taylor moves on secondment 
from tile DTI, where she Is a 
grade 5 responsible for regional 
policy. 

The competition, brief is one 
of the toughest at Oftel, with 
40 new entrants to the UK’s 
liberalised telecoms industry 
calling loudly for better terms 
for connection to BT'a net- 
work. Mercury, BTs main com- 
petitor, is currently in the 
courts c laiming that Oftel has 
foiled to give it a fair deal* 

■ Derek Baudains has been 
appointed md of The Louvre 
Trust, part of FORT GROUP 
HOLDINGS. 


Geoffrey Woodroffe to preside 
over grief and grievance 


Britain's funeral business is 
getting its first Ombudsman, 
Professor Geoffrey Woodroffe. 
director of the centre for con- 
sumer and commercial law 
research at Brunei University. 

Woodroffe’s new part-time 
appointment will entail bis 
scrutinising complaints from 
families who are dissatisfied 
with services provided by 
funeral parlours belonging to 
either the Funeral Stamfords 
Council or the Funeral Plan- 
ning Council, which together 
account for about half of the 
country’s 4.000 funeral direc- 
tors. 

These two professional bod- 


ies have largely displaced the 
older National Association of 
Funeral Directors, which, 
established in 1979 in order to 
bring greater transparency to 
the business, was criticised by 
the Office of Fair Trading in 
1989. 

The Ombudsman's function 
has teeth, notably the power to 
order companies to pay com- 
pensation up to 250.000 to 
claimants whose grievances 
are upheld. The office is able to 
receive complaints backdated 
to - but not beyond - April 4 
this year. The funeral business 
in the UK is worth some £lhn 
annually, with around 640,000 


funerals taking pla 
year. 

Woodroffe is a sol] 
training and ha« broa 
mice of commercial la\ 
the UK and throi 
diverse work far the l 
Commission. 

The Ombudsman's 
has a team of six 
Woodroffe himself) ix 
Jill Moore, chalrma? 
Gibson: Cassandra Ke 
thia McDowell; Alan l 
and Gordon Kee. 

The council will be 
ting its work through 
advice bureaus and ot 
lie forums. 


t 

i 






FINANCIAL TIMES WEDNESDAY JUNE 8 1994 


NEWS; EUROPE 


3 


EUROPEAN NEWS DIGEST 

BA to oppose 
French limits 

British Airways is pl anning to challenge the French 
government in the European Com missio n in Brussels as well 
as through the French courts If it goes ahead with proposals to 
hmit the size of aircraft and flight frequencies on services 
from London to Orly airport in Paris. Although BA will start 
operating services from London Heathrow to Orly on Monday, 
Sir Colin Marshall, BA's chairman, yesterday said that the 
proposed restrictions at Orly were “illegal” and would be 
challenged by BA France bowed to European Commission and 
UK government pressure last month to open Orly to UK 
airline competition. But Mr Bernard Bosson. the French trans- 
port min i s ter, said UK airlines would be restricted to four 
flights a day and that only larger aircraft with more than 200 
seats could use Orly at peak morning and evening hours. He 
also said that BA and its French affiliate. TAT, would be 
regarded as one airline in terms of frequencies. Although BA 
intends to fly only four daily services to Orly this summer, it 
plans to operate extra flights this winter in defiance of the 
French proposal to limit frequencies from. London. 

Sir Colin also said BA would soon file an objection with the 
European Co mmiss ion to French government plans to Inject 
FFr20bn (£L33bn) in additional state aid to Air France. Paul 
Betts, London 

Air Inter calls second strike 

Unions at Air Inter, the mam domestic earner in the Air 
France group, yesterday called their second 24-hour strike in 
three weeks in protest at the lack of “concrete” assurances at 
their pay and job security will not suffer as a result of new 
austerity measures for Air France. But the strike, called also 
to press Air Inter's case for more autonomy within the Air 
France group, was less widespread than the first one, halting 
about 50 per cent of flights yesterday. Meanwhile, the French 
government has warned the European Co mmiss ion that if 
Brussels stops It injecting FFr20bn into Air France and 
thereby forces the airline into liquidation, the total cost to the 
French taxpayer would be even greater, amounting to 
FFr30bn. This was revealed by the C ommiss ion in its formal 
nouncement last Friday of an Inquiry into the Air France deal, 
which Brussels said in view of the airline's debts and losses 
could not be equated with the ‘‘rational" decision of a private 
investor. David Buchan, Pais. 

Russian-Ukraine tensions ease 

Tensions between Ukraine and its Russian dominated region 
of Crimea eased further yesterday when Kiev announced it 
would pursue a policy of flexible deadlines in response to 
Crimea’s diplomatic concessions last weekend. Head of the 
Uk rainian negotiating team, Mr Volodymyr Bthutkevich. said 
that any actions against Crimea's pro-Russian leadership will 
be postponed until June 15, a date which could further delayed 
if negotiations continue to proceed productively. The initial 
breakthrough was achieved late Friday night when Crimean 
negotiators, many of whom have Aiadvocaied independence 
from Ukraine and reunification with Russia in the past, sur- 
prisingly backed down and signed a pro- Ukrainian communi- 
que. 

In the communique, Crimea recognizes “the territorial integ- 
rity of Ukraine, of which Crimea is a part” and "the suprem- 
acy of the Uk rainian Constitution over all Ukrainian terri- 
tory.'* The two sides, meeting on the Crimean peninsula, also 
decided to form a permanent joint working group to resolve 
their legislative differences. JiU Barshay. Kiev 

Little progress at Bosnian talks 

The leaders of Bosnia's warring sides yesterday congregated in 
Geneva for a second day of talks on a proposed ceasefire but 
did not meet face to face promising little hope of an agree- 
ment After separate meetings with the rival leaders, Mr 
Yasushi Akashi, top UN official in former Yugoslavia, said the 
talks would be adjourned for a later date unless the main 
protagonists made a “real effort” towards an agreement As 
bo to sides quarreled over how long the proposed truce should 
last, fighting was reported between Serb and government 
forces in northern Bosnia. 

In Serbia, in a thinly-veiled attack on Bosnian Serb leaders. 
President Zoran Lilic of Yugoslavia, technically head of the 
Yugoslav federation but seen as a puppet of Serbian President 
Slobodan Milosevic, yesterday said his country will not be 
“dragged into war” and that “millions of Yugoslav citizens” in 
Serb-held areas in Bosnia “cannot be hostage to one leader”. 
Laura Silber, Belgrade 

Germany considers tax cuts 

The German government appears to be considering corporate 
tax cuts in response to pleas from industry. A working on 
local authority taxes group comprising federal and local gov- 
ernment officials had identified levies on working capital and 
operating profits as special burdens on industry, Mr Franz- 
Christoph Zeitler, state secretary In the finance ministry said 
yesterday. However, he rejected as “false” press reports that 
Bonn planned to increase value added tax to cover the loss of 
revenue. Mr Zeitler was responding to a story in Stem maga- 
zine, quoting from what it claims to be secret ministry min- 
utes, that the government wanted to “clarify in principle the 
possibility of reforming corporate taxes ."Christopher Parkes, 
Frankfurt 

Reassurance by Dutch chain 

Albert Heijn, the biggest Dutch supermarket chain, said yes- 
terday that it would continue to sell Omo Power, a new 
generation of washing powder manufactured by Unilever, after 
receiving assurances about the detergent from the Anglo- 
Dutch consumer products group. The powder, called Persil 
Power in Britain, is at the centre of a highly public dispute 
between Unilever and its US rival Procter & Gamble, which 
has charged that the detergent damages clothing. Albert Heijn 
said it would compensate any customers who were dissatisfied 
with the powder if they could prove the detergent was bought 
in one of its 612 supermarkets. Ronald Van de Krol Amster- 
dam 

ECONOMIC WATCH 


Setback for Spanish economy 

An unexpected growth in imports halted the improvement in 
the current account of Spain's balance of payments in AprlL 
The monthly shortfall was marginally higher than the previ- 
ous April at Pta222bn despite a sharp rise in income from 
tourism and other services. But the accumulated deficit for the 
first four months was still 30 per cent lower than the same 
period last year at Pfa378bn (£l.S2bn). according to provisional 
Rant of Spain figures. This reflected a 39 per cent upsurge in 
exports and an increased surplus from services and transfers. 
Tourists receipts were 20 per cent up. Some analysts believe 
that despite the latest figures this year could still produce a 
current account surplus, the first since 1986, the year or 
Spain’s accession to the EU. Spain’s gold and Foreign currency 
reserves meanwhile decreased by $394m in May to S443bn, 
showing a total decline of $933m since the beginning of the 
year. David White. Madrid 

■ Italy's retail sales index was up 3.4 per cent in February 
from a year earlier the state statistical institute. Istat, reported 
yesterday. In February, large retail chains registered a 3.8 per 
cent sales rise, while medium-sized retailers posted an 
increase of L6 per cent. Associated Press. Rome 

■ New car sales in Spain rose by 31.6 per cent year-on-year in 
May to 87,712 vehicles, after a 12. per cent increase in April, 
-whir lin g to provisional figures from the vehicle manufactur- 
ers association ANFAC. 

■ Dutch consumer price inflation is expected to have 
remained stable at a year-on-year rate of 2.8 percent in May. 
a rcn rtHng to a poll of bank economists. 


Spain joins drive for EU ‘great leap forward’ 

Quentin Peel reports from a German-Spanish summit designed to give impetus to European unification 


Friendship flourished because of Gonzalez’s loyalty, says Kohl 


For Helmut Kohl and Felipe Gonzalez, 
their meeting over the past two days in 
the faded splendour of Schwerin, the for- 
mer capital of the grand dukes of Meck- 
lenburg in east Germany, bad clear sym- 
bolic significance, writes Quentin Peel 
from Schwerin. It was the first time the 
German chancellor had held top-level 
talks with a fellow government leader in 
east Germany. But it was mare than that. 

The extraordinarily good personal rela- 
tionship between the two, the Spanish 
Socialist and the German Christian Demo- 
crat, has flourished precisely because Mr 
Gonzalez was the only west European 
leader who unhesitatingly supported the 
German unification. For the German 
chancellor, where his colleagues stood on 
tiie question of unification has become a 
touchstone for personal relations. 

It is increasingly clear that the failure 


of Hr Rood Lubbers, the former Nether- 
lands premier, to bade the unification pro- 
cess four years ago, is toe most important 
single reason why Mr Kohl is not support- 
tug him to become the next president of 
the European commission in Brussels. 

Ur Kohl spelt out his appreciation of 
Mr Gonzalez’ loyalty in glowing terms 
again yesterday. He pointed oat how few 
those world leaders were, back in 1989 
and 1990, who had been so positive. 

In private, he names only four: Mr 
George Bush, the former US president; Mr 
Brian Mnfroney, the former Ca nadi a n pre- 
mier Mr Mikhail Gorbachev, the former 
Soviet leaden and Mr Gonzalez. 

One significant exception is President 
Francois Mitterrand of France, who was 
clearly dubious about unification until 
late in the process. But the Franco-Ger- 
man relationship is too important to 


allow that to caose more than a shadow 
between the two. 

The outright opposition of Mrs Mar- 
garet Thatcher, who was publicly cool and 
privately vitriolic about unification. has 
caused far more lasting bitterness. 

Mr Kohl mentioned Mrs Thatcher’s 
opposition yesterday, to underline his . 
appreciation of his Spanish colleague. 

“Some women colleagues have written 
it in their memoirs,” he said. “If you read 
what Mrs Thatcher says, yon can see she 
thinly it was all a terrible mistake. So 
yon can see bow important it was that. 
Felipe Gonz&iez supported the process. 

“You belong to those who, in many crit- 
ical tniicg, pypiaimd again and again that 
German unity was not a thing for the 
Germans alone, but was a good thing for 
the Europeans, and for the free world,” he 
told the Spanish premier yesterday. 


Spain will join France and 
Germany in a co-ordinated 
drive in the European Union 
over the next 18 months to 
ensure that the 1996 conference 
on institutional reform - the 
follow-up conference to Maas- 
tricht - takes further clear 
steps towards European inte- 
gration. 

Chancellor Helmut Kohl of 
Germany, and Prime Minister 
Ftellpe Gonz&lez of Spain, both 
passionate believers in the pro- 
cess of European unification, 
committed themselves at their 
s ummi t in Schwerin, in east 
Germany, yesterday to close 
co-operation In the planning 
process for the next European 
“great leap forward”. 

Spain will also be Involved 
with France and Germany in 
carrying through a clear pro- 
gramme of EU priorities during 
their three consecutive six- 
month presidencies, beginning 
with Germany on July L That 
will Include European-wide 
policies to tackle unemploy- 
ment, new measures to support 
the emerging democracies of 
central and eastern Europe, 
and a parallel programme of 
assistance to the countries of 
northern Africa. 

In spite of differences of 
detail on questions such as the 
German initiative for deregu- 
lation in the EU, and the bor- 
rowing powers of the European 
Commission, the German 


Christian Democrat and the 
Spanish Socialist leaders both 
stressed the overriding need to 
give impetus to the ideal of a 
united Europe in the wake of 
post-Maastricht disillusion- 
ment. 

In several hours of tete-a-tete 
talks, , the two also sought to 
agree on a common slate of 
candidates for a whole series of 
top European and interna- 
tional jobs to be decided in the 
coming weeks. Including the 
future president of the Euro- 
pean Commission. 


“He should be someone who 
can get things done, and who 
can persuade everyone to agree 
on common action,” Mr Kohl 
said after a joint press confer- 
ence in the Schwerin castle, 
former home of the grand 
dukes of Mecklenburg. He 
refused flatly to name any 
names, although he is widely 
believed to favour the candi- 
dacy of Mr Jean Luc Dehaena, 
the Belgian premier, against 
the rival candidacy of Mr Ruud 
Lubbers, the former Dutch 
prime minister. 


Mr Gonzdlez has previously 
given public support to Mr 
Lubbers - before it became 
clear that Mr Dehaene was an 
alternative. He also maintains 
that the future commission 
president should be a flamer 
prime minis ter, which would 
rule out the candidacy of Sir 
Leon Brittan, the smior Brit- 
ish commissioner in Brussels. 

There is now speculation in 
Spanish circles that Mr Gonz- 
ilex might switch his position 
in exchange for support for Mr 
Enrique Baron, the former 


president of the European par- 
liament, to become the next 
secretary-general of the West- 
ern European Union. 

At their press conference, 
however, the two government 
leaders Insisted that there 


Organisation - until a deal 
was done at the forthcoming 
EU summit in Corfu. 


"We both agreed that we 
would talk intensively with as 
many colleagues as possible in 
order to reach the greatest pos- 
sible degree of unity on a 
name.” Mr Kohl said. “It would 
not help to discuss it in pub- 
lic." 

Their message instead, only 
days before the European par- 
liament elections, of their abso- 
lute common commitment to 
European Integration, hi spite 
of their ideological differences. 

“From a European perspec- 
tive. everything is allowed 
which positively influences 
European policy,” Mr Kohl 
said after a day of bilateral 
consultations. “From my point 
of view, Europe includes the 
British isles,” he added, appar- 
ently concerned that his ideas 
might offend toe UK. 

He said that the main 
themes of the forthcoming Ger- 
man presidency, which would 
now be developed in conjunc- 
tion with France and Spain, 
would be the whole field of job 
creation and European compet- 
itiveness, pytenrting toe field of 
common foreign and security 


ticking and organised crime, 
and “everything which belongs 
to toe theme of preparing the 
1996 conference to follow up 
the Maastricht treaty”. 


would be no public talk on the - policies. They would also 
jobs list - which includes the include developing common 
secretary-generalships of Nato policies on immigration, law 
and the OECD, the European and order, fighting drug traf- 
councll of ministers, and the 
head of the future World Trade 


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14 


Ian Davidson 


TWANCIAI, TIMES WEDNE SDAY JUNE 8 1994 

THE FT INTERVIEW: Antonin Martino, Italy’s foreign minister 


tl" 


According to 
tbe conven- 
tional wisdom, 
elections to the 
European Par- 
liament are not 
really about 
tbe European 
Parliament at 
all: they are a series of luke- 
warm national plebiscites, 
which have some relevance to 

nati onal politics but not much 

to Europe. The voters know lit- 
tle about the Strasbourg 
assembly, and care rather less, 
fundamentally because the 
election of the European Par- 
liament does not lead to the 
formation of a European gov- 
ernment. A Euro-campaign is 
really just an extension of 
national politics. 

That's tbe conventional wis- 
dom. and as far as it goes it is 
generally true. In Germany, 
this week's Euro-vote *is a dry 
run before the federal elections 
in the autumn; and in France 
it Is the last national vote 
before the presidential elec- 
tions next spring. 

But what’s new and interest- 
ing is that the conventional 
wisdom does not seem to be 
operating quite so well in 
Britain. This week’s vote is 
supposed to be a plebiscite on 
tbe domestic standing of John 
Major and the Conservative 
government But if so. why has 
the campaign been hijacked by 
arguments over Europe? Why 
have the politicians been harp- 
ing on about tbe single cur- 
rency and the opt-outs, about 
variable geometry and the 
national veto? Why has Mr 
Major scarcely been able to let 
a day pass without giving some 
new definition of his multi- 
speed, multi-layered vision of 
Europe? Contrary to the con- 
ventional wisdom, this Euro- 
election campaign has been 
dominated by European issues. 

On the face of it, this is a 
bizarre novelty. In the past, 
politicians treated Europe as 
something alien which hap- 
pened “over there”. Where it 
could not be reduced to mer- 
cantilist arguments about the 
British budget rebate, it could 
safely be trivialised as an ata- 
vistic jousting match against 
all those foreigners. 

In this year’s Euro-debate, 
however, we have heard much 
less of such breezy sporting 
metaphors. And the reason, 
perhaps, is that it is becoming 
increasingly clear that the 
Maastricht treaty, dreadful 
experience though it may have 
been, was not the end of the 
story, not by a long chalk, ft 


Bizarre 

British 

novelty 

The UK's 
Euro-campaign 
is unusual in 
focusing on 
European issues 

was Mr Major, if you recall, 
who summed up the 253 pages 
of the treaty in the memorable 
words: "Game, set and match 
to Bri tain " Hie phrase implied 
a triumphant, or at least a defi- 
ant, finality about that mara- 
thon. It now seems probable 
that the 1396 Inter-Governmen- 
tal Conference (ZGC) to revise 
Maastricht will be even more 
gruelling Maastricht. 

It will be especially gruelling 
for the UK, because the British 
government seems to be get- 

Major has put 
himself in a 
position that 
guarantees 
maximum conflict 
with EU partners 


ting farther and farther out of 
step with its major partners. 
Mr Major is arguing for a fluid, 
amoeba-like Europe; but the 
Germans are pressing for a 
more integrated Europe, and it 
is they who will set the 
agenda, because they are now 
the leaders of the majority of 
member states. No doubt they 
will be rejoined by their tradi- 
tional French ^thac once tjie 
French have elected a new 
president and (with luck) 
resolved the schism over 
Europe inside the conservative 
coalition. But for the moment 
the Germans win call the tune. 

The tone they are calling is 

lmcffinpmmrsaTig l y integr atinn- 

ist Karl Lamers, the foreign 
policy spokesman of the ruling 
Christian Democrat party, 
op enly calls for the drafting of 
a European constitution, to 
define who does what British 
Euro-sceptics tend to pooh- 
pooh tiie Lamers line, on the 
grounds that he is an unrepre- 


sentative Euro-federalist; and 
tbe people in the chancellor’s 
office in Bonn explicitly dis- 
claim any intention of pressing 
for a European constitution. 
But when you listen to what 
they say in detail, it's hard to 
see what else they mean. 

I tollmri to a very senior offi- 
cial in Germany last week: 
“No,” he said, “we don't want a 
constitution; we most just 
make improvements in the 
Maastricht treaty. But in 1996 
we must try to divide the poh 
icy competences between the 
Community and the member 
states more precisely.” The 
Germans are no doubt anxious 
not to set off the alarm bells in 
London; but fids sounds tike 
the beginnings of a federal con- 
stitution under apofliw name. 

In detail, the Germans want 
a much stronger European Par- 
liament, and a strengthening 
of foreign policy cooperation. 
They will also press for much 
closer co<peration on police, 
justice and immigration poli- 
cies, by transforming tiiam 
from issues of inter-govern- 
mental co-operation to full 
European Union status. 

Moreover. Chancellor Hel- 
mut Kohl remains unrepen- 
tantly committed to a gmgta 
European currency, sooner or 
later; and now the head of the 
Bundesbank has called for 
closer political and monetary 
links between an inner core of 
the member states, as a pre- 
condition for any further 
enlargement to the east. 

In the light of all that is 
known about the priorities of 
Germany and a majority of the 
other member states, it is baf- 
fling that John Major shrm Jri 
deliberately have manoeuvred 
htmaalfj in this EUTO-eleCtlon 
campaign, into a position 
which guarantees the maxi- 
mum conflict with Britain's 
partners in the coming IGC. 

“fa 1996,” says a very senior 
Brussels diplomat, “there are 
only four possible outcomes. 
We may have a new tight 
treaty; and the British will opt 
out of it We may have a new 
loose treaty: and an inner core 
of states will go ahead without 
the British. We may have a 
multispeed treaty; and the 
British will opt for the slow 
lane. Or we may have a com- 
plete breakdown.’’ 

fa other words, he already 
discounts any possibility of 
Britain keeping up with the 
pace of integration. This may 
seem a pity; but at least we are 
having a debate about it, even 
in a European Parliament elec- 
tion campaign. 


I It is a curious 

irony that tbe 
first European 
government to 
be headed by 
a media mag- 
nate should 
| have an image problem. 

But the month-old Italian 
government of Silvio Berlus- 
coni is struggling to shrug off 
the negative international 
impact of containing five mfa 
| istes from the neofasdst MSI/ 
National Alliance. 

Much of the flak fella on the 
shoulders of Antonio Martino, 
the tree-market economist and 
political novice who has taken 
over as foreign minister. 

“We made a mistake fa not 
paying sufficient attpn fe n to 
the foreign press [during the 
election campaign]," Mr Mar- 
tino concedes. 

Having just spent much of 
Monday fielding queries on 
hrtgtilp comments against 
the MSI by Mr Jacques Defers, 
president of the EU Commis- 
sion, ami an Israeli junior min- 
ister, Mr Martino is remark- 
ably sanguine. 

Be attributes the a+tnrirc on 
Ihe neo-fascists to attempts by 
European socialists to score 
points fa tiie run-up to this 
weekend’s European elections. 
“We are in a pre-olectoral 
atmosphere,” he says. “After 
Monday, things should begin 
to quieten down.” 

Though feeling his way and 
distracted by having to con- 
vince Italy’s irt ta matinnnl part- 
ners of the government’s demo- 
cratic credentials, Mr Martino 
dearly relishes the opportunity 
to put his ideas into practice. 
He is an economist trained in 
Chicago under Milton Fried- 
man, who caught Mr Berlus- 
coni's eye writing opinionated 
free market articles some 18 
months ago. Right until the 
end of the campaign for the 
March general elections, he 
was Mr Berlusconi's economic 
adviser and looked set to be 
the pmrt treasury minister. 

Nevertheless, diplomacy 
runs fa the blood, ffw father, 
Gaetano, was the Christian 
Democrat foreign minis ter who 
signed the articles of the 
Treaty of Borne, while his 
cousin, Ferdinando SaHeo, is a 
career diplomat 

Mr Martino is the first Ital- 
ian foreign minister since the 
Treaty of Borne to question the 
European ideal. It would be 
surprising If his forthright 
views do not shape new Italian 
policies towards the Union. 

“In Italy Tm considered a 
Euro-sceptic; but in Britain I 





Sceptic with a hint 

of enthusiasm 






Martino would prefer Sir Leon 
Britton, the trade commis- 
sioner, or Mr Peter Sutheriaud. £ 
the Irish candidate and Gatt ] 
bred. Such figures, or a com- 
promise candidate, are needed I 
to embody a new post-Maas- 
tricht approach to union. But 
the Italian government has yet 
to make up its mind. 

Italy, Mr Martino says, 
chrwilri be more prepared to be 
more opinionated on a range of 
Issues. “One should say exactly 
what one feels about policy. In 
this I admire Mrs Thatcher, 
even if she may have overdone 

it on occasions.” 

This underscores the desite 
of Mr Martino - and that of Mr 
Berlusconi - to raise Italy’s 
international profile. One prob- 
lem here is that Italy, despite 
its size and membership of 
Nata, has poorly equipped 
armed forces. Successive gov- 
ernments when looking for 
spending cuts always turned to 
the defence budget, be 
laments. 

"The defence ministry now 
spends less than the regional 
government of Sicily,” he 
observes. If Italy is to play a 
bigger international rola, it 
must have the military moans 
- “but 1 don’t want to sound 
militaristic”. 


Antonio Martino (in front of a poster of SMo Berlusconi): Tn Italy Fm considered a Euro-sceptic 1 


H e is bitter at the 
way Italy has been 
left to {day second 
fiddle over events 
fa the neighbouring states cf 
former Yugoslavia. Italy has 
been excluded from the contact 
group formed between the US, 
Russia and the EU. “We cahoot 
be answerable for detiskms to 
which we are not a party,” he 
says. 

Behind this treatment of 
Italy lies a complex debate 
over whether troops should be 
sent to ex-Yugoslavia. Mr Mar- 
tino lays down four conditions 
for this to happen: a peace plan 
must be accepted by all inter- 
ested parties; this peace plan 
must be backed by the United 
Nations; the UN must request 
Italian troops; and the troops 
should then be under Nato 

command. 

In all bis answers, Mr Mar- 
tino behaves as if he Is master 
in his own house. “I think Ber- 
lusconi shares some of my 
Eumsceptidsm. He trusts me 
and expects me to take care of 
this area of policy. As a busi- 
nessman he is accustomed to 
the idea of delegating responsi- 
bility." 

Robert Graham 


would probably be considered 
a Euroenihusiast,” he says of 
his membership of the Thatch- 
er-inspired Bruges Group. A 
convinced Anglophile, married 
to an American, he champions 
a more pragmatic approach to 
the consolidation of the EU. 
“The Maastricht treaty is not a 
bfole." 

Mr Martino is also critical of 

fhp Euro-SOCiallSt thinking 
hpVnnH fhp social chapter. “It 
may be motivated by lofty 
ideals but it produces some 
perverse results." He attributes 
Italy’s high unemployment 
directly to unnecessary rigidi- 
ties fa the labour market, 
although the hire and fixe laws 
were intended to protect the 
workers. 

Yet he is by no means 
anti-EU: rather he is deeply 
critical of the unquestioning 
pro-Europeanism of previous 
Italian governments. “Italy 
grid yes to everything but thpw 
was not necessarily able to 
implement," he says, citing 
Italy’s inability to comply with 
milk quotas. 

He dislikes the dirigiste 
aspect of Brussels. Govern- 


ments, he says, should be free 
to determine their own regula- 
tions to avoid the kind of bruis- 
ing national arguments over 
the TSurosausage’ or ‘conver- 
gent size of condoms’. 

“fa the EU we have created 
institutions without strategies 
[for their use] - . . It’s like buy- 
ing a computer without know- 
ing how to use it First you 
must choose the software, then 
the hardware ... If we believe 
in Europe we have to ask 
why." 

Europe, he insists, must be 
demonstrably for the public 
good. He sees five elements of 
common benefit - the sm gfo 
market, a common currency, a 
common foreign policy, a com- 
mon defence policy, and the 
need for a genuine court of 
appeal/ombudsman to which 
citizens can resort 

He supports the single mar- 
ket but warns it must be able 
to make guarantees against 
protectionism among individ- 
ual members. On the advan- 
tages of a common currency he 
is more sceptical. 

“If - and it is a big if - 1 can 
have guarantees that the com- 


mon currency will not be mis- 
managed, then rm in favour.” 
The common currency would 
be beneficial, he claims, 
because it would reduce the 
cost of transactions, help stabi- 
lise international currency 
markets and be an alternative 
to the dollar, while also acting 
as a symbol of European unity. 

“A common currency is 
desirable although it is not 
absolutely essential for the sin- 
gle market ... It requires an 
indivisible solution - ie: it can- 
not be done step by step.” 

On a common European for- 
eign policy, Mr Martino is 
wary of framing axes within 
Europe such as that between 
France and Germany. An axis 
means a return to “conven- 
tional diplomacy with favoured 
partners". To counter the lat- 
est moves by France and Ger- 
many towards tightening their 
co-operation, he is aware Italy 
might be tempted to make 
co mm on cause with the UK 
and Spain. 

The first test of Italy's Euro- 
diplomacy will be the forth- 
coming choice of a successor 
for Mr Defers. Instinctively Mr 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Letters transmitted should be dearly typed and not hand written. Please set fax for finest resolution 


Lower yen 
rate right 
for growth 

From John Hemingway. 

Sir, Recent portfolio flows 
have highlighted the Japanese 
sayings surplus and the 
savings deficit elsewhere fa the 
world. If rising long bond 
yields are not to jeopardise 
western growth, Japanese capi- 
tal outflows need to be resusci- 
tated. 

Lower Japanese interest 
rates would have this effect, 
particularly if they also gave 
rise to the p er ception that the 
yen had peaked. Lower rates 
would not necessarily be Infla- 
tionary because some indices 
show prices are still falling fa 
Japan. 

Lower rates could also re- 
liquefy the banking system fa 
the same way th gt they did fa 
the US in the early 1990s. 
Together with a weaker cur- 
rency, lower interest rates 
would stimulate growth and 
I demand for US exports. 

, Why, then, doesn't Japan cut 
interest rates and the US ame- 
> borate demands for managed 
trade? 

John Hemingway. 
director, 

PDFM. 

Triion Court, I 

Finsbury Square, ' 

London EC2A 1PD 

Short list of 
high pay-outs 

From Mr M J Hart 
Sir, Nothing emphasises 
more the misnnfte rs tanriing by 
Stephen Darrell, financial sec- 
retary to the Treasury, of the 
financing of publicly quoted 
companies than his weekend 
statement that “it may be right 
for Glaxo and Id to distribute 
as they do but it isn’t right for 
an expanding high-tech firm 
with a capitalisation of £50m”. 

I have been in the City a 
long time, but 1 cannot recall 
too many expanding highfach 
firms noted for their high pay- 
outs. 

Perhaps Mr Dorrell could 
produce a list It would be a 
very short one. 

M JHart. 
chairman, 

Foreign & Colonial 
Management, 

Exchange House, 

Pr imrose Street, 

London EC2A 2NY 


UK needs restructured welfare 
system, not lower benefit levels 


From Mr Richard Thomas. 

Sir, Joe Rogaly (“Hand-up, 
not handout", June 7) is right 
to say that “any promise of full 
employment would be hollow 
without some reform of the 
welfare system". He is wrong 
to conclude that this means 
settling for less welfare if we 
want more people in jobs. 

A Commission on Social Jus- 
tice report to be published next 
week shows it is the structure 
and administration of benefits. 


rather than their level, which 
affects employment. And the 
existing benefits system fa the 
UK needs reform in order to 
make work pay. This does not 
imply promoting a downwards 
competition between wages 
and benefits at the .bottom of 
the labour market. It does, 
however, imply tackling the 
outdated notions of a “family 
wage" inherent in the current 
benefits structure and easing 
the transition from out-of-work 


Tax and unemployment 


From Mr John A Chudley. 

Sir, With reference to Sam- 
uel Brittan’s excellent, if 
slightly technical, article, 
“Sad jubilee for a white paper" 
(Economic Viewpoint, June 2), 
why not return to an old idea 
of “negative income tax" with 
unemployment support equal 
to personal allowances and 
permitted earnings equal 
to the earned income allow- 
ance? 

The latter could be increased 
in times of high activity, tak- 
ing some of the pressure off 
wage levels and increasing the 
“pricing in" premium. It could 
then be correspondingly 
reduced when recession threat- , 
ens. | 

The whole could be simply 
administered (perhaps too sim- 
ply to suit the bureaucrats) 
and would at least partly relate 
costs to taxation revenue. 

John A Chudley. 

Tripoleos 4. 

NafpUan 21100, 

Greece 


From Mr William Hodgson. 

Sir, Samuel Brittan asserts 
that “tbe proximate explana- 
tion for this bard core [of 
structural unemployment] is 
that pay and related costs 
make workers unprofitable to 
employ". Actually, all that has 
happened is that more and 
more women have sought to 
Join the working population, 
particularly since 1970. 

One reason is the high level 
of average and marginal taxa- 
tion and national Insurance 
suffered by those in “few paid 
jobs". Hence, many of ihe hard 
core of unemployed collect 
benefit but also work for rash 

The “discussion” of full 
employment could usefully 
move on from monetary policy, 
labour market details and 
social security to changes fa 
tax thresholds, including the 
pernicious national Insurance 
contribution. 

William Hodgson, 

Tumblecroft, Upper Marden, 
Chichester, West Sussex 


to fa-work benefits. 

There is not a sterile choice 
between more or less welfare 
and more or less labour market 
reg ulation. The real rb aTIang e 
is to shape regulation and wel- 
fare to fit today’s world. 
Richard Thomas, 
research fellow, 

Commission on Social Justice, 
Institute for Public Policy 
Research, 

30-32 Southampton Street, 
London WC2E 7RA 

Too late to 
catch news 

From Mr QQnther B Pamberg. 

Sir, As someone reared on 
the banal journalistic diet, 
with scarce news and abun- 
dant comment, highlighted in 
“A dull day fa Germany is. . 
(June 5/6), I know James Mor- 
gan missed the obvious rea- 
sons: German journalists seem 
to knock off work at the latest 
by 5pm and late-breaking sto- 
ries just do not get into the 
next morning’s newspaper. 

I have to get my late German 
news out of the Financial 
Times and international Her- 
ald Tribune. German journal- 
ists also seem to dislike 
leg-work to dig out the real 
story behind the story and 
prefer to sit behind their 
to compose the abundant 
comment. 

G thither Pamberg, 

54 Oiemm de la Gore. 

Case postale 284. 

CH-2900 Parrentruy. 

Switzerland 


Water company gearing should be questioned 


From Y Kovach. 

Sir, Lex concludes (May 30) 
that the ability of water com- 
panies to meet the efficiency 
targets of Ofwat, the regulator, 
is what matters to sharehold- 
ers. Not for him to inquire why 
an industry with the highest 
quality ctf gaming s is so lowly 
geared? The combination of an 
indispensable product and cap- 
tive customers cries out for the 
maximum of cheap debt 
finan ce and tha minimum of 
expensive equity. Instead, we 
have tiie airhamy of water into 
gold, a regulated high-reward, 
albeit risk-free, industry. 


Today’s customers are being 
doubly milked to provide 
shareholders with a generous 
dividend pay-out and, through 
substantial retained earning s, 
much of the equity for projects 
to improve water quality and 
the environment for the part 
generation of customers. 

Ofwat should derail this few 
risk/high reward gravy train 
by calculating its “inflation 
minus x per cent” water 
charge formula on the assump- 
tion that most of the ring- 
fenced capital employed is 
financed with index-linked 
bonds. In order to minim icn the 


need for interest cover, Ofwat 
should state the obvious - 
monopoly water suppliers do 
not go bankrupt and hence will 
always be allowed to meet 
their debt payments. Equity’s 
role would be diminished to 
that of ensuring effective man- 
agement Ofwat would then be 
able to fine tune the water 
charge formula so as hand- 
somely to reward shareholders 
of well-managed water compa- 
nies at little cost to customers. 
Y Kovach, 

36 Lebanon Park, 

Twickenham, 

Middlesex TWl 3DG 


- 

*H l*- 


ua' - 1 , 

' * % * * u 

uiW ' 511 


fe !?;■,! 




15 


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FINANCIAL TIMES 

'Kumber One.Soiithwark Bridge, London SEi 9HL 

U ±iek 071473 3000 Tefex-922186 Fax: 071-407 5700 

^Wednesday June 8 1994 



to cure 



In- themember states of the 
QrgatrfaiHon for Eamomic Coop-, 
eratfou and Development tmem- 
ploymeot stamfc\£ 2 . 38m, 8% per 
pt^ nT therl^K^ force. This is 
" the ^iaved^ecaiicanic failure 
social jmdrtem the? omfront. That. 
ls^^:'ti»-(ffiC&seinetariat was 
asSei W. prepare its study of 
f ro ploymBBt : and unemployment. 
H . is also- why careM attention 
needs to beipaid both to-its analy- 
sfe .apd to its largely persuasive 


^lneylta^y r ‘t3i&. subtleties are 
Tost iajhe fevered British political 
debated AH ■parties can claim scene 
support, from the OECD, although 
the Con^erratisre party’s daregula- 
tory approadi wlns the battle on 
points:. The>: OECD insists. For 
example/- statutory minimum • 
often end op damaging 
employment? opportunities for 
unskilled labour". ? Similarly, it 
flanarfe® that-employment protec- 
tkiale^atipn “can make employ- 
ers more . reluctant to hire new 
workers*. .Yet, faultlessly even- 
handM,^ also points out that 
nfedounnwa^eercan-be varied, by 
age- dr region, and that “employ- 
ment. isectotty _ can . encourage 
investment tomtoetob training". 

Shch edectisdsm cam be irrita- 
4irig, feitt^tethfe-case, it has vtr- 
taesrf’br. this report shows not 
nnly_ *how far performance 
rLdiyergas, vbtdaDy all 

coiuntri$a '£^l.-iii at- least one 
raspeefc^w^fle remedies must be 
jnulti-diinen^onal, ’because the 
jjrobto;i& No single bullet will 

“performan^ 

evenwkftfethe European Union, 
In 199^ the youth unemployment 
ratewBfionly 49 per ^cemt in G»- 
many. , feat' 24-6 pea* cent in France. 
Fapalp.hnemployinent stood at 64 
per .efflst in: Germany and 84 per 
centfe tfe» UK, but at 28H per cent 
bt-'Ss^^The long-term tmem- 
per cent of the 
Belgium, but only 27.0 per 


Heal wages of low-paid workers 
fell by more than 1 per cent a year 
in the 1980s, while wage different 
tids have risen considerably. The 
US then has a real hwvmw» prob- 
lem, justas the EU has an unem- 
ptospmeot probtent Since the aims 
must.: be higher employment, 
lower unemployment and higher 
real wages, this seems to create a 
nasty dilemma. Is a growing army 
of the working poor a necessary 
result of successful policies to pro- 
mote employment? 

Growing gap 

The OECD is not that pessimis- 
tic. Naturally and rightly, it 
rejects pro tec t ToniHm or policies to 
slow technological change. Ii 
insists, instead, that "the gtngift 
most important cause of rising 
unemployment, as well as a grow- 
ing incidence of low-wage jobs, is 
a growing gap between the need 
for OECD economies to adapt and 
innovate and their capacity and 
even will to do so". 

Its array of policy recommenda- 
tions - tneirifte macr oec onomic sta- 
bility, faster diffusion of techno- 
logical know-how, increased 
flexibility of working time, nurtur- 
ing entrepreneurship, making 
wages and labour costs more 
adaptable to market conditions, 
reforming employment security 
provisions, making labour market 
policies more pro-active, improv- 
ing sMTlfl and c ompetences and, 
most important of all, reforming 
benefit and tax systems, to ensure 
that social objectives are achieved 
in ways that impinge less on Effi- 
cient functioning of labour mar- 


Every country should aTamme 




ivdfait 
li levt 


so iau’t 

irh 111!" 




>)!■ 



Mai^Sy. worse 

;. Fw overall EU employ- 

nmt- ffflfennance was markedly 
worse fhkb in the IK, or Japan. 
EU-wide youth unemployment 
stood at 20.6 per cent, for. example, 
as against 1&3 per cant in the US 
and 54 per cent in Japan. The 
share of longterm unemidoyment 
stood at 42J3 per cent of the total 
in the EU,hut lL2 per cent in the 
US. Employment has hardly 
grown in the EU since I960, while 
it is up more than 80 per cent in 
North America. 

!Tet all is not well to the US. 


aU these , policies, to improve the 
trade-off between high employ- 
ment, on the one hand, and rising 
and reasonably equal real 
incomes, on the other. Yet dilem- 
mas remain. Education and train- 
ing are long-term policies, to the 
meantime, jobs offered to the 
unskilled must be profitable far 
employers, and remunerative to 
employees. 

There are two possible strate- 
gies: restricting the availability of 
social benefits or' shifting them 
sharply towards. lob-promotion. 
The former is ruthless, the latter 
expensive. A thud possibility con- 
sists of leaving things in toe EU 
largely as they now are. But if EU 
members remain determined to 
preserve their current welfare 
states and labour market protec- 
tion, they may find unemployment 

rising still further. In the long 
term, that could well be the most 
socially damaging choice of aU 


How not to pick 
a Euro -leader 


Europe owes a great deal to 
Franco-German - co-operation. 
Without the dxivtog ftoce supplied 
by Bona and Paris, .the postwar 
community of European states 
would never have flourished. Wis- 
dom displayed by toe two coun- 
tries’ successive leaders has bene- 
fited toe entire continent One 
striking example- was President 
Francois Mitterrand’s support for 
deployment of medium-range 
nuclear missiles in Germany a 
decade ago. This strengthened 
Chancellor Helmut Kohl’s policies 
at a crucial time. Mr Mitterrand 
tons made an important contribu- 
tion to the eventual end of toe 
cold war, paring toe way for Ger- 
man indficsdidm. 

In spite of these successes, Bonn 
and Paris are not immune to mis- 
takes. Mr M i tte rra n d and Mr Kohl 
are making one now to their 
efforts fe steer the presidency of 
the -European. . . Commission 
towards Mr Jean-tom -Dehaene; toe 
Belgian, prime minister. Having 
decided on toeir: candidate, France 
-and Germany appear to be trying 
to impose bim on the rest of the 
European Union, to spite of reser- 
vations by countries such as 
Britain and Italy. The Objective of 
the wtoi pnigp misguided. Atidi- 
tionafly, way ft . Is being car- 
ried out rm» counter 4o the prin- 
ciples On which the EU should be 


Vital role:. 

The successor, to Mr Jacques 
rims wflt.play^a vital role in 
shaptog theKur^ean Union dur- 
ing toe next five years. As it tries 
to lmprove members' economic 
^onaanod:. and: deepen and 
wtteri existing integration, the 
needs to be made 
jntpB BSm^ iohre cohesive and 


will require 

- «od ideas combined with 
fdminirtrative- -skills and 
ittog ability. 

; — have won 

support fttaf IfrKhhli to particu- 
lar, Oa ths! pmmds of hb Chris* 
J® ilfe»bcsat ; party membership, 
ms packing fbrpolirical and mone- 
5J7 union, andhis adroit han- 
of the l998 Buropean summit 


in Brussels. However important 
these attributes are, they are not 
sufficient to guarantee him the 
job, Mr Dehaene is already dis- 
charging with tenacity the diffi- 
cult takk of holding together Us 
fractious Belgian coalition. Since 
there are three other contenders 
for the Commission presidency, all 
with relevant qualities which Mr 
Dehaene lacks, Europe would 
probably be best served if the 
prime minister were to remain at 
his post 

European integrationist 

Of the others in the running. Mr 
Ruud Lubbers, the Dutch prime 
minister, has strong credentials as 
an AUantidst and as a European 
integrationist His economic policy 
accom plishments during 12 years 
to government are impressive. 
The Netherlands is (me of the few 
countries close to fulfilling the 
Maastricht criteria for economic 
mid monetary union. 

Sir Leon Brittan, the UK's 
senior EU commissioner, has a 
sceptical mind, but is also a strong 
believer in the benefits of Euro- 
pean union. His reputation has 
been improved by his contribution 
to concluding the Uruguay Round. 
Mr Peter Sutherland, director-gen- 
eral of the General Agreement on 
Tariffs and Trade, and a former 
Brussels competition commis- 
sioner, is not a front runner to the 
race. But, like Mr Lubbers and Sir 
Leon, he has a proven interna- 
tional track record. 

EU voters are preparing to go to 

the polls for the parliament elec- 
tions on June 9 and 12. Austrian 
voters look nervous about the EU 
pTifta d of this weekend’s referen- 
dum, Yet toe horse-trading among 
governments about the Union's 
new chief executive is taking 
place in secrecy. If the next presi- 
dent is to give the Union the tode- 
pendmt-minded, persuasive lead- 
ership It needs, he or she needs to 
be the right person chosen in the 
right way. That requires national 
tenders to state openly what they 
consider to be the qualities 
req uir ed for the job and then for 
candidates to come forward pub- 
licly, so that toeir merits can be 
examined ami discussed. 


Better balance for 
loan arrangers 

Falling profits from corporate lending mean UK banks are 
seeking broader customer relationships, says John Gapper 



F or bankers who lend 
money to large compa- 
nies to the UK, this has 
been an unsettling year. 
Six months ago it 
appeared tost the business, which 
was hardly worth the candle by the 
aid of the 1980s, had been revived. 
But banks now face toe return of 
hard times. "We have managm? to 
transform very thin returns, but we 
are beginning to fall back over the 
edge," says one banker. 

The pressures have yet to hit pub- 
lished profits. Operating profits in 
the Royal Bank of Scotland's corpo- 
rate and institutional h anking divi- 
sion were £82m to the six months to 
March, compared with £58m in the 
same period a year before, while 
National Westminster Bank’s corpo- 
rate and investment banking arm, 
NatWest Markets, doubled profits 
last year. Yet this earnings level Is 
under pressure as hanks mt npg re 
for business. 

The most obvious evidence is in 
the price of loans, which has fallen 
shar ply this year. large companies 
which had to pay interest of 0.8 per 
cent (above wholesale Interest 
rates) on loans a year ago are now 
being charged closer to 0.3 per emit. 
"In toe last six months, banks have 
given up half the leading gains they 
made to the past six years,'' says Mr 
Roger Byatt, deputy chief e x ec u ti v e 
of NatWest Markets. 

Banks have found a distinct lack 
cf enthusiasm for borrowing among 
large companies, whose ability to 
tap capital markets more cheaply 
mflflng they use hanfc loans mainly 
as standby finance , ghwfiar to over- 
draft facilities for individuals. 

Furthermore, other services that 
hanks have relied on heavily in the 
past two years to compensate for 
low returns from l ending - such as 
foreign exchange contracts and 
financial derivatives - are under 
pressure. Less volatility in Euro- 
pean exchange and interest rates 
means banks are selling fewer prod- 
ucts and at lower margins. 

The recognition that income from 
lending to large companies will 
probably never recover to levels 
where it gives an acceptable return 
on capital has galvanised banks. 
Following the example of other 
banks, Barclays' new hhigf execu- 
tive, Mr Martin Taylor, lias just re- 
organised Its corporate banking ser- 
vices - ranging from lending to 
cash management and equity 
underwriting - into a stogie 
group. 

Mr Graham Pimlott, the Barclays 
executive who recently took charge 
of this group, says that although 
UK banks have tried in the past few 
years to improve corporate banking 
profits, they have not gone liar 
enough. “Lending as a profitable 
business has been in decline for 
many years. US banks responded to 
that in the 1980s, and it is slightly 
surprising that it took us 10 


more years to respond to it," he 
says. 

Lending profitability deteriorated 
sharply in the late 1980s, as compe- 
tition among strongly-capitalised 
banks reached a peak. One banker 
estimates that Hanks need to charge 
about 1.4 per cent interest on loans 
to large companies to make ade- 
quate returns on capital 

The toll in marg ins In the 1980s 
compounded other problems faced 
by British Hanks in dealing with 
large companies. First, to contrast 
to continental European banks, 
commercial «nd investment bank- 
ing were divided. As large compa- 
nies raised more funds on capital 
markets, a growing proportion of 
their business passed from commer- 
cial banks to inves tment Hantrc 

A second problem was that their 
technology did not allow most 
banks to calculate the total profits 
they made from each customer, the 
risks they ran, and the costs they 
incurred. Many wanted to lend as 
much as possible, even at low mar- 
gins, to cover fixed costs. This drew 
them into making Inann to compa- 
nies with which they did no other 
business, on terms which did 


not earn a sufficient return on 
capital 

These risks were exposed when 
many large companies, such as 
Olympia & York, the Canadian 
property group, collapsed or had 
to he refinanced in the early 
1990s. 

The combination of large losses, 
and new capital requirements 
im pnaad by the Basle-based commit- 
tee of international bank supervi- 
sors, led many hanks to reshape 
their business with large compa- 
nies. Mr Byatt says this process has 
been so e ff ective in NatWesfs case 
that it Ha« raised its <»«mingg from 
large companies to three i™* 8 fhe 
level of the late 1980s. 

Banka have been reforming their 
approach to large companies to sev- 
eral ways: 

• They have analysed the returns 
on capital of each relationship with 
a large company - including ser- 
vices such as cash handling and 
lending. This has shown that lend- 
ing alone is no longer profitable 
enough- “You have to gear lending 
with other forms of income to make 
an adequate return an capital," says 
Mr David Harrison, head of corpo- 


rate banking at Lloyds Bank. 

• They have ended relationships 
with companies which want only to 
borrow money. NatWest Markets 
has reduced its customer base 
from a peak of 2,400 to about 
900. 

Banks have played on the greater 
vulnerability of some recession-hit 
customers by pointing out that they 
are more inclined to rescue those 
loyal in good times. “Banks find it 
harder to support clients who foil 
on hard times if they were oper- 
ating purely in a transactional way, 
and trying to squeeze every last 
basis point from their bankers,” 
says Mr Byatt 

• They have raised lending profits 
by adding higher-margin loans as 
old ones have expired. They have 
been helped by toe withdrawal of 
many Japanese banks from toe Lon- 
don market because of difficulties 
in their domestic markets in 1990. 

But the strongest thrust has been 
to try to improve profits by selling 
more products to companies, using 
the lending relationship as an intro- 
duction and lever. Mr lain Robert- 
son. head of corporate and institu- 
tional banking for Royal Bank, says 


his Hank makes dear to companies 
merely wanting to borrow that “we 
intend to work with them in the 
longer-term to ensure we build a 
profitable relationship". 

It is diffic ult for banks to do more 
than suggest that they deserve a 
slice of more attractive business in 
return for a loan. There is strong 
competition for the most profitable 
forms of wholesale banking. Compa- 
nies can Insist on banks making 
loans before they consider buying 
other services, such as foreign 
exchange contracts. 

Moreover, not all other forms of 
banking activity are so profitable 
that they make up for depressed 
lending margins. Mr Harrison of 
Lloyds argues activities such as 
cheque clearing and cash ha n dlin g 
are a valuable addition to lending. 
But others argue such transactions 
are hardly more profitable than 
lending. 

P robably the greatest prize 
for commercial banks 
would be to persuade 
their blue-chip clients to 
use them as investment 
hanfcn as well as commercial banks. 
If such borrowers sought corporate 
finance advice or asked toeir banks 
to underwrite equity issues, the 
banks would have captured the 
most profitable businesses from 
inves tmen t banks. 

This is the rationale for National 
Westminster bringing its corporate 
and investment banking operations 
together in NatWest Markets two 
years ago. and for Mr Pimlott tak- 
ing control of both corporate lend- 
ing and merchant banking within 
Barclays. Yet banks face difficulties 
in persuading UK companies to 
accept advice, loans and underwrit- 
ing from a single source. Many com- 
panies are doubtful about the qual- 
ity and independence of the advice 
they might receive. 

Even Mr Pimlott Is cautious 
about the chances of short-term suc- 
cess, arguing that it would be 
counter-productive to try to pres- 
sure companies to use the whole 
range of products and services now 
under his remit. “In my experience, 
customers do not like people arriv- 
ing and trying to force them to use 
one service when they are 
quite happy using another,” be 
says. 

Yet the pressures on banks such 
as Barclays and NatWest to induce 
companies to buy such products 
will grow if they cannot sustain the 
recovery in profits of the past two 
years. Mr Byatt of NatWest says the 
bank was surprised by toe rapidity 
with which it improved earnin gs 
after integrating its lending and 
investment hanking activities. But 
he admits that it win be hard to 
maintain the momentum. As loan 
margins deteriorate and profits are 
squeezed, the hard times of the late 
1980s no longer seem so far away. 


David Goodhart argues UK interpretations of European labour laws are unfair and misleading 


Social chapter misread 


E uropean labour law is the 
issue that has most 
sharply divided the two 
main parties in toe UK’s 
European election. But in so doing, 
it has become a focus of rhetorical 
exaggeration and straightforward 
misunderstanding on both sides. 

In toe course of the campaign, the 
social chapter, a voting mechanism 
which makes it easier for toe Euro- 
pean Union to pass some types of 
employment legislation, has been 
routinely and wrongly described in 
the UK as ushering in a 85-hour 
week and a minimum wage. 

Last week Mr John Major, the 
prime minister, attributed France’s 
rising unemployment to its accep- 
tance of the social chapter and 
Britain’s foiling unemployment to 
its rejection of it This assertion 
belied the fact that not a single 
piece of European employment leg- 
islation has been passed under the 
terms of the social chapter. 

The argument over workers’ 
rights and conditions does overlap 
with genuine domestic policy differ- 
ences an labour market regulation. 
But neither the existing framework 
of European employment law, nor 
proposed extensions to ft, can bear 
the weight of acclaim or disap- 


proval heaped upon it by, respec- 
tively, the Labour and Conservative 
parties. 

There is “much nonsense” talked 
to the UK about both the volume 
and the nature of social legislation 
at a European level, says Mr Pad- 
raig Flynn, social affairs commis- 
sioner in Brussels. More than 90 per 
cent of employment legislation, and 
the costs associated with ft, is deter- 
mined by national governments and 
not by Brussels. The three main 
areas where Europe has an impact 
- health and safety, equality for 
rrren and women, and labour mobil- 
ity - are all relatively uncontrover- 

■rial 

Further, toe din of hustings rhet- 
oric has obscured the fact that the 
scope of Europe's social amhitions 
is going through a subtle mutation 
or “a period of creative confusion" , 
according to Mr Peter Reid, of toe 
UK’s Engineering Employers Feder- 
ation. A few months ago Mr Reid 
and others were worrying that 
social legislation, would be prtgnderi 
into national domains such as indi- 
vidual r nriimrianffiwt. 


Not any longer. The first clear 
step away from the agenda of 
detailed Europe-wide legislation to 
protect those at work came last 
December with the white paper of 
Mr Jacques Defers, European Com- 
mission president, on growth, com- 
petitiveness and employment That 
paper - like yesterday's jobs study 
freon the Organisation for Economic 
Co-operation and Development - 
called for more flexible labour costs 
and for a better balance between 
protection of the employed and 
access to work for the unemployed. 

Mr Flynn's less noticed green 
paper on European social policy, 
which will itself become a more for- 
mal white paper next month, is 
expected to mark a further step 
away from detailed, prescriptive 
labour legislation. 

In a recent speech, Mr Flynn said 
Europe's social dimension had 
established a critical mass and now 
required less legislation. “It is no 
longer possible, or productive, to 
focus too narrowly on specific ques- 
tions such as labour law," he added. 

The scepticism of the UK govern- 


ment has had some effect in this 
debate and there is growing interest 
to labour market deregulation 
throughout Europe. But this does 
not mean that toe social dimension 
is dead, or that Britain has “won 
the argument". 

Even after some deregulation, 
most EU countries will have more 
regulated labour markets than the 
UK. Germany and Spain now see 
Europe-wide minimum standards — 
on, for example, part-time worker 
rights - as a useful balance to 
domestic deregulation. 

Even in the UK, clashes over 
labour law seem set to continue at 
least for a couple of years. Though 
the UK won an opt-out from future 
social chapter legislation during the 
Maastricht treaty negotiations, the 
rump of 1980s legislation coming 
into force now means that British 
workers are acquiring new rights in 
maternity leave, working hours and 
part-time work. 

These measures amount to a qual- 
ification, not a negation, of the dere- 
gulatory policies of the Conserva- 
tive government. For instance. 


Europe has not prevented the aboli- 
tion of minimum wage protection in 
the UK. 

The above regulations, and the 
current batch of directives on mat- 
ters such as parental leave for child- 
care, represent the last gasp of 1980s 
social Europe. Mr Flynn suggests 
toe future trill be more modest 

There will be more emphasis on 
implementing existing legislation 
(Greece has implemented virtually 
no health and safety legislation), 
and more sensitivity towards sub- 
sidiarity in the social field where, 
many argue, decisions should 
remain at national level 

In toe longer run there is likely to 
be more harmonisation of employ- 
ment standards and even pay rates 
in Europe, but this will probably be 
the result of economic integration, 
not directives. It is also likely to 
involve convergence between Brit- 
ish deregulation and continental 
regulation. As Sir Adrian Cadbury, 
chairman of the Cadbury inquiry 
into corporate governance, said last 
week, balking about the company of 
the future, Britain will move 
towards Europe in giving employees 
more rights, while Europe will 
move towards Britain by doing the 
same for shareholders. 


Observer 


Fight to the 
Finnish? 

■ You can tell a bully - they are 
the ones who always pick fights 
with much smaller people. Vladimir 
Zhirinovsky, toe flamboyant 
Russian na tionalist politician, fos 
selected a female Finnish journalist, 
Jutta abacus, for his latest 
punch-up. She apparently queried 
his mental fortitude in a recent 
article; now he's suing her. 

The man from 

Ivan the terrifaleograd is little- loved 
in Finland. He says the Finns can 
have eastern Karelia back - they 
lost ft to Russia in the Winter war 
of 1939-40 - but the price wiD be 
that all Finland is reunited with 
Russia. Zhirinovsky is also suing 
a Helsinki theatre, currently 
r unning a farce entitled Mein 
Kampf by Hungarian dramatist 
George Taboris. Zhirinovsky’s 
lawyer claims the central character 
- Herr Scbicklgruber himself - 
spouts words taken from 
Zhirinovsky’s speeches. 

Damages of around $2^m are 
being sought But Zhirinovsky has 
shot himself in the foot again. In 
Finland, at least, hbel damages 
are usually nominal 


They toil not 

■ So, fresh from a relaxing sojourn 
at his Normandy holiday home, 
Peter LQley has agreed to reappear 


in support of Britain’s Tory 
government in its European 
election rgrnpaig n 

It seems the secretary of state 
for social security will now show 
up to Bradford, bolstering the 
hopeless cause of the Conservative 
candidate in that town’s tor-election. 
A hastily arranged programme - 
to persuade us his absence in no 
way reflected his disdain for the 
European Union - will also see 
Lflley visiting a fectary in Leeds, 
as well as cm walkabout in 
Huddersfield. 

Tory central office is deeply 
embarrassed at Euro-sceptic Lflley*s 
preference for a relaxing holiday 
over supporting toe prime minister 
on toe stump. Not everyone shares 
that chagrin. “We are better off 
without him," says one of Major’s 
unhappy Hand of pro-Europ ean 
ministers. 


Winds of change 

■ John Major, watch out - The 
Bloke Next Door is after your job. 
Ken Clarke has sniffed the wind 
and the banquet is sweet What 
else could have induced toe 
chancellor to agree to being profiled 
in a BBC television programme 
so entitled, scheduled to be 
broadcast on June IS? 

Apparently, viewers will learn 
that beneath the hafl-lellow- 
weU-mst exterior throbs the heart 
of a nasty piece of wort “Bdiind 
the plump exterior there’s a 
ruthless streak . . .Ken’s hot at all 



“Let’s face it, our relationship has 
been nraltispeed for years’ 


the man he appears," says Lord 
Parkinson. 

That's all we need - another Tory 
party leader who is not all he or 
she appears to be. 


Alchemy rules 

■ Good old Sir Denys Henderson. 
Who else but the chairman of Id 
dare lecture a group of fat cat 
bankers that “only toe successful 
youthful merchant bankers seem 
to benefit from the excessive 
personal rewards which are so hard 
to justify by the normal standards 
of industrial remuneration”? 

He should know - as chairman 


of Barclays Bank’s remuneration 
committee he presumably gave 
toe thumbs up to the £1.4m paid 
to BZW chief executive David Band, 
51, Barclays' highest paid director 
last year. 


Blair's flair 

■ Labour peers do not feel the need 
to keep quiet about whether or not 
they see young Tony Blair as the 
rwurt leader of the UK’s Labour 
party. 

Lord McIntosh of Haringey, 
spokesman on home affairs in the 
Lords, yesterday repudiated a 
suggestion that Labour was “soft” 
on squatters. “If I were to suggest 
we were, Tony Blair would have 
me shot at dawn," he said. 


Party time 

■ Rarely has there been a finer 
array of parties to choose from than 
in Thursday's UK version of the 
elections to the European 
Parliament Pity only 50 per cent 
of Britons apparently know what 
toe parliament is. 

Never mind. Besides all the 
obvious dull worthies, Observer 
fancies the chances of the “Rainbow 
Connection Om-Say-Non’ party, 
though the choice of four splinter 
versions of toe ubiquitous Having 
Loony' faction might squeeze a 
vote here or there. 

Fervent athletes might find a 
common front with the “European 


People's Party Judo/Christian 
Alliance'. Heinz employees could 
plausibly be deluded into casting 
a glance towards the ‘Eurobean 
from the planet Beamis’ party. No 
doubt a few angry parents will put 
a cross against the ‘Network 
Against Child Support Agency 1 
party. 

Though who will find themselves 
to sympathy with the Mccarthy-ites 
- toe "Make Criminals Concerned 
About Our Response to Hostility 
and Yobbishness' party? 

Oh, I see - expecting a mass 
turnout of disillusioned Tory 
voters . . . 


Beating time 

■ Observer hears mixed reviews 
of the Geoffrey Burgon number 
- First Was The World - which 
has been commissioned specially 
for the Bank of England 
tercentenary and gets its world 
premiere tonight 

A setting of a poem by Marvell, 
it involves several sharp lurches 
in tempo and requires the 
140-strong choir to do much lengthy 
and noisy humming. 

However, the conductor. Sir 
David WiDcocks, seems to have 
got the measure of tonight’s 
star-studded audience of more than 
150 central bank governors. 

He has reminded the choir 
performing the tricky number that 
the audience “probably won’t know 
that much about music. But they 
can count”. 



16 


Carrying the 
nation's goods 



FINANCIAL TIMES 

Wednesday June 8 1994 


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Generating sew, 
aerospace ground 


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Dale Power Systems pic 


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BA looks for a bigger role in 
Chinese air transport industry 


By Paul Betts, Aerospace 
Correspondent, bi London 

British Airways Is stepping up its 
role in the modernisation of the 
Chines e air transport industry 
through joint ventures and part- 
nerships with regional carriers. 

BA is already co-operating with 
nhma Southern, the Guangzhou- 
based airline, and is in talks with 
Shanghai-based China Eastern 
Airlines, Ur David Holmes, BA’s 
director of government and inter- 
national affairs, said yesterday. 

t.tVb other international carri- 
ers, BA now sees more promising 
long-term opportunities in China 
than in Russia, where its project 
to start a new airline called Air 
Russia has been placed an bold 
indefinitely. 

This week's crash of a China 
Northeast Airline’s Russian-built 
Tupolev Tu-154, in which 160 peo- 
ple died, has added to the 


urgency of overhauling Ww coun- 
try's aviation system. It was Chi- 
na’s worst air disaster. 

But, in contrast to Russia's 
instability, China offers an 
administrative framework for 
business, Mr Holmes said. 

The Civil Aviation Administra- 
tion of China and Chinese air- 
lines have become increasingly 
conscious of their technical 
weakness and the urgent need to 
improve safety, punctuality and 
efficiency standards in the Dace of 
explosive domestic air traffic 
growth, which Is averaging 20 per 
cent a year. 

China is Vafin to CQPI U re rmflTiBi * 

its state-controlled airline indus- 
try and is proposing to sell stakes 
to foreign Investors in its 33 
regional carriers. It has 
suggested fisting some of the big- 
ger carriers on the New York 
Stock Exchange in an effort to 

Secure OUt S ide fiwanHng 


BA is not poshing to take a 
stake in one or more Chinese air- 
lines but its longer-term ambition 
is to negotiate a marketing agree- 
ment with a carrier such as Chi- 
nese Eastern to coordinate ser- 
vices at Beijing airport 

BA, however, recently met Chi- 
nese aviation nfffriais in the UK 
to discuss ways forward for Chi- 
nese afrihifi privatisation: 

BA has also entered a joint 
engineering venture with a fel- 
low Boeing operator, China 
Southern, and has sold this com- 
pany computer services. The 
British a iring sees pilot training 
as another area of possible 
co-operation with Chinaw carri- 
ers. 

BA, which flies twice a week 
from Tjmdnn to Beijing find is 
keen to double its weekly ser- 
vices, is anxious to establish a 
strongs - foothold in China at a 
time when some of its main inter- 


national competitors are intensi- 
fying co-operation with Chinese 
airlines. 

Lufthansa of Germany already 
operates six flights a week to Bei- 
jing and is Involved in a large 
aircraft maintenance centre in 
the Chinese capital 

Singapore Airlines has ear- 
marked China as one of its three 
main growth areas for the next 
decade together with India and 
Vietnam. It lias taken a 40 per 
cent stake in the «wnpflny han- 
dling ground services at Beijing 
airport and another 40 per cent 
stake in Beffing airport’s in flig ht 
iritrhfin group. . 

Singapore Airline’s engineering 
subsidiary has also invested hi a 
10 per cent stake hi the VTaman 
joint en gtnefirtTtg venture which 
includes Cathay Pacific and 
Japan Air T.hwe rts Tagging com- 
pany has leased a Boeing 767 to 
China Southern. 


S Korean police put on terrorist alert 


By John Burton in Seoul 

South Korean police forces 
yesterday were placed on emer- 
gency alert to guard against pos- 
sible terrorist attacks in connec- 
tion with the North Korean 
nuclear dispute. 

The new alert came as the 
International Atomic Energy 
Agency said yesterday the truth 
may never be known about the 
intention of North Korea's 
nn gTfiflr programme, and stressed 
that its inspectors must have 
access to nuclear waste sites. 

Some analysts believe the most 
likely response by North Korea to 
threatened UN sanctions could be 
terrorist activity in South Korea 
and Japan, rather than a conven- 
tional military attack. 

The police are increasing sur- 
veillance of air terminals and 


ports to prevent infiltration by 
North Korean saboteurs and 
spies, while bolstering security at 
government buildings and for- 
eign amhaiades in Sunni 
South Korean president Kim 
Young-sam today will convene 
the first meeting of the national 
security council - which consists 
of senior government ministers - 
since he took office 16 months 
ago. The council will discuss the 
military situation on the Korean 
peninsula and preparations for a 
possible conflict 
The gover n ment wifi also seek 
support far sanctions from the 
main opposition Democratic 
party, which fears that punitive 
measures against the North 
could trigger a war. 

Mr Kim yesterday warned that 
North Korea faces international 
isolation and eventual destruc- 


tion if it persists in developing 
nuclear weapons. 

Senior US and Japanese offi- 
cials will meet Mr Han Sung-joo. 
South Korean foreign minister, 
on Saturday in Seoul to discuss 
co-ordinated actions on imple- 
menting proposed UN sanctions 
against the North. 

The visiting officials include 
Mr Kcrji KaMzawa, Japanese for- 
eign minister, and Mr Peter Tar 
naff, US undersecretary of state 
for political affairs. 

The UN Security Council is 
unlikely to consider a sanctions 
resolution until next week at the 
earliest The US is stiH consult- 
ing with other pe rmanen t mem- 
bers of the Security Council and 
no draft resolution has yet been 
circulated or distributed. 

The US, Japan and South 
Korea support the Immediate 


Leading UK actuarial firm in 
discussions over US ‘alliance’ 


By Norma Cohen, 

Investments Correspondent 

R Watson and Sons, Britain’s 
leading actuarial consulting firm, 
is in talks about “an alliance" 
with US-based benefit consul- 
tants Wyatt and Co in a bid to 
strengthen Watson’s service to 
its increasingly multinational cli- 
entele. 

A spokesman for Watson yes- 
terday confirmed that discus- 
sions are going on but said “they 
relate to an alliance, not to a 
merger or a takeover." 

Senior partners are discussing 
what form the alliance should 
take a nd a formal announcement 
is expected next week. 

The move reflects the increas- 
ingly international nature of 
leading UK clients which are 
acquiring or being acquired by 
overseas companies. “Increas- 


ingly businesses are multi-na- 
tional and they want to manage 
their employee liabilities from 
the core," said one senior actuary 
involved In the talks. Also, cli- 
ents are seeking other benefit 
consultancy services, such as the 
design of remuneration packages, 
which go beyond Watson’s pen- 
sion fund consulting expertise. 

An outright acquisition of Wat- 
son, valued by industry sources 
at £50m to £80m, could make mil- 
lionaires out of several of its 94 
partners. However, industry 
sources said that some of Wat- 
son’s most senior partners, while 
anxious to broaden the firm’s 
international consulting capacity, 
want to maintain its indepen- 
dence. “Several of them have 
been going around saying ‘Over 
my dead body,’" said one actuary 

ffarnilinr with the talks. 

Watson becomes the third - 


and the largest - of the UK actu- 
arial consulting firms to seek a 
link with a large US company in 
the past year. Noble Lowndes 
was acquired by insurance bro- 
kers Sedge wick late last year 
while US-based insurance bro- 
kers Alexander and Alexander 
acquired Clay and Partners. 

Wyatt and Co, which, is organ- 
ised as a Delaware-based com- 
pany whose shares are owned by 
its 3,700 employees, has a leading 
presence in the US, It specialises 
not only in pension consulting 
but in a broad range of employee 
benefit and pay packages. It also 
ling a l eading market share in the 
Australian, Hong Kong and Japa- 
nese markets. However, it has 
few blue chip UK clients. 

Watson Ting a commanding 
presence in the UK where it acts 
as actuarial consultant to 40 of 
the 100 top pension schemes. 


introduction of limited sanctions 
that would gradually aonal ate fn 
their severity. 

But in an effort to win Chinese 
support they may propose an 
interim UN resolution instead 
that gives North Korea a final 
deadline to open its nuclear facil- 
ities to full iritema+innal inspec- 
tions and avoid sanctions. 

Mr Han, who has been holding 
consultations at the UN, 
expressed confidence that rihina 
would eventually support some 
form of sanctions if North Korea 
continued to refuse inspections. 

But North Korea is also bidr 
ding for Chinese support. General 
Ghoe Gwang, the chief of the gen- 
eral staff of the North Korean 
people’s army, is holding talks 
with his Chinese counterparts 
during a week-long visit to Bei- 
jing that began on Monday. 


EU faces 
snub from 
Austrians 

Continued from Page 1 

follow suit The governments of 
F i nla nd , Norway and Sweden 
have all watched the crumbling 
opinion poll lead of the pro-Eun> 
pean Union campaign in Austria 
with a mounting sense of alarm. 

With the opposition to the EU 
holding a solid lead in the opin- 
ion polls in Sweden and reaching 
56 per cent - the highest level 
this year - in Norway this week, 
prime minister Carl BUdf s right- 
centre coalition in Stockholm 
and Mrs Gro Harlem Brand- 
tland’s minority Labour govern- 
ment in Oslo badly need an Aus- 
trian Yes. 

In Finland, polls suggest most 
voters are In favour of joining the 
EU. But prime miin> tor ifokn 
Aho's centre-conservative coali- 
tion is troubled by an internal 
EU-related row. 



THE LEX COLUMN 

Mobile market 


Mr Gerry Wheat, Vodafone's chief 
executive, was typically gung-ho at 
yesterday’s annual results. Not only 
did he predict that Vodafone's reve- 
nues par subscriber would hold at last 
year’s level of £665, despite new rivals 
in the shape of Orange and Mercury 
One-2-One, he even forecast that com- 
petitors would raise their prices to 
near the level provided by Vodafone's 
“umbrella". 

If Orange and One-2-One do indeed 
shelter under Vodafone's umbrella 
rather than dragging it into a price 
war, the company's premium rating 
would be more than justified. But it 
would be wrong to take Mr Whenfs 
forecasts at face value. They are best 
regarded as attempts to lure the new 
players into a cosy oligopoly rather 
than predictions. 

If anybody can pull off this feat, Mr 
Whent is probably the man. But the 
dynamics of the new tetrapoly will be 
harder to control than that of the old 
duopoly. When Orange and One-2-One 
a ttain na tion wide coverage in two or 
so years; their imperative will be to fill 
their networks up. It is hard to see 
that being achieved without large 
price cuts. 

Meanwhile, Vodafone's international 
strategy is set to move up a gear. It 
wants to increase its stakes in over- 
seas licences, turning them from 
investments into associates even- 
tually subsidiaries. Greater control 
would help Vodafone add value to its 
investments, some of which have not 
performed welL The group is also 
likely to bid higher prices for new 
licences. That makas swi«» given that 
Vodafone lost the Italian licence 
through too low a bid. The more 
aggressive approach should enable Mr 
Whent to meet his expansion targets. 
But it will not come cheap. 

Anglian Water 

It is staggering that nearly five 
years after privatisation Anglian 
Water can cut ane-tn-five jobs from its 
utility business. Studies conducted by 
Ofwat, the industry regulator, do not 
show Anglian to be especially ineffi- 
cient Yesterday’s £60m restructuring 
charge therefore hints at what might 
be achieved elsewhere. The promised 
£20m annual saving amounts to 
around 7 per cent of Anglian's operat- 
ing costs in water and sewerage. On 
that basis, it looks well placed to beat 
all but the most onerous efficiency 
targets set by the regulator for the 
second half of the decade. 

Still, it is curious that Anglian 


FT-SE Index! 3004.8 (- 4 . 6 ) 


Share price relative to Ihe 
FT-SE-AM-Sharo Index 
120 



1902 93 8 * 

Sourm FTGrapWta 

sho uld show its hand before Ofwat has 
finalised its targets for 1995-2000. The 
company must have reasoned that 
Ofwat is far enough down the road not 
to indulge in last minute tinkering- To 
do so would rob management of the 
incentive to cut costs, which is pre- 
cisely what the system of price cap 
regulation is supposed to deliver. If 
Ofwat does keep its side of the regula- 
tory bargain, thoug h, the outlook for 
dividend growth may be better than 
the equity market has assumed. The 
savings promised by Anglian are sig- 
nificant in relation to the £67m annual 
cost of its dividend. 

Until Ofwat announces price limits 
and efficiency targets on July 28. it 
would be unwise to get carried away. 
Neither is it clear that all water com- 
panies have the management determi- 
nation to push through similarly deep 
cuts. If the regulator allows a reason- 
able proportion of such savings to flow 
through to shareholders, though, the 
sector may have been oversold. 

Germany 

German bond markets were Inclined 
to take fright at yesterday’s first-quar- 
to- growth figures. Their instinct may 
be right, even though the figures must 
be taken with a pinch of salt The 2.1 
per cent increase in output over the 
same quarter of last year foils to 1.6 
per cent when account is taken of the 
extra working day in the 1994 period. 
It was also boosted by a weather-re- 
lated increase in construction output 
which is unlikely to carry forward into 
the second quarter. Meanwhile, the 
underlying trend of personal consump- 
tion is weak. Despite the further fall in 
unemployment in May, the recovery 


has only just begun. It is for too early 
to worry about over-heating. 

Yet rising output gives the Bunds*, 
bank even less excuse to ignore the 
explosion in M3 money supply and cut. 
official rates again. Nor, now that the 
dollar appears to hare stabilised. Is 
there pressure emanating from the 
exchange markets. Indeed the D-Mark 
has also recently fallen slightly 
agains t European currencies as bond 
investors hare sought to exploit yield 
differentials with other markets. 

October's election and the prospect 
of tax increases next year are likely to 
keep consumption muted. There is a 
risk that high long-term interest rates 
will dampen the recovery too. That 
risk will be greater if money is sucked 
back into the US bond market once 
the Federal Reserve stops tightening-. 
Then Europe will be left wondering 
how to cope with its own turn in rates. 

Alexander & Alexander 

Alexander & Alexander’s shareboM- 
ers must hope that the involvement of 
a well-informed investor like A1G 
marks the turn. The insurance bro- 
kers’ shares are trading lower than at 
any time since the late 1970s. AlG's 
$200m investment in convertible stock 
should allow A&A to buy reinsurance 
to limit its underwriting losses. Finan- 
cial flexibility should also help attract 
a credible chief executive. But the per- 
formance of the shares thereafter 
depends on mangement's ability to get 
to grips with operational problems, 
Willis Coroon’s last results were a 
r emind er that conditions in US retail.: 
brokerage are unhelpful. Unlike AKJ, 
ordinary shareholders do not have tin 
benefit of a preferential 8 per cent 
yield for comfort 

National Grid 

The regional electricity companies 
are going to find it hard not to give 
the green light for a flotation of the 
National Grid. Yesterday's 15 per cent 
rise in the Grid's dividend seems 
designed to maintain the pressure. It 
further highlights the value of the 
recs’ stakes in the Grid, which could 
be worth £4bn as a stand-alone entity. 
The recs* share prices responded ! 
accordingly, with their combined mar- 
ket capitalisation rising by over 
£100m. But the further share prices 
rise in anticipation of a flotation, the 
more the recs are boxed in. They pre- 
sumably know that a decision not to 
press ahead would leave investors dis- 
appointed and hit their share prices. 


If you want to know 


At Gardner Merchant, we believe that motivation comes 


how we’ve won 

through ownership: which is why 1000 of our senior and 

the trust of 6000 

middle managers have a stake in our Company. 

companies world- 

Small wonder that we serve more outlets around the world • 

wide, ask our 


than any other caterer. 


top 1 000. 


***** 

GARDNER MERCHANT 

World Service 







I 


•i 


BARR 


CONSTRUCTION 


Expanding by Contracting 


Telephone Ayr (0292) 281311 


AIG 

17 

Henderson Admin 

21 

Alexander & Alaje’der 

17 

Hutamaki 

18 

AIM CaKoida 

24 

Ina 

18 

Amersham 

22 Ingham 

23 

Anglian Group 

21 

Leigh Interests 

24 

Anglian Water 

18 

Metra 

17 

Apollo Metals 

23 

NatWest 

15 

Apple 

19 

National Grid 

22 

Ashley (Laura) 

22 

Nationwide BS 

21 

Avesco 

23 

Nesttt 

18 

BCP 

18 

Norcros 

23 

BT 

19 

Powerscreen 

22 

Bangkok Bank 

19 

RPC 

21 

Barclays 

15 

Rhdne-PouJenc Rarer 

10 

Bertelsmann 

19 

Ricardo 

23 

Bloomsbury Pubtah 

21 

Ross Group 

24 

Brent Walker 

12 

Royal Bank of Scot 

15 

CML Microsystems 

24 

SMH 

18 

Gariplo 

18 

Schroder Japan Grow 

23 

Ceflnet 

17 

Securitas 

17 

Coal Investments 

24 

Sprint 

19 

Cook (DC) 

24 

St James Place Cap 

23 

Coopers & Lybrand 

17 

Staveley Industries 

22 

Credito ttaliano 

18 

TR Property Inv Tat 

24 

Daewoo 

19 

Touche Ross 

17 

Deutsche Telecom 

10 

Trafalgar House 

24 

FF Developments 

23 

Video Logtc 

23 

France Telecom 

19 

Vodafone 

17 

Gander 

24 

Volvo 

18 

Great Portland Eats 

22 

Wellcome 

17 

Market Statistics 

lAraunl reports service 30-31 

Foreign exchange 

36 

BBnctenark Sovf bonds 

20 

Oils prices 

20 


Bond futures and options 20 

Bond picas aid yields 20 

Commodfltes prices 28 

Dnridends announcad. IK 21 

EMS currency rates 36 

Eurobond prices 20 

fired interest Wtas 20 

FTtA World todfces Back Page 

FT Gold Mines Index Back Paga 

FT/tSMA fed bond wc 20 

FT-SE Actuaries Imftces 29 


liRe equrty apttorts Back Pegs 
London stare sendee 30-31 
London tad WttBB Back Page 
Managed tends service 32-36 
Money markets 36 

New did bold issues 20 

Recent Issues. UK 29 

Short-term lid rates 36 

US interest rates 20 

WorU Stock Markets 37 


Chief price changes yesterday 


FRANKFURT CMQ 


Ldane^i 685 + 25 

Zandm 230 + 10 

FWBs 

Boy Hypo BW *295 - 13 

MM ais - 7J 

flo raw 775 - 13 

Semens 685.5 - 13 

KEVYODKBI 

Rb0* 

(nca c fManc 38H + 

Fens 

CatapOw lOOTr - 1% 

W Paper 89-1* 

UttaOm ant - » 

UcnwA S3V1 - a 

VMUM 25* - * 

New York prions at l&SOpm. 


LONDON ( P n n oa ) 


A MCQBnM S 

Anwshmi 

Angfcn Gip 

BAMUpacn 

MngftdMf 

Horcraa 

RBwersaean 

RTZ 

Ite^nrQrp 
Sr JemesPI 


2® + II 

971 + 33 

251 + 13 

488 +9 

530 + « 

139+6 
2S5 + 6 

B33 + 13 

147 + 7 

155 ♦ 7 


AVUvdda 787 - 12 

Bf Sanofl 862 - 21 

EsTO HGCG 653-12 

Gasnont See 707 - 13 

>i euusan ^« 770 - 25 

TOKYO (Van) 

Rtoas 

OiDaBnk 940 + 17 

Dal NO Tor 485 + 25 

Hogan* 9*5 + 42 

Mania 621+33 

Mp Susan 494 + 24 

Otam 890 + 30 


Stn Wales Bed 627 +7 

SalOrtDart 262 + 10 

SsBb kvb 478 + 8 

M* 

AWSO 82-12 

B Pudam 196-7 

Kaiftos 313 - 9 

w ata w 79-10 

OsMfnr 4 LS an - u 


FINANCIAL TIMES 

COMPANIES & MARKETS 

<©THE FINANCIAL TIMES LIMITED 1994 Wednesday June 8 1994 


No. 1 in beating system spares. 


SMH expects 
modest growth 

SMH, the leading watchmaking group, is looking 
for only modest profit growth but has renewed 
confidence in the long-term prospects of its core 
business. Hie once fast-growing group, known 
best for its Swatch plastic watches, suffered stagna- 
tion of sales last year. Page 18 

Italian roadshow on the move again 

After a pause for mould-breaking general elections, 
the Italian privatisation show hit the road again 
yesterday. Page 18 

Sprint deal part of a trend 

If it is consummated, the prospective tie-up between 
Sprint, the third largest OS telecommunications 
carrier, and the state telecoms operators of France 
and Germany will te the second of three grand 
international telecoms alliances expected to be 
formed by the end of the year. Page 19 

Daewoo in Indian joint venture 

Daewoo, the South Korean industrial group, is 
planning a joint venture car assembly plant in 
India with DCM-Toyota. Page 19 

Chase Manhattan gains equity powers 

Chase Manhattan has become the latest hank 
to be given the power to underwrite and trade 
equities in the US, marking a further erosion 
of the barriers that have kept commercial h anks 
out of investment banking business. Page 20 

Fleece increase 

Australia's wool industry has seen a marked 
Cumround in the past six months, with the local 
market indicator price recovering from 381 cents 
a kilogram - the lowest level this century - to 
625 cents. Page 28 

Sustained gains for Nikkei forecast 

A wave of buying in the final minutes of the day 
drove the Nikkei back above the 21,000 mark 
yesterday. Traders were talking about higher 
prices, with one analyst suggesting the Nikkei 
could gain 20 per cent this year. Back Page 

Amersham powers ahead 65% 

Solid underlying business growth, exchange rate 
movements and a US acquisition helped Amersham 
International, the UK health science group, increase 
pre-tax profit 65 per cent Page 22 

Jtm Maxmin to get £1.2m 

Jim Maxmin, the former chier executive of Laura 
Ashley, is to receive a £L2m ($i.8m) pay-off follow- 
ing his abrupt departure from the UK fashion 
retailer which he is widely credited with reviving. 
Page 22 

National Grid fuels float hopes 

National Grid, operator of the high voltage power 
transmission system in England and Wales, yester- 
day fuelled expectations of a flotation. Page 22 

MalHmetHa group to be floated 

VideoLogic. the UK multimedia company, is to 
be demerged from its parent Avesco, the broadcast- 
ing services company, and floated on the London 
Stock Exchange- Page 23 

St James's s trongly up 

St James's Place Capital the UK financial services 
group run by Lord Rothschild and Sir Mark Wein- 
berg, yesterday announced a rise in pre-tax profits 
from £I2.3m to £81-lm. Page 23 


Companies in this issue 


AIG injects $200m into A&A 


Share Prfoa 

24 


By Richard Waters in New York Alexander & Alexander; needed help with flagging finances 

Alexander & Alexander, the US axa »•;•..».! ***•’•' 

insurance broker, is to get a • — ... ■ - ■ .. -- , ..— ..l . ...r 1 ..-I •> » ' ■ 

S20Gm capital injection from the ARW-eaxproWtoSSCSnafe* . Share Priced . Sta»n*»&- V 

country’s biggest properry/casu- w 34 - ^ 

alty insurer. American Interna- • . . i 

tiona) Group, as part of a plan to TO 7 — _ - ; „ ; -’_V» 

revive its ailing finances. go .. - — 22 ' - Jl. ‘ ■ . : . ? 

The deal will leave AIG with • ■■ V^. • :• ■. . 

preferred stock convertible into 50 " 20 ^|| - •~r; .j 

21 per cent of A&A's shares. At 40 - — |B- • .. \ •7" : -fi- l- ■ 

the same time, the broker slashed „ BK 18 ■ . ’■ ^7/Tpt 

its dividend from 25 cents to just ~9B" ‘ / . *■ •' 

2.5 cents to help preserve its ao 16 - '-llJ ' *• t 

depleted capitaL 1fl _^BJHt BB.^B ’ Lj •! ' ? -*8sl 

The investment comes after 9K9&' ^B ^B 14 ■■■■ — M - f-V 

A&A moved in January to w : 

replace Mr Tinsley Irvin as chair- .10 * ttttL. — . 12 1 1 ■ t-ao' Lf f , ■■ ** ■> 

man and chief executive in the tsa® 90 St ® as- j P • m a .■ M J W .‘J. 

wake of disappointing results. . - *9*4 v 

The company has been weighed sowe*c«tMi™am 
down by legal settlements. 

depressed conditions in the prop- say whether these had included not he able to take a voting stake owned more t 

erty/casualty insurance market the possibility or an outright sale, of more than 9.9 per cent in the A&A, and Fa 

and a failure to reduce its costs. Both companies denied y ester- company. Also, the interest is in insurance sub: 

A&A said that in recent day that the deal would under- line with investments made by the UK - had ( 

months it had studied various min e A&A’s independence as a other insurers in the past The lar stake, 

alternatives to rebuild its broker. Under an eight-year broker said that Prudential, the A&A, whic 
finances, although it refused to standstill agreement, AIG would US Insurance giant currently bought the Ca 


■ 10 1909 90 : * «t 92 ' 


Som» Eatasfcwn 

say whether these had included 
the possibility of an outright sale. 

Both companies denied yester- 
day that the deal would under- 
mine A&A's independence as a 
broker. Under an eight-year 
standstill agreement, AIG would 


j p m a . «TV: 
■1994 • 


Sb«» -J : r . \~i j 

ritod’-'-s -L +; 

•;f- v - ■' . ! ' jT-J-" '■ ; -V - \ 

" •» .* . .. -■ 1aO«N-. V f .flTiJ rf. 


not he able to take a voting stake 
of more than 9.9 per cent in the 
company. Also, the interest is in 
line with investments made by 
other insurers in the past The 
broker said that Prudential, the 
US insurance giant, currently 


owned more than 9 per cent of 
A&A, and Farmers - the US 
insurance subsidiary of BAT of 
the UK - had once owned a simi- 
lar stake. 

A&A, which in the 1980s 
bought the Canadian firm Reed 


Stenhoose, as well as Sphere 
Drake and Alexander Howden in 
the UK, is the second biggest bro- 
ker in the world after Marsh & 
McLennan. It suffered fraud- 
related losses at Alexander How- 
den, and in 1992 announced a 
5145m after-tax charge to cover 
asbestos and environmental lia- 
bilities taken on with Sphere 
Drake, ft said part of the 5200m 
from AIG would be used to buy 
reinsurance to cover the Sphere 
Drake losses, although its assess- 
ment of the scale of these losses 
h ad not changed smeft 1 99? , 

AIG win receive an 8 per cent 
dividend on its convertible pref- 
erence stock, payable in addi- 
tional securities. The stock is 
convertible tntn iwnmnn shares 
at 517 a share - a rate fixed dur- 
ing discussions between the two 
companies cm May 13, when the 
share price slumped towards 514. 
Since then, the shares have 
climbed steadily, gaining another 
5% yesterday to trade at 5 16% at 
lunchtime in New Tork. 

Lex, Page 16 


Wellcome opts for single 
auditor to cut costs 


By Andrew Jack and 
Daniel Grew in London 

The board of Wellcome, the UK 
pharmaceuticals group, has 
approved a plan to remove 
accountants Touche Ross and 
appoint Coopers & Lybrand as 
sole global auditor and lead tax 
consultant from next year. 

Details of the plan emerged 
after the company announced on 
Friday the surprise departure of 
Mr John Precious as finance 
director. This was the latest in a 
series of management changes, 
presided over by Mr John Robb, 
chairman and chief executive. 

However. Mr Justin Court, 
group financial controller, 
stressed yesterday: “I really 
want to be utterly categorical 
that there is no connection with 
the departure of Mr Precious.” 

He said the controller's depart- 
ment had begun considering a 
change to a single firm a year 
ago in an effort to save costs. 
“Our level of indulgence has 
gone down somewhat. We are 
quite keen to get a bit more 
briskness.” 

He said Coopers won the audit 
following a “beauty parade” 
which included the three other 
firms that audit Wellcome sub- 
sidiaries around the world: 
Tbucfae Ross. Price Waterhouse 
and KPMG Peat Marwick. 

Mr Court expected the compa- 
ny’s total audit fee - which was 
£800,000 last year - to fall by 


'.T 



'• Vi • t 



SWriUgv 



John Robb: has presided over management changes 


30-40 per cent. But he said that 
Coopers, the UK’s largest firm, 
had won the contract primarily 
because or Its strength in the 
pharmaceuticals sector. 

Some Wellcome executives are 
believed to have expressed anxi- 
eties about Touche following last 
year's reprimand of Trafalgar 
House, one of its audit clients, by 
the Financial Reporting Review 
Panel, the UK accounts watch- 


Barry Riley 


dog. But Mr Court said this was 
not a factor in the selection. 

WeHcome's decision is the lat- 
est in a trend among intemar 
tional companies to appoint a 
single global firm of accountants 
as auditors. 

Touche Ross has recently 
gained the worldwide audits of 
Reed-Elsevier and Credit Lyon- 
nais. Coopers is global auditor to 
companies including Glaxo. 


Tricky timing in the 
alternative markets 


Commodity 
f ' 'N market fever has 
if - if - r' coole ^ slightly 
in the past few 
I pftK if days, but portfolio 
strategists are still 
tempted to dabble 
in real assets. As 
v for equities, com- 
modity-related sectors such as 
oils and mineral extraction are 
among the few showing gains 
falbeit modest) in the London 
stock market since the beginning 
of this year. Gold mining stocks, 
though, have been having an 
indifferent time. 

With commodities, of course, 
you have to pick your moment 
In general they have been rotten 
investments over the long run, 
with a steady fall in real values 
stretching over the whole cen- 
tury, and particularly in the 
1980s - although there have been 
spectacular upsurges from the 
trend, such as during the Korean 
War and the inflationary scares 
of the 1970s. There are one or two 
exceptions, such as timber, which 
has been sustaining a fairly rapid 
real rate of increase - of close to 
5 per cent a year in some cases, 
according to a recent World Bank 
study. 

Nevertheless the general trend 
is downwards, probably 
reflecting consistent declines in 
costs of production and trans- 
port. both for agricultural and 
mineral commodities. The point, 
however, is that in cyclical terms 
the time for commodities to shine 
ought to be just about now. 

Last March Mr Sushil Wad- 
whani of Goldman Sachs noted 
that the year after the US Federal 
Reserve begins to raise 
short-term interest rates tends to 
be a strong period for commodity 
prices. Since the 1970s such 12- 


month periods have produced 
average price rises of about 15 
per cent, depending on tbe index 
used, while equities and l espe- 
cially) bonds have struggled. 

It might seem odd that com- 
modity prices should rise when 
the carrying cost has just been 
increased, but of course there are 
much more powerful influences 
involved. Inflationary fears that 
may have stimulated the interest 
rate rise are negative for bonds 
but positive for commodity 
prices. Stronger economic growth 
is likely to be affecting the sup- 
ply-demand balance. Moreover 
the transfer of speculative activ- 
ist cyclical terms 
the time for 
commodities to 
shine ought to be 
iust about now 


ity from the securities markets to 
commodities in search of richer 
pickings will itself tend to push 
up prices for a while. 

At any rate, the pattern 
appears to be repeating itself. 
Many commodity prices have 
been quite firm this year. The 
indices vary considerably, but 
the Economist index is up 17 per 
cent while Goldman’s own index 
is up a more modest 7 per cent. 
Curiously the CRB Futures 
Index, which so terrifies the US 
Treasury' bond market when it 
strengthens, is scarcely changed 
on balance, after retreating from 
a late May peak. 

Such rises are entirely in accor- 
dance w*th the historical cyclical 
patterns, and do not imply any 


general rise in the rate of infla- 
tion globally. It is notable, for 
instance, that gold has played lit- 
tle part in the recent revival of 
tbe commodities markets. Gold 
bad its own speculative run a 
year ago. when it reached $405 an 
ounce before the Soros/Goldsmith 
bubble burst. This year it has 
been trading quietly about 515 
either side of the current 5380. 

Some strange things may nev- 
ertheless hav* been going on in 
the gold market, where a tumble 
in the gold lease rate signifies 
structural changes - perhaps 
heavy central bank selling 
absorbed by speculative buyers. 

However, the real targets for 
commodity speculators have 
been the metals and soft com- 
modities which have been selling 
at below average production 
costs and are best placed to bene- 
fit from cyclical recovery. 

Some of the rises in 1994 so far 
have been quite sharp - includ- 
ing 23 per cent on North Sea 
crude oil, 26 per cent on copper 
and 70 per cent on coffee. But the 
markets have been dangerously 
flooded with speculative money. . 
much of it diverted from bonds 
after the spectacular end of last 
year's bull market. j 

Commodity markets ran there- . 
fore be seen as reflecting the Hip- ! 
side of bond market sentiment: if 
it becomes generally accepted by 
the markets that the US economy 
is slowing down and inflation 
will stay reasonably low the 
money could flow straight back. 

So although the cyclical case 
for commodities remains valid, 
certainly if economic recovery 
kicks in later this year in conti- 
nental Europe and Japan, the 
ride is not likely to be at all 
smooth. There is no easy alterna- 
tive to the securities markets. 


Vodafone dares 
rivals to cut mobile 
phone tariffs 


By And rew Adonis in London 

Vodafone, the UK mobile 
communications group, said it 
expected to make no cuts in 
mobile ph one t a riffs tiiin year 
and dared its rivals to cut theirs. 

At yesterday's results meeting 
Mr Gerry Whent, chief executive, 
said: “They dare not cut another 
single penny, otherwise they will 
never see a profit” 

Cellnet, Vodafone's main rival 
in the mobile cellular market, 
immediately responded that it 
was “happy to see that Vodafone 
shares our view that no price 
cuts are. needed”. 

Tbe annonnogments took same 

analysts by surprise, given that 
some mobile phone tariffs have 
fallen by more than a third in the 
past year, which has seen the 
launch of Mercury One-2-One and 
Hutchison Microtel’s Orange. 
However, one analyst said the 
statements were a “dear bid” to 
reassure the new operators that 
they need not resort to tariff cut- 
ting to build UK market share. 

Vodafone announced a 13 per 
cent rise in pre-tax profits to 
£363An ($547m) for the year to 
March 31. Turnover increased 28 
per cent to £850 -5m, or 19 per cent 
leaving aside acquisitions. 

Mr Chris Gent, managing direc- 
tor of Vodafone's UK activities. 


predicted that the UK cellular 
market would grow by about 50 
per cent this year, with Vodafone 
broadly maintaining its 59 per 
cent' share of the value of new 
business, althnngb its share of 
overall subscribers might fall 
Last year it saw 40 per cant 
growth to L17m in subscribers to 
its UK network. 

Vodafone darned to have 57 
per cent of the lucrative UK cel- 
lular business market, despite 
falling to 54 per cent of subscrib- 
ers as a whole - with most of the 
loss having gone to Cellnet. 

Mr Whent said the company 
laced two challenges: transfer- 
ring new UK customers from its 

analng ng to its new digital net- 
works; and building up its inter- 
national holding s to equal its UK 
wllniar business in terms of the 
value of overseas markets cov- 
ered. 

Startup costs trebled to £4Sm 
last year and are projected to 
reach £80 m this year. Tbe group 
had year-end net cash of £in.lm, 
down from filffiAn. 

Earnings per share rose 10 per 
cent to 244J4p (22jj7p). A final div- 
idend of <L23p makes a total of 
SJfip, up 20 per cent ' 

Vodafone is proposing a two- 
for-one scrip issue. Its shares 
slipped to 518p yesterday. 

Lex, Page 16 


Metra and 
Securitas 
to merge 
lock sides 


By Christopher Srown-Humes 
in Stockholm 

A plan, to create one of Europe’s 
leading companies in locking 
and access control systems was 
yesterday unveiled by Metra, the 
Finnish industrial group, and 
Securitas of Sweden. 

Metre’s Abloy Security divi- 
sion will merge with the Securi- 
tas Lock Group to form Assa- 
Abloy AB, a company with 
SKr&5bn (5443m) tn annual sales 
and 4,600 employees. The aim is 
to Hst the c ompa ny on the Stock- 
holm and Helsinki stock 
exchanges next spring. 

Metra said the merger would 
create a strong company, capable 
of expanding and competing in 
Europe. It will be Europe’s big- 
gest manufacturer of cylinder 
locks. A final agreement is due 
to be signed in September. 

The arrangement enables 
Metra to focus on diesel engines 
and bathroom ceramics, while 
allowing Securitas to concen- 
trate on guard services and 
alarm systems. 

The Finnish company will ini- 
tially hold 65 per cent of Assa- 
Abloy and will receive a cash 
payment out of the new company 
to compensate for the size differ- 
ence between Abloy Security and 
Securitas Lock. Abloy had 1993 
sales of SKi2J5bn and a SKr46m 
profit, compared with profits of 
SKr78m on sales of SKrlhn at 
Securitas Lock. 

When the merged company is 
listed, Metra’ s holding is expec- 
ted to fan to 40 per cent, but it 
will remain the largest single 
owner. Ihis is because Securitas 
intends to distribute its 4S per 
cent stake to shareholders in 
what is effectively a demerger. 

Securitas said its net debt 
would ten to nil from SKriOOm 
giving it & stray;, financial base 
bom which to expand. It holds 
, more thaw S^perca&of the Euro- 
pean security market ' 

Assa- Abloy will he based in 
Stockholm and Mr Carl-Heurlc 
S van berg, first executive 
vice-president of Securitas, wfil 
be president and executive. 

the Nordic region will account 
for nearly half of total sales, but 
the US will be the largest single 
market with 1893 pro-forma 
sales of SKr860m. The UK and 
Germany are also large markets. 

Securitas’s lock operation, 
Assa, has a substantial UK mar- 
ket share and a .strong position 
in the US and German high secu- 
rity market Abloy’s operations 
include Cardkey in the US, Ikon 
in Germany mid TrioVmg in 
Nonray. . .. 


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/^ v 













IS 


FINANCIAL TIMES WEDNESDAY JUNE S 1994 


INTERNATIONAL COMPANIES AND FINANCE 


SMH looks for modest 


improvement this 


By Ian Rodger hi Bern 

SMH , the leading watchmaking 
group, is looking for only mod- 
est profit growth again this 
year, but has renewed confi- 
dence in the long-term pros- 
pects of its core business. 

Questions have been raised 
in recent months about the 
once fast-growing group, 
known best for its Swatch plas- 
tic watches, following the stag- 
nation of sales last year and 
muted reports about its diversi- 
fication attempts into tele- 
phones and a Swatch car. Its 
bearer shares have lost a third 
of their value since last July. 

Mr Nicolas Hayek, chairman, 
said the modest 7 per cent 
growth in net income to 
SFr441m ($315m) last year after 
two years of double digit rises 
was due mainly to a decision 
not to raise Swatch prices in 
countries whose currencies 


fell against the Swiss franc. 

The continuing strength of 
the franc was a problem as the 
group did not want Swatch to 
lose Its low price identity, be 
said. 

He dismissed suggestions 
that demand for Swatches was 
reaching saturation point US 
sales had been disappointing 
last year, but were improving 
following management 
changes. 

In Germany, first-quarter 
unit sales were up as per cent 
in a flat market 

Mr Hayek Insisted that wrist 
watches would remain the 
group’s core business, and 
Swatch, with a third genera- 
tion of models on the way, 
would play a vital role in the 
volume sector. 

Together with the related 
ETA components subsidiary, 
Swatch accounted for about a 
third of group profits, he said. 


year 

The group saw higher mar- 
gin opportunities in its up- 
market brands, including 
Blancpain. Omega, Longings, 
Rado and Tissot, which 
account for 42 per cent of prof- 
its. 

The slow developing diversi- 
fication into telephones was 
taking a new direction into 
cordless sets. Mr Hayek said 
the group might acquire th e 
telephone set division of a 
major leading telecoms manu- 
facturer. 

The recently announced 
Joint venture with Daimler- 
Benz to develop an environ- 
mentally friendly Swatch city 
car would not require any 
more than 30 per cent of SMB's 
cash flow in the the next three 
or four years. 

The car would reach 
break-even point three years 
after sales began, at the latest, 
at the end of 1997. 


Nestle may buy Volvo food unit 


By Christopher Brown-Humes 

Nestle, the Swiss food group 
yesterday confirmed its inter- 
est in baying Branded Con- 
sumer Products, the food, 
drink and tobacco company 
which Volvo wants to sell as 
part of a programme to focus 
an its vehicle businesses. 

"We are interested in buying 
BCP. In fact we have started 
negotiations with a view to a 
possible acquisition," Mr Hel- 
mut Maucher, Nestl§ chairman 
said in an interview with La 


Grace ta de los Negocios the 
Spanish business daily. 

Volvo said Nestte was one of 
several groups which had 
shown an interest in BCP, but 
it declined to identity the othr 
ers. 

BCP, which indudes Swed- 
ish Match and some of Swe- 
den's best-known food and 
drinks brands, is the biggest 
single unit on Volvo's sale list 
and is expected to raise more 
than SKr20bn (£2ibn). 

The consumer products 
group achieved first-quarter 


profits after financial items 
of SKr296m on sales of 
SKr485bn. 

Volvo holds 74 per cent of 
BCP and has launched a bid 
for the outstanding shares. Its 
offer expires on Friday. 

The vehicle group wants to 
gain 100 per cent control of 
BCP before it enters detailed 
disposal talks. 

BCP was formed in late 1993 
after the break-up of Procordia, 
a drugs-to-food group jointly 
controlled by the Swedish state 
and Volvo. 


UK water group cuts 900 jobs 


By Peggy HoEnger In London 

Anglian Water yesterday 
announced 900 job cuts in the 
latest indication of the 
upheaval facing the water sec- 
tor as it faces a tougher pricing 
regime from next year. 

The UK utility, based in the 
Huntingdon constituency of 
prime minister Mr John Major, 
is cutting 17 per cent of the 
MOO jobs in its core water and 
sewage business. Anglian is 
believed to be one of the top 
five employers in the region. 

Mr Chris Mellor, Anglian’s 


finance director, said most of 
the job cuts would come from 
administration, with little 
scope left for cutting the blue 
collar side after cuts in the 
mid-1980s. At least two or more 
layers of management would 
be stripped out, he said. 

Anglian is taking a £60m 
($Slm) provision this year to 
pay for the redundancies and 
reorganisation. Mr Mellor said 
Anglian expected to make cost 
savings of more than £2Qm a 
year after 1996-97. with some 
savings beginning this year. 
About 500-600 of the proposed 


job cuts would take effect from 
October, with the balance over 
the next two years. 

The announcement comes as 
water companies examine the 
draft price increases set by 
Ofwat, the industry regulator, 
in May. Mr Ian Byatt, director 
general of Ofwat, Is thought to 
feel the water companies have 
not cut costs quickly enough 
since privatisation in 1989. He 
is expected to set tough effi- 
ciency targets as part of the 
current price review, which 
will be made public on July 28- 
Lex, Page 16 


Huhtamaki 
hit by lower 
growth in 
first term 

By Christopher Brown-Humes 
hi Stockholm 


Shares in Huhtamaki, the 
Finnish confectionery, food 
packaging and pharmaceuti- 
cals group, fell 10 per cent yes- 
terday after It produced lower- 
than-expected profits in the 
first four months. 

Taxable profits increased by 
4 per cent toFlOLUm (t20.4xo), 
sharply lower than the 
FM150m profit anticipated by 
the market 

The shares fell to FM189 
from FM210. 

“People have got used to a 
Mg increase in Huhtamakl’s 
profits and this slowdown was 
not expected,” an analyst said. 

The performance reflected a 
slight improvement in operat- 
ing profit, which rose to 
FM163m from FMlBlm, and a 
small reduction in financial 
costs to FM51m from FM53m. 

Sales were up 13 per cent at 
FM2.7bn. Much of the growth 
derived from acquisitions 
which lifted the European 
sales of the Leaf confectionery 
business and Polarcup packag- 
ing. 

This helped to compensate 
for a dow n t ur n in Leafs North 
American operations and a 
stronger markka. 

Mr Timo Peltola, chief exec- 
utive, said the group had a 
sluggish winter but market 
prospects for the rest of the 
year were slowly improving. 
Leaf, the world’s 10th largest 
confectionery group, is expec- 
ted to win market share in 
North America while Polar- 
cup’s business is forecast to 
pick up during the summer. 


Amer advances 
76% to FM81m 

Amer, the Finnish consumer 
group, saw pre-tax profits rise 
by 76 per cent to FMSlm 
(814.7m) in the first four 
months, in spite of a worse per- 
formance from its Wilson 
sports unit and lower sales, 
writes Christopher Brown- 
Humes. 

Sales fell 5 per cent to 
FM157bn, reflecting a stronger 
markka, divestments and a 6 
per cent drop in Wilson’s sales. 


Ina takes the privatisation trail 


A fter a pause for monld- 
breaJdng general elec- 
tions, the Italian priva- 
tisation show hit the road 
again yesterday. 

Less than three weeks after a 
parliamentary vote of confi- 
dence in Italy's new right-wing 
government, the Italian Trea- 
sury published the prospectus 
for the sale of up to 51 per coot 
of the Ina insurance group, 
which claims a bigger market 
share than any of its private- 
sector rivals in Italian life and 
non-life business. 

The price for Ina shares will 
not be set until June 25, two 
days before the retail offer is 
launched, but the Treasury has 
confirmed that it will he 
between IA200 and L 2,700 a 
share, valuing the whole com- 
pany at L8 1 8GObn-L10,8O0bn 
(85.4ira-S6.7bn). That will make 
Ina the biggest privatisation 
attempted by the Italian state, 
although it is almost certain to 
be dwarfed within a year by 
the sale of state-owned hold- 
ings in Stet, the telecommuni- 
cations group, EneL the elec- 
tricity utility and Eni, the 
energy and chwniwiia group. 

One challenge for irm and its 
advisers is maintaining the 
momentum of investor inter- 
est This was seen in the previ- 
ous sales of the financial 
groups, Izni, Credito Ftaliano 
and Banca Commerciale Ital- 
ians (BCI). Domestically and 
internationally, both Stet - 
already a quoted company - 
and Eni are better known. 
They are politically sensitive, 
which means they attract more 
madia interest Hian Tna has in 
its 82-year history. 

That said, the Tna saia IS not 
short on technical and political 


innovation. Hie last two public 
offers - of BCI and Credito Ital- 
ians - were criticised, after 
allies of Mediobanca, the Mi l an 
mer chant hawk, installed their 
nominees on the board. 

New restrictions in the Ina 
sale will prevent such manoeu- 
vring by treating investors 
link ed through other compa- 
nies' shareholder syndicates as 
though they are acting in con- 
cert Together, such investors 
will not be able to buy more 
than 5 per cent of Jna. In addi- 
tion, arn?ii shareholders’ nomi- 
nees will have seats reserved 
for them on the board, offset- 
ting the dominance of large 


“But our potential is much 
greater than theirs." 

In particular, the group is 
hoping to take advantage of 
the opportunities in Italy’s 
underdeveloped life insurance 
sector. 

Life insurance represents a 
comparatively low share of the 
overall Italian market, because 
of generous state pension pro- 
visions. In 1992, for ex a mp le, 
life insurance accounted for 27 
per cent of the Italian market, 
compared with 66 per cent of 
the UK market But increasing 
pressure on the Italian pen- 
sions budget means life insur- 
ance and other linked savings 


The sale of 51 per cent of the insurance 
group will be Italy’s largest disposal, 
writes Andrew Hill in Milan 


ingHhiHnns , a trend likely to 
be continued. 

Mr Lorenzo PallesL, Inn’s 
chairman since 1990, and a for- 
mer head of Prudential’s Ital- 
ian operations, believes a simi- 
lar Mediobanca-inspired raid 
on the Ina board is unlikely. 

I n any case, he will have 
pnrnig h on his plate bring- 
ing the group up to the 
same levels of efficiency as its 
competitors, without having to 
worry about boardroom in- 
fighting. Ina has been totally 
owned and managed by the 
state since 1912, and benefited 
from compulsory contributions 
from other insurance compa- 
nies, until last year. 

“Some other insurance com- 
panies are probably operation- 
ally more profitable than us,” 
admits Mr Pallesi, disarmingly. 


products are likely to be taken 
up as alternatives. 

Ina still leads the sector - 
with an 18 per cent share at 
end-1982 - but has watched its 
hold over the market decline 
over the last few years. 

However, Ina believes it 
should be able to arrest the 
decline by revamping its exten- 
sive distribution network of 
more than 7,000 sub-agents and 
sales people throughout Italy 
and by tapping the fast- grow- 
ing bancassurance sector 
through an agreement with 
Banca di Roma, one of Italy’s 
biggest banks, to sell Ina’s 
products through the bank's 
extensive network. 

Over the last year, Ina has 
tried to counter disaffection 
amid the ranks of its agents - 
most of whom are not 
employed directly by the com- 


pany, but concentrate exclu- 
sively on the sale of Ina prod- 
ucts - by promoting younger 
more dynamic sales people, 
rYiawg fo g about 25 per cent tfl 
the network. 

A t the same time, the 
company is to promote 
the links between Its 
life business and the sale of 
non-life products through its 
subsidiary, Assitalia. Accord- 
ing to the company, this 
should offset the handicap 
imposed by new European 
Union regulations which pre- 
vent Ina and Assitalia from 
taking the logical step of unit- 
ing into a composite Insurer, 
along British lines, just at the 
moment when EU liberalisa- 
tion is increasing competition. 

The board’s second task, 
after restructuring the distri- 
bution network, will be to 
attend to Ina’s extensive prop- 
erty assets. 

The group starts with the 
advantage that its owners at 
the Treasury have allowed it to 
revalue the assets, which 
range from ordinary apart- 
ments to the historic Ptdaao 
Strozzi in Florence, more than 
doubling their book value. If 
Ina sells some of its real estate 
- valued at just over L7JXXftm 
- it win only have to pay tax 
on the increase since the year- 
end revaluation. 

Some analysts see the low 
yield on this property as evi- 
dence that the assets have 
been overvalued, but at least 
this strong capitalisation 
should mean that Mr Pallesi 
will be able to honour his 
pledge that no capital 
increases will be attempted 
“for the foreseeable future". 


Two Italian banks seek capital injections 


By Andrew HE 

Two of Italy’s biggest banks 
have outlined plans for 
increases in capitaL 

Credito Italiano. recently 
privatised, is to ask sharehold- 
ers for authorisation to 
increase its capital by a nomi- 
nal value of L2bn (gigm) over 
the next five years, through 
the issue of shares or a mix- 
ture of shares and bends. 

Meanwhile. Cariplo, the 
Milan-based savings hank, has 
finalised plans for a two-stage 
increase in capital which 
should raise more than 


L2,500bn for the bank and 
allow the company to float a 22 
per cent stake on the Milan 
stock market The first stage of 
the offer is likely to start on 
July 1L 

Credito Italiano ended specu- 
lation about an imminent 
rights issue with a statement 
yesterday convening an 
extraordinary meeting of 
shareholders at the end of 
June to vote on a new author- 
ity. 

Banc a Commerciale Ttelifr™, 
Italy’s other recently priva- 
tised bank, announced plans 
for a fully-fledged issue of 


shares and warrants last week, 
to raise up to IAJXBbn. 

BanMng sources said that 
Credito Italiano did not need to 
raise capital to finance its own 
development over the next few 
years. 

However, the group wants to 
be in a position to move 
quickly if there are opportuni- 
ties for acquisitions. 

Cariplo announced in April 
that it was planning to float 
new shares in Milan. 

On Monday, the bank con- 
firmed that a first tranche of 
600m shares would be issued at 
between L2.350 and L2.750, 


raising between Ll,410bn and 
Ll,650bii. 

Institutional shareholders 
will be limited to a 3 per cent 
stake in the company. The 
group has agreed to protect 
small shareholders' interests 
by reserving certain seats on 
the board for their nominees, 
an idea borrowed from the gov- 
ernment's new rules for priva- 
tisation of the Ina insurance 
group. 

A second tranche. In the 
form of bonds and warrants, 
will be sold before June ,30, 
1995, and should raise more 
than Ll,000bn. 




# 





— j . 


Heading for the islands 


Good news for private international inves- 
tors: Bank Julius Baer (Guernsey) Ltd is 
now open for business. 

A member of the Julius Baer group - one of 
Switzerland's most prestigious private bank- 
ing organisations - Bank Julius Baer 
(Guernsey) Ltd offers a wide range of off- 
shore financial services. These include: 


• Asset management 

• Trust services 

• Custody facilities 

• General banking services 

If your financial needs call for sound off- 
shore planning, simply get in touch with 
Colin Grant or Michael Rivett-Carnac. 


JBp=B 

BANK JULIUS BAER (GUERNSEY) LTD 

P.O. Bex 87. Fran c«a House. Sir WBlIam Place, St Peter Port 
Guernsey, Channel Islands, GY! 485, 

Telephone 0481-726618, facshnHc 0481-728813 


Deposits with Book Julius Baer (Guernrey) Lid in Guernsey axe not twinctwl by (he Deposit Protection Scheme under 
Ibc Bonkmj; act 1*57. Bant Julius Baer (Guernsey) Lid is njgkiered in Guernsey under the Protection of Depositors 
(Basltwtak of Guernsey) OtUImjwu 1»7I as amended. 


NIPPON CHEMI-CON 
CORPORATION 

U.S. $80,000,000 
Guaranteed Floating Rate 
Notes due 1996 
(Coupon No. 7) 

In accordance with the conditions of the Notes, notice is 
hereby given that for the six-month period from 
Sth June 1994 to 8th December 1994 (183 days) the Notes 
will cany an interest rate of 5.225% p.a. Relevant interest 
payments mil be as follows: 

Notes of U.S. $10,000 
DJS. $265.60 per coupon. (No. 7) 

THE SANWA BANK, LIMITED 
Agent Bank 

v J 


f NATIONAL 

Abbey National 

Treasury Services pic 

ussiooo.ooo,ooo 

Guaranteed Floating Rate 
Notes 1999 

Notice is hereby gfven that 
the notes will bear interest at 
4 per annum from 8 June 

1994 ro8 September 1994. 
interns: payable on SSeptember 
1994 uiU amount to USS IL50 per 
L&S 1.000 note. USSI75.00per 
USSIO.OOO note and USSI.150.00 
perUSmO.OOOnoieL 

Agent Morgan Guaranty 
Trust Company 

JPMorgan 


These securities were placed under Regulation S and Rule M4A under the Securities Act 
of 1933 and may not be offered or sold m the United States absent registration or an 
appRcable exemption firm the registration requirements. These securities having 
been previously sold, this announcement appears as a matter of record only. 

THE BANK OF NEW YORK 

is pleased to announce 
the establishment of a 

SPONSORED 144A GLOBAL DEPOSITARY 
RECEIPT (GDR) FACILITY 

and a 

SPONSORED GLOBAL DEPOSITARY 
RECEIPT (GDR) FACILITY 

for 

ASHANTI 

GOLDFIELDS 

COMPANY LIMITED 

THE 

RANKOF 

NEW 

YORK 

For further information regarding The Bankof New Yorfck Depositary Receipt 
Services, please contact Kenneth A Lopian (212) 815-2084 in New York, 
Michael McAutifie (071) 322-6336 or Chris Kearns (071) 322-6322 in London. 


The Kingdom of 
Denmark 

US$1,000,000,000 
Floating rate notes 1997 

The notes will bear interest 
ta 4.4375% per annum from 
8 June J994 to 8 September 
1994. Interest payable on 
8 September 1994 will 
amount toUSSI 1.34 per 
USS 1,000, USSm40per 
USSI0.000 and USS 1, 134.03 
per USS 100,000 note. 

Agent* Morgan Guaranty 
Trust Company 


U.S. $125,000,000 


GREAT LKEi FEDE34L 3KIINQ 


Collateralized Floating Rate Notes 
Series A due December 1997 . 

In accordance with the provisions at Hie Notes, notice is hereby 
given that far the three months Interest Period from June 8, 1994 to 
September 6. 1994 the Notes wBf carry an Interest Rate of 
4.9375% per annum. The Interest payable on the relevant payment 
date. September 8. 1994 wJH be U.S. $1,261.81 per U.S. $100,000 
principal amount of Notes. 


By: The Chase M an h att a n Bank. NJL 
London, Agent Bank 

Junes. 1994 


G 


CHASE 


LOW COST ! ' V;r - 

SHARE DEALING SERVICE 081-944 0111 


i dm ins 
\< vs 


m -H* UliM-HCU r< 


Notice ofRevocaiSoii of Guarantee to cbe 
holders of the outstanding 

6% Guaranteed Redeemable 
Convertible Preference Shares due 2003 
(the '•Preference Shares") 
issued by 

MEGGITT FINANCE N.V. 

(the “Issuer”) 

and guaranteed by and convertible hue Ordinary Shares 
(the "Ordinary Shares") 
of 

MEGGITT PLC 

{forrocriy Meggitt Holding* pic) 

(the “Company") 

Id accordance with the tenns of Clause 3 of the deed poll (the “Deed 
Polf) fflVM by the Company on 8 July 1988 constituting rfig gmnuuoc nf 
the Preference Shares (the “Guarantee'’), notice is hereby given that die 
Guarantee will be revoked with eflect on 7 August 1994 (the “Revocation 
Date"). The revocation of the Guarantee is without prejudice to the 
operation of the Guarantee in respect of any payment of 
moneys or dividends in ndaewn to the Preference Shares expressed to be 
due, or any darm or other rights in relation to the exercise of the 
Conversion Rights (as defined below) in relation to any Preference 
Shares, on or poor to the Revocation Date and in respect of any 
dividends accruing after a Mure to pay such redemption moneys. 

The Preference Shares will be redeemed on 8 July 1994 (the 
“Redemption Date") at the redemption price of £1*266.67 per 
Preference Share together with dividends accrued but unpaid to but 
excluding the Redemption Date all as calculated in accordance with the 
Issuer’s Articles of Association. 

Redemption payments on the Preference Shares and payment of 
diridends in respect thereof will be made presentation and 

surrender of the relevant certificates or, as the case may be, the relevant 
coupcais on o r after the Redemption Dare at the specified office of any of 
the Paying Agents. On the Redemption Date, unmatured coup o ns 
relating to such Preference Shares (whether or not attached) shall 
became voidand no paymenr wfll be made in respect of them. Where any 
Preference Share is presented for redemption wirhout all unmatured 
oaupans relating to it, redemption shall only be m«A. the 

provision of such indemnity as the Issuer or the Company may require. 
The hold ers of any Preference Shares retain the right to convert their 
Preference Shares into Ordinary Shares in accordance with the terms of 
the Deed Poll i,tbc “Conversion Rights") up to the dose of business Ml 
the seventh day before the Redemption Dare. 

The foregoing is subject to the provisions contained in the Deed Pall, the 
Issuer’s Artides of Incorporation and the Agency Agreement relating to 
the Preference Shares. 

Principal Paying Agent 
Kredietbsnk SA, Luxcmbourgmse 
43 Boulevard Royal 
L-2955 Luxembourg 

faring and Conversion Agents 

KrediefbsnkN.V., London Kredietbank N.V, Brussels 

7th Floor, E x chan g e House Arcnbogstraat 7 

Primrose Street B-1000 Brussels 

London EC2A2HQ Belgium 

Swiss Bank Corporation 
Acscbcnpiacz 6 
CH-4002 Basic 
Switzerland 

For and on behalf oE MEGGITT PLC 
Date; 8 June 1994 


EsprRiro Santo Financial 
Holding S.A. 

Soci£t£ Anonym c 
Luxembourg, 37. rue Notre- Dame 
R.C. Luxembourg n° B 22232 

Notice to the Shareholders 

A div idend of 5US 1.30 per stare will be paid against pre- 
sentation of coupon 7. 

Payment: from June 24th, 1994 

Paying. Agent; Kredietbank Luxembourg 

The Board of Directors 




FINANCIAL TIMES WEDNESDAY JUNE 8 1994 


19 


INTERNATIONAL COMPANIES AND FINANCE 


Daewoo in joint 
venture with 
DCM-Toyota 


By John Burton in Seoul and 
Kflvln Done In London 

Daewoo, the South Korean 
industrial group, is planning a 
joint venture car assembly 
plant In India as part of a pro 
ductum expansion in its motor 
division in the developing 
world. 

The venture with India's 
DCM-Toyota, received Indian 
government approval last 
week, and will begin car pro- 
duction next year. 

The new company, which 
will be renamed DCM-Daewoo, 
will be capitalised at $200 tu 
with Daewoo ho lding a control- 
ling 51 per cent stake. 

Daewoo will renovate the car 
production lines at DCM-Toyo- 
ta's plant in Noida City, which 
will assemble kits of Daewoo's 
LeMans Racer. Initial produc- 
tion will be 25,000 vehicles, but 
will increase to 50,000. 

Daewoo is focusing on the 
developing world to achieve 
rapid growth for its car divi- 
sion, although it is also plan- 
ning to market cars in western 
Eurppe in 1995 and the US a 
year later. 

It is planning joint venture 
car assembly plants In the Phi- 
lippines, Vietnam, Uzbekistan 
and Romania, all of which Poona with a total investment 
are expected to go into of DM250m ($149.7m). 

Western Mining finds 
new gold deposit 


operation in 1995 or 1996- 
The strategy is part of Dae- 
woo's plans to quadruple car 
output to 2.2m vehicles by 
2000. with almost half the pro- 
duction to be located abroad. 

Several of the world's lead- 
ing carmakers are currently 
seeking a foothold in the 
Indian auto industry. 

General Motors of the US, 
the world's biggest vehicle 
maker, is to start car produc- 
tion in India in a joint venture 
with Hindustan Motors making 
an investment of around 
?100m. 

The GM venture will assem- 
ble the Opel Astra, GM's best- 
selling car in Europe, and will 
have a capacity to produce 
about 20.000 cars a year on two 
shifts starting in the third 
quarter of 1995. 

Production will be located at 
an existing Hindustan Motors 
facility at Halol, near Vado- 
dara in the state of Gujarat 
Mercedes-Benz of Germany 
meanwhile is to take 51 per 
cent in a joint venture with 
Tata Engineering and Locomo- 
tive (Telco). They plan to build 
up to 20,000 Mercedes-Benz 
E-Class executive cars a year - 
together with 50,000 petrol and 
diesel engines -at a plant near 


By Nfldd Taft In Sydney 

Western Mining Corporation, 
one of Australia's largest min- 
ing groups, announced yester- 
day that it had discovered a 
new gold deposit in the vicin- 
ity of its existing Kamhaida/St 
Ives nickel-gold operation in 
Western Australia. 

The deposit, named Redoubt- 
able, lies beneath shallow lake 
sediments on Lake Lefroy at 
Kambalda. WMC said that the 
deposit was u of modest size". 
Evaluation drilling is still 
under way, and an estimation 
of the ore reserve is not yet 
available. 

However, the Melbourne- 
based company added that the 
potential existed for an open- 


pit resource of around lm 
tonnes, at a grade of four 
grams per tonne. 

• Mr John Ralph, chief execu- 
tive of CRA, the Australian 
mining group in which RTZ of 
the UK holds a 49 per cent 
stake, is to retire on June 24 - 
four months earlier than previ- 
ously announced. 

CRA has already outlined 
the succession plans, which see 
Mr Leon Davis. CRA's mining 
director, take over as chief 
executive. Mr Ralph will ini- 
tially become a non-executive 
director and deputy chairman. 

Mr Ralph's decision to quit 
in June “follows review and 
discussion to ensure that there 
will be no negative effect on 
the company". 


Sprint warms up for race to link world telecoms 

The US group’s Franco-German tie-up reflects a global trend, writes Andrew Adonis and Martin Dickson 


I f it is consummated, the 
prospective tie-up between 
Sprint, the third-largest US 
long-distance telecommunica- 
tions carrier, and the state 
telecoms operators of France 
and Germany will be the sec- 
ond of three grand interna- 
tional telecoms alliances due to 
be formed by the end of the 
year. 

It will also set the seal on the 
contract between France Tele- 
com and Deutsche Telekom, 
headed by Helmut Ricke, 
signed last December, when 
the two European state-owned 
companies announced an 
Eculbn (S6 66m) alliance to 
develop much of their interna- 
tional networks business 
jointly. 

The first alliance was 
announced last June, when 
British Telecommunications 
undertook to buy 20 per cent of 
MCI. the second- largest US 
long-distance carrier, and form 
a joint venture with it geared 
to the international business 
market. BT laid out $5.3bn - 
tlbn for the joint venture and 
the rest for the stake. 

“That put the pressure on 
the rest of us with global pre- 
tensions to move fast," says a 
senior Deutsche Telekom exec- 
utive. That meant, in particu- 
lar. the French and German 
operators, the US giant AT&T, 
Sprint, and Unisource - a joint 


venture between the Swedish, 
Dutch and Swiss state opera- 
tors with Telefonica of Spain in 
loose association. 

France Telecom and Deut- 
sche Telekom were already 
linked in a Joint venture called 
Eunetcom. geared like Uni- 
source to the market for “out- 
sourcing" the telecoms needs 
of multinational companies. 
Their decision to deepen the 
alliance surprised no-one. How- 
ever. intensive talks between 
the two and AT&T caused 
widespread consternation, 
given that it would involve a 
union of three of the world's 
four largest telecoms opera- 
tors, each of them from the 
monopoly stable. 

Disputes over the structure 
of an alliance, and fears about 
regulatory approval - the 
Franco-German unit ba« still to 
be approved by the European 
Commission - appear to have 
scuppered the talks. 

AT&T has since been in 
negotiations with Unisource: 
this has already led to 
co-operation between the two 
to win Europe's largest tele- 
coms outsourcing contract. 
And analysts believe it could 
proceed further. 

That tie-up left Sprint and 
the Franco-German partner- 
ship searching for allies. How- 
ever. it has taken more than 
the elimination of prospective 



Helmut Ricke: attracted to Sprint's reputation for innovation 


partners to bring them 
together - a strong business 
rationale underlines the union, 
however difficult it may prove 
to be in practice. 

T he goal for all the com- 
panies engaged in the 
current matchmaking Is 
simple: as international 
telecoms are liberalised, to 
carve out a leading share in 
the market they expect to 
develop for outsourcing the 
telecoms needs of multina- 
tional companies. 


There is room far scepticism 
about the value, even the exis- 
tence, of the market they are 
aiming at According to Data- 
quest the international consul- 
tancy, the European market 
for corporate outsourcing is 
expected to rise from $80Qm in 
1993 to $L7bn in 1996 - out of 
total European spending of 
$186bn on telecoms services 
two years from now. 

“It’s only a tiny fraction of 
the total market they are going 
for," says Ms Kathy Burrows 
at DataquesL 


However, the large telecoms 
operators have convinced 
themselves that the market 
will grow Cast thereafter, and 
that a commanding position in 
it could open up strategic 
opportunities. 

To take advantage of them, 
each believes it needs to be in 
an alliance with tour factors: 
money, a presence in the US, 
Europe and Asia-Pacific; a 
benign regulatory climate; and 
access to state-of-the-art net- 
work services. 

The attraction of Sprint to 
France Telecom and Deutsche 
Telekom is its reputation for 
tedmological Innovation, its 
international data network and 
its US operations. Its network 
ygtcnwlg to all three impor tant 
sectors of the US market long 
distance and international, 
local telephone and cellular 
wireless services. Given its 
small share of the US 
long-distance market (10 per 
cent against AT&T's 65 per 
cent), it is also unlikely to 
alarm regulators on either side 
of the Atlantic. 

S print already has a size- 
able international pres- 
ence of its own, with 
sales offices and joint ventures 
in 34 countries and territories, 
and a stake in global Sbre 
optic links. It is best-known 
internationally for SprintNet, 


one of the world’s leading data 
networks, Uniting computers in 
nearly 100 cities and 32 coun- 
tries. 

SprintNet is used tor sophis- 
ticated corporate data informa- 
tion flows, such as bank trans- 
fer of funds or ordra: processing 
and inventory tracking by mul- 
tinational manufacturing com- 
panies. The group's SprtntMail 
service also a substan- 

tial share of the international 
E-mail market 

S print needs capital to 
expend. And to be a 
respectable operator in 
the International outsourcing 
market, it needs a weighty 
European partner. 

An aiifanfla with the French 
and German operators offers 
the prospect of both. 

But even If an alliance is 
announced, there are plenty of 
potential obstacles. Not the 
Least of them is the severe diffi- 
culties being experienced by 
France Telecom and Deutsche 
Telekom in their efforts to 
restructure in order to face up 
to competition within Europe. 

The privatisation of the 
German operator appears to 
have run into trouble: and so 
afraid is the French govern- 
ment of the backlash from 
France Telecom’s employees, it 
will- not even start the 
process. 


Brierley sells 
building arm 
to HK group 

Brierley Investments, the New 
Zealand hotels and invest- 
ments group, is selling 
Downer, its construction arm, 
to Paul Y-ITC Construction of 
Hong Kong, AP-DJ reports 
from Hong Kong. 

The deal will make Brierley 
a 17 per cent shareholder in 
Paul Y, which will issue 98m 
shares at HKXLSO each to pay 
for Downer. It will also place a 
further 52m of its shares, at the 
same price, with Brierley. 

Paul Y is a Hong-based con- 
struction concern. The merged 
group will have activities in 
Hong Kong, China, south-east 
Asia and Papua New Guinea. 

It will have the financial 
strength to participate in large 
infrastructure projects in Asia, 
Australia and New Zealand, Mr 
Andrew Meehan, Brierley exec- 
utive director said. 


Rhone-Poulenc may sell US unit 


By Richard Waters 
hi New York 

Shares In Rhone-Poulenc 
Rarer, the US drugs company, 
jumped 11 per cent early yes- 
terday on a statement from 
majority owner Rhone-Poulenc 
or France that it is considering 
alternatives that include a sale 
of the business. 

The news came after last 
month's purchase of Syntex, 
another US drugs group, by 
Roche of Switzerland. The deal 
sparked speculation about 
other drugs company deals. 

RPR said in a filing with the 
US's Securities and Exchange 


Commission, that its French 
parent was considering “sev- 
eral alternative transactions 
involving RPR . . . including 
transactions relating to busi- 
ness combinations, mergers or 
transfers or assets of securities 
involving RPR". 

The statement was made in 
connection with a standstill 
agreement signed by Rhdne 
Poulenc when it acquired the 
majority interest in Rorer in 
1990. Under that, the French 
company agreed not to raise its 
stake until after July 31 1997. 

The French group owns 68.34 
per cent of RPR and can only 
change the terms with the sup- 


port of a majority of RPR’s 
non-executive directors. 

The news pushed RPR shares 
up $4% to $39% early yesterday 
in New York, before they eased 
back to $38%. 

RPR’s sales have been static 
as a result of pressure from 
buyers to reduce drugs costs, 
particularly in the US. The 
company's income was also 
depressed in dollar terms as 72 
per cent of its sales are made 
abroad. 

RPR’s sales in its first quar- 
ter were down 5 per cent from 
a year before, at S870m 
(although they remained flat in 
local currency). 


Strong April at Bangkok Bank 


By WilBam Barnes In Bangkok 

Bangkok Bank, Thailand's 
largest commercial bank, has 
taken the unusual step of issu- 
ing a four-month financial 
report soon after reporting an 
rifiusiiai decline in flrst-qaarter 
earnings. The latest report 
shows a 12 per cent advance in 
net profits against a year ago. 

Bangkok was the only one of 
Thailand's leading banks to 
report a decline in first-quarter 
net profits, down 5 per cent at 
Bt3.45bn (3136.7m). 

"We think they wanted to set 


the record straight, having lost 
face with their first-quarter 
results. They seem to have had 
a colossal April.” said HG 
Asia's country manager, Mr 
George Morgan. 

The quarterly profits fall was 
blamed partly on the fact that 
Btl.Sbn of unaccrued interest 
receivables were injected into 
the first-quarter 1993 result. 

The bank's executive vice- 
chairman, Mr Damrong Krish- 
namara, said net profits for the 
first four months of this year 
were Bt5.5bn, compared with 
Bt4.87bn a year ago. 


This shows the bank made 
profits of Btl.92bn in April 
alone, representing 65 per cent 
year- on-year growth for that 
month. It suggests the bulk of 
Bt606m in unaccrued interest 
receivable from a motorway 
contract was taken in April. 
Mr Damrong said the bank’s 
total deposits were 10.2 per 
cent higher than a year ago, at 
Bt569Jbn, at the end of April. 

Early this year, the bank's 
president, Mr Vichit Sura- 
pongchai - number four in the 
bank's decision-making hierar- 
chy - left suddenly. 


Eridania adds 
to Spanish oils 
operations 

By Andrew Hill in Milan 

Eridania B6ghin-Say. the 
French agro-industrial subsid- 
iary of Italy’s Montedison, has 
taken control of Elosua. the 
Spanish edible oils company, 
only a day after getting Euro- 
pean Commission permission 
for the deaL 

The purchase, tor an undis- 
closed price, gives Eridania 
some 40 per cent of the Span- 
ish edible oils market. It 
intends to merge Elosua with 
Koipe, Us own Spanish subsid- 
iary. 

The deal also brings to an 
end a long-running political 
controversy over control of the 
Spanish olive oil sector, and 
creates one of the world’s larg- 
est edible oils group, with a 
combined turnover of just 
under PtalOObn (S729.4m). 


Axel Springer media 
advertising falls 4% 


By Judy Dempsey in Berlin 

Axel Springer, the German 
media group which publishes 
Die Welt, and the mass circula- 
tion Bild daily, and as has 
growing Interests in electronic 
media, yesterday reported a 
rise in profits for 1993. 

Group profits rose from 
DM57.2m to DM71. 4m (342.2m). 
last year. However, turnover 
dipped by 1 per cent to 
DM3.44bn. This was partly due 
to advertising revenue which 
fell by 4 per cent to DMl.52bn- 

In addition, sales to eastern 
Germany weakened. Overall, 
total newspaper turnover rose 
by 2 A per cent to DMl.QGbn. 

The company invested 
DM229 ,9m, compared with 
DMMO&.am the previous year, 
when it was acquiring new 
titles. Last year it also intro- 
duced a restructuring pro- 


gramme aimed at cutting costs. 
• Gustav & Crete Schlckedanz 
Holding Is selling its 97 per 
cent interest in brewer Patri- 
zier Braeu and raising stakes 
in three Quelle-group insur- 
ance companies, Reuter 
reports from Nuremberg. 

Schlckedanz will raise its 
share of Quelle Lebensversi- 
cherung and Quelle Sachversi- 
cherung to 70 per cent from 50 
per cent, and its interest in 
Quelle Krankenversicherung to 
100 per ceut from 74 per cent. 
Schickedanz did not disclose 
the terms of the transaction. 

It was recently announced 
that Schickedanz was negotia- 
ting to sell its Vp-Schickedanz 
tissue-paper unit to Procter & 
Gamble, the big US detergents 
group. This deal is reportedly 
facing opposition from the 
European Commission. 


Apple in panel display move 


By Louise Keftoe 
in San Francisco 

Apple Computer is to 
collaborate with a small US 
manufacturer of flat panel dis- 
plays. OIS Optical Imaging 
Systems, to develop displays 
tor Apple's next generation of 
notebook computers. 

OIS will be the first US man- 
ufacturer to supply active 
matrix liquid crystal displays 
to the computer industry. 
Sharp, of Japan is the domi- 
nant world supplier of these 
displays which are used in avi- 
onics and a variety of elec- 
tronic instruments. 

OIS, an affilia te of Guardian 
Industries, plans to build the 
first US high volume manufac- 


turing facility for active matrix 
flat panel displays at a cost of 
around $400m. 

The agreement with Apple 
follows a recent announcement 
by the US administration of an 
initiative to boost US fiat panel 
display manufacturing. The 
3600m initiative, which 
includes incentives for compa- 
nies that are estab lishing dis- 
play manufacturing operations 
in the US has yet to be funded. 

OIS plans to seek govern- 
ment support for research and 
development through the Com- 
merce Department's Technol- 
ogy Redevelopment Pro- 
gramme (TRP). “We believe 
that we are well positioned to 
submit a proposal," said OIS. 

Apple, which currently pur- 


chases flat panel displays from 
Japan, said that it may support 
OIS in its application for TRP. 
“We would like to see a US 
supply base," for flat panel dis- 
plays, Apple said. 

However, the agreement 
with Apple and plans for 
expanded manufacturing were 
not prompted by the govern- 
ment move said Mr Ralph Ger- 
son, chairman of OIS. “Govern- 
ment incentives might expedite 
our plans, but we envisage pri- 
vate funding for our expan- 
sion," he said. 

In the first phase of its agree- 
ment with Apple, OIS will 
develop a new, high-perfor- 
mance active matr ix display to 
Apple's specifications and 
deliver prototype displays. 


Bertelsmann 
shelves TCI 
joint venture 

Bertelsmann Music, part of the . 
German Bertlesmann media 
group, has shelved plans to 
launch a music video 'and 
home-shopping cable-TV chan- 
nel with Tele-Communications 
Inc (TCI), tiie biggest cable 
system operator in the US, 
AP-DJ reports from New York. 

The companies had planned 
to launch the service later this 
year to compete with with Vtar 
corn’s MTV channel 

Several large music industry 
companies, . including the 
musie divisions of Sony, Time 
Warner, Thom EMI and Poly- 
gram, later announced plans 
to lamiftfi a music channel. 


Canadian pulp 
grouping buys 
French mill 

A Canadian joint venture 
between Cascades, the Cana- 
dian paper group, and Tembec 
is buying a fluff pulp mill in 
south-western France from Cel- 
lulose du Pin Tartes, writes 
Robert Gibbens in Montreal. 
The mill has capacity for 
140,000 famnes a year. 

Cascades will use 40,000 
tonnes yearly for its own Euro- 
pean boxboard plants and sup- 
ply management services. 
Tembec, a big eastern Canada 
special pulp and carton board 
producer, will supply technical 
and marketing services. 

•Hie min is in the Landes 
region. 


Tribune 
publisher 
buys farm 
magazine 

By Laurie Morse in Chicago 

The Tribune Company, the 
Chicago-based newspaper pub- 
lisher and entertainment con- 
cern, has purchased North 
America’s largest farm publi- 
cation, The Farm Journal. 
Terms were not disclosed. 

The acquisition is expected 
to enhance the Tribune’s farm 
radio broadcast network and 
provide programming for its 
on-line computer information 
services. 

The Farm Journal is pri- 
vately held. It comes out 13 
times a year, and has 175 
full-time workers, including 45 
reporters and editors. Circula- 
tion is around 700,000, taking 
in publications such as Top 
Producer, Beef Today and 
Hogs Today. 

The company also maintains 
a detailed database of demo- 
graphic information on farm 
operations, and owns a market 
research firm specialising In 
agricultural topics. 

The Tribune, which pub- 
lishes Chicago's leading news- 
paper, has a reputation as an 
urban news organisation. 
However, its vast radio net- 
work reaches deep into mid- 
west farm communities. 

“Farm Journal and Tribune 
share a commitment to serv- 
ing the agricultural commu- 
nity, and a vision for develop- 
ing new products and services 
for farmers and advertisers," 
said Mi* James Dowdle, presi- 
dent of Tribune Broadcasting 
company. 

"Our combined resources 
offer a strong base to explore 
new opportunities in elec- 
tronic publishing, television 
programming, database and 
other advertiser services, addi- 
tional print titles and. of 
course, radio." Mr Dowdle 
said. 


Minproc halts 
funding plan 

By Nikki Tait In Sydney 

Minproc, the Western 
Australian mining and engi- 
neering company, has 
suspended plans to raise 
AS352m (VSS258m) after Ke re- 
McGee . the US group, said it 
wanted a bigger interest in 
their Tiwest joint venture. 

Minproc added that it 
planned to resume the fund- 
raising effort, once the Tiwest 
matter was settled. 


TENDER NOTICE 


UK GOVERNMENT 
ECU TREASURY BILLS 


For tender on 14 June 1994 

1. The Bank of England announces the Issue by Her 
Majesty’s Treasury <3 ECU 1,000 milBon nominal of UK 
Government ECU Treasure BJJte, for lender on a 
bid-yield basis on Tuesday, 14 June 1994. An additional 
ECU SO million nominal of Bffls will be allotted directly to 
the Bank of England for foe account of the Exchange 
Equalization Account 

2. The ECU 1,000 million of Bills to be issued by tender 
will be dated 16 June 1994 and wiU be in the following 
maturities: 

ECU 200 million for maturity on 14 July 1994 
ECU 500 million for maturity on 15 September 1994 
ECU 300 million for maturity on 15 December 1994 

3. All tenders must be made on the printed application 
forms available on request from the Bank of England. 
Completed application forms must be lodged, by hand, 
at the Bank of England, Securities Office, Threadneedle 
Street, London not later than 10.30 a.m., London time, 
on Tuesday, 14 June 1994. Payment for Bills allotted wQ( 
be due on Thursday. 1 6 June 1 994. 

4. Each tender at each yield for each maturity must be 
made on a separate application form for a minimum of 
ECU 500,000 nominal. Tenders above this minimum 
must be in multiples of ECU 1 00,000 nominal. 

5. Tenders must be made on a yield basis (calculated 
on foe basis of foe actual number of days to maturity 
and a year of 360 days) rounded to two decimal places. 
Each application form must state the maturity dale of foe 
Bills for which application is made, foe yield bid and the 
amount tendered for. 

6. Notification will be despatched on the day of foe 
tender to applicants whose tenders have been accepted 
in whole or in part. For applicants who have requested 
credit of Bills In global form to their account with ESO, 
Euroctear or CEDEL, Bills wiU be credited In the relevant 
systems against payment For applicants who have 
requested definitive Bills. BDIs wul be available for 
collection at foe Securities Office of foe Bank of England 
after 1.30 p.m. on Thursday, 16 June 1994 provided 
cleared funds have been credited to the Bank of 
England's ECU Treasury Bills Account No. 59005516 
with Lloyds Bank Pic, International Banking Division, PO 
Box 19, Hays Lane House, 1 Hays Lane, London SE1 
2HA. Definitive Bills win be available in amounts of 
ECU 10,000, ECU 50,000, ECU 100,000, ECU 500,000, 
ECU 1,000,000, ECU 5.000,000 and ECU 10,000,000 
nominal. 

7. Her Majesty’s Treasury reserve foe right to reject any 
or part of any tender. 

8. The arrangements for foe tender are ser out in more 
detail In the Information Memorandum on foe UK 
Government ECU Treasury BID programme issued tor 
the Bank of England on behalf of Her Majesty's Treasury 
on 28 March 1989, and in supplements to foe 
Information Memorandum. All tenders wifl be subject to 
foe provisions of that Information Memorandum (as 
supplemented). 

9. The ECU 50 mifllon of Bills to be allotted directly to 
the Bank of England for the account of the Exchange 
Equalization Account will be for maturity on 15 
December 1994. These Bills may be made available 
through sale and repurchase transactions to the market 
makers listed in the Information Memorandum (as 
supplemented) In order to facilitate settlement 

10. Copies of the Information Memorandum (and 
supplements to it) may be obtained at foe Bank of 
England. UK Government ECU Treasury Bills are issued 
under the Treasury Bills Act 1877, foe National Loans 
Act 1968 and the Treasury Bills Regulations 19GB as 
amended. 

Bank of England 
7 June 1994 


PAN - HOLDING 

Soci6t6 Anonyme - Luxembourg 


At Its meeting of May 30, 1994* the Board of Directors decided 
to Initiate the study of a project which would result, before 
year end. In better Bqudty farthe Company's shares at price 
levels very dose to net asset value, assuming that the 
necessary authorizations are obtained. 

As soon as foe Board of Directors accept a project 
moefifying the affront structure of the Company, a new press 
announcement wH bepubSshed. 

As of May 31, 1994, the consolidated net asset value per 
share was US$ 664.90. ' 


Highlights ofthe Annual General Meeting 
30 May 1894 

DIVIDEND 

A dividend of USS 1 050 was declared for 1 993 for shareholders of 
record at cfose of market on 30th June, 1904. The dMdand, free of 
withholding tax in Luxembourg, wSl be payable as from 1st July, 
1994. It shows an Increase of 1 05% as compared to the cflvWend of 
USS9A0 paid the previous year. 

NET ASSET VALUE 

As of 31st May, 1994, the unconsolidated net asset value was USS 
347,047,083.05 ie. USS 63099 per share of USS 200 per value 
compared to USS 621 .77 as at Slat December 1 993. 

The consolidated net asset value pec share at 31st May, 1 994 
was USS 964.90 comptred to USS 654.38 as at 31st December 
1983. 

PERFORMANCES 

Pan-Hokfing pireued its poCcy of actively managing an 
internationally diversified equities portfolio wfth a particular focus on 
minimization of downside risk. THs poicy has proved successful 
both hi the short term and longer term. 

In 1993, the unconsoftteted net asset value, net tfvidend . 
reinvested, showed an increase of 24.66% compared to an Increase 
of 22fl% for the MorganStcrtay Capital International World Index, 
net tfvrdaids reinvested. ... 

For the first Itve months of 1994, to a highly votatHe environment 
for stock markets, the unconsofidated net assetvakra increased by 
1.48% (versus a 3-94% dee tor the MSCI World Index). 

Longar term, the perftvmance was also Qood-Cker 5 years, Pan- 
HokSng’s netassetvaiue has outperformed international indices In 
US doBare, French francs and Stating terms (foe principal base 
(^encfosoftheirt^orityofdiarehciler^: 

31st May, 1989 -31 st May, 1994 (net cBvkktnds reinvested) 




- Pan-HolcSng 




.. 31/05/89 

swsm 

Performance 


USS 

100.00 

' ' 1 146JB5 . 

• 46.65% 


FFr 

100.00 

12205 

22.05% 


£ 

100.00 

.153.09 

53.09% 







Morgan Stanley Capital Infamational World index 



31/05/89 

31V05/94 

Performance 


USS 

100.00 

* 135.45' 

• 35.45% 


FFr 

. 100.00 

112.73 

12.73% 


£. 

100.00 

- -14138: 

41.38% .* 



CURRB4T GEOGRAPHIC BREAKDOWN OF ASSETS 


North America 
Pacfflc Basin ex Japan 


Europe 

Gold button and gold related 


162% 

25-4% 

6,4% 

194)%. 

29.7% 

3.3% 


SHARE PRJCE 

On 3rd June, the dure price was FLux 17,450 in Luxembourg. The 
last quotation on the Over-the-Counter msrkattri Parts was - 
FR* 2.840. - 

Pan-HokRig IS one oTffie oldest continental European rnestment 
halting companies whose shares are quoted bh the Luxembourg 
Stock Exchange and Ovar4ha-Cejontar In Paris. Copies of the 
Company'sl993 Annual RepartamaveBebfeuptmappBcationtD the 
Registered Offk& 7 Place duTh&be, Luxembourg 
( ret 352 4S 2401 -fax 352 4ff 25 27 ). ' 




FINANCIAL TIMES WEDNESDAY JUNES 1994^ 

INTERNATIONAL CAPITAL MARKETS 


by bunds drags European prices lower 


Chase gains equity 
trade powers in US 


Retreat 

By Tracy Corrigan and Graham 
Bovriey in London and Frank 
McGwiy in New York 

German government bond 
prices were again on the 
retreat yesterday, driving other 
European markets down with 
them, as fresh data pointing to 
strong economic growth 
reinforced fears that interest 
rates in Germany have reached 
their low point in the current 
cycle. 

West German gross domestic 
product grew 0.5 per cent in 
the first quarter, or 2.1 per cent 
year-on-year, suggesting that 
economic growth is exceeding 
economists' expectations. The 
data follows the recent upward 
revision of growth by the 
OECD, which now has a target 
of 1.8 per cent for the pan-Ger- 
man economy this year. 

However, Mr Ken Wattret, 
an international economist at 
Mid la nd Global Markets, said 


Moody’s cuts 
BNP senior 
debt rating 

By Tracy Corrigan 

Moody’s has lowered the debt 
rating of Banque Nationale de 
Paris and placed Soctete Genfer- 
ale's debt under review for pos- 
able downgrade. 

BNP's senior debt rating, 
which had been under review 
since January 14, dropped from 
Aal to Aa3- The agency said 
the cut was based on a belief 
that BNP's profitability and 
economic capitalisation would 
be challenged for some time by 
asset-quality stress, competi- 
tion among banks and low 
credit demand. Moody’s said 
any SocGen downgrade would 
“probably be minor”. 

• The Aa3 long-term debt rat- 
ing of the Industrial Bank of 
Japan has been placed under 
review for possible downgrade 
by Moody's. 


that traders had ignored some 
positive elements far the mar- 
ket “We believe the recovery 
is export-led. so the Bundes- 
bank will continue to support 


GOVERNMENT 

BONDS 


the recovery with rate cuts," 
he said, adding that the 
detailed figures back up this 
view. 

However, the negative reac- 
tion to the data also reflects 
the generally bearish senti- 
ment overhanging European 
bond markets. The German 
market failed to take any com- 
fort from the downward revi- 
sion of M3 money supply in 
April to 15.4 from the 1 5JB per 
cent Dealers said that unem- 
ployment data was ignored by 
the market, as it is not strictly 
relevant to the interest rate 
outlook. 


By Antonia Sharpe 

The Province of Ontario Is 
expected to make some conces- 
sion on pricing in order to 
ensure a successful launch for 
its first global offering of its 
new fiscal year. The issue, 
which could emerge today, is 


INTERNATIONAL 

BONDS 


expected to raise around $Um 
and have a maturity of 10 
years. 

Syndicate managers reported 
only muted interest in the 
deal, due to Ontario’s frequent 
presence in the market and its 
recent downgrading. As a 

result, the price talk centred 
around 65 to 67 hauls points 
over 10-year Treasuries, even 
though Ontario's outstanding 
dollar bands were trading at a 
yield spread of around 63 basis 


The September German bund 
future on Uffe ended down 032 
point at 92J27. 

■ UK government bonds 
showed Anther weakness yes- 
terday in a continuation of the 
trend seen in recent weeks. 

With no new economic data 
published yesterday analysts 
saw no reason for investors to 
change thdr view of the mar- 
ket’s prospects, and gilts 
drifted lower with other Euro- 
pean markets. 

“The underlying sentiment is 
still shot to bits,” said one ana- 
lyst. “Most Institutional fund 
managers are optimistic but 
that is a long way from being 
willing to put money into the 
market They don’t want to 
take that risk.” 

Trades reported some profit- 
taking and said that there was 
disappointment that no further 
headway had been after 
the rally last week. 


ket 

Salomon Brothers, which has 
been appointed joint bookrun- 
ner with Goldman Sachs, with 
RBC Dominion as joint lead 
manager, said the lack erf a 10- 
year eurodollar benchmark 
would increase the attraction 
of Ontario's deaL There have 
been few eurodollar offerings 
with a 2004 maturity due to the 
Volatility in the financial mar - 
kets this year. 

Advance Bank Australia, a 
building society-tumed-bank 
operating mainly in New South 
Wales, made its Gist appear- 
ance in the eurobond market 
yesterday with a $25Qm offer- 
ing of floating-rate notes due 
1999. The discounted margin 
on the notes was 40 basis 
points over labor. Lead man- 
ager J.P. Morgan said the 
bonds were selling well, 
reflecting the extensive pre- 
marketing efforts and the 


“Quite a lot of money was 
spent last week anfl the OK 
rallied more than the other 
European markets. It was over- 
sold and it’s now readied fair 
value, winch means that prop 
has gone now ” said Mr Bob 
Dobson, head of gSt sales at 
Daiwa Europe. 

Analysts said todays indus- 
trial production figures and the 
outcome of the European elec- 
tions would be important for 

gate. 

“If the Tories do sUghfly bet- 
ter than expected, then the 
market may get a bit of a 
boost,” said Mr Ian Shepherd- 
son, UK economist at Midland 
Global Markets. The long gilt 
future was down lft point at 
100 % In late trading. 

■ French government bonds 
moved slightly lower yesterday 
in trading dominated by. move- 
ments in the German bond 
market. 


bank’s positive credit outlook. 
The bonds were kept in syndi- 
cate overnight 
Elsewhere, a rise in the 

flanflrffan rlnTlflr ant\ continued 

currency arbitrage opportuni- 
ties prompted a further supply 
of short-dated Canadian issues 
yesterday as SNCF and Swed- 


Analysts said sentiment still 
remained negative. “Both 
France and Germany are cheap 
but we are still going to see 
continued selling,” said one 
trader. 

Mr Julian Callow, an econo- 
mist at Eeinwort Benson, said 
that tomorrow’s industrial pro- 
duction figures and consumer 
price data due an Friday could 
provide further signs of 
strengthening economic recov- 
ery. 

■ US Treasury bonds drifted 
lower in light trading yester- 
day morning as market 
paused after a two-day rally. 

By midday, the benchmark 
30-year government bond was 
down % at 87ft. with the yield 
rising to 5.772 per cent At the 
short aid, the two-year note 
'eased ft to 100ft, to yield 5.772 
per cent 

Early on, prices moved mod- 
estly lower as traders followed 


ish Export Credit raised a total 
Qf $250m through offerings of 
five-year and three-year Euro- 
bonds respectively. 

Investors were attracted by 
the relatively high coupons on 
both issues, the proceeds of 
which were believed 
to have been swapped into 


through on weakness suffered 
by US securities in overnight 
trading in Tokyo. 

During the mid-morning, 
twirls gradually clawed their 
way back, though there was no 
new economic news or overrid- 
ing technical conditio ns to 
shap e the morning's activity. 
Action to the commodity and 
foreign exchange markets was 
featureless. Still, prices ebbed 
far a second time near midday. 

The Twrt significant event on 
the economic calendar is the 
release of May producer price 
date on Friday, followed by 
consumer price figures next 
Monday. The market is priced 
for tame readings on inflation 
in both reports. 

Economists are forecasting a 
0.2 per cent increase in the PPL 
following a slight decline the 
previous month. The CPI is 
expected to show a 013 per cent 
gam, against an OJ. per cent 
increase in April. 


floating-rate dollars. 

• Argentina's Banco de la Ciu- 
dad de Buenos Aires will issue 
a sixth $20m tranche of six- 
month notes under its two-year 
$ 100 m euro- commercial paper 
programme. West Merchant 
Bank and Banco Medefin are 
dealers for the programme. 


By Richard Waters 
In New York 

Chase Manhattan has become 
the latest ban k to b e given the 
power to und erwrite and trade 
equities in the US, marking a 
further erosion of the barriers 
that have kept commercial 
banks out of the investment 
hawking b usiness . 

T.iirA others, though. Chase 
has no ambitions to grow a 
large-scale securities business 
quickly, and is anyway 
severely limited in its ability to 
underwrite and trade securi- 
ties. Under Federal Reserve 
rules, only 10 per cent of its 
securities subsidiary’s income 
fan came from these activities. 

Chase’s cautious approach in 
the US has also been shaped by 
its disastrous experience in the 
UK, where it suffered big 
losses after acquiring local bro- 
kers Simon & Coates and Lau- 
rie MUihank In the mid-1980s. 


By Antonia Sharpe 

The Hellenic Republic 
disclosed yesterday that the 
annual Interest rate on its 
forthcoming five-year $500m 
syndicated loan will be 80 basis 
points over the London inter- 
bank offered rate (Libor). 

The average life of the loan, 
Greece's first in four years and 
the first under its new sover- 
eign name, is about 4K years 
since it will have to start 
repaying the loan in equal 
Bfimi-armnfll instalments after 
three years. 

Thirteen Hanks have under- 
written the loan on an equal 
basis: The Rank of Tokyo, 
Chase Investment Bank, Citi- 
bank International, Dai-Ichi 
Kangyo Bank, Fuji Bank, Hill 


”In the UK, we tried to buQd 
a stand-alone investment 
bank.” said Mr Paul Brandow. 
president of Chase Securities 
in the US and a former head of 
Chase's UK securities business, 
“It never got integrated into 
the rest of the bank.” The plan 
in the US, by contrast, is to use 
the securities powers to raise 
money for existing customers 
of the bank, be said. 

Like a handful of other US 
banks. Chase has already used 
Its powers to underwrite and 
trade debt securities to engage 
in the sub-investment grade 
bond business. It has also been 
among the most active US 
tanks in bringing issuers from 
developing countries to the US 
markets. The equity powers 
will be used to extend activi- 
ties for these types of issuer, 
said Mr Brandow. 

Chase is the sixth US com- 


Samuel Bank, Lloyds Bank 
Capital Markets, Mitsubishi 
Bank, J.P. Morgan Securities, 
NatWest Capital Markets, 
Sanwa Bank, Sumitomo Bank 
and Union Bank of Switzer- 
land. 

Greece will not be paying a 
commitment fee on the loan 
since it is expected to draw 
down the whole amount within 
one month of the signing. Syn- 
dication started on Monday 
and is expected to close on or 
before June 24. Participation 
fees are: senior lead managers 
($20m and above) L3S per rent; 
lead managers ($i5m to $l&5m) 
1.25 per rent: managers (310m 
to $l-L5m) 1.2 per cent; co-man- 
agers ($Sm to $9.5m) 1.10 per 
cent; participants ($lm to 
$4. 5m) 1 per cent 


NEW INTERNATIONAL BOND ISSUES 


Aawunt 

Oapon 

Price 

Maturity 

F MM 

8paad 

Book runner 

Peutiraar 

US DOLLARS 

m. 

% 



% 

bp 


Advance Baric Austrafiet 

250 

cm 

99.7BR 

Jai.1999 

0.20F 

. 

JP Morgen Securities 

Wabbi Uhwa CorpJtgS 

75 

E3-3V*) 

ioaoo 

JUO2004 

260 

- 

Dehm Europe 

YEN 

LB FOwintenrM’feK 

lObn 

3601 

10065 

Jlri.1999 

035 


Salomon Brothers ML 

WtsuWsW Carp. Finencafc) 

53bn 

M 

10025 

Sep.1997 

065 

- 

Bonk at Tokyo CopLMMs. 

CANADIAN DOLLARS 








SNCF 

150 

8375 

flft52R 

Dan. 1899 

0.25R 

•16 (7%9&-9M Swiss Bank Carp, 

Srasdteh Export CnxSW 

100 

7675 

99. TOR 

Jiri.1997 

Q.1875R 

420 0) 

RBC DoraHan Securittes 

rTAUAN LIRE 

San paoto. TurkXg) ' 

lOObn 

10.40 

10060 

Jun6004 

2.00 

- 

Sen Paolo, Turin 


FM terms and nan-calatrie unless stated. The yMd spread (over relevant government bond) V launch Is supplied by the lead 
manager. fConvertMe, tf ta attng rate note. ISeml-amud coupon, ft fixed re-otter price; tees are shown at the re-otTor level, a] S-mth 
Ubor +35bp. b) Priced later. Corn pramksn tarfcatod m 7-12%. Capable. conditional on conver si on being permitted, utter 3 yra subject 
to 140% nis. PuttaWe, if conversion option is not avatabie. renuefly tram 16.6.99 at Treasuries *50bp. 4 Callable on 20095 and 98 
at par. 4 3% to 28.9.95. 2.55% to 2S-9.96 and 4% thereafter, e) Short 1st coupon. Q Over Interpo la ted yMd. g) issue launched on 
3u094 was Increased to LAGGbn. Issuer may convert on 30 699 into FRN poyfag 8-mth Lbor+SObp. 


WORLD BOND PRICES 


Ontario offering may have pricing concession 

points in the secondary mar- 


merclal bank to bp given, 
equity powers. 


Hellenic Republic loan 
In nav TJhnr nlus 80 


BENCHMARK GOVERNMENT BONDS 


Hod 

Coupon Date 


Wee 


Day's Week 

change Yield ago 


Month 

ago 


Italy 

■ NOTIONAL ITALIAN GOVT. BOND (BTP) FUTURES 

PJFFET Ura 200 ni IQQtha of 100 % 


FT-ACTU ARIES FIXED INTEREST INDICES 

Price Indfcas Tub Day's Mon 


UKQRe 


June 7 change % June 6 


Accrued 

Merest 


Australia 
Belgium 
Canada * 
Denmark 
France 

Germany 

Italy 

Japan 

Netherlands 
Spate 
UK Gifts 


BTAN 

OAT 


No 119 
No 167 


US Traeswy “ 


3. 000 
7.250 
IL500 

7.000 

aooa 

5500 

6.750 
8600 
4.800 
4600 

5.750 
10.500 

8300 

B-750 

9.000 
7.250 
8250 

8.000 


09/04 

04/04 

08104 

12/04 

05/98 

04/04 

05AM 

01/04 

06/99 

06/03 

01/04 

1QAJ3 

08/99 

11AM 

10/08 

05AM 

08/23 

04AM 


ECU (French Govt) 

London ctostog. tter Yoifc itrid-dfar 
t Qtea fim*KBng wVNiakfing tax at 185 per 
race*: ua (JK In 3&K&, others tn dadbnoi 

US INTER E ST RATES 


1022900 
95,1300 
862000 
92.7000 
1042750 
872000 
98.0900 
91.1200 
105.1630 
100.7110 
902000 
102.7000 
91 -IB 
88-00 
103-23 
102-07 
87-31 
872000 


-0660 

-0680 

-0150 

- 0.120 

-0130 

-0230 

-0230 

-0230 

-0630 

-1-320 

-0600 

-0200 

-18/32 

-32/32 

-39/32 

-9/32 

-14/32 

-0710 


cant payable t» na uraidaata 


864 8.66 

768 768 

869 8.75 

006 011 
068 665 

7 AO 734 
7.02 868 

968T 
369 
469 
7.10 
1002 
013 021 

860 085 

864 071 

864 7.19 

726 7j46 

761 760 

VWdatLoc* 


— Low coupon ytetd — — Medium coupon yteW — — High coupon ytetd — 
June 7 June C Vr. ago June 7 Jma 8 Vr. apo June 7 Jurat 6 Yr. apo 


071 

765 

868 

TM 

627 

868 

862 


Sep 

Dec 


Open 

Sett price 

Change 

Hgh 

Lew 

EsL vol 

Openlnt 

1 

Up to 5 years p4) 

12263 

-062 

122.72 

2.43 

464 

5 yis 

ai7 

803 

7.13 

839 

824 

766 

850 

864 

767 

106.15 

10660 

+061 

10760 

10565 

44613 

61917 

2 

5-15 years (22) 

14067 

-063 

14169 

260 

5.68 

15 yra 

8.44 

831 

805 

868 

843 

842 

889 

877 

860 

10840 

10560 

-069 

105/40 

105.40 

50 

0 

3 

4 

5 

Over 15 yeers (3) 
Irredeemables (6) 

AM stocks (61) 

15663 

17969 

13862 

-IjSZ 

-069 

-0.77 

159.18 

179.79 

13966 

268 

168 

262 

56S 

666 

5,17 

20 yra 
IrrscLt 

868 

8.40 

867 

837 

827 

882 

868 

843 

eg 

869 

858 

874 

fiOVT.BOND PTPJ FUTURES OPTIONS (UFFE) UrefiOOm lOOttn at 100% 








— MMk 

»M- 

— « 

sore 


n 10% - 

mere 



SMca 


CALLS 


BJIO 

3.14 

■.Utt 

ajg 

Price 

Sep 

Dec 

Sep 

363 

364 

10850 

265 

2.77 

265 

768 

875 

10700 

Z10 

265 

260 

968 

968 

10760 

168 

265 

2.76 


PUTS 


Index-finked 


June 7 June 6 Yr. . 


760 

826 

034 

767 

765 

7.44 


Dec 
367 - 
365 
425 

E*LvdL kM. Gala 1940 Puls 1107. (Yarioua da/a open WL CnSa 18826 Puts 1S010 


Spain 

■ MOTIONAL SPANISH BOND FUTURES (MffF) 


Jww 7 June 6 Vr. ago 


6 Up to 5 years 02) 

7 Over 5 years 01) 

8 AD stocks (13) 

Debentures and Loans 


18848 

-0.10 

18567 

061 

263 

Up to 5 RS • 

, 3.78 

363 

268 

261 

2.76 

268 

17460 

-069 

17467 

164 

1.89 

Over 5 yra 

880 

877 

367 

862 

859 

840 

17461 

-068 

17463 

169 

167 

— 5 yea- yield- 

__ 

18 year yMd- 

- - 

25 year yield 


Jtete 7 June 6 YL ago June 7 June B Yr. ago Jme 7 June 6 Vr, age 


9 Debs & Loans (76) 12860 

Awaaue gross icdocnptiQii yteda are tfrowi 


-163 12969 265 

Coupon Banda; lew: QNr-TWfc 


527 9L7T 965 963 967 

Madura: M-lOWK: Hgtr 11M red over, t Hat yMd. ytri Year to i 


9.41 


9.41 9.47 963 964 


Sam MMB MenadorM 


lunchUme 


tenter ban ob. 


FMJtnfttf UanenttoA- 


One month _ 
7U Teo Boati — 
5«* Tina mutt. 
*A Str mooDi _ 
- (tea year — 


Treasury Bfls and Bond Yields 
403 Two for . 


412 Item year- 
421 Retyasr — 
467 lOyaw 
3.12 SVyear 


5J7 

609 

650 

602 

723 


Jun 

Sep 


UK 


Open Sett price Change Ugh Low Est voL Open teL 
9360 83.75 -048 9461 9368 53604 96653 

0360 9364 -QA7 9369 9364 13288 38675 


FT FIXED INTEREST INDICES 

June 7 June 8 June 3 June 2 June 1 Yr ago Htfi* Low* 


GILT EDGED ACTIVITY INDICES 

June 6 June 3 Am 2 


June 1 


May 31 


8ovt Secs. (UK) 92.82 93.13 9262 9269 9164 95.02 107.04 91.04 CHT Edged bargains 926 114.7 1103 1004 B&9 

Ffaod Interest 11076 11071 109.45 10012 10963 11064 13367 109.12 5-doy average 1008 986 1026 105.7 1047 

'tor 1994 Government Sacujba Ngh ainoa comptetton: 127.40 R/1/36L bar 49.16 (6/1/78). fiaed Newt high aftiea ootnplnion: 13367 (21/IAM) . ka* SUSS (3/1/7B) , Baals 100: Qommmem Seasides 15/10/ 
38 and tend in f er 1018 . SC acMy Men retread 1874 . 


■ NOTIOMAL UK COLT FUTURES (UFFE)* £50600 32nda o( 100% 


BOND FUTURES AND OPTIONS 
France 

■ NOTIONAL FRENCH BONO FUTURES (MATTF) 



Open 

Sett price 

Change 

Han 

Low 

Est vol 

Open bit 

Jun 

102-28 

101-24 

-1-0B 

102-28 

101-25 

3084 

22083 

Sep 

101-14 

100-18 

-1-07 

101-18 

100-16 

73735 

0 

Dec 


99-16 

-1-07 



0 

0 


FT/tSMA INTERNATIONAL BOND SERVICE 


■ LONG GOT WJTUBEB OPTIONS (LFFQ £50000 64tha 0/100% 


Dated we tea tateattate n wrireta bonds far wteii than ban 


Sdeqif escondwy market Latest 
YMd 


Open Sett price Change High 
Jun 117.00 11720 -022 117.28 

Sep 11008 11024 -024 11864 

Dec 115.16 11564 -024 115.18 

■ LOWQ TBtM FRENCH BOND OPTIONS MATTF) 


Low 

Eat voL 

Open InL 

State 


■ CALLS 


- PUTS 





11852 

258635 

68.827 

Price 

Sep 

Dec 

Sep 

Dec 


1000 

93% 

83% 

11560 

44689 

84668 

100 

2-44 

3-10 

2-12 

3-42 


1000 

HB% 

102% 

11812 

27 

8670 

1OT 

a-ii 

2-45 

2-43 

4-13 

Matte 8% 00 

-400 

M6% 

107 




102 

1-48 

2-19 

3-16 

4-81 

Bo* ol Tokyo 8% 98 

.100 

U8% 

103% 


prices s>7M pm on Jure 7 
BM Olkr Chg. 


YMd 


.5500 


.1000 


eshii 











































Esl wjL am. Case 28.112 Puts xrjna . Previous day's open InU Cats 370927 Arts 39 QJMB. 

Germany 

■ NOTIONAL GERMAN BUMP FUTURES (UFFE)* DM250600 IQCftha of 100% 



Open 

Sett price 

Change 

High 

Law 

Esl vol 

Open fat 

Jun 

92.85 

92.95 

-064 

9813 

9260 


12191 

Sop 

9268 

9267 

-062 

92.66 

92.11 

131783 

133150 

Dec 

92.95 

9164 

-033 

9804 

91.75 

298 

431 


vok MM Ctes 453 Pina 747. Previous dq/a open Inc, CaSa43i1S Pure 2BB72 


Ecu 

■ ECU BOW FUTURES [MATTF) 

Est voL Open teL 
2602 8.487 

1659 2819 


■ US TREASURY BOND FUTURES (CST) >100,000 32nde ot 100% 


Begun 5% 03 . 
BCE 7% 97 _ 
BdMiGsazt . 
Canada 9 08 _ 


WOO 


- 150 
.1500 


87 

103 

11 



□pen 

Sett price 

Change 

High 

Low 

Jun 

84>K) 

8432 

-0.40 

8448 

83.70 

Sep 

8870 

8366 

-068 

83.74 

83.18 

US 







Chong Kmg Fb 5lj 98 

CHnG^zM 

Oand Euepe 8 96 

Cterit Fonder 99 

OemnkMi 98 


■ BWP RJTUWE8 OPTKJWS [UFFg D642SQ,000 poSits of 10094 

Stnke 
Price 
9200 
eeso 
8300 

E*. VOL tot* Ctea 11B9B Puts 11307. PMM Ornfa open W. Crib IBJrae Pure 1B1B74 

■ NOTIONAL MEDIUM TERM GERMAN GOVT. BOND 
(BOBUtUFFET QM2S0600 lOMha of 100% 


Jii 

Aug 

CALLS — 

Sep 

Doc 

Jui 

Aug 

PUIS 

Sep 

Dee 

061 

164 

168 

164 

064 

167 

131 

2.00 

0.6S 

167 

132 

1.60 

068 

130 

166 

268 

044 

086 

1.08 

136 

1.17 

160 

161 

900 



Open 

Latest 

Change 

Mgh 

Low 

Est VOL 

Open fat 

Jun 

1 08-09 

105-31 

-0-13 

10009 

105-25 

42684 

142311 

Sep 

105-10 

105-02 

-0-12 

105-11 

104-28 

335310 

268601 

Dec 

104-22 

104-13 

-0-13 

104-22 

104-08 

a>.Q9Q 

35631 


EattJvenlteteeye^aM . 

ECSCBlf 98 

BBC 8^ GO 

93 74(98 

®«|87 

Bee da Raw 998 

SadbnaB^ 96 
Be4nBenk.JepreB02 _ 

Bpett Dar CDrp 9>j 98 

FHredAW 

RvM Bport9%9S 

Fdd Mate Carte 
Gm Bee Chpte 9^ 96 — 
GMAC«l|Se. 


. 800 
. J83 103% 
.100 1035s 
.250 «E% 


■ NOTIONAL LONG TERM JAPANESE OOVT. BOND FUTURES 
CJFFq YlOQm IQOtfta of 100% 


hd Bt Japan fti 7^97 . 
He Amer Dar 7^ 98 — 
Italy 6% 23. 


Open Sett price Change High Low 
Jun 98,83 98.70 -066 <98.88 98.70 

Sep 9820 97.99 669 9820 9820 


UK GILTS PRICES 


dd— — tIM _ 

Red PitetE «■»- Ugh tew 


EaL vol Opart teL 

78 483 

28 50 


lintel 


9ep 

Dec 


Open 

10925 


Close Change 


Hgh 

109.74 


Low 

10960 


Est vol Open tel 
6848 0 

0 0 


Japan Dw & 8^ 91 


i Bee Poser 6^(0. 


‘ UFFE ca nhaa e traded on APT. AM Qpan kniw Sgt are Ur pravkrui day. 


rid- — 199* — 

Red PHeeE+ar- trim tear 


LIC8 fti 8 97 , 


57^ 
1D35» 
H 1 ! 

1000 

-500 9(A 91% 

■ MOO 87^ BSJj 
-TOO 103 <b 103% 

- 300 W9% 110% 

,1000 97% 97% 

93% 93% 

»*% 
104 
103% 

. MOO M7% MB 
-200 100% 107% 

_ MO 104% 105%. 

-500 M3% 104% 

- ISO M9% 109% 

. 3000 M0% 100% 

-200 104% 104% 

.1500 97% 96% 

-300 M5% 108 

-200 103% 104% 

-200 102% 103% 

_ 200 M2% 102% 

3900 84% 88% 

-500 HB% 106% 
-350 M6% 108% 

.1350 87% 88% 

. 200 102% 103% 


-% 

-% 


-% 

-% 

-% 

-% 


.2000 


.3000 


.1250 


IHtad Ktagdcm 7% 97 . 

758 Vdanragre M Hn 7 03 . 

893 VNbdd Bate 015 

762 V/tad Bar* 5% 03 

847 World Be* 8% 00 

7A8 

850 SWISS FRANC SmUQHIS 

830 Men Dor Berk 6 10 100 

505 Areata 4% 00 1000 

868 ComdEurapd4%9B 

854 Daanrt(4%99 

869 EB8%04. 


.ion 


898 Bee de Ranee 7% OB 

858 Finland 7% SO 


.300 


.100 


760 HywdallMorFhS%97 TOO 

848 Iceland 7% 00 100 

829 Kobe 6% 01 240 

623 Qanb6%C3. .400 

883 Quebec Hydra 6 oa MO 

895 SNCF 7 04 460 

622 WbddBrakSIQ 1® 

766 Watt Ba* 701 800 

880 

878 YBrSIRNBHlB 

804 Belgian 5 99 75000 

768 BB6% 00 10000D 


860 FHmd6% 96 

889 bteAnnrDev7% 00. 
887 Briy3%cn , 


.60000 


. 30000 


State- (Urn re Is Ffce Teret 


ta ICpc lA. !994tL— 

txdl1S%pcl994 

liras 9pc1W4t7 

13* 1995 

Escape ora SMS 

10%pel99S_ 

Tittal2%pcl9B5#— . 

14k 1998 

15%peW9B» 

B0H3%K1S96» 

Coneakn lOoc rase 

CHW 71* 1997# 

Tf43t 13%K 1997# 

ba IO%flC 1997 

nrat8%sci987tt 

EsAISfC 1997 - 

9%pe 1990 

fleas 7% pc 1998ft 

Tisas 6%oe 1995-9844- ■ 

14KW-1 

Ttaei5%pc-9B» 

Esdi 12SC 1998 

ht»9%K 1999« 


1800 

1220 

885 

1161 

186 

877 

11.71 

1=56 

1328 

1168 

344 

70S 

1188 

960 

351 

1144 

925 

7.4! 

723 

11.75 

1227 

T85B 

907 


- 100 
4 89 101% 
307 toig 
817 104% 
809 M% 
871 10413 
816 106% 
848 my 

879 

880 
728 
724 6911 
7.44 113% 
763 107A 

728 102fl 
761 120% 


80! 

766 

766 

834 

812 

831 


US% 

97 JJ 

119% 

12BA 

113U 


824 104Q 


RratemeanTtas 

Ettb12%pC19»- 


Tms tOlfl* <998 

IRs Gpc 1899 tt - 

Comntan 10%pc 1999- 

Thotfbb ft* 99 

8pc200D» 

ThasiJucZOOO 

icpcam 

TpeVI 44 

7KV1A 

9%pc2(XR 

Xeimn — 


1068 840 114Q 

887 838 U»i 
858 812 91 £ 

852 845 107.1 
- - 100* 
679 845 UEJi 
1884 87311941a] 

836 870 108}! 
■760 848 82j^ 
7.61 648 SIS 
833 870 MSft 
832 862 96,1 


— 102A 

— m» 

— IIEtU 

— 1D7A 

98% 

1070 

— 113% 
-A 117A 
-A 121 SS 
-A iiTH 
-A 112* 
-H i« 
-ft 121H 
-A 11« 
-U no,’. 

raw 

-ft 1140 
-h 106* 
-0 102 
S 131* 
-0 140*1 
Tzgi 
“% IIMr 


-H raw 
-% ma 
-a ioifl 
-fi 121B 
— 100* 
-K 115* 
-fl 13® 
-it 122 ft 
-O 108ft 
-0 IMA 
-% 123* 
-% 113B 


iOpc 2om 

100 Tnra 11 %pe 2001-4 

101% Fusing 3 %dc *99-4 

M10 Oora u J an 8%pc 2004 

'SU* TN"«%l*aiimt 

0bo»B%pc2005 

Trees 12%oc 2003-8 

“J Ttscsooet* 

114% 

{,,? Ttas11%jJcZ0C»-7„- 

t«a T ? ^a g **— 

mi lyapcw Hi 

Treae 9pc 2008 H 

108,4 

tom 

iiss 

104% 

90S OreRDranran 

w* Trass 8k 2nB 

jray im6vtpc20ia 

cnraSKtiijoutt — 

Tnostesamw 

* TteJ* G*a5C2006-12tt— 

Tranent 2013# 

7*pcan»-ist» — 

Tress Mrpc20l7tt 

Bcdl12DCT3-T7 

11% 

■> 

108% 

100 

101 % iterated 

11 BJ 1 OWBd54oc~— — — 

104|} tarUwSta# 

SOu Cui*3%pc'01 ML 

90ft ■tas3pe‘86M 

)93» OeaedaZ%pc 

94* 1ta&2%j* 


938 

1817 

L80 

0.00 

748 

897 

1826 

826 

840 

1813 

854 

1852 

857 


874 107B 

886 l»ft 

7® 72%s) 

887 105ft 

848 88* 

855 105% 
800 121% 
858 93% 

888 95% 

804 118 

855 99% 
107 128* 
853 103% 


-% 127ft 
S 123M 
-ft 88* 

-1* 12SA 
-1 105% 
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J™ancialtiivies Wednesday june s 1994 


COMPANY NEWS: UK 


21 


Anglian Group at £25m 
in improving market 


By Simon Davies 

Anglian Group, the double 
glazing company, yesterday 
announced an 8.7 per cent 
increase in «npn a i pre-tax prof- 
its to £25. lm, despite the loss of 
business from the privatisation 
of the Property Services 
Agency. 

Mr BUI Hancock, chief execu- 
tive, said: “We do not expect 
the current year to be easy, bat 
consumer confidence in the 
domestic sector, though still 
patchy, has improved.- 

The share price rose I3p to 
251p yesterday, but that com- 
pared with a price of more 
than 320p before the March 
profits warnings over PSA 
sates. 

Anglian revealed that sales 
to the PSA market For the year 
to April 2 had fallen from 
£19 .2m to £7.8m. It added, how- 
ever, that it bad achieved a 
reasonable level of lower mar- 
gin sates to the PSA's succes- 
sors and had also increased 
sales to local authorities and 
housing authorities. 

Reflecting this confidence, 
the dividend for the year is 
being Increased by 8.4 per cent 
to 10.3p via a recommended 
final of 6.2p. Earnings per 
share rase hum 16.7p to isip. 

Total turnover increased by 
17 per cent to £l76.7m. 



although £17. 2m of the figure 
was attributable to recently-ac- 
quired New England Windows. 
Increased retail sales made up 
for the PSA shortfall Overall, 
profit margins were roughly 
maintained at K8 per cent 
Anglian said the new auto- 
mated production line would 
begin operating later tbis 
month and said it was confi- 
dent this would enable it to 
ease pressure on its profit mar- 
gins. These would also be 


boosted by a 5 per cent 
increase in prices, put through 
in January. 

The company recently 
acquired a 77J& per cent stake 
in Living Design, one of Scot- 
land's largest window and 
kitchen groups. It was now 
looking at the possibility of 
acquiring a PVC-u business to 
lower costs for the new produc- 
tion base. 

Anglian has also expanded 
into the security alarm busi- 
ness through the purchase of 
75 per cent of Status Innova- 
tions, with a view to marketing 
security products to its exist- 
ing client base. 

• COMMENT 

Anglian has succeeded in 
weathering the recession with 
remarkable ease, but having 
already taken a main share of 
the market It is going to strug- 
gle to achieve more, its new 
production line should help 
maintain profit margins, but 
the market place remains com- 
petitive, and it will have to 
rely on volume increases to 
boost its profits. Analysts 
believe it can push pre-tax 
profits up to £28m for the cur- 
rent year, which leaves the 
shares on a p/e ratio of 11.6. 
This suggests some upside 
potential for the share price, 
but the outlook is unexciting. 


Henderson 
Admin rises 
39% to £20. 3m 


By Bethan Hutton 

Henderson Administration, 
the fund management group, 
increased funds under man- 
agement by 18 per cent to 
£13.5bu at the end of March 
1994, In spite of losing pension 
fund accounts. 

Pre-tax profits were up 39 
per cent from £14. 6m to 
£20. 3m. These are the first 
full-year results to include a 
foil contribution from the 
Touche Remnant fund man- 
agement business, acquired in 
December 1392. 

Revenue increased by 38 per 
cent from £47.7 m to 285.7m, 
and expenses rose 26 per cent 
to £48. Lm, producing an oper- 
ating profit of £17. 6m. Interest 
and investment income fell 
from £5.48m to E2.18TU. 

Earnings per share grew 43 
per cent to 653p, and the total 
dividend rose 5 per cent to 44p 
after a recommended final erf 
31.SP (29.5p). 

Mr Ben Wrey, chairman, 
blamed the loss of pension 
fund business cm the highly 
competitive state of the pen- 
sions market, where the ten- 
dency was for fluids to be con- 
centrated in the hands of the 
top four or five managers. 


Mr Wrey said Henderson 
was relying on its unproved 
performance record, plating it 
twelfth out or 36 managers 
over a five year period, to stop 
the outflow of funds. The 
group had £5.25bn (£5.38bn) 
pension money under manage- 
ment at the end of March. 

Funds under management 
increased most sharply in the 
international division, being 
more than doubled at £984m, 
against £467m. The figure 
Included Sellgman Henderson, 
the OS Joint venture, as well 
as other clients in the US and 
the Netherlands. Funds under 
administration, including off- 
shore funds and Peps, grew by 
85 per cent to £1.4bn. 

On the retail side, one new 
Investment trust, the HTR Jap- 
anese Smaller Companies 
trust, was launched during the 
year. The unit trust range was 
rationalised to remove over- 
laps between Henderson and 
Touche Remnant funds. 
Investment trust funds under 
management stood at £3.58bn 
at the year end, up 24 per cent, 
and unit trusts at £l-34hn, up 
18 per cent. 

Associated businesses made 
a profit of £464,000, after a 
loss of £585,000 last year. 


Nationwide up 47% but 
mortgage demand flat 


By Norma Cohan, 

Investments Correspondent 

Nationwide Building Society, 
the UK's third largest, yester- 
day announced a 47 per cent 
rise in pre-tax profits to 
£25 2.7m. For the year ended 
April 4 despite fiat mortgage 
demand. 

The society benefited partic- 
ularly from a reduction in loan 
loss provisions, cuts In admin- 
istrative expenses and strong 
commission growth from sales 
of life and general insurance 
products. 

Net mortgage balances for 
the year were stable at £28.lbn, 
and Nationwide said it had 
taken steps to improve the 
quality of its mortgage busi- 
ness. Provisions for losses cm 
mortgage loans fell to BS6.2m 
(£285m), while other loan pro- 
visions fell from £44.3m to 
£26. lm. 

Mr John Wriglesworth, 
building society analyst at 
stockbrokers UBS Philips and 
Draw, said that while the latest 
results showed a strong 
improvement at Nationwide, 
“they are not out of the river 
yet". 

The society’s ratio of 
provisions to loans, at 1 per 
cent, is still well above the 
industry average of 0.7 per 
cent 

While Nationwide has made 


great strides in paring Its 
costs-to-income ratio to 49.44 
per cent against 53.45 per cent 
a year ago, the ratio remains 
well above the average of 43 
per cent for the top 20 building 
societies. 

Retail deposits remained 
unchanged at £25.4bn despite 
tough competition for individ- 
ual customers’ funds. Nation- 
wide said. Wholesale funds 
also were little changed at 
£7.02bn. compared with 
£7-33bn. 

The society's gross capital 
ratio rose to 7.5 per cent from 
6.6 per cent at the end of the 
previous fiscal year, while 
its free capital ratio rose 


Bloomsbury Publishing, the 
Soho-based company started in 
1986 is seeking to raise £5m in 
a plating when it c opi i w to the 
market this month, writes 
Antonia Sharpe. 

The flotation will value the 
company at about £8-5m. A 
prospectus will be issued next 
week and dealings should start 
the week after. 

Of the total raised, £2m will 
go to Bloomsbury's original 
backers which include Baring 


From 4J5 per cent to 6 per 
cent. 

Mr Thn MeMHe-Ross. chief 
executive, said that in an effort 
to develop stronger relation- 
ships with its retail customers, 
it planned a further targeted 
individual mining to all its dis- 
continued account customers. 

In retail financial services. 
Nationwide earned £L15m from 
commissi ons on the sate of life 
and general insurance prod- 
ucts, up from £107.7m. 

Nationwide, which currently 
has an exclusive agreement to 
s ell the products of Guardian 
Insurance, plans its own insur- 
ance subsidiary. Nationwide 
Life, from 1995. 


Venture Partners, Caledonia 
Investments and ECI Ventures. 

After the flotation, their 
combined stake will fall from a 
httte less than 50 per cent to a 
little more than 10 per cent 
About £250,000 will be shared 
among the authors who are 
beneficiaries of the Blooms- 
bury Authors' Trust 

The remainder will be used 
to expand into home reference 
books, paperbacks and chil- 
dren’s books. 


Bloomsbury Publishing to 
raise £5m via placing 


RPC advances 12% 


By Maggie Uny 

RPC Group, the rigid plastic 
packaging maker which came 
to the stock market In May last 
year, yesterday reported an 
11.8 per cent rise in pre-tax 
profits from £6.83m to £7.63m 
in the 53 weeks to March 31. 

Mr Lindsay Mackinlay, 
chairman, said the results were 
In line with the group's expec- 
tations at the time of the float, 
and that the current year had 
“started satisfactorily although 
our markets remain competi- 
tive". The shares, which were 
floated at ISSp, fell lp to 151p 
yesterday. 

Operating margins increased 
once more, from 109 per cent 
to 119 per cent, and Mr Ron 
Marsh, chief executive, said 
there was scope to improve 
them yet further. 

Mr Chris Sworn, finance 
director, said the margin 
Increase stemmed from higher 
volumes, a reduction in some 
overheads, including audit 
fees, and a switch from low 
margin products such as soft 
drink bottles to higher margin 
lines like sauce bottles. 

Mr Marsh said new products 
included bottles for Marks and 


Spencer’s bath foams, bottles 
for Tate & Lyle “Tops” syrups, 
and squeezy bottles for HP 
Sauce. A range of baby wipe 
containers employed three dif- 
ferent processors and RPC was 
the only UX producer who 
could supply the full range. It 
had also recently introduced 25 
per cent post-consumer recy- 
cled material into Its plastic 
paint containers, meeting envi- 
ronmental concerns. 

Group sales rose 6.7 per cent 
to £S8m, roughly equalling the 
increase in tonnes of raw mate- 
rials used as prices remained 
under pressure. 

Operating profits rose 13 per 
cent to £7.85m, before a rise in 
the interest charge to £220,000 
(£123,000), which was caused 
by the £4.18m cash outflow at 
the time of the float when pref- 
erence shares were redeemed 
and some ordinary shares 
bought in. 

Year end debt stood at 
£4.09m, 15 per cent of share- 
holders funds. 

The tax rate was 28 per cent, 
and earnings per share were 
9.4p. A recommended final div- 
idend of 22p gives a total of 
3-3p, compared to a notional 
3p. 


DIVIDENDS ANNOUNCED 




Current 

payment 

Date of 
payment 

Carres - 
ponding 
dmdend 

Total 

tor 

year 

Total 

last 

year 

Ailed Colloids fin 

3.72 

Aug 31 

3.35 

4.72 

4-29 

Amondoni Inti __ 

— Bn 

11.1 

July 22 

95 

15.5 

13.5 

AngSan Group — -fin 

&2 

Sept B 

5.8 

10.3t 

9.5 

Angflan Water .... — tin 

15.5 

Oct 3 

14.3 

22.8 

21.1 

ApoBo Metals Int 

1.2 

July 29 

1 3 

- 

3.6 

CMLMcro § 

—fin 

6 

July 29 

4.7 

8 

4.7 

Qartmore Value — .fln 

0552 

- 

0.952 

3451 

3.81 

Great Portland — 

—tin 

5-3 

July 18 

6.0 

a 

10 

Henderson Admin 

—fln 

31.5 

Jtfly 19 

29.5 

44 

42 

Ingham 

—tin 

335 

Aug 19 

4.5 

5 

6* 

Lotah Interests fin 

5.37 

Oct 3 

5.37 

7-83 

753 

Norens - 

— fln 

3.5 

Aug 2 

3.5 

7 

7 

Powerscreen 

— fri 

53 

July 29 

4.8 

75 

6.6 

RPC 

— Bn 

23 

Aug 12 

- 

3 3 

- 

Stanley 

—fln 

63 

Aug 9 

63 

95 

8.5 

St James’s Cap - 

—fin 

1.5 

July 29 

1.5 

3 

3 

TH Prop Inv Tret _ 

— fln 

0.5 

July 29 

0.5 

0J9 

09 

Turtrey Trust 

— mt 

nD 

- 

nil 

* 

3 

Vodafone — _ — 

— fln 

4.23T 

Aug 17 

3.53 

8.35 

6.96 


Dividends shown 
Increased capital. 


per share net except where otherwise stated. tOn 
stock. * For 15 months. 


LEGAL NOTICES 


"TAIWAN SUPPLY BUREAU” 
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FINANCIAL TI MES WEDNESDAY JUNE 8 1994 


COMPANY NEWS: UK 


Amersham shows 65% 


growth to £43.5m 


Maxmin to 
get £1.2m 
from L 


Boost for National Grid flotation 


By Pad Taylor 


Amersham 


Ashley 


Solid underlying business 
growth, exchange rate move- 
ments and a US acquisition 
helped Amersham Interna- 
tional, the health science 
group. Increase pre-tax profit 
by 65 per cent from £2£L3m to 
£415m In the year to March 31. 

Turnover increased by 20 per 
cent to £3242m (£269-3m). This 
reflected a £3Q.7m first time 
contribution ham US Biochem- 
ical acquired last April, offset 
by a £23. 8m reduction in turn- 
over from the Clinical 
Reagents business transferred 
to Eastman Kodak. 

Earnings per share, 
reflecting the 4.9m shares 
issued to acquire USB, grew by 
55 per cent to 47p. up from 
30.4p the previous year. A rec- 
ommended final dividend of 
ll.lp (9.5p) makes a total for 
the year of 15-5p, up 15 per 
cent. The shares closed 33p 
higher at 971p. 

Trading profits increased by 
54 per cent to £63.4m (£4Llm), 
with USB accounting for j&Sm 
of the increase. Underlying 
turnover and trading profits 
both increased by 10 per cent. 

After a 26 per cent increase 
in research and development 
spending of £20.lm (£l5.9m), 
operating profits were 72 per 
cent higher at £43.3m (£25 2m), 
including a £3-lm contribution 
from USB and a net £13 2m 
ye&r-on-year gain from 
exchange rate movements. 
Underlying operating profit 
growth at constant exchange 
rates was 7 per cent 
Life sciences, the largest 


Share price prance) 
1,200 


By Peggy HoMnger 


>,boO tr yr sr -y -r zr 



iwi -'fis _ae ; . a7.;..:aa^ae . ro 

8otreo:FrtaMf48* ' ' * : ; • " ‘ **• • • 


division, which sells reagents 

to niffdfaal and p harmB«mti«ij 

research establishments and 
now includes USB, returned to 
real profit growth. 

It generated operating profits 
of £3L2m (£19. lm) on turnover 
49 per cent higher at £147.6m. 

The healthcare division 
boosted turnover by 28 per 
cent to £119 3m and more than 
doubled operating profits to 
£9.4m(£32m.) 

The group’s share of associ- 
ated undertakings increased to 
£600,000 (£200,000). 

Net interest costs of £400,000 
compared with net receipts of 
£900/100. Despite spending 
£10.6m in cash on the USB 
acquisition the group ended 
March with net cash of £7.7m 
compared with £2.6m a year 
earlier. 


• COMMENT 

Amersham’s performance, and 
its management which has 
rejuvenated the business, con- 
tinues to impress. The underly- 
ing profit growth remains solid 
and last year’s exchange rate 
gains helped fund (he substan- 
tial increase in R&D spend and 
new branded product launches 
which will fiW its fbture. per- 
formance. Much more modest 
currency gains are expected 
this year but pre-tax profits of 
£5lm look possible, producing 
earnings of about 55p a share. 
The stock is trading on a 
forward multiple of 17.6, but 
could still go higher. In the 
meantime dividend cover has 
been restored to three times , 
and future dividend growth 
should be more in line with 
earnings. 


Gt Portland plans 20% dividend cut 


Great Portland Estates, a 
leading property company 
which has diversified from its 
traditional central London 
base in recent years, plans to 
cut its dividend for the 
first time in its 35-year 
history. 

A recommended flnaT pay- 
ment of 53p will make a total 
of 8p, against lOp a year ear- 
lier. The 20 per cent cut had 
been flagged and the shares 
dosed down only 7p at I96p. 

The cut was proposed 
because the redevelopment of 
one property and sale of others 


bad caused a £6m reduction in 
gross rental income. Overall, 
rental income was flat at 
£87 Jm. 

The company said, however, 
it was likely to increase the 
dividend a gain in the current 
year. 

Pre-tax profits for the year to 
mid-March fell from £3104m to 
£25.4m but would have been 
flat but for a £9.7m charge for 
renegotiating a syndicated loan 
and associated swap arrange- 
ment 

Earnings per share after the 
charge and a higher tax rate 


fell to 5.5p, against 11.3p 
adjusted for last June’s rights 
issue. 

Net asset value rose 21 pm* 
cent, from 172p to 209p. The 
company's investment portfo- 
lio was valued at March 31 at 
£1.04bn, representing, after 
capital expenditure, an 
increase of 14 per cent and a 
running yield of 8.75 per cent 

hi the latest year, central 
London accounted Gout 57 per 
cent of the portfolio against 84 
per cent in 1989, and retail 
space for 33 per cent (13 per 
cent). 






K • 

- - 


••• — •• ‘ .T-T" ’ - fzT K * 



UILDING FOR THE FUTURE 


Our results reflect continued 
progress, file major restructuring 
of our retaliated business will briim 


siunifieaut loiro term benefits. 


IlcriKtrd Ht'iuk't'MHi. ( .15.1!. 
( li;ui riKtn. Vnulian Hater 


Anglian Water 


PneUmiuvy Results for the year 
coded 31 March 1994 


Turnover 


£687.9m 


Profit before tax 
(before restructuring) 

Earnings per share: 

- before restructuring 

- after restructuring 


£192 2m 


down 30.9% 


The 1994 Annual Report and 
FtaucM StatencBte wfQ be seat 
to shareholders on 1 July 1994. 
Copies may be obtained Tram the 
Gray Company Secretary, 
An g lian Water Pie, Anglian House, 
Ambmy Road, Hgg B ag don . 
Cambridgeshire PE18 6NZ. 


Full Year Dividend 22.$p per share up 


By Michael Smith 


Mr Jim MflTmin, the firmer 
chief executive of Laura Ash- 
ley, is to receive a £L2m pay- 
off following Us abrupt depar- 
ture from toe fashion retailer 
which he is widely credited 
with reviving. 

The news of Mr Maxndn's 
compensation package, which, 
includes two years’ salary and 
pension payme n ts, was accom- 
panied fay toe departure from 
toe board of his protege, Ms 
Denise Lincoln, the human 
res our ces director. 

Further management 
changes are likely to be 
announced within the next few 
weeks, although it is not dear 
whether Mr Mwwin wifi be 
replaced. Mr Hugh Blakeway- 
Webb, who lives in the US and 
receives expenses of £1,000 a 
day, stepped up from non-exec- 
utive to executive chairman 
following his departure. 

Mr Uarmhi left Laura. Ash- 
ley in April after what was 
described as a disagreement 
over investment priorities. It 
is understood tfait Mr Maxmin 
was pushing for greater 
Investment in human 
resources, while the non-exec- 
utives wanted to focos on 
retailing. 

The non-executives include 
Mr Takuya Okada of Aeon, the 
Japanese group which bailed 
out Laura Ashley with a £3 0m 
cash injection in 1990. 

The non-executives were 
also thought to have been 
unhappy with Laura Ashley’s 
performance in the US, where 
Mr M»«win frankly admits the 
company failed to get to grips 
with tiie problems. However, it 
is widely acknowledged that 
the US side Is back on track. 

Mr Maxmin was on a two- 
year rolling contract, with a 
salary of £399,000 or {590,000 
in the last annual report. He 
also has options on 2m shares 
at 7 0p and 90p which he will 
retain. 

Two days after annnnnring 
Mr Maxmin’s departure, the 
group reported pre-tax profits 
of £3m on sales of £30Om. 

Ms Lincoln is expected to 
receive a compensation pack- 
age of about £200,000. She was 
appointed' to toe board in 
1992. 


National Grid, operator of the 
high voltage power transmis- 
sion system in England and 
Wales, yesterday fuelled expec- 
tations of a flotation next year 
when it increased dividends by 
1 53 per a gain expecta- 
tions of 10 per cent 

The company, which is 
owned by the regional electric- 
ity companies, announced pre- 
tax profits for the year to 
March 31 in line with forecast 
at £57&5m, against £S33.2m. 

However a lower than expec- 
ted tax charge enabled the 
company to pay a final divi- 


dend of £2J)62 making a total 
Bar the year of £2^82. It said 
toe dividend rise was In line 

with the improvement in after 
tax aaralng E. 

The profits growth was aided 
by a 9.5 per cent drop in staff 
numbers which stood at 4£82 
at toe year end, excluding 
those employed by the Energis 
telecommunications subsid- 
iary. That compares with &537 

In March 199L 

Ehergis accounted for £90m 
of the company's capital expen- 
diture of £35Un (£389m). The 
main transmission business 
accounted for £243m. 

Some LSOOtan of fibre optic 


cable has already been 
Installed for Enargis which is 
due to start services later this 


year. 

Total group turnover 
increased marginally from 
£l.39bn to £1.43bn. reflecting 
income from increased new 
connections and higher sales 
in toe ancillary services busi- 
ness. 

At the end of the year under- 
recovery of revenues against 
the regulated maximum 
amount was about £14m. The 
rp mpany is allowed to recover 
the shortfall through adjust- 
ments to charges in future 


Net debt decreased by 
£ 116.4m to £32Sm, loading to a 
foil in toe net debt to equity 
ratio from 31 per cent to Wrp* 
cent 

The company's perforpance 
wffl reinforce the City’s beta? 
that the regulatory regime on 
prices, in place until 1997, it 
relatively benign. 

Nonetheless It provides a 
strong platform fin* the rocs to 
stage a flotation. A disposal of 
at least 25 per cant of the com- 
pany is likely next year, possi- 
bly in the spring. 

Analysts believe the com- 
pany Is worth between £4bn 
and £ 5 hn . 


Powerscreen declines to £24. 6m 


By Simon Davies 


Powerscreen International, the Northern 
Ireland-based manufacturer of screening 
and stone crushing equipment, yesterday 
announced a w ia r gimi? decline in animal 
pre-tax profits due to the impact of dispos- 
als in early 1903. 

The company recorded a strong 
improvement in sales from the UK market 
and east Asia, primarily Japan resulting 
In group tnr nover of £122J»m (£KHL3m). 
Mr Shay McKeown, chief executive, said 
order books for the first two months of 
the year were “very healthy". 

Pre-tax profits for toe year to end- 
Mareh slipped from £25J$m to £24.6m Ana 
to the loss of contributions from Guzzler, 
the US subsidiary. 

However, Fowerecreen’s three core busi- 
nesses all showed growth, and operating 

profits from confirming operations grew 
by 11 per cent to £23£m. 


The company is also increasing its divi- 
dend by ll per emit to 7.3p, with a pro- 
posed final of 5.3p. Earnings per share 
rose to 22.4p (20.7p) doe to a smaller tax 
charge resulting from lower US e ar nin gs. 
The share price dosed 6p higher at 255p. 

The UK and Ireland now account for 35 
per cent of sales, with North America 
accounting for 26 per cent and Europe for 
30 per cent. Screening, responsible for 
about half of t u r no ver, experienced a 22 
per cent increase In rales, aided by an 
upswing in the UK construction market 
and increased I nfr a stru cture spending In 
the US and east Asia. 

Simplicity Engineering and Ludlow-Say- 
lor, two US businesses acquired In Febru- 
ary, mad* a egm contribution to sales and 
are already operating profitably. The 
crushing and recycling products division 
recorded a 10 per cent sales increase, with 
its performance hampered by a decline in 
its recession-hit European markets. 


Brown Lenox doubled machine sales to 
the UK and Ireland and toe materials 
handling division, primarily its Matbru 
subsidiary, saw a 62 per cent increase In 
gales, having substantially broadened its 
product range and built up an export 
dealer network. 


• COMMENT 

After eight consecutive years of profits 
growth Powerscreen has finally recorded 
a decline, but this merely reflected busi- 
ness rii* qy y m fc- Overall, toe results woe 
positive, with profit margins maintained. 
Profits should hit £28m this year, putting 
the shares on a p/e of 10-4, and U should 
remain on a strong growth track for the 
following year. Powerscreen has switched 
to one of the big four accountancy firms 
and has Increased disclosure, which 
should win over some City sceptics. After 
their recent decline, the shares appear to 
offer value. 


Measurement setback for Staveley 


By Caroline Southey 


Staveley Industries, the 
measurement and mechanical 
engineering company which 
also owns British Salt, suffered 
a 65 per cent foil in pre-tax 
profits in the year to April 2 
after a poor performance and a 
£10m reorganisation charge in 
its measurement division. 

However, the total dividend 
will be held at 8.5p via an 

lmr.hangpd final of 6_2p. 

Pre-tax profits fell from 
£24. 4m to fiR-ftm on turnover 
down 2 per cent at £338 -9m 
(£344. 9m). Operating profits 
dipped 19 per cent to £20^m. 

“We have had a difficult 
year, but we believe the major 


problems have been tackled. I 
feel we have good prospects for 
growth - the key is to bring in 
the benefits of the reorganisa- 
tion,” said Mr Roy Hitchens, 
chief executive. 

The company’s minerals 
division, which supplies more 
than half of the UK salt mar- 
ket, lifted operating profits 
from to £13 ul 

However, the measurement 
division performed poorly with 
operating profits down to 
£5-lm (£8.4m). The reorganisa- 
tion includes rationalising 
Chronos Richardson, the 
systems division, by creating a 
single global operation. 

Its plants, jn. Germany and 
the US will be closed and man- 


ufacture transferred to Not- 
tingham where the company 
win use a network of subcon- 
tractors. Mr Hitchens said this 
was to exploit UK labour rates 
which were 50 per cant lower 
than Germany’s. 

The nwv-hawipai and electri- 
cal services side suffered a 9 
per cent drop in profits to £4m. 

Earnings per share fell 79 per 
cent to 3.4p, but excluding re- 
organisation and exceptional 
costs they dropped M per cent 
to 13£p (lfLlp). 


• COMMENT 

Staveley’s latest reorganisation 
plan fores a credibility prob- 
lem, Several earlier attempts to 
overhaul the measurement 


division have foiled over the 
past six years. But the new 
management team deserves 
the benefit of the doubt If the 
division’s shake up works, 
growth could be enhanced by 
acquisitions in niche markets. 
The minerals division remains 
safe and cash-generative. The 
mechanical and electrical ser- 
vices division should perform 
better next year as the upturn 
in construction tabs hold. Pre- 
tax profits of £25m look possi- 
ble ihfe year for earnings of 
16-4p. On a closing price yester- 
day of 209p, down Tip, the 
shares are on prospective p/e 
of 12.7. That is good value If 
the management TnnVra good 
on their promises.' 


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.LjS^NCgALTIMES WEDNESDAY JUNE 8 1994 

COMPANY NEWS; UK 


iiiiiiiiiiiiiiiiiiiiiimiiiiiviiiiiiiiiiiiiiiiiikiiiiiiiiiifBii 


Lack of exceptional 
costs boosts Norcros 


By Paul Taytor 

Norcros, the building matAriaiq 
print and packaging 
group, reported a substantial 
improvement in fan year pre- 
tax profits reflecting higher 
operating profits, the absence 
of exceptional losses and 
sharply reduced interest costs. 

Profits in riw* year to March 
31 jumped to £l7.lm from 
£2.63m, restated £2. 63m for 
FRS 3. Turnover grew by 7.4 
per cent to £378m (£352m) 
reflecting improvements in 
most markets. 

The pre-tax figure was 
struck after a £l.35m excep- 
tional gain relating to the dis- 
continuing property division. 
In the comparable period there 
was an exceptional loss of 
£7 -59m on property disposals, 
offset by an earlier £4_5m pro- 
vision. 

Earnings per share of G.6p 
compared with losses of 2.4p. 
The final dividend is main- 
tained at 3.5p making an 
unchanged total for the year of 
7p, as forecast at the time of 
the group's rights issue in 
June 1993. The shares closed 6p 
higher at 139p. 

Mr Michael Doherty, chair- 
man, noted that the UK hous- 
ing market showed signs of 
growth last year while the 
commercial market continued 
to decline and refurbishment 
expenditure fell slightly. 

“Against this background, 
many of our businesses per- 
formed very well and a major- 
ity of them produced improved 
skies and profits.” 

Group operating profits, 
including a £4.1im (£2.im) con- 
tribution from associates, 








Michael Doherty: housing market showing signs of growth 


increased by 23 per cent to 
£24m (£19. 4m.) 

In the core building products 
division operating profits were 
flat at £5.9 on turnover of 
£165.5m (£i52L5m.) 

The restructured ceramics 
division, including associates, 
posted Increased profits of 
£9 .2m (£5. 6m) on turnover of 
£!26m (£U5. 7m) while the print 
and packaging businesses 
lifted profits to £10.7m (£8AnJ 
on turnover of £109.9m 
(£101 -9m.) 

Net interest costs fell to 
£&l9m (£13-7m) as net borrow- 
ings dropped from £ 120.2m to 
£S&7m representing gearing of 
39.5 per cent down from 9L8 
per cent a year earlier 
reflecting £19.4m of property 
disposals and the successful 
rights issue last year. 


VideoLogic joining market 
valued at up to £83.9m 


By Alan Cane 9p (SL2p) 

had sales 

VideoLogic, the He rtfordshire-based multimedia Its resi 
company, is to be demerged from its parent, hit by \ 
Avesco. the broadcasting services company, and funding, 
floated on the Stock Exchange via a placing and demerges 
offer valuing the company at between £70fim £15m wit 
and £83_9m. The net 

Avesco shareholders will receive one VideoLo- the done 
gic share for each Avesco share. They will also The d« 
have a preferential opportunity to participate in been prii 
the placing, which is expected to raise £2L5m of the plad 
new money before expenses. 55p and ' 

Some £13m will be available to VideoLogic to The dil 
fund research and development into improved raised ai 
systems for full motion video on personal com- accounte 
puter displays. rowings i 

Yesterday, Mr Richard Murray, Avesco chair- Mr De 
man, said VideoLogic had been transformed and Mr , 
beyond recognition since it was acquired in 1989 are entit 
and its potential could best be exploited through ger, but 
a separate listing. £1.2m in 

At the same time, Avesco announced results half the 1 
for the year to March 31, showing revenues 4 making 5 
per cent down at £2 2 An (£23 .4m) while losses Deallnj 
rose from £lJ3m to £7 2m. Losses per share were Yesten 

Ricardo gears up for 

£ 13.6m acquisition 


9p C2L2p) and the dividend is passed. VideoLogic 
had sales of £9m and lost £5.6m. 

Its results over the past three years have been 
hit by VideoLogic's requirements for research 
funding, totalling almost £lQm. Following the 
demerger, Avesco is expected to have sales of 
£15m with pre-tax profits initially of about £lm. 
The net asset value of the company following 
the demerger will be about 18 -5p a share. 

The demerged VideoLogic’s shares have not 
been priced. Warburgs, which is underwriting 
the placing, will determine a price of between 
55p and 70p through book building. 

The difference between the new money to be 
raised and available to the company win be 
accounted for by expenses, repayment of bor- 
rowings and the repayment of debt to Avesco. 

Mr Derek Maclaren, VideoLogic chairman, 
and Mr Anthony Maclaren, managing director, 
are entitled to a bonus from Avesco on demer- 
ger, but have agreed to invest an aggregate 
£1.2m in VideoLogic shares, representing about 
half the bonus after deducting £250,000 each and 
making allowance for taxation. 

Dealing in the shares will start on July 6. 

Yesterday Avesco 's shares fell 12p to 82p. 


By David Biackwefl 

Ricardo Group, the engin- 
eering consultancy, is to 
acquire the company that built 
the transmissions for the Jag- 
uar KJ220 and the factory 
Ford Escorts in the world rally 
championship. 

It is paying £13.6 m for FF 
Developments, raising the 
money through a rights issue 
at 130p. The issue of Z0.5m 
shares at l-for-3.Q7 is fnlly 
underwritten by Hill Samuel 
Ranh. Yesterday, Ricardo’s 
shares closed. 3p lower at 
I62p. 

FED, which is based in Cov- 
entry and Detroit to the US, 
made pre-tax profits of £U>8m 
last year on turnover of 
£16.5m, with the profits 
divided equally between the 
US and UK. It is 49 per cent- 
owxted by Chrysler and 51 per 
cent by the Holt family. 

Mr Christopher Ross, 
Ricardo chairman, said yester- 
day that the group had been 
looking for a sensible 
acquisition after organic 
growth of 25 per cent in the 
automotive divisi on f or the 
past three years. FED would 
broaden the group’s scope in 
the trassmbslon and chassis 
engineering sectors, comple- 
menting Ricardo’s expertise 
on engines. 


Ricardo has grown by sell- 
ing its expertise on refining 
so-called NVH (noise- vibration- 
harshness) to large motor 
manufacturers. 

FFD’s customers include 
Chrysler, which accounted for 
45 per cent of the US turnover. 
Ford, General Motors, Massey 
Ferguson, Volkswagen and 
Toyota. 

The company has five divi- 
sions - chassis engineering, 
transmission engineering, 
transmission assembly, lim- 
ited sUp differentials and an 
engineering recruitment busi- 
ness. It was farmed in 1971 by 
MaJ Tony Bolt In order to 
apply four wheel drive 
systems and anti-lock braking 
systems, which the company 
pioneered. 

Mr Stuart Bolt, chair man 
and chief executive of FFD 
since 1988, is receiving £2.34m 
of Us consideration in Ricardo 
shares, which he has agreed 
not to sell for two years. He is 
also taking up a two-year ser- 
vice contract to remain with 
the company. 

At the interim stage Ricardo 
doubled pre-tax profits to 
£1.97m on turnover of £30. lm. 
The board intends to recom- 
mend a final dividend of 4p 
(3J3p) on all shares hi issue at 
the end of its financial year 
this month. 


FT-SE 
Actuaries 
Share Indices 

The FT-SE Actuaries Industry 
Classification Committee has 
decided on the following 
changes to classification of 
companies, to take effect on 
July 1: 

Caverdale Group from Dis- 
tributors of Industrial Compo- 
nents & Equipment (Subsector 
4 12) to Vehicle Distributors 
(413); James Crean from Food 
Manufacturers (330) to Diversi- 
fied Industrials (240); Halite 
Holdings from Breweries (310) 
to Distributors, Other (414); 
Huntleigh Technology from 
Instrum ents . Tools & Mechani- 
cal Handling Equipment (269) 
to Health Care (360); Process 
Systems from Instruments, 
Tools & Mechanical Handling 
Equipment (269) to Electronic 
Equipment (253); Martin Shel- 
ton from Other Businesses 
(516) to Printing (284); Spandex 
from Building & Construction 
(210) to Distributors of Indus- 
trial Components & Equipment 
(412); Sutcliffe Speaknian from 
Pollution Control (512) to 
Chemicals, Speciality (234); 
Western Mining from Diversi- 
fied Industrials (240) to other 
Mineral Extractors & Mines 
025). 

• London Share Service: Sun- 
gard Systems will be moved 
from Electronic & Electrical 
Equipment to Support Services 
with effect from July L 


t 


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INDEX LA R 


Kingdom of Norway 

US. $200,000,000 

Floating Rote Notes due 
December 2002 
For the interest Period 7th 
June. 1994 to 7th December. 
1994 the Notes will carr> a 
Rate of Interest of 5% per 
annum, with Coupon Amounts 
ol’U.S. 127.08 per U.S. 55.000 
and L'-S. 52,541-67 per U.S. 
5100,000. The relevant Inter- 
est Payment Date will be 7th 
December, 1994. 


Disposal helps 
St James Place 
Capital to £81m 


• COMMENT 

Norcros’ dividend payment, 
increased by last June’s rights 
Issue, remained uncovered last 
year but that should be recti- 
fied this year as lower interest 
costs, a slow improvement in 
operating margins and further 
property portfolio sales help 
profits move ahead. However 
the management still has to 
demonstrate that it can get to 
grips with the remaining build- 
ing product loss-makers and 
convert higher sales into more 
impressive margins. Pre-tax 
profits of about £24m are 
expected this year producing 
naming s per share of S.Sp. 
Although the shares have 
taken a tumble recently they 
are still -trading on a prospec- 
tive multiple of 15JJ and look 
fairly priced. 


By Simon Davies 

St James's Place Capital, the 
financial services group run by 
Lord Rothschild and Sir Mark 
Weinberg, yesterday 
announced a rise in pre-tax 
profits from £H3m to £81 .lm 
for the year to March 1994. 

The figures were distorted by 
a £28-5m profit from the dis- 
posal of its stake in RTT Capi- 
tal Partners last July, and from 
£26 .8m investment profits, due 
to what Sir Mark described as 
exceptionally favourable condi- 
tions. 

The company's fledgling life 
assurance and investment 
management businesses also 
performed strongly and pro- 
vided a more substantial recur- 
rent income base. 

The company is paying a 
final dividend of l-5p, malting 
an unchanged total of 3p 
reflecting the reduction in 
group capital that followed the 
distribution to shareholders of 
the 37.6 per cent stake in KIT. 

Earnings per share 
amounted to 27.5p (5p) or 17 .8p 
excluding the RIT profits, 
while the net asset value per 
share rose by 29.6 per cent to 
8&3p, also adjusted for the RJT 
distribution, which reduced net 
assets by £11 1.6m- 

SJP has an investment port- 
folio of about £160m. and this 
generated substantial profits 


during the year, which, are 
unlikely to be repeated. 

In the second half of the 
year, SJP bought 80 par cent of 
International Financial Mar- 
kets Trading, the fund manage- 
ment group. The enlarged fund 
management division, which 
also includes a 30 per cent 
stoke in Global Asset Manage- 
ment, contributed £27.7m In 
profit (£lA2ni). 

SJP’s life assurance busi- 
ness, J Rothschild Assurance, 
brought in £250xn in new pre- 
mium income during 1993-94 
and the current year figures 
are “well ahead”. 

profits qTwrmTitgri to £11.7X0. 
However, the management 
cautioned that under the tech- 
nical convention for the life 
insurance industry, of deduct- 
ing a notional rate of tax, the 
declared profit would have 

been reduced to £7.3m. 

Sir Mark said the group 
planned to reduce the impor- 
tance of investment profits, by 
building up finan cial services. 
It had set up a subsidiary 
which plans to acquire and 
restructure existing life insur- 
ance companies. 

In addition, SJP intends to 
build up Us corporate finance 
activities, through the 50 per 
cent owned J Rothschild Wol- 
Sensohn. 

Investment hanking lost 
£700,000 last year. 


Apollo Metals in red 
but improvement seen 


By Paul Cheeseright, Midlands 
Corre sp ondent 

Apollo Metals, the aluminium 
distributor and processor, 
slipped info the red during the 
six months ended March 31, 
after three successive years of 
declining profits. 

Pre-tax losses for this Bir- 
mingham-based company were 
£219,000, compared with profits 
of £588.000, on turnover up 
slightly at £15-2m, against 
£14.6m. Losses per share were 
22p, against earning s of 3p. 

Acknowledging that Apollo, 
during its first half, had 
reached a low point in its 
finan cial fortunes, Mr Leon 
Angrave, finance director since 
last March, said: “We’re com- 
ing out the other side. Things 
are storting to look a lot better 
for us." 


This is reflected in the deci- 
sion to maintain the interim 
dividend at 1.2p. Total pay- 
ments last year were 3£p. 

For most of the first half, 
Apollo had to cope with low 
metal prices and persistent 
pressure on margins as It acted 
to hold its market position. But 
towards the end of the half 
there was a perceptible change 
in the market. Demand 
increased and the producers, 
after capacity cuts last year, 
were unable to meet it 

Importantly for Apollo its 
German subsidiary, whose 
expansion had been a drain on 
resources, came into profit dur- 
ing April But the cost of reor- 
ganisation in Germany, which 
was £234,000 and taken as an 
exceptional item, wiped out 
operating profit of £116,000 
(£771,000). 


Schroder Japan Growth 
raises £88m from placing 


By Bethan Hutton 

Schroders* new Japanese 
investment trust the Schroder 
Japan Growth Fund, has so far 
raised £88m from a placing of 
shares. Its initial size has been 
capped at £125m, allowing a 
maximum of £37m to be raised 
from a public offer, which 
opened yesterday and closes 
cm June 30. 


The fond, which will invest 
in a broad range of companies, 
is to be managed by Mr Ed 
Merner, the Tokyo-baaed 
Japan specialist who already 
manages Schraders’ range of 
Japanese unit trusts. 

Shares are to be issued at 
lOOp, with one warrant 
attached to every five shares. 
Issue expenses have been 
capped at 4-5 per cent 


Ingham at £1.9m and 
plans car parts growth 


Ingham, the York-based motor 
parts, worsted spinning and 
property group, reported prof- 
its of £1.91m for the year to 
March 31 on turnover of 
£25-3m. 

The car parts division con- 
tributed profits of £1.47m and 
turnover of £19 .2m despite the 
recession and a move to whole- 
sale sales which cut margins. 

The company is seeking to 
expand the division through 
acquisitions. 

In the previous period, for 


MEETINGS 


ITw Morfng eon^wMs htna raUM HaM of 
band nwaOncs to Bw Slack Exchange. Such 
mMdnpi ore imagy Md tor 9 m ptipoaa a( 
eerwtoinno dMhnM. OhkiBi mScaaena ar» no: 
m mM Mm 03 IP nhmur dtadanda m wartnui 
or Unota ond ttw RjtMUvrara Ann Mow m 
bond moMy on tan yarn's nmendiln 
TODAY 

MortM. Back, ctamme. Deny McA & Can. tsl. 
Bdrtdoa Pooa. Rrnncn (T). OMncn. O rora nch 
Haa. ni ,* Mpnamartc, Amte Uttt. Cjltyna. 
Capo. Datftnal Gold Mnrp, Q uanta aw n i3oH 

Mnma. OrMunaki Cons. Dmmmond. 

SacMcemponan&t. Oatma« SmdEsMtv. 
Hantaoa. Hoar Gold Mr** iMuta Straat 
Moyar ML. Mama n i Foods, Racal SacL. 

SurHih Hydo-Gsarrc, Tixnpyfce, WaOcfnpuv 


the 15 months to March 31 
1993, group profits were 
£838,000 on turnover of £11 -2m. 
However, the two companies 
making up the parts division 
were not acquired until Sep- 
tember 1992 and May 1993. 

The company said the spin- 
ning company enjoyed a much 
better year and property was 
showing signs of improvement 

Earnings per share were 8-2p 
(8-9p). A proposed final divi- 
dend of 335p makes a 5p total, 
against 6p for 15 months. 


D aqrcnM Data R-ocaaa _ 
OcMan Hqpa rtanaaon . 

Sortwn Buatupp — 


AopM HdogmMca — 

JCS3P 

BrttBtrStM — ■ 

Com Europe . 

encMey 

bm Japan Tst — 

tOcon HKlss. 

Hahns 

Jpvta 


LPNA 2 N.V. 

Tbe MquMalur ot EPTtA Z NX hi Bqehl ettan h«J teWrnrd the nndtrxlgnrd that efler peymet 
ef aB kaom endtun of the company era anaoant at US Dotan UW je&M h mUle Is 
fcmtaiSrt" toil njmjmmt end dm be win make ihe mrnttamd mwa aregiMe to 

Am 3J33 drpMitar? reedpu am oaMaixUos, ibe udenJjpcd will Babe amiable IP 
(kputauji rrtp boUxn as per Jnae 17. IKK as flaal re p ay m ent an amount of US Dolan 
7S9S1 per depasture receipt ■Kabul deflnzBBce or dir oHjlaol crrtJBdt* and 

Al Ibe SSM Urn (be aadbMbauti tl tl d e nds wblcb. at Ibe opdoa *1 certain bmwUua, wen* 
^ded to aslabiilhMmd naerre accaams wB aba be pmrabk; 

Mridcad rcaerre no. I wH dbtribtfa US DoBbos 5U57 p*r D.R. larestad la U* JCss 1 1 

DbUcad reaerTC U wtd dtatilbdb US Dalian 39U3 per OR. tascsted bi DW. 8cm. • 2 

Dl^deod reserve an. m wB dhnlbala US Dolan 979.74 per D-K. l ov ea te d bo Dt-Jtea- f 3 

Tbe ua d btt fc utul wB be paid together wtlb Ibe flaal re pajoi e n L 

Amnenbm. Joe 8, 19M 

STICBTINC IPNA I THIJST SERVICES 

tttBVKba 

I0KCE AMSTERDAM 


1hbaa<k*i*k*a«!l 


Lin of all dm imoed and to I 


cQmnUeaotmUi dw r apiii -c e ta ia of The totcraarkaud Seocfc Exchange of etc 
Ircfaml Umtad (the Tjondnii Stock EjatanMl- fc 4>e* a« Comdwb an oCfc* or dwaason 
duo, BSTibaRa- AopBcadon baa boon made to tbs L onfa s Stack Sidbapi to almlnlm _ 
d to ba bad onDun stmci of lOp oaefa Id VidaoLpgie Crump He (~ORftnaiT *ai*s"L & *» 
bb'bShIwp aaditot fesilngi in AeonHMiyriuaea will minimum gaWtJtdri W*. 

VideoLogic Group Pic 

•d end WoUmmmU, the Comports* Act 19SS with registered no. 392006V 


Admission, to the Official List 

and 

Placing of ordinary shares of lOp each of 
VideoLogic Group Pic 

incorporating a 

Priority subscription offer to Avesco pic shareholders 
by S.G. Warburg 8c Co. Ltd. 
to raise £21 j million 

VideoLogic G triu p Pic dnvdopi end ■"■■^r- molliawdSa fiat uac m p ee ' fnw.l computers. 


SHARE CAPITAL 


Antbodnd 

£ ’Nundsa' 

19^50^00 199,500,000 

SOJi OO 50000 


baccd and fully paid 
£ Number 

12319,048 123.190,476 

50,000 SOMO 


he dutre capital of Vkkots3®EC Gscson Pkr (SoBsse/iiW tbe Dcmnsgcc, 
i paragraph 7(2^*) of Part X of the Luring Paxricnbm) is based on 





ficCa.LtdL, 


IfentodahiM EC2M2PA 

WD48LZ 

Copies of tbe Lbriag Parrirulitrs am abo available during normal burioesa bomsJbr coltecrioo only from tbe 
Company A nn o rm ocnic ms Office, ifae Londoa SwA Exchange, Capri Court oatanee, 
on Batdwloiaew Lane, Laadoa ECZ 1HP op ro and mHinfing 10th Jnae, 1994. 

8d» June, 1994 


TnTrmmiiiiiiiiiiiiiiiiiiiiiiijjjjjjjjjijjjjjjmiTiTiinjjj. 


IIIIIIIIIIIIIIIIlIIIVIfllHIIIIBIIIIIIIIKIIIlIIllflflRIIlIlfllll 

AVESCO pic 

(btforporaUd end registered m England No. 1 78SS63) 

Notice to holders of ordmary shares held in tbe fbtm of bearer warrants 
of a data meeting of those boUtas 

Avesco pic (the “Company") has on 7th June, 1994 posted to its remstered. shareholders a cncnhr giving, 
inter aim, details of the proposed demerger of its whoDy-owoeo subsidiary, VideoLogic Limited, the 
proposed co n v e rsion of ate Company’s bearer shares into register ed fbtm poor to the demerger, the 
proponed creation of 50,000 4 per cent, enmahrive redeemable preference shares of £1 each m the 
Company and the proposed authority for the Company’s directors to amend the Avesco pic 1984 Share 
Option Scheme. The proposed conversion of the beater shares into registered form requires the approval 
ot the extraordinary resointian set oat m the acromnunrmg notice by holders of beater warrant* (“bearer 
shareholders”) at a separate class meeting of those holders. 

If a bearer shareholder wishes to attend and vote (in person or by proxy) at the class meeting he or she 
most deposit die bearer warrants) to his or hex 1 ordinary shares at tfae offices of S.G- Warburg Securities 
Ltd. at 1 Finsbury A venue, London ECZM2PA, together with a written sta te m a a t of his other name and 
address, on or before 9 JS5 ajn. on 27th June, 1994 at which time he or she will receive a proxy form which 
needs to be lodged with, the Company's registrars no later than 9 JS ajn. on 28th June, 1994. The bearer 
warraatf s) will be required to remain so deposited until after the meeting (or any adj ournm ent of it) has 
been held. 

Copies of the circular are available from S.G. Warburg Se c urities Led. at the above address. 

Set out below is the notice of the class meeting. 

Sdijune, 1994 


Notice of p™»* i i i E of bearer shareholders 

NOTICE IS HEREBY GIVEN that a meetiiK of bearer shareholders of the Company win be held at 
Venture House, Davis Road, Chessingtoa, matey KT9 ITT at 9-55 amt. an 30mjiinc, 1994 for die 
purpose of considering and, n thought fit, passing die following resolution which will be proposed as an 
extraordmaiy raoinoom 

THAT this meeting of the holders of ordinary shares held in the form of bearer warrants hereby consents 
to and sanctions all variations, modifications and abrogations of ihe rights attached to such shares 
comprised in or to he effected by die passing and carrying into effect of the Special Resolution of the 
Company to be proposed at an extraordinary general meeting of rbe Company convened for the same date 
and place aa this meeting. ... 


BY ORDER OF THE BOARD 

N. S. Conn 

Secretary 


' 8th ^ne, 1994 

Registered Office 
Venture Ho 1 ” 
Davis Rood 


mmmmimmimnmnmimnminmmmnmm 



RECORD PROFITS 

The following are extracts from cfafi circulated Statement by the Chainnan, 

Mr Derek Coombs. 

• Pretax profits have risen by 243% to £5-6m (&4.5m) , on turnover of &56.8m 

(£52.9m). . • 

• Profits have increased by an average of 25.16% each year over the past 5 years. 

• A final dividend of 8.9p is recommended making ll.5p per share, an increase 

15% for the iiill yeai; plus bCHius share issue. . . 

• Current trading is encouraging in that demand is running ahead of last yean 


From the 1994 Annual Report 

• RECORD PROFITS - UP 24396. 

• FINAL DIVIDEND UP 17.1% . 

• EARNINGS PER SHARE UP 233% 


1 FOR 10 BONUS ISSUE 


For a copy of the 1994 Annual Report and Accounts write to-. ^ 
The Secretary, S&UFLC, 51y53 Edgbaston Stxeet, Btanlngam B5 4QH_ 


Nodes to HoUera 

COMPAQNIEDE 
SAUTF-GOBAIN . 
Ecumnasn 

IftRfMkFpflk 

On I6tti May 1964, iho ganwal mmtinD 
ot ttia TTtraa Part Wpafltb hoidan 
decklad to motfity pan^y a ii l i M. 


5th April 1964 os (olom: 

Any notoe to holdors of TTtrss 
ParidpaBts shaM to domed l o 
imm boon dufygtvon ttfxdOahgdin 
thotoOginingnompapero: 



SCITEOH . " - 

. 8, arreaoB Mirie-lhMae 
..... - - ''V. ‘ fr«J 32 LOXEWBOURG - . 

■ RXXLnandnazgBaOJBSS . 

We have Itie'pleaaure of iaviring be ahanhoUoa to Attend the Amnid Geoenl 
Mecdeg of the SbanbaJdtn, tabe'btid ot tbe hetubove teg&ilnnsft office of the 
t^oatpxaf,oa2uac20,l994,'at3J30 pm. 


■ ■ 

■ 



B B 

Q 



■ ■ 

■ 



■ ■ 

■ 


if. 

H B 

B 






fe 


t. Sabaiiaaia&af the tqniiacf the Board oC pheriors and af tbe Aufiior; . • 

Z Approval of feSatcmeatof Aaeett null iabHitiraaaM Much 3 1, 1994 sad. 

. of the Statemeot oCppecnfaiBafor the year ended Muck 31, 1994; 

3. AllocalJoDof (bcuBtresnha; 

A Dl a chw ga M the PU ot loia; 

5. EVrifa or rrr i rgtiop of Pirestda ariJ ofdte Aaflten . ' 

6 . " M h o djum ia,' ^ ^ 

The ibarehoMcaa are adviaed that do quorum for tin ham of the iqjphdi «• 
reqaired, nadtfaamfaet fc d iB a wa wfflbe takcnal agfatylenM^oritypf dgriarea 
present w repwenled at the meeting. A ahareb older may ata hy proxy. ' 

TTOBOABBOFDIRECrOKS 


BUSINESSES 


Appear in the HnancU Tkrns 
on Tueadaya. FrMeys and SWurdayau 
Por tardier Wbrmaflon 
ortoadrardaeti Me motion 


Karl Lnynton on 071 878 4780 


DO YOU WANT TO KNOW A SECRET? . 

The ina. Gam Seminar ail show you how the rnefcots REAU-Y wodc The amuha 
tradhg lacMques offte topancWy WJD. Qamean Inraassyour proflu andcenMn wur 
kaeaa. How? ThatotweecmL FtingOBl 47» QOUlo hookyowffBEpJica. 
















FINANCIAL TI MES WEDNESDAY JUNE 8 1994 


COMPANY NEWS: UK 


Allied Colloids ahead 
after better second half 


By Maggie Urvy 

A “markedly better” second 
half enabled Allied Colloids, 
the speciality chemicals group, 
to increase full year profits by 
3.5 per cent from £44.4m to 
£45.9m, in spite of a 15 per cent 
drop in interim profits. The 
group forecast a “better growth 
in profits’* in the current year. 

Group margins, which had 
been depressed in the first bait 
bounced back. After suffering 
from adverse exchange rates in 
the first halt currencies con- 
tributed about £3m to £4m in 
the second, and a further £lm 
profit came from the group’s 
captive insurance subsidiary, 
set up after the fire at one 
group plant in 1992, as no 
claims were 

Margins also improved 
through tighter cost control, 
higher prices and more stable 
raw material prices and 
greater efficiencies, Mr Gordon 
Senior, finance director, said. 

Group sales in the year to 
April 2 were up 10.8 per cent to 
£32&8m. Its customers are In a 
wide range of industries 
around the world, with many 
seeing signs of a recovery. 

Only in the HE, which 
accounts for 13 per cent of 
total sales, were sales not 
ahead, with the sharpest 
growth reported from Asia, 
and “substantial increases” in 
continental Europe and North 
America. 

The company said all the 


MM GoNofctft 

Shu* price (pane#} 
2#)** — * 


: 270'~- i -|“ 





.230 *■* — *■ 

Jmi.. 


ances of £24. lm while the bor- 
rowings are at fixed rates. 

A tax rate of 28A per cent 
(33.2 per cent) reflected higher 
capital expenditure of 226.7m 
compared to a depredation 
charge of £14m, and a tax 
refund in Germany. The rate is 
expected to rise to about 30 per 
cent in the current year. 

That left earnings per share 
up 9.6 per cent to 12 j45p, and a 
proposed final dividend of 3.72p 
<3-35p) gives a total payment 
of 4.72p (4Jt9p) - up 10 per 
cent 

A one-for-one scrip is 
planned. 


8oure«Fr GraptAa 

main product divisions 
recorded Increased sales, with 
pollution control overtaking 
paper products as the largest 
Operating profits were 5.4 
per cent higher at £46.7m 
(£443m) giving a margin of 143 
per cent for the year, down 
from the 1993 figure of 15 per 
cent, but well up from the first 
halfs 12.1 per cent 
There was a £258,000 loss 
from the new joint venture 
with Courtaulds, representing 
start-up costs, and the net 
interest charge was £499.000 
(credit £124,000). Net debt at 
the year end was less than 
£lm, but the charge reflected 
lower rates on the cash bal- 


Alhed Colloids has long been a 
favoured stock and was 
quickly forgiven its interim 
profit blip. After these figures, 
forecasts for the c urrent year 
were being increased with top 
estimates now up to £57m pre- 
tax, and the shares rose lip to 
26ft). Those numbers depend 
on another good sales increase 
and a full year of margin* at 
the level of the second half, 
which may be a bit much to 
hope for. However, the high 
continuing level of capital 
spending, expected at £35m 
this year, should keep p rofi t s 
moving ahead in naming years. 
On more conservative esti- 
mates of £54m, the prospective 
p/e is 18.4. That looks- an the 
hi gh stag, but may not stop the 
shares outperforming in the 
longer term. 


Coal boost fuels Leigh rise 


By Peggy Hortinger 

Improved profits from coal 
extraction and lower interest 
charges helped Leigh Interests, 
the waste management group, 
increase pre-tax profits by 4 
per cent to £9Sm last year on a 
similar rise in sales to EUSftn. 

The profit rise is the first 
since 1991, when recession 
began to hit the operations in 
the south of England. 

It was fuelled by a film rise 
in operating profits to £2ftn In 
tire coal extraction business - 
the result of the need to dig 
holes for landfQL Profits were 
also helped by an 18 per cent 
fall to £3.4m in interest 
charges. 

The final dividend is held for 
the third year at 5.37p, for an 
micbanged total of 7.83p. Earn- 
ings were 5 per cent ahead at 
10ft>. 

Mr Arthur Kent, finance 
director, said cover would have 
to be rebuilt before the divi- 


dend could be increased. This 
meant profits would have to 
recover to 1991's peak of 

The cautious policy arises in 
a year which saw competition 
and overcapacity in the Mqrdrt 
waste sector hit the group. 

Volumes fell by 5 per cent 
while average prices for 
treated waste dropped 3 per 
r ynt TWs trend continued and 
was also beginning to hit incin- 
erated waste. 

Mr Kent said Leigh was tack- 
ling the problem by extending 
its waste treatment processes 
and cutting costs. About atm 
had been cut from on-going 
costs, he said. Exceptional 
charges of £700,000 were taken 
for redundancies and reorgani- 
sation. 

Offsetting the bad news on 
liquid waste, Mr Kent said 
Leigh was confident the mar- 
ginal improvement in landfill 
prices would continue. 

Leigh said its financial posi- 


tion was secure, as It had 
agreed a £45m revolving credit 
facility with a hanking consor- 
tium. Net debt tell from £5Qm 
to £48m, representing 69 per 
cent of shareholders’ funds. 

• COMMENT 

T^igh was one of the first in its 
sector to feel the bite of reces- 
sion, but shows no signs of 
being an early recov er y play. 
The coal businesses is doing 
better, largely because Leigh is 
extracting from its own sites 
rather than British Coal’s, but 
there are no plana for p ushing 
tiiis forward. The waste busi- 
ness now appears to hang on 
the long-promised draft EU 
directive forbidding the dis- 
posal of liquid waste with 
solid. When that becomes fact 
is anyone’s guess. Forecasts 
are for £lL5m, for a prospec- 
tive p/e of 17. This might 
appear somewhat over-valued, 
at least until another bid 
rumour gifmg 


Gander seeks £5m in placing 


Grander Holdings, a resi dential 
property development and 
investment company, is raising 
£5m before expenses, via an 
issue on a I-for-4 basis of 71.6m 
shares at 7p each by way of a 
placing and open offer. 

The company specialises in 
refurbishing properties in Ken- 
sington and Chelsea In London 
and proceeds of the issue will 
be used to continue its prop- 


erty acq uis i t i on programme. 

Since the present manage- 
ment took over in January, 
Gander has raised £2. 7m 
through a l-for-2 rights issue 
and has bought a further six 
properties far £2£lm. 

Mr Oliver Vaughan, chief 
executive, said the residential 
market in west London was at 
a turning point “There is a 
window of opportunity to make 


acquisi ti ons now," be said. 

The board believed that the 
availability of opportunities 
might have diminished by 1995 
as the market continued to 
improve. 

The company’s shares trade 
under Rule 535(2), but it 
intends to seek a listing in doe 
course. The placing and offer is 
fully underwritten by Charles 
Stanley & Company. 


A consortium with some political clout 

Breakaway union casts its eyes on the British Coal assets. Michael Smith reports 

M r Arthur Scargill Coal Investments Edwards’ enthusiasm for coal 

must have viewed and his ability to motivate 

events at the Union Share price relative to the employees he rates and the 

FT-SE-A Aft-Share Index 
550 — — 


M r Arthur Scargill 
must have viewed 
events at the Union 
of Democratic Mineworkers in 
the last year or so with some 
pleasure. 

The p resident nf the National 
Union of Mmeworkers feels the 
same sort of contempt for the 
UDM, a breakaway from his 
! union, as he does for the fortb- 
I coming privatisation of the 
I coal industry. 

So the UDM’s early difOcul- 
! ties over the privatisation pro- 
, cess will have provided him 
with a few wry smiles. 

Last year it announced it 
would be bidding for British 
Coal assets with companies 
Including East Midlands Elec- 
tricity and Jim Walter 
Resources, of the US, only to 
find its prospective partners 
drop out later. 

It must be hoping its latest 
liaison - with Coal Invest- 
ments, the Tnfaiinfl - company 
led by Mr Malcolm Edwards, a 
farmer British Coal director - 
is more soundly based. 

Mr Edwards and the UDM 
aTmminnfid last month they 
had formed a consortium to 
consider bidding for British 
Coal assets which are being 
sold later this year. 

They have applied to NM 
the tiwm’i'frarnt h»nV 
advising the government on 
privatisation, to "pre-qualify” 
to bid in three En glish regions 
and are Himig ht to have been 
successful. 

Coal Investments is looking 
at the possibilities in south 
Wales alone and in Scotland 
with another consortium. 

For the UDM, the attractions 
of Coal Investments are obvi- 
ous onmig fr- 

Mr Edwards has his critics, 
among them Mr Nell Clar ke, 
chair man of British Coal who 
Hficira ri hhn as nniri»»Hng direc- 
tor two years ago after a series 
of dashes. And although for- 
mer colleagues at British Coal 
admire and hkp Mr Edwards 
for his intellect and 



Nov ra ■ 

Source FT GrnpKto 


IBB* Jtm 


humour, spme agree with Mr 
Clarke’s asses smen t that he 
was too outspoken end individ- 
ualistic. 

“He had his own a genda and 
sometimes he not wmfiiiB 
in us what it was,” complained 


BRITISH COAL: . 
THE BIDDERS J 


one. "He was not a team 
player." 

Others say that as British 
Coal’s commercial director in 
1990 he should have negotiated 
a five year rather than three 
year deal with the generators 
but at lower prices. 

This would have secured a 
larger marfarf for the Industry, 
even if only temporarily. Mr 
Edwards says he would have 
been in favour of such a deal 
but that in practical t er ms it 
was never on offer. 

Whatever the merits of the 
1990 deal, few dispute Mr 


TR Property net asset 
value surges by 46% 


By Joan Gray 

Strong performances by the 
smaller property companies, 
investments in which comprise 
60 per cent of its assets helped 
TR Property Investment Trust 
achieve a 46 per cent increase 
in net asset value per share to 
41.97P at the March 31 year 
aid. 

This compares with a 29 per 
cent rise fa the FT-SE-A Prop- 
erty Index 

The company saw a 25.9 per 
cent increase In total revenue 
from £&48m to £L0.7m, includ- 
ing a £L3m one-off profit on 
the disposal of a portfolio of 
development properties in an 
associated 

Profit before tax increased 
by 38J5 per cent from £&£m to 
£5.4m, mid a low tax charge of 
£l-3*n (£Li9m) helped earn- 
ings per share rise 50 per cent 
to L43p (0-95p). 

To help rebuild reserves and 
Improve dividend cover an 
unchanged final of 0.5p 
is recommended, making a 


same-again total of (L9p. 

There had been a "strong 
market in property shares, 
particularly in the junior com- 
panies in which we specialise, 
as against lower returns from 
direct property,” said Mr Peter 
Duffy, director. 

Consequently, while 29 per 
cent of the trust’s gross assets 
of £109m were held As direct 
property at the beginning of 
the year and the balance in 
securities, by the year end the 
direct property component had 
been reduced to 22.7 per cent 
of the £156m tntaL 

In April TR bought a £39m 
property portfolio from Pos- 
Tel, and the percentage of 
assets held as direct 
property has risen to 31 per 
cent 

It also raised £41m cash 
through a placing and offer, of 
which £25m has now been 
invested, said Mr Duffy, “90 
per cent of it in middle-rank- 
ing UK property companies 
which offer the best medium 
term growth prospects”. 


Edwards' gnHmshnan for coal 
and his ability to motivate 
employees he rates and the 
investors whose funds are 
needed to develop the ind- 
ustry. 

Mr Edwards reversed 
f>> a] Tmw HH tnipnts into Geevor, 
Britain’s oldest quoted mining 
company last October, shares 
in the enlarged company have 
risen more than sevenfold. 

That Tnak-Pfi Coal Invest- 
ments the stock mar ket’s best 
performer in the period; no 

meg n achievement for a com- 
pany whose i p?*" fyUteg point 
is its plans to reopen up to five 
pits rejected as unprofitable by 
British CoaL Only one is so tar 
in foil production. 

In spite of doubts among 
other coal companies about 
potential markets, Mr Edwards 
says there is no problem sell- 
ing coaL “I wish I had more, 0 
he says. “The market is 
screaming for it” 

However, he is cautious 
about the possibilities of bid- 
ding for the five regional pack- 
ages which include British 
Coal’s opencast sites and 16 
operating collieries. 

Mr Edwards believes the five 
regions may be a riskier invest- 
ment than the pits he is 
already ope ra ting under leas- 
ing and licensing arrange- 
ments because of problems 
over liabilities. 

“We need to see what is on 
offer and if they can be made 
to work,” he says, adding 
that bids are by no means 
certain. 

The UDM. led by Mr Neal 
Greatrex, may be more enthu- 
siastic- Alfhmi gh it bag kept 
proportionally tar more of its 
members than the NUM since 
1985, it now has less than 4,000 
still working, against a peak of 
mare than 26.000. It is seeking 
a more sub stantial ro le. 

However, the union has yet 
to show that It can transform 
itself from a traditional imfon 
to a more business-oriented 
organisation. 


Ross sales 
to raise 
over £5m 

Ross Group, the consumer 
electronics and technical ser- 
vices group, is making two 
sales worth a total of about 
£5.5m. The moves mark a fur- 
ther focusing on core activi- 
ties. 

Voter Accessaries, a Hanson 
subsidiary, has acquired Trav- 
eller International, the travel 
accessories company, for about 
61.15m. including stocks. Roes 
acquired Traveller, which 
made 1993 profits of £750j000 on 
sales of £2. 2m, for £700,000 In 
March 1991. 

Ross also plans to sell 
In-Flight Supply Services 
(International) to Mr Ross 
Marks, the founder and an 
executive director of Roes. He 
will cease as an executive 
director becoming a non-execu- 
tive and consultant. 

The consideration will be 
£226X100 cash on completion, a 
min imum royalty of £100,000 
per annum for five years and a 


It 



TayA n dt— i 

Malcolm Edwards: no problem setting coaL “I wish I had more” 


Mr Greatrex says that in the 
new consortium, management 
derisions would be left to Mr 
Edwards but adds he would 
expect UDM directors to have a 
right of veto on working prac- 
tice changes. That will raise an 
eyebrow or two among poten- 
tial investors. 

The UDM does, however, pos- 
sess an asset in the goodwill of 
the g overnm ent. Tory MFs are 
still conscious of the UDM 
members’ role in helping to 
defeat the NUM strike of 
198485. Same, though probably 
a declining number, believe the 
party still has a debt to dis- 
charge to the UDM. 

That perceived debt would 
give a UDM/ Coal Investments 
consortium some political 
clout if it entered the bidding 
fray. In eftfi tlon the union can 
tap into hinds promised by the 
government to h el p employee 
buy-outs. 

Althougi the Coal Invest- 
ments /UDM consortium has 
the option of twnflprfag for the 
three En tfsh regions of Brit- 


NEWS DIGEST 


farther sales-related payment 
up to a total of £250,000. Mr 
Marks will also assume respon- 
sibility for the borrowings of 
In-Flight, currently £350,000. 

Turkey Trust net 
assets nearly halved 

Net asset value per share of 
Turkey Trust, the investment 
trust rip«Hng mainly an the Ist- 
anbul Stock Exchange, 
dropped to l8L35p, as at April 
30 1994, compared with 847.41p 
a year previous. 

For the six months to that 
the available figure was a 
£132,000 loss, against £60,000, 
equal to 1.34p (G.61p) per share. 

DC Cook car sales 
surge ahead in May 

DC Cook Holdings, the motor 
retail group, announced that 
its new car sales in May had 
soared by 52 per cent against 
the same month last year. 

Mr Derek Cook, chairman, 
said the increase compared 
very favourably with the over- 
all national increase of 10 per 
cent in May for new car sales. 


ish Coal, the chances of it bid- 
ding successfully for all of 
them are remote. 

Developing them would 
involve an outlay of several 
hundred millions of pounds, 
friwiwting the tender prices. 

Mr Edwards may have 
worked wonders on the stock 
market but his company is still 
valued at less than £35m. And 
with most of its mines yet to 
produce coal in significant 
quantities, the company Is still 
largely untested. 

In addition, any consortium 
involving the UDM would have 
to thjnk long and hard about 
launching a bid for the cattral 
north region where Mr Scar* 
gill’s NUM is predominant 

The consortium is considered 
a much more likely bidder for 
central south, where virtually 
all miners are members of the 
UDM 

Previous articles in this series 
appeared on Mao 3& Jwte 1, 
June 2, June 3. and June 7. 
Further articles will appear 
later. 


Used car sales at Cook also 
showed a sharp increase of 69 
per cent 

Management buys 
Trafalgar offshoot 

Trafalgar House, the engineer- 
ing, property, shipping and 
hotels group, has sold Morris 
Mechanical Handling to the 
company’s management for an 
undisclosed sum. 

Equity financing of the 
transaction of same £12m was 
provided by GINVen fluids and 
Montagu Private Equity. Bank- 
ing facilities totalling £23m 
have been arranged far MMH. 

CML moves ahead 
to £4.55m 

Sales of CML Microsystems, 
the specialised electronic prod- 
uct manufacturer, expanded 20 
per cent from £15.7m to £18 An 
while pre-tax profits for the 
year ended March 31 moved 
ahead 5.6 per cent to £455m, 
compared with SAJOxa. 

Earnings per share were 
15.58p (I5.15p). and the divi- 
dend is lifted from 4.7p to 6p. 


(Mite iWMabl 


FIDELITY FAR EAST FUND 

Socidtd dTnvestissement & Capital Variable 
KansaHis House - Place de I'Etoile 
L-1021 Luxembourg 
t R.C. No B 16926 

NOTICE OF ANNUAL GENERAL MEETING 

NOTICE Is hereby given teat the Annual General Meeting of die Shareholders of FIDELITY 
FAR EAST FUND, a soct&£ (finvestissement k capital variable organised under the laws of 
the Grand Duchy of Luxembourg (the "Fund"), will be held at the registered office of the 
Fund, KansaHis House, Place de I’Etoile, Luxembourg, at 11:00 a.m. on June 28, 1994, 
specifically, but without limitation, for tbe following purposes: 

1 . Presentation of die Report of the Board of Directors. 

2. Presentation of tbe Report of the Auditor. 

3. Approval of tbe balance sheet and income statement for die fiscal year ended February 28, 1994. 

4. Discharge of the Board of Directors and tbe Auditor. 

5. Election of six (6) Directors, specifically tbe re-election of Messrs. Edward C. Johnson 3rd, 
Barry RJ. Bateman, Charles T.M. Co His, Sir Charles A- Fraser, Jean Hamilius and HJF. van 
den Hoven, being ail of tbe present Directors. 

6. Election of the Auditor, specifically the election of Coopers & Lybiand, Luxembourg. 

7. Declaration of a cash dividend in respect of tbe fiscal year ended February 28, 1994. and 
authorisation of the Board of Directors to declare further dividends in res p ec t of fiscal year 
1994 if necessary to enable the Fund to qualify for "distributor" status under United King- 
dom tax law. 

8. Consideration of such other business as may properly come before the meeting. 

Approval of items 1 through 8 of tbe agenda will require the affirmative vote of a majority of 
the shares present or represented at the meeting with no minimum number of shares present or 
represented in order for a quorum to be present 

Subject to the limitations imposed by foe Articles of Incorporation of foe Fund with regard to 
ownership of shares which constitute in the aggregate more than three percent (3%) of foe 
outstanding shares, each share is entitled to one vote. A shareholder may act at any meeting by 
proxy. 

Dated; May 30, 1994 

BY ORDER OF THE BOARD OF DIRECTORS 


Fidelity 


Investments 


1 Cm Pn*o 

, sad laa s wim «Mca qbssm a* 

I wMrtfMMWpMtStfnndVWM 

, n*nH~n iji in inn* n , rOwm it ninpiim 
b ■ axs0m meat B» poM V mu fa 

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MnoillPI |BB ipM BBM» WgMW 

Im 3 AqoM (MnsOKM M K b i — n 
triflDbro flKpBtfgJBB DlMN C3DN7S HQ 




Birmingham 
Mid-» h i res | 


£150,000,000 

Floating Rate Notes 
Due 1995 ■ 


Inrerett Rate: 

52875% per annum 

♦ 

Interest ftriod: 

7th June, 1994 to 
7th September 1994 

♦ 

Interest Amounc pet 
£5,000 Note due 
7th SepKmbet 1994; £6&64 

♦ 

Interest Amoanr per 
£50,000 Note due 
7th Septtabte B94i £66637 

♦ 

Agent Bank 

Baring Bnahen & Co., Limbed 


Uptol 5 % 

off electricity 




| 021 423 3018 

I Powerline 


Tbe (bUmiog oa uip ai ti et base d edtod Seal dividends, in Sooth A&ksa ragrncy. perahtc on 3 Ai«dr 1994 m » 
t rghn-ml in the bodes of d»e compenici concerne d mr tho do» rfbotioaa on 24 Jane 1994; 

Ha nt.rf.CM lBBB • OMad Amooni 

tbe Republic of South AEdcs ) 

Dedkoal Gold Mining Company limited 23 10 

qtegawwwa No- 74/00160/06) 

Dr irfomrtn C o ct otidccd Limited 42 

(R igli c atiuii No- <8/0488006) 

Kloof Gold Mining Cnmpwiy l.imltrd 49 

fognrtaoao No. 64/04462/06) 

Wesson paytdde on 3 August 1994 will be post e d on 1 August 1994. 

mbting to tbe psymeoe of sCvsdends «e obminsbk at tbe dm under offices sod the London Office tf 

Kaysw Cm ^mn of t he dhridea ds in Sout h Mitsa omcney by member on the United Kingdom regatta mutt be 
reotsed by die ooopsmes concerned on or belote 24 June 1994 in sceotdra with the sbow^n^nedcoSSL 
The regHtos of membra of tbe than companies viil be dosed bon 25 Juno 1994 to I July 1994. mdushe. 

Tbe fallowing company hai not d ecl a red a final dividend: 

Onorafontein Gold Mining Company Limited 
(Regtssstion No. 05/24709/06) 

per pro GOLD FIELDS CORPORATE SERVICES LIMITED 

It md twSen taii i u, 

London OSes SJ. Dunning. Sew** 

Gtt cooost House United Kingdom Registrar: 

Pondi Street — Baiday* Rcgist&m 

Bourne House 


London SW IP 1DH 



54 Beckenham Knad 
Kent 6*3 4TU 


City of Uppsala 

US$110,000,000 
Floating rate notes 1398 

The notes tpMbetif interest at 
5.0625% per annum from8 June 
JS W to 8 December 1994. Interest 
payable on 8 December B94 
mill amount to USS2S7J4per 
USS 10,000 note. 

Agent Morgan Guaranty 
Trust Company 

JPMorgan 


index! 

' || 

THE TOP OPPORTUNITIES SECTION 

For senior management positions. 
For information please contact: 

Philip Wrigley 
071 873 3351 


* 







25 



Wednesday June 8 1994 


MUHHl'lU W 

Offsb Auckland, wear the trappings of a successful, market-oriented society awn Fonw (routim Aut*mr>m 


..' ll ,'^ft . 

’ V.- " a > 

J 5 * 

v;-<S5. 

. V ,! 

. .‘i- ,n ^ 

.m, 


Disillusion opens the 
door to minor parties 

Impatience with some aspects of the social overhaul 
of recent years was a factor in the people’s vote to 
change the electoral system, writes Nikki Tait. 


much difference between the 
policies of the two biggest 
parties, voted to change the 
nation's electoral system. Out 
went the British-style "first 
past the post" (FPP) method of 
electing constituency-based 
MPs to the single-chamber 
parliament In, for all future 
elections, came a “mixed 
member proportional" (MPP) 
system, a form of proportional 
representation modelled 
loosely on the German system. 

(Bn route, in the 
accompanying general election 
held under the existing FPP 
rules, voters also returned a 
hung parliament. However, 
this situation 
was resolved 
foirly speedily 
when a recount 
in marginal 
seats gave the 
r uling National 
Party a slender 
majority). 

The implications of a vote 
for MPP were clear. The new 
system is likely to give minor 
parties a much greater voice in 
parliament, and thus encour- 
age coalition government. In 
addition, because only half the 
MPs sitting in the enlarged 
120-member parliament will 
represent specific constituen- 
cies, with the remainder being 
drafted in from party lists, 
MMP will probably mean that 
politicians’ loyalty to the two 
major parties diminishes. 

While the practical 
adjustments necessary to 
conduct an MMP election will 
not be complete until next 
spring, there are already signs 
that the number of “serious" 
minor parties is about 
proliferate. Going Into the 
November general election, 
voters had two main choices 
outside Labour and National: 


Mr Jim Anderton's Alliance, 
which is a coalition of five 
left-leaning minor parties, and 
New Zealand First, headed by 
Mr Winston Peters, a former 
National Party cabinet 
minister. 

Now there is talk of a 
breakaway centre-left party, 
possibly headed by Mike 
Moore, the former Labour 
party leader. On the right of 
the political spectrum, some 
observers suggest that the 
National party could splinter 
into about three groupings. 
The Association of Consumers 
and Taxpayers, a free-market 
ginger group formed by Sir 


Roger Douglas, the former 
Labour finance minister, could 
also emerge as a political force. 

The big question is whether 
this fascinating but fluid 
political situation is likely to 
have an important bearing on 
New Zealand ’5 economic 
policies in the months and 
years ahead. 

At macroeconomic level, 
there is no decrying New 
Zealand's recent progress. 
Growth in gross domestic 
product reached 46 per cent in 
calender 1993, and many 
forecasts suggest that the 
year-on-year figure could top 5 
per cent this year. 
Unemployment, while still 
high, has eased. 

The government is widely 
tipped to produce a small 
financial surplus for 1993-4 
when it unveils its annual 
budget in the next few weeks. 


On the inflation front. New 
Zealand now has the 
advantage of its much-vaunted 
Reserve Bank Ace. which 
formally insulates the central 
monetary authority from 
political influence. It is merely 
required to ensure that 
inflation says within a 
publicly-stated band, currently 
zero to 2 per cent 
The international financial 
community's approval for New 
Zealand's recent performance 
has been clear from the foreign 
investment data. Direct net 
investment inflow in the year 
to end-March reached 
NZ$4. 7b n. more than twice the 
level of the pre- 
vious 12 
months. Anec- 
dotally, there 
are indications 
that the coun- 
try has been 
winning corpo- 
rate dollars at 
the expense of Australia, its 
larger neighbour, whose own 
reform process has been much 
more measured. 

It is true that a few 
question-marks persist. Some 
commentators would like to 
see quicker progress in 
reducing the heavy external 
debt burden and the current 
account deficit. The recent 
collapse of the large Fortex 
meat-processing business - 
which had been hailed as a 
prize example of a revitalised, 
efficient company - also cast 
an ominous shadow. It can be 
argued that this was efficient 
rationalisation in an industry 
with surplus capacity; but 
some observers saw Fortex as 
a symptom of inherent 
instability in a key sector, and 
of serious under-capitalisation. 

Many commentators also 
think file Reserve Bank, whose 


ALSO HI IMS 3-PAGE SURVEY 

Politics: the people vote for proportional representation 
Agriculture: surviving freak storms and a rising Kiwi dollar 
Privatisation: it’s not as simple as It once appeared 
Across the Tasman: rivalry with Australia Is less Intense 
Tourism: economic recovery is bringing in more visitors 


FINANCIAL TIMES WEDNESDAY JUNE 8 1994 


FINANCIAL TIMES SURVEY 


NEW ZEALAND 


I t is hard not to notice the 
tensions that pervade 
modem New Zealand. On 
the one hand, the country 
wears an the trappings of a 
successful, market-oriented 
society. Wellington, Auckland 
and other main cities are 
well-supplied with stylish 
restaurants and smart 
boutiques. Warehouses are 
being converted to 
“Manhattan-style** apartments. 
Cellular phones are 
everywhere. 

As Mr Roderick Deane, chief 
executive at NZ Telecom, the 
country’s largest quoted 
company, puts it: "New 
Zealand, in a sense, has 
rejoined the rest of the world 
over the past decade." 

On the other hand, 
memories of a very different 
social structure, which offered 
New Zealanders 

“era die- to- grave" protection 
under a universal welfare 
system, linger on. It is 10 years 
since the nation embarked on 
radical economic reform, first 
under a Labour government, 
which deregulated finan cial 
markets and began to 
dismantle the extensive state 
sector, and then under the 
National party, which 
extended the "free market" 
philosophy to the industrial 
relations arena and the welfare 
system. 

But the implications of this 
social overhaul are still 
permeating the lives of 
ordinary New Zealanders. As a 
result, discontent with some of 
the less palatable aspects of 
the new order - especially in 
the welfare and employment 
areas - is highly visible. 

fn recent months, for 
example, attempts to alter 
work practices have brought a 
rash of strikes, notably among 
recent privatisation 
candidates, such as NZ Rail 
and NZ Telecom. Pensioners 
have marched in protest 
against asset-testing for 
long-stay hospital patients. 
Student rebellion has 
simmered over a threatened 
increase in tertiary education 
fees. 

On the political front, there 
has already been a backlash. 
In a referendum last 
November, a disillusioned 
electorate, unable to spot 


independence was guaranteed 
just as worldwide recession 
began, has yet to face the 
challenge of maintaining a low 
price-increase regime when 
international inflationary 
conditions are less clement. 

But the bigger, and more 
speculative, clouds that 
threaten this sunny economic 
outlook are political. 
Advocates of the economic 
reforms scent two specific 
dangers: a change in Reserve 
Bank targets, and a big 
change/repeal of the 
Employment Contracts Act 
lECA). the legislation which 
deregulated labour markets 
but was criticised 
subsequently by the 
International Labour 
Organisation in Geneva. 
Amendments to the latter, it is 
argued, could dent business 
confidence immediately and. in 
the longer-term, affect labour 
costs and productivity. 

On both scores, changes ore 
already being mooted. All 
three parties, apart Prom the 
National, are talking of 
revisions to the ECA. while 
Labour has suggested a 
widening of the Reserve 
Bank's inflation target range. 
If changes come, the test may 
be whether the variations are 
largely cosmetic, or whether 
they represent a fundamental 
shift. 

Finally, it is worth noting 
that Mr Bolger's National 
government seems to have 
adopted a less rigid approach 
since the last election. Much of 
the reform process had, 
admittedly, been completed. 
Nevertheless, in recent 
months, the government has 
introduced a minimum youth 
wage, held off on further state 
housing rent increases and set 
up a “taskforce" to look at 
unemployment issues. 

Whether this softer 
approach, coupled with the 
general economic recovery, 
will allay the electorate's 
concerns remains to be seen. 
As Anne Knowles, deputy 
chief executive of the New 
Zealand Employers Federation, 
says: "MMP has great potential 
to be disruptive, or it has great 
potential to be stabilising - 
because no one can agree to do 
anything." New Zealanders 
can only wait to find out 


l.r 


j-.slO & 
■Hi 


‘l- ' \ . -- 


m 




alceti at face-value, the 
New Zealand economy is 
going great guns. Growth 
is reckoned to have reached. 46 
per cent in 1998, one .of the 
fastest rates clocked up by any 
.western economy - and. nicely 
exceeding, the 4 per . cent regis- 
tered .by Australia, the coun- 
try’s nearest neighbour and 
largest trading partner.: 

Economic activity in the 
final quarter of 1993 alone was 
.estimated to have been 5.1" per 
cent higher than in the' same 
three months a year , earlier. 
Most analysts expect scone fur- 
ther .progress,- perhaps ; taking 
the year-on-year growth rate to 
ow 5 pec cent later in 1994, 
and then several years of sus- 
tainable growth at around 3.5 
per cent 

Business confidence, accord- 
ing to the New Zealand Insti- 
tute oC Ecmvondc Research, is 
Edits highest since 1972* with a 
net 64 per cent of companies 
questioned In the latest April 
.Binwy. expecting an improve- 
ment in the general business 
situation -over the next six 
months. .' 

Even unemployment, a more 
problematic - marker, has 
shown some improvement 
recently. It remains painfully 
high at around 9.1 per cent, 
bat has at least fallen fairly 
sharply from rates of over U 
per cent seen in early- 1992. 

Finally, New Zealand has 
low inflation locked in for the 
immediate future by the 
Reserve Bank of New Zealand 
Act, which guarantees the 
bank's independence from 
political machinations, and 
requires it to administer mone- 
tary policy to achieve a speci- 
fied inflation target - cur- 
rently from zero to 2 per cent 

WMe nobody quibbles about 
dlls rosy short-term situation, 
codons .become more divided 
when pundits are required to 
look ahead. On the minus side, 
mere are worries stemming 
from New Zealand's fluid polit- 
ical situation, arid from some 
higgling economic question* 
marks, On the. plus side, there 
could be- some .significant bull- 
ish. factor? .Influencing the 
.^mmy in ihelmedium term 
-Ant tedsfc the consequences 
from. the recent con- 
jf tte Uruguay Round 
jn toe Gatt negotiations late 


amti- 

centre on. the .externa) 
... ' -f A current account 

deficit of NZ8969m in the final 
WftxvLvm took the figure 
- E* 1 * cal*®!® year to 
; «zsi.B5bn some NZ$22m 
than in' jsjfiL This means 
JJ*t the current account deft 
at is running at around 2 per 
.cent of gross domestic product, 
a number which the Reserve 
i .4 for one, thinks wHT per- 

V ' ‘ fiBt for tire next fewyears. s 


Nikki Tait reviews the economy 

Business more 
confident than 
for 22 years 


Combined with New Zea- 
land’s heavy, lingering net 
external debt, the lack of 
speedy improvement on this 
score causes some concern. 
Last month, for example, Stan- 
dard- & Poor's decided against 
an upgrading of New Zealand's 
"AA-" foreign currency debt 
rating. "Good news on the 
growth, unemployment and 
fiscal fronts does not, of itself, 
constitute a case for re-rating 
the country," commented the 
ratings agency. 

"In New Zealand's case, 
much depends upon progress 
in improving the country’s 
external accounts beyond the 


improvement already factored 
into the current rating. . . New 
Zealand's current account defi- 
cit and external accounts have 
only slowly improved in recent 
years. . . Most notably, the 
country’s net external debt is 
still currently of the order of 
175 per cent of exports, only 
finctionally down from the 180 
per cent figure at the time of 
the last downgrade [January 
1990 J." 

A second, and much more 
speculative worry, is the politi- 
cal one. It is impossible to pre- 
dict that this stage what kind 
of government the new elec- 
toral system, based on a form 


KEY FACTS 


Area .... - 270,534 sq km 

population 3.6 million (1993 estimate) 

Head of state Queen Efizabeth n. represented by a 

... governor-general 

Currency - - New Zealand Dollar (NZ$) 

Average exc han ge rate 1993 US$1 =NZ$1 .8495 


.May 26 1994 US$1 =NZ$1 .6995 


ECONOMIC INDICATORS 


1890 


Lataar 


Total GDP (US$bn) 

Real GDP growth {%)... 

GDP par capita (US$) — 

Components of GDP (1992/93 %): 
Private Consumption. 

42.8 

4.6 

12,306 

61.4 

19.4 

rLa 

5.0* 

IL& 

Government Consumption....... 

16.1 

30.8 

n_a. 


-28.6 


Consumer prices (% change pa)-. 

1.3 

1.3 

Unemployment (% of k* force)-.- 

9.2 

8.9 

Reserves minus gold (US$bn) - 

3.3 

4.1 f 

3 month money {%,avg} 

6.3 

5.8t 

FT-A index (% change over year). 

+45.5 

-2.5“ 

TRADE: 

Current account balance (USSbn) 

-0.85 

-0.11 

Exports (USSbn) 

10.54 

n.a 

Imports (USSbn) - 

8.92 

n.a. 

Trade balance (US$bri) 

Main trading partners (1993, % 

1.62 

a a. 

by value)- 

Exports 

Imports 

19.9 

21.3 


14.6 

16.2 

us. - 

11.6 

17.8 

UK. — 

6.1 

5.8 


* 1994 figures (SU estimates for 1994) 

4 Reserve Bank of New Zealand forecast 
t February 1994 

fMay 20 1994 

** % change from January 1, 1994 to May 26. 1994. 

Source: IMF, Oatastream, Economist InteiSgence Unit 


ot proportional representation, 
will produce. But if a coalition 
government with a more "left- 
leaning” bent were to come 
into office, two possible insti- 
tutional changes could affect 
New Zealand’s inflation record 
- or, at least, cause financial 
markets to fear such an 
impact. 

The first would be a repeal 
of - or major amendments to - 
the 1991 Employment Con- 
tracts Act (EGA), NZ*s contro- 
versial labour market legisla- 
tion which opened the way for 
individual employee contracts, 
overthrowing the previous cen- 
tralised, award-based system. 
The second would be any tin- 
kering with the Reserve Bank 
targets. 

At present, it should be 
stressed, these doubts do not 
appear to weigh heavily in 
investors' minds. Although 
there was some temporary 
upheaval to both share and 
bond markets and to the NZ 
dollar after the November elec- 
tion result, the dust settled 
quickly. And while some ana- 
lysts scent a slight upturn in 
Inflationary pressures, which 
could push the Inflation rate 
closer to the upper end of the 
0-2 per cent range, New Zea- 
land's 10-year bond rates are 
well below those of Australia 
and roughly in line with those 
of the US. 

Moreover, Mr Donald Brash, 
the Reserve Bank governor is 
quick to stress that the Labour 
party's suggested amendment 
to the inflation target - from 
zero to two, to minus one to 
three - could have a limited 
effect 

“That quite explicitly leaves 
the median unchanged, so it 
isn’t obvious that one would 
run monetary policy very dif- 
ferently," he comments. “If the 
median of the target remains 
at one. which our best under- 
standing of what price stabil- 
ity is, allowing for biases in 
the [consumer prices I index, 
then the debate about whether 
its 1 per cent either side of l, 
or 2 per cent, is to some extent 
a debate about what excuses 
are allowed for in the con- 
tract” 

By this, he means external 
price shocks - a hike in energy 
prices, say - or a temporary 
domestically-induced increase 
through a rise in indirect 
taxes, for example. As Mr 
Brash points out “It's a pretty 
technical argument.” But 
whether the markets would 
interpret any widening of the 
target range in such a kindly 
light, remains to be seen. 

Again, with the ECA, it is 
hard to anticipate the impact 
of any changes, without seeing 
derails of the alterations pro- 
posed. Groups like the New 


Continued on next page 



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iwtvaiW’I AL TIMES WEDNESDAY JUNE S 1994. 


Politics: there will be no more first-past-the post parliamentary elections. Nikki Tait considers the implications 

Thoughtful calm follows the upheaval 




Winds of change are blowing 
through New Zealand politics. 
The question is: what scat of 
landscape will remain when 
they have died down? 

The upheavals began on 
November 6, when voters not 
only wait to the polls fn a gen- 
eral election, but were also 
ashed, via a separate referen- 
dum, to choose an electoral 
system to be used in future 

elections. 

Both results were surprising. 
The 1993 election returned a 
htmg parliament - at least, 

until a recount in marginal 
seats resolved the issue, giving 
the ruling National party a 
one-seat majority (turned into 
a two-seat majority when a 
Labour MP agreed to act as 


More fundamentally, how- 
ever, voters threw out NX’s 
. British-style “first-past-the- 
post” method of electing mem- 
bers to its single-chamber par- 
liament Instead, the electorate 
delivered a clear vote in favour 
of a “mixed member propor- 
tional" system, a farm of pro- 
portional representation which 
has parallels with certain 
European electoral arrange- 
ments. 

Under MMP. the currant 39 
seats in the NZ parliamen t will 
be enlarged to about 120, but 
only half of these will' be 
occupied by members 
representing specific 
constituencies. Instead, voters 
win have two votes - one far 
their constituency MP, and one 
of their preferred political 
party. The results of the latter 
vote Will deter mine how many 
seats each party has in 
parliament, with the necessary 
number of MPs being drafted 
in from the party lists to 
ensure that each party's 
overall parliamentary tally 
corresponds bo this decision. 

The vote for MMP was essen- 
tially a protest New Zealand 
has undergone a decade of pro- 
found, and often painful, eco- 
nomic reform at the hands of 
both its major political parties. 
The Labour government began 
the process in the mid-1980s, 
deregulating financial markets 
god privatising or corporatis- 
ing government-owned busi- 
nesses. National, which swept 
to power in 1990, continued the 
process, freeing up labour mar- 
kets and making major 
changes to the welfare system. 

Going Into last November’s 
election, then, many voters 
saw little to distinguish the 


policies promulgated by the 
two parties, and blamed both 
for the less palatable aspects of 
the reform process, such as 
high i m ep’i pJn ymgTrt. a rising 
crime rate, visable evidence of 
poverty on city streets. By 
choosing MMP, they endorsed 
a system which seemed more 
likely to give minor parties a 
meaningful voice in parliament 
and encourage coalition gov- 
ernment 

For example, the Alliance 
party, a coalition of left-leaning 
minor parties, could reason- 
ably expect about 20 seats if it 
simply repeated its 1993 elec- 
tion performance. Ii attracted 
more than IS per cent of the 
popular vote, but, -under the 
old FPP system, secured only 
two parliamentary seats. 

But while a decision has 
been made as to what type of 
electoral system New Zealand 
will use in future, the practical 
implications - such as the 
redrawing of constituency 
boundaries the drafting of 
party lists - are taking longer 
to sort out 


As a result, New Zealand's 
political scene is strangely 
becalmed. Both Labour and 
National conducted internal 
personnel changes in the wake 
of the last election. In Labour's 
case, the changes started at the 
top with, the ousting of Mike 
Moore as party leader, while 
National shed its hardline 
finance minister. Both Rich- 
ardson- But then, while 
rumours of coalition possfbih- 


crane was to lift the number of 
Maori seats from four to just 
five. This contrasted with some 
expectations of up to 11 seats. 
Protests from Maori leaders, 
who HaiinM that the process 

had been under-publicised, fol- 
lowed, as did calls for alterna- 
tive means of achieving more 
meaningful representation. 
Ideas range from a Maori par- 
ttament or Maori upper house, 
to the formation of a separate 


The repercussions of the MMP vote do not provide 
the easiest background against which to govern, 
and Mr Bofger’s National party has been taking 
an unprovocative, some say conciliatory, tack 


ties and new parties abound, 
no one seems anxious to rock 
the boat too violently until a 
fresh election under the new 
rules is technically feasible. 

The few MMP-related mat- 
ters resolved to date have 
rarely escaped controversy. In 
late-April. for example, the re- 
registration of Maori voters 
was completed, but the out- 


“Aotearoa" party (the Maori 
name for New Zealand). 

The question of how individ- 
ual parties go about drawing 
up their lists is less advanced, 
and none of the .main parties 
has yet settled on a final 
method of ranking names. But 
already two are displaying dif- 
ferent approaches to the 
thorny question of whether 


they should attempt to per- 
suade MPs who will lose their 
constituencies under MMP to 
remain within the party fold. 

Mr Bolger, prime minister 
and leader of the National 
party, earlier this year took the 
hold step of pubfidy acknowl- 
edging that some defections 
were hkedy. "What we are see- 
ing is an inevitable conse- 
quence of the role of MMP. . . 
There are fewer electorate 
seats available, and the MPs of 
the two major parties are going 
to see whether or not there is 
somewhere else they could find 
a position of scone sort,” he 
said. 

“What we want is. . . their 
loyalty in terms of any coali- 
tion understanding or any 
accommodation that they wifi 
vote with the government on 
key issues.” 

The wisdom of this state- 
ment has been much debated; 
some observers see it as a 
canny acceptance of the inevi- 
table, and believe that, by 
allowing defections, Mr Bolger 
will ease his list problems mid 


iMfi -"TT ■ 


• 'f / ‘lij “ 




yet retain some loyalty when 
the time for forming coalitions 
comes around. Others argue 
that National is adding grist to 
the minor parties’ mill. Mr 
Bulger’s stance contrasts with 
that of Labour's Helen Clark, 
who appears more intent on 
retaining members within the 
party fold. 

The repercussions of the 
MMP vote, meanwhile, do not 
provide the easiest background 
against which to govern - and 
in general Mr Bolger’ s 
National party has been taking 
an unprovocative, some might 
say conciliatory, tack. It is true 
that of the reform pro- 
cess was already complete on 
going into the 1993 election, 
with most of the major privati- 
sations complete, and thorny 
subjects such as industrial 
relations law in place. 

But National has become 
somewhat more responsive to 
voter concerns - introducing a 
minimum youth Wage, far 
example, and setting up a task- 
force to look at the unemploy- 
ment Controversial fur- 










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M&ii-^rSouOTand \ 




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ife ■ 


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ther potential privatisations, 
like NZ Electricity and NZ 
Post, are also off the agenda. 

One remaining bone of con- 
tention is the Employment 
Contracts Act (EGA), the tegis- 


The faces to watch, as the country moves to proportional representation 





J 






Jim Bolger. prime minister and 
leader of the conservative 
National party, which narrowly 
retained power In the November 
1933 election. A practising 
Cathofic and North Island 
farmer, Bolger has never been 
a charismatic figure to the 
electorate. But he won ptaudks 
for a statesmans® performance 
on election night, and has 
demonstrated a speedy grasp 
of consensus politics. His 
recent decision to raise the 
"republic” issue has been more 
puzzling: opinion polls Indicate 
that the majority of New 
Zeafcmdets don’t favour the 
introduction an elected 
“presWantjal" head of state to 
replace the Governor-General, 
appointed by the Queen. 


Hel en Cterfe leader of the 
main opposition Labour party, 
who took over from Mike 
Moore shortly after 
November’s election. A former 
lecturer in politics at Auckland 
University, she has the difficult 
task of articulating a 
centre-left policy which 
distinguishes Labour from 
National, yet eschews the 
more radical changes 
promised by the Affiance. 
Internal party warfare with her 
predecessor and hie 
supporters does not make the 
job any easier. Her tow 
popularity ratings have led 
to talk of further leadership 
changes - although such 
gossip has been strongly 
denied to date. 


MBce Moore: The one-time 
buddere' labourer was a 
member of the Lange 
government which initiated New 
Zealand’s reforms ri the 
m id-1 980a He became leader 
of the rufing Labour party in 
1990 shortly before the October 
election, but his popularity failed 
to save Labours fortunes then, 
or in 1993. Moore performed 
poorly amid November's 
election night urcertainties, and 
was soon ousted by Helen 
dark. Since then, he has tinted 
at the formation of a new 
centre-toft party but, for the 
moment, remains within the 
Labour party. A passionate 
speakBr, Moore st# commands 
substantial loyalty among the 
electorate and within ft is party. 


Jbn Anderton: A former Labour 
party president who broke away 
to form the New Labour party 
in 1989, and then forged the 
Alliance, a coafition of five 
left-leaning minor parties, In 
1991. The Affiance won more 
than 18 per cent of tile popular 
vote in November, but only two 
seats. The grouping sometimes 
looks shaky, but Anderton has 
strong personal support He 
has also handled a number of 
recent issues - such as the 
coBapae of Fbrtsx meat 
business, a major NZ employer 
- adroitly. The Affiance, which 
derives support from traditional 
Labors- voters dissa tisfied with 
the party’s centerist leanings, 
looks Btely to be the clear 
winner from the move to MMP. 


Winston Peters: A former 
National party cabinet minister, 
Peters spirt to become an 
independent MP and then 
formed New Zealand First in 
July East year. Its policies going 
into the 1993 election were not 
weB-detsfled, but it is generafiy 
pro-business and has a slightly 
xenophobic tinge - witness 
Peters’ recent urgings for a 
tourer i mmigration policy. 

Often viewed as a maverick but 
charismatic politician, he has 
a reputation far revesting alleged 
scandals under parliamentary 
privilege. Earlier fins year, his 
attention focused on financial 
abuses supposedly occuring 
in the Cook islands and 
involving NZ businessmen and 
International figures. 


Sir Roger Douglas: The former 
finance ministar set New 
Zeeland on the path to 
economic reform, but resigned 
after deferences with the 
then-prime ministar, David 
Lange. Sir Roger has now left 
the Labour party and is widely 
expected to turn his Association 
of Consumers and Taxpayers, 
a friae-market ginger cyoup, into 
a political party. The ACT has 
support from the business 
community; and is generally in 
favour of a mWmaBst approach 
by government. Douglas 
recently pubfished Unfinished 
Business, a 300-page 
diss er tation on New Zealand’s 
eoonomlc and political situation, 
suggesting that the reform 
process has further to go. 


lation which effectively deregu- 
lated the labour market When 
the current parliamentary ses- 
sion began last month, Labour, 
the Alliance and Mr Winston 
Peters’ New Zealand First were 
all proposing changes - with 
Labour suggesting that a new 
employment council should 
draw up a replacement for the 
act, and that the ECA be 
repealed by 1995. However, the 
government was sticking to its 
guns, insisting that, if the mat- 
ter was pushed to a confidence 
vote, it would win. 

Many in the business com- 
munity dearly hope that New 
Zealanders' rebellion peaked 
cm November 6, and that, after 
a couple of years of solid eco- 
nomic growth, the electorate’s 
disquiet will have ebbed. 
Whether the National party 
government survives that long 
is the key question. It is widely 
accepted that the mechanisms 
required to hold an MMP elec- 
tion will not be in place before 
next April or May. Mr Bolger 
has also Indicated that he wQl 
seek to govern for the full 
three-year term, if members of 
his own party permit him to do 
so. 

But some observers suspect 
that a showdown. In the form 
of a vote of confidence, is inevi- 
table before then. "The hot 
money,” suggests one Welling- 
ton-based economist, "is on 
August 1995”. By then, it is 
argued, the MMP processes 
will be in place, and BOPs, anx- 
ious to maximise personal posi- 
tions, will have started to 
defect from the major parties. 
Why wait? 


The Tas 


N ew Zealand’s farmers 
are in a sunny, expan- 
sive mood. They have 
enjoyed the best summer in 
memory with just the right 
amount of sun and rain encour- 
aging spirited grass growth. 
Cattle, sheep and deer are in 

excellent condition. 

But no summer is perfect A 
aeries of freak hailstorms dev- 
astated a fifth of the country's 
apple crop, and more rain than 
usual caused harvesting diffi- 
culties for South Island arable 
crops such as wheat and barley. 
Farming 


high despite a rising Kiwi dol- 
lar, which is eroding export 
earnings. Prices for Iamb, 
sheep, beef and dairy products 
have all dropped over the past 
four months, although there 

has been an encouraging rise in 

wool Incomes. 

Farm profitabilttyis expected 
to rise by 5 per emit this year, 
mainly du e to higher lamb-k£Q 
and wool prices. However, his- 
torically, retains are low. Bob 
Davison, chief economist with 
the Meat and Wool Board's eco- 
nomic service, says that; while 
farmers' Incomes are at the 


Terry Hall sees agriculture ben ef iting from economic reform 

‘Few farmers mourn subsidies’ 


highest level since 1984, they 
are only two thirds the level 
recorded in the 1970s and early 
1980s. 

Those were the years when 
fairness received generous tax- 
payer assistance with subsidies 
for fertiliser and other Inputs 
to encourage production. In 


THi* amourtconatf appears asanumcr ef record wily 


April 199i 


New Zealand Dairy Board 
Finance (N.Z.) Limited 

U.S. $150,000,000 

Floating Rate Notes due 1999 

Guaranteed by 


New Zealand 
Dairy Board 


Lehman Brothers 


1984, the reformist Labour gov- 
ernment wiped these out, lead- 
ing to seven years of difficulty 
as farmers were forced to 
adjust The most indebted, and 
those with uneconomic units, 
were forced to leave their 
farms. 

Mr Davison says that few 
farmers want to retain to the 
days of subsidies. They prefer 
the risks of the marketplace; 
believing It is the only sustain- 
able long-term option. How- 
ever, he says that all Kiwi 
farmers wish that other coun- 
tries would follow the New Zea- 
land lead. 

Farmers are also benefiting 
from other reforms introduced 
from 1984. Low inflation has 
led to a sharp reduction in 
costs, as have fells in interest 
rates, and tael and fertiliser 


There is optimism that the 
progressive relaxation of agri- 
cultural protection under the 
Gait round from next year will 
eventually lead to greater ben- 
efits for local fanners. Host 
exporters expect a minor 


improvement in prices from 
June next year, as a result of 
Gatt There is optimism, too, 
about the long-term trend, 
given the Uruguay round’s 
comm i tment to gradually lower 
agricultural barriers over the 
o wnin g years. 

Sharply rising land prices are 
also adding to farmer confi- 
dence. Investment levels are 
high, especially from city peo- 
ple, and farms axe chang hr g 
hands at double and treble the 
price of five years ago. ' 

Market forces have led to 
rapidly changing land-use pat- 
tons. High dairy prices over 
the past three years have led to 
a spate of conversions of for- 
mer sheep and cattle country to 
dairying. Conversion costs are 
high, as dairy farms need 
ample water and related costly 
plant. Record land prices in the 
traditional dairy provinces of 
Taranaki and the Waikato have , 

encouraged many farmers to 
migrate to areas like Southland j 
and Otago in the deep smith, 
where land is cheaper. j 

Other land is bring converted j 


The economy 


Continued from previous page 

Zealand Employers’ Federation 
remained firmly opposed to 
any tinkering with the act, 
warning of the impact on busi- 
ness confidence. Privately, 
however, some executives sug- 
gest that modest - and probar 
bly largely cosmetic - changes 
now might be acceptable, if 
this ensured the act's 
long-term survivaL 
In contrast to these minus 
points, there are. a couple of 
potential factors which could 
play In New Zealand's favour. 
Far a start, there Is the appar- 
ent strength of the Australian 
economy - which grew at 
around 4 per cent in 1993 and 
is tipped to go higher still 
Despite the two countries' tra- 
ditional rivalry and common 
desire to develop links with 
Asia, Australia is stDl New 
Zealand's biggest trading part- 
ner, accounting for about one- 
fifth of exports. If Australian 
consumer spending continues 
to rebound, and government 
forecasts of a strong revival in 
business investment are cor- 


rect, New Zealand manufactur- 
ers stand to benefit 

Finally, the impact of the 
Gatt talks should not be over- 
looked. Economists at. ANZ 
Bank in Wellington, for exam- 
ple, have noted that the settle- 
ment should underpin agricul- 
tural commodity prices over 
the coming year, and improve 
market access. While they 
warn that no simplistic conclu- 
sions should be drawn from 
the GATT deal, and note that 
much depends on how the 
details of the agreement pan 
out, they also point out that 
almost two-thirds of New Zea- 
land's experts are still agricul- 
ture-based. 

"Consequently, New Zealand 
stands to benefit substantially 
from the successful Gatt out- 
come,” they conclude. “It is 
suggested that the gains for 
New Zealand could include 
increases averaging 17 per cent 
In the prices our exporters 
receive for meat and dairy 
products. Optimistic estimates 
hint at gains for New Zealand 
totalling NZ$i.5bn a year in 
additional export revenues". 


to forestry, while low venison 
prices have seen some prime 

land revert to dairying or horti- 

cultural use. 

The rate of farm conversion 
to alternative nses has led to 
forecasts that suggest that, 
even if prices improve. New 
Zealand is unlikely to return to 


the days when sheep farming 
was the mainstay of the agri- 
cultural tmtastry, as there is no 
longer suitable land available. 
Vast tracts ef tee Mfiy high 
country has been co n verted to 
forestry, and tt takes 25 to 30 
years for a tree to reach matu- 
rity. Sheep numbers have 
dropped from 73m in 1984 to 
50m today. 

Sheep fanning is bard work, 
and modern New Zealand fann- 
ers prefer to work their farms 
on their own. A thfati of a pres- 
ent day farm may now consist 
of radiata pine forests which 


require minimal care. Unlike 
other farm endeavours, there 
are taxpayer incentives to 
exxrarage forestry. 

The rise in wool prices since 
January has been cheering; as 
has the steady reduction m the 
stockpile. This stood at 655,000 
bales in 1991 when the Wool 
Board decided it could no lon- 
ger support the market The 
magnitude of the stockpile Ini- 
tially depressed prices. But it 
should all have been sold by 
next year. The stockpile has 

Continued on. facing page 


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Fletcher Challenge is a New Zealand based international company 
committed to creating superior value for its shareholder* 

Our operations transform resources into valued products, for customers 
in world markets. 

Our Ordinary Drmfon is a leader in Pulp & Paper, Oil 8c Gas, and 

f Building Industries. Its major manufacturing operations are in 

New Zealand, the United Kingdom, Australia, Canada, the 
United States, Chile and Brazil, and its products are sold 
internationally. 


Our Forests Division is one of the largest pure-play plantation forestry 
investments in the world. It has solid wood ifawL. r__ — 



businesses in New Zealand and Chile, producing swfogt from 
faw-growing and versatile radiata. pine for the growth markets of 
Ana. 


GA WtireJiar, Equity MBnaganfOC Director. 
Hatcher OmOwbo Limited, New Zealand 
Telephone: (WJ (9) 525 TOO 
Fax (WHS 525 9034 


jUL to pper, PtaOdM, 

52l r Rn,nc0 «*»*• Inc. Toronto 


h N"1h America i 




, J V> \ *■ 


• i * w • • : 



FINANCIAL TIMES WEDNESDAY JUNE 8 1994 


NEW ZEALAND 3 


1 -W--: 


l*;. 


^\i 


% 




50-N 


iS* V 


'-"Jh 


'.?N| 




- «iw 

; ■*£- 

fef 

•-■ ;u 

1 r, 'l'Li; - 
•I th.ii 


LoUticat^obkms have slowed 
Jl3w-.^fed«ial -^eninieat's : 
T^ btens-to seB further state 
- assets*- te- spite cf ihe phTlosoghkal 
'-'vie^jiljteost of the cabinet teat they 
_sh(^l«ihii»dyate:hatefe. *. 1 
r Tba go yg rafflqnt this year stalled 
^gpecuhrften 'that it was preparing 
Neflr’Zealafld <Poat and-Efedtricorp. 
Jhr>s^e. ;lt 6aid it was honouring 
rpteel^O^ ^ to sell 

lhea^0d^ , to , . frrtensebeMnd-thfi- 
■&ea&jgiattm is being applied per- 
.tesfefttesell other assets, sucitas 
televtskm, tee former 
Fata, Wxwkscarp, the 
' gOT grtn pi tet Computer services' com- 
.^ny?and -parts , propert y ccsn- 
pinQrltfMteorp.: >? - . 

. ^ CpnServatiYe elements in the 
jj>y«uinfitit aw^rgadm^. warily, and 
'aoit'-all-of .':ffiBse sites may- happen, 
baatcse-hf opposition from other 
poffiacaOMftiesfind'the approach of 
the' nteif.Ttnlxed member ‘propor- 
tumP^ (MMPM electoral system: ■• 
:f(ppbpitft^^toS;BC^ irate teat the 

iBsae has even arisen, given the 

-^cohsensatf’. teat ; is supposed to 
,exis£dne tothe government’s nar- - 
^twms&r^f- -- 

Priva^feJO has proved a political 
n^fagty. a was' a major factor in the 
•defeat-to -:U®0 af~ the reformist 
Labettf; ffl v e roment, - after ft had * 
lushed the sale. aT some NZ$l2bn of 
state agaety. On tee campaign trail.,., 


Privatisation has proved to be a political liability, writes Teiry Hall 

Unpopular sales prompt caution 


that year,. Jim Bolger. tee National 
leader, Implied teat there would be 
no further sales. So there was auger 
in some circles when the Rani^ of 
New Zealand was subsequently sold. 

’ Since then, despite the presence of 
staunch advocates of privatisation in 
the cabinet, only one other major . 
asset. New Zealand Bail, has been 
sol^ The Bank of New Zealand went 
to tee National Bank of Australia for 
NZ$L4bn, and New Zealand Rail- 
ways to US railway company Wls- , 
coosim Central and a consortium of 
New Zealan d investors for NZ$320m. 

Bote sales proved unpopular with 
large sections of the public. Small 
shareholders in the Bank of New 
Zealand, who had no option, bn t to 
sell, mounted a spirited protest cam- 
paign. saying it was being sold too 
cheaply. They now say that BNZ*s 
subsequent strong profit recovery 
and reduction in bad-debt provision- 
ing has provedtbezn right 

There were similar complaints 
over the sale of the national railway 
network. Trade unionists - 
embroiled ina bitter fi gft* over plans 


by the new US owners to cut staffing 
levels on the Cook Strait ferries, the 
vital link between the North and 
South tqlandfr - are making m nrh of 
the fact that the new owner is 
introducing American work prac- 
tices and seeking to cut jobs. 

Polls suggest that most voters 
oppose selling ‘tee family silver”, 
although there is a widespread 


tech, amid suggestions that it was 
worth twice that It has proved a 
profitable investment for its US con- 
trolling s hareholder s. 

Philip Bunion, minister of state 
owned enterprises, said in May that 
public disquiet was the major reason 
why the privatisation programme 
had slowed. It was the reason why 
Electricorp and New Z ealand Post 


Polls suggest that most voters oppose sell big ‘the family 
silver*, though there is a widespread acknowledgement 
that it is vital to reduce the cowrtiys indebtedness. 


acknowledgement that it is vital to 
reduce the country’s fadfthtednpft” 
Part of the problem is that Labour 
used little of the money it raised in 
paying off . debt, in spite of promises 
to do so. Rational has been careful, 
to use any money raised in asset 
sales for debt repayment 
There is also continuing public 
concern that many assets were sold 
too cheaply. Telecom, for example, 
was sold for NZ$425bn to US phone 
companies BpH Atlantic and Ameri 


were not being privatised. 

Mr Bunion said he had no philo- 
sophical objections to tee govern- 
ment’s selling the enterprises. “I do 
not believe that state ownership is 
an effective form erf administration." 
He said there was public disquiet 
over the selling of public utilities. 
However, that did not extend to the 
sale of other assets such as the gov- 
ernment computer company, GCS, 
which has been put on the market. 

Most interest appears to centre cm 


the sale of Television Two, the sec- 
ond state-owned television channel. 
A number of buyers have indicated 
their interest, including both major 
newspaper publishing chains, Inde- 
pendent Newspapers, which is con- 
trolled by News Corporation, and 
Wilson and Horton, publisher of the 
country’s biggest daily, the New Zea- 
land Herald. Television New Zealand 
is fighting doggedly to retain the 
ownership. 

The 40-strong commercial radio 
network operated by Radio New Zea- 
land is also expected to be sold. The 
major problem appears to centre on 
the future of public radio, the BBC- 
style network of the Concert Pro- 
gramme and national services broad- 
casting. The systems, are linked, 
sharing news and current affairs 
staffs. 

The government .is expected 
shortly to offer some NZ$2bn of low- 
interest mortgages owned by the 
Housing Corporation. Barber it sold 
NZ$50Qm-wurth to a consortium led 
by merchant bank Fay Richwhite. 

Maurice Williamson, one of the 


ioaiting reformers in the cabinet, has 
been lobbying bard for the sale erf 
the three major airports, in Auck- 
land. Wellington and Christchurch, 
but has won no public support from 
his colleagues. 

The most imminent sale is that of 
the computer company. GCS. This 
ntns a major installation at Wan- 
ganui. in tee North Island, which 
centralises all police files and other 
confidential information on individu- 
als. The government says that GCS 
will not be sold until a code of prac- 
tice protecting confidential informa- 
tion is in place. 

The minister of finance, Bill Birch, 
said last month that there would be 
no fire sales, and that assets would 
be sold only when tee government 
was confident of getting the best 
prices. “But we do have a list of 
businesses for posable sale, which 
we consider are no longer appropri- 
ate for the government to own in 
today’s environment" 

Supporters of privatisation look 
bleakly at the future. They feel that 
this is the last chance to sell many 
of the remaining state assets. It is 
believed New Zealand will have 
minority governments under the 
MMP political system: and this, they 
say, would tie the hands of any min- 
ister of who might wish to 

sell any of tee NZ$2bn of assets that 
have been prepared for sale. 


"OCJt 
Ihf b 

1 i- ' i4 "' HW. 


•• Trade has spurred reciprocal investment flows with Australia 

The Tasman looks narrower 


„ _ successes, and 

" j'pttiwign ns -of political good- 
'wflVaHPete to/be. “breaking 
‘Hnw ri thftoffetefatenae arid his- 
'toric riviliy bghyeen.New Zea- 
land ...and its: ~ resourcejich 
i — -n^g hhonit Anstralla, - .. 

1 :ii <H ■ j'-Austrafians-'aie showing 
, " , ' 'Alfa- ' {pffwfofr ig r ipteTBst in tee eoo- 
' ' ‘ r* * fc ’■ nomi&r&fonn^ programme in 
' ' 4J8w 7 Zealandr although it is 

1,11 /utf r ; ^frnng fodged that political 
Njtuqj; jpwKti pg irialte it rmlfltflly that 


l! W.K • 
win ^ 

1:1 


■ fc ; 

• " 1 ’» iT.fe, 

"I *■- Mi\ ft;." 

• in* 
! - i! at. 

■ ,n"i j wsafc 



Epas-J^TOen-tefi countries 
L spurred 

, by fc,frs<te-pat£~ Closer Eco- 
"■nAtefc Hakdons (CER). 
-%aSl9a2. CER has been 
p tf^^)S^te^artance to New 
^decades Anstra- 
wasthemsdor 
_ manufactured 
; tautttkmally ran 
-fpi Australia's 
'foday it .is in baT 
Spcwmtry increased 
the othe^’bar.u 

^S^iRpdftrsiarepto^Bg 
^ntiraiia tp further develop 
ift' agreement .and move 
towards a fuller integrati(m of 
ths itwo econoinies. But there 


farmers’ 





, iMi lHui ill I.. - **// " 

^ ^ season 

,:.j . ’."rJit •• ..- -; . ' . * 

■ v- ’!■ « re- 

*,.V. !■■»*: -^4 



-r;' 


^Bt&med from foctngpage 


•: txH’- -iui 


liri"" 1 


#dtentQiso ; o60lMles 
j.. The wool season began last 
a -. :T r5 ' ; .July with lo^ demand and 

jpricta^. avereging around 
^■._NZ*8.^...a:-.--lri!d. .However, 
7 - ^ a *' prices have risen hy anmnd 
11 since . February, helped 
stronger demand from 
Britain, .wfaich has emerged as 
Jjteiftecorid biggest hay^. The 
l&tncreBSBd its purchases by 
■41 iwr cent In the ntqe mantes 


if., mi 1 i 


■c- 



N6E 


l yt 




• China and Hong Kong 
rriaain the biggest buyers, 
using New Zealand wools in a 
j^foge. of products from hand 
fedtiing. to. tufted carpet .. 

'j]ln recent werics, land) prices 
laive fallen in Europe, the 
tinta market This hu caused 
me concern to exporter as 
Juices had. been unusually 
"buoyant for the previous 18 
-reputes.- There is optimism 
that consumption will recover 
gowarife the end of the year. 

*i Reef exporters lucre contin- 
ued to struggle with protec- 
.JBttnfet measures in the major 
Canada and the. US, 
tee pest year. However, 
seme newer markets were 
developed in Asia, notably 
teorea, as wd! as In Mexico. 

strong Now Zealand dak 
fflr. and intense' competition 
: fossa Europe mid Australia on 
Wfai mariceta, has depressed 
^etians from dateytng. The 
fcdustry is con fid ent that 
Mcea wffl^ improve markedly 
m.tee coming BHotte* Rven- 

fol formers are expected -.to 
teWw a pjffwt tif imus a 
of luBkfirt - thta -swscin, 4? 
jssrie tower: dumbest . 

’I ’A series of froak haastonns 
^ *oae of which lasted more 
' : tug".g few minutes - 
d^troyed the hopes and 
of many apide-grow- 
gtt Thanks to tee-warm sum- 
the fintit war fo tee best 
OBaUtioh for xoahy years. 
jUter the. buoyant prices of 
, ut»M prices taiain.krw, - 

although the New -Zealand 
-We and Pear Board is priud 
gd Swi apples stiq fotte & 
WWlHBB'ftt Wffjdr mjfatii 
r l?te k Hfiftnttr jndnriiy Is 
wcove ring from, the massive 
im-Pro- 
fo dowu shaiply, and 
^ to hopes 

yWMb on wffl 'be good mar- 


was disappointment in May, 
when some Australian rrfflriain 
argued that “CER has gone 
about as far as it can." The 

Australians refuse to evamrnB 
tefl-uiea’ such. as. harmonising 
. taxation,, matching manufac- 
turing standards, and freeing 
up mutual investment options. 

After iititiat raidd progress, 
aviation. i^umaSe anjears to 
have stalled: The agreement 
has allowed Air New Zealand 
to establish, a. “hub" in Bris- 
bane; to service tee Asian mar- 
ket This has proved of 
immenre ; benefit to the airline 
and created thousands erf jobs 
in. Queensland as Asian hoH- 
daymakers flock in. . 

However, Australians have 
been slow to' use the "beyond 
rights" that they gained to 
New! Zealand in tee reciprocal 
aviation deaL New Zealand is 
anjribus to see Arisett flying 
tlie Tasman Rea between the 
two countries. .. 

■ Both countries seem to be 
igh( «rip g one of the most deli- 
cate issues: 'fines 'of prigjn. 
New.-. Zeatendviaanufi^ftgers 
operate tora largely tariff-free 
enviranmapt, 'and can buy raw 
materials, such, as plastic, 
cheaply on tee. worid maxket. 
However, Australia retains 
import protection for its own 
' manufoctoring goods. This sit- 
..luation appears to benefit New 
Zealand manufacturers in sell- 
. teg to Australia, as ft keeps up 
tee prira of Australian inputs. 

Rowland Croae, president rtf 
tee New Zealand M anufactur- 
ers’ Federation, says action mi 
these issues is a priority and 
would further strengthen CER 
trade and economic ties. 
Behind Mr Crone’s concern are 
statements by the Australian 
prime minister, Paul -Keating, 
who, te a visit to Thailand last 
month, spoke of extending 
CER.to.the.six Asean nations. 

New Zealand officials are 
also keen to see freer trade 
between the two blocs. How- 
ever, Mr Crone argtfes that to 
compete equably with the 
dynamic Asean countries. New 
Zealand and Australia must 
settle the remaining outstand- 
ing issues between them over 
CEE. 

Political differences became 
intense in tee mid-1980s, over 


defence, highlighted by New 
Ze aland ’s withdrawal from 
ANZUS, tee pact with Austra- 
lia' andthe US. Since last year, 
relations have improved, "fol- 
lowing a state visit to New. Zea- 
land- by -Mr Keating, -who 
appears to have developed an 
excellent relationship with the 
New Zealand prime minister, 
Jfrn.Bcdger.'' . 

to many areas, apart horn 
trade, the ties are growing 
steadily stronger. Defence 
links appear to have improved, 
and there is dnw Haisrtn on 

police and crime matters. 

However, the Australians 
continue to keep a dose eye on 
New Zealand. There were 

grumbles in New and after 

Australia’s April budget: many 
people complained that ft con- 
tained a tax incentive measure 
that was expressly aime d at 
encouraging companies to base 
their head offices and manufac- 
turing facilities in. Australia 
rather than New Zealand; 

... This -followed moves to. New 
Zealand by ^string of compa- 
nies^ to tak£advaniage of the 
lower tax, cost and wage struc- 
ture. A major attraction was 
the Employment Contracts 
Act, which has introduced 
greater flexibility in . wage bar- 
gaining but is laTiriled an anti- 
union measure in Australia. 

Among . companies moving, to 
New Zealand, or ' expanding 
there, were Gillette, Unilever, 
Johnson & Johnson and 
Alcatel, which supplies wiring 
systems for the Australian car 
industry. All use New Zealand 
as a base to supply Australia 
and Asia, 

. A recent . study by Trust 
Bank found that major compa- 
nies were coming to New Zea- 
land because of its low infla- 
tion. It found that costs won 
being held as industry devel- 
oped flexibility, and said pro- 
ductivity of -New Zealand 
industry bad risen by 28 per 
cent in the five years to last 
December, using no more staff 
or overtime hours. 

A number of New Zealand 
companies are expanding in 
Australia,. They include Pacific 
Star, a subsidiary of Telecom 
New Zealand, which is a major 
supplier to telecommunica- 
tions equipment to the Queens- 


land government and larger 
companies; and the white- 
goods manufacturer Fisher and 
Paykel, which has built a large 
plant te Queensland. 

The growth of sales to Aus- 
tralia fa** fawn s factor in the 
surge . of optimism seen 
recently among New Zealand 
manufacturers. Business confi- 
dence is at its highest level for 
two decades, and the Manufac- 
turers' Federation believes eco- 
nomic growth could touch 6 
per cent by June, after years of 
running between zero and 2 
per cent a year. 

In the year to December 31, 
tfa* strengthening New Zwwhmd 
economy led to the creation of 
42,000 jobs, of Which 23,000 
were fulltime pnatimw hi man- 
ufacturing. Many more were 
created in allied industries that 
service the manufacturing sec- 
tor. The Statistics Department 
reported in Marti that employ- 
ment jjl tfa» TTUfflTtfiirtrrrinp sec- 
tor was up 9.7 per cent! . 

The strength in manufactur- 
ing is spreading through, the 
economy, -and the extra- jobs 
and spending power is seen as 
a significant reason for the 
budget surplus that is expected 
thin financial year. 

Yet all is not going. New Zea- 
land's way. Australia, for 
Bvampie, is winning the trade 
war an tee food front, where ft 
appears to offer cheaper 
canned and frozen processed 
items. Against this, New Zea- 
landers have done wen in light 
i»n gh>pprtng and steel and alu- 
minium fahri ratio n 

Gilbert Petersen, of the Man- 
ufacturers’ Federation, says 
that, while there is a feeling of 
confidence in the sector, there 
is no great seise of security, 
with the knowledge that the 
Australians “could run rings 
around us if they wanted to”, 
because their large- population 
leads to economies of scale. 

! It is widely believed that any 
advantages New Zealand man- 
ufacturers have gained are dim 
to offjHmq fli learned the bard 
way, through surviving a 
protracted and deep rec ess i on . 
They win battle to keep them, 
and make the best possible use 
of tee CER pact 

Terry Hall 


Improved air links are helping tourism to take off 

Asia discovers the south 


been startling. Between 1988 
and 1991, annnai arrivals had 
risen by an a vera g e of 2L8 per 
cent, c om p a red with the world 
average growth rate of &2 per 
cent Bat since 1992 visitor 
numbers have been growing 
by an average 10 per cent a 
year, substantially ahead of 
the world’s average growth of 
3£ per cent projected for- the 
1990s by the World Tourism 
Organisation. 

The industry is encouraged 
by the increase, because, for 


After many false starts, New 
Zealand’s tourist industry 
believes it has a winning for- 
mula - a view reinforced by 
Hip rapidly rising number of 
visitors. 

Even ISO years ago, settlers 
from Europe spotted the coun- 
try’s leisure potential. One rel- 
atively small country seemed 
to offer just about everyt hing: 
hundreds of miles of warm, 
sandy beaches in the sub-tropi- 
cal north, remarkable volcanic 
geysers, monntain-climblng, 
skiing, wilder- 
ness bash 
walks, ample 
finh arid game 
h u n ting. 

From the 
1870s, tourist 
hotels began to 
appear te the 
most popular 
destinations, 
and later the 
government 
added its sup- 
port. 

‘ Visitor 

bers. ebbed and - Wh fcn w ate r rafting may attract tha more adwentuom towiat 
flowed, dis- 



tance always being a problem. 
Initially, only wealthy tourists 
from the US and Europe bad 
the time for long sea voyages. 
Closer to home, as air ltoku 
developed, Australians might 
enjoy visiting New Zealand, 
three hours away, for an 
annual skiing holiday. 

Now, mass air travel is 
changing perceptions. New 
Zealand is today served by 24 


international drlhiM Hurt link 
it to most ports of the world. 
Tourist numbers are climbing, 
helped by the economic recov- 
ery. Between January and 
March, 400,000 visitors 
arrived, 17 per cent more than 
in the same period of last year. 

March alone saw a 21 per 
cent increase (to 139,000) over 
the mhw month last year. Vis- 
itors from the TJK represented 
the strongest growth (up 26 
per cent), followed by the 
Netherlands (up 22 per cent). 
In the year to March 31, visi- 
tor numbers grew by 12 per 
cart, to 1.21&318, the stron- 
gest growth this dec arte. 

Norman Geary, chairman of 
the New Zealand Tourism 
Board, says the recovery has 


much of the period, most of 
the countries from which visi- 
tors came - Australia, North 
America, Britain, Japan and 
Germany - woe coifing with 
recession. Mr Geary is confi- 
dent that the industry’s goal 
of 2m tourists a year by 2000 
will be met 

Its strategy is one of sus- 
tained promotion In target 
conn tries, and a reasonable 
level of government support 
Assisting fog drive are inde- 
pendent operators, including 
Air New Zealand, which has 
extended its sendees to much 
of Asia during the past 18 
months. 

The South Korean market 
has developed strongly. 
Koreans’ interest te New Zea- 
land is high, because they 
have become one of the largest 
migrant groups; and te the 
year to March, 40,000 visited, 
compa r ed with a few hundred 
in 1990. 

- Taiwanese numbers have 
also risen. Nearly 50,000 vis- 
ited New Zealand te tire year 
to March, up from 10,000 in 
199L Hie recession te Japan 
has impeded growth, although 


numbers have continued to 
climb (145,000 in the same 
period, compared with 100,000 
a year earlier). 

Numbers like these are forc- 
ing New Zealand to improve 
facilities. One regular com- 
plaint from Asian tourists is 
that, while there is plenty to 
do during the day, there are 
Insufficient attractions at 
night. Two international-stan- 
dard casinos are being built, 
in Auckland and Christchurch, 
and others will follow in 
major towns. 
Relaxed migra- 
tion policies, 
which open the 
door to anyone 
who meets the 
criteria, have 
led to the open- 
ing of hun- 
dreds of ethnic 
restaurants 
and night 
clubs. 

However, Mr 
Geary 
acknowledges 
that much still 
oeeds to he 
done. More hotels most be 
built, involving substantial 
investment Asian developers, 
especially from Singapore and 
Hong Kong, have invested 
heavDy In the sector during 
the past three years, but have 
concentrated on buying exist- 
ing hotels. 

Despite new labour laws, 
which have substantially cut 
wage bills, profitability 
remains low in the hotel 
industry. Mr Geary and others 
fear that, unless new hotels 
are built in Christchurch, 
Auckland and the major desti- 
nation of Queenstown, tourist 
numbers wiB not increase - 
already it is often dtiHcnlt to 
get a room. 

Mr Geary believes improved 
profitability is essential if the 
industry's potential is to be 
maximised. He says govern- 
ment support is vital, and 
points out that foreign 
exchange earnings from visi- 
tors is 21 per cent ahead of 
1991 levels, and that the indus- 
try is a major employer of 
labour. 

Terry Hall 



world, connected to iVev^ y 



***d. 


IBBsT' 

•SI m 


% = 


m — 1 









BUTTLE m WILSON 

A Member of the S C Warburg Croup of Companies 


Links to all major finanrial markets, an indepth local knowledge and a substantial tradition in the 
community allow us to structure highly sophisticated investments for our local and international clients. 


27 

liiimiiiiimiiiiiiiHHHiim 

Government 

Property 

Services 

NZ$175 million. 
Senior Debt Issue 
Uttd Manager and 
Organising Broker 

BUTTLES WILSON 

IIIIIIIIISIIIlllllIirilllllBillll 

isiiitimiimiimmmimui 

Housing 
Corporation 
of New Zealand 

NZ$900 million 
Prime Rare Mortgages 

Financial Advisor 
to Treasury 

BUTTLE ©WILSON 

IIIIIIIIIIIIIVIIII1IIIIIIIKIIIIII 

imimimiimmiHiiMiiiiii 

Trustbank 
New Zealand 

NZ$206 million 
Initial Public Offering 
Joint Organising Broker 
and Underwriter 

BUTTLE ©WILSON 

iimiJimmiiiiimiiimiJiJV 

iiiimimiiiimiiimiiimiii 

Progressive 

Enterprises 

NZ$105 million 
Purchase of 
FAL New Zealand 
Financial Advisor 

BUTTLE ©WILSON 

KKIlllllllllllllllIllllllllllllll 

IIIIIIIIIIIII1III1IIII1I1IIIIIKII 

Brierley 

Finance 

NZ$170 million 
Subordinated 
Capital Notes 
lead Manager and 
Organising Broker 

BUTTLE ©WILSON 

IIIIIIIBIIIIKISKIIIIIIIIIIIKIIIII 

iiiiiiiiiiJiiBiiJiiiiifimiiiiii 

Fletcher 
Challenge 
Industries . 

NZ$150 million 
Subordinated 
Capita] Notes 
Joint Lead Manager 

BUTTLE ©WILSON 

MIIIIIIIIIIIIIIIIIllllllllllllll 

iiiijmimiMiimiiMiiHm 

Wang 

New Zealand 

NZ$15.1 million 
Initial Public Offering 
Organising Broker 
and Underwriter 

BUTTLE ® WILSON 

miimimiiimiimimimii 

jjiiiiiiiiimiiimijiiijiiiiiii 

Asian 

Pacific 

Breweries 

NZ$115 million 
Acquisition of 
DB Group Shares 
Financial Advisor 

BUTTLE 0 WILSON 

mimiiiHiimimiiiimmH 


The transactions 
listed above are 
indicative only of 
recent significant 
business successfully 
undertaken by 
Buttle Wilson 




28 


T.MK WEDNESDAY JUNE 8 1994 


COMMODITIES AND AGRICULTURE 


China takes over from Japan as top wool buyer 


By Tony Walker in Baling 


China emerged in 1993 as the 
world’s top customer for raw 
wool for the first time, over- 
taking Japan, according to an 
Inte rnational Wool Secretariat 
study. 

China's wool use last year 
accounted for about 20 per cent 
of world production, and this is 
set to reach 25 per cent by the 
year 2000 at the present rate of 
growth. 

"Total wool use has 
increased a remarkable 2.75 
times since 1980 when it 
accounted for only 7 per cent 


of global wool production," the 

study said. 

About two-thirds of wool 
used in China is imported, 
with Australian supplies 
accounting for half of total 
imports. New Zealand weighs 
in with about 25 per cent and 
Uruguay 10 per cent. South 
Africa, the other IWS member, 
supplies a relatively small 

amriimt 

In 1992, imports of raw wool 
and tops reached a value of 
US$764m and 65 to 70 per cent 
was consumed within the 
domestic market Semi-pro- 
cessed and finishpri wool tex- 


tile products earned China 
about UgUSm in 1992. 

"Raw wool and top imports 
into China could well increase 
by nearly 60 per cent from 1992 
to 2000, accounting for up to 
one-third of Australian and 
New Zealand wool production 
by 2000,” the study saw. 

The study found that 
“Greater China” - including 
China, Hong Kong and Macau 
- had become th e fas test grow- 
ing market for IWS members 
over the past decade. Austra- 
lian exports as a percentage of 
total wool exports had almost 
trebled in that period. 


But the study, prepared, by 
the UK-based Wool Develop- 
ment International, warned 
that China’s market was Gable 
to sharp fluctuations caused by 
sudden changes in economic 
policy- In 198990, China's with- 
drawal from the market had 
contributed to the rapid rise in 
raw wool stocks in producing 
countries. 

“With further promised eco- 
nomic liberalisation, rising for- 
eign investment, increased 

mnreimpr afflnwirp and possi- 
ble Gatt membership, China 
has the potential to continue 
as the fastest growing market 


for wool textiles and clothing 
in the world," the stud? con- 
cluded. 

“At the same time given its 
recent history of stqpgo eco- 
nomic cycles, wool price sensi- 
tivity. and political uncer- 
tainty, it could be the most 
volatile amH unpredictable mar- 


The IWS is sponsored by 
Australia, New Zealand, South 
Africa and Uruguay. The 
organisation became active in 
the Chinese wool market in the 
early 1380s and is involved in 
mgristmg China to upgrade its 
wool processing 


Australian growers emerging from the gloom 

Nikki Tait on a marked turnabout over the past six months in the sector’s fortunes 


N ext month. Wool Inter- 
national, the newly- 
constituted keeper of 
Australia's vast wool stockpile, 
-will begin a fixed monthly 
schedule of sales in an effort to 
pare back the stocks. The regu- 
lar sales programme, involving 

28,000 bales a month at the out- 
set, has been stipulated by law 
- the same federal legislation 
that set up the government- 
owned body at the end of last 
year. 

A year ago. the prospect of a 
steady supply dripping on to 
the market would have sent 
shudders down any Australian 
wool-grower’s spine. Indeed, it 
is only 16 months since Mr 
Wayne Goss. Queensland’s pre- 
mier, suggested that the stock- 
pile’s 3.96m bales should be 
burnt, to remove the simply 
overhang and save storage 
costs. 

Today, however, the indus- 
try’s attitude can only be 
described as relaxed. “It’s fun- 
damental the stockpile is 
sold and debt paid down,” says 
the Wool Council of Australia, 
the main growers’ organisa- 
tion, adding that it supports 
the open, orderly process. Mr 
Bob Quirk, head of the Austra- 
lian Council of Wool Exporters, 
also predicts that regular 
stockpile sales should not 
prove disruptive. 

This sudden sangfroid owes 
much to a marked turnabout 
over the past six months in the 


fortunes of Australia's wool 
industry, one of the nation's 
biggest export earners and the 
source of about 30 per cent of 
the world’s wool production. 

On April 28 1993, the sector 
bit rock-bottom. The local mar- 
ket indicator price plunged to 
381 cents a kilogram, clean, the 
lowest level seen tins century. 


either on the mend, or thought 
likely to be improving by the 
end of 1994. “There’s been a 
quite sustained level of 
demand from all the tradi- 
tional markets," says Mr 
Quirk. “We’ve seen consider- 
able demand from western 
Europe, including Germany, 
and Japan. There is a growing 


Today’s improved prices allow 
Australian wool growers to survive, 
but leave insufficient margin to fund 
the backlog of investment and reno- 
vation work left by recent losses 


Yet by the end of last week, 
the same marker had recov- 
ered to around 62S cents. While 
this may be only half the level 
seen in the headiest days of the 
late-i980s, prices above the 600 
cents-mark seemed way 
beyond many growers’ dreams 
last year. 

The sea- chang e has come 
about for two main reasons. 
The first is the recovery, or 
anticipated recovery, in Aus- 
tralia’s traditional export mar- 
kets. The biggest buyers of 
Australian wool include a 
number of western European 
countries - notably France, 
Italy and Germany - along 
with two Aslan customers, 
Japan and Korea. For the most 
part, their economies are 


degree of confidence". 

At the same time, he sug- 
gests, China’s new role as the 
biggest overseas buyer of Aus- 
tralian wool is moving on to a 
firmer footing. Even in the 
industry's gloomiest moments, 
this was a ray of light, with the 
country taking around 21 per 
cent of Australian wool exports 
in 199293. But Mr Quirk sug- 
gests that one of the most 
encouraging features is that an 
increasing amount of Chinese- 
purchased wool is being 
retained for domestic use 
(rather than re-export). He puts 
the retained figure at 70 to 80 
per cent, up from perhaps 30 
per cent in the past 

In the meantime, grower sup- 
ply has also contracted, and 


stocks in the wool processing 
pipeline are thought to have 
declined. According to the Aus- 
tralian Bureau of Agriculture 
and Resource Economics, the 
number of sheep shorn in 

1993- 94 is likely to fall by 5 per 

cent or so, to about 169m, and 
then ease back to 166m in 

1994- 95. 

All these developments have 
made Wool International’s job 
considerably easier. The stock- 
pile buQt up under the indus- 
try’s previous guaranteed pric- 
ing structure, and was 
originally the responsibility of 
the now-defunct Australian 
Wool Realisation Commission. 
Wool International, the brain- 
child of Professor Ross Gar- 
naut at Australian National 
University, whose recommen- 
dations on the re s truct u ring of 
Australia’s wool industry were 
adopted wholesale by the fed- 
eral government last year, took 
it over at the be ginning of 
December. 

The new institution, which Is 
scheduled to be privatised by 
1997, has been charged with 
selling 28.000 bales a month 
during the latter half of 1994, 
and then 187,000 bales a quar- 
ter in 1995. 

But, already, it has more 
than tested the waters, he 
March, April and May, its sales 
averaged about 40,000 bales a 
mnnth, well ahead of the stipu- 
lated levels (which permit only 
small “tolerances” on either 


side). As a result, by the end of 
last mnnth, the stockpile had 
reduced to under &6Sm bales. 
In large part, the fact that W1 
has aiw»aHy been pushing out 
stockpile sales in excess of its 
proscribed post-June monthly 
targets explains the relaxed 
attitudes to its impending per- 
manent market presence. 

Perhaps the biggest remain- 
ing question is whether nhfna 
will remain in the market in 
such a substantial fashion , 
given the recent rise in prices. 
At least some observers predict 
that prices will ease back in 
the second half of 1994, but 
should then resume a steady 

rfimh next year. 

still, if an air of stability has 
finally returned to the belea- 
guered Industry, Australia’s 

65,000 growers are not cheering 
yet 

At prices of about 600 cents a 
kilogram, they say that it is 
possible to survive. But, after 
the horrendous conditions of 
the past three years, thee is a 
hanking of investment and ren- 
ovation work to be done and 
current price levels st£D. pro- 
vide little margin. 

And already, the federal gov- 
ernment is whipping away 
some of tha emergency finan- 
cial aid - in the form of inter- 
est subsidies and the like - 
that it introduced in the indus- 
try’s darkest hours last year. 
That move, says the WCA, is 
“premature". 


More transparency 
for London bullion 


urged 

market 


By David BtackwaO 


The London bullion market 
should become more transpar- 
ent if it does not want to lose 
ground to New York, the 
Financial Times World Gold 
Conference was told in. London 
yesterday. 

Mr James Riley, a partner 
with J. Aron & Company/Gold- 
ptan , Sachs & Co. said failure 
to make the market more open 
would ensure that New York, 
where Comex trades gold 
fixtures, would “remain the 
home to gold price transpar- 
ency”. 

While the London fix pro- 
vided the benchmark for physi- 
cal gold, “no-one knows the 
turnover on a fix". 

Mr Rfiey also predicted a rise 
in the gold price to $414 a tray 
ounce this year as gold began 
to be treated once more as a 
long-term asset, rather than as 
a commodity. He cited a report 
that Fidelity, a leading US 
fund, had 4 per cent of its 
assets in commodities. 

Mr Victor von Klemperer, 
senior manager with Dresdner 
Bank, suggested that the Bund- 
esbank, which holds almost 

3,000 tonnes of gold, was 
looking seriously at mobilising 
same of its reserves following 
the budget deficit pressures 
“brought on by the horrendous 
costs of reunification". 

“This topic will obviously 
gain in actuality in a year 
when they don't have a 


DMlSbn surplus to transfer to 

the finance ministry," be told 

the conference. 

Mr Norbert Schroff, a senior 
precious metals mana ge r at 
Credit Suisse, said Zurich was 
the premier physical gold mar- 
ket In the past 10 years it had 
Imported an average of 
between 1,200 and 1,400 tonnes, 
and exported between 1,000 
and L200 tonnes. 

The level of imports was 
equivalent to 70 per cent of 
western mine production and 
40 per cent of total world sup- 
plies. "It is dear from these 
figures that Zurich is holding 
its own not only as the centre 
of gold trade in Switzerland, 
but also as the world's princi- 
pal trading arena for physical 
gold," he said. 

Mr Timothy Green, chief 
consultant with Gold Fields 
Mineral Services, said that 
physical demand for gold in 
the Middle East and India had 
accepted the higher trading 
range of around $380 an ounce 
more quickly than expected. 

“I happened to be in Jeddah 
e«rHw this year when the price 
slipped momentarily to $375. 
Jeddah ran out of physical gold 
that day as people covered 
unfixed positions. And from 
then on I was much less con- 
cerned about the downside risk 
of the price." 

Mr Robert Ashley, director 
and hea d cf treasury at Roths- 
child Australia, said that 
although Chinese gold con- 


sumption was down last year 
by about 30 tonnes, its con- 
sumption of 325 tonnes made it 
the second biggest consumer 
behind the US. 

He pointed out that prosper- 
ity continued to increase, with 
Oftinnse bank savings passing 
USSlOObn. There were about 
800m farmers who bad not yet 
bought gold. 

With inflation at 22 per cent 
and the political uncertainty 
that would attend the post- 
Deng Xao Ping era. gold would 
benefit from its status as a reli- 
able store of wealth. 

"In the 1920s and 1930s 
S hang hai was the third largest 
gold market behind London 
and New York." he said. 

“The influence of China In 
the market In 1993 demon- 
strated that it is regaining lost 
ground." 

Mr Yuri Mityuk, head of 
treasury at the Bank for For- 
eign Trade of the Russian Fed- 
eration, said the Russian gold 
mining industry was expected 
to produce 150 to 155 tonnes 
this year, compared with 149,5 
tonnes in 1993. This could be 
considered a sign that the bot- 
tom in Russian production had 
been reached. 

He said the Russian finance 
ministry was eager to help the 
industry and suggested that 
cuts in both the number and 
level of both federal and local 
taxes would promote new 
investment and increase effi- 
ciency. 


MARKET REPORT 


Copper leads LME base metals rally 


COPPER led other base metals 
contracts hi g her in late trading 
at the London Metal Exchange 
yesterday. 

After dipping to $2,233 a 
tonne early in the day the 
three months position closed 
the afternoon ring at $2J270, up 
$28 on balance. But as invest 
ment fund buyers became 
active again in New York the 
LME price moved still higher 
in after hour trading, topping 
$2*800. 


The three months ALUMIN- 
IUM price consolidated morn- 
ing gains to close at $1,37335 a 
tonne, up $9.75. And it added a 
few dollars more after hours. 

At the London Commodity 
Exchang e September delivery 
COFFEE futures recovered 
from a morning fall to $1*985 a 
tonne to dose at $2,024, still $4 
in arrears. 

“It's not so much selling 
pressure as a lack of active 
buying that is keeping the 


market down." said one trader. 
“It’s really very quiet, the mar 
ket is trying to consolidate." 


Compiled from Reuter 


(ta at Monday 1 ! dots) 


COMMODITIES PRICES 


CROSSWORD 


BASE METALS 


LONDON METAL EXCHANGE 

(Plicae from Amalgamated Metal Trading) 

■ A UMNiU M,98JPURrY(S per tonne) 


Precious Metals continued 

■ -GOLD COMEX {100 Troy oz,; S/boy era) 


GRAINS AND OIL SEEDS 

■WHEAT LCE g per tonne) ■ 


SOFTS 

■ m COCOA LCE (EAonne) 


MEAT AND LIVESTOCK 

■ UVE CATTLE ONE UOflOOtmi centa/ta). 


No.8,474 Set by HIGHLANDER 



Cnh 

3 mths 

Clow 

13434-444 

1373-734 

Previous 

1334-35 

1363-64 

Hgh/lew 

134003394 

1377/1384 

AM Official 

13394-40.0 

1369804 

Kerb dose 



Open Ira. 

2S8JM3 


Total dnfly twnavar 

35.884 


■ ALUMMUM ALLOY (B per tonne) 


Qom 

1382-65 

1380-85 

PlWtOUB 

1345-65 

1390-60 

HfcNI ow 


136671360 

AM OflidBl 

1366-70 

1388-03 

Kart) dose 


1380-70 

Open ha. 

3,367 


Total rtafly turnover 

821 


■ LEAD (Spar tonne) 


Clom 

499-994 

518-17 

Previous 

4994-6004 

517-18 

Hgh/tow 


518/512 

AM Official 

4984-09 

515-164 

Kort> dose 


617-8 

Open irt. 

38441 


Total daily turner 

6430 


■ NICKEL (S per tome) 


Ctose 

6210-20 

6300-10 

Previous 

6170-80 

6286-70 

High/low 


8350/6230 

AM Offidel 

8150-56 

8240-42 

Kerb dose 


8335-40 

Open mt 

58.460 


Total daffy turnover 

8479 


■ TOI (S par tonne) 



O on 

6615-25 

5395-000 

Previous 

5475-85 

5550-60 

Hflh/low 

5492 

5600/5600 

AM Officio/ 

5482-96 

5570-75 

Kart) Clom 


5820-30 

Open Jnt. 

16403 


Total daffy tunewer 

8.103 


■ ZMC, epootal Mgh glad* 0 per tonne) 

Clom 

950-51 

975-784 

Previous 

9494-504 

975-8 

hffgMow 

947 

977/970 

AM Offlcfed 

9484-474 

9724-734 

Kerb done 


978-77 

Open fnt 

105,097 


Taw desy turnover 

15410 


■ COPPER, grade A (S per tame) 


Clom 

2259-61 

2270-71 

Previous 

2234-35 

2242-43 

Kgh/low 

2234 

2291/2235 

AM Official 

2234-35 

2246-47 


SUB Dan (*■> 

prim ctanpa Hgb km kit Vat 

Job 381.1 +67 38X5 3800 1,748 854 

Jri 382.1 +4? - - - - 

tag 8835 +68 3852 382-1 71,257 31/112 

Oct 3885 +68 388J 3854' SAB 44 
Dec 389.7 +04 3909 3884 24,338 790 

Mi 393.1 +68 - - 5715 18 

IMal t39jDT7 33459 

■ PLATWUM NYMEX (50 Ttoy pz_; Sflray ozJ) 


Jta 

386.2 

+14 

4004 

3884 H319 

1421 

Oct 

4000 


4024 

4004 

5,186 

484 

Jm 

4011 

+04 

4034 

402.1 

1,114 

44 

tar 

4042 

+04 

4065 

4042 

1467 

160 

luri 





Z14H 

2,189 

■ PALLADIUM NYMEX (100 Troy oza tftroy or.) 

Jem 

13540 

+075 13575 

13540 

115 

2 

Ste 

13440 

+0.45 

13540 

13425 

3273 

182 

Dec 

13475 

+045 

13525 

134.75 

744 

- 

Kar 

134J5 

+045 

. 

- 

6 

- 

TOW 





4,138 

184 

■ MLVBt COMEX (100 Troy ol; ContaAray oz.) 

Jm 

SMB 

+44 

_ 

. 

7 

11 

M 

5302 

+44 

5364 

5285 70808 19431 


533.1 

+44 

- 

« 

- 

re 

sea 

5344 

+44 

5414 

5344 14422 

2438 

Dee 

542.1 

+34 

5484 

5405 

18478 

1411 

Jm 

5434 

+34 

- 

- 

32 




Sen 

Oxfi 

flPM 



Salt 

B 


Opm 


SOB Dqte Open 



price 

cfesofS High lew 

tat 

1M 


take i 

dtawga 


lew tat M 


price dooge Hgh lew tat 

M 

Jan 

109.45 

-a70 11140 109.45 

406 

40 

Al 

966 

-12 

878 

963 18415 1434 

Jm 

62425 -1425 84000 62400 12488 18705 

Sta 

9945 

+045 

484 

- 

Sap 

BB8 

■9 

1001 

986 18455 1481 


62.425 -1200 64400 82225 29474 

8.749 

Nov 

9940 

+045 9940 99-10 

2490 

14 

Dec 

1011 

-8 

1020 

1009 25.408 478 

Oct 

66475 41975 67AS) 65400 14,450 

2238 

Jm 

10145 + 040 10145 10145 

1229 

8 

Ur 

1033 

-8 

1042 

1030 27.186 1415 

Dec 

67725 -8800 80.700 67225 10.135 

1.719 

iter 

103.18 

+860 103.15 10245 

361 

6 

**** 

1044 

-9 

1054 

1044 10485 284 

Fab 

88.750 -0775 69700 68.150 8.478 

545 

MW 

10445 

+845 10445 104,10 

311 

19 

Jiff 

1058 

-9 

1078 

1056 3221 3 


09450 -0450 70400 09.700 2485 

110 

Total 



4481 

79 

ToW 




11140 5414 

TdM 

78253 24261 

■ WHEAT CHT (5400bu mbt; eenta/BOR) buaheQ 

■ COCOA CSCE (10 tonttee; S/tonme) 

■ LIVE 

HOGS CME (404tXSbK centals) 



JM 

335/2 

+3/4 

337/0 

330/0124435 48440 

M 

1316 

+12 

1322 

1290 27412 9,475 

Jm 

48475 -Ol350 47450 48400 

3,487 

2.795 

Sip 

341/2 

+4/0 

342/0 

335/4 45485 8448 

&P 

1348 

+14 

1351 

1320 23,185 5.787 

■M 

48400 -0A50 47400 48475 10467 

1432 

OK 

3524) 

+3/2 

353/4 

348/4 68420 22,120 

Dec 

1383 

+13 

1383 

1357 9445 1466 

tap 

48.450 +0425 46400 45775 

7.483 

2401 

Mar 

354/B 

+3/4 

360/2 

35010 7450 725 

■Dr 

1413 

+13 

1408 

1380 8422 605 

Oct 

43413 +0.125 43450 41275 

4,136 

808 

tate 

344/6 

+2/4 

- 

-305 50 

■te 

1432 

+13 

1433 

1424 2400 7 

Dm 

44250 -0025 44300 43425 

3.021 

Z77 

Jiff 

325/4 

-0/4 

326/D 

3254) 1408 20 

JM 

1454 

+13 

- 

- 2405 

ft b 

44125 +0425 44.150 43400 

720 

55 

TOM 




248495 78465 

Tew 




77405 174*0 

Tobff 


30,126 

7440 


■ MAZE CBT (5.000 bu mtn; centa/5Bt> bushel) 

JH 288/0 +2M 268/4 20441509480122.415 

Sap 282/2 +1* 264/0 253*184,745 35490 

DK 25345 +06 257/0 25172480435190460 

Mar 2604 +1/0 293/2 25812 52480 2440 

May 264/8 4-1/2 266* 262/4 7400 285 

Jri 266/4 +2XS 266/0 263/4 13470 2405 

Total 1Ja2MZB410 

■ BARLEY LCE (E per tome) 


■ COCOA (JCCQ) (SDR-a/tonne) 


■ POHK B&UE3 CME t40400tt»; oentafox) 


Jon 9 
Daft- 


Prim 

.101244 


Prwt day 

1043.17 


10 day 


.m 


N/A 


■ COFFHE LCE ffAonna) 


Total 


12*198 2X202 


ENERGY 

■ CBUPE OE. NYMEX (42.000 US gafle. S/boreQ 


KM don 
Open H. 205340 

Total daffy turnover 49.731 

■ LME AM OflWri E/S ridac 1 J09D 
LME Ctoatng Ut raw 1408S 


Spot 15079 3HDK1.5056 BaBrelJOtl 9m8Kl4D27 
■ WGHQRADE COPPER (COMBQ 




Dan 

Opm 



Ore 

ctaege Mgh 

lore tat 

M 

Jm 

10&JS 

+475 1DB.7D 

102.10 1480 

165 

Jri 

10640 

+445 10740 10240 35485 

5J7B 

tag 

106.70 

+485 

- 499 

3 

Sta 

10840 

+475 107.00 1 1E-20 10422 

1419 

Oct 

108.10 

+4G0 

- 272 

49 

Nev 

10540 

+445 

- 202 

- 

TbU 



58481 

74« 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
(Prices suppled by N M BothcchBd) 


Gold (Tray ceJ 

$ price 

£ oquhf. 

Ctose 

330.40-380.80 


Opening 

37940-38020 


Morning fix 

38050 

252.740 

Afternoon flx 

30040 

262.488 

Days High 

38140-38140 


Dsyls Low 

38040-38040 



Previous due 


378.60-37930 


lehnt Ore's 
price cOmpa Hgk 

Jri 1741 -040 18.18 

tag 1745 -024 17.75 

Sm 1749 -022 1745 

Oct 1740 -040 1747 

Itav 17.13 -021 1744 

Dm 1749 -022 1748 

Total 

■ CRUDE 06. IPE (S/benti) 

Low °tat > Vd 
1778102229 38,160 
17j*2 704ta 10417 
1745 384*3 5,108 
17.10 25446 2207 
17.13 1B464 1291 
1749 31432 3.489 
423338 74285 


latest 

Oafi 



Opm 



tatca ebanga 

Mob 

lew 

tat 

tftff 

Jiff 

1842 

-025 

10J7 

15.95 58470 19498 

tag 

1548 

-021 

1020 

1602 41,184 

9480 

sop 

1848 

-0.19 

1830 

1585 

15488 

2092 

Oat 

1640 

-043 

16.11 

1840 


435 

taw 

1542 

•0.19 

1&10 

1579 

5479 

357 

Dec 

1541 

■022 

1648 

1580 

5444 

329 

Total 




Ml 421 

24.189 

■ HEATMQ CM. NYMEX {42400 US grita; c/US grita) 


latest 

OteCs 



Opm 



price 

dwope 

Mgk 

Lew 

tat 

Vai 

Jiff 

4640 

■046 

47.75 

4600 4Q094 17462 

Aag 

4740 

-041 

4843 

4746 

17.403 

8433 

sm 

4080 

■046 

49.10 

4845 

12187 

1439 

Oct 

4055 

■046 

5020 

4840 

7411 

375 

taw 

SOSO 

-041 

5045 

5040 

5702 

501 

Bm 

5148 

■0.41 

5145 

5100 14JH8 

2441 

IMri 




121431 

30688 

■ OA8 OIL PE (Stand 





Salt 

D tf* 



Item 



price change 

ugh 

Low 

tat 

M 

Jm 

14840 

-340 

15025 14675 17.374 

5495 

Jiff 

147.75 

-2.75 

15140 147.76 25439 

7764 

ta 

14075 

-240 

15340 

1+9.75 

9418 

2401 

MP 

15240 

-225 15475 15200 

6419 

725 

Oct 

154J5 

-225 15740 13475 

6461 

673 

taw 

150,75 

-240 

1S925 

15875 

4577 

S0J7 

TOW 





01755 19pSB 

■ NATURAL QAS NYMEX (10,000 wnttLi SAnnBte) 


latest 

Oafs 



fttae 



Mice 

cbtatge 

Ufth 

Lew 

tat 

Hd 

JM 

2418 +0448 

•nan 

1485 2*711 

8424 

tag 

2498 +0434 

2100 

2075 13767 

2592 


2.130 +0421 

2135 

2115 12271 

1451 

Oct 

2175 +0.018 

21B0 

2188 

4714 

426 

■or 

tm +0410 

2290 

2240 10488 

447 

Dm 

2354 +0410 

2354 

2350 

14495 

481 

Total 




128482 13487 


SiP 

9625 

+078 

. 

- 175 

taw 

9975 

+075 

9625 

9940 333 23 

Jm 

100.78 

+050 

10075 

10055 30 2 

MV 

10240 

+020 

- 

22 

Hay 

10440 

■ 

- 

4 

Tatff 




584 29 

■ SOYABEANS CBT C5400ba mta; CUte/SOb tuffMQ 

M 

680/4 

+1/2 

868/0 

658/4- 251,495 108460 

tag 

6994 

+Offi 

063/+ 

855/0 80230 30.495 

sm 

846/0 

+48) 

651/4 

640/2 46.470 .7,185 

test 

639/6 

+4/8 

641/0 

8200294790198785 

Jm 

640M 

+8/0 

648/0 

6348) 26445 3,490 

Kw 

845/8 

+3» 

848/4 

640/0 10.785 388 


JU 

2051 

■fl 

2054 

2010 11737 

14S2 

sm 

2924 

■4 

2027 

1385 18785 2,194 

taw 

1888 

-14 

XHl 

1956 

8491 

521 

Jm 

1968 

-17 

1980 

1942 

M29 

437 

Nar 

1944 

-n 

1944 

1000 

2483 

182 

■ter 

1935 

+1 

- 

- 

128 

- 

Total 





43751 

6MB 

■ COFFEE *C* C8CG (37^0C®w; crettatw) 


Jiff 

12246 

+370 

12375 

11675 18730 7783 

■ta 

12095 

+345 

12175 

11840 

17.103 3483 

Dm 

11640 

+245 

119.18 

11540 

12428 

845 

Bar 

11035 

+3.10 

11740 

11375 

7,175 

165 

■re 

11640 

+540 

11640 

11600 

790 

45 

JH 

1157S 

+375 

- 

- 

107 

23 


M 41.125 -1350 42.400 40850 4/35 1440 

tag 40.173 -1.125 41.150 39JD0 3403 650 

M 48400 -O-4O0 48.400 47450 429 91 

■W 47450 -0.130 . 47450 36 2 

■V 50400 -0350 - 48450 32 2 

Jut 48500 -1400 - 48500 12 2 

TaW U40 UBS 


LONDON TRADED OPTIONS 

1 price • tonne — Cade Puts — 


■ AUJMMEUM 

(09.746) LME 
1325 


1378. 

142S. 


Total 736439313430 

■ SOYABEAN 08. CST (BO.OOOB98: cantata) 


Md 

■ COFfEEQCO) (US cenlfl/pound) 


5897911481 


(Grade A) LME 
2200 


Jri 

27.19 

+030 

2774 

2843 24471 

13,430 

tag 

27.19 

+041 

2773 

2845 14.463 

44K 

Mm 

27.11 

+049 

27.13 

2872 11487 

1.813 

Oct 

2844 

+039 

2645 

2625 7,773 

584 

Dm 

2612 

+Ol34 

MX) 

2675 21,187 

4497 

tan 


♦0A3 

2603 

2699 3429 

230 

Tfabff 




86504 26155 

■ SOYABEAN MEAL CBT (100 tons; S/torO 


JH 

1904 

-14 

1924 

1904 26353 10433 

tag 

1904 

-14 

1937 

1967 18481 

3428 

tap 

1904 

-0L7 

1924 

teas 10438 

1450 

Oct 

1864 

-1.1 

1905 

I860 5434 

512 

Dm 

187+ 

-17 

1894 

1887 17482 

9789 

Jm 

1874 

-04 

1867 

1874 1fl74 


Tetri 




8242B 21,790 


Jm 8 


Price 

Piter, ffay 





■ No7 PltamM RAW 8UOAR LCE (qente/lsa) 

Jiff 1277 +617 1279 12.18 

Od 1240 +070 

Jan 1142 ... 

MW 1248 +OT7 

Tetri 

■ MMTE SUGAR LCE (Stonne) 

2427 292 
1498 

60 

3J83 282 


Lee 


2100 . 

2150. 

2200. 


■ COCOA ICE 
960 


973. 


1000 . 


1560. 
1600 . 


34740 +690 34840 34540 13464543 IT 


1650. 


Aug 

Nov 

**g 

NOV 

6S 

102 

20 

33 

37 

73 

42 

53 

19 

SO 

73 

79 

Aug 

Nov 

Aug 

Nov 

98 

110 

45 

91 

89 

87 

67 

117 

48 

68 

95 

148 

Jiff 

S«P 

Jiff 

Sep 

48 

164 

97 

240 

32 

147 

131 

273 

21 

132 

170 

308 

Jiff 

Sep 

Jiff 

Sep 

24 

71 

8 

33 

10 

57 

19 

44 

4 

45 

38 

67 

Jiff 

Aug 

JuJ 

Aug 

- 

- 

S 

- 

21 

68 

18 

28 

4 

25 

- 

48 



■ POTATOES ICE (E/tonno) 


tan 

904 

• 

_ 

tear 

1054 ... 

- 

• 

Apr 

133.1 +04 1334 1324 

097 

31 

a* 

M04 

- 

- 

tan 

1077 

- 

- 

Tetri 


867 

31 

■ FttBQHT (BIFFEX) LCE ($10/bldax poVff] 



let 

rw* «n 

+140 

32940 

32640 6748 

591 

Dm 

31600 

+240 32040 31740 704 

58 

Mar 

31940 

+740 31650 31840 2736 

13 

Mar 

319.10 

+200 

‘ - 

- 205 

. 

tag 

32140 

+200 

- 

- 235 

- 

TOW 




2332S 1703 

■ SUGAR *11* CSCE (112JXXXbK oantsAbs) 


JM 

12.13 

+0.13 

1270 

1145 40429 4480 

Oct 

1271 

+618 

1278 

1149 87704 5433 

Mar 

1149 

+618 

1143 

11JD 2+783 

1,111 

■w 

1144 

+611 

1147 

11.73 3483 

66 

Jri 

1141 

+611 

- 

- 1476 

17 

Oct 

11.72 

+611 

- 

- 687 

- 


LONDON SPOT MARKETS 

■ CRUDE OB. FOB (per barrel/Jiff) +or 


12841910497 


Jm 

1285 

4 4 HA 

jJB 

1285 

lion 

1280 

616 

MQ 

39 

■ COTTON NYCE (50.000830; cantatas) 


JU 

tag 

llcfU 

12D5 


11W 

1210 

1 1HU 

1195 

387 

2D 

28 

Jiff 

81.10 

•633 

0140 

8140 

- 

Oct 

1283 

+6 

1288 

1280 

210 

22 

Oct 

7743 

-002 

7745 

77.13 

- 

Jm 

1308 

-2 

1308 

1300 

83 

11 

Dm 

7600 

+608 

7849 

7840 

- 

tar 

1330 

-1 

. 

• 

80 


Mar 

7685 

+618 

7695 

7637 

- 

Ttlri 

BR 

Oere 

1378 

Piter 

1382 




119 

Mm 

Jri 

■ Trial 

77.10 

77.40 

-620 

-oat 

7775 

7748 

7745 

7740 

MM 

HA 


■ ORAMQE AflCE NYGE (IS.OQOBae; cnntataa) 


Loco Ldn Mean Odd laming Rates 


1 month „ 

2 months 

3 months 

SRwar Rx 


3.96 B months 


.447 


■ UNLEADED QASOUNE 
HTMtt (42400 US sfelcrtBgfflp 


3 months 
6 months 
1 year 
Odd Coins 
Krugerrand 
Maple Leaf 
Mow Sovereig n 


L04 12 months 442 


Latest 

Bftn 


Opm 


4.10 



price 


Hph 

lew M 

Vri 

p/troy az. 

US cts equhr. 

Jri 

5145 

-045 

5240 

5145 SI 488 

10487 

350.60 

52840 

tag 

5140 

-QJ4 

5255 

51.75 22457 

3453 

35445 

633.75 

tap 

5140 

-654 

5140 

5140 11,128 

1442 

359.15 


OH 

4640 

-054 

4070 

4640 4,137 

240 

371.70 

55690 

Itev 

4650 

-641 

4646 

4646 1272 

r 

S price 
368-389 
30145-393.70 
89-92 

£ equhr. 
2S6-2S9 

69-€2 

Am 

Total 


•661 

5240 

5650 2,482 287 

97ffS7 17418 


European fete rarftet. from Metal BuMln, S 
par to to warehouse, unless otherwise stated 
pest week's In Predate, where changed- Artt- 
mcnr 90.8%, S par tonne, 3.000-3^30 (2^00- 
2400). Btenerile ldn. BS4SK, tonne late 225- 
2M Cadmfaen: n*L 994%, 75-85 cants a 
pound. CobeBb MB tree rrurtet, 994%, 24.00- 
25.00 (24.50-26^0): 99.3%. 19.60-20.50 
(165Q-202fl. Mercury: mat 9949%, C par 78 
111 Reek. 105-120 (100-120). Molybdenum; 
drummed mdybdic oxide. 620-346 Sete- 
nium; idn 984%. 340-445. Tungsten ora: 
standard ndn. 65%, S per tonne unit (lOfca) 
WO* df. 33-43. Vpnadken: rrin. 98%. df. 
1.40-140. Uranium: Nuexco exchange value. 
74& 


Jri 

8440 

-046 

9640 

8440 10471 

1J60 

tap 

9745 

-1.10 

9740 

9740 

6«1 

748 

Ear 

8615 

-2.10 

3670 

9615 

1440 

138 

Jm 

10045 

•1.10 10145 IOOLOO 

2481 

80 

Mar 

10200 

-650 

10240 

10140 

1438 

81 

«ta» 

10440 

-040 

10440 10*40 

2E 

- 

Total 





22,103 2488 

VOLUME DATA 
Open Intarnet end 

vehone 

dote 

shown 

tor 


INDICES 

9> REUTERS (P«ee ia/af31.1Q0) 


Jon 7 Jun 8 month age yew age 
19572 19744 1902.7 18157.7 


Dubai 

*15Jtt-5.1+W 

-0450 

Brent Blond fcbatredO 

*1549-681 

-6235 

Brent Blend {.Xff) 

S154D6JH 

-0-255 

W.TX (1pm net) 

Str^D-7J2w 

-a 180 

■ OS. PROOU6R NMEprompt drivey Cff (tarmri 

Premium QosoBne 

S18S-187 

-1 

Gas Off 

*1+7-148 

-65 

Henvy Riel Oi 

88446 

-04 

Naphtha 

*184-155 

-3 

Jet Fuel 

SI 58-160 

-2 

PUmlwm Awe Eetntere 



■ OTHER 



Go/d (per tray az)4 

terennn 

+140 

SSwr (par tray ozrf 

531140c 

+640 

Platinum (ptr tray orj 

*39655 

+1J3Q 

PafladMn (per tray ez.) 

$134.15 

+040 

Copper (US pnxL) 

10640C 

-2.00 

Load (US pradj 

35.00c 


7Tn (Kue=a Luitpir) 

. 1440m 

-615 

Tin (New York) 

25540c 

-2.00 

Zinc (US Prime WJ 

Unq. 


Carte 0he wWt 

12622p 

+640* 

Sheep Pve weitfrtr4 

11249p 

-22.12* 

PtgepvwwepiQ 

8448p 

-245* 

Lon. day »jgar (raw) 

$291.70 

-240 

Lon. day tugv (w«) 

cacc cn 

*140 

Trie 6 Lyte export 

B30640 

-240 

Barley (Eng. teecQ 

£10441 


Metee (US No3 Yetaw) 

$1404 


Wheel (US Dak North) 

£1604 


Rtff3ber(JU)V 

7S45p 

+145 

Rutoer (AiEfff 

75.25p 

+1.25 

RubbortKLRSSNol JU) 

26240m 

*240 

Coconut 08 (Ph8)§ 

S6184E 

+6.0 

Pahn 01 (M8toy.)§ 

S+86.0W 


Copra (Ph*)§ 

S403L0 


Soyabeans (JS) 

£190.0* 

-6,0 

Cotton OuOeok AlndCK 

86.660 

-605 

WoeKope (8+e Stood 

•488b 



ACROSS 

1 Existing odds against one 
finding time to rest (9,6) 

10 More than one spoke for artil- 
lery: 500 + 11 (5) 

11 Frank and four from Rome 
lead oriental order (9) 

12 Smart and semi-sophisticated, 
makes trouble (7) 

13 Care to broadcast about ori- 
gin of imported pom? (7) 

14 Studies announced for wind 
instruments (5) 

16 Don't fully appreciate being 

subject to tax (S) 

19 Daughter is third in succes- 
sion embarrassed by sex 

smear ( 9 ) 

20 Swiftly moves violin round (5) 
22 Insect’s sensor reveals insect 

queen is back (7) 

25 Baffle with foreign negative 
first (7) 

27 Change of attitude: use first 
two letters in expel (9) 

28 Grow large initially in period 
of prosperity (5) 

29 Archbishop's clanger or 
bloomer (10,4) 


7 Excuse a politician sitting on 
one (5) 

8 Two-thirds of football team 
fed in advance (7) 

9 Appropriate for theatre group 
in the aw*avt»>n t (g) 

15 Asking her perhaps for extent 
of contraction (9) 

17 Duty schedule perceived as 
complete reversal is trigger 
to explosion (9) 

18 Sweet girl first victim of prac- 
tical joke (5,4) 

19 Severe spasm covered up by 
doctor since (7) 

21 Points to identical seed plant 
(6) 

23 Stage Act One in Italian dty 
(5) 

24 American crowd upset by 
Britain's first modem weapon 
(M) 

26 Arrest ex-pupll, a very 
wealthy chap (5) 

Solution 8,473 


DOWN 

2 With no one in the saddle 
lacking a qualification (9) 

3 Pass on to the French outside 
a foreigner's farewell (5) 

4 Cover sure to be conservative 
©) 

5 Tend to give special attention 
to harbour (5) 

6 Gave help to con-man's vie* 
tim. said Edward (9) 



■ CRB ftriura+Pma; 47a/5fl»100) 


■*"4 Ami month ego year ego 

22844 232,05 22641 20029 


£ per ttmm unteff* ottrerwtse stated. p 

r ftnggMka. m Mriwtei centtto l 

Jwi w Jut V London nwxciL S OF Room 
nretm don. 4 Snap |)Jm warn prtnret 
amto pnaMonri priooo. 


ccmttb 
Cnimg* on 


JOTTER PAD 



f' 


pitching 

jctin'W 

jiHans° n 


O- 


r • u 


Mummum 

-2425 

ta 2.BKL+25 


AlumMim eBay 

-500 

to 31.820 


Capper 

-3,700 

to 379450 


leed 

+3,850 

to 356425 


Mcfcri 

-762 

to 131440 


Hoc 

+6250 

to 1, 186+25 


Tit 

+35 

to 265+0 



4 








* ****** ji n 


1 S.T 


--u 




4* 


v 


'■T— . 






f ^ 


I tv 


■ 4*4. 
■*i* 


*1 












29 


-C-J'-V- - _ 





f^AJVGLAJL TIMES WEDNESDAY JUNE 8 1994 


LONDON STOCK EXCHANGE 


MARKET REPORT 


Share prices struggle in thin trading volumes 


FT-SE-A All -Share index 


1.600 


Equity Shares Traded 

Turnover by volume Jm»an). Exduttins: 
imm-market buoness ml overseas turnover 


* i,„X. 

fci- 

, ‘V • 

•• '| ll!l J ila 

" ,sl in J^v 

I . 'liy «. • 
‘■I'T. J * 

'■ nil,. L V- 
•Iii Ity.; 

IT „ 

;; ■"' i; .« +, 

I :ll -K. 

“■5 !S : 

• IV,. * fcV 
1 *5. 

1 Si- 

’i !,'■ *s 

•Ib il ; 

r 1 .’ • , 

.'ft 

"• ivj 
" " 1 r ^- 


: r 


UK -Stock Markot Editor 

London stock market had to 
styog^e .to hotd {Hi to the Footsie 
8^00 , mailt at the dose of trading 
yesterday after renewal weakness 
In British 'government bonds under* 
mined- equities. Trading volume 
remained .poor, matching Monday’s 
retail- Business total of £7B4.1m, 
which was "among the lowest genu- 
lM -dafl-jr: totals Ifor the... past- 12 
months. 

- Low volume again brought vola- 
tility' in jftxnaiket in winch many 
ftmd martagers appeared to have 
backefl-flft until next week, when 
tbeetecfians to - toe European par- 
liament wflf be out of the way. 

focused in London 
because ; of 1 the , likelihood that 
Thursday's poll will deal a further 


blow to the political standing of Mr 
John Major's governing Conserva- 
tive party. - 

The FT-SE 100 Index finished 4.6 
down at 3,004.8, but had traded 
between 3,014 and 2£98 during the 
session. Across the wider range of 
stocks, the FT-SE Mid 250 Index 
closed at 3,577.6 for a net gain of 62. 
Seaq volume of 482£m shares com- 
pared with 4364m hi the previous 
season. 

. Although economic news came 
mostly in other securities markets, 
equities in London continued to 
move under the influence of bond 
prices. Unsubstantiated rumours of 
farther corporate problems in Ger- 
many helped to unsettle the mar- 
kets, and widespread falls in UK 
gilts kept share prices under 
restraint. 

At Panmure Gordon, Mr Robin 


Account Dealing Dates 

Hat nedfeiair 

May 18 ' 

JM 6 


Option Dodaradoaa; 
Jm 2 

Jui 16 

Jm 30 

Laat DeaBnen 

Jun 3 

Jun 17 

JvlT 

Adooiad D V. 

Jun 13 

JUQ 27 

Jll 11 

*N*w dm deaflnga may taka 
bnahHaa days aaritar. 

ptaoe trmn bee 


Aspinafi warned that the decoupl- 
ing of European bonds from the US 
may save to emphasise the sale of 
overhanging positions built up 
when investors were playing 
between transatlantic maikets. Lon- 
don markets turned cautious yester- 
day afternoon when investors were 
waiting for the US consumer credit 
statistics. 

After opening a shade easier, the 
stock market fell sharply wi thin 


minutes as government bonds 
began to ease. Hie Footsie 3,000 
mark was lost but only briefly. By 
mid-morning the index had 
rebounded to what was to prove the 
day's high of 3.D14A. 

Chart analysts were relieved to 
see the Footsie 3.000 level held since 
any loss would again leave the mar- 
ket struggling to find a new foot- 
hold. But the poor trading volumes 
In the market undermined the cred- 
ibility of the rally. 

The final, picture showed a some- 
what mixed performance by blue 
chips. One of the strongest areas 
was the regional electricity generat- 
ing companies, which moved up as 
the market assessed prospects for 
the National Grid that belongs to 
the 12 regional companies. 

Bank and financial shares were 
largely tumble to extend the recov- 


ery of the previous session. Con- 
sumer stocks struggled to throw off 
the market’s continued doubts over 
the outlook for consumer spending, 
with only a handful of food retailers 
finding support 

Unilever, however, bounced sig- 
nificantly in the second half of the 
session on news that a Dutch super- 
market would continue to stock the 
new detergent product which has 
attracted public attack from its 
principal rival. 

Worries in the retail sector were 
taken up by analysts at Robert 
Fla ming , who maintained that the 
sector will “lose momentum" this 
year, dragging down GDP perfor- 
mance in its wake. Fleming believes 
that neither recovery in investment 
nor stockbuilding will prove suffi- 
cient to replace what it identifies as 
missing personal consumption. 



H* 

Scum FT Ora** 


■ Key tmficators 

Indices and ratios 

FT-SE 100 3004.8 

FT-SE Mid 250 3577.6 

FT-SE-A 350 1521-3 

FT-SE-A All-Share 1514.10 
FT-SE-A Afl-Share yield 3.89 

Best perform in g sectors 

1 Gaa Distribution 

Extractive Ends 


-4.6 

-15 

-158 

(3-88) 


Other Ftrandais , 


2 

3 

4 Rotators, General 

5 Printing, Paper &Pchg—' 


, +1.4 
+1.4 
+ 0.8 


FT Ordinary Index 2382.1 -&5 

FT-SE-A Non Fins p/e 1955 (1951) 

FT-SE 1 00 Fut Jun 2996.0 -1.0 

10 yr Gilt yield 8.62 (8.50) 

Long gBt/egulty ytd ratio: 253 (2.21) 

Worst performing sectors 

Oi Exploration & Prod -2.1 

Diversified Incfla -1.0 

03, Integrated -0.9 

-OA 


+0.7 


Water ... 

rvfineral Extraction 


,..- 0.6 


■* it 
If; 




Z&- 

1 1. ^ 

;; r : *' ,r, ---£ 

raas' 

: -‘'Tat e f . 

***.. 
■ ,,1 ‘ IDiTV 


is ralh 

■ 

»h«v H»ow ’ 
“W"Jirae crnoT' 


in Hanson 

flanw mwarrants andordinary 
chtf M. ft g nrad pr mhimgrtTy fn 

the: market's most actively 
tnudfel stocks, with the Seaq 
tfekec revealing two exception- 
ally heavy. steals in the war- 
rants ahi ooe.;hxg: trade in -the 
ordinary shares. ,:.v ; _ ■ 
TurdqypT' of - llm Hans on 

warrants, im ohm ost entirely 
dDe~to : twmtEades,::each of 5m 
warrants 1 carried: oaf at 32p 


apiece, while Hanson ordinary 
saw turnover of 7 An shares, 
with 3m accounted for by a sin- 
gle trade at 253VVp. Salomon 
Brothers, the US brokerage, 
acknowledged that it had been 
heavily involved in a switching 
operation. Hanson ordinary 
closed 3% off at 250%p and the 
warrants lost a penny at 31V4p. 

‘Rees’ wanted 

Better than expected results 
from the National Grid, owned 
by the regional electricity 
companies, were behind the 
latest strong, performance from 
the "recs". 

The National Grid 
announced a 15 per cent 


increase in its dividend pay- 
ment, slightly disappointing 
the market’s super-bulls, who 
had been looking for a rise of 
around 18 per r*»nt but gener- 
ally pleasing the -market, 
where the “recs” made good 
progress throughout the ses- 
sion. 

Mr Kevin. Lapwood, utilities 
analyst at Smith New Court 
described the National Grid 
results as “extremely bullish 
for the recs". The Smith ana- 
lyst said that In only one year 
since the Grid had its regula- 
tory review - then viewed as 
harsh by the market - the 
company has already managed 
a return on capital of 8 per 
cent on the dividend and 15 per 


EQUITY FUTURES AND OPTIONS TRADING 


Weakness' Instate index 
futures, wwfaced by' a 
sfubboOVCash market that ■ 
refused to be led downwards, 
Cfvfstir»AKkley write® 


One derivatives trader 
speculated that a buy 
. programme may have shored 
up the cash market, which has 
reoertfy often faiten pray to 


it FT-SE -fOOMDEX rt/lURES (UFFE) E25 pirUMH point 


(APT) 


- Opjari> ..rSoBprita Chang© htigh Low Eat. vd Opon.lnL 

jin - n -f' miriio.'; -298&0- ' - -m 3 oi4jo xobujo isoib 45343 

sep :• SaooBar ' soosjO ~ -os 3023.0 299&.0 nea issm 

Gael ; ;tol7J>-. >1 n 0 252 ' 

■.■ft-sf im.aatr-aggx futimes (Ufeq eio par m pont 

Jun W- .saftaxi .36600 -1O0 35BOO 35680 38 3612 

6kj- J: t 3SMO ..-fO.O 35840 36640 12 1285 

a FMS>B?2MWP6X FUTURES {0>iBJQ CIO poffal txlax pottf 




38600 


Jua> 

' ter crwtaa» du. T Ekm shown. 

■ FMEWdl«*X OfTOON (UFFQ f300Q CIO par Ml hdax point 


771 


IRD 

i; amTT 

I 11 
I II 

■ m 

■f 


3100 3150 3200 

C P C P C P 
7D - 41a 413*2 1*2 100*2 *2 210*2 
97 202 130*2 15*2 160*2 9 214*2 
118 mV1« 37 184 23*i 222*2 
- — a m 3^ 234*2 
109*2194*2 71 257*2 


2950 - 3000 30S0' 

P C >'47 P C P 

Jm ■ W6*' M8 8*2 85 18 33 37*j. 14 

iMAfAftl S 

up- rm : » w a -?4 refe as m ‘ 

OKt -I ' 20 108*2 1» 142*a 

OAMM PiftWI . . .. s : - 

■ H^BTYiorr-SE ire piDexoiroowiiiFFq eio porfajhxtaiK point 

. ~ 2825 9875 2925. 8B5 - 3026 -. 30» 312S . 3178 

M m % H5*j 6 0*2. n 45*2 2^ n SI 8*2 ani 3*2 130*2 1*2 1W2 

Je 4 .1*0*2 14*2149*2 a 112 35*2 80 53 94 77, 36 107*2 21 143 12 183*2 

«| 20*2 33*2 143;81*2 M.104 48 162*2 . 

3^ mfrS&L . Hi '74 .180*2117% 68*a 174 

Dwfm .74 . . 1*5 105*2 138%: 146 « 200- 

MUBW *.W • uhdBi%fcp Pmtma mm mfmtim n B— * gitew; 

ttavew apin' mfav 


■ EWtoSTYlJ FT-SE WP^WMX OiroOMpMLX) eio per rul Indaw point 


8700 3760 


u 

ll 


. 3600 3580 . 3600 -• 3680 

Jw. 18 48 38*2 2B 64*2 . . 

CMhOMi 0 Uttwwt aim and w*nw n «a W 43*m. 


SE Actuaries Share Indices 


3800 


3850 


the many swings of the June 
contract on the FT-SE 100. 

Directionless trading dogged 
June, with much of Its fan over 
the session attributed to 
ticking down by independent 
traders. Institutions were said 
to have kept to the sidelines. 

This week's lack of 
economic data is deepening 
the apathy. For most of the 
day, June traded at a 
substantial discount to cash 
although in a fairly narrow 
range. The contract fell to its 
lowest level early in the 
session when it touched 2,883, 
although it rained to reach its 
intraday high of 3,014 only a 
little later. 

However, after mid-moming 
the contract found few friends 
and drifted, often downwards, 
for. muchxrf the session, 
dosing at 2,998 and trailing 
the cash market by nearly 9 
points. Volume was thin at 
13,070 contracts. 

Options had an uneventful 
day, with Just 20,913 lots dealt 
Index options were a 
prominent part of the activity 
as investors looked for 
hedging positions. The FT-SE 
100 option traded 10,685 lots. 
The most traded stock option 
was Guinness at 1,005. 


I 


Jun 7 


ehgtN -Jun 6 


Jui 3 Jun 2 


Y osr 
(•90 


Div. Earn. 
yMdN )4aUH 


‘he UK Series 


PTE Xd act Totnl 
ratio ytd Rattan 


■ I 
I I 


FT-SE W- • V - . • 3004.8 

3677.6 

3683.7 
1521.3 

1867m 
1043198 
1814.10 

f lt*SS Actuaries Alt-Share 

Jtn 7 


FME MH480 «( few Wilttl 

fmu» , 

FMEl iWOre •. 

FT-3T 0awRCw> few TnaSm . 

Mumms 


-05 3009.4 29975 28608 28445 
+05 35715 35575 38603 3186.1 
+05 3677.0 35622 35625 32155 
-ai 15225 16185 15085 14215 
-05 187059 187150 167284 163066 
-02 184653 185015 185236 164153 
-0.1 .151558 160856 150358 140758 


4.11 

SM 

17 JO 48.83 

1121.88 

3-46 

6.71 

21 JO 

44JJ3 

1315.78 

3.59 

6.15 

19J1 

44J0 

1314J03 

3£5 

682 

ia.io 

23J3 

1161.83 

3.00 

4-23 

29.14 

20J7 

1434.49 

3.1B 

4^7 

26.74 

21.48 

142004 

3.89 

8.45 

18.60 

22.77 

1178M8 


03/9 

CflQBH 


Jui 6 Jin 3 Jun 2 


Year 

ago 


Ov. Earn 
yMiOt yjjMW 


P/E Xda4- Total 
ratio ytd Rafum 


■W lWtERW. EXnV<«CmON(ie 257848 

r.ri* feeaettw mduMteafe 378356 

.15 CAMagrvtodp) 252459 

-~16 OB Expteation 3 Prodfl II r 183a59_ 


-05 258452 250S5S 260752 2208.40 352 455 2756 3758 

<+14 3731.64371652 375859 303050 351 654 23.48 4358 

-05 254010 2652.78 256758 213550 356 459 28.48 4043 

-2.1 187048 1888.96 1902.00 1967.60 358 15S BtLOOt 1552 


20 QB« MMWFACTURERSt2K8 1663.62 
« BAdbeSOBnaiioHanpl) 1205.12 

. 22 OutdlnQ MBIIa.& MaretapiJ 182358 

23 ChHMoakCni 2437.16 

24 bhanMad fexftiB*Ma(iq . 198750 

28 Qectronlc a Boot £quip{34) '■ 200257 

» En^martnotM) ' W4aK 

27 Entfnoorio,,. VeWdroftg : . 225058 

-28 PiMdb, Pappr 0L Pd(g(27) 278254 

29 TexMw&4«M»aB201 171858 


-05 188754 186059 1873L87 1769.60 3.79 4.49 27.71 2959 

+0.1 120357 120258120641 108050 3.W 4.04 3156 1552 

+05 1B1450 188656 190559 171540 3.73 354 3258 3053 

+02243158 2445.13 244758220550 351 357 3248 4252 

-152007.84 201055 198059 184950 458 452 2853 3848 

. -0.4 2010.64 1993.08 187858 196850 358 647 1858 1356 

__ 164059 1823.75 1823.51 154450 257 458 3056 2152 

-05 226751 222052 233354 177550 455 250 6032 3258 

+0.7 Z742.76 273859 275651 234050 352 653 2257 3753 

-05 172158172355172358179650 459 554 2259 28L46_ 


1024.64 

103257 

102441 

105453 

898.70 

S3S53 

896.82 

106954 

1008.96 

96659 

1041.09 

107S58 

1078.16 

865.77 


r 30 OWOU62H1 OOOOSW ““ 260750 

31 Brewsrtaapi) 217348 

32 Sptrfta. Vttu» 3 CWnrsODJ 264651 

33 Food Mnuftlcturanpq 2167.75 

34 Household Gooda(13) 2465.12 

36 Hartti Caw(2q - 1692.18 

37 WnritiacBullcWafll) 268656 

3fl Totwcoofll 35775S 


-05 261352 282357 261350 266250 
. -0.1 2178.43 220157 2194.47 196350 
-0.4 28S757 268150 2878.10 275050 
+05 218257 219654 2202.77 222250 
+05245155 248855 2472.10 2312.40 
+05 1680.56 1684.41 1676.76 168S50 
-05 268951 268354 268357 2930.80 


4.49 

454 

359 

458 

356 

352 

476 

sea 


756 

756 

8.66 

653 

7.48 

5.71 

8.17 

952 


1451 5059 
1551 36-16 
1753 68.79 
14.16 42.76 
16.12 4074 
20.92 19.00 
1459 4750 
1159 10255 


886.70 

966.70 
94654 
9iai4 
97659 
971.16 
84052 
796.74 


.40 8BWtCES(2Zflt • - 1948.40 

41 outwnpt) : '•.<■•.' 2810 « 

42 IjBtam 2094.97 

43 UsHfipQ. ; :• 298434 

44 RMaton. Food(17) - 157451 

45 rMH a n. Canwaitm . . 1677.17 

*8 Support Sanico^KQ- r 159752 

^Tiwwportnai - V 2339^8 

_51 OtficrSigTriega & BuafcmrflCT T18955 


+05 184453 193856 193156 179250 3.12 651 1953 2355 94754. 

-05 282055 281454 291656256620 3.12 500 1957 35JJ4 96349 

-&4 2103.67 209458 2087.00 1783.10 3.49 455 25.48 19.42 101940 

+05 2977.68 296853 296050 232&10 2.17 4J98 2350 3855 102943 

+05 156650 157253 1560,67 1690.70 4.03 955 1255 26.18 93153 

+4L9 1664.04 1854.75 165150 148150 3.04 B48 19.09 2459 000.70 

+05 1583.41 159955 160257 148450 252 S73 2052 13.75 96152 

-05 2m38 233354 230955 209850 359 4.79 -23.73 15.14 90258 

119053 11933B 11M5B 122450 450 230 60.00t 551 100654 


, |i * F* . 4 

P-8i' 



. , » murieuM) ". - v - 

KSh fettCbiiBonto . 
^T+ikiaftwurlwtlwwW 


219857 21 97.40 21 7557 2TTOB8 203650 

209058 +05 206154 207256 207258174650 
182033 +.14 1794.74 174352 175450 190850 
195650 -04196433 194350192654194650 

170452 -03 1718.77 171756 172S48 1624.70 


4.67 

8.72 

14J0 

2a 02 

828.79 

4.09 

11 J1 

1033 

24.67 

84838 

6.58 

t 

* 

53.43 

831 31 

4J0 

736 

1631 

are 

81330 

SJ5 

15J5 

7-66 

19.72 

sioaao 


163357 -0.1 1635.75 163152 1627.71 1S2B52 350 659 185 5 23.10 1139.94 

214951 214945 2126.16 210254 189350 

276753 276759 273451269950 244950 

126757 -0.1 128853 123459 1229.77 132450 

360859 +05 2296.19 226355 223859 2S4250 

-05 283656 280252 2797.B1 254450 

+05 179855 17B259 1 78358 1457.60 
-0.5 164559 iceqia 154055 1401 .10_ 



fesasl 


4.10 

8JS 

14.11 44.73 

842J9 

331 

338 

IS. 87 S937 

81858 

8.13 

11^6 

37* 2344 

860.17 


7M 

15J8 66J8 

87659 

350 

11.40 

10-26 44.45 

8*5.48 

3.76 

&63 

18.09 25J7 

95538 

358 

436 

ai m 2330 

87234 


Twsriwiaa 

« FT-5E^ AU-SiWEpStf 

M Hourly movements • 

-- •- . ' '''•ebas*-' 950' 


vrtniri jJ.1 274758 274151 273454 930750 253 1JB8 5385 2742 91856 


1514,10 


-0.1 161558 1509L98 1503.89 140758 358 645 1360 22.77 1176.46 


1050 1150 1250 


1350 1450 1550 16.10 WQhMay Low/day 


FT-3EW6 - . = 

.FT-66^350 


30065 

35285 

1&U 


29876 

3572.4 

18131 


aooar 

35774 

18232 


3014.7 

3S81.3 

1S2S.5 


30125 

35795 

1824,4 


3007-1 

35795 

1522.4 


30025 30015 3008.1 30146 2B935 

35785 35765 35785 35814 35703 

15203 18200 18226 15256 1516,4 


16.10 cion Pmloua Change 


,te " *• 100 High lIUMn IM 84Wn 

* Ft-S* Actuaries 300 Industry baskets 

'• ■ ; flbl* ' MO tiMH 1150 12-00 1350 1450 166 0 

jftlg&Cnfecri ' iriK.7 11999 • 1133.6 113&S 1137.1 11384 1138,4 11376 1TM.6 11^4 1^85 ^3.1 

fhammukia ■■ arc r -«Mi wm»h 26607 26896 2664.0 2683.4 2B584 26616 26586 2612.1 -136- 

S?55 Sh 1T016 1701.9 1702.7 17te0 17016 WU -«6 

-Beta -27982 ^27876 2797.0. 2801.0 ZJ956 2782.1 27803 27836 280X3 26014 28016 +0.1 



cent an gaming s on the back of 
a 10 per cent cut in manpower. 

“If the recs can do the same 
after the current review, then 
you could be looking at poten- 
tial prices of 900p a share 
on average,* said Smith’s Mr 
Lapwood. 

The best individual perfor- 
mances from the recs came 
from Eastern, 11 higher at 
SeOp, Northern, 10 up at 651p, 
and Southern, 10 firmer at 
573p. Norweb. S22p, and South 
Wales, 627p, rose 7 apiece. 

Bank leads 

Banking group Standard 
Chartered was the FT-SE 100’s 
best individual performer for 


TRADING VOLUME 


ASOAGreupt 

set* 

Z&SZL 


VbL Ckmfcig Da/a 
000 a nrtea dwni 



IMi 

art 

BT(rvpak4 

BTRt 

BonX of SooOawft 

BanW 


Zjxn 54*2 
1310 417 

UBOO 5S 

1JM» 573 
1JDOO 457 
237 349 

2310 235 

13X1 Z74 

776 52S*i 
305 245 

533 948 

<300 427 

1,000 122*2 
335 402 

549 717 

3£00 390 

990 291 

3.000 309*2 

1400 


+*I 

+1 

-1 

+1 

-1 

-1 

+ 1*2 
+2 
— *2 

-1 

-1 




1JX» 

2400 


Boottf 
BoanUrt 
Bill AampaMf 
BrtXali Mnaaysf 
BridahOavt 
Brush Land 
B+UshSurtf 
Bund 

Burnish Caanoit 
. astern 
CBbis&WMt 

□sdhay Schanppssf 

Cstor 


191 

541 

5,700 BIB 

441 297 

718 888 

974 323 


251 -5*2 

378 • -3 


1,300 

2400 


Ostann C(aivnB.t 
Coots IflyMkrf 

Comm. IMonf 
CookBOn 

OourMM«t 

e*w 

Sliftnrt 

Dhons 

EastamBsEt 
EastMUandBsct 
BlflCMns days 
Ertatpriso 0»t 

EurehaaM Units 

RQ 


FcnSgn & CDL LT. 

Rawf 

Oan. ActMantt 
OomwiSoctf 
Gtamt 
Oyiwnd 

Qranathri 

Grand **»tt 


001 _ 
(Unnaadt 
KSSCpgpah^t 


458 

383 

3.100 278 

822 388 

8.100 139 

1^400 m 

461 808 

TJ30Q 38*2 

982 445 

839 457 

15 298 

tjm 322 

455 943 

240 219 

1.100 557 

1JOO 254 

1.100 510 

198 413 

675 574 

903 196 

276 590 

778 STB 

646 see 

064 879 

IBS 363 

124 174 

4j000 144 

2.100 139 +1*2 

961 232 

1.100 584 

gorm 299*2 

2^00 541 

1^00 357 

ZCOO 496 


-a 

-6 

+9 


-a 

•8 

-a 

♦9 

44 

-3 

+15 

+11 

+6 

+1 

-6 

-5 

-1 

<3 


087 

uoo 


Hanaont 

naipMH Wj m u 


KZt 

henespat 
Johnson Mattwy 

EtSS 


Land a soi s Msat 
Lapona 

Lags* & Qanentt 

SSSSS3 

LASiSO 
London Beet 
Lonrho 
Lucas 
MEPCf 


MaiksX 


870 

51 


1^00 

ija» 

307 

1.400 

*<400 

626 

108 

as 

X7D0 

747 

IW 

743 

4^00 

2J0O 


-7 

-3 

-3*» 

-1 

-1 


+1 

♦11 

+2 

-4*Z 

f2 

-1 

-2 


mr*"* 

NstWost Ba+t 
NadonUPDaNst 
Mod 

North WBMWWart 

Nonham E+bcL hi 

Thariwnroodst 572 

Nonnb 140 

Paanent SS6 

P«Ot 788 

474 



-JlANor-t 482 

.HTdr^asoL 1,100 

«y* *w t i.4oo 

4JJ00 
978 


584 

177 

1^00 591 

784 469 

1,500 711 

57 337 

MOO 2601, 

1JXU ITT 

188 2B4 

3.100 IBB 

827 316 

t.roo Bta 

484 
584 
590 

642 

4200 *67*7 

489 697 

28 748 

491 438 

950 *1 

564 -8 

Ijno 133*7 -5** 

307 538 *3 

1A00 140*2 -3*Z 

174 -2 

435 -10 

155 -1 

053 »3 

402 *3 

392 +4 

120 

212 -a 

470 +3 

418 -1 

540 248*z +1*7 

1^00 482 -10 

840 851 +10 

208 +1 

822 W 

820 +7 

847 -8 

178 -3 

1/300 465 

3200 289 

68 984 

2.005 

MOO 

1.400 
431 

IjOOO 
1200 
798 
MOO 

2.400 
3^00 
1.000 
1^00 

43 


& 

+1 

633 +13 

235 +8 

384 -8 

sas +8 

303 +10 

796 -5 

213 +3 

480 +*2 

155 4& 

408 +3 



356 
MOO CM 
1.000 556 

277 238 

1.700 497 

151*2 


384 +3 

1243 -2 

521 -2 

33a +5 

343 
120 

177 +5 

317 42 

499 -5 

-7 


H6 

-h 


n«MH)A 

tSS&SStf 584 ooo — • 

taaar r* « a « 

Southara Qaa-f uxn 673 +16 

Sort, Waiaa BaeL «7 B2* t7 

60 Uh WSatWMar 109 505 

Sdu6> Wari. BaeL 24 598 44 



WaMari_ 2?5 _ 

~ dfl 

2WHt "wa «i +a 

Baud an mdUg Av a tatoafcn ol irafler 

sacuUn oraB mnugh B» 8CAO syaam 
yamrtsy uoa OOpn. Tradas ol ana soSm 01 
mm m naaidad down, t Mona an FT-S0 

100 kite uoniUusni 


the second consecutive session, 
the shares following Monday's 
I 2 p rise with a farther gain of 

10 at 262p after renewed 
aggressive buying from Mor- 
gan Stanley, the US invest- 
ment ha+ilc. 

Morgan Stanley recently 
published a strong buy recom- 
mendation on the stock, 
emphasisin g the bank's “very 
good long-term prospects, cost- 
cutting ability and dividend 
growth potential”. 

Mr Nick Collier, banks spe- 
cialist at Morgan Stanley, said 
Standard shares had come 
down from the equivalent of 
358p and that he had empha- 
sised the selling had been over- 
done. “The rerating of Stan- 
dard has rally just begun," he 
added. 

A buy recommendation from 
Yamaichi helped J. Salnshnry 
buck the general trend and rise 
3 to 384p. 

The broker highlighted a 
stronger than anticipated 
recovery in sales and the 
impact of subsidiaries - such 
as Homebase and US retailer 
Shaw's - as major factors in the 
recovery, and believes the 
“Essential for Essentials" cam- 
paign, launched last October, 
has been successful enough, to 
put strong pressure on other 
retailers. 

“If Sainsbury and the other 
majors can contain the dis- 
counters and if cost reductions 
can be implemented, then it is 
possible to forecast some 
recovery in profit levels for 
same parts of the industry,” it 
saidl ... • . 

Yamaichi is forecasting 
£787 m pre-tax profits for the 


NEW HIGHS AND 
LOWS FOR 1994 

HEW MOHS (27V 

MSTRunnoits m cook (D.O). nvERsana* 
B4DLS (1) ftuMr QudMan. ELfiCTRNC 8 
■JOT EQUP A AtoNMriC W, Un C94L 
Moo, MhuHN EJoetrtc. Ptaamoct ENO, 
VBBCLES Pi BounooL EXTRACTIVE MDS (D 
INSURANCE PI Mn. INVESTMENT TRUSTS (3) 

OH. EXPLORATION A PROD (4) Ovasraodi 09. 
GkNoOoom Roo Canada. Ina Potfotam. TUtoa 

OI, OTHER 8EHW B BUSHS rt) &MNan mL 
RETAILERS, GENERAL (1) Au*9n Rood. 
SPmfTB, WANES 6 CIDERS ft) Ssogram, 
SUPPOWr SSWB 0) HkmU WhWno, 18X18398 
A APPAREL fll DtMMrri. A1EHCANS (9| 

NEW LOWS (MM- 

BANKS p] EXMsrfw. BBEWEfHES (1) Footoro, 
BUHJHNO 8 CNSTRN M EBC. Lang (*•»*. 

Da W. Da PL Pamtina FWna BLOO MAILS 5 
MCHTS (3| Holton, PMngua Da IMua. 
WSIWmjTORS ft) Hoffraga. WVSISB+H) 
BUMS M BUw (JJ. Kiaemer XT. PadBa 
Dw+ORb PtwM DuHrym, UCltHC A ELECT 
EQUP (4) OCC CBp. Rn Belli 2020. Bfck. 
DlHri. Votax. BNMNB9«Na (5) BaOunlm, 
BUam {JJ, FXL HM Eng. Hunttag Pit, 
OuadrwnaUc. ENO. VS9CLES HI >Wnv 
BXIRACme MDS n FOOD MANUF n 
AcMoa 8 HutehMon. Assoc. BriL Foods. DalgMy. 
HndowocxL untomr. Da NV. HEALTH CARE n 
InlMM, Tept+ri Dtaanoarica, waanfeimr 
MaBtaaM. HOU88HOU7 OOOOS (4| fkia 
Decor, Jayne. RadcU ACafenanCqx Bd. RNyon. 
INSURANCE 66 MVBSIMENT TWBT6 (10| 
LB0U9S 6 HOTEL8 A Biam tWAsr. Canada 
PlL. latnu. LVE ASSURANCE (R Monde, 
MEDM |5| AMaea Nsm kitL SpnoW DkfL On 
Oanund Mb. Reed M, Scotfen IV. 

MEHCHAffT BANKS ft) Hambms. OIL 
EXPLORATION & PROD B Copiax Res, 
Entaiprtu. Handy OI A One. OTHER FMANCIAL 

M OTHER 6ERVS A BUSHS CQ Ow*frt Mona 
UN, Rodkna PHARMACEUTICALS (1| HUdund 
Nyoarad TT. PKTNQ, PAPER A PACKO (29 
Jenta Porter. RPC. PROPERTY (7) RETAILERS. 
POOO n DWy FWm, Taaeo Captal Or Bd 2005, 
RETAILERS, QENBRAL (7) CBnton Cam. CatW 
Myer. C&onoton. Cuts, Hughm (TA Ktaoneza, 
W^awaN Qardai Cenma. SUPPORT SERV8 66 

Cepto. Duets Sendee. »BafX Rkamto. VnuoUty. 
TEXTILES A APPAREL (2) BrfMgh Ikriulr. OsMN 
IE, TRANSPORT (3) Oo-MmkL Mwnar DdcM 
6 HetPour. Traneport Dadpt. AM 012CA H 8 (0 

current year and £847m for 
1996. 

Strong sentiment pushed 
RTZ ahead with a buy note 
from Kleinwort Benson and an 
upgrade of this year’s esti- 


mates from Lehman Brothers 
helping the shares post an 
increase of 13 to B33p. 

boosted Its earnings 
per shar e forecast from 37.6p to 
40J8p for this year on tl» back 
of a substantial upward revi- 
sion. of the copper price. by the 
broker. It raised Its estimate 
for the average copper price for 
1994 from 78 cents/lb to 92 
cents/lb, citing a combination 
of high demand in the US and 
strong investment interest. 
Turnover reached 2 m. 

Unilever bounced back from 
yesterday’s 22p foil, gaming 13 
to close at 98Sp. Sentiment 
recovered after this morning’s 
statement from Dutch retailer 
Ahold that it would continue 
to stock the Unilever washing 
powder which rival Procter & 
Gamble has alleged ruins 
clothes. 

Kleinwort Benson moved 
from hold to buy; Richard 
Allen said the worst possible 
case was a one-off write-off of 
about 3 per cent of market cap- 
italisation, about £250,000 - 
even on that basis, the stock 
was undervalued "and that is 
not our central case,” he 
added. "Remember over 50 per 
cent of Unilever's business is 
in sectors that are growing as 
well as if not better than the 
market The shares represent 
good value at this leveL” 

Enterprise Oil slipped 9 to 
379p, with the shares increas- 
ingly weakened by fears that a 
robust defence document 
which has to be made by the 
end of this week from bid tar- 
get Lasmo r could bring a 
higher offer from Enterprise. 

Lasmo shares were again 


upset by selling bom specula- 
tors who bought the shares 
ahead of the much-rumoured 
bid. closing 5ya off at 135V»p. 

Amersham shares surged 33 
to 871p in the wake of excellent 
preliminary results which 
showed pre-tax profits up over 
65 per cent and the dividend 
total up 15 per cent. 

The good figures and news of 
a proposed one-for-one scrip 
issue saw Allied Colloids 
advance 11 to 260p. 

Heavy turnover of 5.7m in 
brewer Bass was prompted by 
a change from hold to buy by 
Kleinwort Benson, but the 
stock eased a penny to 519p. 
Mr David Thompson said the 
two concerns of big cash out- 
flow and beer pricing had now 
been factored into the price. 

Results from Great Portland 
Estates disappointed the mar- 
ket this morning, knocking 7 
off the share price to close at 
196p. A NAV of 209p per share 
compared badly with expecta- 
tions in the 225-230p range, and 
a cautious statement on the 
prospects for rental growth did 
nothing to allay fears. 

Continued benefit from its 
announcement of talks to take 
a stake in Fokker and news of 
a Colombian contract buoyed 
British Aerospace, which 
added 9 at 468p with 1.3m 
shares traded. The stock was 
backed in buy notes from UBS, 
Strauss Turnbull and NatWest 

MARKET REPORTERS: 

Steve Thompson, Christine 
Buckley, Clare Gascoigne. 


Other statistics. Page 2D 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


RISES AND FALLS YESTERDAY 


Optica 



caw — 

Oct Jan 


Pats 

Oct Jm 

OpOoa 

fWl* - Ditoa , , 

J* 

■M 

u«o ru*j 

Aug Mm Fab Aug Nov FC6 

MmRyan 

540 44M 

57 - 

5M 

15 - 

Kanam 

240 18M 22M 28 4M 9 12H 

(*572) 

589 

I5 29M - 

27 

37 - 

f251 ) 

280 8 1ZM 18 14 19 23 

*9*6 

220 

IS 

22 2BM 

8 

13 17M 

Latme 

134 12*4 15*4 - 9 13K - 

(*233) 

240 

5 

1ST7M21M 

25 2SM 

r*35) 

154 5 7 - 2214 25 

ASM 

50 

7 

IM 10M 

2 

4 5 

Lucaa kids 

160 20M 25 27M 3M 9 12 

(*55) 

60 

2 

4 6 

7 

10 11 

(174) 

180 8 14M T7M 12M 19M 23 


raMnuya 360 2S S7H CK 8M I5M 22 
f383 } 390 11 22M 28 24M31M 37 

WOMB* 360 36 SIM 5H MM 20M 
(*388) 390J6V4 28 35 16HZBS* 34 

Bools 500 35 48M 66 7M 15M 22 

(*523 ) 550 35 4SM SB 7» 15M 22 

BP 360 SOM 30 4B 6H 13 I7M 

(TBI ) 390 12 23 29 18 26M 31 

OH* Steel 130 12 17 29 4M 7M 10 

(*138 ) 140 BW 1174 IS 9 12M MM 

Bass SOB 35 47H5SM1DM IB 31 
(■519 ) 550 11 23 31 M 38 45 S9H 

CrtteSMe 425 28M - - 11 - - 

T445 ] 450 14W - -235+ - - 

GouMtt 500 2BM42M51M 13 23 30 
rSIO) 550 BH 19 2BH45M52H 56 
C0OH Data 550 Z7 34H 46 12» 26M 29M 

(-558 ) 600 6M 15 24 46 59 61 

O 800 38 54M6BM 18 36H47M 

rOTS) 860 14M3IM47M46MB6M74M 

NagBstar S00 45M SB 05M 7 1854 25 

H530 ) 550 17M 33 39M31M39M GO 

Laati Scar 600 4BM 58 8B 4M 13 16 

(*fi38 ) 650 M2BM 36 23 33H 37M 

Marts & S 390 23 33*4 40M 7 12H16H 

(*402) 420 8 19M2SM 23 28 31 M 

Namat 460 ZSM 35 46 12 24 26M 

(*470 ) 500 8 17M 28 3814 40 52 

Sajama) 360 32 43M 49 BH 14 19 

(*384 ) 390 13M 26 3ZM 16 27H 33J4 

She* Tens. 700 22 34 43M IBM 3114 38H 

(-700 ) 750 5 MM 23 53 66 6814 

Stantam 200 20M2SM26M 4 B 11 

(*216 ) 230 7» 14 MM 13M 17M 21 

TfcHpr 79 714 - - 4M - - 

(■81) 68 4 — — 974 - — 

Udwar 950 G8M 79H SOM S» 19M 26M 

rSB9] 1000 2774 60 64M 30 41M48M 
Zeneca 650 47 99M B9M 7H 21 M 27 

rW) 700 17 32 4314 29 461452 

option Am Bat Fab Aug few ftb 

Cons Mat 420 2IM 35 4504 15 23* 30 
(■428 ) 4606M23M24M42M47MS3H 

Intake 140 21 2BK 3014 314 514 7 

(*158 ) 160 TIM 17 19M UH 14 16M 

LAP OaoBS 300 34 43 46 4 1044 14 

1*325 ) 330 14M 2» 29 15H 25 28 

Option Jm Sap Ban jw Sap Dec 


P & 0 E00 62M 74 80M 9 24M30 

(-646 ) 660 27 «5M 53M 28M 50 55H 

PMhBfcm 160 JIM 28 30 4 714 I0K 

[*178 ) 160 9 WM IB 12M IBM 20M 

POdenBal 280 28M 33 37M 5 10M 14 

[*298 ) 300 OM 2IM 27 12M 21 23M 

RIZ 800 B7M 77 93 15 33 38 

{*833 ) 8S0 8BM56M B 37 66MB2M 

Radfcnd 500 2BM 43 50M 18 32 37 

(*505) 550 9 2144 29 51M64M 68 

Royal kisca 280 19 28 33M10M2DM21 
(*265 ) 280 9 18M 24K 22J4 31S4 32 

Taaeo 200 18 24H Z7M E 10M 13H 

(*210 ) 220 7M 13M 17 16 21M 24 

Itatana 500 3« S2M 60M 17 29 35W 



Maes 

Faiio 

Seme 


.. .. 1 

63 

• 

14 

as 

392 

104 

318 





78 

170 

50 

120 

11 

78 

50 

51 






71 





200 

331 

33 








Totate 


680 


1498 


Data broad on Uiom oompanln Wad on eha London Shn Senloa. 


TRADITIONAL OPTIONS 


FM Doaflnga 
Lost DwIngB 


May 23 Ural Declarations 
June 10 For eattiamant 


SepL 1 
Sept. 12 


Celia: Cone. Uath, Medova, Micra+ocua, Regent Crop, Trim OO Put Modoye 


LONDON RECENT ISSUES: EQUITIES 


rsia) 

550 

12 29M 37M 47 58M 84 

taue 

Amt 

MM. 



dorse 






Warns 

325 

32 38 - 4M 11 - 

price paid 

cap 

1904 

price 


Nat 

Ohr. Gre 

WE 

P3W ) 

354 13M 22 - IBM Z4» - 

P 

up 

(Oil) 

«9h 

lour Stack 

P 

+/- 

(tin. 

com. ytd 

net 

ll|)llnn 


Jd Oct JM Jui Oct J» 

100 

FJ». 

44.1 

ire 

100 AuKunotfwe Praca 

108 


LN4.0 

08 

4J 

35jB 

BAA 

900 57M75M 87 12 22M 3DM 

- 

FJ. 

344.1 

81 

73 CAMAS 

80 

-1 

UN3.75 

07 

5J 

37J 

(-948 ) 

950 24M4BM SB 33M 45 54 

- 

FJ>. 

1089 

112 

108 CIS 

108 


- 

- 

- 

- 

Thanes to 

460 22H29M 32 IBM 25M 32K 

- 

FJ>. 

126 

148 

125 GEptid 

138 

-3 

LN3.3 

18 

3.0 

22.7 

r*75> 

500 

5 14 16M 47M 51M 58M 

5143 

FJ>. 

11.1 

151 

143 Caaael 

151 


W3J 

- 

32 

lOI 

— 

FJ. 

302 

38 

36*2 Chime Comma. 

38 


- 

_ 

- 

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Option 


Joe Sap Dec Jui Sap Dec 

k250 

FP. 

1702 

249 

228 DCC 

228 


L034M 

3.8 

3J 

1 1JB 


390 

80 41 48M IM 11 15M 

no 

FP. 

419 

120 

110 DRS Data & Ras 

115 


LN2-8 

1.1 

3J 

27^ 

f417) 

420 

6M 23M 31H 9 24M 29 

130 

FP. 

45.1 

137 

133 D tatty 

135 

-1 

W3.1 

2J 

2.9 

13.1 

Aestnd 

30 

2» 6 8 1 3» 4» 

- 

FP. 

772 

93 

90 Renting Man 

92 


+ 

• 

“ 

- 



1 S 4 4M 8 7M 

- 

FP. 

8.06 

50 

42 Do Wanants 

48 


- 

- 

- 

- 


500 

44 57 STM 1 13M ISM 

- 

F.P. 

- 

37*2 

35 Gown CXti SI m 

35 


• 

- 

- 

- 

rs4i j 

550 

5 27 89 14 35H 41 

*05 

FP. 

51-3 

105 

93 Hertithcel 

83 

-1 

WN4.0 

1J 

54 

13J 

225 

FP. 

105J 

227 


227 


LN9J 

2.1 

05 

8j0 

Blue CWo 

280 

SM MM SIM 3 14S4 19M 


FP. 


75 

85 JF R Japan Wrts 

74 

+3 

_ 




1*286 ) 

300 

2 MM 22 IBM 28 31 

5 

FP. 

4.20 

5*7 

5 Kays Food 

5A* 

+*« 

- 

- 

. 

- 

British Gas 

260 

IB 25 27M IM 8 14 

130 

FP. 

B4.4 

138 

115 Kallar 

115 

-1 

WN04.7 

S3 

4.1 

133 

(*273 ) 

280 

3M 12 17H 9 ISM 26 

180 

FP. 

57.4 

163 

159 Lombanl Ina. 

181 


WN7.7 

2-2 

OO 

9J 

fHmans 

160 

BM 17** 22 2M 13*4 18 

200 

FP. 

1504 

222 

200 "K^ndon Ctuba 

221 


W11J2 

1.6 

6.7 

115 

r*«8) 

200 

IM B 14 18 28 28 

- 

FP. 

34J8 

IS 

13** My KJrxJa Town 

14*4 


- 




WskMt 

150 

18 17MZ1M IM 7M BM 

105 

FP. 

47J 

113 

105 MahttalM 

IDS 


Rare 

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4JI 

109 

120 

FP. 

35.0 

130 125*9 Norcor 

130 


W456 

23 

AA 

11.1 

rise > 

ISO 

1 8 12 15 IBM 20*4 

_ 

FP. 

263.0 

131 

118 Redrew 

119 

-2 

WN2.7 

2.6 

2£ 

15.1 

Lonrho 

140 

1 HUH 4 13M IBM 


F.P. 

83.7 

92 

91 Scudder Latin 

01 


- 




r*4ti) 

160 

1 7 11 20M 27 29H 

. 

FP. 

5.18 

44 

43 Do Wrts 

44 

+1 

- 

- 

- 

- 

Mail Mwar 

390 

80 « S2M IM 10M 18 

- 

FP. 

29.0 

133 

128 SpectaOy Shops 

131 

-1 

12A 

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23 

- 

T417) 

420 

8*4 27 35 9*4 25 29M 

- 

FP. 

58-B 

100 

96 TR Em Gwth C 

98 


- 

- 

- 

“ 

330 

100 

FP. 

56.4 

100 

92*7 TR Prop kw C 

92*2 


— 

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_ 

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Scot ftmer 


150 

FP. 

41 J 

163 

164 Vymuca 

163 

+1 

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22 

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108 

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3E0 

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Sam 

120 

35* 9 12 3 8 10)4 












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Forts 

130 

220 

1 5 7 11*4 14 18 

13 24*4 28*4 IM 9)4 13M 

RIGHTS OFFERS 








(*231 ) 

240 

2 13 17 12H 20H 2454 

Issue 

Amount Latest 




Closing ton- 


155 

6 - - 3 - - 

price 

pidd Rerun. 

1894 




prico 


ns7 1 

174 

1 - - 16M - - 

P 


data 

High Low Stock 




p 




Raon 

H44) 

Option 


140 6M T7 
160 1 8 


21 3 

12 IS 


11 15 
23H27H 


Aug Mov Feb Aog Hov Ft* 


Beta 460 36 SB BB 24M 42 50 
(*4«) BOO *9*4 39 51 48 84M 72 
BATtadi 420 27 34M MM IBM 2B» 2914 

(*429 ) 480 11 19M 27 46M 5114 84 

BIR 380 27M 33 41 M 714 15 IBM 

1*377 ) 390 11 19 2BM 22 31 34 

BA Telecom 380 19 25 2BM 15M 19 251+ 
(*369 ) 390 B B IB 36 38*4 44M 

canny sa 420 4BM 54 81M 4 10M 12M 
f457 ) 4S0 19 30)4 31 18 27 29 

Eata Bac 550 49M 66 78 16 26 34 
(*589 ) • 600 ISM 14M 48 41 5234 8074 
Ouku L C 450 25 36M46M12M21M 24 

r«Bl 500 7M W a 37 *5 48*4 

GEC 300 9 18 19H 1S20H23K 

r*00 ) 330 2 S 9 41 4» 4414 


Thom SI 1050 25M 6IM 85M 9 STM 72M 

n06S) 1100 7 39 B3 42M 89 1U 

T58 200 t2M 28*4 25M 1S4 9 12M 

(*210 ) 220 214 KM KM 12*4 21 *4 24 

TeeMra 220 14M 22 JSM IM 954 13 
[-232 ) 240 2 11H IBM 10M 21 Z4» 

Wacom 500 5BB8M7BM 1 17 25*4 
rS48 1 550 BM 39 61 13M 38M 49 

Oft** JM Oct JM JJ Oct JB1 

Sam 500 55 6TM 74 8 28 33 

r542 ) 590 23*4 38)4 48 28 S3 GO 

HSSCTSprta 700 46 71 87M 29M 52 63H 

(712 ) 750 34H 4 E5U480H 81 

Rautera 487 25 37M - 10)4 31 - 

f490 ) 500 18 SI - 25*4 37 - 

Open *U9 Hw Fat> Aaa Hw (w 

Rtti+flajC* 180 *4M 22 JSM 7M 13*4 *6 
(786 ) 200 5M' BM IBM 19M 2SM M 

* LMeripng roculw plea. Pramumg shown in 

brood on ckxungomr pdcro 

June 7. Itnl anas 20880 QdK 4209 PUB: 

12671 


105 

Nti 

VT 

21pm 

IBpm 

Btagdon tads 


21pm 


237 

NS 

IQS 

28pm 

5pm 

Clyde Bowwa 




52 

N3 

23/7 

4pm 

1>2pm {Cap. Services 


2*jpm 

-J2 

120 

m 

vr 

26pm 

1B*2pm Dawson Inti 


17pm 


180 

M 

20/7 

23pm 

10pm 

Dixon Melon: 


10pm 

-10 

265 

Ml 

- 

66pm 

38pm 

Eurotunnel 


57pm 

-3 

185 

NB 

11/7 

26pm 

13pm 

Hasdan 


13pm 

-2 

105 

M 

207 

1*ipm 

1pm 

H003 a HR 


1*4 pm 


230 

N* 

- 

34pm 

24pm 

Janris Porter 


24pm 

-2 

205 

NO 

ia n 

2Bpm 

16pm 

McAlpho (A) 


17pm 


80 

IW 

An 

11pm 

5pm 

Pslcan 


5pm 

<2 

24 

NB 


12pm 

lOpns 

unit 


12pm 


125 

IW 

*n 

23pm 

16pm 

VTR 


16pm 


FINANCIAL 

TIMES EQUITY INDICES 






Juie 7 

June 0 

Juno 3 

June 2 June 1 

Yr ago 

-tfeh 

low 

Ontinaty Share 

2382.1 

2387.6 

2379.9 

2364.5 2321.2 

2224.fi 

Z713J 

2321.2 

<*d ttiv. yMd 

4J2 

4.21 

4J2 

4-25 4J2 

4.1B 

4J2 

3.43 

Earn, ytd % Ml 

5.02 

6.01 

6.62 

6J1 5.78 

5.29 

6.78 

3Lfi2 

WE rata net 

19.04 

19.06 

19.05 

10.14 1053 

23.85 

3343 

1059 

P/E ratio ftil 

19.S8 

19.72 

19-99 

19.71 1922 

22.24 

30J0 

18.16 


FT GOLD MINES INDEX 



Jbo 

6 

X dbg 

« tiqr 

Jon ta rter 

3 2 ago 

Gran to 
ytaUX 

82 eta 

Hgh Low 

S 

I 

I 

3 

188451 

-M 

W18J2 192BJ3 1782JS 

410 

2367 JO 1SZ2JB8 

■ Aagfeual baflcaa 






Atria (TQ 

2582.11 


285376 261320 2399A8 

4.71 

344080 180323 


2551.78 

-47 

2B2145 2807J6 206432 

403 

301358 169318 

I 

I 

•a 

158490 

-1.1 

1802.18 162157 1584 53 

0J1 

203385 138300 


"For 166*. Oxinary Shn Index olnea o anp h t to n; high 27118 2/0279+1 low 4&4 2BW40 
FT Ontay Sta Index Dana dm 1/705. 

Onflnary Sftwe heutiy change* 

Open SLOP igjQO IIjOO 12J0 *3jOO 14J0 15P0 16j 80 Wtfi LUw 
23fi&5 2378.1 2380.4 2391^ 23908 2384.6 2379A 237BJ 2384.0 23SX2 2375C 


CcbmUB, Tim FhancU Times Limited 1094, 

F^wro in x— -»■■+- ahow nunaxr a eenyalaa. Brol* US Dolara. Baro Hum 100000 31/KMLZ. 
r Ceid Mwa Indme June 7: 2139 ; dayia taipK -Ml pone Year age: 1643 T MU 
i tar tiro addon 



June 7 

Juw 6 

June 3 

June 2 

June i 

Yr ago 

SEAObagdm 

Equity turnover (£mtt 
Equiiy tuugatnsr 

Shanes traded (ml)t 

T Eadumo tntra+iwiiiat tin 

21,289 

atinacc and m 

22,112 

784.1 

24,102 

341.0 

31,482 

12433 

33,508 

609.0 

«r. 

28,144 

1161.6 

30073 

519.1 

22J53 

111EJ 

27.230 

4400 

28J18 

1174J3 

30J78 

4to.1 










































































FINANCIAL TIMEfiT WEDNESDAY JUNE 8 1994 


LONDON SHARE SERVICE 


WavoeMlHW 


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UdtrTV. 

UAHa 


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140 MB 135 

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nu 750 IK 

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Z7b *38b 18 204 

PU -4 *33 300 m2 

sn -1 573 308 7770 

SU -I an 266 1/06 

ist ns ns us 

D« -4 tm £32), «<] 

94 34 23 US 

-46 *46 18V 306 

326 *8 2M 182 1780 

nan — tn m mo 

M3 m 233 wo 

467 -1 sn 403 22Z3 

t27 132 66 209 


tori 

Grt IK 

49 ISO 
20 24.4 
10 42.1 

M ♦ 

14 IU 
io U7 RET, 
90 16.4 

50 - 
IO 170 
3.1 103 

42 - 
U 120 
IO 220 
31 220 

- 133 

12 * 

2.4 135 
50 8J 
U Ml 
IO 931 
U 1U 
20 ♦ 

43 137 
31 MO 
IO - 
<7 IU 
ix 4. 

50 - 

13 IU 


Fma Comet A 

Fn»L no 


m 


no - 

41 232 

31 - 

<1 2V8 
36 HI 


*m 1994 JW 

£ 

6 SM -6 6 M 611 l/OB 

«% ^ 
i ~ 

4 & spss 

(24 £ 19 V <137 

-« 177 ESBH EVBj 

*1? ath 9WJ 

4 1 u 0 ® 


♦ or 

Mm . - 

its* 

— 

& - 
mi — 
MV — 


za 

36 -1 

934 -1 

w *e 

^ — 

123 

3M -8 

Mtb -h 
101*2 -tfi 

206 a -1 

as — 

IB *-1 
ITS — 


mi 

X % 

-nr in 

31 17b 
*14* W9 

m in 

37 b 14 

3 ft U 
n SB nj 
a a is 

7B 550 2480 
*211 M3 mo 
47 JS 320 
"US 72 621 
27S 213 3333 

ft ft IS 
137 03 SOI 

■474 379 1.MB 

OTttasb tbs 
nriift 2DU 
•as m 48sa 
ft n is 

US 90V JBU 
•267b 125V 132 


34 238 „ 
31 - OS 


10 - 
-32 237 
- 70 
36 270 
20 334 

31 - 

32 - fttt&S 

30 17.4 Unefeu 

U 321 WolLc 
1.1 66b4 wywwt. 


ceseces . essssstscceelfa see , cssecsKtstj 






















































































































































































































































































34 












































































































































































CURRENCIES AND MONEY 


FINANC IAL TIMES W EDNESDAY JUNES 1994 

- MORE Y market funds " 


MARKETS REPORT 


POUND SPOT FORWARD AGAINST THE FOUND 


Dollar treads water 


The dollar traded steadily on 
foreign exchanges yesterday 
with no fresh data to give the 
mariiet direction, writes PtdUp 
Gaurith. 

The US currency held onto 
its recent gains to finish in 
London at DM1.6695 against 
the D-Mark, from DM1- 6692 on 

Monday. Against the yen, it 
finished at 7105.235 from 
Y10&3SO. 

The dollar fell back later in 
US trading after Mr Mickey 
Kan tor, the US trade represen- 
tative, said the OS would use 
trade laws if framework talks 
fail to open Japanese markets. 

Traders said the recent pat- 
tern of foreign exchange mar- 
kets playing second fiddle to 
the bond markets had per- 
sisted. Currency trade was 
directionless with “very little 
to go for", one dealer said. 

Sterling also had a steady 
day with the sterling index fin- 
ishing at 855 from 80.6 on Mon- 
day. 

In Europe the D-Mark was 
slightly weaker ahead of the 
weekly repo announcement 
today, and European elections 
tomorrow and later in the 
week. 

■ In European trading the dol- 
lar showed little reaction to 
earlier news that Germany's 
economy had grown by an ann- 
ualised 2.1 per cent in the first 
quarter - above market expec- 
tations. 

It was also unmoved by com- 
ments from Mr Lloyd Bcntsen. 
US treasury secretary, suggest- 
ing that the fall in US unem- 
ployment to 6 per cent in May, 
from 6.4 per cent in April, 
might be subject to revision. 
The strength of this figure was 
a key factor accounting for the 
rise in the dollar last Friday. 

Mr {Cantor's comments, how- 
ever, had more impact on the 
market Speaking to reporters 
at the annual meeting in Paris 
of the Organisation for Eco- 
nomic Co-operation and Devel- 
opment, he said: “Our goals 
and strategies have not 
changed. We will open the Jap- 
anese markets either through 
the framework or through US 
trade laws.” 

His observations served as a 
timely reminder of one of the 
factors that has depressed the 
dollar in recent months. Some 
commentators thought they 


SterBitg 

Decantber'fri, Future contract price 

35.0 w-1 - — * * r— : — : 


. Jan " 199* 

Sotico.Fr GcSpflfio 

■ Pound fa Hw York 


Jon 7 

— Ufa 

-Pm. dose- 

£*w 

1X060 

15078 

1 mo 

1X071 

1X069 

3rth 

1X057 

1X055 

IT 

14B9B 

1X003 


had recently detected a change 
In US administration policy 
towards th« dollar. 

Mr Paul Chertkow, for exam- 
ple, head of global currency 
research at UBS, spoke of the 
“end of the policy of dollar 
debasement by the Clinton 
administration to exert pres- 
sure on the Japanese authori- 
ties to undertake measures to 
increase imports.” But Mr Ran- 
ter's comments suggest it may 
be business as rampi 

■ The flip side of recent dollar 
strength has been a softening 
of the D-Mark on the percep- 
tion that the dollar enjoys 
Investor support 

The D-Mark finished in Lon- 
don at FFr3.317 against the 
French franc from FFr3.412 on 
Monday. Mr David Cocker, 
economist at Chemical bank in 
London, likened the franc’s 
recent strength to a “snail run- 
ning tor the finishing line”. He 
said the franc might rise to 
FFr3.39, but said this could 
stai take some time. 

One European currency that 
slipped against the D-Mark was 
the Swedish krona which 
closed at SKr4.755 from 
SKr 4. 738. Analysts attributed 
this to the *»ie of bonds by 
foreigners, on fears of infla- 
tion. and worries that Austria 
might vote “no” in Sunday's 
referendum about accession to 
the EU. Sweden, also wishes to 
join the EU. 

Another feature of an other- 
wise quiet day was a series of 


comments from European gov- 
ernment figures and central 
bankers about possible falls in 
interest rates. Mir Edmond 
Alphandary, the French econ- 
omy minister, said there was 
still room tor European inter- 
est rates to falL This message 
was echoed by Mr Erik Hoff- 
meyer, the Danish central 
bank governor, and Mr 
Guenther Rexrodt, the German 
economics minister. 

As yet the European elec- 
tions have Impacted little an 
the marimt consciousness. Mr 
Cocker comments: “The total 
apathy of the voting public will 
probably spill over into the 
markets.” The possible excep- 
tions to this rule might be the 
UK, Spain and Germany, 
where bad results could result 
in political instability and cur- 
rency weakness. 

There is also speculation 
that with tiie election past, the 
Greek government might 
relent in its defence of the 
drachma. Were the drachma to 
fall in value, this could spill 
over into other weak European 
currencies like the Spanish 
peseta and the Portuguese 
escudo. 

■ Markets are anticipating a 
3-5 ba«na point mi in the Ger- 
man repo rate when the result 
of the weekly auction is 
announced today. The rate is 
currently 5.15 per cent Ger- 
man cat! mone y rates firmed 
slightly to about 5.10/550 per 
cent from Monday’s 5.05/5.15 
per cent 

In the UK money markets, 
the Bank of England provided 
late a«riRfa»ruy» of gKnij com- 
pared to a forecast shortage of 
£30 Om. The overnight rate 
traded between 4Y> per cent 
and 6% percent 

In the fixtures markets short 
sterling gave up some of its 
recent gains. The December 
contract traded 23,000 lots and 
finished at 93.78 from 9356. 
The December euromark con- 
tract traded nearly 44,000 lots, 
and finishpri four hnsis points 
lower at 94.73. 

■ OTWBB CUHHCH8 

JH 7 E S 

Hang a? 155420 • 19UB 103X30 - 103X00 
few 2333X0 - WOXO 1748X1 - 1733X0 
Kurt 0.4468 - 0X303 0X979 - 0X967 

AM 341513 - 342032 226700 - 228BOX 
RoaSi 2520X7 - 2528-10 1938X0 - 1943X0 
UAE 5X306 - &3419 3X715 - 3X735 


Rnfand 

franco 

Germany 

Greece 

Intend 

Luxembourg 


Switzerland 

UK 

ECU 

SOR 


(Set* 17X809 
(SFr) 51.7780 
(DKf) 9X474 
(FM) *341fl 
ffft) 8X771 
(DM) 2X169 
PO 375.168 
W 1X248 
84 2439X8 
(LFr) 51-7780 
(fi) 2X196 
fiNKr) 10X979 
<Etf 280X81 
(Pta) 206X45 
(SKr) 11X680 
|Sfr) 2.1332 
B 

- 1X038 

- 0X83992 


-OX269 712 
-00229 407 
-00002 428 
<0028 312 
•00083 727 
-0X005 146 ' 
*01303 687 
*00018 232 ■ 
-052 752 
-00229 407 ' 
-00027 179 
-0X102 920 
-0857 323 
-0847 883 
*00489 563 ' 
-0X032 317 


905 17.7343 
113 51X5101 
521 9X877 

519 03519 

814 05835 

172 2X25! 

8GB 3700491 
259 1X2S9 

084 2440841 
113 51X810 ! 
213 £8251 

037 109183 ' 
798 281X06 S 
228 206X51 : 
798 100756 
346 2.13SS 


Argentin a (Peso) 

Bred (04 

Cenada (CS) 

Mexico (New Peso) 
USA « 


AuatraBa (AS) 

Hong Kong <HXS) 
tncSe (Ra) 

Japan M 

Malaysia (MS) 
New Zealand (MZS) 

PHPpp tee e (Paw) 

Seucfi Aratte (SR) 
Singapore (S3) 
S Africa (Cent) (R) 

3 Africa (BnJ R 
South Korea (wort) 
Taiwan (TS) 

Thtoand (Bl) 

t8DFt rate tor Jwi S. (fata 
but n knpead by corart I 


1X042 -00005 038-048 1X048 1X011 

3029.18 *6033 817 - 019 3031X0 2971X0 


5.0384 *00261 272-456 5X466 5X264 


47X748 -0X151 551 - 940 47X980 47X550 
188X90 -0238 499 - 680 188X90 150100 

3X103 *00041 002 - 123 3X123 3X014 


Three murrihs 

One year 

Bank el 

MO 

*PA 

Rate 

%PA &«. Index 

1 17X719 

OX 



114.0 

51^11 

-03 

51.630 

OX 

115.1 

£068 

-OX 

9X69 

-OX 

n ax 

. 

. 

- 

- 

806 

i 6X663 

-04 

8X652 

ai 

IQS. 4 

£5137 

OX 

£5003 

08 

123.4 

. 

- 

- 

- 

— 

1X283 

-07 

1X281 

-03 

104X 

3454.73 

-XX 

24S2.83 

-SL2 

77.4 

51X11 

-03 

61.630 

03 

116.1 

£0198 

OX 

£6007 

07 

118X 

10X048 

-03 

100999 

OO 

85.6 

283.481 

~4X 

- 

- 

- 

207.446 

-£7 

2iaii6 

-£0 

869 

12X24 

-1.9 

12.122 

-IX 

rax 

£1293 

07 

£1066 

IX 

118.0 

. 

. 

- 

- 

SOX 

1X008 

as 

1X016 

ox 

- 

£0711 

-09 

£0652 

-09 

BJJ 

1X047 

ax 

1.499 

OX 

66.7 

£0499 

ax 

2X489 

ax 

_ 

11X352 

04 

11.6822 

-0.1 

- 

167X9 

3X 

15£4 

£3 

183X 

£5482 

-04 

£5567 

-04 

- 

_ 

„ 

. 

. 

_ 


409162 *02863 002 - 301 41X301 406000 - - - - 

5.6520 -0X023 497 - 542 5X547 5X415 - - - - 

2X096 -00033 084 - 107 £3122 2X059 - - - - - 

64680 -0X007 650 - 809 54809 5.4354 - - - - 

7X291 -00802 116-468 7X102 7X118 - - - - 

1214X5 -OA 424 - 565 1215X6 1212X4 - - - - - 

40X213 *0X004 043-382 40X400 407400 - - - - 

38X367 -0X078 090 - 844 38X844 37X780 - - - - - 

lor epneete to toe Pend Spat Mb* dww toy to tad fare facmd (test* Farm* mm «m not faec*r qtote i 
raarret ram Swing Mb eafcufaad by tin faflk of Eagtaoe. BMC nange 1885 — 10QAL Offer red Md-rewi in I 
red fam THE MIMteSUTERS CL08NG SPOT RATES. Scow toure are Runted fa ttre F.T. 


DOLLAR SPOT FORWARD AGAINST THE D< 


Change Bkttaflfa (fay's mid One moatb Three months One year JJ 3 Morgan 
on day spread low Rate %PA Rate %PA Hate %PA index 


FHand 

France 

Germany 

Greece 

(retold 

(toy 

Luwmtxxsg 

Neteerirede 


(SKr) 

7X403 

^10356 

305 - 440 

7X645 

7X883 

7X68 

-£7 

7X888 

-£4 

£0803 

-1.8 

81.0 

(SFi 

1.4155 

-0X010 

150- 160 

1.4180 

1.4120 

1.4166 

OO 

1.4158 

-Ol 

1.4063 

0-7 

1044 

B 

1X070 

-0.0006 

068 - 075 

1X078 

1X040 

1X061 

QJ 

1X047 

06 

1.499 

OX 

89X 


1.1560 

^1X004 558 -584 

1.1672 

1.1532 

1.1543 

IX 

1.1517 

IX 

1.1639 

-0.7 

- 

- 

1.40790 

- 

- 

- 

- 

- 

- 

■ 

- 

- 

- 

- 

peac) 

09982 

400001 

931 -982 

0X982 

08981 

- 

- 

- 

- 

- 

- 

- 


Portugal 

Spain 

Sweden 

Swtaariand 

UK 

Ecu 

SOR 


Brad (pr) 2010X8 

Canada (C » 1X713 

Mexico (New Peso) 3X420 
USA m 

Pactfc/MdXe EaalMMca 
Austria (AS) 1X618 

Hong Kong (HK8 7.7287 
tofla OFta) 31X700 

Japan (V) 10SX3S 

Malaysia (MS) £5947 

New Zeeland (NZS5 1X890 
PhMppines (Peso) 27.1500 
SaucS Arabia (SR) 3.7608 
Sbaaocni CSS) 1X328 
S Africa (Cong (R) 3X218 

S Africa (Hn.) (R) 4.7970 

South Korea (Won) 808X00 
Taiwan (TS) 27X878 

Thailand (Bp 25X400 

1SOR raw tor jui 0. eteUtar reraade 
bur as bnpted fa carat immt tore. 


11.7325 -0X125 300 - 360 11X780 

34X570 -0X015 450-890 344400 : 

8X944 -0X038 334 - 354 8X517 

5X352 *0X208 302 - 402 6X440 

5X918 -0.0033 905 - 925 5.7007 

1X896 *0X003 892 - 698 1X742 

248X80 *0X 700 - 200 248X00) 

14709 -0-0031 684- 724 1.4745 

1618X0 *0X 800 - 900 162020 

84X570 -0X015 450 - 690 34.4400 i 

1X710 -0X01 705-716 1X782 

7X315 -0X039 300-330 7X505 

172X00 -OX 800 - 000 173X50 - 

138.725 -0X75 660 - 800 137X60 


11.74 -OX 11.7435 -0.4 11X683 

343848 -1.0 94A32 -OX 34.447 

8X431 -IX 6X599 -1.8 8X381 

£8384 -0J 5X452 -0.7 5X677 

5X978 -IX 5.7065 -1.1 5.669 

1X707 -OX 1.8722 -0-7 1.688 

Z50X -65 251.16 -3X 253.45 

1.4893 IX 1.4684 IX 1/4598 

1623.4 -OX 1631.46 -3X 1683X5 

34X845 -1.0 34/432 -OX 34.447 

1X723 -OX 1X738 -OX 1X684 

7X362 -OX 7X42 -OX 7X078 

174X05 -8.8 178X -7X 181X5 

137.145 -3.7 137X7 -3X 140.175 


*8459 007-008 2010.10 2010X7 
-0X021 710 - 715 1X715 1X685 1X731 
*0X18 370 - 470 3X470 3X360 3X43 


-IX 1X785 -IX 1X911 -IX 83X 

-04 3X448 -OX 3X822 -OX 

1005 


613-822 
282 - 292 
675 - 725 
210 - 260 
942 - 852 
889-903 
500-500 
602 - 507 
323-328 
210-226 
870 - 070 
000-400 
as • boo 

300 - 500 

tor8poctotoi 

id & ECU are c 


currency. JJ>. Morgwi 


-OX 1X823 -0.1 1X88 -OX 89X 

0.1 7.7307 -0.1 7.7448 -OX 

-3.1 31X95 -£9 

£3 104X £4 102X3 2X 144X 

3X £5837 1.7 £6147 -OX 

-IX 1X98 -12 1.7177 -1.7 

-02 £7531 -OX £7088 -0.4 

OX 1X315 OX 1X338 -0.1 

-5.1 £8866 -42 £7423 -£3 

-8X 4X896 -7.7 - 

-4X 81 £7 -£2 831 X -£1 

-OX 27.1478 -OX - 

-34 2544 -£2 25X2 -2.7 

ptocss. f onrerd rate* ree nor d u c t ly quoted to Hit wire 
nrambid itocaa Jun & Bare wmge 1990*100 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 


EMS EUROPEAN CURRENCY UNIT RATES 


Jun 7 


Bfrr 

DKr 

FFr 

DM 

l£ 

L 

fr 

NKr 

Ea 

Pta 

SKr 

SFr 

t 

cs 

9 

r 

Ecu 

Bototam 

(Bft) 

100 

19X2 

18.11 

4X58 

1X78 

4711 

£446 

21X4 

5032 

397X 

2£10 

4.120 

1X32 

3X91 

£911 

3062 

£517 

Dormarir 

(DKU 

5£57 

10 

£471 

£554 

1X40 

2477 

£083 

11.08 

264X 

2092 

1£1S 

£188 

1X18 

£098 

1230 

181.0 

1X23 

franca 

(FfrJ 

6£07 

11X1 

10 

3X15 

1X28 

2924 

3X80 

13X6 

31 £3 

247X 

14X4 

2257 

1.199 

£477 

1X07 

1900 

1282 

Germany 

(DM) 

20X8 

3X15 

3X17 

1 

£407 

969X 

1.121 

4X30 

10£6 

81X1 

4255 

0848 

0298 

0X21 

0299 

63X2 

0218 

►eland 

OT 

90X6 

9.618 

£146 

£456 

1 

2382 

£753 

1063 

254.4 

2012 

11.88 

2X63 

0X77 

£018 

1.472 

154X 

1272 

My 

W 

£123 

0.404 

0X42 

aioa 

0X42 

iaa 

0118 

0448 

10X8 

£448 

0490 

0X87 

0X41 

0.08S 

0X82 

£499 

0X63 

Netherlands 

IR 

18X8 

£493 

2X59 

0X92 

0363 

8662 

1 

3X83 

9241 

73X8 

4243 

0757 

Q3SS 

0733 

0235 

5623 

0482 

Norway 

(M<r) 

47X4 

9X42 

7.669 

£309 

0.940 

2240 

£589 

10 

2992 

1892 

10X8 

1X69 

0X18 

1X97 

1X84 

1452 

1.197 

Portugal 

«w 

19X7 

£780 

£202 

0X86 

0X93 

9362 

1X82 

4.180 

100. 

79X8 

4X91 

0X19 

0X84 

0793 

0579 

6084 

£500 

Spten 

(Pta) 

25-13 

4.780 

4X49 

1221 

£487 

1184 

1X88 

8X88 

1282 

100. 

£806 

1.035 

0488 

1.003 

0732 

78X4 

0X33 

Sweden 

OO) 

43X9 

8X33 

6X74 

£103 

0858 

2039 

£387 

9.105 

217X 

1722 

10 

1.783 

0836 

1.727 

1280 

1322 

1X89 

Switzerland 

(SFr) 

24X7 

4.917 

3X10 

1.179 

0480 

1143 

1X22 

£106 

1 2£1 

9628 

5X07 

1 

0469 

0X89 

0707 

74X1 

0811 

UK 

<SJ 

51.77 

8X47 

£341 

£515 

1X24 

2439 

£819 

1089 

2802 

2062 

11X6 

£133 

1 

£068 

1207 

1582 

1X03 

Canada 

(CS) 

25.06 

4.788 

4.037 

1X17 

0498 

1181 

1X84 

£271 

1201 

9071 

£789 

1X32 

0484 

1 

0729 

7072 

0X31 

US 

ffi 

34X5 

6X34 

6X35 

1.689 

0X79 

1618 

1X71 

7X26 

172X 

1307 

7X38 

1/05 

0X64 

1X71 

1 

1062 

0X86 

Japan 

m 

326.6 

82.13 

62X2 

15X7 

£461 

16388 

17.79 

6£71 

1844 

1300 

75.46 

13.46 

6X09 

1003 

9208 

1000. 

£221 

Ecu 39.73 7X57 £401 1X30 £788 1672 £183 8358 199X 158.1 

Vre pw ijOOO; Dertoi Kroner. Ranch Frew, Nanrefan Krarar, red SwwC* Kroner par 10s Befam franc. Escudo. Iks and Perec 

9.179 
e par 100. 

1X37 

0787 

1288 

1.157 

1212 

1 


Change % */- fcom % spread Dfv. 



rates 

against Ecu 

on day 

can. rate 

v weafea 

Intend 

OijUWfiPfE 

0795193 

*0X00327 

-2.77 

078 

NaOifatenda 

£19872 

£18838 

*0X0129 

-129 

£17 

Bofgkan 

402123 

39X081 

*0X243 

-1X1 

4.87 

Germany 

1X4984 

1X3415 

*0X0111 

-079 

4.85 

franca 

6X3883 

8X9382 

-0X0644 

0X4 

2X6 

Denmark 

7.43879 

726871 

*0X0224 

1.77 

£01 

Spain 

154250 

158402 

-0X33 

£69 

1.09 

Portugal 

192X54 

200211 

-0X78 

£81 

0X0 

NON 8RM MEMBERS 





Greece 

284X13 

280322 

♦0299 

9X0 

-4.78 

My 

1783.19 

1872X1 

-2X5 

445 

-0X0 

UK 

0788749 

£768809 

*0000886 

-228 

624 


■ D-MARK FUTUSom (IMM) DM 125X00 par DM 




■ JAVA 

iMaaftYM FUTURES DMM) Yen 1£5 par Yen 100 




Open 

Latest 

Change 

High 

Low 

M. voi 

Open iru. 


Open 

Label 

Change 

«gh 

LOW 

Eat to 

Open Int. 

Jun 

0-5983 

£5990 

*£0008 

£5996 

£6974 

71X54 

113441 

Jun 

0X508 

0X510 

*00009 

0X519 

09500 

85241 

45261 

Sep 

02880 

£5961 

+00008 

02987 

£5966 

25X69 

33X83 

Sep 

£9672 

£9573 

♦0X011 

09681 

0X661 

20201 

35284 

Dec 

05975 

02984 

*00012 

05988 

02975 

272 

505 

Oec 

0X636 

0X642 

*0X013 

0X642 

£9635 

20 

1,168 


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P ec m gi cfangtesni to Eats pato n dwnfadwioteiserefcagraney.Obwgrecs drew 
totabt wure tee sprewto; 4w pwcwtegs dWtuxs hW esw i toe ecbtenwrtre red Ere onto 
tor s current^, and Bra nrefaere pwfaaea p ercen tag e rt wta B t w t * tos aerancy** metal rate I 
Ecu cirM rate 

p 7AB8 Storing red teten Us sureaadsd fam BSL A^uremnt odrateted fa tfw Rwidd 1 


■ SdRM mAIM fVTUMU QMR 4 SFV 126 . 00 D per SFr 


lfamnfa»PMM) £82,600 per £ 


Jun 

£7070 

0.7072 

*0X010 

£7083 

Sep 

07050 

07075 

*00018 

07086 

Dec 

£7075 

0.7088 

*0X008 

07088 


Jun 

12064 

1X060 

-09010 

12074 

Sep 

12036 

1X040 

-0X008 

1X049 

Dec 

12030 

12030 

-0X008 

12030 


FUTURES (LUTE)* DM1 ni paints of 10044 



■ PIN 9 PRLPIOA OR 8/RORTIOW 01X50 (cento pre pounr3 

SWre CALLS PUTS 

Price Jun M Aug Jm M 

1428 7X8 7X6 7X5 - 

1460 5X3 547 5X2 - am 

1478 £03 £22 £61 - 025 

1X00 070 149 £00 007 0X8 

1X25 049 1X1 1X2 £44 

1X80 - 009 041 <26 448 

Previous dfais reb Cdto 9X78 Puls 6X72 . Prey, dfa* epm bit, Cafe 621.732 Pits I 


LONDON MONEY RATES 


tote rta n k Stofag 
Staring COs 

Tretwry BBt 
Bank BO* 


Over- 7 days One Three Sb One 

ritfi notice month monttie months year 


eh -41, S-41* Sft-4fl 5ft-Sft 5ft-5ft «ft-S}i 

40-4% S»i-Sft SH-Sh 53-58 


4^ -4a «-4B Sb-5ft 
5A-4U 6*8-6 5,5-54 5U-5JI 


Load authority dap*. 4* - 4,5 4fi - 4fl 5ft - 4J1 6*8-6 5,5-5, 
Dtecount Mtatret daps - 4 ^ *S« - 

UK (tearing bank base faxing cate St* par om tore Fsbroay £ 1994 

Up to 1 1-3 3-8 M 


■ S LIBOR FT London 


interbank Ffadng 

44 

44 

4H 

Si 

week ago 

44 

4% 

5 

st 

US Dollar COa 

- 426 

4X8 

4.65 

5.19 

week ago 

- 425 

*48 

4X6 

£43 

SDR United Da 

3» 

3& 

314 

4 

wools ego 

314 

34 

3% 

4 






Open 

Sett price 

Change 

High 

Low 

“ 

- 

" 

Jun 

93X9 

94X3 

0X4 

94X3 

93X8 

“ 

“ 


Sap 

94X9 

94X4 

-0X0 

94X9 

94X3 

- 

“ 

- 

Oec 

93X6 

93X0 

-008 

93X6 

93X0 

“ 



M fa 

83.76 

93X9 

-009 

93.78 

93.71 


Open to. 
8553 
12090 
7711 


Carta <* Tax dep. (£100,000) 1^ 4 3* 3*2 

Care of Tfa dfa. orvter CIOUOOO m >m Dreodts MMen to cadi Ireo. 

Aire. Mr eras of rtegwrt LJfleijx. BCGD Bred rata SOg apart Bianca Mate iff day May 31. 
10K. Agreed ate to period Jun 28. 1804 n A* 25. twlcfam n a ■ «47|pa. Ratosaaa rete to 
praiod AerM. 18M k Ufa 31. iw, Sctreraai IV A V 522apc. frunes Hwai 8an Ada 5>zpc tnn 
June 1. 1994 


I KOCfTH SnBOJttO FUTURB9 (UFPB £500000 potrtta of 10096 


ECU UduKf Oa retd rates i mu 55* a dc 52: B nrtre: a : 1 yaw: a*. * U0OR toerban k Una 
cnee <n eflared raue tar Sion ouorad b are awtot fa tow refareca breid at Hem each vreridne 
ear. are: BmIvm Truer. Breh nt Ttfaa, Qddaia and MaBand Wsi bi te efa . 

UU rates m sbo*n tor the Oomeetie Money Ratos. US S COs red SOB Unhed Oepeeda fffa. 

EURO CURRENCY INTEREST RATES 

Jun 7 Short 7 daya Ona Three Sbt One 

torn notice month months mo, she year 

Belgfai Franc 54-54 54 ■ 5ft 5% - 6V 6>2-6^ 5ft -Eft SH-Ofi 

Dm* Krona 5^| • 5 5% - fi«2 8 - 8^ - 5% flJ* - 6 flL - 8 

OMrak 5ft - 4H 54 - 54 54 - 54 5^-5 84-64 8ft - 5ft 

DutcftGuMar 5ft - 54 5ft - - 6ft Si* -5ft s^-64 «4-5l* 

French Franc Sft - 5ft Sft - 5,5 6ft - 5ft 54 - 5ft 5 s ! - 5*2 Sji - 5fi 

Portuguese Be 161* - 15*4 IBt* - 1E1t 18 - ISh IB-13 13h - ITh 11^ - IQh 
Spart* Peseta T^-?* 7ft -7& 7fr-7ft 7fl-74 7*-7fi 8-7% 

aerfng ■ t\ 4% - sft - 4ji 54-64 5,5-64 6-5^ 

SfateFtoic 4J*.4 4ft- 4ft 4ft-4,5 4ft - 4ft <5 * 4ft 4ft - V, 

Can. Dotar 5}J - 5ft S% - 6^ • Sfl 8-5% 63, - B\ 6^-64 

US DoBar 4ft -4ft 4ft -4ft SH-4U 4ft - dft 4% - 4ft 6k - V, 

MfaiUra Bk-7 7%-«l 7k- 7k 7\ ■ Ik 7%-7l* SV-Sla 

Yen Sft -2 2ft -2 2ft -2ft 218 -2ft - Sft 2H-2g 

Asian SSnfl 3%-34 3^-33, 4,5 -4ft 4ft - 4% Sft- 5ft 53- Sfl 

SUM torn raw* are cte to Ore US Mfa and Yen. oOmtk two days' noBca. 


■ 1MB MOUTH MWnOiHB DM) ft Sim points <9 100% 



Open 

Latest 

Change 

Hgh 

Low 

Eet to 

Open to. 

J«n 

9541 

9640 

-cm 

9641 

6540 

61 J390 

319293 

Sep 

94X7 

94X4 

-003 

MM 

94X2 - 

133201 

402X61 

Deo 

8427 

9424 

-0.03 

9428 

9422 

203X34 

393,421 



■ U8 TBBMUHV BOLL W11MM (IMM) Sim per 100% 


Store 

Price 

Jun 

- CALLS - 
Sep 

Dm 

Jun 

— PUTS - 
Sep 

Ok 

9400 

024 

£12 

0X9 

0 

neg 

081 

9478 

0X3 

£09 

0X5 

004 

041 

1X2 

9600 

0 

aw 

0.02 

028 

£63 

124 


Jiri 

85.78 

95.78 

- 

AS. 79 

95.77 

£665 

10X15 

Sap 

9528 

9628 

-002 

9529 

9628 

4X67 

16X82 

Dec 

94.78 

94.77 

-002 

94.78 

94.78 

678 

7X20 


• cm 43*1 PUB 7D4JL PTMfaUi dfaa open hL, Cab 200910 Pub 173305 


A* Open totwaM 9ga. are tor preekxre ifar 
■ EURQMAMt OPTIONS {LfFt} DMIre points o( 100% 


Store 

Price 

Jun 

Jul 

CALLS - 
Aug 

Sep 

Jui 

JUI 

PUTS 

Aug 

Sep 

9475 

013 

022 

024 

028 

0 

0X5 

007 

axs 

9800 

0 

007 

£09 

012 

012 

ais 

017 

020 

9525 

a 

0X2 

004 

0X5 

0X7 

oxs 

0X7 

03B 


BASE LENDING RATES 


■ THHnMONTH PBOfiFUTUim 0 MATTF) Paris Intotnnk oflared rale 



Open 

Salt price 

Change 

High 

Law 

EsL to 

Open Ira. 

Jun 

9443 

9443 

-0.01 

94.44 

9441 

£134 

50800 

Sep 

9446 

9444 

-004 

9447 

9443 

13,848 

49X11 

Dec 

9429 

9425 

-008 

9429 

9423 

9X19 

35,467 

Mar 

94X4 

04.01 

-008 

94X5 

93.99 

8X08 

33X06 


EaL to. toUL Ote 6390 frM 4285. RwilM dfab open InL. C*9e Z737M Rte 1070S9 
■ mmo «MM HU»e OMnaNSOJFFQSfrlmpoMaol 100% 


CALLS - 
Sep 

Doe 

Jun 

— PUT8 - 
Sep 

Ok 

021 

020 

0X1 

017 

036 

nna 

Oil 

013 

■ nan 

062 

0X3 

0X5 

0X7 

049 

071 


N THREE MONTH EURODOUJUt (UFFg- Sim pofena of 100% 


Ed. to HMi, CUb q Pub 0. Efataue dafa open to. Cdto aw Pute 3TN 



Open 

Sett price 

Change 

High 

Low 

Ebl to 

Open bit. 

Jun 

8£42 

9S41 

- 

95.42 

95.40 

54 

5864 

Sep 

04.83 

94X8 

-001 

94X3 

94X3 

100 

2001 

Dec 

9424 

9428 

-002 

9424 

0423 

204 

1644 

Mar 


94X6 

42X2 


* 

0 

1098 


Adaffi&CBnoarqr — 6X5 

A8«J Trust Bar* 529 

ASBrek 6X5 

•Henry fcisbachar 5X5 

Barer at Baroda £25 

Banco BMao Vheaya. 5X0 

Bare o! cypn» 525 

Bank Odreiartd M SXS 

Baikal intfa 5X5 

Bar*tfSctAaO_ — 825 

Barclays Bank 5X5 

BrkBkaTMdEaO 5X5 

•Brawn SHjtey&CbUd £23 
Ct Barer N aderiand— 6X5 

C3|M(NA S2S 

CbteUeBsrii 525 

The Ooflpettovs Bwfc, 5X5 

CouBbSCo 825 

CraXt Lyonnais SXS 

Cyprus Popular Bwec 5X5 


Oran Lttrfe 52 

Oto Br D et A UmllBd— 825 
finandM&fianBrek- 6 
•Robert Ranteg & Oo - 5X5 

Gtobartk 5 X 5 

•GUnmssttoirei 525 

Hateb Bade AG Aaidi .325 

• Ha m boa Barer &xs 

Heritobb S Gai kw Bk. 5 X 5 

MSfaveL 5 X 5 

C-HoareSCo 5 X 5 

Hongkong & Shanghai. 6 X 5 
Jufai Hodge Bar*—, 5 X 5 

•Leopold Josephs Sons 6X3 

UoydsBrek 6 X 5 

MeghnieankUd axs 

Hctoid Bank axs 

*Mau 8 BwnMng 6 

r WVWM neto S2S 

•ResBretMa— 525 


• RooJXJS^d Guatoria* 
CorporeOan IMad b no 
bngarutatadas 
abwtoi g baOuOots 8 
Royal Bk of Sccdaret- 625 

oanWt& Wn re a Bca. 925 

TSB 625 

•UrfMBkafM»eal- 6X5 
Urty Truer Bank Pic _ 625 
RbaiemThto — 6X5 

wetwBfayL®tore*„^£23 

YoriShtre Barer 5X5 

• Memhere of BrBWi 
Merchant Banking & 
Securities How*** 
AaaodoHon 

• inateMcfesSon 


Money Market 
Trust Funds 


COHttS&CO 
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»■#•**• *'•» elti-IMt 

071 320 B232 



Petroleum Argus Daily Oil Price Reports 

.-'</• A'!f ipol :nf.;rr:.:;Hcn yen rcqwrc for Slopn! Cr.trfp 


CALL 


Petroleum Argus 



FUTuftES !. OPTICUS BROKERS 


ROUND 

TRIP 




pi 5 TJ.iMil.M.lj.Hr “1 

I V 1 P I /Sl*JLv f 

_ T/iA/lllill 1 trat^recmBDendalkms.Ba»Me ■ 

1 OImm/ vl ftJ\J ifpw mate year own trafirtg ■ 

_ ■ decfeiwa, using tfiiD-cTOHtission ■ 

[ anycontracL/'aiyadMiije 

| fwitonotpaytoraMeejiao I 

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■ — itoreMufrbiiifcEngeto.WcdD | 

I AV Kllfc Mthwe the added easts nsodated « 

* Ul UUU) with offering a wide range of fanest- | 

■ nent products. So bb can ssiejeoti m 

“ mtnwy -and proftfe service tint I 

| is first class Iqraaystmdard, ■ 

■ . *ftnrdoywnh)ltf isaqaestioow (fiscount or M price. I 

■ .Sarerefadrere - 1 

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■ They cannot befiere they caa get onr a ™ gaiMgtoytKL I 

I writhe nnntelebroter ! 

I Hcwd owodo^latoempoilMl farinleptndQd&duratradas H 

I W3 3' K wridwitte. Toi^hone or write Uxfrj-, . 












37 


BS 






- FINANCIAL TIMES WEDNESDAY JUNE 8 1994 


WORLD STOCK MARKETS 


!■/-' H*n» Law wa rat 


la tw HI t*» 


" — >- ,'^V. 

■*« , * . . T i 


■■■? S' 


"'■-.SwV 




*•*> Cvit. *• ’ 

- 






EUROPE ■■ - 

«sn»tnm-7/S8?" 

1XW -T»3,7T? 1,190 IX 

U«nB.VZ™S ‘*§ ‘■ 22 : ’-SSS 04 

is.:- .-a 3 ^ b.k 

a.f ■ij.inii. 

+10 Ml MU 
ttMr - _«S +3 BOO 436 10 

•tort* ' 3.4*5. . *74X40 3011 1.1 

IEfi»M 1 «a»B 0 Wfipun. 7 /Ffi) 

- ♦B50'* 

a 


S'ilii! 


43 
1.430 24 
B0OO. — 
MOO 12 
2.4 
47 
12 
17 


Ltodf 12440 
JjSmI 1.144 
Legmd . 6,100 
'“*■ E7D 


to»xo 

^MT*2I 
"MU . 1234 
NMsB .14140 
Don 21320 


■■■■471.10 
RhwPA 13320 


Sdndr- 371.50 


Tato am 
IftnCSF 17060 
Thus - 317 
1»20 
423 



■ +40W.J0 118 ™. 
-201206 1285 Oja 

-no OJDO 5.4BO 0.7 
-41.10 28621030. _ 

- : *2 024 £45 27 
-220 274 337. W 1 JOr 
-1 16710080 42 
401340 888 54 
-TOWR 146 SJ 
-250 280 1B0 — 
<1.10 825 386 46 
+J0 535 !ffiU 
-1JO 2341SS.TDX4 
-110O44&203HUO 06 
■10 896 763 IX 
-6 1005 BIS _ 
-2 1.1 E0 880 44 
-1XQ BM3S210 _ 
'-T.»D1B74DiaU0-27 
-2 7S2 601 14 
•47 946 770 OJ ■ 
-2530X04710 1J) 
_ 73* 570 34 

■ >11 1.700 7 .677 72 
*1.50 40020 360.10 — 

-1 000 519 21 
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-7 700 510 0X1 
*3024701431 — 
-8 7M SB6 17 
*7 MOO 1» ZZ 
*8.10 S29M7JB 
*240 377 23540 
— 3,120 2261 17 
*3& 214 160 U 
*.7036450233.10 13 
*20 23450 MOJO 30 
-21 404 420 16 
-&S0 650 4S0 M 
-4 000 555 M 
*260 307 235.1a 16 
-0 333 W0 34 
*1 356 852 34 


«tHBftA*BSyun7/Fh.) 


ABH*m BUS 

BO 

47 JO 
807 

AMUR 7730 
BOMO 3060 
BmMH 4420 
CSM 63 JC 
DJW 134JBCM 
DBdm 10160 
Eton 164-20 
EUOpR 16X0 
Gamma 100.70 
BBrOpR 48X0 


*81X401.145 _ 
_ ISMOrUSU) 04 
-40 7&0 6,150 0.7 


jBd: 


— aWRg 

— BmtzSr 727 

*s 


2090 -26 2X00 1X00 2-2 

-11 1X55 776 IX 



zisssr n -s 

— KOI 3840 
~ MfflpR 90X0 

— KLM 4940 

— mPBT 40.10 

— KPROpR 47 JO 

— Mrtyd eaxo 

81X0 


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_ 07X0 47X0 XI 
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-XDE7X0 40 IX 
-JO 04X0 73X0 OX 
+J0 131 11620 EX 
.10 n SB X3 
*1 13540 mato 2 X 
-XO 16660 8X30 4X 
-2X0 31X40 WUO 4.4 

-XO 60130 40X0 1J 
-JO 230 107 XI 
*130660 IBS XI 
-2D9IL504U0 IX 
-XOmSDTOUD 1A 


a =B» 


-11 105S 778 12 
-3 227 180 IX 
*2 888 707 _ 
_ *0X0 3055 IX 
*3 870 083 — 
*35 1X50 1460 SL5 
*14 1.100 040 IS 
— 631 350 18 
♦XO 260 100 — 
— BIB 810 — 
+1 770 558 — 
-4 B86 735 — 
*4 1X031X55 23 
-9 B32 810 - 
-13 1X15 1 .220 14 


Z PACIFIC 

- JAPAN {Jtffl 7 / Yon) 


Apmto 1790 +201,4201.200 _ 

— Mo&Br EOS *11 BIO 480 — 


- *#B 

— 8 maos 


1X70 *101X00 881 OX 
1X20 *601X00 970 — 
1.100 —1X10 OBI _ 


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287 1.1 
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1.40B. -01X701X21 OX 

410 =*30 450 340 23' 
232X0 -420090 -318JX 

1.017 -33 1X65 1X11 -XX 
587 +5 85E EDO 20 

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831 XI. *1 000 760 3.1 
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- Attn S3 -0 070 S7S 20 

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- BASF ■ .314 -2B0SCXD Z76 25 

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- Rjgwy 440X0 -12 57S43SSB 29 
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0U« 483 -4 600*8550 0.4 

OMnlr SDE -1260 014 771X0 IX 
Douna 512 -.70 568 4*3 IX 
OnST 260 -1210X8 236 _ 

DacfiBk 741X0 -6X0 88760 72H7D 22 
DtdWrt 183 +1X0 1B8 132 2X 
OOU01 £56 -4- 607 531 ZJ 

OJSX* 282 -7 JW 26D IX 

0rMB*37lL503 -5X040 6» 370 3X 
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HarnbB a» -S 2*5 198 32 

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«a«P 61 om „ BOl B02 IX 
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HOrtlH 1X60 —1X821X40 IX 

HTCM 345 -22nSW5a»L2D 2X 

HBnra 808. +1O1JO00 830 IX 

Horn 230X0 -XO 2B3 222 ZB 

WB 287 *X0 324 285 3X 

IndlMc 383X0 -65® 433 3B3 21 

KUOS 145X0 -4X0 IBB 141X0 — 

ICn» 624 -2 B40 SIS 21 

Kftof 504 -7 558 451 27 

KH1 ' 136 -5X0161X011510 — 
nockW 163X0. —5X0 17010270 23 

Lafimjr tHB +25 BOD 050 IX 

Lena 780 *3 890 BBS IX 

Undo 832 - sen ran 15 

LfewH 330 -XO 410 3S2 22 

imna 182 — 1 220X0 IBS — 

LUIPI 187 -1X0 210 1S8 IX 

MM 415 -7X0 «7» 378 2X 

MM FT 318 -8 387 303 27 

Mamm44SX0 +149B50 387 1.1 

Banawr 300 822 TBS _ ■ 

MtDHg 233X0 -2 28617SX0 34 

Muamp Z-fsm -103X17 2X4D 04 - 
PW* 230 -1X0 362 210 _ 

. PtsSsBim 524 -1 630G04X0 3J 

; ftncti 773 -15 m mm 

PIMM 444X0 -6 49B *27 22 

IWE . 446 -5X0 529X0 *20 2-7 

WE Ft 36270 -1X0 424 333 3X 
RhotaE 1X87 -23 1X2D 1J40 0 9 

flhmlB 320 +1 372 305 22 

Hhmi#f 245 __ 2B7 225 3J3 

.fSsn-W 282X0 -5 313 2Q25 . 

-tom » 1.073 -a UflUB 970 IX 

sa-iifi 383 -4 438 350 13 • 

SSaiats 803X0 -13 79BSJ S81X0 IX 

aMKflg BIB -2 BBS 810 IX 

EWKhm 540 — 568 « 1.1 

TOySM 276 -S 306236X0 22 
Vasia 320 -2 380 307 11 

IMS 514-2001 -0 552 438 2X 

yen 308 -1 387 317 1.9 

-VMM 378 _ 415 STB 2A 

Vto 472X0 -3X0511X5 441 IX 
VW 484X0M1 -6X0 364 410 04 
VWPI 382X001 -JO 443 338 OX 
• UMtaP 052 +2 are 7B0 14 

atfmp 230 +10 270 220 17 


■ww«r {Jun 7 /Kronen 


81X0-2X0 11281X0 4X 
181 .SB -1 108 138 OX 

1130 -43 ra.® 15 _ 

158 ~E IBO 125 IX 

98 -1 mssxo _ 

111U -2 148 111 4.0 

322X0-1250 306S22W 17 
100 +211SJ0 96 OX 

232n -4 260 208 IX 

160 — 0 208 165 IX 

254 -5 309 226 IX 

145 +416*58 188 28 

77 -1X0 91 74 28 

70X0 -2 91 73 ZB 

70 -1 97 72 _ 

112 -1 122 85X0 IX 

132 -1 131 122 2£ 

40 -2 64X0 31 „ 

S3 -XO 89 67 9L1 


— Ann 1,710 -101,7001770 _ _ 

— AndoQl 687 -10 744 683 IX _ 

— Antsa 1.410 +10 1420 940 _ _ 

~ Add 491 -1 534 402 IX _ 

~ Um 37W -100 6X00 3.700 — - 

— MinOI 5,180 -2D 5X30 4JJ7D 08 _ 

~ tatth 1,100 _ 170Q 1X30 _ - 

— AsBASr 1.160 +10 1750 1,100 _ _ 

Anne 773 +3 ora 560 17 ~ 

~ MdS 1760 +201790 1X40 _ _ 

— Mann S7B +4 685 410 ox _ 

— Asm 473 +2 4SG 380 1.1 - 

mm CIO +3 B79 550 _ - 

Brats’ll 926 +4 960 855 _ _ 

0rgm 1X» *30 7J37B USD OLB _ UMW 

BraSv 794 +13 734 415 — 

CSS 3X00 _ 3X30 2410 — — 

— C*®fe 1.140 __ 1720 0*2 3X „ 

CMok 628 -B 640 436 — — 


- QWM 17« 

— Cdtaac . 625 


Ijm +101J001X30 _ _ 


1*90 +40 2X20 2.150 

052 +8 995 732 _ 

710 _ 738 005 _ 

ew +33 000 640 .... 

705 +10 719 SSl _ 

KUGUB4 609 -I 630 429 1 8 

Kindm 458 +18 477 31B _ 

Rfaran 1700 —17401X10 __ 

- 585 +7 611 408 

2X90 *402,7302720 _ 
8X80 *50 7X305X80 - 
400 -10 5K 370 IX 

B39 +17 BBS 789 „ 

570 -1 1X50 905 _ 

2X00 +102XB02X2D — 

738 -4 782 838 — 

1.160 -101730 708 - 

1.150 —1340 986 OX 

705 +2 700 512 — 

IBM 2.160 —2.1901X50 - 

804 +11 679 428 — 

814 *0 8H 780 IX 

410 +6 413 321 _ 

1,740 -101X601.420 IX 
MSU9 1X30 +201X501.700 - 

Mans iXTD +4018701X00 ._ 

MMtuE 1.160 -101720 600 1.0 

MMd(B 3XW +70 3X00 2.7M __ 

90S -2 960 711 — 

621 +03 630 387 

809 +2 082 689 — 

092 +28 692 557 — 

779 +24 780 582 OX 

Matt 1790 *40 1X*0 1X80 0.7 

810 *3 819 480 — 

590 +10 592 380 - 

tonfl 1.130 +10 1730 790 OX 

IBlB8dK 2.720 +W 3X10 MOO - 
■Com 1730 +10U50IX20 — 
602 +1* 703 520 _ 

1750 +20 1X00 905 — 

lAGcOl 512 -8 5Z3 335 _ 

772 +0 763 80S — 

522 +5 533 *26 — 

582 +1 585 3S4 - 

955 +15 660 798 

ew +10 1X1© 842 — 
IMpr 775 +6 730 487 — 

000 +4 733 580 — 

515 -3 537 *07 — 

■BROfll <1> -2 4*5 316 — 

830 *28 640 395 — 

1J30 +50 1.780 1.1*0 — 


snoai 2,190 



Shw6ai 
5h«®f$ 1X20 
Skyttr 2,450 
SnMBrM 783 
6X40 



~ KH? +» 1340 ZXB *2.7 WWhM 1J20 +2O1X101X5O - Z 

— cbm; ixto +10 ljeo 1 x 20 ix — mat em +4 e*e 455 — — 


— Cfloflo 550 +3 800 315 _ 

— Canes 425 _ 433 337 17 

— CJfiwS 940 +17 907 8*1 — 

~ Ct+oda 1X00 +301^40 1X40 05 

— ClJyPM 734 +4 736 671 IX 

■— ChmuE 2,720 +30 2X70 2X20 — 

— Charms 1.170 — 1X301.1S0 — 

— OlnkB 2X00 +10 2JB0 2X10 — 

“ CIM>TB 1J30 — 1X00 1710 — 


BOB +4 648 455 — 

SI 2 +4 838 672 _ 

381 +8 384 301 _ 

1790 +20 1 .420 1.100 0.7 

848 +8 BBO 755 0l8 

448 +10 4GB STB — 

460 +5 463 337 — 

888 -8 875 STB — 

900 +23 040 770 OJ 

420 +12 448 BID — 

1X00 +3017*0 045 — 


*S §S§ — — M “ ah 1 J J10 +101X30 760 — _ 



- 5PW(Jun7/Pls.) 


817 +0 825 410 — — 

513 -3 524 307 — — 

1J50 +101X701.423 — _ 

1.470 -10 1X90 1X50 OX — 

2X10 +00 2.0B01J2D — — 


1J07O +10 2X301X00 OX 

72S -2 7B2 010 — 

1X70 +201X00 650 — 

-inn iwi Km n + 

B22 J2I5 - - UmaoM 678 +0 K4 406 DX 

ESS T -SS -1 S 1 -5!2 1 'SS - — **oriE 2x«o - 402 x 802 x 00 — 

DsOdn B36 -1 048 BBO — — IM4MI 4J40 +30 4 0+0 3.320 _. 

DMqa 1.160 +10 1,180 BOO — — NEC 1210 +20 1X20 6M _ 

gw +1 ? S 2 Si — — ** ln ’fl ” 0 - 2011*1 SS ~ 

£!K2 . 5£ tl.SS 3 JS — — msksji ixjo — 1 . 4301,020 _ 


Cubnx 11.740 
DnidBt 2 x 00 
Bn*0 1X23 
ES0M 2,760 
Brator 6X40 

Fuat 

aomf 
ICdCan 4,060 
miff* ixoo 
xoipa 8 x 00 
Mapfre 5X20M 
man SJOO 

12,300 

4 ™ 


TldxcA 4X60 
ToMi 1X90 
TOdor 1 x 10 
UlFan S70 
UoFM 1X70 
UMB 1.035 
VMm 2 X 25 

vtsctn axes 


X 4 

-dSSBS 

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2X 

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— 171 s 2.000 ax 
-231,7731X80 IX 
—303760 2.460 2.9 

-19 868 41B1IX 
-40 6.140 3X00 BX 
-5 1710 021 _ 
-100 7.400 4X00 2.1 
-70 7X30 6,400 2-7 
-TDOjIOO 4X10 1.9 
-50 lifioo 9.710 TX 
-106 4X00 3X80 2.7 
-5 311 102 _ 

.-21 80S 351 7X 
-17 B13 BIO 6.1 
-50 4^60 3X00 XI 
-15 2,186 1XBS 3X 
+20 1X36 B60 IX 
-B 739 578 GX 
+20 2^00 1X15 199 
-30 1 J10 1.160 4X 
-60 3,120 2X16 1.9 
+15 3.410 2750 OX 


— Dfnoni B40 +14 910 551 — — 

— DMn 536 +1 540 415 — — 

— DaOFh 1700 +10 1770 833 — — nhkSD 

— DaMPr 1X90 +30 1X401X60 _ — ^ 

— OIUTdr 485 +26 400 345 — — 

— dmmp ixoo — ixbo are — — 

— DToAFM 039 +14 043 607 OX — 

— lUlwaB 1X20 —1X70 961 — — iha 

— DOMI IXBO —101.710 1X80 — 71X tio-Mv 

— DafiraS 1.780 +101X301730 OX — mL- L. «n 

— DmUp 4,120 -10 4X00 3X50 OX — SSn 556 

— DowflAl 086 _ 706 646 09 — MM 1X00 

— Domain 605 +4 610 469 — — 

— B*S 1X30 — 1X60 1750 — — 

— Bssl 1X10 — 1X00 1.770 — — 

— EafcS 1,120 -101,170 083 — — 

— Fame 4X00 +30 4X10 3X00 — — 

— FmMCn 640 — BM 621 OX — 

— FiXBh 2X40 +50 74501X20 — — 

— Op 633 +2 653 445 — — 

— FUW 2700 — 2X00 2X00 — — 

— FupFM 700 +0 713 595 IX — 


1X>0 —1.430 1,020 — 

580 +16 3B8 395 — 

200 +2 291 231 — 

797 +7 002 506 — 

730 +12 754 520 1.1 

703 +12 712 483 — 

465 +9 474 316 — 

807 +17 910 711 — 

0S0 +14 073 7B1 OX 

558 — 588 300 — 

1X00 +1D2XB0 1J90 _ 

1X90 -101.0601X30 — 

747 +2 816 600 

740 +17 788 628 — 

487 +11 S07 400 OX 

716 -10 744 679 — 

400 +10 495 412 — 

1X80 +30 1.430 1X60 OX 

1X60 —1,100 B55 — 


470 +14 470 Z75 

646 -1 685 300 _ 

918 +71X40 710 — 

1.120 -101X70 900 

L290 —.2X001X80 — 

.100 — 1.130 041 — 


I (Jon 7 /Kroner) 


-a *66 no 2 X 

-7 470 373 2X 


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rcotnm u» 
M02AO 5. ISO I 
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1+606,405 
1+90 5X76 
+302X60 


4,-m 3-8 
» 1 J 


801 -6 000 640 1J 

801 -0 086 438 1.7 

170 -Z 700 127 — 

108 _ m 143 — 

94X0 -1X0 ME60 80 0X 

94X0 -1X0 106.00 01 ox 

300 —ft 430 262 IX 

SS2 -ft 400 200 1.1 

124 -3 134 101 27 

121 -5 134 100 27 

3S3 +8 440 340 1.6 

SOT -5 430 261 IX 

40 -2X0 09 4*50 27 

282 -6 J11 .258 2.7 

202 -S 312 266 2.7 

181 -0 TIB 15B 29 

181 -7 215 TS2 ZB 

307 -8 300 17 SX 

124*1 — . 155 108 IX 

l&nd -1 .155 109 IX 

115 — 168 114 3X 

116 — 1GB 110 OX 

135 -* W 13:-. 

130 -4 IBS 120 3.1 

113 -2 143 108 — 


740 +11 768 51* _ _ 

881 *2 033 7B7 — — 

17*0 +1017B01.1S0 — — 

570 _ EOS 426 OX 

1X88 —1X60 930 — — 

699 *4 630 440 — — 

692 +1 728 002 1.1 — 

010 +2 040 5B5 — — 

408 -3 525 438 — — 

707 +2 780 650 

1X30 +101.120 705 — — 

480 -2 550 307 IX — 

923 *M 926 679 — — 
93B +17 950 028 — — 

0.47D +40 6X20 5,700 — — 

055 +14 678 568 — — 

1X00 +10 1,120 812 — — 

809 +1 918 


— Aland 0X30 +20 7X00 8.150 _ 

n oon +200 n ?nn 4X80 

466 +8 482 310 — 

2X60 +20 2.1*01X10 — 

7X00 +30 IXBO 1730 — 

1X70 —1,110 837 — 

792 +3 802 702 OX 

577 +3 620 450 


— KtQod 2X00 +402X40 

— HtKuM 1X30 +10 1,040 

— HtUlDd 2.100 —27001X1 

— HOMO 1720 -101730 

— mSMD 695 *15 734 

— tflZssn 550 +8 599 

— MoOSP 2X60 +60 3.040 

— HAT* 490 - 466 

— mafi 7*7 +2 700 

— matt 2X90 +30 2X50 2X30 

— HndaM 1X30 *401X001 

_ Unhid* 716 +10 850 

— HmFB 2,110 +202X401X80 OX — 

— HoyaCp 2.100 +10 2.120 1X50 - _ 


2.100 —27001X1 

1720 -101730 

605 *15 784 

559 +8 599 


1X20 -10 2.190 1X50 OX — 

800 +9 050 026 — — 

730 +6 740 470 — — 

1X38 *101X601X80 OX — 

780 +15 794 653 — — 

835 +11 703 508 _ — 

725 +13 725 484 — — 

1,170 -10 1790 1X80 OX — 

578 -12 817 450’ 

1.180 +101X001X70 07 — 

673 —2 016 441 — — 

900 +0 1,110 908 — — 

17*00 +201X201.420 — — 

1700 -101X101760 — — 

447 +11 463 336 — — 

358 +1 381 302 — — 

484 +24 494 34G — — 

25.700 -400 26300 IB5D0 0.4 — 
870X00 +8X00 UBU8 74LBO — — 

573 +7 578 384 — — 

040 +5 053 521 — — 

624 +4 523 365 — — 

1710 1X70 1,05!} OX — 

GS8 -12 698 349 ._ — 

886 +4 $04 727 — — 

1X50 -101X201X40 — — 

MW z z 

454 — 475 32S — — 

’S +i4 , a «1 z = 

900 +81X50 BID — — 




+20 2X501X10 — 
+10 1X40 840 — 
+4817901,140 — 
-101X601.120 — 
-11 KM SBM 
-8 581 411 — 

+8 381 258 — 
+8 700 500 — 
-3 623 481 — 
+401X281.110 — 
-20 2X202X40 — 
-2 SOT 700 OS 
+1» 0,460 5,400 _ 
+10 811 818 — 
-2 730 425 — 
+6027901X00 — 

*B57343r_ 
+8 510 404 — 
+301X80 837 _ 
-1X801780 _ 

*8 453 288 Z 
+131X30 851 0.7 
-3 — — 

+4 

+7 734 811 IX 

— 1X00 816 — 
+501.7801X90 — 
+24 815 074 - 
+50 1,480 1.090 — 
+80 4X80 3.7B0 ... 
+10 749 610 _ 
-102X101X80 IX 

*4 722 570 _ 
+17 802 879 0.7 
-101X901X70 — 

— 1X40 1.000 _ 

— 1X40 887 

-8 3B7 408 _ 
+14 792 618 OS 
*12 1,100 705 OB 
+0 790 EES 0.7 
+C 555 367 IX 
+3 7TO 602 — 
+7S31E7D — 
+4 907 533 — 
-10021JOD172D8 — 
+40 BfiiS 2X60 — 
+20 1X10 1.110 — 

+8 004 326 — 

-7 536 416 .. 
•301X801.190 OX 
+20 587 421 — 
+30 1,720 1.450 — 
+10Z02D 1X10 _ 
+70 2X00 1X70 — 
-10 3X40 8X50 _ 
•30 3,480 2X40 — 
+4 570 *01 — 

+13 700 520 — 

+10 2.720 2X00 ... 
-30 1X90 1X20 08 
+26 897 450 — 
+13 029 057 — 

730 505 

+40 1X80 1,400 — 


+3 

+ft 052 870 — — 

-10 1X00 1,OBO — — 

675 433 

-2 B74 800 — — 
+13 414 205 — — 
+10 2X90 1X70 — — 

-10 677 421 OX — 

— 1XG» 1.430 _ 54X 
•II 705 615 — 

-1 733 524 — — 

+40 3X002X80 — — 

+40 2.100 1.760 — — 

-8 501 330 — — 

+101X70 965 — — 

+15 SOB 330 _. — 

+10 685 432 __ — 
-1 566 3*6 — — 

— 402 285 — — 

+S 3B5 Z72 — 

— 1X00 035 — — 

-10 1X301.170 1.1 — 

+201.420 030 — — 

+2 BS& SKJ — — 

-6 087 502 0.B — 

+20 Z230 1X00 — — 
+201X101X50 — — 

+20 1.120 800 — — 

— 1X48 1.110 — — 

— 2X90 2X10 06 — 

— 1X80 1.190 — — 

+11 £20 350 1.1 — 

♦7 848 727 OX 564 
+« 983 734 — — 
*101X50 700 — — 
+4 900 B50 — — 
+10 710 528 — — 
+101XTO BBO — — 

*201,150 021 — — 
♦15 72S 442 — — 
+1 587 486 — — 


■Mir 052 +03 8X8 8.10 3X — 

WMng 7X8 +X3 0X0 6XS IX - 

warnd 7X0 -.10 9X2 7.40 IX — 

WstfTr 2X0 -XZ 2X5 2X1 3X _ 

Mdpac 4X9M +.13 5X3 4X8 2J — 

wooan 4X0 +X5 4.7s are ix — 

W-WBl 8X1 + 052 £04 2X — 


— B0rtfflW{Jun7/HJLS) 


41000 CAE 
22000 Qnpnw 
74830 C»reOP 
5300 CWFdS 


ADVlFr 10X0 
BEAMS 36.76 
1170 
3876 
42 

72 

ChnEM 025 
CMeF ?7W»i 
Crtkrt 17 
DFnin 1050 

4X0 

38 

86 

MjmO 13X0 
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— 4.80 142 4J — 


45179 4 AknAI 
587708 AmBanx 
1575 AttdO 


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SOUTH AFRICA {Jun 7 / RaOd} 


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2B 
121 al 
Anal ITOai 
AngAm 227 X0 
AnWdd 412 
- — 127 


Darin 2150 
BulM 4150 
CNAGal 4 
DBtiCnn 11225 
Deotor a.sa 
Drkrtn 58X0 
Broo 075 
BandQ 25 
Enoon 39 

FNMBk 106 
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28 

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Randtn 4175 
RmHGp 2775 
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FkadPI HO-GO 
SaSkn 177 
GraXiCti 1175 
SASltoM 84X0K) 
SAMnAm 46 
SM 138 
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Tnalkit 5050 
VFtoMS 401 
WArm 41.76 
WDaap 165 
WUMl 51 


S 170 5X 
27 17.50 27 
122 03X0 26 
17D 115 2X 
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+4 104 102 21 

_ 68 43X0 1 4 

+X0 50X0 28X0 1.0 
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Pricm ngplto ty fttotoo 

NOTES ■ We«» on fti pub sa w Mtod an to* 
IHU KKqnMncrtUMd 
pacsL hmiiAom n to IBM, tad Tanda 5 
MMlMl ( Datov itoto >d E> 
Xittoto « h «ertp lu *■£* itgrt. a E* M 

FT FREE ANNUAL REPORTS SERVICE 


21 US 2 I 2 Wj ""MrilM.? RMg 0*1 770 0770 It to OBI 770 
• 4 % UZZ.to«to|FUto«a 6 ato»to»aU*.lliM 

£2 Lmitt +44 Bi 77 D 0778 at IB +44 81 m 3 BZ 2 OriMg FT 
M JMtlNNlMMKWIBtoMinKiKr. 

S +% SV » into n— w i ii to not FT j— 1 m 1N0 tpji 

In? 11 ? P""“ 


Stocks 

Closing 

Change 


Stocks 

Closing 

Change 

Traded 

Prices 

on day 


Traded 

Prices 

on day 

12.7m 

708 

+24 

Nippon Steel 

4.5m 

358 

+1 

5.7m 

470 

♦14 

M*btshi Bactric 

42m 

692 

+14 

5.6m 

772 

+a 

Mnebea 

3.7m 

BIO 

+3 

5Xm 

- 621 

- - +33 

Talcums - - 

3.6m 

1770 

+70 

4.6m 

404 

+1 

Iseki . . _ ._ 

3Xm 

433 

+17 


Price Rep ;r| 

Uim Afj.i 




INDICES 






wMiiin) -v-. v 

■tort 


tommmm 


- J». J*- "JW . ■ 

. .7. B • 3 

.Z122DJ0 2D685SZ 39O0iH 180 
•-Mm2 28725: 20710 33*00. M 

w.. iB327‘ wm* imm aa 

ABZOB - 40178 40C54 46008 26 . 
101629 101 178 -1022X5 12222S IS 

'145648 148626 1457X8 1542X6- 9^2 

J M . 290B7JD 268800 29867X8 

M 367S06 3701.18 3679X9 180 
64- 426900 4281X0. 4B8UB 230 
*«: 1965.71 1988.49 218280 1C 


FCOUrlBTq 


Jill Jui Jm 

7 B 3 H» 

64 2484X4 246438 2891.17 BO 


196118 SO 
90490 50 


48170 60 
ton 76 8* 


329908 204 
4UBX0 20M 
19037 19M 


C8S 1MnGn(M B3) 430X 4337 

C8S Al »r (Old 83} 2715 27X2 

SkMJWW) 2121X6 » 


4260 46498 31/1 
2725 29480 31/1 


41748 SM 
368X8 31/3 



6 

3 

2 

a* 

Low 

0* 

Low 


3768X2 

377272 

3758X9 

3878X8 

(31/11 

m 

397638 
(31 AW) 

4172 

(2/7/32) 

Home Bomb 

98.44 

6776 

97X5 

105X1 

Plft) 

9643 

na 19 

18977 

(18/1CW3) ( 

54X9 

1/10/81} 

Ttonspori 

181 5J7 

181841 

1816X6 

188229 

PWJ 

154802 

taw 

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Financial Times. Europe’s Business Newspaper. 



38 


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A 

CootJWKKl on next page 


39 


FINANCIAL TIMES WEDNESDAY JUNE S 1994 


•» 4 pa state Jane F.l 


NYSE COMPOSITE PRICES 


NASDAQ NATIONAL MARKET 


4 pm dose June 7 


UM 


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18% 15% USX M 
4ft 30% USX US 
17% 12% USXObU 
31 25% Mqpl.775 
31% 27%UdScon> 


53% 44% VF CD* 

24% irtVknE 
12% 11% ValeraNfi 
7 4% WHInc 
6% 7% MidteupH 
10% 6%WnKUnplfei 
12% 10% 




1.48 4X 14 43S6 
0X4 IX 7 96 

0X0 00 0 15 

an 4.1416 2254 
1X0 2X 8 1006 
OXD M 17 127 

1.75 06 4 

1X8 5X 15 333 

~v~ 

1X8 £5 13 858 50% 48% 

052 £8 025 18% 018% 

OXD *1 39 ISO 12% 12 

0X8 1.5131 2 5% 5 

12.4 55 8 7' 

1J012X /! 10 . 

0X4 72 178 11% 11% 

30 B40 6% ft . . 

024 07 11 1179 33% 33% 33% 

27 1037 38% 30% 37% 

13% 



lS%i3%**au 

IX 

02 

0 

m 

13% 

13% 

78% 64%VkEBPSXi 

5W 

7.6 


Z1D0 

85% 

art 

39%31%WriuyM 



20 

991 

n4i% 

25% XVtoltos 



1! 

33 

23% 


28% 20% Wn he 



19 

76 

23% 

2?% 

84% 73%Md3tUU 

IX 

20 

24 

601 

70 

771 i 

14 io%VDhnmr 



17 

*100 

11 

11 


... 16 Von Cos 
38% 31% Wmdo 
51% 44VUOM 


2ft 20% HUS M 
32% 27% WK HOOD 
20% l31Manlnc 
35% 30% wan 
IS 12% WBMMDt 
3% Wahoco 
37MdBm 


47 17% T7% 
n3B% 

75 48% 


»S3B% 3^ 



2B% 22% WaMrlx 
6% 2% WBrnarlna 
72% BOWULan 
18% 14% Wtefnaim 
42% 36%«UEL 
25% 20% HtaOMIX 
204221% dtaM’B 
35% IftmkJnx 
3% 2WBUMIM 
18% 14%WWlIDa0 
40% 38% HMngBtM 
11 6% HMnonSt 
TO 24% Waklli 
ift 7%HWbn 
28% 17% VMknaax 
15B%127%Watef 
18% 18% Wandpt 

25% 21% Wort Co 
18% 16% WaateatE* 
4G 39% VM8» 

15% ftWsaMn 
20% ft wang 
35%24%WMn9u 
24% 18% Watsi Hng 
34% 28%VMnn»x 

15% 10% WSQB 
5% 4% WEbnCDU 
19% 13% Wan Warn 
20% 15% Wadpac 
88 2S% IMmcoir 
51% 38*2 MW* 

21% 17% Whaatahnr 
' 52 % mama 
14% 11% WMalUl 
17 14% WhftBOX 
17% 1'_ 

War Inc 

IMcatAG 

30% 22% MUX 
7 ftWWNa 
11% 6 % WMbwbx 
4SIMnnDx 
0% WhnahBDD 
' WssEn 
UhcPnbSra 

18% 15VRaaiO 

x 2B%ma»Cup 
30% 22% WMXT 
24% iftlWmtee 
28% 12% WDDM8, 
16% 14% WtartdHUax 
3%WU1daxp 

- . 16% Wm Labor 
22% 18%wymnx 




13 

2X0 14 43 
1X2 28 20 

- w - 

19 363 22% 22* 

182 OB 13 119 29% 

37 2768 16^ 

1X0 15 12 1856 
OLX 24495 TO 14 

*8 844 5 

068 1.7 1B14U 40* 

0X4 IX 17 129 344. - 
017 07 2314895 24% 23? 

004 M 7 63 3 3 

£44 16 X 2017 70% 68% 

1X0 02 26 113 16% 16% 

222 07 14 79 38% X 

1X8 47 8 75 2ft 22% 22% 

420 M 16 9237% 2X 236% 

046 1.4 22 Z« 33% 32% 33% 

0X8 4X 0 31 2% D2 2 

020 M 17 280 18% 18% 16% 

228 6X 27 624 X 37% 37% 

OB4 72 12 23 8% 8% 8% 

072 2.9 14 15 24% 24% 24% 

032 3X 11 3098 8% 6 8% 

024 IX TO 526 2ft aft 24% 

4X0 2X 20 851 157% 156% 15ft 

024 M 22 1 356 1 7% 17 17% 

OM IB 15 67 22% 22% 22% 

066 12 II 877 17% 17 17 

3*4 43% 43% 43% 

11 2273 11% 11 11 

55 4285 14% 

020 07 22 55 29% 

023 1X143 Z7 23 

1X6 6X 10 242 29* 

020 IX 18 3954 127 

032 67 0 13 44 

TO 753*19% 

056 15 5 TO 1ft 

1.10 15 40 442 31% 

120 £8 16 3222 42% 

010 05 22 1547 TO 

1X2 22 17 2283 57 

13 4 
034 £2 15 356 

18 14 

1X6 12 16 102 
010 IX 14 340 
084 10 12 1600 

005 OX 14 20 
020 IX 17 BIT 11% 

1.44 12 14 328 45% 

20 546 11 

1X1 15 14 850 
179 10 11 82 29 

040 £8142 16 15 
1X0 12 87 454 31 
050 £1 X8753 
016 OB 11 503 20 

1.1B 77 3 2910 18% 15% 

1X0 7X 10 15% 15>. 

14 1E3 3% 3? 

048 09 23 569 
028 IX TO 43 
044 £0 13 24 


ig 
28% 
_ 23 

aft aft 
12 % 12 % 
4% 4% 
19% 19% 
16% 16% 
0% 31% 
42 42% 

12% 12% 12% 
15% 15% 15% 
14% 14% 14% 
28% 

&£ 
US 45% 
10 10 



- X - Y - Z - 



36% X X 
14% 14% 14% 
19% Tft 19% 


1 . 

% glMMCM 
15% 6%U5Nr 
tft 11%UM0 
23% l6%U5ntar 
2ft 16% USHom 
41% 34%lfiUCp 
19% n%USSU 
32% 15% USSug* 
48% 3&%UBWart 
72 SBUWTac 
14% i2%UdWUar 
15% iftUBteoda 
34%29%UDl«FUxte 
17% 15%tH*m 
% AUMrtML 
ft B%UnhirCip 
1% 17% UM Op 
XZftUnrt 
59 44% UBM CUp 


M 100 v< & i 7 . 4* 
012 IX 6 5496 6% ft ft -% 
020 IX 14 IBS 13% 13% 13% 

X 111 21% 21% 21% 

2 BO 17% 15% 17% 

1X4 13 8 135 37% 37% 37% 

032 1.7 551281 15% 15 19% 

008 04 62714 21% 20% 20% 

£14 13 X 1977 40% «% 

1X0 £7 18 1199 65% 85% 

0X2 OB 13 37 14 13% 13 

129 15% 15% 1! 

' Si* 

17% 11 
% 

ft 1< 

18% II 


26 

OJB 27 15 99 33% 
1X6 04 12 54 017% 
0 118 A 
030 £9 32 60 Tft 
OM 12 10 146 1ft 
080 8X 21 377B 27% 
0X6 £0 12 3305 48% 



101% 87% Xarmx 10D £9 
I 60Xanu4.12S 4.12 75 
51% ana Cup osa i.i 
ft 20 Tartan &y 1 1-22 5X 
40 33%VMW 016 04 

S 4%ZrmIb 

72hlfl 

24% 20% ZadUl Nat 1X0 4.3 
7% ftZHWklB 0X2 1M 
16% 11% ZUo 040 11 

29%20%ZuaM 088 4.1 

13% 12%2MgFuid 1i1B ai 
10% ftZwafgTalx OM 08 



22% 21% 21% 
12% 12% 12% 
ft 0% 9% 


nkt em mums tf fauna 


YDanj ugn ml ten lor ms «u an pmoe tan nn 1 1914. 

Wan a u* a nock dMdgna aaeawig u 35 peraw B nerp Im tan 
prtd. ns tHr*! UplHirtir anga nd dMOual bb rtmn to me aw nock ertj. 
Ifeta uBnrtn MML rate* e( (Mtand an mart AtmeMte tam) aa 
UttrintedbiUatenarMll 
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eMUStaa MbHL ckKAd mm prty ua frtMamo um u pm 
ta onDKteB 12 imiK. a+ftAkad n Cmno tad*. Meet ■ 191 
DOM tee. M taUa il Maid tear dm v rack iftildiHL (+■*■ 
rtHri pdd Mi mr. artML doterad. gr os acSoo etas u tdm dMdart 
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aua h mum. mk a» * m pm h mm na lamm mu* 
bate* hUi taa ran rt n*v. nPou My dUeen/. WE p u nau nda 
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a m — a hjr neb ca mp— m-dkaum at-«am team. — nki ear 
nrt*. a n+iattk ikaUka* wan wram 

ran k u mpm i am k t* 


AMEX COMPOSITE PRICES 


4pmckeeJaa7 


n Ma 

Suck DL E Wa Mp UwCtaBOni 
AUrltagn 05 IDS 12 11% 12 +% 

«Bte 3 64 1% 1% 1% 

2 * 4%. 4ft ft 

ARferPD 1X4 11 2 '.41 

MINAxOBtSS 148 20% 

Anttdd 005 2 689 8 

As&pl £ 188 1. 

teWaMmA ' .41 343 

HIM 072 1 238 

tafcMi 23 8 

Nul -5 323 

ASaCHB . ..1 » 

fettMA rwe 


BUI Dana 055 D 
Bk4uHt*073 18 
BkdmTA 0M3D 

Bunrus-. so 

WIH 029 32 

too 6 

UuMan 040151 

wua . ■-:« 

UaUBLA 050 41 
BMttBqr . ICS 
. Buamv . 37. 

^ Borne x 039 10 
, Buxan A '1X4 15 



16 ^ 

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*r 22^-1!^ 123 

53 37%Xft '37%+1% 
40 1ft 11% 11% 

173 3» 3% 3% 

24 22 21% 21% -% 
12 14% ■ 14.14% 


Npnp 


020 ll . 3 2^ +% 

xaa.22 3 12% 12%T2% ■% 


OtaOraA- 091 • Ml 
tandtet* 8 21 
.taufcB . •- 47 T24 
•OrtB TO! 186 

0X4251212 
WUF» OXT, 673 


-I 

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S S i 


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ffrujiln e 0 

CucdEM 4 

OwsATA 064564 
Crewe C A 040 44 
. Create CB 040 15 
CUUc 053 82 
15 


'. u Sh 

Dh. E 100a W0b 
030 22 IS 16% 



nut 15 241 1% 1A U« 

Dtandc 30 51 18% 18 18 

Duumraun 8 44 4% 4% 4% 

Duplex 048 10 84 9% «% 6% 

BtetnCo 046 15 12 

Ekfljp tup t723DS 42 

EchnBw 007X42788 10% 1 
BadBiAx 030 ID 16 12% l. 

EUKdRs 8 10 8% 8 

Ban 1835B2 SS% 35% 38% 

BwSuv 50 2481 A& 3H 4A 

Epttp* 10 078 16% 1ft 1ft 

Fab teds 0X4 12*100 34% 34% 34% 

nuA* 320 16 5 74 74 74 



MOtenc 020 14 Z100 11% 11% 11% 
MULB 052 75 M03O% 29% “ 


„ 30% +% 

Fmatla 28 B87 48% «% 4ft +1% 

fr equen c y 2 5 3% 3% 3% +% 

Gkren 050 7 28 2ft riffl 23 ft 
SWFM 072 13 213 21% Zlh 21% ft 

OfadHr 070 34 153 16 15% 16% +% 

5(MMd • 2 51 % dA ,5 

aeunon 32 23 6% 6% ft ft 

StdUCUa .034 22 252 3A'3A 3A iV 

Hud» 372908 6% B% 6% -% 

HartXC 025 143525 32>2<Q1% 31% ft 


W Ste 

Stuck Did. E lOBe Ugb LoarCkm Cbno 
HeamiCh 4 29 3 dZ% 2% ft 

HanWwst 3 313 u3A ft 3% 

Mco 015 « 2 10% 10% 10% , 

14 263 11% 10% 10% ft 


EHCttp 1 679 5* 

tabonCpx 012 25 7 10» 

it. Cores 4 342 43 

mnnagn 98 BOB 193 

tat 0X6 17 3106 17* 


Jan Bad 

Krtanu 

KnmCp 

KUyBu 

KbuGq 

txbUBB 
Lam ted 
LaaPtaa 

Luna* Inc 
Lynch Cp 

Mnxun 
Merita Ax 
Mem CD 
MwU 
MOOflA 
MSRExpl 

Mat POT 

NTTmAx 

NOiCsnOI 

Nunac£ 

NVR 


5% 6% +% 

10 10 % +% 

17 17% 


41945 6% 5% 6 ft 

20 0 13% 13% 13% ft 

22 2 4% 4% ft 

22 145 19% 19% 19% . 

77 129 9% 9% 9% ft 

10 12 1A di% lA ft 

15 66 5^ 5$ 5% ft 

162 JM 8^4 9^2 

5 10 TO 26 25 ft 

2 19 36% 36% 38% ft 

044 27 127 27% 27 27 -% 

“ 6 ’! S S S 

r % % ^ 


7 105 
0X3821012 
020 10 3 

120 15 

12 10 


si zii 
8 % 8 % 8 % 
6 8 6 
8% 5% 8% 


Odette* A 34 IX u9% d9% 9% 

Olsten 02*152 106 32% 32 32 -h 
FtesnraG 040 801584 l5%d1S% 15% ft 


Pedal 
Pet HUP 
PMLD 
PtewayAx 
fly Gun 
PMC 


RagmBnd 

R88WCD 

RMSEW 


n ste 
n*. e loo* 
0X0 47 65 
1X4 13 2 

024 19 
050 19 90 
012 28 362 
09Z 17 48 
010 1 129 

31 2 

3 X 
0 7 


HP 

11 % 11 % 

24 24 


Lon Dosi Cfang 


11 % 

24 


70% Tft 
37% 36% 

20% 20% 20% 

15% 15 15jp 

28% 

s 

a 

12 % 


1 % 1 

29% 29% 
6 % 8 % 
hi 1% 


SJWCUp 

210 10 

X 36% 

X 

StenUnkn 

16 

92 18% 

18 

SMB 

004 13 412 12% 12% 

Tlkd 

21 

67 3H 

3% 

Tab Prods 

OX 52 

2 EPb 

ft 

TeKDete 

(LX 63 

318 42% 

42% 

Hwmadcs 

70 

IX 15% 

irt 


X 

IX 28% 

SB 

TUPNA 

ax 21 

305 Irt 

15% 


4 

4 


A 


28% ft 


TownCnsy o 293 2}l 

TrfBXi 10 IX 1% 

TUbraMn 71116 5% 

TumrBtA 007 70 36 19% 1 

TumM 0X7181 1261 19% 1 

UkFoodsA 5 17 2% 2% 

UhRmfcB 020112 10 2% 2% 

UnM>Ms 17 24 6% - 

USCeM 99 as 28 28 

MactnA 10 IX 30% 30 

Macooe 6838 28% 27 

25 234 11 1 

0X0 24 313 28% _ _ 

1.12 20 247 1ft 14% 

0X0 13 294 28% 29 



MRET 

Worthan 

Xytnnx 


4 ZS 




OFFICE IN THE GRAND DUCHY OF LUXEMBOURG. 

• : . A" subscript on hand delivery is available m ihe whole of the Grand Duchy of Luxembourg. 

We will deliver yow daily copy" of ihe FT to your home or to your office at no extra charge to you. 

: . Jt'you would like more information about subscribing please call Philippe de Norman 
• - , . on Tel: (322) 513.28.16 or fax your requirement to (322) 511.04.72. 


:W£* 





n Ps 

SM Ue E ten Wgh Lw IM Cteg 

ABSted8 020 20 10 15% 15 15 

ACCQap 012 651437 16% 10 16 ft 

tataE 237400 1B% 17% 18% ft 

Acme Ills 20 150 23 22% a ft 

teriomCp 28 64 20% 20 2D 

Adapted! if 5932 75% 15 15% ft 

ADC Tela 331185 40% 30% a ft 

ftttngm 20 115 15% 14% 15% +% 

Ada Saw 016 22 139 36% 36*2 38*2 

AdDbrSjS 020 232442 Z9 28% 28% ■% 
A**nwC 7 BSD 12%n0% 1032 -i£ 
AdfLogfc 7 290 4% 4% 4% ft 
AdvPUym 7 X ft 5% 5% 
AdiflMd) 26 79 15 14% 15 ft 

Mvuitax 031 19 751 38% 37% 37% -1% 
Anwar B 415 13% 12 13+1% 

Agency fe 221982 13% 13 13% -it 
AgnlcoCa 010127 183 11% 11% 11% ft 
«**pr 020 14 336 22% 22 22% 

AkzD Affl £34 IS 570 55% 55% 55% ft 
AMECp 38 1996 27£ 26% 26% ft 
MOS 068 17 733 25% 24% 34% ft 
Afc08W 15 a 8% 7% 8% ft 
Alai (kg 052 14 8 37X37 -1 

Afan Ph 5 590 10% ID 10^ 1 7 * 

HUCtm 100 12 132 144* 13% 13% 

AH Cap OLB0 12 92 14% 14 14% ■% 

AtameC O32 20 H0D 3 03 3ft 

Aria Gold 006 6 B54 1% 1% 1% ft 
Altera Co 31 9622 33% 32 32 -2 

Am Baker *072 B 2S2 22% 22 22% 
AmCtyBo 14 25 15% 14% 16% +% 
Am MUtag 21 375 22% 22% 22% ft 
Are tart B 13 550 10% 9% 0% ft 
AmSoftm 032156 278 5% 4% 5ft 

AmFrtwyB 33 1S1 20 19 10% ft 

AmBIA 050 IB 4979 28% 28% 2B% 

AmM> 1 740 1* 1 1% 

AnHte x £20 7 296 48 47% 47% +% 

AmPwiConu 41 3102 23 21% 21% -1 

AmTrav 10 264 13% 12% 13% 

Amganlnc 17 9029 45% 44% 44% -% 
Affltecn Cp *0X8 23 932 17 16% 16% ft 

AnwFte 4 676 9 08% 8% ft 

Anrtoglc 16 494 16% 16% 1B% ft 

Analysis 048 IS 64 16% 16 16% ft 

ArangsMm 1X0 14 g 17% 17% 17% +A 
AndrawCp 22 624 39% XX 

Andres An 8 219 15% 14% 14% ft 

Apogee En O30 25 101 12% 12 12% +% 

APPBta 7 1342 5% 5% 5& -& 

AppU MM 291O06B <6% 43% 44 -2 

ApplaC* 048 2412328 37% 27% 27% ft 

Appiabees 0X4 41 540 1 8% 16 18 ft 

AitnDr 024 X1036 18 17% 17% ft 

Arctco 026 22 662 X 29% 29% ft 
Aigonau 1.16 S 465 28 27% 28 

ArnorAlX 064 20 GOB 20% 20% 20% +% 
Areoklta 040 17 214 19% 19 19% ft 

ASX Grp 31403 13.11 131111 

AspecfTd 35 254 28% 27% Z7% 
AwacCOma 372 14 24,«« 24>2 24* +A 

ASTHnch 107087 IB 1 * 15% 16% +% 

Addnson 15 22 u9% 9 1 z 9% ft 
All SEAir 032 20 2028 28% 27% 28% 

Auttek 0« 20 2045 52% 51 52 +% 

AutaMb 12 IX 3% 3% 3% 

AMKtale 092 16 237 8% 7% rt ft 


- B- 

BEISx 0X8 91 43 6 

Bdteagas 10 245 13% 
BakartlWI 168 A 

Baker J 0X6 11 1456 1B% 
BUwoLB 024 3 3 14 

Bnctac 16 477 22% 
Bnasoun 044 11 475 19% 
BanknaCp 0« 10 188 19% 
Banheorth 080 12 59u22% 
BanWItacs 030 28 24 U34 

Bans Bn 052 16 211 34 

BasutF 080 15 IX 28% 
Bay View 060 1 3 797 24% 
Baytaiks 1-« 14 087 53 

BBSTFhx 1X8 9 278 20% 
BE Aero 2) 570 9% 
BeauBCM 028 34 X7KI5% 
MJeny 19 423 18% 
BwUeyWR 044 14 46 40 

BHAGrp 012 12 28 5% 
in 32 5% 
016 16 505 11% 
0X6 14 75 12% 
34 5468 32% 
162747 10% 
1X4 11 175 30% 
182760 SB 
Badn»SxM4 10 799 33% 
Bab Euro 027 19 803 21% 
BaetoftB 15 34u30% 
Butand 34724 9% 

Boston Bkx 076 5 308 32% 
Boston Tc 442399 10% 
BratyWA OBB 18 Z1D0 46 
Bienca 020 29 1217U13% 
Bruno S 024 151053 7% 
BSSBncp OJB 9 158 28 1 * 
BTSHpng 045 7 218 3% 


Bine 
BtgBx 
BfadqyW 
Btogn 
Btonwt 
BtocfeDrg 
BMC Sate 


«% 5% 

12 % 12 % 
xi A 
18% 16% 

14 14 

22 22 % 

1B% 18% 

18% 19% 4 
21% 21% -ft 
33% 33% 

33% 34 

28% 28% 

24% 24% 

62% 82% -1% 
29% 29% ft 
8% 9 ft 

15 15 ft 

17% 18% ft 
3B% 39% ft 

8% 8% -1% 

5 5-% 

lift 11% ft 
11 % 12 % -ft 
30% 31% +% 
9% 9% -% 
29% 30 +% 

56% 57% ft 


ft 


+% 

ft 

ft 


BUMS 

BidderaT 

BurBmn 

Budneasfl 

BuaortMg 


319209 20% 
22 87 13% 
30 148 9% 
61 2 32% 

5 98 23 


-c- 


33% 33% 

21% 21% ft 

30 30% 

8% 9ft 

31% 31% ft 

ft 9« -A 

46 48 -1% 
12 % 12 % +% 
7% 7% 

27% 27% ft 
3A 3% 

20% 20% ft 
12% 13 

5% 6% ft 
32% 32% 

22 23 ft 


CTec IK 771 26 25% 26 ft 

Cabot Mad 9 87 5% 8% 8% 
CuSdNtoS M7 16 X 28 27% 26 ft 

CadnuCUDOTO 22 23011119% 17% 1&% +1% 


Caere Cp 
CUgene 
CU Hfcra 
Canute 


Qxflaa 
Canon toe 
Canonic 
CanftHl 


3% 

2 

85 

3% 


CaseyS 

Cetgene 

Catear 

CBICp 

CentaxTel 

Cantocnr 

CuriRd 

MrtSpr 


ft 

-A 

ft 

+% 

ft 

+1 

ft 

+% 

ft 


ft 

ft 


116 380 7% 07 7 

225 8 1378 14 13% 13U 

21 1597 23% 22 22% 

1 2962 1% dl 1% 

2 132 3% 3% 

1 20 2 2 

060118 143 K 84% 

2 237 4 3% 

012 X 144 46% 46% 48% 
CUttonCU 0X1 21 267 28% 25% 26% 

OB) 18 8 20% 20% 20% 

0X8 16 692 11%d1D% 11% +% 
5 15 6% 6% 6% 

B 334 19% 16% 19% 

19 26012% 12 12A +A 
77 2 11 10% 10% 

410151 11% 10% 11% 

1.12 12 531 33% 33% 33% 

24 21 12 11% 12 

B 17 4% ft 4% 

0X0 8 321 22% 22% 22% +% 
009 13 1245 10% 9% 10 

42 47 10% 8A 8% 

15 100 10% 10% 10% 

1 290 % d% % 

12 10 3% 3% 3% 

8 888 4% 4% 4% ft 

62 3584 55 % 63% 64% -1% 

1X8 12 588 53 52 53 ft 

017 311258 32 31% 32 ft 

3510757 35% 32% 33% -2% 
131 608 2S 2A 2% 
1319772 

CbBuicpxIXS 18 15 

CtaanHxr 27 161 

CakDr 43 5 

CUbestm 81848 
CocaCataB 1X0 17 in 
CodsEngy 118TOK 

CRtoAtann 
Cooler Cp 
Cugnas 
CoTOnsnt 


Dapurl 

DnnBh 

Qundsgn 


ChBDpoww 
OdprtTe 
ChkanCp 
Ckm Bn 
antes (to 

Cknntgc 
CK Tech 


25 23% 24 

29 28% X 
7% 7% 7% 

12% 12% 12% 

S% 4ft 4% 

28 27% 27% 

6% 5% 5)3 

27 X 10% 10% 10% 
251878 16% 15% 16% 

102 44 11% 11% 11% 

18 1G6 13% 13 13% 

88 167 21% 21% 21% 
CoHGacx IX 13 50 21 20 21 

CoM Grp 050 8 75 23% 23 23% 

Cantor 024 12 1995 19% 1B% 19% ft 
CmUAx 009 191310 18% 18% 18j 7 t ni 
CmcsttSp* 009 38 692 18% 18 18% 
OaurBdksOSS 11 107 32% 31% 31% 

CDRoa 070 SB 12 18% 18 18% 

Compute 383 555 11% 11% 11% 

ConHara 54 IX 12% 12 12 

CootobcH 34 264 3ft 3i 3% -XS 
MB 27 634 40% 40 40% ft 

7 51 8% rt 6% 

M4 IB EQ26u11% 10% 11 
32 384 17 16% 16% ft 

16 269 till % 11 11 

050 18 233 19% 18% 18% 

68 571 10% 10% 10% 

23 1375 52% 51% 52% ft 


ft 

ft 

+1 

ft 


Crated 

QxntoCd 


CousAa 
CtWttta 
CBnfisCp 
Ccrp « A 


44 IX 16 15% 16 
Cocker 9 1 ME 29 4996 24% 23% 24% 
Gray Crap 0 944 1/, 1% 1* 

CXMRfei X 30 5% 5% 5% 

cyngn 41355 s% ft 5% 


- D - 

DSC Cm 1234690 20% 619 19ft 

Datfirua 013 IB 2 74 574 74 


DSHSWOl 


Daatcdw 


9 408 2% 2% 2% 
31 84 7% 7% 7% 

161777 ul? 19% 16% 


Stock 

DaupMfip 
Dab Shags 
Mato ED 
Dekalb Be 
Dektmps 
Del Comp 
DtotaQStm 

Dntjvy 

DepBty 

Devuxi 

DHTedi 

DH1 

obi ha 

D*gMkn 

Dig Stud 

HO a* 

tenwep 

(Werm 

DNARart 

DtAarGn 

Dordirtn 

DreoEngy 

DraaSun 

Dray GO 

DregEmgw 

DS Banco 1 

Duriiui 

Dor FI 

DynTOcb 


W Sk 

BkL E ISO* Mp UM 

0X2 12 443UZ7% 28 j 2 
020 20 63 7 A 6% 
032 23 9 15 IS 

03045 9 30% X 

044 11 177 22% 21% 
ZB2B791 28% 26% 
01818 53 15% 15 

33 333 38% X 
1X0 9 253 30% 30% 
02D 4 21 6% B% 

18 SIOUTll* 2ft 
UO 7 1509 1ft 15,* 
14 943 14% 13% 
7 659 13% 12% 
7 202 1% 1% 

6 25 3% 3% 

16 197 32% 

0201025 303 10% 9% 
2 832 4% ft 
020 252028 26 25% 

058 15 32 1 ft fli 2% 
12 374 B% 07% 
It 1020 Iftdlft 

024 2D 651 23% 23% 

009 52 5 5% 5% 

1X9 17 4H 30% 10% 
M2 12 671 1B% 15% 
OX 24 5u33% 32% 

7 35G 21% 19% 


Into tei 

Z7 ft 

6% -ft 
15 

30% 

22% 

28% 

15 
X 
30*2 
6% 

20^2 
15% 

14% 

13% 

112 
ft 
3ft ft 
10% 

4% 

2ft 
lft 

8X6 -.40 

19% *A 

23% ft 

rt ft 

30% 

irt ft 

32% 

20% 


EagtaFd 
EanriCo 
EaetEiwmt 
ED Tel 


BPrtoB 

BectrSd 


BacUMa 

Enron Ass 

ftmWw Cp 

En u yV n b s 

EmrirSn 

Enron toe 

Equgn 

Ertcsme 

BMd 

Evens Sth 

Exebyu 


Ertd e Ofl c 

Eroednix 

EznvpAmr 


ftdfire 

FUrCp 


fWM 

RUertce 

Fmtimrif 

Ftflf OH 

HmtoA 

FBflner 

ErtAteauk 

Ftori Are 

MBcOMox 

FHWBR 
Fa Seciy 

Fat Toon 

MWertl 

RdadMcx 

fMkrx 

modes 

Ftaen 

Ftawim 

FoodLA 

Fo oUB 

FUenad 

Fuaetner 

PtusBanc 

Rater A 

Fnnnn 

FHEKtn 

FrtRrt 

FstHBMUx 

FiderHB 

FUtorfti 

Rim 

FubnedADR 


5X4% 04% 
2 61 4 3% 

2 AO 1% 1% 
01B 22 2387 17% 16% 
62 835 7% 7% 
2 SIB 2% 2ft 
101598 11 1ft 

0X9 48 108 48% 48% 
24 5500 21 20% 

21 472 7% 7% 

271442 8% 06 

42 140 11% 11% 

« a 2 2 

2 385 ft 2% 
010 15 194 3% 3% 
0481374807 49% 49 

100 7% H7% 
67 297 15>2d14% 
23 1 071 17% 17% 
lOzin 7% 7% 
18 TO8 22% 21% 
01D 22 2D2a19% 18% 

22 M 14% 13% 


- F- 

II 118 5% 4% 
024 11 421 5% 04% 

0X4 53 184 33% X 
154052 25% 24% 
3 174 3% 2% 
1X8 16 331 uSS 54% 
71150 4% 4% 
024 0 297 11% 10% 
34 2972 26% 24% 
120 1 2 1 652 35% 35% 
0X4 81151034% 34% 
IX 11 279 »% 2* 

06021 548 24% 24 

1X4 11 2714 iflft 29% 
1XB 10 20001143% 43 

OS 7 106 8{3 8% 
OS 6 203 22% 2 
IS 11 116 47% 47% 
44 X 7% 7% 
25 745 20% 20% 
17 452 6% 5% 

an 1510288 5% oft 

0095751042 5% 5% 
1X910 6 31% 30% 

13 11 13% 013% 
OX 33 457(04% 34% 
« 384 3% 3% 
1X4 11 1004u29% 28% 
1.12535 6 26% 26% 

040 8 334 1ft 15% 
1.18 11 831 1126% 27% 
056 23 382 X 37 
054 11 116(01% 20% 
024 19 BX 15% 14% 
78 5% 4% 


4% 

4 

1% 

17% -% 
7% -% 
2ft 
10% -% 
48% A, 
20% -% 
7% -% 

IIS +X8 
2 ft 
2% 

312 +A 
4ft -«% 
7% 

1«% 

17% +% 
7% -% 
22% -% 
19% ft 
13% ■% 


5 +% 
4% -% 
33% 

25 -% 
3 
55 

4% ft 
11 

24% -1% 

3ft 

34% 

24% ft 
24 -% 
30% ft 
43% ft 


ats 

22% 

47% 

7% 

2ft 

8 


5% +% 
ft 

30% -% 
13% ft 
34% ft 
3% 

28% 

28% 

1ft ft 
28% ft 
37 -% 
21% 

15% ft 

5% 


- G - 


GUApp 

G&KServx 

GBnbB 

Sanaa Ri 

GeM Co 

GertBhd 

Gertyte 


Gotta Cp 

Gere* Inc 

Genzyms 

GteauiGlx 

BddtagsL 

GttoutA 

QdiBlun 

Good Guys 

GokfePmp 

GradroSyc 

9mk 

GreonAP 

tenidiPli 

Qwsmans 

andWtr 

GH Coni 

gsw&h 


8 54 
0X721 44 

0 203 

10 900 
616156 17 
a« 17 840 

19 78 
41M0 
4X0 43 623 
137 400 
69 639 

aa io nee 

012 17 761 
0X0 17*100 

11 75 
151321 

050 19 274 
35 19 
020 75 76 
024 11 SB 
a 382 
11224 
675 134 
8 267 
51176 


3% «B% 

14% 14% 

3% 3% 
3% 3% 
6% rt 
16% 16% 
«5 4% 
13% 12% 
26% 25% 
4% 4 

30% 29% 
17%d17% 
23 22% 
16 16 
5% 5 

13 12% 
22 % 21 % 
2% 2% 
22 % 22 % 
IB IB 

li % 

3 2% 
13% 13% 
10 % 10 % 
9% 8% 


ft 

+A 

-% 

-% 

ft 


3% ft 
14% 

3% 

3% 
rt 
16% 

5 

12% 

25% 

4% 

29% 

im -a 

22% ft 
19 ft 

ft ft 

13 +% 
22% ft 
2% 

22% ft 
16% 

% 

3 ft 
13% 

1ft ft 
9 % 


Harding A 

HvtovyU 

Karp* Gp 
HBO&Co 


HbUXeib 

Haaflhdyn 

HaataH 

Hectengv 

Htodmj 

Hetenlrcy 

Haul 

Hegmsyt 

Hotaoto 

Home Beni 

Home Ofce 

Hon Inis 

Hembeck 


Vkmt JB 

HuMiootn 

HureoCe 

HukkTedi 

Hycorte 


- H - 

83 162 7 6% 

0X4 8 10 22% 22 

020 14 866 15% 14% 
016 25 5X6(131% 29% 

18 2151 20% 1ft 
0X6 21 722 U13 12% 
9 143 6% 6% 

14 145 6% 5% 
016 27 1705 16% 15% 

196 11% 10% 
5 286 15% 14% 
072 17 898 28% 25% 
015 29 455 ID 9% 

55 687 13% 12 

0X0 9 3 21% 20% 

0J2 25 251 U21 20 

044 22 48 31% 30% 

15 6833 lft 14 

044367 160 4 3% 

OTO 16 974 1B% dlB 
080 11 IBS 27% 26% 
006 0 319 2% d2% 

53 482 35 X 

17 61 5 4% 


7 ft 
22% ft 
lft ft 
3ft ft 
16% -1% 
12% 

ft ft 
8% ft 
16% ft 
11 -% 
16 +% 
25% -1% 
9% +% 
12% -% 
21% 

20% 

3T% ft 


14% 

3% 

16% 

27% 

2% 


32% -3% 
4% -% 


FRSye 

S3 42 

9 rt 8% 

-% 

OB Demins 

1 2332450 

8% 7% 7% 

ft 

am 

6 508 

B% ft 6% 

rt 

kmnuar 

33 379 

6% 5% 5% 

rt 

hiuiMmogeii 

1 4 218 

6% 5 5% 

rt 

bnperfBc 

(MO X 1584 u19% 15% 19% 

■rt 

tad Banco * 1.16 X1 161 

041 4ft 40% 

rt 

tad ha 

024219 88 

15% 15% 15% 


MRu 

17 304 

15 14% 14% 

rt 

kdumh 

2111728 

17% 18 17% +1% 

hgtesMd 1 DBS 15 111 

11% 10% 10% 

-% 

htagrDev 

3410185 

29% 27% 28% 

•1% 

totebBys 

28 74 

12% 11% 11% 

rt 

ngtsna 

8 387 

3% 82% 2% 

-A 

total 

024 1120971 

62% 61 61% 

-A 

total 

B 362 

2%d2% 2% 

rt 

MgnS 

032 366301 

21% 20% 21% 

-% 

HerTri 

21 187 

10 ft 9JJ 

ft 

MarfcaA 

024 17 86 

13% 13% 13% 


HBPh 

3 2384 

rt rt b% 

rt 

total 

8 768 

6% E B% 


kdushe 

4 35 

11% 11% 11% 

-% 

totarvUc 

171403 

10% 9% 9% 

rt 

KdOakyOA 

15 77 

18% 17% 18 

rt 

hi Res 

006 20 141 

ft ft ft 

-A 

tot Total 

434 216 

0 ft m 

-A 

hvactre 

001 18 687 

TO 27 27 

■1 

kanageCp 

1 S3 

2% 2% 2% 

rt 

ihwihui 

18 8 

17% 16% 17% 

rt 

UOYriodo 

1.17 X 58 

206 205 206 +2% 


- J 



JU Snack 

15 87 

13 12% 13 


Jason Inc 

OX 16 546 

11% 11 11 



JLX mi OIO 2B B47u34% X 32% +% 
JUnsenW 59 194 23% 22% 23% ft 

Jmubit 10 in 14% 14 14% 

JonsHad 010 17 773 11% n n% ft 

JuriynCp MD 11 B5 24% 24% 24% -% 

JS6 Rn 0X4 15 308 25 24% 25 +% 

Juno Up 029 19 717 19% 18.74 10% +% 

Judta 016 9 314 13 12% 12% ft 


Buck 

Oh. F iBOi use 

Lear lari 

tog 


- K - 



KSwbs 

DJffl 12 263 23% 

22 23% 

+% 

KurunCp 

044 5 73 0% 

9% 8% 


Kenton Cp (MO 131653 22% 21% 21% 

-% 

luaym 

81615 7% 

6"% 

ft 

tehSv* 

072 22 128 27 26% 27 

-% 

Kenudcy 

011 9 43 5i2 d5% 5% 

ft 

Kjnttril 

OW 13 71 24% 

24 24% 

rt 

Kudin 

14 31 7% 

7 7 


HA tear 

W545S 41% 

AO 40^ 

rt 

hruvrieege 

42347 ft 

dB 8% 

-1 

K08A 

1 788 li 

A A 

12 

Komaglnc 

193 4116 22% 

21 21% 

1% 

KUkkeS 

9 959 15 14% 14% 



- L - 



Ladd hire * 0 12 52 32 9 

8% 9 

rt 

Lmfech 

34 1583 30% 28% 30 

-1 

Lancasterx OW X1599 47% 

47 47% 



Lancs toe 0» 18 74 16% 18 18% 

UndmfcGph 39 1319 30% X X, 1 * 

Lmpdcs 10 18 7% 7% 7% 

Laseracpo 86 I7l 6 5% 6 


LaUceS 

15 2911 

1ft 18 18% 

rt 

Lawson Pr 

048 16 

215 

23 22% 2ft 

rt 

LOOS 

257 4073 18% 17% 

IB 


UUCP 

018 2 

15 

5 5 

5 

-% 

tedkn 

>5 

466 1ft 12% 10% 

rt 

LegentCp 

19 3408 31% 30% 31% 

rt 

LEayNtBc 

078 15 

980 

31 30% 30% 

-% 

UleTech 

OX IB 

BO 

18 17% 

18 

rt 

Lrtefce 

21 

17 

4% rt 

rt 


LtoyfndA* 

028 13 

315 

15 14% 14% 

rt 

LtoBr 

101 

380119%11B%1!9% 

rt 

LtocotnT 

052 14 

78 

15 14% 

15 


Lutoayut 

14 

7 

32 31% 

32 

rt 

UneorlBc 

OW 37 1892 46% 45 

a 

rt 

1 

040 18 

7 

36 <04 

36 

+% 

LnewenGp 006 28 

805 

24 23?i 23U 

ft 


Lore Star 21 330 7% 6% 7 

LotusD 4612089 57 % 55lj 57% +1% 

L7TfCp 2 585 2% 2% 2% -A 

LVMH 035 4 25 31 30% 31 ft 


- M - 

M3 Cm* OJB 2112322 24% 24% 24% +% 
IB tea 17 81« 20 19% 19% +% 
UacUH 0X0 42 81 13% 13% 1313 -it 

MaUsonee *1X8 14 98 32% 32% 32% 
Magma Pur 13 287 30%iC9% X ft 
UBOnaGro 078 121108 18% 18>2 1B% 


MaiBw 
HarearaCp 
Mute Dr 

total Cp 
Marouad 
to i tuns 


12 41 8% 8 B 
X 124 10% Irt 10% 


131107 ft 4% 4% 
9 244 40 39*4 39% 

0 192 2,% 1% 1% 

19 10 9 8% 9 

tod£n*AQ44 10*100 10 10 10 

toshat OlGO 11 640 22 21% 21% 

ID IX B% 8% ft 

Marin, IK 41 1537 54 53 53fi 

Cp 01123 6 S% 5iJ 

McGrath R 044 13 11 17 15% 18% 

McConUc 048 17 783 21% 21 21% 

MtftokC « 1974 52% 51% 51% 

IMtaug 0 75 U % % 


Maria he 016 16 
MadlctaaS 04813 
Metantae 0X4 B 
Malta Cp 016 45 


19 12 % 12 % 12 % 
84 22% 22 22% 

9 5% 5 9 

X 14% 13% 13% 


MamG 024 20 2052 10% 10% Irt 
MarcanLB 0X8 11 1672 20% 2ft 2ft 
Mousy G 070 8 533 30% X X 
Mendtan is I2ii95 32% 31% 31}] 
162881 17% irt 16% 
MattodaA 006 15 119 IS 1 * 14% 15% 
MchaelF 020 17 177u12% 12% 12% 
MdlNalB 2003a 115 77 76% 76% 

9 95 3% (D% 3% 

18 701 24% 23% 23% 

4 47 rt ft ft 

17 94 7 6% 6% 

2 996 ft 6% 6% 

1540019 54% 53% 53% 
4611379 53% 40% 52% 
04D12 412B 31% 30% 30% 
MriwSrton 050 27 I26u34% 33% 33% 
H 052 19 1046 27 26ft 27 

Won 655 28% 25% 25% 

Mtodadi 14 36 11 Irt 11 

MoMeTto 46 2983 19 18% 18% 

Modem Co 02018 19 7% 7% 7% 

Mutate M! *05? 20 222 27% 27 27% 

Mtta 0X4 1068 38% 35% 36% 

Mote* he 084 TO 756 38% 38% 38% 

Museum 0X4 14 735 8% 7% B 

MasiroeP 036 22 9 30% 29% 30% 

MTCnflee 17 291 14% 14% 14% 

MTSSysx OSB 11 57 27ft 27% 27% 

Mtbned 13 707 30% X X 

Mycegen 4 169 11% 10% 11 


McroHUi 
Menage 
Mcrecom 
bOagpafii 
Mcrpefls 
Mcdl 
MM 
MdanUc 


ft 

ft 

ft 

+% 

-% 

-% 

■ft 

-ft 

ft 

ft 

ft 

♦% 

ft 

ft 

-A 

ft 

•ft 

ft 

-% 

-% 

+% 

-ft 

ft 

+ft 

-% 

42K 

-1% 

ft 

♦H 

ft 

ft 

*% 

ft 

+% 

ft 

■h 

ft 

-% 


NACRt 016131241 
Kuril Fncb 072 11 37 

MPlza 14 107 
Md Compt xOX 75 146 
Mrs Sin 020 SI 299 
13 6 

048 99 72 
17 37B 

24 506 
98 259 

25 3 
027 20 380 
0X0 21 52 

84924 
29170® 
NewprtCp 004 13 119 
NoHa Dd 22 887 
058 25 18 
tekbnx 040 24 7B81 
Nonstanl 14 680 
N Star Un 4 in 
texVmTdk 088 14 5« 


Nawgator 

NEC 

Neftrer 

HetMKGen 

nomo 

Hauugan 

Nbgna 

NawEBua 

Newknagc 

NMgeNet 


NWAk 

Novel 


NSC Oup 


OChariays 
ten 
OOrinLg 
OgkteyH 
CKBoCs* 
OU Kent 
Old HUB 
Onbancorp 
One Price 
Optical R 
OrecteS 
OrbSeaee 
Ottmedi 
OroMSupp 
OragonMet 
(Map 

OriABA 

OriitoshT 

OOftTall 


14 386* 
BB3151K 
32 1505 
8 51 


31 30% 
17% 17 

6% 5% 
12% 12 
15 14% 

irt irt 
57% 57% 
27% 27 

17% 17% 
6% 6% 
7% 7% 
20% 19% 
19% 19 
11% 10% 
40%d37% 
U8% 5% 
7% 7 

X 55 
42% 41 

Ul9 17% 
u8 5% 
42% 41% 
14% 13% 
18% 17% 
37% 35% 
3% tD% 


- o- 


28 200 
15 489 
14 1517 
0X0 8*100 
1.48 5 4X7 
1.18 11 343 
002 18 6 
1X0 8 267 
14 84 

20 300 
5417094 
53 B13 
099 22 4a 
9 18 
031 9 268 
8 256 
041 41 834 

ax ii x 

1.72 14 22 


18 17% 
20% 19% 
Irtdl2}£ 
25% 25% 
28% 27% 
34% 34% 

X UK 
32% 31% 

19 18% 
21% 21 
37% 35% 

21 20 % 
7% d7% 
13% 13% 
5% 5% 
2 % 02 % 
12 % 12 % 
10 % 10 % 
32% 32 


31 +% 
17% ft 
6 

12 -% 
14% ft 
19% +1% 
57% +1 

27% +% 
17% ft 
8% 
ft 

irt -% 

19 -% 
10% -1% 
3ft +1% 
rt ft 

7% 

SB +% 
41% -1% 
18% +1 
5% +% 
42% +% 
13% -% 
17% ft 
35% -1% 
3% -% 


17% -% 
19% 

13% +% 
25% +% 
28% ft 
34% ■% 
X 
31% 

18% 

21 


ft 
ft 
-ft 

37ft +}] 


21 

7% 

13% 

rt 

2% 


+% 

ft 

-% 

ft 

ft 


12% +% 
10 % 

32 -% 


PBcdicre 

Panrotorc 

Paycftm 

PaycoAm 


- P - Q - 

IX 12 754 48% da 

PWOlrtopxOIE 12 » 13612% 
PTrian 1X2 IS 14 22% 22 

24 2131180% 5812 
33 5578 28% 27% 

O 4011140 32% 31 

21 23 8% dB% 
050 39 3 9 (IS 

9 5 14% 14% 

IX 23 83 33% 32% 

072 15 177 35% 35 

18 X 8 5% 

020 21 12 Irt 18 

024 13 934 13% 13% 
1.12 16 5 32 30% 

£4 95 9 7 

25 348 5 4% 

0« 4 4 Iftitlft 

28 444 14% 13% 
42 112 18% 1^4 
PtaneafipxOX 271091 40% a 
PIUMM 056 22 1706 33% 32% 
014 13 4a 24% 23% 
6 X 8% 7% 
18 387 
009 3 114 
103 933 
009388 
X 721 
15 Tin 


Pot Trty 
PanVtrg 
Pentab 
Renwftl 
Penwest L 
tsH 
Mrdk 
Phuitncy 
PluuUTrii 
PkadU 
Ptturete 

motion 


PUneaSt 
Fun FM 
Fdm* 
Pin Ufa 


46 -2 

12% ft 

22 % 

58% -1% 
28% ft 
32% +1% 
8% -% 
9 ft 
14% 

32% ft 

* ft 

9 
18 
13% 

X% 


ft 

t% 


PWOW 
pnttePw 
Prtotmel 
Prod Ops 


6% 
rt rt 

29 26 
14 13% 
5 04% 
9 9 


0X4 22 57 25% 25 


8 -% 
5 

11% ft 

14 ft 

irt 

40% ft 

33 

24% ft 
7% •% 

ft 
6% 

28 
13ft 
ft 
B 

25A -ft 


ft 

-1 

-it 

ft 


w 


Stock Dh. 
Puritan B 013 
Pyramid 

QuatarCtm 062 
Opal Food PPD 
Ouanaxn 
(Uriah 
(WC NBTHk 


Sb 

lrib 


E 

8 1505 
12 332 
11 13 
71 7 

173897 
8418076 
19 112 
22 2323 


Up In Iri On 

2011 19% 20% ft 

7% 7% 7% 

7 6% 6% 

19% 17% 17% 

24 23 23% 

15% 13% 14* -lft 
14% 13% 13% -% 
34% 33% 34 •% 


ft 

ft 

ft 


Rrinbew 

Rafts 


Raymond 

Rscotor 
URs A 
Rapigen 


fesrcund 

Reuters 

Renin toe 

IfterFst 

faadwS 

RtMgra 

Rod£v9k 

Roosaiot 


RotacWad 

Ruflc 

RPM toe. 
RSRn 
Ryan Ririy 


- R - 

12 7» 14% 
62314 5 *e 
3 451 5% 
a 371 19% 
32 121 X 
17 7? 19 

2 249 4% 
5 93 3% 
15 X 9 
£24 1519U 44% 
1 16 6% 
OX 10 BO 35% 
IX 22 688 70% 
012 13 52 8% 

056 41714 17% 
015 31015 18% 
020 II 1167 14% 
25 416 20% 
068 60 5*2 Irt 
052 TO 276 18 

048 13 37UZ1% 
14 3064 7% 


13% 13% 

5ft rt 

4% 4% 

ia% irt 

34 34% 
18% 16% 

4 4% 
3% 3% 
6% 8^ 
43% 44% 
5% 6% 

35 35% 
69% 08% 

6% 6% 
16% 17% 
17% 17% 
137 a 13% 
20 % 20 % 
19 19% 
17% 17% 
00% 21% 
7% 7% 


-% 

ft 

-% 

ft 

ft 

ft 

ft 

ft 

ft 

-1 

ft 

♦A 

■% 

-% 


ft 


- S - 

Safeco IX 81717 56% X 
Sanderson OX 13 12 17% 17% 
SddmbgrA OX 18 968 25% 24% 
SdMedL 


SO Syaun 

Seta 

SckexCp 

Score Bid 

SeaMd 

ffgato 

SB Cp 

SabrisB 

SrtecflnB 

Sequent 

SffljKUa 

ServTccb 

Senfrad 

Swenson 

Sotted 

SHLSystm 

9nmud 

SlmwbtrP 

Sierra On 

StarraTkc 

StomNx 

SlgtnaDa 

SkcnUBc 

StocnVGp 


7 1262 28% 28% 

12 341 16 15% 

7 GW 7 5% 
052 1 2056 1 7% 18% 

8 2112 8 7 

ix a a 38% x 

1 021 308 22% 21% 
016 23 3S8 16% 18 

036 1 21 1% 1% 

1.12 14 X ZSl* 24% 

69 2135 15% 14% 

26 2479 4% 3*2 

13 85 6% 9 


58% ft 
17% 

3% ft 


28% 

15% 

6% 

17% 

7% 

X 

£i‘? 

16% 

1% 

24% 

14% 

4 

9 


ft 

ft 

-it 

ft 

ft 

ft 

ft 

ft 

ft 

-i. 


S3 19 4% *% *% ft 

16 4 17% 17% 17% 

084 17 482 23% 23% 23% ft 

3 £82 7 6% 6% ft 

28 280 Ul7% 17 17% ft 

10 92 11% 10% 10% ft 

161875 2D 18% 19 -1 

2 20 3% 3% 3% 

033 18 3688 41 39% 40% -% 

1 797 8 7% B 

006 51 122 10% 10>4 IO 1 * ft 

x 12a irt irt irt 


SUnpeanx 

056 SS 14 X 19% 

X 


SmlBftj 

32 T035 24% 22% 23% 

rt 

SnappfeBv 

7313609 28% 

27 

TO 

-% 

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1 920 5% 

4% 

5 


fiOflppp 

056 142529 20% 

20 

20 

-% 

SouUitel 

068 11 1963 u21% 21% 01% 

rt 


StcyH 

Strife 


Spiegel A OX 47 779 23% 22% 22% 
SJudcMd 04D 12471B X 28 28% 

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2 848 2]] 2<*« ?A 

a 2326 30% 30 X 

OX 171572 42% 41% 42% 
111973 17% 16% 16% 

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008 19 104 17 18% 17 +% 

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135 IX 19% 19 19 ft 

1.10 12 57 20%d1B% X% +% 
20 1418 10 9% 9}] ft 

028 221553 2B% 27% 28% ft 
20 42 Irt 14% 14% ft 


SttMcro 

stditaok- 

StodTec 

SWdyUSA 

SnbN 

StrmtxCi 

StacdDy 

Stryker 

SuHfeO 

SunknmaB 

Sunml.Bc 

SUiuntTe 

Sui Sport 

SunMfc 

Swfltlra 

Sybase Inc 

Symenue 

SynaOoy 

Synacun 

Synsrgen 

SyneOc 

Synopses 

SyrimSaft 

SystamSco 

Sysenrod 


ft 

ft 

ft 

-% 

ft 

ft 

ft 

ft 


080 25 08 02% 02 

084 14 575 U23 22% 
39 2337 0B% 27% 
14 71 8 5% 

11 5509 21% 21 

X 6Sli29% 29% 
65100321158% 55% 
371770 1ft 13% 
OX 19 27 19 16% 

68 54 3% 3ft 


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21ft ft 
29% ft 
56% ft 
13% ft 
19 ft 
3ft ft 


2 171 9% 9% ft ft 
81 328 15% 14% 14% ft 

14 0456 irtmrt irt ft 

012 17 2341 15% 14% 15% +% 
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TBCCp 18 841 13% 13% 
TCACaMe 044 27 381 23% 22% 
TechOaia 101094 17% 16% 
Tecumsah x 080 14 B2 54% 53% 
lakelet 2 X 9% 9% 

Telco Sys B 561 15 14% 

TetoCnmmA 31BM949 22% 21% 
Ttoebb 5 1808 5% 5 

TrikbS 2211130 33% 30% 

TdxunCp 001 93 345 17% 16% 

TetraTro 71 76 8 % 8% 

TevaPMOT 027K5171 25 23% 

Tim Cun 2916588 44% 042% 

TJht 022 33 B26 22% 21% 
Tokos Mad 2 B32 4% 4% 

Tokyo to 032 37 172 83 82% 

Tom Brawn BO 5B5u15% 14% 

Tapps Co 0283*3 1607 7% 6% 
TRErter 3 165 7 6% 

TrenswU 10 32 10% 10% 

Tranwkkx IX 12 2i0u43% 42% 
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Tnmoto 52 382 10% 9% 

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WsRidEdl 77 367 
MtashUitSeOGB 73003 
WMFedSL 030 9 407 
WattrindA x 022 10 400 
Wausau PM 034 16 290 
WD-40 200 15 126 

Wtotek 22 257 

West One 072125311 
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12 61 
0X22 S3 
UtoBSanuiB 78 772 
Wotohan L *02B 12 37 
Wtteigix OX 24 731 
WW Group 083 22 1384 
Wyman-Gdnoa 4 640 


wan* 

wstpsn 

WatSeMA 

WkntJfi 


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01 % 21 % 
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31% 31% 
12% 11% 
15814% 
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46% 45% 
35% 33% 
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rt ft 


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YHkW OW 27 1379 18% 1ft 18% -% 
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tatsUaii 1.12 10 157 u4l% 40% 40% ft 



40 


WORLD STOCK MARKETS 


FINANCIAL TIMES 


Wednesday June 8 1994 


AMERICA 


EUROPE 


Dow subsides 
as equities 
follow bonds 


Frankfurt frightened by new loan losses rumour 


Wall Street 

05 share prices slipped yester- 
day morning' as stocks followed 
bonds in a convictionless 
decline, writes Frank McOurty 
in New York. 

By 1pm. the Dow Jones 
Industrial Average was 7.G9 
lower at 3,760.83, while the 
more broadly based Standard 

6 Poor’s 500 was down 0.49 at 
45839. In the secondary mar- 
kets, the American SB compos- 
ite dipped 0.1B to 442.41 and the 
Nasdaq composite receded 3.05 
to 74038. 

With no fresh economic news 
available, activity was light. 
Only 139m shares were traded 
on the NYSE by 1 pm. Analysts 
said that trading was likely to 
remain listless until Friday, 
when the Commerce Depart- 
ment is scheduled to release 
producer prices data for May, 
followed by consumer price 
data next Monday. 

However, the two reports 
were not expected to stir the 
market unless the data con- 
founded ex p ecta tions of tem» 
inflation last month. Forecasts 
centre on a 0.2 per cent 
increase in the PPI, after a 
slight decline in April, The CPI 
is expected to show a 0.3 per 
cent upturn, after inching o.l 
per cent ahead during the pre- 
vious month. 

After a welcome two-day 
rally, the US Treasury market 
was taking a breather. The 
benchmark 30-year govern- 
ment bond was showing mod- 
est losses by midday, with 
traders also looking ahead to 
the infla tion data due out later 
hi the week. 

In the absence of a strong 
movement by bonds or impor- 
tant fundamental guidance, 
technical conditions came to 
the fore, giving rise to profit- 
taking across the board. 

Cyclical issues were the 
hardest hit, probably reflecting 
recent statistics pointing to a 
cooling economy. Caterpillar 
dropped 11% to $106% and 
International Paper receded 
$1% to $69. 

Utilities were among the 
most actively traded issues, in 
transactions linked to dividend 
payment schedules. Texas Util- 
ities dipped $% to $32% in 
heavy volume of more than 
2.2m shares. Pennsylvania 
Power & Light was off $% at 
$21% and Long Island Lighting 
shed $'/. to $19%. 

In pharmaceuticals, Rhone- 
Poulenc Rorer was turning in a 
strong performance amid spec- 
ulation that its French parent 


South African gold shares 
advance on rise in bullion 


Gold shares in Johannesburg 
improved sharply following a 
rise in bullion above $380 an 
ounce. However, industrials 
lacked direction, while there 
was steady interest In De 
Beers, up R335 at Rl.12.25. 

The overall index rose 56 to 
5,518. industrials 6 to 6,545 and 
golds 56 to 1,979. 

Among other movers, Anglos 
added R6 at R227J50 and JCI 
was 50 cents better at R95-50. 

Remgro depressed the indus- 
trial index with a 75-cent fall to 
R26.75 on fears that it could 
suffer from possible taxes on 
cigarettes and alcohol. 

Gencor appreciated 5 cents 
to R10.70, Richemont slipped 25 
cents to R39.50 in good volume 
and Minorco moved ahead 
R4J30 to R11L 

Absa shed 15 cents to R8.70 


as its strong showing of the 
past week tan out of steam, 
although dealers said the mar- 
ket remained positive about its 
prospects. In golds, Kloof 
climbed R3 to R50J5Q and Vaal 
Reefs HU to R40L 
• The Council of Southern 
African Banks said yesterday 
that it had rejected recommen- 
dations for an evolutionary 
restructuring of the Johannes- 
burg Stock Exchange, and 
warned that without full 
deregulation a rival exchange 
could be set up. 

The council said that with- 
out frill deregulation there 
would be “no option but to 
apply for a licence to establish 
a rival stock exchange”. 

The move followed the JSE’s 
release of its restructuring pro- 
posals last month. 


As equities wobbled around 
the world, Mr David Roche and 
his new firm. Independent 
Strategy, offered encourage- 
ment yesterday to long term 
financial asset markets, writes 


company may raise its stake in 
the US operation. 

Late last Friday, the com- 
pany filed a document with the 
Securities and Exchange Com- 
mission which Increased the 
likelihood of such a move, ana- 
lysts said. 

After a delayed opening yes- 
terday, its share price jumped 
$3% to $38%. 

Alexander & Alexander Ser- 
vices resumed trading after a 
one-day hiatus requested by 
the company, pending a “sig- 
nificant announcement”. 

In an anticlimax, the stock 
added $% to $16% as the com- 
pany revealed that American 
International Group would 
invest $200m in a new issue of 
convertible preferred stock. 
AIG was up $% at $93%. . 

It was a quiet day on the 
Nasdaq, with most technology 
stocks showing slight declines. 
Wellfleet Communications 
shed $% to $25% and Lotus 
Development dropped $% to 
$56%. Microsoft marked its first 
day as one of the Standard & 
Poor's 500 index stocks by slip- 
ping to $53%. 

Canada 

Toronto traded lower at noon, 
the TSE-300 composite index 
registering a fall of 25.82 to 
4,243.14 in volume that climbed 
to 28.1m shares from Monday’s 

213m. 

A firm base metals index 
kept the market from easing 
further. The group rose 1L92 to 
3,68638 as Alcan Aluminium 
held steady at C$31% and Inco 
traded C$% higher at C$35 
after Lehman Brothers raised 
its 1994 Inco profit estimate. 

Conversely, precious metals 
were lower, the sector losing 
93.41, or 1 per cent, at 9,640.74. 

Brazil 

Shares in Sao Paulo were 0.6 
per cent higher in quiet mid- 
day trading, but behind the 
average daily rate of inflation, 
as foreign and domestic inves- 
tors continued to buy ahead of 
the introduction of the new 
currency, the zeal, on July 1. 

The Bovespa index had risen 
175 to 29382 by lpm. 

Chart analysts said that the 
Bovespa index had a resistance 
barrier at 30,000 points, and 
there were expectations that 
profit- taking would hold 
at that level. 

Midday turnover was 
Cr340.9bn. 

Talebras was up 0.7 per cent 
at Cz84.70 and Petrobras 3.6 per 
cent ahead at Cr2l4. 


“The conditions are set for 
mild world economic recovery, 
no return of inflation and 
lower bond yields in most 
countries,” said Mr Roche, 
marking out German, US 
Japanese equities and bonds 
for positive surprises. But yes- 
terday’s German surprise was 
quite t he rever se. 

FRANKFURT was running 
along contentedly when the 
bottom fell out of the market 
The Dax index closed the ses- 
sion 2787 lower at 2,135.10 and 
hit 2423.67 in the post-bourse 
before ending at 243L80, down 
L5 per cent on the day. 

Share prices foundered on a 
rumour that major hanks were 
at risk of more heavy losses 
from a corporate borrower - 
perhaps, once again, in the real 
estate sector. The hanks daniari 
it but Bayernhypo Ml DM13, 
or 23 per cent, to DM42930 and 
Commerzbank DM12^0, or 3.7 
per cent, to DM325. 

Elsewhere, Daimler led the 
slide with a Ml of DM1230 to 
DM802; Siemens lost DM13 at 
DM695.50: and, in a weak engi- 

AS1A PACIFIC 


nee ring sector, KHD and 
KlOckner-Wexfce Ml DM480 to 
DM135.90 and DM5.50 to 
DM15330 respectively. 

Ms Barbara Altmann at B 
Metzler in Frankfurt said that 
the tanking r tnnn nr hmi a gen- 
eral effect on share prices. Not- 
ing that turnover stayed low 
yesterday, rising from DM5.2bn 
to DM5ibn, she added: “With 
volume this low, people can 
make money out of other peo- 
ple’s fears.” 

MILAN recovered 1.6 per 
cent as domestic and foreign 
investors returned to buy blue 
chips. The Comit index 
regained U.73 at 75036as the 
market awaited government 
measures, possibly today, to 
help the labour market hives- 
tons were further cheered by 
news that Italian equity funds 
continued to record net 
receipts in May, confounding 
worries that the recent market 
downturn might have indi- 
cated net redemptions during 
fhp month. 

Fiat led the advance, adding 
1339, or 33 per cent, at L736Q 
after comments by Mr Giorgio 
Garuzzo, Flat Auto president, 
that the group was struggling 
to beep up with demand for the 
new Punto model Olivetti put 
an L100 at I££51 and Pirelli 
added L102 at 13,769. 


FT-SE Actuaries Share .indices 


Jim 7 THE EUROPEAN SERIES 

Hnaty dua Open 1030 1150 VtM 1359 1400 1000 Ow 

FT-SE Erato* 100 141X53 KT4Z7 141473 141249 1410.10 140836 140X23 140055 

FT-SE Eratack 300 142078 142930 148*78 14ZUM 143592 10X95 148330 M2Q30 

4a» J» 3 Jub 2 Jm 1 Mg 31 

FT-SE Eumack 100 141&S1 149358 139056 138387 1399.73 

FT-SE Qmtadc 200 143130 1417.13 140657 13093 140170 

bm ion (onam; HtfMw no - an - i«ao» MtttF ho - mouo zoo - iczzat 


Sham pckwand Max debased 
125 J 

fl . stare prim A 


Sip and Stet, foreign favour- 
ites, both rose by 4J. per cent, 
by L181 to L4£55 and by LZ21 
to L5382 respectively. 

Against the trend, Credito 
ItaBano Ml T.sa to I on 
news that it planned to raise 
L2,000bn over five years 
through rights issues. 

PARIS bounced back from 
the session’s lows, helped by a 
technical recovery late in the 
day in fixtures. The CAC-40 
index finished 1&41 down at 
2,023.74, in turnover of some 
FFrSbn. 

Suez rose FFr2.60 to 
FFr30830 as the market was 
swept by rumours that the sale 
of its Groupe Victoire insur- 
ance subsidiary was imminent. 

RhOn e-Poulenc, FFrl.70 
cheaper at FFr13330. was also 
subject to unconfirmed reports 
that it was to buy oat the 
minority shareholding in 
Rhfine-Poulenc Rorer, a US 


subsidiary, in which it has a 68 
per cent shareholding. 

AMSTERDAM drifted lower 
in a session dominated by 
broad declines in blue chip 
issues. The AEX index shed 
237 to 40538 as Royal Dutch 
dipped FI 2.60 to FI 19630 on 
weakness in oil prices. 

NedDoyd drifted down FI L40 
at FI 66.60 with James Capel 
reiterating its sell recommen- 
dation. On the upside, ELM 
rose 40 cents to FI 49.40 as the 
airline reported a rise in pas- 
senger traffic during May. 

ZURICH made an early 
attempt to add to Monday’s 
rally, before renewed profit- 
taking and a weak bond mar- 
ket pulled prices back. The SMI 
Index ended 33 off at 2,778.1 
after a morning peak of 2,798. 

Roche certificates found 
Monday’s strength stunt-lived, 
giving up SFr40 to SFr6340. 
Cyclicals were mixed: BBC lost 


105 91 

: | Hex Index 

100 0 «— — * a — 

Jan 1994 
Sourer FT Graphite 


SFr8 to SFrL225 while Sulzer 
registered put on SFrl4 to 
SFr948 after a recommendation 
from Credit Suisse. 

SMH lost SFrll to SFrSlO 
after the watchmaker said it 
expected only modest profit 
growth this year but was confi- 
dent about the outlook for its 
core business. 

MADRID was hit by last 
minute selling after a drop in 
the futures market, and the 
general index Ml 3.52 to 32334 
in turnover es timate d at less 
tha n Pta2 5bn. 

ATHENS slipped nearly 2 per 
cent on profit-taking, with 
most of the losses seen among 


construction stacks. The gen- 
end index lost 173 to 85154, in 
a session extended by one hour 
Following technical problems. 

HELSINKI fell 13 per cent 
but two or its conglomerates 
fared worse. Huhtamaki lost 
FM20, or 9.5 per cent at FH190 
after its profits came out 
higher, but far below analysts' 
expectations; and Amer shed 
FM3, or 23 per cent to FM131 
although it reported a 67 per 
cent rise in earnings per share 
for the first four months of 
1994. The Hex index closed 2U 
lower at 1.7548. 

WARSAW dropped back for 
the third consecutive session 
os the Wig index Ml 3763 or 
3.6 per cent to 10221.7. . 

Turnover declined by 5 per 
cent to 995bn zlotys as volume 
rose 49 per cent to 2.?m shares 

ISTANBUL fell 1.6 per cent 
in a volatile session, which 
concentrated mainly state 
industries after the head of the 
privatisation agency urged 
that the privatisation pro- 
gramme should be accelerated. 

The composite index lost 
217.34 to 16.536.4, having begun 
the day at 17,225.65. Turnover 
dropped to TLlJ83bn. 

Written and edited by WlNaa . 
Cochrane, John Pitt and MHohaal 
Morgan 


Late buying spurt takes Nikkei back above 21,000 


Tokyo 

After a lacklustre morning and 
afternoon which produced 
modest gains in light trading, a 
wave of buying drove the mar- 
ket back above the 21,000 mark 
in the final minutes of the day, 
writes Robert Patton in Tokyo. 

The Nikkei 225 average saw 
a day's low of 20,735.05 at the 
opening but, largely on foreign 
buying and sporadic bargain 
hunting after three days of 
declines, was lifted gently 
through the morning and most 
of the afternoon. In the final 
minutes of trading a barrage of 
futures-linked buy orders 
pushed the index up sharply to 
a close of 21,042.71 for a rise of 
316.06, just below the session's 
high of 21,053-71 recorded sec- 
onds earlier. 

The capital-weighted Nikkei 
300 gained 3.65 at 30731 and 
the Topix index of all first sec- 
tion stocks put on 17.06 at 
1 ,68138. Volume was an esti- 
mated 270m shares. In London 
the ISE/Nikkei 50 index was 
0.68 firmer at 138939. 

Large-capital and high-tech- 
nology stocks came back to 
lead the advance. Oki Electric, 
the day’s volume leader with 
12.7m shares traded, climbed 
Y24 to Y708. Fuji Heavy Indus- 
tries, the manufacturer of 
Subaru cars, was up Y14 to 
Y470 in the day’s second high- 
est volume of 5.7m shares. 
Other auto makers also gained, 
Mazda Motors roaring up Y33 
to Y621 and Isuzu Motors 
adding Y16 at Y517. 

Nintendo rose Y20 to YB.63Q 
in spite of a morning report 
that the game makarr had been 
found guilty of patent infringe- 
ment by a US Federal court 
The case, which could cost 
Nintendo $3 50m, is being 
appealed with a damage ruling 
expected on July 18. 

More and more traders were 
talking about higher share 
prices in the near to medium 
term. One analyst basing his 
optimism on the recent 
strength in a number of retail 
areas, particularly ladies’ gar- 
ment sales, suggested that the 
Nikkei could gain 20 per cent 
this year. 

But another area of gwnwpnt 
retailing took a beating in 
today’s mariraf.. Thp manswear 
discounters, Aoki tnhamflti final 


and Aoyama Trading, dropped 
Y220 to Y2.380 and Y100 to 
Y517 respectively. Both compa- 
nies, especially Aoyama, have 
been extremely profitable but 
competition has been mount- 
ing rapidly, with many tradi- 
tional large retailers now mov- 
ing into deep discounting. 

In Osaka the OSE average 
put on 12031 at 2330231 in vol- 
ume of 110m shares. 

Roundup 

Some sharp fails were regis- 
tered in the region yesterday. 

BANGKOK was heartened, 
however, by an easing of 
domestic political tensions, 
prompting investors to buy 
finan ce and bank issues. The 
SET index rose 2038, or 18 per 
cent, to 138339 in turnover of 
BtlO.Q6bn, more than double 
Monday’s Bt43bn. 

A two-week hunger strike by 
a political activist, Chalad 
Worachat, who was demanding 
democratic reforms, had 
increased tension within the 
ruling coalition. But yesterday 
political parties agreed to sup- . 
port his latest proposal to set 
up a committee to study draft- 
ing a new charter. 

The banking sector 
accounted for almost half of 
the day’s trade. Bflnpknk Bank 
closed Bt6 higher at Bti88. 

HONG KONG encountered 
futures related selling linked to 
speculation about today’s gov- 
ernment property package, 
aimed at cooling the over- 
heated residential property 
market, and renewed rumours 
about the health of the Chinese 
leader, Deng Xiaoping. The 
Hang Seng index lost 136.15, or 
L4 per cent, at 934738 in turn- 
over that rose to HK$3.6bn 
from Monday’s HK$23bn. 

Property issues were the 
hardest hit. Cheung Kong shed 
76 cents to HK$3835, Hender- 
son Land 75 cents to HK$4030 
and Sun Hung Kal Properties 
HK5L50 to HK$5L 

China stocks were mixed. 
The state-run Dongfang Elec- ! 
trical Machinery eased back , 
from its high, but still ended 
with a lfrcent gain at HKS3375 
on its second day of trading. 

SINGAPORE was mixed, 
with losses in a few index 
stocks dragging the Straits 
Times Industrial index down 
24.70 to 236731 in thin volume 


ET-ACTUARIES WORLD INDICES 


Jointly cempfed by Thu Financial Tbrns Ltd. Goldman. Sachs & Co. and NatWast Secuittes Ltd. In conjunction with tha knttute of Actuates and the FacUty of Actuates 
NATIONAL JUD 

REGIONAL MARKETS MONDAY JUNE 0 1994 HODAY JUNE 3 1994 DOLLAR MDEX 

Figures in parentheses US Day's Pound Local Local Gres US Pound Lore! Yc 

show number or Inas 
<rf stock 


Australia (69) 

Austria (17)._ 

Betoken (38) 

Canada (106) 

Denmark (33) 

fintend CSS) 

Prance (07) 

Gemtwiy (SB) 

Hong Kong (56) 

Ireland (14). 

Italy (GO) „ 

Japan f4S9) 

Malaysia (99 

Mcndco (18) 

Motherland (26) 

New Zealand (14) 

Norway (33) 

Singapore (dd) 

South Africa ( 6 ^ 

Spain (42) 

Sweden <30 

Switzerland (47) ....... 

United Kingdom (203)— 
USA (519) 


— 173.85 

167.46 

165.61 

13092 

247.88 

143.48 

168-46 

137.42 

385.66 

181.23 

86,92 

1026 

453.74 

_ 2121.05 
.— 199.19 
7050 

18002 
341.41 

— . 262 .Se 

— 143.61 
218.73 

~~n.160.10 

185.58 

187.26 

184.60 

20690 

16085 

165-64 

' 163,76 

149.43 

249.15 

16087 

171.35 

— 17 Z 09 

1KL35 


-0.7 17096 

-13 164.68 

0.3 162.78 

0,6 128.74 

03 243.78 

-0.4 141.09 

-03 163.70 

OB 135.14 
IS 37026 
OS 17023 
IS 85.48 
-1.1 155.63 

1.1 44021 

OS 2086.84 

07 105.88 

-02 6SS3 
OS 106.67 
03 335.74 

-2S 25022 

05 141 S3 

08 213.10 

1.4 167.60 

06 1BZ50 
-OS 184.15 


EUROPE (720) 184.60 0.0 161.87 109.81 142.84 15496 06 3J 

Nordic (115) — 30650 OS 203D7 13781 17020 20077 07 1 , 

Pacific Basin (750) 166S5 -08 16358 11098 14462 115.16 -0.7 1J 

Euro-PanffiC ( 1470 }„, 16554 -02 182S9 110S1 143.74 131.16 -OS TJ 

North America {825)-..— —103,70 -0.1 10071 12207 169.48 16302 -OS li 

Europe Ex. UK (51$ 149.43 OS 148S5 9051 12957 137.41 0.7 2. 

Pacific Erf. Japan (Z81) 249.15 07 245.02 155 52 21022 223.63 09 2J 

World Ex. US (1653) 166S7 -02 104.10 111.12 144S1 134.48 -02 1 j 

World Ex. UK (1867) 17135 -03 10061 114.11 14070 147.75 -OS 2 J 

VYortd Ex Sa At pi 13) 1 7Z.09 -OS 169S4 11490 149S4 15005 -OS 2- 

Wortd Ex. Jspw (1703) 1BS35 Ql 179S2 121.43 168S4 177.12 OS 2J 

The WarM Index (21 72) 172.63 -02 169.78 114.96 14991 15101 -02 2J 

OcmttL The Hnmielnl Tims LMkkL Ooldnan. Sachs ml Ca. and NaflNM Securities LkncstL 1987 
MnsniOTm m (Mdmi iM 0WB4 weted m tfeng Ifeo* CwMKwra dangee effea BWM MftMaE I 
P**g k«l* IMtat priea wot maralofct* tor 0 * sauon. Malum ckmd Stm Wnl and NwZMed 


Local 
Currency 
Index ' 

Local 
% chg 
on day 

Grt*a 

Wv. 

Yield 

US 

Solar 

Index 

Pound 

Sterling 

Index 

Yon 

Max 

□M l 
Max 

157.33 

14523 

-02 

-08 

360 

1.12 

17599 

189.47 

17262 

18856 

11048 

112^4 

151.70 

14853 

14034 

05 

nog 

18496 

18254 

100.74 

14292 

13030 

-03 

290 

13029 

12808 

8808 

11208 

220.42 

06 

134 

24791 

24359 

10453 

21491 

166JM 

-03 

088 

144.02 

14191 

9591 

12478 

149.70 

- 0.1 

3.03 

16699 

184.40 

11105 

14462 

11936 

0.7 

123 

1385S 

13454 

9091 

11239 

382.63 

19 

3.10 

37047 

37292 

251.78 

32791 

17334 

09 

390 

10097 

17892 

12020 

16864 

10535 

13 

130 

8500 

8404 

5708 

7403 

10639 

- 1.0 

073 

15697 

15702 

10042 

13000 

452-77 

1.1 

1.78 

44090 

44232 

29804 

38894 

770854 

08 

191 

2107.79 

207886 

141J2-34 

182017 

170.19 

19 

330 

197.78 

19406 

13108 

17104 

63.12 

09 

329 

7067 

68.83 

4702 

8103 

18831 

07 

1.77 

189.18 

18608 

125.84 

16308 

24138 

0.1 

1.76 

34033 

33504 

23041 

29487 

277.43 

-09 

235 

268.81 

284.88 

17803 

23288 

149.16 

0.1 

496 

14308 

14108 

9808 

12421 

25536 

1.1 

168 

21797 

21359 

144.41 

18857 

140.71 

19 

1.73 

10795 

16603 

10608 

13804 

18230 

04 

4.10 

18460 

181.79 

12274 

13955 

18738 

-02 

208 

187.60 

184.84 

12400 

18203 

15436 

06 

391 

16309 

18100 

10809 

14102 

209-77 

07 

1.42 

20591 

20240 

138.72 

17805 

116.16 

-07 

195 

18798 

16562 

111,78 

14604 

151.16 

-02 

T46 

18894 

18300 

11048 

14308 

10332 

-02 

205 

18494 

18104 

12244 

15905 

137.41 

07 

238 

14892 

146.44 

9087 

12078 

223J33 

09 

205 

24701 

24309 

16453 

21428 

134.49 

-02 

100 

18708 

18403 

11109 

14498 

147.75 

-02 

294 

17158 

16038 

11438 

14851 

160.05 

177.12 

-02 

02 

233 

25a 

17244 

18208 

18951 

17041 

11472 

121.13 

14040 

157.78 

15131 

-02 

Q9S 

173.02 

17048 

115.10 

14900 


DOLLAR MDEX- 
Ya 


I (V v P H) ml IMaM (V v P flj. CmMMmm; Pwmtm A. ItaMM a, c and D (ei 


of 106.1m shares. Fraser & 
Neave, S$l&30, and Inchcape, 
S$S.65, dipped 20 cents apiece. 

Negara Hotel made a further 
3frcent gain to S$6^0 on fur- 
ther redevelopment specula- 
tion, but profits were taken in 
Seaview Hotel, driving it down 
70 cents to S$10A0. 

SEOUL remained worried 
about the North Korea nuclear 
problem and the composite 
index ended 8.54 lower at 
9ZL72, after touching 91-L94, in 
turnover of Won585.2bn. 

Against the trend, institu- 
tional demand helped low- 
priced construction stocks to 
make gains. Among them, 
Poonglim Industry and Shin- 
wha Engineering & Construc- 
tion went Umit up by adding 
WonfiOO each at Wanll^OO and 
Wonl5400 respectively. 

MANILA saw its fourth con- 


secutive decline as profits were 
takpn in blue chips and foreign 
institutions sold San Miguel 
and Manila Electric. 

The composite index shed 
27.52 to 2^94^4 as turnover 
rose to 8SL3m pesos from Mon- 
day's 633.9m. San Miguel “B n 
fed 2B per cent to 135 pesos 
and Manila Electric “B” 2.7 per 
cent to 357^0 pesos. 

SYDNEY was supported by 
buying of industrials, but fur- 
ther weakness in gold stocks 
left the All Ordinaries index 23 
easier at 2,070.2. Turnover 
amounted to A$357m. 

Brokers said a fall in the 
price of gold bullion overnight 
contributed to negative senti- 
ment. and forecasts were that 
the bullion price would remain 
under pressure for the next 
few days. 

The gold shares index recov- 


ered some ground to close 14.6 
off at 2328. 4, after a session 
low of 2£&5. 

Fears over the future of min- 
ing projects in Papua New 
Guinea also upset investors 
after the government there 
suspended further proposals. 
Among companies involved in 
mining in PNG, Nlugim lost 5 
emits at A$5.10 and Highlands 
Gold 2 cents at AJ1.38. 

In industrials. News Corp fell 
8 cents to A$8.90. Foster's 
Brewing was steady at A$1.14 
after announcing a corporate 
restructuring on Monday. 

TAIPEI finished off the day’s 
low on late buying in the elec- 
tronics sector. The weighted 
index was down 7.40 at 6,069.85, 
after 6,028.03. Turnover 
declined to T$66J!bn from Mon- 
day’s T$73Bbn. 

WELLINGTON, closed on 


Monday, saw the NZSE-40 capi- 
tal index slip 17.12 to 2.12L8S, 

An announcement that a . 
three-year ban on logging in 
the Pacific Northwest US 
region had been lifted trig- 
gered a wave of selling in for- 
estry stocks that spread to 
other sectors. Telecom went 
against the trend with a rise of . 

8 cents to NZ$5.11. 

KUALA LUMPUR closed 
firmer but off its highs after a 
late round of profit-taking in a 
session dominated by second 
line stocks. The composite 
index added 2JX at 972.42. 

KARACHI opened a new 
account with bullish sentiment 
in energy stocks, on rumours 
of favourable treatment for the . 
industry in tomorrow’s budget 
The KSE 100 index advanced A 
22.5 to 2JJ39.32, with Sui Norte 
era Gas op Rs3 at Rs68^0. 


Risky 


to ignore 

Not so long ago, most fund managers thought derivatives 
were purely for speculators. Everyone else was content 
with buy, sell and hold. 

Today, equity options play a key rale in the portfolios of 
every kind of fond manager. Equity options are established, 
the liquidity is there and tbe perceptions have changed 

dramatically. 

Equity options have come into their own 
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report called “Futures and Options; A Guide 
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Because equity options simply can't 
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L FF( 


Th© London International Financial 
Futures and Options Exchange