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FINANCIAL TIMES 





| '-Europe ‘ : s SiUoiness. Newspaper ' 

MONDAY JUNE 13 1994 .1 

: , D8523A vp| 


Europe goes to the polls 


Kohl’s party scores surprising win in Euro poll M Gonzalez’s Socialists defeated 





Right gains in Germany and Spain 


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By Quentin Peal in Bonn 







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Row over food 
eid mars accord 
with Ukraine 


Ukrainian.president^jedKiM Kravchuk is expected 
to sign a“partuerabip” agreement with fBe Euro- 
pean Umon inXujffi^bom^ tomorrow. the first 
sign of a more evefii^nded EO' stratcgyrtowacrds ■; - 
Tnt mmp HTid Twtg hlvmrm g Taimriin. 

The EUs new polity of engagement to bang 
hobbled by a itw oser a European Commission 
plan to Bend oiaigogr food hk£ Britain, among - .: 
Others, opposes the provision Of farm credit guaran- 
tees. believing that reports of food shortages are 
exaggerated, and that . the Qopmdsrian’s move 
is a short-term palliative. page 20 , 


China urges more talks over North Korea: 

China made its Wrongest plea yet for renewed 
diplomatic efforts to resolve the argument over 
North Korea’s reluctance to open its nuclear 
sites to inspection. Bage 5 - 


Haiti regime declares alert: Haiti's 
army-backed government has declared a state 
of emergency amid reports of impending foreign 
military intervention to reinstate exiled president 
Jean-Bertrand Aimtida Page 4 


Bundesbank warns against tax rises: 

Falling private demand poses the biggest threat 
to Germany's economic recovery, Bundesba n k 
chief economist Otraar I s sln g said, warning against 
ftcther tax rises. Page 3 

Ford seeks to aefl mors can In Japan: 

. US motor vehicle manufacturer Ford launched 
an aggressive strategy to gain a bigger share 
of the Japanese new car market by exporting 
right-band drive cars from the US and Europe. 

Page 23; West Europe new car sales up, Page 2 


Argentine offer to FaHdand WandarK 

Argentina would consider paying the Falkland 
Islands’ 2,000 inhabitants comppyisatfon to accept 
Argentine sovereignty, foreign minister Guido 
<fi Telia said: Page 4> ■ 


Tunnel launch for Italy freight ran: The 

nhunnpi t unnel mstVes its first crartilbution to 
moving freight traffic from road to rail tonight 
with the start of a container service to Italy. 
Page7; Notkes couM assist French Eurotunnel 
share investigation; Page 2 


Delon puts .ease for bdMNn'flexflUIlty: 

Plans to promote flexibility in European labour 
markets are spelt out in an internal European 
CommissiQn progress report by EC president 
Jacques Delors on employment and competitive- 
ness. Page 2 


Yeltsin cracks down on advertising: Russian 
president Boris Yeltsin issued a decree banning 
dishones t financial-advertising which has enabled 
crooked financiers to make fortunes at the expense 
of investors, Page 4 


Uabior to ntise^Bva Meets bhh French 
steelmaker Ustnor Sadlor said it would table 
an lncreased bad for the special steels division 
of Bya. Itatys state-owped steelmaker. 


Outokumpu In FM1.2bn shore offer Finnish 
nrinir^gr and metals group Outokumpu has launched 
a FMl^hn (felTm) international share offer on . 
the back of a sharp improvement in profits in 
-the first f^jwuiuis. Page 23 


European Monetwy Systems Hie EMS grid 

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. Chancellor Helmut Kohl’s 
Christian Democrats scored a 
surprising victory in the German 
leg of yesterday’s European par- 
liament elections. 

In Spain, the Socialist party of 
Prime Minister Felipe Gonzfflez 
suffered defeat at the hamfri of 
the opposition conservative Popu- 
lar party. 

In preliminary results amon g 
the other six countries that went 
to the polls yesterday, governing 
parties suffered setbacks in Por- 
tugal but maintained their posi- 
tions in Greece, Belgium and 


Luxembourg. 

In the UK, where voting took 
place on Thursday, sharp divi- 
sions in the ruling Conservative 
party over Europe and Mr John 
Major’S leadership amarg ffd a gain 
last night as the government pre- 
pared to face its worst defeat in a 

national pIptH/hi since t frp coonnH 
world war. 

Amid predictions that the Con- 
servatives would bold on to at 
most half of their 32 seats in the 
European parliament, Mr Doug- 
las Hurd, the foreign secretary, 
signalled *h» start of a concerted 
cabinet operation to shore up Mr 
Major’s premiership. 


The shift to the right in Ger- 
many and Spain was expected to 
be offset by gains by leftwing 
parties elsewhere in the Euro- 
pean Union, leading to a ynB 
overall increase in the Socialist 
representation in the 567-seat, 12- 
nation parliament in Strasbourg. 

The combined total of Mr 
Kohl's Christian Democrats and 
its Bavarian sister party, the 
Christian Social Union, was fore- 
cast to rise to 40.5 per cent from 
37.7 per cent in the previous Euro 
election of 1989, according to an 
exit poll carried out fra- the ZDF 
television station. 

In contrast, the opposition Sod- 


ali Democratic (SPD) party was 
projected to stump to its worst 
result since direct European elec- 
tions began, down from 373 in 
1989 to just 33 per cent 

The ZDF forecast that the CDU/ 
CSU could take 48 of Germany's 
99 seats in the Strasbourg parlia- 
ment, against 39 for the SPD and 
12 for the Greens. 

The liberal Free Democratic 
party, junior partner in Mr 
Kohl’s coalition government in 
Bonn, looked set to lose its place 
in Strasbourg, along with the far- 
right Republicans. 

The Republicans, the feared 
bogeymen of Germany’s far right. 


also seemed to have suffered a 
dramatic setback. The poll 
suggested a halving or support 
from 7J. per cent in 1989 to 3.5 
per cent 

In Spain, exit polls put the Pop- 
ular party’s result at between 
3940 per cent and 40 per cent of 
the vote, giving it between 26 and 
28 of Spain’s 64 seats. Mr Gonz- 
alez* Socialists were projected as 
g aming only 2931 per cent of the 
vote. 

Polls also predicted that 
Spain’s Socialists would lose 
their absolute majority in the 
regional par liamen t in Andalusia 
in elections held in parallel with 


the European poll 
In Portugal, the opposition 
Socialists appeared to be heading 
for victory with 35-39 per cent. 
But Greece’s governing Socialist 
Panhellenic Socialist Movement 
looked set to win that country's 
vote, with exit polls giving it 
3842 per cent of the vote. 

Early projections put the 
Socialist grouping’s strength in 
the new Strasbourg assembly at 
203 plus a forther nine allies from 
France, compared with 197 in the 
old parliament. Rightwing par- 
ties' showing in the parliament 
was expected to be more frag- 
netted compared with 1989. 


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Big Austrian majority to join EU 


Ian Rodger in Vienna and 
Hugh Camegy In Stockholm 


Austrians yesterday gave the 
European Union its first big vote 
of confidence in several years, 
with 664 per cent voting in a 
national referendum in favour of 
joining the Union. 

The turnout for the referen- 
dum. 81 per cent, was equally 
impressive, in contrast to the low 
participation in European parlia- 
mentary elections in many coun- 
tries yesterday. 

Late in the afternoon, when the 
scale of the result became 
known, enthusiastic crowds wav- 
ing EU flags - gathered at main 
political party headquarters in 
Vienna ami in front of the federal 
chancellery shouting, “We are 
thp Ghampions” 

Mr Alois Mock, Austrian for- 
eign minister, said: “It proves 
that Austrians me determined to 
play their part , in building - the 
new Europe’’. ' . 

* . It- is: also a' hoost for pro-EU 
forces in Norway, Sweden and 
Finland where EU entry referen- 
dums are due in the autumn. 

More immediately, the Aus- 
trian Yes vote comes just before 
three important party congresses 
cm the EU issue, in those three 
Nordic countries next weekend, 
and a parliamentary no-confi- 
dence vote due on Wednesday in 
Finland- * ‘ 

Mr Carl Bildt, the Swedish 
prime minister, last night wel- 
comed the Austrian derision as 
“an important signal” to Swedes. 
“That the result was so strong 
was based upon the wish to influ- 
ence the development of Europe. 
The argument for influence won, 
and won big,” Mr Bildt said. 

Only in Finland, where fear of 
neighbouring Russia is a maim* 
factor, is the Yes campaign lead- 
ing the referendum race in the 
opinion polls. In Sweden and 
especially In Norway, the 


No campaig ns hold a Strong 
lead. 

Mrs Gro Harlpm R nindtland , 
the Norwegian prime minis ter 
faring a No campaig n with well 
over 80 per cent support in the 
opinion polls, said Austrian entry 
to the EU strengthened the 
opportunity to build bridges 
between western and eastern 
Europe. The Norwegian No cam- 
paign h«d argued that the EU 
will shut out poorer former east- 
ern bloc countries. 

The Austrian vote will be weD 
received by the country's central 
European neighbours. The f^ach 
republic, Slovakia, Hungary, 


Austrians put their faith 
In the EU Page 2 


Editorial Co m m ent Page 19 


Poland and Slovenia all hope that 
their interest in joining the EU 
-will be taken up by Brussels socai 
after the . current; applicants 
hfl cnmp members. - ■ 

Respectable majorities in every 
province in Austria backed EU 
entry.' Even in Tyrol, where 
resentment over the pollution 
from alpine lorry transit has pro- 
voked strong anti-EU sentiment, 
the majority Yes vote was 56j4 
per cent. 

Government nfficbilK said yes- 
terday their own polls showed 
many people were shaken by 
scare stories put out late in the 
campaign by the anti-EU camp, ft 
was claimed, for example, that 
Austria, once ft joined the EU, 
would have to simply water to 
Spain and that Brussels could 
farce it to build nuclear power 
stations. 

But late last week, the pro-EU 
camp responded strongly; dis- 
missing the scare stories and 
emphasising the importance of 
the vote for the country’s future 
security and prosperity. 



Austrian foreign minister Alois Mock is surrounded by EU supporters dressed as yellow stars as he cast 
his vote in Vienna yesterday in the referendum on joining the Union 


Van Miert 
appeals for 
flexibility 
at talks to 
rescue steel 


By Paul Betts in London and 
Lionel Barber in Brussels 


The European Commission will 
this week reconsider its rescue 
plan for the steel industry amid 
renewed warnings from Mr Karel 
Van Ifiert EU competition com- 
missioner, that he will walk 
away from it unless he wins sup- 
port for a flexibile interpretation 
of rules on state aid. 

Mr Van Mlerfs stand puts him 
on a collision course with Sir 
Leon Brittan, chief EU trade 
negotiator. Sir Tjno is unhappy 
about the planned granting of 
Ecu415m ($481m) in Italian state 
aid in exchange for the closure of 
steelmaking in Brescia, Italy. 

In an interview with the Finan- 
cial Times, Mr Van Miert said the 
Brescia cuts were crucial for the 
Commission reaching its target 
of cutting steelmaking capacity 
in the EU by a total 19m tonnes 
by September. - 

In Brussels, Mr Van Miert ’s 
allies are betting that Sir Leon 
will soften his position in order 
to win the backing of the Italian 
government for his bid to suc- 
ceed Mr Jacques Delors as the 


Continued on Page 20 
Interview, Page 2 


Austrian leaders plan to sign 
their accession treaty at the EU 
summit in Corfu on June 24. The 
country then becomes an official 
observer of EU institutions from 
July 1 until its entry on 

January 1 1996. 


Fall in world CFC output a 
victory for ‘green’ campaign 


By Nancy Dunne ki Washington 


Global production of 
dbiarofluorocarban gases, which 
scientists say are responsible for 
holes in the earth’s ozone layer, 
has plummeted since 1988, 
accardkg to a US report 

The fall is the most striking 
success to date of the worldwide 
campaig n by environmentalists 
against the use of CFCs. 

The report. Vital Signs 1994. by 
the Washington-based World- 
watch Institute, a private think- 
tank, says CFC production fell 20 
per cent last year, and is 60 per 
cent down from its peak in 1988. 

Mr Lester Brown, head of the 
institute, said: “We are now 
headed in the right direction. If 
we continue on this phaseout 
path, eventually the ozone layer 
will heaL But that is several 
decades down the road.” 

Concern about the ozone layer 
dates back to 1974 when two 
atmospheric scientists at the Uni- 
versity of California warned that 
CFCs could deplete the ozone 
layer which protects the earth 
from ultraviolet radiation. Gov- 
ernments began to take the 


threat seriously when a team led 
by Mr Joseph Farman of the Brit- 
ish Antarctic Survey, reported a 
recurring h oi ** in Ito n y f mf* laypr 
over Antarctica. 

Snbsequent investigations 
found a IhtoniBg of the ozone in 
other regions of the world. In 
1987, governments signed the 
Montreal Protocol, promising to 
halve CFC production over the 
next decade. Later agreements in 
London in 1990 and Copenhagen 
in 1992 pledged many industrial 
countries to phase out production 
of CFCs and other ozone-deplet- 
ing substances. CFC production 
is due to stop hi industrialised 
countries by the end of this year. 

Vital Signs, an annual exercise 
in “taking the planet’s pulse”, 
found the environmental move- 
ment making important gains. 
Use of wind power rose 13 per 
cent last year, with most of the 
growth in northern Europe. 
N ncfoH' generating ca pacity grew 
by nearly 3 per cent but the 
number of plants under construc- 
tion fell and closures increased. 
Capacity is expected to peak 
before the year 2000. 

Natural-gas production expan- 


ded to record levels and now pro- 
vides 21 per cent of (he world's 
primary energy as coal use 
declined. Sales of compact fluo- 
' rescent lamps -'efficient substi- 
tutes for incandescent bulbs - 
have quadrupled over the past 
five years. 

Carbon emissions - believed to 
produce global warming - fell 
slightly, but that was attributed 
to recession in the industrialised 
countries and the economic con- 
traction in the former Soviet 
Union. Emissions are soaring in 
Asia. 

Meanwhile, the 1993 grain har- 
vest fell by nearly 5 per cent, the 
report says, one of the largest 
drops on record. “With irrigation 
expanding much more slowly 
than in the past, and with the 
lrmi tad capacity of p’gigHng vari- 
eties of grain to respond to the 
application of additional fertil- 
iser, farmers will be hard pressed 
to keep up with the projected 
growth in world population.” 

Vital Signs 1994. Worldwatch 
Institute, 1776 Massachusetts Ave- 
nue NW, Washington DC 20036, 
US. Tel (202) 452 1999, fax 296 

7365. 289. 


CONTENTS 


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June ipp 4 









Opponents’ scare campaign turns tide in referendum 

Austrians put faith in EU 


By Ian Rodger in Vienna 

Whatever the meaning of other 
messages that arrived in Brus- 
sels yesterday from around 
Europe, those co ming from 
Austria were unequivocally 
positive. 

Even the most optimistic 
pro-European Austrians never 
dreamed that 65 per cent of 
voters participating in yester- 
day's referendum would put 
their support behind joining 
the EU. 

An examination of the Wnai 
days of the referendum, cam- 
paign suggests that the vote 
reflected a solid vote of confi- 
dence in the EU as an institu- 
tion. 

A week ago, opinion polls 
indicated a very dose result, 
and a scare campaign mounted 
by the anti-EU camp appeared 
to be eroding pro-EU senti- 
ment But by the end of the 
week, the tide was running 
heavily in the Ell's favour. 
What happened in between 
was that the anti-EU forces 
went too far, and the govern- 
ment was able to undermine 


their credibility and take the 
high ground. 

On Wednesday. Mr JOrg 
Haider, the populist right-wing 
leader, held up a container of 
Spanish yoghurt during a tele- 
vision debate, claiming that it 
contained a dangerous colour- 
ing agent aofl that Austrians 
would be obliged to eat it 

Mr Haider also intensified 
his complaints about the inten- 
sity of the government’s 
pro-EU campaign, urging 
resentful voters to use the ref- 
erendum to teach it a lesson. 

On Friday. Mr Alois Mock, 
the foreign minister who has 
campaigned tirelessly for the 
EU cause in spite of a severe 
illness, struck back angrily. 
“Anyone who thinks this vote 
is about tearhmg the govern- 
ment a lesson is behaving on 
the very edge of what is demo- 
cratically acceptable,' 1 he said. 

Then in a moving nation- 
wide address on Friday night, 
Mr Thomas KLestil, the Aus- 
trian president, emphasised 
what he thought the vote was 
about The EU. he said, was an 
organisation which, for all its 


faults, had already proved 
itself as the best and only hope 
for preventing war again in 
western Europe. 

At a time when Austria has 
watched war ravage much of 
its southern neighbour, the for- 
mer Yugoslavia, this message 
had real meaning. Even In 
Tyrol, where the problem of 
lorry transit traffic has made 
the EU very unpopular, a con- 
vincing sas per cent voted in 
favour of joining. 

The result should have 

immediate consequences both 
inside and outside Austria. 

Mr Wolfgang Wolte, head of 
EU affairs in the for e i g n minis- 
try. said yesterday he was con- 
vinced that it would have a 
positive influence on voters in 
Norway, Sweden and Finland. 
They face EU entry referen- 
dnms in the autumn. 

In Austria itself, the mate 
impact will be on the political 
scene, possibly contributing to 
a realignment among parties 
after national elections which 
are due in October. 

Mr Haider appears to be the 
big loser from the referendum 


outcome. Heading into the 
ramp ni gp, his popularity was 
already at a low ebb following 
unimpressive showings in pro- 
vincial elections, the rejection 
last year of his petition to out- 
law immigration and defec- 
tions of iftadlfig parliamentary 
ralloa gnps 

A sometime supporter of EU 
membership, he decided half- 
way through the campaign to 
oppose it, initially claiming 
that the entry terms that the 
government had negotiated 
were im satisfactory. But he 
gradually took up any argu- 
ment he could fmd. 

Now he could again face 
nails for his resignation and 
furt her defections from among 
Us party's parliamentarians. 

The ruling socialist-conserva- 
tive coalition, which, presented 
a unified pro-EU stand 
throughout the campaign, 
emerges with its credibility 
enhanced. It came together in 
1986 with the main aim of tak- 
ing Austria into the EU. Now 
that goal has beei achieved, 
however, it may well need to 
redefine itself. 


Swiss voters say no to 
UN peacekeeping role 


eminent and parliament last 
year agreed to amend the con- 
stitution to allow for the dis- 


By Ian Rodger 

The Swiss have once again 
shown their aversion to foreign 
involvement, with 57.3 per cent 
of voters rejecting in a referen- 
dum a government proposal 
that they provide troops for 
United Nations peacekeeping 
operations. Only 42.7 per cent, 
or 898,925 people, were in 
favour - a much lower number 
than had been expected. 

Yesterday’s vote comes after 
f-p r p rgTwlmn ripri-rifwc in 1986 to 
avoid UN membership and in 
1992 to stay out of the Euro- 
pean Economic Area. 

Earlier this year, Swiss vot- 
ers irritated neighbouring 
European governments by vot- 
ing to prohibit transit lorries 
from their Alpine passes 
starting in 2004. 

The overwhelming rejection 
of involvement in UN peace- 
keeping therefore marked the 
third timp m eight years that 
the Swiss had turned their 
backs on the rest of the world 
and opted to continue what 
one r«mmpntato r described as 
“splendid isolation". 


There were signs in the 
run-up to yesterday's vote that 
European countries were no 
longer willing to accept Swit- 
zerland's lack of international 
solidarity passively. 

Last week, Mr Matthias 
Wissmaim, the German trans- 
port minis ter, acknowledged 
that the referendum had no 
direct relation to European 
transport discussions, which 
have been jolted by a Swiss 
referendum decision in Febru- 
ary to prohibit all lorry transit 
traffic bom the Alps from 2004. 
' The connection was “more 
atmospheric", Mr Wissmaim 
said. With a “yes” vote, Swit- 
zerland would signal that it 
sought not only advantages 
from international relations 
but also to carry the burdens. 

The proposal to create a 
troop of 600 volunteer blue hel- 
met troops was rejected in all 
but the French-speaking can- 
tons of Vaud. Neuchatel, 
Geneva and Jura, opening the 
potential for a renewal of ten- 
sions between French-speaking 
Swiss and the others. 

The four-party coalition gov- 


patch of peacekeepers. 

Opponents claimed that 
Switzerland’s neutrality would 

be compromised by participa- 
tion in peacekeeping and that 
blue helmet troops were inef- 
fective and a waste of money. 
The cost of the peacekeeping 
contribution was estimated at 
SFrlOOm (£47m) per year. 

Mr Ernst Rllesch. a Free 
Democrat (FDP) deputy and co- 
chairman of the committee 
backing the proposal, said 
opponents had won support 
with an emotional campaign 
that deliberately ployed on vot- 
ers’ fears of potential dangers 
faring Swiss UN soldiers. 

Pre-referendum polls indi- 
cated that the difficulties faced 
by the UN peacekeeping force 
in Bosnia in recent months 
undermined support for the 
idea among Swiss voters. 

In another referendum vote 
yesterday, the Swiss rejected a 
proposal to make it easier for 
children of immigrants to 
become citizens. 


Socialist redoubles efforts on behalf of free market 



Karel Van Miert: fighting back from fiasco -nnmrHwvMM 


over-paid Eurocrats, and not 
politically responsible, and 
tiling s Ifl«» that. But the Brit- 
ish government will ask Mr 
Bangemann and me officially 
and formally to use Article 90 
to liberalise the telecommunir 
cations sector without parlia- 
ment, without the Council of 
Minis ters Isn't that a very 
strange attitude?” he asks, 
referring to Article 90 of the 
Treaty of Rome, known as the 
nuclear option, a rarely used 
provision which gives the Com- 
mission the power to break op 


public monopolies on competi- 
tion grounds. 

In some more liberal quar- 
ters, Mr Van Miert’s appoint- 
ment 18 months ago raised 
fears be would take a soft 
approach to competition 
issues. Instead he is confound- 
ing his doubters by initiating a 
broad series of competition 
cases involving everything 
from mergers and state aid to 
price fixing In sectors as varied 
as consumer goods, cement 
production, carton board, tele- 
communications, airlines and 
banking. 

He is proposing to block a 
controversial takeover of a 
German feminine hygiene 
products company by Procter 
& Gamble of the US: only the 
second deal to be blocked by 
the Commission ginna it was 
given wider powers to vet large 
mergers more than two years 
ago. 

Mr Van Miert, a former 

‘Slim’ 


transport co mmis sioner who 
engineered European air trans- 
port liberalisation, is also plan- 
ning to attack ground handling 
monopolies at European air- 
ports. He is keeping an eye on 
the French government's pro- 
posed FFr20bn (£L3bn) capital 
injection into Air France, the 
troubled French national car- 
rier, and is pursuing a com- 
plaint by the small Irish car- 
rier. Ryanair, against Aer 
lingus, the Irish state flag car- 
rier, of predatory pricing. 

Mr Van Miert is extremely 


concerned by the French gov- 
ernment’s plan to inject 
FFr4-9bn of capital into Credit 
Lyonnais, one of Europe’s big- 
gest banks, and writing off 
FFr40bn of bad debts. In a 
novel approach to EU competi- 
tion investigations, he is plan- 
ning to appoint a panel of emi- 
nent independent bankers to 
advise him on the case. 

From the be ginning . Mr Van 
Miert has adopted a pragmatic 
approach to competition 
issues. Just as he felt that the 
only way forward for the steel 
industry was a flexible plan 
linking state aid to the decom- 
missioning of capacity, even 
though this might have been in 
a strict legal sense questionr 
able, he believes the state has 
a role to play in areas, includ- 
ing big infrastructure pro- 
grammes. where private inves- 
tors do not want to invest 

But be is also convinced that 
the cause of liberalisation in 


Europe has been won. even in 
bis own country of Belgium. 
Undo- the Commission's state 
aid policy for flag carriers, 
state^owned airlines have been 
allowed one last injection of 
state funds to help them adapt 
to the new liberalised aviation 
market and restructure their 
operations. 

“Sabena [the Belgian 
national carrier] made losses 
for many, many years. Now 
they have had to adapt in a 
dramatic way to new circum- 
stances. So we thought it was 
fair enough to give carriers a 
new chance. But just once.” 

Privatisation is also the only 
way ahead for large sectors of 
previously state-owned indus- 
tries, inrUndjng steel, telecom- 
munications, airlines, among 
many others. “There is no rea- 
son why they should be state- 
owned,” Mr Van Miert said. 

“If is utterly unfair if in a 
given member state companies 
not receiving state aid are 
being put to the wall by those 
continuing to produce quite 
happily although in trouble 
because of state support," be 
said, adding that national 
bankruptcy laws also risked 
further distorting the market 

For all these reasons, it was 
important to give the C ommis - 
sion tire necessary instr ument s 
to monitor competition. “If we 
are not equipped we must 
admit that we are unable to do 
so and then leave tt to the 
gods," he said. “Once you go 
for liberalisation, you need a 
strong central authority to 
make the rules, implement 
them and respect them.” 

Equally, it was important to 
take a long-term view erf com- 
petition and overall industrial 
policy, added Mr Van Miert, a 
close friend of Mr Jacques 
Defers, the Commission presi- 
dent. “I believe you have to 


remain far-sighted. One erf the 
great strengths of Jacques 
Defers is that he senses per 
hap* much more *b»n many 
other people what will or 
might be needed in years to 


come. I believe very much that 
the next president of the Com- 
mission should be that kind erf 
guy." Mr Van Miert recalled 
how Mr Defers asked him to 
draw up a new transport infra- 


structure network for Europe 
when he first took over the 
transport portfolio. “I still keep 
the map he gave me on which, 
he drew various lines and at 
least one tunnel." 


chance of 1997 currency merger 


Paul Betts talks to Belgium's 
competition commissioner, Karel 
Van Miert, who feels let down 
by European governments 


T he fiasco over the Euro- 
pean Commission's res- 
cue plan for the steel 
industry has left Mr Karel Van 
Miert, the normally genial 
European competition commis- 
sioner, in an angry and com- 
bative mood. It also seems to 
have stirred the Flemish social- 
ist to pursue even more vigor- 
ously than his free-market con- 
servative predecessor. Sir Lean 
Britten, competition abuses in 
tin* single TnMrirpt 
Mr Van Miert feels he has 
been let down by governments 
which had originally asked 
him to draw up with Mr Martin 
Bangemann. the industry com- 
missioner, a plan to cut Euro- 
pean steel capacity. “I was 
asked to put together a steel 
plan but I was never ‘deman- 
denr* [originator]. If the feeling 
is that we should put an end to 
ft, rm prepared to do so," he 
said defiantly in an interview 
with the Financial Times. 

Although governments are 
now scrambling to salvage the 
plan, Mr Van Miert suggested 
the moves were unlikely to 
succeed but designed rather to 
give the whole affair “a deceit 
burial". 

For Mr Van Miert, the steel 
affair reflects the contradictory 
and often hypocritical position 
of governments that ultimately 
undermines the entire Euro- 
pean Union process, “ft's very 
frustrating when you have to 
discuss with governments 
about capacity cuts, about 
state aid, when they all have a 
veto. It doesn’t work. I mean, 
it’s like a referee In a football 
game where he has to ask the 
player if he please may give 
him a yellow or a red card.” 

And then governments, not 
least the UK, adopt completely 
contradictory positions. “We 
will be told we are well paid, 
which is true, perhaps even 


The chances of a majority of 
European Union countries being 
able to merge their currencies in 
1997 are at best slim, Mr Henning 
Christophersen, European econom- 
ics commissioner, said yesterday, 
report Lionel Barber in Brussels and 
Reuter in Basle. 

Mr Christophersen said that the 
early target date for monetary 
union by 1997 would be “very diffi- 
cult”. There was a general consen- 


sus that “it would be better to wait 
until 1999”. 

Mr Christophersen was speaking 
on the eve of the annual meeting in 
Basle of the Bank for International 
Settlements, the central bankers* 
central bank. 

His cautions pessimism contrasted 


with his usual upbeat assessments 
of the prospects for an early move 
to Emu. The Danish conmrisskmer 
may also have had an eye on his 
audience. A new central bankers’ 
report expresses concern about the 
size erf budget deficits in member 
states. 


Last week, Mr Gftnter Rexrodt, 
German economics minister, 
appeared to cast doubt on the Maas- 
tricht treaty timetable for Emu by 
saying that a single European cur- 
rency might take until 2001 to real- 
ise. 

Mr Rexrodt stressed that meeting 


the Maastricht criteria on inflation, 
currency stability and government 
debts and deficits was far more 
i mpor t a nt i tem meeting the Maas- 
tricht dates. 

Asked whether be agreed with the 
German assessment, Mr Chris- 
tophersen conceded: “Unless we get 


3 per emit [economic] growth in 
1996 and more in 1997, it (Emu) will 
be impossible.” 

Despite his cautious line, Mr 
Cfaristqphersen said that he did not 
want to rule out 1997 altogether 
because that could prompt countries 
to scale down their efforts to meet 
the Maastricht treaty targets. “I 
don't want to discourage everyone 
from trying to get there," he 
said. 


Lille’s public transport sets an example for Europe 

As others lobby for a single line, this French city is extending its network, writes Charles Batchelor 



An example of the underground trains which are central to the public transport network 

The few operating costs of 


T he first stop for many 
travellers through the 
Channel tunnel will be 
the French city of Lille, a for- 
mer textile and mining centre 
which has been given new life 
by the creation of France's net- 
work of trains 6 grande Vitesse. 

Strategically placed at a 
junction of the high-speed lines 
between London. Paris and 
Brussels, Lille recently com- 
pleted a new TGV station as 
part of a FFr5.3bn (£625m) 
office development 
But civic pride in the TGV 
connection is matched by 
Lille’s commitment to an inte- 
grated public transport system 
for the city and the neighbour- 
ing towns. Lille's approach to 
running its transport network 
provides some interesting les- 
sons parallels for fecal authori- 
ties elsewhere in Europe. 

While an the British side of 
the Channel, Birmingham, the 
UK's second largest conurba- 
tion, lobbies desperately for 
government funding for a sin- 
gle high-speed rail line, Lflte. a 
city of Llm people, is busily 
extending its existing under- 
ground network, having just 
completed a FFrLSbn upgrade 
of its tram system. 


It has financed its impres- 
sively modem infrastructure 
with tile help of government 
grants which meet 20 per cent 
of its investment costs and 25- 
year to 30-year loans which 
cover 80 per cent. The loans 
are repaid in part by a tax on 
local businesses. 

Companies which employ 
more than nine people pay 1.6 
per cent of their payroll costs 
towards the municipality's 
transport MIL In return, their 
employees travel for free on 
public network. 

Proposals in the UK for a 
proportion of the business rate 
paid by London companies to 
go towards funding the Cross- 
Kail project, an underground 
link between the east and west 
ends of the capital, found little 
favour with the Treasury. 

Central to Lille's public 
transport network is its under- 
ground, flie first line of which 
was built to Hnk central Lille 
with a new university suburb, 
Vflleneuve d’Ascq. Three years 
before London’s Docklands 
opened its overground auto- 
matic rail system in 1987, Lille 
began operating its own under- 
ground driverless trains. 

It currently has two lines in 


operation covering a total of is 
miles and is extending the net- 
work to the neighbouring 
towns of Roubaix, Tourcoing 
and ultimately the Be l g ian bor- 
der, says Mr Bernard Gmliemi- 
not, director of operations. 


Safety on the underground 
platforms is enhanced by plat- 
form barriers which open only 
when the train is in the sta- 
tion. Stations on London's 
Jubilee line extension in 1998 
will have a similar feature. 


the underground system mean 
that revenues exceed costs by 
10 per cent (including interest 
charges) though the more 
labour-intensive bus and tram 
networks cover only half of 


their costs. Overall the entire 
transport network earned reve- 
nues of FFr380m against costs 
of FFr530m in 1993. Hus deficit 
is met from city fluids with no 
contribution from the govern- 
ment to operating costs. 

The creation of a high-tech 
underground system made 
Lille’s 80-year old train net- 
work look inadequate, so in 
1989 a decision was taken to 
replace track, signals and the 
trams themselves. Some sta- 
tions were put underground to 
smooth traffic flows; station 
platforms were raised to align 
themselves with the Italian- 
built trams, which ran at 
speeds of up to 70kph. 

To simplify journeys, Lille 
has introduced a traveleard 
similar to those in use in Lon- 
don and other large British 
cities. This allows travellers to 
switch between metro, trains 
and buses. But Lille has gone 
further by oxtending the avail- 
ability of its tickets to taxis. 
This allows travellers from out- 
lying suburbs to take a cab to 
reach their fecal underground 
terminus. T his taxi service 
requires two of the standard 
FFI7J5Q travel cards. 

As part of its efforts to drive 


down costs. Socialist-run r.iifo 
- its mayor is Pierre Mauxoy, a 
former prime miniatur - has 
delegated the management of 
its transport network to a pri- 
vate company. Transpole, part 
of the Via GTI group, which 
runs the public transport 
systems of several other 
French cities. Transpole won a 
five-year contract in a tender 
competition held in 1993. 

If the cost of running the sys- 
tem is higher than expected 
Transpole’s profits suffer. But 
if receipts are greater than 
forecast, the agreement is re- 
negotiated to reduce the wind- 
fall profit. 

In many European cities 
improving public transport has 
been accompanied by with 
tough restrictions on the use of 
the private car. But the new 
Euralille office and retail com- 
plex arising alongside the TGV 
station and the nearby metro 
station will provide no fewer 
than 6,000 car parking spaces. 

Improvements to Lille's 
metro and trains have limitari 
the increase in the number of 
cars driving into the city cen- 
tre but the city says there hag 
been no overt discrimination 
against cars. 


Delors 
jobs plan 
wins 
backing 

By DavW Goodhart. 

Labour Editor 


Plans to promote flexibility In 
European labour markets 
which fall well short of Brit- 
ish-style deregulation are spefc 
out in an internal European 
Commission progress report on. 
last December’s white paper an 
employment and competitive- 
ness by Mr Jacques Defers, 
Commission president. 

The report was warmly wel- 
comed at a meeting of the 
Commission last week and wifi 
form the basis of Mr Defers* 
contribution to the European 
Council meeting in Corfu this 
month. 

The report, written by the 
employment task force at the 
Commission’s directorate gen- 
eral for social affairs, says the 
white paper has been judged 
useflil in all member states bat 
“a fragmentary approach is. 
still noticeable" and the need; 
for “collective action” has not 
yet been realised. 

It also argues the white 
paper strategy is a medium- 
term one and that progress at 
this stage must be judged In ', 
terms of “trends and changes 
in political positions" 

The paper is vague on the 
appropriate role for Brussels in 
promoting the goals of the 
white paper. Reflecting the 
more cautious approach to 
European-level employment 
legislation spelt out recently 
by Mr Padraig Flynn, the 
social affairs commissioner, 
the report says Brussels should 
encourage countries to “pick 
and mix” elements of policy 
from different national 


systems. 

The paper welcomes progress 
made on the white paper 
recommendation to reduce 
non-wage labour costs and 
approves of the steps being 
taken in countries such as 
Spain to liberalise redundancy 
and dismissal legislation. 

But it stresses that labour 
market efficiency is to be 
sought not through a “dilu- 
tion" of the European model of 
s oefal protection, but “through 
the adaptation, rationalisation, 
and simplification of regula- 
tions. to establish a better bal- 
ance between sodal protection, 
competitiveness and empfey . 
meat creation". 

The paper says deregulation 
means different tilings in dif- 
ferent countries. And in a 
coded dig at 'the British gov- 
ernment. it says the burden of 
change should not be borne by 
the weakest in society, which 
is “the easiest, but least accept- 
able, way of increasing access 
to jobs". 

A similar time is adopted in 
a discussion paper on Euro- 
pean employment issues from 
the German government, 
which takes over the European 
Union presidency next month. 
The Germans stress the impor- 
tance of greater flexibility in 
working hours but at the same 
time welcome the EU working- 
time directive - bitterly fought - 
by Britain - as an “important 
framework". 


The German government, 
like the British, wants to pro- 
mote part-time work, but the 
Germans’ first priority In the 
employment field is to estab- 
lish a European directive lay- 
ing down minimum standards 
for part-timers. Germany has, 
however, failed to persuade the 
British government of the need 
for a directive which ensures 
that pay and conditions must 
be the same, pro rata, as that 
for foil-tuna's. 

The European Commission 
progress report concludes by 
warning about a return to com- 
placency on unanploymait as 
economic growth picks op. It 
also chides member states for 
failing to come up with more 
fecal level job creation ideas 
and for failing to develop forms 
of “top-up" state support which 
encourage people to take low- 
paid work. 


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FPSANCIAX TIMES MONDAY. JUNE 13 1994 


3 



NEWS: EUROPE 


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GERMAN local elections 

CDU’s vote in east 
better than expected 


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By Judy Dempsey h Bofin 

Chancellor Helmut Kohl’s 
governing Christian Demo- 
crats, stuggflng for months in 
the opbuon..B9lls l yesterday 

looted set to defy the pollsters 
and the' critics by doing fer bet- 
ter than expected In eastern 
Germany’s -local government 
elections. 

Despite substantial gains 
made by the opposition Social 
Democrats and the Party of 
Democratic: SodsBism, Hie suc- 
cessor to the fbiiner east Ger- 
man. Communist' party, their 
support appears insufficient to ■ 
dislodge the CDD from power 
in Hoar of the five eastern Ger- 
man states when state elec- 
tions are held in June and 
October. 

Indeed, yesterday’s rise in 
support for the PDS reflects 
voters shifting then, allegiance 
away from the SPD, as east 
Gentians became increasingly 
sceptical that- Mr Rudolf 
Scharping, head of the SPD, 
can offer any viable alt ernative 
policies to Mr Kohl's. . 

In exit polls released last 
night by Enfas. the national 
pollsters for ARDi television, 
the SPD*s share of the vote in 


Saxony-Ahhalt, considered a 
test case for Mr Kohl's CDD 
since it will be the first to hold 
state elections on June 26, 
increased from 22£ per cent in 
1920 to 29 per cent, while sup- 
port for the PDS rose sharply 
from 12.7 per cent to 20 per 
cent 

Opposition 
ppport appears 
insufficient to 
dislodge the 
CDU in most 
eastern states in 
the coming 
state elections 

But more -s ur pri s ing is that 
support for the CDU fell only 
about 1 paint to 33 per cent 
despite recent corruption scan- 
dals, mo&fiy in the the Free 
Democratic party, the Junior 
partner in the CDU-led coali- 
tion in the state: 

The PDFS share of the vote 
fell from 10 per cent to about 6 
per cent. These provisional 




By Tim Coone in DubSn 

Two faydfectkms and 80 local 
council elections in Breland 
held the same day as the Euro- 
pean election last Thursday 
have badly shakenthe coali- 
tion gutoinn wnt 

Hanna Fall, file Senior COaB- 
tton partner, has lost file two 
feats it was defending in the 
Dafl {Irish parliament). One of 
them - a marginal seat in Dub- 
lin - has gone to the Demo- 
cratic Left party. 

Of much greater conce rn for 
Fianna Fail, however, is the 
loss of what was believed to be 
a secure seat in fife west of 
Ireland fon nerly: held fay Mr 
Padraig Flynn, Ireland's mem- 
ber Off the European Commis- 
sion, which was being 
defended fay Ids daughter, Ms 


setback for 
Fail 


Beverly Cooper Flynn. The 
seat went to the conservative 
apposition candidate Mr Mich- 
ael Ring of Fine G&eL 

In the local elections, the 
Labour party, the junior coali- 
tion partner, has seen its vote 
slump to 11 per cent from the 
1&5 per cent it obtained in the 
.IMS general electron. 

lids has led to calls from 
Labour backbenchers at the 
weekend tor a revaluation of 
labour’s role in the coalition. 
Mr Dick Spring, file Labour 
leader, described the results 
y esterday as “a wrfrftw m set- 
back". 

Sinn FSin, file political wing 
of the nts, has increased its 
number of. local council teats 
across the country from 17 to 
24, and obtained 4 per cent of 
the vote. . 


Usinor to raise 
Ilva steels bid 


By Andrew HD in RHan 

Usinor Sadlor, the French 
v i steelmaker, said at -the week- 
r , end it would, tabid a new. 
Increased bid for lOO per emit 
of the special steels division of 
r Uva. Daly's state-owned steel-, 
maker. 

c - The French company also 
threatened to complain to the 

- European Commission if M, 
V Italy's state holding company, 

: add the division to a compet- 
iug Italo-German consortium, 
m the grounds of the domi- 

- nant position that would be 
• achieTCd. 

The privatisation of Ilva was 
a. central plank of the Commis- 


sion’s steel plan, aimed at 
reducing capacity and cutting 
state subsidies. 

UgiriB, the qwrial steels sub- 
sidiary of Usinor, said it would 
probably submit its new bid for 
an unspecified sum today. Ital- 
ian partners, led by the Luc- 
nhini steel group, are likely to 
take part in the bid, as they did 
in fiie earlier offer for only 35 
per cent of the Uva division. Iri 
favours the rival bid from a 
consortium ted by Krupp and 
Thyssen of Germany, and 
including Riva and Falck of 
Italy. But M postponed a deci- 
sion cm the sale two weeks ago 
and reopened talks with the 
Italo-Gennan group. 


CONTRACTS & TENDERS 


GOVERNMENT OF THE REPUBLIC OF ALBANIA 
AGRICULTURAL SECTOR ADJUSTMENT CREDIT 


&MID! 


ST NOTICE 


INDIVIDUAL PROCUE 

INVnATXON FOR BIDS -ASACflL 
Credit No: 2524 ALB 

CofetoNtme Computer mid Office Equipment 

1 The Government of the Republic of Albania has received a credit 
bom the World Bank - far various currencies un der the Agricultural 
Sector Adjustment Credit and it is attended that port of the proceeds 
of this loan will be ffllal to the payments tinder the contract for 
Computers Office equipment for the Rural Commercial Bank. 
Albania. 

Bidding wD be f w ri i'dw 1 through International Competitive Bi dding 
procedures under the Guidelines for Procurement of the World Bank, 
and is open to all bidders tram eligible source countries as de fin ed in 
arid Guidelines, . f 

2. The Project Implementation Unit, Mmisuy of Finance, now invites 
sealed htfsfnnn ctgfolo bidders for fonushfag; 

Computers • - ■ - 66No 

UPS 66 No 

^^ eActpriateW 66 No 

Pbolocoplera 20 No 

Seamier - ' ■ 1 No 

Associated ma , [> i| Wr 

3. ImciietidtgUe'biddeis may obtain farther infamatian Grom: 

Director, 


Moatty of Finance - 
Bokvwtfi’DesJOTWTetcKoinbit* 


Albania. 

Tet 355 42 27938 Fax: 355 42 27941 


and upon paytnem of non refnndabte foe at ussxu. inc oocumc 
he actu byUHL courier or handed to a iqifwmialwe of I 
tbgible Mdffer. Payments to be made to A/c 45ol/107fl)l, Nadoi 
0» BMi^a i^aegteSkiaa d ett^ Tfnma, Albania. 


iiwu% Nadonal 

F Skcffitobeg. Tinna, Albania. 
.IBGAVAIUBUEntOMTHEFID OFFKB 
FROMTHE27JVNK, 1»M.. 

• - — « nu, juoBt os BEEOHiiafead by a Wd sccmiQr, details of which are 
»he found In Qm Bidding documents. 

Bids will b« OMBCd in the presence of those bidders 
X K fo * tfed ** Vm, Neon, 5 Aagurt 
atteenqkc hwHcatedto pan X 


results mean that file CDU will 
have to increase its support to 
hold on to power later thin 
month. 

Even in the northern state of 
Mecklenberg-V orpommern, 
where thousands of shipyard 
workers have lost their jobs as 
a result of closures or privati- 
sation of the shipbuilding sec- 
tor, the electorate swung 
behind the Chancellor, with 
support far fits CDU increasing 
from 27J5 per cent 33 per cent 

The SPD, for its part, 
increased its share of the vote 
from 20 per cent in 1990 to over 
27 per cent But the PDS 
eroded possible greater gains 
for the SPD, as its support rose 
from 19 per emit to 25 per «»nt 

These trends are likely to be 
reflected in the two other east- 
ern states of Saxony and Thu- 
ringia if go, they inriiffwfw the 
electorate in eastern Germany 
could play an increasingly 
Important rote for Mr Kohl as 
he edges up in the opinion 
. polls in western Germany. 

to the western German state 
of S aarland, governed by the 
SPD, the CDU made grins with 
its provisional share of the 
vote rising from 35*1 per «»nt 
in 1989 to 37.3 per cent 


W Europe new car 
sales up 13% in May 


WEST EUROPEAN NEW CAR REGISTRATIONS 


By Kevin Done, 

Motor industry Correspondent 

West European new car sates 
rose by 13.4 per cent to an esti- 
mated L099m last month, the 
biggest monthly increase this 
year and the strangest indica- 
tion to datp that demand is 
recovering from last year’s 
deep recession. 

Sales have been higher than 
a year ago in four of the last 
five months, and in May alone 
demand rose year-on-year in 16 
of 17 markets in west Europe. 
In the first five months of 1994 
new car demand was higher 
than a year ago in 11 of the 17 

marirffty 

According to industry esti- 
mates, new car sales in the 
first five months have risen by 
5J5 per cent to 5.4m from 5.14m 
in file corresponding period a 
year ago. 

Sates in the whole of 1993 feO 
by 15.2 per cent to llASm, the 
steepest declme since the war. 

The recovery during the first 
five mnnths has been led by 
the i ik France Spain and 
by sharply rising sates in sev- 
eral smaller roar ka te fnrindtng 
the Netherlands, S candina via 
and Ireland. 

Sales were stiff lower than a 
year ago in Germany, Italy, 
Austria, Switzerland, Greece 


and Portugal, but with the 
exception of Austria sales also 
began to recover in these mar- 
kets In May. 

In Germany, the biggest sin- 
gle market in Europe, new car 
sales are estimated to have 
risen in May by 6.5 per cent 
year-on-year to 300,000, while 
new car sales in Italy increased 
by 7J> per cent to 179,000. 

New car sates in France and 
Spain, where demand has been 
stimulated by government 
financial incentives to encour- 
age the scrapping of cans 10 or 
more years old, rose sharply 
year-on-year in May by 26.2 
and 3L6 per cent respectively. 

Japanese 
carmakers have 
not taken part in 
the recovery 

The rate of growth in the 
UK, which slowed in April 
under the impact of tax 
increases, recovered in May 
with a rise year-on-year of 10 
percent 

Japanese carmakers, strug- 
gling to maintain competitive 
prices under the impact of the 
strong appreciation, of the yen. 
have failed ao far to take part 


in the recovery and have suf- 
fered an estimated 65 per cent 
decline in sales during the first 
five months to 596,000. 

The share taken by Japanese 
car producers has (alien to 11 
per cent from 12.4 per cent in 
the same period a year ago. 

Only Honda among eight 
Japanese carmakers in the 
west European market has 
managed to increase its sales 
this year, and the producers 
hardest hit are those without 
mainstream car production in 

west Europe, such as Mazda, 

Mitsubishi and Daihatsu. Suzu- 
ki's four-wheel-drive vehicle 
plant in Spain has been closed 
for much of this year by indus- 
trial enwflipt 

Among the big six volume 
carmakers in west Europe, the 
Volkswagen and Fiat groups 
have continued to lose ground. 
The German group’s leading 
brands, Volkswagen and Audi, 
have seen sales volume fall 
this year, offset by sharp rises 
at Seat and Skoda, its Spanish 
an d Czech subsidiaries. 

The Fiat group, which has 
been hit in particular by the 
recession in Italian market, 
is being undermined by the 
weakness of its Lancia and 
Alfa Romeo brands, where 
sates have declined by 6 and 12 
per cent respectively. 



Votaima 

turn 

Volume 

Chnge(%) 

Share (%) Share pt) 
Jan-Mey 94 Jv+Mays 

TOTAL MARKET 

5,425,000 

4&S 

100J) 

ioao 

MANUFACTUftStS: 

Volkswagen group 

889,000 

+1.5 

ISA 

17JD 

- Volkswagen 

581,000 

-1.6 

10.7 

11J5 

- Seal 

142.000 

+208 

2.6 

Z3 

- Audi 

140.000 

— 4.2 

2.6 

28 

- Scoria - 

25 POO 

+20.6 

03 

04 

General Motors# 

895JXW 

+&3 

12B 

12.7 

- Opel/Vauxhail 

666,000 

+5.6 

12.3 

12.3 

- Saab” 

23.000 

+32.3 

0.4 

0^ 

PSA Retreat Citroen 

686,000 

+13^ 

12-6 

11.7 

- Peugeot 

411,000 

+11.0 

7.6 

72. 

- Citroen 

274,000 

+17^ 

5.1 

4.5 

Ford* 

643JI00 

+7J 

11.8 

11.6 

- Ford Europe 

637.000 

+7.4 

11.7 

11J5 

- Jaguar 

5.000 

+55 

0.1 

0.1 

Rat group#* 

823,000 

+2.8 

115 

11J3 

- Rat 

483.000 

+6 J2 

09 

8B 

- Lancia 

82,000 

-6.4 

1.S 

1.7 

- ANa Romeo 

53.000 

-11.9 

1.0 

1 2 

Renafet 

575.000 

+7.1 

106 

104 

BMW groupt 

sw/wq 

+5^ 

6.1 

6.1 

-BMWt 

167,000 

-OB 

3.1 

3.3 

-Revert 

165.000 

+13.6 

3.1 

2.8 

Mercedes-Benz 

189.000 

+38.8 

3.5 

2.7 


177.000 

140.000 

-1.4 

3.3 

3.5 

Toyota 

-4.0 

2.6 

22 

Volvo 

91,000 

+23.9 

1.7 

1.4 

Mazda 

85,000 

-11.0 

US 

1.9 

Hondaf 

71,000 

+5^ 

1.3 

U 

Mitsubishi 

54.000 

-17.B 

1.0 

1.3 

Suzuki 

38.000 

-19.4 

0.7 

0.9 

Total Japanese 

S96JXX) 

-8^ 

11.0 

12.4 

MARKETS: 

Germany 

1.455,000 

-0.B 

26.B 

28.4 

Italy 

887,000 

-4J 

16.3 

18.0 

United Kingdom 

822.000 

+13.3 

15.1 

14.1 

France 

803.000 

+1&0 

14J 

13^ 

Spain 

359.000 

+17^ 

6.6 

5.9 


-MV hath 31 oar cent and m enannww con MV or » o<*. 

MUM cars onportMi tom US and toU m mm Europe: 

-tar /mbs SO O eanr and m a nu p nm e n t cqbboT or Sam d u —n bfc 
aa MoooMnlnLn* Roman hmcana Fa 


fSMVoma 80 p* cm of Sam gmup ana it to acquto Via m at ting 


SO per cent from Nandi. 
Source : MMy aaumatee 


L 


t is comforting to entrust one's assets to a Geneva private banker. 










s f 


,/■ 


Jtv 


.. . »; ■ . •. .v : ‘ • . 




^■0" Geneva is a leading 
^ financial centre known for 
international banking 
expertise and, 
for 200 years, its private 
bankers have focused on 
asset management. 
They like to establish 
durable person-to-person 
relationships and their close 
involvement in investment 
decisions is profoundly 
reassuring to their clients. 



Geneva's Private Bankers 

Liberty • Independence • Responsibility 


In Geneva: 

BORDIER & Ge - DARTER HENTSCH & Ge - LOMBARD OD1ER & Cie - ADRABAUD & Cie - PICTET & Cie 

( 1844 ) ( 1796 ) ( 1798 ) ( 1819 ) ( 1805 ) 

Faro GaauBttKptedate IMfji^iridKWeiaTa ratal 

Hi ffe« AM ItegM UJL 1M KRkatflHK). 




FINANCIAL TIMES MONDAY JUNE 13 1994 


INTERNATIONAL 


Bhutto seeks 
to reassure 
investors 


Haiti regime declares emergency 


By Canute James in Kingston 


Stefan Wagstyl and Farhan 
Bokhari interview the 
prime minister of Pakistan 


M s Benazir Bhutto, 
Pakistan's prime 
minister, said yester- 
day the country was now free 
of the political instability that 
had plagued ft in the last five 
years and urged foreign compa- 
nies to invest 

"Pakistan today has real 
democracy and real stability,” 
Ms Bhutto said in an interview 
yesterday. "People have begun 
to realise that Pakistan has 
returned to foil democracy.’* 
She dismissed suggestions 
that the military, which ruled 
Pakistan until the death of the 
dictator General Zla ul-Haq in 
1988, was still active in politics. 
She ggid the army leaffarghip 
was now "neutral”, siding nei- 
ther with Ms Bhutto nor with 
Mr Nawaz Sharif, the main 
opposition leader and former 
prime minister. 

Mr Sharif's government col- 
lapsed last year amid argu- 
ments with the army and with 
the president Months of politi- 
cal turmoil culminated in a 
general election and Ms Bhut- 
to’s return to power. 

Speaking a few days after 
the government announced its 
budget last Thursday for the 
year starting in July, Ms 
Bhutto said she was frying to 
make Pakistan an "investor- 
friendly country". 

Building on the steps taken 
by Mir Sharif and his tempo- 
rary successor Mr Moeen Qure- 
shi to liberalise the economy, 
the budget includes cuts in 
import duties and the introduc- 
tion of full convertibility of the 
rupee on the current account 
The government also plans to 
keep a tight rein on borrowing 
- after cutting the fiscal deficit 
from 8 per cent of GDP at the 
mid of Mr Sharifs rule to S.4 
per cent now, ministers intend 
fbrther cuts to 4 per cant in 

1994-95. 

Ms Bhutto said foreign 
investment could play a lead- 
ing role in Pakistan. “Some 
Pakistanis are very sceptical 
about foreign investment in 
Pakistan but I think it is 
because they are not aware 
that the world has changed so 
dramatically, and in the 21st 
century we are going to be wit- 
nessing a global economy. We 
have to try to prepare Pakistan 
to compete with that global 
economy and integrate with 
that global economy.” 

Ms Bhutto said she was very 
encouraged by the response 
from foreign companies. Last 
week, ICI Pakistan, the 61 per 
cent-owned affiliate of Id, the 
British chemical group, 
announced plans for a $350m 
plant to produce pure tere- 
phthalic acid, a raw material 


Haiti’s army-backed government has 
declared a state of emergency after the 
tightening of economic sanctions 
against the Caribbean nation and amid 
intensified rumours of inmending for- 
eign military intervention to remove 
the military and reinstate Mr Jean- 
Bertrand Aristide, the exiled 
president. 

The annnimwmimt of the eme rg en cy 
by Mr Emile Jonassaint, recently 
appointed head of the government by 
the army, coinaded with an attempt by 
several thousand Haitians and hun- 
dreds of foreigners to leave the country 


before the te rmination of commercial 
f lights, one of several new sanctions 
against Haiti, takes effect 

Hie US and Canada say they will end 
commercial flight* to Haiti on June 25 
to increase pressure on the militar y 
which took power in a coup 30 months 
ago. France is also expected to end com- 
mercial flights, but it is not yet known 
whether other countries which have air 
links to Haiti, including the Nether- 
lands, Panama and the Dominican 
Republic, will do the same. 

In a further show of defiance, the 
Haitian military said it would dose the 
country’s main airport in Port an 
Prince, the capital, and several smaller 


airfields, five days before the new sanc- 
tions takes effect 

Foreigners have been told by their 
governments to leave Haiti as soon as 
posable, and several governments are 
also evacuating family members of 
their di plomatic Most of the Hai- 
tians who have been purchasing tickets 
to leave the country are children 
and women who are being sent 
yhf pari as the t ightw sanctions take 
effect 

Concerns about public safety 
increased over the weekend after tire 
military guns from several US 

mart nos e n ter i ng thfi COUSfry . US Offi- 
cials the marines were assigned to 


security duties at the US embassy in 
Port au Prince, and that they were part 
of a normal rotation of guards. 

The imposition of a state of emer- 
gency will not change the situation in 
the country. The military and its police 
arm have been exercising powers in a 
virtual state of siege since econ om ic 
«Mvtinn«t were put into effect soon after 
the coup. 

rupifnrKite in port au Prince said yes- 
terday that the declaration of the emer- 
gency, the decision to close airports 
before tiie June 25 deadline, were part 
of the military government’s display of 
defiance of efforts to have Mr Aristide 
returned. 


Argentine 
offer to 
Falkland 
Islanders 


By John Barham 
In Buenos Aires 



New chief 
for Czech 
sell-off 
agency 


By Vincent Boland tn Prague 


Bhutto: encouraged 


for making synthetic fibres. 
The plant, to be funded by a 
rights issue and loans, will be 
one of Pakistan’s largest indus- 
trial investments. 

Also, international bankers 
and fund managers are dose to 
giving final approval to a {2bn 
oil-fired power station to be 
built on tiie Hob river, which 
is being financed by a combi- 
nation of public and private 

finam-P 

Officials said yesterday the 
scheme’s promoters, including 
the World Bank, hopes to 
secure fina mdal commitments 
by the end of July or early 
August at the latest Equity 
investors, which are putting up 
{320m, include National Power, 
the British generating com- 
pany, which last week agreed 
to raise its stake from {40m to 
{90m and assume management 
control from a consortium 
which has run the project until 
now. 

Ms Bhutto said that with the 
help of the Hub river project 
and other schemes, thp govern- 
ment p lanned to increase elec- 
tricity output by 50 per cent in 
five years from about 
IOjOOOMW in 199394. “Ridding 
the country of power cuts is 
the major concern... of the 
country to improve the life of 
the citizens and also to 
improve industrial productiv- 
ity.” 

The government expects the . 
economy to grow by 4 per cent 
in 1993-94 after 2£ per cent last 
year when agriculture suffered 
from drought and a pest attack 
on cotton, a principal export 
The government forecasts a 
sharp 1994-95 recovery to 7 per 
cent 

Ms Bhutto said: "Much 
depends now on weather and 
crops but given good weather 
and good crops I think Pakis- 
tan win be in a good position 
by next year. So if within 18 
months we can bring real eco- 
nomic stability we would feel 
proud of that achievement” 


The Czech Republic’s 
privatisation programme is 
excepted to be speeded with 
the appointment on Friday of 
Mr Bnnwm Cwska as ehainwfln 
of the Czech National Property 
Fund, the state holding com- 
pany responsible for privatisa- 
tion. Mr Ceska replaces Mr 
Tomas Jezek, who resigned 
after charges that the agency 
was selling state assets on the 
cheap. 

Mr Ceska said he would put 
proposals before the board of 
the NFS this month: "1 want to 
speed up the privatisation pro- 
cess." 

The official reason for Mr 
Jezek’s resignation was a 
potential conflict of interests 
between his position at the 
NPF »wi his imminent , chair- 
manship of a parliamentary 
budget committee. But he said 
he had stepped down because 
of "continuous attacks” on 
him in recent weeks. 

Fierce rivalry between the 
NPF and the Privatisation 
Ministry has been a feature of 
the Czech privatisation pro- 
cess. Politicians have accused 
the NPF of acting indepen- 
dently of tiie government and 
of reaching agreement with 
investors without seeking 
approval from parliament 

Tension increased after sev- 
eral high-profile sell-offs, ; 
including the sale of a stake in 
Czechoslovak Airlines to Air 
France and after a DMSJibn 
(£L4m) investment in the car 
maker Skoda by Volkswagen, 
Europe's biggest car maker; 
turned sour. 

Mr Jezek accused the board, 
headed by Mr Jlri Skalicky, 
privatisation minister, of dis- 
rupting the NPFs operations 
and frying to undermine Us 
position. Mr Skalicky said the 
board asked Hr Jezek to 
resign because it was tdissat- 
isfied with the pace of realisa- 
tion of privatisation projects”. 

The NPF is res p onsibl e for 
selling stakes in state compa- 
nies to domestic and foreign 
investors and is a shareholder 
In much of Czech industry. 


w .,i. ... Ac 










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'• *■ "v'i'; -' .-riv 


On Wednesday, June 15 the Financial Times will publish a survey on 
Telecommunications In Business. 

Tetocommuricathms play an Increaringy vital role In the e fBcfq i cy of htwdn— 

The survey wfll rfve a detailed description of the new technology and sendees avalable, 
comparing prices and raBabOty. 

»* win, for example, examine the opportunities for the corporate sector to exploit 
***** ssnfoes and explain the benefits of phone cards over hotel rates for the 
t** v#ra “« executive. 


the w “ hrtlBie ** ,n toleconumedcaaons, this swvey will put you on 


FmaidalTi 


■nes. Ewopefe Business Newspaper 





Nigerian election 
winner in hiding 


The Nigerian military, getting 
tougher on the anniversary of 
the election It nullified, offered 
a reward yesterday for the cap- 
ture of Mr Moshood Abiola, a 
fugitive tycoon who tried to 
riflhw his mandate by declaring 
hims elf president, AP reports 
from I^gos. 

General Sani Abacha, The 
military ruler, marked the 
annulment of the presidential 
election a year ago with a 
nationwide television address 
during which he threatened to 
punish opponents of his rule. 

. . Choosing the path of 
confrontation and subversion 
at tins time erf our national his- 
tory would not be tolerated. 
Such acts would be sternly 
punished,” Gen Abacha said. 

He also promised to return 
Nigeria to "genuine democ- 
racy", but like previous mili- 
tary dictators who have ruled 
Africa’s most populous nation, 
he gave no timetable for this. 

Mr Abiola gained the most 
votes in the election when the 
ruler at the time, Gen Ibrahim 
Babangida, suddenly voided 
the ballots, triggering riots 
that killed an estimated 200 
people over three days. 


Gen Rahangidn resigned last 
August, naming a civilian sup- 
porter in his stead. Gen Aba- 
cha forced his way into power 
in November and dismantled 
the nation’s elected Senate, 
lower house, 30 state govern- 
ments and more than 500 local 
legislatures. 

He has made it a treasonable 
offence to criticise his govern- 
ment, and on Saturday ordered 
the arrest of Mr Abiola after 
the businessman declared him- 
self presided. 

State media said a reward of 
50JJ0O naira (£1,515), at the offi- 
cial rate, was being offload for 
Information leading to the cap- 
ture of Mr Abiola. 

Mr Isiaka Adel eke, former 
governor of Osua state, who 
lost office when Gen Abacha 
dissolved all civilian political 
posts, said Mr Abiola was safe 
at a secret location in 
Lagos. 

He said Mr Abiola travelled 
on Saturday evening to a city 
park for a ceremony in which 
he was sworn in as president 
Mr Adeleke said between 2^000 
and 4400 people wen present 
at the largely symbolic cere- 
mony. 


S Yemenis 
welcome 
UN envoy 


US university moves to 
cut grade expectations 

Students may fail again, reports Jeremy Kahn 

F rom the autumn of 1995, even been mocked in the popu- have to add it We need 
a student at Stanford lar cartoon strip Doonesbury. higher than a.” 
University in California Anyone who thought Doo- It is a rare college t] 


F rom the autumn of 1995, 
a student at Stanford 
University in California 
may actually foil a course for 
the first time in 24 years. 

The faculty senate at Stan- 
ford, consistently ranked one 
of the top five universities in 
the US, voted this month to 
reinstate the grade Fail, 
though it will be called, euphe- 
mistically, “NP” (not pass). 
Failing marks were eliminated 
in the late 1960s in the belief 
that they discouraged students 
from academic experimenta- 
tion. 

Stanford also voted that 
transcripts, which record 
courseby-course academic per- 
formance, should more accu- 
rately reflect students' aca- 
demic history. Previously, 
studrote could drop a course 
up to the day before the final 
exam and repeat a course as 
many times as they wanted, 
without this being recorded on 
their transcripts. 

Stanford is the latest battle- 
ground in the war against 
"grade inflation", the term 
coined to describe the notice- 
able rise in the average grades 
being given out at colleges and 
universities across the US over 
the last 30 years. 

The phenomenon, which has 
left some experts asking if 
degrees and transcripts are 
worth more than the paper 
they are printed on, has 
received widespread attention 
in academic circles and has 


even been mocked in the popu- 
lar cartoon strip Doonesbury. 

Anyone who thought Doo- 
nesbury’s creator Garry Tru- 
deau was exaggerating need 
look no further than Stanford, 
where the mean grade Is A 
m i n u s and S3 pa* cent of the 
grades given out are As or Bs. 

"Most of your prestigious 
universities have grade infla- 
tion,” says Mr Martin Ander- 
sen, a senior fellow at the Hoo- 
ver Institution at Stanford. 
"When you get to the point 
where Stanford is, I call that 
hyperinflation or phoney 


Mr Anderson believes even 
the best universities have 
become "diploma mills" churn- 
ing out devalued degrees that 
tell little about actual aca- 
demic achievement. He warns 
all prospective employers and 
graduate schools to look at 
more than transcripts and 
grade point averages in assess- 
ing potential. 

Mr Thurston Smith, Har- 
vard’s associate registrar, dis- 
agrees. He contends high 
admission standards at top 
schools such as his mean any 
graduate will be bright and 
have enormous potential. 

Even so, Mr Smith admits 
average grades at Harvard 
have been creeping up for the 
past 20 years. "We’ve done 
some studies on it and we 
know it is happening here, 1 * Mr 
Smith says. “We don’t have 
A-plus at Harvard so we may 


have to add it We need a grade 
higher than A.” 

It is a rare college that has 
escaped the phenomenon. Two 
of the best that have, accord- 
ing to Mr Anderson, are the 
science-oriented Massachusetts 
Institute of Technology and the 
University of Chicago, where 
Mr John Boyer, dean of the 
college, says the average grade 

is B- minus. 

While Mr Smith says grade 
inflation affects all acari« nic 
disciplines equally, .Mr John 
Wakeman-Unn. a forma- eco- 
nomics professor now at the 
International Monetary Fund, 
found in a study that it is 
worse in the humanities and 
social sciences, where grading 
Is more subjective. 

Mr Wakeman-Linn says the 
promise of higher grades in 
these subjects is luring stu- 
dents away from the socalled 
"hard sciences” such as phys- 
ics and maths 

The roots of grade inflation 
are complex. Some experts 
believe it began as an attempt 
by professors in the late 1960s 
to keep more students in col- 
lege and out of the Vietnam 
war. Others blame a general 
relaxing of conventional aca- 
demic standards in the late 
1960s and early 1970$ or univer- 
sity budgeting that allocated 
money to departments based 
on their enr olments, encourag- 
ing professors to inflate their 
grades to attract more students 
and thus resources. 





Northern Yemeni forces 
pushed to within 20 miles of 
the southern Yemeni city of 
Mukalla yesterday but were 
ordered not to shell it, Reuter 
reports from Haifa, Yemen. 

In the ■ city, southern 
Yemenis welcomed UN peace 
envoy T-akhriar Br ahlml, who 
is expected to meet Ali Salon 
al-Baidh, president of the 
southern state which seceded 
from a four-year union with 
the north on May 2JL 

Mr Brahimi. a former Alge- 
rian foreign minister, is trying 
to arrange a ceasefire between 
Sanaa and Aden. He met 
Yemeni President Ali Abdullah 
Saleh in Sanaa last week. 

Deputy prime minister 
Abdul-Qader Bagammal told a 
news conference in Sanaa that 
northern troops were under 
orders to keep their artillery 
just out of range of Mukalla, 
which contains many historic 
buildings, an airbase an oil 
export terminal. 

Meanwhile northern forces 
have taken control of a huge 
central chunk of what was, 
before unification in 1990, 
South Yemen. 


Restraint of trade: Uses of 
trucks waiting for up to three 
days to cross into Macedonia 

from Albania at the pass of 
Qafe Thana. The trucks were 
diverted through Albania after 
Greece blocked its routes to 
Macedonia, with which it has 
disputes over its name, 


New York plan 
for street cars 


New Yolk’s city council has approved a plan to bring bade the 
trams or street cars that last rattled around the city half a 
century ago, Richard Tomkins writes from New York. A vote in 
the council at the end of last week will allow officials to seek 
bidders for a {135m (£90m) project to build a 3.2m tramway 
running the length of 42nd Street from one ride of Manhattan to 
the other. 

The project is intended to cut traffic, pollution and noise, speed 
up travel across midtown Manhattan and help bring about the 
regeneration of 42nd Street Years ago the street was famous for 
its nightlife, but much of it is now rundown and sleazy. 


Gaidar founds party 


Mr Yegor Gaidar, former deputy prime minister and engineer of 
Russia’s market reforms, yesterday founded a new party called 
Democratic Ounce of Russia which he promised would be the 
most disciplined of liberal parties to compete in elections sched- 
uled for 1996, Leyia Boulton writes from Moscow. The party Is 
being built on the ramp of last December's ill-feted electoral 
alliance known as Russia’s Choice, which united a variety of 
flntji T n^niiinfait parties *nii movements but did badly in the 
elections despite support from the stale-owned media. Mr Gaidar 
said the party, which would be a guarantor of market reforms, 
would have to be disciplined "otherwise our struggle with conser- 
vative forces will recall a battle between cavalry and an 
armoured division”. 


Kyrgyzstan ‘needs Russia’ 


Mr Askar Akayev, the reformist president of the poor and 
remote republic of Kyrgyzstan, was quoted at the week e nd as 
saying that his country was doomed by its backwardness to 
return to Russia’s economic orbit, Leyia Boulton reports. Accord- 
ing to tire Russian Information Agency, President Akayev, in a 
surprisingly frank description of his nation’s prospects, said its 
industry could not attract "serious” foreign investment and 
would remain "on the sidelines of economic progress” for at least 
10 to 15 years. 


Mexican rebels spurn offer 


Rebels in Mexico's southern state of Chiapas rejected the gov- 
ernment’s peace offer, saying their local demands were met only 
partially and that permanent peace could only be achieved via a 
nationwide democratic transition, Ted Bardacke reports from 
Mexico City. They also pledged to maintain the ceasefire that has 
held since mid-January. The peace offer, which emerged from 
negotiations in the Chiapas city of San Cristobal de las Casas in 
March, was rejected by 97.88 per cent of the rebel forces and their 
supporters in voting held over the past month, according to a 
rebel communique. 


'EttSs Grid 


June 10. 1994 


Irish Bunt 
Gaidar ' - 
BJranc . 
Wferfc 
FJRrahc 
BJCrone 



rliin 


imi 11 


Argentina’s foreign minister, 
Mr Guido di Telia, has said he 
would consider paying the 
Falkland Islands’ 2,000 inhabit- 
ants to accept Argentine sover- 
eignty. 

In an Interview, Mr Dl Telia 
said: “We would be willing to 
pay somo kind of compensation 
In exchange for Argentine sov- 
ereignty, but we do sot want 
them to be paid to get out of 
islands.” 

Mr Di Telia did not mention 
a figure, but Implied it could 
be substantial. He said former 
UK government adviser Alan 
Walters had proposed a similar 
solution to the dispute over tire 
islands, which led In 1982 to a 
74-day conflict between the two 
countries. 

Mr Dl Telia reiterated Presi- 
dent Carlos Menexn’s claim 
that the islands would "revert” 
to Argentina by the year 2000 
through peaceful diplomacy 
and by convincing the island- 
ers to accept Argentine 
rule. 

However, Mrs Sharon Hal- 
ford, a Falkland* councillor, 
said: "I don’t think this would 
be viewed vory favourably. 
Money is not everything. If 
they bought someone out, 
where would they go?” 

Mr Di Telia denied that pay- 
ments would be made to 
encourage people to leave the 
FaBdands and settle elsewhere. 
HO said. “We want to be very 
respectful of these 2,000 people. 
They have lived there for a 
long time and have a special 
way or life, and if necessary we 
are ready to consider monetary 
compensation for the psycho- 
logical disturbance” of ceding 
sovereignty. 

• AP reports from La Pax, 
Bolivia: Congress impeached 
the Bolivian Supreme Court’s 
president and its No 3 judge on 
Saturday after finding them 
guilty of soliciting bribes from 
a suspect in return for protect- 
ing him from extradition. 


■*: *j- 

T% . .. 2% 


Eimopean Monetary System: The order of currencies in the EMS 
gnd was unchanged ahead of the European elections. The Portu- 
guese escudo lost ground at the bottom of the grid. The peseta is 
probably most vu lnerable to a poor government showing in the 
elections. Currencies, Second Section. 

The chart shows the member currencies of the exchange rate 
mechamsm measured against the weakest currency in the system. 
Most of the currencies are permitted to fluctuate vritittn is per cent 
qf agreed central rales against the other members of the media- 
msm. The exceptions are the D-Mark and the guilder, which move 
in a Z25 per cent band. 





NEWS: INTERNATIONAL 



FINANCIAL TIMES MONDAY JUNE 13 1994 



urges more talks on N Korea 


’I'o n 

'Wr, 




By Tony Waftar in BeQing and 
John Burton in Seoul 

China yesterday made its strongest plea 
yet for renewed diplomatic efforts to 
resolve the , argument over North 
Korea's reluctance to open its nuclear 
sites to Inspection. Mr Qian Qichen, 
China's foreign minister, reflecting Bei- 
jing’s growing alarm on the possibility 
of United Nations sanctions on Pyong- 
yang. urged. the international commu- 
nity to refrain from “closing the door”. 

Sanctions, Mr Qian told the visiting 
Japanese foreign minister, Mr Koji Kak-. 
izawa, could only intensity the M contra- 
dictions” and even lead to results that 
all parties would not like to see. 

However, in Seoul, the US, Japan and 


South Korea, after holding discussions 
in the South Korean capital at the 
weekend, reaffirmed their determina- 
tion to push for the phased introduction 
of UN sanctions against North Korea 
un l es s Pyongyang accepts international 
nuclear inspections. 

Russia also indicated its willingness 
to support sanctions after the DS 
endorsed a Moscow-sponsored interna- 
tional conference that would attempt to 
resolve the North Korean nuclear issue. 

Invited participants to the conference 
would include North and South Korea, 
the US, Russia, Japan, China, the UN 
and the International Atomic Energy 
Agency, the UN’s nuclear watchdog. 

Mr Qian's statement reflected Bei- 
jing’S fears that a sanctions process 



backed by the US and its western allies 
might develop a life of its own and lead 
eventually to a dangerous confrontation 
with North Korea. 

“We appeal to the parties concerned 
to make efforts to open dialogue and 
seek a way of settling the problem step 
by step," said Mr Qian. 

Beijing is now at the centre of intense 
international efforts to defuse the Kor- 
ean crisis, recently receiving foreign 
mini sters of both South Korea and 
Japan as well as the chief of staff of the 
North Korean armed forces. 

Mr Qian appeared to foreclose the 
possibility of early Chinese support of 
sanctions. The US and its allies may 
proceed as early as this week before the 
UN Security Council to put forward a 


resolution calling for phased sanctions. 

The IAEA has warned that the oppor- 
tunity may have passed to verify 
whether North Korea has diverted 
wea pons-grade plutonium from spent 
fuel rods at a reactor near Pyongyang. 

On Friday, the IAEA voted to sus- 
pend technical assistance to North 
Korea in protest at its refusal to open 
its nuclear sites to inspection. China's 
IAEA delegate abstained. 

Meanwhile, former US president 
Jimmy Carter will arrive in Seoul 
tomorrow on his way to Pyongyang, 
where he will meet North Korean presi- 
dent Kim H-sung in what is described as 
a private initiative to maintain dialogue 
between North Korea and the US on the 
nuclear issue. 


Beijing tightens 
up on gold trade 


By Tony Walker 

.China will crack down on 
i black-market gold trading from 
the end of this month, in an 
effort to re-establish the state 
monopoly over the buying and 
selling of the precious metal 
The authorities also said at 
the weekend that futures trad- 
ing in gold would be banned. 

The People's Bank. China's 
central bank, which is respon- 
sible for gold acquisition, 
reported that in the first four 
months of this year gold pur- 
chases were down by 35 per 
cent on the same period in 
1992. China's central h ank pur- 
chases of gold last year plum- 
meted 32 per cent from 1992. 
This followed growth of a ram- 
pant black market. 

A circular issued by the 
State Council. China’s cabinet, 
said officials who allowed a 
black market in gold to con- 
tinue after July 1 would be 
"charged and punished". Mines 


that failed to sell their gold 
output to the state would be 
denied government loans and 
tax breaks. 

The circular also urged the 
People's Bank to increase the 
gold price to International lev- 
els. China last September dou- 
bled the gold acquisition price 
to Yn2,9SS (£229) a troy ounce, 
about 10 per cent below the 
world market C hina produced 
100 tonnes of gold last year and 
imported 150 tonnes. Most of 
this was used to make jewel- 
lery. China is the fourth big- 
gest gold consumer after India, 
the US and Saudi Arabia. 

• Reuter adds from Beijing: 
China, blaming blind specula- 
tion on international futures 
exchanges for big foreign 
exchange losses, said it would 
allow Chinese brokerages to 
place orders only on domestic 
exchanges. "The state will 
strictly control futures trading 
outside the borders," the offi- 
cial People's Daily said. 


The worst in Japan is 
over, survey suggests 


By William Dawkins in Tokyo 

A faint economic dawn is 
beginning to dispel Japan's 
longest recession in post-war 
years, yet the rising sun looks 
anaemic. 

Hie latest survey of business 
confidence (“Tankan") by the 
Bank of Japan last Friday, 
showing the first upturn in 
sentiment for five years, was 
the latest in a series of indica- 
tors that not only is the worst 
over but an upturn has tenta- 
tively begun. 

Hie publication this week of 
gross domestic product figures 
for the first quarter to March is 
expected to confirm this. Sev- 
eral forecasters expect a small 
rise from the previous three 
months, perhaps a fraction of a 
percentage point, with a 
decline of a similar order from 
the same period last year. 

Few in Tokyo now doubt 
that the recession is past or at 
least near the bottom. The 
main evidence includes a rise 
in industrial production from 
the final quarter of last year to 
the first three months of this, 
plus increases in imports, 
household spending, construc- 
tion contracts and an accelera- 
tion in the rate of growth in 
bousing starts over the same 
period. 

At the same time, the rate of 
decline has slowed in super- 
market and department store 
sales, car registrations and 
machinery orders. 

The big question now is in 
what kind of shape Japan's 
economy will emerge from the 
recession. Is it really anaemic, 
or leaner and meaner than in 
the fast-growth late 1980s? 

In the short term, at least, 
the latest economic statistics 
suggest a weaker recovery 
than from the previous two 


downturns, in the early an d 
mid-1980s. 

For one thing, the Tankan 
shows that Japan's corporate 
restructuring, so far gentle by 
US and European standards, 
still has some way to go - not a 
problem in the previous 
upturns. 

The gap between output and 
de man d is still high, though 
declining. This is shown in the 
Tankan by a decline in the per- 
centage balance between com- 
panies reporting excess and 

Is the economy 
really anaemic, 
or leaner and 
meaner than in 
the fast-growth 
late 1980s? 


insufficient supply from 55 in 
the previous survey in Febru- 
ary to 50 in May. 

One consequence is that 
companies, in particular those 
in manufacturing, plan to cut 
their workforces by about 1 per 
cent, a further drag on con- 
sumer spending. Another is 
that they plan to reduce capital 
investment - by 3.7 per cent, 
for the third year r unning - so 
hitting suppliers of capital 
equipmenL 

The general tone of the Tan- 
kan was, however, strong 
enough to give the Bank of 
Japan an argument not to cut 
its 1.75 per cent official dis- 
count rate (ODR). at which it 
supplies funds to commercial 
banks. The BoJ has guided 
overnight market rates - at 
which commercial hanks lend 
to one another - to a record 
low of just over 2 per cent. 


very dose to the ODR. Another 
drop >s seen by many as a 
vitally -needed step to stimulate 
the fragile recovery. 

Yet central bank officials 
have talked in recent weeks of 
controlling the risks of recov- 
ery. rather than easing credit 
further, a sign that the lesson 
of the late 1980s' liquidity-fu- 
elled explosion in asset prices 
is still etched deep in their 
minds. 

All this is worrying for those 
who fear that tight credit could 
throttle the recovery. For 
despite the central bank's 
strategy of driving down over- 
night rates, bank lending 
remains weak. There was a 1 
per cent annualised decline in 
new loans by the 11 city banks 
last month, the Federation of 
Bankers' Associations says. 

All this indicates that the 
after-effects or the recession 
might take a year or two to 
evaporate. Many economists in 
Tokyo assume that Japau has 
lost one or two points from the 
average 4.5 per cent CiDP 
growth rate it experienced in 
the 1980s. 

Of course, they could be too 
pessimistic, an over-reaction to 
the false economic dawn that 
appeared in spring last year. 
Corporate Japan could yet sur- 
prise the world with its hidden 
strength, as it has done before. 

The latest forecasts of Japa- 
nese companies' pre-tax profits 
by four Tokyo economic 
research groups range widely, 
from a 2.7 per cent decline by 
Nomura Research Institute to 
a 7.4 per cent increase by 
Nikko Research Centre. But 
the four, who published their 
forecasts late on Friday, expect 
corporate Japan to show prof- 
its growth of between 20 per 
cent and 25 per cent the follow- 
ing year. 



Ilwi? i s .« proud men i lx. r iif ilu.- World Travel Jt Ti hitimii <'.uiita.il 


Travel. Meet Your Neighbours. 

Reading about a culture is preparation for a trip. Not a substitute. Try to understand curry without 
tasting it. Chinese opera without seeing it. An evening breeze in Lamu without feeling ii.The world 
is filled with wonderful places to see. interesting people to meet, rich opportunities to pursue. Go. 


‘ r ’-- bi: 


Pt 


Death sentence for attack on Taiwanese 


^ Yb Afjon, handcuffed, is flanked by police 
as be leaves the Hangzhou People's Court 
yesterday after being sentenced to death along 
^ with two other men for the murder of 32 
Taiwanese tourists on a pleasure boat in 
China's coastal Zhejiang province on March 
31, Agencies report from Taipei. 

Delicate relations between Beytog and Taipei 
reached their lowest ebb after the attack, 
iU but bilateral relations appeared to improve 
after China arrested tbe three men In ApriL 


Taiwan plans to hold a new round of 
high-level talks with the mainland flhiHMB 
government in Taipei in August, according 
to a Taiwanese newspaper. 

The Straits Exchange Foundation plans 
to Invite Mr Tang Shubei, secretary-general 
of China's Association for Relations Across 
the Taiwan Strait, to travel to Taipei in 
August for talks on how to expand contacts 
between the two bodies, tbe China Times 
report e d. 


GENERAL PROCUREMENT NOTICE 

PROCUREMENT OF PRODUCTS AND SERVICES 
UNDER JAPANESE GRANT AID FOR ECONOMIC 
STRUCTURAL ADJUSTMENT OF 
SOCIALIST REPUBLIC OF VIET NAM 

The Government of Socialist Republic of Viet Nam has received a Grant Aid of 3 billion Yen from the 
Government of Japan to purchase products and services incidental to such products for die public bodies and 
private sector companies of Socialist Republic of Viet Nam. 

Categories of product are: 

□ Petroleum products □ Fertilizer (Urea) □ Tires for cars and tracks □ Trucks □ Micro-Buses □ Paper and 
Paperboard for packaging □ Plastic mate rials (Polypropylene/Polyethylene) □ Cotton □ Iron and Steel for 
construction (Steel bar/Steel tnbcs/Steel plate) □ Inorganic chemical materials (Caustic soda/Soda ash light) 

□ Artificial resins (PVC resin) 

Eligible source countries are all countries and areas except Socialist Republic of Viet Nam. 

Rims or companies who are interested in supplying produces) as mentioned above should submit to JAPAN 
INTERNATIONAL COOPERATION SYSTEM (JICS) the information listed below as soon as possible. 

The information required is as follows; name and address of firms or companies, name(s) of personfs) in 
'charge, telephone and facsimile number. 

This information should be submitted only by facsimile to the number as below. 

By return JICS would send the Form of Applications by facsimile, which is to be filled and sent back with 
the documents required for submission by JICS (e.g. annual report) within 21 DAYS of the publication of 
this announcement. 

It should be noted, however, that JICS is not commit led to contact ALL films or companies expressing 
interest after receiving the above mentioned form. 

Invitations to bid will be issued at a later date. 

Pi 1X31x0x1 cnl Office for Non-Project Grant Aid, 

Grant Aid Management dept., 

JAPAN INTERNATIONAL COOPERATION SYSTEM 
'P.O. Box No. 301, 6th Door, Sbinjuku Mitsui BJdg, 
l-i. Nishi-Shinjuku 2-chomc, Shinjuku-ku, Tokyo 163-04, JAPAN 
Tel: 03 (5322) 2441-2444 Fax: 03 (3340) 5505 


CONTRACTS & TENDERS 


Announcement for Information Purposes Only 

Tender Number: PR-SD-CF-01/94 
BID NUMBER: SD-CF-01/94 

PeMEX-Jtetwrcttn. a Mexican Corporator, toffy-owned by Petrdteoa Modems. [PEMEXJ, announced today Ml 
seeks a partner tor a New Con*wny to be created tor the purpose at setting bunker fuels In the mate Mexican Ports 
and off-shore, In Die Pacific and tho Grf of Mfrdca The official announcement regarding this Tender process ts wrtng 
puttehed on June 9. 1994 In the Mexican Official G azzena (Cfiario Oflcta! de la Federacton) and in tt» mrtn Mwlco 
Cftynawspspere. Pretoninaiy Intormaton can be obtained with the financial Agents, Trejo Reyes SAtteCV. (Trejo 
and Merearionai Semcka Fmancieroa SA de C.V. (ISEF1) at Herschel 143. Cd. Anzurea. 01 IS M. Maxto r 
D.F. Telephone end fax. (010 525) 545 9290 and 545 5179. or fax (010 525) 705 3132 to Die attention of Mo3sra. 
Trejo and Dondar. • 

interested paries could tone a Consortium of two independent companies (one Mexican, one foreign), tor the piapose 
of boring b majority share ot the New Company. Full Enlormatkm ■ contracts lor the association and ratetod opfirenons 
PEMOf RaSnackSn, tho prospectus and tho right to visit relevant sites aid receive answers to technical c*ie$flons 


Summary of Conditions 

1- - interested parties may obtain Pretimtoav Information - Business ptoffe Inducting a summary of contract s. Tend er 
condSkxft, AcSrties catexJar aid Deposit contract - upon payment of NSSJXXIOO (FWe thousand Mexican new pesoq. 

2. . interested partes n u?t gua&fy tor stemming forma! Tenders upon presentation and approval erf l Bpal, finar Kaal 
retd Mctarfcd Information, such as prawn business experience in bunker tufli operation and proven financial and 
technical capabBttes. desalted lufiy In the preiimlnBty intonnatoi. 

3- interested. parties vriB obtain the Ml Mwinatton package upon: Recognition as Qualified Bidders, deposit of A 
cash guarantee aid signature of a Confidentiality Agreement All Intotmation and doewnents relative to the 
proceap te'in Spenteh. . * 

4. Formal UdS must be presented in Spanish and wffl be subrofeled and pufafidy opened on July 22, 1994 in Menca 
Announcement of the winning bd w« be made the first week of August, 18M. 

5 bi evaluating jflfo pWnary consideration wfi be given to Dm price offered and the Business Plan presented by 

CuaUEsd Btddecs. 

For addtlonri information the Financial Agents may be contacted at Herschel 143, Col. Anaures. 011590 Mdxteo D.F. 
(“wfco Cfiy). Tefephtma HrvJtex; (010525) 545 9290 and 545 5179. 


PEMEX 


Mexico City, June 8, 1994 



i 


r 





CTTSIANCTAL TIMES MONDAY JUNE 13 1994 


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v : • . • : . - - r v ■ 


On Tuesday, June 14 the Financial Times will publish a special supplement on 
the outcome of the European parliament elections. 

This authoritative guide will include a comprehensive round-up of the voting and 
analyse how the results could affect the political outlook of the European Union. 

There will also be a revealing look at the successful candidates - the men and 
women who will wield the power in the new parliamentary line-up. 

Financial Times. Europe’s Business Newspaper 


: international 


tOTE38^TIWALTBE^REVlEW j 

Jitters over foreign investors 


INDONESIA 


By Manucla Saragosa 

The widely-used derogatory 
Indonesian term for westerners 
is bule - which translates as 
albino - and over the past 
week, the prospect of bule capi- 
tal entering Indonesia' s media 
sector has been a hotly-debated 
topic in the national press. 

It was sparked off by a for- 
eign investment deregulation 
package from the government 
which promised to abolish 
restrictions on foreign equity 
and open up sectors such as 
media, seaports, telecommuni- 
cations. nuclear power, rail- 
ways and civil aviation, all of 
which had previously been, 
barred to foreign ownership. 

Most newspaper editorials 
have wiriiraitprf that, while they 
can tolerate foreign ownership 
in most sectors, the media are 
off limits. Television stations 
and newspapers, they argue, 
are the "tools of national strug- 
gle". 

Leading that line of argu- 
ment are the dailies Republika 
and Bompas, widely regarded 
as pro-establishment newspa- 
pers. “If foreign capital is 
allowed to enter the press 
world in Indonesia many 

thing s ran ha p pen,” warned an 

editorial in Republika last 
week. "The spirit of national- 
ism may be gfvwn second Haas 
status by the capital owners." 

In a country where political 
labels such as “nationalist” or 
“reformist” are more appropri- 
ate than left-wing or right- 
wing, foreign investment 
deregulation treads on sensi- 
tive ground. Nationalists argue 
that keeping the national spirit 
alive and well is paramount 
because Indonesia's I8Qm peo- 
ple are made up of hundreds of 
ethnic groupings. 

Ironically, foreign investors 
have expressed little interest in 
placing money in the Indone- 
sian media because of the arbi- 
trary restrictions imposed an 
public debate. An editorial in 
the widely-read English lan- 
guage daily, the Jakarta Post, 
which usually fatK a reform' 
1st line, asked, "Which foreign 
media baron would be willing 
to invest millions of dollars in 
a business that runs the risk of 
having its licence revoked at 
any moment for publishing' the 
wrong kind of information?” 



-l,. , _ •, j, - __y k-i- -• ' f *? '* 


ALL GREEK TO YOU 


It needn't be. 


Financial Times Magazines publish a monthly magazine 
specially written for the investor with a global perspective. 
We recognise the need for impartial investment advice 
written by people who understand every aspect of overseas 
investment. 

It's called The international . • 

And you don? have to be an economist to understand it. 

FINANCIAL TIM is* I 

IWAiflAjMNKi % “ 


With a wealth of editorial. in ^ every- issue, ft*s the 
essential guide to the worfd'of -finance. And because 
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Yae,Pie*aa send me, FREE and without oMgatlon, tor 
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How the Jakarta Post saw Indonesia's contortions to attract foreign Investors 


In fact, deregulation of the 
sector flies in the face of 
a law Hating from 1S82 which 
stipulates that foreigners are 
not allowed to own newspapers 
or broadcasting stati ons . News- 
papers *mH government minis- 
ters fi ghting the new regula- 
tion have not failed to point 
this out. But in a country 
where the rule of law has yet 
to find its grip, all that has 
resulted is confusion. 

The deregulation package 
appears to have been slapped 
together in a hurry in order to 
counter falling foreign invest- 
ment at a time when other 
Asian countries are attracting 
strong inflows. 

This point was not lost on 
the weekly Economic & Busi- 
ness Review Indonesia, which 
noted that because of the rush 
"the impression that has been 
created -intentionally or oth- 
erwise -is that there was a 
lack of co-ordination among 
government agencies whose 
domains were to be reformed.” 

The likelihood is that minis- 
tries did not bother to consult 
<me another at alL Foreign 
investors, used to this state off 
affairs, barely raised an eye- 
brow when President Suharto 
was reported to have said that 
the media would remain dosed 
to foreigners only four days 
after the deregulation package 

Was nnnnnnneri by senior mfa- 



i* 1 ^ - 

• TO SAVE ALL - 
THESE TREES WE i 

• HELP CHOP t* 
DOWN THIS ONE t 



Tropical hardwood trees are mote 
vafaaUe to logps duo other tra in the 

L_f 


iffigb pikes fir haidwoodi one that 


other no chat sand in their way. 

So j WWF project in Casa ftia is 
mocking wap of fifing a tree without 
briogjng dona setral afccn itxmd it 
And how to rbok k wsboDt hdldanng 

2 padi dmMg h the kMn /wiw iln^ Dees. 

if Ar Hndbms sc used wisely, the; 
can be Bed fitner. Hdp WWF prove 
rids in ninfemB around die wtnkL by 
wiring to die Manba d rip Ofar A the 
addressbdbnt 

WWF 

VtoW Wide Fund for Nature 

(bod* WxU WHfc FroO 
htawBonl SeatmiK. Wt OeiMonU 


isters. 

Mr Suharto reacted to pres- 
sure from Mr Hannoko, infor- 
mation minister, who teamed 
up with local journalists and 
publishers, arguing that for- 
eign capital in the media sector 
threatened Indonesia’s 
national integrity and exposed 
it to foreign influence. 

It was a humiliation for the 
cabinet's economic team. Mr 
Sanyoto Sastrowardoyo, chair- 
man of the Investment Co-or- 
dinating Board, was quick to 
tell local reporters that people 
should give the reform team 
enough time to review the 
whole package. 

Attempts are being made to 
boost the role of parliament in 
policy formation, instead of 
minis terial decree, but no one 
yet really knows how to go 
about im plementing new poli- 
cies. "There has yet to be a 
method of establishing such 
vital policies as economic 
reforms which are then will- 
ingly accepted by parliament, 
the executive branch of gov- 
ernment and the people in gen- 
eral,” said Business & Eco- 
nomic Review Indonesia. 

The latest foreign invest- 
ment deregulation package dif- 
fers from other deregulation 
measures in that it introduces 
drastic changes in one go. 

As a result, even the most 
rdbrmist of newspapers have 


joined up with the more 
nationalist ones in calling for 
caution from the government 
"A note of caution is still in 
order." an editorial in the Jak- 
arta Post said. "Extra care h 
needed because the govern: 
meat should see to it that the 
entry of foreign ventures wfll 
not barm the public interest" 

Phrases such as "national 
interest" and "public interest” 
have been used repeatedly in 
discussing the deregulation 
package, although few editori- 
als have ventured to define 
them. Only Kampos tried to be 
more precise by commenting 
that "the government must 
remain in control of the econ- 
omy so that economic activi- 
ties are truly aimed at bringing 
about prosperity for the people 
as a whole." 

Although the government 
has become more tolerant of 
criticism over the last year, 
perusing Indonesian newspa- 
pers is often an exercise in 
reading between the lines. 
Korapas' comment on govern- 
ment control of the economy 
may have been made with ref- 
erence to foreign ownership of 
businesses but it is also a 
reflection of growing concern 
throughout the country that 
gradual deregulation of the 
economy over the past 25 years 
has done little to improve the 
distribution of wealth. 


FT CONFERENCES 


EUROPEAN TELECOMMUNICATIONS 
London, 20 & 21 dun* 1994 

TWa yew's meeting w* locus on the <*atenge of emerging competition and 
convergence for operators, regulators and business users in Europe. The 
issue of network modernisation and 

yfinandng will also be addressed. Speakers include: BUI Wigglesworth, 
OFTH.- Cantttdo Vai&zquar-Gaaafaj Ruiz. Tatttao fca de Espana SA; Michael 
Hapher, British T sle oomm unteafluns Pic; Wkn Dik, Royal PTT Nederland NV: 
Mika Harris, Mercury Communications Lid; Eugene Connell, Nynax 
CaUsComs Limited; Michael Phair, Director, NM Rothschild & Son Ltd; Berta 
Thomgren. Tefia AB. 

THE STRUCTURE AND EVOLUTION OF 
THE INTERNATIONAL EQUITY MARKET’S 
6 &7 July 1994, London 
The Financial Times and the Centre for the Study of Financial Innovation are 
arranging a high-level meeting for stock exchanges, regulators, market 
pradHonsra and Investors to review equity market developments, discuss r 
requkemertfs and look at rejyd&lory issues. The role of technology in shaping 
tommorrow's markets wffl also be examined. Andrew Large, Chairman of the 
Seortkn and Investments Board. wU give the opening address end speakers 
include: Brandon Becker, US Securities and Exchange Commission: Or 
ROdlger von Rosen, Deutsche Bfirse AG: Giles Vardey, London Stock 
Exchange; Steven Wimsch, A2X Inc and John Heraog, Herzog Heine Geckid. 


MULTIMEDIA -VISION AND REAUTY 
London, 12 & 13 July 1994 
This major business forum win locus on the key Issues facing Bits fast-growtag 
industry; the regulatory and legal framework for industry development: 
fteancteg the muWmedia future; assessing real business applications and 
potential and the rote of strategic affiances In responding to tha devatapkq 
muttfmedta marketplace. Speakers include Professor Nicholas Negroponte 
Maesachusette institute of Technology: Teny Herehey. Tima Warner 
iramcitve; Alfred C Sikes, Hears! New Madia and Technology; Dr Reinhart! 

P « 8r Job - R «*«* Holdings PLG; Scot! 

Maiden. Ptimps Matte. 

WORLD AEROSPACE AND AIR TRANSPORT 

1 & 2 September 1994, London 

T Ws con ference, which has the support of the Society of British Aarospect 
Companies, Is the latest in tha financial Tlmoar International series of high 
tovsl aerospace meetings, (t wfll focus on the chaJtengec facing the industry In 
restructuring tor the future to achieve growth. 
8mwim9fl1 Policy. Speakers include: Professor 
rtennan De Croo, Comtt das Sages; Mr Dick Evans CBE. British AwoepaOK 

AWrvwSIjSm 

un “ •*—■*•** 

Thtel^Wovel meeting win examine the outlook for nuclear m North 
^ chaflan 9 Q a « Improving effk*rey and saWy W 

Nw**n « Scam 

Association- Roger Haves. John RaW - Canadian Nudear 

Vtenaa ^ 

CB; British Nistiav Puei.< \ Bwrdorc EBRD; John Gutman 
Rachel Weston, Friends crttheEartii. ***'' ******* 

RETAILING TOWARDS 2000 - 
COMBINING VISION AND EFFICIENCY 
L^^.ZI & 22 September 1994 

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1 »„1 





FINANCIAL TEVIES MONDAY JUNE 13 1994 


NEWS: UK 



fcW 



Candidates for 
Labour leader 
clash on jobless 



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. By Kevin Brawn 
and Jamas BBtz 

Fun employment emerged as 
the central issue in the cam- 
'paign fin* (be leadership of the 
opposition Labour party yester- 
day, as Ur John Prescott and 
Mr. Tony Blair clashed over 
whether a Labour government 
should set targets for cuts in 
unemployment 
As Mr Ken Livingstone 
joined four other candidates 
seeking to succeed the late 
John Smith, a telephone poll 
Cor Granada Television con- 
firmed that Mr Blair, . shadow 
home secretary, is the most 
popular candidate among vot- 
ers* - 

The poll, which was not 
restricted to. Labour members, 
gave Mr Blair & per cent sup- 
port Mr Prescott, shadow 
employment secretary, won 30 
per cent, Mrs Margaret Beck- 
ett, acting leader, 23 per cent, 
and Mr Denzil Davies, a former 
treasury minister,. 5 par cent 
Ur Blair, the candidate of 
Labour’s dominant modernist 
wing; wanted on BBC Break- 
fast with Frost that Labour 
should avoid setting unemploy- 
ment targets it might not be 
aide to keep. 

“What we are about is not 
renaming a party of opposi- 
tion, but moving to be a party 
of government,” he said. 

.. Mr Prescott, whose support 
is mainly on the party's tradi- 
tional socialist wing; efafmpri 
that a Labour government - 
would have to set targets to 
retain credibility with the elec- 
torate. 

He said : “I believe we will 


have to set ourselves a target 

. . because I don’t think the 
people in' this country are 
going to be satisfied with rhet- 
oric. Let the politicians be 
judged on how many people 
they get back to work.” 

Mr Prescott, who called for a 
“crusade" to put unemploy- 
ment at the top of the political 
agenda, declined to define full 
employment or indicate what 
targets a Labour government 
should set 

Bulhe saidbigctitemmifim- 
ptoyiaent could be financed by 
raising taxes on the better off. 
making joint venture infra- 
structure projects easier, and 
allowing local councils to 
spend £6bn of accumulated 

capital receipts. 

Mr Prescott also injected a 
note of controversy fato the 
contest by combining his blunt 
rejection of Mr Blair's cautions 
approach to full employment 
with a withering attack on 
Labour’s “tendency to avoid 
difficult questions" in favour of 
“easy answers* and “warmlan- 
guage.” 

Mr Livingstone, the MP for 
Brent who unsuccessfully 
sought nominations for the 
leadership in 1992, said he was 
prepared to stand as the candi- 
date of the left-wing Campaign 


group of MPs. Mr Jeremy Cor- 
byn, MP for Isling ton North, 
will seek election as deputy 
leader. 

Mr Davies, who will cam- 
paign against Labour’s eco- 
nomic policy and Hyt nwimtt. 
meet to the European Union, 
said he was confident of ach- 
ieving the 34 nominations 
required to enter the race 


Britain in brief 




Bankruptcy 
= cases face 
- rapid closure 

FENCES Official fiLesm'tiibmandsof 

UK liquidations and. . 
bankruptcies are to be 
earmarked for rapid closure 
in a move that will raise fears 
they win escape adequate 
investigation for potential 
fraud. 

Staff at tiie government's 
Insolvency Service are under 
Instructions to identify at least 
11,000 cases to be dosed 
- without any detailed 
examination between today 
and July 8, according to an 
internal memo obtained by 
the financial Times. 

This target is more than half 
* tiie entire number of cases , 
completed by theaervice last 
■" year, and comes in response 

to ministerial pressure to 
reduce a backlog of files as 
rapidly as possible. . 

. The memo, written earlier 
this month by Mr Michael 
• OdMxnet toe Senior Official 

Receiver, warns the number 
aTjuvestigative reports carried 

oot by the agency will be cut 

. below tts plans and that other 
'■* targets wfll be “affected 
adversely". 

\. “You wffl need to review 
the file thoroughly, but not 
in depth," says an attached 
note of guidance. “Do not 
spend time on . potential 
offences or possible areas of 
mvestigatfon. It is anticipated 
that mi average it wfil not be 
necessary to spend more than 
: an hour on each review." 

The dtivuto dose more £0es 
. follows the National Audit 

Office’s critidsms of the 
. Insolvency Services for foiling 
to seek disqualification of a 
greater p rop or tion of company 
directors who have broken 
the law. 


between Elf Acqurtame of 
France and Enterprise Chi, the 
UK’s largest independent, had 
issued one for £70m. 

Inland Revenue said it 
expected that the cases would 
eventually be decided by the 
courts, as it "could not accept 

Hig r pflsamtng " nf t he 

companies involved. . 


Building trade 
deficit falls 

JSritatnTs trade deficit in 
lwnkfing materials Ml by 16.7 
per cent last year to L44bn 
the lowest figure since 1986. 

• The im pr ovement was led 
by a 15 per cent rise in the 
' value of exports which 
increased from £L3bn to 
£2L6tm according to figures 
published by the environment 
department. 

There is concern however 
that the deficit may be poised 
to rise again as material 
bottlenecks start to emerge 
as the construction industry 
recovers. Prices of a number 
of British produced materials 
and components have risen 
sharply this year. 

Sales abroad by British 
companies, however, have 
been boosted by sterling’s 
devaluation since autumn 1992 
and by very big productivity 
gains. 

British steel suppliers and 
fabricators have been 
particularly successful in 
breaking into continental 
markets. The trade surplus 
in structural steel, for 
example, almost trebled last 
year from £&L3m to £179 An. 


Oil tax dispute 
may widen 

A tax dispute between ■' 
Britain’s faiimri Revenue and 
some UK ofl companies could 
widen tMs week as additional 
.com pa ni es review whether to 
joihHF Enterprise and Laj$mo 


revalue. 

fte dispute is aver 
gmfl tcBng intimations of 
Pttfvtefons in the l990 FitLance 
. Act relating to interest 
Payments on tax rebates in 
Previous yeas: The revenue 
says the 1990 act capped the 
amount ot release a c ompany 


• Wufifs. Tbe.iSspute turns on 
the revenue’s flahn that total 
fe&f should not exceed a 
«®paniee current loss. 

On Friday Lashxo, the 


a writ flat ESSmJ&rtier Elf 
: venture 


Science PhDs 
going abroad 

One in five of the UK’s 
recently qualified PhD 
scientists goes overseas for 
farther study or employment, 
the Institute of Manpower 
Studies says today. 

This figure covers the five 
“core” sciences of biology. 

chemistry, mathematics, 

engineering and physics, and 
suggests that the “brain drain” 
away from the UK is 
continuing unabated. 

Transmitter 
decision soon 

The British government is 
exploring ways of trying to 
introduce private money and 

expertise into the management 
of BBC transmitters. 

Ministers hope to take 
decisions on the ftitore of the 
BBC transmitters in the next 

few weeks, but it is dear that 
the status quo - a 
wholly-owned BBC transmitter 
s y stem - is no longer an 
option, fbn privatisation is 
also unlikely, although it has 
n ot been formally ruled out. 

The search for a compromise 
revolves around a number of 
Options, ranging from 
bringing in large outside 
comm ercial shareholders, or 
private investment, to a form 
of management buy-out In 
both cases the BBC would 
retain a large stake. 


Strawberry fields almost forever 


By Deborah H argreav es 

Strawberries are as much an 
essentia] part of the British 
Summer as the Wimbledon ten- 
nis tn nmampnt and racing at 

Ascot, but this year’s crop 
could well come from plants 
shipped in Cram Argentina last 
year. 

Britain’s £80m strawberry 
industry - the balk of it is 
concentrated m En gland - has 
managed to manipulate the 
growing season for its crop to 
such an extent that it can 
ensure a steady flow of straw- 
berries from April until early 
October. 

In the fafg of rising demand 
for the flavoursome English 
fruit, farmers have poshed out 
the boundaries of the tradi- 
tional three-week season. 

Plants from typical Rn gfieh 
varieties are cultivated in the 
southern hemisphere and than 
shipped to Britain, while they 
are still dormant from the 
southern winter. They start to 
produce fruit much later in the 
season. 

Other plants win have spent 
the past few months in the 
deep freeze, which wmt)«! they 
can be planted out later in 
June and July to produce fruit 
in early September. 

Discerning customers are so 
eager for English fruit that 
they are prepared to pay 
almost twice as much as for 
Spanish and US strawberries 


in the early season, when fruit 
is grow n under glass. 

Mr Simon Brice, who has 1m 
plants in his cold store at 
Mockbeggar farm near 
TUgham in Fpnt, said: “We’ve 
always grown a few lata ber- 
ries but now there’s such huge 
demand for En glish strawber- 
ries. The supermarkets are not 
interested in anyone who has a 
three-week season for any- 
thing." 

Mr Brice, who sells 500 
tonnes of strawberries a year, 
said that about half of the 
nation's strawberries are now- 
eaten outside the traditional 
season, comp a red with about 
30 per cent 10 years ago. 

He said: “For every three 
strawberries we sell in Wimble- 
don. fortnight, we want one in 
August md Waif of nw» rn Sep- 
tember." 

Mr Richard Hamden, manag- 
ing director at Commercial 
Fruit Kants in Rnmngy - Mareh, 
Went has pioneered the grow- 
ing of plants in Argentina. 
These plants are being frozen 
for- the trip back to Britain, 
where they are planted in 
greenhouses in late July. 

They produce their first crop 
in September and early Octo- 
ber manag e to bait again 
in April the following year. 

Mr Hamden’s trials 

with relatively small numbers 
of pfonts have been so success- 
ful amt he is hnpiwg to expand 
significantly next year. 



Fruit grower Simon Brice at work on his farm in Kent, which 
sells 500 tonnes of strawberries a year 


Container run 
to Italy set for 
tunnel launch 


By Charles Batchelor, 
Transport Correspondent 

The Channel tunnel makes its 
first contribution to moving 
freight traffic from road to rail 
tonight with the start of a con- 
tainer service to Italy. 

The launch of long-distance 
freight services will provide a 
link between the 10,000 miles 
of British Rail track and the 
150,000 miles of continental 
European railways. 

Until now the British rail 
network provided few routes 
long enough to make freight 
transport economic. 

The container service is run 
by Combined Transport (CTL), 
a joint vent u re between Euro- 
pean haulage companies and 
British Sail's freight division. 
Mr Francois Ledercq, manag- 
ing director of CTL, called it 
“the most important develop- 
ment in European freight 
transportation for 50 years." 

The first long-distance 
freight train carrying contain- 
ers will leave a depot in Wem- 
bley, west London tonight and 
arrive in M ilan early on 
Wednesday, its load including 
tank containers for non-haz- 
ardous chemicals, and “swap- 


bodies" - bodies which can be 
detached from a lorry chassis. 

The inaugural train will 
carry 20 to 22 containers or 
swapbodies, each with cargo 
weighing up to 50 tonnes. The 
through-tunnel train will 
in London but con- 
sist of loads brought from ter- 
minals to Glasgow, Manchester 
and Bir mingham 

At first the service will con- 
sist of two or three trains a day 
in each direction to destina- 
tions in France. Switzerland, 
Luxembourg and Italy. From 
September the service will also 
cover Austria and Spain. Mr 
Ledercq said Germany might 
be added but it was difficult to 
obtain attractive rates for ship- 
ments to German destinations. 
• Passengers who took part in 
a Channel tunnel evacuation 
rehearsal were lata- delayed by 
a real breakdown. The tenure, 
affecting the overhead power 
linp fe ed in g the Eurostar 
train, was the third reported 
breakdown in the tunnel in the 
five weeks since it was offi- 
cially opened. The first two 
involved freight shuttle trains. 

A Eurostar spokesman said 
engineers were investigating 
the fault. 


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8 




FINANCIAL TIMES SURVEY 


Individual designers 
each choose a favourite 
product: Page 111 


DESIGN IN EUROPE 


FINANCIAL TIMES MONDAY JUNE 13 1994 


This year’s EC Design 
Prize winners line up 
for awards: Page IV 


f 


Monday June 13 1994 



In the competitive international markets of the 
1 990s, design is more important than ever. 
European companies must use it more imaginatively 
if they are to prosper. Alice Rawsthom reports 

Talent needs 
intelligence too 


The fire station designed by Zaha Hacfid for Vrtra, the Swiss furniture company, at its production sits m WaB-am-Rheln, Germany. The company was awarded an EC Design Prize last week 


Locked in a secret room in the 
labyrinthine headquarters of 
Thomson Consumer Electron- 
ics in Paris are a dozen or so 
television sets which, or so the 
company hopes, will bring it 
back into the black after years 
of losses and spark a revolu- 
tion in the recession-scarred 
European electronics industry. 

The televisions, which will 
remain shrouded in secrecy 
initii their launch this Septem- 
ber, are the legacy of Thom- 
son's liaison with Philippe 
Starck, the superstar French 
designer who became its artis- 
tic director last year. Most 



1994 BRITISH DESIGN AWARD. 


Organised by the Design Council, the British Design 

pesiGM Awards are a tribute to the best of British design. 

"SBST" 

"" The winners have to satisfy the most stringent 
judging criteria. 

Not only Design Innovation. But also Commercial 
Success. Effective use of Materials and Resources. Outstanding 


Appearance and Ergonomics. Ease of Maintenance. Ease 
of Use. Value for Money. Performance. And Reliability. 
Need we say more? 

If you have designs on the award tow winning 

Rover 600 Series, phone us on 600 SERIES 
0345 186 186 for more details, above all, it’s a rover 




“new" electronic products look 
like updated versions of their 
predecessors - or competitors, 
but these designs ooze lateral 
thinking. They seem so fresh 
and so different from anything 
else on the market that it looks 
as though Starck must have 
started from scratch by dream- 
ing up the type of television 
the company’s customers 
would tike to own. 

Thomson knows that the 
iconoclastic designs are a gam- 
ble Yet it is convinced that 
European consumers are so 
bored by what Starck calls the 
grey boxes now on the market 
that they are ready for some- 
thing new. “For years compa- 
nies have been trying to sell 
new products with a new tech- 
no- this, or new techno-that," 
says Starck. “People take tech- 
nology for granted these days. 
What they want are worm, 
friendly products - something 
to seduce them." 

Thomson is not the only 
European company to have 
come to the conclusion that, 
after a frustrating decade of 
losing market share to the Jap- 
anese and Americans, it could 
regain a competitive advantage 
by adopting a more imagina- 
tive approach to design. 

Olivetti, the Italian Informa- 
tion technology group, is revis- 
ing its design strategy as part 
of its corporate overhaul. 
Volkswagen and Mercedes- 
Benz. the German car compa- 
nies, are taking a fresh look at 
their new models for the mid- 
1990s following Renault’s suc- 
cess with the Twingo, its funk- 
ily futuristic new city car. 

The concept of design as a 
competitive tool has been con- 
ventional wisdom since the 
early 1900s, when Peter Beh- 
rens, a German architect, 
transformed the fortunes of 
AEG's industrial empire with a 
crack team of designers includ- 
ing Walter Gropius and Lud- 
wig Mies Van Der ROhe, the 
founding fathers of the Bau- 
haus. Iconoclastic design has 
since been central to other 
European successes - from 
Flaminio Bertoni’s 1955 Citroen 
DS19, to Ettore Sottsass's 1969 
Olivetti Valentino typewriter. 

Europe still has an abun- 
dance of design talent Gert 
Dumbar. Fabien Baron and 
Neville Brody are among the 
world’s most influential 
graphic designers, as are Phil- 
ippe Starck, Jasper Morrison 
and Marc Newson in furniture; 
and John Galliano, Vivienne 
Westwood and Martin Margiela 
in fashion. Some companies 
have exploited their skills, 


Not many companies 
have made the most of 
design on a large scale 


such as Vltra of Switzerland, 
which has become a world 
leader in office furniture (anti 
last week won one of this 
year's EC Design Prizes), 
thanks partly to its liaison 
with designers such as Starck 
and Morrison. 

Yet successes are still out- 
numbered by failures. There is 
still a dearth of European com- 
panies which have made the 
most of design on a large scale. 
The excuses are legion: every- 
thing from failure of nerve and 
the lowly status of designers in 
the corporate hierarchy to dis- 
illusion with the superficial 
use of design as a styling tool 
in the 1980a. Is it realistic to 
expect European companies to 
adopt a more intelligent 
approach in the future? 

The blunt answer is that 
they do not have a choice. It 
cannot be a co inciden ce that 
same of the new converts to 
design, notably Thomson Con- 
sumer Electronics and Ren- 
ault, are in dire flnant-m 
straits. Volkswagen's decision 
to unveil Concept 1, the 
acclaimed new Beetle proto- 
type, at this year's Detroit 
Motor Show was interpreted as 
an attempt to distract atten- 
tion from its industrial espio- 
nage row with GM and atro- 
cious US sales figures. 

There are also positive rea- 
sons why European industry 
might re-assess its approach to 
design. One is the rn gnifinawt 
shift in consumer attitudes. 
The Increase In prosperity 
from the 1950s onwards encour- 
aged consumers to purchase a 
range of new gadgets such as 
refrigerators, freezers, colour 
televisions and video record- 
ers. Today's consumers are less 


* 


impressionable, more discern- 
ing, aware that unnecessary 
expenditure is bad for their 
ecological consciences, as well 
as their bank balances. 

This means that manufactur- 
ers must work harder to 
attract consumers by adopting 
more imaginative strategies. 
Design can play an important 
part in that process, providing 
it is properly integrated with 
other areas such as production 
planning and communications. 

“Public perceptions are shift- 
ing from quantity to quality" 
says Stefano Maizano, design 
director of Philips, the Dutch 
electronics group. "New tech- 
nology dominated product 
development in the 1980s, but 
it's not an end in itself. Why 
redesign a washing machine 
with 15 programmes so it has 
20 or 35. when you know the 
consumer only uses six?" 

At the same time, consumers 
do seem to be responsive to 
genuinely innovative products, 
which are visually stimulating 
as well as efficient. Renault 
almost lost its nerve when the 
Twin go's pre-launch research 
showed that 40 per cent of the 

The new multimedia 

Industry will create new 
areas of design 

market “actively disliked it". 
The launch wait ahead after 
Patrick Le Quftment. design 
director, argued that “W per 
cent would fall in love with it". 
The Twingo is now France’s 
second best-selling car. 

Consumer pressure for inno- 
vation comes at a time when 
many industries are accelerat- 
ing product development plans 
in anticipation of enforced 
structural changes in their 
markets. The car industry is 
accelerating the development 
of micro-compact and electric 
cars to accommodate tighter 
environmental controls. The 
new multimedia industry will 
create new areas or design 
such as interfaces for home 
shopping and information 
systems. It should also fuel 
demand for new products In 
sectors such as office electron- 
ics and even furniture for 
those who want to work from 
home via modems. 

Olivetti, which has used 
design successfully during past 
periods of transition, hopes to 
do so again as its old informa- 
tion technology activities are 
subsumed into the multi-media 
industry. “We know there'll be 
deep changes in the structure 
of our industry, but we don’t 
know exactly what they'll be," 
says Michele de Lucchi, design 
director. "What we can do is 
use design as a tool to guide us 

- and our customers." 

In practical toms this means 

that Olivetti is developing new 
products, notably multi-fane- J 
tion machines such as com- ■ 
bined fax and photocopiers. De 
Lucchi is also refining its styl- 
ing by using bright colours and 
tactile materials so the sophis- 
ticated new machines appear , 
accessible and easy to use. 

This new era of product / 
development coincides with i 
stru ctur al changes within I 
industry which are eradicating ' 
one of the old deficiencies afj 
European design management i 
the failure to integrate design | 
with other activities. Manufac-, 
hiri ng systems are now so. 
complex that it is increasingly 
diffimilt to separate different! 
functions and to relegate, 
design to the role of a supetfl-’ 
dal styling tool. The Twingo ’s 
development was facilitated by 
Renault's adoption of a Japa- 
nese team-based product devel- ; 
opment system. ; 

Such changes create new 
opportunities, but they also 
pose huge challenges. Euro- 
pean companies are under 
Pressure to invest more Intel- : 
lectual energy in design - an d 

to take adventurous decisions 

- at a tune when confidence is 
stRl depressed by recession. 

But the time is ripe for 
change. The defeats of the 
early 1990s must surely have I 
shattered any lingering Illu- 
sions about the play-it-safa pol- 
icy of producing yet more over- 
programmed washing 
machines. The Twinge’s tri- 
umph suggests there is an 
appetite for inventive Euro- 
pean design. Thomson Con- 
sumer Electronics hopes to 
prove that when it unlocks the 
secret room containing Phil- 
ippe Starck's television sets. 


Idem 


* i f 


Uap to 





9 


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W 






FINANCIAL TIMES MONDAY JUNE 13 1994 


DESIGN IN EUROPE II 



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F rom. .Olivetti to Fiat, 
Braun to Citrfien. the 
commercial power of 
industrial design in Europe's 
mass markets - not merely the 
&lite niches occupied hy the 
Ekes of BMW. and Bang & Ohif- 
sea - has been evident for 
decades to any manager who 
cared to look. 

During the past 15 years, 
under a variety of influences 
(notably the exemplary effect 
of Sony and other Japanese 
imports), the proportion of 
companies which exploit indus- 
trial design to its fall creative 
potential,, rather than simply 

treating if as skin-deep styling, 

has started to soar. 

Converts since the late 1970s 
include Philips, Volkswagen 
and Ford of Europe - whose 
commitment paved the way for 
Hs US parent company’s con- 
version. 

The remarkable success of 
the Ford Taurus, launched in 
1985 and last year still the best- 
selling car in the US, has not 
only changed the face, but also 
the character,, of American 
cars. And, more than any other 
single exemplar, it has fired a 


Christopher Lorenz assesses industrial design's commercial clout over the past 15 years 

Skin-deep styling is not enough 


new commitment to design 
among a wide range of other 
US companies: for example, its 
arch-rival General Motors. 
Apple. Black & Decker, and 
Rubbermaid. (The last four 
companies all won gold awards 
in this year’s US Industrial 
Design Excellence Awards, 
announced last month.) 

The new-found preeminence 
of design in these companies’ 
priorities Is not merely a mat- 
ter of copying the actions of 
successful rivals. It is also the 
result of careful strategic anal- 
ysis. 

This shows that, with tech- 
nology, quality, low-cost manu- 
facturing and high-class ser- 
vice all becoming competitive 
commodities as Industries 
mature, a product’s shape, feel 
and character - together with, 
wherever possible, some 


unique functional features - 
are some of the few ways in 
which a company can now dif- 
ferentiate itself from the com- 
petition. 

Yet behind the new organisa- 
tional awakening of design lies 
a set of paradoxes, if its com- 

Why have many design 
pioneers allowed their 
commitment to decay? 


merdal power has been mani- 
fest since at least the 1930s, 
why do so many marug ip m i>n fe 
Still fail to recognise it? 

Why. when they do, have so 
many failed to give it sufficient 
weight within their organisa- 
tion? 

Why, in spite of repeated 
design-led successes in the 


marketplace, have many of the 
design pioneers allowed their 

commitment to design to 
decay? 

The problem is not merely 
the generic tendency of any 
gstahh's hwl organisational phi- 
losophy or practice to erode 
over time - much as market- 
ing ha* shrunk in many con- 
sumer goods companies from 
an imaginative, b road-lens ed 
way of thinking to a narrow 
set of processes and proce- 
dures. 

Design's problem is much 
greater for several reasons: 

• It tends to be overlooked in 
the strategic concepts which 
most managers use. 

• Academics consul tants 
have failed to develop a power- 
ful typology of the various con- 
stituents of design - the equiv- 
alent of marketing’s “four P's". 


• Design’s historically junior 
position within the corporate 
hierarchy, buried deep beneath 
marketing or engineering, 
makes it hard for management 
to give it sufficient weight 
alongside other functions. This 
is true even in the rapidly 
growing number of companies 
where product development 
has been reorganised from a 
traditionally sequential set of 
department-by-department 
activities, into a parallel pro- 
cess In which specialists of all 
kinds work together in inte- 
grated teams. 

• Even in companies where 
design is at last being taken 
seriously, it tends still to be 
seen only as a “soft'', light- 
weight, right-brained activity 
by managers whose education 
has been largely left-brained, 
verbal, linear and analytical. 


Various “harder" aspects of 
design need to be recognised. 

• In countries - unlike Italy 
and Japan - where right- 
brained, visual, synthesising 
skills carry a lower social sta- 
tus than left-brained, analyti- 
cal ernes, designers are seldom 

Most companies should 
discover design’s 
potential rale in strategy 

taken seriously by the organi- 
sations for which they work. 
They tend to be seen as third 
class citizens, rated even more 
lowly than the engineers. 

• Even when, top management 
recognises the potential power 
of design and the versatility of 
designers, and tries to unleash 
their hidden potential, the way 


is often barred by turf warfare 

with engineers and/or market- 
ing specialists. 

Even among the corporate 
design pioneers, these inhibit- 
ing factors tend to assert them- 
selves as the years pass, espe- 
cially when the original top 
management gives way to a 
new generation. This is true of 
Olivetti, Braun and IBM. 

For all these reasons, most 
companies need to undertake a 
voyage of “executive discov- 
ery" - or rediscovery - about 
design's potential role In strat- 
egy. 

Under Mr Don Petersen, its 
former chairman, Ford under- 
took that voyage successfully, 
at least in the US. In Europe its 
commitment faltered a decade 
ago after launching its 
avant-garde Sierra, partly 
because of the car's early com- 


mercial problems but also 
because the company's 
long-standing power barons 
(its departmental heads) fought 
against the introduction of an 
effective cross-departmental 
system of “programme man- 
agement." 

Only when this was finally 
given its head, in the Europe- 
an-US Mondeo development 
project, could the European 
designers again pull their full 
weight as equal members of 
the product development team, 
along with engineering, pro- 
duction. marketing and so 
forth. 

Ford's start-stopstart use aT 
industrial design in Europe 
holds any number of lessons 
for companies which have yet 
to embark on their own voyage 
of executive discovery about 
the commercial power of 
design - or need to take a revi- 
sion course. 

The themes in this article trill 
be explored in greater depth m 
Developing Strategic Thinking, 
a book edited by R. Garratt 
which will be published by 
McGrmc Hill in the autumn. 


Graphic designers work across national borders, writes Rick Poynor 

Identities have to endure 



Thv new mg. 


areas of 

•' " \' 

■ *.•£ ; 

• -- r 

. -.1. •• J, 
1 ' ! 

• , :v.; 


For- graphic designers who 
believe they have a vital mes- 
sage for business, the early 
1990s is a period of both mod- 
est progress and - at times - 
-frustrating retrenchment. 

On the one hand, clients left 
reeling by 'designers a 

htt-and-rmr dash for the -fast 
buck , in the 1980s are now 
understandably shy of sweep- 
ing invitations to throw out 
perfectly servicable identities 
and -start all over again. 

On the other hand, the 
future erf almost any ambitious 
European business will lie as 
much outside its national .bor- 
ders iis within them, and there 
is an all the more pressing 
need for design as a way of 
differentiating yourself. 

“I don't think there's. less 
work." says Chris . Ludlow, a 
. partner in Henrion, Lmflow- & 
Schmidt, corporate identity 
specialists in London. “But 
there is more nervousness . 

- about making visual changes. 
People want to maintain or 
adapt or service their existing, 
identities, but also to- see them 
in the context of -the total 
organisation You (AnY always 
demand a clean" Sheet at 
paper". . - ■ ■ ~ -- 

Designers^ like their clients, *■ 
must increasingly, think Euro- 
pean- if they are to thrive. A 
German partner helps to give 
Henrion, Ludlow <& Schmidt a 
close understanding of the Ger- 
man mentality and market 
place. Clients include Beiers- 
dorf (cosmetics and pharma- 
-ceuticals,) Krups and Volks war 
gen Lloyd Northover Citigate, 
a 35-strong consultancy, num- 
bers Banco Santander, Madrid, 


Intrum Justitia and Amster- 
dam among its clients. 

But what makes a German 
manufacturer turn to a British 
consultancy? The answer lies 
in what Ludlow guardedly 
calls the “myth, or fact, of Brit- 
ish creativity." The humour 
element," he adds, “ is very 
much appreciated." At the 
same time, the very fact that 
design is so well integrated 


Lloyd himself concedes: "There 
is a danger that you try to 
please everybody and mid up 
pleasing no one." 

Lloyd Northover Citigate’s 
railway identity and livery for 
European Night Services 
recently received approval 
from the Dutch. Belgium. 
French, German and British 
partners in the cross-Channel 
project “It really is a pan-Eu- 


ORF I 


NaveSe Brody, ‘bad boy* tuned brtenistionai star, designed an Indentity 
for Osterraicftischer Rundfunk, the Austrian state broadcasting company 


into German companies (there 
are fewer external consultan- 
cies; designers work in-house) 
means toey.afreo.fed a need to 
go outside in search of a strate- 
gic overview. “A lot of the 
work they do an the continent 
is much more more formal - 
systems — less emotional and 
imaginative," says John Lloyd 
of - Lloyd Northover Citigate. 
^Our style in the UK £s closer 
to the US style." • . 

That . may be so. but the 
designer working across 
national borders faces some 
obvious pitfalls. Is it possible 
to reconcile and satisfy the 
tastes of so many different 
markets without reducing toe 
individuality of a country’s 
graphics to an inoffensive but 
bland and flavourless Euros- 
tyle, which ends up making 
everywhere look the same? As 


ropean brand," says Lloyd. 
“It's more to do with toe bene- 
fits of toe service than any of 
the destinations." 

The other important changes 
in European graphics are bring 
driven by technology. In design 
studios Apple Mackintosh's 
domination is now complete. 

Neville Brody, the “bad boy” 
of 1980s design who became an 
intemattopaj i star; believes 
thaf^the computer will force' 
change at all levels of the 
design* business. The annual 
report still needs laying out,” 
be says, “but more and more 
r-nmpaniPK have gone in-house 
with their design forangp they 
can - it makes financial sense, 
it makes manpower sense. Hie 
outside designer’s role is to 
come up with a structure, a 
language, and probably a 
series of digital templates. The 


age of the corporate design 
manual is completely fin- 
ished." 

Not quite finished, perhaps, 
but certainly evolving fast CD- 
Rom-based identity manage- 
ment systems are already 
replacing cumbersome paper 
rrmwimia Electronic multime- 
dia annual reports will soon be 
commonplace. The big studios 
may be slower to retool for 
change, bnt they can see it 
coming. Lloyd Northover Citi- 
gate has recently established a 
“new media group" to explore 
these issues. 

But there is a larger prob- 
lem. Whatever toe merits of 
the identity specialists’ strate- 
gic thinking, the design out- 
come is often disappointing. 
Since the 1980s, the gap 
between toe larger, business- 
conscious consultancies and 
smaller creative teams has 
widened. 

Ironically, the reason Neville 
Brody has been visible in the 
1990s is because, like his larger 
rivals, he has been working an 
toe continent - to France, Ger- 
many and Spain. His most 
elaborate commission, an inge- 
nious indentity for Osterrei- 
chischer Rundfunk, the Aus- 
trian . state- broadcasting 
company (ORF), based on 
structure and graphic relation- 
ships rather than a simple 
inflexible logo, suggests that a 
reassessment is in order - not 
only of Brody himself, but of 
the way corporations commis- 
sion their graphics. 


Rick Poynor edits Etye Maga- 
zine 


John Thackara analyses the technological challenge for design 

Leap to an interactive future 


. The development of interactive 
information and communica- 
" Hons systems Is the" greatest 
/. challenge and opportunity for 
v . design since industrialisation. 

" The opportunity for design 
‘ lies in developing products, or 
"content”, to toe scale 
^ of the investments being made 
' in the infrastructure: as much 
money will be. spent on net- 
works between now and 2000 
’ . ‘ as was spent on all. telephone 
systems- and equipment since 
Alexander - Graham Bell 
invented tbam. 

Penetrating this gigantic 
■ new market, however, will 
require a cultural shift within 
the design business; much of 
- : the industry still suffers from a 
: tendency to aperate'to relative 
isolation from its clients, and 
betieves' that a "design" is a 
finished product or environ- 
meat or piece of print - not 
/. something intangible such as 
an Interactivity programme. . 

'■ Some designers are adapting 
fester than others to a new 
business environment trans- 
formed by new technology and 
" Droeess reengineering. Archi- 
tects seem tp have:, accepted 
that the matoet ftfr lofty, dis- 
engaged aesthetes has been 
~ superseded^ a world of smart 
buildings regarded by. their 
owners not as large objects but 
« information systems. Archi- 
tects have espied a niche for an 
..' .expert in the* building team 
' who represents .the building’s 
.... final user - who has the added 
abflfty to orchestrate coher- 
- face and quality in the fin* 
. isbed building. 

Industrial designers in man* 

■ nfecforing feceeven more dra- 
' mstic changesas the distance 
tetweai toe producers of prod- 
• nets, and their users, shrinks. 

Sophisticated distribution 
and logistics systems, com- 
puter mtegrqted manufactur- 
ing and design, technologies, 
jew materials, and direct mar- 
. ketiag. have changed ftmda- 
JtentaUy what it means to 
a product- 

The heroic industrial 


designer of legend, epitomised 
by Raymond Loewy, was 
trained with a basically linear 
model of manufacturing to 
mfriri: he (rarely she) inputted 
a "concept", and various engi- 
neers and marketing types pro- 
duced and sold the product 
Today, multi-disciplinary, 
process re-engineered teams 
juggle multiple inputs from 
consumers, widely distributed 
production facilities, and intel- 
ligent distribution and retail- 
ing systems. Competitiveness 
is bared on the effectiveness of 
the innovation process as a 
wholfi. The product designer - 
like the archi- 


tect - can no 
longer deliver 
competitive 
products from 
the splendid 
isolation of the 
atelier. 

The idea of 

collaborative innovation, and 
shared creativity, with users, 
designers and producers creat- 
ing new products together, is 
the most exciting feature of 
what pundits are calling the 
New Economy - and poten- 
tially the most profitable. 

At the moment, less than 5 
per cent of toe $60bn a year 
spent by its 380.000 researchers 
on R&D in Europe makes it to 
toe market in the form of a 
product or service which some- 
one can buy. (And less than l 
per cent of that SGObn is spent 
learning how to spend it) 

But economists have discov- 
ered that commercial perfor- 
mance is determined more by 
the Quality of interaction 
between research scientist 
users - and this does not mean 
passive customers stuck 
behind one-way mirrors to “try 
thing s out 1 *. 

Such one-sided relationships 
between a company and its cli- 
ents - the user reacts, he or 
she does not propose - are 
being superseded by “envision- 
ing laboratories'’ - environ- 
ments In which users can play 
with new technologies before 


When the technology is 
novel, involving users in 
design and simulation 
of new applications Is 
even more valuable 


an application has been pack- 
aged as a finished product 
Companies such as Xerox are 
designing research centres 
with multi -media capabilities 
in which customers, supported 
by advanced programming 
tools, can quickly model the 
consequence of reconfiguring 
products and systems. 

Mr John Seeley Brown. 
Xerox’s research chief, 
explains: “It is not enough just 
to tell people about some new 
insights from the lab. You 
have to get them to experience 
it to a -way which evokes its 
power and possibility. Put 

another way, 

we are trying 
to prototype a 
use before we 
prototype a 
system." 

Pre-prototyp- 
ing user needs 
has obvious 
benefits even in traditional 
“hard” product development, 
where desig n decisions tend to 
be irrevocable once tooling and 
production investments are 
specified. When the whole 
technological environment is 
novel - as it is with interactive 
computers and communica- 
tions - the ability to involve 
users to the design and simula- 
tion of new applications is 
even more valuable- 
Nicholas Negroponie. direc- 
tor of toe Media Lab at the 
Massachusetts Institute of 
Technology (MIT) potots out 
“At toe beginning of toe cen- 
tury, people who invented new 
media were the users: photog- 
raphy was invented by photog- 
raphers, cinema by film mak- 
ers. This intimate coupling of 
the inventor and the creative 
user only disappeared with toe 
invention of television and, 
later, computers. Its disappear- 
ance was needless." 

Today, even the most 
g ung -ho of the American tele- 
phone companies and media 
giants agree that unless more 
content, or “programming”, is 
developed for their much- 


hyped mfobahnen - highways 
of toe mind - they will not go 
very far as a business. All that 
is on offer so far is video-on-de- 
mand and tele-shopping - 
decidedly banal electronic ver- 
sions of Mrigting human activi- 
ties; hardly the stuff of which 
new civilisations are made. 

So where are ideas for new 
needs to come from? However 
well envisioning labs engage 
with groups of users, someone 
has to provide an aesthetic 
stimulus - throw ideas into the 
ring - to provoke genuinely 
fresh thinking - This is where 
design can provide a cultural 
function as a bridge between 
industry and artists who are 
Interested in technology but 
suspicious of big business. 

Intellectuals and artists have 
been preoccupied by the impli- 
cation of information technol- 
ogy for some tune. For avant 
garde media artists in particu- 
lar, the notion of the interface 
has replaced the finished art- 
work as the main object of 
enquiry, but few computer sci- 
entists (or even marketers) 
have the faintest idea how 
exciting (and even marketable) 
scone of these ideas can be. 

' Design can be a useful medi- 
ator in breaking down the iso- 
lation from each other of art- 
ists, computer scientists and 
users, and in promoting the 
fruitful interaction between 
them which may just yield the 
new concepts and applications 
needed to fulfil the promise of 
the new technologies. 

The need for such bridge- 
building between industry and 
artists is not new. It was toe 
main mission of the Rauhans 

TO years ago. The original Bau- 
haus foundered on the rock of 
elitism and exclusivity: the 
news media - inclusive of 
users as well as design e rs - 
may mean that a design-based 
Electronic Bauhaus becomes 
Europe's secret weapon. 

John Thackara is director of the 
Netherlands Design Institute m 
Amsterdam. 


Re-thinking a corporate identity 

Avant garde 
Dutch twist to 
a Danish tail 


When toe officials of Danish 
Post started to trawl around 
for a graphic designer to 
devise a new corporate iden- 
tity to pave the way towards 
privatisation, one of their first 
stops was at Stndio Dumber in 
The Hague. 

The Danes had admired the 
bold and, to some of its wilder 
manifestations, avant garde 
corp orate identity that the 
PTT - the Dutch post office 
and telecommunications 
authority - had adopted in 


The new Danish Post 
identity has been 
designed to cope with 
a number of possible 
futures 


1989. So much SO, inHaftH, that 
they asked their Dutch col- 
leagues at- the PTT to advise 
on the creation of Danish 
Post’s own new identity- The 
Dutch urged toe Danes to seek 
the help of Stndio Dumbar, the 
Dutch designers b ehind their , 
own instant design classic. 

The Danes hedged their bet 
To ensure that Studio Dum- 
bar’s unpredictable ideas were 
translated into so mething that 
would make sense to toe Dan- 
ish public, the designers were 
teamed with Kontrapunkt, a 


Copenhagen-based consultancy 
which has worked with Danish 
Post for 15 years. “Kontra- 
punkt is very good on solid, 
classic design," says Gert 
Dumbar, toe charismatic front 
man of Stndio Dumbar. “We’re 
tiie opposite - coming up with 
new ideas and shocking the 
client" 

An important part of the 
clever new D anish Post iden- 
tity Is the way it has been 
designed to cope with a num- 
ber of possible futures. “We 
don’t know today whether the 
Post will continue as a state 
company or as a privatised 
company," says Aksal Less- 
mann. head of communica- 
tions. (This will not be derided 
until after the next Danish 
election this autumn.) "But we 
do know that we have to com- 
pete. We have to modernise 
and show the public that we 
Tire not so old-fashioned.” Post 
offices will sell a much wider 
range of services and the com- 
. pany will compete .more 
^aggressively abroad. - -- 

The- new identity = was 
launched in March at six post 
offices - three of these in 
Copenhagen. Two more sites 
have been added since. 

The design preserves impor- 
tant elements of the original 
1939 identity and its 1982 re vi- 
rion. the coach born and the 



Studo Dunbar and Kontrapunkt designed Danish Post's new identity 


royal crown; bnt their colour 
has been changed from red to 
yellow and they have been set 
more forcefully hi a red, 
round-ended box. 

The “S“ in Post is given a 
memorable - bnt also tradi- 
tional - twist of the tail. Two 
new colours, green and bine, 
have been added to "signal the 
new business activities which 
are coining." says Kim Meyer 
Anderson, the Kontrapunkt 
team leader. 

For the first time, the Dan- 
ish Post has an Identity which 


banishes confusion with its 
private post competitors. The 
inherent flexibility of the logo 
- the basis for a full corporate 
identity now in development - 
allows for later subdivision of 
the compa ny al ong the lines of 
toe Dutch PTT. 

And in a country where the 
bright red postboxes are 
regarded by the pnblic 
as "almost holy," the 
identity of Denmark itself 
is subtly strengthened. 

Rick Poynor 



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I 






FINANCIAL TIMES 


DESIGN IN EUROPE 


T here is a modest, though 
unmistakable air of opti- 
mism among Europe's 
design consultancies as the 
industry slowly but steadily 
emerges from recession. 

Design ~ the business which 
expanded so rapidly in the 
1980s, has had a gruelling time 
in the early 1990s. Some of the 
industry's best known names 
have disappeared in a mael- 
strom of takeovers, receiver- 
ships and redundancies. But 
the economic tide is now turn- 
ing. The design business in 
most European countries is 
coming out of the doldrums 
and Is poised for recovery. 

“We've been through a hell- 
ish period," says Martin Beck, 
chairman of Fitch, the London- 
based retail design business 
which was forced to mount an 
emergency financial restruct- 
uring in 1992. “But the worst is 
over. Business is more buoyant 
and there is so much pent-up 
demand in the European 
design market that the long 
term prospects are excellent.” 

As the industry prepares to 
enter a new phase in its for- 
tunes. the critical questions 
are whether the recession has 
wrought long term changes in 
its structure, and which type of 
consultancies will be best 
placed to benefit from the 
expansion of the European 
design market in the future. 


Alice Rawsthom finds cautious confidence among design consultants in the aftermath of recession 

Industry prepares to enter a new phase 


Perhaps the most accurate 
Illustration of the scale of the 
changes within the industry is 
the annual league table com- 
piled by Design Week maga- 
zine In the UK (arguably 
Europe's most mature design 
market, but also the base for 
most of the consultancies oper- 
ating on a European basis.) 
Design Week recorded a steady 
decline in the fee income of the 
100 largest consultancies in 
1990, 1991 and 1992 until 1993, 
when it registered a 2 per cent 
increase to £307m. 

Yet last year's increase 
means that the 100 largest con- 
sultancies are still gaming con- 
siderably l ess than in the peak 
year of 1989, when their com- 
bined fee income totalled 
£429m. 

Furthermore, the Design 
Week survey suggests that the 
bigger businesses have borne 
the brunt of the recession. The 
number of companies employ- 
ing over 100 designers has 
fallen from 19 in 1991 to eight 
today. The fastest growing con- 
sultancies are those employing 
25 to 49 people. 


At first glance, the contrac- 
tion of the big design groups 
appears to reverse one of the 
key themes of the Industry 
doting the 1980s - the transfor- 
mation of strong, local design 
consultancies into European 
networks working in different 
countries across the continent 
In the past, international 

Recession forced some 
companies to freeze 
European expansion 
plans; others dosed their 
new offices and studios 

design projects tended to be 
the province of high profile 
individuals who had formed 
close personal relationships 
with their clients. The new 
breed of retail, packaging and 
corporate Identity consultan- 
cies were working on a larger 
scale. They mimicked the 
advertising indus try by open- 
ing offices and studios to sell 
their services m d im piMnonf 1 
projects across Europe. The 

loading US wwsntemfiiM SUCh 


as Landor, part of the Young & 
Rubicam marketing group, and 
Siegel & Gale, a Saatchi & 
Saatchi subsidiary, also expan- 
ded their European operations. 

The rigours of the recession 
forced some companies to 
freeze their European expan- 
sion plans; others closed their 
new offices and studios. The 
multinational marketing ser- 
vices groups, such as Buro- 
RSCG of France and the UK’s 
WFP, streamlined their desig n 
interests by merging some of 
their subsidiaries. 

The industry now faces the 
dilemma of deciding how to 
service its international cifent$ 
in the future. The market for 
multinational projects 
remained reasonably buoyant 
throughout the recession; 
indeed, some UK consultancies 
could not have surviv ed other- 
wise^ The market also has con- 
siderable long term growth 
potential as the activities of 
the design industry’s ‘clients 
become increasingly interna- 
tional. 

“We have no choice but to be 
a European business, “ says 


Brian Boylan, deputy chair- 
man of Woolf Olios, the Lon- 
don-based corporate identity 
consultancy, “it isn't simply a 
question of picking up new 
jobs outside the UK. Our UK 
clients are nearly an interna- 
tional companies and we can’t 
do our work for them properly 
unless we operate in a Euro- 
pean context.” 

Perhaps the most useful les- 
son of the recession was that 
the industry’s finances are too 
fragile to support advertising 
agency -style networks of 
offices and studios. It is 
instructive that one of the few 
large London consultancies to 
have expanded steadily during 
the recession is Pentagram, 
which has always stuck stub- 
bornly to its original concept 
of operating as a co-operative 
of individual designers. “It’s no 
secret how we've done it,” says 
John McConnell, a partner. 
“It’s because we stuck to our 
guns and resisted the tempta- 
tion to expand in the 1980s.* 

The new consultancies 
which have sprung up in the 
early 1990s have adopted a shn- 


John Ridding finds renewed competitiveness and flair in European car design 

The family dog goes out of fashion 


When Mr Patrick Le Qu&ment, 
head of design at Renault, 
sought to persuade the com- 
pany chairman to go ahead 
with the Twinge, he told him 
that he planned to develop a 
car which would “put the fam- 
ily dog out of fashion." One 
year after the launch of the 
quirky mini-car, 200,000 of 
man's best friends may be 
wondering whether to seek a 
new kennel 


Europe’s renewed 
competitiveness has 
resulted In some very 
att r act i ve products 

The commercial success of 
the Twingo is evidence of a 
renaissance of innovation, and 
a degree of risk-taking, at the 
French state-owned car group. 
But it also stands as a symbol 
of a renewed competitiveness 
of European car design after a 
period of assault by interna- 
tional rivals. 

“There are some very attrac- 
tive products at the moment," 
says Mr Le Qu£ment, effing the 


Opel Corsa, the curvy small 
car which is devoid of straight 
lines. For Professor Dan Jones 
at the University of Cardiff 
business grihnnii, the Vauxhall 
Calibra is another tr iumph “It 
got them away from the Mies 
rep image," be says. “They 
have got an awful lot of mile- 
age from the car.” Mr Roy Axe. 
managing director of Design 
Research Associates, the Inde- 
pendent consultancy group, 
commends Rover, with its 
emphasis on British character- 
istics, BMW, and Mercedes. 

For many in the industry, 
the emergence of products 
such as the Twingo and the 
new Rover range marks a wel- 
come response to the threat of 
international competitors - 
particularly from the Japanese 
cons tru c to rs - and the end of a 
period of self doubt in Euro- 
pean car desjgn T 

“Europe held the leadership 
in auto design until the 1980s, 
and then in the. late 1380s the 
Japanese seized it by being 
more adventurous," says Pro- 
fessor Jones. Mr Le Qufiment 
concurs. “The Japanese took 
over and captivated the Inter- 


3T CAMBREXSE PRODUCT DESIQN POD OtOMBS ANDBtSON UNHORSE 
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bath tub furpe in common ? 


Sense, common design sense. 


DESIGN = COMMON SENSE 


Enthoven Associate Design Consultants 
Kasceel Betv&tere 
Broeksmat 13 

B-2 1 1 0 Wqnegem (near Antwerp) 

BELGIUM 

Phone ++32 3 685.1085 • Rax ++ 32 3 685.1 122 


AD CREATIVE CONSULTANTS 


The Royal Victoria Patriotic Building , 

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Tel: 081-870-8743 Fax: 081-877-1151 

An energetic learn of profosslonab to desi gn 




and Graphics. 

Asda Stores, BP, CV Home Furnishings, GaBaher, 
LHdewoads Stores, Maria & Spencer, United Dbtite*. 

Brian Mathews tor a Brochura or Meeting. 





The Twirtflo’s q u irl dh Bs a hariui back to a tradition of French Innovation 



est of the whole industry. The 
Europeans went through a 
patch of desperation and many 
felt they would never see bet- 
ter days,” he says, referring to 
the succession of concept cars 
developed by the Japanese in 
the 1980s and their success in 
penetrating traditional strong- 
holds of European design, such 
as the sports car segment 

That, however, was then.] 
“Today the situation has' 
changed significantly," says 
the Renault design chief. “We 
feel that we have not been 
beaten by psychological war- 
fare." 

The reversal of fortunes is 
partly explained through the 
adoption of lessons learned 
from the Japanese themselves. 


In particular, European manu- 
facturers have implemented 
team-based design techniques, 
resulting in Increased effi- 
ciency and reduced costs 
through the combination of 
styling and engineering pro- 
cesses hi the development of 
new models. The Europeans 
have still not caught up with 
their eastern rivals in this 
^area, but the gap has nar- 
^ rowed, allowing broader ranges 
of vehicles and greater respon- 
siveness to customer tastes. 

The increased design com- 
petitiveness of many European 
manufacturers also reflects 
their adoption of a strategy of 
emphasising the distinctive- 
ness of their particular prod- 
ucts, rather than attempting to 


appeal to the broadest possible 
number of consumers. As the 
Massachusetts Institute of 
Technology warned in its book 
The Future of the Automobile: 
“It is clear that product dis- 
tinctiveness is the major com- 
petitive advantage of the Euro- 
pean producers, and they will 
lose it only at great risk.” 

This thinking is dear in the 
case of the Twingo. “It is better 
to adopt a strategy of pleasing 
wholeheartedly a smaller num- 
ber of people than to try and 
avoid displeasing everyone," 
says Mr Le Qufiment, dismiss- 
ing the idea of a world car 
which can suit all tastes. “That 
is a myth, like Euro-camem- 
bert or Euro beer ” he says. 

Part of this strategy involves 
an emphasis on natio nalism In 
design. Rover's renewed suc- 
cess, for example, is partly the 
result of an emphasis on its 
Britishness, from the wooden 
dashboards to the regal grille 
on the front of its more recent 
cars. The quirkiness of the 
Twingo also harks back to a 
tradition of French innovation, 
from the Renault 16 - the first 
car to have a modular interior 
- to the Citroen DS, the shark- 
like saloon with swivelling 
headlights, hydraulic suspen- 
sion and steering. 

“We took the approach of re- 
establishing our design as a 
French manufacturer rather 
than a Euro manufacturer,” 
says Mr Le QufimenL “We 


Early prudent policy. One new 
area of design to have emerged 
in the recession is branding, or 
brand development, which has 

grown out of the packaging 

design business and spawned 
dynamic young consultancies 
such as Scott Libby Hemi n g 
and Wickens Tutt Southgate, 
both of which are based In 

*We don't have 
stereotypical d tents, so 
we cant offer them 
standard solutions. 
We’ve got to be flexible’ 

London but are already execut- 
ing European projects. 

“We saw what happened to 
the design groups which 
expanded aggressively in the 
1980s,” says Mark Wickens, a 
founds - of Wickens Tutt South- 
gate. “We're absolutely com- 
mitted to expansion In Europe 
but well do it in a much more 
focused way." 

Meanwhile, the established 
consultancies have pared down 
their operations and are now 


believe the richness cf the cul- 
ture is what makes Europe and 
we reject the idea of trying to 
do the best average.” 

Not all constructors agree. 
Ford of the US, for example, is 
a strong advocate of the world 
car, designed to appeal to a 

maw i nlwna ti n nal tnai- fcpt an d 

achieve huge economies of pro- 
duction. “If the Ford approach 
works then it Is frightening,” 
says Mr Le Qufemenl 
Notwithstanding this chal- 
lenge, however, the increased 
diversity of European design 
deprives international rivals of 
a unified target “In the 1980s 
Europe was drawn towards a 
standardised product line, off 
which were developed different 

The Japanese reached 
a plateau - they need 
to find a focus again, 
and I am sure they will 1 

versions. The result was that 
cars became similar and boring 
and presented an easy opportu- 
nity for the Japanese", says 
Professor Jones. The Miata 
MX5 sports car, and the Toyota 
Lexus, aimed to compete with 
Mercedes and BMWs, came as 
a “profound shock” to the 
European producers, he says. 

But if the Europeans have 
been strengthened by a more 
adventurous approach to 
design, the battle is not yet 
won. The Americans, and 
Chrysler in particular, are 
becoming increasingly compet- 
itive. “The Japanese reached a 
kind of a plateau,” says Mr 
Axe of DRA. “They need to 

find a focus a gain , ami I flm 

sure they will." 


operating in Europe on a more 
flexible basis, “It’s horses for 
courses,” says Brian Boylan ot 
Wolff Ollns. “We’ve thought 
long and hard about how to 
handle international projects. 
The feet Is, we don’t have ster- 
eotypical clients, so we can't 
offer t hem standard solutions. 
■We’Ve got to be flexible." 

Woolf Ollns still has an 
o ffif y in Spain «nd has formed 
associations with local compa- 
nies in Italy and Portugal But 
it services its German and 
Scandinavian clients from its 
London headquarters. Simi- 
larly, Landor Europe operates 
across the continent from 
full-scale offices in London and 
Paris, with satellite operations 
in Madrid and Milan. 

This flexible approach to 
European design projects may 
last Hftn ger than the industry 
expected. This is partly 
because of the changes in the 
industry's relationship with its 
clients. The financial pressures 
of rec ession, coupled with the 
changes within mass-market- 
ing, have prompted many large 
multinational companies to 


reassess the way they work 
with external suppliers, includ- 
ing design consultancies. 

Some companies have set up 
internal design departments to 
co-ordinate their design activi- 
ties. These departments often 
handle the implementations! 
side of projects, leaving exter- 
nal consultancies to concen- 
trate on the conceptual and 
advisory side of design and 
thereby - reducing the need for 
large local teams <rf people 
working on the ground with 
clients. . 

Similarly, advances in tech- 
nology have reduced the cost 
and complexity of orchestra- 
ting cross-border projects from 
different countries. Fitch uses 
video conferencing and 
modems to link its US and 
European offices. Its employees 
nk n use the Internet to com- 
municate among themselves 
and with their clients. Fitch Is 
putting its own experience 
with new technology into prac- 
tise by diversifying into new 
multi-media fields such as 
home shopping systems. 

-Technology will play a cen- 
tral role in the future of the 
design industry." says Martin 
Beck. “In some respects the 
newer firms have on advantage 
over the older companies 
because they are starting fresh 
with technology at the core of 
their business." 


4 * qO 





After the daalfinarimi of the 1980a and daconstmctian In the early 1090s, 
the focus of tasNon has now shifted to more enduring classics, or 
■objeta da memoir*’. Mucda Prods has breathed new Me Into Prado, the 
famfly firm founded by her grandfather, which is one of Italy’s oldest 
luxury homes. She has created a new school ot contemporary classic 
fashion with thoroughly modem materials and simple shapes 


The brightest and best stand up to be counted 


Alice Rawsthom asks some influential designers to 
choose one item each from the galaxy of products 



The prototype for the iconoclastic MuZ 
Skorpion motorbike, developed for MuZ of 
eastern Germany by Seymour Powell, the 
London-based product designers, was chosen 
by Paul Smith, the British fashion designer. 

"I love the utilitarian feeling about the bike," 
tie says. "It’s amazing that MuZ, an eastern 
German company previously looked upon 
as the Lada of the bike world, could have 


L 


come up with such a revolutionary design. 

It weighs less at 500cc than most Japanese 
250cc bikes. 

“it's glued together, not welded, and has 
30 per cent fewer parts than equivalent 
Japanese bikes. It was the star of the last 
Bike show in Birmingham. Apparently the 
man on the BMW stand dropped his clipboard 
when he saw IT 




The Hotel New York, a new hotel which 
opened last summer in the 19th century 
headquarters of the Holland- America shipping 
company on a stunning waterside site in 
Rotterdam harbour, Is the choice of Stsfano 
Marzano, design director of Philips, the Dutch 
electronics group. 

"It’s completely cflfferent from ary other 
luxury hotel," he says. "It’s impossible to go 


there without thinking of the history of the 
Hofland-Amertca line and of all the people 
who left their homes In Europe from there 
to go to a new Ufa in America. You can almost 
hear their voices in the rooms. 

"It’s also important because it’s the centre 
of the redevelopment of the Kop Van Zuid 
area, so Its a real link between Rotterdam’s 
past and its future." 


Despite afl the warnings about 
maturing markets and sated 
consumers, each year thou- 
sands of new products are stffl 
launched. Some will last Oth- 
ers will not The FT asked 
some of the most influential 
figures in European design to 
choose one example of imagi- 
native and Intelligent design 
which is already - or Is about 
to be - available in Europe. 

PhRlppe Storck, the French 
architect and designer, plumps 
for Concept 1, the car Volks- 
wagen of Germany is consid- 
ering for a launch in the mid- 
1990s as a successor to the 
old Beetle. "It's something 
really extraordinary - warm 
and friendly," says Stare k. 
"Design today Isn’t about mak- 
ing something that people 
gasp at and say 'Ahl How 
beautiful’ It's about creating a 
product which w3l please peo- 
ple and that they need, without 
using unnecessary materials. 
The new Volkswagen is Intelli- 
gent and cute. It’s like looking 
at a baby. A baby needn't be 
beautiful to make you smfle." 

“My vote goes to the Cad- 
die, a shopping trolley 
designed by Raul Barbieri for 
Magis, the Italian manufac- 
turer," says Jasper Morrison, 
the British product designer. 
"It's a genuine reinterpretation 
of an essential product which, 
until now, no one had thought 
of re-evaluating. It consists of 

a lightweight aluminium frame 
on which is hung an expanding 
woven nylon sack. It folds 
away to insignificance, it also 
offers an element of road 
safety - a reflector built on to 
the side of the wheel Beauti- 
fully engineered, faultlessly 
practical” 

The TGV, or Train de Grande 
Vitesse, the high speed French 
train, is the choice of flert 
Dumbar, the Dutch graphic 
designer, "it’s innovative, aes- 
thetic, functional comfortable, 
safe, silent and looks stun- 
ningly beautiful crossing the 


European landscape,” he says. 
If the TGV was to adopt a 
frequent flyer system like the 
airlines, I’d never again take a 
plane to a TGV destination." 

Giorgio Armani the Italian 
fashion dsigner, opts for the 
lamps of Giorgio Sabattini, a 
young Italian designer making 
intricate fights In a contempo- 
rary vein. "1 particularly like 
Giorgio Sabattini’s work 
because It is both exotic and 
modem," says Armani “His 
lamps can look bath like 
objects from outer space or 
old Moroccan Tights.” 

'It was terrific to realise 
that they’d been made 
by Spear & Jackson. 
They’re a joy to use and 
they do look stylish' 

“I admire Renault for having 
the guts to bring out a bold 
piece of design in the 
Twingo," says Sir Terence 
Conran, chairman of the 
Design Museum in London. 
“It’s easy to drive and It’s 
affordable. The Twingo is also 
an exciting, modem design 
that has captured the Imagina- 
tion of the mass market. The 
Renault Twingo is like other 
classic designs such as the 
Concorde, which seemed 
absolutely extraordinary when 
it was first launched, but is still 
remarkable years later ” 

Jll Sander, the German 
fash ion designer, selects an 
established design classic: the 
Serie 7 chair designed in 1989 
by Arne Jacobsen, the Danish 
architect. “Jacobsen's work 
succeeds In creating a context 
not only between space and 
facade, but between space 
and design," she says. “A 
good example is the Serie 7 
chair Which has lost none of its 
modernity or clarity of style 
over the years." 

The Italian designer and 
architect, Ettore Sottsass, 


also picks a classic: the Lsfca 
MS, a range finder camera 
introduced in 1984 by the 
eastern German camera-maker 
as a direct descendant of its 
first-ever, the Laica 1 which 
was brought exit in 1914. Sott- 
sass, a compulsive photogra- 
pher, Hires the camera because 
it is "small, wafl balanced and 
very well-made, although it’s 
expensive." He also likes the 
Leica MB’s reflex shutter. “I 
have other cameras that are 
easier to use, like my Olym- 
pus. But the reflex shutter 
makes such a difference. It’s 
almost a sexual pleasure every 
time I push the button." 

James Dyson, the British 
inventor and engineer, chooses 
the new Spear & Jackson 
anvil large garden shears. 
"When I first saw these shears 
I assumed they'd be very 
expensive products from Swe- 
den or Switzerland," he says. 
“It was terrific to realise that 
they'd been made by 
Spear & Jackson In Sheffield. 
For years the only large shears 
on the market have been 
enlarged pairs of scissors that 
are foul to use, particularly 
when you’re hacking away at 
reaHy tough things. These new 
shears have a daver mecha- 
nism on the end which gives 
them an anvil action that Is 
much more effective. They're a 

joy to use and they do look 

rather stylish.' 

"If I could choose any prod- 
uct it would have to be the 
Thonet bentwood chair, 
because It Is a perfect combi- 
nation of technical and aes- 
thetic innovation,” says Mich- 
ele de LuccN, design director 
of Olivetti, the Italian electron- 
ics group. “But the most Inter- 
esting contemporary phenom- 
ena are not products but 
events." He cites Oz. the 
Dutch collective of ecology 
activists who stage events to 
raise awareness of environ- 
mental issues among other 
designers. 







■ - 









11 



FINANCIAL TIMES MONDAY JUNE 13 1994 


DESIGN IN 






.-r 


unte: 


EC design prize can show 
company culture at its best 


• There was.a time wtwi the 
only real attraction for archi- 
tecture enthusiasts' visiting the 
Bft3te rsgton TTOS Le Corbu- 
sier’s Chapefle Notre-Oame- 
du-Hout at Rpnchamp. 

These days. there's another: 
the extraordinary collection of 
contemporary architecture 
commission ed. by Vitra, the 
Swiss office furniture company, 
st its production plant in Walk 
am-Ftheft across the German 
border, lor which it has been 
awarded one of thta year's EC 
Design Prfeee. ■' 

The. .Well, -site' - which 

includes factories by Nicholas 

frimshaw and Alvaro Siza, the 
museum designed by Frank 
Gehry; Tadao Ando's confer- 
ence centre end the axpres- 
■skjntetk: flurry of Zaha HadkJ's 
fire station. - attracts 40,000 
dsltore a year, many of . whom 
nuke a special trip to see ft. 

Vitro opened -yet another 
landmark buitdmg last month 
when it moved .Into, its new 
headquarters designed by 
Frank Gehry in a Basle suburb. 

There Is a commercial sub- 
text to Vftra's architectural 
passion. The company, which 
was founded as a-shopffttar in 
tat -J93QS, was the European 
manufacturer for Hermann 
MOer. -the' US furniture group, 
uptlf MSA ' 

It -has- since made its own 
-way lo" the office, furniture field 
t^-^Vpddng.Vwittf freelance 
deslgnas such as. Mario Bel- 
^ PWSppe StSBCk arid Jasper 
-Wwlson; : . . 



Vitra, the Swiss furniture company, commi ss ions l a ndma r k buddings 


The publicity generated by 
its buRcSngs, -together with the 
fact that many of the people 
trooping around the' Well site 


are architects who could even- 
tually become customers, has 
undoubtedly helped Vltra to 
establish Itself as an Indepen- 


dent entity. Rolf Fehlbaum, the 
chairman, who initiated the 
construction programme after 
the old factory was damaged 
by fire in 1981, is convinced 
that Vltra's employees have 
also benefited - not only from 
working in a visually stimulat- 
ing environment, but from liais- 
ing with different architects. 

He sees the collaborative 
experience as a valuable com- 
plement to Vftra's "trial and 
error” approach to working 
with its own designers. 

"A project like this Isn't a 
fotfy or fantasy, It's part of the 
company's culture,” he says. 
“It's a financially feasible proj- 
ect with practical benefits that 
also send a dear message to 
our customers.” 

The company's financial fig- 
ures corroborate his analysis. 

Since the break with Her- 
mann Miller the co mpan y has 
quadrupled its turnover from 
SFrSCm in 1984 to SFr210m 
last year. Its success in this 
year's European Union Design 
Prize is Indicative of its status 
in the design sphere. 

Vitra is now moving in a new 
direction, developing new 
office systems to take account 
of the technological changes 
which are transforming working 
patterns, it has also called a 
halt to its architectural 
schemes. 

"We don't need any more 
buildings," says Rolf Fehl- 
baum. “Not now, at least.” 

Alice Rawsfhom 


. •'■family has - long- loomed 
large.tn Italian industry, but It 
played ’a .very special part' In 

- tto.aBatfcviofrUiceplan dur- 
Sngthefets 1970s. 

'three Jounders Rio- 
cardo Sarfatti, Sandro Sever! 
CrteMfi and Pado- Rizzartto - 
met while studying architecture 

- ^university. They went on to 
Work together £4 Artelueo. 'a 

' lighting company owned by 
33arfattrs father. untfi. ft was 
of 

ftaflan lighting. They stayed 
Iherafbrawhife 
start on their cwril.: -i 
£ tuceptan Is now Italy's tad 
largest fighting: company, 'its 
annual _ turnover Js . almost 
L20bn {70 per cent of wffich is 
exported) /tend it-^has, 55' 
As Miter factory. 
iYa^yi fvee founders aw* 



_ afl the .20 B^its '• 
produced - since the 
Ibn.theymarkst - 
proqf- of a cdmmftment to 
des^ri tat has earned one of 
thte’year's EC Design Prizes. 

it .car seem cfchfid when 
companies wax lyrical -about 
design being an integral part of 
.takr business, but it happens 
to be true for Lucepten. Where 
other Italian Bghling companies 
wok with external designers - 
as Ros does, for example, with 
AnhUla Castigiioni, PhlUppe 
Starck and Marc Nawson> the 
Luoepter partners stick to the 
Bauhaus model of designing 
a their own products along- 
side their factory production 
team. • 

"We don't beOeve ft is possl- 



A8 20 Bahts produced by Lucapfan, the ItaBan company founded in the late 1070b, are still on the market 


bie to have a design studio In 
one place and a factory in 
another,” says Paulo Rizzatto. 
“We are dealing . with very 
complex products which 
require a high level of technical 
expertise, ft is essential that 
the design and production pro- 
cess is homogeneous.” 

This commitment to homo- 
geneity Is best exempfifled by 
Luceplan’s headquarters: a 
compter of- five early 20th cen- 
tury warehouses, specially 
converted to accommodate 


product development, manu- 
facturing and distribution. 

The partners also co-ordi- 
nate the design of all Luce- 
plan's packaging and publicity 
material to ensure that it con- 
veys the correct image. 

Until recently toe company 
concentrated on domestic 
lighting, but Its latest venture 
marks a new departure into 
heavy duty lights for public 
spaces such as apartment 
blocks. The catalyst, Riccardo 
Sarfatti says, was the realisa- 


tion that existing products in 
that market were not only of 
low quality, but also had failed 
to take advantage of the devel- 
opment of technically 
advanced light bulbs. 

Luceplan's response was to 
devote 30 months - and a 
tenth of its turnover - to devel- 
oping the Metrop. After a year 
on tile market it has already 
sold 20,000 units and 
recouped the investment. 

A.R 



U» world's fcadfoff producer of playground •qufpnwnt. I» shifted •mphante from physted ptovk« to social Intemctkjn 


* Hens Mogens Frederlteen and Tom 
l j«8tedt Vw* w«» man with a mission 
thty founded Kemp® - * in Denmark 
10 WO. Ffejecting the concrete bleakness 
.«ii 1960# ^chUdren'a outdoor play- 
0h^-tiwY : doBwrided cctaur, excite- 
tant and ptey value. 

■ nwy :wera cfoariy on to something. 
Jfcmpari; Is pow the. world’s leading pro- 
equipment with an 
Wte^ftornotfsr.flf OKrSOOm, 90 per (tent 
of teticli & exported through soles to 40 
optWrita Strang br^ colours and bold 
atepes make its equipment instantly 
hfoognfeabfe. And the accolades have 

«b»ll 6 «fingkailminatinginoneofta 

1884^ EG DeUgOPrizea. 

Jamming Aggatgaartt, managing cftrec- 
tar of Koropen International, emphasises 
I . has been "ftmdamentoT to the 


company's success. He says the chal- 
lenge is to fink the aesthetic and fun with 
the stimulating end educational - while 
ensuring that “took” is never promoted 
above safety. Safety, play value and qual- 
ity are the watchwords. 

Kompan looks at the world with a 
chad’s eye. ”We try to understand what 
happens when children play. We work to 
find products which further titer intellec- 
tual and social needs,” says Aggergaard, 
Child education experts have been 
involved In product development from the 
start. The emphasis Is on primary colours 
and organic shapes. Much of the equip- 
ment Is spring-loaded and as much as 
possible is made from wood. 

But he is conscious of the competitive 
threats - manufacturing barriers to entry 
are tow and the group's products are 


expensive. Hence the stress on "concept” 
as much as "product" and the attention 
given to the whole chain of activity from 
planning to after-sales service. The group 
even helps to arrange insurance - a big 
Item in markets such as the US. 

Kompan has done more than simply 
transform the look of playgrounds and 
shift emphasis from physical prowess to 
social interaction. Aggergaard notes 
approvingly the subtle shift in customers' 
attitudes from "what can we get for the 
tods” to "what would be good for the 
kids.” 

Kom pan’s important selfing tools are its 
child development seminars. The aim, 
says Aggergaard, is to "explain to custom- 
ers why we are doing things as we are.” 

Christopher Brown-Humes 


Alice Rawsthom reports on 
changes in design policy in 
several EU member states 

‘We shall act 
as the glue’ 


EUROPE IV 


When the UK government last 
autumn announced a radical 
reform for the Design Council 
ft marked the end of an era for 
British design policy. 

It also heralded the begin- 
ning of a dynamic, new design 
initiative which, so the govern- 
ment hopes, will meet the 
needs of UK industry into the 
next century. 

The UK is not the only Euro- 
pean country to have imple- 
mented sweeping changes in 
design policy. The Dutch gov- 
ernment last year launched a 
new Netherlands Design Insti- 
tute. The French system is in a 
state of flux as the Age nee 
pour la Promotion de la Cit- 
ation Industrial^ (APCI) 
attempts to redefine its role fol- 
lowing the withdrawal of the 
state's support Even the Euro- 
pean Commission is consider- 
ing ways of modernising its 
design strategy. 

Each country - or institu- 
tion, in the EC's case - has 
tailored Its approach according 
to its own needs, but it is posa- 
ble to identify common strands 
in the new public sector design 
policies of the 1990s. 

The old design promotion 
organisations were, typically 
for the postwar period, verti- 
cally-integrated bodies with 
large staffs and an interven- 
tionist style. The new breed 
tend to flavour a more flexible 
approach by operating on a 
small scale as catalysts 
between the design community 
and other areas of the econ- 
omy. 

They also tend to be more 
tightly focused towards indus- 
try than their predecessors, 
which also often had the phil- 
anthropic aim of raising design 
awareness among the public. 

"Our aim is to create an 
inspirational organisation,” 
says John Sorrell, chairman of 
Newell & Sorrell, the corporate 
identity design consultancy, 
who has orchestrated the 
reform of the UK's Design 
Council as its chairman. 
"We’re going to act as the glue 
between the UK's designers, Its 
design infrastructure and 
industry.” 

The creation of the new 
Design Council has been a 
complex and painful process - 
although it is indicative of the 
depth of the government's 
commitment to the project that 
it allowed John Sorrell to map 
out a blueprint for a new body 

rather than simply ahnHahing 

the old one. The old Design 
Council, which employed 250 
people with activities ran g in g 
from conference management 
to ma gazine publishing, is now 


being pared down to a new 
body with a staff of 50, Many of 
the old activities will be sub- 
contracted to external special- 
ists. 

Mr Sorrell, who is deter- 
mined that the new Design 
Council will be "fester on its 
feet and more visible” than its 
predecessor, also plans to 
co-opt “guerrilla groups" of 
designers and industrialists for 
specific projects. He has 
started with a series of 
research initiatives - including 
an analysis of design's effec- 
tiveness in industry and an 
overview of the government's 
use of design - which will 


mark the launch later two year 
of the new Design Council on 
the 50th anniversary of the 
original body. 

The new Netherlands Design 
Institute has also cast itself in 
a catalytic role. It was founded 
18 months ago as part of an 
overhaul of Dutch arts strategy 
which also led to the founda- 
tion of similar organisations in 
parallel fields Including pho- 
tography. 

John Thackara, the insti- 
tute's director, sees the organi- 
sation as a "facilitator” to 
build bridges between the 
Dutch desig n community and 
other fields, notably industry 
arid the aits. He and his tpam 
have already liaised with exter- 
nal consultants to identity cen- 
tres of excellence in Dutch 
desig n , such as graphics and 
typography. They are now ini- 
tiating projects, again in liai- 


son with external specialists, 
to facilitate the future develop- 
ment of those areas particu- 
larly in the fields of new tech- 
nology and multi-media. 

While the UK and the 
Netherlands stride forward 
into the future, the French are 
still trying to find a new direc- 
tion for design policy. Until 
recently the Association poor 
la Promotion de la Creation 
Indus trielle, a public sector 
body funded by the culture 
ministry, was the linchpin of 
design promotion in France. Its 
most notable recent project 
was last summer’s controver- 


tury exhibition of 20th century 
design at the Grand Palais in 
Paris. 

However, the APCFs influ- 
ence was steadily eroded in the 
late 1880s, as the then socialist 
government set up a series of 
regional design centres linked 
to local business bodies such 
as chambers of commerce. 
These new centres are more 
concerned with the business 
community than the APCI 
which, under the influence of 
the culture ministry, tended to 
concentrate on artistic initia- 
tives aimed at the public, 
rather than industry. 

The current conservative 
government withdrew Its fund- 
ing from the APCI earlier this 
year, which was then threat- 
ened with closure. The associa- 
tion has since managed to 
secure the support of the Paris 
Chamber of Commerce and is 


now assessing its future under 
Its new, more commercially- 
minded patron. 

Meanwhile the European 
Commission is revising its 
design policy to ensure that it 
plays a complementary role to 
the raft of national and 
regional bodies. Its design 
activities come under the aegis 
of Sprint - alias the Strategic 
Programme for Innovation and 
Technology Transfer - within 
DG13, the part of the commis- 
sion which is responsible for 
innovation and telecommuni- 
cations. 

The focus of the EC's design 
activities has since the late 
1980s been the European Com- 
munity Design Prize, which Is 
intended to encourage small 
and medium-sized companies 
to make the most of design as 
a competitive tool. The prize 
was introduced in 1988 and is 
awarded every two years. The 
latest prizes were awarded last 
Friday at a ceremony in 
Amsterdam to Kompan, the 
Danish children's playground 
equipment manufacturer. 
Luce plan, the Italian lighting 
company, and Vitra, the Swiss 
office furniture group which 
has its main manufacturing 
base in Germany. 

The aim of the prize, accord- 
ing to Antonio Doronzo, head 
of Sprint's design projects, is to 
reward small and medium- 
sized companies for achieving 
"all-round excellence in 
design". The winners must 
demonstrate that they have 
reached the highest possible 
standards of design in their 
products, communications 
activities and the environment 
of their operations. These com- 
panies can then be used by the 
Sprint team as role models for 
others to follow. 

Mr Doronzo is now looking 
at ways of expanding the Euro- 
pean Commission's design 
activities. He envisages the 
prize continuing to be the 
focus of its design promotion 
effort for the foreseeable 
future, although he is inter- 
ested in broadening its ambit 
possibly to include young com- 
panies that are noing design as 
catalysts for growth. 

"We have been considering 
lots of different roles for the 
commission in design promo- 
tion as we do think we could 
make more effort in this area,” 
says Doronzo. "But design is a 
complex subject We're well 
aware of that and are very anx- 
ious not to Impose a single 
view across the European 
Union when tfesig n can mean 
very different things in differ- 
ent countries.” 


sial Design: Mirror of the Cen- 


The European Community Design Prize, 
introduced in 1988 and awarded every 
two years, is intended to encourage 
small and medium-sized companies 
to make the most of design as a 
competitive tool. Profiles of the three 
latest winners, who received their awards 
last Friday, appear opposite 


Design: 

The benefits of going Dutch! 


• -isasS^- 



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'v- 




a 


> 


TJ 

C 

-K,y 

n> 

— 


o 

■VIiv . 


Vormgevingsinstituut 

Netherlands Design Institute 


Keizersgracht 609 
NL-1017 DS Amsterdam 


tel 00 31 20 638 1120 
fax 00 31 20 620 1031 











12 


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FINANCIAL TIMES 


BUSINESS TRAVEL 
CLASSIFIED 


appears every Monday in die Financial Times 
Do not miss the market-place for Business Flights, 
Business Travel Agents and any other services 
that will ease your journey - 


Although every reasonable precaution hu been taken, on responsibility can be accepted to 
flights and/or accommodation offered through these columns. Readers are advised to take 
■H IWOelHiy measun KAitwiIwiih Mr. m »nwl aimyiMnI,. 


To advertise contact: 

Julia Copeland: .. 071 873 3559 


FINANCIAL TIMES MONDAY JUNE 13 1994 

THE WEEK AHEAD 


DIVIDEND & INTEREST PAYMENTS 


■ TODAY 

Beu Brothers 1.25p 

BSNFR2325 

□KB Asia Fttg/ftceL Rata Gtd. Mis. 
DocJZOOl S2O1SS0 
Denmark (Kingdom erf) 3Kr% tnt. 
Debt DKr3£Q 

5 Du Font 7%% to 1999 S752J 
Hefcml Bar&3p 

Hickson |nt 5_15p 

Honeyweti Inc. S034 

Japan Dev. Bank 9K% (3d. to 

1997 S475J3 

Kobe Steel 4.7% Bd. 1998 
Y47000Q.0 

Kubota R W 1997 Y69520.0 
Lloyds Bank Prim Gap. Und. FRN 
S 1 B 6 A 2 

Mitsui 4.3% 84 1997 Y4300000 
Da 4.6% Bd. 1998 Y46000QJ) 
MuraapaBty Fin. 9%% Gtd. to 
1997 £92£0 

NEC 7% Bd. 1998 Y700000D 
Nippon Saneo 72% Bd 1998 
Y7200000 

Nippon Sedco 7.2% Bd 1998 
Y720000.Q 

Osaka Gas 7% to 1998 Y700 QOQlO 

Pearson 10%% Bd 2008 £1054 

p&ODfii asp 

Royal Intsce. 7%% Cv. Sb. Bd 

2007 Cl 81 .25 

Spkax-Sarco 3J3p 

Toyota Motor 654% Bd 1997 $68.75 


Cap. Und FRN (Ser.2) $83.89 
Ladbtoka 5V%% Sb.Cv.Bd 2004 
£5125 
LirntadStLQB 

Manpower S0-Q5 

New Centre! Wttwatersrand B 0 . 74 
Quarto Grp. 4p 
Ragfay Gtd FRN 0ea1997 
SI 381 238 

Temple Court Mortgages (No2} 
Class A 2 MuRhCtass Mtg. BckdL 
FRN 2031 £144.82 
TamwooSOAO 

Tokyo El e ctric Power 10%% Nts. 

2001 C$105.0 

Wrinfcto CoOtey ZSQ-125 


■ TOMORROW 
Anglo American bw. TsL R2.85 
BankAmerica $0.40 
Conversion 9Vr% 2002 £4.75 
Chase Man hat t an Rtg- Rate Sb. 
to 2009 $134.17 
Commerzbank O'seas Rru Gtd FRN 
1998 $274886 

Hongkong & Shanghai Banking Prim. 


■ WEDNESDAY JUNE 15 
AEa 59% Grass Cm. Pf . R0 j 055 
Abbsy National Tress. Services 
9%% Gtd. Bd. 2004 L41440.97 
Abtrust Adas Conti. Europe Portfolio 

DM0.038 

Do. Eurapriva Portfbfio 0.13p 
Da UK Grawtti of Inc. Portfolio 1 JSp 
Da UK PartfoBo 1 J5p 
Am Benick $0.05 
Afoert Ftaher 5%% Gtd. Rd Cv. 

PL 2)04 2£375p 
Atlantic redtfieid $1375 
Awonmore Foods A fft2p 
Blenheim &4% Cv. Pf. 32p 
Bradford & Blngley Bldg. Scty. FRN 
1995 £133.90 

British Airways 10%M Bd 2008 
£108.75 

Brunswick SO. 11 

Caisse Nationale des Autorocries 

16% GtcL Ln. 2006 £400.0 

CemaudMetalbox FFr4.0 

CSXS044 

Cusains Property 2p 

Dana $0.42 

Dover Corp. S023 


investors Capital Tat 5V*% Cm. 

Pf, £1.8375 >MO 

Kriki Mppon Railway 39% Bd 19W 
Y84681.0 

Oft 3.6% Bd 1999 Y91000.0 

Louisiana Lsnd & Enp^ SO-25 

MYHWgs.a5p 

Martin Currie PecMicTst ^33p 

Midland Bank Non-Cm. Doter Pf. 

SerAI $0,355 

Da SerA2 $0.08875 

Do. Und. Rtg. Rule Prim. Cep. Nts. 

(SerA) SI 82.0 

Pecer Systems $a03S 

PenCBck Prase 7% Cv, 5b. Bd 1998 

$35 £1 

Preudfbot i^p 

Richards Grp. IJSp _ 

Royal Bank of Canada Fltg. Rate 
Dtx 2085 SI 03-82 
Royal Bank of Scotland Und Fttg. 
Rate Prim Cap. to $186.42 
St Lawrence & Ottawa Railway 4% 
Stig. 1 st Mtg. Bd £1.0 
Sapporo Breweries FRN 1999 
Y11312.0 

Sothebys Class A UnWtg. S0.06 
Svensk Exportkredit 12% Nts. 1994 
£120.0 
TRW $0.47 

Termeco 10%% Gtd. Ext. to 1990/ 
95 $107.50 

Thomson Carp- $0413 

Tune Warner $0.09 

Toyo Const. Gtd FRN 1998 

$19084.72 

Trinova S0.17 

Wagon indL Cv. Ptg. 

Pt 3.625p 
Whirlpool SO. 305 


Fkwoa Units iRS.Sp 

Leeds Permanent Bldg. Scty. FRN 

l99a£133.SC 

Lloyds Bank Ser.C VSr. Rn Sb. 
to 1998 £142.10 

Lytas(S) ip 
Penrorotl SOTS 
pfeer $0.47 
RossmontOJp 

Santander Fm. issuances Sb. Und 
VAr. Rato Nts. $2954.88 
Scotland hit Pn. 14\i% Gtd. FkY 
Rig. Rate to 1998 S2654 
SMdnZ^p 

Southeast Banking Fttg. Raw Sb. 

Nts. 1996 $265.42 

Sumrtoroo Chemical FRN 1997 
Y 64208.0 
VTR 1.45p 


■ THURSDAY JUNE 16 
Elys (Wimbledon) l5.5p 


■ FRIDAY JUNE 17 
Abbott Mead Vickers 7.3p 
American Int. Grp. $0.10 
Anglo Americamn GokJ R7J2S 
Aspen Comma 2-9p 
David Brown 4.3p 
Chepstow Racecouraa lOp 
Christ ianu Bank 8 % Sb. to 1906 
5800.0 

Citicorp $045 

East Rand Gold & Uranium R0.56 
Freo State Cons. Gold R2.0 
Holt (Joseph) 37p 
Lowland tnv. 3-3p 
P $ O 4%% Cv. Bd. 2002 £47.50 
River & Mercantile Geared 
Cap. & Inc. Tst. 1999 3.325p 
Senior Eng. 9*% Un. Ln. 1994/ 

99 £4.6875 
Shore© Grp. 2 . 8 f> 

Toto 5.7% Bd. 1997 
YS70000.0 
Weir G»p- 4.S75P 


UK COMPANIES 


■ TODAY 

COMPANY MEETINGS: 

Trinity HUBS. ABnlsy Hotel. B n ntrigham 

Road, ARariey, Camay, n JO 
Wamar Howivd, Rat Browory. CNawal 
Straw. EO. 12.00 

Wansum. 10 Nawhal Straw. Bfcr uin g ha nt. 
11450 

BOARD kCETlNGS: 

Mk 

Banner Homas 
Cropper (James) 

Cuflsrfs 

Jarvis 

Oriflanra 

W 


AppHsd Hotogra p htea 
B8S 

Brodford Proparty Tat 


East Staray Hdga. 
FAC Smaear Go’s 
Oiand Central Inv. 


Haaita (CE} 

HeMng Pantooost 
London BadMctty 
M a ns tls l d P iewory 
Mountvtow Estates 
Robert Wiseman Dsirtsa 
StMngGrp. 

Ufltand biL 


Portor Criadtxan 
Ports m outh Wntar 


Sawm ThMt 
Symonds Eng. 
Thama Water 
Unigate 
Yotax 
WoBman 


Smith Nm* Court 
South Wn)« Goctrictty 
T h ai ay Robor 
Iruonrra- 
AMs 


Bumdsna bwa. 
London Scottish Bra* 
Southom Busman 


WTsodiaai A Esat Donta. Water 


interims: 
Prospact Inds. 


■ TOMORROW 
COMPANY MEETINGS: 

Bank of Scotland, Tho Mound. 
Ecfnbugh. 1200 

Campari hdL. 28 Fnsbury Squara. EC_ 

3 LOO 

Cusains P rop erty , The Northern CaraOsa 
Pub. Hood Straw. Newcastle ipcn-Tynt. 
11.45 

F & C Carman few. Tat, Eadtraige 
House. Primro se Street, EC- 1245 
Holt (Joseph}. Hie Roebuck HoML 2 
Church Road. Ffarion. Hraietisster. 1280 
Lament Mdga, Tlra Savoy HoM. The 
Strand. W.0, 12J» 

Marita Currie PadSc T»t- SsHns Court. 
20 Carte Tsnaea. EdobuBh. 1230 
Radtahust, 99 Chsttathoeas Smat ECL 
1230 

Try Crjx, Ccmbtf Susioesa Paric. Mgh 
Straw Cowtay. Urttadgs. lidrtssav. 
1200 

BOARD MEETINGS: 

Finale: 

ACTOtpu 


DavM Uoyd IMsura 
Naetronica Tech. 

Rfvar Plata A Oorv hat TaL 


■ WBJNESOAY JUNE15 
COMPANY MEETViGS: 

Body Strop ino. The OenfstanceCsntrs. 
Wick. LUehamptan. Wsst Sussex. 11.00 
Cl Opt, Tho NovomL Union Straw, 
Wj No i Hamp ton. 1030 
Oanoora, Wawsnsy House Hotel. 
Puddnynoor. Bocdas. SuffaK, 1230 
Hay tNona ag), Tits Armoury, Fkst Roar, 
Condi House, Eari Strast. Covsntry, 
11.00 

ll a nfafl Btatar Harris. SatMsrs Homo, 
Gutira Lana, Owapstds. EC- 1230 
Rosa Grp- Ross House. 1 MBs Way. 
8oaoonWa Oown Suansaa Ml 
A maaCtisy, VtflBs- 1030 
SMoh. Prak MIL Osasdaia Street. 
Roytorv 11.00 

Wrtrartm. Htaabra a ione Road, 

I w t y 1230 

BOARD M6ETWG& 

FtntaK 

British Thornton 

Drayton Roomraty TsL 


■ THURSDAY JUNE IS 
COMPANY MEETINGS: 

Bony Btatii A Nobta Grtmn House. Wsst 
Street. Woking. Swtay. 11.00 
British American FBm Hidga- 214 Ttra 
Chambers, Chrises Hsrttour. S.W.. 1245 
City of Oxford Inv. Tst- 41 Tower HH. 
EC, 1200 

Etawtak, The Omd Hotel. Cotmora Row. 

EHrmtaghain. 1130 

HkTec Sports. Aristion Why. 

Southend -on-Seo. Essex. 10.00 

r ta ran ac. Frena ha m Pond Hotel. Chrat 

Fsmham. Suiay, 12.00 

fllvar A Msraantto Ooarad Cap. A 

taoema, TsL 1008, Now Connauohl 

Rooms. Gnat Ouasn Saaot. W.C- 11.00 

Sfcigrtiy (H.CJ. Victoria Hotel Bridge 

Street, BnuflonJ. 10.30 

Toys A Co- Now Connaught Room, 

Great Ouson Strast. W.C- 1130 

BOARD MSTTNO& 

FMk 

AMI 

BraddanaWi 
Chester Writer 
CNorMe 

Cmb sas y P i oporty 
Hardy CM&Oaa 
Locker rn 

London Merchant Sec. 

Moorgata SmaBer Cal% fere. Trit 


Donmano Electrical 
Osprey Comms. 

RCO Support Ssivtc— 


■ FRIDAY JUNE 17 

COMPANY MEETINGS 

DawMratOrp- Merchant Taytora' HriL 

AkJwark. York. 1200 

NtariMph Technology. The msututa 

oi Dvecrors. watedoo Room. 115 Pal 

(Writ. S-W.. 10.30 

Slam Sata cMva Growth Tat, The 

Canntrve Contonnco Sut*. 4 Kings 

Aims Yard. E.C.. 1030 

BOARD MEETINGS: 

Fowls: 

Crattaridgo Water 


Daraa Eaiatsa 
Davenport Knih — f 
Faupol Trading 
I sttiran (J| 

Portsmouth A Sunderland Navrspapera 
Vtach 

e--« — 

fflRinwirP* 

Interims: 

Ortringtr TsL 
O raeww i oh Comma. 

H enderson Bams taw. 

Johnson A Firth Brown 
Company mesangs are ■ w v N gsnomi 
martnps urdns otitannsaotatstf 
Pl ease note Report* and aooaunei an 
not nanasey ovsasbta until approximately 
an weeks aher ttw board meeting to 
Approve ax pf R a tariy rasuite. 


CONFERENCES & EXHIBITIONS 


JUNE 16 

CONSUMER CREDIT 
AGREEMENTS 

An important opportunity for all those 
involved in coasumcr credit agre ement s to 
update their know Ledge of the application 
of the 1974 Act Recent developments and 
proposals lor reform will be covered and 
their procrical implications considered. 
Contact: Steve Wetner 
European Study Conferences I JwiIfrH 
Tel: 071 3S6 9322 Rue 071 381 8914 

LONDON 


JUNE 16 

PROSPECTS FOR LOCAL 
MARKETS AFTER THE 
RECESSION 

Aims to highlight strategic influence* 
affecting local markets and economies, 
helping to develop sew ideas and more 
effective local marketing strategies for the 
fnmie. Cost £50 * VAT. 

Contact: Jacqui Gout 
Tel: 071 353 9961 

LONDON 


JUNE 22-28 

R&ENGMEERMG 70 CREATE 
WORLD CLASS PERFORMANCE 
Executive briefings on World Class 
M an agement issues, a. Business Process 
Re-Engineering and Workflow 
Automation, b. Re-Engineering the 
Manufacturing Process - towards World 
C l a ss Manufacturing. 

Contact: Vicki Welham. World Class 
InDcnEHSOOBi Limited 
Tel: 0705 268133 

VARIOUS 


JUNE 28 

THOMSON BANKWATCH 
Bank CrecRAnaiyais Workshop 

Teaching the ftm i tom fink of Bank Credit 
Analysis, focusing on qualitative and 
quantitative factors. Begins with im... 
of the significance of banking system 
s aucmi ea. fallowed by a review of analytical 
techniques, Ammeiat aaatyda , peer 

comparisons and trend analysis. 

Gnacc Ian Rotbery 

Tel: 071 353 17S&071 315 0406 

Fax: 071 815 (MOB 

LONDON 


JUNE 21 

GATEWAY TO JAPAN 
CAMPAIGN SEMINAR 

The Birmingham Chamber of Commerce 
A Industry presents a seminar oa Japan 
which Includes campaign information, 
market briefings, workshops (half or whole 
day). The workshops cover material 
handling, medical equipment and [iina t ui e 
nectors. 

Contact David Frost 
Tel: 021 -454 6171 ext 2362 
Fate 031 455 S670 

LONDON 


JUNE 24 

CHINA: OPEN FOR TRADE AND 
INVESTMENT 

Business Intelligence for firms assessing 
op port unit y in Chins. Speakers from DTT. 
Glaxo. Manchester Business School, 
Laocascec Univcfsily M$ myui finr School 
etc. Session on cross-cultural business 
etiquette. Panel discussion with experts 
from Chinese Embassy, Foreign office, 
China- Britain Trade Group. 

C uutoti l Sue Erdq 

Tel: 0524 594013 Fas 0524 381454 

LANCASTER 


JUNE 28-30 

GAINING COMPETITIVE 
ADVANTAGE FROM PARALLEL 
COMPUTING 

3 day confere n ce spo ns o r e d and hosted by 
US Embassy, London. Top level 
international describe expci ifra re g 

of commercial, embedded and Industrial 
applications and explain bow to harness 
the power of parallel computing in the 
corpora t e coiiiexL 
Contact; Unicom Seminais 
Td: 0893 256484 Fax: 0855 813095 
LONDON 


JULY 4 

US GOVERNMENT 
PROCUREMENT CONFERBICE 
Policies, Procedures, Legal Issues and 
Dfveisificarian Opportunities 
A high level seminar with US spcafceis tram 
the Washington-based British American 
Business Council; the American Bar 
Association, the first lonuiy (commercial) 
of the British Embassy and spakos from 
Coopers* Lybrand and the University of the 
West of England. 

Contact: Richard Deanery. RDA 

Tel: +44 275 856700 Fax: +44 275 858569 
BRISTOL 


JULY 6 & 7 

FT INTERNATIONAL 

EQUITY MARKETS 

The Hnaeial Tima and the Crime far the 

high level c o n fe rence an the lumn si iflu s T 
Equity Markets. Hie aim is to provide ■ Ugb- 

the evolution and future snuemre of the 

Fa i yiiMr Rminrl rf T im f jt 

Tc* 081 673 9000 Euc 061 673 1335 

LONDON 


JULY 13 

fcH-fcCtlVE LTTUTY REGULATION 
The Accounting Requirements 
CR1TCAEW Sem ina r e tkh e a e s the basis on 
which financial information should be 
collected and whether the information is 
su fficien t for regulatory decision making. 
Speakers indude Sir Bryan Onsbag. Offiae 
of Fair Trading and Pro fe ss o r John Kay, 
IfffffQ H K ftBt fM i iM 
O j ntiicT: Leigh Sykes, CRI 
Tet 071 895 8823 Ew 071 895 8825 

LONDON 


SEPTEMBER 30 
COPYRIGHT -THE 
CHALLENGE OF DIGITAL 
TECHNOLOGY 

How copyright has advanced to new 
icdmalogks in the pasc subject matter of 
copyright; do the oid legal categories fit 
the new mul t i medi a products? Digital 
distribution technologies: private copying: 
the latest EU proposals: voluntary 
international numbering system: latest 
W1PO proposals; lights clearances. CPD 6 
hoots. 

Contact: Ksy Di cki ns on . IBC 
TeL- 071 637 4383 Fax: 071 631 3214 
LONDON 


JUNE 16*17 

EUROPEAN DERIVATIVES 
EXHIBITION 

Derivatives exchanges from USA. 
Australia, Pacific Rim and Continental 
Europe join brokerage compa m c a . system 
suppliers and clearing firms at Europe* 
premier event for dm derivatives industry. 
Entrance is free oa the door. The Brewery. 
Qrissdl St London ECI. 

Futures A: Options World 
Teh 071 8279977 

LONDON 


JUNE 21 

INDIA - NEW BUSINESS 
OPPORTUNITIES 
The foremost Conference on India's 
liberalization A economic reforms post 
1994 Indian budget with active 
participation of the Governments of 
hidia/UK. Bringing together a high profile 
delegation of leading Government, Legal 
and Business experts from India and 
Britain. Auspices of the DTI. 

Carlton Corporation 

Td: OSI 5777713 Fare Ml 813 8136 

LONDON 


JUNE 27 

SOVEREIGN RSK- A CREDIT 
ANALYSIS WORKSHOP 
Thomson BankWatch, the international 
credit rating and analysis agency. Is 
running a workshop to > ** ap * 1 tho techniques 
rod strategics for understanding country 
risk. Country risk analysis techniques are 
applied to both OECD countries and 

unuiging markets. 

Contact: Ian Rodtery 

Tet 071 353 1768 or 071 815 0406 

Fare 07 1 815 0408 

LONDON 


JUNE 29 

CREST -THE DEVHXJPMENT 
FRAMEWORK 

For business and systems analysis led by the 
Bank of England CREST Project Team 
which r.xnminrt technical aspects of the 
OU5ST s ys t em development. This half-day 
c onfer e n c e features wottabape on N e tworks 
and Saetm'r y Registration. Instruction, Input 
and Access ro Information. Price: £75 
+VAT. Contact: SoQy-Ann Bezant - 
tw i K»r M inwitnn* (Services) Ltd. 

Teh 07 1 626 3052 Pte 07 1 6263062 

LONDON 


JULY 4 & 14 

STRATEGIC PROCUREMENT IN 
THE 1990s: Concepts & Cases 

Two linked workshops denjgncd to explore 
leading edge thinking about Strategic 
Procurement. Each event win combine the 
work or senior practitioners and leading 

practice. They are intended to ect as 
deputing point for new purchasing fannn. 
Contact: The Contracts & Procurement 
Research Unit. University of Wnwingiwii 
Teh 031 4143221 Fax: 021 414 3217 
BATH/BIRMINGHAM 


JULY 7 

PRACTICAL ANALYSIS OF THE 
NEW INSIDER DEALING AND 
TIPPING OFF LEGISLATION 

Seminar al The Law Society covering new 


provisions to Criminal Justice Act 1993, 
Stock. Exc 


Exchange Guidance, Corporate 
Finance & EC Directive 1989. High level 
speakers from the Bar. New Scotland 
Yard, Media A City Law Firm, Ahm Jones 
QC Chairman A Gilbert Gray QC 
luncheon address. 

INTERFORUM Tel: +44 (0) 71 386 9322 
Fax; *44 (l))71 381 8914 

LONDON 


JULY 13-14 

DATA WAREHOUSE '94 

An invaluable window on tho state of the 
art in corporate da ra- warehousing, 
covering archite ctur e s; models, methods, 
techniques; cost evaluation; migration; 
case studies. Presenters include ABN- 
AMRO Bank, Great Universal Stores; 
Unisys; Chattered Trust; Uoyrfs Bank; 
C ul cT v w O M p Q U ian 

Teh 0895 256484 Fare 0895 813095 

LONDON 


JULY 5 

PROJECT RISK ASSESSMENT 
AND MANAGEMENT 

An Executive Overview 

Focusing on the need for practical risk 

analysis technafues for project decisions. It 


will highllgh^whst- is' necessary to 


JUNE 21 - 23 

1CAP 94- Information Capture & 
Processing Exhibition & Conference 

Featuring a wfcJe range of suppliers to the 
ano identification industry, The c o nfer en ce 
triqgs In expert speakers m discuss automatic 
identification sofatioos to end naets in wmjrtr 
market sectors such as hanirwig. brewing, 
htaUicarc. manufacturing, and mare. A half- 
day workshop oa the basics of automatic 
jdarrifirnfinq e available eo those new ff) the 
industry. 

Contact: AdvanaiarCoramunicadons 
TeL *44244 37583S Fax: 4-U 244 370011 
BIRMINGHAM 


JUNE 27 -28 
TNEBUSWESSOFFUND 
MANAGEMBfT COMPETITIVE 
STRATB3ES FOR THE 1990 b 
T he seminar will itrsnua the issues affix ring 
the development rod competitiveness of the 

mo ney imiH ym anf h m fi n gyy . It will tab* a 

fresh took ac market penetration analogies, 
the management of people, finances, 
information lechaolqgy and s^pfierre 
EUROMONEY 

TeL 44 71 779 8683 Far 44 71 779 8603 

LONDON 


JUNE 29 

INTERNATIONAL WHEAT 
COUNCIU WORLD GRAIN 
CONFERENCE 1994 
Spea k ers from major gram importing and 
exporting countries will explore policy 
adjustments in (he post- Uruguay Round 
teaefing wwif^niHwit PnwmiFnf traders wQJ 

examine rfiBlIf t i g pn fttarTng tbc miffing imd 

bdostdet. 

C a MI I iH I tnCffTM tiima l Wheat fVttnril 

TeL 071-513 1122 Flax: 071-7120071 

LONDON 


bnrodnee Ririt Management Practioes’into 
commercial decision making. Current 
succeasfal practices in a range of di ffe ren t 
industries will be discussed. 

Contact Dawn Meads, 

The APM Orocp Limited 
Teh 0494 452430 Fare 0*m4S9SS9 
LONDON 


JULY 7-8 

IMPLICATIONS OF OECD JOBS 
STUDY REPORT 
CONFERENCE ON FULL 
EMPLOYMENT IN EUROPE 
Speakers include John Llewellyn. Head of 
Private Office of Secretary-General. 
OECD. Other contributed from Eu r op e an 
Commission. Scottish Office, C 8 L 

Contact Cambridge Econometrics on 
Tei 0223 460760 Fax 0223 464378 
CAMBRIDGE 


JUNE 28 

USING ABC AS A CATALYST 
FOR CONTINUOUS 
IMPROVEMENT 

Waldorf Hotel, London 

How to use activity baaed costing 

information as a succeasfal agent of 


JUNE 22 

CREATING A CONSTITUTION 
THAT DRIVES THE FAMILY 
FORWARD 

Key to the success of any family business 
is a c o ns t itution setting out baric roles for 
the mvotvemeni of family tnemben. This 
evening workshop outlines the key areas 
within a constimtiod and provides precticaJ 
guidance on putting one In place. 

Contact: Frio Ttoffoli, Stoy Centre for 
Faintly H amm 
Tel: 071 486 5888 

LONDON 


Contact: Evtmta Morris, 

ClMA Mastercouises 

Tel: 071 917 6588 Fax: 071 580 6991 

LONDON 


JUNE 29-30 

STRUCTURED TRADE AND 
PROJECT FINANCE 
2nd Global Seminar 

Examining funding, credit rating and 
environmental issues In developing 
regional fade deals and projects in power, 
transport and telecommunications. 
Speakers include Brian Willott, ECGD; 
Masahlto Agata, iexim; and US 

Exlobnifs Rita Rodriguez. 

Phase contact Arabella Senociltet on 
Tet 071 779 8534 Fax: D71 779 8603 
Emomoncy 

LONDON 


JULY 5 & 6 

NCC94 'EMPOWERING THE 
ORGANISATION' - 
The Business of FT 
This confczaice w31 focus oa pra ctica l advioft 
on how new and evolving IT solutions are 
bring used to develop efihetive, real-werid. 
business strategies. NOC94 is specifically 
tailored for senior n profesrioaah and senior 
corporate executives requir i ng u pda t es oa 
changes faraoivkig n. 

Coocjcc Card Wright Nat. Computing Centre 

Tet 061-228-4333 or Fare 061-2364049 
LONDON 


JULY 7 & 8 
PROJECT 

MANAGEMENT WORKSHOP 

Khan National Hood, Gobham. Surrey 
The key control techniques for ensuring 
project completion oe time and at budgeted 


JULY 13 1415 
TRANSFORM BUSINESS 
PERFORMANCE & 
PROFITABILITY M 8 WEEKS. 

X/R/M 3tUy 

RE-ENGINEERING WORKSHOP £950 
Consists of ■ three staged approach to 
Strategic Business Analysis, Business 
Redesign ^ Change T m j J* « n < | i iii « u,m a 

for iwpfewi tffn g sustained **** 

m 8 weeks. 

Call 071 430 2232 

LONDON 


OCTOBER 6 

PUBLIC PROCUREMENT OF 
INSURANCE, BANKING AND 
FINANCIAL SERVICES 
Directives, regulations and practice; 
complaints procedure: how to claim 
damages for unfairly and wrongly nwanfcd 
tenders; view from public sector (i) 
Utilities (ii) Government; view from an 
insurance broker; view from private sector 
(I) Insurance (ii) baa kingfin vestment; 
potting together the winning bid. 

CPD 4 boms. 

Contact Kxy Dickinson, IBC 

TaL 071 637 4383 Fare 071 631 3214 

LONDON 


JUNE 21-30 
OBJECT WORLD UK 

OLYMPIA 2, LONDON 
Sponsored by The Object Management 
Group, IBM and Andersen Coosulting, this 
event focuses on the cost and business 
benefits of Object Technology, achievable 
through faster software development, 
extensive re-use and more effective 
m a inten a nc e. A FREE exhibition and seats 
at FREE Vendor Seminars are on offer. 

Tab (081)541 4865 Fare (081) 974 5188 

LONDON 


INTERNATIONAL 


OCTOBER 13 
PROPERTY VALUATION 
AND ACCOUNTING 

Different values of a property; methods of 
valuing different types of prope r ty , cun tm 
property accounting issues; sale and 
leaseback; investment analysts view; 
leading banker's view; pro p ert y anmpmtiiw 
- special issues; Rics Valuation Working 
Party Report (The Maflinsan Report) CPD 
4 hours. CPE 7J5 points. 

Contact: Ray Dicfcmroa. IBC 

Tet 071 637 4383 Fax: 071 631 3214 

LONDON 


Aitwh Bvanui Ifotds 
OMA Masferooancs 
Tet 071 917 6588 Fare 071 580 6991 
SURREY 


JULY 5-7 

INFORMATION SYSTEMS - IN 
SICKNESS AND IN HEALTH 

TTris MfflirM r am— do help executives who 
He CTperi endiiE inoblcum conuu ufl lca tii ig 


JUNE 28 

RELOCATION POUCT&PRAC7X3E 
UNDER THE NEW TAX REGIME 
A CBI/Efitat & Young seminar on 
domestic und intenational relocation to 
frpiain- the new tax rules nod employers' 
reporting oWigarions; how organisations 
are reviewing relocation policies and 
p r ac ti ces ; and tho results of a major survey 
on fYMi|uiiji practice. 

OnHacc Sandra Aldred CBI Conferences 
TeL- 071 379 7400 Fax: 071 497 3646 

LONDON 


JUNE 30 

TAKING THE RISK OUT OF 
RE-ENGINEERING 

ITTM present a (ice seminar comprising, 
recent case studies sad a proven 
methodology far bosiness change. 6.00 to 
8pm followed by refreshments, 
Lanesbo rough Hotel, London. Abo three 
day metfaodalogy wotksbops. 

Book now, call Sharon on 
Tet 071 430 2232 

LONDON 


effectively with IT professionals. 
Employing the minimum jargon, Peter 
Gyngell will cake participants rbroegh 
Strategic Business Planning, Data 
M ana ge men t etc. 

Contact: Jeanette, LSE 

Teh 071 955 1968 fine 071 955 7385 

I A dtacaimr is available to FT readers) 

LONDON 


JULY 7 & 8 

INTERNATIONAL CORPORATE 
INTELLECTUAL PHOPERTY 
PRACTICE 

Ail important opportunity for Imdlecnal 
property profarctomds and t h e ir advent to 
look si new dcvekjpmcms rod Beads, re- 
examine practices, problems and 
p raBctimw. pm,| nf »p-*trw tan hnen 
carefully chosen for their specialist 
knowledge and expertise. 

Contact: Sieve Warner, European Study 

riiirfi , 1 ‘ivi 1 , Lumted 

Tet 071 386 9322 Fax: 071 381 8914 

LONDON 


JULY 28-29 

PRESENTATION SKILLS 

This is a key event, especially for those 
who need to win and retain new b eri n est . 
The ability to give a pemuulve and 
ewiRilair p nat w u a finw y an wrniriil wWll 
for every socccssfn] executive. Defegaies 
win discover how to win recogni ti on and 
be a hrad of their co m pe tit ors. 

Contact: Tony MooKon-Barrefl 
Tet 0730816926 Fare 0730 814343 
HAMPSHIRE 


OCTOBER 13&14 
NATURAL GAS TRADE AND 
INVESTMENT OPPORTUNITIES 
IN RUSSIA AND as 

A delegation from Russia, indading the 
President of Gazprom, Rem Vyakhirev and 
Anatoliy Sbatilov, Deputy Minister of 
FneaJ and Energy, will review the 
opportunities in the CIS gas Industry. 
Oxnact: R1IA Tel: 071-957 5700x298 
Ru 071-321 2045 

LONDON 


JUNE 22-24 

WORLD CONFERENCE OF 
SECURITIES EXCHANGES 

Organized by the World Federation of 
Stock Exchanges (FTBV). this conference 
is a unique opportunity for investors, 
analysts, custodians, and other finance 
professionals to meet directors, regubtoa, 
and market authorities from stock 
exchanges around the world. Numerous 
presentations by emerging stock ex c hang es 
are included. 

Contact Caroline Thpp. Buraon-Mameller 
TO: 071 831 6262 Fax: 071 $31 5510 
PARIS 


JULY 6 

SECOND CITY OF LONDON 
DERIVATIVES CONFERENCE 

Bankers, regulators and users discuss 
supnvtsfoo, capital adequacy, new product 
development and problems in die uuLhil^ 
Sponsored by CSFL Total Bank Europe, 
Arthur Andeisen, Freshfieids and t / wta ii 
Riak Systems. David Mullins Keynotes. 
Details foam: Cityforum Ltd 
TO 0225 466744 Fax: 0223 442903 

LONDON 


JULY 12 & 13 

FTMULTMED!A-V!sioRandReaBy > 

i ill* major boriocsi Emmi wjQ qq ths 

ley Bsoes faring one of the fastest growing 
industries, the regulatory and legal 
framework for industry development, 
fiimMiiy (he motan wl tb finozce bpc 

the rale of soae gfc rIHubw ni responding to 

EoqiBrfes: FSoaoda] Times 

TeL 081 6739000 Pa=(Wl 673 1333 

LONDON 


SEPTEMBER 1&2 
FT WORLD AEROSPACE 
AND AIR TRANSPORT 

The conference will focus oa the 
challenges faring the industry in the next 
century, how it is r estruc t uri ng for the 
Anne to achieve growth, together with the 
impact of government policy. 

Enquiries: Financial Times 
TO 081-673 9000 Pare 081-673 1335 
LONDON 


NOVEMBER 24 

ISRAB. - TRADE & MVESTMENT 
M AN BNERGING MARKET 

Mayr axfeteaoe a aseodsaiaa writ the baeE 
Kmbewy, Icndoa High fevd speskeo horn the 
Israeli Govern meat & Companies already 
established in branJ. Topics include The 
&pandfag Economy, Bosons Devdopment fa 
a High -Tech Environment, Opportunities 
through Ptivatisdoo, F mnrlig . lidnMiuau re, 
StSmre A Tecfenlogy. 

INTERFORUM TO +44 ( 0 ) 71 386 9322 
Pax: +44 (01 71 381 8914 
LONDON 


JUNE 26-27 

A POWERFUL GLOBALAIJJANCE 
- Infomercial Teleshopping “94 

MIMA tnaanar ira nN jntw MAn wj ™tw » 
featuring lop direct response television 
eserotiws Grom North America and Europe, 
fa-depth disenraioa on regnbmry fames and 
current DRTV finds, followed by six 
workshop seafcHB. Guokc ^vienWaflnce 
TO 071-630 9977 Fax: 071-O3U 9806 
■NwartBradwah NcABkndi IMhgtetvS«ata 6 «. 
AMSTERDAM 


EXHIBITION 


JUNE 28 & 29 
EUROSECURITY *94 

IT Security. Industrial Espionage nud 
Fraud Preveation Canferencc. The 
international meeting place for company 
OMiltives concerned with IT security. AO 
aspects of IT protection will be covered by 
world-renowned experts « thiafiM. 
Socidtf Gfofrak do Divdoppcmait S.A 
Td (+322 512 46 36) Fax (+322 512 46 53) 
BRUSSELS 


SEPTEMBER 27 
WORKING IN THE EU 

Over half of British trade is now with the 
EU- This conference will give a factual 
base plus analysis of m ai n hwnMng«t to be 
considered for those sending employees 
abroad. 

Fbrdstaih contact invw n i i i p i»i 
fi t*— fow l Oc n facnees Ltd ofl 
071-2337733 

LONDON 


JUNE 15-16 

GOVERNMENT COMPUTING 
CONFERENCE & EXHIBITION 

Meeting (he challenge of change. Expert 
speakers from public and private sectors 
explore opportunities and implications of 
Market Testing, Government process re- 
engineering and the enabling technologies 
of the future. Includes 60 top IT exhibitors 
demonstrating the latest technology. Free 
entry. Peter Springe rt, GC Magazine 8 
Exhibitions I id 
TO 071 582 9191 

LONDON 


SEPTEMBER 27-29 
DA/DSM EUROPE 94 

Competition in combination with open 
access will force utilities to Introduce uwte 
advanced technologies such as: 

IT/D AA3$M/SCADAMM/FM/GlSf AMR 

At this conference & exhibition the latest 
developments wffl be doomed and shown 
by the major companies and utilities. High 
towel 

Coamcc PentWdl CAE 
Phone: *31-30*50.963 
Fox*31-30-65a«S 


PARIS. 


TO ADVERTISE IN THIS SECTION PLEASE CALL JANET KELLOCK ON 071-873 3503 





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13 


FINANCIAL TIMES MONDAY JUNE 13 1994 



Boardroom imports down under 


Nikki Tait on a wave of American 
executive appointments in Australia 


A ustralia ' has often been 
called the 51st state - a 
li g h t hearted reference to 
the proliferation of Holly* 
wood films , fast-food restaurants 
and baseball caps. But now, at a 
lather more, fundamental level is 
American management culture 
infiltrating Australian boardrooms? 

The thought has been prompted 
by a spate of top executive appoint- 
ments at some of Australia's biggest 
companies, last month, for exam- 
ple, the Australian Mutual Provi- 
dent. the nation’s largest life 
insurer and a pillar of its Institu- 
tional investment community, 
named George Trumbull as its new 
chief executive. Trumbull comes to 
the AMP from Cigna, the giant Phil- 
adelphia-based insurer, where he 
was president of the individual 
financial services division and for- 
mer investment chief. 

Last year Bob Joss, a former 
Wells Fargo executive, was 
appointed to head Westpac, the old- 
est of Australia’s "big four" com- 
mercial banks. In 1992, Telecom, the 
large state-owned telecommunica- 
tions company, recruited Frank 
Blount from AT&T, the US fa»lpmins 
group, as chief executive. 

This importation has seeped down 
to lower management levels, too. 
Last month, for example, Coles 
Myer. one of Australia’s biggest 
retailers, appointed Dennis Eck to 
run its supermarkets division. Eck 
is a former executive vice-president 
of American Stores and, more 
recently, worked for California- 
based Vons Supermarkets. 

But despite these eye-catching 
moves, executive search firms and 
management consultants remain 
divided about how pervasive the 
importation of US talent actually is. 
Geoff Morgan, at Morgan & Banks, 
the executive recruitment special- 
ist, describes the development as "a 
definite trend*’, pointing out that 
the Trumbull/Joss/Blount appoint- 
ments were all the results of 
full-blown searches conducted out- 
side Australia. 

He thinks the pattern stems 
partly from a desire for the general 
management siting and objectivity 
which US executives can offer, and 
partly from the need for sector-spe- 


■ ctfic experience. The latter element, 
he predicts, will mean that the 
influx continues, especially in ser- 
vice industries where “Australian 
companies don’t have a great repu- 
tation"/ and in high-tech fields. 

This view seems well supported 
by Coles: it lists four specific skills 
where it reckoned Eck had an edge, 
ranging from inventory manage- 
ment to technological expertise, 
especially in supplier relationships. 
The Australian retailer notes, too. 
that it has a major refurbishment 
programme getting under way, and 
that Eck has handled more than 
1,000 store overhauls. 

But David Berm, managing direc- 
tor of consultants Korn/Ferry in 
Sydney - whose strong American 
accent belies 20 years in Australia - 
reckons that the development “is 
not nearly as pervasive as the head- 
line-grabbing stuff suggests”. 

For the most part, he suggests. 
US executives are being used as 
troubleshooters. *T don’t think any- 
one has had the brief: ‘Go find an 
American’. It [such appointments] 
tends to happen in situations where 
there is a well-defined problem, and 
all other bets are off," he says. 

Telecom, he points out, was (and 
is) facing the loss of its protected 
monopoly position. Westpac, having 
called itself Australia’s world bank, 
had strayed badly at home and 
shareholder disgruntlement was 
swelling. Australia's insurance sec- 
tor faces major issues like the mer- 
its of demutualisation and 
increased competition. 

But at least some board directors, 
who have the formal say over such 
appointments, «»gm to have been 
wooed by the promise of broad man. 
agement objectivity. One AMP 
director notes that the insurer did 
first consider an internal promo- 
tion. but eventually shortlisted two 
candidates from outside Australia. 
"We decided it was better to select 
someone who was unencumbered 
by AMP baggage”, be says. 

So if these are the expectations, 
are they realistic? Where US execu- 


tives have already been installed, 
-there are some clear signs that 
international perspective has 
quickly come into play. 

Most of the recent US appoint- 
ments, for example, have put a 
major emphasis on raising service 
levels. Joss wants the bank to take 
McDonald’s as its management 
model and emulate the US ham- 
burger chain’s route to consistent 
quality. Reaching such a target, be 
has acknowledged, implies a strong 
training focus. He has also stressed 
the need for a more targeted 
rewarding of performance. 

Meanwhile. Telecom, which 
remains state-owned and therefore 
hugely political says that greater 
use is now being made of tech- 
niques like international “bench- 
marking”, especially in finance. 

Bat there also are some signs that 
cultural differences - notably, Aus- 
tralia’s strong e galitarian tefipf p - 
may not make for the easiest transi- 
tion of ideas. Already, executive 
remuneration is in the spotlight, 
and the packages offered to the new 
breed of executives - whether 
home-grown. like Tony Berg at 
Boral or imported, like Joss - have 
been 

On the plus side, institutional 
shareholders, anxious to lift their 
profile in the wake of the 1980s 
“entrepreneurial” excesses, say 
they are supportive, provided the 
structure of an option package is 
"appropriate”. The Australian 
Investment Managers Group is cur- 
rently drawing up guidelines on the 
subject and on corporate gover- 
nance matters generally. 

The throwaway remark of one 
mining - industry manager, a sked 
about a recent non-Australian 
appointment in his own company, 
seems to summarise the attitudes 
which the stepped-up exec uti ve cul- 
ture has yet to alter. “We haven’t 
caught the Bob Joss syndrome if 
that's what you mean,” he com- 
ments. “My famil y hag htwm share- 
holders of Westpac for years and all 
I can say is he’d better be worth it” 


Shortage of top talent 
willing to move 


A recent international survey* 
conducted by two Harvard 
University professors found 
that. fewer. thanlhalfjthe corporate, 
participants were- training their 
executives for international assign- 
marts, even though 94 pa* cart said 
such expertise would be of vital 
importance to the “-p"? In the 
future. Instead, they relied heavily 
on recruitment from outside for 
vacancies abroad. . 

That and similar trends revealed 
in the research mean the “global 
executive” should be able to name 
his price. The survey for Amrop 
Partners, the international execu- 
tive recruitment firm, was based on 
interviews with 1,000 senior execu- 


tives in 30 countries, including Aus- 
tralia. and conducted by Robin Ely 
at John F. Kennedy School of Gov- 
ernment and Janice. McCormick at 
Harvard Business School 

It found that in general there is 
as acute shortage of international- 
ly-mobile managers, anti that the 
problem is most severe far multina- 
tionals attempting to operate in 
fast-developing regions such as 
south-east Asia or eastern Europe. 

Only 35 per cent of respondents 
said their companies offered access 
to international management 
courses, while fewer than half pro- 
vided opportunities to develop lan- 
guage skffls. Half those surveyed 
said fear of losing touch with the 


company’s central activities made 
them reluctant to go abroad. 

Financial considerations seem to 
be the strongest motivator for peo- 
ple to work abroad. The three top 
“strategic inducements” were relo- 
cation assistance, a comparable 
benefits package and an attractive 
expatriate fmanrial package. 

Australia was the only area in 
which the success rate in attracting 
international executives outstripped 
the perceived need by a very wide 
margin (over 20 percentage points) 
- perhaps because of the sandy 
beaches and sunny climate. 

*The New International Executive, 
Amrop IntemationallHarvard Uni- 
versity. 




DESERT ISLAND 
MANAGER 

Yves 

Newbold 

Yves Newbold is looking forward 
to her stay on a desert island. A 
whirlwind of efficiency in her 

job as company secretary at 

Hanson, the Anglo-US 
conglomerate, she would quickly 
have .the island organised to her 
Eking. Her only worry is that 
she would settle in so well that 
she would find herself 
composing a resignation letter to 
her boss. Lord Hanson, on some 
of the electronic equipment she 
plans to take with her. 


What would you need to carry 
on your business apart from a 
fax and a phone? 

“A videophone. I could call up 
my kids and tim bank manager. 

co- see what the traffic was like 
in downtown Naples. 1 like to be 
abfe to see people’s expressions.” 


How would you keep your 
sanity? 

*T would keep fit. Fd do water 
aerobics and wear those 
repulsive great big arm bands 
him! plastic dumbbells and swing 
them through the water. Td also 
jog In the evening after the sun 
goes down. 1 ’ 

How would you busy yourself? 
*Tm assuming my brain wifi 
soften a bit So 1 would do 
compnto- games. It would be 
better thai taking back editions 
uf the Times crosswords, which 
would seem totally meaningless 
ana desert island." 


Who would accompany you? 

“I have no doubt about that Fd 
tafcp my mother. She’s Irish, 
very funny, a great mimic, and 
she’s my best friend. She is a 
most superb conversationalist, 
we never run out of things to 
say. She’d be much better than 
taking a partner. Imag ine the 
frigid silences you’d have over 
who finished the sun cream." 


What would you take for food 
and drink? 

“I could not live without my 
plug-in filter coffee maker. 
Alternatively I’d take Diet Coke. 
To eat Fd have something 
completely wicked and forbidden 
like bacon sandwiches. I could 
easily eat those every day." 

Which book would you take? 

“I'd have to look after my 
spiritual side, so it would be The 
Prophet by Kahtil Gibran. It's a 
philosophical tract: a bit Zen, 
although Gibran is an Arab." 


Quitting to pursue other euphemisms 


LUCY 

K E L LA WAY 



L et me take this chance to 
wish John Precious, the out- 
going finance director at Well- 
come. every success in pursuing his 
other opportunities. I am, however, 
curious to know what they are. 
They must be pretty special to have 
persuaded him to quit a prestigious 
job with a salary , of £200,000 or 
more. ; 

l would like to know, and I think 
shareholders have a right to know, 
a little more about why be is leav- 
ing. When a director quits his post 
suddenly it Is not good enough fora 
company to offer a limp cliche by 
way of explanation. I’m sure there 
is nothing untoward about Pre- 
cious's departure - especially as he 
has kindly agreed to stay put until 
a replacement can be found - it is 
just a shame that Wellcome chose 
to explain his departure in woolly 
toms guaranteed to raise the suspi- 
cions of sceptics. 

“Pursuing other opportunities" or 
"interests” can mean that the guy 
was no good 3rd’ has been fired: 
that he disagrees with the compa- 


ny’s policy; that he cannot get on 
with his colleagues: that he has had 
a better job offer; or that he h3S had 
a mid-life crisis and wants to gener- 
ate his own electricity on a farm. 

The phrase is just one in a collec- 
tion wheeled out for senior resigna- 
tions and sackings. Some directors 
who depart in a hurry cite a desire 
to “spend more time with the fam- 
ily", while others refer to “clash of 
management styles”. This last one 
is less opaque, as it usually means 
there has been a mighty row. 

The reluctance to explain is 
regrettable. It is also understand- 
able. Crisis, a biotechnology com- 
pany, recently fired its chief execu- 
tive claiming that his performance 
had been wanting. Now the com- 
pany is being sued both for unfair 
dismissal and defamation. 

It is a pity that the law encour- 
ages companies to mince their 
words. Directors are paid a great 
deal of money, and if they do not 
deliver the goods they deserve to be 
sacked and shareholders deserve to 
be told about it If truth were the 


norm, there would be no niggling 
suspicions when a director genu- 
inely found that the pull of those 
other interests was irresistible. 


I was intrigued to read that the 
president of the Board of Trade is 
considering an investigation into 
the affairs of Impregnatos Ltd. it 
seems there was an ugly scene at 
the company’s agm, with sharehold- 
ers making allegations and direc- 
tors stonewalling. 

What surprised me about this 
snippet was that it appeared in the 
June 7 1944 edition of the Financial 
Times reprinted last week. Accord- 


ing to the rest of the media's D-Day 
extravaganza the world has 
changed beyond recognition in 50 
years, but the old copy of the FT 
proves that, in business, matters 
are much the same. In addition to 
the thoroughly modem tale of cor- 
porate corruption, the news of 1944 
included familiar sounding payoffs 
to directors losing their jobs. 

The stories may be the same, but 
the way we tell them is not In 
those days there was no need to 
present events as exciting, nor to 
explain them. Neither was there a 
market for clever comment Autoly- 
cns. the Lex of the time, spent 
D-Day explaining that J. and J. 


Coleman was shortly to go ex-divi- 
dend, and forecast that the share 
price then would be the same as 
today, minus the dividend - unless 
there was any “change in the mean- 
time". Tm not sure if today’s ultra- 
discerning readers would feel happy 
paying 65p for that insight. 


Over breakfast the other day I 
found myself having a row with my 
husband over the unlikely issue of 
absenteeism. The discussion was 
amiable enough until he declared 
that women were off sick more than 
men. 

To prove him wrong, I phoned the 
people who research this sort of 
thing, like the Confederation of 
British Industry and the Institute of 
Personnel Management, to find they 
had no relevant figures. That didn't 
stop them speculating some said it 
was the men, others that it was the 
women who were the skivers. 

Finally, I tracked down an unpub- 
lished study at the Equal Opportu- 
nities Commission showing that 


women are off sick 5 per cent of the 
time, while men are only off 4 per 
cent I would have let the matter 
drop quietly had it not been for the 
explanation. The difference is 
entirely due to women staying at 
home to look after sick children. 
“Just what I thought” said my hus- 
band, when I triumphantly pres- 
ented the evidence. I wonder how 
many men take time off having 
been assaulted by their wives? 


Still on the subject of the sexes, the 
Equal Opportunities Unit in Brus- 
sels takes a novel approach to the 
differences between them. Prospec- 
tive employees must complete a 
form that asks them their sex, giv- 
ing them the option of m or L The 
corresponding footnote explains; 
“Indicate your choice". 


This is the last week for nomina- 
tions for the FT Mean Boss Award. 
The winners will be announced on 
June 20. 


And which film? 

J Tm very, very fond of horses, 
and as i couldn't have horses on 
the desert island, I’d take instead 
National Velvet with Elizabeth 
Taylor. I could watch it again 
and again, and sob every’ time." 

How well would you adapt? 
“Quite well I think. If I were 
allowed a pen knife Td make 
myself a house. If birds can do it 
with their beaks, 1 could 
certainly do it with my two 
hands. Td like the chance to 
develop a sense of perspective 
away from the mad daily rush of 
London life." 

What would you most dislike? 

“I hate blistering sun, so Td need 
to take my factor 25.” 

What message would you send 
back? 

“It would be to my children 
saying - 1 know this sounds 
mawkish and sentimental - 
remember I love you and 1 hope 
you are behaving yourself." 


Lucy Keliaway 



TI» Swvoy wffl report on too outcomo of the April elections, and profile Sooth Africa’s new president. 
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WORKING LIF 


READING MATTER 


Dirty laundry 


Sticking a real US dollar bill on 
the front cover of a book is almost 
guaranteed to get an author 
UOtked; unfortunately it is equally 
likely to mean the book itself Is 

so bad. it needs that kin d of hype 
to get anyone interested. 

The Laundrymen purports to 
tfll i tbe in si d e story of "the world's 
third largest business'*; hyping had 
books certainly looks like becoming 
the world’s second largest business. 
It does nothing of the sort. The 
gl on the front cover is said to have 
a high statistical chance of 
containing traces of cocaine; on 
that basis you would need about 
500 copies of this book to be able 
to conclude “gee, that was a wow 
of a read". 

Sure, laundering money is a 
hugely-troubling phenomenon, 
destructive of lives, economies, 
nations. And an authoritative book 
on the subject would be a major 
event. 


myself asking: where are the 
footnotes? That is not pedantry; 
in a book of this sort, we need to 
be convinced that an the stuff _ 
which does not come from cuttings 
is credible. Of course, Robinson 
ran - does - fall back on the 
ripftrnrfi of confidentiality, though 
I did not have confidence in his 
deserving my trust One e x a m p l e 
from many possibilities, Robinson 
writes that “apparently he's (Fidel 
Castro) also approached the 




hr *> 




So what Is the problem with this 
one? Leaving aside some of the 
more egregious factual errors - 
1 would relish the chance of flying 
in a “Leerjet” (page 61), for example 

- its central flaw is, ironically, in 
keeping with the subject matter. 

For Jeffrey Robinson - or his 
publisher - encourages readers 
to think they are getting something 
new, insightful and challenging. 
Whereas what is actually on offer 
is a rather shoddily-written 
cuttings' job. Robinson knows his 
way round the world's databases; 
he has sifted them all, it feels, in 
the effort to track down established, 
already written-up, cases of clearly 
proved money-laundering. For 
anyone interested in the subject, 
there is nothing here which has 
not already been thoroughly cooked 
op elsewhere. 

Robinson holds up for display 

- not contempt, exactly - a global 
rogue’s gallery of convicted 
criminals. But throughout I found 




The Laundrymen. By Jeffrey 
Robinson. Published by Simon & 
Schuster. 34Qpp r price £ 17.99 


Gary Mead 


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The Guide to Registering Companies in Moscow 
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EATING OUT 


GIZMOS 


A munch at 
the Apple 


Bi-Bop deluxe 


Chinese and the North Koreans, 
proposing to help them develop 
their nuclear capacity in exchange 
for oiL” That apparently speaks 
worrying volumes. 

Most peculiarly of all, Robinson’s 
style and tone clearly indicates 
that he is half in love with the East 
car, rich lifestyle, globe-trotting 
image of the unsavoury characters 
be writes about. Imagine Helio 
magazine doing a photo-spread on 
a Colombian drug baron; if that’s 
your idea of a good read, buy this 
book instantly. 


It is called Mrs Ascheris steamed 
Vegetable Torte and it tends to 
turn beads when served in New 
York’s Park Avenue Cafe, 
coa-dating as tt does of a brightly 
coloured tower of layered peppers, 
squashes, zuchlnis, spinach, 
cauliflower and broccoli, topped 
with a puree of eggplant, potato 
and leek. 

The dish typifies the exuberant 
style of resident chef David Burke, 
one of Manhattan's best known 
exponents of New American 
cuisine, who imaginatively mixes 
traditional staples of US cooking 
, wtfh more exotic ingredients and 
presents the dishes in dramatic 
fashi on. Other examples of his art 
include chilled lobster salad with 
toasted saffron, couscous, endive 
and candied lemon; or carpaccio 
of marinated tuna and seaweed 
wrapped noodles. 

The Park Avenue Cafe is a 
relative newcomer to New York's 
rich choice of top quality 
restaurants. But over the past two 
years it has become a fashionable 
alternative to Mid-town 
Manhattan’s leading established 
exponents of contemporary 
American cooking, namely Aureole, 
Arcadia, the Quilted Giraffe and 
the Sign of the Dove. 

The food is exciting (though some 
t critics complain it is a little too 
contrived), the wine list is strong; 
and the service is attentive, without 
the American waiter’s irritating 
tendency to over-familiarity. 

It is a good place for business 
discussions because its tables tend 
to be well spaced apart - unlike 
some of its cramped rivals, where 
you may find yourself sharing your 
confidential negotiations with the 
next tables, or your attention 
wandering to the much more 
fascinating details of a 
neighbouring diner's love life 

The decor is conducive to both 
types of conversation, blending 
romantic American country folk 
art with a dash of hard-edged city 
sophistication. . . 

In short, it has the class one 
would hope for from a Park Avenue 
address, without any of the 
stuffiness that often accompanies 
it 

A meal for two, including a 
decent bottle of wine, tax and a 
20 per cent tip, will cost $180 to 
$200. 

Park Avenue Cafe, 100 Bast 63rd 
Street, New York. Phone: 644-1900. 


There are few things the French 
like better than techno-toys. Only 
a few years ago they were extolling 
the virtues of Minitel, the 
interactive information system 
that might be more of a bumpy 
B-road than an information 
superhighway, bat is now a fixture 
of Gallic fife. However, the 
techno-toy of the moment is the 
Bi-Bop, the portable phone 
launched last year by Trance 
Telecom. So Car the Bi-Bop is only 
available in Paris and Strasbourg: 
But the cafe terraces and garden 
squares of those cities are already 

peppered with phoneaholic Bi-Bop 
owners chattering into their natty 
black plastic phones. 

The Bi-Bop has its drawbacks. 

It is not after all, truly portable. 

It can only be used within reach 
of a borne, one of the transmission 
boxes that France Telecom has 
fitted to the Paris and Srasbourg 
lamp-posts. That said, so many 




Martini Dickson in New York 


Alice Rawsthora in Paris 








FINANCE 


Tax-free benefits 
for those made 
redundant 


homes have been installed that 
there are few places in Paris or 
Strasbourg where you cannot use 
a Bi-Bop, and it can receive calls 
from - and make them to - 
anywhere in the world. 

Also, the Bi-Bop does have its 
advantages. One is Us price, it only 
costs FFr990.00 (around £100) to 
buy the phone itself - plus FFr5450 
for monthly rental and FFr29.00 
a month for access to an 
ansamachine - which makes it 
much, much cheap® than a 
conventional portable phone 

The Bi-Bop also has the benefit 
of good design. It is small enough 
to be popped into a pocket but not 
so small that the user risks falling 
into the trap of looking as though 
they are conducting a love affair 
- or clinching a business deal - 
by mumbling into the palm of their 
hand. 


Few anptoyees tike to consider 
the possibility of redundancy. But 
if you are farad with the prospect 
of being “surplus to requirements", 
you should at least be able to get 
benefits, such as redundancy 
counselling from your employer, 
witborrf being taxed for them. 

Usually, benefits provided by 
an employer are subject to income 
tax. But David Harris, barrister 
at Prince Henry’s Chambers, 

London, says benefits provided 
with the sole or main purpose of 
helping the employee adjust to the 
end of his employment, and/or 
enabling him to find other gainful 
employment, are tax-exempt 

“Gainful'* employment can 
include sett-employment and even 
positions which carrying an 
honorarium, such as a job with 
a charity, the position 

must involve payment other than 
expenses. 

As long as this condition is 
fulfilled, the employer can provide 
advice and guidance. This can take 
the form of the services of an 
outplacement counsellor, 
professional preparation of a 
curriculum vitae; training or 
retraining; the use of office 
equipment or even the services 
of a secretary. 

The exemption also extends to 
travelling expenses met by the 
employer as long as they are in 
connection with the tax-exempt 
benefits. So they can include 
travelling from the employee's place 
of work to a counsellor, a training 
centre or an interview and even 
visits to prospective clients, if you 
are t hinking of seff-emptaymeoL 
ft is highly unlikely though that 
reimbursement for travel expenses 
from the employee's home will be 
tax-exempt 

Harris says that although the 
employer cannot restrict the benefit 
to any pertiodar type of employee 
(such as directors). It can be limited 
to a particular class so that an 
employer can require his staff to 
have had five years’ service before 
giving than this benefit. 

Relief is not available for services 
performed outside the UK, so an 
overseas employee who is made 
redundant cannot benefit from the 
exemption unless he returns to 
seek “gainful employment" in 
Britain. If he has been working 
abroad for a long time, he may not 
be liable to pay UK tax, anyway. 


Schehera za de Danesbkhu 


T wo sportsmen sit in a 
court of law. A judge 
decides, if, during the 
course of a game, one of 
them was guilty of inflicting Inten- 
tional injury upon the other. It is a 
strange scenario. It seems inappro- 
priate, almost to the point erf absur- 
dity. that the elephantine weight or 
the judicial process should be 
brought to bear upon that fleeting 
rush of blood, that momentary loss 
of control, that ridiculous clash of 
wills; that it should be brought to 
bear upon a “tackle”. 

Surely the person who inflicts 
intentional Injury is the thug with 
the jagged bottle? There might be a 
few such people on the terraces; but 
on the pitch? How can the two are- 
nas be in any way compared? Does 
not the question of guilt or inno- 
cence, so clear-cut in the case of the 
football hooligan, become amor- 
phous and - again - inappropriate . 
when applied to the essentially 
unreal world of the game? 

Yet the question has been raised 
over the pak few weeks. Ex-Chelsea 
player Paul Elliott had tafs knee and 
his career wrecked in a tackle by 
Dean Saunders (then of Liverpool, 
now of Aston Villa), and took Saun- 
ders to court for compensation. In 
order to receive any money. Elliott 
had to establish that Saunders’ 
tackle was reckless or dangerous; 
that he had been going for the man 
and not the balL This question, one 
of the most commonplace in foot- 
ball and snap-judged by referees 
perhaps every week in the season, 
had, through the severity of Ell- 
iott's injury, become a different 
question; whether Saunders was 
guilty or innocent. 

Yet it is hard to believe that any- 
one in the case thought of it in that 
way. Surely Elliott didn't really 
believe that Saunders was "guilty" 
of anything? Surely there was some 
deliberate, If necessary, obfuscation 
of the issue; Elliott wanted money, 
rather than the condemnation of 
Saunders, but he could not get the 
first without the second? 

It was an absurd situation; not 
because of the claim itself, which 
Elliott had every right to make, but 
because of the way in which he had 
to make it It wasn't even as if the 
question of guilt or innocence was 
easy to judge. Certainly the effects 


FINANCIAL TIMES MONDAY JUNEJ3Jgg4_ 


STYLE 


BUZZWORD 


Binoculars: 
one man’s view 


Euro 


It Is hard to get by at Epsom, Ascot 
or a Test match without them. But 
binoculars are a bit like fire 
extinguishers - you only use them 
tardy and then in somethin? of 
a harry. And like fire extinguishers 
if they don’t work immediately 
you won’t get a second chance to 
deal with the matter in hand • 
whether it's picking out your horse, 
glimpsing a migratory Redwing, j 
or identifying a yacht off Cowes. 

So binoculars must be sensible 
and easy to use. This automatically 
rules out some of the smaller pocket 
binoculars, made by Nlkkon or 
Pentax and available In many high 
street shops; however cute and 
stylish they look they’re too fiddly 
to adjust and too uncomfortable 
to hold for any length of time. 

This a lso goes for the Zeiss ladies 
binoculars, which look terrific but 
are awkward to use and cost over 
£300 (Zeiss’ largo: offerings are 
handier but come in at over £700). 

At the opposite end of the scale 
there is the Russian-made Helios 
range at less then £50 for on honest 
pair oT binoculars. These are cheap 
but they're not the best optically 
and they’re distinctly old-fashioned 
in use. 

The serious binocular user wUl 
probably go far something like a 
Viking or a Bresser - both of which 
despite their names are essentially 
Japanese. And this is the important 
part - provided that the optical 
equipment inside your binoculars 
is Japanese there's tittle difference 
in image quality between most 
makers, only one of price and 
usability. 

The Viking Firefly for instance, 
is a compact ladies binocular 
offering lOx magnification, a 24mm 
lens, anti-glare coating and a 
moulded grip. It is easy to use and 
highly effective. The larger Vilring 
model, with lOx magnification but 
a 42mm lens (for a bigger, brighter 
view) costs around £200. It fits the 
palm nicely and can be adjusted 
far focus and eye postion almost 
without thinking. 

Bresser binoculars are of Centum 
design but Japanese manufacture. 

Its 7x50 Action model ia tough and 
workmanlike at £120; while the 
heavy traditional !2xSd Corvette 
design costs £244 and will give a 
fine image, but at the expense of 
a little more shake. Indeed, a 
magnification of anything over 
I2x is likely to be unhelpful since 
the bigger the magnification the 
more shake Is transmitted. Officiate 
at Cowes use vast binoculars with 
2Qx magnification but they have 
to rest them on tripods to keep 
them stiff. Zoom binoculars offering 
variable magnification (ram dx to 
20x are fun, but (quite apart from 
shake) the extra lenses inside 
reduce image quality and the ska • 
of the field of view. 

Whatever you choose make sure 
you give it a reasonable trial first 
Look far any curvature of straight 
lines In the field of view, and watch 
far Imperfect odour correction - 
do whites come out yellow or bluish 
rather than white? You’ll need a 
decent photographic shop or optical 
equipment specialist if you want 
to do tt properly. Somewhere like 
Broadhnrst. Clarkson and Fuller 
in Farringdon Road, London, is 
agoodbet 




The European otectkgtt wfthtW 
-Euro-candidates . u Euro«e»ticr 
and "Buriwaithuslasts" are the 

latest confirmation "Euro* he*_ 

become the moat highly charged of 
political terms. A decade ago it sent 
Js to sleep. But Its meaning fepeods 
on who « using It. 

In Australia it has a double Bft a» 
the name tor a kangaroo, accordant 
to Webster's dictionary, fa Swept , 
the prefix is as old at the continent. 
"Euro" comes from “Europe" 

(Greek; Europe), the Pho en i c i an 
princess abducted by the Greek god 
Zms who appeared in the farm nU 
white huff The noun and adjective 
-European" have spawned the 
Inevitable “Europeanise* and 
"Europeanisation". 

In UM9 George Orwell spun 
"Eurasian" (combining Empire aad 
India, meaning an Angkt-S&xon wfan 
spent a lifetime fa India) into the 
power block "Eurasia" for "Mat". 
Then fa 1963. investment banka . 
Hambies and Warburgs created 
-Eurodollars" and "Eurobond*". 
Since then, with the UK's Impending 
membership of the European - 
Community fa the UNs 
and the money 

market expansion 
in the 1960s. 
"Euro" has 
enjoyed two 
periods** 
popularity. 

During the 
19608 when tilt 
pejorative 
Eurocrat" and 
fiurospeefcr 

nodded towards 

Orwell's faceless state; . 
the political foundations of the 
word, with an anti-European 
leaning, were laid. Thorn was an 
inundation of consumer 
"Eurobabbte" in the 1970a as UK 
membership began to affect 
shoppers and suppliers, white 
economists warned of growing 
“Eurosderoais". 

fa the 1980s, “Euro" arrived as 
shonspeok lor Eurodollar Futures fa 
Chicago and New York. And the 
mid-1980s saw "Euros", meaning 
poople from Europe, used by 
American* as hr “there are Euroa 
on holiday... and ’Mia mi Vice' 
clones" (Afewafay 1989k and by the 
British In “why didn't we assert 
British Rule and make the Euros 
change to furlongs and chains...?" 
(The listener 1986). America today 
uses "Eurotrash" far Europeans in 
New York, dark of suit and thick of 
accent fa Soho or the Village, 
fa the UK. the word pulls fa two 
directions. In British polities, 
“Euro-" evokes its antithesis, not 
Asia- or America- but a feeling of 
Britishness. Politicians starting life 
as Members of the European 
Parliament became "Euro-MPS”, a 
Brussels copy of Westminster. But 
fa business. “Euro-" is a positive 
%hd unequivocal fiBrnff."Ettro-" . 
spells multinational, culturally 
adjusted. "Dun & Bradstreet’s Key 
British Enterprises” has 111 of the 
largest companies bearing the 
"Euro-" prefix, like Eurobake. 
Eurohire, Eurotec and EurotunneL 
The greatest "Euro-" remains the 
evergreen "Eurovision Song 
Contest”. The patron saint of 
television, St Clair of Assisi, could 
not have wished for better 
"Euroconvergence". 


Andrew St George 


Charles Jennings 


7dapoTn*E<p«.Ti»(afi9mMluii joa pnnWewfl! bchdd In 0 udanhoaln mum Mmnsdaf 
ST pro*maadwyb«UMd by aiker Kfac.nl qnllQramifanin far mMH>« Hu papaa. 


PremAMoeUfen 


Dean Saunders: fann«mt of inflicting intentional injury to Pan! Elliott 


SPORT: LAURA THOMPSON 



No question for 
courts to tackle 


of the tackle were horrific, but one 
might see any number that look 
more obviously reckless. This added 
another level of absurdity to pro- 
ceedings. as a parade of witnesses 
passed solemnly thought the court 
to tell it whether or not they 
thought Saunders had been going 
for the ball. The final absurdity 
came when Mr Justice Drake, hav- 
ing listened to this minutely 
observed evidence, decided he 
would, after all and nonetheless, 
abide by the instant judgment of 
the match officials. At the dmp of 
the collision, the referee had 
awarded the free kick to Liverpool; 
and the referee is always right 
It is interesting to imagine what 
would have happened had the 
tackle been completely Indefensible. 
In the Elliott case, the question of 
whether or not a sportsman can be 
adjudged guilty fa a court erf tew, 
for a misdemeanour committed on a 
playing field; was obscured by the 
attention given to whether or not 
Dean Saunders was guilty of “any- 
thing”. Everybody was absorbed In 
the tittle intricacies of what had 
happened two years ago. Nobody 
had to address the larger muddle 
that is happening now. Sport was 
let. off the hook by the fact that 
Elliott’s case rested more on the 
dreadful effects of the tackle than 
on the tackle itself. What might 
happen if a clearer cose was 
brought, in which no evidence 
could be given in favour of the 
sportsman who Inflicted the injury? 




w 


iin 




Safer 


kadc me 

Coventry 

climax 


V'.-i-: , 


Another question would still 
remain; that of intent. It Is hard 
enough to say what motivates any 
sudden assault, and It would be 
almost Impossible to prove what lay 
within the Impassioned cxnivulsfons 
that shake team sport Even that of 
Van tier Bergh, the South African 
rugby player whose studs ripped 
Joa Calterd’s head to shreds, could 
probably defend himself by saying 
that in the heat of the moment he 
lost all consciousness of the fact 
that he was walking around some- 
body's eye. 

And Dean Saunders: even if his 
tackle on Paul EUfott had looked as 
wild as the one in which Paul Gas- 
coigne wrecked his own knee, who 
could ever prove that there was 
intent behind it to harm another 
player? It is an accusation which, 
again, Is inappropriate. That Is 
where guilt fa tho tew court and 
guilt on the playing field become 
two different things. 

Sportsmen want to win; that 
desire can lead them to do things 
which are sometimes stupid, and 
some tim es that stupidity con have 
serious consequences. But the 
intention behind a sportsmen’s 
actions is so confused by aggression 
- the dangerous commodity with 
which he is always dealing - that 
he himself would scarcely be ahlo to 
analyse it. If the aggression is badly 
directed, then he is playing bad 
sport. If it Is directed to a more 
deliberate, more sinister purpose, 
then he is not playing sport at all 


f 






' \ 



i t 


IS 


MEDIA FUTURES 


J apan plays catch-up with US Haldeman: a 


T he dull, grey halls 
of Japan’s Ministry 
of Posts and Tele- 

communications 

seem an unlikely 
<*aaie for inspired visions of 
the country's high-tech future 
But for several months these 
shadowy corridors have been 
an an with activity, as bureau- 
crats have raced against time 
to come up with, a credible 
blueprint for Japan’s informa- 
tion superhighway. 

The speed and enthusiasm 
with which the MPT has 
moved has been startling. Last 
month, in a report by the Tele- 
communications Council it 
made public its vision’ of 
Japan’s advanced information 
network. The report will form 
the basis for the ministry’s pol- 
icy-making. 

It raid Japan should be well 
on the way to an advanced 
information society by the turn 
of the century, with 20 per cent 
w the population connected by 
fib reoptic cable that will allow 
speedy, two-way transmission 
of vast amounts of informa- 
tion. By 2010, such cables 
should criss-cross the nation in 
a network that would provide 
the entire population with 
access to the information 
superhighway. 

At first sight it might seem 
like another instant of Japan 
stealing a march an its compet- 
itors with an ambitious 
long-term plan to give it a lead 
in a key new technology. The 
truth is rather different Japan 
is behind the US in plans for 
an Information superhighway 
and there is little detail on how 
the ministry's report might 
become reality. 

By the MPTs own estimate, 
the programme would cost 
between Y33tn and Y55tn, with 
an additional Y42tn needed if 
the cable is to be installed 
underground. As yet there is 
no indication where funds on 
that scale would come from. 

Yet the bureaucrats are in a 
hurry for a number of reasons. 
They are under pressure to 
catch up with the US which, 
when it comes to multimedia, 
is several years ahead of 
Japan. The MPT estimates that 
by the year 2010, the informa- 
tion and communication indus- 
tries could be generating 
between 5 and 6 per cent of 
gross domestic product, or 
Yl23tn. The number of new 
jobs created could come to 



THE WORLD’S 

SUPERHIGHWAYS 


2.4m, or more than the numbe r 
employed in the Japanese auto- 
mobile industry today. 

Japan is searching for a new 
engine for economic growth. 
The post-war growth of the 
Japanese economy was fuelled 
first by heavy industry and 
then in turn by automobiles 
and consumer electronics. 
With international competition 
in both industries mounting, 
and after a long and bruising 
recession, economic strategists 
are searching for competitive 
advantage in higher value 
added fields. Multimedia is an 
obvious candidate. 

The telecommunications 
ministry is not alone in map- 
ping out a multimedia future 
for Japan. The Ministry of 
International Trade and Indus- 
try last month published its 
own report on an advanced 


At first sight 
advanced informa- 
tion networks might 
seem like another 
instance of Japan 
stealing a march on 
its competitors in a 
key new technology. 
The truth is rather 
different, reports 
Midnyo Nakaxnoto 

information programme. As 
the past architect of Japan’s 
industrial future, Mitl is 
increasingly convinced that 
added value in economic activ- 
ity will come not from manu- 
facturing but from intellectual 
activity, such as software. A 
sophisticated information 
infrastructure is crucial in fos- 
tering such intellectual activ- 
ity. 

According to the MPT’s 
vision, Japan's advanced infor- 
mation infrastructure should 
be rolled out in three stages 
over a period of 17 years. 

The first stage would be to 
connect the largest cities, pre- 
fecture! government offices 
and public facilities, such as 
hospitals, libraries and schools, 
with fibre-optic cable. This 
would link 20 per cent of the 
population. 


The target for the second 
stage, would be to link cities 
with a population of over 
100,000 and give coverage to 60 
per cent of the population. The 
final stage would aim for 
nationwide linkage by 2010. 

Plans for fi nan cin g all this , 
however, are vague. The job of 
building the superhighway 
should be left to the private 
sector, the government argues, 
and the MFT believes govern- 
ment’s role should be to pro- 
vide interest-free or low-inter- 
est loans and tax incentives. 
There could also be spending 
to promote the use of informa- 
tion superhighway services, 
especially among pub he insti- 
tutions. This could start as 
early as next spring. 

The authorities' approach to 
regulation could be equally 
Important Tight regulations 
and lack of competition have 
kept the prices of many ser- 
vices very high in Japan. With- 
out greater competition in pro- 
viding multimedia services, 
prices could be so high as to 
discourage many consumers. 
There are some signs that Jap- 
anese ministries recognise that 
the multimedia market will 
only take off with a plurality of 
service providers offering a 
wide range of services. 

The only private company 
capable of building a fibre-op- 
tic cable network of any scale 
is NTT, the telecommunica- 


tions group. It has drawn up 
plans for laying fibre-optic 
cable throughout the country 
by 2015. 

Yet by relaxing many of the 
roles that separate the broad- 
casting and telecommunica- 
tions industries - which have 
hindered the growth of cable 
TV operators - the MPT is 
attempting to foster competi- 
tion against NTT. Rules on for- 
eign ownership of broadcasting 
companies have been relaxed 
and the ministry is considering 
a plan to enable the country's 
small, independent cable TV 
operators to link up using the 
infrastructure of the relatively 
new telecommunications com- 
panies known as new common 
carriers. While the authorities 
labour over the regulatory 
issues, a swarm of private pro- 
jects are under way to test the 
practicalities of advanced 
two-way communications and 
the services they might offer. 

The National Children's Hos- 
pital and Tokyo T eishin Hospi- 
tal are carrying out an experi- 
ment linking some of their 
patients to the hospital 
through digital networks. A 
colour videophone is place in 
the patient's house to enable 
doctors to conduct simple 
examinations of their patients. 
Data on blood pressure, urine 
samples and from cardiograms 
can also be sent through the 
digital phone lines. 


Secom, a security systems 
company, and a hospital in 
Tokyo have started a service to 
provide support in analysing 
computed tomography and 
MR! images. Hospitals and 
clinics which sign up for the 
service send in CT and MR1 
images through integrated ser- 
vices digital networks for anal- 
ysis by specialist doctors. The 
analysis is then sent back by 
fax. But in future Secom aims 
to conduct the services on 
interactive networks. 

Sega, the video games 
maker, has started proriding 
cable TV subscribers with 
games-op-demand- And trading 
houses, such as Sumitomo and 
CJtoh, have tied up with US 
companies to develop home 
shopping. 

Okazaki, a city in central 
Japan, has been designated by 
the MPT as a model city for 
multimedia networks. Students 
will be able to access educa- 
tional information collected by 
the city using existing cable 
TV networks, and teleconferen- 
cing will be used for major 
school events, such as student 
board meetings. 

As projects multiply, the 
practical benefits of advanced 
communications networks will 
become clearer to a still mysti- 
fied public. 

The first m this series appeared 
on June 30 and looked at Italy 


new insight 


MAIN ADVANCED COMMUNICATIONS PROJECTS IN JAPAN 


Remote medical services: 

• The National Children’s 
Hospital and the Teishln Hospital 
in Tokyo have linked up with 
some of their patients in an 
experiment to provide remote 
medical services. 

• Secom and the Eugayama 
Hospital in Tokyo are providing 
a service to hospitals and clinics 
which enables them to send 
medical images, such as those 
obtained in computer tomography 
and magnetic resonance imaging, 
over advanced 

telecommunications lines to a 
central station, which then 
retransmits specialist analyses. 

• Nikon, Fujitsu, Kyoto 
University and Osaka University 
are conducting experiments in 
telemedicine, such as the transfer 
of X-ray photographs and other 


medical data from one hospital 
to another across telephone 
lines. 

Cable TV experiments: 

• Sega has started providing 
video games on demand for 
subscribers to two cable TV 
networks in Japan. 

• In the spring of 1995, NTT plans 
to test the combined utilisation 

of cable for CATV video 
transmission, video-on-demand, 
telephone and other services 
through optical subscriber 
systems. 

General experiments: 

• NTT Is developing applications 
for multimedia in the office, using 
high-speed, broad-band backbone 
networks operating at the gigabit 
level, using a combination of a 


synchronous transfer mode and 
optical fibre technologies. 

• Next spring NTT will be 
conducting experiments in 
high-performance electronic matl u 
electronic newspapers and other 
database services for private use. 

Public experiments: 

• The Ministry of Posts and 
Telecommunications is promoting 
a programme in the Kang ni 
Science City with the private 
sector to conduct multimedia 
experiments ranging from 
video-on-demand and TV shopping 
to personal handyphones. home 
reservation systems and video 
conferencing. 

• Okazaki, a city in central 
Japan, is being designated a 
multimedia model city by the 
Ministry of Posts and 


Telecommunications. Educational 
photos and video are bring 
digitised and the database will 
be linked by optical fibre to 
schools in the area, so that 
students can call up the data 
whenever they need it An 
interactive conferencing system 
is also bring considered for 
schools. 

• The Ministry of Education is 
setting up a multimedia promotion 
group to lay the groundwork for 
the use of multimedia in 
education. 

• Tokyo metropolitan 
government will conduct 
multimedia experiments in TV 
shopping, remote education 
services and video on demand. 

Compiled by Kimiko Kurimura 
in Tokyo 


By Dan Davidson 

The diaries of the late H R 
Haldeman, written every night 
while he served as President 
Richard Nixon’s chief of staff 
and closest confidante, have 
been published in the US in 
two formats - as a 
conventional book (G P 
Putnam, New York, §27.50) 
and on CD-ROM (Sony 
Electronic Publishing Co, 

Santa Monica, California. 
$69.95) as the Complete 
Multimedia Edition In his 
introduction. Stephen E 
Ambrose, author of the 
well-received three volume 
life of Nixon, states he would 
welcome the opportunity to 
write an entire book based on 
what Is revealed in the diaries. 

The printed version has 
instantly soared to near the 
top of the US best-seller lists. 
Newspaper articles, analyses 
by columnists and lengthy 
letters to the editor from 
Henry Kissinger have 
generated controversy. Was 
Nixon anti-black and 
anti-semitlc? Haldeman 
recounts Nixon's complaint 
to the Rev Billy Graham about 
“the total Jewish domination 
of the media", a view 
previously confined to the 
lunatic fringe. Did Nixon and 
Kissinger consider postponing 
an end to US participation In 
the Vietnam War in order to 
increase Nixon’s prospects for 
re-election? The diaries 
strongly suggest an affirmative 
answer. 

Can there be many better 
arguments against w noting 
a president to two terms than 
Nixon, who violated 
constitutional norms in so 
many ways during his first 
term, telling his subordinates 
that, in planning for his second 
term they should recognise 
that “we will have awesome 
power with no discipline, that 
there won’t be another election 
earning tip to discipline us?” 

The Haldeman diaries are 
Indispensable to any serious 
work on the Nixon presidency 
or on Henry Kissinger. But 
the epoch marking fact is that 
real research will require 
review of the CD-ROM. 

As the book indicates in a 
preface, presumably to be read 
after purchase, it Is a 


condensed version of the 
diaries. The full text, which 
is available only on disc, 
contains at least two and half 
times the words in the book. 

The book has an inadequate 
name index, with, for example, 
well over 100 references to 
Kissinger without any 
indication of the subject 
discussed. It is impossible to 
use the index for a subject 
such as wiretaps or Vietnam. 
The disc, however, permits 
the reader to enter any word, 
or combination of words, and 
move to the relevant passage 
with the selected keywords 
highlighted on the screen. 

Another useful feature of 
the disc is the ability to obtain 
instant identification of any 
individuals mentioned in the 



Diarist: Haldeman 


text. If, for example, a 
reference to a “dragon lady" 

Is obscure, a click of the mouse 
will produce a short 
biographical sketch of Anna 
Chenault. The user of the disc 
can split the monitor screen, 
with the diary entry on one 
side and the presidential log 
book and newspaper headlines 
on the other. 

Some of the remaining space 
on the disc is occupied by 700 
still photographs, 45 minutes 
of amateur movies taken by 
Haldeman, and a 120-page 
unseat letter from Haldeman, 
then in prison, to James Neal, 
the prosecutor, asserting 
Haldeman's innocence and 
giving his version of 
Watergate. 

Research may never be the 
same again. 

Dan Davidson is a Washington 
lawyer and former member of 
President Nixon’s national 
security council 


ARCHITECTURE 


Academe’s 

Coventry 

climax 

Colin Amery praises 
the new work by 
Richard MacCormac 

P atronage is the key to good archi- 
tecture. When a top British com- 
pany has the courage and skill to 
commission a leading architect 
to design one of its major b uil d in g s the 
result can be inspiring, both tar British 
business and the architectural profession. 
The new residential training college for 
Cable and Wireless at Coventry shines like 
a beacon of encouragement in a world 
where good architecture is badly held back 
by both the recession and client timidity. 

Quite simply it is one of the best and 
most thoughtful new buildings to have 
been built in England for some time. 

When it came to its search for an archi- 
tect for a new college on a rural site near 
Coventry. Cable and Wireless was wise 
enough to follow the route of a private 
competition by interviewing a shortlist of 
potential candidates. 

The company’s choice of Richard Mao- 
Cormac's firm of MacCormac, Jamieson 
and Prichard was made for two reasons. 
First, it appreciated the experience of the 
firm in the building of academic and resi- 
dential buildings. Second, Cable and Wire; 
less recognised the firm s distinction, 
Richard MacCormac had 
top of the architectural tree as president of 

^Before^ choosing. 

tour of MacCormac’s existing buddings, 
s Th £ the waterside. l*MU . «* 
hurv Building at Worcester College, 
Oxford, the New Court at Fitewilham Cd- 
lene and the more recent chapel at the 
X rollege to Cambridge. ^showed 

the clear aesthetic arid 

r .j,, nracti.ee over the last decade. 

SSSTS SSmSSTS £ 

“Sue and Wireless is relatively ronaaj 
is global in rcaintog 1 centre from 

S, ThiXo U ts,de Coventry W store - the 
University of — ? t “ 

bordered by a with assur- 

perfoetiy placed and desi MacCormac has 
ance .and lm^marion- to talk to and 
rare gifts. He is ^approach to 

refreshingly flwjJJJf His quiet thou^itful- 

architwturol detete. Hte ^ 

ness shows at every 
Wireless College. 



Atmosphere of calm is as much to do with materials as with the sense of enclosure 


The company wanted somewhere that 
immediately gave a sense of a special 
place of learning; a place where residential 
life is made dignified and enjoyable by the 
surroundings. You sense its special quali- 
ties the moment you arrive, driving past 
the water and scrunching on the gravel as 
you reach the gently modulated steps 
beneath the wave-like curves of the roofk. 

A parallel series of amgtestarey teach- 
ing studios stretch out on each side oS the 
twain entrance. As you pass through you 
reach the central Bpace of the college - an 
aval court that is partly sheltered and 
partly open to the sky. This is the heart erf 
the college: in a traditional way the refec- 
tory library and common rooms gather 
here’. The college garden separates yon 
from the residential bundings. At one end 
of the Jong garden court is the leisure ana 
fitness centre. L . 

Water plays an important part in the 
overall layout - a long rill running 
through the garden culminating to a 
waterfall beneath the leisure centre. The 
firm of Colvin and Moggridge were the 
landscape architects and they seam to 
have understood the sense of almost orien- 
tal simplicity of the architecture. The gar- 
dens. water, trees and varied surfaces 


underfoot all unify the whole site and cre- 
ate a rare feeling of another world. 

The atmosphere of calm is as much to 
do with the choice of materials as it is 
with the sense of enclosure. The specially 
made green ceramic tiles cm the wave-like 
roofs have an extraordinary capacity to 
reflect the Chang in g light in the sky. The 
stone and concrete is everywhere finely 
finished; the palette of colour inside and 
outside is natural and elegant 
There is no sense of pretension or con- 
trivance about this building. It is a place 
which is respected and Eked by those who 
work there. Prof David Ashton, the cot 
lege’s chief executive, explained how well 
the traditional collegiate qualities of the 
desig n help to cement working relation- 
ships on bis courses on advanced commu- 
nications technology. 

the architect and the client had to 
marry the everyday world of human rela- 
tionships, laboratory and dassroom teach- 
ing with a mass of high-tech equipment 
and its necessary services. This is where 
the student* learn. They do so In a new 
building that, by its beauty and careful 
planning , demonstrates that good architec- 
ture can inspire and humanise the most 
arcane technology. 



Active since 1946 in the internal iona I pa? industry. 


Cax de France is constantly developing it*. iwJiiioJogy 


and services at home and abroad. A pipeline network 


which has ■crown six- fold in fortv vears. a distribution 


network increased bv 3.500 km in 1 (, 93: Uii/ de France 


exports ibis know-how to Germ any. Russia and 


countries a> distant as Bolivia and 


C.liin n. With oue-iliiril 


if Western Europe's storage f‘apucil\ . Cuz «lc France'- 


expertise in this field is recognised worldwide and i- 


currently com rib min a In iniponum project* in the 


L'niied Stairs and t.anada. Prmidinu 


Gaz 

de France, 
a company built 
on performance. 


Stiff, n-h.dile art* 


*iip|»l\ i« mik pan 


f the sn»r\. Gaz dr I riunv »« 


ftirlin-i. ■ ■lle- 


riii'! M-rvier* 


in eiu*ra\ lou-ervainni- 


prutcciuni of iln- cm in jiiiih*i»i. 


and training. Bvcww for Gnz dr France. 


performance nl*o means eumribmiiiu 


to the i'ood of nil. 



I 






16 


BUSINESS TRAVEL 


tCl a i ■ TIMES MONDAY JUNE13I^ 


BAservies 

British 
Ai r way b " 
IwM c Wn gM 
eighth dafly 
flght 

between . 
London and New York 
from September 12 , 8» 
company anmnmeod last 



The dally Booing 7*7 
fight wU-Ioom 
HH w - t T—WBoiir 

at a48am, arriving at ttw 

abflnAKnMbtanAal 
In New York at 
The return sendee wffl 
leave Kennedy at 10pm 
r ea c h i ng Heathrow at 
1020 am the next day. 


Airport numbers rise 

Ban* hoMaymatere seeking 
stmsfana dxoad last month; 
hdped boost passenger 
numbers at the UK's major ‘ 


BAA’S airports, which indude 
Heathrcwand Gatwfck, handed 
a 7 An passengers n May, a 
0L5 per cert increase on tha 
year before. 

The lags number of chater 
fights meant Gatwfck, fr» UK’s 

biggest heflday apart handed 

7.5 per cent more passengers 
month. Stansted numbers were 
up 15.1 per os rtf, Heathrow up 

5.6 per cent Glasgow up 9.7 - 
pot cefit are! Edjnbtfftjft up 8.7'. 
percent 


Mexico Services ‘ 

Tha gro w th of air traffic 
hH— n fie mitfwr states 
ofttwIISmdlMcehilie 

wake of five qig n h g of the 

■— -*« * - - ■ •--- ■*.- 

mo# noo 

agreement, was confirmed 
tatHMk by UMIr. K wfi 


TWnpaBey, 

H I ij 1 1 iT . fit. ^ 

noc Kxa ana mxicu uny on 
Jena 11. 

. ^ - - - - ■ - 

rttflWl wn OpMdV P »7 

ttwaagh the monster end 

th en he r educed to thro e 
ttaw wooMy, hegtoatng Sr 
S eptember sect mNactlao 


HaW flights cut 

President canton has cut off US 
commerc ia l ak traffic, to Hatt 
and Inposad a ban on finance! 
feansaeflons In a bid to further 
isolate Hartfs mSftary rufere and 
face them to step down. * 

Canada teao sad that ft would 
twit commerce! ffights to Haft 
on the same day Oie US does; 
Jtra 25. Franca, the Dornrican 
Repubfc, Panama and the 
N etherlands afeo haw fights to 
Port-aii-Princft. • ; 

In retaBffion Haiffa 
mStary-backed govern me n t said 
it \wx4d dose the country’s 
airport to aS fights five days 
before tha ban goes into effect. 


Ral strike threat 



fnwohre d in t ha py di s pu t e, 

■he officiate sfid nwcbaf 
the goodwrB bofit eplB 



The 

for 24 -bour '• 

15 and Jane 22. 



TwHtdflre- 

exptodonorr .. 
Saturday ' 
caused a 
serious tire in a 
cat tunnel bang 
bufi under the 
Greet Baft waterway between 
-Denmark ^ main afandsattha 

mouth of ftoBatSc. 

' StorebaeR A/S (Great Bet$, 
tha conduction group 

: responsive for the project, said 
tha fre tested eight hours before 
being brougte under control v 
Tha tunoai is part of a 20bn 
crown (S3bn) raacifcafWunnsV 
bridge He between Zealand 
island and the European 
mainl a nd, via Funan. 


Ukely weather in the leading business centPM^' 

Mon Tu* w#d ThMr 

a*. £>* 

Itagllni (Q“ fjr> 31 Hi ** ♦ 

-at <£) « 

** Sb* 1 

j* * tt$!J 

;W ^ rn; t&iM- 
22 ^ 




M wtw ro la i ^ aa m w » Q*afcn _ 

1 impnrt -f** 1 — »«mw»»—Biwi«ia> 




Tony Walker offers guidelines for a trip to China 

How to stay as safe 
and secure as you can 



Weighing op the risks: doing business in China poses problems 

scat" - as opposed to “bard” - 


T ravel in China these 
days is not a tea 
party, as late Chair- 
man Mao Zedong said 
of the revolution. The crash 
last week near the historic city 
of Xian of a Russian-built 
Tupolev-154, killing all 160 pas- 
sengers, did nothing for 
already shaky confidence in 
China's air safety. 

Foreign visitors to China 
might follow some fairly basic 
guidelines to improve the odds 
ctf surviving their expedition. 
The first is to avoid Russian- 
built planes, which comprise 
about 10-15 per cent of China's 
domestic fleet of some 350 air- 
craft, spread among 30 or so 
airlines. 

Mr David Mahon of Mahon 
and Associates, a China busi- 
ness consultancy, says that in 
scheduling flights for clients 
he avoids Russian Antonovs, 
Ilyushins and Tupolevs. On the 
occasions when a passenger 
finds that a Russian-built air- 
craft has been substituted for a 
Boeing or an Airbus, Mr 
Mahon's advice is to walk 
away, await another flight or 
seek alternative means of 
travel 

To prepare for last-minute 
changes of plan, travel light: in 
other words, try to restrict lug- 
gage to “carry-on” items. 

Risks of travel in China, 
where more than 500 have died 
in some half dozen crashes 


The strains of travel m China 
have become a rich source of 
anecdotes, and more thaw a 
few apocryphal tales are 
exchanged by jaded 
businessmen. 

Among the more recent 
“horror” stories was one 
involving a McDonnell 
Douglas MD82 on a flight from 
Hong Kong to Qtngitao on the 
coast southeast of Beijing. 
Passengers were alarmed 
when the pilot of the Eastern 
Airlines aircraft tilted the 
wings from one side to the 
other in an apparent attempt 
to get fuel running smoothly 
to the engines. 

Travellers in China become 
used to delays In an 
overloaded network, but they 
also require nerves of steeL 


since 1992, mean that help on 
the ground is virtually a neces- 
sity. Agents abroad might lack 
expertise in local conditions. 
Ticket confirmation is also dif- 
ficult to ar rang e at a distance, 
given the chaotic Chinese air- 
craft booking systems. 

China consultants are also 
recommending these days that- 
their client^ travel first class, 
since escape may be easier 
from the less crowded forward 
compartment In selecting 
regional airlines, choose carri- 
ers with established reputa- 
tions, such as China Eastern 


A New Zealand businessman 
r e ported that an aircraft in 
which he was travelling 
earlier this year made four 
abortive attempts to take off, 
before giving up. 

Passengers are also obliged 
to endure faulty landing* and 
other mishaps that would be 
rare in the west A Chinese 
safety study found that In the 
first five months of this year 
there were 17 such mishaps, 
including wings scraping the 
ground On landing 

Hijackings are another 
problem: travellers over 
China’s southern coastal 
regions stand a fair chance 
of making an unscheduled 
detour to Taiwan. Last year, 
there were no fewer than 10 
hijackings to Taiwan. 


from Shanghai and China 
Southern from Guangzhou. 
Airlines based in remote 
regions should be avoided 
where possible. 

Western aviation experts 
attribute China’s bad air safety 
record to the increase in air- 
lines: there are not enough 
experienced pilots and mainte- 
nance staff to go round. Air 
traffic guidance systems are 
also inadequate. 

In addition, many airports 
have not been designed to 
receive jets which require 
greater length of runway than 


propeller-drive aircraft Pilots 
come into land hard and fast 
as if they want to get the pro- 
cess over and done with. 

Travellers to China have a 
range of options other than air 
travel. But again arrangements 
are hard to make at a distance. 

Ferries are a reasonably 
pleasant and secure means of 
travel between coastal cities, 
such as Shang hai and Ningbo 
in the south, or Dalian to Tian- 
jin or Qingdao in the north - 
provided you can secure first 
or second-class accommoda- 
tion. “Soft sleeper” or "soft 


rail travel is another method of 
getting around China, 
although the process is slow. 

Road travel is another 
option; but because of con- 
gested roads - there are few 
expressways - and anarchic 
driving, it can be nerve-wrack- 
ing. Hotels will assist in 
choosing a car and driver. 

No means or Chinese travel 
these days is especially appeal- 
ing. and is unlikely to be so for 
years to come. In China, busi- 
ness is not easy, and neither is 
getting from A to B. 


Vision of winged giants 


Paul Betts on plans for 600-seater superjumbos 


T he world’s two biggest 
commercial aircraft 
manufacturers, Boeing 
of the US and the European 
Airbus consortium, are step- 
ping up studies to develop a 
new generation of superjum- 
bos, capable of seating 600 or 
more passengers. 

Mr Jean Pierson, Airbus 
chief executive, confirmed this 
month that the European 
group would soon start mar- 
keting a GOO-seat aircraft - the 
A3XX - to a selected group of 
international airlines. 

This new project would chal- 
lenge Boeing’s dominance of 
the large aircraft market with 
its 747-400 jumbo, which can 
already seat 450 to 500. But 
Boeing is also at an advanced 
stage of studies to build an 
even larger jumbo: either a 
completely new aircraft or a 
bigger derivative of the 747. 

At the same time, Boeing 
and Airbus are jointly studying 
the development of an even 
larger aircraft seating more 
than 800. in the socalled Very 
Large Capacity Transport 
(VLCT) project 
Although the sitting indus- 
try has yet to recover its finan- 
cial h ealth, the manufacturers 
believe there will be demand 
for a large aircraft by the turn 
of the century. “By around 
2002, airlines will have to con- 
sider replacing their existing 
747-400 fleets,” says Mr 
Pierson- More significantly, a 
big aircraft will also be neces- 
sary to cope with air traffic 
growth and increasing conges- 



BA’s impression of a double-decker, dwarfing a Boeing 737 


tion at busy airports. 

“Already only 33 airports 
account for 50 per cent of 
world air traffic," explains Mr 
Claude Terrazzoni, the head of 
the commercial aircraft divi- 
sion of Aerospatiale, the 
French aerospace group with a 
37.9 per cent stake in Airbus. 

So far only two big airlines 
have expressed strong interest 
in acquiring superjumbos. “We 
would be willing to go forward 
with an aircraft of 600 scats 
offering the same long range 
but also 20 per cent lower open 
ating costs than the 747-400,” 
says Sir Colin Marshall, British 
Airways chairman. 

A superjumbo would help 
BA tackle some or the growing 
runway congestion problems at 
its London base of Heathrow, 
But it would also give the UK 
carrier the opportunity to offer 
more facilities for both busi- 
ness and economy passengers. 


BA has already made its own 
design studies for the configu- 
ration of such an aircraft, 
including the introduction of 
inflight business offices 
equipped with faxes, tele- 
phones and personal comput- 
ers, a cinema-style inflight 
entertainment room, and even 
a work-out section for fitness 
addicts. 

“We see the use for such an 
aircraft on Far East routes. 
Australasia services and across 
the Atlantic.” Sir Colin 
explains. ■ ■ 

Singapore Airlines has also 
expressed strong interest. Mr J 
Y Pi llay, the Singapore Airline 
Group chairman, recently said 
his carrier would initially buy 
five superjumbos to serve 
routes to the UK and continen- 
tal Europe as well as trans-Pa- 
dfic routes and - if It secured 
the necessary rights - across 
the Atlantic from London. 




PEOPLE 


Shakey first steps of 
black empowerment 

Nthato Motlana tells Patti Waldmelr 
about the challenges facing black 
business in the new South Africa 



N thato Motlana is 
South Africa’s most 
prominent black 
businessmen - and 
that is a revealing commentary 
on the state of black business 
in the post-apartheid era. 

Motlana is a medical doctor, 
a decent soul, a man of tbe 
best intentions. But his record 
as a businessman can scarcely 
explain the large infusions of 
corporate power which he has 
recently received from white 
business, eager to divest itself 
of peripheral assets in the 
name of black economic 
empowerment 

Tbe recipients have been 
Motlana and a handful of other 
black leaders with the right 
political connections, but often 
only a passing experience of 
business. 

Perhaps they are best seen 
as caretakers for the new gen- 
eration of black businessmen 
growing up freely in a world 
without apartheid. But in the 
meantime they control several 
billion rands worth ctf assets; 
and at least as far as Motlana 
is concerned, his plans for 
managing the assets remain 
difficult to discern. 

Motlana is understandably 
pleased with the recent elec- 
tion of his lifelong friend and 
patient. Nelson Mandela (he is 
Mandela’s personal physician) 
to the Presidency of the new 
South Africa. 

When I arrived to interview 
him in the coffee shop of a 
Johannesburg hotel - on a 
public holiday, he has no free 
time on any other day - Mot- 
lana proudly announces that 
there is only one member of 
the new cabinet whom he does 
not know welL 
His pride would be touching; 
if that fact were not so much 
part of the problem: the suspi- 
cion that political expedience 
prompted Ids elevation, that he 
and other black South Africans 
(deprived by apartheid of capi- 
tal skills, education and oppor- 
tunity} could be tempted to 
peddle political influence to 
gain economic power. 

Motlana. 69, who has had a 
long and respected career as a 


community leader, has no time 
for this argument Tve been 
criticised as one of those who 
is going to get rich as a result 
of so-called black economic 
empowerment 

“My answer to such critics is 
that I got involved in business 
in the late 1960s when the (rul- 
ing) National Party took a res- 
olution that ’elXe kaffir moet *n 
baas he’ (every black must 
have a boss) and that’s where 
we begin.” 

Far from accepting that a 
black man could never be boss, 
Motlana formed a series of 
companies over the past 25 
years, yet he does not try to 
hide the fret that almost all of 
these businesses failed. His 
first company, formed to man- 
ufacture school uniforms, went 
under because manag in g 
director stole company funds; 

tbe next, a manufacturing firm 
producing hair products, deter- 
gents and car wash liquid, 
failed because of lack of man- 
agement skills. A venture in 
chicken fanning proved no 
more successfuL “You have no 
idea how much money i’ve 
lost” Motlana concludes. 

His only notable success has 
been the Lesedi Clinic. South 
Africa's first private black hos- 
pital - and even that had to be 
bailed out by a white share- 
holder, Afrox, which recently 
took 10 per cent of the equity 
and a management contract to 
prevent its collapse. 

This is not to deny the formi- 
dable, perhaps insuperable, 
obstacles which, apartheid put 
In Motlana’s way. “Everything 
we did was illegal. Black busi- 
ness in this country has 
always had to break the law.” 
he points out, reminding the 
listener that until the 1980s it 
was virtually impossible for 
blacks to obtain property for 
business use. Banks would not 
lend In the absence of collat- 
eral - and this was unavailable 
because under apartheid 
blacks were not allowed to own 
the freehold of their homes. 

He is understandably proud 
of his achievement in conduct- 
ing any business at all nnrfpr 
those circumstances. “I hate 


people who say to me, you are 
empowered by politics, because 
Fm not! I battled at the coal 
face when it was almost impos- 
sible to do so. 

“So don’t talk to me about 
black economic empowerment 
because I don’t come from that 
bloody genre, I come from a 
time when it was impossible 
and I did it! That’s where I 
come from, not from some 
bloody political patronage!” 

B ut thp challenges facing 
Motlana now are of a 
wholly different order. 
Last year he became chairman 
of Methold, a black-owned 
holding company. 

The Afrikaans insurance 
giant Sanlam recently granted 
Methold a controlling stake in 
Metropolitan Life, an insur- 
ance company which targets 
mainly Macks. It was one of 
the first major corporate deals 
to empower black Sooth Afri- 
cans. 

As part of the deal, Sanlam 
ceded control to Methold, 
which borrowed R137m from 
the state’s Industrial Develop- 
ment Corporation to finance 
the purchase of 10 per cent of 
MetLife shares. But Methold is 
struggling to place the shares 

with black shareholders, who 
lack the capital or inclination 
for share purchases. 

Motlana is also chairman of 
Corporate Africa, his chief 
investment vehicle, ft controls 
the largest black newspaper, 
the Sowetan, after Anglo 
American Corp, which previ- 
ously controlled the Sowetan 
indirectly, ceded a majority 
stake to Motlana and other 
black leaders. 

The deal was financed via 
Corporate Africa's stake in the 
cellular telephone network 
MTN, which it gained in turn 
through political pressure. 

All these deals have been 
criticised for empowering the 
black elite far more than the 
man in the Soweto black taxi, 
whom Motlana claims to repre- 
sent 

An amiable man clearly 
unused to tough questioning. 
Motlana becomes increasingly 


strident when confronted with 
this charge; but he lacks a con- 
vincing defence. 

“You can ask, what value 
does Motlana add to any of 
these busin e sses,” says a local 
businessman Involved in one 
of the deals. “The answer is 
not a lot But then you have to 
ask: who else is there?" Apart- 
heid not only stifled black busi- 
ness, it prevented the emer- 
gence of natural leaders. 

And that Is precisely what 
Motlana wants to rectify. 
“We're interested not in some 
token director like Motlana 
who sits on the board, hut in 
seeing upward mobility of 
blacks within organisations, 
that’s where the real power is," 
says Motlana. 

“Sometimes we speak of 
black economic empowerment 
and we demand total con- 
trol... that is unrealistic. We 
lack the financial muscle... the 
management skills... all man- 
ner of things we have been 
denied for many years. Tra 
looking forward to companies 
where we have a van, der 
Merwe and a Khumaio (typical 
Afrikaner and African names). 

“You can call it tokenism if 
you like, but it’s going to be 
the story of South Africa: van 


der Merwe and Khumaio. The 
Afrikaners did the same thing; 
when the National Party took 
over in 1948, it was Levine and 
Kruger. The banks in South 
Africa were all run by English 
men; today most of the major 
banks are run by Afrikaners.” 

Motlana’s vision of a South 
Africa run by Africans is 
scarcely consoling to whites: 
“For the first time we blacks 
are going to sit back and 
employ whites and see them 
sweat on our behalf - hardly 
a sentiment which his patron. 
Nelson Mandela, would 
endorse. 

But whatever Motlana's 
other shortcomings, he can 
boast perhaps the mast essen- 
tial quality of a successful 
businessmen: the desire to get 
rich. He quotes Chinese leader 
Deng Xiao Ping approvingly: 
“It is glorious to be rich. That’s 
my favourite quotation. 

“I’m looking forward to the 
creation of black Danny Gor- 
dons (founder chairman of the 
highly successful liberty Life, 
the South African insurer).” If 
Motlana ran foster the creation 
of younger versions of the rich 
and flamboyant tycoon, he will 
have done his bit for the new 
South Africa. 



‘English’ 
Frenchman to 
head Unice 

Francois Perigot is the first 
Frenchman to take over tbe 
presidency of the increasingly 
important European 
employers’ body Unice. writes 
David Goodhart Unice has 
a vital lobbying role in 
Brussels and in areas like the 
European social dimension 
it even has a formal 
negotiating status. 

As these responsibilities 
have grown so has the 
potential for tension, within 
Unice between the business 
cultures of different European 
countries, especially between 
the aggressive tone of Britain’s 
employers and the cnnspngiia? 
manners of much of 
continental Europe. 

Domestically, Perigot is 
regarded as a liberal and was 
roundly condemned, even by 
other businessman, fear 
suggesting that a GATT 
agreement might be good for 
French business. “That earned 
him his spurs and really 
clinched the Unice job,” says 
one senior Unice member. 

He is also happy to take a 
tough line against tbe 
European Commission on 
issues like the imposition of 
European works councils in 
multinational companies. And 
having spent 15 years of his 
working life at Unilever - 
running both the Spanish and 
French subsidiaries - he is 
more than familiar with 
British business culture. “He 
is virtually an English 
Frenchman," says his friend 
Howard Davies, head of the 
Confederation of British 
Industry. 

But the golf-playing Perigot 
may not always see eye-to-eye 
with the CEL Last week he 
was quoted in the French 
business daily Les Echos as 
saying that the European 
social dimension “is both 
substantial and positive” - 
a sentiment to which few 
British business leaders would 


put their names. 

In any case, Perigot is well 
versed in the politics of 
employers* organisations; since 
1986 he has been president of 
the main French employers' 
tody CNPF, a job he is not 
expected to continue for long. 

Ponzellini 
moves to EIB 

Jacques de Larosfere's 
European Bank for 
Reconstruction and 
Development has been raided 
fora second time, writes 

William Hall than thrw» 

months after Mario Sardneffi, 
number three in the EBRD, 
left to head Banca Nazkmale 
del Lavoro, the European 
Investm ent B ank has poached 
another EBRD high flier. 

Massimo Ponzellini, 43, who 
helped set up the EBRD and 
beads its tourism real 
estate department, is the 
youngest of three new recruits 
to the EIB’s top management 
committee. Tbe others are Luis 
Marti, 57, an adviser to 
Spain’s ministry of economy 
and Wmhi*, and 
Panagiotis-Loukas 
Gennimatas, 45, a senior 
adviser in the Bank of Greece. 

The EIB lends roug hly t en 
times as much as the EBRD 
and Ponzellini will be one of 
the six vice-presidents 
reporting to Sir Brian Unwin, 
the EIB’s new president The 
intention Is that the EIB’s 
vice-presidents will have an 
increased hands-on role. 

Ponzellini Is a former 
personal assistant to Romano 
Prodl, a fellow Bolognan who 
has just banded in his notice 
as chairman of IBI, Italy’s 
huge debt-ridden state bidding 
company. Much of Ponzeliinl’s 
early career was sprat in 
various parts of IR1 but at the 
EBRD be has made his mark 
by pioneering project-related 
lending and taking equity 
stakes. 

“The challenge at the EIB 
will be to get closer to the 
private sector." says 
Ponzellini, who hopes that 
as one of the few bankers at 
the top of the organisation, 
he can help revitalise an 
institution which in terms of 
balance sheet size ts bigger 
than the World Bank. 

Skinner on brink 
of huge power 

Pacific Gas and Electric's 
carefully laid plans for 
management succession called 
for Stanley Skinner, president 
and chief operating officer. 


to take over as chief executive 
a year from now, writes Louise 
Kehoe. Instead, Skinner will 
move into the top job at 
America's biggest power utility 
next month. 

By accelerating its plans, 
PG&E aims to give its new 
chief executives head start 
an what may be one of tbe 
most difficult periods in the 
history of the company as 
California moves to deregulate 
its electricity supply industry. 
Skinner, 56, will succeed 
Richard Clarke, 64, who will 
remain chairman of the board. 

The next few years will 
produce greater change than 
we have seen in tbe last 10 or 
15 years combined,” says 
Clarke. 

A recent proposal by the 
independent California Public 
Utilities Commission aims to 
reduce electricity prices by 
creating a competitive market 
The plan calls for all electricity 
users in the state, including 
resident ia l customers, to be 
allowed to buy electricity from 
the supplier of their choice 
by the year 2002. It also 
establishes a streamlined, 
performance- 
based rate-setting system. 

PG&E, which has long 
operated its electricity supply 
operations as a regulated 
monopoly in many parts of 
California, is about to go 

through the same kind of 
upheaval that has reshaped 
the US telecommunications 
industry over the past decade. 

Skinner will play a 
pioneering role in mnnag jjpg 
.the transition to deregulation 
in the US electricity industry. 
California’s plans for 
deregulation o! energy utilities 
are advanced, and other states 
are expected to follow Us lead. 

* Han s Beckmann, an 
executive vice president of 
Union Bank of Switzerland, 
is to join tho UBS board next 
year and will replace Robert 
Favarger as vice chairman. 
Heckmann’s Job as head of 
corporate and institutional 
banking will disappear at the 
end of the year when his 
division merges with the 
corporate finance, primary 
markets and merchant 
banking divisions under Pierre 
de week, currently In chance 
of the corporate finance 
division. 

■ Robert Castaigne, 48, has 
been appointed chief financial 
officer of Total and joins the 
five-man executive committee 
headed by Serge Tchuruk An 
engineering graduate of the 
Institut Industrial du North 
he has been assistant chief 
financial officer since 1990. 


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Th6 summer rrktsic festival at 

Highland FMc outside Chicago 
opens on Thursday with the first of 
six jazz concerts featuring the Count 
Basie Orchestra, Wynton MareaBs, 
Cteo Lafcne (below) and Dave 
Brubeok. The Chicago Symphony 
Orchestra then takes upresdence 
for eight weeks, with soloists 
Including Hermann Pray, Midori, 
<2don Kramer 
: and Shura 

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Apartframthe 
music, Raytnla's 
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with downtown . 

Chicago. , 


TATE GALLERY 

R-B.Kteq is an American who came 
to England m the late 1950s, under 
■ the provisions of the G.I. Bifl. to 
study painting. He has remaned here 
ever since. At the Royal College in 
London Ibs contemporaries wore 
David Hockney, Aten Jones and 
Derek Boshter and fiielr friends in (he 
gkxy-daya of “Pop goes the Easel 1 *. 
Kitaj remains his own man, and his 
work gives the Be to the thought that 
the tradition of the ambitious figure 
composition, dense with tmpflcation, 
was ever irrelevant or moribund. 
Shows of recent work and prints are 
already open at Marlborough Fine Art 
and the V.& A The fuB retrospective, 
which opens at tha Tata on 
Thursday, is many years overdue. 


Britain's lost ballerinas 

Anachronistic teaching threatens our classical dance, reports Clement Crisp 


M any are called but 
few are chosen. 
Children take up 
ballet, thrilled by 
what they may 
have seen in theatre or cm televi- 
sion; in its day, The Red Shoes did 
more to Inspire young dancers than 
anything since Anna Pavlova's 
world tours. And baHet-training is 
fine for the young, encouraging a 
physical co-ordination which can 
promote a mental discipline no less 
beneficial. 

But a career as a dancer in a 
classical ballet company is vastly 
different The combined rigours of a 
religious order and Olympic train- 
ing are comparable: I do not sup- 
pose that either co ntains quite such 
obsessive concern with the minu- 


tiae of means, nor such chance of 
failure. 

And yet, despite the implicit hard- 
ships, young people decide to try for 
that short - often over by the 
thirties - and far from heady life in 
ballet. A recent audition for English 
National Ballet attracted 500, 
mostly British, aspirants. After a 
first weeding-out, just over 100 
remained, and of these Derek 
Deane, ENB’s artistic director, and 
his panel of teachers, found not one 
dancer suitable for the demands of 
a company that gives 200 perfor- 
mances a year. Shock Horror, of 
course, because Deane has made 
public issue of a matter which he 
believes to have serious implica- 
tions far his nnm|Mmy and hfMICfl far 
the future of ballet in Britain. 

He has been obliged to look to 


artists in Italy, France and America 
far the forthcoming London seasons 
at the Coliseum and Royal Festival 
HalL Deane's argument, which has 
caused scene much-needed flutter- 
ings in ballet's dovecots where the 
birds seem unwilling to stretch 
their wings, concerns a lack of seri- 
ous grounding, even of a will to 
compete in classic ballet 
Technical standards are higher 
today and, as Deane notes, “British 
teachers don't always tafca this fafa* 
account Dancers are athletes - aes- 
thetic athletes, maybe, but athletes 
nonetheless - and training must 
always bear this in mind. About 
half the dancers I took into the com- 
pany last year needed retraining so 
that, they did not hpmmo injured. 
With our heavy work-load, we must 
have dancers whose physique and 
abilities can sustain a very demand- 


ing schedule rtf' performance.” 

The other problem is psychologi- 
cal rather than physiological. 
“Apprentice dancers in this country 
also seem shy of ambition, of drive. 
These are not qualities of the Brit- 
ish temperament But look at the 
dancers of the Paris Op6ra Ballet, 
sustained by the brilliance of their 
tprrinifgl training, or anngiriw the 
American attitude towards danHng 
with its 'make or break' belief that 
one must use one’s b 1 «hh«« to the 
best, or quit” 

Ballet training responds to a 
national ideal. In the Soviet Union, 
dance reflected the demands of the 
new socialist aesthetic, it was pow- 
erful and yea-saying yet with enor- 
mous respect far the great classical 
past. American ballet mirrored a 
faster, more acute and energetic 
culture. By contrast, ballet in 
Britain now seems underpowered. 

Over the past decades I have 
reported with unfailing admiration 




on the Paris Op6ra troupe - the 
evenings given by Jeunes Danseurs, 
the Opira School performances, pin- 
point those qualities of professional 
gloss and security Deane seeks. In 
America, New York City Ballet and 
its School of American Ballet are 
the exemplars of brightest skill. Bal- 
anchine once said that he might be 
“remembered as a teacher”. The 
training he initiated and supervised 
sought (and found) ideals of clarity, 
speed, musical acuity, which are as 
much part of his genius as his cho- 
reography. To dancers in class who 
were not driving themselves hard, 
he would say: "What are you saving 
yourself fori" 

Deane has noted a weakness of 
the “English" style in ballet nowa- 
days. The former virtues of classic 
harmony, ease, have waned. The 
En glish manner was formed under 
the guidance of Dame Ninette de 
Valois, whose school and company 
were the mains pring of British bal- 
let from the 1930s onwards. She fos- 
tered a style that was elegant, mod- 
est and expressive. But It has not 
grown with recent years. British 
dancers now acquire a mhrpri bag- 
gage of influences from teachers of 
different schools. Identity seems 


unclear. 


Internationally, there is now a 
greater emphasis on physical bril- 
liance in ballet The arrival of the 
Bolshoi Ballet in 1955 opened our 
eyes to a more exultant way of 
dancing. Developments since then 
have encouraged audiences to ask 
far greater and more extreme mus- 
cular expression from dancers. 
Some choreographers make much 
more searchingly physical, and per- 
haps athletic, demands on their 
interpreters than in the past Virtu- 
ousity is something audiences 
always adore and it is not always 
provided by British dancers. 

Comparison with Russia suggests 
how vital is a coherent system of 


training. The schooling shaped by 
Agrippina Vaganova, the accepted 
means for ballet training since 
Soviet times, from earliest steps to 
last professional days, endows the 
body with exceptional wisdom as 
wefi as dignity and physical power. 
It ex plains every movement justi- 
fies every step. A Russian ballerina, 
working with ENB a few years ago, 
said to me: “Vaganova taught us 
how to dance. The girls I see here in 
class have to learn for themselves." 


D eane’s associated 
concern is with the 
absence of sufficient 
finan cial support - 
through grants, 
funding - for dance training. For a 
child seeking a professional dance 
career, expense can be prohibitive if 
grants are not available. A two year 
course at the ENB's own recently 
established school, for example. 
At the Royal Ballet 
School, our leading school of 
classical ballet training, a two year 
course costs £16,446. Inevitably 
many promising pupils are lost at 
the financial hurdle, 

But, Deane insists, problems 
really begin at the start of a 
professional career “It is a 
completely different way of life. 
You are on your own, and if you 
don't have a solid basis of serious 
work in your body, then you are in 
deep trouble. 1 * 

“Is dancing difficult?” I once 
asked Natalya Makarova. “Oh yes. 
Very difficult indeed", was the 
answer. If it is to be any good, it 
must be difficult, as every dancer 
knows. Not to provide classical 
dancers - extraordinary, dedicated 
beings - with the best skills, and 
the ability to use them, is to 
diminish them, and the art they 
serve. Deane's comments must be 
heeded. 

English National Ballet will be 
appearing at the Coliseum from July 
25; and at the Royal Festival BaU 
firm August 2 




Ballet teaching reflects a national 
ideal. Have we got the classical 
dance we deserve? The film that 
launched a thousand pfife SEotra 
Shearer (far left) and Ludmilla 
Tcherina in The Red Shoes (1948). 
Today, outmoded teaching, a 
failure of will and lack of subsidy 
means British dancers are losing 
out, says Derek Deane (left) artistic 
director of English National Ballet 



Aldeburgh Festival 

The rivalry 
that 

stimulates 

Although they were two of the 
leading composers of their day, Brit- 
ten and Stravinsky only exchanged 
passing glances. A degree of rivalry 
is evident on both sides, culminat- 
ing in Stravinsky's comment about 
Britten's War Requiem that he 
could hardly hear the music for the 
“Battle of Britten" chorus of 
applause from British critics. 

The Aldeburgh Festival has cho- 
sen Britten and Stravinsky as this 
year's theme. Besides featuring 
major 20th-century figures who 
draw audiences, the pairing affords 
intellectual stimulation. The post- 
war period found the two composers 
responding to musical trends in 
very different ways and yet they so 
often trod the same ground. Stra- 
vinsky himself commented grudg- 
ingly, “I seem to have shared too 
many titles and subjects with Mr 
Britten.” 

At Friday's opening concert both 
composers had to be featured. As 
the Stravinsky item Aldeburgh 
chose The Flood, one of the larger 
scores from the composer's 
neglected later years. This is one of 
the subjects where the composers 
overlap, although the concert (per- 
haps wisely) did not allow a direct 
comparison: Britten’s Noye's Ftudde 
is scheduled to be heard later in the 
festival. 

The Stravinsky has generally 
been thought a lapse from his usual 
rigorously high standards. It was 
written for television, and a desire 
far popular approval (some thing he 
envied Britten) may have led to a 
softening of his gritty intellect The 
story of the flood and Noah's ark - 
taken in part, like Britten's, from a 
Chester miracle play - is told in 
fast narrative style, with some wit 
and copious knowledgeable refer- 
ences for the observant yet these 
favourite Stravinsky traits have 
been reduced to a lowest common 
denominator appeal. 

The Flood is difficult to classify. It 
was staged during Stravinsky’s life- 
time (as part opera, part ballet part 
play with music) but at Aldeburgh 
was given simply as a concert per- 
formance. Oliver Knussen con- 
ducted the BBC Symphony Orches- 
tra, crucially making sure all the 
words could be heard, both from the 
soloists and the chorus. The story 
flashes past as though in a strip 
cartoon. One wonders how there 
would be time to take in visual dis- 
tractions as weUL 

On either side we had two pieces 
of music for the dead: Mahler's Tod- 
tenfeier (the first version of the 
opening movement of his Second 
Symphony) and Britten's Stnfonia 
da Requiem - another clever pair- 
ing which threw up other connec- 
tions. other resonances. The festival 
promises more imaginatively- 
planned concerts in the same vein. 

Richard Fairman 


Interna tional 

ARTS 

[Guide| 

■ BERLIN 

CONCERTS , _ 

Philharmonic Mariss Jansons 
conducts the Berlin Phjwwj* 
Orchestra tomorrow, Wed andThurs 
In works by Weber, Szymanowski 
and Dvorak, with violin soloist Daniei 
Stabrawa. Jansens also conduds 
a popular concert at the WaldbOhne 
on8unC2548 8132)- Uwe Gronostay 
conducts the Berlin Radio 
Symphony Orchestra and 
Philharmonic Chorus on Sat in 
Janacek's Glagolitic Maos and 
«, Kodaly's Te Deum (229 8413) 
SchauspieJhaus Biahu inbai 

Berlin Sympho^ 

Orchestra on Thure, Fn ana wn 
in works by Kodaiy. Chopin and 

Musorgsky/Ravel, with piano sdoid 
Peter Rfisei. Heinz R6gner 
the Berlin Radio Orchestra onjjun 
m Brahms. Respighi and Reger 
(2090 2156) 

OPERA/OANCE 

Deutschland ha fie Steven Pmlott s 
arena production of Carmen, 
conducted by Jacques De^fe. 
opens on Fri and runs daily till Ju ne 


23 with changing casts including 
Agnes Battsa/Denyco Graves, Jos6 
Carreras/Marto Malagnini and Simon 
Estes (3038 4444) 

Deutsche Oper A new 
contemporary dance programme, 
featuring works by New York 
choreographers Mag Stuart, MoGssa 
Fenley and Karote Armttage, can 
be seen on Wed and SaL This 
week’s repertory also includes - 
Tosca, Don Carlo, Aida and 
Meisterslnger (341 0249) 

Staatsoper unter den Linden The 
Michael Gielen/Ruth Berghaus 
production of PeHdas et Mtfsande 
is revived on Sun (repeated June 
25, 28). Repertory also indudes 
Tosca, Salome and Die ZaubeiflWe. 
Felicity Lott and Ann Murray give 
a song redtal next Tues (200 4762/ 
2035 4494) 

■ NEW YORK 

theatre w J 

• Broken Glass: set in New York 
in 1938. Arthur Miller’s latest play 

is a short, discursive and compelling 
study of paralysis in the face of 
crisis (Booth, 222 West 45th St, 

239 6200) 

• Three Tall Women: a moving, 
poetic play by Edward Albee, 

dominated by the huge, heroic 

pertorrnance of Myra Carter. She. 
Jordan Baker and the drofl and 
delightful Marian Seldes represent 
three Generations of women trying 
to sort out their 

Broadway at 76th St, 239 6200) 

• Medea: Diana Rigg grves a 
magnetic performance in this 
SSSflondf EUripides; ttgdj. 
Kiport from London sAknejda 
Theatre directed by Jonathan Kent 
Till June 26 (Longacre. 220 


West 48th St 239 6200) 

• AH In the Timing: six sparkling 
short plays by David ives add up 
to one enchanted evening (John 
Houseman, 450 West 42nd St 239 
6200) 

• Angels In America: Tony 
Kushner’s two-part epic conjures 
a vision of America at the edge of 
disaster. Part one is Mitienhim 
Approaches, part two Perestroika, 
played on separate evenings (Walter 
Kerr, 219 West 48th St 239 6200) 

• Four Dogs and a Bone: John 
Patrick Shanley's satiric comedy 
about movie- making and power 
plays In Hollywood (Lucffle LorteL 
121 Christopher St 924 8782) 

• Laughter on the 23rd Floor 
Nefl Simon’s 27th Broadway play, 
about a group of writers trying to 
come up with a new show, Is one 
of his finest comic efforts. Directed 
by Jerry Zaks (Richard Rodgers, 

226 West 46th St 307 4100) 

• An Inspector Calls: J.B. 
Priestley's 1947 mystery thriller in 
an award-winning production from 
Britain's National Theatre, directed 
by Stephen Daldry (Royals, 242 
West 45th St, 239 B200) 

• She Loves Me: the 1963 Bock, 
Harrack and Masteroff musical is 

a delicate, unabashedly simple story 
with afl the humanity, integrity and 
charm that Broadway's 
mega-musicals lack (Brooks 
Atkinson, 256 West 47th St 307 
410 (?) 

• Carouseh Nicholas Hytneris 
bold, beautiful National Theatre 
production from London launches 
Rodgers and Hammerstein towards 
the 21st century (Vivian Beaumont 
Lincoln Center, 239 6200) 
DANCE/MUSIC 

State Theater New York City 


Ballet's Spring season runs daily 
except Mon tin June 26. This week’s 
programme includes Balanchine’s 
Mozartiana, Peter Martins' Barber 
Violin Concerto and Kevin O' Day's 
new work for the com pany's 
Diamond Project (870 5570) 
Carnegie Hall The Solti Orchestra 
Project a professional training 
workshop, gives a concert tonight 
under Georg Solti, featurtng 
Wagner's Metetersingor overture 
and symphonies by Shostakovich 
and Beethoven. A second concert 
win be given next Tues (247 780(9 

JAZZ/CABARET 

• Horace Silver and the Saver 
Brass Ensemble open an 
engagement tomorrow at the Blue 
Note (131 West 3rd St near Sixth 
Ave, 475 8592) 

• Vernal Bagneris offers a 
substantial tribute to Jetty Rod 
Morton at Michael's Pub, where 
Woody Allen continues his Job as 
clarinet player every Monday (211 
East 55th St 750 2272) 

• Bobby Short, singer and 
showman, is in residence at Carlyle 
Hotel, giving royal treatment to 
gems by Gershwin, Blington, Berlin 
and Cole Porter (Madison Ave at 
76th St, 744 1600) 

• Maureen McGovern, longtime 
exponent of swing -era music, 
presents a programme of classic 
World War Two songs at the 
Rainbow & Stars, daily tfll Sat (30 
Rockefetter Plaza, 632 5000) 

■ PARIS 

DANCE 

Palais Gamier Paris Opera BaHet 
is currently showing two 
programmes of 20th century 


classics. The first consisting of 
HaraJd Lander's Etudes (1952), 
Jerome Robbins' In the Night (1970) 
and William Forsythe’s In the Middle 
(1987), ends its current run on Sat 
and next Tues. The second 
programme, comprising works by 
Antony Tudor, Paul Taylor and 
Kenneth MacMillan, opens on Fri 
and runs till June 28. The Nurayev 
production of La Bayaddre has a 
two-weak run at the BastiSe opening 
on June 29 (4742 5371) 

Thtifitre de la VI Be Lyon Opera 
Ballet is in residence this week with 
two programmes: Maguy Marin's 
production of Coppelia and an 
American evening comprising works 
by Bfll T. Jones and Stephen 
Petronb. June 25-30: CompagnJe 
PhBIppe Genty (4274 2277) 

OPERA 

Opera Bastffle Final performances 
of Tosca, staged by Wemer 
Schroeter and conducted by Spans 
Argkris, are tonight and Fri, with 
Galina Kalinina, Giacomo AragaH 
and Sergei Letferkus/Jean-Philippe 
Latent Carmen is revived on Sat 
for a month-long run, with changing 
casts ied by Marta Senn/Kathryn 
Harries, Sergey Larin/AJberto Cupido 
and Alain Vemhes/Gino Qufflco. 
Jose- Luis Gomez's staging is 
conducted by Serge Baudo/Cyril 
Diederich (4473 13QQ). The Paris 
Opera School presents a staged 
performance of Poulenc's Dialogues 
das Carmelites at Palais Gamier 
on Sun (4742 5371) 

Op6ra Comtque Roberto Alagna 
and Nueda Fodie sing the title roles 
in Gounod's Romdo at Juliette In 
a production conducted by Michel 
Plasson, opening on Jun 24 for eight 
performances (4286 8883) 


Chjitefet A new production of 
Wagner's Ring, staged by Pierre 
Strosser and conducted by Jeffrey 
Tate, opens with Das Rheingold 
on June 25 (repeated June 29. July 
2) and Die WaJkOre on June 26 
(repeated June 30, July 3). The final 
two parts of the cycle will follow 
in October (4028 2840) 

CONCERTS 

Theatre des Champs- Bys^es 
Tonight Jean- Claude Casadosus 
conducts Orchestra National de 
Lflle in works by Prokofiev and 

Brahms, with mezzo Ewa Podles. 

Tomorrow: Philippe Herreweghe 
conducts Orchestra des 
Champe-Byshes in Beethoven, 

Berlioz and Mendelssohn (4952 
5050 ) 

Salle Pteyol Tomorrow: Vladimir 
Ashkenazy piano recital. Wed, Thursc 
Lawrence Foster conducts Orchestra 
de Paris in works by Berlioz, 
Mendelssohn and Enescu, with 
piano soloist Moura Lym party. June 
21: Maurizfo Pollini (4561 0630) 
BasifiQtje de Saint-Denis 
Tomorrow: John Nelson conducts 
Strasbourg Philharmonic Orchestra 
in opening concert of Saint-Denis 
Festival, with soloists Juliet Booth 
and Yuri BashmeL Sab Dmitri 
Hvorostovsky. June 22: 

Rostropovich conducts Britten’s 
War Requiem. June 23: Teresa 
Berganza. June 26 and 28; Josd 
van Dam (4813 1212) 

JAZZ/CABARET 
T.S. Monk, son of Thetonious, is 
in residence this week and next 
at Lionel Hampton Jazz Club- Music 
from 10.30 pm to 2 am (Hotel 
Meridien Paris EtoHe, 81 Boulevard 
Gouvion St Cyr. id 4068 3042) 


ARTS GUIDE 

■Monday: Berlin, New York and 
Paris. 

Tuesday: Austria, Belgium. 
Netherlands, Switzerland, Chi- 
cago, Washington. 
Wednesday: France, Ger- 
many, Scandinavia. 

Thursday: Italy, Spain, Athens, 
London, Prague. 

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 
(Central European Time) 
MONDAY TO FRIDAY 
fec/Super Channel: FT Busi- 
ness Today 1330; FT Business 
Tonight 1730, 2230 

MONDAY 

NBC/Super Channel: FT 
Reports 1230. 

TUESDAY 

Euronews: FT Reports 0745, 
1315. 1545. 1615, 2345 

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY 

NBC/Super Channel: ft 
R eports 1230 

Sky News: FT Reports 0230. 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports £230 

Sky News FT Reports 0430. 
1730; 


i 










FINANCIAL TIMES MONDAY JUNE )3 1994 


Samuel Brittan 


Beware Ivy League, 
central bankers 


C asual observers 
might get the impres- 
sion that European 
insurers are in the 
grip of takeover fever. Com- 
mercial Union's announcement 
last week that it is poised to 
buy France’s sixth biggest life 
insurer. Groups Victoire. for 
some tfemsbn (£L45bn), is 
the latest in a recent flurry of 
deals. It is also a farther etxam- 
ple of consolidation as the 
industry prgares to adapt to a 
new avid mare liberal regula- 
tory regime. 

By the beginning of next 
month European Union mem- 
ber states must implement new 
legislation which completes 
the deregulation of their mar- 
kets. And as Europe emerges 
from recession, insurers appear 
to be becoming increasingly 
acquisitive as they prepare for 
the competition which will 
I result. 

In January, Switzerland’s 
Winterthur bought one of Ger- 
many's biggest insurers, DBV, 
for an estimated DM900m 
(£360m). Last autumn, Vic- 
tolre’s owners, Compagitie de 
; Suez, title French ffaanrfai con- 
glomerate, sold off VIctoire’s 
Germany subsidiary in a deal 
worth FFr2 Obn to France's 
Union des Assurances de Paris. 

And in March 1993, Sun Alli- 
ance, one of Commercial 
Union's UK rivals, became the 
biggest insurer in Denmark 
whan it paid KrL27bn 
to buy business erf wafafa. 
a company pushed into receiv- 
ership after an unsuccessful 
effort to expand. 

Commercial Union's foray, to 
be finnnrpd through a mri tu u ft 
of debt, rash and equity, is the 
most significant European 
acquisition by a UK insurer for 
20 years and one of the biggest 
acquisitions of a French com- 
pany by any UK business. 

Commercial Union has long 
harboured European amhWnng 
- It acquired its Dutch subsid- 
iary in 1973. But for the UK 
insurance industry as a whole 
- which has traditionally 
focused overseas activities in 
the United States and other 
En gtigh^Mairing territories - 
the deal marks a change in 
direction. 

“Europe is our hnmp market 
from which we seek to 
expand," explains Mr Tony 
Wyand, Commercial Union's 
finance director. “A lot of peo- 
ple at the political level 
approach Europe with 
ingrained sus picion. But more 
and more business people 
regard the Continent as a sig- 
nificant opportunity to 
inm>3<a > profita bility ." 

Althoug h the acquisition will 
leapfrog Commercial Union 
into the European industry's 


Last week's 
central bank- 
ing symposium 
organised by 
the Bank of 
England was 
attended by 
central bankers 
from 128 coun- 
tries. The overt themes of the 
conference were central bank 
independence, low or zero 
inflati on and how to achieve it 
But there was a subtext which 
reflected more nearly the main 
concerns of the most important 
bankers present, but which 
was almost entirely absent 
from the conference papers. 
This was whether it was 
enough just to concentrate on 
restraining consumer prices, or 
whether the bubbles which rise 
up and burst in the capital 
markets also need attention. 

There was a justified 
scepticism about returning to 
capital market controls. Direct 
intervention in markets for 
long-term assets obviously did 
not appeal either. This left 
open only one option within 
the pre vailing - framework. This 
was to take into account in 
monetary policy decisions, not 
only consumer or product 
prices, but bond prices and 
even equities and real estate as 
welL 

What would be the purpose 
of the whole operation? One 
justification might be that 
large surges in asset prices will 
ultimately destabilise product 
prices if allowed to go too far. 
But the real reason that 
central bankers lose sleep is 
different. It is a fear that a 
slump in asset markets will 
one day threaten the solvency 
of large h anks whom they win 
have to bail out as a result, as 
in the case of Continental 
Illinois. 

There are also grounds for 
anxiety about the way in 
which central bankers have 
became dependent on academic 
economists of the mainstream 
US Ivy League variety. 

An example occurred in the 
conference paper. Modem 
Central Banking, by Professor 
Stanley Fischer of the 
Massachusetts Institute of 
Technology, who is soon to 
become an assistant managing 
director of the International 


Price taml 

Zero inflation v price level faceting 
6A* 


Zero Inflation 



Smok Sea tact 

Monetary Fund. I refer to his 
strong preference for a target 
for inflation over a target for 
the price krveL 

An infla tion target means 
that any upward overshoot in 
inflation above the_ target 
range is not corrected. Bygones 
are treated as bygones and the 
price level base from which 
future infla tion is estimated 
drifts upwards. The difference 
between the two is shown in 
the chart. With an inflation 
objective, a series of modest 
unavoidable errors pashes the 
price level up over some 
decades to a level four or five 
timps as high as at the starting 
point 

Fischer admits that with his 
preferred inflation objective, 
the price level would not be 
predictable over generations. 
So Alan Greenspan's definition 
of stable prices as a state in 
which inflatio n did not enter 
significantly into business 
rfaoigions would be violated. 

Fischer's reason for 
accepting this fault is his 
extreme fear of the 
deflationary episodes that 
would be required to correct 
overshooting, if a target for 
prices, rather than their rate of 
change, was adopted. 
A s s umin g that central hankwr a 
tried to correct half of any 
error in the ensuing year 
output and employment could 
fluctuate violently. 

This interpretation is a 
travesty erf what price stability 
meant when we had it The 
author lrimsplf mentions that 
the same level of prices 


prevailed in Britain in 1844, in 
1881 and in 1914 under the gold 
standard. But that standard 
did not mean foflt the Bank of 
England had to reverse any 
rise in prices over the horizon 
of a short-term forecasting 
model. 

Ttiere were several years at a 
time in which prices rose or 
fell; and over the ce ntury as a 
whole, prices ranged between 
70 and 130 ( taking 100 as a 
price index for the years just 
mentioned). Price stability 
meant that looking ahead 
prices were as likely to fall as 
rise; and that the best bet in 
long-term planning was that a 
pound in 30 years' time would 
be the same kind of measure as 
a pound today. 

The result was due to a 
policy regime, based on the 
ultimate convertibility of notes 
and da pnaite into gold. It did 
not depend on having and 
manipulating a model 
purporting to show how to 
manag e output and prices OVBT 
the next few quarters. 

Wbat is the moral? 
Economics as taught in the US 
East Coast universities of the 
United States is not to be 
written off as necessarily 
wrong or bogus. But it does 
need to be treated with 
scepticism. 

Mainstream North American 
economics is more like the 
speculations of physicists on 
the origins of the un i verse or 
the nature of time than the 
kind of physics used in 
splitting atoms or larnirhing 
rockets. 



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Mid-life change 
for insurers 

Recent takeovers show how the European industry 
is preparing for liberalisation, says Richard Lapper 


“premier league”, Mr Wyand 
suggests f hat- many of the ben- 
efits stemming from ec onomies 
trf scale will merge only In the 

fong wr term 

To a degree its tuning - just 
three weeks before the l July 
ripariitep — js coincidental and 
Commercial Union's approach 
to tho <teai uainstakinrfF nego- 
tiated ova - the last three to 
four months, reflects ti» adop- 
tion cC a more realistic attitude 
to European expansion by 

many m p i panwe 

First, it is becoming clear 
that despite the, achievement erf 
a liberal market framework the 
development of a g»mmwp sin- 
gle European, insurance mar- 
ket could be a slow process. 

By July 1 European Union 
member states must imple- 
ment new rules which allow 
insurers licensed in any state 

tO trade thr yHi gteib,! 1 ftp iiriinn 

Price control and rules giving 
local regulators control over 
the types of insurance policies 
available must be abolished. 

But in practice most Euro- 
pean markets are already liber- 
alised in these respects. Price 
control, effectively limited to 
motor liability iri sn r awf«» , Tia* 
disappeared in most EU coun- 
tries - except Germany, Italy 
anti some smaller markets. 
Across the Continent, in line 
with long-established UK prac- 
tice. the focus of regulation is 
on ensuring the financial 
health or solvency of insurance 
companies. 

At the same time the EU 
directives will have no impact 
on a range of other factors 
which are likely to restrict 
cross-border competition, espe- 
cially insofar as the needs of 
TPdf pMn ffl c oDsrantt s *■ istlisr 
than corporate buyers - are 
concerned. 

Europe's biggest insurers, 
such as Italy's Generali, Ger- 
many's Allianz arid France's 
UAP, dominate their local mar- 
kets partially because the 
agents who sell their products 
exclusively tend to enjoy high 
degrees of customer loyalty. 

Tax rules vary sharply 
between different states and 
are unaffected by the new leg- 
islation. Differences in tax 


Hour Com merci al Union measures up 
Before and after the Vkdolredeal - 


income from continental Europe 

SLSatm 


Income from ooittimntal Ewopo 
StZfbn 



Total pramtan Income 
wedudng acquisition 
£5J87bn 


Total pranwm fcmsu e p u -famw. 
after aoqtialtlon of Vletato* eubektelaaa 
SMBbn 


C om pared with loading Euro insurers 
(1933 actual or estimated premium hcrane) 

ABanz Germany 


EfaMon 

2 S.6 

lAO 


Swiss Re 


Swttzariand 

France 


BAT V 

--inckidMmmiamincoawofFtatMra j 

Exetangas plus Eight Stir and «ed Dunbar 


Germany 

tety 


CoBaiwreW Urtion 3 


^ Pro fonaa «iar Colanto atataHtai 
* PM loan star DBV aquftWan 
3 Pli o*o« —al ta , Vlo*olrsaqMMbon 


treatment have a crucial 
impact on the life Insurance 
market, where sales are often 
driven by tax advantages. 
Although British life insurance 
policies frequently produce bet- 
ter returns for policyholders, 
this is sometimes at the 
wpw»«a of higher risk and vol- 
atility to which consumers in 
France and Germany have 
proved to be averse. 

In addition, local regulators 
will continue to enjoy some 
power, and could restrict the 
extent to which overseas com- 
panies can compete. In particu- 
lar, they can limit the free- 
doms of companies whose 
policies are deemed to conflict 
with a legal principle known as 
the “general good”. 

There are fears, for example, 
that some regulators could 
limit the ability of insurers to 
vary the premium rates 
charged to customers on the 


0 5 10 15 » 25 30 

Sowok BZW auitat FT 

grounds that such moves 
would be discriminatory, for 
groups such as ethnic minori- 
ties. 

Second, it is partially the 
problems created by an over- 
hasty approach to European 
expansion which have given 
Commercial Union its current 
opportunity to expand. Many 
observers believe companies - 
such as Suez - paid too much 
to build their European 
operations in the late 1980s, in 
preparation for the first phase 
of single market regulation. 
Rules lifting restrictions on 
cross-border trade In large 
commercial risks - the 
socalled second non-life direc- 
tive - were implemented by 
member states in 1990. 

Suez iterif was »m>hlp to sus- 
tain its aggressive European 
strategy after acquiring the 
Victoire group in a takeover 
valued at FFr27.4bn in 1989. 


Denmark's Hafcia was pushed 
into receivership and Norway^. 
Uni Storebrand forced to. 
restructure after launching a 
joint plan to take over Swe- 
den’s Skandia, with the goal of 
creating a Scandinavian insur- 
ance giant capable of compel- . 
mg with its larger European 
rivals. 

A number of other compa- 
nies made smaller, less ambi- 
tious, acquisitions in a bid to 
establish a toehold. But few of 
these deals brought lasting 
benefits and some., such u 
Guardian Royal Exchange's 
acquisition of an Italian motor 
Insurance company, left huyere 
with heavy losses. 

**A decade ago the major 
companies were desperate to 
establish their toehold in 
Europe. This quest typically 
resulted in making an exorbi- 
tantly priced, though not nec- 
essarily large, acquisition In 
one of the fast-growing 
southern European markets,” 
says Mr Michael Huttner. ana- 
lyst with BZW. the securities 
house- 

-Over the last few years 
there has been a definite 
change in approach,” says Mr * 
Huttner, who believes Insurers 
are much more likely to con- 
sider alternatives to acquisi- 
tion. The success of direct tele- 
phone sales in the UK has 
spurred a number of compa- 
nies to set up new operations 
in other EU states as an alter- 
native to purchase. 

Winterthur, which owns the 
second biggest telephone 
insurer in the UK. ChurcMU, 
recently set up another opera- 
tion in Denmark, for example, 
while its Swiss rival, Zurich 
insurance, announced its 
intention earlier this month to 
set up a new telephone insurer 
in Switzerland, which it 
intends to extend throughout 
Europe. 

Mr Wyand, who is part of the 
management team which has 
led Commercial Union's recov- 
ery since its disastrous US 
losses in the early and mid- 
1980s, is anxious to downplay 
any accusations of hubris. 

-This is a strategic decision 
taken without regard to 
premium volume." he explains. 
Five years ago, companies 
typically paid prices equal to 
twice the annual premium 
income of the businesses they 
acquired. 

By contrast. Commercial 
Union has a bargain paying 
Suez a price equal to about 
half Victoire’s annual 
premiums. “Size Is the 
consequence of success not the 
cause. We have obtained 
critical mass at a price we 
believe is economic.” Mr 
Wyand insists. 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Lenas transmitted should be dearly typed and not hand written. Please sec fox for finest resolution 


Objectivity 
and less 
rhetoric 

From RK Essex. 

Sir, “Europe loams smalt in 
UK voters’ eyes” (June 8) is a 
worthy article hearifinp. but I 
really must take issue with 
some of the rhetoric used. 

“Mr Major's dismal domestic 
record", “a painfully slow eco- 
nomic recovery" and “the larg- 
est tax increases in recent 
memory” are more In tune 
with the Daily Mirror. Since 
I the first comrnfint is nnn-spe- 
cific one should concentrate an 
the latter two. 

Over the past 18 months all 
I successive forecasts of eco- 
nomic g r owth have been 
revised upwards and the latest 
industrial output data, released 
on June 8, indicate something 
akin to a boom. 

Unemployment has been foil- 
ing for most of the past 15 
months and nobody predicted 
that Not, I wou ld respectfully 
suggest, circumstances synony- 
mous with painfully slow eco- 
nomic growth. 

On personal taxation, figflal 
policy has indeed been unex- 
pectedly tightened and the 
media has certainly concern , 
trated the public’s minds an 
that 

But why no mention of the 
monetary loosening and who 
at the time of the last election 
would have predicted base 
rates at 535 pa 1 cent two years 
hence? A little more objective 
reporting, please. 

R K Essex, 

23 Add Green, 

Add, Leeds LS168JX 


R&D: the crucial distinction 


From Mr David DamanL 

Sr. Dr Muhrey of The Save 
British Science Society 
(Letters, June 9) and others 
concerned with the question of 
fop financing of research mid 
development, must make a cru- 
cial distinction: between the 
views taken by Investors 
through fo« pricing of shares 
on the stock exchange, and 
what company managements 
believe the views of investors 
to be and what the stock 
exchange does. 

Many company directors are 
convinced that the stock 
exchange takes short-term 
views. They may therefore i 
take actions on that assump- j 
tlon, for example to restrict 
R&D expenditure, which can 
lead to unfortunate conse- 
quences for the UK But evi- 
dence on the stock exchange 
itself is that long-term pros- 


pects, and the virtues of R&D 
expenditure (when properly 
explained, which is an impor- 
tant point), are in foci com- 
pounded in stock exchange pri- 
cing mechanisms; the evidence 
is very much in that direction, 
although not completely so. 
Anyway, the stock exchange is 
a rational place. 

The solution to this problem 
is not for the government to 
act on false assumptions by 
taking (almost by definition) 
Inappropriate actions. The cor- 
rect response is to educate 
ffinnaggnimt and others in the 
efficient market theory. But 
how can this be done? 

The academic work on this 
subject is vast, based on papers 
which have won a Nobel Prize. 
Yet, for example, the Commons 
trade and industry committee 
concluded that “research indi- 
cates that the stock market 


undervalues long-term invest- 
ment” on the basis of one aca- 
demic paper alone. How many 
parties to this debate can artic- 
ulate the possible defects in 
the capital asset pricing 
model? 

This is a difficult and in 
same ways a non-in tidtive sub- 
ject. But it is irresponsible to 
come to conclusions without 
reading and discussing the 
great mass of statistical and 
logical evidence. 

There may. of course, be 
macro-economic reasons why 
industrial investment should 
be planned on a short-term 
basis and high dividends paid 
out That may be an even more 
important subject for discus- 
sion. 

David Damant, 

Beaufort Bouse, 

IS St Botolpk Street, 

London EC3A 7JJ 


Keyboard configured by design not chance 


From DJ Paul 
Sir, The true moral of the 
QWERTY keyboard is rather 
different from that supposed 
by Michael Prowse (Bo ok 
Review, June 9). The QWERTY 
keyboard and its equivalents 
in other languages were care- 


fully contrived to minimise 
key-jamming on early mechan- 
ical typewriters, both by slow- 
ing typists down and by avoid- 
ing the need to use 
neighbouring keys consecu- 
tively. The QWERTY keyboard 
did not therefore arise by 


chance. It is an example trf the 
way solutions tend to outlive 
problems they were devised to 
overcome, thereby becoming 
problems themselves, 

D J Paul, 

5 Aldermary Road, 

Bromley, Kent BRl 3PH 


It’s right to emulate where the action is 


From Mr Roger Woolfe 

Sir. Robert Bischofs Euro- 
centric view misses the point 
(Personal View, June 10). Yes, 
the UK “is so often in a minor- 
ity of one in Europe”. But 
Britain's economic and social 


policies are not out of line with 
those of North America, and 
not far different from the 
industrialised countries of Asia 
Pacific. That is where the 
action and the growth is talcing - 
place, Mr Bischof, not Europe. 


Britain’s attitude is not a sign 
or being wrong, it is n sign of 
being right. 

Roger Woolfe, 

Torenlaan 23. 

1261 GA, Blaricum, 

The Netherlands 


Denmark more than just an ‘ally’ in fight against EU fraud 


From Marianne Jeloed. 

Sir, I was pleased that the FT 
showed interest in the serious 
problem that fraudulent use of 
Community funds constitutes 
with your article, “A labyrinth 
of loopholes” (May 19). As 
more and more resources are 
being administered through 
the Community budget, the 
potential scale of the fraud 
increases. The removal of 
internal frontiers with the cre- 
ation of the Single Market also 
poses new challenges in the 
flgM against fraud. 

However, the article needs 
some correction. It says con- 
cern about fraud is most 
strongly felt In Germany, 
which baa found allies in the 


Netherlands, Denmark and the 
UK 

In my opinion Denmark Hag 
been more than just an ally. 
Denmark has played a very 
active rule in enhancing the 
focus on the war against EU 
fraud. The protection of the 
financial interests of the Com- 
munity was spelled out by the 
Copenhagen European Council 
in June 1983 when it asked the 
Commission to present a stra- 
tegic programme for reinforc- 
ing the fight against fraud by 
March 1994. 

hi addition, the Danish gov- 
ernment published a note, 
“The Community Budget and 
Fraud", before the Ecofin coun- 
cil meeting In May this year, hi 


this note we suggest important 
additional elements to the 
Co mmission 's anti-fraud strat- 
egy. The note proposed speed- 
ing up member states' reaction 
to the Commission's requests 
for control visits; the use of as 
precise and targeted instru- 
ments as possible; and the 
development of systems to ana- 
lyse the results of various anti- 
fraud activities. 

In addition, the note pro- 
posed more publicity to flit 
against fraud; and use by mem- 
ber states of more common 
standards of control The Com- 
mission's control and auditing 
teams should to a larger extent 
he able to draw on national 
audits in connection with EU 


Si 01 * l?? 1 * 8 in member 
fteies. And it is necessary also 
to focus on the problem that 
the country where the fraud is 
committed is often not the 
same as the country of which 
the swindler is a resident 
Ihe Danish attitude is not 

mterest. Misuse of public flinda 
nms counter to vital principles 

contS”?^^ ^mocratic 
^ against fraud 

for utDMSt ^postmen 

nfrv^,i maee of to Comma- 


11 S 


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girop 1 
to t 111 ’ 


Mr Blair 

for renev 


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financial times 


tT™ SoDtiwark Brid 9=* London SE1 9HL 
Tel. 071-S73 3000 Telex; 922 1 86 Fax; 071-407 5700 

Monday June 13 1994 


Europe slips 
to the east 


The European Union looks better 
from outside than from inc^a to 
judge by the events of the last 
week. 

Inside, the fourth direct election 
of a Europea n parliament stirred 
little positive enthusiasm, ana W as 
treated in most countries as a 
Chance to protest against mcunt' 
bent governments. One might 
think that a visiting US president, 
coming from a world power whose 
economy is growing strongly, with 
much lower unemployment in 
spite of steadily incr ea si ng pro- 
ductivity, would find little in the 
EU to admire or encourage. And 
one might think that a 
European country lifcg Austria - 
which as a member of the Euro- 
pean Economic Area already 
enjoys access to the single market 
and has weathered the recession 
better than most - would ftnnv 
twice about choosing this Tnnrngnt 
to sign up for full membership. 

Yet Mr Clinton used his trip to 
give the EU a ringing endorse- 
ment, even in the field of defem? 
from which his predecessors had 
been anxious to exclude it; and 
the endorsement given by two- 
thirds of the Austrian voters per- 
haps counts for even more, since 
they have to put their money 
where their ballot-paper is. If any- 
thing should jolt the EU out of its 
recent despondency it is that, for 
the first thus in 20 years, a coun- 
try with a higher standard of liv- 
ing than its existing average, and 
one which will be a net contribu- 
tor to its budget, lias actually 
decided to join, ignoring attempts 
to scare it with a veritable barrage 
of Euro-nightmares from drained 
reservoirs to floods of poisoned 
yoghurt Should the Austrian 
example be followed by Nordic 
countries later in the year, Janu- 
ary 1 1995 will indeed mark a 
hopeful new beginning. 

Austria’s vote 

By their vote, the Austrians 
have already moved the EU in' a 
direction Mr Clinton was urging it 
to go, namely eastward. In a lit- 
eral sense, they have moved its 
eastern frontier from the 15th to 
the 17th meridian, while waiting 
for Finland to take it to the 31st 
More significantly, while Finland 
(and indeed Norway) would give it 
a common border with Russia, 
Austria gives it one with Slovakia, 
Hungary, and Slovenia, and brings 


it within 20km of Croatia. Aus- 
tria, even more than Germany and 
Italy, has felt itself involved in the 
Yugoslav tragedy, and in propor- 
tion to its population has absorbed 
larger numbers of refugees. His- 
torically, its links are with the 
Magyars and Slavs of the former 
Habsburg empire. It will use its 
membership, without doubt, to 
incite the EU to play a bigger »n^ 
more creative role in eastern anH 
south-eastern Europe. 

Open markets 

That is also where Mr Clinton 
put his emphasis. In his speech to 
the French national assembly * gg t 
Monday he said nothing about the 
single currency or the gfngte mar- 
ket. Instead he dwelt on “the 
development of a European 
defence identity”, and on the 
importance of “a broader Europe”, 
Open to the east . He mgntinmpri 

with particular pleasure that 
“Nato recently approved an Amer- 
ican proposal to allow its assets to 
be used by the Western European 
Union” (the EU’s “defence compo- 
nent”), and reiterated his call, 
uttered in Prague last January, for 
western markets to be open to 
goods from eastern Europe. 

The Austrians would surely 
agree with the latter point They 
may have reservations about the 
former one. Neutrality, originally 
imposed an thpm in 1955 as the 
price of Soviet withdrawal, has 
become since the 1970s an impor- 
tant element in their national 
Identity, and their government felt 
obliged to reassure them, during 
the referendum camp ai g n that 
this status would not be affected. 
It would have been more honest to 
say frankly that with the mid of 
the cold war this concept has 
became an jmflchrrgiigm, that Aus- 
tria was proposing to join a union 
with a dev e loping defence iden- 
tity, and that as the memb er-state 
closest to an unstable and war- 
ravaged part of Europe it would 
have a stronger interest in that 
development than any other. 

At least the Austrian chancellor, 
Mr Franz Vranitzky, has said that 
he contemplates joining the WEU 
In due course. The next step, not 
only for Austria but for its new 
partners, should be to weigh Mr 
Clinton’s words carefully. He' is 
offering to stand by Europe, but 
only if Europe stands militarily on 
its own feet 


Mr Blair looks 
for renewal 


Mr Tony Blair is the likely winner 
of the Labour lead ership contest 
He is also the most suited to the 
task- Five candidates have pres- 
ented themselves. It is striking 
that four of them, all improbable 
victors, are from the left of the 
party. Mr Denzil Davies and Mr 
Ken Livingstone are mavericks. 
The weightier pair, Mrs Margaret 
Beckett and Mr John Prescott, 
have put themselves down for dep- 
uty as well as leader, a prudent 
insurance against Losing the real 
prize, since neither is possessed of 
the leadership qualities the party 
needs. Mrs Beckett has proved her 
credentials as a competent admin- 
istrator, a reliable second-in-com- 
mand, but that may be all she has 
to offer. Mr Prescott is the voice of 
Labour's past . 

It is therefore hardly surp rising 
that half the parliamentary party 
and the overwhelming majority of 
the shadow cabinet have declared 
their support for Mr Blair. The 
two other thirds of the party’s 
tntpmflt electorate - its members 
in trade unions and its members 
at large - have yet to be con- 
sulted, but the general expectation 
is that they will follow the pattern 
set by their elected representa- 
tives. They will vote for Mr Blair 
if they want Labour to win. 

Some will do so with misgiv- 
ings. At 41 his inexperience wai be 
called in evidence against him, 
but his very newness is also an 
asset As he showed in his inter 
view with the Financial Times on 
Saturday, he has mastered a 

coherent set of generalisations 
within which a credible Labour 
policy mi ght be developed. He has 
given tiie pro-market thinkin g. of 
the 1980 $ an overlay o^sooal 
responsibility, affirming that tne 
individual and commuiuty 
strengthen one another. He nas 
captured the theme of fenritt 

ues from the Conservatives. To 

can this “renewal" may strike a 

chord with the electorate- 

Freedom to reposition 

This gives Mr Blair a freedom^ 
reposition Ms party that his prede- 
cessors lacked. It is positively in 
the public interest to have a 
dynamic market economy. ^ 
told the FT. Echoing Prudent 


turnon. Be muuvu 1 .7 

of left-wing thinking with, we 
want a nation at work and not a 
nation on benefit.” S ~L 
ownership, he said that ^most pe°- 


pie would not regard it as a sensi- 
ble expenditure of mon- 
ey . . . that you renationalise the 
water Industry”. He defined full 
employment in the careful words 
of the 1944 white paper. 

Radical moderniser 
Astutely put as they are, such 
statements merely set a tone; 
there is roam within them for Mr 
Blair to be the radical moderniser 
Labour needs, but there Is also 
room for fudge arid muddle. Mr 
Blair evokes a sense of mission, 
but be cannot rest on that Before 
long he will have to provide spe- 
cific answers to questions about 
Labour policy. Having grown up 
during the Thatcher ascendancy, 
Mr Blair is aware that the greatest 
British politician of his own life- 
time approached her first election 
victory, in 1979, in comparable 
political circumstances. Mrs 
Thatcher resolutely avoided spe- 
cific f^ymrnitmpmtB , preferring to 
speak about values and principles. 
In present circumstances, Mr Blair 
would be unwise to regard this as 
a sufficient approach. 

The late Mr John Smith behaved 
in keeping quiet while the Conser- 
vatives tore themselves apart; bad 
he lived he would have focused an 
policy at the October 1995 party 
conference, in readiness for an 
election the following year. Mr 
Blair should begin to fill in the 
blanks well before that, between 
now and this year’s conference. 
The list of gaps is large; strategic 
clarity on Europe, a sense of what 
he means by modemisiiig the wel- 
fare state, an indication of where 
Labour proposes to draw the 
boundaries between public and 
private enterprise. His declaration 
of support for a dynamic market 
e frmomy is meaningless unless he 
shows that he knows what it 
would take to sustain it 
Leadership may be about broad 
perspectives and aspirations, Mr 
Blair is showing himself skilled at 
offe ring them. But in the post- 
Communist world there are no 
single ideological solutions. Spe- 
cific, often technical, policies are 
required. The new labour leader 
must use the crest of the wave on 
which he is now riding to drive 
his party’s thinking forward. He 
must show Boon that Ms leader- 
ship will involve believable social, 
economic and fiscal strategies. 
Without them the present expec- 
tant mood could quickly cha ng e 


M r Malmj fn Rfflcinfl, 
the UK defence 
secretary, is to 
make one of bis 
most painful public 

annnmiBimBifa! next month t ghon 

be outlines to parliament toe latest 
series of cuts in toe armed forces. 
The ministry's review of defence 
spending, code-named Front-Line 
First, will probably conclude that 
bases should be closed, services pri- 
vatised, and about zyx)0 jobs lost, 
many from RAF support staff. 

To sweeten the pilJ Mr Rtfkind 

can announce some new military 
equipment orders. The Army may 
get up to 250 Challenger II tanks, 
the Navy its latest batch of three 
Type 23 frigates and the Royal Air 
Force a substantial updating of its 
Tornado aircraft 
But the result of one proc u r em ent 
decision is unlikely to be welcomed 
by all sides of the UK indus- 

try. The race to replace half of the 
RAFs ageing fleet of 60 Hercules 
transport aircraft is being run 
between US and European competi- 
tors. Both sides have British part- 
ners. both badly want to win. 

Lockheed, the US manufacturer 
of the Hercules, is vying with a 
European group, which will operate 
under the aegis of the Airbus con- 
sortium and includes British Aero- 
space, to supply the new g e ne r a ti on 
of transport aircraft. T<ockheed says 
it can provide the RAF with a first 
batch of 30 of the latest generation 
of Hercules, called the C130J, at an 
attractive price. Starting in 1996 toe 
C130J will be available “off-the- 
shelf’. Lockheed says it will have 
none of the unexpected develop- 
ment costs and uncertainties which 
often dog new aircraft. 

British engineering companies 
such as Dowty and Lucas have won 
12 per cent of the work on the CL30J 
in open competition against US 
competitors. According to General 
AI Hansen, vice-president of Lock- 
heed’s air transport programmes: 
“The C130J is worth £2J2bn to Brit- 
ish industry and will secure 3,500 
jobs in the UK if we sell 700 aircraft 
worldwide. Because the RAF is a 
world-class air force we regard it as 
very important to secure them as a 
hiWh customer for thw new gener- 
ation of Hercules." 

Lockheed 1 b trying to make it 
worthwhile for the RAF to order the 
C13GJ. It has of fere d a rftawmnt of 
about 10 per cent of the £750m- 
£85Dm coat of toe first 30 aircraft if 
the RAF is the launch customer. In 
an unprecedented move, it will taka 
the RAfs old aircraft in parbex- 
rhang a, provided they can arill fly. 

While the deal is financially 
attractive to the RAF, it is not criti- 
cal to UK participation in the C130J 
worldwide. Mr Frank Turner, the 
managing director of Lucas Aero- 
space, says; “We support the C130J 
to replace the Hercules. But ijirag 
was chosen by Lockheed, regardless 


Herculean task for 
UK defenders 

Bernard Gray on the US-European contest to supply 
the RAF's new generation of transport aircraft 


of uk interest, as the global leader 
in our field, and we expect to keep 
our share of the work whatever the 
UK decides.” 

British Aerospace acknowledges 
that its own contender, rather pro- 
saically called the Future Large Air- 
craft, will not be available until at 
least 2000. The development costs of 
toe FLA, estimated by BAe at mare 
than £2bn for the consortium as a 
whole and £500m for the UK, will 
also need to be met by the purchas- 
ing! 


BAe argues that the FLA will be 
bigger, faster and more flexible 
than the C130J. It will be able to 
transport helicopters, armoured per- 
sonnel carriers and field guns 
which the Lockheed aircraft is too 
small tO h ftrailft And while ear h 
FLA will cost between £40m and 
£45m (including development costs) 
compared with £25m for the C13GJ, 
its increased capacity, flexibility 
and advanced technology will make 
tiie total lifetime costs of its fleet 
lower than Lockheed’s equivalent 
Mr Dick Evans, BAe’s ghirf execu- 
tive, says: “The FLA would bring 
work to toe UK worth between 
£Sifen and £12bn and secure 7,500 
aerospace jobs at the peak of pro- 
duction.” 

The argument over which aircraft 
toe MoD should choose goes wider 
than the fawhninal merits of the two 
transporters. Mr Evans insists that 
the aircraft’s importance to the, UK 
aerospace industry means that “pis 
derision is just too important to be 
left to the Ministry of Defence”. 
BAe says that if the government 
opts for toe US aircraft, Britain will 
be forced to withdraw from the FLA 
programme altogether. 

This is because the share of work 
allocated on European collaborative 
programmes has depended tradi- 
tionally on how many aircraft 
country derides to buy. Between 250 
and 300 FLA are expected to be 
ordered by the consortium's Euro- 
pean partners. But if the UK 
replaces the first half of its Hercules 
fleet with the C130J, it will not need 
the 50 FLA which would ensure 
Britain a 20 per cent stake in toe 
project 

Decisions are to be made next 
year on how many FLA each Euro- 
pean partner wants. In nuntmental 
Europe, enthusiasm seems to be 



The RAF wfil select either Lockheed’s C-130J (bottom) or the European 
Future Large Aircraft for its new generation of transport aircraft 


running hi gh Both President Fran- 
cois Mitterrand Chancellor Hel- 
mut Kohl stressed their commit- 
ment to the FLA at the recent 
Franco-German summit. 

Gaining a UK commitment to a 20 
per cent share of the aircraft is 
regarded as important by British 
Aerospace because that is approxi- 
mately the amount of work which 
goes into toe aircraft’s wings. BAe 
fears that if ft does not build the 
wings the German aerospace com- 
pany Dasa will usurp its position. 
Once Dasa is established as a wing- 
maker, BAe fears that it win not be 
able to win its place back in future 
civfl Airbus prog ra mmes. 

BAe may be overemphasising its 
dilemma: the total size of the FLA 


programme is not yet clear and 
work-sharing arrangements may be 
flexible. On the Eurofighter pro- 
gramme, for example, Germany 
looks likely to order fewer than a 
quarter erf all aircraft, but is trying 
to bang on to a third of the work 
However, an early decision to buy 
the new Hercules would be damag- 
ing to BAe - and the cnmpflny has 
a case far arguing that a decision is 
being rushed. The MoD has put up a 
strong fight for an early resolution 
of the debate: it says the existing 
Hercules fleet is almost 30 years old 
and according to a House of Com- 
mons defence committee report, the 
Hercules* wings, tails, fuel systems 
and flight deck will all need refur- 
bishment in the next few years if 


they are to remain in service. 

Ageing is also reducing reliabil- 
ity, says the Ministry of Defence, 
and pishing up maintenance costs. 
The ministry says each Hercules is 
only available for 55 per cent of the 
time now, compared with 65 per 
cent In 1986. Worse is to come. The 
MoD estimates that the annual sup- 
port costs of the fleet will treble by 
1998 without a programme of large- 
scale refurbishment. Thus, for toe 
Ministry of Defence, Lockheed's 
offer to begin early deliveries has 
attractions. 

But there ore doubts about how 
urgently the aircraft need to be 
replaced. The House of Commons 
select committee noted “allega- 
tions'' that the RAF may be exag- 
gerating the urgency of its require- 
ments; the RAF sees an opportunity 
to get new aircraft white there is 
still money available in its equip- 
ment budget. 

S imilarly, toe MoD and the 
Treasury have motives for a 
quick decision: the ministry 
is anxious to announce 
equipment orders to couoter the 
bad publicity over job cuts, and the 
Treasury regards the C13GJ as the 
less expensive option and is 
attracted by the good terms cur- 
rently on offer from Lockheed. 

To counter such views and partic- 
ipate fully in the FLA programme, 
BAe must persuade the government 
to implement its preferred strategy: 
a minimum refurbishment on the 
existing Hercules fleet while 
waiting for the FLA to become 
available. However that route was 
described by the House or Commons 
defence committee as, “prima facie 
an unattractive option” and it is 
clear that BAe faces considerable 
hurdles: it would have to overcome 
doubts about the cost of refurbish- 
ing the current fleet and squeeze a 
cheque for £500m to cover toe UK’s 
contribution to FLA development 
funds from a cash-strapped MoD. 

At present, BAe is simply arguing 
for more time to develop and pres- 
ent its case, since the FLA will only 
complete its feasibility study at the 
mid of the year. It has used newspa- 
per advertisements to raise public 
interest in the issue and pressure 
the MoD to postpone a decision. 
One option it is considering is an 
offer to maintain the Hercules fleet 
at a fixed price until the FLA is 
available. 

For BAe, a request for a delay 
does not seem unreasonable given 
the importance of the decision to 
the UK aerospace industry. As one 
defence industry observer puts it 
“Lockheed is not going to go away 
and this is a derision the UK will be 
stack with for 40 years. It will have 
knock-on consequences throughout 
the civil and military aerospace sec- 
tor. It may just he worth taking 
another six months to make sure 
we get it right” 


A Rembrandt among commentators 


"The art of economics consists in 
looking not merely at the immediate 
but at the longer effects of any act or 
policy, ; it consists in tracing the con- 
sequences of that policy not merely 
for one group but for oil groups. ” 

T his is such a wise saying 
that it might have been 
coined by Adam Smith or 
one of the great classical 
economists. It actually flowed from 
tiie pen of Henry Hazlitt, tiie distin- 
guished US economic journalist and 
author who died last year aged 98. 
Hazhtt wrote superbly and deserves 
immense credit for keeping his head 
during the middle decades of the 
century, when nearly all his con- 
temporaries were seduced by social- 
ist ideas and Keynesian economics. 
Indeed, in his analysis of economic 
and social problems, he was often 

ripraftoq ahreaij of his time. 

A self-taught polymath, he wrote 
or edited some 18 books*. But he is 
probably best known for his short 
classic. Economics in One Lesson, 
which he wrote in 1946, during time 
off from his job as economics leader 
writer for The New York Times. 

Many economists would dismiss it 
as a primitive effort There are no 
equations or graphs. There is no 
macroeconomics, because Hazlitt 
despised “en bloc thinking that 


assumes away the individual differ- 
ences that make up reality", there 
is nothing about demand manage- 
ment, because he believed in “Say’s 
Law" - the proposition that in a 
flexible market economy, supply 
will create its own demand. 

Seemingly anachronistic in its 
day, the book now looks prescient 
Hazlitt grasped the destructive 
power of special interest groups 
long before the academic commu- 
nity. The difficulties inherent in 
economics, he wrote, were “multi- 
plied a thousandfold by a factor 
that Is insignificant in say, physics, 
mathematics or medicine - the spe- 
cial pleading of selfish interests." 
He saw that such pleading was a 
natural result of the division of 
labour: as individuals we specialise 
more as producers than consumers. 

A steelworker, for example, may 
benefit from special government 
concessions for his industry even if 
these make everybody else power. 
But he will be hurt by every conces- 
sion granted to other industries. It 
follows that the only policy that is 
in everybody’s interests is the 
apparently hard-nosed doctrine of 
zero protection in trade and zero 
subsidies in domestic markets. How 
much anguish might have been 
avoided in the postwar years if 
Hazlitt’s lesson had been thor- 



MICHAEL PROWSE 

on 

AMERICA 


ougfaly learned. 

The second point be stressed is 
tiie need to pay attention to all the 
consequences of a given policy, 
especially the long-term conse- 
quences. Hazlitt understood toe 
short-run attractions of deficit 
spending and public works. He 
knew why decent people favoured 
minimum wages, rent controls, 
union privileges and so forth. But 
he patiently analysed the long-term 
results of these interventions, show- 
ing that they were almost certain to 
do more harm than good. He wor- 
ried about in cent i ves, for work, sav- 
ing and investment when leading 
Keynesians dismissed such talk as 
19th century claptrap. 

Economics in One Lesson was an 


introductory text If you want to see 
Hazlitt at full throttle, read The 
Failure of the New Economics (Van 
Nostrand, 1969). a withering line-by- 
line critique of John Maynard 
Keynes’s General Theory. Hazlitt is 
wickedly irreverent noting at one 
point: “It is amazing how many fal- 
lacies and inversions Keynes can 
pack in a small spare, and espe- 
cially how many fallacies, like a set 
of Chinese boxes, he can pack 
inside other fallacies”. He concludes 
that none of Keynes's significant 
doctrines was both original and 
true. This will seem a cheap shot 
only to those who have not sampled 
Hazlitfs scholarship. 

He sometimes went too far - at 
least for colleagues. In 1944, Arthur 
Sulzberger, then running The New 
York Times, lost patience with 
Hazlitfs opposition to the Bretton 
Woods agreement “Now, Henry, 
when 43 governments sign an agree- 
ment I don’t see how The Times 
can any longer combat this." Rath®: 
than compromise, Hazlitt stopped 
writing editorials on the subject 
and later moved to Newsweek as a 
columnist Hazlitt regarded the pro- 
posed system of fixed but adjustable 
exchang e rates, with only a partial 
tie to gold via the dollar, as logi- 
cally flawed and bound, eventually, 
to collapse in a global inflation. His- 


tory proved him right, although the 
Bretton Woods system provided a 
stable monetary framework for lon- 
ger than he expected. 

He was prescient on numerous 
other issues. He anticipated Charles 
Murray's critique of the US welfare 
system by more than a decade. He 
was an early critic of postwar for- 
eign aid, seeing from the start that 
trade and investment were the keys 
to third world development 

Hazlitt was worldly enough to 
recognise that true believers in free 
markets and minimal government 
would always be heavily outnum- 
bered by activists proffering instant 
“solutions” to every social problem. 
Speaking shortly after Bany Gold- 
water’s crushing defeat in the 1964 
presidential race, be urged yet 
greater efforts, arguing that mem- 
bers of the libertarian minority 
“can’t afford to be just as good as 
the individuals in toe majority. If 
they hope to convert the majority 
they have to be much better, and 
the smaller the minority, the better 
they have to be. They have to think 
better. They have to know more. 
They have to write better." Nobody 
could have set a better example. 

*See The Wisdom of Henry Hazlitt. 
Foundation Jar Economic Education. 
Irvington-on- Hudson. New York 
10533. 


OBSERVER 


Merck's odd 
injection 

■ Merck Chair man Roy VagelOS 
is m» of the most hr iTHant US 
«arien list s of hia generation and 
has made Mer dr one tlw mnrf 

a rt ml i w l compan ies tn tfri> 
pharmaceuticals business. But in 
one respect Vagetos has failed. 

He bas not been able to groom 
an internal successor and has bad 
to hand over the chair manshi p of 
one of America's top ten companies 
to a virtual unknown. 

It is hard to imagine other US 
bine chips Me Exxon, General 
Electric or CocaCola prepared to 
take such a risk. Merck is not 
another IBM. It is not short of good 
managers. So why has it turned 
to Raymond Gihnartin, 53, boss 
of Becton Dickinson, a much 
smaller medical supplies company? 

Gihnartin, who has spent 18 years 
with his firm, has no big drug 
company experience and is not 
toe sort of corporate super-star 
to stir Wall Street Admittedly, he 
las done the sorts erf things on a 
small scale that Merck will need 
to do if it is to prosper over the 
coming decade. Becton Dickinson 
relentlessly cut costs during the 
mid-1990s and O il mar tin also 
boosted the company’s research 
and development budget to take 


ft into more profitable areas, such 
as diagnostic equipment. 

The hope is that Gflmartin wn 
work the same sort of magic at 
Merck. But despite the best efforts 
of Merck’s PR machine. Wall 
Street's initial verdict is that tip's 
A high-risk choice. Gflmsrtin wfll 
be in charge of a $L3bn R&D 
budget, yet he has no background 
at all in the discovery and 
development of new drugs. He 
joined Becton Dickinson after an 
electrical engineering degree, an 
MBA from Harvard, and a stint 
as an Arthur D Little consultant. 

He's said to be charismatic and 
a hands-on manager, like Vagelos, 
whom be succeeds on Thursday. 

Even so, the management 
succession at one of the world’s 
most admired companies looks like 
a botched job. Vagelos’s abr upt 
exit at Merck has given the 
impression that it’s a one-man 
show, which it is not 


Going begging 

■ Nice to see Lady Margaret 
Colville made Companion of the 
Royal Victorian Order in the latest 
honours list As “Extra Woman 
of the Bedchamber to Queen 
Elizabeth the Queen Mother”, she 
no doubt deserves it 
And something far below stairs, 
too: Royal Victorian Medals (Silver) 



Tan lost his deposit and he’s taken 
it rather badly 1 

to - among others - Henry Charles 
Bynoth (roofing contractor), 
Christopher Arthur Chiverton 
(trapper. Great Park. Crown Estate, 
Windsor) and Peter Horace 
Matthews (senior sous chef, 
Buckingham palace). 

Nothing for the corgis? 


Sic transit 

■ They take Latin seriously in 
Toledo. Ohio. Richard Ehret, a 
classics master, recently got into 


trouble with an over-enthusiastic 
attempt to infuse life into the 
tongue of Catullus, a Roman poet 

Ehret’s offence was to introduce 
into the classroom phrases like 
“in dentibus anticis frustum 
ma gnum spinaciae habes" and 
“braccae tuae aperiuntur”, which 
loosely translate as “you have a 
tog piece of spinach on your front 
teeth" and “your fly is open". 

“Totally inappropriate" said 
school superintendent Kenneth 
Bishop. Ehret who claims he was 
trying to make his classes 
interesting and merely took 
examples from the textbook Latin 
for all occasions, was suspended 
without pay for 10 days. 


Goodhart's handle 

■ Last week's gathering of two 
thuds of the world’s central bank 
bosses, on the occasion of the Bank 
of England's tercentenary, was such 
a rare event that it deserves a 
collective noun. Charles Goodhart 
of the London School or Economics 
has suggested a “discretion” of 
central bankers, but Observer is 
open to better suggestions. 


Reading list 

■ When BUI Clinton popped into 
Blackwells bookshop in Oxford 


last week, only five minutes before 
closing time, he obviously knew 
what he was looking for. 

Hamish McRae's The World in 
2020, about “power, culture and 
prosperity - a vision of the future", 
is typical presidential reading 
material- David Sel bourne's The 
Principles of Duty, billed as a 

“powerful criticism of the corrupted 
liberal order”, sounds equally 
worthy. But wasn’t Selbourne the 
maverick left-wing don who upset 
the left by writing for The Times 
when toe unions were up in arms 
against Rupert Murdoch’s plans 
for the paper? He was so hated that 
he was drummed out of Oxford. 

Peter Arnett’s memoirs of a hack 
who has covered every recent war 
from Vietnam to Kuwait also looks 
a bit of an odd choice. Could 
Clinton be planning how to survive 
a siege conducted by liberals wbo 
fear a sell-out? 


Black humour 

■ A press release lands on 
Observer's desk from toe 
Department of Trade and Industry, 
aka the department of hollow 
laughter. It starts: “Energy Minister 
Tim Eggar today thanked all British 
Coal employees for their tireless 
efforts in creating a real ftiture 
for a private-sector coal 
industry..." 


> 




FINANCIAL TIMES 

Monday June 13 1994 




OSJ 689 2266 


woatDWiM mam* mammas aw 


Nuclear arsenal makes Ukraine a danger spot 

Kravchuk poised to sign 
EU partnership deal 


By Lionel Barber In Brussels and 
JB Barahay in Ktav 

Ukrainian president Leonid 
Kravchuk is expected to sign a 
"partnership" agreement with 
the European Union in Luxem- 
bourg tomorrow, the first sign of 
a more evenhanded EU strategy 
toward Ukraine and neighbour- 
ing Rmwia- 

Mr Kravchuk will draw satis- 
faction from the fact that a simi- 
lar partnership agreement 
between the EU and Russia 
r emains unfinished, although 
Brussels hopes to wrap up the 
accord in time for the European 
s ummit In Corfu next week. 

Ukraine’s nuclear arsenal and 
pnTiflpstn g economy make it the 
regional danger spot, but the 
ED’S new policy of engagement is 
being hobbled by a row over a 
European Commission plan to 
send emergency food aid. 

Britain, among others, opposes 
the provision of form credit guar- 
antees amounting to EculOOm 
($u 6m) so that Kiev can buy 
western fertilisers with scarce 
hard currency. The UK believes 


that reports of food shortages are 
exaggerated, and that the Com- 
mission's move is a short-term 
palliative. 

Winter crops in Ukraine failed 
and had to be replanted. Many 
spring mops were planted with- 
out fertilisers, making them vul- 
nerable. 

Kiev's powerful agricultural 
lobby, trying to restore tradition- 
ally high subsidies, has warned 
of pending disaster, but western 
diplomats believe large-scale 

h umani ta rian aid Jg “premature”. 

Although choice is limited. 
food stores are stocked. Many 
warehouses are watching their 
potatoes rot because demand has 
dropped on the retail market. 
The explanation is that self-suffi- 
cient Ukrainians with access to 
garden plots ban e been planting 
their own. 

“Ukraine doesn't need food,” 
one diplomat said. "They need 
much more sophisticated help” - 
such as market incentives to pro- 
duce, a competitive distribution 
system and better storage facili- 
ties. 

Mr Kravchuk, fighting a tough 


campaign for re-election this 
month, can expect a wann recep- 
tion in Luxembourg. But pri- 
vately he will be warned that 
future aid is linked to closing 
unsafe nuclear reactors such as 
Chernobyl, and ratification of the 
nuclear nonproliferation treaty. 

Nuclear safety in Ukraine will 
feature highly on the agenda of 
die Group of Seven industrialised 
nations in Naples next month. 
Brussels estimates suggest that 
the dismantling of the Chernobyl 
plant may cost Ecu300m to 
EcusOOm. 

As fateiT^atiftiwI QUtCTy tO 

close Chernobyl has moulded, 
Ukraine has r aise d its asking 
price to shut the station from 
$2bn to $14tm. With Ukraine's 
future government still uncer- 
tain, it will be tricky to secure a 
deal with the executive branch 
without the Hangar of it backfir- 
ing in Ukraine's partianwmt 

A s ecfrnfl complication is *hat 
the EU*s p res su re for accelerat- 
ing closure of Chernobyl is tem- 
pered by the desire to avoid being 
stock with the whole clean-up 

hill 


German government warned 
against further tax rises 


By Christopher Parices 
in Frankfurt 

Failing private demand poses the 
biggest threat to Germany's eco- 
nomic recovery, according to a 
senior Bundesbank nffirint 

Arguing that no fresh stimulus 
could be expected from lower 
interest ra tes, Mr Otmar Issing 
warned the government against 
any further tax increases. 

Mr fasfng . the German central 
bank’s chief economist and a 
member of its directorate, said 
state burdens on private incomes 
were already at record levels. 

“No economy has ever deliv- 
ered the growth rates we need 
with such high contribution 
rates," he said in a .weekend 
newspaper interview. 

Disposable incomes bad Kalian 
in real terms this year, and the 
prospects for next year were not 
rosy, he added. 

Mr Lssmg was referring to a 7.5 
per cent i ncome tax surcharge 


to be imposed next January. 

The mam purpose of this levy 
is to finance continuing heavy 
transfers to aid economic recon- 
struction in eastern Ge rmany 

Hie interview also reflected the 
bank’s concern that recent signs 
of recovery might encourage 
inflationar y expectations in the 
1994 pay round starting this 
autumn. 

This year's real wage cuts were 
insufficient to solve the problems 
piled up during the unification 
boom, hie sald_ 

The popular mood was lifted 
last week by west German 
growth figures for the first quar- 
ter which showed gross domestic 
product expanding at more than 
2 per cent year on year. 

Although exports are continu- 
ing to grow strongly, the early 
surge in private consumption 
winch contributed to the good 
first-quarter result is already 
showing signs of evaporating. 

Mr Tnghrg also confirmed that 


the hank felt its interest rate pol- 
icy had been relaxed as for as 
possible for the time being 

"We are of the opinion that we 
have now reached a level ... ap- 
propriate to the current economic 
situation and our outstanding 
problems," he said. 

In spite of ballooning monetary 
gro wth , the bank continued its 
rates reduction policy up to the 
middle of last month. Since then, 
Bundesbank ers have made plain 
that a pause is necessary. 

"We must keep our nerve and 
trust. In spite of all the undenia- 
ble difficulties, that we are on the 
right course," Mr. Issing said. 

Steering monetary policy 
would be even more difficult if 
government failed to continue 
reining in state spending. 

In the meantime, the excess 
liquidity bloating Germany's M3 
measure of money supply had to 
be released, “but not through 
inflationary spending, rather in 
long-term investments”. 


UK spy 
chief tells 
viewers 
the story 
of MI5 

By Diane Summers 


Three quarters of the work of 
MI5, the British security service, 
is now focused on fighting ter- 
rorism, particularly in Northern 
Ireland, rather than the infiltra- 
tion of “subversive” political 
groups or the type of counter-es- 
pionage portrayed In spy novels. 

The picture of the modem, 
post-cold war MI5 was drawn 
last night by Mrs Stella Riming- 
| ton, director general of the secu- 
rity service, in an unprecedented 
speech on television by the head 
of a secret service. 

Since the collapse of Soviet 
communism, the threats to 
national security had been trans- 
formed, Mrs Rintingtou said. 

“Countering espionage now 
takes up less than a quarter of 
our resources,” she said, deliver- 
ing the 1994 Richard Dimhlehy 
Lecture on BBC1. 

The threat from subversion 
had also subsided, taking up less 

than 5 per rent of Hnn > 

Now, part of what little time 
was devoted to countering sub- 
version was spent on extreme 
rigbtwing groups “who are seek- 
ing to undermine democracy 
through the exploitation of 
racial hatred and xenophobia". 

The service’s overwhelming 
focus today was fighting terror- 
ism, originating both from 
within the UK and abroad, she 
said. For example, MI5 had pre- 
vented “the intelligence services 
of a number of Middle Eastern 
states from carrying ont sus- 
tained campaigns of murder 
against their opponaits in this 
country and elsewhere". 

The service’s most important 
terete was nuumting in tellig ence 
operations to counter the threat 
from Irish terrorism. “The Provi- 
sional IRA, in particular, is a 
sophisticated and ruthless ter- 
rorist organisation, and poses 
tiie most serious threat to our 
national security.* 

Staff were selected for their 
judgment, impartiality and 
integrity. “Fortunately, it is no 
longer necessary for anyone to 
pass one of the tests which was 
imposed on recruits to the ser- 
vice in 1914. Thai, staff had to 
show that they could make notes 
on their shirtenff addle cantor- 
ing on horseback," Mrs Rimi n g - 
ton said. 


Van Miert appeals for flexibility at steel rescue talks 


Continued from Page 1 

next president of the European 
Commission. A spokesman for 
Sir Lean said the two issues were 
entirely separate. 

Mr Van Miert ’s decision to dis- 
tance himself from the steel res- 
cue plan means that the slim 
chances of a revival lie with Ger- 
many’s Mr Martin Wangnmawn 
EU industry commissioner. 

Mr ftangpmnrm, co-architect of 


the plan, wants a generous inter- 
pretation of the rules to take 
account of the complicated cross- 
ownership of tiie Brescia mint- 
m£Qs. The web of company share- 
holdings means that not all com- 
panies linked to steelmaking 
would shut down, raising the 
legal question of whether state 
aid could be used for “partial 
closures”. 

Last month, Mr Van Miert suf- 
fered a heavy defeat after Sir 


Leon argued in favour of a rigor- 
ous interpretation of the steel 
code on state subsidies. 

Mr Van Miert said he was 
relaxed about a possible collapse 
of the steel plan. 

Tm not asking for anything. I 
was simply trying to do what I 
had been asked but if the conclu- 
sion Is we can't go ahead, that is 
no problem," he said. He repeated 
warnings that the EU would open 
proceedings against Italian steel 


industry aids as well as a case 
against Luxembourg steel pro- 
duction. 

Mr Van Miert noted that he 
had opposed proposals to adopt 
an intervenionist steel policy 
based os production quotas 
which would have only resulted 
in freezing capacity, opting 
instead for a more flexible 
approach, combining support 
measures in exchange for capac- 
ity cuts. 


FT WEATHER GUIDE 


Europe today 

South-west Europe wtU be mainly sunny and 
significantly wanner than yesterday. After a 
cold start, temperatures wfll exceed 20C in 
the Low Countries and 25C In southern 
France. Tropical temperatures and abundant 
sunshine will dominate Spain, the southern 
Balkans and Turkey. The Norwegian 
mountains wHl remain unsettled and wet but 
southern and eastern Scandinavia wUl be 
mainly efry with some sun. Heavy rain with 
some thunder is expected over northern parts 
of Italy and the former Yugoslavia. The 
western CIS and the Baltics will have rather 
cool breezes despite brief periods of 
sunshine. North of the Alps, cloud with 
patches of drizzle wffl be followed by dear 
skies from the north. 

Five-day forecast 

Scattered rain and thunder showers wiH 
develop along the Mediterranean but ft wffl be 
mainly dry and warm Inland. The south-west 
wfll stay sumy and warm, but north-west 
Europe, Including the UK, win become cooler 
from Wednesday. The cooler air wfll also 
reach northern Ranee towards the weekend 
Scandinavia wffl, in general, be very unsettled 
with rough conditions along the Norwegian 
coast 

TODAYS TMPBU1URES 


”1010 

1020_=it— 




E l* '/ 












Sftuafion at 12 GMT. Temperatures metimum for day. Forecasts by Meteo Cansufl offfw N etd ed an ds 



Maximum 

Bdpng 

shower 

30 

Caracas 

tar 

26 

Faro 

aw 


CeiMu8 

Belfast 

fate 

17 

Cardiff 

Mr 

22 

Frankfurt 

doudy 

Abu Dhabi 

sun 

41 

Belgrade 

Berlin 

rah 

19 

Casablanca 

tar 

24 

Geneva 

fair 

Accra 

shower 

29 

cloudy 

21 

Chicago 

thund 

30 

Gibraltar 

sun 

Algiers 

sun 

26 

Bermuda 

fate 

28 

Cdopw 

tar 

21 

Glasgow 

far 

Amsterdam 

lair 

22 

Bogota 

doudy 

18 

Dakar 

am 

29 

Harr burg 

tat r 

Athens 

sun 

31 

Bombay 

ram 

30 

Deltas 

am 

34 

HebtfiM 

fate 

Manta 

ahowor 

32 

Brussels 

fate 

23 

Delhi 

shower 

36 

Hong Kong 

doudy 

B. Aires 

sun 

14 

Budapest 

rain 

21 

Dubai 

atm 

40 

HonoMu 

fate 

Siam 

fair 

22 

Ohagen 

fair 

23 

Dublin 

Mr 

18 

Istanbul 

fair 

Bangkok 

thund 

30 

Cara 

SU1 

38 

Dubrovnftc 

doudy 

27 

Jakarta 

fate 

Barcelona 

sun 

20 

Cape Town 

sun 

18 

Edinburgh 

Mr 

21 

Jersey 

tar 









Karachi 

fair 



Lufthansa 

German Airlines 


Kuwait 

L Angeles 

Las Rabins 

Lima 

Lisbon 

London 

LuxJxug 

Lyon 

Madeira 


24 

Matteld 

sun 

31 

Rangoon 

22 

Majorca 

aim 

21 

Reykjavik 

22 

Matte 

sun 

25 

Rio 

20 

Manchester 

fate 

22 

Rama 

21 

Manta 

thtmd 

33 

S. Freco 

21 

Melbourne 

fate 

14 

Seoul 

19 

Mexico City 

tar 

24 

Singapore 

30 

Miami 

Mr 

33 

Stockholm 

31 

Mnan 

rain 

24 

Strasbourg 

27 

Montreal 

fair 

34 

Sydney 

34 

20 

Moscow 

Munich 


20 

21 

Tangier 

Tel Aviv 

35 

Nairobi 

fate 

25 

Tokyo 

42 

Naples 

doudy 

24 

Toronto 

24 

Nassau 

fate 

31 

Vancouver 

25 

New York 

tar 

29 

Venice 

18 

Nice 

doudy 

23 

Vienna 

30 

Nicosia 

far 

32 

Warsaw 

23 

Oslo 

doudy 

21 

lUf 

Tvawwwnjn 

24 

Paris 

fate 

22 

WeBngtan 

23 

Perth 

doudy 

IB 

Winnipeg 

21 

Pmw 

doudy 

10 

Zurich 


rain 30 
rain 8 
dowdy 35 
shower 24 
fate 21 
fair 25 
shower Si 
cloudy 17 
fair 22 
lair IB 

sun 28 

awi 32 
ft* 28 
drawer 25 
rain 18 
rain 23 
fate 22 

dowdy is 
fete 32 
shower 10 
cloudy 22 
tak 22 


THE LEX COLUMN 

Grip of steel 


The European Commissioa will try to 
| breathe life fa fn its moribund steel 
! plan this week. Wednesday’s mee ti n g 
j will focus on whether Italian state 
subsidies can be provided to dose 6m 
ton no g of capacity in the Brescia. The 
original scheme, promoted by Mr 
, Sard. Van Miert, the competition, com- 
missioner, was shot down on the 
grounds that such aid was legally 
dubious. His fellow industry commis- 
sioner, Mr Martin Banggrnann, is 
attempting to revive the Brescia 
srfigfr ig so that the overall plan of 
cutting 19m tonnes of capacity can be 
salvaged. 

What happens in Bresda is of little 
relevance to British Steel, which does 
not produce steel rods, the speciality 
of the Bresdani companies. Brescia 
cots are more relevant to direct rivals 
such as ASW. But even it would have 
derived few b enefits from the original 
Brescia scheme. Though some capac- 
ity would have been cut, the Bresciani 
producers would have been aide to 
continue producing at similar rates 
and would have been financially stron- 
ger as a result of the subsidies. 

More important for British Steel is 
whether the European steel industry 
has seen its last round of state aid. 
The Commission would do better to 
ensure ♦frig is genuinely the last round 
l ather ffran gaatemg- ftir ftnw capacity 
cuts. Not only does it look odd to be 
demanding plant closures at a time 
when the European economy is pok- 
ing up. A firm ifriA on subsidies would 
provide the best guarantee that over- 
capacity does not become a problem in 
the next recession. Steel makers 
would then know they could not rely 
on their governments to hail them out 

Securicor 

Cellnet has consistently underper- 
formed Vodafone in market share, 
profits and cash flow «inrw both won 
their licences m the mid 1980s. But it 
is hard to beheve that Cellnet is worth 
only 45 per cent as much as its stron- 
ger rival. Yet that is the implication 
from the way tiie market values Secur- 
icor and Security Services, which 
together own 40 per cent of Cellnet 

Securicor, which owns 13 per cent of 
Cellnet plus 51 per cent of Security 
Services, is valued at £830m. The 49 
per cent of Security Services not 
owned by Securicor is valued at 
£38 0m . That gives a grand total of 
£J-21hn. On tap of their stakes in Cell- 
net, the two companies have a range 
of other businesses worth perhaps 
£270m. So the implied market value of 


Secwfcor/VodafoM 

Sham prion Abased 
160 



80-VA- 


1900 01 

Sourew FT Graphite 


92 S3 9* 


their 40 per cent Cellnet stakes is 
£940m, giving a value of E2.35bn for 
the whole company. Vodafone’s mar- 
ket capitalisation Is £52bn. 

These relative values seem mis- 
judged not merely because CeUnet’s 
rash flow is currently half Vodafone's 
and looks likely to rise foster. The 
probability that BT, which owns 60 
per cent of Cellnet, will eventually 
want to take full control further 
enhances its value. Though BT is cur- 
rently prevented from doing so by reg- 
ulation, little political capital has been 
invested in mainlining the ban. And 
if BT were able to buy Cellnet, the 
chances are tfr«t it would pay a pre- 
mium because of the benefits from 
integrating mobile services with its 
fiypd network. AD this leaves open the 
question of whether Securicor is 
undervalued or Vodafone overvalued. 
Investors could play safe by buying 
the former and selling the latter. 

Japan 

Judging by its buoyant equity mar- 
ket. there is a mood of optimism in 
Japan. Yet Tokyo’s strength is partly a 
function of weakness elsewhere. With 
other markets upset by US rate rises, 
international investors have had to 
scratch around to find a suitable home 
for their money. The question is 
whether they are right to conclude 
Japan is the place. Tim dollar's modest 
recovery against the yen helps, but it 
is hard to argue that the earning s out- 
look is really bright enough to allow 
the bull run to go for much longer. 
The Bank of Japan’s latest Tankan 
survey of business confidence shows 
more corporate restructuring coming, 
despite the improvement in sentiment 

The Nikkei 225 average is currently 
on a multiple of 89 times prospective 
earnings for the year to next March. 


This announcement appears as a matter of record only 


That is demanding when the average 
company is expecting an increase of 
only around 8 per cent in pre-tax prof- 
its. Measured in relation to cash flow 
the market is on a more reasonable 
multiple of around 13, a reflection of 
the gj ye of depreciation charges follow- 
ing the late 1980s surge in capital 

investment. 

But it looks as though the steer 
weight of cash is the main fector. 
Domestic investors may be driven just 
as much by fear of missing out on a 
bull nut so for fuelled mainly by for- 
eign institutions. Liquidity also pro- 
pelled the market before its spectacu- 
lar collapse in 1990. That lesson Is 
engraved deep on the heart of the 
Bank of Japan. It may sot now want 
to risk another bubble by dropping the 
official discount rate. 

Gold 

Rising bond yields, a weak dollar 
and anxiety about inflation look like a 
sure-fire recipe for a rising gold price. 
Yet bullion has been stuck around , 
$380 an ounce since the turn of the 
year. Part of the reason may be that 
the speculative funds which fuelled 
the gold rally in 1993 have switched 
into other commodities; notably ban 
metals. Neither are the fundamentals 
ctf supply and demand as compelh&g 
as last year. 

The discretionary buying which 
buoyed gold in the early months of i 
last year has fallen away. Purchases 
by Indian , Chinese and Middle Eastern 
buyers were all lower in the first quar- 
ter. The relatively smooth transition 
to democracy in South Africa - which | 
still accounts for around one third of 
world gold production - has also 
reduced the risk of disruption to sup- 
ply. Central fr* nk * have not been sell- j 
mg bullion on the same scale as last ! 
year, when between 500 and 1,000 
tonnes were released. With around 
35,000 tames in their vaults, though, 
the threat of liquidation is never for 
away when the gold price rises 
towards $400. 

Yet the biggest dampener on bullion 
is the rising trend in US interest rates, 
which has increased the cost of hold- 
ing a non-yielding asset If rising rotas 
reflect real inflationary pressure that 
drag could soon be outweighed by 
other factors. The worst of all possible 
worlds for bullion would he If the IK 
Federal Reserve has timed its mone- 
tary tightening just right Rising reel 
interest rates combined with relatively 
low inflation would be a powerful 
argument for lower gold. 


May 1994 t 



AKUKONEPHOEOSUieCTBO 


AvtoVAZ Inc., Russia 

with the support of 


A 


AVTOVAZBANK 

US$ 100,000,000 

Multicurrency Revolving Credit 

and 

Medium Term Loan Facility 

for financing the Investment Programme of 

AvtoVAZ Incorporated 


Borrower 



LM International Finance S.A. 
Luxembourg 


Lead Manager and Lender 

Standard £ Chartered 

Standard Chartered Bank 

London 


Financial Adviser and Arranger 

European Capital, London 










21 



FINANCIAL TIMES 

fSl BROOK m 

LSJ Hansen KJ 

Your Swedish Telecom Partner 

UK Tel: 071 41S 0306. UK Fax: 071 416 0305. 

COMPANIES & MARKETS 

©THE FINANCIAL TIMES LIMITED 1994 

POWERFUL 

CONNECTIONS 

Controllers, Electric Motors, 
Gearboxes 



MARKETS 


THIS WEEK 


t MARTIN DICKSON: 

GLOBAL INVESTOR 
For the past three years California 
the biggest single state economy, 
has been sunk in recession, badly 
trailing the national recovery in 
business activity. Now, it is 
showing the glimmerings of an 
, . „ . . . , economic upturn. Is the "golden 
state, which tost its Image of boundless 
opportunity during the recession, about to regain 
It? Page 24 



PETER NORMAN: 

ECONOMICS NOTEBOOK 
Globalisation is one of those ugly 
words impossible to avoid when 
discussing the world economy. Last 
week, in Its Jobs Study, the OECD 
cleared globalisation of contributing 
significantly to the sharp rise of 
unemployment In the industrialised 
countries. Page 24 


BONDS; 

Signs that, at tong last, investors are prepared to 
tak a cha nces on new Issues which they believe to 
be attractively priced have raised hopes that after 
several difficult months, some stability has returned 
to the eurobond market Page 26 

EQUITIES: 

For those strategists focusing on the strength of 
underlying equity valuations and on the evidence of 
economic recovery in the UK, last week brought 
valuable support Page 27 

EMERGING MARKETS: 

With such an apparently rosy economic 
background, why is the Tel Aviv stock market 
plunging? Page 25 

CURRENCIES: 

Foreign exchange traders will start the week by 
trying to assess the impact of the European 
elections. Page 25 


COMMODITIES; 

Delegates at the Vienna meeting this week of the 
Organisation of Petroleum Exporting Countries have 
the task of avoiding damage to the market's 
new-found buoyancy. 

Page 24 

UK COMPANIES: 

The Cheltenham & Gloucester Building Society 
seems to face a second hurdle to its acquisition by 
Uoyds Bank. The new hurdle affects mortgage 
holders. Under the 1986 Buikflng Societies Act 
borrowing members must pass a separate vote in 
favour of the t ra nsfer to another company. 

Page 22 

INTERNATIONAL COMPANIES: 

Ford, the US motor vehide manufacturer, has 
launched an aggressive strategy to gain a bigger 
share of the Japanese new car market 
Page 23 


STATISTICS 


Base landing rates 33 London recent Issues 33 

Company meetings 12 London share service . 34-35 

Dividend payments 12 Managed find service 29-33 

FT-A World indces 33 Money markets 33 

FT Gude to currencies — 25 New int bond Issues 26 

Foreign exchanges .33 World stock mkt indices .. 28 


John Griffiths talks to Honda about its European strategy after BMW bought Rover 


Not divorce 
but a partial 
separation 


I n the rmmpHinrp aftermath of 
the decision by British Aero- 
space to sell Rover Group to 
BMW, Honda appeared bent on 
filing for a bitter divorce from 
the UK car company which had 
been its partner for 14 years. 
Tempers have now cooled; prag- 
matism has set in. 

Honda and Rover have still 
undergone a partial separation, 

in that their wns mharphnlrting s 

have just been unwound. 

But their collaboration an spe- 
cific projects will continue, and 
possibly be renewed, for as long 
as there is considered to be 
mutual advantage. 

Honda meanwhile considers 
itself fine to form as many liai- 
sons with other European part- 
ners as it might choose, accord- 
ing to the Japanese car maker's 
president, Mr Nobuhiko Kawa- 
moto. And while mention of BAe 
still provokes frowns of disap- 
proval among Honda executives - 
who wiaiTitaiw that BAe should 
have let Rover remain indepen- 
dent and British - it is a measure 
of how much the atmosphere has 
lightened that even BMW is not 
excluded as a potential project 
partner. This flexibility in atti- 
tude towards partners present 
and potential is one of several 
key pipiments in a long-term strat- 
egy for Europe just drawn up by 
Honda, and which has what Mr 
Kawamoto describes as a “mid- 
term" goal of almost doubling 
Honda's car sales in the region 
by the year 2,000. 


What the long-tram goal might 
be, Mr Kawamoto is not yet will- 
ing to say. But it almost certainly 
will involve a further expansion 
Of Honda's car making 
at Swindon in southern Rw glanri 
beyond even the 50 per cent 
Increases in capacity, to 150,000 
cars a year, announced in Tokyo 
last week and to come cm stream 
in 1998. 

The capacity increases, 
together with the installation of a 
£30m ($45m) body pressings 
plant, form another element in 
the strategy. They will provide 
Swindon with stand-alone capa- 
bility and viability, says Mr 
Kazue Ito, currently executive 
vice-president of Honda Motor 
Europe, and who is to succeed Mr 
Miyake as president of UK-based 
HME an June 29. 

They would allow Honda to 
“strongly accelerate the self-reli- 
ant strategy which we have been 
pursuing” the Rover take- 
over, says Mr Kawamoto. The 
unspoken message was clear: 
Honda may form other project 
partnerships In Europe, but 
never again will it willingly 
make itself vulnerable within a 
long-term, strategic alliance. 

E ven ignoring the reason- 
able assumption that Hour 
da’s long-term goal Is to 
lift its European sales higher 
than the 300,000 (2 per cent of the 
total market) projected for the 
year 2,000, the expanded Swindon 
capacity is inadequate on the 



basis of Honda's own numbers. 

According to Honda’s strategy 
presentation last week, 150,000 of 
those sales will be provided by 
cars built at Swindon. 

Yet Swindon Is also to supply 
cars to the Middle East and 
Africa, regions for which HME 
and Mr Ito are also taking over 
responsibility. Honda already 
sells 50,000 cars in these markets 
and in the longer term they could 
take up to 10,000 from Swindon, 
according to Mr Ito. 

Other elements in the new 
European strategy should help 
Honda achieve its goals, most 
notably the addition of more than 
500 dealers to the European net- 
work, bringing the total to 2^00, 
by the end of the decade. 

The strategy needs to work. 
The new investment at Swindon, 
including a new model to be 
developed for the end of the 1990s 
at a cost of £240m, will total 


£33Qm. Given that the spending 
will be phased over several years, 
it is a relatively small amount for 
a group with consolidated net 
sales and other revenues last 
year of Y3.862.7bn (S37.48bn). 
Even so, Honda’s profits have 
«ww<> under increasing pressure. 
Three weeks ago it disclosed a 
further 86 per cent foil in net 
profits for its financial year to 
March 3L to Y23.6bn, following 
four straight years of profits 
decline from nearly YlOObn in 
1988-90. 

Mr Kawamoto insists, however, 
Honda has turned the corner and 
efficiency improvements and 
market recovery in North Amer- 
ica and Europe should see profits 
more than double in the current 
year. 

The new European strategy is 
not fwnfinfiri to cars, and itself 
forms only part of a wider set of 
policies through which Honda 


will try to ensure its long-term 
presence in a globalised auto 
industry. Honda also produces 
motorcycles, car engines for itself 
and Rover, lawn mowers, genera- 
tors and a variety of other power 
products in Europe. 

From now on the development 
manufacture gjn of all of 
these are to be integrated and 
co-ordinated by HME. 

Altogether, says Mr Ito: 
“Honda has 800,000 customers a 
year in Europe.” Many car buy- 
ers, he points out, are also natu- 
ral purchasers of other Honda 
products like lawn-mowers and 
there is a logic in multi-product 
showrooms. The same integra- 
tion will go on throughout the 
four global regions into which 
Honda has split its operating 
activities: the Americas, Asia/O- 
ceania, Japan and the new 
Europe/Middle East / Africa 
grouping. 


UK shares 
fall out 
of favour 
with funds 

By Maggie Urry 

UK fund managers' enthusiasm 
for buying British equities has 
waned further, according to the 
latest monthly poll of Investment 
intentions from Smith New 
Court and Gallup. 

The balance of bulls over bears 
of UK shares has fallen from 20 
per cent in April to 8 per cent Id 
the June poll, carried out early 
last week. This is in spite of a 
balance of 28 per cent of respon- 
dents, np from 17 per cent In 
May, expecting the FT-SE 100 
Index to rise over the next three 
months, and 81 per cent (74 per 
cent) bullish on the Index over 
the next 12 months. 

Fund managers have become 
more b ullis h about gilts, how- 
ever, with the balance of those 
planning to buy over those 
expecting to sell rising from 2 
per cent to 16 per cent between 
May and June. 

A desire to reduce cash bal- 
ances, currently 3 per cent of 
pension funds’ money, is persist- 
ing ami fund managers' favour- 
ite target market Is the Japanese 
equity market, with Smith New 
Court saying investors were 
“rampantly bullish” about the 
outlook for this market. The bal- 
ance of buyers over sellers was 
47 per cent in the June poll 
although the market has already 
risen significantly this year. 

Among other European mar- 
kets, fund managers favour 
France, Germany and Spain at 
the expense mainly of Italy. The 
US market is expected to show 
the lower growth over the next 
12 months than the UK, Japan or 
Europe. 


Bond weakness slows UK property upswing 


size of this reverse yield gap until bond 
yields Bettie down or there is firm evi- 


By Vanassa Hotddar, 

Property Correspondent 

The sharp upswing in UK commercial 
property values over the past year has 
been brought to a halt as a result of 
weakness in the bond market and alack 
of growth of property rents. 

Total returns from the UK property 
investment market for the year to May 
were 29 per cent, down on April’s figure 
of 29 .3 per cent, according to a monthly 
inrig* published by Richard Ellis, UK. 
chartered surveyors. 

“Capital growth due to significant 
movements in investment yields have 
temporarily come to an end. yet the 
anticipated rental growth has not yet 


started to appear,” according to Richard 
Ellis. 

Most participants in the UK property 
market expect the setback to property 
prices to be slight Mr John Rltblat, 
chairm an of British Land, said the mar- 
ket's codling was a symptom of balance 
emerging between numbers of buyers 
and sellers. “The froth has blown off the 
market" he said. HDlier Parker, char- 
tered surveyors, believes that average 
property yields, the ratio of income to 
capital, have been stable over the last 
month at 12 per cent Mr Greg Nichol- 
son of Hillier Parker believes they are 
likely to edge up by one percentage 
point over the coming menth. 

The principle reason for the slight set- 


back to the wwniner etal property market 
is the behaviour of the bond market 
The movements in bond prices had a 
heavy Influence on property value last 
year since - in the absence of rental 
growth - property's long-term, secure 
Income stream tends to be valued like a 
bond. This year, the link between prop- 
erty and bonds has loosened, as inves- 
tors have become more optimistic about 
prospects for rental growth. A few 
months ago, property yields fen below 
gilt yields as investors became con- 
vinced that rental growth would soon 
re-emerge. The gap between property 
and gilts yields is now more than one 
percentage point 

Some investors are nervous about the 


dance of rental growth. “There is great 
uncertainty in the market as to what is 
happening”, in the view of Mr Marc Gil- 
bard of Goldman Sachs. If gilt yields 
were to move out to say, 9 per cent he 
would expect property values to foil in 
the short term. 

Investors’ nerves are also being tested 
by the paucity of evidence of rising 
rents, except in a few markets such as 
prime Central London office space. Rich- 
ard Ellis reports that rents fell in May, 
after stabilising in previous mnnths, Mr 
Andrew Walker of Institutional Property 
Forecasting Services, a subsidiary of 
Erdman Lewis, has cut its estimate of 


total returns for this year from 1&3 per 
cent to 10.7 per cent as a result of down- 
grading rental forecasts. 

Properties most affected by the weak- 
ness of the bond market are those let at 
above-market rents and so have the 
least prospect of rental growth. Agents 
estimate that around £800m-£900m of 
over-rented property for sale in the City 
is having difficulty in attracting buyers. 
However, demand is still strong for cer- 
tain parts of the market, particularly 
shopping centres and prime high street 
shots. Agents believe that several bil- 
lion pounds of institutional fluids are 
allocated to the property sector. In par- 
ticular, unit trust managers have raised 
significant sums to invest in property. 


This week; Company news 


KONINKLUKE PTT NEDERLAND 

Trading begins in 
shares of postal 
privatisation 

Trading gets under way today in shares 

of Koninklijke PTT Nederland, the 
Dutch telecommunications and postal 
operator which is being partially 
privatised in the biggest share launch 
in the history of the Amsterdam stock 
exchange. . 

The 138.15m shares were priced at 
F149.75 ($26.60) with private investors 
given a discount of F12-50 per share 
up to a maximum of 75 shares. The 
price was at the high end of 
expectations but the offer was nearly 
three times oversubscribed. 

The Dutch state, which is raising 
nearly F17bn through the sale of a 
30 per cent stake in the company, is 
eager for trading to go well to pave 
the way for a second tranche by late 
1997. It will also be watching to see 
how many private investors cash m 
"■ ' ' ares imm ediately to realise 

»rence between the price they 

- .. ... sc A infitiflltinr 


diiu uic yi ua. A , 

store. This is the first Dutch 
ati cation in which small 
eholders have been given a 
nrifll incentive to take part 
5N Amro, the Dutc h ban k leading 
nteraational underwriting 
ortium, had asked consortium 
ibers to refrain from trading m 
lhares on an “as. if and when 
sd" basis ahead of today’s official 
ch. . ^ 

ith a total market capitahsation 

[toJSba, KPN will be the third 
sst company listfido n “® 
iterdam bourse, behind the 
Lange's two Angio-Dutch giants. 


luajiuibiui uwi- w 

i market's total capitalisation. 


re astock mariset listing, the 
my Scheduled to issue* i new 
j today in a design that 
s logo with a drawing of toe floor 
; Amsterdam stock exchange- 


Sfiarp price tetattw-to the. ... 



Recovery may prove 
a moving experience 

NFC's performance is viewed as a 
bellwether indicator of UK economic 
activity, so the transport and logistics 
group’s interim results doe on 
Wednesday will be well scrutinised. 

In March the UK-based group, which 
reports its results on a quarterly basis, 
reported an 11 pear cent increase in 
underlying operating profits. At that 
stage the company said the domestic 
economic recovery remained variable, 
and noted there were no signs of 
recovery in continental Europe. 

The second quarter is t rad i ti o nally 
the weakest for NFC. Reflecting this, 
first half pre-tax profits on an FRS3 
basis are likely to foil from £8&6m 
to £53m ($79-5m). However they should 
show hesdthy growth from £375m to 
about £49m on a normalised basis as 
the recovery in the US and UK 
economies begins to pull mare 
consumer goods through the 
distribution pipeline serviced by NFC's 
logistic operations. 

Meanwhile the upturn in the housing 
markets should help Pickfbrds moving 
services but investors will be looking 

for further clarification on the future 
of Lynx, the loss-making parcels 
business. Earnings growth will 
continue to be held back by the dilutive 
effects of the £263mrighls issue . 

completed in January which has 
nevertheless provided additional 
flexibility to expand the distribution 
and removal businesses internationally. 


OTHER COMPANIES 

Mediobanca rights 
set for approval 

Shareholders in Mediobanca, the 
powerful Milan merchant bank, should 
approve a LLSOObn ($939 Am) rights 
issue at their meeting in Milan today, 
although the exact price of the shares 
to be issued will not be set until next 
week. The gharehrildfir assembly comes 
exactly two weeks after Ravenna 
magistrates warned top bank 
executives that they were under 
investigation for their role as advisers 
to the Ferrum-Montedison industrial 
group last year. 

Mediobanca has said it is “bitter” 
about the allegations that directors 
conspired to issue false accounts. 
However, in line with its reputation 
for the utmost discretion, the bank 
is miii fcpiy to comment further on 
affair today. 

■ Christian Salvesem The UK 
distribution company today reports 
full year results winch are likely to 
show only a modest increase on the 
year-ago pre-tax level of £75 .8m 
($U&9m) and earnings of 19-lp. 
Following the group's profits warning 
in January, the shares have 
underperformed the market by around 
40 per cent - these results should mark 
a turning point 

■ FKL The UK-based electrical 
engineering group is expected to turn 
in annual pre-tax profits of at least 
£50m ($75m) on Thursday, np from 

a previous £38m. 


.Mediobanca 


Share price {Lire *000) \ ’ 



■ Argus Newspapers, the new 
company 'hnirtfng tbft publishing 
interests of South Africa's Argus group, 
is due to list cm the Johannesburg 
Stock Exchange today. With the listing, 
Mr Tony O'Reilly's Dublin-based 
Independent Newspapers group will 
become the largest shareholder in the 
group. Although the share had been 
tipped for a strong opening - its 
pre-listing statement, forecasting 
earnings of 72 cents a share for the 
next financial year up from a proforma 
64 cents in the year to March, was well 
received by the market - its prospects 
have been overshadowed by a wage 
dispute with journalists in the group’s 
newspapers. Although a threatened 
strike by the two major press unions 
appears to have been averted pending 
the outcome of mediation on Tuesday, 
pickets are still planned outside the 
stock exchange this morning, and the 
continued threat of Industrial action 
is likely to deter several prospective 
purchasers. 


Companies in this issue 


Anglesey MHng 

22 

Ford 

23 

Mgn Grenfell Dev Cap 

22 

Apple Computer 

23 

Hereto 

22 

Outokumpu 

23 

Cheltenham & Gtouc 

22 

Hewlett-Packard 

23 

Pilar Properties 

22 





Qufflgotti 

22 

Dale Electric 

22 

Honda 

21 

Rover 

21 

Ennemix 

22 

total 

23 

Trfe»e 

23 

Eurotunnel 

22 

Lloyds Bank 

22 

Uelnor Sector 

3 


77m jnnounantmr appear- at a matter of retard tvtlu. 



L O C A L de 

FRANCE 

Japanese Yen 30J)00fiQ0fl00 


3 3 A% Notes due 1999 


Issue Price: 100.00 PerCent 


Norinchukin International pic 


Doiwa Europe Limited 

Goldman Sadis International 
LTCB International Limited 
JJ1 Morgan Securities Ud. 

NSdco Europe Pk 

Sakura Finance Infra motioned limited 

Jmu,t994 


Fuji International Finance PLC 

IBJ International pic 
Merrill Lyndi International limited 
Morgan Stanley & Co. 
Nomura International 
Ybmaichi International (Europe) limited 







■ ::-m ■ 


FINANCIAL TlM^S MONDAY JUNE 13 1994 


COMPANIES AND FINANCE 


Ruling may bar payments to mortgage borrowers say advisers EllDC niix 

n Jl 1 11 !• AN n AN _ 


Further hurdle for C&G offer cuts float 


By John flapper, 
Banking Editor 


Cheltenham & Gloucester 
Building Society said yesterday 
that it believed that it had 
been barred from making pay- 
ments to its 370.000 mortgage 
borrowers as part of its pro- 
posed £1.8bn acquisition by 
Lloyds Bank. 

The society's legal advisers 
have said that last week's 
court ruling prohibited pay- 
ments to its borrowers as well 
as its investing shareholders of 
under two years’ standing. 

The interpretation erects a 
second hurdle to Uoyds’ acqui- 
sition because, under the 1986 


Budding Societies Act, borrow- 
ing members must pass a sepa- 
rate vote in favour of the trans- 
fer to another company. 

The society said that the 
mterpretation was one reason 
why it expected to take several 
weeks to devise a new scheme 
to comply with the judgment 
made by Sir Donald Nichdlls, 
the Vice Chancellor, last week. 

Although it has estimated 
that 27 per cent of its 825,000 
shareholders, or some 220,000, 
would be unable to vote under 
the ruling, it is expected to re- 
examine its records to check 
whether this figure is correct. 

C&G has already closed 
investing accounts to new 


members temporarily to pre- 
vent inflows of funds. 

The requirements for the 
borrowing members’ vote are 
less onerous than for the vote 
among investing shareholder s 
because the borrowers' resolu- 
tion needs only to be passed by 
a majority of those voting. 

That is in contrast to the 
shareholders 1 vote, which must 
be passed both by a majority of 
those eligible to vote, and a 75 
per cent majority of those actu- 
ally voting, a figure made bard 
to achieve by the court ruling. 

The society has ruled out 
paying members In preference 
shares rather than cash. 
Among options it is consider- 


ing is persuading shareholders 
afless than 2 years s tanding to 
transfer to no&voting deposit 
accounts. 

Although the judge ruled 
that it was allowed to make 
payments to depositors who 
are ineligible to vote it would 
risk being taken back to court 
by the Building Societies Com- 
mission if it paid shareholders 
cash to give up voting rights. 

The longer the society delays 
devising a new scheme, the 
more of its investing members 
will qualify for payments. 
However, Lloyds could come 
under pr e ss ur e from the stock 
exchange to clarify its inten- 
tions publicly. 


price by 
up to 30% 


By David WJghton 


Approach 
to Dale 
Electric 


Quiligotti calls for £1.5m 


Dale Electric International, 
the power systems maker, has 
received a preliminary 
approach which may lead to 
an offer for the co m pany. 

The board also announced 
that it was expecting a pre-tax 
loss of about £4m for the year 
to Hay 1 after taking account 
of exceptional provisions of 
£L4m. Profits of £2J!6m were 
recorded in 1992-93. 

However, trading perfor- 
mance improved in the second 
half and further progress was 
being looked for in the open- 
ing half of the c u rrent year. 

Mr Christopher Coole has 
resigned as a director and left 
the company and Mr Terry 
Smith has been appointed 
company secretary in addition 
to his duties as finance direc- 
tor. 


Quiligotti, the USM-quoted 
tfles and flooring group, has 
launched a l-for-3 rights issue 
at 15p to raise about £L5m net 
in order to restore its resources 
following the acquisition of 
Cristofoii in April. 

The group also announced 
reduced pre-tax losses of 
£2£3m (£3 An) for the year to 
March 31, and that it had 
applied for admission to the 
Official T.jgt 

In addition, Quiligotti has 
disposed of its Irish subsidiary, 
Quiligotti Ireland, to its man- 


agement for £1 plus the pay- 
ment of some intercompany 
debt 

Q nfHg ntti Ireland, which is 
involved in the contract laying 
of hard flooring systems, will 
be appointed as the group's dis- 
tributor in Ireland. 

Group turnover for the 12 
months amounted to £12.9m 
(£15An) fnclnding film from 
acquisitions and £824,000 
(£1.22m) from, discontinued 
activities. The pretax result 
was after rasfructuring costs of 
£L03m. Losses par share came 


through at L22p (4.4p). 

Irrevocable undertakings 
have already been received to 
take tq> 46.6 per cent of the 
underwritten rights issue of 
i t 9 9m new ordinary shares. 

As anticipated last October, 
the company Tntonjte to consol- 
idate its shares on the baas of 
one 5 p share for ev e ry 10 exist- 
ing 05p ordinary shares. 

Mr Campbell Allan is step- 
ping down as rihalrawm with 

effect from July 4. He will be 
succeeded as chairman by Mr 

Tfannath HodgSOU. 


Notices could assist French 
Eurotunnel share investigation 


By Antonia Sharpe 


Mgn Grenfell 
Equity Partners 


Morgan Grenfell Development 
Capital has raised £26Lm at 
the first dosing of a sew fund 
to be invested in larger man- 
agemait buy-outs. 

Morgan Grenfell Equity 
Partners, as the new fond is 
called, was raised from 38 
investors mainly in the UK but 
also in the US, the Middle East 
and Japan. 


The routine issuing of Section 
21 2 notices by Eurotunnel, the 
fThannal tunnel operator, fol- 
lowing its £85&3m rights issue, 
could provide important infor- 
mation for the Commission des 
Operations de Bourse, the 
French stock market regulator 
which is investigating French 
claims that Eurotunnel shares 
were manipulated ahead of the 
rights issue. 

After big share offerings or 
rights issues. It is standard 
procedure for companies in the 
(JK to send out these notices 
which oblige investors to pro- 
vide details of their sharehold- 
ings. A by-product of these 


notices is that the company 
can also And out who has 
bought or sold its shares. 

Last month, Mr Christian 
Cambier, head of a French 
association for Eurotunnel 
shareholders, wrote to the COB 
calling for an inquiry into the 
movement of shares in Euro- 
tunnel ahead of the announce- 
ment of its rights issue. 

“It seems that massive sell- 
ing may have deliberately 
weighed on the share price 
since the beginning of May and 
that curiously shares in Euro- 
tunnel may have been lent 
between institutions during 
the same period," he said in 
the letter. 

Although selling “short" is 


This advertisement is issued in compliance with the regulations of The International 
Stock Exchange of die United Kingdom and the Republic of Ireland Limited (the 
"London Stock Exchange"). It does not constitute an offer or invitation to any person 
to subscribe for or purchase any securities. 

Application has been made to the London Stock Exchange for the whole of the share 
capital of VCI pic (the "Company") which will be in issue following the Placing and 
Intermediaries Offer to be admitted to the OffidaUist. It is expected that admission 
will become effective and that dealings in the ordinary shares will commence on 
Thursday, 23 June, 1994. 


VCI pic 

(Incorporated and registered in England and Wales under tbe Companies Act 1985 - No. 2326986} 


PLACING AND INTERMEDIARIES OFFER 


Samuel Montagu 


21,000,000 ordinary shares of lOp each ax 150p per share payable in foil on 
application, of which up to 5,250,000 ordinary shares are being placed subject to 
clawback for the purpose of meeting valid applications by Intermediaries and 
Preferential Applicants 


Share capital immediately following the Placing and Intermediaries Offer 
Authorised Issued and fully paid 

Plumber Amount ’ Number Amount 

50,000,000 £5.000.000 ordinary shares of lOp each 38,874,782 £3,887,478.20 


VCI pic is the holding company of one of the leading audio-visual and audio 
publishing groups in the UK. 

Applications under the Intermediaries Offer must be received by 10.00 a_m. on 
Friday, 17 June, 1994. Intermediaries, who must be member firms of the London 
Stock Exchange or other securities houses authorised in the UK by The Securities 
and Futures Authority Limited, may obtain application forms, during normal 
business hours, only from James Capel & Co. Limited at the address below. 

Copies of the Listing Particulars relating to the Company may be obtained during 
normal business hours on any weekday (Saturdays and public holidays excepted), 
up to and including 14 June, 1994 from the Company Announcements Office of the 
London Stock Exchange, London Stock Exchange Tower, Capel Court Entrance, off 
Bartholomew Lane, London EC2N 1HP (by collection only) and, up to and inducting 
27 June, 1994, from the Company’s registered office at VCI pic, 36-38 Caxton Way, 
Watford, Hertfordshire WD1 8UF and from: 

James Capel & Co. Limited Samuel Montagu & Co. Limited 

Thames Exchange 10 Lower Thames Street 

10 Queen Street Place London EC3R 6AE 

London EC4R 1BL 
13 June, 1994 


FZrf ureSburce - N 




UDKflP 


Technical Analysis & Traded Options Software 


HTOEX1A Research, (21 HighSt, Berfcttmaml, HP4 2QJ 
Td (0442) 8780 Id Fax (0442) 876834 



legal in the UK and regularly 
occurs ahead of a rights issue, 
the exercise could benefit large 
institutions at the expense of 
shareholders. 

Eurotunnel said it would 
co-operate folly with the COB. 


DIVIDENDS ANNOUNCED 


Bridgend — 
Bufgin (AF) _ 

Cohan (A) 

Paris Food _ 

Sonde , I- - 

WaMi Water 


Currant 

payment 

Data of 
payment 

Cortes - 
ponding 
cSvJdond 

Tam 

far 

Total 

last 

year 

0.1 

Aug 5 

02 

02 

0.4 

025 

Aug 3 

0.1 

025 

0-1 

id 

- 

&4 

rti 

BA 

1-567 

Oct 4 

1.33- 

24 

2* 

1.5 

Aug 12 

W 

25 

1.5 

16.95 

Oct 3 

15 J 

2S.4 

225 


Dividends shown penca per share net except where otherwise stated. tOn 
increased capttaL §USM stock. 'Adjusted (or scrip. 


VARD 


Notice of the Anneal General Meeting 

The Annual General Meeting of Vand AS will be held on 
20th June 1994, 15.00 hours 
at Shippingklubben, Haakon VU's gt. 1, Oslo 1 


Agenda: 

1. Approval of the summons to (he meeting. 


2. Approval of ihc attending shareholders and presented powers 
of attorney. 


3. Election of Chairman and two shareholders to co-sign the 
minutes of the meeting. 


4. Approval of the Company's Financial Statements 1093. 

a) Presentation of the profit and loss account and balance 
sheet for the Company and the Group, 
bj Approval of the reports of die Board and Auditor for 1993. 
c) Determination of the profit and loss account and balance 
sheet for 1993 for die Company and the Group. 
d> Approval of the Board of Directors' recommendation for 
covering the loss for 1995- 

3- Approval of the remuneration of the Board of Directors. 

6. Approval of the Auditors' fee. 

7. Miscellaneous. 


Oslo, June 1994 
VardAS 


Einar Roster 
Chairman of the Board 


This advertisement U issued in compliance with the regulations of The 
International Stock Exchange of the United Kingdom and the Republic of 
belaud Limited ("the London Stock Exchange"). Application has been made to 
the London Stock Exchange for Ok dare capital of Qmhgoni pie, arising from 
the Teotgamsatkm of ha share capital and to be issned to the Rights 

Issue to be admitted to the Official List. It is emphasised that this adverti s ement 
does not co n st it ut e an offer or hrricatxm to any person to subscribe for or to 
purchase securities. It is expected that dealings in the Ordinary Shares oF 5p 
each will commence on 5th July 1994. 


Quiligotti pic 

(Incorporated la England and Woles nndcr the Companies Act 1983) 
(Reghtered No 2282021) 


ADMISSION TO THE OFFICIAL LIST 
AND 

RIGHTS ISSUE TO RAISE EL5 MILLION 


Share capital immediately following the Rights Issue 


Authorised 

£3,250,000 


Issued aad foil paid 
£234333 


of Ordinary Shares of 5p each 


Copies of tbs listing Particulars relating to OniUgotd pic may be obtained 
during normal business hows on sny weekday (public bolidaya excepted) from 
the Company Announcements Office of the London Stock Exchange Tower, 
Capel Court entrant off Bartholomew l ane London EC2 (for collection only) 
up to and tod rating 14th June 1994 and up to 27th June 1994 from; 

Rnriawd fiB pmW Pimmw fjmiteil Q nilrgrVri pic 

Rutland House Newby Road 

Hnttwmt q<hIms Hurl Grove 

Tmwtnn 

SW71BX Cheshire SK75DR 


13th June I9W 


T.-MS I- 


Pillar Properties sets 
up joint venture fund 


O ' 11 


,ku» l l w 


By Simon Davies 


gnw«wnhr 7 an east MW eu ds 
aggregates comp a n y , has been 
forced to cut its flotation price 
by more than a quarter afro 1 
Institutions foiled to back its 

original proposaL 

This unusual plan involved 
raising almost £9m from a 
rights issue offered to existing 
shareholders of Anglesey Min- 
ing; a quoted north Wales min- 
ing group. 

Mr Christopher Stainforth of 
merchant bank Guinness 
Mahiwi, which is advising both 
companies, said that institu- 
tions had ngpti Hw deal's com- 
plexity as an excuse for not 
hacking it Hie said there were 
signs that the new issue mar- 
ket was recovering but 
because fameraix needed new 
funding to complete an acqui- 
sition It could not wait 

It is therefore going ahead 
with an orthodox flotation hot 
the price has been cut by 
“25-30 per cent". 

Faced with the lower price, 
Nash Sells, the venture capital 
company, has decided not to 
sell any of its 23 per cent 
stake. 

Mr Stainforth said the 
amount raised for Eunemix 
would he the same as under 
the former plan though the 
total raised would be between 
£Gm and £7m. 

The original proposal would 
have seen Ennemix Inject a 
much needed £600,000 into 
Anglesey in return for a 15 per 
emit stake. 

Anglesey believes its credi- 
tors will amtinnB to support it 
for the time being and It has 
been given assurance from 
Imperial Metals Corporation, 
its largest creditor which owns 
41 per cent of its shares. 


Pillar Properties, the UK 
investment company due to 
float later this week, has 
formed a £25Qm joint venture 
investment fond to buy retail 
property in the UK. 

The venture has been set up 
with part of Canada's largest 
piddle pension fond manager, 
Caisse de depot et placement 
du. Quebec, which controls 
about S33bu (£22bn) of assets. 

It shows the resurgence of 
confidaace in the UK property 


market since the launch of 
another joint venture fond by 
Mr George Soros and British 
Land a year ago which has 
invested more than ESOOm. 

The latest investment com- 
pany, which will be ma n aged 
by Pillar, will focus on shop- 
ping centres, with an average 
purchase price of about £30m. 

The fond will buy properties 
which require active manage- 
ment, including refurbishment, 
and it intends to be folly 
Invested within two years. 
Profits will be split between 


the two partners, hut Hilar 
win receive an additional car- 
ried interest, to reflect Its man- 
agement rote. 

Pillar and its partner, Sodfitt 
Immobiltere Trans-Quebec, will 
initially inject £30m each, and 
acquisitions will he fonded by 
a combination of equity and. 

non-recourse debt 

The company has built up 
assets at £330.4m. it is man- 
aged by Mr Raymond Mould 
and Mr Patrick Vaughan, 
founders of BAe's property 
arm, Arlington Securities. ; 


Harrods claims damages 


By Antonia Sharpe 


Harrods, Britain's most famous department 
store, has put in a counter-claim for damages 
amounting to hundreds of thousands of pounds 
against a former employee who is suing the 
Krughtsbridge store for £23,000 in severance pay. 

Harrods said it would vigorously defend the 
High Court action brought by Mr Nicholas 
Whalley who had been taken on to modernise 
the store’s distribution systems. 

“Mr Whalley had been given an important job 
to do but he abdicated that responsibility and 
allowed the situation to continue for six 
months," it said. 


Mr Whalley was dismissed in March for fell- 
ing in his duties and for railing to safeguard foe 
interests of Harrods. the company added. The 
store’s claim for damages is with respect to 
contracts for new equipment entered into by a 
mnn Harrods claims was not qualified to do so, 
This situation had also cost Mr Stephen Tu- 
tor, Harrods* personnel director, his job. Then 
departures come in the wake of the highiy-pubb- 
cised resignation in April of the store's farmer 
managing director, Mr Peter BolUgar. Butter 
this month, Harrods said all differences had 
been resolved amicably. 

Harrods has appointed a successor to Mr 
Whalley hut declined to reveal Ids identity. . 


Tri/ Cl 

oftVr i" 


CROSS BORDER M&A DEALS 


BIDDSVINVESTOfl 


COMMENT 


Co mm er ci al Union (UK) 


Groups Vtctoire [Francs} Insurance 


Advanced talka 
announced 


Daewoo (South Kotos)/ 
DCM-Toyota (India) 


DCM-Dmwoo (JV) 


Auto assembly Cl 33m 


Indsn oar 
production 

grow* 


Smiths Industries (UK) 


Dettec (US) 


Medical 

equipment 


Phamwda 

non-core 

disposal 


Sendee Corp 
Intamatioaal (US) 


Great Southern Group (UK) 


Funeral 

aarvices 


Rejection 
looting My 


CLT (Luxembourg) 


CMtem (UK) 


Broadcasting Cl 6.3m 


First big UK 
push 


Unitech (UK) 


Advanced Analog (US) 


Electronic 

components 


Deterred p«y- 


Aga ( S weden) 


BKZ (Russia) 


Initial 35% 
stake 


Erfdanb Mg M iKSay 
(Franc*) 


Boeua (Spalh) 


EdfatooPs 


Montedteon aria 
takes control 


Divenwy (Canada) 


Unit of Chamrits 
(South Africa) 


Chemicals 


Third African 
operation - 


Metro (Finland)/ 
S ec uUe a (Sweden) 


Assa-Abtoy 

(Flntand/Swedsri) 


Control system n/a 


Control merger 
creating leader 


Unkm Carbide (US)/ 
Bf-Atocham (Franca) 


Specialist 

plastics 


Ptfroche m 

restructuring 

continues 


CONSOLIDATED 
ANNUAL REPORT 


Statement of 
Income 


(tor tea petal Apt J.1BB3 
H March 31. IBM) 
to MWooaaf Van 


Net sales .. .. 4.630.907 

Cost of sales 3,345,120 

Income before taxes and minority 

interests 90,190 

Income taxes 75,506 

Net income 12,140 

Net income per share 3.78 (in Yon) 


Balance Sheet 


Assets 


(March 31. 19M) to Mttona <rf Y« 


Liabilities and Shareholders' Equity 


Court 


mini 


Cash and cash equivalents 596,601 

Nates and accounts receivable, 

trade — — 1,113,992 

Inventories 1,102,249 

Other current assets 391 .511 

Properly, ptant and equipment 1,331.612 

Other assets 815,725 


Bank loans and current portion of 

long-term debt 865.396 

Notes and accounts payable, trade 818,741 

Other current liabilities 1,067; 777 

Long-term liabilities 1.3S&323 

Minority interests 127,729 

Shareholders’ equity 1.117,725 


.5^50,690 


Total llabTHtfes and 
shareholders' equity 


.5,350*890 . 


In T ouch with Tbmorrow 

TOSHIBA 



Telecom Markets is the essential source of regular information about 
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TM Is designed so that Information Is readily accessible and outckhr 
absorbed, providing the latest on: ^ ^ 

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FINANCIALraMESMQNDA^UN E 13 1994 

COMPANIES AMP FINANCE 

Outokumpu in FM1.2bn share offer 


By Christopher Brown-Humus 
in Stockholm 

Outokumpu. the Finnish 
mining and. metals group, has 
launched a FMlJ2bn (S217m) 
international share offer on the 
back of a sharp improvement 
in profits in the first four 
month*? 

The Finnish state is also sit- 
ing part of its stake in the com- 
pany to raise FMttMm. The 
moves give farther impetus to 
the Finnish privatisation pro- 
gramme and will reduce state 
ownership in Outokumpu to as 


little as 38.2 per cent from 50 1 
P® cent 

Outokumpu and the state 
will offer 18m A shares, 
increasing to 2L3m shares if 
there is strong demand All 
shares will carry warrants, giv- 
ing subscribers the right to 
acquire one additional share 

for every six warrants before 
June 28 1996. 

The offer Is mainly *ftngd at 
international institutions, 
although there will also be a 
Finnish retail tranche. Pro- 
ceeds will be used to 
strengthen Outokumpu’s bal- 


ance sheet, lifting its eqmty-to- 
assets ratio towards a targeted 
per cent from 28.7 per cent 
at the mid of ApriL A win also 
help finance investments in 
the group’s base metals and 
stainless steel businesses. 

The offer will be marketed in 
the second half of June, and 
pricing fixed in early July. 
Global co-ordinator is 
S. G. Warburg Securities. 
Kleinwort Benson Securities, 
Merrill Lynch International 
and Pro spec tus/KansalHs- 
Banking-Group are co-lead 
managers. 


This will be Outokumpu's 
third share issue in little more 
than a year and cpny s on the 

hark of a stren g th ening finan- 
cial performance and rising 
metals prices. 

The group lifted pre-tax prof- 
its to FUSOtm from FM2lm in 
the first four months of 1991, 
despite a 4 jb per cent fall in net 
sales to FM5£lbn. Improving 
market co nd Mons, rationalisa- 
tion and reduced debt are 
expected to maintain the better 
trend over the rest of the year. 

Outokumpu's shares fell 
FMS.60 to FMB5.20 <m Friday. 


offerto^ Intel and Hewlett-Packard 
creditors seek best of both worlds 


By Bernard Simon 
In Toronto 

Trizec, the Calgary-based 
property developer, is poised to 
finalise its debt restructuring 
after improving its offer to 
creditors with the help of a 
Cf 300m (US$21Sm) injection 
from an investment group led 
by New York finapcjpr Mr Ger- 
ald O’Connor. 

A committee of senior deben- 
ture holders, who have held 
out for better terms since Trl- 
zec launched its recapitalisa- 
tion almost a year ago, has 
urged its members to approve 
the proposals. Information 
meetings for debenture hold- 
ers, many of which are Euro- 
pean institutions, wifi be bald 
in Zorich, Toronto and New 
York over the next fortnight 

The injection by the US 
Investment fond, known as 
Argo Partnership, brings the 
Trizec rescue package to more 
than Cflbn. Horsham, the 
holding company controlled by 
Canadian entrepreneur Mr 
Peter Munk, earlier agreed to 
put up as much as C?7l7ta- 

Under the latest plan, Hor- 
sham Will have a maximum 
equity stake of 44 per cent in 
Trizec. Argo wifi own 24 per 
cent, leaving outside share- 
holders with 315 per cent Tri- 
zec, which is North America's 
biggest publicly-traded real 
estate developer, is presently 
controlled by Toronto’s Bronf- 
man family. 

Thp mam chang e in thn lat- 
est offer is a CfSOQm increase 
. in the amount of cash available 
to securities holders, as an 
alternative to the common 
shares to he issued under the 
plan. The cash amount avail- 
able to senior debenture hold- 
ers has risen from 55 per cent 
erf the value of their loans to 76 
per cent, or a total of C*91Tm. 

Mr Kevin Benson, Trizec’s 
chairman, said that besides 
improving the chances of the 
debt restructuring going 
through, the sweetened 
“liquidity offer" should have a 
stabilising effect on Trizec’s 
share price once the plan is 
implemented. U hopes to 
implement the debt-restructur- 
ing towards the end of July. 


I ntel’s alliance with Hew- 
lett-Packard to develop a 
new generation of micro- 
processor chips could, if it Evas 
up to the companies’ expecta- 
tions, became the most impor- 
tant computer industry part- 
nership Of the riftfinfnp 

the direction of computer tech- 
nology for years to come. 

The Intel-HP partnership 
links the world's largest semi- 
conductor manufacturer and 
dominant supplier of micropro- 
cessor chips with the second- 
largest US computer company, 
creating a new power axis in 
the computer industry. 

Intel plans to collaborate 
with. HP in a broad joint 
research and development proj- 
ect “aimed at providing 
advanced technologies for end 
of the decade computers". The 
companies will together design 
64-bit microprocessors, related 
semiconductor production 
technology and software. 

For both companies, micro- 
processors are a critical tech- 
nology. The chips are the 
“brains" of computers and 
determine, to a significant 
degree, the speed and power of 
a computer and what types of 
software it will run. The new 
partnership could, therefore, 
prove to be a decisive factor in 
the success of both companies. 

For Intel, the HP technology 
alTianw si gnals a shift Of loyal- 
ties. Since the late 1970s, Tntpl 
has been closely linked to row , 
still its largest customer, as the 
developer and supplier at 
microprocessor chips for IBM 
and IBM-compatible personal 

computers. 

Intel's relatio nship with IBM 
has been frayed, however, by 
IBM’s adoption of PowerPC, a 
new microprocessor architec- 
ture jointly developed by IBM, 
Motorola and Apple Computer, 
as the foundation for many of 
its fixture products. 

IBM and Motorola are pro- 
moting the microprocessor as 
an alternative to Intel chips in 
PCs. Apple has launched sev- 
eral Macintosh PCs based on 
the PowerPC chip and IBM is 
expected to introduce its first 
PowerPC “personal systems” 
in a few months. 

By working with HP, Intel 


aims to expa nd its market into 
microprocessors for use in 
higher performance computers 
such as workstations, network 
servers and mainframe** while 
also defending its leadership in 
microprocessors for PCs. 

HP brings several strengths 
to the partnership. The com- 
puter company has its own 
microprocessor architecture, 
called PA-Risc, which has 
helped to make it a leader in 
the market for computers that 
are linked by networks. HP is 

Louise Kehoe 
looks at the 
implications of a 
new power axis 
in the computer 
industry 

also an expert in “open 
systems” software, which has 

an im portant standar d 

for distributed comDutinc. 

Unlike IBM and Digital 
Equipment, HP is flourishing. 
Its sales rose 24 per cent last 
year to |205bn, overtaking 
Digital to become the second- 
largest US computer company. 

HP and Intel aim to combine 
the “best of both worlds”. 
Their jointly developed chips 
will draw an Intel’s expertise 
in high volume ehip manufac- 
turing *md its dominant ml a in 
the PC arena and HP's experi- 
ence in very high-performance 
Rise (reduced instruction set 
computing) microprocessors 
and its understanding of the 
“open systems” field. 

The HP-tntd chips will run 
both PC software and open 
systems software without mod- 
ification, thg companies said. If 
they can achieve this without 
sacrificing the performance of 
existing software, Intel and HP 
will have a clear advantage 
over all competitors. 

However, HP and Intel do 
not expect to see the first fruits 
of their collaboration until late 
in the decade, giving PowerPC 
and other rival microprocessor 
architectures such as Digital 
Equipment’s Alpha time to 


consolidate their positions. 
Competitors characterised the 
alliance as an attempt to «teh 
OP with their technology. 

“We have a six-year lead on 
them,” said Mr W illie Shih, 
vice-president of Digital Equip- 
ment. “Intel and HP are 
endorsing our technology 
direction by developing 64-bit 
microprocessors, but we have 
already sold $lbn worth of 
computers based on our Alpha 
microprocessor." 

IBM similarly maintains that 
Intel’s plans are a defensive 
move. “This [partnership] 
affirms our view that Rise is 
the current and future answer 
for high performance micropro- 
cessors," IBM said. “While HP 
and Intel are entering the 
research phase we already 
have chips and products on the 
market.” 

However, by merging their 
long-term research and devel- 
opment efforts, HP and Intel 
will bring huge resources to 
their efforts to create a new 
generation of microprocessors 
that, they say, will leap-frog 
their competitors products. 
Although the companies 
declined to discuss financial 
arrangements, they indicated 
that both expect to spend hun- 
dreds of millio ns of dollars on 
the effort. 

S uch resources can only 
be matched, at present, 
by the IBM, Motorola, 
Apple Computer PowerPC 
team. This raises questions 
about the fixture of rival micro- 
processor standards from Digi- 
tal Equipment, Sun Micro- 
systems others. 

Analysts have long predicted 
that only two or three micro- 
processor architectures will 
have a significant role beyond 
the end of the decade. Now it 
appears that consolidation may 
be under way. 

Still, Intel and HP face signif- 
icant technological and man- 
agement challenges. Their 
partnership holds great prom- 
ise but - like many other affi- 
ances in the computer and 
semiconductor industries - it 
could prove barren unless both 
sides prove willing and able to 
collaborate folly. 


Court ruling hits Baby Bell competitors 


By Martin Dickson 
In New York 

Shares In several upstart 
North American telephone 
companies fell sharply late on 
Friday after a court overturned 
new regulations meant to help 
them compete against the 
established Baby Bell US local 
telephone monopolies. The Bell 
companies bailed the ruling as 
a significant victory. 


A federal appeals court in 
Washington overturned a 1992 
ruling by the Federal Commu- 
nications Commission, the gov- 
ernment agency which over- 
sees the telephone Industry, 
which required local monopo- 
lies to set aside space In their 
central offices for competitors 
to place equipment allowing 
them to inter-connect lines 
with the monopolies’ networks. 

The Bell companies say such 


“physical colocation" of equip- 
ment is not necessary to pro- 
mote competition and prefer to 
have “virtual co-location”, 
with competitors’ lines con- 
nected from locations near, but 
outride, their central offices. 

The court said the FCC had 
overstepped its legal authority 
anil nnte-wl tt tn i-ft flntninB its 

decision. 

The ruling is not expected to 
prevent competition coming to 


the local telephone market, but 
it could slow its progress. The 
uncertainty created by the 
court's ruling could make state 
telarwminiinfcntinret regulators 
more wary about forcefully 
backing new rivals to the Brils. 

Shares hit by the ruling 
included Omaha-hased MFS 
Communications, which serves 
corporate customers in more 
than a dozen cities and fell $3% 
to $24% at Friday’s dose. 


Ford aims 
to increase 
car sales 
in Japan 

By Kevin Done, Motor Industry 
Correspondent 

Ford, the US motor vehicle 
manufacturer, has launched 
an aggressive strategy to gain 
a bigger share of the Japanese 
new car market 

It has begun to export 
right-hand drive cars to Japan 
for the first time from the US 
and from Europe, and has also 
set prices in Japan which 
undercut many rival import 
models. 

The group, the world’s sec- 
ond largest manufacturer of 
cars, has benefited from the 
strong appreciation of the yen, 
and claims that in some cases 
its products are now priced 
below similar models from 
domestic Japanese competi- 
tors. 

Ford has already increased 
its holding in Autorama, its 
Japanese distribution channel, 
to 45.1 per cent to give it par- 
ity with Mazda, its 24.5 per 
cent-owned Japanese affiliate. 

Ford’s trademark is replac- 
ing the Autorama name on 
Ford dealers' signs throughout 
Japan, and it has begun to 
expand dealer outlets through 
other channels with the open- 
ing of the first three Nissan/ 
Ford dual dealers. 

Previously, most of the cars 
sold under the Ford marque in 
Japan have been rebadged 

MarHn products. 

Bat tiie US company hasi 
| now launched a strategy to 
give equal impo rtan ce to the 
I sale of Imported cars in the 
Japanese market 

It has set itself a target oT 
selling around 200,000 cars a 
year in Japan by the year 
2000, of which half would be 
imports (chiefly from Ford 
plants in North America and 
In Europe) and half would be 
rebadged Mazdas. 

Last year, it sold 39,753 
rebadged MiwHas, such as the 
Ford Telstar 626) and 

the Ford Laser (Mazda Fami- 
Iia/323), in Japan, while sales 
of Ford cars imported from the 
US totalled only 5.11L 

This month. Ford has ' 
launched in Japan right-hand 
drive versions of Ha Europea n- 
buflt Mondeo, which is pro- 
duced at its plant at Genk, 
Belgium, and h»« begun to sell 
right-hand drive versions of Its 
Probe coupA winch is built at 
Auto Alliance, its 50:50 joint 
venture plant with Mazda, in 
the US. 

Apple Computer 
director resigns 

By Louise Kehoe 
In San Francisco 

Apple Computer announced 
that Mr Paul Stem had 
resigned from its board of 
directors, just six months after 
joining, “to avoid any percep- 
tion of conflict of interest”. 

Mr Stem, a former chief 
executive of Northern Tele- 
com, the Canadian telecoms 
group, is now a limited part- 
ner with Forstmann little, a 
private investment firm. 

He is also a member of the 
board of directors of General 
Instruments, an electronics 
manufacturer active in the 
market for cable television set- 
top boxes. 

Apple plans to enter that 
market through an alliance, 
announced last month, with 
IBM and Scientific Atlantic, 
one of GTs main competitors. 


Ice-cream retail war hots up in China 


mi 



Western entrants have the locals licked, reports Tony Walker 

W hen the Great Australian foe shoot of the old ministry of light indus- Dairy Farm brand. It has begun pri 
Creamery opened its first try. Undo- the agreement Walls is an 85 ing in southern China and plans a 
retail outlet in China last per cant shareholder with Sumstar a 15 venture in Beijing. Other joint ven 





W hen the Great Australian Ice 
Creamery opened its first 
retail outlet in China last 
week, it marked the latest shot in one 
of China’s hottest retail wars. ' 

While the Australian company may 
not be a household name internation- 
ally, some of its competitors are - nota- 
bly Walls of the UK, which began prod- 
ucing its best-known brands in Beijing 
this month. 

Walls is investing USSSOm in a Bei- 
jing factory and retail outlets in its 
effbrts to capture a share of the China 
market, which is only now being intro- 
duced to western-style ice-cream. 

Mr Bob Smith, general manager of 
Walls (Beijing), said that by any stan- 
dards China, with its 3QQzn urban dwell- 
ers, was a huge market - bigger, in 
fact. tt»«" continental Europe, where 
Walla is the dominant bland. 

“All the indications ait that 
people Eke eating ice-cream and eating 
food out-of-doors,” he said. 

Western icecream companies enter- 
ing Hhing have been Hying by the seats 
of their pants, in the sense that they 
have concluded that researching the 
market would be futile. 

“To be absolutely honest, we did very 
little research.” said Mr Smith. “Wo 
decided the best way to find out was to 
co me here and get established-" 

Walls, which is part of the Angle- 
Dutch Unilever group, signed a Joint 
venture agreement In 1992 with a Chi- 
nese company called Sumstar, an off- 


shoot of the old ministry of light indus- 
try. Undo: the agreement Walls is an 85 
per cent shareholder with Sumstar a 15 
per cent partner. 

Walls’ mate, competitor at this stage 
is Bud's Ice Cream of San Francisco, 
which in 1991 began producing 
icecream at a factory in Beijing, its 
output has reached VSm ganmm annu- 
ally, using local milk and cream. Invest- 
ment in its Beijing venture is 31.6m, 
with a further $im planned. 

Ms Alice Chiu, marketing manager of 
Bud’s, said the company did not worry 
too much about the competition. The 
market is simply so huge,” she says. 

Urn Chinese market is crowded with 
local producers. In Beijing alone there 
are some 600. hut they are hardly com- 
petitors to foreign entrants since their 
products, sold for a few cents, consist 
mostly of flavoured ice. 

Apart from Walls and Bud's, other 
foreign manufacturers in the field 
include Kraft General Foods, which 
recently launched a small range of 
“rap" products under Its Kibon brand 
name used in Brazil, where it is market 
leader. 

But in tight of Unilever’s recent take- 
over of Kraft's US ice-cream making 
arm, it is not dear whether the US 
company will continue its fairly small 
operation in Beijing. Kraft’s representa- 
tive In Beijing declined to comment on 
its icecream plans in China. 

NestK, the Swiss company, is also 
pushing tntft the rthfria mar ket with its 


Dairy Farm brand. It has begun produc- 
ing in southern China am\ plans a joint 
venture In Beijing. Other joint ventures 
include Meadow Gold, linked with 
Malaysian interests, and Louis D’or, 
launched with Taiwanese capital 
Companies like the Great Australian 
Ice Creamery and Baskin Bobbins of 
the US differ from other producers in 
that they are establishing boutiques 
selling "scooping ice-cream”. The Aus- 
tralian wwnpany opened its first near 
Beijing zoo and has plans for two oth- 
ers, one near the Great Wall 
Mr Smith said Wans would concen- 
trate its efforts initially in the Beijing 
area, where it had already established 
500 outlets with 3,000 planned by the 
end of the month is shops and ho tels 
“It’s early days but things have been 
going exceptionally welL People appear 
prepared to pay for quality,” he said. 

Walls is able to secure 70 to 80 per 
cent of raw materials in the local mar- 
ket, the exceptions bring high-quality 
chocolate and flavourings. It imports 
about half the materials required for 
packaging but hopes that in time It will 
be able to source most of its product 
and packag in g locally. 

A Walls Cometto sells for Yn3.50, 
which is about 40 US cents, or much the 
same price as a can ri Coca-Cola in 
China. With urban Incomes tiring, this 
Is well within reach of an increasing 
number of Chinese who would not be 
seen dead eating a locally-produced 
bmp gur, or flavoured ice. 


LORRAINE 
INVESTMENTS 
LUXEMBOURG S.A. 

SOCIETE ANONYME 
Rrgistre de Commerce B 47793 

OFFRE DE VENTE PUBUQUE 

de L43S625 actions LORRAINE INVESTMENTS LUXEMBOURG S A. 
auprixde LUF 280 par action. 

KESERVEE AU PORTEURS 

- soit d’un coupon n° 1 des actions ARTAl GROUP S.A. 

- sort d’un certificat description nominative dans le reqistre 
d’ARTAL GROUP S.A. 

- soit d'une attestation de la Stichting Administratiekantoor ARTAL, 
Vlaszak, 75, NL-4811 GX Breda Otaolissant que le porteur est 
inscrit au registre des certificats nominatifs de la Stichting. 

Les personnes souhaitant se porter acqudreur peuvent se procurer 
aux neures d’ouvertures des guichets (de 9h00 a IGhOOJ des 
prospectus et bulletins d'acquisition auprds des £tablissements 
suivants. qui sont dgalement charges de receuillir les bulletins 
d’acquisition auxquels seront joints soit le coupon n° 1 , soit le 
certificat, soit I’attestation. 


BANQUE DE LUXEMBOURG 
14, Boulevard Royal 

L-2449 Luxembourg 


BANQUE DEGROOF LUXEMBOURG S A 
7, Bowearrd Joseph D 

L-1840 Luxembourg 


La Notice legale a 6t£ depose© auprbs du Greffier en Chef du Tribunal 
d'Arrondissement de et d Luxembourg en execution de I'artide 33 de la loi du 10 
AoGt 1915 concemant les societes commercrales et en application de la toi du 23 
novembre 1972 portent adaptation de la loi du 10 AoOt 1915 concemant le regime 
des societes com mer dates. 

La pgriode d'acquisition est ouverte du 13 juin au 27 juin 1994 


THIS ANNOUNCEMENT APPEARS AS A MATTER OF RECORD ONLY 


PARTCO GROUP pic 

Placing and Intermediaries Offer of shares in Partco Group, 
the largest independent distributor 
in the U.K. automotive aftermarket 

Market capitalisation of £59 million 
at the Offer Price 


/ O HAMBRO MAGAN & Co 

acted as financial adviser 
and co-sponsored the flotation 


J O HAMBRO MAGAN & COMPANY LIMITED 

32 Queen Anne’s Gate London SW1H 9AB 
Tel: 071 233 1400 Fax: 071 222 4978 

Member of The Scrarirics and Futures Authority 


Finance for Danish 
Industry International 
SJL 

Yen 5,000,000,000 
Guaranteed notes due 
1994 

Notice is hereby given that 
for the interest period 13 June 
1994 to 12 December 1994 
the notes will carry an interest 
Me Of 181% per annum. 
Interest payable on 12 
December 1994 mil amount 
to Yen 1,899,731 per Yen 
100 , 000 . 000 note. 

Agent: Morgan Guaranty 
Trust Company 

JPMoigan 


Residential 

Property 

PRIVATE 

ADVERTISERS 

please contact 
Sonya 
MacGregor 
071 873 4935 


SRF MOKTGAGE NOTES 1 PLC 

Class A Mortgage Backed Floating Rate Notes 

Due March 2021 

NOTICE IS HEREBY CIVEN U> the holder, of tho Cba. A UortR.se 


20th March, 1989 (the Treat Dud*}, between iholauerud the law Debenture 
Trust Corporation p.l.e., u Trustee, and the Agency Agreement dated 
20th March, 1989 (the 1 Agency Agreement*), between the toner and Morgan 
Cuenuty Trail Campin* of New York (the "Principal Paying Agent’) 
and "others, the leaner baa determined that, in accordance with the 
Redemption provisions set out in the Terms and Conditions of the Class A 
Notes, Available Funds at defined in the Terms and Conditions in the 
amount of £4,000,000 will be ntifited on 22nd June, 1994 (the 1 Redemption 
Dale 1 ) to redeem a like amount of Class A Notes. The Class A Notes 
selected b y drawing in lots of £100,000 for redemption on the Redemption 
Dale at a redemption price (the "Redemption Price 1 ) equal to their principal 
amount, together adlib accrued interest thereon are aa followi; 
OUTSTANDING CLASS A NOTES OF £100,000 EACH BEARING 
Tills DISTINCTIVE SERIAL NUMBERS SET OUT BELOW 


127 

202 

213 

221 

223 

552 

255 

268 

274 

287 

323 

394 

431 

465 

492 

525 

583 

664 

684 

702 

728 

747 

755 

758 

764 

765 

780 

878 

1366 

892 

U6T 

-909 

1495 

1269 

1496 

IS7I 

1273 

1290 

1291 

1X4 


The dan A Nolo may he surrendered for redemption at the specified ofliee 
of any oftbe Paying AgenU, which areas fellows: 

Morgan Guaranty Trot Company Morgan Guaranty Treat Company 

of New York of New York 

60 Victoria Embankment Avenue des ArU 3$ 

London EUY QJP B-1040 Brenuli 

Basque Paribas (Luxembourg) S A. 

10a Boulevard Royal 
L-2093 Luxembourg 

In rcapcQ of Bearer dam A Notes, the Redemption Price vriU be paid upon 
proenlsMn and surrender of aucb Notes together with all tmmi lured Coupons 
appertaining therein, on or within a period or ten years and five yean 
respectively, after the Redemption Date. Such payment will be made (t) 
in sterling at the specified office of the Paying Annt in London or (ii) at 
any specuied office of any Paying Agent lilted above by sterling cheque 
drawn on, or at the option of the holder by transfer to a sterling account 
maintained by the payee with, a Town Gearing branch of a bank in London. 
On or altar the Redemption Date mtereal ahatl cease to accrue on theCtosA 
Notes which a re the subject of this Notice of Redemption. 

SRF MORTGAGE NOTES 1 PLC 

By: Morgan Cuarnnly Trust Company 
as Principal Paying Ago nt 

Paled. 13th June. 1994 




financial times 


MONDAY JUNE 13 \994 


FINANCIAL TIMES 


MARKETS 


THIS WEEK 




. r.y.y. 


The US is not 
so much a sin- 
gle economy 
but an agglom- 
eration of 
regional ones 
with their own, 
varied business 
cycles, and for 
the past three years California, 
the biggest single state econ- 
omy, has been sunk in reces- 
sion, badly trailing the 
national recovery in business 
activity. 

Now, however, California is 
showing the first glimmerings 
of an economic upturn, with a 
fragile recovery in housing and 
a modest increase in employ- 
ment from the trough of late 
1993. Is the “golden state," 
which lost its image of bound- 
less opportunity during the 
recession, about to regain it 
once more ? And if so, how can 
investors benefit? 

A report out this week from 
a well known research group, 
the cumbrously named Center 
for the Continuing Study of the 
California Economy (CCSCEJ, 
points out foa* venture capital 
fundings in Silicon Valley 
reached record levels in 1993 
nnd the first quarter of this 
yean evidence, it says, that the 
state's recession was not 
caused by a broad based, per- 
manent loss of strength. 

California, it argues, still has 
strong long-term growth poten- 
tial - provided the politicians 


Global Investor / Martin Dickson in New York 


California dreaming of recovery 


are prepared to put money into 
critical investments in educa- 
tion and infrastructure. 

The group points to the 
strength of the state's high 
technology industries, its 
excellent position for trading 
with the fast-growing nations 
of Latin America and the 
Pacific Rim, and Its strong pop- 
ulation growth. This, it pre- 
dicts, will produce a 27 per 
cent Increase in employment 
between 1993 and 2005, well 
ahead of a 17.G per cent 
national average. 

Long-term, this argument 
looks plausible. But it should 
not not obscure the shortterm 
problems which suggest that 
California's economic recovery 
will be a slow one. 

Two factors have made the 
recession here particularly 
long-lasting: the bursting of a 
property bubble, and a sharp 
drop in both US defence spend- 
ing and the global civil aero- 
space business. 

Both are heavily concen- 
trated in the south of the state, 
and, indeed, it is probably 
more correct to call the reces- 
sion a Southern California phe- 


WntCoMtfawdw 


Hetattwto'SandPBante 
220— 



80 1 — ■ 

T009 - 
Stage* U malriwi i 


82 93 04 


nomenon. More than 70 per 
cent of the state's Job losses 
have occurred In one southern 
county - Los Angeles. The 
north of the state, led by a 
buoyant Silicon Valley, has 
largely tracked the national 
recovery. 

In the south, however, the 
contraction of the defence 
industry is permanent, and 
may yet have some way to go, 
while the civilian aerospace 


COMMODITIES 


Richard Mooney 


Opec needs to tread carefully 


With oil prices having enjoyed 
a modest but, to producers, 
welcome rally over the past 
month or two, one of the main 
tasks of delegates at the 
Vienna meeting this week of 
the Organisation of Petroleum 
Exporting Countries will be to 
avoid damaging the market’s 
new-found buoyancy. 

The scope for influencing the 
market positively seems very 
limited, but from the opening 
of the meeting on Wednesday 
traders will be watching for 
signs of a weakening in mem- 
bers resolve to maintain a rea- 


sonable degree of discipline on 
export quotas. 

Prices are about $3 higher 
than they were when the Opec 
ministers last met in March 
and agreed to keep the overall 
output ceiling at 2452m barrels 
a day for the rest of year. Out- 
put has remained closer to 25m 
bid but that has not deterred 
buyers, many of whom see 
demand for Opec oil growing 
to about 26m b/d by the final 
quarter. 

Traders warn, however, th at 
any talk of quota reductions, 
most Hkely from Iran, the chief 


price “hawk”, could backfire 
if the cuts failed to material- 
ise. 

Iran could also pose a 
threat to the cartels’ perceived 
solidarity through its persis- 
tence in maintaining the candi- 
dacy of Mr Kazempour Adebfii, 
its ambassador to Japan and 
representative on the Opec 
board of governors, for the 
Opec secretary-generalship in 
place of Dr Suhroto of Indon- 
esia. 

“All of the rest of Opec, 
including Saudi Arabia, is in 
favour of [ex-Venezuelan oil 


|f Napoleon had better information, 

might not have met 
his Waterloo. 


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Total ret urn In locuf 


to 2/8/04 


• a* 1- 

0*8 

Montil 

0*7 

Yew 

3*1 

Bonds 3-0 wav 

Weak 

0*4 

Month 

tM 

Year . 

t*5 


0.10 oti aw 

D AA 048 O.B7 

ftflB 8*3 1019 


Bonds 7-10 yaar 
Waah 

Month 

Year 

063 

2.71 

043 

-0*0 

-1*8 

7.76 

EquifaW 



Waok 

0.1 

12 

Month 

3* 

04 

Year 

&4 

5* 


022 

084 

nag 

0*7 

-08*. 

-0.71 

-122 

013 

046 . 

5*6 

14*1 

4*3 

1*2 

123 

1.15 

1.04 

-1*3 

-1.41 

-3*2 

-0*1 

4.73 

4*8 

17*3 

3.H 

02 

1.1 

2.7 

1* 

-4A 

•4* 

■OJ 

-2 A 

25.7 

. 13* . 

44A 

10* 


Sowed: CMh & Bondi -Irina Broom. 
Tba FT-/ctoadM Ufadd Mom m \akttf i 
OcMran SMa a Ca, «ri MW m Sm 


by Tb* FftMOW TfeMa UmtaL 


side is barely out of its cyclical 
trough. 

It remains uncertain that 
commercial real estate values 
have touched bottom. Some 
large Japanese corporate inves- 
tors, who bought at the top of 
the cycle, axe rumoured to be 
on the pptef of gening 

The area also faces formida- 
ble problems of traf fic conges- 
tion, crime, environmental deg- 
radation, aud racial tension as 


well as the aftermath of Janu- 
ary's earthquake. 

Nor do the obvious stock 
market plays on a CaSSbmian 
recovery look particularly gen- 
erously priced. Among the 
banks, RankAmprf ra, with fiat 
earnings for the past 13 quar- 
ters, has a price/eammgs ratio 
broadly in fine with the super- 
regional universe, while WeSs 
F argo, which has enjoyed a 
surprisingly strong share price 


over the past two years, Is dis- 
counting a fair amonnt of good 
news. 

In telecommunications, 
Pacific Telesio, the state’s 
phnnp company, faces increas- 
ing competition from newcom- 
ers wanting to break its 
monopoly and large capital 
outlays. 

It recently spun off its fast 
growing wireless business into 
a newly quoted company 


minister Alirio] Parra simply 
on his merit alone, but it must 

be a rtnutiimmig decision," «rm 

erf the Gulf Arab delegates told 
the Reuter news agency on Fri- 
day. 

• Other events this week 
include a three-day Interna- 
tional Precious Metals Institute 
conference starting in Vancou- 
ver today and, foam t o mor row 
for four days, a European Met- 
als conference in Freiburg, 
Germany, at which Mr Philip 
Crowson, chief economist of 
RTZ Corporation, will be 
among the speakers. 


r l 


Globalisation 
is one of those 
ugly words 
impossible to 
avoid when 
discussing the 
world econ- 
omy. It is 
defined by the 
Organisation for Economic 
Co-operation end Develop- 
ment as a widening and d ee p- 
ening of companies’ 

operations across borders to 
produce and sell goods and 
services hi more markets. It 
involves international invest- 
ment, trade and collaboration 
for the purpose of product 
development, production and 
sourcing, a n d marketing: 

Last week, in its Jobs Study, 
the Paris-based OECD cleared 
globalisation of contributing 
significantly to tbe sharp rise 
of unemployment in the 
industrialised countries to 
about 35m today. 

Although the OECD said 
i nte r national economic inte- 
gration had produced more 
intense competition and a 
greater need for economic 
adjustment among its member 
countries. It claimed that it 
had also yielded increased effi- 
ciency and welfare. 

Globalisation has, however, 
produced sweeping changes in 
recent years. The chart shows 
how strongly world wide out- 
flows of foreign direct invest- 
ment grew in the 1980s. The 
average annual increase was 
29 per cent between 1983 and 
1989, nearly three times foster 
thaw trade almost four 
times foster than world eco- 
nomic growth. 

The number ctf inter- 
national collaboration agree- 
ments among companies dou- 
bled during tbe 1980s. In 
manufacturing, international 
sourcing of components and 
intermediate goods used to 
make finished products grew 
foster than domestic sourcing; 
and now accounts for at least 
half of imports by the big 
industrial countries. 

Behind these broad figures, 
there was, the OECD says, “a 
turbulent process of birth and 
death of firms, the rise and 
fall of whole sectors of activ- 
ity and the reallocation of pro- 


Economics Notebook 


Employment 

challenge 


Fo rt lg p d&racttawM&nMiit 


flnwrfl nM ealme ntl lo wB WB^^ 

2S0— — ■ 



WW 7* TO 80 82 84 

Stage* BECO-BPE. baaed on Btf . . 


88 .88 8 ft 


duction within, as well as 
between, regions and coun- 
tries". This resulted in the 
wholesale destruction of many 
jobs, perhaps one in 10 a year, 
but the creation of a stmiinr 
number of new ones. 

However, these manifesta- 
tions of globalisation were 
largely concentrated in tbe 
industrialised countries. 

In their recent study, 
Europe in 1998*, economists 
from the Ereco consortium of 
European economic institutes 
described the 1980s “aa a lost 
decade for developing 

nations ”. 

The OECD calculates that 
exports from low-wage coun- 
tries account for only L5 per 
cent of overall spending on 
goods and services in its mem- 
ber countries. On present evi- 
dence, it concluded, the 
impact of imports from low 
wage countries was “too small 
to account for a significant 
part of either current unem- 
ployment or foiling relative 
wages of tbe low skilled* in 
tbe industrialised world. 

This analysis, however, was 
based on conditions in a world 


that no longer exists. It is 
debatable whether globalisa- 
tion will remain such an intra- 
OECD phenomenon following 
the collapse of communism. 

At a seminar organised by 
tbe Guardian newspaper last 
week. Prof Fritz Scharpf of 
■ Germany’s Max Planck insti- 
tute pointed out that the end 
of the Soviet Empire had 
made it safe for companies to 
invest in low cost countries 
without fear of expropriation. 

In a paper prepared for min- 
isters at its annual meeting 
last week, the OECD acknowl- 
edged that globalisation was 
rapidly involving China and 
the fast growing Asian econo- 
mies as well as parts of Latin 
America and eastern Europe. 

Ereco expects that the reces- 
sion-induced slowdown in for- 
eign direct investment in the 
early 1990s, shown in the 
chart, will be followed by an 
increase of about 50 per cent 
in the world stock of snch 
investment by 1998. 

The consortium has forecast 
a doubling to (SObn in the 
annual flow of foreign direct 
investment to the developing 


FT-ACTUARiES WORLD INDICES 


last week, with, statistics sag- 


known as AlrTouch. This has a 
strong spread of cellular and 
pa g in g interests not just in 
California, but in other parts of 
tbe US and Europe. 

It has a good track record 
anH more than $L5bn of nota- 
tion in its pocket. The 
shares are not cheap, but they 
represent a means of riding 
recovery on both the West 
Coast and in Europe, as well as 
a st ake in the explosive world- 
wide growth of wireless com- 

Tni mirations . 


turn might not be as great « 
Wall Street is hoping. Jtt* a 
continuing surge in the price 
or industrial commodities. 

Last week's statistics were 
relatively minor, but those das 
out this week are not, And asp 
that emerge worse than the 
Wall Street consensu could 
knock bonds hard. sta» that 
would increase raise tba pros- 
pect of further tightening by 
the Fed at its pottey saktag 
meeting on July Wi . 

That still seams unlikely. 
Various Fed governors hire 
been quoted over the past 
week as saying that tnB a tt Bhli 
under control. Even Ur Aim 
Greenspan, the Fed chahman, 
said at a London conference 
that price data had bean 


■ Fed policy 

Global markets are likely to 
be influenced strongly this 
week by a cluster of US eco- 
nomic statistics which could 
significantly affect the timing 
of the next tightening by the 
Federal Reserve. 

For much of the past month 
US bond prices have rallied on 
the hope that the Fed's half a 
point ti ghtening in May will be 
sufficient to slow the US 
growth rate and thus the 
threat of inflation. 

But growing doubts about 
this optimistic picture emerged 


“dearly restrained," though he 
added the rider that this Wtt 
historical data. 

Yet as Mr Lawrence Lintfesy, 
another Fed governor, pohus - 
out, the Fed funds rate » stiR 
only about percentage 
points above Inflation, 00 a. 
pared to an historical average 
closer to 2. A truly neutral Fhd 
policy implies more tightening 
before the year is out, and 
there is a distinct poaslttfityof 
a summer move • the FOMC 
also meets on August 1& > tt 
growth remains robust The 
rally of the past fortnight may 
be no more than a bounce tat 
bear market 


world between 1992 and 1996. 
That would lift the developing 
countries' share of the iroria 
stock of foreign direct Invest- 
ment from the present 20 per 
cent to 25 per cent 
Globalisation could there- 


fore have a far more pro- 
nounced impact on employ- 


nounced impact on employ- 
ment in the industrlmtasd 
nations in the years ahead. 

The good news is that mar- 
kets in developing countries 
will be growing fast But 10 
will be their skills. Aft Id 
DeAnne Julius, the chief econ- 
omist of British Airways, and 
Mr Richard Brown, a UK eco - 1 
nomic consultant, point out in 
the London Business School's 
latest International Economic 
Outlook**. South Korea had j 
mure 20 to M yaftr oUs In edu- 
cation as a proportion of tba 
population than either France 
or Germany in tin late 1869s. 

The lesson drawn by both 
Ereco and Brown and JuHau is 
that the OECD countries mat 
focus more on the pr ovision 
and i ntern a t ional trade after- 
vices. Brown and Julius warn 
that mamrffccturing jobs wffl 
become increasingly low paid 
in the mature economies. 

According to Ereco, tbs 
future will see an increasing 
hybridisation of manufoctur- 
ing and service activities at 
infra and inter-company lev- 
els. The consortium cites a 
Swedish study, showing that 
already as little as a fifth of 
labour costs in manufacturiug 
companies goes towards the 
actual process of manufactur- 
ing and assembly. Nbw tech- 
nologies and materials require 
mare complex distribution 
networks so that marketing, 
distribution and after sales 
service will be of more Impor- 
tance in employment tanns. 

The OECD is commonly, 
described as the club of titit 
world's leading industrlafiterf 
countries. If these predictions 
prove true, a new defh&fian 
will be needed very soon, 
•Details from Camdrtdge&on- 
(metrics, tel UK am 460 7&: 
••Details from Centre fat Sea 
nomic Forecasting, LBS, tdGK . 
071 262 SOSO ■ -V 


Peter NoniBH* 




BEOWNAL MARKETS 
Hpufoi fa parantfnaoa 
Shaw number of Brws 
Of alack 


FRIDAY JU* 10 1994 — 

ttchg Pound Local local % Gross 


toursday Jime 01994 — oouteifWr" 

r’S? Local • . Ym 


Do to- sfaoo Staring Yen DM Currency chg Cram Dtu. Data- v — 

J* 1 3V,!MB M- W 3W2M YMd j* ^ ZZ. SL ■"* 


AlwWe (17) 

Belgkanp7) 

Canada (106) 

Denmark (33) 

Ffatand (Z3) 

France (37) — 

Germany te) 

Hong Kong £4 

Inland (14 

Italy CBQ 

Japan (480) 

Motay»ta(98) 

Mexico {18} 

Nethafendt&O 

New Zealand (14) 

Norway (23} - 

Sfagapoa (44J 

South Africa (69) 

spam (42} 

Sweden (38} 

Switzerland (47) 

United Kingdom (205) . 
USA (BIS) 


-173J35 4.1 170.71 114AB 1SCLS1 167.20 -3ii 3^1 

,179.79 -48 178.75 11X09 155.83 165.48 -HB 1.03 

_ie&93 JLO 18X12 10839 143.62 14044 -3.1 333 

-12838 -4J7 127,17 84.97 112.12 12064 -1.2 233 

-253.74 2JB 24045 18087 21933 224.63 -1.7 u, 

-13737 113 135.05 9023 11007 16046 OS 031 

-106.73 -5.0 16233 10888 143.66 14743 -OS 3.05 

-13000 -OD 133.76 8038 11734 11734 -63 1.75 

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-18SS8 0.1 16235 121.77 16068 17733 -4.0 042 


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VSti* 222-85 Mr- “ *212 

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202*4 7.1 199*1 133*1 175*0 206.15 Zl 135 S70 22 


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•84 168.70 185*0 ’l 7-74 1»-01 134*9.166*1 

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World Ex. Japan (1701) 


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FINANCIAL UMBg MONDAY JUNE 13 1994 


EMERGING MARKETS: This Week 


The Emerging Investor / David Horovitz 


Tel Aviv declines against a rosy background 




The figures make depressing 
reading. 

The Tel Aviv stock amhangp 
has been declining steadily for 
the past five rnrmihc and at the 
end of last week the general 
share index stood at 185.45 - a 
shght improvement on the pre- 
vious week's aHnonth trough 
of 176-21, but stffl far from its 
mid-January height of 258-38. 

The index yesterday closed 
at 189.21. 

In May alone, the average 
investor lost 27 per cent on 
share dealings that same 
month, companies traded on 
the exchange lost ShkS7bn 
(about $l2bn) in piper value. 

Although most of the day to 
day ihlls have been minor, the 
cumulative effect hn« analysts 
comparing the decline to 
crashes in years past. 

Particular comparisons are 
drawn with October 1283, when 
revelations of an illegal hawir 
share manipulation rait shares 
into free fall, losing by as 
much as 90 per rent of their 
value. 

Yet the spring and early 
summer of 1994 have seen no 
hint of any similar widespread 
stock market scandal. And, in 
contrast to other past rapid 
mar k e t declines, the economy 
is generally in buoyant shape. 

Prof Jacob Frenkel, the gov- 
ernor of the Bank of Israel, has 
predicted 5 per cent growth in 
the economy this year, with 8 
per cent growth in exports and 
unemployment levels falling 
from 10 per cent to &S per cent 


■ *rr' 


So with such an apparently 
rosy economic background, 
why is the stock market plung- 
ing? 

And why is investor confi- 
dence so low when the 
exchange has attracted an esti- 
mated £L5bn in forei gn invest- 
ment which increased tenfold 
between 1988 and 1993, and 
rose 25£ per cent in 1993? 

A group of economists on 
the KTMypyt Finance Commit- 
tee Capital Markets Subcom- 
mittee has attempted to find 
explanations 

Mr Sam Bronfeld, the direc- 
tor of the Tel Aviv stock 
exchange, asserted that the 
non-appearance of an antici- 
pated “peace dividend” follow- 
ing the Israeh-PLO agreement 
an limited autonomy for the 
Gaza Strip and the Jericho 
area of the West Bank was a 
significant factor. 

The market had risen on 
hopes of accelerated growth 
and massive new investment 
following last September's 
White House signing of the 
framework peace accords. But 
it was now failing realisa- 
tion that SUCh iTT wmt rnant was 

slow in coming. 

Analysts have also pinned 
same blame on the crisis sur- 
rounding Kupat Hnlirn Clnftt , 
Israel's largest health insur- 
ance fonrf^ now an the hrink of 
collapse with debts of 

Shirt flhn 

Only a few large pharmaceu- 
tical companies have so far 
been directly affected. But hun- 


dreds of private companies 

that supply the health firnri are 

now braced for a blow, and the 
economy as a whole will be 
asked to share the burden. 

While these factors may 
have played some part perhaps 
a more gi gntifnant cause has 
been the disappointing first 
quarter results reported by 
many com pftrclre. 

Dozens of companies held 
back from iwm fa g their results 

until the final liianilina tWO 

weeks ago, and almost across 
the board there were repeats of 
fallin g turnovers rtpotmtog 

profits. 

Excuses were many and vari- 
ous. They included failing 
prices worldwide (In the case 
of the giant Israel Chemicals 
concern, for example); on 
increased competition (which 
hit the Te mp o beer and soft 
drinks company, warfeatar of 
Pepsi in Israel); on shekel-dol- 
lar exchange rate fluctuations 
unfavourable to exporters; on 
staff salary increases stem- 
ming f r o m good company per- 
formances last year; and mi the 
faiift on t he stock exchange 
itself, where many rempantas 
had invested surplus funds. 

Mr Yair ShfeZ, who reports 
on the Tel Aviv stock exchange 

for Tgraal Radio, aaid that thp 
twatahility of thp maricot had 

now reduced foreign invest- 
ment to a minim u m and fed to 
the s cup pering of plans by a 
leading French hank to set up 

a multi-minion dollar fond tO 

invest in the exchange. 


Ten best performing stocks 




SAM 

1 

8 

I 

stage 

Steak 

esaky 

Setae 

S 

% 

Cukurova Bektrflc 

Turkey 

02047 

00634 

3173 

Gunay BtracA 

Turkey 

09414 

02227 

3099 

Eregl Demtr Vs CaGk 

TUkay 

0.1759 

10383 

27.84 

Ooktaa 

Turkey 

0M75 

10959 

27.25 

Banco De BrasS (Pfd) 

Brad 

00189 

10037 

2422 

tec Holding 

Turkey 

06173 

01127 

2233 

Otosan 

Turkey 

1.7593 

12914 

1935 

Ego Bbacfflk 

Turkey 

2A383 

03883 

19.00 

Koc Yrnrim 

Turkey 

1.0957 

01630 

17.47 

CompanMa Cervafaria Brahma 

BrazB 

12595 

h.pagg 

14^2 


Thp Israeli bond market 
escaped the worst of the falls, 
with the big Israeli banks 

among thp r»Mpf purchasers. 

But the stock romhang w mnl 
aise has now spread to the 
New York exchange, where 
about 50 Israeli companies are 
traded. 

The New York-traded Israeli 
shares began slipping after the 
Hebron mosque massacre on 
February 25, s*id Mr Howard 
Sterling, managing director of 
Corporate Finance at Oscar 
Grass investment brokers in 
Tel Aviv. 

"Seeing the foils in Tel Aviv, 
file Americans simply followed 
suit," he said. 

But, be added, the "selling 
frenzy" has eased off a little in 
the past three weeks. 

“giare values have fallen to 
the point where people are 
starting to buy again,” he said, 
"and the forecasts are good. 
The ftnuda m e nta ls are positive. 
Israel's high-tech pr o sp ec ts are 
as good as Silicon Valley's 


were in the 1970s." 

Analysts are hoping that the 
Tel Aviv exchange will now 

follow thpt faint lead from New 

York. 

The Rank of Israel is alsn 
trying to restore stability with 
new regulations limiting how 
much credit banks may offer 
customers to finance stock 
market investment. 

Mr MosbB Maniielhtmm, the 
for me r Bank of Israel gover- 
nor, asserted on June 8 that 
the market had probably now 
readied its lowest point 
And, said Mr Amfram Si van, 
chief executive officer of Bank 
Hapoalim, Israel's biggest 
bank, "there is no economic 
reason for the foiling share 
prices." 

But unless there is a sus- 
tained rally, said Mr Yerah 
Nissan, deputy managing 

fHnprfrw of Rank Pfaml«ra‘hi J a 

real crisis of faith could 
develop, brin g in g punk ariHwg 
That kind of crisis would 
have deep intipiiwatinTwi for the 


government’s already slow- 
moving privatisation pro- 
gramme. 

Indeed, when only last week 
the government announced 
plans to sell 51 per cent of its 
holding in El Al, the natinnal 

airline, the first question 
analysts asked was whether 
the offer would find subscrib- 
ers in the declining Israeli 
market. 

Host analysts are agreed an 
one thing: the market and the 
economic atmosphere overall 
could benefit from a firmer dis- 
play of flnawriai management 
by Prime Minister Yitzhak 
Rabin and his government 

Mr Avraham Shochat, the 
finarw«p minis ter, and Mr Ben- 
jamin Ben-Eliezer, the housing 
minister, are widely criticised 
for their failure to halt the 
soaring house prices which are 
fuelling Inflation. 

In a week that included an 
Israeli air strike against Hiz- 
bollah guerrillas in Lebanon 
and numerous crises stemming 
from file Palestinian antnnnmy 
accord, Israel's newspapers 
consistently featured the stock 
market falls as front page 
news. 

Yet when Mr Shochat was 
asked to comment on file mar- 
ket slump he merely replied 
that. yes. "there is a crisis an 
the stock exchange. But the 
economy is really moving, and 
eventually t he stock exchange 
will adjust itself to file econ- 
omy, not the other way 
around." 


News round-up 


Li 


■ Thailand 

The stock exchange of 
Thailand has agreed to lower 
the entry fee for new 
brokerage seats from the 
original asking price of Bt350m 
(SI 4m) to Bt300m staggered 
over five years, following 
complaints from Thailand's 
37 sub-brokers and the 
securities and exchange 
commission, writes William 
Barnes in Bangkok. 

The fees, previously revised 
from BtS5Gm to Bt305m, are 
still above the SECs suggested 
BtSOQm. Nevertheless the 
commission has indicated it 
will allow this revised price 
to stand. 

The 40 full members of the 
MtrhangB have at least 
responded to the request of 
Mr Tarrin Nimmanahaeminda, 
the finance minister, for an 
explicit and more open policy 
on admitting new members. 
Subject to certain minimum 
qualifications all sub-brokers, 
many of whom have foreign 
joint venture partners, will 
be allowed full membership 
of the exchange, perhaps 
within two or three years. 

New brokers will pay Bt200m 
upfront and then pay 10 per 
pent of their trading 
commissions to the exchange 


for five years or until that total 
reaches BtlOOm, whichever 
is the sooner. 

■ Beirut 

The foundation for a revived 
Beirut stock exchange will be 
laid on June 23. when 
secondary trading opens in 
Solidere, the SlAbn property 
development company created 
earlier this year in one of the 
Middle East's biggest 
flotations, writes Mark 
Nicholson in Cairo. 

The secondary market In 
Solidere’s 1.8m shares will, 
said Mr Nasr Chamaa, 
managing director, as with 
its launch subscription, be 
open only to Arab investors. 

A grey market tn the $100 par 
issue has already seen shares 
change hands at a 20 per cent 
premium, bankers say. 

Formal over the counter 
trading will open under the 
auspices of the Soci6t6 
Financfere du Liban. which 
is jointly owned by Lebanese 
commercial banks. Tte trading 
floor, which will at the same 
time become the market for 
Lebanese Pound treasury bills, 
will at first have seats few 
about 30 members, the 
majority being local 
commercial banks. 


CURRENCY MARKETS 




Markets watch Euro election results 


Foreign exchange traders will 
start the week by trying to 
assess the impact of the Euro- 
pean elections held yesterday 
ami last Thursday. 

The countries they will he 
watching most closely are the 
UK and Spain where the ruling 
parties are weak and vulnera- 
ble to an electoral setback. 

Last Friday sterling 
shrugged off a dismal, but 
widely expected, set of byeleo- 
tfom results for the Tony party. 
Another setback in the Euro- 
pean poll, however, would 
inevitably reopen speculation 
about the political future of Mr 
John Major, the prime minis- 
ter. 

He has vowed that he win 
not be driven out of office, but 


the political uncertainty pre- 
ceding a leadership ftiwiimp 
in the antimm ennid weigh an 
sterling. Some observers argue 
that a c ha n g e in Tory leader- 
ship could be well received by 
the market 

Others rnafntaiu that the 
possibility of a Labour govern- 
ment is not in the market, and 
political developments which 
increase this prospect may well 
lmdnrmftw Sterling. 

Sterling watchers will also 
have a barrage of economic 
data on which to feed. 

The retail sales and average 
earnings figures will be closely 
watched. An expected rise in 
the latter win encourage the 
vfauir of Rn giand to argue for a 
ti ghtening of monetary policy. 


Markets will also keep a 
close eye on the Mansion 
House speech of Mr Kenneth 
Clark, the chancellor. The 
speech is traditionally a mone- 
tary policy set-piece and will 
be combed for any hints an the 
fixture passage of interest 
rales. 

In Spain the European elec- 
tions coincide with regional 
elections in A ndslucie, the 
stronghold of the socialist 
government. A setback there 
win arguably be as damaging 
as the predicted defeat at’ the 
hand of the conservative 
Popular party in the European 
pofL 

The risk is that if the Social- 
ists do very badly, they will 
lose the backing of their Cata- 


lan allies, which would precipi- 
tate an election. This uncer- 
tainty Would mute-mine Span- 
ish flngnrini markets and the 
peseta. 

The US also feces a heavy 
week of ffnanriai data which, 
should give analysts a better 
picture of second quarter 
growth and the likelihood of 
another near-term tightening 
of monetary policy by the Fed. 

The May consumer price 
index Is released an Tuesday, 
but other indicators include 
the Atlanta and P hiladelphia 
Fed Indices, retail sales, hous- 
ing starts, industrial output 
and capacity utilisation for 
M ay. 

Analysts believe the data 
should be good for the bond 







«Diicwpr.Qraphto 


;• J.i 


market, which, if recent perfor- 
mance is anything to go by. 
will help fiie dollar. 


FT GUIDE TO WORLD CURRENCIES 


n» totate boiow ghm i 


i rates «* ttectar «0 (rawxtod) agatnat four key i 
m they are Mown to be athamiML In mm < 


idee an Friday June 10, 1004 . In ecme ceeee the me » t 
i market rates hem been taraimd (mm thoee of fcrei^i < 


Itoket rate* tno amraoe of buying end 
lee to which they are Sad. 



NOTICE OF A GENERAL MEETING OF SHAREHOLDERS 


Gmyle 
Op. VsnJs 
Caprunto 


44 54178 


Uliteini li 

646.76 


(first call) and, If needed, on June 29, 1 994 (second call), same time and ptace, in order 
to discuss and vote upon the fallowing items on the agenda: 

1. Report of the Board of Directors on the Company's operations for the 1993 fiscal year. 
Report of the Board of Statutory Autfitors. Company accounts at December 31, 1993. 

2. Change In the terms of the engagement aid the remuneration of Deloitie& Touche sji.c. 
dl Adolfo Mamofl and C. as the Company’s Independent accountants. 

a Settlement between tha Company and a fomier director relating to the Company's claim 
for damages and waiver of exercise by the Company of an action for liability Bgainst such 
director pursuant to article 2393 of the Civfl Code. 

4. Appointnierrtof one Director pursuant to article 2386 of the CIvU Coda. 

Shareholders are entitled to attend the General Meeting H, at least five days prior to 
the General Meeting (excluding from the computation the day of the Meeting), they hove 
deposited their share certificates at the Company's registered office or at one of the following 
financial institutions: 

in Italy: Monte THo8 (for certificates deposited with the same). Credit© italiano. 

Banca CommercialB ttafiana. Banca di Roma, Banca NazionaJe del Lavoro, Banco dl Napoli, 
Banco dr Sardegna, btituto Bancario San Paolo dl Torino, Monte del Paschr cli Siena, 

Banco Ambrostano Veneto, Banes Mercantile tta&ana, Banca Nationals deJI'Agricoltura, 
Banca Popolare di Bergamo - Credfto Vareslno, Banca Popolare dl Milano, Banca Popoiare 
dl Novara, Cassa di Rteparmta dote Pnjvincte Lombardo, Credtto Romagnoto. 

Abroad (by appointment of Italian banks according to the law): 

In Switzerland: Banca del Gottardo - Lugano. 

to France: BanqueNationalede Paris- Paris, SoclfirtG6ndrate- Paris. 

In Greet Britain: Morgan Guaranty Trust Co. - London. 

In Belgium: Banque Bruxelles Lambert - Brussels. 

In Germany: Deutsche Bank, Dresdner Bank -Frankfurt a/Main. 

In the Netherlands: ABM-AMRO N.V. - Amsterdam and Rotterdam. 

In the USAj Bank of New York - New York. 

On behati of the Board of Directors 
Guido Rossi 
Chairman 


THE COMPANY’S FINANCIAL STATEMENTS TO BE APPROVED AT THE MEETING 
ARE AVAILABLE UPON REQUEST, FROM MONTEDISON S.pA, For© Buonaparte 31, 
20121 Milan, Italy. An. Mr. G.C. ScarameW peL 2.62705061). 


IS***" VS 

FMell (Brtc*l»n ito) 


R.ayrxw" 
Fr„ Guana 


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VMfflMJS 


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W*"* |£2 dSdrtaTiwnme UteWSUTBte^ ttO&iG SPOT RAJ& a Eboc cl Ajwtafc Enwewta Dwaftia* LOflbcn todfe Cam En*«K 071 SS4 499V& 




SPOT RATES 5 Bo* 
May in 10. 1604 


M ondri 
Biwwi 


PROCEDURE TO BE FOLLOWED BY FOREIGN SHAREHOLDERS: 

(A) Shareholders wishing to attend must request tn writing or by telex that lire bank where 
their stares are deposited issue an admission ticket. If that bank is one of Montedison’s 
above-flsted depositary banks; If the bank where their shares are deposited is not one 
of Montedison's depositary banks, they must request that bank to contact one 

of the depositary banks so that an admission ticket can be Issued. All admission tickets 
must be issued at least five days before the General Meeting. 

(B) Sharehoktorti wishing to vote by proxy may appoint a proxy only after -depositing their 
shares and receiving the admission ticket In accordance with the procedures described 
in (A) above. Proxies ere to be in writing and cannot be Issued to: banks, members 

of the Board of Directors, Statutory Auditors and employees of Montedison and Its 
subsidiaries. 

Please Note: Shareholders may contact the foreign branches of the above- listed Italian 
depositary banks to expedite these procedures. 




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DS credit markets face a heavy 
flow of economic statistics this 
week, which could unsettle 
a market which has already 
lost the mnmnnhim from, a 
two-week rally. 

The benchmark 30-year 
Treasury Issue fell % on 

Friday, with its yield dropping 
to 7.31 per cent from 7-27 per 
cent after the release of May 
producer prices figures. 

These showed a drop of OJ. 
per cent, but this was due to 
large frit" in volatile food and 
energy prices. The core rate 
of Inflation rose by a larger 
than expected 0.4 per cent, 
r aising fonffm that Inflation 
is gathering speed, and that 
this will prompt the Federal 
Reserve to tighten monetary 
policy again. 

The market's more cautious 
tone will he tested tomorrow 
with the release of May's 
consumer price index. Analysts 
are forecasting an increase 
of 0 J per cent, compared with 
a 0.1 per cent rise in April, 
with core prices up 02 per 
cent, against 0-2 per cent 


Benchmark ytew cave 
iawB4— Month ago <= 



to yean 20 


“AB yWd* «ra market conwontlori 
leuae: Man* Lynch 


Figures for May industrial 
production, due on Wednesday, 
are expected to show a rise 
of just 0.1 per cent, down from 
0.3 per cent in April, partly 
because of a decline in output 
from vehicle manufacturers. 
Operating rates were probably 
around 83£ per cent compared 
with 83.6 per cent in ApriL 
Retail sales, also due 
tomorrow, appear to have been 
uninspiring in May, with 
sagging sales at car 
dealerships and fhain stores. 


There will be plenty of 
information for the gilts 
market to get its teeth into 
this week, with the normal 
mid-month, flurry of economic 
statistics. 

While the retail prices index 
and. the unemployment 
numbers represent the 
“heavyweight" economic 
figures, the gilts market may 
be even more interested in the 
average earnings number. The 
relentless rise in the 
underlying annual rate of 
growth, to 4 per cent from 3 
per cent, has been seen as a 
precursor of future inflationary 
pressures. 

“The market win want to 
see at least an unchanged 
annual average eaminga rate,” 
says Mr Sanjay Joshi, head 
of bond research at Daiwa 
Europe. “The worst-case 
scenario would be a movement 
UP to 4U per cent” 

The chancellor of the 
exchequer’s Mansion House 
speech is a chance for Mr 
Kenneth Clarke to reassure 
the markets about the 


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government’s economic 
policies. Ha has previously 
appeared much more willing 
to cm interest rates than the 
governor d the Bank of 
England. “What the market 
will not want to see is an open 
dispute between the chancellor 
and Eddie George” says Mr 
Joshi. 

Nevertheless, DK economic 
fundamentals have not always 
been the primary factor in 
determining the direction of 
gflts in recent weeks. 


The tentative optimism evident 
in the bund market towards 
the end of last week may be 
sustained in the next few days. 

"The tone to the market is 
much better than it has been 
for weeks now," Tamaichi 
International says. “With 
yields close to 7 per cent ami 
in a noticeably more stable 
environment, institutional 
domestic investors are 
beginning to return.'* 

Investors are likely to focus 
on the Bundesbank's 

j-ppnr rhggA 0° 

Wednesday. The "repo" rate 
has dropped by 25 basis points 
since the last discount rate 
cut and now stands at 5 JO per 
efnt If the repo continues to 
fan at 5 basis points a week, 
the stage may well be set for 
another cut in the discount 
rate as early as July. 

This could counteract the 
pessimism among investors 
about the direction cf German 
monetary policy. 

“The likelihood is stai that 
the Bundesbank drags its heels 
on the repo to avoid being 


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bored into a discount rate cut, 
but the prospects of a pleasant 
surprise in July are clearly 
improving," says Ms AUison 
Cottrell at Midland Global 

Markets. 

On the other hand, the 
European parliamentary 
elections could dampen 
investor interest in bunds if 
the results suggest a poor 
outcome for Chancellor 
Helmut Kohl and his ruling 
coalition to the national 
elections later this year. 


Japanese government bond 
prices soared following 
Friday’s release of the tankan 
quarterly survey of business 
sentiment The benchmark 
10-year bond yield fell to 4.130 
per cent 10 basis points below 
the previous Friday's dose. 

On Friday morning, before 
the release of the tankan. bond 
prices fell on the belief that 
the report would pa int a bright 
picture that would rule out 
interest rates falling much 
lower. But when the report, 
released that afternoon, 
showed that busines s 
ex pe c tations were improved 
but still weak, dealers swung 
back on the buy side, s endin g 
bond prices higher to the close. 

Bonds started the week with 
prices continuing to slide, 
following the previous week’s 
fails in world markets. On 
Tuesday, Mr Masaru HayamL 
who heads the Japan 
Association of Corporate 
Executives, said the economy 
would improve by autumn 
without any need for fiscal 
measures. This triggered an 


Japan 

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avalanche or selUsg. but on 
Wednesday, a rise to the yen . 
triggered by US threats of 
trade sanctions caused bomb 
to rebound alter eight days 
of declines. 

The market’s renewed 
strength is tempered by the 
Increasingly worrisome North 
Korea nuclear s ta l em ate. On 
Thursday, prices fell on reports 
that the North had been 
testing a 1 , 000 km range 
missile, but regained ground 
near the close. 



* V ... 


i -«r* if <■ 

i » * p » 


!l IW' 


Capital and Credit / Conner Middelmann 


10 mr benchmark bond ybWt 


> M 


End of the bloodletting in emerging markets 


The bloodletting to emerging 
bond markets has finally 
stopped, but It may take soma 
time before investors regain 
some of the confidence that 
pushed prices to dizzying 
heights last year. 

Although cautious investor 
buying to recent weeks has 
bolstered prices and helped 
yield spreads over US Trea- 
suries tighten, observers warn 
that the markets remain vul- 
nerable to further upward 
lurches to US interest rates 
and political surprises. This 
may keep a fid on activity, 
both in tiie new issues sector 
and the secondary market 

"Given the political uncer- 
tainties, and the unfavourable 
recent capital market develop- 
ments, I would not be sur- 
prised to see a slowdown in 
investments to the region this 
year," Mr Onno van den Broek, 
general manager at 1NG Bank, 
said at an emerging markets 
conference to London last 
week. 

After a raging bull-run 
pushed emerging market bonds 
sharply higher in 1993, a dra- 
matic tumround, triggered by 
the Federal Reserve’s tighten- 


ing and political and economic 
shocks in Latin America, sent 
prices into froo-falL 

J J*. Morgan's emar gni g mar- 
kets band index posted a total 
return of 44J.7 per cent in 1993, 
before falling by as much as 22 
per cent to its low on April 4. 
Since then it has recovered 
slightly, but is still down 13.3 
per cent to the year to date. 

Since the correction, “people 
have become more risk-averse 
- investors are gaming a bit of 
confidence, but the market will 
be slow to regain its compo- 
sure,” says Mr Brian Lazed of 
JJ?. Morgan to London. 

However, he and others say 
they have seen new investors 
entering the market “All the 
large customers who were in 
the market in the third quarter 
of 1993 are still invested, and 
there have been new investors 
c oming in.” says Mr Stephen 
Dizard of Salomon Brothers to 
New York. 

“We’ve seen new people 
enter the market who felt it 
was oversold and saw this as a 
buying opportunity, ” echoes- 
Mr Lawrence Brainard of 
Chase Securities in New York. 

However, “the threat of 


higher US interest rates is still 
overhanging the market,” 
warns Mr Peter West of West 
Merchant Bank in London, 
although he says “there may 
he room for further recovery" 
if the yield on the US long 
bond continues trading In a 7.2 
to 7.5 per cent range. 

Latin American elections 
wifi also keep investors on 
their toes. While Mexico’s PRI 
party is expected to remain to 
g ov er n ment after the August 
elections, the outcome of Bra- 
zil's elections in October is less 
clear-cut, with leftist opposi- 
tion candidate Mr Luis Inado 
Lula da Silva currently leading 
to the opinion polls. 

“Emerging markets are 
macro-driven, which makes 
them very sensitive to poli- 
tics,” says Salomon's Mr 
Dizard. “You can expect to see 
a lot of volatility out of Latin 
America this year.” 

But this should not daunt 
fund managers, he says. “They 
just have to manage their port- 
folios actively and may want to 
avoid exposure to certain mar- 
kets at certain times. There is 
enou gh value In ftmtlMgentally 
sound countries such as Argen- 


tina and Mexico - you don't 
have to dicey calls. But 
having some ex pos u re to mar- 
kets like Brazil and Venezuela 
cftn hsto boost performance.” 

Amid tins uncertainty, new 
Issuance to ♦•hw eurobond mar- 
ket has slowed to a trickle, 
leaving an estimated $2bn 
-SSbn of new issue mandates 
piling up in underwrit e r s ' desk 
drawers as borrowers await 
more favour able conditions . 

In the year to date, Latin 
American borrowers have 
raised the equivalent of $7i3m 
in eurobonds, compared with 
last year’s $25.3bn total, 
according to IFR Securities 
Data. , 

Eurobond yield spreads over 
the underlying government 
bonds widened sharply during 
the sell-afr, making enufl -gin g 
market borrowers more reluc- 
tant to tap the market “For 
any size, deals will have to err 
on the generous side, and 
that’s holding Issuers back," 
said a syndicate official to 
London. 

Still, several Argentinian 
borrowers are expected to 
emerge soon, including t he 
Province of Buenos Aires, Sodt 


Thb announcement appears « a matter of record only. 


NEW ISSUE 


10th June. 1994 



THE EXPORT-IMPORT RANK OF JAPAN 

(Incorporated under The Export-Import Bank of Japan Law) 

¥30,000,000,000 

4% per cent. Guaranteed Bonds Due 2003 

Unconditionally and irrevocably 
guaranteed 

as to payment of principal and interest 
by 

Japan 


Issue Price 101.75 per cent. 


Nomura International 


Bank of Tokyo Capital Markets Limited 


Goldman Sachs International 


Merrill Lynch International Limited 


Morgan Stanley & Co. 


CS First Boston 


J.P. Morgan Securities Ltd. 


S.G.^Kaibuig Securities 


Daiwa Europe Limited 


EBJ International pic 
Mitsubishi Finance International pic 


Sumitomo Finance International pic 


LTCB International Limited 


Nikko Europe Pic 
Yamaichi International (Europe) Limited 


gas and Banco del Sud. The 
Republic of Argentina is expec- 
ted to raise between DM400m 
and DMSOOm to short-dated 
bonds this week. 

Elsewhere, the government- 
owned Industrial Development 
Bank of India is poised to issue 
the first straight eurobond by 
an Indian borrower in four 
years. Market talk is of 3100m 
of five-year floating-rate notes 
with a put option after three 
years, rumoured to be led by 
13. Morgan. 

One syndicate manager says 
he hopes eurobond investors 
“learnt an important lesson" 
from the recent carnage, 
namely that they should pay 
more attention to credit consid- 
erations and fundamental 
factors, and less to the high 
returns some bands may offer. 

Moreover, he says, they 
should ensure that the lead 
managers of new issues are 
crnnmitteH to making a liquid 
secondary wmHcnt jjj the paper. 
Lastly, he said “issuers and 
underwriters need to have a 
responsible attitude to ensure 
issues are appropriately priced, 
get placed and don't weigh on 
the market”. 



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Hopes raised for return to stability 


Signs that, at long last, 
investors are prepared to take 
their chances on new issues 
which they believe to be attrac- 
tively priced have raised hopes 
that after several difficult 
months, same degree of stabil- 
ity has returned to the euro- 
bond market 

Among last week’s issues, 
the three deals which appeared 
to have worked the best were 
the Province of Ontario’s Slim 
offering of 10-year global bonds 
(Its first global deal to its new 
fiscal year), Wal-Mart Stores’ 
$25Qm issue of five-year euro- 
bonds and the $250m issue of 
lb-year eurobonds from Uni- 
lever. 

“When a deal is fairly priced, 
it is selling well,” says Mr 
Stoum Meadows, joint head of 
syndicate at CS First Boston, 
adding fhaf one month ago 
would not have been the case. 
However, while there is evi- 
dence that the market has sta- 
bilised, it will take a long time 
for activity to return to the lev- 
els seen at the start of the 
year, he says. 

Closer inspection of these 
deals suggests that Issuers are 


having to scale down the size 
of their offerings and give up 
several basis points on pricing 
to order to encourage investors 
to buy the bands. 

"Last year, if Ontario’s 
bonds were trading at a yield 
spread of 64 basis points over 
Treasuries to the secondary 
market, it could raise $2bn at 
63 over ” says one syndicate 
manager. "But this year, 
Ontario ban to make do with 
Slbn at 87 over." 

The market has also been 
unwilling to believe estimates 
from the book-runners that 60 
per cent of Ontario’s bonds 
were placed with investors in 
North America. Many syndi- 
cate managers say that as 
much as 80 per cent went to 
North America, which reflects 
badly on the level of damand 
to Europe, where Investors 
have bean badly hurt by the 
sharp slide to European gov- 
ernment bonds this year. 

“The market is still in a sen- 
sitive state, and as the Uni- 
lever deal shows, it is still a 
domain for the tip-top names," 
says Mr James Garvin. >wbm! of 
syndicate at S.G. Warburg. 


Investors who are willing to 
return to the market axe selec- 
tive about currencies, although 
they appear to be more com- 
fortable with longer maturities 
than they were only a few 
weeks ago. Deals denominated 
to dollars and yen remain the 
most attractive, while the 
recent rush of Canadian dollar 
offerings has appealed mainly 
to retail investors wishing to 
roll over expiring Canadian 
dollar holdings. Redemptions 
of Canadian dollar eurobonds 
are estimated at CgLSbn this 
month, C$50Gm In July and 
C$1 Abn in August 
There is some speculation 
that last week’s successful 
deals will prompt more dollar 
offerings this weOk, Including a 
five-year global issue from a 
European sovereign borrower. 
The market can also expect the 
first global offering from 
Freddie Mac, the US govern- 
ment agency, to emerge to the 
next three weeks. The mandate 
for the issue, which is likely to 
raise Jlbn and have a maturity 
of five years, has been awarded 
to Goldman Sachs and Salo- 
mon Brothers. 


NEW INTERNATIONAL BOND ISSUES 


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By contrast, deals denomi- 
nated to sterling, French 
francs and D-Marks are having 
a rougher ride, mainly due to 
continuing interest rate uncer- 
tainty to the underlying bond 
markets, though structured 
deals denominated to Italian 
lire have been popular. Many 
issuers who want to access 
these sectors of the eurobond 
market are waiting for the 
results of the European parlia- 
mentary elections, since a 
large protest vote could 
unleash a fresh bout of vdbtfflr 
ity in government bond 
markets. 

Argentina is also expected to 
show some flexibility on pric- 
ing when It braves the D-Mark 
sector this week. It is expected 
to raise between DM400m and 
DMSOOm through an Issue of 
short-dated eurobonds, via 
Deutsche Bank. The three-year 
bonds are likely to be priced to 
yield between 220 and 240 basis 
points over the corresponding 
German government notes, 
which compares with a second- 
ary market yield spread of 200 
basis points on Argentina’s 
outstanding five-year bands. 




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NEW YORK 


EQUITY MARKETS: This Week 


Frank Me Guttv 


LONDON 


Tern/ Bv land 


OTHER MARKETS 


RISK AND REWARD 


Analysts fear 
fresh bout 
of turbulence 


Wall Street has been very quiet over 
■ Pa®! perhaps a little too 
qmet The even tempo of trading 

may have come as a relief after this 

spring's impassioned sell-ofL But 
witt» the period of relative restraint 
ana stability now extending into its 
fourth week, some analysts fear toe 
maritet is poised for a fresh bout of 
turbulence. 

“The longer volume stays low, ar^ 
the longer the market just 

along, the better the odds of an 

exaggerated move," says Mr Gregory 
Nie, technical analyst at Kemper 
Securities in Chica&). 

Since toe immediate reaction to 
the Federal Reserve's fourth, move 
to h ig her interest rates in mid-May 
petered out, the bear wiai-irwf has 
seemed more like a snail market. 

Excluding last week’s closi n g 
session, when the Dow Jones 
Industrial Average gained 20 points, 
the blue-chip index has shifted 10 
points higher or lower only four tfm«i 
since May 23. 

In most sessions, toe Dow has 
stalled within a point or two of its 
opening leveL For the most part, 
activity has remained sluggish. 

Even last Friday, trading was 
restricted to 2 sam shares. Howeve r , 
investors may look back on the 
session as a turning point of scats. 
This week, the potential for 
fester-paced activity and sharp price 
movements looms larger. 

First, political instability is a wild 
card which could come tntn play, 
with the US attempting to formulate 
a response to North Korea’s 
intransigence over nuclear 
inspections. US trade talks with 
Japan, and their impact cm the 
dollar’s value against the yen, also 
represent a threat to confidence. 

The issue of market timing will 


DowJones Industrial Awarag* 


3780 



also re-emerge this week. On Friday, 
Wall Street feces the “triplfrwitching'* 
expiration of futures and options 
on stock indices , and options on 
individual issues. The consequent 
unwinding of investment png j tjmn f 
is sure to exaggerate any underlying 
trend, especially in view of the thin 
level of trading recently. “The risks 
for speculators Is going to go up a 
notch," says Mr Nie. 

This week also marks the hn fffrmfng 
of the quarterly "window-dressing" 
period, when activity traditionally 
accelerates. As the month draws to 
an end, portfolio managers will either 
add to the# winning positions, or 
unload their losers, in the hope of 
casting their second-quarter 
performances in the most favourable 
light 

Mr Nie Is one of several analysts 
who believe most windows will be 
undressed In the final days of June, 
setting the stage for a big downturn. 

A brief spurt higher is certainly 
possible this week. The Kemper 
analyst points out that rash reserves 
remain low, even though stocks have 
now moved into a “oversold" position. 
As a result, the market “feels fflrn 
it wants to move up". 

“But somewhere in here we are 
going to get a selling wave.” Mr Nie 
argues, pointing out that a hefty 
itedinfl would help buOd up ca sh 
reserves. “Until that issue is 
addressed, 1 have a hard time 
believing that we are going to get 
a sustained rally." 


A whiff of 

short-term 

optimism 

The division between optimists and 
pessimists among UK stock market 
analysts is now more sharply divided 
than before. On the one hand, the 
FT-SE 100 index starts the week 
solidly above the 3,000 mark which 
has tormented the chartists since 
toe TnifldV of last month. On the 
other, the bond markets retain then- 
capacity to rattle equities and reverse 
. stock market trends within minutes. 

For those strategists focusing on 
the strength of underlying equity 
valuations and on the evidence of 
economic recovery in the UK, last 
week brought valuable support in 
toe powerful rise in UK industrial 
output reported for April The L6 
per cent monthly gain was well above 
expectations and put teeth into three 
equity market valuations which stand 
accused of over-valuation. 

Strauss Turnbull believes the 
recent business recession brought 
sharper falls to earnings than to the 
past, and the way is now open for 
earnings growth of 40 per cent to 
the next two years without generating 
the high inflation which lies at the 
heart of the bond market’s worries. 

The most significant response to 
the industrial output data may prove 
to be the emergence of signs that 
equities have at least begun to shake 
off the influence of the gilt-edged 
market. Although gilts contin ued 
to unsettle shares within a narrow 
range, they did not seriously hinder 
the near 2 per cent recovery to the 
FT-SE index. 

Indeed, base rate fears are not what 
they were. S. G. Warburg has 
upgraded its base rate forecasts to 
the tight of last week’s ernnnmir 
data, and now looks for a rise of a 
full point to g as per cent by this Hma 
next year. However, such 
ex p ecta ti ons , once alarming now 


FT-SE-AAfl-Shara index 



1,905 V *+~ ' — ' 

3 June 1994 10 

S tUMtxFT&aptita 


ring no tocsins in the City of London, 
or at least not to the stock market, 
which has decided to live with them. 

The prime n?sp did Mb 

best for the market by assuring 
newspaper readers that “dividend 
control is a non-starter," even if he 
did leave obscure the wider question 
of dividend taxation, which is the 
market’s real worry. 

The government’s political 
problems, Including the by-elections 
and the European elections, have 
all been so widely rehearsed in the 
financial markets that it is difficult 
to see what further damag e can 
follow. 

The economic side of the optimistic 
argument will be well tested this 
week. If the Footsie continues to 
progress against a backcloth of 
statistics on producer and retail 
prices, the retail price index and other 
data, then “the equity market will 
have more room to manoeuvre," as 
Mr Richard Jeffrey of nhaTterh otip p 
Tfineyputsit 

But those still unw illing to take 
such a positive view will want to 
see more evidence that equities have 
indeed shakep off band market. 
infiuence - it was still gilts leading 
equities ahead at the end of the week. 

Prominent among th** m jp Mi* 

Nicholas Knight of Nomura Research, 
the noted bear of the London market, 
who was reported to be cutting his 
arid-year forecast for the Footsie 
Index. This week could be toe week 
to watch. 


■ . .. ■ri-' JV'.* " ■■ .tf , i.i- -. I. . -• — - .. r- •» -• t , • -t s . w. ^ 

wmee&«r aolaucs 4.=.* i'-uV U-C &£.'•.* 



50*01 T 8^93 ■•= 


AMSTERDAM 

Trading in KPN, the Dutch 
telRcommtmicatiops and postal 
company, begins on the stock 
exchange today. Allocation of the 
shares was determined over the 
weekend after strong demand for 
domestic mid foreign investors 
resulted in applications for about 
390m shares, compared with the 
13gJ3m on offer. 

Ahold reports first-quarter figures 
on Thursday. The food retailer has 
already forecast an improvement 
in first-quarter net profits compared 
with last year’s result, after figures 
last month showed that sales, 
arnhiriing value added rose fay 

8 per cent in the first 16 weeks of 
the year. 

MILAN 

Tfij , the Agnelli family holding 
company, launches its complicated 
capital increase on Thursday, the 
start of the July trading account, 
which aim« to bring in a total of 
about L8Q2bn. 

Friday brings the close of the 
institutional offering for shares in 
Finanza & Future, rate of Italy's 
leading mutual fund nmnagpmwii 
groups. About 24m shares are being 
sold by Cofide, the holding company 
of Mr Carlo De Benedetti. which is 
seeking to raise SlOOm through the 

sals. 

STOCKHOLM 

Six-month figures come from Henries 
& Mauri tz on Thursday. UBS, which 
expects a 40 per cent increase in net 
profit, notes that the retailer has 
already Indi c ated that first-quarter 
sales were 20 per cent ahead of the 
previous year and that profits also 
grew strongly. 


HELSINKI 

The busy results continues 

this week with four-month figures 
today from Kemlra and Kone. Me tre. 
RautaruukM and Valmet report 
tomorrow, Metsa-Serla and Skopbank 
on Wednesday, while Nokia, Finvest, 
and Okobank anmnnnra figures on 
Thursday. 

TOKYO 

Investors are expected to make a 
more measured response to Friday’s 
tamtam survey of business rainfiriBney 
from the Bank of Japan. The 
immediate response to the report, 
which while positive was not as 
strong as same had expected, left 
shares off the two-year highs seen 
on Wednesday and Thursday. 
Investors will also be awaiting 
first-quarter GDP figures, due on 
Thursday. 


Search is on for 
a better way to 
evaluate exposure 


The current 
debate over the 
dangers inher- 
ent in the 
derivatives 
market has led 
to a more 
detailed analy- 
sis of the differ- 
ent types of 
risk involved, and greater 
attention to toe best way to 
quantify risk. 

Traditionally, the growth of 
the over-the-counter deriva- 
tives market has been tracked 
according to the notional prin- 
cipal amount of swaps out- 
standing - that is, the notional 
amount on which payments 
under each swap agreement 
are calculated. The notional 
amount, in most swap agree- 
ments. is not actually 
exchanged. 

However, many derivatives 
dealers have argued, not sur- 
prisingly, that while this mea- 
sure of derivatives volume may 
reflect toe size of toe market, it 
does not reflect the amount of 
risk involved. Instead, they 
argue, It makes more sense to 
measure the replacement val- 
ues of swaps transactions, 
which reflects the current 
credit exposures of outstanding 
derivatives transactions. 

Such a measure has much in 
its favour. First because deal- 
ers manage risk by marking 
the value of transactions “to 
market" - up or down to line 
with market fluctuations, a 
measure of current replace- 
ment value is more in keeping 
with market practice. Second, 
the measure reflects credit 
risk, nnp of toe trial™ types of 
risk identified by bankers and 
regulators as a source of con- 
cern in the derivatives market 
It can then be more reasonably 
compared with credit risk to 
other markets. 

"Modem risk management 
allows us to disaggregate and 
isolate different elements of 
risk, against which one ran set 
appropriate amounts of capital 
internally,” said Ms Gay 
Evans, chairman of the Inter- 
national Swaps and Deriva- 
tives Association (ISDA). 

To prove the paint EDA, the 
OTC derivatives trade associa- 


tion, last week announced the 
results of a pilot survey on 
derivatives replacement val- 
ues. The survey of 14 leading 
dealers around the world found 
that the gross replacement 
value of swaps outstanding at 
the end of 1983 was $lT8.4bn, or 
2.1S per cent or their notional 
amount of $7.G0Obn_ However, 
the net replacement value - 
once all agreements between 
individual counterparties have 
been netted off - is even lower 
at $101 abn or 1.22 per cent of 
their notional amount. 

The smaller figure assumes 
netting is legally enforceable, 
which remains unclear to some 
jurisdictions. However, the 
Basic Committee of central 
bankers Is believed to be close 
to making a fresh statement on 
the issue. 

to future. ISDA will conduct 
a survey of net replacement 
value alongside Us regular sur- 
vey of notional principal 
amounts. Its most recent sur- 
vey of the notional principal 
amounts, for the end of 1992, 
produced an estimate of 
$4^0tt>n. The latest survey of 
just 14 participants, showing 
their notional amount at 
$7.6bn at the raid of 1993, sug- 
gests the market's expansion 
has accelerated still further. 

The survey also showed that 
the credit exposure of partici- 
pating firms in derivatives was 
si gnificantly less than to other 

activities. For example, the 10 
banks and two of the four bro- 
ker-dealer affiliates surveyed 
held net loans and letters of 
credit totalling $l,686bn, and 
the 14 firms had a total of 
$442hn of securities to invest- 
ment or trading accounts - 
compared with net replace- 
ment value, or credit risk, of 
just over $100bn. 

The move away from 
notional amounts was recog- 
nised in the recent report by 
the US General Accounting 
Office. In its own survey of 14 
US participants, the notional 
amount at the end of 1992 was 
$&500bn, with gross credit risk 
of only $114bn and net credit 
risk of 9681m - much smaller 
than for loans. 

Tracy Corrigan 



CONTRACTS & TENDERS 


APPLICATIONS FOR TENDER 



DRIVER AND VEHICLE 
LICENSING AGENCY 

Invites expressions of interest 
from Contractors wishing to Tender for its 

Stores and 
Waste Management 
Services 


DVLA Stores and Waste Management served 
approximately 12.000 customers in the year CO Matt* 1994. 

The unit operates from 3 conditioned stores receiving over 
3,000 tonnes of stock las! yeat Almost 28,000 picking lists 
were processed issuing 1,750 tonnes of stock of which over 200 
toanes, some 30.000 parcels, went to external customers. 

in addition to this the Stores is responsible for the disposal 
of waste paper ensuring that where posable all materials are 
recycled and responsibilities include the shredding of confidential 
waste and segregating paper into quality grades. 

The above figures are for information only and not 

indicative of future demand. . . . 

The following data must be provided when registering interest 
Presentation of balance sheets and statement of the firm’s 
overall turnover in respect of the services to which the contract 
relates for the previous 3 financial years. 

List of the relevant principal contracts effec ted in the past 3 
vears, with the values, totes and recipients, public or private, involved. 

Description of technical facilities, measures for ensuring 
quality and its study and research facilities and (policy 

accredinmon^ current customers wiffing to supply trade 
references in support of the firm’s experience and expertise «n 
this field. 

DEAOUM FOR RECEIPT OF. APPLICATION 2SI0SIH 
Term of Contract 1.12.94 - 30.11.97 
Applications to: PSG, Room C 2 AS, DVLA, 

SWANSEA SA 6 7 JL. 

Further enquiries should be addressed to 
Mr Alike Griffin. 

Tel: Swansea (0792) 782445. 


'punaoemint savww 




pitman •*f>'* 4 * 


as ***** 


saSsasgs Sarsr 

SS5 Bg giSgai »B3 

sSSSSSSaK 




PRE-QUALIFICATION 

OF 

CONSULTANTS 

The Civil Aviation Authority of Pakistan intends to 
undertake a major programme of developing 
commercial ventures at its airports. 

Out of the 40 airports owned by the CAA, Quaid-e- 
Azam International Airport at Karachi alone offers over 
100 acres of land for soch development. This airport 
currently handles more than 5 million passengers per 
year and is served by over 30 airlines. Being the main 
airport of the country it offers opportunities for great 
commercial development. 

To optimise its revenues through commercial ontlets the 
CAA intends to conduct a Feasibility Study for the 
development of potential commercial ventures at its 
airports. 

Applications from reputable and specialised consultants 
are therefore invited at this stage for pre-qualification. 
The consultants selected for the short-term study will be 
expected to suggest to the CAA, the most appropriate 
course of plan to pursue among the unlimited options 
available far commercial development at CAA land in 
Karachi. 

Interetsed firms are requested to send details fo their 
organisation for pre-qualification by 5tb July, 1994 to: 

Director Plans & Design 
Headquarters, Civil Aviation Authority 
19 Liaquat Barracks Karachi, Pakistan 

COMPANY NOTICES 



PUBLIC 
SPEAKING 

Training and 
speech-writing by 
award winning 
speaker. 

First lesson free. 
Tel: (0727)861133 


Union Bank of Switzerland 
1^50,000 Call Warrants 
on Series B Shares of Cemex, SLA. 

(tbe"Vferaas") 

ISIN GB0049212375 

In accordance with the Terms and Conditions of the Warrants, 
notice is hereby given feat, following a subdivision of the 
Series B shares of Cemex, SA. with effect on and from 
life May, 1994, the Settlement Amount for fee purposes of 
Condition 3(b) shall be determined by reference to 3.375 
Series BCP shares of Cemex, S -A. 



9th June, 1994 


The Warrant Agent 


• .. V- 


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price 

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1180 


882 

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881 

10.75 

1078 


laz 

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10.75 


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1073 

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BlDO 

1070 

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0530 

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toss 

1085 

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1080 

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1183 

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1237 

1182 

1488 

0830 

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1000 

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1685 

18.12 

Jtao 


23J0 

SSL 73 

1100 


zue 

28.73 

1130 

2830 

2883 

2040 

1200 

2830 

3083 

3480 

1230 

2490 

3083 

3480 

1300 

2AS0 

3083 

3480 

1330 

2JJ50 

23.11 

2020 

1-400 


1401 

1888 

1«5D 


1881 

1038 

1600 


1586 

1012 

1630 


11.10 

11.10 

1000 


1188 

1188 

1630 

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11.10 

11.10 

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1237 

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1Z8? 

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1038 

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1988 

2000 

1267 

1881 

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1237 

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2100 

1iS8 

30X4 

3381 

2130 


30A4 


2200 

2883 

3044 

3381 

2230 

z&ea 

9044 

3381 

2300 

29-83 

1685 

1012 

2330 

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1183 

1680 

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1188 

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LEQAL NOTICES 


NO.OBWOW19M NO.KBSUW1SM 

IN THE H1GB COURT OP JUSTICE IN TH E HIGH COURT OF JUSTICE 

CHANCES? DIVISION CHANCERY DIVtSOW 



IN THE MATTER OF 
WASA WTHtNATTONAL (CXJ 
INSURANCE COMTANT LOOTED 

IN THE MATTER OP 
THE COMPANIES ACT 1SS3 

irencs is 

dv ibmc am 
I9M 

tadee tattie 

tbe 

AND Nona IS FURTHER OJVBN tfaM ito 
Mid PhMm « tfrtoed 10 bo htwd betas Mr 
fegttt Bwfctey uni: taj* Cants rf JaUfce, 
tbe Staid, LMH VC2A 2U, on «ata*dt}> 

Any Creditor or Starebolder of the uld 
!«** 

Ontata 
ttacShn 

[fae of tbe bevtag fa pen gr by 
ttajjcj*. 

A copy of the tad Ptdticp gg bo InW i id to 
^MEhpaaaare^ittaEdBgHBotaAg 0 ^ 
■ j « fc» i nl 5flBdwo«lO fir— ottaii grf* d 
etB^tatbeMBe. 

Quod AH I Ok diy of Jobs 1994. 

bee & Oft, beflyi Boogo, 1! Bj»«ul tea. 

Loedaa. EC3ft SOL 

stfmoAaoammm 

Tct 071 £32011 


Dl THE MATTES (W 
WASAIUJU holdings UMTns 


IN THE MATT™ OP 
THE COMPANIES ACT MS 



befctar BocUc; m As Baygl CbnHoT Jorita, 
Stood, London WOA 3 ILmWb M reMy 
Z2ad6*yaihaB 199*. 

Aaj Creditor or StareboUcr of ibe gold 
[ to e^tse Ite Miking of as 
i of tbe oM redae rt na of 
) P muia ta Acxoan taoW mm o He 
ha boM*s ■ praoo * ty CMonl to 


A copy Us aid 


FetUBawabctanteflio 
dnosteMool^awBoder- 
I PC pk jBL Bt of ttlfl mpkfaHO 


Dtef thfa nu day ofhm 199*. 

lace A Co. RaoSyi Bmd, 11 8j«*d SaceL 
loorina K3K SEN. 

XetTBmAODSrtSCAW 
-neon ss 2oti 


Polly Peck International (Finance) N.V. 

established at Curaqao 
(Netheriands AntibH) 

Notice of Meeting of holders ol the Company^ 

7K% Guaranteed Redeemable 
Convertaate Preference Shares 1994/2005 
(Treference Shares? 

To fie Item on ttanday Juiw 23. 19M ai tono B-m. (New York Ume) Ol Itw orno« ol 

Naina DutBi. attomoys, 101 Park AvBnuft, 43id floor. Now York, Now York 10178. 
SutHoa the meeting wHI bo Bmongat others tho appolmnianl or the Mambers and 
rJotegaflonof auttwrlty to meCornmmoool Protaenoo Sharaiwktas and an ufKlata 
on Iho flnandal position ol PPI Hokflnps av. and the sHtftra of CotiQonf claim 
ogalnat PPl HoUngs B.V. 

The agenda and other documents relevant to the meeting may be obtained 
6jr shareholders of Bib Company endued do stand the meeting oi the office of 
the Company ai De Ruytakade 5BA. Curacao, ss Irom June 15. 1994 upon 
sotUsctory proof of ahsrehoidsrehlp. Copies ot the agenda oMho meatmo wd also 
be molied u toktas whose Preference Shares are deposited in an account Mtfi 
EuredeerorCedal. 

Preterenca Sharahoidera who wish to anond and, to the extent enMIM thereto, to 
mm at the meeting must deposit their shares wkh (he Pnnopal Paying Agent. 
The Chase Manhattan Bank. N A at Wooigan House. Coleman street, London 
EC2P 2HO, Unfceti Kingdom, etiher cSrectty or through Eurodear or Codel. pnor to 
TUesdoy June 2L 1994. 

As the Preterenca Shares are no longer Rsted el Vie Luxembourg Stock Exchange. 
pubflcaUon ol notices to the Preference Shareholdare win henceforth only toko 
plaog In the Financial Times and hr tin Amlgoa or Curasao. Nethertondi Antrtlei, 
and no longer in s leadbig Luxembourg newspaper. 

By: The Board of Managing Directors 

ol Polly Pock International (Finance) N.V. 

Curacao. JUne 0. 1994 



art frwsday, Ally 1 2, 


A» the ftench Oo v en u nent enters Re second year, the country 
contheiM to endorse malar chang e#. Tbe survey wM present a 
coaqrreheriehm view of one of Europe's fo re most octmonri os and 
vrit bo of partkailar btereet to tavoston. tradsrs, poOTWans and 
afl Involved fa defog tnrieri with Fteaca. 

WHh ■ wotfdwWo cbmaUon and a readereMp of over one Rdnun, 
the RnonoM Howe eurvoy «n Franco wtB be tho tdeei odverdefog 
metgum for afl b uein oe swi Intareetad In the Frencfa market. 

For m editorial synopsis and advortfalng hfor matlon cril Dominic 
Good fo Paris OH (1J 42 97 06 30 Of fax (1) 42 97 06 24 

FT Surveys 


r dTY c -^ - b s K j aaNiii 

The MbXM Lckdcre m (ptEad baling • Fimnwl tod Sprat, Fer a 
bnadiurc sue in acenuM epflicuiM C*m cmU 0- 1 7m JKA' 

Anmu we oormaUi cpennl i»ubia " nmot 

Sen out up-lo 4 »I« pnera ■* in 10 Op m m Tctoicw page “H 


INDEX; 



071 8292 


Tho oeeniitl icnl far the rerloui ininux 

Market-Eye 



London stock exchange 


O 130 * software a pptic afl ons O 
O RT DATA FROM S10 A DAY O 
O Signal SOFTWARE GU/DE O 
Cal LondonS 44 + (0) 71 291 3558 
ta you pulda and Skriat price fist. 


Argus Fundamentals 

‘Unaersisr.c -'.'hui is driving oil prices’ 

Petroleum Argus 

CALL { cr,- f-HEE TRIAL ‘.o this r/Qi't.iy publ'calion j-V' 71 > S£9 °~T2 



28 


FINANCIAL TI MES MONDAY JUNE 13 1994 


WORLD STOCK MARKETS 


EUROPE 

MlSTBU(jlm10/Scty 


BnoMB 38,275 

BM1 2&12S® 
CSRCtoi 12JOO 
CMB £410 
CUm 6*80 
Cd * 187 
DBM 7.700 
DBk 103M 

§& 3S 
Sh* 3£S 

^ as 

Oraort £200 
GMW 4000 
BnowM 3.10C 
Khto* 6.B80 
KbnMF SM0 
M mnr BJSO 
Maaanei*B6® 
ntwim 
PUk. 10*00 
pwriin ajooa 
Hcfld si»n 
RySeto 8*00® 
IlyflWV 5.110® 
SDcSnB aun 
IfflWfV £320 
Sofha 15,300 
Stine 1.610 
seen* 15*26 


UCB 2<300 
IVMn £080 


♦40 £200 1. 7S0 2* 
+51,270 OBS 08 
•3 04 838 1* 
+20 4,200 3.420 _ 
+47 1.713 1,100 1A 
*9 1.387 1*50 CW 
+14 1.071 BBS 1* 
— 1*30 TO 2.1 
_ 480 483 2.1 
-1 2SC 171 £4 

♦2 ace aaa i* 

+12 701 646 2* 

+i aoa 439 u 
+1404*40 3L41T 1-0 


(JunlO/FreJ 


+40 3035 £550 ZB 
+10 4j5l3j£s 1 J 
+10 8*00 7.600 3.1 
■180 £300 4*00 _ 
+30 4370 4*20 4* 

■iso iCna rfjxo 2* 

♦7526*5021748 ZA 
10042*7839*13 5* 
17526*® 31350 )* 
+10013*7511829 2* 
— Z5 2J00 2JSM 3* 
+20 6*00 5*10 3* 
_ 202 164 7* 
-80 8*00 6.100 1* 
_1*B01*30 2* 
+10 8*20 5*70 7 2 
-6 3*00 3*10 3* 
-404*80 3*70 44 
_ 4,470 3.950 42 
-10 1*80 1.430 £3 
-20 aim 0*80 
idtoc B*00 18 
5*50 4,100 £3 
3.603 3*70 4* 
_ £200 6*80 1* 
-130 7*50 0*80 1* 
♦00 £380 6.000 _ 
630 1.033 8* 
*0010*00 0.1 
-TSIOJTSSJKH £7 
+79 3.000 3*2S 4.4 
_ 668 420 _ 
+80 8*00 4*30 4.1 
-20 5*80 £000 3* 
+25 2*38 2-25D 40 
-30 2*30 2*08 4* 
+501978014,425 £2 
—20 1875 1,462 0* 
-7317*50 vlTSO 4* 
-2011*00 8*00 4* 
-176 36,100 22200 2.4 
+20 2*30 £440 4* 


“ iis-^asisss? 

atemns s*nta -Jn 27432.10 i* 
Uatox 14X70 -1*0 157100*0 4* 
MMU 1*48 -1 1*48 988 £7 

-*0160*914320 ^ 


IBiJEflUIBS(Jm1fl/Rl) 


— NnErt 

— Orsn 


21 <20 ■480 280 100 — 


«Mm 81*0 
AC80N 99 
MM 47*0 
AKZO N 209110 


380® -6*0 625 388 4J 

381 _ 333 362 6* 

. — ... 160 -3 234 166.10 3.4 

— Prune 377.10 -1.404C*J3miO 8* 

— Run 03 +2 93E 763 1* 

— M 017 -11 1*03 818 _ 

— Praam 901d +38 1.150 880 4* 

— todfctr 482*0 -1.10 6043S218 _ 

— nmPA 134*0 -£70187^012630 £7 

— BUM 811 -1 702 SSI 1* 

“ SttJC 770 -27 94S 770 7.1 

— Sjoem £750 -24 £290 £710 1* 

SSflg 670 +14 734 578 3* 

9LM 1*36 -01*801*27 2* 

sonar 353 -646*13B£4a — 

S32 +5 800 918 £1 

482 -1*0 BIO 45620 02 

508 -7 700 400 £1 

1*81 *1 £470 1*31 _ 

— SocGm 009x1 +2 702 598 17 

— SoraorA 1*65 +5 2*00 1*50 £2 

— SpMt 380 +8*0 529 _ 

— Sneza 303 -6 377 285 4. T 

— 3yntt6 201 -1*023780187*0 — 

— Tattai 2*10 -80 3,120 £281 12 

— ThmCSF 16320 -4 214 100 5* 

— IMS 330.10 +9*0 3845029118 12 

— IMP 152*0 +.1022458141® £9 

— UFHjOC 443 +16 404 420 14 

— Unftni 434 -SB 850*7110 60 

— UhM+ 651 -8 800 351 60 

— VMeo 253*0® +*0 307 236. ID 3* 

200 -1*0 330 240 14 

290 +*0 395 202 3* 


GERMANY (Jut ID / Dm.) 

ABE 178*0 +1*019830 163 0* 
fOM 58420 +120 835 544 £1 
AaMnfcj 1200 +30 1*46 1,120 1.1 

Mm £474 +30 2*11 2287 0* 

Mona 845*0 +4*0 870 GTS 12 
Aata 


D3M 131 TUB 
DsstfX 184*0 

Bstvr 188*0 

FUOpR 1610 
Banna 10020 
SBtOdH 48*0 


... 37*0 

HGDpR 8020 
MMUB 80*0 
MJ4 6020 
kMPBT 8720 
KPVOpfl 49 

Na&yd 71*0 


_ PMp 5170 
_ MyGr 77*0 

_ Romeo 12020 
“ name 12220 


RDuWi 198.10 
StorVH 47.70 


17630 

VDOOpfl 52.70 

WNDpH 111*0 


7170 69-70 4.7 _ 
+.10110*00020 32 _ 
+.70 5140 48 — _ 

+4 229W7.60 £1 _ 

+.40 B9A0 06*0 42 _ 

+204720 3820 _ _ 
■120 52 42 £1 _ 

♦20 7720 6150 _ _ 
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EumrartlOOPflfKWCS 141145 1408*7 142074 1540,19 31/1 
Bn Top-100 0BAKQ 122541 1222*7 123096 1311*1 2/2 
JQpflOgm (31/12/88) M 31128 314*5 385.19 5/1 
Bortps Enagff/Ma 15840 157*4 15B71 18272 14ft 


138887 W 
1280*8 UB 
29628 21ft 
141*8 21/4 


■ mr vork ACTTva aroexa ■ immu ACnvrnr 


1730971 4/1 
2B£22 4/1 
144KS7 4 n 
187139 «1 


■ CM 

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20260 

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2009* 

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20789*00 

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3*30*00 

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price « 6 k 
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Jus 10 Jm 9 Jib 8 
K9W YOife SE 222*07 252*40 2S5 lOS6 
Anti 16* 91 22*84 16743 


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DEI 14220192. P Gerraany und F rfua e . FT VAT No. 

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TU 329517U, Fxa 329S171X IZZ***. Fox 3W2J97, Far East contxa Tokyo 


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Hara ta raf^taa o Xaraa taW. 


Financial Times. Europe’s 






































































































30 










































































































































































































































CURRENCIES AND MONEY 


MONEY MARKET FUNDS 


POUND SPOT 


fe Junto 

Europe 

Austria 

Behjtam 

Danmark 

FHand 

Fiance 

Genrany 

Grows 

Msid 


Netherlands 

Norway 

Portugal 

Spoln 

Sweden 

Swifcarfand 

UK 

Ecu 

SORt 

Amertcea 

Argentina 

Smzfl 

Canada 


FORWARD AGAINST TM e POUND 


Change BUtatfer (w. uu 

spmad ^ 


DOLLAR SPOT FORWARD AC 


One month Una months One yew Bank of 
Rate %PA Rato %PA Rato XPA Eng. Max 


Closing 

rrid-poto? 


Change BUtaffer 
on day s p re a d 


Da/s mid One month Tim* months One year JP Morgan 

*gh tow Rato HPA Rata 9iPA Bate %P* ***** 


ffidlj 17.6825 -O mh £ rn , 

(BFr) 51.7678 la’s! ™ ' “? 17 7574 1MEM 170S8? OS 17.5581 02 

(DtCrt 0.B163 In'm« 510340 61.8810 51.7476 02 51.7826 -03 51.8178 03 

(FM| a340S InoiS 1!® “ !!! aB38 ° MO 4 * 9-8231 -10 92353 -02 90380 -02 

S *?-“• 03640 82850 


- 0238628 


80719 80305 

XS563 

- 0.6 

80611 

-04 

X54 

Ol 

2-5303 2^003 

20144 

-ai 

20141 

0.0 

2.4379 

OB 

378.433 37CL400 

« 


. 

. 

. 

- 

1027/ 10214 

10273 

_as 

10284 

-07 

10302 

-03 

244X32 2324.08 

2382.42 

-xo 

2392.17 

- 2.6 

243007 

-20 

510340 510810 

SI .7478 

02 

510926 

-03 

SI .6176 

03 

2.8225 2.6145 

20178 

00 

201 % 

OO 

2.7984 

07 

100285 1X8219 

100888 

00 

109013 

-03 

T 08925 

OO 

282085 261079 

283067 

-40 

255012 

-40 

re 

- 

20X954 205,483 

208.169 

-20 

207054 

-2.7 

209.724 

-20 

1107B1 11P101 

110 588 

-20 

IIP 936 

-1.9 

120618 

-10 

2.1202 2.1218 

2.1216 

00 

2-119 

00 

209*6 

10 

10039 10012 

10031 

- 1.1 

10901 

00 

10898 

00 


(Pew) 1.6055 +O0OD1 051 - 050 12094 12028 

31 ®-80 +6721 513 - 646 319820 313300 

ZOna “0-0006 701 - 717 2.0757 aSS 

“£*=° (New Peag 5.0671 -00063 623 - 610 |o«4 S06OB 

MB*Mdcto E^Afctef 180 *° 0005 077 ‘ 083 '-SOW 

J5S MS? ~ a00ls S1B - “8 22583 22493 

Hong Kong m 110MS +0-0046 «« ’ 712 112882 11.6442 

Jmn °?S MSS ‘*°f 134 880 " 154 A7MB0 «* 1 M 

.S??-.. _E) 1 38.704 -0206 835 - 773 167280 1SX580 

Matr on (MS) 32156 +0.0022 140 - 171 *eo*n 32076 

NewZeatovl (NZS) 20614 -0.0003 698-830 20W7 

571 - 788 41. T 766 406871 

®2 +aQ081 =39 -668 6.8668 52445 

2-3 ^ +02001 116 - 140 22182 22089 

| ft** £»mJ P) 6.4824 +0.0103 601 -846 64656 5 4353 

„ W 7215B -O042B 993 - 328 72628 7.1933 

South K orea (Wap 1215.05 +02/ 566-644 1216.17 1213.78 

2? 2JHI2 80 ~°SS 963 ■ 308 40.7350 

ihatand (Bl) 38.0016 -0.0012 790 - 242 382770 372410 

l€OR rate for tfan 9. DkVoflai h tbs femi Aw -jit ^ , „ - , 

jy* gtfqjM °7 ant knre e t raws. Satoo inr** »-+ . mm u <+ 

gwDggg^gjafajaajartaaa tom T>C WMtoEUTms CLOStWQ SPOT R*TCX%nl 


22723 -02 22758 -02 20898 -02 

12072 0.7 1.5058 02 12003 02 


2252 04 22504 0.4 22485 02 

112804 02 11.8566 04 112834 -Ol 


166293 3.1 150484 XI 161279 X4 18X1 

22607 02 22842 -04 22708 -02 


* peers. Fonrenj nua res net drrcsy omtad id Ore martat 
i angi tan - WW OUrr ant MMm In bom a* red 
■ mm rounded by thr F.T. 


AijBrta (Sch) 11.7125 

Bftghm (Bft) 342220 

Denmark pKrt 62068 

FWSnd (FMI 52311 

Franca (FA) 62710 

Germany (Dj 12672 

Greece (ft) 250250 

hwena 09 12689 

iwy W 1HB.10 

Linembaug (LFrJ 342220 

Netherlands (FT) 12689 

Norway (NKi) 72244 

Portugal (Ea) 174200 

Spain (Pa) 138278 

Sweden fSKf) 721+9 

Swttwtond (SR) 1/4079 

UK (8 12080 

Ecu - 1.1684 

SORT - 121200 

Americas 

Argentina (Peso) 02984 

Brazil (CD 211929 

Canada (CS) 12733 

Merdoo (New Peso) 32535 

USA tS) 

PactflO/Mddto Eaat/AMca 
Auetrafie (AS) 12812 

Hong Kong (HKS) 7 .7378 

hda (Rs) 312675 

Jepai (V) 10X915 

Malaysia (MS) 22965 

New Zealand (NZS) 1.6986 

PhOpptnea (peeo) 27.1000 

Send Arabia (SR) X75G3 

S ingapore (SS) 12337 

SAMca(Conv) (R) 32223 

S Africa (Hn.) p) 4.7850 

South Korea (Won) 80X400 

Taiwan (TS) 272810 

Th genii (BO 2X2000 

tan rata far Jun X BUMItar apraam 
butarekiwSad By asrara imreat noae 


-00495 

100-150 

11.7630 11.7150 

11.72 

-00 

11.7235 

-a* 

11.8483 

as 

10X0 

-00965 

040 -400 

340SOO 340900 

340495 

-10 

34397 

-op 

34.412 

-03 

1D40 

-00155 

078- 096 

&5152 60016 

60175 

-10 

60343 

- 1.6 


-00 

1 W 2 

-041 « 25 8 - 3(W 

S.5M5 50(71? 

5J343 

-0.7 

50471 

-0.7 

50636 

-as 

752 

-00235 

685-725 

60830 5.6835 

S.6773 

-13 

X 688 

- 1.1 

S0455 

04 

104.7 

-00049 

669 -075 

1.8690 10637 

1.6682 

-as 

1.6634 

-00 

1.8644 

02 

1040 

+00 *00-900 

2S0.650 245050 

252 

-80 

252.85 

-30 

255.15 

-ip 

6X9 

-00025 

877- 701 

1.4788 1.4667 

1.4873 

13 

1.4644 

10 

1.4578 

08 

- 

-015 

820 - 000 

1617.75 160620 

1814 

-3.7 

162X05 

-30 

165X65 

-20 

7X0 

-00965 

040 -400 

i 

i 

340495 

-10 

34097 

-09 

34.412 

-03 

1040 

-00047 

682 - 666 

10716 10664 

10702 

-00 

10717 

-OB 

10663 

ai 

1040 

-00143 

234 - 294 

72417 7.1788 

72281 

- 0 .fi 

7.2346 

- 0.6 

70007 

00 

95.4 

+005 

900 - 100 

174.100 173050 

17X405 

-9.7 

177.4 

-70 

IBS. 35 

—40 

SI .8 

-0275 300-450 

13X590 136090 

19X796 

-3.7 

13702 

-X4 

13X825 

-2.5 

80.6 

—00148 

103 - 194 

70474 7.0064 

7.9328 

-2.7 

70634 

-20 

8.0549 

-IS 

SOP 

-00066 074 - 084 

10112 1^082 

1.4079 

00 

1.4062 

- 0.1 

10977 

0.7 

1 W 0 

+00005 

077 - 063 

10110 10050 

10072 

X7 

10059 

06 

1.5003 

00 

9X4 

+00037 

581 - 586 

1.1582 1.1657 

1.1568 

10 

1.1541 

1.5 

1.1664 

-07 

- 

-0.0003 

693-984 

naastA naaun 

. 







+3724 021 - B25 

211825 211X18 

• 

- 

■ 

- 

- 

- 

- 

-00008 

730 - 736 

10742 10725 

1075 

-1.5 

1.3786 

-10 

10948 

-1.5 

630 

+0003 

610-560 

a?uain 13510 

30545 

-0.4 

30563 

-00 

30637 

-03 

_ 

- 

' 

- 

' 

- 

- 

- 

- 

■ 

1004 

-00015 

807- 617 

10824 10807 

10815 

-00 

10618 

- 0.1 

10853 

-03 

89.7 

+00003 

375 - 380 

7.7400 7.7335 

7.7373 

ai 

7.7386 

-o.i 

7.7541 

-02 


-00025 

560 - 700 

31.3700 310660 

31.4475 

-XI 

310825 

-20 

re 

_ 


-004 

890 - 9*0 

104.140 10X770 

10X72 

20 

10327 

X5 

10038 

20 

1*60 

+00005 

960-970 

20005 20045 

2089 

30 

n cm 

T.7 

20165 

- 0 .B 


-00009 

97B- 092 

10802 10964 

1.7003 

-10 

1.7049 

-10 

1.7268 

-1.7 


-Ol 

000 - 000 

27.4000 280000 

- 

re 

- 

• 

- 

• 

_ 

• 

600 - 605 

3.7505 X7500 

3.7509 

-02 

X7S2B 

-00 

X7B56 

-04 


-00005 

332 - 342 

10355 10332 

1033 

0.6 

1.5327 

00 

10347 

-Ol 


+00055 

215 - 230 

30230 30060 

3.6378 

- 6.1 

3.B661 

-40 

X742B 

-33 

- 

-iHH 

760 - 950 

4.7850 4.7750 

40187 

-80 

40775 

-7.7 

re 

re 


+0.15 

300 - 500 

608000 BOB.1DQ 

809.4 

-40 

9128 

-X2 

631.4 

-XI 

- 

-0012 

680 - 640 

27.0735 270580 

27.081 

-00 

27.121 

-0.9 

• 

. 


-001 

900 - 100 

282100 252100 

2S27S 

-30 

2X4 

-30 

25.69 

-2.7 

- 


EXCHANGE 

June 10 

Batflfcm 

Danmark 

Amos 

Qarmany 

Ireland 

Italy 

NattwrianiM 

Norway 

Portugal 

Spain 

Swadan 


CROSS RATES 

BA- DKr FFr 


In #«• OcBar 8 oot mie mew a% «w law three dadnal ptocea. Forward MM en not c»ec9y euated to me rnwKet 
. UK. Mare A ECU ere quoted w US currency. JJ>. Morgen ncoWwl nMn Jun 9. Beee arere ge IBBO-IOO 


MONEY RATES 


Ecu 

Yen per 1 P 0 Q MU 


(BFr) 100 
(DKr) 6X74 
(FA) 6022 
(DM) 2020 
00 50.40 
U 2,134 
FD 1X37 
(MCr) 4723 
(Ea) 19.73 
(Pta) 25.18 
( 8 Kr) 4328 
(SFD 2428 
(Q 61.78 
(CV 24.99 
tS 3422 
(V) 330.3 
38.75 

h Kroner. French 


FFr DM 

3 1822 4287 

X713 2261 

) 10 X940 

I 3.402 1 

f X327 X448 

S 0263 X104 

i 2036 0.B82 

i 7253 2209 

) 3259 0258 

l 4.160 1223 

t 7.1 58 2.107 

I 4228 1.184 

S 8252 2214 

) 4.129 1214 

) &871 1287 

I 6428 1X04 

I 8266 1231 

N enreg i en Hrorer. and 


1264 4887 

1.046 2472 

1201 2837 

0409 966.0 

1 2382 

a 042 100. 

0284 8802 

0.943 2228 

0291 9242 

0200 1180 
0261 2034 

0484 1143 

1227 2420 

0498 1171 

0281 . 1609 
8254 15482 

0789 1883 

aredrti Manor per 


5.444 

2271 

XPQ«5 

1.121 

X744 

0116 

1 

2288 

1274 

1271 

2262 

1227 

2218 

1281 

1.588 

1728 

X184 

IttBeWm 


■ P-MAHK PUTUBB8 QmM) DM 125,000 per DM 


2124 507.0 

11.10 2872 

1X73 30X8 

4232 1044 

1020 2552 

0449 1082 

XB64 0X12 
10 2412 

4. ISO 100. 

0297 127.6 

9.128 219.9 

5.130 1232 

1089 28X4 

5258 12X7 

7221 1742 

8920 1676 

8264 2012 

Amo. F*— Lfea < 


UK INTEREST RATES 



Open 

Sett price 

Change 

Hflh 

Low 

EeLvoi 

Open K. 

Jun 

05866 

00001 

+00008 

06010 

05891 

B043 

8X154 

Sep 

00687 

00983 

+00006 

08009 

06960 

40023 

46088 

Dec 

06880 

05965 

+00007 

05000 

05666 

188 

777 


LONDON MONEY RATES 

Jun 10 Omr- 7 days One Three She One 

notine month months months yew 

Hattiark Staring 8^-4 4Q-4% 5-4(2 5 d- 5, 1 , 5A - SA - 6» 


■ BWHS nUNC FUTURES 0 MM) SFr 125200 per SA 


Jun 

07068 

071 IB 

+00032 

07129 

07087 

•4034 

22000 

Sep 

07065 

07124 

+00032 

07133 

07092 

14083 

2X184 

Dec 

07116 

07137 

+00034 

0.7137 

07106 

38 

446 


Hatbark Staring 8^-4 +H -45, 5 . 4(2 5d - 5,%-SA 6& - 5» 

Staring COa - - 4g-4R S&-& S& - 5* 6ji-5fi 

Tieaaivy BKs - 4I-4B 4^-412 

Bank Hh 4J1-4B 4(|-4% 5*4-54 

Local audxrty daps. 54| - 6* 4tf-4fl «-4{| F> - 5& SH-S& 64-5(2 

Ctacount Mattel daps 5*4-4 4ft-4£ .... 


June 10 

* Over 
right 

One 

If 

ax 

mtha 

One 

year 

Lamb. 

Intar. 

Du. 

rata 

ftapo 

rata 

Belgium 

6ft 

6ft 

5ft 

5ft 

6ft 

7.40 

400 

_ 

weak ago 

5ft 

6ft 

5ft 

SB 

Sft 

700 

400 

- 

lYanca 

6ft 

6ft 

5ft 

5ft 

6ft 

600 

_ 

075 

week ago 

5ft 

6ft 

5ft 

Sft 

53 

500 

- 

076 

Qarmarty 

503 

605 

505 

505 

X12 

6.00 

400 

X10 

wreak ago 

5.18 

606 

508 

X10 

6.13 

6.00 

4.50 

500 

kratand 

5ft 

5ft 

5ft 

Sft 

6ft 

- 

- 

025 

weak ago 

5ft 

5ft 

5ft 

5% 

Sft 

— 

— 

60S 

Italy 

7| 

7% 

7ft 

7% 

8ft 

- 

700 

700 

week ago 

7ft 

7ft 

7« 

7ft 

8ft 

- 

700 

700 

,|t - J--,!, 

mi u w im mi 

608 

60S 

506 

608 

HM 

- 

60S 

- 

week ago 

X15 

508 

5.13 

X16 

608 

- 

503 

_ 

totaataid 

31 1 

4ft 

4ft 

4M 

4ft 

8025 

200 

_ 

wsek ego 

4ft 

4ft 

4ft 

4ft 

4ft 

mux 

300 

- 

US 

4ft 

4ft 

4ft 

4 

6% 

- 

XSO 

- 

weak ago 

4ft 

4K 

4ft 

4# 

5ft 

- 

300 

- 

Japan 

2ft 

2ft 

2ft 

2ft 

2ft 

- 

1.75 

- 

wreak ego 

2ft 

2ft 

2ft 

2ft 

2ft 

- 

1.75 

- 

■ $ UBOR FT L 

andon 








KnsfDNnK njong 

- 

4ft 

4ft 

4ft 

5ft 

- 

- 

- 

weak ago 

- 

4ft 

4ft 

4ft 

5ft 

- 

- 

- 

US DoBar COa 

- 

4.15 

408 

408 

601 

- 

- 

- 

wreak ago 

- 

4.16 

440 

4.78 

603 

— 

— 

_ 

SDR Lkdcrcf Oa 

. 

3ft 

3ft 

3ft 

4 

- 

- 

- 

week ago 

- 

3ft 

3ft 

Sft 

4 

- 

- 

- 


■ JAPAWBB YW PUTURBS (WM) Yen 122 par Yen 100 


UK tfeartig bank baae landkig 


rata 5*4 par oant from February X 1994 

Up to 1 1-3 3-6 6-9 


ECU Lfedred Da rata ratare 1 mh 6K 8 mhai 5)k 8 mam fltk 1 ym 
ratee era eflerad retee tor SIQm quntrei to the merest by tas nderenca 
CWy. The badta aw Bmkare Tnao. Bmk or Thtyo. Bwetayi aid KWo 
Mkt rataa am ehoeai tor Ore otameetie Moray Anat U6 S CDa and 81 

EURO CURRENCY INTEREST RATES 

Jun 10 Short 7 days One Three 


: BA- 8 UBOR Martwnk Mg 
1 bank* re iiam each watdng 


1 ureed OecoaKa PX 




Open 

Satt price 

Chungs 

Mgfi 

Low 

BOwof 

Open tot 

to* — - 

Jun 

09621 

0.6848 

+OOQ27 

noiw 

00608 

8000 

30063 


Sap 

09681 

00712 

+00028 

00732 

09668 

27,181 

51,893 

fl0*'l-F’ 

Dec 

09747 

0.9781 

+00029 

00780 

09747 

301 

1070 


■ ■ t—LMU wn— I QMM) E62200 par E 


Jun 

1.5080 

10090 

-OOOID 

10008 

10080 

X121 

21077 

Sep 

10076 

.10068 

■00008 

10078 

, 1002* 

11050 

21062 

Dec 

10010 

10052 

-00008 

10062 

10010 

48 

151 


Carta of Tax dap. K 100 . 00 CO 1*2 4 3\ 3* 3* 2 

Carte Otltat Ikp. Wtaw 2100000 m>ni Oaporere w«iikaan lor orii lipe. 

Au*. render roe of dhcomt 4.Wpc- BXIO tad Me SBg. &pret Rnmoe. Mdre up dw Mqr 31, 
IBM. Mned rem tor padod Jui 2B. i«a< to jre ZS, 1(94. (drew ■ 6 «1 &47pa Mem Me lor 
pwWApraa 1994 tt Mw 31. 1*04, 6elwtiwa IV A V 1222pa Hnam Hbum Bae Itata 6*ape torn 
An* 1, 1904 

BANK OF ENGLAND TREASURY BILL TENDER 

Jut 10 Jm 3 Joi 10 An 3 


■ PtQ4M2tlIA»» </t OPHOIM E312S0 (oerta per pemd) 


BNa on othr 
Totri of Mta ttre 
IBM riuriad 
Ha. acoptad NO 
Mabnret at nta. hot 


SSOtka eSOOtn 
215B0ai CISSrn 


£9X736 £88785 

11 % 100 % 




•y:- ■ ■ 

■ ttl . . 



Strike 

Price 

Jito 

- CALLS ~ 
Ai 

Aug 

Jun 

— PUTS ~ 
Jid 

Aug 


1425 

&19 

X07 

803 

- 

■ 

001 

.•re. 

1.450 

5.74 

603 

5.7B 

- 

• 

018 


1473 

304 

303 

307 

- 

0.14 

066 

- 

1000 

070 

100 

206 

- 

075 

108 


1025 

- 

044 

007 

1.61 

X18 

2.72 

IT. - ■ 

1080 

- 

006 

007 . 

406 

404 

401 


ft oune to vpoiu oummon 


table am be found on rite Em wgtng 
Markets page In tode/e eeftton. 


Tip aocapM rata 42734% 42734% 

Are. rata ol Brows 42517% 42833% 

AnagajWd 42111% 42230% 

Offer re rest tanka £3Q0re ESOOn 

Mb. RGBS, bid 182 dm 


■ Peread In N aw York 


Brigtan Frano 
Dantah Krona 
D-Mrek 
DuRh Guldar 
French Franc 
Portuguaen Eac. 
^bHi P a aata 
Stttlhg 
Swim Franc 
Can. Dotar 
-U8 Dolar ~ '' 
Mtan-Ua 
Yan 

AaJan SStag 
8hort term rataa 1 


5A-S& 5A 

«t-6 A 

6&-AU SA- 
6A-6A SA- 
SA -tt 64 - 
16*4 - 134, 15V 
Th - 7A l*o - 

4V-4H 4(J 

3% - 34, 3(|. 

6*a-6^ 6V- 
4ft -4A -44, ■ 
8*|-7 74, ■ 

2A-2 2A- 

3% - 34, Ho - 
is ml tortre U3 Da 


SA 5*4 - 5*a 

6*2 6-54, 

5 A- 4 H 

6A 6*a-6A 

BA 5ft -SA 

134, 17 - 15*a 
7*2 7^-7*2 

4ft 5-4(1 
3ft 4-3* 
5*2 64,-6% 

4*e 4%-4% 

7% 74,-7% 

2A 2A-2A 

34, 4A-4A 

kr and Ytai oewre: 


SA - 6ft 5ft - SA 

8%-S* 6%-8 

SA - 4)2 5A - 4(1 
5%-sA 5%-5A 
5ft - 5A 5 % - 5*2 

14*2-13 13*2-12*2 
7% - 7% 74,-7% 
6%-BA 5%-Sft 
4% -4% 4% -4% 

8-5% 6% - 8% 

4ft -4ft 4% -44, 
74,-7% 7% - 74, 
2%-2A 2%-2ft 

4%- 4% 6ft - 5ft 
tw> ttaya' noBca. 


Pravtoia dw% wot. O* 9200 Pure 1ft«1 . Rar. day* span tot. Cafe 980.n0 Putt S0S.7XB 


•ton 10 

—OO® — 

-tow do® 

2®Bt 

1J080 

10065 

In® 

10082 

10087 

3b® 

10099 

10073 

lyr 

10013 

10017 


■ THR 

HMONTH BUnODOLLAR (MM) *1m prints of 100% 




Opart 

San price 

Change 


Low 

E at Mi 

Open tot 

Jun 

M.43 

06.43 

• 

9644 

9541 

20044 

312,749 

Sep 

0407 

8408 

-002 

9400 

EU.S4 

75010 

402075 

Dec 

9403 

94.19 

-0.04 

9404 

04.18 

10X568 

386,126 


i PB0 tlm par 100 % 


UK GILTS PRICES 


i - r— r— - 


Jito 

Sep 

9500 

9304 

9500 

8502 

-001 

-002 

9601 

9506 

95.78 

9601 

2.028 

1428 

8083 

17094 

Dae 

94.74 

94.74 

■004 

94.76 

94.73 

151 

7075 


Wk% Met Mm Ust Ry 
mdbs mree *f- an am JJa 


Wk« mo nareri Lret Ckj 

Naha mcaE +/- Bn due H taa 


trkC Aar, Maori CM DO 

Nriaa Neat *4- Em dm id Ba 


SKBEWSr 

Boa 12*2 pc IBM 

7imaftKl9M» 

iZpe 1996 

Btft 3pc 8M 00-95 

1W*PC*M 

Tto»12*pcl995# 

14pc1008 

IB^pelOW— 

Beh TS^pc I9B8tt 

conmrim Wpe — 
CnmTJielOOTtt-—— 
Trerei3Vpc 10071* — 

Evil 10**PC 1007 

Tmaa M»pc 1837$J 

Em tape i9or 

Bvpcion 

Thiea 7J*DC 1988#.-— 
Trees 6%pc \095-96#~ 

14pc I 98-l — 

Traaa 15*3114 ‘08# 

E«a 13*1880-- . 

Tram S%pe ISOS# 1 


RMtaNRreajrem 

irWpr 1998 115% 

Jrma 10^*1998 1DW 

Tree* Spe 1989#-—- JW 

Conreraksi I04,ps1000- 

Tnm fBBRtM ’OB WA 

8pc 2000#— 

Treat 13PC 2000 1»&*J 

TOK200J 

Tpstn# KS 

7DC-01A WJj 

MipcZOE 1WM 

ape 2003#. 9811 


— 1200 
-2 1040 
-.1 1200 

2260 

214 

XI 2200 

840 

^1 770 

1.130 

800 

■O X40S 
-.1 20000 
-.1 1200 
-%1 3,700 
-2 5250 
-2 *30 

-,1 3250 
-.1 7230 
-,1 1200 
-4 070 

-3 635 

-2 3200 
-.1 1200 


-.1 3050 
-2 1232 
-.1 5200 
-2 1.798 

0 

-2 5,358 
-2 3.171 
-2 4406 
XI 3259 

2200 

-2 6027 
XI 7000 


JHM 

F82ZM22 
llyl7Hri7 
JriSJfZB 
MylNri 
JC1JJ21 
Hy1SMn5 
Ja22 AC2 
IftSIM 
HO 5 Mr) B 

MM 5 

JB22JJ22 
FB21 An21 
HI Sal 
ApZ7 0k33 
JaiflJylfl 

H90SH0 
Uyl Nrt 
My22N*Z2 
IMOSaSO 
Hbsomso 
jgi5jyi5 


321284 
17.1 1233 
.1141345 
20.121204 
2X31271 
1X121254 
04 1208 
1X121305 
2821300 
041208 
841240 

1X12 1302 
17.1 1253 
24.11341 
2121200 
1X121273 
21 2 - 

2X31331 
1X41300 
2121308 
1X41250 
OB 13(7 


10PBM03 108% 2208 

Time 11*8*2001-4 113% -vl 1020 I 

Rnftp&peW-t 74%Sl 22 543 

Carewrion9%»2XM — JOB* -.1 X412 
ireasMue2004# — BBft oa xzso 1 

cum B 1, pc 2MB 10811 -wl 4042 

Tnne l24pc 2003-6 — 122% — 20DO 

7%pC2006# B4fi -%1 3000 

Ope 2002-8# 00% 10 2000 

Tree* 11 We 2005-7, 110% -2 XI® 

irereB%pe2007# — loaud -2 0497 

13%#eD4-8 129U 10® 

Hum flbe 2006# 104% -2 5021 


OmFQBmYkare 

TressXH2000 »& — 1100 I 

Trim BWpC 2010 81H “2 X7» 

Com Ope in 2011# — IDS* -2 4073 
Trea,9pc20l2# — — 105* -0 MBO 
Treat S^e 2038-12#_ 78 10 1000 1 

TilM 8pc 2018#— 0B& -J 40® 

TV* 201 2-1 8# 04U -0 800 

Time 8Vpc 2017# 104A -2 0050 

Bril 12pcT3-"17 132ft -0 1000 


Al Open taarere Oge. are lor | 


28898 100 02 1000 HIBOalB 701813 BANK RETURN 

4Vn<B8# — <13501 107ft 0.1 B00 «7Qc27 212 - 

3%®W (7X3) 1B8% 04 1200ta«£M4 1501 STB ftmumta rr 

SltfClB <780) 182% XS 1050 Hi® N»2D 041117 BMONQ 0SWT7M»fT 

4%wU4# — (HU 110 03 10OOAP21QC21 2X4 - uatriUM 

2ne-00 B02) 109ft 03 1050 JriiJyiO T112TS14 

OtA 133% 04 1090 MjZDJtdD 1141«B dapoeits 

2*tpc11 (742) 158% 04 1030 M3MB 17.11310 U^T^la 

21(00*13 (88JS 180ft 04 2000 FalBAulO 1X11330 5?!?? 

HjX'IB 01A 130% W X660 JriB0® 2X121321 nooom «oa omar Booou 

2%pe*20 Qxq 1® 02 2000*100610 1X31322 

VtfCTa# SIT) Itoftri OB 2000 Ji17Jyl7 1041323 n - nm 

4%PC«#_<1311) 110ft OB 1200 JHflJ y22 1X1 2. - Qowmnrt mcuiWm 

W Flgwm in parenthaam dm RP1 baas far Wa tag Q. B Ad322?md7tfr moot 
montha prior to M*ua)md have bmnat»JBiad to reOact rebaring TTT 

olBFt to 100 In January 1987. Cqnvarelon tactor X945. HPt far PrwTtaa, *qL»pn>onl ana 
SaptHnearl093: 1410 and tor Apt! 1894: 14X& 


Capita! 

Pubic deposits 
Bankers deposits 


Government securities 
Advance and other a co o unla 
P ren d ae, aquipmanl end other i 


M2B8HB 
MylOMrtfl 
W0 *010 
M 722 M 22 


Cumtodpc 

MrUMn3>2pC#- 
Qm3%peB14X. 
Tren ape *68*9 — 


14 3 90 midi 

-10 1009 JV1DB1 

20 118 W0 Cl 

00 ® ApSQcB 

00 279 &Mfe40e 

00 (78 *1001 


1X01336 
194 - 

7J1245 
31.121701 
121330 
1B0 - 

2X121332 
1X11002 
X6T260 


2X121230 
2541352 
230 1243 
121324 
10 1238 
2101315 


Othrer Fbokd Int a rwrt 

Mfcai Dm 11% B10_ 110ft — 
Mkn DaWre 2000— 112ft — 

Bin 11%pe 2812 110% — 

MredCtaB%pe*1Q ■ 12 

taoCtalOOB 101% — 

mw-z 110% 02 

Hr*DtaaereiBpc20ti_ i4S% — 

HB 120 — 

__»r*a 37% — 

LCCapcTOAft. 32% 

ttaxtamii%toaxj7. ns% — 

mat.wv 87 — 

HtaHi Ancfia3%pc 2021. 133 — 

4%pcL2CB4 126% — 

DM Mat strin 1B%pc200B 141 — 


50 J*4Jf4 
100 H24SB24 
46 MyiBitns 
303 WIOcI 
725 JriOjy® 
315 AplOBl 
40 U|31 Ik® 
40 AplOcI 
G ureptaOe 
SB IJBJaSaDa 

• tossocss 

88 torisri 

60 JriXjy® 
50 

50 HI Sal 


2X81428 

27.10 - 

3X13148 
8*03 - 
12 - 
*933278 
123381 
1933485 
2X7 - 

372 - 


ISSUE I»>AFrrMD<T 


Notao tn ctraJaSon 
Notes in Bsrddng Depart iwnt 


Government debt 

Other Qtwe mn re n t aaeurtSae 

Other Saourittaa 


JtmX I 8 B 4 

£ 

14053000 

1.13X313^(2 

1^0X311002 

3.124^89^88 

X78XS4X832 

1,030925,898 

2.185.166D93 

2^60249077 

lOJBBJM 

180218 

5,780548,932 


17.8891971,062 

10J2Q048 

17,9001 000000 

1 10 ) 1 X 1 w 

1X818,77X021 

20)7X205279 

17000000000 


daore aa a tor weak 
£ 

+879043084 

-181032092 

+191093.188 


+9083089 

-378028068 

+1074087.184 

+3,961.689 

+35024 


-383061089 

+3.961089 


+1075060031 

-1^35060031 

-380,000000 


• Tap' riot*, ft Tarr-ftee to 


— C boa. »d Be fvtknd. CtoHia nWHatow — riww In paundb. Waatiy preqrwfle riawga are rritn tato d en a Friday b PMat bada, 


STOCK INDICES —iB 94 — Stacaoam. 

JU, 10 tag Jdit 017 011 K* urn HWI jpg 

— .. mm+' wm, amft4 38202 2031.9 382X3 00X9 FT-SS BstHack 100 

n-H 100 SJJi ^4 m U 3537.7 (1520 13784 FT- 6 E B»® Rk 200 

FT-SE Md 250 wu 3 S 71 358X7 55770 (18X7 35440 418X7 13780 FT GH aiy 

rr-SE Wd 250 W FIS Mis.® ^3 1 S a 5 17780 USXl t77&a 6842 FT &M Sro18r 

FT-SE-A 350 '*** 1BW01 twS 208408 106X17 208428 136X79 FT M M 

FT0C SraaOCtP 1863.17 1594 *7 « 043+3 208X72 182528 200X22 138X79 FT Gold Mhaa 

FT JMDU * 171 jg^laASlSSlISl 0 161308 1364.11 148(03 1W«1 6102 PredBMBurSoMMlO 


LONDON RECENT ISSUES: EQUITIES 

(saw Amt MX Ctoee 

price paid cap 1994 price Nat 

p up (Enij Wgh Low Ikdt p +/- t*v. 

5120 FP. 702 123 115% Aate. itambta 123+2% WX74 

191 FJ>. 3X4 164 180 Army 763 IN 10 B 

255 FP. 1460 287 2 S 6 Argert 298 - 

100 FJ». 44.1 108 10 O Automotive Pmca 108 LN40 

§150 F0. 31.7 154 150 Brewh DoM*» 16* *< 100 

- F0. 2340 81 73 CAMAS 77 -1 1*0.75 


138X79 FT Grid Mwa 
6102 PrafecassrOWlfhi, 


2a 10 Jen 9 Jn B 

141145 140827 142X74 
143220143X94143X20 
24103 2*010 2*110 
9202 02.78 0202 
11027 11055 11023 
190X82 100X12 19M.15 
21U 21X3 21X4 


Jin 7 Jun 8 
140X06 141X91 154X10 
142X3D 143X301807.10 

2382.1 23870 271X0 
9282 9X13 10M 
11178 11X71 1X307 
190X17109451 23674 
2130 2149 2770 


IM H» 

138X97180.19 
138X63 1907.19 
23210 271X8 
9104 12749 
10X12 13X87 
176202289740 
1850 7347 


- F0. 1060 112 107 00 


§143 

FP. 

114 

155 

143 

Canal 

155 


FP. 

200 

38 

36% 

CMmComm. 

38 

kS50 

FP. 

1700 

248 

228 

DCC 

228 

110 

FP. 

400 

120 

110 

DBS Data ft Raa 

114 

130 

FP. 

45.1 

137 

133 

Danby 

135 

- 

FP. 

770 

83 

90 

Rarntog ln®n 

92 

— 

FP. 

X06 

50 

42 

DoWtaranto 

46 

- 

FP. 

- 

37% 

35 

GowB Gbl 9 Wt 

36 

105 

FP. 

524 

103 

S3 

HaAteaD 

95 


dt -v^ • 


BASE lending rates 


F8QHTS OFFERS 


rs*- 8 -*; 


AdBnXCHW..-^ 

AflodTMrtOB* 

A® Bank -» 

•HtnyAnabodw — MB 

BMkofBBDdi 

Banco Bawvtzcay8...xffi 

Sffl 

Barit of 

Jj® 

EMnkOfSceBznd 

BentayeDf*- 

atBholMUEASJ..- 
•awnSnttoyft CpL# 0^ 
CL Barit NattoriBid X» 

-52 

aidOKtotaBer*...— 
TheCoopenOra Bank. 5^ 

Counftco 

CriiJl Lijumek so 


DuvanLBHte XM 

BtotarBenkUrr*#-.. MS 
FtametaXaBiBw* - « 
aBobartRantooftO*- 
Orobank » 

, sss:as=s 

•sssx-sg 

■msarnuri... {* 

s»S=a 

MriarriBnrit 

. Mount Britttofl. -A 

NBBfi MnirW F 

■aaaBndherB 


•HBriwrftaGuBBjae 
CBporBOonUritadiano 
toWraArttori _ 
abarMckritOuBoa 8 
R ge|BkolSooltaid r &M 
•GrrHl&WMSecs.^ 

TSS - 525 

•UntodflkoHM.- 5= 
Uriy -nuri Baric Pto-X^ 
WegtemTHi ri.-. ..,— S 2 B 
VWHaaare y Lri*W.^X 2 B 
YcriartreBsi* X25 

• Manborm ol BrKah 
Merchant BanWng ft 
SecurtUee Houaaa 

■ ftireinMMOR 


Issue 

price 

P 

Amount 

paM 

UP 

Uteri 

Benin 

dtaa 

1994 

Hgh 

105 

NB 

8/7 

21pm 

62 

W 

23/7 

4pm 1 

120 

M 

8/7 

gpn * 

180 

Ni 

20/7 

23pm 

288 

M 

- 

S^m 

185 

M 

TV? 

2£pm 

105 

NB 

son 


230 

M 

- 

3*pm ! 

205 

ffl 

18/7 

apm 

S 

M 

21/7 

7%pm 

2* 

NB 

- 

12pm 

250 

M 

27/7 

3Spm 


BtagdMMB 
rJCorp. Seritoes 
Dnnon HI 
flan Motore 
Emhinri 

nffufljj 

MggaXMl 

Jam Penar 

MoMptoeW 

BMMW 

Un* 


Ooring +«r- 
prioe 
P 

20 pm -1 

2%pm ♦% 

20 pm 
tom -2 
46pm -8 
8 pm -2 

1 pm 

22 pm 

as * 

12 pm 

SEpm a 


225 FJ*. 1080 232 225 Mvmadria 

- P0. - 77 65 JF R Jtpm Wrto 

5 FJ*. 400 8*2 5 Kay» Food 

100 ftP. 674 163 ISO LombanMna. 

200 FJ>. 16X2 225 200 ftondon CUre 

106 FP. 470 113 105MgK»eigK 
120 FP. 344 130 125% Noreor 

- FP. 2M0 131 113 Redrew 

FP. 6X7 92 91 Scudder Lrifai 

- FP. &1B 44 43 DO VMS 

995 FP. 130 ill 109 GpaiDQ Cora 

- FP. 290 133 128 Spadaflty Shops 

- FP. 630 100 98 TR Bm Own C 

100 FP. 564 100 82 % TR Prop tov C 

S108 FP. 4X1 119 108 UPF 
150 FP. 410 IO 15* Vymtia 


FT GOLD MINES INDEX 


mOl.Yp 

Mi 


gCUTremtnvealPU: 

= BC SSP- 

tfl0 * ,n * W 2re«' 
TM; ,71 945 00" 

ffje *71 238 




%Bk8 
Jto tow 

io svtan 

J® HOC® 

0 am 

«ri 

fltfd 

Han 

Oran Ar 

Staid ft 

Sank 

High Low 

BtadMtontadfttpB) 

110602 -140 

1MX12 4X22 

10000 

221 

230749182208 

iMHuta 

Am (is 

271X16 -1X0 

200046 130* 

3002 

483 

344000 180323 

Al— BtatoR 

281805 -10 

202240 700 

1547 

108 

301309 1 BBS. IB 

Ngrti AflWlH (11) 

158X21 -1B0 

13SL10 9429 

oan 

X71 

203806 138300 


Copvrioht. The nrencW itmei utbm lvas ^ 

NBmaki bnctato rime unbar at oompartaa. to* 1 ® Oo— 1 . Bare vta wa: loonnosinaw. 
P red reH W i arid Mtore Wire Juts ia 21X6; werirt cnwiga: +X0 petota Tar agK 17X8. t Pwtta. 


Money Market 
Trust Funds 


ha m am too 
GAF Money Management Co Ltd 

toreaeuyNwHenErcofimuD ora 7701 u 
Cnaei Otpaca Fve _ j + gi - +re|9-M«i 

Oepaa&Omrt nuanj 4-M - +7« C-M»i 

DtMsa owenaan I *-m -I (aals^re 

ThB CBF CttallOM DbmbR ACCOBM 

2FareSn*.UMonB=ri*i on^snisre 

D*»a — I - 1 (wly-rea 

Cent 88. ol Hn. til Ctarch ol toriaadt 
SferepsoHmiDnCcrMi D7i-M9i8i5 

town ..Nan -I +«l3-wn 


Money Market 
Bank Accounts 


tore art «a Mb 


Altkso Hums Bank ale 
jocai Ah& lmm cclr am. 


tore m eu MO 

Crofts & Co 

* 0 Stoat urn *CT atr, iTi-tq iooo 

Cnak Chna tammtx rerea mnw 
15UBCaaSM unaoirCHMi c.->-+a ’Ctfl 

(teanyofeifilsivio^l ++N -I -I 

Dm Haag Book (LoMom IXC Pietrier Ace 
10 wpe taft uw» lea Are tri-«r«'aii 

C3Uvo» 1 sou i.i! 5 ere I or 

t'n 11 / aa 

R.HD-CIDWO. — - 1 lr. am iso « 

iMiOjwxani — .-. I in JOB I ?7Bl Or 

raiiredi a in Tat IV Ita i m n liom BO H Irr 

BtjtJghrA MaMMd*U40U HT-CCU14 

no so- urea Its 1U3 1 -ls-*aa 

tiDjOOO - 1 tw. ( r JO lies 7 .: t trerer 

ri.W.fre,tohHZ«Hl«® «orl r 7f 

RridBy OtoMy Mukat AeeouBt 
ncMW how SanCre LU. tor* 

taureiSdrer inn 

n-f+D.tm .I + 73 .-oil ico I a a 
r*Vt»»-t?'W.3T> - +71 T'«7 I « 1 ? ! cr 

taw.unJ-MSa.M0 . l+f.c J+kJ I 4C0t oo 

V W.TO. Mre, Uj»» RcM m n««d 

Hattax Btdg Sue Asa# Resam Qamre Ace 
im8>iw> are ini are. wa nan 

■renr fdarerei 

rawMim . s«i 4 m| &r= 1 Or 
it* oooioniiaBV — ijj I r -js or 

iMLooo re c+.me . , 3 c teal «.»! or 

r 5 . 00 uEica.ma _ 4» 11 'jl 4UI or 

Mre re NHMMd MMn 

CSO.OOOMMM _ t:>, 33* 3 33 cr 

u5JiuE)i<a.a» . 4.-1 its tit or 

rinuBDni.m 4 ;.j isa 4 y or 

£9.uooeo.are - . . +ja i>o «n or 


1 Hodge Bank Ud 

MriCnc vameu 1 


concaare 

nauoo-c+.oaa 

Bureo-t+area 

BOPOO arm-. 


— . 02, 240,-5 I 050 

+ 0U JIB 407 

+53 1378 4 JO I 

479 49021 I *491 



ori-aMoera 
400 as, trrenr 

4JO us tree 

13 5M IM, 

XBO 50 vrenv 

Ut HIT Mi 

IOO *0/ MM 

111 657 Many 

American Emnere Bank ltd 

Sum Moon. Bureau IM Ull 5 MO D+44 2M44, 

1«3« r+ren—or P+gin IHrmwl 

rsavttMM in on its ire 

n nca-tJ o.sl« 350 uo lu m 

moDO-mrea® are ?jt» xar jw> 

nojxn-£?tt69H0.- <00 so iu «i 

BIMOHUMJM. OB a.18 4.13 MB 

CNLODO- *78 US 4U MD 

Bank of Ireland Htak tetarari Cb ag u iAcc 

10-40 Mre+R twe" 5Tl ID. 0753 810910 

nOJXJD . 1000 2619 I io«a I or 

EMTO-CS339- -J 2 M IdTB I 257+ 1 Or 

toakofScollBiri 

S9TTV+SreSeatC+ 7£H ,071-4010*40 

renjteCjaM2*». | sjo 2 ® ua| un 

*29.OOtMO40«a ...1 3 75 701 I Ucl Ml 


7 Iralmd Hkta tatareal ChaqooAee m.—. n^n* ny- 

EK~J2Sw ,te 

Aa»_ - 1 2 “ tarelaSwl or * SEJST CWD0 *‘ 1 2-2 

" : -iv 

fScottaod r'airo. irn 

anMOB%CCT2DI ,071-0010*40 1C53* 

:CJDHNM-|U0 202 3LJB| Ml 

^ 2 +ooea iTB 701 ucl mi Mtomnoa sag s 

u -.1 Boo 3.75 I &.]?! Ml brekrer w pi w re nt l 

ntuar,. r-ure+LD 

reSahct c?.noo-c*sw-.— 

31, Wadaeoa to to, OMoey 0800*00100 "jff - 

SS«=:T« S » S . 

-t+aow— .. 900 3.T5 &oo I Yndr u “ uw * 

-ro,» — ere JO* uoliMiy bb, mnnttnr 

J- IlM *13 I uoir-nr £® t ®® , ..F9L525 


lontuvnutoniiiai ~oa taain 

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010 1 229 1% 1A 1* 

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038 61 384 42 41% 41% 

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32 180 29% 29% 29% 
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rrT your ft by hand delivery 

in STOCKHOLM. 

quires of Malmo, Lund. Stockholm or Goihenburg well deliver your daily 
If you work in the ^ C0SL Ca || Bra dley Johnson For details (08) 791 2345. 

eopv of the FT to > our 



BMk Dh. E KBs ma Lm Lrt Ckog 
ASS tart » 020 20 143 15% IS 15 
ACC Dm 012 G9 466 17* 16* 1ft* * 


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AcmeHte 

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Adapted! 

NX Tab 

Addngtsn 


2028368 17* 15* 15* -1ft 
18 SB 22* 21* 21* -* 
28 GO 20* 19* 19* 

16 8341 17% 16* 17* *1% 


33 38* 


321196 40 

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AdSMSrt 020 221450 27% 27 27 
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M*rtl X 020 19 211 38* 37% 3fl* 4* 

MTynm 9 106 13* 12* 13 

AoaneyRB a ns 12% 12* 12% 

AgdcoEa 010129 193 11% 11% 11% 

AB&JX 020 16 854104% 23* 24% 4l* 
AtanADR 124 30 8*8 58 55% S6 + 1* 

AttbCO 36 899 2% 25% 25% 

AtxSfl 068 17 136 25* 24* 25* 4* 

AfegtlBW 14 33 7* 7* 7% •% 

AlanOig 052 15 2100 37* 37* 37* -1* 
AflaiRl 5 356 (0* 9* 9* -* 

«Cd* 1X0 12 35 14* 13* 14* 

AMC*> 030 12 48 14* 14 14* 

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AmBatarxOTZ 8 316 22* 21% 22* 4* 

An Oy Bo 15 167 16 15 16 41* 


Am Hpnag 21 201 22* 22% 22% 

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AraWP 11244 1 dU U „ 

AnMn x 120 7 28 48 d47 47* 4* 

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An Trav 10 348 13 12* 13 4* 

Amoanlnc T7 7103 45% 44* 45* 41 

AoBecti CD xO08 21 3722 IS* 14* 15% 

AnMRn 4 63 0* 9 9* 

Aftabtfc 15 30 17* I6I2 16* 

Afldysta 046 14 S 16* 16* 16* 

AnaieaMm 1X0 14 2 17* 17* 17* 

AntatoCp 21 621 37* 37 37% 

Antes An 81127 16* 15 15% 

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APPBto 82511 6 5% 5|| 4* 

AppUMat 2712889 40* 36* 40 .1* 

AppteCa 048 2312501 27% 26% 26* -* 

Appfatws 0X4 39 593 15* 15* 15* 

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1.1S 7 32 27* 26* 27* 

064 21 814 o22 21* 21% 

040 17 42 19* 19 19* 

31304 16* 1313X6 

24 866 27* 2Bft 27 

272 59 25 24* 24* 

910663 IS* 14* 15/. Wi 
15 4B7U10* 9* 10 4* 

032 20 282 27 * 27* 27* 4* 
048 19 1456 51 49* 46* -* 

13 30 4 3% 3% *it 

092 17 1650 D&* 8* 6* 4* 


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AnnorAI 

Arnold la 

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AapecfTal 

AssocCUran 

AST Rsrcfi 

AtWnsdrr 

AISEAtr 

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Baker J 006 11 76 18% 16% 16* 

8MMLB 024 3 3 14 14 14 

Bbstec 15 737 22* 21* 21* 

BrtSorthx 044 11 200 18% 18% 1B% 

BateesCO 040 10 54 19* 19* 19* 

BartowCi 060 12 1BU22* 21* 21* 

Santa Baa 0X2 IS 240 33* 32* 33* 

030 15 162 29* 28 28 
0X0 14 223 u2S* 24* 25* 

130 14 1435 63 61 62* 41% 

1X6 9 400 30 29% 29% -* 

21 113 9* ft* 8* 

02B 34 16 15* 15* IS* 4* 
16 15T 17* 17 17 -* 
BaridayMI 044 15 535 40* 39* 40 4% 
BttA&p 012 15 12 10*10*10* 41 
Vtoc 01 106 4% V, 4* -ft 

«BBX 016 IB 271 11% 11% 11* 4* 
Btoday Wx OXB 14 72 12* 11% 12* 4X4 
Hogan 343898 32* 31* 32* 4* 

Btanrt 171751 10 9* SiS +ft 

BtOdiDrg 1X4 II 13 39d29* 20* -* 

BECScSte 16 8839 53* SI 5T% 4% 
Boatmen S 12A 11 1324 84* 33% 34 
Bob Evans 027 19 B7B 21* 21% 21* 


BS&THn 
BE AteO 


BanUany 


SooteSB 

Bubnd 


15 SO 30* 30 30 4l 

3 3910 9 8% 8% 4* 


Boston Bk 070 5 2S2 32* 31* 31* 4* 
46 4851 10* 9* 10* 4,', 


Te 

aradyWA obb ig 59 48* 45 46* -* 
Brtnco 020 23 73 12% 12% 12% -% 
BnanS 021 17 1602 8* 7% B 
BSBBncp 078 9 9 2tf 4 27* 27* 

BTSUpng 048 7 30 3* 3* 3* -* 

'2 


wtbs 

BrtdmT 

Bter8nui 


BuBartlg 


2B 438 20 19 19 
24 354 13% 13 13* 4* 
30 82 9* ft* 8* -A 
BO B9 32* 31* 32 -* 
6 2 24* 24* 24* 4 * 


- c - 

CTac 169 50 2ft* 25* 

Cabal Med 9 33 8% 8* 
CadSetMpe 1X7 IS 113 27* 27% 
CadmusOoaia2D 21 9i 10 17* 
Caxra Cp 1201072 7% 7* 

Ctegem 225 81420 13* 13 

CrtMkro 21 916 23* 21% 
CamteOa 1 1035 f% 1* 
Curtrtd. 1 83 3* 3% 

Crates 1 32 2* 2 

Canon toe 0X0119 27rtU* 88* 
Canute 2 34 4 3% 

Csrakol 012 25 144 46* 46* 
CartatCm OBI 22 16 26% 26% 
Cascade 090 20 18 21* 20% 

Cacey $ 008 17 534 1Z* 11% 

Crigene 4 194 8% 6% 

CeUter 5 334 19* 16% 

CEMQi 18 102 12* 12* 
CantBXTd 77 116 t0% 10% 
Cantacor 534996 13X0 12* 
CbPI Hd 1.12 12 243 33* 33 

CnOlSpr 23 31 12 II, 1 . 

CMnBar 8 10 4* 4* 

CtBPtorl 0X0 a 590 22* 22% 
CramSk OO0 141879 10>4 9% 

orantow 42 47 rt* 8ft 
Qwnbb 15 MOO 10* 10* 
Ctoartb 1 290 * d* 

OMMomr 12 17 3* d3* 

OteaiTe 61183 4* 4% 

Ctoror Cp 628730 68* 64* 

CbnHn 1X8 12 37a 54* 63 

ChtaQ) 017 31 1174 32* 32 

Chuslgc 32 4972 31% 30* 
CSTrtfi 131 152 2% 2* 

QscoSye 1220(71 23% 23* 
Clz Bancp x 1X8 16 46 20 28* 

CtonHbr 27 427 8 7* 

003 Dr 42 151 12* 12* 
CMnstm 8 48 4% 4* 
CDcaCntaB 1X0 17 222 2B 27* 


28* ♦* 

B* 

27* •% 
18 +* 


7* 

13% «■* 
22* *% 
1ft 

3% -* 

2 

88* +* 

3* 

46* 

26% +* 
21* iJ* 
11 % +& 
6 * +* 
19* 

12 * 

10 % 

13ft .1ft 
33* -* 
11 * 

4* 

22* 

10 * 

8* 

10* -% 

* 

3* 

♦% -* 
64* -* 
54* 


DMiaBngy 

CodeAtara 

cctpwQa 


122 2747 U6% 6 

27 31 10% 10* 
25 240 18 15* 

106 329 11* 11* 
10 140 13* 12* 
85 193 21* 21* 
12813 77 21 20 

aeo S 11 23022* 

024 138760 19* IB 
OXB 193007 IB* 16* 
DnCatA^p x 009 395024 18% IS* 
Qsnrtete»AW8 11 355 32* 31* 
CBOnQ 070100 26 19 18 

Darplix 3751061 11* 10% 
59 27 13 12* 
381494 9% 3ft 
1X9 28 100 39* 38* 
8 123 7 6* 

1A4 18 5026 uil* 10% 
31 GO 1716* 
16 57B 11* 10% 
050 18 SIS 18* 18% 

85 453 10* 9* 
2237B4 40* <8 
43 147 16 15* 
factarBx 002 SB 1418 24* 23* 

Clay Omp 0 7417 ift ift 

CmnRn 37 300 6 Hi 

Cytogm 31506 5% 6 


Cotym 
CaHGrt 
Caul Op 
CaasT 

QretA* 


Ccrtw 

CuuduUfl 

CoeAp 

Canstem 

Corttel 

CratetOb 

OMtetB 

coflfsA 

Comtob 

Conte Cp 

Cap Of A 


32* +* 
30% +* 
2% +* 
23* +ft 
28* ** 
7* 

12* +* 
4% ifti 
27* 

6 * +* 
10% -* 
16* 

111} *4 
12* -* 
21 % 

21 

22 * -* 
10ft +& 
19* ** 
18* +ft 
32 

19 +* 
11* ** 
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7 
11 

16* 

10 % 

18* 

10 * 

49* 

16* 

23% 

1 * 

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6 * 


- D - 

14220BB 22]| 21* 21% +1* 
D.13 18 4 74 04 74 -2 

10 188 2% 2* 2% 

31 *100 7% 7% 7% ** 

16 485 16* 18*16.43 -20 

OoujtotoOp 092 12 382 Z7 26* 20ft -ift 


DSC OB 

DtatGrau 

OabSraui 


N 

Start Ox. E toax Hrt ** led Cb* 

DebSsa 020 20 63 7ft ft* 6* 

Oetabto 032 23 G8 15* 15 15* * 

DddSiGs 000 45 2 30* 30* 30* r* 

OetotaiTfB 044 11 7 22 22 2 

DrtComp ZS1S6E8 ZB 267, =7% .1* 

ftflaoam 015 IS 53 15* 15 15 

Dntoly 33 945 39* 37* 38% ♦% 

OGPOya UD 8 1B9U31* 31 31* ^1 

12) 4 8 9* 3* 8* 

17 115 21* 21 21* 

060 S 32S 17* 16* 17* 

151110 15* 15* 15* <* 
6 363 12* 11* 12* -% 

6 420 1JJ 1% 1» 

7 138 3* 3* 3* 

18 291 

020375 111 

2 388 
020 24 510 
0X8 IS 3 
1) 24 


Orton 
OH Tedi 
MreBB 
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npMoo 

Dip Sound 

0*Syst 

uensCp 

D&JflTm 

DNACtart 

DetorGn 

DueflKtn 

DrtaEngy 

Dresafiam 
Drey 60 


34 

9* 

«* 


34 33* 

9% 9* 

4* 4 

25 24* 24* +* 
13* 13 13* 

8* 8* 8* -* 
11 403 Ift-VlO* 10% +* 
024 20 820 24* 23* 23* .* 
Drag Empa 0X8 51 57 5% S* 5* -* 
DS Bancor 109 18 350 32 30* 31* .1 
tkaten 042 1230GB 17 16* 1B% -% 
DurrRfl 030 24 8a33* 32% 32% 

Drtotedl 7 29E 20* 19* 19* 


-E- 

EagteFd s 33 4* 04* 4* •* 

EfirtfCp 2IZS2 4* 3* 4* .ft 

EasEflunt 2 31 1% ift :/■ A 

ECl Tel 0.18 23 7427 Iftlj 17% 18* •* 

Egghead 63 532 7% d7* 7% ♦% 

HPaaoEl 2 213 2% 2ft 2% .ft 

BacbSd 10 533 10% 9% joft 4.1, 

aocttxa 0X9 47 IS 46% 46% 4C% 


BedAiB 2040218 1B*die* 

Emcui Aaa 21 179 7* 7* 7* 

Emits Cp 271442 6% dfi 6% 

EngyVntes 40 X5 Il%d1l* 11* 

EmffSn 83 65 2* 2* 2* 

Eszontac 21112 3* 2% 3 

Ee«yoa ato 15 so a* 3* 3% 

ErkanB 0461332607 46% 47% <8* 

arid 195 7* 87 7 

EtuuSto 7D 7 15*814* IS* +* 
Bopyto 202418 16 IS* 1Stf .ft 

10 15 8* 7* 7* -* 

16 39 22* 21* 21* 

Expert I 010 22 47u19* 10* 16* 
EtamrpAm 21 545 13* 12* 12% 


17 -1* 


-* 

-* 

-ft 


-* 


-* 


-P- 

FrtGtp 11 4 4* 4* 4* 

Fan Cp 024 11 51 4* 4* 4% 

Fasten* 0X4 53 1041 34* 33* 33* 

FHPtaB 15 1785 24* 24* 24% 

FKxonfcj 3 174 3% 2% 3 

Rfthlhrd 1X8 IB 3» 05G 54* 55 

FMyOtf 6 424 4% 4* 4* 

HggbA 024 0 135 11* 10% 11* 

X 2240 21* 20* 21* +* 

FatABtma 120 12 1G52 35% 35% 35% 

FW Am OM 8 490 34* 33% 34 -* 

FatScOfala 1X0 11 96 28 24* 28 +* 

FatCdSk 0X0 21 326 24* 34* 24% ■* 

FMSacty 1X4 12 S39U31* 30* 30% +* 
MTm 1X8 10 3709 D4G* 44* 45* +* 
MIMA OXB 7 5 8% 6% 8% 

052 7 95S 24% 24 24% 

(XB 11 344 47% 47* 47% 

43 28 7% 7* 7% 

25 568 20% 20* 20* +* 

Row tat 171183 8% 6 6* 

RkkftA 006161841 6 6% • ♦* 

FooclX 0X96122228 6* 5% 6* +* 

Rnraoat 1X6 10 80 81% 30% 31* 

Raadnar 12 33 13% d13 13* +* 
PtUdOanc 030 33 940 34% 34* 34ft +ft 


natera 


+* 

•+* 


FosarA 

FrdiFte 

MGaMn 

FUHrfX 

MHaab 

Fdbrte 

Rtorfln 

Won 

RdmedAOR 


40 201 3% 3* 8% 
1X4 12 131 1139% 29* 30 
1.12 3B 09 26% 26% 28H 
141 16* 16* 16* 
921128* 27% 26* 
7 37* 38% 36% 
21 u 21 % 21 21% 
20 14%d14* 14* 


040 6 
1.18 11 
050 23 
054 11 
024 18 


45 5* 5* 5* +* 


- G- 

eiApp Brtoo 4* 4* 4* +* 

6&KSMVX 007 20 216 14* 13* 13* 

m 0 52 3* 3* 3% 

GunatRa 11 812 3% 3% 3% 

GertCD 016150 48 6% 6* 6% 

CM Bad 040 IB 17 17* 16* 17* 

Gsrayto 18 2 4 % 4% 4% 

tf* 4 379 12* 12 12* 

QtfltaxCp 4X0 41 146 2S* 24% 24% 

Gere* toe 133 70 4* 4 4 

Genzyma BB 353 29% 20* 29* 

canon El 040 10 404 I7%d17* 17* 
GkkflnpL ai2 17 845 23* 22* 22% 

it A 080 17 BO 16* 18 19 

GWiBBn 11 37 5* 5 5* 

Good Guys 17 894 14 13 13% 

GartbPtop 0X0 19 22B 22* 21% 21% 

OtticoSyB S3 157 2* 2 2 

Oarte 020 77 B58 23* 22* 23* 

Greta W 024 11 4 19* IB* 19* 

&DWC8 Rl 0 666 % % % 

enramant 1 842 3 2% 2il 

GmaWb 681 119 14 13* 13% 

on Corp 8 61 11 10* II 

GbWteg 51215 9% 9% 8% 


+% 

+* 

** 

+% 

-* 

-* 

+% 

-* 

-* 

-* 

-% 

+* 

•* 

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+1 

-ft 

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S9Z100 6* 6* 
064 6 49 22* 21* 


6 * 

22 


Harper Gp 
HBOS CD 
Keamcar 


Herthfcf 


4-U 

020 14 895 15* 15 15* •* 

018 2S3B43 X* 29% 30* ♦% 
18 862 20% 19% 19% 

008 20 81 12% 12% 12* -*4 

9 321 0* d5% 6 

14 254 8% 8% 8% +ft 
OIB 27 B4S 16* 15% 16ft -ft 
ZlOO 10% 10% 10% -* 
Hammy 9 330 IS* 14* 15* .ft 

072 16 1059 25* 24* 24* -% 

HapnSpt 015 31 598 10* 9% 1031 */> 

Hotodc 51 884 11* 10% 11* *% 

Hem Bert 080 8 4 20% 20* 20* -* 

Horn Ofce 072 25 251 u21 20 20% 

Koa tods 044 21 125 30* 29% 29% 

Hambeck IS 727 14* 13% 14% 4-* 

HanaMtes 044362 18 3% 3* 3% -% 

HurtJB 020 18 780 18* IB 18* *U 

Horttegtex 0X0 11 1117 27% 27* 27% +* 

Hurd 09 OXB 0 130 2* 2% 2* 4-* 

tUehTad) 53 442 33 31% 32* *1* 

HyurOa 19 164 5 * 4% 5 -h 


ntSys 53 530 8ft 7* B% 

DBOmms 2344474 8* 7* 8ft 

■3 total 5 1Z3 6% 0* 6ft 

knmueor 32 64 6 5* 5* 

hmumgeo 3 91 4% 4* 4* 

knpottt 040 38 368 19* 18* IB 

tad BMP 1.16 20 411 41* 41 41 

tad tea 024217 15 15* 15* 15* 

HRrt 17 718 14% 14* 14* 

te 193121 17 16* 16* 

tagtosaad obb 14 53 11 * t0% 10% -% 

Magrtta* 3119976 26% 25% 25* ♦% 

MgtdSyd 28 48 12* 11% 11% 
eagtaWsr 10 2512 3% 62$, 3* +% 
wet 024 111G62S 60* 5959X0+1,18 

tea 7 964 1 % <ft% 1 % +ft 

myns 032 303444 18*d17* 17% -% 
taW Tel 21 444 9% 9* 9* -* 

MafceA 024 16 154 12* 12* 12* +% 

Wgph 3 327 S% 9* 9% 

rt 7 758 6* 6* 6* 

htantva 4 596 12* 11% 11% 

krtamto ib 2157 9% dB% 9* -A 

httUryOA 15 llluis* 17% 18* +ii 
KRte 006 20 11 3* 3* 3* 

tat Total 416 471 8* 8* 6* 

baeare OOl 18 1467 27* 27 27* +* 
IcoegaCp 1 IS 2* 2* 2* 

A 15 373 17* 16% 17* 
unfcade 1.17 38 10207*206*200* +1* 


JSJ&w* 

hC 

JLGtod 

lahnrita HI 

Jbbwq n 

JbhM 
Jones Mid aid 17 
Jedyety 1X0 11 


- J - 

16 330 14* 13% 14* +* 
020 16 59 11 11 11 

010 27 628 32* 30* 31* +2 

58 113 23% 23* 23* 

10 302 13% 13* 13% 

50 11% 11 11% 

4 24* 24* 24* 


JSBFte 064 IS 641105* 24% 25* +ft 
JmoUga 02B1S 33 IB 19 19 
Jesan 016 9 332 12% 12* 12* 


Sort 


ft Ste 
E recto 


Mgfc (jM Urt Dug 


-K- 

kGassa QOS 12 40 22ft 22ft 22ft 
tamanCp 044 5 432 9% 9% 9* 
KayttonCp 040 12 980 21 20% 3) % 


KdkpyOi 2 4068 77, 7% 7% 

Kefir Sv 072 22 505 26* 26 26% 

Kentucky 011 10 115 e* 8 * U* 

KittUd 034 13 zlOO 74* 24* 24* 

fttow 14 26 8 * 6 * 6 % 

K1A task 43 4989 37 35% 36% *1 >> 

ttertedoe 4 827 9 8* 8% -ft 

Kid A 12618 H d* 

Kamagiec 1S4 1617 20* 19% 20ft 

KUKMS 9 259 14% 14 l. 14ft 


+% 

+ft 


** 


-L- 

Ladd Fun a 012 47 102 6ft 08 8 

Lantech 31 4000 28ft 27ft 27* 
IflneadWx O.W 20 493 48* 47* 47j$ 
lance tac 096 18 60 18% 18 18 

LandrtQpb 36 1740 20* 27% 27% -1* 
18UP90 10 112 7% 07 7% »% 

Losereow 59 367 5ft 5% 5% -% 
UfflcaS 14 4799 18ft 17* 17* +ft 
Lamm FT 048 16 218 23 22* 22* -* 

U»S 2430297 18* 1t% 17* -* 

UUCP 016 2 14 5ft 5 5ft +ft 

Lecaten IS 71 13ft 12% 12ft -* 
Legem CP 18 1702 30* 29* 30* +% 
UXytOBex 078 IS 6S0u32* 30* 32* .1* 
LteTacfl 020 15 5 18 17*17* -* 

LTeBoo 22 500 4% 4ft 4* 

IflttaOAi 028 13 33 14ft 14 14 

ImBr 101 868121*1 19*1 19* 

Lincoln T 052 14 80 15 14* IS 

Ureuylta 13 20 3Z 31* 31* 
LncaTeC 024 37S673 46% 44* 45* 
LQuSei 040 17 62 35* <04 


■ft 


♦ S3 


LoowmGp 006 28 534 


Low Star 

Infcwf) 

LDtCp 

LWM 


22 568 
4218103 
1 1997 
035 4 B 


242330 
7ft 7* 7ft 
58 52% 52ft 
2ft <C 2 
31 30% 30% 


■% 
•1% 

■* 

*1 
34 -1* 
24 .% 


MCI Cm* 005 2115834 24% 24% 24A -A 
MS Car's 18 794 21* 20ft 21* +* 

Mac MB 080 42 8 135513X51356 -.15 

Mtebaift 1X6 14 82 33* 32* 33* *% 

Magus Pw 13 87i 29 d28 29 .% 

Magna Grp 076 12)399 I9>2 18% 19* +A 
HrtBn 13 416 8* 8 8ft .ft 

Mtetam Cp 30 842 10% 10* 10% +% 

Or 13 939 5% 4ft 5 .* 

Market Cp 9 15 40 39% 40 +* 

Mangel 1 72 2 1ft 2 

uarrwta 19 30 Bft 8% 8% .ft 

MmhSnUA044 10 10 10* 10% 10* .ft 

080 112360 21% 21ft 21ft -* 
10 191 8% 8* 8A +,'. 
40 953 52% M% 52* +1* 
02110 6 5% 5% .ft 

044 12 14 16% 16% 18% +% 

048 171900 21ft 20% 21 

495329 53% 52% SZ* 


Mantas 


Madia lrt 

CP 

R 

McCunte 


0 25 ft * * 


-% 


Med mag 

Medoitac OIB 17 101 13% 12% 13% +% 
MadkteaS 048 13 37 22* 22 22 -* 
024 7 188 5% 5% 5% +ft 
Cp 016 45 20 14ft 13% 13% 

024 20 2107 10% 10% 10* +ft 
MenanLB 0X8 11 465 20% 20% 20% 
Mercury 9x070 B 457 30% 30* 30* 

128 12 4048032% 31% 32* 
100186 10ft 10 10 
A 0X8152011 16% 14% 15* 

F 020 16 299 12 11% 11% 

Mfc&NtoB 2X0356 1479u79% 78* 78* 

8 84 3% d3% 3* 
1618109 
6 683 
151122 
26716 
1523796 


r: 


sack oar. e ran 
Puritan B 012 8 2*5 
Pyranss II 20) 

omnLog 10 4? 

OuakcrCm Ofr 72 27 
Oual Food 020 17 3137 
Quantum 


not ia lm enp 

21ft .’oft :ift ♦* 
■% ;ft ;* 
tft uK 

13* 13* 13% .* 


34 


Qudote 

avettettok 


Ml 1559 13% 13 ft 
28 708 14* Ij'- 
34 14« Hft 35 * 


- R - 


a \ 
!]"* -* 
14 .* 


Rainbow 

13 814 

14 13* 14 

•ft 

ft fflft 

6 561 

5% 5* 5* 


Rastanoa 

1 303 

4 * 4* j,; 

.1 

fDynxxu 

S r I9ft 18* 19ft 

♦ft 

Itmtoi 

73 non 

JS Jift 34% 

■ 1 % 

RUtfBA 

IS 103 

19ft 19 10 

♦ft 

Hcphgan 

? 310 

4ft 4 4ft 

♦ft 

RzpWsto 

5 (74 

3% 3ft 3ft 


Heschtad 

14 31 

8% 9% 3* 

-’j 

Reuters 

224 15 7)1 4J% 43* 4J% 

'l 

Reran toe 

1 J94 

h% 5* S's 

•Li 

RnwFa 

DEO 10 157 

30 35 20 

•ft 

RtudwS 

1.40 22 861 

G9ft 67* 69 

♦ 1* 

RDNgnt 

012 13 S3 

6* >j|« 6* 


RoctlSaBfc 

059 4 5l17ul‘J* 17 Id* 

.1* 

Roosrven 

015 3 778 

177, 17* 17* 

-ft 

RossSta 

020 11 COO 

■4% 137, iji; 

1% 

AnrdMad 

35 68 

20 * 20 21) % 

• ti 

Rousnx 

068 59 154 

19* t) 10% 

ft 

FFkl he. 

052 20 1242 

17% 17 17* 


RSFoi 

048 14 141 

u24 22% 34 

• 1 

HrmFirty 

I4 21J0 

.'ft 7ft 

-ft 


- s 

m 


Sabco 

196 6 e*t 

58* 58* 50% 

•a 

Sandamon 

03U 13 II 

17ft 17ft l.'ft 

•hi 

ScrtntigrA 

030 13 223 

2!i 24* 21* 


SrtUfdL 

72045 

Zb * 176 28* 

»* 

SQSpam 

11 1741 

14', 13% 13 ft 


Sdn 

710M 

7* 7% :ft 

•* 

SzkaiCp 

052 0 1537 

17% 17 r.- 


Scorn Bnt 

8 277 

8* 7% 8ft 


CerttaM 

1 20 45 24 

38 37* J7 * 

■* 

S^gata 

1013122 

22% 21% 22ft 

♦A 

50 Cp 

016 25 161 

2U V.1* a 

_u 

Suite B 

036 1 172 

1% 1% 1* 


Smetana 

1.12 14 H 

25 Si* 24* 

-ft 

Sequent 

71 4273 

15% 14* (5 

,i< 

cerate 

25 750 

4 3* J* 


ServTach 

1? 150 

Bft Aft 6ft 

ft 

SanAnct 

22 Cl 

4ft 4ft 4ft 


Sewnson 

17 auiaft ir% ia* 

•* 

snMcd 

0X4 18 732 

25 24ft :s 

♦* 

SUSysim 

31479 

7 * aft 7 |. 

*14 

Snavood 

23 992 

U18 17* 17% 

■% 

State.- p 

101542 

lift to* lift 

*% 

Siena On 

<5 124 

19* 18* 18% 


SknaTuc 

2 20 

3% 3ft 3ft 


apui 

033 18 1879 

40 39* 39% 


SlgmaDn 

1 212 

H 7* 7* 


SUdWBc 

006 51 83 

10% 10* 10-ft 

*% 

SBMMSp 

30 442 

10 * 10 % to* 


Stmpsan 

058 26 73 

20% 20ft 20% 

♦ft 

SdrittM 

35 884 

25% 24% 25* 

♦ft 

SNHteBv 

8310998 

24* 23% 24 

-ft 

SaitmraP 

1 1879 

5* 4ft 5* 

♦ft 


Sanoco 

Sudhbt 

SptegrtA 


StcyBt 


HapaCs 


4ft 
♦% 
-% 
+* 
-* 
-ft 

_ _ "ft 

22 21 21% +ft 
5% 5% 5% +ft 
6 * 6 % 6 % 

8* 5% 5% -1% 
53 51% 52ft .ft 
MU AIM 46 7378 64ft 50* 52ft +2ft 
040 11 3235 30* 29% 30 -* 

050 27 25 33* 33* 33* 

rK 052 19 95 27 26% 27 +% 

20B 25% 24% 25% 4* 
MTlMedl 14 20B 10% 10* 10* 

MoHdTel 46 501 18% 18* 18* 

ItodaraCD 020 18 4 7* 7* 7* 

McdtaoMf 052 19 23 27* 28* 26* -* 
0X4 2383 35% 35 35* •* 

MotaxtaC 004 28 101 37% 37 37* -% 
004 13 204 7*3 7* 7* -% 
P 036 22 BO. 30* 30 30* -* 
MrCDftae 182014 14% 14* 14% +* 
MTSSyax 05B 11 3 28* 27ft 28* 4% 

■mad 14 1174 83* 30 33* +3% 

Iftcogen 5 17D 11% 11 11* +% 


- N - 

MAC Ha OIB 13 945 31* 30% 31 

Feet! 072 11 1818 18 17% 17* -% 

Nat Pizza 14 zlOO 6* 8* 6* 4* 
Hal ComptxOJB 75 7 12* 12 12 

MnSui 020 20 20 14* 13* 13* -% 
12 10 18* 17% 18* -* 
WC 046104 28 u61 80% 60% +% 
17 415 27* 27 27* -* 

MrtrtGeo 25 1594 17% (7% 17% .* 

NatakS 92 489 8% d6% 8* 

Nauogen 25 3 7% 7% 7% 

Mrgna 027 20 173 20 19* 19% 4% 

HetoCBua 080 22 121 19* IB* 19* -% 

Mat Usage 81107 10% 10% 10% 4* 

HxngeNet Z9Z0 7 7 5 40% 38% 38% 4% 

NSteMCp 004 13 55 u8* 5% 6* 4% 

Matte Dl) 21 687 7* 7 7 -% 

ttvdson z 058 25 137 58% 55% 56* 41 

Ndskm 040 254486 42% 41% 42% +1 

Neman I 14 EG 18% 17% 18* +* 

N Startle 4 145 5% 5* 5% J, 

Motorist* 088 14 784 43 42* 42* 


5U» Sir 
StdUcra 
SU Regia 
Start Tac 


058 154440 20% 20* 20% 

068 11 1329 1122 21* 22 

020 46 432 22* 21% 21% 
StJUdrtdd OA0 121146 29 28* 29 

StPaUBc 030 10 258 21% 21 21% 

I 451 2* d2* 2% 

42 4834 2B* 27* 27% 

058 18 8037 42% 41% 42!% +1* 
11 1785 17% 16* 16)3 +ft 
068 14 17 21* 21 21* 

0X8 191249 17% 17* 17% 
SHMyUSA 020 371194U10* 10 10^4 
State 139 4 19* 19* 19*z 

StrantaO 1.10 12 51 20*dl9% 20* 
Sbucmy 191460 9% 9*2 9* -% 
Stryker 028 23 482 28JJ 28* 28% +* 
Stilmfi 22 202 15* 14% 14% -*4 
Sunfin maB 0X0 26 4 22% 22 22% ♦* 

Summit Be 084 14 410 u23 22* 22% 
SunmttTe 402338 29* 28 29* +2 
Sun Sport 14 8 B* 5% 5% -% 

II 4579 20*2 20 20% -% 

32 192BU31% 28* 31% +2% 
6122495 S3 50* 53 +2% 

34 542 13012% 12% -ft 

038 19 8 19 (8* 19 .* 

66 13 3ft 3ft 3ft 
21730 9*2 9% 9% 

81 2B3 15* 14% 14% -% 
1410797 10% 10% 10* 

012 IB 240 15 14% 14% 

29 155 18* 17% 17% -% 
25 404 8% 6 6ft +ft 


»* 

** 

-% 

+ft 


-% 


+* 

c* 


SwfBTra 

Sytaaahc 

Syraartac 

Synrttay 

Synaream 

Emergen 

Smatlc 

SynapBcs 

Systateoft 

^ntanleo 

Syatamed 


MV Air 

Hove* 

NowAs 


14 1850 14 13% 14 

HS623ZM 17* IB* 17% 
302319 33* 32ft 33ft 


+% 

+% 

‘I* 


NSC Cup 

8 

51 

3ft 03* 3* 



- U - 



- a 



usnha 

068 15 7381 42 )1 «ift 




18 17* IB 


unttai 

28647 5ft 5ft 52, 

OOEtoay* 

a 

213 


UCHaGs 

1X0 13 48 15ft IS* 15ft 

Dew Cun 

151309 

20 19* 19% 

♦* 

USTEt 

200 12 25 52 51ft 51* 

OffltoraLg 

14 10B2 13ft 13* 13n 

♦A 

UModSi 

040 0 596 11 10* 11 

O^etayN 

0X0 8 ZlOO 24% 24% 24% 

-* 

IWtogx 

024 21 134 U27* 26* 27 

OtteCs 

1.46 5 1383 M* 27% 20* 

+* 

Urtton 

1.40 22 34 41* 41 41* 

Old KM 

1.TG 11 

246 34% 34* 34% 

♦ft 

US Bancp 

QX8 11 1581 28ft 27ft 27ft 

OUNaffi 

002 18 

31 38ft 038 36 

-* 

US Energy 

29 192 4ft 4ft 4% 

Ontaneup 

1X0 8 

162 32ft 3<* 31% 

♦% 

usr Coro 

112 10 824 14 13)1 13{’ 

One Men 

14 

177 

IS 18* 18% 


IkabMed 

II 309 7* 7 7* 
10 2 «i* 4C% 46% 

opncrtH 

20 

346 

22 21 21ft 

♦* 

UUTcbv 

OradeS 

54203236X9 34ft 38% +2il 

mar 

IB 12 5ft 5* 5ft 

OrtJScnea 

531115 

21 20ft 20% 

♦* 



omaacb 

099 23 

145 

8ft 7% Bft 

♦ft 



OrcOdSupp 

10 

5 

14 14 14 

♦% 



Oregon kta 

031 10 

49 

Sft 5ft 5ft 

+% 


- V - 

nmy 

6 

128 

2* 2ft 2* 


vatand 

030 33 II 15* D* 15* 

DtoABA 

041 41 

42S 

T2%d12ft 12% 


tawdCd 

60 1810 u34 * 33 % 33)2 

totter* T 

05011 

54 

10ft 10% 10ft 

♦* 

Varttdne 

10 554 17* 10% 17* 

OterTaa 

132 14 

110 

32% 32 32 

■* 

Wcu 

35 316 23 22* 23 






VianAd 

9 IOC 14*d14>| M* 






Weteaglc 

25 1973 20* 13% 20* 






Via Tort 

32 3497 15ft 14* 14* 


- 

P - 

Q - 


VrtroB 

084 17 1403 94% OJft 94ft 

Pacw 

1X0 12 

819 

47 46* 46% 

-ft 



PacDudcokOGZ 12 

90 

12%tfl2ft 12% 

+* 



PTekat • 

132 IS 

IS 

23 22ft 23 

♦% 


- w - 

PacfiQfl 

S 

49 

58ft 58 56 

-* 



3110797 

26% 25* 26* 

♦% 

wbmarEii 

010 22 890 28% 20* 20* 

iftyctax 

024 « z 

539 

33% 33* 33% 

♦A 

ffanaaclt 

75 196 4ft 4ft 4* 

taycoAm 

a 

34 

9* 9 9* 

+* 

VtashUutSB 068 72033 21ft Zift Zlft 

tarieas 

050 40 

7 

9* 9* Bft 

-ft 

nastfeoSL oxo 9 139 22ft Sft 22ft 

PenrtTrty 

B 

10 

14* 14% 14% 

♦ft 

VUtandA 

022 10 78 M3* 3 

Peonvirfl 

1X0 24 

10 

33* 33* 33* 

♦ft 

VKUQuPM 024 10 776 25% 25* 25* 

Weir 

072 15 

299 

35ft 34% 35 

+* 

WD-40 

200 14 3689 38*337% 38ft 

Paotastil 

15 

137 

8 5% 5% 

-A 

wtatdk 

22 443 4* 3ft 4 

PunwaflL 

020 22 

30 

19% 19 19% 

♦% 

west one 

072 12 943U32ft 31% 32 

Peeples H 

024 13 

388 

13ft 13 13 

-ft 

lUtfub 

5 407 lift 11 lift 

PenoBe 

1.12 16 

4 

32 30ft 30* 

-A 

WstpSlA 

1 50 15d14% 15 

PTunDcy 

24 

269 

8 7% 8 


WetSertA 

13 807 3* 3 3* 

RnenxTch 

24 

888 

S 4ft 4ft 



096 22 442 46* 4$* 46* 

RcoOi 

048 4 

15 

11*d1tft Hft 


WnaStnam 77 411 34% 34 

Rcaaeb 

28 

407 

13* 13 13* 


ttctotanL 

029 12 29 14*dI34| 13% 

PWtSrtM 

39 

21 

15* 15* 15* 

-% 

wmgix 

0X0 25 580 19* 18% 19* 

Pmertjp 

080 27 

130 

39% 39* 38* 


WPP bun tfUQ 21 219 3 A 3 A 3A 

Fttnetatfl 

058 24 

785 

35% 35* 35% 

♦1 

Wynan-GUiOAO 4 167 6* 6ft b, J 4 

nonacrSt 

0.14 13 

3 

24% 23% 23% 




Pence Fed 

5 noo 

Bft Bft Bft 




Powel 

18 

a 

5% 8ft 8% 



W# 1 g mm 

PraUe 

009 3 

39 

Sft 6* 6* 

-ft 


• X - Y - Z - 

Preaatek 

■rtw 

832 

29* 27* 28ft 

-% 

Ob 

2513171 42* 39 M* 

Pi/Cost 

2218757 

15ft 14ft ISA 

♦ft 

torn C«p 

2 576 3% 3ft 1* 

nuaPat 

38 

328 

5ft 4ft S 

T* 

Worn 

094 SB 2589 19 17ft 1811 

PiMiui 

17 

19 

u9% 9 9% 


York Radi 

43 463 4ft 3% 3ft 

Prod Ops 

024 22 

11 

25* 25ft 25* 

♦* 

flonsUtan 

1.12 10 13u41% 40% 407, 


- T - 

T-CaflSc 7 214 4% d3% 4% 
TjcwaPr 052 192451 31* 30* 30* -% 

TBCCp 17 230 13% 13ft 13ft +ft 

TCACaUa 044 27 357 23 22% 22% .% 

TacMUa 10 3347 16ft 15% 15% 

TacunseaxOXO (3 3 54* 51% 51% 

Tatafce 2 11 9% 9*4 9% 

Trtea&yi B 706 14% 14 14% 

TdeGunmA 30612971 21% 21% 21ft -ft 
TflfebU 71704 5% 4% 4% -ft 

Mb 237054 33ft 31 31% +1% 

TatnmCp 0X1 08 350 15* 14* 15* +ft 

Tatra Tec 71 98 8% 8* 8% ♦% 

TeuaPIWM 027 252301 25% 24% 25ft +ft 
Tim Com 3015500 45ft 43, ’■ 44% +1 

TJht 022 34 333 33 21% 22ft 

TctaaUM 2 314 4* 3% 4ft 

Trfcyoktar 032 38 MM* 64 64* 

Tom Bnmn 83 TOT ulfl 15% 15% 
ToppaCo 0283562415 7% 6% 7% 

TP1 Enter 31135 7ft ft* 7 

TransoU 10 2 11 11 11 

Trwwfckx 1X0 12 58 42% 4J% 42% 

Tneare 8 6 3% 2% 2% 

Titntofa 52 407 10* 4 9% 10 

TiustaflXxlXO 10 38 20ft 19* 20ft 

Tseng Lto 020 12 433 7ft 7 7% 

TyaHU 008 18 Uil 23 22% 22% 


+i« 


♦ft 

-ft 

♦ft 

-% 

-ft 

.% 

♦% 

r% 

-% 


•% 

►1% 


♦ ft 

t* 

♦ * 

ft 
ft 
♦ ft 

-a 1 ) 

♦ft 


-ft 


38 


FT G U IDE TO THE WEEK 


13 


MONDAY 


Euro-election results 

Governments and voters throughout 

Europe digest the results of the week- 
end elections for the 567-member Euro- 
pean parliament and the referendum 
on EU membership in Austria. 

The big question now far the Stras- 
bourg political groupings is whether 
the parliament’s increased powers 
can be translated into positive action 
- to improve parliamentary supervision 
of the Commission and Council of Min- 
isters, and to increase the cohesiveness 
of legislation affecting the 269m-strong 
EU electorate. 

OAU: the Organisation of African 
Unity holds its annnal summit in T unis 
(to June 15). South Africa will partici- 
pate far the first time. 

Bankers meeting: World central 
bankers assemble in Basle, Switzer- 
land, for the annnal masting of the 
Bank of International Settlements. 
Topics for discussion Include the recent 
turmoil in the bond markets; the 
growth of derivatives trading and the 
potential need for regulation; and the 
explosion in cross-border capital flows. 

Counties review: Today is “Big 
Bang" in the local government review 
of England. The Local Government 
Commission, chaired by Sir John Ban- 
ham, anno unces plans to restructure 
five counties, in which the local author- - 
ities strongly disagree - Cambridge- 
shire, Cheshire, Cumbria, Kent and 
Oxfordshire. Hampshire, Lancashire 
and Berkshire (where the local coun- 
cils, unusually, agree) follow tomorrow, 
with Buckinghamshire on Wednesday 
and Bedfordshire on Friday. 

Emperor Aldhlto and Empress 
Michiko of Japan are In Washin gton 
(to June 25). Today they attend a White 
House dinner hosted by President Clin- 
ton. 

Korean crisis: A small group of 
opposition Japanese MPs leaves for 
North Korea in an effort to find a solu- 
tion to the nuclear row. Former US 
president Jimmy Carter is also in 
North Korea this week. 

Orly flights: British Airways is to 
Introduce four daily round trip services 
from London’s Heathrow airport to 
Orly in Paris following the French 
government’s decision to open up the 
Parisian airport to more competition. 

Opec oil ministers hold mid-year 
conference in Vienna on pricing and 
production strategy. 

Add rain: Environment ministers 
from Europe and North America are 
expected to sign a deal cutting emis- 
sions of sulphur dioxide, a mam compo- 
nent of add rain (to June 14). 

Cartagena: Ibero-American heads 
of state meet in. Colombia to discuss 
integration and cooperation. 

FT Survey: Design In Europe. 

Holldays: Australia, Hong Kong, 
Portugal (Lisbon only). Taiwan. 


14 


TUESDAY 


BCCI verdicts due 

Court verdicts on 13 former senior 
executives of the collapsed Bank of 
Credit and Commerce International 
who were tried tn Abu Dhabi are expec- 
ted today. Charges include dissipating 
funds, forging documents, concealing 
deficits a nd approving false 1 mb« 

One of those accused, MrSwaleh. 
Naqvi, BCCFs former chief executive, 
was last month extradited to the US. 

If found guilty, Mr Naqvi would be 
returned to Aha Dhabi but only after 
standing trial in the US and serving ' 
any sentence received there. 

EU foreign ministers conclude 
a two-day meeting in Luxembourg 
to prepare for the European summit 
in Corfu on June 24-25. The EU may 
finally wrap up a political and trade 
agreement with Russia, so that Presi- 
dent Boris Yeltsin can atten d a high- 
profile signing ceremony in Corfu. 

Meantime, President Leonid Krav- 
chuk of Ukraine is due in Luxembourg 
today to sign an accord with the EU 
promising closer economic and political 
ties. Ukraine will be the first ex-Soviet 
state to form an official relationship 
with the EU. The accord opens the 
door for Ukraine to join the European 
free trade area as early as 1998. 

Royal Ascot 

starts today 
with the St 
James’s Palace 
Stakes, which 
promises to 
be the 'hi g hli g ht 
of the meeting. 
The racing 
continues iTr| tii 
Friday, with 
Ladies Day 
on Thursday. 

DOB mooting: Germany’s Trade 
Union Federation, the DGB, under 
which tiie country's 16 industrial trade 
unions are grouped, starts a special 
three-day congress to elect a successor 
to Mr Heinz-Wemer Meyer who died 
last month. The congress will be 
attended by Chancellor Helmut KohL 
Also today, Romania's leading trade 
nrrinna hold a mans rally in Bucharest 
to protest against low pay and the 
government's failure to stem the coun- 
try’s four-year recession. 

Transport: EU transport ministers 
finish a two-day meeting in Luxem- 
bourg. They are expected to endorse 
an action programme to consolidate 
deregulation of Europe's arriinp indus- 
try. But controversy could arise over 
the French government’s plan to inject 
FFritObn (USJ3.5bn) into Air France. 

Westminster: MPS return to 
Parliament after Whitsun recess. Prime 
minister’s question time is likely to 
he dominated by the European election. 

FT Survey: Nottinghamshire: 
Regeneration of the Coalfields. 

Holidays: Hong Kong. 


15 


WEDNESDAY 


Clarke speaks to City 

Kenneth CLarke, 
the UK chancel- 
lor (left), gives 
the annual 
"Mansion 
House" speech 
to the City 
of London. 
Traditionally 
an occasion 
forexpounding 
monetary pol- 
icy, it is expec- 
ted that Mr Clarke will also cover 
broader issues such as education and 
training in rtesrrihtog how the govern- 
ment plans to nurture economic recov- 
ery without reigniting inflation. 

Finnish no-confidence vote: 

P rimp Minister Aho’s centre-right 
reta fare* a parliamentary vote 
of no wmflrtpn ffl amidst squabbling 
within, the government over the coun- 
try's intention to join the Europe an 
Uzdon an January 1 next year. 

Hosokawa loan: Maaatoshl MByama, 
the ex-secretary of former prime minis- 
ter Morihiro Hosokawa, is to testify 
In Japan's lower house on YlQOm 
(2636J300) which Hosokawa borrowed 
from a scandal-tainted trucking com- 
pany and allegedly used for a personal 
political rampaij-r n 

Also in Tokyo this week, first-quarter 
GDP figures wffl be announced. 

Cambodia’s Khmer Rouge guerrilla 
fact i on ie amiriingshr BarrinrnfflrfaTs 

to peace talks starting today in Phnom 
Penh. The group's nominal leader, 
Khieu Samphan, will not attend. 

City elections: Sndthfieldmeat 
market t rader s have been exploiting 
a medieval electoral system in their 
dispute with the Corporation of London 
over market rents. The traders have 
tried to pack the electoral rolls with 
their supporters ahead of the Corpora- 
tion’s elections due in December. Today 
Is ti 1 ** final day for registration. 

Nuclear plants: A conference of 
the International Atomic Energy 
Agency in Vienna this week aims to 
set inter national safety standards for 
land-based civil nudear power plants 
(to June 17). 

Queen M e rgreths of Denmark visits 
Iceland (to June 19 ). 

RaH strike: 

Britain’s rail- 
way network 
is threatened 
with a shut- 
down today 
when signal- 
men are expec- 
ted to strike 
in support of 
an 11 per cent 
pay claim. 

FT Survey: Telecommunications 
in Business. 


16 


THURSDAY 


Labour trio share platform 

As nominatiass dose 
for the Labour leader- 
ship contest, candidates 
Tcaay Blair, John Pres- 
cott and Margaret Beck- 
ett, will today take 
part in a debate spon- 
sored by the Transport 
and General Workers 
Union. The debate rounds off a busy 
week for the trio which starts with 
oflnh of Hi pm addressing 1 the GMB gen- 
eral union c onf erence on Monday in 
BlaCkpooL 

Bosnia: Senior nfflnfais from the 
"contact" group, comprising thp US, 
Russia, the European Union and the 
United Nations, are expected to meet 
In London today to (Bros* moves 
towards a broad political settl e m e nt 
in the former Yugoslavia. Last week 
the warring parties agreed a month- 
long truce, which may create the condi- 
tions for negotiations on territorial 
division. The contact group had earlier 
proposed a four-month ceasefire. 

Also today, leaders of the waning 
Wnwnfaw farHrmg are due to meet in 
Sarajevo for talks with UN special 
envoy Yasoshi AkashI and General 
Sir Michael Rose, the UN commander 
in Bosnia. 

Berlusconi In Bantu Italian premier 
Silvio Berlusconi meets Chancellor 
Helmut Kohl in Bonn In his first top 
level European diplomatic meeting 
efrnre* afi yrrmng iiffico a nwntli ago. 

Italy has been traditionally dose to 
Germany but the new Italian govern- 
ment is wary of a strong Franco- 
German axis. 

Top of the agenda will be the forth- 
coming EU summit in Corfu (including 
the question of who win be the next 
Euro pean Com mi ss ion president), mid 
the German EU presidency. 

Single market: EU ministers meet 
in Luxembourg today to review the 
progress of the single market, 18 
months since Its inception. On the 
agenda will be proposals for a new 
system of administrative cooperation 
between member states, which should 
allow faster problem-solving related 
to the free circulation of goods. 

Qatt director general, Peter 
Sutherland, delivers the third annual 
Hayek Memorial Lecture in London. 

Dalai Lama visits Rome (to June 
17). 

Him wine: One of the finest private 
wine cellars to come mi the market 
is to be sold at Christie's in London 
today. Some 18J100 bottles from the 
world’s greatest wine estates, which 
have beat assembled over 30 years 
by a private collector, are expected 
to fetch more than £lm. 

Qolfc US Open championship in 
Oakmant, Pennsylvania (to June 19). 

Cricket: England play New Zealand 
in second test at Lends {to June 20). 






LEADERSHIP 

CONTEST 



Beffing to now at the centre of Intense Internationa] efforts to detuse the Korean criaa 


17 


FRIDAY 


Scandinavia debates EU 

Finland's Centre party, Norway’s 
governing Labour party and Sweden’s 
opposition Social Democratic party 
open special party conferences called • 
to decide official party policy towards 
memb ershi p of the European Union. 

Support from all three is seen as 
vital to winning a Yes vote in referen- 
dums due in their respective countries 
in October and November, but each 
Is deeply split on the Issue. 

The pro-EU leaderships of the three 
are expected to prevail, but not without 
agonised debate. 

AMs researchers, representatives 
fr o m I nt er na tional organisations and 
more than 40 health ministers meet 
in Paris today. They are preparing 
for a summit conference in the French 
capital in December when government 
beads will discuss new ways to fight 
the disease (to June 18). 

Soccvc The World Cup starts today 
with Germany playing Bolivia, and 
Spain taking on South Korea. During 
the next four weeks, nine US cities 
will host 52 matches played by 24 
national teams across four time zones. 

FT Guido: World Cup FootbalL 


IS - 19 


WEEKEND 

Colombia votes again 

A close finish is expected In the swxuf 
round of Colombia's presidential elec- 
tions on Sunday. Liberal Party candi- ' 
date Ernesto Samper had an advantage - 
of only (L3 per cent over Onuncvatitt 7 
Andres Pastrana in the first round . 

on May 29. G 

Voter abstention in the first round. 
reached 66 per cent, and is expected M 
to be worse on Sunday because of the^ 
soccer World Cup. 

Baffin parade: Allied forces hold && 
a farewell parade on Saturday in Bef®5 
Un. US, British and French troops wffi. 
march close to the Brandenburg Gah(| 
which divided the city until Novembjg 
1969. Russian troops have been ‘ tT;- 
exduded by the cdty authorities. 

Polish polk A local government 
ballot on Sunday provides Poland's 
politicians with their most serious ' rr: 
test since last autumn's parliamentary 
elections. Poles will be voting nation. •* 
wide for 52.173 coundflora. 

Lo Mans: 24 hour race on Saturday. 

Holidays: Bahrain (Saturday). 


Compiled by lan HoMsworth. 
Fax: (+44) (0)71 873 3191 


ECONOMIC DIARY 


Other economic news 

Monday. A busy week for UK 
economic statistics kicks off 
with May producer prices. 
Annual rates of growth have 
been subdued but there were 
signs in April that the surge in 
world commodity prices was 
showing up tn manufacturers’ 
costs. 

Tuesday: The Confederation 
of British Industry’s distribu- 
tive trades survey wiD give the 
week's first clue to the 
strength of the retail sector in 
May. Analysts will be looking 
to see if April's tax rises have 
affected consumer behaviour. 

Wednesday: A cornucopia of 
economic information. Infla- 
tion in May is expected to be 
subdued, with the underlying 
annnal rate stuck at 2.3 per 
cent and the headline rate set 
to fall slighly to 2J> per cent 
Analysts think unemployment 
will foil by a further 25,000 in 
May. But a key focus for the 
markets will be average earn- 
ings, the annual growth rate of 
which has recently accelerated 

from 3 to 4 per cent 

Thursday: Official retail 
sales figures for May are expec- 
ted to show a small increase in 
the annual rate of growth, 
from 4.4 to 4.5 per cent May’s 
public sector borrowing 
requirement is forecast to have 
been £4.1bn. 



' 7 Statistics to be released this week 



Pv' 

Mesas* - Camay. 

BcqnMte- ■ .Ifpifu 

GteffetfQ. . .. #V ‘ ; ■ ; rbflicwft ' 

.- PnwhNHi 
AOfcWl • 

O* 

. . IWrieri Oovnby 

ssr 

MKflWt 

ftntaw 

Aatuit 

Mon UC' 

. May producer '- prices bid* Iqpur ' 0.6%- 

.06% 

■ fhur- • US.- 

• May housing starts 

143m 

1.46M 

June '13 UK- ' 

Mi^produBarprto8B)mtelrgaA^-.„ -1-2% 

. • -v, 

. **mi$ us 

May butkSng penults 

- 

127m 

UK ' 

May prtjducer. prices todjcoutpuf^ . 0-35 . • 


: : . PS *■. 

initial dafms, wfo.^ne 11 

355JXXJ 

358, OQQ . 

• . UK . 

' • -Mayjqpducarpr^^ *2% ' 

;• -; s . - 

;,V, ‘ 

'. Stats benefits, w/e Jisie 4 

- ' . % ■ 

2.78m ' . , 

. UK- 

. - Ditto, excf food, (fiteKtohabccr. ' ' .. 2-2% 

& 2 % ./r 

-. • •’ •„ ••’-us '• 

' • M2, wfe' June 6 . 

* S4bn . 

"-$7bo • 

■Awe ■ us -■ 

Meyrattftwatafc- , ... ■ / 4X8% \\ ■ ■■ 

••• •OB96- 

.'•*•>•*' - us . •- • . 

'... M2. May nrantfify : 

SLSbn 

S07bn ■ . 

Jtane 14' ■ US 

• , -.-Off tojews autos ., ^ . - . ' TUSS6 '■ • • 


:' v r.^V', Japan 

■ ‘ .MSajr.vada batance,- custom cfoar. 

S7^bn . * 

■ Sli.lbn - \* 

.US;'- 

• May consumer prteto feast: -‘ ,. .’039& *' • : 

•j.o.ivtf 

-.;• .7 ' ’France 

Mar current afct ' 

FR5br* 

,-FFW^bn ; • . 

US 

. pitta; wet food & wetfly'. . *' ' 

da%\' u '.-' 

E.-'.Zv" .U'Wv*a 

' , , 1st qtr'onpiw donwet prod,- p n&n 

05%; 

01% 

Us. 

'May real eamjngg • . s ; 

aw ; 


' .Mayi'ps^t.- 

S4,tbn • 

£5A3bn - - 

Japan 

. May wholesale prices fata** / . 0.0% ■ 

•' : 


' EMay retaft sales* " ; 

02% 

04% 

• Japan 

M^Wbotesateprk^faobi^ '-24%' 



V".May Mai " ** 

45% 

•44% , ! 

Wad-' US • 

May todos&M pfaducttafi - - 0.1% . . ■' . 

. ; . 

- . • fti- . , Ftance ' .*• Apr trade butanes"'.' 

FFWa5bn' 

FFr09b(i- 

May 15 US 

■ May.capacity utfflsaifao ' • " ' '33.5% .. 

• 8^96 • • 


-f . AiMycoreiwierfjrteas tortt, annents 02% -. 

02% ' 

US,- 

. • • AivtapWessttwematee . .. . . 03%=-. ■ 

; :"•$**. . 7 . 

-v ;: .Padoyifoe wilt- 



• • - • - 

: . . -. US 

Idqtrcutrarftafo .-. *. * .•••■ 



1st qtr GDP, seas acganouHl rata 

£5%. 

*2% 

• .us.- . 

lkqtrprodudtMty/nvbad< - - 

-•W'' *. 

*• ■;'• f . • r -^fepas; •';•' 

-Jifey moiwy 


2 : 1 % 

Japan 

AprfridustprtKl mvisedt ■ ■ 

/• '• 

:: 7 * !V a * • ' • Apad* - - '• . 

-. ,v May broad 


.02% 

-Japan 

■ Apr sHpmentoi. rmtodt : ■ 

":***. ‘ 

' :V ^Gaiwary 

"Aprrataflsataa.pcnQenrtmy^ . 

- 1 % 

2% 

UK 

■ May price fochC ' 'ttS% 

• d.i% 


:: l^.«iAoWU4pric41hd< - 

02% 

• 02% • - • 

UK 

May retak taloe inda*' . ! 2S% . 

2.6% ' -.* 

’ ./''••ftanoB,." 

Apr MS* ! ’ ! \ ■.■■■; - 

.02% 

oii% 

UK. 

. . ' tittlo, bx-jwHBaga fat payments*" SL3% : 

-234t-V 

•• .7 :•••• 

• Apr lodust prorffion, not sees aeff 

08% • • 

07% 

• UK - 

., May unaiiytuyjiiwit rafo -.; -25,000 .. 

'-38^00 : • 

•• •■ .■ ■■: 

-May urwRipfc^irwftti Vegiaiared 

17.6%. . ' ' 

17.76%- . 

UK 

■ ^prawraoeaernfogs '4%^'- • 

■ —■■■■. - *4 *f '.iw 

••Ate,.. 



5% • ' ' 

.03% 


UK 


■Apr unit wags 3 Wwnffjfy**' 


£2% 


2 % 


. •mboaj tnbBttvryaae DB.yr,' DO qtr,.t aa a nad Statistics, courttay tyMS tata ma tlwmL 


ACROSS 

Foreign Office given new 
shape to cope with weather? 
< 8 > , 

Display without publicity, 
only possible in One weather? 

<§o up to top of house, say. in 
relation to fang-term weather 
(8) 

Wine in churchyard (6} 

It's [Humiliating and enter- 


exam 

rough 


13 Drink for ent 
causes a measure 
weather (4£) 

14 Finance officer for British 
Rail hugging bear (6) 

16, 22 Talons deployed among 
little fish to check what 
changes the weather (7 JS) 

19 Dry weather instrument with 
emperor in support (7) 

21 Heavenly body responsible 
for the weather? (6) 

23 Fighter downs arms for a 
change (9) 

25 Gloomy sort of weather 
makes strange return to part 
of sky (5) 

26 Less than six tricks are crys- 
talline (6) 

27 Horae's half tarn has very 
little potential (S) 

28 Something unusual makes 
one tarry fu) 

29 Line of similarly hot weather 
Is different by 1P00 (8) 


DOWN 

1 Container of documents, 
about a hundred thousand, 
like British weather (6) 

3 Wet weather Instrument 
from Guinea treated with rag 

3 leather map found by Our 
Father? <5) 


penny 

division (5) 

8 Usual direction of weather 
swelter, oddly, at start of year 
(8) 

11 Part of circle formed on staff 

16 Effect of wintry weather on 
downs - possible break In 
cloud (4-5) 

17 Plural number discovered 
tomorrow? Point taken (8,2,4) 

18 Disregard the spring festival 
(8) 

20 Sort of weather that keeps 
mother quiet <41 

21 Acceptable conduct In stately 
homes, say (7) 

22 See 16 

24 Beast in more summery 
weather losing head (5) 

25 Sort of weather, one that’s in 
the majority (5) 



MONDAY PRIZE CROSSWORD 

No.8,478 Set by CINEPHILE 

of a PcUkan New Classic 390 fountain pen for the first corre ct 
l opened and five runner-up prizes of £35 Felitom vouchers will be 
awarded. Solutions by Thursday June 23. marked Monday Crosswo r d 8,478 
on toe envelope, to the Financial 110189, 1 Southwark Bridge, London SEl 
ctht. Solution an Monday June 27. 

N ame --■■■■- — — — — 

AtMmce - . 


Winners 8,466 

RJ. Contanche, Petit Port, Jer- 
scy 

G. Bar re tt- Cleethorpes, South 

Humberside 

Alison. Emmett, Les Mouriaux, 
Alderney 

F.W. Hornett, Aylesford, Kent 
Jacqueline Mercer, Barley, 


Solution 8,468 


W*E. Nelson. Gorebzidge, Mid- 
lothian 



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