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Climbing Mount Fuji: 
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Greek deputies 
vote for trial 
of ex-premier 

The Greek parliament voted to put former 
conservative prune minister Constantine M l t a otakis 
on trial for his alleged role in a telephone tapping 
scandal. Deputies voted by 163 to six to lift his 
parliamentary immunity so be can be tried on 
charges of instigating a scheme to tap rinro n g 
of political opponents and journalists. 

IBM forma now division: The US computer 
company is forming a division to create services 
ranging from interactive television to personal 
messaging systems for the “information superhigh- 
way". Page 19 

Peufiwrt CftroGn lost an appeal at the European 
Court of Justice against an earlier ruling that 
new car sales by independent traders across 
national borders to specified customers were 
legaL Page 18 

Bridge given go-ahead: Swedish environment 
minister Olof Johansson quit after the government 
said it would go ahead with plans to build a contro- 
versial bridge and tunnel link to Denmark. Johan- 
soon had argued the bridge would upset the Baltic 
Sea's ecology. Page 18 

Green light for Transrapid: Germany's 
parliament passed a bill clearing the way tor 
the construction of the Transrapid high-speed 
rail link between Berlin and Hamburg. The "whis- 
pering arrow" will hover at speeds of up to 250mph 
in a magnetic field above a monorail. 

Boost for res ea r ch : British companies boosted 
their spending on research and development 
by 9 per cent to £7.1bn ($10.65bn) last year, a rate 
of increase well ahead of the UK’s main interna- 
tional competitors. For the first time since the 
R&D Scoreboard was launched four years ago, 
companies increased their R&D spending by more 
than they raised dividend payouts to shareholders. 
R&D Scoreboard, Pages 12-13 

CS Holdings chairman Rainer Gut said 
Creditanstalt would remain "a proud and indepen- 
dent Austrian bank with its own identity” if the 
Swiss bank succeeded in winning control of the 
Austrian banking flagship. Page 19 

hailed alter Jail rel eas es 

Shareholders of electrical 
■ - engineering group 
Schneider greeted 
company chairman 
Didier Pineau-Valen- 
denne with a round 
of applause after bis 
release from Brussels’ 
Forest prison. Mr Pineau- 
Valesudenne, who faces 
charges of fraud relating 
to two Belgian subsid- 
iaries, was released 
last week on bail ctf FFr£5m ($430,000). Page 18 

Israel frees prisoners: Israel set free two 
former leaders of the Hamas Islamic resistance 
movement after they signed a pledged ren o uncing 
violence, according to other prisoners released 
at fiie same time. 

Book price-fixing THegaF: British, and Irish 
book publishers should not be allowed to continue 
their price-fixing deal known as the net book 
agreement, a legal adviser to the European Court 
said. The publishers are appealing against a 1988 
European Commission ruling that the accord 
is illegal. Page 9 

Ub Perns challenge polk The UK’s Liberal 
Democratic party is seeking to have the result 
of last week's European parliam e ntary election 
in Devon and Plymouth East declared void. They 
believe voters were misled into voting for a candi- 
date who called himself a Literal Democrat Page 9 

Eurotunnel’s share price closed 14p lower at 
3G3p in London yesterday, raising the likelihood 
that the underwriting syndicate may have to 
take up a sizeable slice of one of the UK's largest 
ever rights issues. Page 19; Details, Page 27 

UK move Into French magazines: British. 
rmartia group Bmap has agreed spend FFr914m 
($16Qm) on tour acquisitions which will make 
it France's third-biggest consumer magaz i ne pub- 
lisher. Page 20 

More IIS bases to go: The US is to end or 
cut operations at 27 more military installations 
in Europe, most of them in Germany. The latest 
changes wfll affect 5,655 people. 

Fine wines: A single cellar of fine wines fetched 
a record of almost £lm (tf-Sam) at auctioneer 
Christie’s in London. The cellar was made up 
of 18,000 bottles. 


FRIDAY JUNE 17 1994 


D8523A 



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Mktel 21357*7 (*84.51) 

Mm York knefitime 

Dow Jones tad Aw — 380485 H-13-M) 

S8P COraposte , — <01.00 (*&39) 

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hag Bond — . — MS 

tad 7382% 

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Bonn to impose M-way charges on all trucks 


By IMcftael Undemarm in Bonn, 
Ronald Van de Krol m 
Amsterdam and Charles 
Batchelor 

The German parliament 
yesterday voted to impose levies 
on all domestic and foreign 
tracks using the country's motor- 
ways from next year, although 
domestic hauliers will be par- 
tially compensated by a cut in 
vehicle registration toes. 

The decision - which follows a 


decade of debate in Europe over 
whether charges aimed at foreign 
truckers are discriminatory - 
comes as several other European 
governments are also planning 
to introduce levies to contrib- 
ute to the upkeep of road net- 
works. 

In Germany, only 10 of the 600 
parliamentary deputies voted 
against the bill in the Bundestag, 
the tower bouse of parliament. 
The bill proposes an annual 
charge of DM1,500 (8898) for 


three-axle trucks and a DM2J500 
charge for four and five-axle 
trucks. 

In Britian, the Road Haulage 
Association said new motorway 
charges would create “yet 
another expense for the British 
haulier'*. The Netherlands also 
plans to introduce truck levies 
from January i, wiihon gh the leg- 
islation has yet to pass through 
parliament. 

Mr Matthias W issman the Ger- 
man transport minister, said his 


country's levies would raise 
around DMB09m a year, exclu- 
ding the COStS Of managing the 

system, estimated at DM9im. 
Germany’s upper house has yet 
to vote on the proposal but its 
passage is taken for granted by 
the government. 

Dutch road hauliers, who han- 
dle around 25 per cent of all 
cross-border road freight ship- 
ments in Europe, are expected to 
seek compensation for the extra 
costs. One possibility is a reduc- 


tion in vehicle tax, in line with 
Germany's policy for its road 
haulage companies. 

The UK Freight Transport 
Association had argued for a 
clearing-house system between 
European governments to reim- 
burse countries whose roads suf- 
fered wear by foreign based haul- 
iers. 

Belgium. Luxembourg and 
Denmark also intend to introduce 
truck charges from January 1. 

Germany's original plan was to 


charge only foreign trucks for the 
use of German motorways while 
exempting domestic hauliers, but 
this was blocked by European 
authorities on the grounds that it 
was discriminatory. 

Mr Wissman said the truck 
levies would bring German haul- 
iers into line with other coun- 
tries, including Italy, France and 
Switzerland, which have for 
years charged motorway tolls 
deemed to make German hauliers 
uncompetitive. 


Bundesbank report offers rare praise for Bonn finance policy 


German economy starts 
to head out of recession 


By Christopher Parkas 
In Frankfurt 

The German government’s 
finance policy is on the right 
path and there are increasing 
signs that the recession is over, a 
confident Bundesbank reported 
yesterday. 

The bank's rare praise for 
Bonn's policies was accompanied, 
however, by strict instructions to 
reduce spending and borrowing. 
“The growth rate in public spend- 
ing should be kept substantially 
below the nominal rate of growth 
in gross national product for an 
extended period,” it said. 

The warning came as the 
Bundesbank acknowledged that 
the economy had moved out of 
recession. “The recessionary ten- 
dencies in the west German econ- 
omy appear to have been over- 
come,” it said in its monthly 
report, adding a strong hint that 
further interest rate cuts are 
unlikely in the short term. The 
comments helped the D-Mark to 


rise against the US dollar, Japa- 
nese yen and British pound yes- 
terday. 

Farther evidence of German 
economic recovery camp from Mr 
Karl Heinrich OppenJ finder, pres- 
ident of the Munich-based Ifo eco- 
nomics institute. At his insti- 
tute’s annual meeting yesterday, 
he said the west German econ- 
omy had finally turned the cor- 
ner. and growth was accelerating 
in the east. He said the institute 
now expected pan-German 
growth this year to be 1.5-2 per 
cent, and higher in 1995. 

In a review of recent develop- 
ments, the Bundesbank report 
says state borrowing is still driv- 
ing M3 growth, while growth In 
consumer credit has slowed to an 
«im«t rate of 5 per cent Signifi- 
cantly, though, lending to compa- ~ 
nies is lower, but borrowing by 
manufacturing industry has 
increased for the first time tor a 
year. 

Capacity utilisation has also 
risen, further supporting the 


view that the recession has been 
overcome. The Bundesbank 
report, repeating a recent state- 
ment by its president, Mr Hans 
Tietmeyer, noted that the “rather 
strong” cut in the discount rate 
in mid May (a 0.5 point reduction 
to 4.5 per cent) has cleared the 
interest rate horizon for some 
time. 

The bank now has to wait to 
see how investors react to the 
new Interest rate environment. 
Fears about the course of 
long-term European rates have 
been blamed for the recent turbu- 
lence in j yitprrnaHnnai bond mar- 
kets. 

The Bundesbank also said that 
economic growth and rising tax 
revenues next year might help to 
cut the public-sector deficit by up 
to DMfiObn ($36bn) - equivalent 
to .2 per cent of gross domestic 
product 

For this year, the deficit is 
expected to be unchanged from 
1993. 

The government was reminded 


that its aim should be to reduce 
“extraordinarily high" fairwi «nH 

welfare contributions, which will 
equal 45 per cent of GDP in 1995. 
The so-called solidarity tax sur- 
charge, to be reintroduced next 
year, will yield an estimated 
DM26bn. 

In spite of the stick-amtcarrot 
tone, the bank was markedly 
more optimistic than in the past 
year on most fiscal, economic 
and financial prospects, except 
for short-term interest rates. Its 
rate policy is in a “particularly 
strained" situation, the report 
says. 

According to the bank, it is 
important that funds now parked 
in short-term instruments, which 
is seen as distorting money sup- 
ply data, should be invested in 
long-term deposits, outside the 
scape of the M3 supply measure, 
which is the bank’s indica- 
tor of potential inflation. 

Currencies, . World stocks. 
Section II 



Silvio Berlusconi (front) made his first trip to Bonn as prime 
minister of Italy yesterday, when be met Chancellor Helmut Kohl for 
talks in the German capital Report, Page 2 


PVatreRnoam 


Swissair ponders Sabena stake to gain EU hub 


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ffr 55685 

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Y 110335 

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SMB 649 

(64*8 

Tokyo close Y1 02J7 


By Paul Betts in London and 
David Gardner in Brussels 

Swissair is discussing a strategic 
alliance with Sabena that might 
see the Swiss airline acquire a 
large minority stake in the Bel- 
gian national carrier. 

Swissair confirmed yesterday 
that it was holding talks with 
Sabena as well as with other 
European airlines, but declined 
to comment on a report that it 
was considering buying a 49.5 per 
cent stake in the Belgian carrier. 

Sabena also confirmed talks 
with Swissair but added that it 
was also holding discussions 
with American Airlines over a 
possible link-up. Last week 
American confirmed to Sabena 
an undisclosed co-operation offer. 

A Sabena official drew a dis- 
tinction between talks and nego- 
tiations and said Sabena was 
tanring “to a lot of people". 

But Belgian government offi- 


cials described as “completely 
plausible" the report of the possi- 
ble acquisition by Swissair of a 
minority stake in Sabena. 

They added that the Belgian 
government would not object to a 
Swissair minority stake as long 
as the Belgian state maintained 
majority control of its airline. 
Sabena is currently 0L8 per cent 
state-conteaUed. 

A large minority stake in 
Sabena would finally give Swiss- 
air a base to the European Union 
to take advantage of the EU sin- 
gle aviation market 

Swissair’s biggest handicap is 
its lack of free access to the liber- 
alised EU aviation market espe- 
cially since the airline appears to 
have lost any hope of overcoming 
it through an air transport agree- 
ment between the Swiss govern- 
ment and the EU. 

The Swiss airline also indicated 
that it intended to expand its air- 
line partnerships after the col- 


lapse last year of the socalled 
“Alcazar” plan to merge Swissair, 
KI.M Royal Dutch Airlines, Scan- 
dinavian Airlines System and 
Austrian Airlines. 

“Several European carriers are 
involved in the discussions, 
tochxHng Sabena," Swissair said 
yesterday. 

A report published today to 
nach, the Zurich financial maga- 
zine, refers to a detailed docu- 
ment setting out the strategic 
importance for Swissair to 
acquire a stake to Sabena. 

The report said Swissair 
intended to acquire a 49.5 per 
cent stake to Sabena by buying 
Air France’s 37.5 per cent bidding 
and a further 12 per cent stake in 
Sabena held by four financial 
companies controlled by the Bel- 
gian government 

Swissair said the article was 
based on one of a number of 
papers prepared by McKinsey, 
the business consultants. “It is 


not Swissair policy to comment 
publicly on any proposals or 
recommendations which such 
documents may contain," it 

Air France said it had no com- 
ment on the talks between 
Sabena and Swissair. It added 
that its original agreement with 


Sabena left open the possibility 
for another airline to acquire a 
minority stake to the Belgian car- 
rier. 

Although Sabena has become 
increasingly unhappy with Air 
France as a minority share- 
holder. the financially troubled 
French carrier may be reluctant 


at tbis stage to shed its stake, 
airline industry officials said yes- 
terday. 

The sale of its Sabena stake 
risked complicating its efforts to 
win European Commission 
approval for its proposed FFr20bn 
($3.5bn) French government capi- 
tal injection, they added. 


Russia joins China to fight 
sanctions against N Korea 


By Our Foreign Staff 

A US proposal to impose phased 
sanctions against North Korea in 
an effort to persuade it to allow 
international inspection of its 
nuclear foryfljtipg ran into trouble 
yesterday when Russia joined 
far™ to objecting to the move. 

However, tension an the Kor- 
ean peninsula eased slightly 
when former US president Jimmy 
Garter, visiting Pyongyang In an 
attempt to find a solution to the 
crisis, said North Korea had 
agreed to allow inspectors from 
the International Atomic Energy 
Agency to remain at its nuclear 

Installation. 

Last week North Korea said it 
was withdrawing from the 
agency, which suspects the north 
of using its reactor to supply 


‘Powderkeg’ could cause 

fourth conflict Page 6 

Etfitorial Comment — Page 17 


a secret weapons programme. 

The resistance to sanctions 
expressed by Moscow and Bei- 
jing. both among the five perma- 
nent members of the United 
Nations Security Council, threat- 
ens to dilute attempts to increase 
pressure on Pyongyang. How- 
ever, neither country said it 
would veto the sanctions plans 
outlined by Ms Madeleine 
Albright. US ambassador to the 
UN. 

China, a traditional ally of 
North Korea, had long signalled 
its wariness of sanctions. Mr 


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Wadd Thu# Nans. 

UKNaws 

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CONTENTS 



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M. Companies — 

—2034 

— 25 


Shun Guofang, foreign ministry 
spokesman, said in Beijing: 
“China in principle does not sub- 
scribe to the involvement of the 
Security Council In the nuclear 
issue on the Korean Peninsula or 
the resort to sanctions to solve 
it" 

Mr Andrei Kozyrev, the Rus- 
sian foreign minister, caused con- 
sternation when be made clear 
his lack of sympathy for the US 
move because Washington had, 
he alleged, failed to consult Rus- 
sia in drafting the proposal. 

He mid: “I think tabling the 
draft unilaterally will seriously 
complicate for Russia consider- 
ation of the document to any 
case we wfll not support a set of 
sanctions worked out without 

Continued on Page 18 


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Shfc* WonnaUor . — 3233 
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London SE 31 

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STSt r,*JAMn A T -niVfES LBVgrKD 1994 No 32,395 Week No 24 LOUDON • PARIS • FRANKFURT ■ MEW YORK ■ TOKYO 


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VACHERON CONSTANTIN 

Geneva, since 1755 



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NEWS: EUROPE 


Company’s currency option contracts worth DM10bn-DM14bn 

Balsam derivatives deals revealed 


By David Wafer in Frankfurt 

Balsam. the German 
sports-flooring manufacturer 
which has filed for protection 
from creditors following the 
arrest of its entire board on 
fraud charges last week, has 
altered into currency options 
contracts worth DMlObn- 

DMl4bn ($6bn-$8.4bn). it 
emerged yesterday. 

The sheer scale of transac- 
tions dwarfs Balsam’s modest 
turnover of DM460m, highlight- 
ing the risks associated with 
trading in derivatives at a time 
of bitwise international debate 
over bow such instru- 

ments should be regulated. 

Swaps, options and other 
more complicated products are 
known as derivatives because 
their value is “derived" from 


more conventional assets. 

Bankers insisted yesterday 
that the losses they meed as a 
result of “open positions” with 
Balsam were limited to a maxi* 
mum of DM400m, a fraction of 
the gross value. But tins comas 
on top of the DMLSObn banks 
stand to lose as a result of the 
collapse of Balsam and of Pro- 
cedo, Germany's largest factor- 
ing company, which has 
emerged as the biggest victim 
of the alleged fraud. 

The revelations raise the 
question of whether bankers 
should have become suspicious 
about the volume of deriva- 
tives business long before the 
company filed for protection. 

"Banks have been remiss in 
assessing the relationship 
between the volume of deriva- 
tives business undertaken 


the real needs of a relatively 
small company,” commented a 
banker at the Frankfurt arm of 
a US institution yesterday. 
“They should have put a stop 
to it earlier on." 

Separately, Citicorp, the larg- 
est foreign bank in Germany, 
confirmed yesterday that it 
stopped conducting options 
business with Balsam in the 
final three months of last year 
because the company “no lon- 
ger fitted our customer pro- 
file”. 

The case draws parallels 
with problems at MetaEgeseEs- 
ctaaft one of Germany’s largest 
companies which came to the 
brink of bankruptcy earlier 
this year after running up 
$L4bn (£933m) of losses in the 
oil derivatives business. 

But bankers painted out yes- 


terday that, unlike MetaUge- 
sellschaft, Balsam was in gen- 
eral successful in its trading in 
d eri v a t i ves - the state prosecu- 
tor in Bielefeld said last week 
that the profits from this area 
of business had for several 
years disguised losses in the 
company's mainstream sports- 
flooring activities. 

The directors of Balsam are 
accused of forging documenta- 
tion to support applications for 
factoring agreements with Pro- 
cedo, under which Precede 
would advance cash to Balaam 
and assume responsibility for 
collecting the outstanding 
receivables. 

The cash advanced by Pre- 
cede to Balsam was used to 
finance the latter’s currency 
options business. It is also 
alleged that the value of the 


Rocard seeks to steal a march 
on his would-be challengers 


receivables was fraudulently 
inflated. 

“The c ay illustrates how lit- 
tle transparency there is in the 
case of over-the counter deriva- 
tive products [products tai- 
lor-made for individual corpo- 
rate clients],” said Mr Adolf 
Rosenstock, chief economist at 
the Industrial Bank of Japan In 
Frankfurt "It is a jungle out 
there." 

■Hie Bundesbank, which is be 
watching the development of 
the d e r i v a tives markets in Ger- 
many with a critical, eye, 
refused to comment on the 
case yesterday. But Balsam's 
experience is likely to add 
weight to rails from the Bund- 
esbank for a new listing of the 
risk faring hanke which rntor 
derivatives agreements with 
corporate customers. 





By David Buchan in Paris 

Out of the depths of his 
Euro-election misery, Mr 
Michel Rocard has played a 
bold card. 

He has asked the French 
Social ist party's national coun- 
cD far a vote of confidence on 
Sunday, just when his leader- 
ship is under great criticism 
for gaining the party only 145 
per cent of the Euro-vote but 
before any serious rival can 
mobilise Him. Only Mr 

Jack Lang, former education 
and culture minister, has 
expressed open interest in 
wresting the party's leader- 
ship and presidential candi- 
dacy from him. 

But Iris continued leadership 
now rests more on sufferance 
teon niiindMm. According to 
a party official cited by Libera- 
tion newspaper yesterday, Mr 
Rocard’s likely rale is to con- 
tinue "as sexton of the ele- 
phants’ graveyard” to give 
way as hod leader to Mr Jac- 
ques Delors when the latter 


finally quits the European 
Commission in December. 

The Euro-election result con- 
founded predictions that the 
foil in the Socialist party’s for- 
tunes bad finally bottomed out 
with its respectable 22 per 
cent share of the local govern- 
ment election vote in March. It 
was clear that the propor- 
tional system used for Euro- 
elections would not favour a 
so-called mainstream party 
like the Socialists; but the gov- 
erning conservative coalition 
was hurt by dissident rival 
lists in exactly the same way. 

However, traditional in- 
fighting between the Socialist 
party's dans to get on the list 
of Euro-candidates was com- 
pounded by the number of ex- 
deputies seeking employment 
after losing their national 
seats in 1993 and by the deci- 
sion to 6U half the slots with 
women. After this squabbling 
start, tiie campaign got no bet- 
ter, with Mr Rocard seeming 
to pay more court to the Paris 
intellectuals who ran on an 


"arms for Bosnia” platform 
than to youth and workers 
whose support was scooped up 
by Mr Barnard Tapie. 

The latter’s power base is 
Knilt on the Mouvement des 
Badicaux de Gauche (MRG), 
which has traditionally fol- 
lowed the Socialists almost 
blindly. Bat buoyed by their 
12 per cent in the Euro-poll 
and 13 seats in Strasbourg; the 
MRG threatens to be less obe- 
dient than in the past, whOe 
negotiations with it are made 
problematic for the Socialists 
by all the business controver- 
sies surrounding Mr Tapie. 

Casting, as ever, a shadow 
over Mr Rocard is the enig- 
matic President Francois Mit- 
terrand. The latter has denied 
any conspiracy to nndermine 
Mr Rocard by promoting Mr 
Mr Tapie. But, during the cam- 
paign, he praised the "dyna- 
mism” of Mr Tapie, briefly 
urban affairs miniictgr q (me 
of his gnv w iiingnte. And other 
close Mitterrand associates 
loudly criticised Mr Rocard for 


his policy shifts on Bosnia. 

ATT tirie comes a gaimy f the 

background of the long and 
well-docnmented antipathy 
between Mr Mitterrand and 
Mr Rocard. They have sepa- 
rate political roots - Mr Roo- 
ard once led the separate Parti 
Socialist Unifid party that the 
Socialist party absorbed in 
1974 - and different ideologi- 
cal leanings. Mr Rocard 
earned Mr Mitterrand's ire for 
criticising as "archaic” the lat- 
ter’s joint programme with the 
Communists and, then later, 
the extent of his natioiwlisa- 
tions, though the president 
eventually gave him three 
years as prime minis ter . 

Whenever it really mattered, 
however, Mr Rocard was loyal 
to Mr Mitterrand. Indeed It Is 
tee example of the president’s 
achievement in pulling him- 
self up from poor poll stand- 
ings to win the Elysdein 1981 
that still gives Mr Rocard 
some hope for 1995. The differ- 
ence is that this time the loy- 
alty may not be reciprocated. 



g JIS FIEB. jP: 


Mr Michel Rocard; rallpd on 
his Socialist party for a vote 
of confidence 


Brussels shelves pension deregulation 


By Emma Tucker 
in Uneinboiis 

The European Commission 
yesterday shelved ambitions 
proposals to deregulate the 
management of pension foods 
after member states could not 
agree on how for national gov- 
ernments should be allowed to 
dictate the terms of invest- 
ment 

EU members could now face 
Brussels sanctions if domestic 
rules gove r n ing pension funds 
are found to break treaty rules 
on free movement of capital 
and services. 

The decision to withdraw the 
proposal was taken at a meet- 
ing of EU ministers in Luxem- 
bourg. The directive bad aimed 


A European Commission proposal to crack 
down on the sale of counterfeit goods from 
non-EU countries was approved by ministers 
in Luxembourg yesterday. It will increase 
the power of customs authorities to stop Sake 
goods entering the EU, writes Emma Tucker. 

Under customs procedures introduced in 
the Union four years ago, a trademark owner 
can obtain a temporary “freeze” on the import 
of a consignment of counterfeit goods and 
can then take legal action. The new proposal 


wiD allow customs authorities themselves 
to decide whether an application from a 
trademark holder is valid. It also extends 
the scope of the legislation to cover pirated 
goods and design rights. The proposal should 
came into effect cm July 1 next year, provided 
it is approved by the European parliament 
According to the Commission, trade in fake 
goods has risen sharply in the past few years 
and could account for 5 per cent of total world 
trade. 


to allow the free flow of pen- 
sion fUnd investment across 
the European Union, together 
with freedom of operation for 
pension fund managers. 

Mr Raniero Vanni d'Archir- 
afl, single market commis- 
sioner, said there was no point 
pursuing a directive that nei- 


ther satisfied the Commission 
nor commanded the support of 
a qualified majority of states. 

The three-year deadlock 
stems from fears that the Com- 
mission proposal is too liberaL 
Most EU countries argued that 
they should be able to insist 
that a large part of a fund's 


assets be invested in local cur- 
rency - the so called currency 
matching rules. 

Only Britain, Ireland and the 
Netherlands - which impose 
few restrictions on their pen- 
sion funds and consequently 
dominate the overseas invest- 
ment market — ha dead ftp plan 


DEVELOPMENT 

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A 2 1 ST CENTURY CITY 

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WORLD'S BEST PRACTICE 


A commercial partnership is now 
sought with an innovative and visionary 

development consortium to ““ 

the first stage of a woi 
leading urban development. 

As a model of world's best 


will balance innovative, economic and social 
development. In co-operation with the 
' : sector, Australia’s MFP is 
important strategic initiative 
of the Australian and South 


Australian Governments. 


to opai up the European mar- 
ket, currently valued at 
EcuLOOObn (£770bn). 

Opponents said they wanted 
a directive that would only 
allow .20 per cent of a pension 
fund’s assets to be invested in 
foreign currencies. The Com- 
mission insisted on a maxi- 
mum threshold of 40 per cent, 
supported somewhat reluc- 
tantly by the British, Dutch 
and Irish. 

Earlier, Mr d’Archirafi 
for renewed efforts to get Euro- 
pean le g islation on to statute 
books. He produced detailed 
tables of areas with the most 
glaring holes, declaring Brus- 
sels was "on the warpath”. 

A proposal aimed at giving 
the Commission a clearer i d e s 
of how often countries blocked 
goods on sale in another mem- 
ber state, cm the grounds that 
they did not meet national 
standards, made little head- 
way. The French and Germans 
signed that the proposed sys- 
tem - requesting authorities to 
notify the Commission when- 
ever they rejected goods or ser- 
vices - would be ineffective. 

But Mr NeO Hamilton, UK 
minister for corporate affairs, 
said: “The Commission needs a 
crowbar to prise open markets 
from which our goods are 
excluded on spurious grounds 
of safety, quality and so on. 
Too often, small businesses 
Just give up the unequal strug- 
gle as complaints procedures 
are too legalistic, bureaucratic 
and time consuming.” 

Ministers agreed to reexam- 
ine the scope of the proposal. 
The Commission hopes it will 
be adopted at the next Internal 

market council meeting in 
October. 


Faster 

French 

growth 

forecast 

By John Rkkfing in Paris 

French economic growth 
should accelerate in the second 
quarter of this year and 
long-term interest rates, which, 
have risen sharply over recent 
weeks, should stabilise, Mr 
Edmond Alpband&y. the econ- 
omy minister, said yesterday. 

E0s remarks coincided with a 
further easing in France’s key 
short-term intervention rate, 
which the central bank 
reduced by one tenth of a per- 
centage point to &2 per cent 
The reduction is in fine with 
the bank’s strategy of gradu- 
ally eaginp monetary policy to 
support economic recovery. 

Further evidence of an 
upturn was provided by a rise 
in gross domestic product 
hxsee, the national statistics 
institute, reported that GDP 
grew by 05 per cent in the first 
quarter of 1994, compared with 
tee last three months of 1993. 

The Economy Ministry said 
that the first quarter growth, 
which followed a flat final 
quarter last year, showed the 
recovery from recession was 
firmly under way. 

“We expect economic growth 
to continue to strengthen,” 

sylri OBe tvnmtmV nffirial, cit- 
ing surveys of business senti- 
ment among industrialists. 

According to Insee, the GDP 
rise was achieved despite a 

rtaoHnp in wiwr gy consumption, 
due to mild weather, which is 
expected to reverse in the sec- 
ond quarter. Growth was sup- 
ported, however, by specific 
stimulatory measures, such as 
those aimed at reviving the car 
market 

Private economists agreed 
that tee French economy has 
moved into a recovery phase, 
but expressed caution about 
the rate of growth. "Mr 
Alphandfiry’s projection of an 
acceleration from 0.5 per cent 
in the first quarter may be a 
bit optimistic,” said Mr Jean- 
FrancoLs Merrier, economist at 
Salomon Bros in T/ntim 

The first-quarter figures, he 
said, were boosted by a sharp 
reduction in stocks, which 
declined by FFr5.4bn in the 
period, but there was still little 
evidence of a substantial 
pick-up in investment 

Some economist also 
expressed caution about the 
rise in long-term interest rates, 
which have climbed to about 7 
per cent from some 5 per cent 
at the beginning of the year. 

Mr Alphandfery played down 
tee risks to economic growth, 
however, saying that inflation 
remained under control and 
that interest rates would stabi- 
lise. 

"I am optimistic”, be said, 1 
think these movements [in 
long term interest rates] will 
automatically eahn down." 


FINANCIAL times FRIDAY JUNE *7 lgg4 




Kohl cautious 
in welcome 
for Berlusconi 


By Quentin Peel in Bom 

Chancellor Helmut Kohl 
yesterday gave Mr Silvio Ber- 
lusconi, Italy’s prime minister, 
a cautious initial welcome to 
the inner circle of European 
heads of government 

On the Italian’s first official 
foreign visit since emerging 
victorious from national and 
European elections, Mr Berlus- 
coni was accorded foil military 
honours, and promises of con- 
tinuing dose co-operation. 

But he apparently foiled to 
persuade the chancellor to 
back bis conservative Forza 
Italia movement in a move to 
join the European People's 
party - the Christian Demo- 
crat group - in the new Euro- 
pean parliament. Instead, he 
la nd his party would form its 
own independent movement 
for the time being. 

On the other hand, there was 
no word of criticism about the 
presence of members of the 
neo-fascist Italian Social Move- 
ment (MSI) in Mr Berlusconi’s 
government, and Mr Kohl was 
anxious to express his desire 
for continuity in their close 
relations. 

The two men discussed both 
tee forthcoming summit erf the 
European Union on Corfu, and 
the Group of Seven world eco- 
nomic summit in Naples. 

They foiled to agree on a 
flnmwi«n candidate to be the 
next president of the European 


Commission, the Italian prina. 
minister indicated later. 

The official visit gave Mr 
Berlusconi his first big oppor- 
tunity to launch a public rela- 
tions defence of Us new gov- 
ernment before an inter- 
national audience, and he' 
roundly denounced any sugges- 
tion that "fascists” were mem- 
bers of it. “I cannot allow toy. 
one to make a sta t e ment ao for 
removed from the truth,” he 
said. There was "absolutely 
nothing undemocratic" about 
any of his minister*. 

Yet it is the presence of 
those MSI members of the 
National Alliance in' the gov- 
ernment which has dearly 
caused concern in Mr Kohl's 
Christian Democratic Unto, as 
well as the opposition Social 
Democratic party. 

The chancellor insists teat 
the question of Form Italia 
joining the Christian Demo- 
crats in the European parti* 
meat does not arise, because 
they have not applied to do sa 
There is little secret, howe v er , 
that a majority ct the party; 
would like to. although * 
minority favours the alterna- 
tive liberal group. 

In a joint statement issued 
after the talks, the two leaders 
pledged their determination to 
continue the “traditional dose 
co-operation" between their 
governments, and in particular 
"intensively” daring the cas- 
ing German EU presidency, - 


East ‘needs farm 
price stability’ 


By navkf Gardner in Brussels 

The European Union urgently 
needs to set np a system to 
help support stable farm 
prices In east and central 
Europe, and lay the founda- 
tions of an agricultural policy 
that will enable these post- 
Commnnist democracies to 
join toe EU. 

This is the main candusion 
of an independent report 
released yesterday, commis- 
sioned by Brussels from Mr 
Henri Nallet, a former French 
agriculture minister, and Mr 
Adrian van Stalk, a Dutch 
authority on trade and agricul- 
ture. 

Papers from a dosed semi- 
nar on eastern Europe, which 
the Commission held in 
March, highlight the 30 per 
cent drop in farm output 
between 1988 and 1992 in Hun- 
gary, Poland, the Czech and 
Slovak republics, Bulgaria and 
Romania. 


"The risk is teat agrtct&tmt 
will quickly become tee cen- 
tral point of friction with our 
eastern partners,” according 
to the paper presented by Mr; 
Rent Stelchen, EU agriculture 
commissioner. "By one means 
or another,” be says, "a mech- 
anism has to be found to sus- 
tain certain primary products 
at near world price levels." . 

The Nallet/van Stalk report 
warns that the fall in east 
European output, because of 
foiling prices leading to lack 
of investment and access to 
credit, is too dangerous to 
ignore. 

The report calls for modest 
price supports to buttress pro* 
dnetion and eliminate the 
huge swings in food prices 
caused by speculators. It pro- 
poses an Ecu62 ($71.92) price 
support for wheat - from 
which other support prices 
would be derived - against tee 
EcniOO per tonne price the EU 
expects to reach in 1998. 


Kravchuk turns to old 
guard in election race 



By JB Barshay in Kiev 

President Leonid Kravchuk of 
Ukraine yesterday won pariia- 
mentary approval for a stal- 
wart of the former communist 
Site to become (rime minister, 
in what appeared to be an 
effort to draw support from lef- 
tist and eastern voters for Ms 
re-election bid later this 

mo nth 

The appointment of Mr 
Vitaly Masol, who advocates a 
state-controlled economy and 
closer ties with Russia, was 
backed by 199 of toe 335 depu- 
ties, with 24 opposing him. 
Many market reformers and 
nationalists abstained from 
participating in “the lurch 
back to the co mmunis t sys- 
tem”, as one put it 
Mr Masol sored as prime 
minister of Soviet Ukraine 
from 1987 to 1990. He was 


forced oat of office in protests 
that delivered tee first blow to 
the Communist party’s abso- 
lute rale in Ukraine. 

It is unclear what Mr Masol, 
as a powerful prime minister, 
would bring Ukraine. In his bid 
for parliamentary approval he 
astonished delegates by saying 
Ukraine "is a state with mar- 
ket reforms" and that “we can- 
not act by traditional meth- 
ods”. 

Last month he urged the res- 
toration of strict state controls 
and condemned Ukr aine lead- 
ership for “liberalising 
prices . . . exiting the rouble 
zone . . . [and] cutting credits to 
industry”. 

Mr Masol’s return to the pre- 
miership reflects Mr Krav- 
chuk’s vulnerability in the 
p res i d en ti al vote on June 26, 
where he is trailing Mr Leonid 
Kuchma, an industrialist who 


‘Play along’ with money 
laundering, OECD says 


Banks should "play along” 
with money-launderers, in 
co-operation with police, to 
maximise the chances of catch- 
ing them and seizing their 
assets, officials of the Organi- 
sation for Economic Coopera- 
tion and Development said yes- 
terday. 

The officials were comment- 
ing on the latest annual report 
by the OECD's Financial 
Action Task Force on money 
laundering. This is the practice 
of le gitimisin g fll-gotten gafaa 
from drug-trafficking and other 
forms of crime by investing 
them in legitimate assets or 
businesses, and concealing the 
money’s origin by shifting it 


through several institutions. 

The FATF’s chairman, Mr 
John Gieve, a senior UK Trear 
silty official, said some prog- 
ress had been made in the past 
year in the fight against mon- 
ey-laundering. 

A key recommendation of 
the task force is that banks 
report suspicions, either to the 
police or to specialist bodies in 
some c&untries, such as the 
Tracfln unit In the French 
Finance Ministry. 

"We obviously can't force a 
financial institution to accept a 
transaction that involves sus- 
pect money,” said an official of 
the FATF. "But law enforce- 
ment authorities now realise 
the benefits of letting monsy- 
launderers deposit their money 


and tracking them and it 

“The problem with turning 
the money away is that this 
alerts the money-launderers 
that they have been detected, 
and they are capable of learn- 
ing from their mistakes.” 

At a separate conference 
organised yesterday by the 
Paris Criminology Institute, Mr 
Andrf Levy-Lang, president of 
the Paribas investment hank 
said his bank had co-operated 
with Tracfln “in several cases". 

"When we alert Tracfin, they 
sometimes tell us to accept the 
money and then help us run 
the case ” Mr Levy-Lang said. 
Banque Nationale de Paris said 
that it had recently cooperated 
with authorities on “sting" 
operations. 


is popular in the Russian-ori» - 
ented eastern Ukraine. 

Mr Kravchuk raw hawk on 
votes from western Ukraine, 
where a strong body of nation- 
alists back him. Uk rainian 
nationalists fought a gainst Mr 
Kravchuk in the 1991 election 
but now see Mr Kuchma’s pro- 
Russlan position as a threat to 
independence. 

The president’s position in 
the west was also helped by 
the signing of an accord with 
the European Union on Tubs-. 
day. 

However, Mr Kravchuk is 
fesperately seeking support hi 
the more densely populated - 
east, where the mood is 
increasingly pro-Russian ami 
pro-communist 

On Monday he adopted the 
eastern call to mpfc e Russian 
an official language along with 
Ukrainian. 


THE FINANCIAL TIMES 
nUabcd by TV Fmxadil Ton fEanm] 
GabH, Nftduoaeapbtz J, «01S riuUWrt 
am Mam, Oenoany. Tckpfaooc t+49 0 LM 

MO, Fix 4+49 $ SwUSTltia 416111 

RgraeomJ n Ftmkfert by J. Walter Bari. 
Wfoctai J. Brfcjd. CoHn A. Kama* » 
ud hi Ixadoa by DwM 
CM. M nd A1 m G Mite. Printer: DVM 
Dreek-yewmb and Mariettas OnifeH. 




FINANCIAL TIMES FRIDAY JUNE 17 1994 


NEWS: EUROPE 


3 


EUROPEAN NEWS DIGEST 


Russian banks 
urge restraint 

Russia’s bigge st banking lobby yesterday appoalH to western 
bante to refrain in their "own interests” from to enter 
the Russian marke t. In an open letter to the international 
banking community, the Association of Riparian uanire asked 
western banks for a self-imposed 18-month “moratorium” on 
ope ning Dew subsidiaries in Russia. It said this was necess ary 
to give domestic hanks more time to develop, as well as to 
pre-empt a possible political backlash, against economic 
reforms. 

The association, whose opinions are not shared by all Rus- 
sian bankers, was responding to President Boris Yeltsin’s 
decree last Friday which lifted a retroactive haw on deposit 
taking from Russian customers by western hank^ which >»»d 
already obtained full Russian b anking licences. The decree 
also said that in future the Russian central bank would only 
give licences to banks from countries which gave equal treat- 
ment to Russian banks seeking to open offices and subsid- 
iaries abroad. 

But Citibank and Chase Manhattan of the US, and Turkey’s 
Yapi ve Kredi and Ttraat both of which, plan joint ventures 
with Russian banks, will still be by the earlier ban 

This is because the decree only lifted the ban for frgnks from 
countries with bilateral treaties encouraging investment b~**c 
with Russia, and the US and Turkish treaties have yet to be 
ratified by the Russian parliament The restrictions - confin- 
ing western hanking subsidiaries to an “offshore” status - 
were imposed in response to protectionist pressure from Rus- 
sian banks. Leyla Boulton, Moscow 

Bundestag scraps pricing curb 

Germany's Bundestag, or lower house of parliament, yesterday 
sought to introduce more c om pet i t i on by scrapping a 1933 law 
preventing retailers from reducing prices by more than 3 per 
cent outside the summer and winter sales. But its efforts are 
likely to be defeated when the draft law goes to the Bundesrat, 
or upper house. Attempts to retain the law, passionately 
defended by small retailers on the grounds that they would be 
forced out of business, and even by some large chains because 
it would mean increased competition, were defeated by 314 to 
262. with 26 abstentions. 

In theory retailers can now set their own reductions; which 
might mean that the German co n s u mer will be given a choice 
on prices outside sale periods. But in practice, yesterday's vote 
was a pyrrhic victory for Mr GOnter Rexrodt, the economics 
minister, who spearheaded the campaign, for a reform of the 
law. as the Social Democrat-dominated Bundesrat is Ukely to 
reject it Judy Dempsey, Berlin 

Moscow warned of ‘turmoil’ 

Senior Russian and western economists yesterday warned of 
eennnmic and political turmoil in Russia later this year as the 
country's m onetar y and credit policies became “unsustaina- 
ble”. A conference at the Stockholm Institute of East Euro- 
pean Economic s produced a sobering agr eement that fragile 
improvements in Russian finances, which have seen a 
monthly inflation rate of &8 per cent in May. are now in 
danger. Lack of real institutional reform and pressing 
Hwnanrk from military, industrial and agricultural lobbies 


threaten to bring back high inflatio n and with it a nationalist 
resurgence. Figures produced for the conference on the bud- 
get, which is under discussion in the Russian parliament, 
show that tax income for the first quarter of the present year 
is below the target level by more than 10 per cent of gross 
national product, while expenditure has also been slashed by a 
similar figure. This has meant deep cuts in programmes mid 
long delays in wage payments, contributing to increasing 
unrest in the military. John Lloyd, Stockholm 

Turkey shifts sell-off stance 

Economic turbulence has forced Turkey to shift its privatisa- 
tion efforts from international share offers to direct equity 
sales to industry, according to a senior government official . 
Economic uncertainty - with a halving in the lira's value 
against the US dollar since the start of the year - would make 
it difficult to attract institutional buyers. Mr Tezcan. Yara- 
manci, chairman of the privatisation administration, said. But 
he predicted the government would return to the market once 
the current IMF programme took effect Mr Yaramanci con- 
firmed bids would be invited next week for a 51 per cent stake 
in the Brdemir steel company. He added that buyers would be 
sought for strategic stakes in Petrol Ofisi, the oil products 
retail concern, Tupras, the oil refinery company, and for a 
minority share in Turk Hava YoDari, the national airline. John 
Murray Broum. Ankara 

Scuffles mar Romanian protest 

Romanian government offices remained under guard last 
night alter scuffles earlier in the day between anti-government 
protesters and riot police. Witnesses said several hundred riot 
police attempted to remove about 1,000 protesters from the 
central Victory Square, where trade unions have been staging 
a peaceful sit-in over low pay and slow reform. Tension had 
increased because there were at times more troops tha n dem- 
onstrators. the Alfa Cartel trade union, organisers of the rally, 
said. Alfa, which represents more than lxn mainly industrial 
workers, said police had also blocked roads into Bucharest to 
prevent supporters from other parts of the country joining the 
protest The government which last night resumed talks with 
nninn leaders, said the demonstrators had illegally blocked the 
square and their actions were destabilising. Virginia Marsh, 
Bucharest 

Talks on Bosnia map 

Negotiators from the US, Russia, Britain, France and Germany 
conferred in London yesterday in a fresh effort to draw up a 
map that would divide Bosnia among the warring parties. A 
plan to give 49 per cent of Bosnia to the Serbs and 51 pm - cent 
to the new Croat-Moslem confederation is resent ed by both 
sides. However, diplomats said that if the current m e diation 
effort bore fruit, the plan would be presented to the parties on 
a take-it-or-leave-it basis. Mr Alain JuppA French foreign 
minis ter, said in Istanbul last Friday that he hoped a Bosnian 
map would be ready within 10 days. Foreign &afi 

ECONOMIC WATCH 


Dutch unemployment falls 


lethertands 

JoemptoymentflfflO) 


Unemployment in the 
Netherlands fell to an average 

483.000 people in March-May, 
the second successive decline 
since the jobless total peaked 
at 5204)00 in Jannary-March. 
The central statistical office 
said the figures indicated the 
rise in joblessness had stabi- 
lised or been reversed. 
Although the number of reg- 
istered unemployed rose by 

96.000 in March-May from a 
year ago, this is still a slow- 
down compared with year-on- 
jrear figures published so far 
in 1994. The latest figures are 

1BB2 es » • unadjusted for seasonal fac- 
jurce:fTGraphto tors but, even so. the drop 

as steeper than would normally be expected. Ronald van de 

unemployed in Poland Mi in May for the 
tird consecutive month - by 47JL00 to 2JM p eople Q M5-5 per 
ot of the country’s workforce. Christopher Bobmski, Warsaw 
The Danish National Bank has cut its swages repurchase 
ite to 5.60 per cent from 5.70 per cent, effective from July 1. 




spirits test new union supremo 


Germany’s trade union federation badly needs a confidence boost, writes David Goodhart 


M r Dieter Schulte, the 
steel industry union 
boss who has just 
been elected to lead the Ger- 
man Trade Union Federation 
(DGB). inherits an organisation 
badly in need of a boost to its 
confidence. 

On tite face of it this seems 
odd. At its congress this week 
in Berlin the entire political 
Bs taWikiinuTit, Chan- 

cellor Helmut Kohl, came to 
pay homage to the principle of 
social partnership and the 
important role of organised 
labour in national political life. 

Just how integrated it is into 
that political life was evident 
on Wednesday wight- in one 
hall Mr Rudolf Sharping, 
leader cf the Social Democrats, 
gave an address to the major- 
ity of delegates, while else- 
where a group of Christian 
Democratic trade unionists 
was addressed by several min- 
isters from Bonn. Even the 
Greens threw a little party. 

But the DGB is not only a 
political force. Its 16 industry- 
based unions still have more 
than torn members, represent- 
ing a higher proportion of the 
work for ce than in almost any 
other large industrial country. 
And only a few months ago the 
unions were being widely 
praised for their restraint in 
this year’s pay round. 

So why does the 54-year-old 


Mr Schulte inherit such an 
anxious organisation? German 
unions are still central to the 
political and industrial life of 
the cr m i r t r y - as this year’s 
wage round underlined - but 
they fear they are beginning to 
lose their critical mass. 

Membership, although still 
high, hag faTten by 1.5m over 
the past two years. That is 
mainly because of job losses, 
especially in east Germany, 
but the unions are not recndb 
fog many new members to the 
growing service sector and 
remain unattractive to women 
and young people. 

The trends have co nt rib ute d 
to the rapid dariinp of unions 
elsewhere in Europe and Mr 
Schulte and his colleagues 
know that unless they take 
action it could be them next In 
his address to the cro i gre s* he 
talked of the dangers of becom- 
ing “dinosaurs” «wd of the 
to “abandon dreams of a 
lost utopia”. 

Mr Ulf Fink, a Christian 
Democrat DGB official, even 
warned congress of the French 
example, where union member- 
ship has fallen to 8 per rmt of 
the workforce. 

After his speech Mr Schulte 
said the “French option” would 
be avoided in Germany and 
added that there were some 
special factors behind the 
recent decTim» in iminn stand- 



tog. ‘including the disappoint- 
ment that many erf our new 
members in east Germany felt 
when we could not prevent 
their jobs being lost”. 

The other key challenge to 
the unions is the growing 
interest of the government in 
labour market deregulation as 
an aid to creating more jobs, 
and the emergence of a two- 
tier labour market with an 


increasingly large group of 
workers not covered by cen- 
tralised collective bargaining. 

The unions are happy to 
accept some aspects of the new 
flexibility. They are keen to 
reduce non-wage labour costs 
and are not opposed to an 
expansion in part-time work, 
although they do want to 
improve the social protection 
of part-timers. 


Mr Schulte stressed the 
unions' favoured means of job- 
creation: reducing working 
time, with some corresponding 
reduction in pay without 
undermining existing hourly 
pay rates. “Ten years ago it 
would have been unthinkable 
to talk in this way", he said. 
That may be true, but so far 
only a handful of companies 
have followed the lead of 


Volkswagen, the car group, in 
cutting hours and pay to create 
or retain jobs. 

The more insidious threat to 
the unions' centralised collec- 
tive agreements comes from 
the growing number of compa- 
nies leaving the industry asso- 
ciations which enforce them, 
or are drawing up special deals 
with their own company works 
councils to undermine the 
national unions. 

Mrs Ursula Engelen-Kefer. 
Mr Schulte's deputy, says the 
flight from collective agree- 
ments seems to have been 
stopped by the moderate wage 
deal earlier this year. But Mr 
Charly SchObel. an official of 
the engineering union I G Met- 
all in Schweinfurt, says an 
increasing number of small 
metal industry companies in 
his area are paying skilled 
workers only DM8 or DM9 
(£3.60) an hour - about half the 
national rate. 

Given the continuing solidity 
of most German labour market 
regulations it is tempting to 
ask whether the decline of the 
unions will make much differ- 
ence. 

“It would make a big differ- 
ence,” says Mrs Engelen-Kefer, 
“We are part of the political 
and social structure but our 
arguments are only listened to 
because of our strength on the 
ground”. 


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nxr a a i . TTTVIES FRIDAY JUNE 17 1994 



Land inequality ignites Brazil politics 

Left-wing Workers party hopes rural policy will help win it votes, writes Angus Foster 


T hree miles off the road 
to Caruaru, an agricul- 
tural town in Brazil's 
north-eastern state of Pernam- 
buco, is a settlement of rickety 
huts made of bamboo frames 
and black polythene bags. 
About 20 families have been 
living in the clearing for a 
year, wondering when their 
dream will come true. 

Although they have water, 
there is little food and the chil- 
dren lack basic health or edu- 
cation facilities. A band of 
patrolling gunmen, employed 
by the local landlord to intimi- 
date the families and deter visi- 
tors, keeps a nervous watch 

over the settlement 
The families are part of Bra- 
zil’s Moumunta Sem Term, or 
Movement of the Landless, 
which claims that- 5m Brazil- 
ians need land. It wants a 
far-reaching redistribution of 
land to the poor and uses occu- 
pations of private property, 
such as that under way near 
Caruaru. to pressure the gov- 
ernment to act “I just want a 
little piece of land as a means 
to work and to survive,” says 
Mrs Cicera Monteiro. 

The battle for land and rural 
reform has dannad more than 
500 lives in the last 10 years. 
This seems perverse in Brazil, 
one of the largest countries in 
the world, with areas of low 
population density. But it also 


has one of the most unequal 
land distributions In Tjttn 
America. Nearly 80 per cent of 
the land is owned by 10 per 
cent of the farmers. Among the 
poor, most have plots of less 

fhan 25 acres, snmgHmpa only 

enough for subsistence. 

This disparity continues to 
force people off the land, usu- 
ally through bankruptcy after 
bad harvests, and into the 
already overburdened cities. 

Rural reform is a key pledge 
which Mr IaUz InAdo Lula da 
Sflva, leader of the left-wing 
Workers party (PT). hopes will 
help win him the presidential 
election in October. 

Tawd inequality da**** from 
colonial days but has been 
compounded until recently by 
government assistance to 
large-scale farmers, such as tax 
breaks and infrastructure pro- 
jects. During the 25 years to 
1987, mainly under military 
governments, 25m acres of 
land were transferred- by 
sale or donation -to just 45 
companies. 

To redress this balance, Bra- 
zil’s 1988 constitution estab- 
lished rules tor the appropria- 
tion of land that was not being 
used productively. Kit some erf 
the legislation has still not 
been passed. Successive gov- 
ernment promises to accelerate 
Land transfer schemes have 
been frustrated by budget 



Two poverty-stricken Brazilians asleep on concrete steps 


problems, a slow bureaucracy 
and a judicial system which 
tends to back properly owners. 

In Pernambuco, where mat- 
ters are critical because of the 
decline in its sugar cane indus- 
try, about 90,000 acres have 
been transfered, enough to set- 
tle nearly 3,000 families- But 
Mr Jaime Amorim of the Sem 


Terra claims there are 35OD00 
families still needing land in 
the state smt ^ the* about 7.4m 
acres are required to settle 
them. 

The Sem Tara's claim that 
nationwide 5m people want 
land is impossible to verify, 
but probably exaggerated. 
Even if they have doubled 


their estimates for greater 
impact, this still suggests there 
are as many as rm rural fami- 
lies who need land, and a far- 
ther lm in the cities who 
would return to the fond if it 
became available. 

These are roughly the esti- 
mates with which the PT is 
working. The party believes a 
proper rural reform pro- 
gramme would take 25 years 
and would involve land reallo- 
cation as wen as education and 
reform of rural credit and 
insurance systems which dis- 
criminate against smaller 
farmers. 

"It also needs proper training 
and preparation of people too, 
otherwise they will fail and 
simply desert the land again,” 
says Mr Josd Graziano da 
Silva, a PT agricultural 
adviser. 

Such a programme would be 
expensive. It usually costs the 
equivalent of between $5,000 
(£3,300) and $9,000 to settle 
each family. The total reform 
bill could therefore exceed 
SiObn. more than the annual 
health budget The FT argues 
that urban jobs cost much 
more to generate, while 
migrants to the cities are 
forced to live in shims. 

Given the size and costs of 
rural reform, analysts question 
whether an incoming PT gov- 
ernment would be able to meet 


its likely target of settling 
between 350,000 and 400,000 
families in four years. The 
jiisra are also criticised as Ide- 
alistic. Brazil's rural popula- 
tion has fallen from 75 per rent 
to 25 per c*ait of the total since 
the second world war, 
reflecting the attraction of 
urban services as much as 
rural problems. 

The Sem Terra, which is 
closely linked to tire PT, Is also 
an electoral liability. Brazil’s 
mainly right-of-centre media 
say the movement's invasions 
are examples of left-wing radi- 
calism and contempt tor the 
law. 

For the poor victims of Bra- 
zil's economic mismanage- 
ment, rational arguments 
about the feasibility of the PTs 
pledges make little sense. In 
S3o Paulo state, a large occu- 
pation n**a r the town of Getu- 
Ttna was recently broken up by 
tine police under court order. 
The group, which earlier this 
year numbered some 2,300 fam- 
ilies, is camped alongside a 
road hoping the courts will 
rule in their favour. 

Francisco, a father of three, 
joined the group when no lon- 
ger able to pay rent on the 
family's room in the city of Sfio 
Paulo. “I hope the court 
decides soon, but we'll stay, 
whatever happens,” he said. 
“There's nothing else to do.” 


New currency , 
details start 
to take shape 


By Angus Foster fa SSoPaula 

Brazil’s financial authorities 
have started to finalise details 
for the July 1 introduction of 
the country’s new currency, 
the real, which is designed to 
terfrie chronic inflation. 

According to Finance Minis- 
try "fHHaig, the real will be 
secured by two “anchors”, 
designed to keep inflation out 
of the new currency, which 
will be backed by the country's 
foreign exchange reserves of 
about $40bn. First, the real will 
be l^iked at parity to the US 
dollar for an “indeterminate 
period”. Second, release of the 
currency will be partly tied to 
pre-set money supply targets. 

These anchors are designed 
to give the government slightly 
more policy flexibility than 
previous economic stabilisa- 
tion plans in the region, such 
as Argentina's. Argentina’s 
so-called convertibility plan 
tied the Argentine currency 
explicitly to parity with the 
dollar, flwd forbade the central 
har>k to issue local currency 
unless backed by dollar 
reserves. Changing the 
exchange rate requires legisla- 


tion. Brazil is more compli- 
cated. officials say. because it 
faces presidential elections 
later this year. 

The present administration 
is trying to build into the plan ' 
policy alternatives for which- 
ever of the two main candi- 
dates wins the elections, Bra- 
zil’s economy is also more 
reliant on industrial exports, 
which would soon become 
uncompetitive If the currency, 
became overvalued. 

According to private sector . 
analysts, the link with the US 
dollar is likely to be kept In 
place until the end of the year, .. 
If the current election front 
runner, the left-wing leader Mr 
Luis InAcio Lula da Silva, 
retains his lead in the opinion 
polls and worried investors 
start to take capital out of tee 
country, central h a nk offici a te 
say there are sufficient I 
reserves to spend $lbn a . 
month defending the currency 
for at least two years. 

Many details, including tee 
money supply targets them- 
selves, will be decided over the 
coming weeks. According to 
some estimates, the monetary 
base of about $3bn will treble. 


WORLD CUP 


America braced for the big kick-off 


Jurek Martin in Washington on how 
the hosts are preparing for the feast 





Sneakily, a bit like 
a sliding taritlw an a 
wet pitch, the 
World Cup of soccer 
is catching up on 
America. Scrub that metaphor, hi 
all Tiing cities where the first round 
of the tournament Is being played, 
the temperature this week has 
exceeded 90°F, often with humidify 
to match. 

So let us say that, sneakily, like a 
cold beer in Death Valley, soccer is 
.wiring to refresh America for the 
first time. Starting today in Soldier 
Field in Chicago and the Cotton 
Bowl in Dallas, 24 national teams 
will play 52 matches over a span of 
exactly one month, culminating on 
July 17 in the Rose Bowl in Los 
Angeles. 

An estimated 3.6m tickets mil be 
sold for those actually going to 
games, and the small ads offering 
them now run to several columns a 
day. The global television au dience 
may amount to a cumulative 30hn 
plus, with perhaps 2bn watching 
the final, rather more than the 135m 
who caught last year’s American 
football Super Bowl an the box. 

Every game will be televised in 
the US by either ABC, one oF the 
established networks, or ESPN, the 
sports channel, without commercial 
interruption while tee action flows 
on the field, but with half-time 
reserved more for the pitchmen 
thaw the players. 

It will be big business - not sur- 
prising given that the profit that 
organiser Peter Ueberroth made for 
the 1964 Los Angeles Olympics has 
served as such an example to Alan 
Rothenberg, chairman of the World 
Cup Organising Committee. 

Foreign visitors may spend more 
than $4bn of foreign currency; com- 
mercial sponsors are paying up to 
$20m each for the rights to use the 
World Cup logo in their marketing 
and promotion. The approved credit 
card is MasterCard, the candy 
Snickers, the film Fuji, the cereal 
Wheaties, and so on. 

So much for the prospective num- 
bers. So much, too, for global inter- 
est in the World Cup, which can be 
taken for granted. The big question, 
as yet unanswerable, is how the 
tournament plays in its host coun- 
try. where, according to one poll 
last week, two-thirds do not know 


that tee tournament is being played 
here at all (and that is an improve- 
ment on two months ago). 

There are objective circumstances 
working in soccer's favour. It is 
already entrenched in suburbia and 
among immigrant communities. 
When the US team played Mexico 
recently in Los Angeles, more than 
90,000 turned up, most cheering for 
the Mexicans; a recent appearance 
by tee Greek side drew over 50,000. 
The Italy- Ireland match tomorrow 
at Giants Stadium, just across the 
Hudson River, is already being por- 
trayed in terms of New Tack’s great 
old ethnic rivalry. 

Second, America is a naturally 
hospitable and carious country 
always on the look-out for some- 
thing new. Yon can get big audi- 
aices hoe for the Japanese tea cer- 
emony or beach volleyball The 
national presumption will be that 
soccer, understood to be the world’s 
most popular game, must have 
something to offer, only to be disa- 
bused if this year’s World Cup is as 
cynically played and tactically ster- 
ile as teat four years ago (sorry, 
Ireland). 

Third, the competing Amerteaw 
sports are approaching a mid-sum- 
mer lull. Ice hockey’s Stanley Cup 
was settled on Tuesday night, with 
the New York Rangers taking the 
championship for the first tim e 
since the 13th century. Basketball's 
season will come to an end within a 
week, with either Patrick Ewing's 
New York Knlcfts or Hakeem Olaju- 
won’s Houston Rockets on top. 

B aseball is in its mid-season 
passage, eternally fascinat- 
ing but not yet at a decisive 
stage. It may never reach -that 
stage, since its season is now 
threatened by yet another dispute 
between owners and players. Golf, 
in the shape of the US Open, will be 
over and done with this weekend. 
Exhibition football, American-style . 
does not start until August Soccer 
has tee sporting coast remarkably 
clear to strut its stuff 
Nor has the media been negligent 
in trying to explain to its readers 
and viewers what soccer is all 
about Every self-respecting news- 
paper and magazine has produced 
special sections stuffed with illus- 
trations about the game’s basics - 



Gobi Janes, the US team’s highly-regarded forward, signing autographs for young fans 


how to kick, head and trap a ball - 
its terminology and its rules. 

Profiles of teams and stars, all 
largely unfamiliar to Americans, 
have been extensive. It is now no 
mystery that Italy's Roberto Baggio 
sports a ponytail and that even in 
his dotage, Roger Mflla of Cameroon 
can still swivel his hips on scoring. 

The only soccer player even half- 
way towards a household word is, 
erf course, Pele of Brazil, and memo- 
ries have been dutifully jogged by 
film of his great goals (and of Gor- 
don Banks’s immortal save from 
him) in the 1970 World Cup. 

Not all the explanatory efforts 
have been accurate, but the effort 
has been conspicuous. Only lacking 
so far has been much interest on 
tee part of the heavyweight sport- 
ing columnists and TV and radio 
pundits. 

One who did chip in was George 
Vecsey in last Sunday's special 16- 
page section in The New York 
Times, and he had reservations. “I 
have come to the conclusion that 
this fervent nationalism is what 
makes Americans uncomfortable 


with soccer. Americans are not 
really put off by the business of not 
using the baud s or by the business 
of low scores . . but are by the 
business of language, the business 
of old national ties, the business of 
passion." 

G ood points, but debatable 
nonetheless. For example, 
this World Cup has a new 
Adidas ball with a glossy surface 
enabling it to travel farther and fas- 
ter. It would not have been intro- 
duced if fear of scoreless draws was 
not palpable, nor would referees 
have been instructed to interpret 
more leniently the offside rule. 

It is also hard to argue against 
the proposition that American inter- 
est win rise or fan according to the 
performance of the US team. The 
risk is that it becomes the first host 
country to fall at the first-round 
hurdle. The potential is that it is in 
a less tough group (Romania, Col- 
ombia and Switzerland). 

There is no doubt that Bora MRu- 
tinovic, the peripatetic Serbian-horn 
coach who has played in five coun- 


tries and manag ed in fOUT, is in the 
process of producing a better US 
side. It knocked off England 2-0 last 
summer, Mexico 1-0 just last month 
and only lost 4-3 to Germany in 
anntbar summer exhibition. 

But its record against other World 
Cup finalists is a modest two wins, 
two draws and seven defeats, and it 
hpc been handicapped by the diffi- 
culty of fielding its widely scattered 
best players together at one time. 

The US soccer stake extends 
beyond the World Cup itself. There 
are plans afoot for a new profes- 
sional league to replace the one 
effectively killed by Pele's retire- 
ment 15 years ago from the New 
York Cosmos. To succeed, it will 
need the participation of young 
American stars like Claudio Reyna 
and Alexi Lalas, who will otherwise 
be drawn inexorably to European 
competition. 

Ultimately, it is up to soccer to 
sell Its finest wares to America. For 
those from northern dimes, that 
will not be so easy in this scat of 
heat Worse, beer sales have been 
banned at stadiums after half-time. 


Germany seeks re-run of 
opening game victory 


Coach Berti Vogts wants W orld 
Cup champions Germany to start 
tiw way they did four years ago: 
with an eyecatching victory. In 

today’s opening game, Germany 

play Bolivia in Chicago. 

Unto 1990, tee Germans usually 
struggled in their opening World 
Cup matches, before asserting 
themselves. But four years ago 
in Italy they kicked-off with a 
fearinstflUng 4-1 win against 
Yugoslavia, and stayed unbeaten. 

“We want to gain that 
momentum in the opening game 
that wiH take us through the rest 
of the tournament,” said Vogts, 

A world television audience 
of about Ibn, pins a sen-out 
crowd of 83,117 at Soldier Field, 
will hope that new rules make 
the Gennany-Bolivia game 
exciting. In recent World Cups, 
the opening games were often 
dnll and cautious. 

Hoping to galvanise the 
tournament after a towest-ever 
average of 2^1 goals per game 
in 1990, Ufa, soccer’s governing 
body, decided that this time a 
victory in the first round - 
involving round-robin group play 
- would he worth three paints. 

Germany’s other Group C rivals 
are Spate and Saute Korea, who 
clash later tonight in Dallas. 

The Germans hope to become 
the first team to win four World 
Cups. 

Bolivia are making their first 
appearance in World Cup fin a l s 
since 1950. They are not 
well-regarded. However, Vogts 
is cautions: "It will be tough to 
score a goal against Bolivia. They 
have a good defence. They beat 
Brazil [and] they knocked out 
Uruguay, a great soccer nation.” 

Bolivia’s main doubt concerned 
star forward Marco Et ch ev er ry, 
who has not played a game since 
breaking his left leg. Coach 
Xavier Azkargorta says he wfil 
make a late decision on whether 
to field his most influential 
player. 

Injury doubt over 
Swedish defender 

Defender Jan Eriksson re-injured 
his right thigh in practice in 
mid-week, and could miss 
Sweden’s Ckoup B opener against 
Cameroon on Sunday. Eriksson, 


■ Today's gum 

GROUP C 

Oimny *» BqM 

Chicago. 1 4.00 P0t» BST) 

Spain va Sowh Koraa 
18M (0030 BST) 


a central defender, was Injured 
after a sprint when warming up 
for a workout, and was taken 
to hospital tor examination. 

Sweden's other Group B 
opponents are Russia and Brazil. 

Governor counts 
on his citizens 

Welcoming world soccer leaders 
to Chicago, the governor of 
Illinois, Jim Edgar, was not so 
much unimpressed with the 
World Cup as under-awed by his 
own authority. 

Speaking at tee opening session 
of the 49th congress of Fife, 
soccer’s governing body, Edgar 
welcomed the delegates on behalf 
of “the 11% people of Illinois." 

The state has about 11.5m 
residents. 

Odds-on for a 
betting record 

Even though England, Wales and 
Scotland failed to qualify, the 
World Cup finals may break all 
records for soccer betting in 
Britain. The Coral boohmaklng 
firm reckoned yesterday that 
betting on the month-long 
competition could top £30m. 

Ireland have been well 
supported - down from 50-1 to 
28-1 - and so have outsiders 
Nigeria, sliding from 150-1 to 33-1 
in recent days. 

Coral lists Brazil as 3-1 
favourites, followed by Germany 
(7-2), the Netherlands and Italy V 
(6-1), Colombia (9-1) and 
Argentina (10-1). 


Correction 

The Italy-lreland match is in New 
York tomorrow, June 18, and not 
in San Francisco on June 20, as 
stated in error in a fixtures list 
on page 19 of the FT guide. World 
Cup Football, which appears with 
some editions today. Giuseppe 
Signori plays for Italy, not Brazil 
as stated in one edition. 







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FINANCIAL, TIMES FRIDAY JUNE 17 1994 


NEWS; THE AMERICAS 


Sfc 




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liifne victory 

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counts 

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Changing the guard on Europe 

Jurek Martin and George Graham on a State Department shake-up 


F or a man who had been 
eased out his job only 24 
hours before, Stephen 
Oxman was, by local stan- 
dards, surprisingly devoid of 
rancour, only gently suggest- 
ing that some reports of his 
removal were “overplayed". 

Indeed he could easily have 
cancelled the interview, 
arranged before it was 
announced that he was to be 
replaced as US assistant secre- 
tary of state for European awH 
Canadian affairs by Mr Rich- 
ard Holbrooke, currently 
ambassador in Bonn. 

The contrast between the 
two could not be more stark. 
Mr Oxman is a low-key former 
investment banker, Rhodes 
Scholar and friend of both the 
president and secretary of 
State. “A really nice man ." nnp 

European ambassador said, 
“but I never thou ght he under- 
stood us and he was never very 
assertive." 

Mr Holbrooke is a gregarious 
Washington insider, never 
short of an opinion and well 
connected to the younger for- 
eign policy turks such as Mr 
Strobe Talbott and Mr Sandy 
Berger, the number twos at the 
State Department and National 
Security Council. His expertise 
is Asian and he has only been 
in Bonn for eight months, 
which means his t ransfe r will 


take a little diplomatic explain- 
ing to the Germans. 

But his move, combined with 
an equivalent change at the 
NSC, i n dica t es an awareness of 
the need to strengthen the 
upper echelons of foreign pol- 
icy making, in spite of many 
rumours, this probably makes 
more secure, for this year at 
least the positions of Mr War- 
ren Christopher as secretary of 
state, whose retention is con- 
sidered vital to the Middle East 
peace process, and Mr Tony 
Lake as head erf the NSC. 


Christopher’s 
position may 
be more secure 
as a result 


Mr Oxman says his own 
departure was the result of 
“the realignment of some of 
the principal European policy 
players to advance policy goals 
even more effectively”. 

He argued that these goals 
were well on the way to being 
met 

Nato’s Partnership for Peace 
with the members of the for- 
mer Warsaw Pact was now, be 
said, “a working reality". The 


House starts 
in US up 22% 
in 12 months 


By Michael Prowse 
ta Washington 

US housing starts rose 2.6 per 
cent last mjeth and by 22 per 
emit in the year to May, indic- 
ating residential construction 
remains fairly resilient despite 
the rise in long-term interest 
rates since February. 

Housing starts last month 
were running at a seasonally 
adjusted annual rate of 1.51m, 
below the peak of L6lm hit last 
December. During the first five 
months of this year, the aver- 
age level of starts was 21 per 
cent higher than in the same 
period last year. 

A sharp recent fall in appli- 
cations for mortgages, how- 
ever, has raised doubts about 
future demand for new homes. 

However Mr Lloyd Bentsen, 
Treasury Secretary, said he 
was “encouraged" by the 


increase in starts. He said 30- 
year mortgage rates were still 
favourable, which should con- 
tinue to help the industry. 

In a separate report yester- 
day the Federal Reserve Rank 
of Philadelphia said its index 
of manufacturing activity rose 
modestly this month to 16.1 
against 14.S in May, but 
remained below first-quarter 
levels. The index indicates the 
direction of change in manu- 
facturing production, rather 
than its magnitude. 

An index for new orders 
declined from May indicating 
the pace of growth may be 
slowing. 

Claims for state unemploy- 
ment insurance fell to 348,000 
in the week ended June 8, the 
lowest level in two months and 
a further sign that demand for 
labour remains strong. 


Menem Buenos 


warns 

over 

economy 

By John Barham 
in Buenos Aires 

President Carlos Menem has 
warned governors of Argen- 
tina’s 23 provinces against 
inserting clauses into the coun- 
try’s new constitution that 
could destabilise his economic 
policies. 

Most of the provinces are 
controlled by Mr Menem’s 
Peronlst party and are in seri- 
ous financial trouble. They 
intend to insert a clause in the 
constitution ordering the fed- 
eral government to transfer 
half its tax revenues to the 
provinces. 

But Mr Menem told them in 
a radio interview on Wednes- 
day “to be quiet and try to 
contribute to reforming the 
constitution without introduc- 
ing destabilising elements." 

A constituent assembly is 
rewriting Argentina's 1853 con- 
stitution to allow Mr Menem to 
run for reelection to a second 
four-year term next year, in 
addition to strengthening the 
legislature and the judiciary. 
The assembly is also consider- 
ing additional reforms, includ- 
ing the relationship between 
local and federal governments. 

Mr Menem warned that 
interfering in current tax-shar- 
ing mechanisms would under- 
mine federal finances and 
destabilise the economy, as has 
happened in Brazil under its 
1988 constitution. 

Under the current system, 
the provinces receive 56 per 
cent of selected taxes, such as 
value added tax. But they do 
not have a right to other taxes, 
notably customs revenues. In 
May, the provinces got an esti- 
mated $424m (£279m) in federal 
transfers, while the federal 
government’s total tax reve- 
nues were Si.86biL However, 
many provinces have signed 
agreements with Buenos Aires 
entitling them to larger, fixed 
transfers in exchange for eco- 
nomic reforms at local level. 


Aires 
port sale 
hit by row 

By John Barham 

A bitter dispute between a 
consortium led by a subsidiary 
of UK-owned P&O and Argen- 
tina's Murchison-Roman port 
services company is blocking 
the privatisation of the port of 
Buenos Aires. 

The consortium, led by P&O 
Australia, originally won bid- 
ding to operate two of the 
port's busiest terminals as a 
25-year concession. 

But last week Mr Domingo 
Cavallo, the economy minister, 
rejected P&O’s offer after sec- 
ond-placed Murchison-Roman 
claimed one of its rival’s local 
partners, OX. Fasce. had not 
complied with bidding terms. 

Mr Cavallo said he regretted 
P&O had lost the concession, 
bnt said he cancelled the 
transfer because Fasce had 
foiled to prove it had a mini- 
mum net worth of $4m (£2.6m) 
-one of the conditions of the 
privatisation. 

However, P&O had previ- 
ously challenged Murchison- 
Roman’s objections In court, 
insisting Fasce could prove its 
net worth. On Wednesday it 
applied for a injunction halt- 
ing the transfer. 

Mr Luis Dotras, a Murchi- 
son-Roman d i rector, said P&O i 
made “a totally speculative 
offer that would be impossible 
to comply with.* He alleged 
the P&O consortium would not 
be able to generate sufficient 
cashflow to pay the govern- 
ment the *13.5m (£8.88m) 
nmrnal fee it had offered. Mur- 
chison-Roman offered a $9.7m 
annual fee. 

P&O In turn alleges Murchi- 
son-Roman used lobbying 
strength to overturn its bid. 
Mr Hondo Duranona, a law- 
yer acting for the P&O consor- 
tium, said: “P&O made the 
biggest offer. Murchison pres- 
sured Congress. The economy 
ministry did not review all the 
documents proving sufficient 
net worth.” 


setting op of combined joint 
task forces gave European 
security a clearer definition, 
with “separable but not sepa- 
rate capabilities” for the West- 
ern European Union as a Nato 
pillar. Cooperation with Rus- 
sia. inside and outside PFP. 
was genuinely productive. 

It mattered, too, that the US 
was leading the way in “out- 
reach" to the countries of east- 
ern Europe, for example, by 
actively encouraging capital 
inflows. 

The $11.5bn of Investment 
capital generated over the last 
five years, nearly half to Hun- 
gary alone, is “bnt a fraction" 
of what a region of 135m well 
educated people could attract 
and needs. Getting the Vise- 
grad Four (Poland, Hungary, 
the Czech Republic and Slo- 
vakia) into the Organisation of 
Economic Cooperation and 
Development could also be of 
practical assistance. 

But the US bad no “pre- 
scribed or set vision for the 
EU’s future". Association 
agreements already signed 
with eastern Europe were 
“very substantive" and the 
question of when the EU 
acquired more members was 
up to the Union and the coun- 
tries concerned. The main US 
policy thrust towards Europe 
was simply to avoid creating 


new blocs defined on either 
security or economic lines. 

Mr Oxman concedes that 
relations with the leading gov- 
ernments in Europe were bad 
in May last year over Bosnia 
and “scratchy" in the run-up to 
the Uruguay Round trade 
agreement. Yet in January 
Europe had virtually 
“implored” the US to take a 
leadership role over Bosnia, 
which it bad resulting in the 
lifting of the siege of Sarajevo 
and the formation of the Bos- 
nian-Croat federation. 


Security is still 
a vital concern 
in the EU 
relationship 

There had been setbacks 
(Gorazde) but also much prog- 
ress on the diplomatic front It 
might be noted, however, that 
the US effort has been led by 
Mr Charles Redman, but he is 
likely to be reassigned to 
another Senior ambassadorship 
as a result of the State Depart- 
ment reshuffle. 

Stiff, Mr Oxman said, the 
evolution of Nato and the Bos- 
nian crisis “has sobered people 


to the fact that though eco- 
nomics will be very important 
in the transatlantic relation- 
ship it is for too soon to put 
security considerations into 
the background." Still he trots 
out figures showing the depth 
of the economic relationship 
with Europe still exceeds Asia. 

If Mr Oxman has anything 
close to a public complaint, it 
is that his bureau is having to 
get by on less. It operates 90 
posts in Europe, a net 16 more 
than four years ago, and hag 
5,500 staff, over 200 in Wash- 
ington. President Biff Clinton 
will be mgiriwff is "country vis- 
its" to Europe this year and 
the secretary cd state an esti- 
mated 23. “We’re carrying a lot | 
of water in the European 
bureau,” he adds ruefully. 

But plans are already under 
way. as required by the presi- 
dent, to cut the departmental 
budget by 9 per cent over the 
next four years. Already two of 
the bureau's five deputy assis- 
tant secretaryships have gone. 

That other regional bureaus 
are in the same beat Is no con- 
solation. “The feet is we are 
going to have to do less with 
less", eliminating any number 
of functions normally con- 
ducted by embassies. Which is 
where, probably in Europe, Mr 
Oxman is headed - keeping 
any discontent to himself. 


Venezuela banking 
pay-out raises fears 


By Joseph Mann in Caracas 

The eight financial institutions 
closed down by Venezuela's 
government this week will re- 
open on Monday to begin re- 
paying depositors, the Finance 
Ministry has ann o unced 

Economists warn that the 
multi-billlon-dollar financial 
assistance provided by the gov- 
ernment to ailing hankg this 
year could drive inflation to 
record levels. 

The government of President 
Rafael Caldera has not 
revealed its detailed plans for 
the seven commercial banks 
and one finance company it 
closed. However, barring recap- 
italisation by former owners or 
offers by other Investors to buy 
out the institutions, they are 
likely to be liquidated. 

The first payments sched- 
uled for depositors next week 
will probably go to individuals 
with small accounts. The tens 
of thousands of businesses 
nationwide therefore have no 
idea when the government will 
free up larger deposits at the 
banks and their subsidiaries, 
or if other normal banking 
operations will be resumed. 

Under current legislation, 
each individual or company 
holding accounts at the institu- 



Caldera: closed seven banks 

tions is entitled to a payment 
of up to about 4m bolivars 
(£15,000) from the govern- 
ment’s bank deposit guarantee 
fund (Fogade), regardless of 
the number of accounts they 
hold. This will cost the govern- 
ment around $1.7bn, which 
may have to be funded through 
new bond issues. 

Officials are considering rais- 


ing the total payment to indi- 
vidual depositors to a maxi- 
mum 10m bolivars, the same 
amount paid after the failure - 
and recapitalisation - or Banco 
Latino earlier this year. The 
failure of Latino, the country’s 
second largest bank, sparked 
the banking crisis. 

This would more than double 
the cost to the government, 
which has already supplied 
around $6bn in aid to the eight 
banks and Banco Latino since 
this year, creating a govern- 
ment deficit equal to around 10 
per cent or GDP. 

Mr Julio Sosa, the finance 
minister, said recently that the 
government expected inflation 
of 50 to 60 per cent this year, 
up from -16 per cent in 1993. 
Some economic analysts are 
project predict price increases 
as high as 80 to 100 per cent. 
Taming inflation was one of 
the central goals of the Caldera 
government, which took office 
on February 2. 

It remains to be seen if the 
government's action will stabi- 
lise the Venezuelan financial 
system, in the grip oT the sec- 
ond year of a recession, or if 
other banks that built up large 
loan portfolios in recent years 
will face problems later on. 



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FINANCIAL TIMES FRIDAY JUNE 17 3 994 


INTERNATIONAL 


Trade surplus 
shows sharp 


drop in Japan 


By Gnrard Baker hi Tokyo 


The first clear-cut evidence 
that Japan's huge current 
account surplus has peaked 
came yesterday with figures 
showing a sharp drop in the 
trade surplus for May. 

The Ministry of Finance 
reported that the customs- 
cleared merchandise trade sur- 
plus foil by 15J1 per cent from 
the month a year earlier, 
to $6>54bn (£4.3bn), the first 

double-digit year-on-year 
decline since December 1991- 

Imports rose by I2J1 per cent 
to $ZL5bn while exp o rt s grew 
by just 4 J 2 per cent to $28J.bn 
on a year earlier. The more 
reliable three-month trend, 
which irons out monthly fluc- 
tuations, showed a fan in the 
seasonally-adjusted trade sur- 
plus of 7 per cent in the three 

tn qnfhg to tho onri of May. 

The sharp fall in the doHar- 
denommated surplus reflects 
thn decline in yen <*nns under 
way for several months. The 
sharp rise of the Japanese cur- 
rency against the dollar in the 
last year had led to a rise in 
the dollar-denominated sur- 
plus, despite a fan in thn sur- 
plus in volume terms. 

But yesterday’s figures sug- 
gest the volume of imports is 
now gr o wing so fast as to out- 
weigh the effects of the stron- 
ger yen. Import volumes rose 
rose as modi as l&l per cent 
on a year ago, the fifth consec- 
utive monthly increase, while 
export volumes fell 2.6 per 


HK’s airport 
move tests 
China ties 


By Simon Hafoerton 
fen Hong Kong 


The Hong Kong government 
yesterday put its improving 
relations with China to the test 
when it said it would seek the 
local legislature's approval for 
more than HKglfib n (£L2bn) of 
finance for the colony's multi- 
billion dollar airport project 

Britain and nhftia have yet 
to agree overall terms for the 
financing of the project, Asia’s 
largest integrated transport 
plan. The two are discussing 
the Hong Kong government’s 

fourth fin an rial plan for the 
project; hopes have been raised 
that an agreement is within 
sight 

China yesterday confirmed 
that Mr Alastair Goodlad, a 
British foreign nffira minister, 
win visit Bering next month. 
A Chinese gove rn ment spokes- 
man said Beijing was keen that 
disputes about Hong Kong 
should not sour China's wider 
relations with Britain. 

The request for further fund- 
ing from tiie Legislative Coun- 
cil (LegCo) is by far the gov- 
ernment’s biggest gamble in its 
“step-by-step” approach to 
building the airport, flhfna has 
acquiesced in the past to 
LegCo voting funds for the 
project, but its continued 


indulgence cannot he taken for 
granted. 

Mr Lu Ping, a senior Beijing 
official in charge of Hong Kong 
affairs, said recently that the 
government should refrain 
from further funding requests, 
pending Bn overall a gragmant 
with China. At the same time, 
Mr Lu said he thought the 
issue of finance could be set- 
tied shortly. 

A Bong Kong government 
official said yesterday that 
more funds were needed by the 
Provisional Airport Authority 
so that companies tendering 
for work could be certain the 
authority had the money. Ten- 
ders for work have to be let 
between July and September if 
a mid-1997 completion date for 
the airport is to be achieved. 

The nPHrial noted that flhiwa 
had been informed about a 
month ago of the need for 
more funds and had been told 
the details of yesterday's fund- 
ing request some days ago. 

The government is asking 
LegCo for HK$&9bn to build 
the airport passenger terminal, 
HK$4.93bn for the airport's 
first runway and other essen- 
tial civil engineering, 
$HK1.08bn for baggage han- 
dling facilitie s, and HXyaW m 

for the airport authority’s head 
office expenses. 


Arms imports 
by developing 
world increasing 


By Bruce Clark, Defence 
Correspondent 


The volume of the 
international arms trade, in 
decline for the past seven 
years, is now stabilising, with 
anus imports by the develop- 
ing world increasing, the 
annual survey of the Stock- 
holm International Peace 
Research Institute says. 

Sipri's analysis of world 
trade in conventional weapons 
shows total volume declined 
only marginally laat year, to 
$22bn (£14.6bn) from $224bn in 
1992, peaking of at $4&9tm in 
1987. Arms imports by the 
developing world showed their 
first increase in six years, with 
a 1993 total of $i94hn, up from 
SU-7bn in 1992 hut stfll down 
cm a high of $3L0bn in 1987. 

Some of the fastest growth lu 
purchases came in the Middle 
East, where the conservative 
Gulf states and Egypt have 
been rearming after the Iraq 
conflict Middle Eastern coun- 
tries bought S5-5bn-worth of 
armaments last year, up from 
K8bn in 1932 and *L6bn in 
1991. In the Nato countries. 


military budgets have been 
falling; the share devoted to 
arms procurement has been 
t umbling even foster. 

Comparing last year with 
1989, the year when commu- 
nism collapsed in eastern 
Europe, the institute reported 
a decline in Mato’s manpower 
from SSm to 5-1 m, a drop in 
general military spending (at 
constant prices) freon $370bn to 
$322bn, and a plunge in pro- 
curement from $83bn to $60hn. 

Falling demand from their 

home markets has forced the 
west's top arms companies to 
concentrate harder on export, 
particularly to the Gulf south- 
east Asia, and America. 
Among the world’s top recipi- 
ents of conventional weapons, 
Turkey moved from second to 
first place last year, with 
imports of $2.5bn, ahead of 
India ($?..?.bn), Egypt ($L48bn) 

and Saudi Arahta ( p Mm) 

In 1992, the top recipients 
were Greece. Turkey. China 
and Japan. But measuring the 
value of aims for Greece and 
Turkey is complicated since 
they receive huge volumes of 
second-hand equipment. . 


Price demanded by North Korea for opening its nuclear facilities is likely to be steep 

‘Powderkeg’ could cause fourth conflict 


By John Bulon In Seoul 


cent, the fourth straight fall. 

The sharp rise in import vol- 
umes appears to reflect a slight 
strengthening in domestic 
demand, hut some analysts 
attribute it to the growth in 
Japanese companies’ offshore 
production. TO offset the yen’s 
high value, many manufactur- 
ers have stepped up overseas 
production. 

Mr Geoffrey Barker, chief 
economist at Baring Securities 
in Tokyo, said: “The Japanese 
economy is now sucking in 
imports, as Japanese compa- 
nies increase the foreign out- 
sourcing of many of their 
operations.” 

-Most analysts agreed that 
thn figures marked a turning 
point “The strong yen is at 
last being reflected in a 
email pt dollar trade surplus,” 
said Mr Dick Beason, senior 
economist at James Capel 
Pacific. “We can now expect to 
see some spectacular falls in 
the surplus in the second half 
of the year.” 

But the figures are unlikely 
to have an immediate effect on 
the trade tension between the 
US and Japan. The bilateral 
trade surplus rose 7.5 per cent 
from a year ago to $3.05bn, 
reflecting tin* w i r wi g th of US 
demand for imports. 

The dollar was little affected, 
remaining under pressure 
against the Japanese currency, 
at Y 102.65 to tiie dollar at the 
cl ose of Tokyo trading. Minis- 
ters greeted the figures with 
caution. 


The Korean peninsula is a 
political powderkeg that has 
caused three regional ' wars 
since 1894 when China and 
Japan dashad over the coun- 
try. The question is whether 
the Noth Korean nuclear dis- 
pute will cause a fourth con- 
flict 

Whether the crisis can be 
resolved peacefully depends 
largely on North Korea's inten- 
tions fil refusing ffitgrnatirmaT 
ingpgfftinns; of its rmnlogr faefl- 
ties. The most optimistic inter- 
pretation has been that North 
Korea is seeking concessions 
from the US in return for 
allowing full inspections. 

A deal, perhaps brokered by 
former US President Jimmy 
Carter, who is now in Pyong- 
yang, could lwafl off a confron- 
tation. 

But the price demanded by 
North Korea for opening up its 
nuclear facilities is likely to be 
steep, ft wants - US diplomatic 
recognition, economic aid 

tnclnriing the supply of safer 

light-water nuclear reactors, 
and the eventual withdrawal of 
the 37,000 US troops from 
South Korea. 

- The Mw would bo TtnlwH to 
a peace treaty between North 
Korea and US that would for- 
mally And the Korean W3T Of 
195053. 

hi return for diplomatic nor- 
malisation, the US is also 
likely to demand conditions 
that North Korea may find 
unacceptable. Including 
improvements in human rights 
and ending its exports of 
long-range missiles. 

Another thorny issue is 
whether the US would permit 
North Korea to retain the two 
rnwjgar weapons it is already 
suspected of possessing, as 
long as nuclear safeguards 
would pre v e nt ft from making 
any more. 

That issue could be solved If 
fun inspections disclose that 
the North has not in fact yet 
succeeded in constructing 





NFT, which would deepen the 
dispute, Pyongyang hie add ft 
would consider sanctions an 
act of war, implying it would 
launch an attack against, pos- 
sibly, South Korea or Japan. 

Officials in Seoul belfev* tin 
threat is a bluff to totaddate 
South Korea and Japan from 
supporting sa n c tion s, and that 
North Korea realises it would 
lose any war. But terrorist 
activity is not ruled out. . 

If economic sanctions are 
introduced, the US and its Jap- 
anese and South Korean aides 
might then adopt a wait-and- 
see attitude, would hope the 
economic measures would lead 
to North Korea’s eventual cot 


Seonl department store shoppers read instructions an. haw to use a gas mask in case of a possible surprise attack by North Korea ap 


atrimir hranhfl 

There are other obstacles to 
a diplomatic «ihitinn- Negotia- 
tions could easily founder due 
to d wq r mutual distrust. Any 
negotiations would also be 
lengthy. This presents a politi- 
cal problem for US President 

TMT1 fiHntrwi, already bring erffr 

itised by domestic conserva- 
tive opponents for being too 
patient with North Korea. 

Granting fli pinmatir recogni- 
tion. to North Korea would also 
open Mr nHntnm to c ha rges 
that he has bowed to nuclear 
b lank-mail, although he has 
established a precedent by giv- 
ing eco nomic aid to Ukraine in 
return for dismantling its 
nuclear forces. 

US concessions to North 
Korea would he likely to 
anger South Korea and pro- 


voke doubts about a US com- 
mitment to its defence. This 
could force Seoul to quit the 
US nuclear umbrella arid try to 
acquire its own midear weap- 
ons capability. 

Nevertheless, diplomatic 
activity is expected to Increase 
in the next few weeks as the 
US gives North Korea a final 
deadifm to accept inspections 
before threatened UN sanc- 
tions are I mpna a ri 

North Korea baa wi g a g ai in 
diplomatic brinkmanship «in«t 
the nuclear dispute erupted in 
Marrb 1993 when it threatened 
to withdraw from tiie nuclear 
non-proliferation treaty. Based 
an its past performance, it may 
offer a last-minute concession 
on inspections sufficient 

pr^q n gb to Ippp talks going 

But there is a growing belief 


in Washington Seoul that 
North Korea is just playing for 
time as it pushes ahead to 

h rrilH more nnriMr weapons. 

The worst-case scenario is 
that North Korea plans to sell 
both weapons-grade plutonium 
ami Tin«iiM to other anti-west- 
ern natinm, SUCh as Iran and 
Libya, in r et ur n for hard cur- 
rency and ail supplies, which 
are needed to keep its strug- 
gling twvmnmy aflnat 

Although US economic aid 
might remove the need for 
weapons sales, Pyongyang 
would prefer not to become 
economically dependent on tiie 
US, according to tb«i analysis. 

If North Korea does not 
appear willing to compromise 
within the next few weeks, the 
UN Security Council would 

hggin iwtm rtnrlng phas ed sane- 


Outpost shows what N Korea 
could gain by co-operating 

Tony Walker sees possibilities on a recent visit to Fangchuan 


F rom the remote lookout 
of Fangchuan where 
China, Russia and 
North Korea meet, foe visitor 
views foe Sea of Japan to foe 
east and in the foreground, the 
Bnadan wetlands ibat are qnp 
of the world’s most prized bird 
sanctuaries. 

Below the lookout flows foe 
Tumen River, muddy and shal- 
low, driinaatbig fog boundary 
where over the years, tension 
has risen and fatten according 
to power games being played 
out in capitals hundreds, if not 
thousands, of kilometres away. 
But Fangchuan provides a per- 
spective on what might be 
commercially possible if the 
row is eventually defused. 

The Tumen River area in 
China’s Jilin Province a n d th e 
nearby ports of Zarubino in 
Russia and Rajln in North 
Korea form the nucleus of an 
ambitious scheme to draw 
China, Russia, Mongolia, 
Japan, and South and North 
Korea Into a partnership to 
develop this remote area. 

Failure to resolve foe North 
Korean issue with the threats 
of sanctions and even war 
would vastly complicate pres- 
ent efforts by the United 
Nations Development Pro- 
gramme (UNDP) to encourage 
economic development in a 
region long forgotten. 

The various parties to the 
project are due next month to 
initial agreements for estab- 


Zerubtoqj 



halting the Tumen River Area 
Development Commission and 
Committee which would he 
responsible for implementing 
the project: a $30bn (£2flbn) 
gleam in the eyes of UN offi- 
cials who hope to attract vast 
amounts Of international capi- 
tal 

But even without a UN 
framework for development, 
which some critics regard as 
much too grandiose in any 
case, China has quietly been 
getting an with foe job. North 
Korea itself is reportedly co-op- 
erating. 

Hunchnn, the main qpnase 
town in the area, bag under- 
gone a remarkable transforma- 
tion in the past year. Some 
804500 people, mostly construc- 


tion workers, have poured in, 
doubling its pop ulation. 

Local officials are confident 
that in spate of regional ten- 
sions and rtrfffcnlties of co-ordi- 
nation among the various play- 
ers. the Tumen area will be 
developed with or without the 
UN’s grand plan. 

Mr Jin Tie, vice-director of 
the Tumen River Development 
Office, says China. Russia and 
North Korea realise there is no 
future in maintaining the 
Tumen’s Isolation. “The cold 
war atmosphere has loosened,” 
he said, “the ice has melted.” 

International business has 
begun to get involved, even at 
tbi« nummit of increasing ten- 
sions between North and South 
over the midear issue. 

Hong Kong and Singapore 
investors last month signed 
agreements for a 50 per cent 
stake in the China North-East 
Asia Railway and Port Group 
Co, whose shareholders 
include the local Jflin provin- 
cial government. 

The company plan to build a 
railway bridge over the Tumen 
to connect with a North Kor- 
ean rail link to Raj in port 
would be upgraded with the 
construction of grain and con- 
tainer terminals. 

Similar work wfll he carried 
out at the Russian port of 
Zarubino. Hnnchm itself has 
established a 2% sq km eco- 
nomic Hw mlnpiwit w hich 
has attracted some 44 compa- 


nds was not due to political 
tensions, they said, but was 
caused by foe continued deteri- 
oration of North Korea’s econ- 
omy. 

White it may not be business 
as usual on China’s north- east 
frontier, this almost certainly 
has less to do with politics 
than with economics. 

In the end. North Korea’s 
failing eco n omy may be the 
imperative that drives it to 
seek an accommodation, with 
tiie international community. 

The Tumen River project 
shows that the North Koreans 
are not beyond co-operating, 
when they believe it is in their 
interests. 


Investors fear rising tensions 


By Our Markets Staff 


Yields on dollar-denominated bonds 
issued by South Korean borrowers have 
widened out by between 25 and 30 baste 
points over the last week, reflecting inves- 
tor fears of a farther brightening of ten- 
sions on foe Korean peninsula. 

Last week, Standard & Poor’s, foe inter- 
national credit rating agamy, revised the 
outlook on its A-pius implied long-term 
rating on the Republic of Korea, to nega- 
tive from positive. The agency said the 
revision was pro m pted by North Korea’s 
refusal to comply with demands for 
inspection of its midear facilities. 

The yield spread on the benchmark 
$l.35bn offering of 10-year global hoods 
from Korea Electric Power Company! 
South Korea’s partially privatised power 
utility, stood at 160 basis points over 10- 
year Treasuries yesterday, which com- 
pares with a spread of 90 basis points 
when the bonds were launched last 
November. 

However, dealers reported some bar- 
gain-bunting which they said could lead 
to a stabilisation in the hmifl q 

Share prices in Seoul rallied yesterday 
after two days of losses. The com pos ite 


StOCfc hui*T 10.18 points higher at 
90L08, off foe day’s high of 90634, as 
institutions bought blue chips. The mar- 
ket is nearly 7 per cent below its 1994 
peak reached at the beginning of Febru- 
ary, before the gover nm ent acted to cool 
the market, hut has not plumbed the low 
of 855 points it readied in early April 

On the cur ren cy markets, foe US dollar 
managed an initial rise yesterday on early 
rumours that a US helicopter had been 
downed in North Korea - speculation 
which was late denied by the Pentagon. 

The US dollar is often perceived as a 
“safe haven* in times of international cri- 
sis and might have been expected to gain 
from tiie growing tension in Korea. 

However, the dollar has been weak for 
much of the last few weeks, and has gen- 
erally gained little from the Korea effect 
The markets have taken tiie view that US 
economic growth is slowing, Implying 
that there is less pressure on the Fed to 
raise interest rates. 

“It would be normal to assn me that 
disturbances in any part of the world 
would cause a flight of safety to foe dol- 
lar,’’ said Mr Jeremy Hawkins, senior eco- 
nomic adviser at Bank of America. “But it 
does not seem to be having an impact on 


tiie tnartrrt at tiie m om ent." 

Indeed, by putting upward pressure on 
commodity prices, foe Korean crisis may 
be upsetting the US band market, which 
fears a resurgence in inflation. A sell-off 
in foe Treasury bond market would prob- 
ably adversely affect sentiment towards 
the dollar. 

Deepening concern about North Korea’s 
intentions has helped to lift oil ami gold 
prices. Recent firmness in crude prices 
was consolidated this week when mem- 
bers of foe Organisation of Petroleum 
Exporting Countries confirmed their 
determination to stick to tiie existing pro- 
duction ceding. The North Korean factor 
helped to spice up the cocktail, which 
yesterday lifted the North Sea Breait crude 
price above $17 a barrel for the first time 
in seven and a half months. 

Gold, seen as a haven for funds in times 
of trouble, is traditionally sensitive to 
international security worries. Yesterday 
morning its price touched a two-week 
high of $387.10 a troy ounce at the Lon- 
don bullion market fixing. By the dose it 
had retreated to $38&3Q, hot that was still 
up $24W on the week so far. 

Reporting by Antonia Sharpe, Philip Cog- 
gem, Motoko Rich and Richard Mooney 


tians. These would start with 
tniiii measures, such as ending 
UN economic aid, and gradu- 
ally escalating to an oil 
embargo and cut-off of cash 
remittances from Korean-Japa- 
nese. But China may try to 
block sanctions. 

Even if Beijing allows the 
passage through the United 
Nations of phased sanctions, it 
may try to cushion their effect 
on North Korea by turning a 
hHnri eye to continued supplies 
of oil and grain, which are 
vital to Pyongyang. China has 
a vested interest in preventing 
North Korea from collapsing. 
shmp it wants to avoid millions 
of refugees streaming across 
its benders. 

There is little doubt that UN 
sanctions would cause North 
Korea to withdraw from the 


Another possibility is that 
the Chinese-influenced North 
Korean military might stage s 
coup against the . country’s 
next leader, Mr Kim Jong-0, 
once his father, the 82-yearold 
President Kim U-suztg, dies. 
There is believed to be consid- 
erable military opposition to 
Kim junior. 

But there are certain time 
constraints to waiting. North 
Korea is on the brink of. rap-, 
idly expanding Its nuclear 
capability. While it now oper- 
ates only a 5MW. reactin', it la 
expected to complete budding 
a 50MW reactor in 1996 and a 
200MW one in 1998 that could 
produce amounts of plutonium. 

The US might, consequently, 
consider conducti n g a preemp- 
tive military air strike to 
knock out the two bigger reac- 
tors before they are finished. 

But this action carries grave 
risks, ft would be likely to trig- 
ger a desperate military Inva- 
sion of South Korea by the 
North. Pyongyang might also 
launch Scud missiles against 
the South’s 12 commercial 
nuclear reactors in retaliation, 
which would spread radioactiv- 
ity clouds throughout the 
region. 

For this reason, foe US Is 
unlikely to find much support 
for a military solution from 
South Korea and Japan. 


nies involved in textiles and 
other light wum nfa etm-mg . 

ff than is a cloud over Huxt- 
chun these days, it has less to 
do with the North Korean 
problem than with a marked 
slowdown In SinoRossian bor- 
der trade. 

Trade was down by about 50 
per cent in the first five 
months of this year romparad 
with the same period last year, 
largely because of Russian 
restrictions on access for Chi- 
nese traders. _ 

Business with North Korea is 
also down. Local officials of 
Yanbian Prefecture, which 
includes Hunchnn, were not 
able to provide figures, but 
said the decline from last 
year's exports of $l40m was 


Clinton has 
few trumps 
up his sleeve 


By George Graham in 
Washington 


US President Bill Clinton 
yesterday met his foreign pol- 
icy advisers to discuss the 
mounting crisis over North 
Korea, with few useful cards at 
his disposal for dealing with 
Pyongyang's apparent determi- 
nation to pursue its develop- 
ment of nuclear weapons. 

The Clinton administration 
has been grappling, ever since 
it took office a year and a half 
ago, with tiie problem of what 
Mr Anthony Lake, White 
House national security 
adviser, calls “backlash 
states". 

Besides North Korea, Mr 
Lake numbers Cuba, Iran, Iraq 
and Libya in his list of such 
“recalcitrant and outlaw states 
that not only choose to remain 
outside the family but niw 
assault its basic values". 

Of the five. Noth Korea is 
apparently most advanced in 
its development of weapons of 
mass destruction. 

The Clinton administration’s 
response has been a strategy of 
containment, backed by a will- 
ingness, as yet untested, to 
respond with military force to 
any aggressive act 

While not ruling out any 
option, Washington officials 
have expressed no readiness to 
take pre-emptive military 
action. 

That leaves only diplomacy 
a path hindered by the diffi- 
culty of penetrating the mind 
of President Kim fl-sung and 
the North Korean regime, as 
well as by the paucity of levers 
available to foe US. 

The administration has tried 
to keep some carrots in the 
deal presented to North Korea. 

These come in the shape of a 
promised improvement in dip- 
lomatic relations and economic 
ties. 

The danger is that it will be 
trapped into conferring these 
privileges over and over, in 
exchange for minimal North 
Korean concessions that do not 
even get hack to the status quo 
ante. 

Few sticks, however, come to 
hand. 

The problem is not just per- 
suading China not to veto a 
United Nations sanctions reso- 
lution. 

ft is that only China and a 
handful of other countries 
have any significant economic 
re l ati on s h i p s with North Korea 
through which economic pres- 
sure can be applied. 

The arms embargo proposed 
tofoe first phase of the US’s 
draft resolution seems unlikely 


to have much effect, since the 
main countries th at trade arms 
with North Korea are the same 
“backlash states" least likely 
to comply with UN sanctions. 

The advantage of the phased 
approach contained in the US 
draft, however, is that the next 
step along the road is not a 
restart of the Korean War. 

Some in Washington argue 
that the US does not have the 
luxury of waiting to see if 
Pyongyang wfll have a change 
of heart 

Mr Brent Scowcroft, national 
security adviser under Presi- 
dent George Bush, and Mr 
Arnold Kanter, under-secretary 
far political affairs In the Bush 
State Department, argued in 
the Washington Post that mure 
immediate action was needed 
to deal with the possibility that 
North Korea might by the end 
of this year, have reprocessed 
enough plutonium to make 
another four to six nuclear 
warheads. 

“We should tell North Korea 
that ei t h er it must permit con- 
tinuous, unfettered Interna- 
tional Atomic Energy Agency 
m oni t o r ing to con fi rm that no 
further reprocessing is taking 
place, or we will remove its 
capacity to reprocess, 1 * they 
wrote. 

Mr Scowcroft does not 
believe a limited attack to 
destroy North Korea’s nudear 
reprocessing facility would. In 
feet, lead the North to military 
retaliation. 

But if it were to do so, he 
argues, it is better to fight the 
war now than later, when the 
North might possess as many 
as eight nuclear warheads. 

At foe CEnlon State Depart- 
ment, officials say thig argu- 
ment “had not been over- 
looked," but believe Mr 
Scowcroft and Mr Kanter 
understated the risk of all-out 
war between North and South 
Korea. 

That warning was reinforced 
yesterday when a for. 

eign ministry spokesman can- 
finned Beijing stood by Its 

SSW ? tfence agreement 
wuh North Korea, saying the 
two countries were “as dose as 
lips and teeth”. 

Nor is there great support 
I?*’ military gamble in 

the US Congress, even among 
Mr Scowcroft’s friends in the 
Republican party. 

"I th ink on our side there is 
a 3e cautious, be firm, but 
don’t rush into anything right 
this minute’ kind of mood." 
said Congressman Newt Ging- 
rich, number two in foe Repub- 
lican leadership in the House 
of Representatives. 


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FINANCIAL TIMES FRIDAY JUNE 17 1994 




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on has , 
rumps 
^ sleeve 


Austere budget for 
Kenya as debts rise 


NEWS: INTERNATIONAL 


No peace yet in troubled Kashmir 

Kidnappings highlight unrest in spite of fragile gains, writes Stefan Wagstyl 


By Leslie Crawford In Nairobi Kenya 

Mr Musalia Mudavadi, Kenya’s Wttemiid* 
finance minister, yesterday ss 
announced an austere 1994/95 " KBb 

budget with little scope for ->0 

Investment in the country's 
dilapidated social services or 
transport infrastructure, 1^. ““T 
against the backdrop of a stag- 
nant economy and «c*if«Hn g m . 
debt servicing costs. 

Nevertheless, Mr Mudavadi q_« 
forecast an economic turn- . : K 
around this year and promised ■■ .H 
to reduce inflation to less than 0 
10 per cent by the end of 1994 ‘ 

from about 40 per cent at pres- S6tmarc«r 
ent 

A better harvest was expec- GDP this 
ted to boost Kenya's economic in the fac 
growth rate to 3 per cent in ballooning 
1394, he said, still barely ahead product c 
of population growth but bet- in the rtu 
ter than the dismal 0.1 per cent 1992 *i*r< 
registered in 1993 - the conn- banking : 
try’s worst economic perfor- country 1 
mance since independence 30 of dollars, 
years ago. The K£ 

Few conjurers would envy tic debt 
the trick Mr Mudavadi must stuned all 
perform this year. Under the merit's re 
watchful gaze of the Interna- d ominate* 
tional Monetary Fund, he has of the bu 
been ordered to cut the budget admitted, 
deficit while servicing a grow- beyond ac 
Ing public debt As a r 

Reducing from 7 per cent of was force 


Mem«cM>ti|Kawr> 

PS. ■»■*«*. 

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• 1989 . 90 . 99 02 93* 

SauraarCan&s* Bureau ofStattaflo ‘ 

GDP this year will be difficult 
in the face of the government's 
ballooning domestic debt - the 
product of financial profligacy 
in the run-up to toe December 
1992 elections and subsequent 
banking frauds that cost the 
country hundreds of millions 
of dollars. 

The K£2J57bn f£3lm). domes- 
tic debt servicing bill con- 
sumed almost half the govern- 
ment’s revenue last year. “It 
dominated the entire outcome 
of toe budget," Mr Mudavadi 
admitted. “It blew toe deficit 
beyond acceptable limits.” 

As a result, Mr Mudavadi 
was forced to curtail public 


Egypt resists 
IMF pressure 
to devalue 


By Marie Nicholson hi Cairo 

The International Monetary 
F und is pressing for a devalua- 
tion of the Egyptian pound as 
part of the country's reform 
programme, but the govern- 
ment is resisting, for fear of 
harming investor confidence a 
senior minis ter hqs admitte d. 

Hie disagreement over deval- 
uation is holding up IMF 
approval of Egypt’s economic 
reform programme which, once 
secured, would trigger the 
relief of between $4bn and $5bn 
(£2£bn-£L3bn) of external debt 
under a deal reached in 1991 
with the country’s Paris Chib 
creditors. 

The government conceded 
this week it had abandoned 
hopes of gaining such approval 
by next month, as had origi- 
nally been hoped. Ministers 
now say they hope to have won 
the Fund’s imprimatur before 
the end of the year. 

Mr Atef Obeid, minister for 
the public sector, vowed Egypt 
would “never devalue”, saying 
that continued currency stabil- 
ity was essential to sustain and 
improve flows of capital into 
the economy. 

Egypt's central bank has 
pegged the pound at around 
£E3.3 to the dollar for the past 
three years, aided by high 
interest rates which have 
attracted substantial financial 
flows. 

Over that period, the bank 
has been purchasing dollars to 
prevent the pound from app- 
reciating, accumulating 
reserves which now stand at 
$16.6bn l£Ubn) and covet 16 
months of imports. 

The IMF has argued that 


Egypt cannot indefinitely hold 
the pound at artificially high 
levels without harming export 
competitiveness, a view sup- 
ported by many local business- 
men and bankers, who believe 
a level of between £E3£-£E4 to 
the dollar is more realistic. 

Hie Fund also argues that a 
devaluation would then permit 
accelerated cuts in Egypt’s 
high interest rates, which the 
IMF sees as an additional con- 
straint on its already modest 
economic growth. 

The government has 
trimmed rates in the past two 
years, but many bankers 
believe the interest rate struc- 
ture to be misaligned and rates 
too high. Prime lending rates 
to multinationals, for instance, 
stand at 12 per cent three- 
month treasury bills at 12J2 per 
emit and the discount rate at 
15.4 per cent 

Mr Obeid resisted the argu- 
ment that Egypt must devalue 
to boost non-oil export earn- 
ings from S2bn a year at pres- 
ent to the government’s target 
of $10bn by 1909. “There is no 
reason for the pound to Ian, 
exports are already increas- 
ing,” he said, citing a 16 per 
cent rise in exports last year 
over 1992. 

The government also fears a 
devaluation might prompt 
swift and hefty transfers out of 
pounds back Into dollars, 
reversing the successful “de- 
dollarisatian” of the economy 
over the past three years, 
while placing pressure on 
reserves. 

“We made it very dear we 
disagree,” Mr Obeid said. “We 
will do what is right for the 
Egyptian economy." 


Zimbabwe civil 
servants receive 
large pay rise 


By Tony Hawkins In Harare 
Zimbabwe's public servants, 

police and soldiers are to get 
an interim pay rise ra ngi n g 
from 10 to 23 per cent next 
month, at a cost of Z?1.74bn 
<£146.6m). l 

In a country, where individu- 
als are overtaxed, according to 
finan ce minister Dr Bernard 
Chidzero. the government has 
introduced a battery of tax-free 
allowances for public servants 
covering housing and trans- 

P °'Hie chairman of the Public 
Service Commission said the 
increases, announced late on 
Wednesday night, were an 
interim measure designed to 
help civil servants cope with 
inflation of 24 per cent over 
then past year. 

He said private sector sala- 
ries were - on average - 172 
per cent higher than those In 
the public service while para- 
statal employees were paid 84 
per cent more than civil ser- 
vants. 

The government was com- 
mitted to redressing this situa- 
tion once it bad consideiwl the 
report of a British consultant 
Further reviews of allowances 


for the police and the defence 
forces were under way, he 
added. 

Ironically, the announce- 
ment follows increasingly 
shrill warnings about inflation- 
ary pressures In the economy 
from the Reserve (central) 
Bank of Zimbabwe. 

The Z$L7bn pay award repre- 
sents a rise of nearly 12 per 
cent in public spending in the 
1994/5 fiscal year starting cm 
July L 

With the government likely 
to miss its budget deficit target 
of 5.4 per cent of GDP by a 
s ubstan tial margin - most esti- 
mates suggest a deficit in the 
current year to June 30 of 
around 9 per cent - the 
increase will not go down well 
with the donor community. 

But with real wages having 
fell by a third In the last four 
years to a 20-year low, substan- 
tial pay increases, next year as 
well as this, were inevitable, 
toe more so ahead of next Feb- 
ruary’s general elections. 

With inflation forecast to 
average at least 24 per cent 
this year, thispay award is not 
going to reverse toe long-run 
downward trend in real 
take-home pay. 


investment sharply last year. 
Gross investment, he noted, 
fell by 16.4 per cent last year, 
with the government responsi- 
ble for four-fifths of that drop. 

There will be no respite thin 
year. Mr Mudavadi warned 
government ministries that 
they would be issued with 
monthly expenditure rgiimgq 

Their cash balances will 
henceforth be monitored daily 
by the central bank via a 
recently set-up computer 
network. 

He is also planning to cut 
direct and indirect subsidies to 
the parastatal sector, which 
totalled 5.5 per cent of GDP 
last year. Legislation is 
planned to encourage private 
sector investment In the elec- 
tricity sector, telecommunica- 
tions, and port and railway ser- 
vices. 

On the revenue side, Mr 
Mudavadi has introduced pri- 
vate inspection companies 
inside customs to cut down cm 
the evasion of Import duties, 
an estimated one-third of 
which are never paid. 

Mr Mudavadi said foreign aid 
flows would cover 23 per cent 
of government expenditure 
next year, but deplored that 
feet that most aid was “tied” to 
specific projects. 


T he kidnapping of two 
British tourists by sepa- 
ratist militants in the 
northern Indian state of 
Jammu end Kashmir high- 
lights how far this troubled 
region still is from peace. < 
Over the last 12 months, the 
imhan authorities have tried to 
create the impression that the 
1 violence which has hit Kash- 
I mir in the past four years is 
being brought under control. 
They were so successful that 
tourists started coming back 
this year: owners of hotels, 
houseboats and handicraft 
shops thought their trade 
could at last see a revival 
The kidnapping baa put in 
jeopardy this fragile gain in 
confidence. It is now 11 days 
since Mr David Madtie, aged 
36, and 16-year-old Kim 
Housego, son of Mr David 
Housego, a former Financial 
Times staff correspondent, 
were captured while on trek- 
king holiday s with their fami- 
lies. 

The Incident has exposed the 
feet that despite considerable 
advances in suppressing mili- 
tants in the capital city of Sri- 
nagar ibo surrounding val- 
ley, the Indian security forces 
are far from crushing the sepa- 
ratist fighters. 

Even the government’s own 
figures show violence remains 


widespread. In the five months 
to the end of May, the death 
toll was broadly the as 
far the same mrmtira last year 
- 501 militants, 85 members of 
the security forces, and 420 
civilians (killed in militant 
attacks or in crossfire.) A fur- 
ther 189 people were kid- 
napped. Altogether nearly 
10,000 have died since the fight- 
ing broke out In 1990. accord- 
ing to official statistics. The 
militants put the total at mine 
than 20,000. 

Hus is not to say the author 
ities have made no progress in 
the past year. The security 
forces have killed or captured 
several top militan t leaders 
and disrupted lines tininwg mil- 
itants with their sources of 
supply in neighbouring Palos- 
tan. 

Delhi scored a considerable 
coup last November by bring- 
ing to a peaceful end a month- 
long siege of the Hazratbal 
mosque, the holiest Moslem 
shrine in Kashmir. 

“In Srinagar at least toe 
improvement is palpable,” says 
a senior official of the Jammu 
and Kashmir state govern- 
ment. 

But even in Srinagar, Ufe is 
far from normal. The paramili- 
tary Border Security Force 
patrols the streets anrf main- 
tains sand-bagged bunkers. “If 


Srinagar seems quiet it is 
because we have adjusted to 
life under occupation, not that 
we have accepted it," says Mr 
Abdul Ghani. a representative 
of the An Party Freedom Con- 
ference, an umbrella organisa- 
tion of Kashmiri political 
groups, some of which demand 
independence and others union 

with Pakistan. 

Moreover, while violence has 
declined in the Moslem heart- 
land of Srinagar and the sur- 
rounding valley it has 
increased elsewhere - notably 
In the southern districts with 
mixed Moslem/Hindu popula- 
tions, including the hilly Doda 
area, where militants recently 
assassinated two local leaders 
of the right-wing Hindu Bhar- 
atiya Janata party. 

There is also a shift in the 
balance of power among the 
militants, with groups linked 
to the Jammu an d Kashmir 
Liberation Front, the pro-inde- 
pendence political organisa- 
tion, losing ground to radical 
pro-Pakistan fciamie groups. 

They see the battle against 
India as a jihad - a holy war. 
Supplied with arms from 
within Pakistan and strength- 
ened by the presence of small 
numbers of Af ghan and other 
battlehardened Moslem fight- 
ers, these groups have chal- 
lenged the traditional domi- 


C '’■**> -.’I""; , 

P-”*" 1 *■-. / • 

I 1 • Srinagar 


; ISLAMABAD f . 
I PAKISTAN f 


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nance of the JKLF. Among 
these radicals organisations is 
Harkat-ul-Ansar, which cap- 
tured the two Britons. 

The JKLF seems unsure how 
to react Some leaders want no 
compromises, others appear to 
be putting out feelers to the 
Indian government, among 
them Mr Yasin Malik, who was 
released from prison a month 
ago and promptly appealed 
publicly for talks. 

It is hard to see how the gov- 
ernment can respond if the 
JKLF sticks to demands for 
independence. But if the gov- 
ernment does nothing, it could 
miss a valuable opportunity to 
create a point of contact with 
the militant movement There 


may not be much time -pro- 
Pakistan militants tried to 
shoot Mr Malik earlier this 
month and could try again. 

Delhi is aware that the lon- 
ger the fighting goes on, the 
more the pro-Pakistan Islamic 
groups are likely to gain 
ground, notably Hizb-ul-Muja- 
hideen. the Ijiggest and most 
active organisation. Mr Rajesh 
Pilot, the minister responsible 
for Kashmir, has said repeat- 
edly that he wants to start a 
"political process”, meaning 
talks with Kashmiri groups, 
followed by state-level elec- 
tions and possibly an increase 
in autonomy from Delhi. 

“I feel there is more chance 
of the political process starting 
now than at any time in the 
past two years,” he says. 

But for most Kashmiri activ- 
ists. hints of increased auton- 
omy arc worthless. Mr Ghani 
says: "If we don't leave India, 
all this violence will have been 
shed for nothing." 

Yesterday Mr Housego 
returned to Polialgom, the area 
of the kidnapping, with a 
group of journalists, in a move 
to encourage the kidnappers, 
who are apparently nervous 
about the presence of Indian 
security forces, to release their 
captives. If he succeeds it will 
at least remove oue point of 
tension in the troubled state. 


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FINANCIAL TIMES FRIDAY JUNE 17 1994 


WORLD TRADE 



Trade ratification ‘a priority’ 


Peter Sutherland: ratification 
Is “outstanding priority” 


By Martin Wolf 

"The outstanding priority”, 
argued Mr Peter Sutherland, 
director general of the General 
Agreement on Tariffs and 
Trade, In London last night, is 

"to ratify the Marrakesh trade 

agreements so that they can 
enter into force on the agreed 
target date of January 1 1995." 

Giving the third annual 
Hayek memorial lecture at the 
Trw jtto to of Bfflnnmlc Affair s, 
the free-market think tank, Mr 
Sutherland said international 
economic relations would then 
depend on achieving farther 


cuts in trade barriers and the 
willingness of members of the 
prospective World Trade 
Organisation to abide by the 
letter and spirit of the new 
roles. 

Mr Sutherland pointed oat 
that in industrial countries 
there would still be tariff peaks 
in sensitive categories; that 
average tariffs would remain 
much higher in developin g 
countries than in industrial 
ones; that most agricultural 
tariffs would be significantly 
greater than on industrial 
products; and that much nego- 
tiation remained to be done in 


services, starting with finan- 
cial services. 

One reason for the spread of 
illegal obstacles since the 
1960s was the absence of third 
party compl a ints against bilat- 
eral accords. But, stressed Mr 
Sutherland, a more fundamen- 
tal threat to countries’ willing. 
•news to abide by the rules 
disciplines of the new WTO is 
concerns about implications 
for national sovereignty. 

Arguing against this view, 
he indicated that the WTO did 
not have the power to impose 
new trade policy obligations. 
Amendments of the WTO 


Agreement that alter the rights 
and obligations of members are 
effective only for those coun- 
tries that have accepted them. 
Also “some countries have 
interpreted the right to refuse 
panel findings as the preroga- 
tive of a sovereign nation. Bui 
what this amounts to is a 
c o u n try choosing to be above 
the law whenever it is inconve- 
nient to observe the tew.” 

More fan rtarm»n tally , iniriieteH 

Mr Sutherland, "if sovereignty 
is equated with the ability of a 
government to carry out its 
legitimate functions, the accep- 
tance of the new WTO rules 


and procedures by govern- 
ments around the world will 
increase the sovereignty of 
each and every one of them." 

Meanwhile, an important 
challenge would be dev eloping 
coher ence between the Bratton 
Woods institutions (the World 
Bank and International Mone- 
tary Fund) and the WTO. 

Another priority is expan- 
sion the system, winch now 
has 123 contracting parties, 
with 19 more - including 
China, Russia and Ukraine 
- now negotiating accession or 
resumption of membership. 


Salinas 
backed 
to lead 
new trade 
body 

By Nancy Dunne 
in Washington 

The leaders of 19 Latin 
American countries and Spain 
and Portugal have endorsed 
Mexican President Carlos Sali- 
nas to head the new World 
Trade Organisation, the Mexi- 
can embassy in Washington 
said yesterday. 

The embassy said that lead- 
ers reached a consensus on the 
Salinas candidacy at the 
fourth meeting of the Ibero- 
American summit in Carta- 
gena, Colombia. The decision 
will give momentum to the 
campaign on behalf of Mr Sati- 
nas. 

Brasilian diplomats in Lon- 
don, however, cautioned that 
it was premature to suggest 
that Mr Salinas had unani- 
mous support from the region, 
and underlined that Mr 
Rubens Ricupero, Brazil’s min- 
ister of the economy and a for- 
mer ambassador to Gait, was 
the only candidate from Latin 
America yet to have been for- 
mally declared. 

Mr Salinas is not expected to 
campaign for the new post, 
created by the Uruguay 
Round, until after the Mexican 
elections in August However, 
his supporters both in and out- 
side Mexico wanted to move 
quickly to head off the candi- 
dacy of Mr Ricupero, 57. 

Among Latin American offi- 
cials in Washington it has 
been expected that the region 
would unite behind one candi- 
date. “Mr Salinas has the 
larger international stature,” 
said one offiriaL “Hie is a very 
strong candidate.” 

Mexico acted swiftly and 
deliberately in the week before 
the European Union was to 
rally around its own candi- 
date -Mr Renato Ruggiero, a 
former Italian trade minister. 
Mr Ruggiero is expected to 
win the formal endorsement of 
the EU, probably at the Corfu 
summit next week. 

In the US there is wide sup- 
port for Mr Salinas, who is 
seen as energetic and ambi- 
tions. However, it Is thought 
that Mr Salinas first must be 
the candidate of the develop- 
ing countries before the US 
announces its backing. 

Mr Pedro Solbes, Spain’s 
finance minister, was recently 
quoted as saying that Mr Safi- 
na s was a “suitable candi- 
date”, and that were he to be 
appointed head of the organi- 
sation “we could not be in bet- 
ter hands”. 


China seeks to boost 
vehicle parts sector 


Concentrate effort, 
UK groups told 


By Tony Walker in Beging 

nhina will give preference to foreign 
automobile manufacturers who demon- 
strate their commitment by launching 
vehicle component projects to satisfy 
the country's huge damanri for compo- 
nents and spare parts. 

Mr Ye Qing, vicedirector of the State 
planning Commission, yesterday out- 
lined conditions for the entry of 
foreign carmakers after a freeze e xpi res 
on new manufactur ers at the and of 
next year. 

“All things being equal priority will 
be given to foreign partners who have 
shown good co-operation in the spare 
and component parts fields,” Mr Ye told 
reporters. 

ffttnn has not yet officially m wiled 
its new Industrial Polk? for the Auto- 
mobile Industry (IPAD, but companies 
such as Toyota and Mitsubishi, Ford 
and General Motors have been informed 
they have been excluded from establish- 
ing assembly plants until 1996 at the 
earliest 

Beijing has made it clear that it 
wants investment in its components 
sector which is backward, fragmented 
and inadequate for the demands of a 
modem automotive industry. 

The car giants, who have been slow 


to take advantage of opportunities in 
China, are being told effectively they 
have to prove themselves by going Into 
the components business. 

Most of the big car makers are pres- 
ently investigating possibilities, includ- 
ing seeking Joint venture partners in 
components manufacturing. 

Foreign manufacturers who estab- 
lished an early presence in China such 
as Volkswagen have been accorded a 
rignWwmt windfall under tha present 
freeze on entrants to the ranks of inter- 
national companies involved in assem- 
bly. 

Mr Ye confirmed reports in the Chi- 
nese press that Beijing would establish 
three automotive conglomerates based 
on the 1st Auto Works in rhangnhim in 
north China where the the Audi and 
Jetta cars are being assembled; Shang- 
hai where the VW Santana is being 
produced; and the 2nd Auto Works near 
Wuhan in Hubei province where the 
Citroen ZX small car is being assem- 
bled. 

China produced some 300,000 passen- 
ger vehicles last year and imported 
another 100,000. 

The country plans to he producing 
some L5m vehicles by the end of the 
decade. 


By Alexander NfooB, 

Asia Editor 

British companies as well as 
gnvya nmen t aid yh^uid concentrate on 
a few centres of economic growth in 
China in order to maximise their 
impact and bufid strong relationships. 
Mr Richard Needham, the British trade 
minister, said yesterday. 

Speaking at a London seminar on 
city of Suzhou, he said: “I do not 
believe that a sc atte rg nn approach to 
China works. You may hit the target 
but you are far more likely to mfeac it.” 
He urged UK businessmen to 
Suzhou as oim area in which they could 
establish a presence. 

Mr Needham last year signed a mem- 
orandum of understanding with the 
mayor under which British companies 
are to be offered preferential terms for 
investment in Suzhou, which is 60 
miles west of Shang hai , in return for 
co-operation an the city’s development 
plans. 

He expected UK companies to be 
involved in a frill range of activities, 
particularly in frastructura l projects 
such as power stations, tdecosnmmica- 
tions. and a clean-up of the canal city’s 
water, as wen in manufacturing invest- 
ment and services. 


The British presence would, In part, 
he a partnership with Si n gapore, which 
fa building an industrial township to 
the east of the old city. 

Mr Alan Barlow, a director of 
accountants Coopers and Lybrand, 
which has produced a report on the 
Suzhou plans, said: “We’re piggy-back- 
ing on what the Singaporeans are 
doing.” 

Mr Needham said this triangular 
approach would also be approp ria te in 
other parts of China, such as in Wuhan 
in central China, where Hong Kong 
rrnnpawta; are heavily involved, and in 
the eastern city of Fuzhou, where Tai- 
wanese companies might be involved. 
He said there were gfoinar opportuni- 
ties in Bangalore, India, where Singa- 
pore is building another industrial 
park. 

Mr Needham grid Britain must ™i»* 
clear its long-term commitment to 
involvement in China’s development, 
in order to counter suspicions about 
London’s intentions after sovereignty 
over Hong Kong passed to Qrina hi 
1997. 

Failure to build on British invest- 
ment in Hong Kong- which he esti- 
mated at £50bn - would be a devastat- 
ing loss and put Britain's role a world 
power in quetffon, he said. 


Keeping politics out of the canal 

Stephen Fidler on concern about its management by the Panama government in 1999 


W hen some Panamani- 
ans look at what has 
happened to the rail- 
way that crosses their country, 
they despair of the prospects 
for the canal their government 
is due to take over at the end 
of the decade. 

The railway, which connects 
Panama City on the Pacific 
Ocean with Col6n on the 
Atlantic side, was handed over 
to the Panamanian govern- 
ment after ratification of the 
1917 canal treaties between the 
US and Panama. 

Handed over as a thriving 
concern, the railway is now 
virtually moribund. There is a 
na g gin g worry that the canal, 
in its 80th year id operation, 
may go the same way. 

From tha Panama Canal 
administration b uilding at Bal- 
boa Heights, the inactivity of 
the railway can be clearly 
seen. According to Mr GUberto 
Guardia, thg canal's adminis- 
trator anti the first Panama- 
nian to hold the post, the rail- 
road serves as a useful 
reminder about what could 
happen if thg inanagpmput of 
the canal falls victim to politi- 
cal infighting . 

“There is a legitimate cart 
cem over the deterioration of 
the railroad," he says. “Evi- 
dently It’s an agency that had 
its share of mismanagement 
that was a remit of its becom- 


Panarazt Canal: the rise In lolls 




ing politicised. From the point 
of the view of the canal, it’s a 
great thing that that hap- 
pened.” 

Mr RIcaurte Vasquez, a for- 
mer budget and planning min- 
ister, says the new government 
of Mr Ernesto Pferez Balla- 
dares. which will take office in 
September, “will have to send 


the world a signal that the 
canal will not be run as gov- 
ernment has run thing s in the 
past” 

Moves are already under way 
to do just that Measures are 
before the Panamanian con- 
gress designed to ensure that 
the canal is isolated from Pana- 
manian politics and run as an 


independent business after it is 
handed over at midday on 
December 31 1999. 

To encourage this, the US 
administration is expected to 
ask the US congress to approve 
change to the Panama Canal 
Commission. These changes 
would convert the commission 
to a government corpo ra tion, 
allow the greater use of inde- 
pendent external advisers from 
countries other than the US 
and P anama , and allow the 
canal board the final authority 
to set toll rates. President Bill 
Clinton said the aim of th*> pro- 
posals would be to “facilitate 
and encourage the operation iff 
the canal through an autono- 
mous entity under the govern- 
ment of Panama after the 
transfer of the waterway." 

Whatever happens once the 
canal is transferred, it is not 
going to affect the way the 
capai fa managed in the mean- 
time, says Mr Guardia. “We are 
managing it as if it were not 
going to be transferred," he 
says. The canal’s maintenance 
plan is continuing - it is pro- 
grammed unto the year 2005 - 
and a plan is going ahead to 
widen the canal at its narrow- 
est point, the GaiHard Cut. 

Work started in January 1992 
on this $200m (£132m) project 
- which will allow two-way 
traffic 24 hours a day for the 
largest “Panamas” ships which 


can now, for safety reasons, 
only travel one way through 
the eight-mOe channel during 
darkness. 

Meanwhile, the canal is see- 
ing the benefit of the revival of 
the economy in the US, offi- 
cials say. Some 13 per cent of 
US trade still passes through 
the canal - despite the growth 
in container traffic across the 
US rail network -and the US 
remains the largest user of the 
canaL Revenues rose to more 

than in tha lari: financial 

year ending September 30 for 
the first time, despite a fan in 
tonnage through the canal, 
thanks to higher tolls. 

Canal officials say that 
higher tolls have not been 
responsible for the fall-off in 
traffic since 1991 and assert 
that even if tolls were elimi- 
nated completely most con- 
tainer traffic now using the US 
rail network would stm use the 
route. The highest tonnage 
ever went through the canal in 
1982 - the year a new oil pipe- 
line opened across the isthmus. 

But no toll increase is 
planned for this year after the 
10 per cent rise that took effect 
in October 1992. “We don't 
envisage a toll rate increase 
next year either," says the 
administrator. “There is a pos- 
sibility that we may go 
through 1996 [without an 
increase] hut it’s early to say.” 


CONTRACTS & TENDERS 


SIS debis 

Immobilienmanagement 

Potsdamer Platz Project 

Participation Competition for Selecting Firms for Carcass, Roof, Cladding Work and Lift Installations 


We are supervising the construction of new city pennises on 
the Potsdamer Platz in Berlin on behalf of Daimler-Benz AG. 

The project is divided up into 4 sub-projects and 17 
individual buildings: 


Bldg 

comp 

Bldg 

Use 


A 

Al 

Office 

33.000 


A2 

Residential 

25.500 


A3 

Residential 

6.000 


A4 

Residential 

14.500 


A5 

Hotel 

30.000 


UG 

Car park/stores/tech bldg services 

32300 

B 

B1 

Office/retail 

20.000 


B2 

Office/retail 

2.700 


B3 

Office/retail 

11.500 


B4 

Offic^retatl 

18.100 


B5 

Retail/residential 

21.700 


B6 

Office/retail 

18.300 


B7 

Office/retall 

18.300 


B8 

Residential/retail 

18.500 


B9 

Residential 

10.600 


UG 

Car park/stores/ tech bldg services 

107.000 

C 

Cl 

Office 

43.400 

D 

D! 

Casino 

8.000 


D2 

Theatre 

13.500 


There will be a limited invitation to tender for the 
following services as part of a participation review under 
the control of VOD/A 

1. Carcass work 

2. Cladding 

3. Waterproofing of roofs 

4. Lift installations 

The services will be awarded separately in accordance 
with headings 1 to 4. 

The building sponsor reserves the right to select 
applicants without constraint 

It is planned to award the building services separately for 
individual buildings or groups of buildings. 


Planned completion times: 


Building C 
Building A2 - A5 
Building B5 - B9 
Building A1/B1 
Building D1 - D2 
Building B3-4 


January 95 - November 96 
May 95 - November 96 
July 95 -April 97 
September 95 - June 97 
November 95 - February 97 
October 96 - May 98 


Please enclose the following documents with the 

application as evidence of capability: 

1. Turnover of company in last 3 trading years In relation 
to comparable services. 

2. References with details of contract size and contract 
dates. 

3. Number of employees broken down into occupational 
category. 

4. Technical resources available. 


Applications must be sent in writing by 24.6.94 to our 
company In charge of project control: 


DREES & SOMMER AG 

Projektmanagement nod technische Beratoag 
Obentrautstrafle 72 
D-10963 Berlin 
TeL: 030/21 50 954) 

Fax: 030/21 50 95-20 


All Nippon, 
Delta agree 
to co-operate 


By MteWyo Nakamoto In Tokyo 

All Nippon Airways, the 
Japanese airline, and Delta Air 
of the US have agreed to 
co-operate in marketing and 
other services in the first such 
extensive uwk between a US 
and Japanese carrier. 

The agreement, which comes 
amid fierce competition over 
trans-Facific air traffic, “will 
possibly lead to a definitive 
marketing and business rela- 
tionship in the US and Japan,” 
ANA said yesterday. 

The Japanese carrier will 
co-operate with Delta through 
schedule co-ordination to facili- 
tate connections between the 
two carriers, sharing of fadli- 
ties and passenger han dlin g 
and mutual participation in 
frequent flyer programmes. 

The two companies will also 
explore opportunities for code- 
sharing and blocked-space 
arrangements in the US and 
the Ada-Pacific region centred 
in Japan. 

Such arrangements would 
enable ANA to attract trans- 
pacific travellers flying to US 
destinations to which ANA 
does not fly, by publicising 
easy transfer to Delta flights. 

Delta would have simUar 
benefits in attracting travellers 
from the US to Japan. It would 
also benefit from being able to 
use ANA’s facilities, including 
reservation facilities, through- 
out the carrier’s extensive net- 
work in Japan and Asia. 

The deal highlights the 
increasingly competitive envi- 
ronment. particularly in trans- 
pacific travel, where low-cost 
US carriers have taken market 


share from the leading Japa- 
nese carriers. Japan's airitow 
have seen their profits eraSad 
in the country's economic 
recession and os competition 
from lower-cost carriers has 

Increased. . 

-There is a limit to compet- 
ing on your own," an ANA rep- 
resentative said. "There is a ■ 
need to pull strengths 
together." 

The agreement follows a his- 
tory of friction between tha US 
and Japan over their bilateral 
aviation accord, which Japan 
claims unfairly benefits US 
carriers at the expense of Japa- 
nese airlines. 

Also at issue has been access 
in and out or Tokyo’s busy 
Narita airport and Japanese 
flight frequencies to the US. 

The agreement also reflects 
the growing interest US air- 
lines have in expandi n g their 
operations in the Asia-pacific 
region, which is expected to be 
the most promising growth 
market for air travel In the 
near term. 

Japan Air Lines, the coun- 
try’s largest airline, said that It 
could als o strengthen its com- 
petitive position through a 
dmiiar tie-up and confirmed 
that it is in talks with other 
airlines about such arrange- 
ments. 

Recently JAL announced 
that it would be sharing flights 
with Air France from Paris to 
Osaka, when the new Kansal 
International Airport opens 
later this year. 

All Nippon Airways is also 
understood to be discussing 
commercial links with British 
Airways. 


NEWS IN BRIEF 


Polish group to 
make Spanish 
cigarettes 

Spanish cigarette brands will be made in Poland from this 
aut umn undo: an agreement between the Tabacalera tobacco 
group and Polish state company ZPT Radom, writes David White 
in Madrid. 

The accord marks Che first foreign manufacturing investment 
by the partly-privatised Spanish company. It is the latest in a 
series of agreements between Polish cigarette manufacturers and 
international groups. 

Tabacalera said it would spend about Pta750m (£3.64m) on the 
Polish project Apart from licensed production of Tabacalera’s 
Fortuna and Winns brands, the two companies plan to introduce 
a new brand through a joint venture 51 per cent controlled by the 
S panish partner. 

Tabacalera will supply packaging equipment and raw materials 
and will take charge of promotion, with the Polish company 
responsible for production and distribution. Tabacalera said 
Poland ranked eighth among world markets for tobacco products 
with one of the highest per capita consumption rates of 7.28 
cigarettes per day, compared with 5.6 in Spain. 

Further deals are under discussion in other foreign markets In 
an effort by Tabacalera to offset a gradual decline in domestic 


US, Japan to reopen glass talks 

The US said yesterday it would resume negotiations with TOkyt 
over a glass trade dispute, Reuter reports from Washington. Th* 
cffice of Mr Mickey Kan tor, US trade representative, said the twt 
sides had decided to bring the flat glass sector under their trad* 
framework negotiations. 

In 1992 the Japanese government agreed to take steps tc 
improve market access to the glass sector. 

“Despi te thi s com mitment and concerted efforts by US and 
other foreign firn^iniports into Japan from foreign' flat das* 
with Japanese gfassmakira feU frm 
5.1 per cent In 1992 to 3.5 per cent in 1993," the office 

Strong yen lifts car imports 

JSS, SL P?* US carmakere in Japan have suited 
01 .Pt stron? y™ and more aggressive 

rvi k F^f Mirfu^Nakamato ta To *y°- JapimeaeSS 
GM, Ford mid Chrysler from January to May doubledfram the 

16531 — to sssjM 

Sh ? rp appreciation has made US cars more 
affordable, the rise m sales was also helped by the create* 

Toyota to buy more US-built parts 

by Toyota's US 

USiuUt parts inX v.ar mS^ L^ 1 a65b " os 

that T r ta 

"Growth will continue aslo5te° L i997 - 

working to shorten their lead timM continue 

lower their costs," to 

ager, Mr Koichiro Nogucbf^d P^bastog nan- 

oonsiderable room for «H there was 

lines for developing part orototvS* su ,^ pUers met tkefr tart* 
in work on <*"* <* «» tta* 

September. y AValon - wW( * begins production in 

IBM in Asian shake-up 

IBM is to concentrate its south 

operations in Australia, writes^Sw^?i. c ?“ ,pater Processing 
company said ttewSSri^?^ £“ 1 ¥**» ?»**». Tta US 
Asian region, it had decided tTr^^r!?I eqilircments f< * 
countries - Japan and Australia operations la two 

in each Individual country. instead of handling the work 
A new centre, possibly in Qninn, ... 
business processing for the all IBM’s 

from customer ordering Asian nations, ranging 

aidant the 

Australia by over A$300m Investment in 

and create up to 375 addiJonaljS. dUnng next **ve years 


i 




NEWS: UK 


^ rise * D s P en ding o n research and development but still behind rivals as share of profits or sales 

R&D growth ahead of world competitors 

fiv Danlnl Rma . n>- . 


By Danw Green and dive Cookson 

UL spending on research 

and development is growing faster 

““SS o! ** 032111 “tSnatioMl 

oompefatore and, for the first 
at least four years, fester than divi- 
dend payments to shareholders. 

UK R&D spending rose 9 per cent to 
ELiton, according to the Department 
? 3J ade ^ u i hidustry*s R&D score- 
brart, pubhshed today, it also shows 
tot the UK has a long way to go 
before it catches other countries in 
terms of R&D spending as a propor- 


tion of sales, profits or dividends. 

Bfr Michael Heseltine, secretary of 
stat e at t he Department of Trade and 
Indnstry. said the figures were “very 
encouraging” aithnngh “there is still 
some way to go to catch up with the 
world's best standards.” 

The scorecard measures R&D 
spending anywhere in the world by 
companies based in to UK. 

The international top 200 companies 
devoted an average 4£5 per cent of 
1993 sales to B&D. compared with 
per cent for the 13 British companion 
in to group. 


But the rise in the total R&D spend 
last year of the top 200 jntemattonfii 
companies was just 2 per *»nt less 
than one quarter of the increase of 
the top 100 in the UK. 

General Motors of to US was the 
world's biggest B&D spender with a 
budget of more ton Mm It is fol- 
lowed by German engineering, group 
Daimler-Benz, Ford Motor of to US 
and Japan's Hitachi 
Those three nationalities dominate 
to world's top 20 which has just one 
representative from France, the 
Netherlands and the Swiss-Swedlsh 


Asea Brown BoverL The biggest UK 
spender, drug company Glaxo, is 
ranked *gnd 

However, to UK’s pharmaceuticals 
industry stands out as cen tral to to 
country’s R&D effort Four of the top 
six UK spenders on R&D are drugs 
companies (Glaxo, SmithKline Bee- 
cham. Zeneca and Wellcome) and to 
pharmaceutical sector carries out 3l£ 
per cent of all industrial R&D in 
Britain. 

Among the top 200 international 
companies, the sector accounts for 
only &8 per cent of all R&D spending. 


The UK performance in other areas 
is mixed. Engineering companies 
spent 10 per cent more ton in 1992, 
led by Rolls-Royce and British Aero- 
space. 

But electronic and electrical compa- 
nies spending ou R&D fell fay 1 per 
cent. And spending by oil companies 
fen by 5 per cent BP cut its budget by 
one quarter. Mr Heseltme refused to 
criticise particular companies for 
spending too little. *T would not seek 
to put my judgment as a politician 
into the minds of individual boards of 
directors.*’ 


Retail sales 
growth figures 
levelling off 


By G&an Tett, 

Economics Staff 

Growth in retail sales levelled 
off in May compared with 
April, although the underlying 
trend points to a subdued rate 
of recovery. 

The Central Statistical Office 
said yesterday the retail sales 
volume in May was a season- 
ally adjusted 3.9 per cent 
higher than the previous May. 

This was slightly slower 
ton April’s figure, which was 
revised down yesterday to 4.1 
per cent from the 4.4 per cent 
published last month. 

But comparing the two 
months, the index showed the 
volume of sales was 
unchanged, after growing by 
0.5 per cent in February and 
March _ 

The British Retail Consor- 
tium, the main industry body, 
yesterday marfa light of this 
flattening off and pointed out 
that the underlying trend 
remained positive. 

Mr James May, director- 
general of the consortium, 
said: “This shows that consum- 
ers are still willing to spend in 
spite of the tax increases.” 

Measured on a three-month 
basis - an indicator econo- 
mists believe is a better guide 
to the trend - retail sales grew 
by 09 per cent in to three 
months to May compared with 
the previous three months, and 
were up 3.9 per cent on to 
same period last year. This rise 
was spread fairly evenly across 
the sectors, with all the non- 
food sectors reporting rises of 
about 0£ per cent in the three 
months to May, compared with 
the previous three months. 

Food retailers reported a 
slightly better rise of 1.3 per 
cent during this period. 

Within the last month, foot- 
wear and clothing was the 




most sluggish sector, with 
sales volumes falling by L7 per 
cent in May, after surging in 
April. 

Economists said this dip was 
partly due to poor weather at 
the start of the month 

Household goods, by con- 
trast, grew by 1.7 per emit last 
month, after failing back in 
April, hi spite of this, to con- 
sortium said the furniture and 
carpets sector continued to be 
affected by the uncertainty in 
the housing market. 

This was also rnidarmtowig 

sales of DIY and electrical and 
electronic goods, the consor- 
tium Ral«»g of televisions 
and hi-fi goods were up com- 
pared with last year, while 
white goods sold at the same 
level. 

Retailers continued to face 
intense cost comp e t it ion, with 
consumers remaining very 
price-sensitive, the consortium 

arid pH 

This trend was most sharply 
indicated in the monthly 
household goods data, where 
to total value of sales fell by 3 
per cent in spite of the growth 
in volumes. The figures were 
greeted with some relief in the 
City, where some analysts had 
feared sales might dip slightly 
after a fion faiwutim nf British 
Industry survey earlier this 
week reported retailers had 
become more p w>ilhiisHp 
Mr Ian Sheperdson, UK econ- 
omist with Midland Global 
Markets, suggested that one 
reason for the discrepancy 
between to CBI survey and 
CSO might be that the CBI sur- 
vey gave more weight to to 
voice of smaller retailers. 

Since large retailers were 
performing better than small 
ones, according to the CBI, this 
might explain why the tone of 
the CBI survey was less opti- 
mistic, he said. 



Mm 

mm 

&&& 

. . ... » 



The CrossKail project to create an underground link across London from east to west may have 
been thrown out by a parliamentary committee but work is c on ti nuin g on to design of the £2bn 
link. A full scale mock-up of the train wait on display in London yesterday. Attempts are being 
made to revive to project Supporters have written to MPs urging them to back a motion to send 
the bill back to the four-man co mmi t te e which originally rejected it The project was turned down 
because of revised traffic forecasts and fears it would not attra ct pr ivate sector finance. 


New skills 
sought in 
transport 
projects 

By Charles Batchelor, 
Transport Correspondent 

A new breed of entrepreneur 
able to master a wide variety 
of business skills will be 
required if to private sector 
is to be brought into transport 
projects, according to Mr Pen 
Kent, the Bank of England 
member of to government’s 
private finance paneL 
It was unreasonable to 
expect a single group to have 
all the afri tfe needed to 
build, finance and operate 
transport projects such as road 
bridges or railway lines, he 
told a Financial Times confer- 
ence, Transport hi Europe. 

The government bad come a 
lung way in its approach to 
the involvement of private 
finance but further changes 
were needed if private funding 
was to be found for to more 
than 100 projects in fields 
which also included health, 
flurf prisons. 

Treasury guidance on the pri- 
vate finance initiative issued 
earlier this year had stQl not 
folly sunk in throughout the 
public sector, he said. So many 
companies were bong asked to 
tender for some project s that 
their combined costs of prepar- 
ing bids were higher than the 
value of the contract. 

Departments must also pro- 
vide sufficiently detailed speci- 
fications of projects. But to 
private sector should not for- 
get that civil servants were 
Hiring risks in agreeing con- 
tracts they might have to 
defend before the pnblic 
accounts wiiimiHt*^ 

Sometimes pnblic account- 
ing conventions, including to 
government’s insistence on 
not committing funds for more 
than one year, posed a real 
difficulty for the private 
finance initiative. 


Spurs to 
appeal 
against 
FA penalty 

By WHBam Lewis 

Mr Alan Sugar, chairman of 
English football club 
Tottenham Hotspur, last night 
got board backing for his 
appeal against the Football 
Association's penalties for 
financial irregularities. 

He has decided to appeal 
against the £600,000 fine, points 
deduction and FA Cup expul- 
sion - even though it opens up 
the possibility of a more severe 
penalty from the FA. 

Yesterday's moves came 
after to FA found that Spurs 
had contravened association 
rules in making interest-free 
loans - allegedly totalling 
more than £400.000 - to players 
between 1985 and 1989. 

Mr Sugar said yesterday: "I 
have been shocked by the man- 
ner in which this club has been 
dealt with for what I consider 
to be coming dean." 

If the club's appeal against 
the FA p unis hment fails Spurs 
will seek an independently 
chaired arbitration hearing, as 
permitted by FA rules. 

But Mr Sugar ruled out the 
possibility of subsequent court 
action on the issue. “At tot 
point we will have to accept 

the outcome,” he said. 

However, Mr Sugar said he 
would consider suing the FA if 
it failed to investigate loans 
and ex gratia payments made 
to players by other Premier 
League dubs. . . 

He said he knew of two elute 
that had recently settled 
claims with the Inland Reve- 
nue, one for about £lm, and 
two others that were in the 

process of being investigated. 

The FA inquiry centred on 
loans made to player* before 
Mr Sugar took over the club in 
1991. However Mr Sugar adnut- 
ted yesterday that after &emg 
told of the loans *? ***** 
two years before notifying tne 
FA in September 1993. 


Lib Dems in legal challenge to poll defeat 


By Roland Ac&xwgham, Wales 

lfif ■■ lit riHnif 

ana wesx wuresponaent 

The Liberal Democrats, 
Britain’s second opposition 
party, are taking legal action 
to have the result of last 
week's European parliamen- 
tary election in Devon and 
Plymouth East d e cla re d void. 

The seat was held by the 
Conservatives with nearly 
75,000 votes, a majority of 700 
over the liberal Democrat Bfr 
Adrian Sanders. But a candi- 
date catling himself a Liter al 


Democrat polled more than 
10,000 votes. The Liberal Dem- 
ocrats believe the “lookahke" 
confusion deprived them of 
what would have been their 
third European seat 

Mr firahair) Rlsnn, the par- 
ty’s general secretary, said yes- 
terday “several hundred” peo- 
ple frfld already -said they had 
been misled into voting fra: to 
literal Democrat Mr Richard 
Huggett 

“Many people in the constit- 
uency fed cheated - that they 
had their votes stolen from 


them by Mr Huggett and were 

dteanfranrhiaa d " he Said. 

The Liberal Democrats, after 
advice from counsel, are to 
issue an election petition 
against Mr Frank Palmer, the 
returning officer, and against 
the winning candidate, Mr 
Giles Chichester. A hearing by 
the electoral court - presided 
over by two High Court judges 
- might take place within 
weeks. If to petition is suc- 
cessful, the court could order 
the election to be rerun. 

Mr Piers Coleman, solicitor 


for the Liberal Democrats, 
described an electoral petition 
as an “extremely rare phenom- 
enon which is treated by to 
courts with the utmost prior- 
ity”. He believed the last suc- 
cessful petition after a parlia- 
mentary election was in 1952. 

Bfr Palmer, chief executive of 
South Hams district council 
and a returning officer for nine 
years, said yesterday: “I felt 
the nomination was validly 
submitted and I did not have 
to power to invalidate it" 

Advice to returning officers 


was that the candidate’s 
description must not he more 
than six words nor obscene, 
but there was no copyright 
over party names. 

Before to election, a High 
Court challenge by the Liberal 
Democrats to Bfr Huggett’s 
nomination was unsuccessful 

The last occasion on which 
the courts overturned the out- 
come of a parliamentary elec- 
tion was in July 1961 when Bfr 
Tony Benn was barred from 
the Commons after inheriting 
the Hflo of Visco unt Stansgate. 


Britain in brief 



700 sacked 
on Severn 
bridge project 

Over 700 construction workers 
on to second Severe crossing 
wav dismissed as they staged 
a 24-hour strike over pay. 
Work on the £300m bridge, 
between England and Wales, 
is expected to be at a standstill 
today. 

The privately-financed 
bridge is being built by Severn 
River Crossing, a UK-French 
consortium with John 
Laing-GTM Enfcrepose as main 
contractor. Laing-GTM said 
last night letters had been 
posted to everyone who took 
part in to strike, telling them 
they were being dismissed for 
breaching their terms and 
conditions of employment 

The workers, members of 
Ucatt, TGWU and GMB 
unions, voted in favour of 
limited industrial action at 
the start of this month. They 
intended to stage a second 
24-hour strike next week. Most 
of to men dismissed were 
working on to English side 
of the bridge, and about 100 
on to Welsh side. 


Net book 
judgment 

The net book agreement, a 
pricing pact by publishers 
which prevents most books 
being sold at a discount, 
should not be allowed to 
continue, to advocate-general 
of the European Court in 
Luxembourg advised. 

The opinion applies only to 
the trade in books between 
EU member states, and not 
to book sales within the UK. 

It could affect, in particular, 
books exported from the UK 
to Ireland. 

The view of advocate general 
Carl Lenz is not binding on 
to European Court but the 
court’s decisions are usually 
in line with its advisers’ 
recommendations. A final 
decision is expected before the 
rad of the year. 


City cordon 
permanent 

The experimental security 
barriers set up in the City of 
London in the wake of last 
year’s Irish Republican Army 
bomb attack are to become 
permanent from today. 

The City of London 
Corporation said the scheme 
had brought about a dramatic 
cut in to local crime rate, 
an improvement in traffic 
circulation, and a reduction 
in pollution. 


ESOPs seen 
as big bonus 

An overwhelming majority 
of non-quoted companies with 
employee share ownership 
plans (ESOP*s) believe they 
improve their corporate 
competitiveness and the 
motivation of their workers, 
according to to annual survey 
published yesterday by to 
ESOP Centre. 

Mora than four out of five 
managers say their employees 


are more productive because 


of the ESOP. a 75 per cent 
increase on the figure in the 
last survey in 1992. 

Three in race 
for Labour 

The contest for to leadership 
of to opposition Labour 
party, vacant after the sudden 
death or John Smith, will be 
between three MPs who have 
attracted enough nominations 
to enter an election. They are 
Tony Blair, 154; John Prescott* 
46; and Margaret Beckett 42. 

‘Terriers’ 
for Falklands 

Soldiers from Britain's 
part-time volunteer Territorial 
Army serving in Northern 
Ireland are to be sent to the 
Falklands for a tour of duty 
for the first time. 

The volunteers will enlist 
into the regular army for the 
tour and are expected to rejoin 
the TA on their return to 
Ulster. 

Terminal for 
tunnel traffic 

Work on the development of 
the Daventry International 
Rail Freight Terminal should 
start by the end of the year, 
following the decision of the 
Department of Environment 
not to subject the project to 
a public enquiry. 

Daventry District Council 
has already stated it is 
prepared to grant planning 
permission for a rail port with 
2.3m square feet of 
manufacturing and 
distribution space. 

Abbcott Estates, to 
developer, in which Severn 
Trent Water has a majority 
stake, said the finished scheme 
would have a value of £140m. 
The terminal will co m pete for 
Channel tunnel traffic with 
Hams Hall, near Birmingham, 
being developed by Trafalgar 
House and PowerGen. 


French forum 
for Teeside 

A French Business Council, 
based in Teesside, north-east 
England, has been set up to 
improve commercial, training 
and educational links between 
the region and the 
French-speaking world. The 
Department of Trade and 
Industry is providing finanrial 
support for the council's first 
three years. 

Tory Party 
chief to quit 

Sir Norman Fowler is to stand 
down as Tory Party chairman 
but win carry on in to job 
until his successor is named, 
he announced yesterday. He 
pledged to John Major that 
he would give him “the 
sturdiest possible support 
from to backbenches through 
to to next election and 
beyond’. This was an 
indication that John Major’s 
critics on to Conservative 
be nc hes will have to face a 
counter-attack from Sir 
Norman and other loyalists. 


Vote for 
women priests 

Scottish Episcopal Church 
today voted in fevour of 
ordination of women at annual 
general Synod in Edinburgh. 


Euro-poll ‘backs Ulster peace plan’ 


By David Owen 

Sir Patrick Mayfaew yesterday 
claime d that last week's Euro- 
pean elections had given Lon- 
don a democratic mandate for 
pressing ahead with efforts to 
forge a lasting political settle- 
ment for Northern Ireland. 

On to eve of today's inter- 
governmental conference 
between British and Irish min- 
isters in Dublin, to Northern 
I reland secretary told MPs that 
more Ulster voters bad voted 
for candidates “supportive of 
or acquiescent in” to Down- 
ing Street Declaration than for 
candidates who opposed it 


Last week's poll was topped 
by Rev Ian Paisley, leader of 
the hardline Democratic 
Unionist party, who chose to 
ran bis campaign as a referen- 
dum against the declaration. 
But his majority over bfr John 
Hume, leader of the mainly 
Cathobc Sodal Democratic and 
Labour party, was much 
reduced. 

Mr Paisley nevertheless 
claimed e a rlie r tht* week that. 
he had achieved what he set 
out to and be wanted an 
urgent meeting with Bfr John 
Major, to prime minister. 

Today's conference, which 
will be attended by both Sir’ 


Patrick and Mr Michael 
Ancram, Northern Ireland min- 
ister, is expected to focus an 
making further progress on a 
framework they hope to com- 
plete in time for an Anglo-Irish 
summit in mid-July. 

The two sides have made 
good progress on the docu- 
ment, which is designed to 
help forge a durable political 
settlement in the province by 
spurring political talks involv- 
ing Ulster’s main constitu- 
tional parties. 

But potential stidring-points 
have emerged over whether 
to agreement should contain 
an explicit commitment by 


Dublin to rescind its constitu- 
tional c laim over Northern 
Ireland and whether it should 
set out a specific blueprint for 
the future, or simply provide a 
starting-point for, new talks. 

Sir Patrick was supported 
yesterday by Mr Kevin McNa- 
mara, opposition spokesman 
on Northern Ireland, who 
called for republican leaders to 
renounce violence in view of 
the “strong mandate " to elec- 
tions had given to parties seek- 
ing peace. 

Sinn Fein, the IRA's political 
wing, saw its support advance 
by l percentage point to IQ per 
cent 


Go-ahead for dairy industry shake-up 


By Deborah Hargreaves 

The British government 
yesterday gave the go-ahead 
for the biggest shake-up in to 
dairy industry in Rn giand and 
Wales for 60 years by approv- 
ing plans to liberalise the 
£3J&n milk market 
The announcement ends six 
years' of uncertainty over 
plans for to dairy sector after 
the future of to Ifilk Market- 
ing Board was first questioned 
in 1988, Mrs GiDian Shephard, 
agriculture minister, approved 
a scheme by to mflk board to 
set itself up as a voluntary 


formers’ co-operative called 
Milk Marque. This leaves dairy 
companies free to buy their 
milk directly from farmers 
from November L 

But Britain's dairies still 
held reservations about Milk 
Marque’s plans for sales under 
the new market roles fearing 
to co-operative would retain 
too dominant a position. lhe 
Dairy Trade Federation which 
represents dairy companies, 
has threatened legal action. 

Mrs Shephard recognised 
purchasers’ concern that Milk 
Marque mi ght abuse its domi- 
nant position, “but the compe- 


tition authorities will be moni- 
toring them very closely from 
the start of operations and 
there Is no reason for Milk 
Marque to act unreasonably,” 
she said. 

Fanners which have already 
signed up with Milk Marque 
have a 2-week cooling off 
period to reconsider, but most 
dairies expect to new co-oper- 
ative to gain control over at 
least twotords of supply. 

Mrs Shephard said tot con- 
sumers should not expect to 
pay a higher price for milk 
under the new market rules 
even though fanners were 


expecting price Inc re ases. 

Mr Andrew Dare, chief execu- 
tive of Milk Marque, agrees 
that there will be slight 
increases in prices to formers 
on average “not miles beyond 
to rate of inflation.'' He said 
British fanners received below- 
average EU prices. 

Supply continues to be con- 
strained by EU quotas which 
wiQ tod to push prices higher 
but Mr Dare said imports 
would be sucked in from to 
continent if prices rose too 
high. The next 4 weeks will see 
a scramble in the dairy indus- 
try to secure milk supplies. 


Red-hot sales for small 
company with big aims 


“Pukka People Pick a Pot of 
Patak’s,” runs the television 
advertising for Patak’s Indian 
foods, which range from pick- 
les and pastes to ready-toeal 
mini-pappadums. 

Indeed, so many pots of 
Patak’s were picked from 
supermarket shelves during 
last year tot the small Wigan- 
based family firm found itself 
in the unlikely position yester- 
day of owning the UK’s fastest- 
growing consumer goods 
brand. 

Patak's achieved a red-hot 92 
per cent growth in retail sales 
in 1993, according to figures 
collected by Nielsen, to mar- 
ket intelligence company, 
which were published in to 
trade magazine Marketing's 
annual Biggest Brands survey. 

Says the magazine: “So used 
are we to seeing the Procter & 
Gambles and Unilevers domin- 
ating Biggest Brands that it 
comes as something of a shock 
to discover that our fastest- 
growing brand this year is 
owned, not by a multinational 
with an advertising budget to 
match, but by a family-owned 
foods company with a TV pres- 
ence you'd need tracker dogs 
to find.” 

Procters bad to be content 
with second place on to list of 


Diane Summers 

gets a taste of 
the UK’s fastest 
growing brand 

fastest-growing brands, with 77 
per cent growth for Always, its 
sanitary towels with “wings"; 
third, with 45 per cent growth, 
was Eternity, the Calvin Klein 
fragrance for men. 

Compared with to big boys, 
Patak's sales are tiny: trade 
estimates put to company's 
annual turnover at £15-20m, 
about one-third of that going in 
overseas business. This com- 
pares with the number one 
retail brand, Coca-Cola, which 
had sales of over £411m in the 
UK alone last year and spent 
an estimated £9.1m on adver- 
tising. compared with Patak’s 
£500.000. 

But while some of to largest 
food brand names strive to 
inject a home-made, family feel 
into their mass-produced prod- 
ucts, Patak’s can justly claim 
to be to real thing. The com- 
pany was founded in to 1950s 
by the father of to current 
chairman, Bfr Kirit Pa th ale , 
and is still entirely family- 
owned. 


Bfr LG Pathak began by sell- 
ing samos as from home to 
raise money to buy his first 
shop. The business expanded 
into pickles and chutneys and , 
although it has now risen to 
the number two Indian foods 
brand and has about 200 
employees (Sharwood’s, owned 
by conglomerate Tomkins, is 
the leader), Kirit Pathak’s wife, 
Meena, still directs recipe 
development 

The company reckons to sup- 
ply 90 per cent of the UK’s 
Indian restaurants, as well as 
becoming an increasingly 
familiar name on to shelves erf 
the largest retailers. 

Patak’s surge in growth 
came a year or so after the 
company took on its first non- 
family director, Mr David Page, 
in 199L Bfr Page, who formerly 
ran Campbell's grocery prod- 
ucts in the UK, met Mr Kirit 
Pathak at a dinner party and 

ended Up BS manag in g director 

Deciding initially to spend 
money on TV advertising was, 
says Bfr Page, “the big jriH for 
us to swallow in terms of 
costs" but it gave to company 
the boost it needed. 

"We’re big believers in if it 
ain't broke don’t fix it*. We 
intend to continue with exactly 
the same strategy," he says. 






FINANCIAL TIMES FRIDAY JUNE 17 1994 


MANAGEMENT 


CHRISTOPHER LORENZ 


Learn the lessons 
of history 


Unlike their 
counterparts in 
politics, the armed 
forces and the 
legal profession, 
many business 
leaders would 
agree with Henry 
Ford that “history 
is bunk”. They see little use for it 
The loss is theirs - and that of 
their employees and shareholders. 

If Kenneth Olsen, founder and 
former head of Digital Equipment, 
had had a better grasp of Amer- 
ica’s 19th century industrial his- 
tory, his company might not have 
plunged into the deep trouble in 
which it is now struggling. The 
same is true of IBM, Kodak and a 
string of other leading crnnpanrag 
on both sides of the Atlantic that 
are having to go through fire to 
replace obsolete technologies. 

They are suffering from a phe- 
nomenon that has plagued suc- 
cessful large e n terprises at least 
since industrialisation began: the 
tendency to react inappropriately 
to a technology or other Mnd of 
radical innovation threatens 
their core business. 

Some companies foil to notice an 
innovation until it is too late. Oth- 
ers reject it, re-investing desper- 
ately but usually ineffectively hi 
their existing technology or busi- 
ness. Still others embrace ft, but 
only half-heartedly. 

Whatever their reaction, the net 
result is what James Utterfaack, a 
professor at the Massachusetts 
Institute of Technology, calls the 
disturbing regularity with which 
leading companies “follow their 
core technologies Into obsoles- 
cence and obscu rit y”. 

In different ways. Digital and 
[BM both mishandled the emer- 
gence of personal computers, 
under-rating vastly the impact 
that PCs would have on their mini 
and mainframe businesses. 

Digital then compounded the 
problem by its schizophrenia 
towards new Rise (reduced 
instruction set computing) archi- 
tecture for computer workstat- 
ions. It was slow to move into it 
and, tom by its long commitment 
to its old VAX technology, contin- 
ued to make parallel investments 
in the latter for for too long. As a 
result it was tom by indecision 


and turf warfare. By contrast, its 
smaller arch-rival Sun Microsys- 
tems broke stnglerolndedJy with 
Hs old workstation technology and 
prospered. 

Digital was probably more at 
fault than mngf companies. For, as 
Utterback shows in a fascinating 
and very readable new historical 

study* of how companies can seize 
the initiative in the face of techno- 
logical change, one of the most 
Instructive past examples 
occurred in Digital's own Massa- 
chusetts backyard. 

Over the four decades to I860, 
the New England ice-cutting 
industry built a formidable deliv- 
ery business across large swathes 
of America. The New Englanders 
invested steadily in so-called 
“incremental” innovation, improv- 
ing their processes and productiv- 
ity sharply. 

But then a threatening “radical” 
innovation arrived: mechanical 

In many industries 
radical Innovations 
almost always come 
from outside the 
industry 

ice-making machines from France, 
which allowed the product to be 
made near its markets. Over the 
next 30 years machine-made ice 
took over from the natural vari- 
ety, even though the cutters 
ploughed more resources than 
ever into process improvements. 
But they steadfastly refused to 
embrace the new. None even 
raperimented with carrying their 
ice south in refrigerated ships. 

Utterback's book is fall of such 
examples. They include the self- 
defeating ways in which compa- 
nies and their famous leaders - 
even the redoubtable Thomas Edi- 
son - reacted to successive 19th- 
century innovations; how Boning- 
ton came to dominate the new 
typewr ite r industry only to cede 
leadership to IBM 80 years later 
when the electric age arrived; and 
the near-lethal resistance of Good- 
year and Firestone to Mldbelin’s 
radial tyre technology In the 
1970s. 

Only in what Utterback calls 


uon-assembled products, such as 
tyres, glass, and other continuous 
processes, do incumbents such as 
M ichettn have a good track record 
in either pioneering the new, or 
switching to it when under threat. 

Utter-back's analysis offers many 
other lessons for the hard-pressed 
modern manager. They include: 

• Radical innovation is uncom- 
fortable, but vital. If a company 
does only short-term, incremental 
innovation, it is failing to prepare 
for the future. It is hastening the 
inevitable decline of its bumness. 

• Most radical innovations are 
less surprising than they seem. 
They exist in embryo for many 
years before they become commer- 
cially significant, and are based 
on well-known technical informa- 
tion or components - which 
defending companies sometimes 
possess themselves. 

Yet in many industries radical 
inno vations almost always come 
from outside the industry. So 
“benchmarking^ and the collec- 
tion of competitive intelligence- 
should not be limited to Industries 
resembling one’s own. Instead, 
new company activity in other 
fields should also be monitored. 

• It is hard enough for a com- 
pany to follow a “dual strategy” of 
defending its old technology and 
developing the new. Doing so in 
tiie same part of the organisation 
is a recipe for conflict and sup* 
press] on of the new. Part of the 
solution is to establish a separate 
and very independent unit 

The trouble is that most such 
units have always suffered an 
unfortunate fate, which Utterback 
does not discuss. The moment they 
have shown signs of success, they 
have tended to be wrapped back 
into the main organisation, and 
their innovative drive stifled 
rather than spread. 

IBM might not be in quite such 
a mess today if, instead of follow' 
tog tins predictable pattern, it had 
given its originally independent 
PC unit longer life, and cloned the 
same approach for other innova- 
tions. But, like Olsen, IBM’s 
recent leaders never bothered to 
learn such lessons from history. 

• Mastering the Dynamics of Inno- 
vation. Harvard Business School 
Press. $24.35 


E dward de Bono can barely 
keep the scorn from his 
voice as he dismisses the 
teachings of Socrates, Piato 
and Aristotle. The Gang of Three, 
as he calls tbwu, have locked west- 
ern societies into rigid patterns of 
thought that have sapped our 
energy and cre ativity , leaving us fll- 
prepared for a world that is chang- 
ing rapidly. 

Lucidly there is a saviour to sight 
- in the ghapp of de Bono himself 
The man who introduced the world 
to lateral thinking has come up 
with a new process, the Six Think- 
tog Hats, with which he feels he has 
trumped the classical philosophers 
once and for alL 

Sitting over a glass of water at 
the Criterion Restaurant in London, 
he fires off a description of the Six 
Hats, impatiently shrugging off 
questions, especially the sceptical 
ones. These hats promise to make 
every nnmap n- — nay, every human 
being - more effective, he says. 

By Tnairirfg gQ participants think 
to paraTlpI tho system ran mrt meet- 
ing times In half. For the average 
manager, who spends 40 per cent of 
each day to nuagHngs , the savings 
could mean t hy equivalent of an 
extra day a week. 

The six hats are already well 
established to the US. IBM, Du Pont 
and Federal Express wear them. So 
does the Mnrmwn Church. In Japan 
NTT has been converted to six-hat- 
ted thiwkfngj as has Marzotto to 
Italy. 

But to the UK they are stm pretty 
obscure, fop thinker's flying 
visit On Tuesday night be packed 
the Institute of Directors to explain 
tiie prinrfpT^f to business leaders 
and a few p oliticians. “The Six Hats 
are a fimdamental change in the 
basis of western thought" he 
explains. “The standard way of dis- 
cussion is to discover the truth by 

naming an lmtriTth This is very 

limited. My method gets away from 
that to parallel thinking.” 

The method may be revolutionary 
and universal, but what exactly is 
it? De Bono gg plains that aach hat 
has a colour and stands for a partic- 
ular thought process. 

The white one is for gathering 
information. The red is for feelings 
and emotions. The hat is for 
caution, criticism and assessing 
risks. (British people are particu- 
larly fond of this one, he says, and 
warns that it should not be over- 
used.) The yellow one is for locking 
at benefits and far studying feasibil- 
ity. The green hat is for new ideas 
and possibilities. And the bine one 
is the “meta” bat which manag es 
the whole thinking process. 

At any one time everyone in a 
meeting wears the same colour hat, 
and together they work through the 
colours to nwncidgr the issue from 
every angfa. 

De Bono is unimpressed by any 


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De Bono: "The standard way of dfecussloo b to ibcow the truth by nulling an wtruth. My nwtbod g*b away firm* tap 

Put on your 
thinking caps 

Edward De Bono tells Lucy Kellaway about the 
benefits of his new Six Hats approach to meetings 


suggestion that his bats are just a 
gimmicky way of describing what 
we do anyway. “I did an experiment 
of 250 executives in Canada. I 
divided them into two groups, and 
asked one to judge a subject, and 
the other to judge it wearing the 
Yellow Hat for 2 minutes and the 
Black Hat for 2 minutes.” 

The group that used the hats per- 
formed three times as well as the 
other group, which looked at the 
pros nnH rang in an undisciplined 
way. “The chemical setting In the 
brain is different when thinking 
positively and negatively. If you try 
to do both at the same time you do 
not do either properly,'* he explains. 

But might not some people find it 
irritating to be told what sort of hat 
to wear? Not a bit of it, he says, the 
hats help people think better, and 
as as soon as they realise the advan- 
tage there is no stopping them. 

Apparently at the Prudential in 
Canada the hats have been woven 
Into the carpet At Marzotto in Italy 
there are hat posters plastered over 
the walls. 

By getting all participants to 
think to parallel the discussion 


becomes faster, the final decision 
clearer. Everyone uses their frill 
intellectual horsepower, as each 
person is forced to be positive, nega- 
tive, creative and so an. The hats 
also do away with egos and politics, 
as there is no scope for people to 
block ideas by wearing the black 
hat throughout 

Asking people to wear different 
coloured hats may bring out 
thoughts that would otherwise have 
been suppressed. At a meeting of 
US senior executives from Roth- 
mans, the tobacco multinational, De 
Bono asked whether the company 
should set up clinics to help people 
stop smoking. With red hats on. two 
thirds said it was a good idea. “That 
would never have emerged in an 
ordinary discussion. They may not 
want to set up a dfaic now, but 
may keep it for next timw they are 
really under pressure," he says. 

He eiaimg his system translates 
into all cultures: in Japan it allows 
subordinates to express their feel- 
ings or to point out a danger, to a 
way that would otherwise be 
unthinkable. At The Sowetan, a 
South African newspaper, it has 


been used as a way of discussing 
complicated emotional issues with- 
out becoming too bogged down. - 

De Bono thinks the Six Hats may 
gain an even greater hold than his 
earlier work because it Is both shn- 
pie and universally applicable. 
Indeed, It is so big that he feels he 
cannot carry it alone. “If it just 
depends on me, then Z am res tri cte d 
on the i am available and. on, 
price." He has decided to franchise 
his ideas, and has already licensed 
200 trainers In the US to spread the 
gospel. This week he announced 
that Svend Holst, a training consul- 
tant based in Buckinghamshire, will 
be his UK disciple. 

De Bono thinks the system goes 
far beyond meetings between man- 
agers: politicians and families could 
wear the hats to advateage. “I’d like 
to see Parliament using it,” he says, 
giving his only smile of the inter- 
view. This is meant to acknowledge 
that he cannot see It happening. I'm 
not so sure: I can just hear Betty 
Boothroyd. the speaker of the 
House, saying: “Win Right Honour- 
able members now put on their 
(keen Hats.” 


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Some like it hot. so they choose from the wholesome, hearty western lunch and dinner 
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FINANCIAL TIMES FRIDAY JUNE 17 1994 


N kVi» 


'nil. 


turn has 

trumps 

1 !*> sltfC'C 


T he root-and-branch 
overhaul of BTs prop- 
erty portfolio prom- 
ises to be one of the 
most thorough ever attempted 
in the UK. 

BT, which owns three-quar- 
ters of the 75m square feet of 
space it occupies, has the third 
largest corporate property port- 
folio in the UK. But by 2010, it 
wants to dispose of virtually 
all its property which Is. or 
will have become, obsolescent 
In the UK we have too 
much of the wrong quality of 
space located in the wrong 
location costing too much to 
run," said Mr Alan White, BT*s 
group property director. 

BT’s running costa for its 
properties total £l.lbn a year, 
its third largest expense after 
salaries and depredation. “It 
was not until the end of the 
1980s that there was a realisa- 
tion that property cost what it 
did. It came as quite a shock’’ 
said Mr White. 

The telecoms group believes 
It now has the opportunity to 
slash its property costs. It has 
embarked on a big rationalisa- 
tion programme which will 
reduce its workforce from 
240,000 in 1987 to about 110,000 
by 1998. Moreover, BT believes 
it will be able to reduce its 
operational sites - such as tele- 
phone exchanges - from 6,000 
to 500 within the next 10 years. 

A smaller workforce will cut 
BT’s property requirements. 
The company plans to reduce 
its property portfolio from 75m 
sq ft to 15m sq ft by 2010, slash- 
ing annual r unning costs from 
£l.lhn to £200m. Over the past 
two years the company has 
shed some 5m sq ft of space; it 
will continue to sell between 
35m sq ft and 4m sq ft a year 
for the next 10 years. 

Virtually all of BT’s build- 
ings are up for sale - the most 
marketable, as well as those 
which are known to be sur- 
plus. “We are prepared to be 
flexible," said Mr White. Dis- 
posing of such a large amount 
of space is a daunting task, 
particularly where obsolete 
buildings are concerned. Tt is 
not as If we have something 
that people want,” he added. 

BT has made its priority the 
examination of those proper- 
ties that pose “the greatest 
threat and opportunities’’ in 
terms of runnings costs, 
according to Mr White. It first 
concentrated on high-cost 
units and. in particular, looked 
at properties with long leases, 
where leases were ending, 
where there was a notice to 
break a lease and where there 
was a sub-leased property. 

Hie company Is also looking 


PROPERTY 

BT’s big 
sell-off 

Vanessa Houlder on the UK 
group’s property disposals 


PEOPLE 






property division, particularly 
as their business plans co n tain 
rigorous targets for reducing 
property costs. 

According to Mr White, a 
measure of the importance 
with which the group treats 
property Is that BT’s chief 
executive reviews portfolio per- 
formance quarterly, while the 
chief financial officer reviews 
the portfolio at least monthly. 

As well as cutting property 
costs, BT believes its property 
portfolio overhaul should 
change the company’s culture 
and improve productivity. It 
believes that by transferring 
people from old-fashioned to 
more modem offices “people 
can jettison out-moded ways of 
working and bring in new 
practices and procedures". 


Provincial continues 
family tradition 


B T Is keen to introduce 
new working arrange- 
ments such as flexible 
working, desk-shar- 
ing, working from home and 
video conferencing, which it 
believes will save above im sq 
ft of office space over the next 
decade. “For many people, 
being tied to one office, five 
days a week, could become a 
thing of the past" said BT. 

The company is also keen to 
bring its staff together in func- 
tional groups, according to 
their specialist s kills rather 
than their business unite. 

These ideas - known collec- 
tively at BT as “Workstyle 
2000“ - are due to be tested at 
the company's prototype office 
at Apsley, Hertfordshire, in 
southern England, where 1,300 
marketing and sales staff will 
be relocated in the aut umn. 

The Apsley premises feature 
open-plan offices around an 
atrium, large multi-purpose 
areas for communal activities, 
a restaurant and conference 
and video-conferencing room. 

If Apsley is a success, BT > 
plans to move 10,000 people out i 
of central London to s imilar I 
offices around the M25 orbital 
road over the next 25 years. 
Although there is little differ- 
ence Id rents between inner 
and outer London premises, BT 
believes that moving out-of- 
town could drastically cut ser- 
vice charges. 

BT’s plans to move out of 
London is a measure of its 
belief that new technology will 
change the way that people 
work. Historically, we have 
always had a strong presence 
in the capital, but today that is 
no longer necessary,” said BT. 
“Our communications technol- 
ogy has given us greater 
freklom to site many of our 
offices wherever we choose,” it 
added. 







Timer HunpMM 

Slashing property costs; BT headquarters in the City of London 


for quit* routes out of leases. 
It is taking advantage of oppor- 
tunities to sell leases to adjoin- 
ing owners wanting more 
space, to developers and to 
freehold owners seeking to 
gain possession in order to 
redevelop or to release for 
higher returns. 

On its leased buildings, for 
example, BT 

‘We've a] 

suade landlords a Strong 
to cancel leases : n 
for a one-off ® LOn< 
payment of today 
advance rent l nn opr n 
although, as lon g er D 
Mr White said, 

“it is not an easy process to 
persuade people to give up a 
triple A covenant” 

More radical proposals are 
also being studied. BT has 
examined the possibility of dis- 
posing of a mixed package of 
properties to investors or, 
even, spinning off the entire 
portfolio to BT shareholders 
under separate management. 


out of leases. “There is no doubt that at this 
tage of oppor- current stage of the UK real 
tses to adjoin- estate inves tment cycle such a 
m ting more route for corporations with 
ipers and to large portfolios looks attrac- 
seeking to five,” said Mr White, 
in order to The disposal of large quan ti- 
re! ease for ties of property also presents 
organisational problems. As 
jufldingB, for jobs are shed there is a ccmtin- 
ual need to re- 

“We’ve always had s “ 

a strong presence between 
In London, but *%£ ^p. 
today it is no tion caused fry 
longer necessary 1 ££ „°S2 

pc red by BT’s 

y process to attempts to upgrade offices 
jo give up a before it transfers staff. T 
” think our popularity [with 

roposals are staff] is improving,” said Mr 
ed. BT has White. “We are moving people 
ibility of dis- to a better office environment. 

1 package of We are persuading them by a 
vestors or, carrot rather than a stick.” 
f the entire Senior managers of business 
hareholders units within BT are encour- 
iflnagemenL aged to cooperate with the 


Provincial Group, the 
family-controlled financial ser- 
vices group founded by Sir 
James Scott in 1903, has 

appointed its latest chairman 

from the Scott family. It dis- 
closed yesterday that 34-year- 
old Alex Scott has taken the 
post 

Scott succeeds Tiro Shaker- 
ley, another family member, at 
the head of Provincial, which 
owns Provincial Insurance, one 
of the largest privately-owned 
UK insurers, as well as Exeter 
Bank, Which makes loans to 

small businesses. 

Be was appointed a director 
in 1988, and has been deputy 
chairman since 1991. He has 
also worked at Thames Water 
as investor relations manager, 
and Jardine Fleming Holdings 
in Hong Kong in charge of cor- 
porate communications. 

Finance moves 

■ Stephen Edell has been 
appointed the first ombudsman 
of the Personal Investment 
Authority. He will consider 
complaints against member 
firms of the new investment 
regulator. Edell. 61, who 
qualified as a solicitor, set up 
the office of the Building 
Societies Ombudsman In 1987. 

■ Michael Hope-Lewis, the 
former chairman and founder 


Scott, great grandson of Sir 
James and son of the president 
and former ch ai r” 13 * 1 Sir Peter 
Scott, also becomes chairman 
of Provincial Insurance. Tim 
Shakeriey retires after 17 years 
in the post. 

Scott says his role as chair- 
man is partly a traditional one 
of overseeing management 
strategy, and partly as a repre- 
sentative of family sharehold- 
ers. The Scott family controls 
over 80 per cent of Provincial 
equity. 

“I don’t think we have had 
problems in being family- 
owned, although there is 
always a potential for tension 
between the company's owners 
and its managers. As long as 
we recognise that. 1 think it is 
perfectly manageable.” he 
says. 

Scott, who studied Philoso- 


director of Smith New Court 
Far East in London, has joined 
the group management board 
of BARING SECURITIES. He 
will advise on the development 
and marketing of global 
research with particular 
emphasis on South East Asia. 

■ Tony Mallfn , vice-chairman 
of Haznbros Bank and 
vice-chairman of Leaseurope, 
has been appointed to 
HAMBROS' board. 

■ Neil Williams has been 



phy. Politics and Economics at 
Exeter College, Oxford, says he 
“would not claim to be an 
expert on insurance" but has 
learned management skills 
from working with senior 
directors or large companies. 

He says it is “difficult to say 
exactly whether my role is 
executive or non-executive" 
but he will spend the first few 
months trying to learn bow 
best to combine the family’s 
twin responsibilities as share- 
holders and senior managers. 


appointed director of bond 
market research at UBS. 

■ Michael Eddy has been 
appointed a director of 
MATHESON Securities. 

■ John Maher, formerly global 
marketing director at Hill 
Samuel, has been appointed 
director of marketing at 
LOMBARD ODER. 

■ Jamie Sbeldon and Evelyn 
Wright have been appointed 
directors of GERRARD & 
NATIONAL HOLDINGS. 


Hamish Grossart takes third chair 


Haiuish Grossart is to become 
chairman of Hfoking Pentecost, 
the quoted Cardiff-based textile 
and industrial products group. 
It is a non-executive job which 
he will do alongside the task 
he took on in January of chair- 
ing and sorting out Ashley 
Group, the window blind com- 
pany which had hit trouble 
with a Spanish acquisitio n, as 
well as being chairman of EFT, 
the Glasgow-based asset 
finance company he helped 
found. 

The 37-year-old Glaswegian 
corporate finance specialist has 
long been intent on pursuing a 
career outside the mbit of his 
better known uncle Angus 
Grossart, chairman of the mer- 
chant bank Noble Grossart and 
a man with Us finger in many 
Scottish pies. 

Hamish worked at Noble 
Grossart for a time before 
creating EFT in 1987. He had 


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Until last month he was 
chairman of Quality Care 
Homes, the nursing homes 
group which he took public in 
1992. He has been involved 
with Hicking Pentecost since . 
1991 and organised its recent 
£9m acquisition of Barbour 
Campbell a former Hanso n off- 
shoot “It’s virtually Wales's 
only successful quoted com- 
pany." he says, and points out 
that its market capitalisation 
has risen tenfold since 1990. 

Grossart sees his speciality 
as helping companies with 
“financing, City relations, 
management structure and 
problems of growth and devel- 
opment but not deciding how 
many cans of b eans go out 
each day". He is also on the 
boards of Scottish Radio (for- 
merly Radio Clyde) and British 
Thornton, the quoted furniture 
and drawing equipment com- 
pany. 


m I Constructive 


careers 

Mark Creedy has been 
appointed as managing direc- 
tor of Chartwell Land, the 
property subsidiary of King- 
fisher. the retailing group. 

Creedy, who is currently a 
director of Chartwell Land 
responsible for investments, 
will replace Alan Jones who 
left last month to set up his 
own property business. 

The job involves taking 
responsibility for Chartwell 
Land's investment and devel- 
opment activities. In addition, 
Creedy will hold joint responsi- 
bility for the management of 
property initiatives and ser- 
vices across the Kingfisher 
Group- 

Before joining the group in 
August 1991, Creedy held direc- 
torships with Stockley and 
B&C Properties, a subsidiary of 
British & Commonwealth Hold- 
ings. 

■ John Rogers has been 
appointed divisional director of 
Denco, part of AMEC, an the 
retirement of Reg Green. 

■ David Laidlaw has been 
appointed contracts director of 
MORGAN LOVELL LONDON: 
he moves from John Lelliott 
Group. 

■ John Richards has ben 
promoted to finance director of 
the miller GROUP. 

■ David Tilston, formerly 
group treasurer of MEYER 
INTERNATIONAL, has been 
appointed business 
development and marketing 
director of its subsidiary 
Jewson. 

■ Peter Gregory has been 
appointed chairman of LAING 
Management Scotland and 
LAING MANAGEMENT for the 
whole of the UK; he is 
succeeded as md of Laing 
Manag ement Scotland by 
Bernard Ainsworth. 

■ Richard Swinson (below 
left), md of RMC's Roads tone 
and Building Products 
Division, has been appointed to 
the main board. 

■ Keith Perry (below right), 
formerly finance director of 
BO VIS Abroad, has been 
appointed md on the 
retirement of David Johnson, 
who will remain a 
nonexecutive director. 





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FINANCIAL TIMES FRIDAY JUNE \7 1V%U 


TECHNOLOGY: R&D SCOREBOARD 


Spending up as 
drugs dominate 


Clive Cookson looks at an international 
comparison of R&D investment 


T he fourth annual 
R&D Scoreboard 
sponsored by the 
Department of 
Trade and Industry 
gives the most encouragement 
so for to those who believe that 
UK industry must spend more 
on research and development if 
it is to compete more effec- 
tively in world markets. 

The scoreboard, published 
today, shows that listed British 
companies raised their B&D 
spending by 9 per cent to 
£7.1bn in 1993 - a rate of 
increase that comfortably out- 
paced both inflation and the 
(JK’s main international com- 
petitors. The world's top 200 
companies spent just 2 per cent 
more on R&D Last year. 

Cynics may point out that 
British industry’s increase in 
R&D spending does no more 
than match its 9 per cent rise 
in sales. But the robust sales 
performance was achieved 
largely overseas (and resulted 
mainly from the depr eciation 
of sterling against other cur- 
rencies) whereas UK compa- 
nies carry out most of their 

R&D at home. Therefore the 
figures do show a real improve- 
ment in the country’s indus- 
trial R&D performance. 

And, for the first time since 
the scoreboard started four 
years ago, companies expanded 
R&D spending by more than 


they increased dividend pay- 
outs to shareholders. Although 
the difference was only slight 

- dividends grew by 8 per cent 

- it was a step in the right 
direction for those who believe 
that UK industry is putting its 
long-term competitiveness at 
risk in order to keep 
short-term investors happy. 

The UK has for to go, how- 
ever, before it even comes 
close to matching other coun- 
tries in its spending an R&D In 
relation to sales, profits or divi- 
dends. The international top 
200 companies as a whole 
devoted an average 4.85 per 
cent of 1993 turnover to R&D, 
compared with 2J29 per cent for 
the 13 British companies in the 
group. The most impressive 
national performances came 
from Sweden (7-26 per cent of 
sales), Germany (&80 per cent), 
Switzerland (6.78 per cent) and 
Japan (590 per cent). 

The gap between the UK and 
other countries becomes wider 
still when R&D is related to 
profits and dividends. R&D 
Spending by the Interna Hnrwl 
top 200 averaged 101 par cent 
of pre-tax profits and 283 per 
cent of dividends; equivalent 
figures for the UK companies 
were 29 per cent of profits and 
72 per cent of dividends. 

But Rob Marge tts, research 
and technology director of 
Imperial Chemical Industries, 


says international cwnparisons 
frggftd on spending may under- 
estimate Britain's real R&D 
effort, because scientists and 
engineers in the UK work as 
well as their counterparts in 
other industrialised countries, 
despite being on lower salaries. 
“We're fortunate that a high- 
proportion of our R&D Is per- 
formed in relatively low cost 
countries.” 

1(3 carries out half its R&D 
in the UK although only 22 per 
emit of turnover is in its home 
country. Costs per researcher 
are about £50,000 in the UK, 
£60,000 to £80,000 in the rest of 
Europe and £100,000 in Japan. 

When the scoreboard is bro- 
ken down according to indus- 
trial sector, the overwhelming 
importance of pharmaceuticals 
for the UK becomes dear. Four 
of the top six UK spenders on 
R&D are drugs companies 
(Glaxo, Smi th Klin e Beecham, 
Zeneca and Weflcome) and the 
pharmaceutical sector carries 
out 3L8 per cent of all indus- 
trial R&D in Britain. Among 
the top 200 international com- 
panies, the sector accounts for 
only 8JB per cent of all R&D 

spending- 

And the dominance of the 
drugs companies is growing, as 
they boost R&D faster than 
other sectors. Last year the UK 
pharmaceutical sector in- 
creased R&D by 19 per cent, 


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FRANCE Tf GERMAN Y JA?AN 


led by Glaxo, the British R&D 
champion, with a 24 pear cent 
increase to £739m. 

The UK performance mother 
areas is mixed: 

• Engineering companies 
spent 10 per cent more, led by 
Rolls-Royce and British Aero- 
space. 

• Kiprtmnic an a electric com- 
panies foil by 1 per cent Cuts 
by the sector’s two biggest 
companies, G£C (down 5 per 
cent) and Racal (down 8 per 
cent), outweighed substantial 
increases by some of the 
smaller electronics companies. 

• Oil companies foil by 5 per 
cent A cut of 25 per cent by BP 


undermined Shell’s 6 per cent 
increase. 

The diversified industrial 
sector presents a revealing 
contrast between the two giant 
UK conglomerates, BTR and 
Hanson, which coincidentally 
both had a tu rnover of £9J9m 
in 1993. BTR’s R&D spending 
was £101m - up by 9 per cent 
last year and by 71 per cent 
since 1990. Hanson’s R&D 
spending was £20m - down by 
23 per cent last year and by 41 
per cent since 1990. 

Hanson's corporate develop- 
ment director, Christopher Col- 
lins, denies that the group has 
an anti-R&D attitude. "Han- 


son’s portfolio consists partly 
of industrial companies, with a 
focus on basic industries, and 
partly of resources companies 
- and there’s no R&D involved 
In digging out more coal,” be 
says. “What doesn't show up in 
the R&D figures is our con- 
stant drive to Improve manu- 
facturing techniques and ope- 
ating efficiencies.’* 

Collins says the ups and 
downs of Hanson’s R&D spend- 
ing are determined more than 
anything by its sale and acqui- 
sition of companies. Last year’s 
take-over of Quantum, the US 
rhamicai company, will boost 
this year’s B&D figure. 


aSagsakg; 

j>7vs7'| 

3 -q? 2 ) 

illiiif 


But at least Hanson features 
on the scoreboard. Forty-two of 
foe FT-SE MO companies are 
missing because they declare 
no figure for R&D -spending. 
Most ace financial, retailing 
and other services groups, 
which probably do no signifi- 
cant R&D (though J Sainsbury 
sets an example for other 
supermarket groups by declar- 
ing an R&D figure of £4LSm). 

. There are some glaring 
exceptions, however - compa- 
nies apparently contravening 
accounting standards by foil- 
ing to disclose R&D activities. 

Cable & Wireless, the tele- 
communications group, is the 


f HivS. 

Li-aa; 


1 ‘®SS 



M ichael Heseltine, sec- 
retary of state at the 
UK's Department of 
Trade and Industry, and chief 
sponsor of the R&D Score- 
board, is delighted with the 
spending increase it shows this 
year. 

"It is very encouraging that 
an area which has been a mat- 
ter of some controversy and 
much concern is being 
addressed by the management 
of Britain's leading comparries, 
despite very difficult trading 
conditions," he says. "But 
there is still some way to go to 
catch up with the world’s best 
standards." 

Heseltine believes the Score- 
board’s R&D comparisons 
around the world "are valuable 
because they focus manage- 
ment’s attention on the ingre- 
dients of international competi- 
tiveness. They are a broad 
indicator of what is possible, 
what the best are doing," he 
says. 

The managers of most Brit- 
ish companies are taking seri- 
ously the message that R&D Is 
important, according to 
Heseltine. “That doesn’t mean 
that all management is taking 
it seriously. This is indicative 
of what the best are doing. We 
should never let the people at 
the low end of performance off 


Timor HuapWM 

“SSI soma way to go to catch up wflh the best standards" 


Heseltine hails advances 

The trade and industry secretary talks to Clive Cookson 


the hook," he says. 

However. Heseltine refuses 
to discuss the performance of 
individual companies or con- 
demn them for spending too 
little on R&D. “I would not 


laying down formulae for 
industrial success. There are 
too many exceptions. Just 
imagine the effect of a politi- 
cian saying all companies 
should be spending X per cent 


low and declining R&D spend- 
ing bid, Heseltine points out, 
"it also stands out as a com- 
pany with a quite remarkable 
success record". 

At first sight; Heseltine’s 


The tablet and how to read tham v> 

Tha BSD Scorebond ii pmpaied far 8 » Dapsdmantot to stwflngat tfw exchange ratm on 3 i£*»mb«r I" 3 - 

Tracts and Inefcjgfay by Company Bap o rB io . an EJnftutft In al casts. 8 » RSD spend stows tt^imount of RSD 

coratitancy. It >s based on figures prtofabod lo amunt - ftaictoiJ by tha company anywhata in 0 * WOdd, whether i 
reports ant! accounts up to 31 May 1 S 84 . fa canted out la-house or by a contractor or urtvwafcy. 

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seek to put my judgment as a 
politician - as a minister away 
from the hurly-burly of the 
capitalist world - into the 
minds of individual boards of 
directors. 

“I don’t believe in ministers 


of turnover on R&D, and the 
consequence was that a signifi- 
cant proportion of companies 
upped their expenditure, went 
into loss and were taken over. 
Who would thank you?” 

Hanson may stand out for its 


own department is not setting 
a good example in raising R&D 
spending. According to the 
1994 Forward Look at Govern- 
ment-funded Science and Tech- 
nology, the DTFs net expendi- 
ture on science and technology 


is set to foil steadily from 
£500m in 1992-93 to £3S0m in 
1996-97. 

Heseltine rejects that as “fac- 
ile criticism". He says the foil 
results mainly from a reduc- 
tion in nuclear research, cou- 
pled with increasing receipts 
from past expenditure on aero- 
space R&D and changing 
arrangements for small 1 busi- 
ness consultancy. 

At the same time, the DTI is 
gifting the bal ance of its inno- 
vation support away from gen- 
erating new technology "mi 
which industry and govern- 
ment already spend billions", 
to concentrate more on 
Influencing the broad envi- 
ronment which allows innova- 
tive firms to flourish". That 
means cutting collaborative 
research projects and s pen di n g 
more on technology transfer 
and spreading the word about 
best practice. 

The R&D Scoreboard itself is 
a small example of such activ- 
ity. Of course, R&D is only one 
ingredient In the overall pro- 


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outstanding absentee. “The 
statement in our report and | 
accounts two years ago that 
there was no R&D in C&W was 
a great error," concedes Sidney 
O’Hara, a former BT research 
executive who recently became 
C&W technology adviser. 

O’Hara estimates that C&W 
devotes between 1.5 and per 
cent of its £5bn turnover to 
R&D, in line with other tele- 
coms service companies. That 
would give a figure in the 
region of £100m and put C&W 
comfortably into the UK top 20. 
O'Hara promises that a figure 
will be published in next year s 
annual report 

cess of innovation - defined by 
the DTI as "the successful 
exploitation of new ideas". 

The DTI Innovation Unit is 
now tackling the greater chal- 
lenge of drawing up an "inno- 
vation index" which would 
take account not only of fluids 
that companies put into R&D 
but also the outcome. 

Measures might include 
patents, new products, even 
stock market valuations. Defin- 
ing and quantifying these - 
and combining them into an 
Index that would be acceptable 
to industry and usefiil for man- 
agers - pose formidable mathe- 
matical and econometric prob- 
lems. 

Even so, two groups - Stay jf 
Hayward consultants with - 
Warwick University, and Impe- 
rial College - have drawn up 
practical proposals for an inno- 
vation index. DTI officials are 
now considering which 
approach to develop Anther, in 
consultation with industry. 

There is a reasonable chance 
that the innovation index will 
be ready for launch next year. 
Barring a corporate upheaval, 
Glaxo is certain to emerge as 
the leader of the 1995 UK R&D 
Scoreboard. A more interesting 
subject for speculation is 
which company will emerge as 
the most innovative. 


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•t 




FINANCIAL TIMES FRIDAY JUNE 17 1994 


13 


TECHNOLOGY: R&D SCOREBOARD 


A killing through contracts 

A S comnantac 


s companies emerge 
fr°“ recession, their 
thirst for R&D could 
.increase. One way to 
satisfy this without piling on 
the overheads is to contract 
out R&D, or acquire technol- 
ogy from other sources. 

“I see R&D as one of the cor- 
porate activities that the larger 
corporations will seek to out- 
source,” says Peter Watson, 
who has just left British Rail, 
where he was board member 
for engineering, to become 
chief executive of AEA Tech- 
nology. 

The company, based at Har- 
well in Oxfordshire a n d a prod- 
uct of Britain's nuclear p owe r 
programme, is the country's 
largest technical services 
organisation. With a turnover 
of around £l50m, AEA 'tech- 
nology is destined for privati- 
sation. It is, says Watson, one 
of a number of Independent 
R&D organisations that are 
"coming much more aggres- 
sively to the private sector” to 
sell their services. 

Much of the activity of AEA 
Technology foils into the area 
of technical services rather 
than straight R&D. For 
instance, it optimises plant 
performance and helps compa- 
nies to meet new safety and 
environmental regulations - 
activities with a high technical 
content which might not be 
central to a company's own 
business. 

Faced with a diversity of 
te chnical topics, “you cannot 
rely purely on your own 
resources’*, says Watson. “You 
cannot cover all of the emerg- 
ing technologies. You have to 
find a way to fill the gap.” He 
naturally sees contract R&D 


Michael Kenward on independent R&D sources 


and technical support as an 
area destined for rapid growth. 

Paul Anton also sees a bright 
future for contract research. 
Anton is the current chairman 
of tiie Association of Indepen- 
dent Research & Technology 
Organisations (AIRTO) and 
managing director of Cam- 
bridge Consultants (CCL), 
which bad a turnover of £!4m 
last year. AIRTO 's members 
employ 7,000 people aid have 
an annual turnover in excess 
of £32flm. This may seem 
small beer alongside the over- 
all spending on R&D by corpo- 
rate Britain, but the larger 
AIRTO members would appear 
well up the R&D Scoreboard. 


however. Both Pera and CCL 
have seen an increasing 
demand for help in technology 

wiflimgwnPTit 

"Companies join Pera 
because we offer a range of 
business and technology ser- 
vices,” says Armstrong. These 
include manag e me nt mar- 
keting as well as advice on 
such issues as patent protec- 
tion and technical aspects of 
European legislation. 

Auton says that other ser- 
vices are also in Increasing 
demand from contract research 
organisations, Including proj- 
ect management advising 
companies on bow to exploit 
their technology portfolios. 


licensing. 

Contract research is by no 
means new to corporate 
researchers. Companies have 
increasingly *aw«n a customer/ 
contractor approach in their 
internal R&D. Research cen- 
tres work on a contract and 
project basis for operating divi- 
sions. 

Contract research will not 
hit the hPflifHruxj in the Rama 
way as in-house S&D. “What 
companies buy from people 
like us is competitive advan- 
tage and they don't want their 
rivals to know they are buying 
it," says Rerih Jones, who was 
recently recruited from Cam- 
bridge Consultants to become 


'You cannot rely purely on your own resources. 
You cannot cover all of the emerging technologies. 
You have to find a way to fill the gap’ 


Pera International, for exam- 
ple, has a turnover in excess of 
£31m. 

Pera’s work shows the 
spread of activities that compa- 
nies buy in. As well as contract 
R&D, Pera also operates a 
membership scheme that gives 
companies access to consul- 
tancy services and information 
through a large number of 
databases at no cost on top of 
the animal fee. Ron Arm- 
strong, chief executive of Pera, 
points to a sudden increase in 
membership numbers as 
another indicator of growing 
interest in contracting out 

The customers of the con- 
tract research organisations 
want more than just R&D, 


Auton estimates that this kind 
of consultancy work now 
accounts for around 20 per cent 
of CCL’S business. 

Another new phenomenon in 
contract research is that of the 
corporate laboratory operating 
as a stand-alone R&D unit for 
third-party customers as well 
as its own parent The Central 
Research Laboratory (CRL) of 
Thom EMI, which had a turn- 
over of £8.6m last year, now 
derives as much income from 
external clients - 37 per cent of 
the total - as it does from 
Thom EMI As well as contract 
R&D, product development »wd 
its own production activities, 
CRL also earns 27 per cent of 
its income through technology 


commercial manager at CRL. 

Jones says companies may 
want to keep the technology 
hirMpn from their competitors 
or might be reluctant to admit 
that they buy in technology. 
Jones finds thtm puzzling. "You 
could argue that it should be 
the other way round,” he 
explains. After all a willing- 
ness to adopt ideas, or technol- 
ogy, from elsewhere is "a true 
sign that you are a progressive 
and innovative company". 

Companies are happier to 
talk about their links with the 
aradqmfc research community. 
The web of relationships 
between industry and aca- 
demia IS Wide but arrmnnts for 
a small fraction of the corpo- 


rate R&D budgets, or of the 
universities' income. 

Industry spent in UK 
universities in 1992-93, a little 
over 10 per cent of their 
income from grants and con- 
tracts and about half as much 
as the universities received 
from research chari ties such as 
the Wellcome Trust. 

The universities’ income 
from industry may be less than 
that of contract research 
organisations but it is no l ess 
valuable or productive. Compa- 
nies turn to universities for 
ideas that will have an impact 
in the longer term rather than 
for new products. Research 
costs less than development 
and can deliver more new 
ideas per pound invested. 

Universities cannot cany out 
market-oriented product 
research, says Peter Seraga, 
director of Philips’s UK 
research laboratory at Redhill 
in Surrey. The Dutch electron- 
ics company is expanding its 
contract research with univer- 
sities, Seraga explains, hut he 
fears that universities are get- 
ting pulled into shorter term 
research. 

Philips likes working with 
universities because they give 
the laboratory's 250 or so staff 
access to the frontiers of 
research. The laboratory is a 
leading player in Philips's 
work an multimedia technolo- 


Its university links include 
projects with the Royal College 
of Art and Imperial College, 
bringing together artists and 
engineers to develop software 
for the production of multime- 
dia titles on CD-Rom, optical 
disks that can store images 
and sound. 


Focusing on the 
breakthrough 

Competition in the drags sector 
is increasing, says Daniel Green 


D rugs companies may be 
suffering from lower 
profit margins as a 
result of healthcare reforms in 
many countries, but they 
remain among the most enthu- 
siastic investors in the creation 
of new products. 

The international scoreboard 
shows pharmaceutical R&D 
spending 11 per cent higher in 
1993 than in 1992, with some 
companies boosting spending 
by more than 25 per cent 
But behind the bare figures 
lies a structural change in the 
way that drugs companies 
manage their R&D budgets. 

The impetus for the change 
is that sales growth has stalled 
in many areas. Those who ulti- 
mately pay for drugs - insur- 
ance companies and their pol- 
icy holders in the US, and 
governments elsewhere - have 
decided to drive hard bargains 
with pharmaceutical compa- 
nies in an effort to control the 
cost of healthcare. 

Many drug makers have 
responded to foiling profit mar- 
gins by cutting staff and reduc- 
ing the number of manufactur- 
ing sites. But price competition 
has, if anything. Increased the 
need for effective R&D. 

R&D directors have adjusted, 
their strategies to try to max- 
imise the chances of discover- 
ing a breakthrough product 
The first moves were to drop 
the development of drugs that 
provided little advance over 
existing treatments. They then 
gave more emphasis to 
research into areas such as 
cancer. Alzheimer's and arthri- 
tis. 

With that, however, has 
come the realisation that no 
company has the resources to 
research every promising field. 
“The industry recognises that 
technological self-sufficiency is 
□o longer attainable,” says 
George Poste, head of R&D at 
SmithKline Beecham. "It most 
be strengthened by alliances.” 

As a further incentive to 
external R&D spending, the 

: RAMKING GF top too 


companies with which alli- 
ances are usually cemented - 
biotechnology companies - are 
entrepreneurial and hard 
working and can offer huge 
rewards for success through 
share hptiohs. This means' that 
much of the best work is being 
conducted there, says Jan 
Leschly, chief executive at 
SmithKline Beecham. “Bio- 
technology companies can 
attract the geniuses,” he says. 

Across the pharmaceutical 
Industry, between 15 per cent 
and 25 per cent of R&D spend- 
ing is already external, says 
Switzerland's Roche. “This has 
been rising recently and win 
continue to rise," it says. 

The importance of the 
change is probably understated 
in the official R&D figures. 
Many pharmaceutical compa- 
nies have taken equity stakes 
in biotechnology companies as 
a means of gaining access to 
expertise. Such stakes are 
classed as investments rather 
than R&D spending. 

If drugs industry executives 
needed further convincing of 
the wisdom of spreading the 
R&D risk, they need only look 
at how some manufacturers 
conspicuously fail to benefit 
from even very high levels of 
in-house spending. 

Syntax of the US ranked 
number one In 1993 among 
large pharmaceuticals 
companies for R&D spending 
as a proportion of total sales. 
Yet it failed to invent a 
replacement for its big-selling 
anti-inflammatory drug 
Naprosyn which lost patent 
protection in the US last year. 
In April Syntex was taken over 
by Roche. 

The genuine breakthrough 
that Syntex needed is by its 
nature more elusive than a 
drug adapted from an existing 
product. Perhaps it is more 
likely to be found by highly 
motivated geniuses working 
for small companies. Drags 
companies are prepared to pay 
a lot of money to find out 



Glaxo’s ETOOm Mo g d h an Research Centre, near Stevenage in H ert fo rd aHra , is 


TOP 20 ENTBmMTfOMAL COMPANIES BY R&D EXPENDITURE 


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401,449 


3,990,253 

3,979,313 

3.610341 

3519,772 

36541 

955 

145,181 

3424,4 

3,624,474 

3569589 

3.188,930 

3593,714 

73540 

4.63 

539J71 

629.2 

2,828.016 

2319.770 

2.404366 

3535513 

45538 

855 

218553 

1300.7 

3.146546 

2,971328 

2,078.671 

2,996563 

31.779 

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1075.1 

333.661 

3,071,773 

2.716.739 

2594,930 

42,369 

757 

611593 

489 6 

3.435.630 

3.380.196 

3.321.392 

2433.484 

42726 

57 

158593 

1534.4 

2531.922 

2.325.048 

2593.591 

2543,083 

20560 

11.16 

109,796 

2134 

2373b 334 

1.997.474 

1.655.153 

2574549 

45591 

457 

1,203,108 

172.4 

1387,556 

2.104,765 

1544,474 

1588530 

28522 

6.74 

194518 

3705 

1326,059 

1,810,645 

1,610.095 

1.789504 

39563 

454 

472583 

3788 

1.737.445 

1,650578 

1.443.416 

1,730528 

18507 

955 

224524 

7695 

1,164303 

830.320 

918551 

1565558 

21.281 

753 

93.229 

1766.5 

1331395 

1.692505 

1535.736 

1534578 

19,138 

An? 

157.485 

974.7 

1512.706 

1582.967 

1305.170 

1.405,947 

23,482 

559 

112584 

1244.4 

1.457,067 

1546387 

1.000,646 

1528.767 

15560 

7.7 

287548 

4275 

1,205,044 

1,167578 

1,065,701 

1506585 

25.024 

452 

82521 

14625 

1,185,687 

1,175,139 

1,091.377 

1,190568 

13.732 

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154,106 

772.4 

1394564 

988547 

923,900 

1,182558 

17522 

6.8 

201.229 

5875 

1.130.312 

1,116.690 

1,045550 

1.182.140 

20,470 

5.78 

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1.346,742 

1,523.524 


Anomalies in the 
reporting system 

Andrew Jack describes why UK financial 
disclosure methods need updating 


S ipping Frascati does not 
normally bring accoun- 
tancy to mind, but it has 
proved a heady legacy for 
those struggling with current 
UK financial reporting stan- 
dards on research and develop- 
ment 

Existing requirements are 
based on the work of a paper 
prepared by the Frascati com- 
mittee of the Organisation of 
Economic Co-operation and 
Development in the 1960s for 
its own data collection. 

SSAP 13, the accounting 
standard that deals with R&D, 
was Introduced in 1977 and 
last revised in 1989. It still 
uses these same OECD guide- 
lines for the recognition of 
R&D. 

But David Tonkin, head of 
Company Reporting, the Edin- 
burgh-based monitor of 
accounts that compiled the 
R&D Scoreboard for the 
Department of Trade and 
Industry, says: “There’s a 
problem of definition.” 

He says the OECD concen- 
trates on an outdated science- 
based definition, split between 
pure and applied, research and 
development. It misses ont 
areas of spending such as 
intellectual property, includ- 
ing computer software devel- 
opment. 

He also highlights a number 
of other limitations to report- 
ing requirements on the topic 
in tiie UK. For example, for- 
eign-own ed companies with 
British operations do not have 
to disclose their spending in 
the local accounts if it Is 
funded from abroad. 

To add to the confusion, 
there are differences between 
the accounting standard in the 
UK and elsewhere, such as In 
the US where all such expendi- 
ture most be taken against the 
profit and loss account and hot 


capitalised, says Ken Wild, 
accounting technical partner 
at Touche Ross. 

An Issue for UK standards 
setters Is whether companies 
should similarly be allowed to 
allocate R&D between the 
profit and loss account and the 
balance sheet 

Deferral is currently allowed 
for expenditure on projects if 
their technical feasibility and 
commercial viability can be 
assessed with reasonable cer- 
tainty. 

“It is very subjective," says 
Tonkin, who opposes making 
the guidelines more restric- 
tive. “In my view this is pre- 
cisely what we want out of dis- 



closure: for directors to make 
judgments and to pat their 
reputations on the tine." 

The result of all these anom- 
alies is companies can in 
good faith find themselves 
struggling to represent fairly 
all their R&D expenditure 
becanse of the guidelines’ limi- 
tations. 

There is nothing to stop 
them providing additional vol- 
untary disclosures outside the 
scope of the standard, to 
reveal what they consider to 
be a fairer view. They now 
also have scope in the Operat- 
ing and Financial Review, the 
new set of voluntary guide- 
lines circulated last year by 
the Accounting Standards 
Board. 

Few do so, however. There is 
considerable evidence that 


many companies arc failing to 
even disclose the minimal 
amounts required by SSAP 13, 
with all its current faults: 
something to which regulators 
need to pay greater heed. 

An analysis of R&D under- 
taken for the F inan cial limes 
by Company Reporting for 521 
companies with year-ends up 
to the end of May 1994 shows 
that 213 provide some Indica- 
tion of research and develop- 
ment activity. This is normally 
in the form of commentary in 
the chairman’s statement, or 
an accounting policy note. 

In three-quarters of these 
companies, the value is dis- 
closed and charged to income. 
In a smaller number of cases, 
companies disclose spending 
in the directors’ report rather 
Hi an - as the law requires - 
the accounts. 

However, in 22 per cent of 
cases there is no disclosure of 
the income effect provided 
anywhere in the financial 
statements. Examples include 
As da, BAA, Bass, Cable & 
Wireless and Guinness. 

In response, some companies 
argue that the amount con- 
cerned is not material. Others 
that it would make them vul- 
nerable to competitive disad- 
vantage if they disclosed the 
amount to their rivals. 

Tonkin disagrees. “Compa- 
nies should be debarred from 
making disclosures about 
items that are not material,” 
he says. “It is misleading. Oth- 
erwise the chairman is going 
on about something that 
doesn’t exist” 

Meanwhile, the OECD is in 
discussions over a revised ver- 
sion of its own R&D defini- 
tions. Readers of accounts can 
only hope that its members do 
not get too carried away 
drinking Frascati before they 
finis h their drafting. 


Collaborate to innovate and survive 

Alan Cane examines why electronics companies are joining forces to share costs 


lectronics companies 
that were once bitter 
enemies are forming 
unprecedented alliances aimed 
at cutting research and devel- 
opment costs and improving 
effectiveness. Collaboration 
h pn become the nama of tha 
gama at an international level, 
as companies find themselves 
squeezed between spiralling 
research costs and revenues 
forced down by recession and 
price competition. 

For example, Unisys, one of 
the largest US computer manu- 
facturers, has abandoned its 
own semiconductor operations, 
saving itself $100m (£67m) a 
year. The advanced chips for 
its new large machines will be 
made by International Busi- 
ness Machines, the world's 
largest computer company and 
still a fierce competitor. Uni- 
sys, marginally profitable after 
several troubled years, spent 


£348m on S&D last year, well 
down an the £505m spent In 
1990 but still equivalent to GJB5 
per cent of sales. 

Many large companies In the 
electrical and electronics sec- 
tor have found it necessary to 
cut R&D spending in line with 
reduced revenues. Siemens of 
Germany took premier place in 
the sector last year with spend- 
ing of almost £3im, a decline of 
8 per cast an the year before. 
IBM, formerly the world’s R&D 
powerhouse, was a whisker 
behind, but cot its spending by 
13 per cent 

Bill OHiordan of Imperial 
College, London, who is also 
head of research and advanced 
technology for ICL, the UK- 
based computer company 
owned by Fujitsu of Japan, 
says there are two reasons why 
collaboration has taken on a 
new importance. 

First, no angle company can 


afford the costs of building and 
managing systems of today's 
complexity without help. ICL 
benefited greatly throughout 
the 1980s from an alliance with 
Fujitsu which gave it privi- 
lege! access to the Japanese 
company’s wniwinJurin r tech- 
nology. 

it was an appreciation, how- 
ever, of the funding level nec- 
essary to stay at the forefront 
of innovation that led the com- 
pany to takeover by Fujitsu. 
Today, ICL. at £ 208 m a year, 
spends substantially more than 
any other nan-listed UK com- 
pany; ICL's R&D represents 
7.96 per cent of its £2.6bn sales. 

Second, unless companies 
collaborate, their ability to 
respond quickly to change 
deteriorates. The value of the 
experience built up by their 
scientists and engineers with- 
ers in a rapidly changing envi- 
ronment unless they are 


exposed to fresh stimuli. 
OHiordan says; “When you 
collaborate, you innovate; 
when you don’t, you invent.” 

For many companies, collab- 
oration has become an essen- 
tial feature of corporate 
restructuring. Amdahl, a US 
company which pioneered 
plug-compatible mainframe 
computers, functionally identi- 
cal to IBM’s, seemed in trouble 
a year ago. Sales were stagnant 
as customers turned away 
from mainframes towards 
apparently more cost-effective 
networked computer systems. 
R&D spending was, at BMfim , 
19J} per cent of sales, the sec- 
ond highest in the global rank- 
ing. 

Amdahl's business plan 
called for the company to move 
down from sales of 52J5bn to 
$l.5btL ft&u spending had to 
be brought in line. The solu- 
tion was a technology collabo- 


ration with Fujitsu, owner of a 
minority stake in the company. 

Amdahl abandoned ECL 
(emitter-coupled logic) cir- 
cuitry, which is fast but pricey, 
in favour of Fujitsu's cheaper 
CMOS (complementary metal 
oxide silicon) alternative. 
Fujitsu now designs and builds 
the computer; Amdahl builds 
in the features which enable 
the machines to compete 
directly with IBM. 

The leading semiconductor 
companies, Intel and Motorola 
of the US, have pushed up R&D 
spending by 24 per cent and 16 
per cent respectively as they 
battle to maintain their chip 
designs as industry standards. 
Even they are finding collabo- 
ration with other companies 
essential 

Motorola, Apple and IBM are 
working together on a design 
called “Power PC". Last week, 
Intel and Hewlett-Packard 


announced they were working 
together on a new generation 
of microprocessor chips which 
could dictate the direction of 
computer technology into the 
next century. 

Software companies are, for 
the moment, an exception to 
the trend. SAP of Germany 
spends 25 per cent of its £428m 
revenues in developing R3, a 
highly successful accounting 
package. Quality Software 
Products of the UK has spent 
£ 16 m over the past few years 
in developing a competitive 
product Bigger software com- 
panies often buy smaller ones 
to add an attractive software 
product to their catalogue 
without incurring R&D costs. 

The pressure to spend on 
R&D has in no way dimin- 
ished. In the future most com- 
panies will be able to survive 
and advance only by sharing 
costs. 


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877 

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4.193 

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330.4 

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7.100 

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0.68 

81,700 

6.7 

104 

7.000 

7500 

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35500 


1517 

948 


253 

3.07 


30300 

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1185 

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16.7 

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29500 

2fl500 


29,100 

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12536 

334 

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12,455 

1015 

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6515 

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17500 

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558 

3541 

3896 

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11 506 

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FINANCIAL TIMES 


FRIDAY JUNE 17 1994 



Scott Inquiry takes centre stage 

Malcolm Rutherford reviews ‘Half the Picture’ at the Tricycle Theatre 


T he best tribute to 
Richard 
Norton-Taylor's 
dramatised version 
°f the Scott Inquiry 
into British arms sales to 
Iraq is the discussion it 
provokes at the end. This 
takes place in the theatre with 
a formal chai rman. a pa^i of 
lawyers, journalists, politicians 
and, as with Question Time on 
television, the audience is 
encouraged to join in. 

On the first night Paul 
Henderson, managing director 
of Matrix Churchill, the 
company that supplied the 
weapons material, was a 


member of the panel He said 
that the stage version, 
including its portrayal of hhn 
as a man who spied for his 
country then was shopped by 
his own government, was 
broadly accurate. 

For the rest, there was a 
spilt among the audience 
between those who believed 
that practically any kind of 
arms sales Is immoral and 
those who recognised that the 
central point is that the 
government was prepared to 
let people who had helped it 
go to prison and sought to 
conceal the evidence that 
would have protected Hum, in 


between, cm which there was 
little disagreement, there was a 
great deal about excessive 
government secrecy. 

That Is the trouble with 

Scott Inquiry. What precisely 
is it about? We shall not know 
the foil answer until we have 
tile Scott report towards the 
end of the year, by which time 
many of the ministers involved 
may be out of office. Seme of 
them, like Alan Clark, already 
axe. 

So it is not surprising that it 
is also the problem with 
Norton-Taylor's piece. Half the 
Picture takes its name from a 
statement by Sir Rohm Butler, 


the cabinet secretary and head 
of the civil service, on 
answering questions in 
Parliament: “You should not 
try to mislead ... You give 
some information that you 
safely can... Half the picture 
can be true". 


N 


orton-Taylor ts 
a journalist on 
the Guardian 
who has long 
campaigned for greater 
freedom of information- There 
are no particular distortions, 
except perhaps in tone of voice, 
in Half The Picture. Almost 
every word is taken from 



written or spoken evidence to 
the Scott Inquiry. 

How far you appreciate it 
may depend on how well you 
know the subject, and we 
would all know the subject 
even better if the inquiry had 
been televised in the first 
pta.ee. The word is that Sir 
Richard Scott turned down the 
request because he regarded 
television as a mainly 

for emertaiwnent 

Scott was wrong: his 
hearings would have made 
riveting television by any 
standards, both entertaining 
and informative. If you can 
televise Parliament, including 
Select Committees, surely 
there is a compelling case for 
televising a public inquiry into 
the working of government 

Norton-Tayior does well with 
the material on stage. All the 
characters are there. Sylvia 
Syrns is a severe Lady 
Thatcher and avoids felling too 
far into parody. Jan Chappell 
is a precocious pushy Presfley 
Baxendale QC, the woman who 
asks most of the questions. 
Michael Stroud plays Scott 

Arguably the piece is too 
kind, to Alan Clark who has 
became a cult figure even with 
a predominantly left wing 
audience in KHburn. Played by 
Jeremy Clyde he is almost 
cheered for his outrageous 
nonchalance. Norton-Tayior, 
too, plainly has a soft spot 
for Michael Heseltine (David 
Robb) who is the nearest to 
a hero on the government 
aide. 

Directed by Nicolas Kent, 
Half The Picture remains a 
documentary rather than a 
play, but it is an outstanding 
example of the theatre as a 
place for public discussion. 


Michael Stroud and Jan Chappell in Norton-Taylor’s drama on the inquiry into British arms sale to Iraq 


Tricycle Theatre, 
NW6, (071) 328 1000 


London 





IV ,v « 

■tW*. 





Atesulr Muir 


Damian Lewis: a striking young Hamlet with a tide of Tudor red hair 




L 


M ountains made 
of barking 
says Wim 
Vandekeybus. 

An evening made of torment, 
say L A theatre-piece made 
of modish nonsense. An event 
made of mindless aggression, 
irrational posturing; cheap 
effects. 

Five years ago we saw 
Vandekeybus* London debut 
with What the body does not 
remember, which told of the 
new dance-theatre emerging 
in Belgium. It might look at 
moments like Euro-crash. - 
bodies slamming to the floor; 
danger the essential in every 
step - but its emotional force 
and wBd logic, its skilled 
disdain for hazard, were 
hugely effective. I called it 
"essential viewing” in these 


Since then Vandekeybus has 
become popular, much seen 
on the international 


Dance/Clement Crisp 


Mountains made of sheer 
self-indulgence 


postmodern circuit- one of 
the less engaging circles of 
hell - and be has returned 
to London with creations in 
which dance has seemed 
increasingly tmenterprisrng, 
increasingly a slave of an 
oblique, angry theatre. It is, 

I s upp o se , par for the course 
in our dislocated age, and one 
must accept the work of 
Vandekeybus and his fellow 

choreographers as 

symptomatic of a time when, 
new dance-theatre makes 
much of anxiety and 
frustration, and little of 
movement invention. 


But I find Vandekeybus* 
latest piece - seen at the 
Queen Elizabeth Hall mi 
Tuesday and Wednesday - 
seif-indulgent and unworthy. 

The illogicalities of nightmare, 
a trip to fihn in North Africa, 
toe presence of a blind 
Moroccan actor in his troupe, 
seem part of the paraphernalia 
of this 90 minute trial. Other 
ingredient include 
Vandekeybus 1 favoured 
stam-danchig procedures 
(which look very old-fashioned 
nowadays); din (the thump 
of drums reverberating in 
erne’s chest-bone); kamikaze 


relationships between men 
and women; a German chap 

h ^ n g ring ns; VanHeke yhnc* 

home-movies erf “My trip to 
Morocco" to bore us; 
something nasty h a ppening 
to a chicken an film; male 
nudity and public washing 
(completed by a shower of 
sand - and grit in the 
underpants); a tea-party; a 
girl having her ears cleaned; 
chatter; furry masks; a 
palanquin made of brooms. 
(What a list!) It is a sequence 
of demonic energy and 
diabolical racket, and is as 
muddled and pointless as 


someone else’s nightmare - 
when you bite back the words: 
"See an analyst" 

As an exercise in re-heated 
surrealism - lacking, alas, 
the elegance of means th at 
earlier games with the psyche 
had - it is an unmitigated 
vexation to the spirit I do not 
find that Vandekeybus ttfata 
at any moment as a 
choreographer in Mountains 
made of barking. Dance for 
h im Is 8 bllUlt nwhmnfltrt with 
which to hammer home brute 
theatrical points. He has an 
eye for quick and predictable 
design effects and for toe 
coarsest stage tricks. The 
result has the unfocussed 
vehemence of a mob, and is 
about as enjoyable to watch. 

■ On Monday in my piece 
on Lost Ballerinas, I teas 
misinformed about the cost of 
putting a student through the 
ENB school, which should have 
readU-KTOO. 


Baroque opera/Iohn Allison 

Peri's ‘Euridice’ 

was often over-relaxed. Some of the 
singers treated Euridice as an oratorio, 


O pera, one of the first musical 
innovations of the Baroque 
period, was represented at 
tM« year's ijifthimga Festi- 
val of Baroque Music - celebrating its 
tenth anniversary - by Jacopo Peri’s 
Euridice, the earliest surviving opera. 
But Euridice is not a work best encoun- 
tered, as on Wednesday at St James’s 
Church, Piccadilly, in concert form: 
apart from its novel, declamatory music 
the interest lies in the way Peri, the 
so-called "inventor” of opera, was 
exploring the theatrical possibilities of 
the new medium. 

Euridice (1600) does not require a 
complicated staging. The action, which 
departs from the tragic myth and 
returns Eurydice to Orpheus - a happy 


end was required since the opera was 
written as a wedding entertainment - is 
straightforward; the settings, a forest 
glade and the underworld, can be left to 
the spectator’s imagination. In the 
absence of these, the dramatic burden 
falls on the music, and Wednesday’s 
performance was too cool and reflec- 
tive. 

The "period" group Combattimento 
has a fine sense of musical style, but 
David Roblou’s direction from the key- 
boards - harpsichord, organ, regal - 


singing with little inflection of tone, 
which is ftnp far the limited emotions of 
sacred music but makes for no dramatic 
spark. Even some who had to imper- 
sonate more than one character seemed 
limited to a single vocal colour. There 
were a few outstanding exceptions, in 
each case the singers best able to make 
something of the Italian text. 

Mark Tucker was a poignant tenor 
Orpheus (a role first taken by the com- 


poser himself), anrt found emotion in 
every word of his excellent Italian. Lil- 
iana Mazzarrl was a charming Eurydice 
- though the title role, a small part - 
and ahe, too, had the temperament the 
music requires. Sarah Connolly's Trag- 
edy sang the Prologue with poise, and 
Kym Amps made something of her 
Nymph and Venus. Ian Caddy’s power- 
ful pluto outsang them all, and his sim- 
ple gestures helped: the Pluio-Orpheus 
encounter was one of the few episodes 
all evening to come to convincing fife. 


The Lufthansa Festival of Baroque 
Music continues at St James’s, Picca- 
dilly, and toe Wigmore HaD until June 
30. 


Theatre/Alastair Macaulay 

Hamlet in the Park 


T fds most excellent can- 
opy the air, look 
you. . . It makes a dif- 
ference to when you 
can see the firmament Hamlet 
is talking about, and here is 
one of the gams of watching 
Hamlet in the Open Air Thea- 
tre in Regent's Park. With the 
dry above he counts himself 
king of infinite space; amid the 
theatre he m ight be bounded in 
a nutshell 

The three other strengths of 
Tim Pigott-Smilh's staging are 
its clarity of utterance, its con- 
cision, and its protagonist. 
Every word registers, even 
from actors who a fortnight 
ago were often inaudible in A 
Midsummer Night's Dream. 
The play has been cut (not 
only is Hamlet's address to the 
players gone, so is the play the 
players usually speak) so 
tautly that the audience's 
attention never flags. As for 
young Damian Lewis (just a 
year out of d rama school) as 
Hamlet, everything he does 
hag the audience firmly held. 

Strikingly equipped with a 
tide of Tudor red hair, burning 
blue eyes, heroic bones and 
good build, this Hamlet works 
hard to win his authority over 
the play, but win it he does. He 
speaks the lines "with good 
accent and good discretion”, 
and he has both virility and 
stillness. He is a Hamlet both 
Romantic (frozen in melan- 


choly, vivid in action) and 
modem (playing at crude Aper- 
ies in his "madness", sardoni- 
cally rude). He manages both 
to relate freshly to everyone 
else onstage and to suggest 
that Hamlet's mind is always 
at one remove from everyone 
around him. 

Remarkably, he achieves this 
by working within very narrow 
confines. His vocal register is 
seldom more than a minor 
third, he no particular 

Apart from the 
open air , the 
strengths of this 
staging are clar- 
ity , concision and 
its protagonist 


play between piano and forte, 
he employs no great contrasts 
of speed during his soliloquies. 
Yet one attends to him. He has 
not yet bent the role to his 
wifi, has not relaxed within its 
rigours so that we trust his 
command of it, is still shifting 
in his way of addressing the 
audience - and yet one attends 
to him. 

One g ttepds to his chief col- 
leagues, but with considerable 
less gratitude. Ophelia 
(Rebecca Egan) is a pushy 


modern miss. Gertrude 
(Pamela Miles) a slow and 
unemotional marshmallow, 
Claudius (Paul Freeman) a 
flamboyant thespian of flash- 
ing eyes and rolling Rs, Polon- 
ius (David Colfings) a tepid old 
trouper. Everything the last 
three actors do tells us, with 
emphatically actorish delibera- 
tion, that they are actors of the 
Old School - a school so old 
one thought it was dead. Their 
experience makes its effect, but 
I cannot believe in their char- 
acterisations for a moment. 

The production is set, more 
or less, in Georgian times: 
Empire-line dresses, frock 
coats, trousers and waistcoats. 
The way poor Gertrude kept 
hitching her skirts around told 
us only too clearly that the 
13th century just wasn't her 
time; she only relaxed when 
put into a nightie for the closet 
scene. And why has the 
designer, Tanya McCallin, 
allowed Gertrude and Ophelia 
to wear hairdos that are so bla- 
tantly modern that they clash 
with their frocks? The effect is 
cheap - as if the Open Air 
Theatre could not afford wigs. 
But these irritations are 
peripheral Hamlet is alive in 
Regent’s Park, and Hamlet is 
more than promising. 


In repertory at toe Open Air 
Theatre, Regent’s Park, NWI 



e 


It lNTEBNATiQNA&]\ 

A 

G 

.R 

rs 

UI 

DE 


■ EXHIBITIONS 
GUIDE 

AMSTERDAM 

Van Gosh Museum Van Gogh’s 
Self-Portraits: 20 paintings and 
two drawings dating from his stay 
in Paris 1886-7. Ends Oct 9. Dally 
F^ksmuseum Flowers and Plants: 
flora and fauna In five centuries 
of prints and drawings. Ends July 
31. Closed Mon 
BERLIN 

Museum ffir fndteche Kwnst loot 
Empire of the Sflk Road: a 
remarkable cofleetton of 87 
wefl-preserved pieces of Buddhist 
art from the tenth to 13th centuries. 
Ends July 3. Closed Mon 
Haus der KuHuren der Welt 
Tanzania: masterworics of African 
sculpture. Ends Aug 7. Closed Mon 
BERNE 

Kunstmuseum Bafthus fo1908): 
drawings by the French painter, 
now resident in Switzerland. Ends 
Sep 4. Closed Mon 

BONN 

Kunst- und Auss*ellungsha&» 

The Century of the Avant-Garde^ 
in Central and Eastern Europe: 700 


works by 200 painters and 
sculptors, offering a thematic guide 
to the main artistic developments 
of the past century. Ends Oct 16. 
Closed Mon 
BRUSSELS 

Palais des Beaux-Arts Robert 
Smithson: retrospective of the 
American artist, one of the founders 
of Land Art Ends Aug 31. Closed 
Mon 

COLOGNE 

Museum Ludwig The Unknown 
Modigliaii: 240 of the 440 hitherto 
unknown drawings amassed by 
Paul Alexandra before 1914. Ends 
July 10. Closed Mon 
DIJON 

Muato Magnin Sculptors’ Designs 
1850-1950: a survey of 
developments in scdptural art from 
Daumier, Degas and Rodin to 
Giacometti and Picasso. Ends Sep 
11. Closed Mon 
DUSSELDORF 

Hetjens-Museum Ceramic Works 
of Picasso, Mrt and Thple: around 
90 works by three major Catalan 
artists erf the 20th century, ranging 
from Picasso's decorative owls 
and figurines to Tapies’ massive 
sculptures. Ends Aug 28. Closed 
Mon 

GENEVA 

Petit Palais The Family: from 
BaziUe to Picasso, a thematic series 
of paintings. Ends Oct 31. Dally 

LAUSANNE 

Musrie d*Alt Contempora in 
Contemporary Picasso: 80 works 
1946-1971, Including 30 paintings 
and a dozen sculptures. Bids Sep 
25. Dally 

Mus6e Ofympique Mirb: 41 
scufctorea covering his entire 
career, plus 13 prints from the 


1960s and 70s. Ends Sep 4. Daily 

LONDON 

Tate Gallery R.B. Kitaj (b1932): 
retrospective of the American-born 
artist who has lived In Britain since 
the 1950s aid is now regarded 
as one of the outstanefing figurative 
painters of his generation. Ends 
Sep 4, Daily 

Victoria and Albert Museum Pugin 

- A Gothic Passion: the first 
exhibition to look at the life, work 
and influence of one of the most 
important designers of the 19th 
century. Father of the Victorian 
Gothic revival, Augustus Wei by 
Nortftmore Pugin (1812-1852) is 
probably best known for hte 
coHaboration with Charles Bany 
on the design of the Houses of 
Parliament at Westminster. Bids 
Sep 11. Anew Glass Gallery has 
been opened to display over 6,000 
objects, fflustrating the history ami 
development of glass over the past 
four milienia. Daily 

Nation^ Gallery From Caspar 
David Friedrich to Ferdinand 
Hodler, A Romantic Tradition - 
Paintings and Drawings from the 
Oskar Reinhart Foundation: 130 
works from one of Europe's finest 
collections of German, Austrian 
and Swiss at of the 10th century. 
Bids Sep 4. Daly 
Accademfe ttatiana Michelangelo 

- An Invitation to Casa Buonarotti: 
15 drawings, pfue tetters and 
books. Bids July 24. Deify 
British Museum Indian Paintings 
and Drawings from the Collection 
of Howard Hodgkm. Ends Aug 21. 
Goman Printmaking In the Age 

of Goethe. Ends Sep 11. Daily 
Eskenazi Yuan and Early Ming 
Blue aid White Porcelain: 26 rare 


pieces dating from 1340 to 1435, 
mostly from private collections. 
Ends July 8. Closed Sat and Sun 
(10 Clifford Street W1) 

LUGANO 

ViRa Favorite Europe and America: 
19th and 20th century oil paintings 
and watercolours. The 
Thyssen-Bomemisza Foundation’s 
summer exhibition consists of 150 
works ranging from the Hudson 
River School to examples of 
Cubism, German Expressionism, 
the Russian avant-garde. Dada, 
Surrealism and Pop Art Ends Oct 
30. Closed Mon. No parking 
facilities: take Bus no 1 (tel 
091-516152) 

MADRID 

Centro de Arte Reina Sofia 
Gerhard Richter 10Q works by one 
of the key figures In contemporary 
German art Ends Aug 22. Closed 
Tues 

Fundadon Juan March Isamu 
Noguchi D 904-88): 58 outdoor 
sculptures expressing the oriental 

and western cultural traditions 
inherited by Noguchi, an American 
artist of Japanese origin. Ends June 
26. Daily 

CasteOana Fernando Botaro: an 
outdoor parade of 21 of the 
Colombian sculptor's bulging 
bronzes. Ends Aug 12 
MART1GNY 

Fondation Pierre Gianadda From 
Goya to Matisse: Masterworks of 
the 20th Century. Olds Nov 1. Dally 
MUNICH 

Haus der Ktsist Ban Vital: an 
exhibition exploring the fink 
between Kandinsky, Klee, Arp, Mko 
and Cakler. Ends Aug 14. Closed 
Mon 

KimsthaBe der 


Hypo-KuHursttftwtg El Dorado: 

300 gold and ceramic treasures 
from pre-colonial Colombia. 

Ends Sep 4. Daily 
Akademie der schSnen KOnste 
The Russian Stage 1900-30: 190 
treasures from Moscow. Ends June 
26- Closed Mon 

Neue Plnakothek Wilhelm LeiW 
(1844-1900): around 200 paintings 
aid drawings offer a 150th 
anniversary retrospective of the 
Cologne artist who was file leader 
of German Realism In the late 19th 
century. Ends July 24. Closed Mon 
NEW YORK 

Metropolitan Museum of Art 
Petrus Christos: 22 paintings by 
the 15th century Netherlandish 
master, renowned for the jeweWike 
luminosity of hte work. Ends July 
31. Picasso and the Weeping 
Women; 80 paintings and works 
on paper from the 1930s and 
1940s. Ends Sep 4. The Decorative 
Arts of Frank Lloyd Wright Ends 
Sep 4. Closed Mon 
Museum of Modem Art From 
Manet to Picasso - Masterpieces 
from the David and Peggy 
Rockefeller Collection. Ends Sep 
6. Closed Wed 
PARIS 

Grand Palate The Origins of 
Impressionism 1859-69. Ends Aug 
8. Closed Tues 

Musde d*Ait Modems de la Vflle 
de Paris Dutch Art of the 20th 
Century: the first part traces 
developments from Van Gogh to 
Mondrian, whBe the second focuses 

on ten contemporary artists. Ends 
July 17. Closed Mon (11 awe du 
President Wilson) 

ROME 

Palazzo deBe Esposlztoni Dada 


- The Art of Negation: 300 works. 
Ends June 30. Richard Long: eight 
installations by the British artist 
Ends June 30. Closed Mon 
San Michele Garden Theatres; 
drawings, engravings and scale 
models showing the lost baroque 
art of creating theatrical scenery 
using only carefully manicured 
plants and trees. Ends June 26. 
Closed Sun (Via di San Michele) 
Museo del Folklore The Influence 
Of Egypt how toe cult of 
Egyptology influenced film-makers 
and strip-cartoon artists. AH the 
decorative hieroglyphics are based 
on the numerous obelisks scattered 
around cental Rome. Ends June 
24. Closad Mon (Piazza S. Egktio) 
STUTTGART 

Staatsgalerie Picasso: a rare 
showing of 400 prints from a 
private collection. Including 
portraits, stilWffes and many other 
themes. Ends Aug 14. Clotted Mon 
Linden-Museum Art of toe 
Aborigines: 90 wood paintings, 

40 sculptures and an Installation. 
Ends Sep 25. Closed Mon 
VENICE 

Antichi granai della reputobtica 
China In 220 BC - The Warriors 
of Xi’an: ten of the 7,000 litesize 
terracotta soldiers who guarded 
the tomb of Emperor Qjn 
Shihuangdi in central China, along 
with copies of war chariots and 
weapons discovered in one of this 
century's most dramatic efigs. Ends 
Sep 11. Daily (toe old granary on 
the tip of the Giudecca) 

Palazzo Grass! Renaissance 

Architecture from BruneHesehi to 
Michelangelo: 250 works from 
European and American public 
collections. Ends Nov 6. Daily 


Scuofa Grande dl San Rocco 
Tintoretto portraits. Ends July 10 
WASHINGTON 

National GaBery of Art Willem 
de Kooning's Paintings: 75 works 
by America's influential abstract 
expressionist Ends Sep 5. From 
Minimal to Conceptual Art - Works 
from the Vogel Collection: 90 
drawings, photographs, paintings 
and sculpture by contemporary 
artists. Ends Nov 27. Recent Prints 
and Sculpture from Gemini G.E.L: 
a selection of work from the 
acclaimed contemporary art 
workshop in Los Angeles. Ends 
Oct 2. Deify 

National Museum of American 
Art Thomas Cote: 70 works by the 
father of the Hudson River school 
of painting. Ends Aug 7. Mary Vaux 
Walcott 50 watercolours by the 
early 20 th century naturalist, 
explorer and artist. Ends Aug 29. 
Daily 

Arthur M. Sackler Gallery 
Contemporary Porcelain from 
Japan. Bids Sep 5. Daily 
ZURICH 

Kunsthaus Dada: 150 paintings, 
drawings and collages, plus a large 
number of posters, letters and other 
documents relating to the nihilistic 
movement founded in Zurich In 
1916. Ends Aug 21. Amor and 
Psyche around 1800: an artistic 
exploration of the classical Greek 
legend, with paintings and drawings 
by David, Ptaot, Meynier and 
others. Ends July 17. 

Closed Mon 

Graphtsche Sammlung der ETH 
Kicking Boxes Billiard: European 
Art and Geometric Forms Since 
1970. Ends July IS. Closed Sat 
and Sun 




16 


nn FRIDAY JUNK. 7 w 


M aking its way 
down Tokyo’s 
narrow city 
streets, Chrysler’s 
sturdy Cherokee Jeep appears 
as outsized and out-of-place as 
its name might suggest 
But Yuki and Asami Nagash- 
ima are delighted with the US- 
made vehicle they bought this 
year, which offers the kind of 


Drive into the 


• • 


inc reasing ly crave hut few Jap- 
anese cars can yet offer. 

“At first, we hesitated," says 
Mrs Nagashlma. “We thought 
an American car would con- 
sume a lot of petrol and break 
down easily. But we liked the 
Cherokee’s style." 

For the first time in decades, 
Japanese consumers are taking 
a serious look at American 
cars and are pleased with what 
they see. 

While US and Japanese trade 
negotiators squabble over ways 
to break down trade barriers, 
US carmakers have lifted sales 
in Japan to unprecedented lev- 
els. General Motors, the big- 
gest car manufacturer in the 
US, more than doubled regis- 
trations in Japan last year, to 
28,700 units, including its Ger- 
man-made Opel model Chrys- 
ler, the third biggest American 
manufacturer, saw registra- 
tions surge last year from 
some 2,600 to 5,700. Ford also 
boosted sales in 1993 by nearly 
50 per cent to more than 5,400. 

Although the figures are still 
small in comparison to total 
Japanese car sales of more 
than 4m last year, these suc- 
cesses have fuelled the ambi- 
tions of the Big Three US car- 
makers in a market once 
considered impenetrable. 

“The Big Three wifi be able 
to sell 100,000 cars in the near 
term. That is not a dream but a 
reality,” says Mr Yoshiaki 
Kanno, head of public relations 
at General Motors in Japan. 

Chrysler says it expects to 
double sales this year to 13,000 
vehicles. Ford hopes for a simi- 
lar growth rate this year and 
talks optimistically about sell- 
ing up to 100,000 imported care 
by 2000 (in addition to care sold 
with the Ford marque but 
manufactured by the Japanese 
Mazda group)- GM is targeting 
100,000 imported units for all 
GM brands by the turn of the 
century. 

The Big Three’s success in 
Japan and their confidence 
about the future, stem Cram 
several important changes in 
the US car industry, in the car- 
makers' approach to the Japa- 
nese market and in the Japa- 
nese market itself. 

First US cars are perceived 
In Japan as a much improved 
product in sharp contrast to 
the perception a decade ago 


rising sun 

Michiyo Nakamoto on inroads 
US cars are making in Japan 



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when the Big Three’s cars were 
notorious for poor quality and 
high fuel consumption. 

“The Big Three have put a 
lot of effort into raising their 
quality and there is Little dif- 
ference between US and Japa- 
nese cars,” says Mr Atsushi 
Horigome of Tokyo Nissan 
Auto Sales, a dealer affiliated 
to the large Japanese car- 
maker, which recently began 
selling Fords. 

Such recognition would have 
been unthinkable a few years 
ago when the widespread view 
in japan was that American 
cars fell way behind Japanese 
standards. At the time, many 
Japanese joked that if you 
heard a noise under the bonnet 
of an American car it would be 
that of a Coke bottle left 
behind by the production line 
workers. 

A second factor is the 
renewed confidence of US man - 
ufacturers who believe their 
latest models are highly com- 
petitive. “My Lincoln Conti- 
nental drives 7km a litre. Fuel 
consumption is much better 
than Japanese care of the same 
size,” says Mr Konen Suzuki, 
president of Ford Motor Japan. 
The increased attractiveness of 


US cars has been helped by the 
growing number of Japanese 
travelling and living abroad. 
“People no longer see imported 
cars as something unfamiliar,” 
says Mr Shoji Sugimoto, a 
director of Yanase, the car 
importer and dealer which 
sells GM cars. 

B ut better quality and 
an improved image 
alone do not account 
for the rising sales. 
Equally important has been 
the sharp fall of the dollar 
against the yen in recent 
months, which has made US 
care more affordable. 

The dollar's weakness has. 
for instance, led to a fall in the 
price of the Cherokee, from 
Y5J8m two years ago to Y3.7m 
(£23,600) today. The price of 
Ford's Taurus Wagon has 
fallen 10 per cent below that of 
a comparable Toyota. 

US carmakers have also been 
helped by the uncharacteristic 
sluggishness of Japanese com- 
petitors' response to changes 
in market fashions. While US 
station wagons have become 
popular with Japanese famili es 
keen for more spacious 
vehicles, few Japanese car- 


makers have responded with a 
range of comparable estate 
cars. “Japanese station wagons 
are commercial vehicles,” says 
one manager at a US car group 
scornfully. 

This lapse by Japanese car- 
makers has provided US rivals 
with an opportunity to gain a 
toehold in the local market At 
the same time, recession-hit 
dealers, desperate to keep their 
businesses going, are more 
wining than ever to sell foreign 
cars. 

“If we can't make money 
soiling Nissan cans, well just 
have to sell Ford cars,” says 
Mr Masam Jzumi, chairman of 
Tokyo Nissan Auto Sales. 

Such trends are encouraging 
US manufacturers to use Japan 
as a springboard for boosting 
sales in the region. The Japa- 
nese market is the second big- 
gest after North America. Suc- 
cess here means a big step 
forward in Asia." says Mr 
Osamu Nagata, marketing 
man ger for Chrysler in Japan. 

That explains why the Big 
Three are strengthening their 
sales and service networks in 
Japan, introducing more 
right-hand drive cars (the Japa- 
nese drive on the left) and 
adopting aggressive pricing 
strategies In an attempt to 
secure their foothold in the 
market 

Ford last month caused a big 
stir in the industry when it 
a price of Y229m 
for its 3£00cc 1994 Mustang - 
cheaper than the nearest 
equivalents, the 3,000cc Toyota 
Supra (Y23m) and the cheap- 
est Nissan Fairlady Z (YJ5m>. 

Ford says that while the 
high yen was a factor behind 
the low price, there were 
broader strategic consider- 
ations. “What Ford is trying to 
do is challenge Japanese mak- 
ers,” says Mr Konen Suzuki, 
president of Ford Motor Japan. 

US car manufacturers realise 
that, in spite of their early suc- 
cesses, further efforts will still 
be needed to meet the high 
expectations of Japanese con- 
sumers. Pleased as they are 
with their Cherokee, the 
Nagashimas complain that the 
car Is difficult to drive: “It’s 
like a truck and the steering 
wheel is not in the right posi- 
tion for Japanese drivers,” 
notes Mrs Nagashrma. 

US carmakers also face a 
race against time. Japanese 
manufacturers are beginning 
to reap the gains of a period of 
restructuring and the introduc- 
tion of new, cheaper models 
that will be better placed to 
compete with American prod- 
cuts. Ford's Mr Suzuki says 
“Japanese carmakers will 
make a comeback. So we must 
win acceptance before that” 


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Joe Rogaly 

The naked civic servants 



Britain's Tories 
are in trouble 
because they 
are not think. 
ing clearly. 
Their curse is 
not the reces- 
sion; nor is It 
Inept adminis- 
tration. It is intellectuaL They 
suffer from what Mr David Wil- 
letts, a backbencher with a 
brain, calls “a dangerous 
uncertainty about the nature 
of modem Conservatism”. You 

and I might have thought that 

the Tories are no longer useful 
because they behave as two 
parties, in two minds about 
what they stand for. Mr Wil- 
letts puts it differently. “The 
real problem,” he writes in a 
pa m phi p t* out today, Is that 
Conservatives have become 
waxy of relying as heavily on 
the free market as we appeared 
to do in the 1980s.” Or, as Mr 
Daniel Finkelstein of the Social 
Maricpt Foundation observes in 
a forew o rd, “the counter-revo- 
lution against a rationalist; 
abstract and umversahst free 
market triumphalism contin- 
ues to gather pace”. 

Tell us another one. Of 
course that is what is happen- 
ing. Capitalism unfettered is 
bong blamed for all our anxi- 
eties. The Thatcherite 1980s 
eroded the power of many 
respected institutions. Lady 
Thatcher acted on the advice 
of, among others, Mr Willetts 
TivnueeTf. Much of the m edicine 
was necessary, but there are 
these dratted side-effects. In 
the presoit decade we fear an 
unravelling of our polity, a dis- 
concerting process whose aid 
is not in sight. Everything is 
undermined - the civil service, 
the system of justice, the mon- 
archy, the professions, the 
BBC. Mr Willetts defends mar- 
ket economics against these 
charges, but he does not exon- 
erate “neo-liberals'’. The trou- 
ble with them, he says, “is that 
they simply think in terms of 
the individual economic agent 


without any understanding of 
the institutions, values and 
ties which are not just good In 
themselves but are anyway 
essential for any real free mar- 
ket to thrive”. 

Ah yes, but that is not what 
the ge nti an*^ intimated fast 
night. “Conservatives have 
made a useful alliance of con- 
venience with the free-market 
neo-Liberals end fought many 
of the battles of the 1980s with 
them,” the ungrateful brute 
confesses this morning. He 
didn't say that when he was 
enjoying his alliance of conve- 
nience. His song now is about 
enduring institutions, such as 
the family and the nation, not 
to mention important lasting 
values, such as honesty, pru- 
dence and gen- 


tion reforms, but does not 
address the dangers of corrup- 
tion inherent in appointments 
from the centre, made by min- 
isters of his party- He warns of 
the "damage which enormous 
concentrations of economic, 
political and legislative power 
in the hands of government 
can do", but appears not to 
rcrcrt wgfeiwri that over the past 
15 years it is his. Conservative, 
government that has wielded 
that power. 

Someone equal to the task 
should be brought forward to 
rebut him. Enter Dr John 
Gray, a political theorist and, 
once, a fellow-traveller among 
neo-Llberals. Dr Gray's pam- 
phlet**, due next week, is 
advertised In Mr Willetts ’s as 

"one of a pair", 

which could be 


erosity. These _ _ - , 

are as much To declare a belief said of either 

in minim al 

ivemment and 

e free market Is 

an insufficient 

response to the 

human need for a 

stable family 


part of the 
make-up of a 
true Conserva- 
tive as good 
management 
practice, fiscal 
prudence, vol- 
untary societ- 
ies, a proper 
legal frame- 
work -and the 
free market, mmmmmmmmmm 
“The challeng e facing both our 
main political parties,” he 
writes, “Is to formulate a 
coherent set of policies which 
shows that, as well as for the 
individual, there must be a ride 
for collective action, but that 
collective action does not nec- 
essarily mean state action.” 

Mr Willetts has produced a 
robust defence of this cur- 
rently apposite proposition. It 
is closely argued, often 
thought-provoking. “Civic con- 
servatism” could catch on, as a 
phrase. Alas, the substance of 
bis thesis is undermined by 
what he leaves out. He clearly 
favours local self-determina- 
tion, but dodges the issue of 
local government, which his 
lot have all but destroyed. He 
defends the health and educa- 


Punch or Judy. 
Punch Gray 
will argue that 
the destruction 
of institutions 
and values has 
now gone so 
far as to 

be irreversible. 

We let the free 
market rip and 
mmmmmmmm now W6 must 
pay the price. There is no turn- 
ing back to one-nation Tory- 
ism. The only remaining undis- 
puted value in our society is 
choice, self realisation, individ- 
ual advancement You cannot 
recreate the traditional family, 
or a sense of duty and loyalty. 
It is too late. As Mr Willetts 
reminds us. Dr, Gray is apt to 
quote Wittgenstein's remark 
that “trying to repair a broken 
tradition is like a man trying 
to maid a broken spider's web 
with his bare hands". 

It could be that a reassem- 
bled tradition is offered by Mr 
David Selboume’s The Princi- 
ple of Duty, published this 
week by Sinclair-Stevenson. 
This is one of those essays that 
most of us know is important 
but cannot quite understand. It 


fa described as "the most com- 
prehensive theory of civic sod. 
cty In English since Locke", 
and perhaps that fa so. Mr Sei- 
bourne attempts to 'shift the 
basis of political theory fro® 
talk of rights to an equation, hi 
which the duties of society to 
the citizen are matched by the 
duties of the citizen to society.. 
As I read him, he chaltagig 
"self realisation through unfa* 
peded freedom of action" at an 
overriding goal, but also 
rejects the notion that welfare 
and work are natural rights. 
His principle, he tells os 
"remains In essence a principle 
of moral expectation - the 
expectation that the citizen 
will respect the civic bond and 
voluntarily accept co-iwpoasi. 
bllity for the dvte order - tad 
of anticipAtory moral disap. 
provol If he does not*. 

What beats me fa bow the 
ethical expectations of any of 
these three contemporary pofa. 
leal philosophers can be met In 
a secular society. Oh the other 
side of the Atlantic there fa 
talk of certain values, such as 
“fairness” and “Justice*,' a* 
natural to the hum a n condi- 
tion. You do not need a reft, 
gion to sustain them. They 
simply arise because, as con- 
scious beings, we see the util- 
ity of them. This may be so, 
but every night the TV news 
suggests otherwise. We can be 
sure that to declare a belief fa 
minimal government and the 
free market fa ail hmifBdent 
response to the need of most 
human beings to be part of a 
stable family in a settled com- 
munity. Mr Willetts fa right 
about that: so fa Dr Grey- So, 
for that matter, fa today's 
Labour party, which fa another 
reason why the Conservatives 
are in such a deep hole. . 

*duk O w wa tt a: by Dadd 
Wilktts. **77fa Vndotoe of Con- 
servatism, by John Gray. Both 
£10 front the Social Market 
Foundation, 20 Queen Anne's 
Gate, London SWlH 9AA 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Letters transmitted should be clearly typed ana not hand written. Please set fax for finest resolution 

No mood for a shift to 
United States of Europe 


Broad approach to 
local government 
change is right 


From SfrJMn Banham. 

Sir, In your leader (June 14) 
you coined a new catch-phrase, 
the “Concorde fallacy” to 
describe the current review of 
local government structure In 
the English shires now being 
undertaken by the Local Gov- 
ernment Commission - even 
though only half of our recom- 
mendations are as yet in the 
public domain. 

As an occasional user of Con- 
corde (although not at the pub- 
lic expense) I am always 
impressed with the vision, 
engineering genius, interna- 
tional cooperation and quality 
of service that makes it possi- 
ble for me to arrive in New 
York before I have left London, 
and fit for worts. It would be 
nice to think that those now 
closely involved with local gov- 
ernment could match these 
characteristics. 

The fallacy in your own 
approach, if I may say so, fa 
shown in your last paragraph. 
You acknowledge a case for 
unitary status for Leicester 
and Bristol, and for Che aboli- 
tion of new counties such as 
Avon and Cleveland. But there 
is a substantial number of 
broadly similar places. If 
Leicester, why not Derby and 
Nottingham? And if not these, 
why not Plymouth, Ports- 
mouth, Southampton and a 
good few others? And Humber- 
side, Cumbria and Hereford 
and Worcester? 

It must be right to pursue a 
broad approach to cover all the 
English shires and to allow 
these issues to be aired in front 
of the commission and local 
people so that we may all 
weigh the evidence for change. 
It was also right fast year to 
speed the process up so that 
local government need not be 
in Umbo for any longer than is 
necessary. 

In undertaking the review, 
the commission, often alone 
among the many interests con- 
cerned. shares most of the con- 
cerns to which you now draw 
attention. First, the commis- 
sion has always been clear that 
the law provides that it may 
propose no change in the cur- 
rent structure if that appears 
to be what local people want 
and local circumstances dic- 
tate. 

Second, the commission has 
always been concerned to 
determine, as closely as can be, 
the true costs of reorganisation 
and has put these forward so 
that local people can judge 
whether they wish to pay the 
price (as in Rutland where it 
could be attained for the price 
of a pint of Ruddles a week for 
every household). 


Third, we have been very 
concerned to maintain the stra- 
tegic capability of local govern- 
ment This has been one factor 
in oar decision in many areas 
to recommend the retention of 
the county council and in our 
wish in nearly every area to 
retain the existing structure 
planning framework. It also 
underlines the commission's 
general preference for any uni- 
tary authorities in rural 
areas to be larger in pop- 
ulation terms rather than 
smaller. 

Fourth, the c ommiss ion is 
clear that new councils should 
devolve management to the 
local level and provide a bigger 
role for local councils (an 
approach the government 
espouses in Scotland and 
Wales but so far seems 
unwilling to support in 
England) 


Fifth, the commission fa 
clear that the real stakeholders 
in local government, that is 
local people, should be closely 
involved in the process of deci- 
sion, often to the dismay of 
local politicians who have their 
own interests to promote. That 
fa why the commission fa now 
embarking on an unprece- 
dented exercise to consult 
every household on a range of 
possible structures, any of 
which we will be prepared to 
commend to the secretary of 
state. 

Far from being an example 
of the “Concorde fallacy” the 
commission's approach to its 
task fa aimed at testing all 
the arguments of the propo- 
nents for change thoroughly, 
including the financ ial argu- 
ments. ThBxi, if change fa to 
be made, it will be in the light 
of all the relevant facts. A simi- 
lar approach to the develop- 
ment of Concorde would proba- 
bly have resulted in it never 
having been built. What a 
shame that would have 
been! 

Moreover, it is at least pref- 
erable to the “chattering clas- 
ses” fallacy: the notion that 
officials (and leader writers) 
in London, often with no di- 
rect experience of rural life, 
know best what fa good for the 
people in places like Cumber- 
land, the Fens, Huntingdon- 
shire and Rutland. All previous 
experience suggests that they 
do not 

John Banham, 
chairman, 

Local Government Commission 
for England, 

Dtdphyn Court, 

10-11 Great Turnstile, 

Lincoln’s bm Fields, 

London, 

WC 2 V 7 JU 


From Dr Berm SteiL 

Sr, Presented with a fourth, 
slate of candidates for the 
Strasbourg parliament, Euro- 
peans were about as excited as 
they would be by a fourth plate 
of lasagne. But the European 
Union, like an Italian mother, 
just won’t take "no" for an 
answer. 

With recent polls revealing 
growing anti-Maastricht senti- 
ment across Europe, “citizens 


of the European Union” were 
in no mood to ratify further 
moves toward the creation of a 
United States of Europe. Yet, 
with no outlet for legitimate 
desires to keep accountability 
lodged in national parliaments, 
Europeans used the European 
Parliament elections to deliver 
a loud, but garbled, message 
on the state of the union ami 
domestic politics. 

With voter turnout at its 
lowest since Euro- voting began 
in 1979, substantial numbers 
were effectively endorsing the 
closest thing to a pan-Euro- 
pean movement; the movement 
to stop further transfers of sov- 
ereign control to remote supra- 
national institutions. Where 
well-financed, anti-Maastricht 
groupings were on offer, such 
as in France, voters delivered 
stinging rebukes to the main 
parties. As for the mam par- 
ties, their representatives gen- 
erally vied to woo voters either 
with nationalist lines or prom- 
ises to pick the pork barrel bet- 
ter than the other side. 

There axe 567 MEPs who are 
the illegitimate children of this 
unedifying affair. They will 
form a new parliament resem- 
bling a Tower of Babel In ways 
other than linguistic. Article 
138a of the Maastricht treaty 
emphasises the importance of 
European political parties “as 
a factor for integration within 
the Union". They contribute, 


we are told, “to forming 
European awareness and 
expressing the political will 
the citizens of Europe”. 

With nine contrived and te 
uous parliamentary grouping 
- some including anti-unio 
fats, and the third largest bell 
the "non-attached” - anyoi 
with a “European awarenes 
should recognise that they ca 
not manifest a “political will 1 

Despite the parliament 
dubious pedigree, there ts 
disturbing, almost religiou 
aura attached to its status as 
“democratically elected” ins 
tattoo. 

Newly elected MEPs ai 
already crowing about the 
mission to bring the Unic 
under “democratic control az 
scrutiny”, which will large! 
consist of exercising their ne 
powers of obstruction und< 
Maastricht provisions. MEPs < 
all political hues have unite 
behind gratuitous threats I 
veto new commissioners on 
l egisla tion, all in the service t 
arrogating more powers froi 
national governments, an 
thereby contributing to tta 
construction of the Unite 
States of Europe which Eun 
peons have been saying the 
don’t want 

"There can be collectiv 
European ventures only if tb 
ci t izens take an interest an 
are convinced that the overa 
direction fa the right one” 
the words of Commiraion pres 
ident Jacques Delors. Thi 
time, at least, it is worth tat 
ing him seriously. 

Benn Steil, 
senior research felhm. 
Int ernation al Economics 
Programme, 

The Royal Institute of 

International Affairs, 

Chatham House, 

10 St James's Square, 

London SWIY4LB 


Where does Blair stand on El 


From Mr SG Grant. 

Sir, In your interesting inter- 
view with Tony Blair (“A mar- 
ketable Danger Man”, June 11 / 
12), it would have been helpful 
had he outlined his standpoint 
on the issue of European 
Union. John Major has been 
criticised, rightly or wrongly, 
for changing his mind over a 
two-speed Europe. It has to be 


remembered however, that Mr 
Blair, together with Margaret 
Beckett, the acting Labour 
leader, and John Prescott, 
acquiesced in Labour's policy 
commitment at the 1983 gen- 
eral election to leave the Euro- 
pean Community, 

SG Grant, 

23 SoUershotS West, 

Letduoorth, Herts SGS 3PU 


Explanation on abuses needed 


From Mr a Joseph. 

Sir, tf Mr Kit Jebens, chief 
executive of Lautro, the life 
assurance industry regulator 
believes that “the level of 

2; SSJVT. at * “ore 

acceptable level" - as quoted 

m your article, “When he dies 
my dear, all this wifi be yours" 
(June U) - then could we 


. be informed \ 
acceptable leveL Hi 
compare with wh 
thinks fa an acceptn 
abuse in other profit! 
A Joseph, 

White HOuse Farm, 
Tenholme Bar, 
Northallerton, 
Yorkshire DL6 3LQ 














FINANCIAL TIMES FRIDAY JU>fE 17 1994 


* 









; '■"■ace « 
’« ibr 

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financial limes 

Number One Southwark Bridge, London SEl 9HL 
Tel: 071-873 3000 Telex: 922186 Fax: 071-407 5700 

Friday June 17 1994 


Sanctions 
and N Korea 


That western countries would 
move towards imposing oan^Hnn^ 
upon North Korea was inev itab le 
follow ing its removal of fuel rods 
from the Yongbyon reactor with 
the apparent intent to make 
nuclear bombs. Coupled with its 
refusal to permit adequate inspec- 
tions and its withdrawal from the 
International Atomic Energy 
Agency, which carries out the 
inspections, this action deserved a 
response - otherwise the Nuclear 
Nan-Proliferation Treaty would be 
worthless. 

As drafted by the US. the sanc- 
tions would be mild, and preceded 
by a grace period to give Pyong- 
yang another chance to comply. 
The avoidance of more provoca- 
tive measures is sensible: the 
world must continue to avoid the 
temptation to over-react. Though 
NPT principles are important, it 
should tie remembered that ftidfa 
and Pakistan, have developed 
nuclear capabilities with impu- 
nity. It has to be taken into 
account that North Korea is a 
small, isolated country run by an 
aged maverick who wants more 
international respect and has very 
few cards to play. The decision to 
draft moderate sanctions is also 
useful in that it helps to fend off 
hotheads in the US who are call- 
ing for precipitate action against 
Kim n-stmg - including former 
senior officials who ought to know 
better. At the same tfans. the pro- 
posed measures have a better 
chance of achieving an interna. 
tional consensus than would more 
draconian punishment 
However, It would be pointless 
to pretend that the action contem- 


plated will have much, actual 
effect upon North Koreans, who 
eke out a poor but largely self-reli- 
ant exi ste nce. International con- 
tacts are so few that their reduc- 
tion will barely be noticed. The US 
has stopped short erf proposing a 
cut-off of foreign transfers of 
money because this would proba- 
bly not be acceptable to Japan. 

Given the absence of real 
impact, and the possible conse- 
quences of imposing sanctions at 
all - North Korea promises to 
wage a “pitiless war" - diplomatic 
efforts to resolve the crisis with- 
out sanctions must be persevered 
with until the last possible 
moment 

Former President Jimmy Cart- 
er's current visit to Pyongyang 
may prove useful But China 
seems to hold the real key - espe- 
cially as it can veto sanctions if it 
believes that their thru* has not 
yet arrived. Betting's efforts to re- 
engage Pyongyang over the past 
week, playing host to officials 
Including its rfrfaf of gfarff, should 
be given time to work. 

China and Japan, which with 
South Korea have the most to lose 
immediately from failure to 
resolve the crisis, have tradition- 
ally held back from direct involve- 
ment in International disputes. 
The failure so far of US-led efforts 
to bring North Korea round puts 
an extra onus upon them to use 
their influence to do so, to which 
Beijing and Tokyo appear to be 
responding. An Asian diplomatic 
solution to an Asian problem - 
backed by the threat of broader 
international action if necessary - 
is the desirable o ntegmu . 


Phone alliances 


The g4J2bn alliance forged this 
week by France Telecom, Deut- 
sche Telekom and Sprint, a US 
long-distance telecoms operator, 
should not be allowed to proceed 
until the French and German gov- 
ernments open their telecoms 
markets to foil competition. 

In the context of the liberalisa- 
tion. of telecoms services, interna- 
tional alliances are to be wel- 
comed. In time, some four or five 
international alliances will com- 
pete as “single source” providers 
to multinationals. These alliances 
are set to offer more competition 
and better service than now - of 
particular benefit to Europe, 
which suffers from a multiplicity 
of national jurisdictions and 
excessive prices for cross-border 
calls. 

Sprint operates in one of the 
world’s most competitive telecoms 
markets. Whether France Telecom 
and Deutsche Telekom can add 
sufficient value to justify their 
large investments is a matter for 
them and their state shareholders. 
However, other US operators do 
have legitimate concerns about 
the use of monopoly revenues to 
aid Sprint, while Europe’s con- 
sumers have a strong interest in 
Europe's monopolies being abol- 
ished before its monopolists attack 
other markets. 

France Telecom and Deutsche 
Telekom claim that their alliance 
with Sprint will compete only in 
sectors - such as calling cards and 
data communications - already 
open to competition. They also 
stress that the Sprint deal will be 
completed only a year before full 


domestic liberalisation is achieved 
to meet the Ell's 1998 deadline. 

That is an unconvincing 
response, ft is notoriously difficult 
to separate oat costs in tdermnn 
companies, particularly • in the 
early years after the abolition of 
their monopolies. Even with regu- 
lators dedicated to the task, as in 
the US and UK, claims of unfair 
practice abound. 

Only last month, Deutsche Tele- 
kom was found by Germany's Fed- 
eral Cartel Administration to have 
been channelling large subsidies 
into its data division since the lib- 
eralisation of data telecoms in 
1989. Until its principal markets 
are open, international competi- 
tors will have understandable 
doubts about the fairness erf com- 
petition. while French and Ger- 
man consumers continue to be dis- 
advantaged. 

The 1998 EU deadline offers only 
marginal reassurance. It leaves 
the French and German voice 
monopolies intact for another 
three years. Furthermore, it does 
not extend to infrastructure liber- 
alisation, vital to effective tele- 
coms competition. 

The European Commission is 
expected to recommend that provi- 
sion erf infrastructure also be liber- 
alised in 1998, It is not however, 
feasible for the EU to bring for- 
ward foe 1998 deadline, given the 
careful balancing of interests It 
represents. So if the French and 
German governments support 
their companies’ desire to invest 
hfTHnmi overseas, they should be 
forced to allow competition 
at home. 


Slipping market 


or the European Commission 
ad EU governments, lack of prog* 
ss in MiaWrig the stogie market 
ork is becoming a severe embar- 
issment Yesterday the Camnris- 
on published a list showing that 
ranee, Germany, Greece and 
■eland have the worst records in 
lamwg single market legislation 
i national statute books. EU 
wntries have transposed nearly 
) per cent of laws to free passage 
E goods and sendees. However, 
aly 50 per cent of single market 
leasures have become legally 

Lading in all 12 countries. 
Governments have been particu- 
irfy slow to open up public pro- 
arement, accounting for 15 per 
ent of EU economic activity- 
ven where liberalisation mea- 
ares have become law, there are 
roblems in enforcing them. Many 
mntries appear to be maintadll- 
ig import barriers through over- 
Stzictfre procedures on technical 
tandards, thus flouting agree- 
imts on mutual recognition. 

This poor record - along with 
m recession - helps explain why, 
ccording to opinion polls, the sto- 
le market has generated little 
uthuetasm companies and 
msumers. In January 1993, Mr 
aniero Vanni d'Archirafi, the 
Mnmiflsioner responsible for the 
iternal market, unhelpfully 
iggested lenient treatment for 
overnments which foiled to 
□{dement the rules. His subse- 
uent statements have been 
Earcely more convincing. At the 
ad of last year, for example, he 
romised "decisive action" to 
nprove implementation. This 


week he pledged this would 
receive “urgent priority”. So far, 
however, he has come up with 
nothing more muscular than a 
{dan for national civil servants to 
report on other governments that 
do not stick to the rules. 

Implementing single market 
rules does test the HU’S doctrine 
erf subsidiarity. If dedsion-making 
is to be earned out "closest to the 
people", en fo r c ement should ide- 
ally be left to governments. Expe- 
rience suggests, however, that a 
strong push from Brussels is 
essential for achieving compli- 
ance. The Commission should not 
shrink from recommending fines 
for proven infringement 

Equally, there should be a bare 
minimum of centrally agreed 
Euro-laws laying down harmon- 
ised norms to ensure products can 
pass through national frontiers. 
Where countries persistently mis- 
use national standards, extra leg- 
islation may be needed, to gen- 
eral, however, the Ccanmlssinn Is 
right to emphasise the quality 
rather than the quantity of legisla- 
tion needed to maintain the 
momentum of the market. 

Setbacks to malting the single 
market operational underline how 
far foe EU must travel simply to 
consolidate measures agreed 
under the 1987 Single European 
Act If the internal market is to be 
a lasting success, it will need a 
decisive champion, to Brussels. At 
present, that person does not 
exist A priority for the successor 
of Mr Jacques Delore will be to 
ensure that a barrier-free Europe 
for business becomes reality. 


17 


Outsider in 
the hot seat 


Michael Lawrence, new chief executive of the London 
Stock Exchange, outlines his strategy to Norma Cohen 



Taking stock: Mic h ael Lawrence's big challenge will be to salvage the London Stock Exchange’s dented reputation 


N ot one of us." That 
view of the London 
Stock Exchange’s new 
chief executive came 
from a group of UK 
stockbrokers who recently invited 
him to speak. It is also the view 
heard, in many trading rooms and 
boardrooms, as some in the City 
struggle to come to terms with the 
exchange's new leadership. 

The main challenge for Mr Mich- 
ael Lawrence will be to salvage the 
exchange's dented reputation and 
forge a more coherent identity for 
an organisation which has never 
decided whether it is a club, a com- 
mercial operation or a regulator. 

"What he ought to be worried 
about Is whether the exchange has 
any role at all,” said one board 
member. "The exchange's only 
function seems to be to legitimise 
decisions which favour six big 
marketmakfag firms.” Marketmak- 
ers are the firms which indicate the 
prices at which they will buy and 
sell blocks of equities on the 
exchange’s Seaq computer screens. 

Mr Lawrence has assumed his 
role at a crisis point to the 
exchange's history. Not only has its 
international standing been dented 
by the collapse last March of its 
ill-fated Taurus project for paperless 
share settlement, but the character 
of London as a securities trading 

«m*TB Is chang in g ra/tiraTIy 

Since the liberalisation of Big 
Bang to 1966, non-UK investment 
banks have increasingly dominated 
the exchange, employing their capi- 
tal to innovative ways such as foe 
use of derivatives and trading on 
their own acco unt. While this trend 
has helped London become Europe’s 
focus for intemafcinnfll share trad- 
tng, exchange participants are ask- 
ing whether it can retain that sta- 
tus. 

Mr Lawrence’s job is to ensure 
that it consolidates it, and then 
increases it The task will be tough 
for a man who, when appointed last 
December, was greeted with “Mich- 
ael who?” by many to the City. 

Mr Lawrence’s suits and small 
gold tie-pin announce that he is nei- 
ther a public-school-educated patri- 
cian, nor a streetwise working-class 
individual - two prevailing City 
types. Hie is a product of Wembley 
County Grammar School who stud- 
ied physics at three universities 
before receiving a PhD to 1965 to 
mathematical physics from Bristol 
University. He trained as an 
accountant at Price Waterhouse, 
where he went an to specialise to 
resuscitating faffing companies. 

Ha has never worked in foe secu- 
rities industry and thus cannot be 
accused of representing vested 
interests. It is this characteristic of 
being an outsider which some City 
observers say may prove his great 
strength. 

Asked whether he isn't "one of 
us”, Mr Lawrence demurs. The con- 


cept of “ns” to the City is chang in g 
rapidly, he says. "We’re going to see 
a different sense of community 
because of foe international posi- 
tion of London. International firms 
are increasingly important to the 
marketplace." 

The exchange recognised that it 
needed a new broom after Mr Peter 
Rawlins resigned as chief executive 
when Taurus collapsed. After a long 
search, the exchange turned to Mr 
Lawrence, then finance director of 
the Prudential, the UK’s largest 

insurance mwipany and rViflirwift-n 
of the influential 100 Group of 
Finance Directors. 

Four months into the job, Mr 
Lawrence has let the City get a 
good look at him, while he has lis- 
tened to the (Sty. "He said all foe 
right things to ns," said one private 
client stockbroker. “He said: ‘tell 
me what you want’” 

But the jury is still out an the 
crucial question of whether Mr 
Lawrence can translate what he 
hears into a policy which will 
ensure foe exchange retains its 
position as foe centre of European 


equities trading. The task is compli- 
cated because exchange members 
can have conflicting interests - UK 
and US marketmakers me compet- 
ing for foe same customers, for 
instance - and the concerns of 
members occasionally conflict with 
foe exchang e's role as a regulator. 

Mr Lawrence says he has already 
come to some conclusions about 
what the exchange must do to 
repair its fortunes. 

First, the exchange must behave 
like a commercial organisation. "We 
have a tremendous brand here to 
London," be says. "We have to 
make London as attracti v e as we 
can and then go out and market it” 

To this and , he has restructured 
the exchange, altering the main 
committees’ chain of command so 
that they report to the executive 
and not to its 21-member board. He 
says this system resembles that of a 
typical corporation and is less like 
that of a trade association. The 
reform should give the executive 
more control over dedsion-making 
and reduce some of foe wrangling 
among various factions 


However, the chang e in foe com- 
mittee structure is rin g in g alarm 
bells among some of foe exchang e's 
powerful marketmakers. That is a 
warning signal to me,” said foe 
chief executive at one firm. “It 
means that foe evebang n can ignore 
foe recommendations of foe practi- 
tioners." 

One of Mr Lawrence's first initia- 
tives ruffled the feathers of foe mar- 
ketmakers. He asked the board to 
approve funds to build an order- 
matching capacity Into the 
exchange’s new Sequence trading 
system (which will eventually 
replace Seaq, the automated price 
display mechanism). Marketmakers 
fear that their competitors will take 
advantage of th«n by undercutting 
their prices. Non-marketmakers 
support the effort partly because it 
will bhmt the attractions of Trade- 
Point, an emerging dealing system 
developed by several exchange 
defectors, particularly to the trad- 
ing of small company shares. 

Among other changes, Mr Law- 
rence has ditched the post of direc- 
tor of policy, taking on that func- 


tion himself. Instead, the exchange 
will have a director of strategic 
planning, a board-level post which 
is expected to be filled shortly. Most 
critically, it will have a director of 
marketing for the first time. 

The ambitions of the marketing 
department are initially modest. To 
start, it will have three or four peo- 
ple seconded from UK and foreign 
securities firms whose task will be 
to encourage greater participation 
by non-UK corporations on the 
exchange. Mr Lawrence concedes 
that Stock Exchange members 
might have felt it unseemly openly 
to solicit business a few years ago. 

But competitive pressures from 
other European bourses and the 
emergence of dealing systems such 
as TradePotot are forcing market- 
makers and stockbrokers to rethink 
their position. 

M r Lawrence dis- 
misses the sugges- 
tion that London’s 
best way forward 
is greater integra- 
tion with other European 
exchanges. "Why we should try to 
create a pan-European stock 
exchange 1 do not know,” he says. 
“It would be less friendly to smaller 
companies because it would inevita- 
bly cater for foe shares erf targe 
multi-nationals. 

"I don't believe the option is 
either a pan-European exchange or 
open warfare,” be says. He argues 
that international securities houses 
want simply to see three interna- 
tional trading centres - Tokyo, New 
York and London - in different 
time zones. They do not want the 
expense of setting up offices in 
every European capital to which 
they wish to do business and, there- 
fore, will welcome greater concen- 
tration of business to London. 

One of the most important guar- 
antees of the exchange's future suc- 
cess, Mr Lawrence says, is the abil- 
ity to offer an efficient “technology 
platform” to make securities trad- 
ing cheap, swift and efficient. 
Although the exchange was 
rebuffed in its bid for a 30 per cent 
stake to Crest, foe successor to Tau- 
rus developed by the Bank of 
England. Mr Lawrence believes it 
has a good chance of being 
appointed manager of the system. 

But technology is only one de- 
ment of Mr Lawrence’s rejuvena- 
tion strategy. He will need to win 
the confidence and commitment not 
just of the stockbrokers and market- 
makers who are members of the 
exchange but of the corporations 
which raise capital there and the 
institutional investors which pro- 
vide it. TO retain its prominence, 
the exchange must demonstrate 
that it remains the cheapest and 
most efficient way to raise capital - 
unless it can do this, all Mr Law- 
rence's best intentions will not res- 
urrect its fortunes. 


Will GE continue to indulge US investment bank Kidder Peabody, asks Richard Waters 


What parents are for 


S ometimes, having a rich 
owner is a securities compa- 
ny’s greatest asset Shear- 
son Lehman and First Bos- 
ton, two leading Wall Street firms, 
learned that lesson to 1990 whan 
each was helped out by a powerful 
parent (respectively American 
Express and CS Holding, the Swiss 
banking group). Bidder PBabody, 
errant eon of General Electric, foe 
US conglomerate, is the latest to 
learn the benefits of an owner with 
a deep pocket 

Since it disclosed to April that 
$350m erf previously reported trad- 
ing profits over the past three years 
were fictitious, Kidder has been the 
target of rumour and sniping on 
Wall Street Questions have been 
asked about the value of its securi- 
ties portfolio. Headhunters have cir- 
cled the firm, trying to pick off its 
best traders. 

In feet, Kidder's difficulties are 
not as dire as most of the firm’s 
rivals make out - tbankn largely to 
GE. The GE connection has brought 
some powerful benefits. Whereas 
other securities firms - including 
CS First Boston - raise money on 
their own behalf using their sin- 
gle-A credit ratings, Kidder is 
funded through its immediate par- 


ent, GE Capital and. ultimately, GE. 
The top triple-A rating of these 
companies enables them to raise 
money cheaply, in turn giving Kid- 
der an advantage over rivals. (With 
a portfolio of securities valued at 
$73bn at the end of last year, shav- 
ing even a fraction of a percentage 
point from the firm's financing 
costs has a big impact on profits.) 

This week, GE has been forced to 
restate its support for Kidder - a 
company which, two years ago, it 
came dose to selling. But to the 
process, it made little pretence 
about the difficulties the company 
feces. Mr Dennis Dammerman, GE 
chief financial officer, drew a direct 
comparison with other ailing busi- 
nesses the manufacturing giant has 

nursed through difficult times 
before: its power generation busi- 
ness to the 1980s. and its network 
television business to the early 
1990s. He implied that foe current 
environment for the securities 
industry is equally difficult - an 
observation likely to come as a sur- 
prise to many Wall Street firms, 
which, though not doing as well as 


to foe record year of 1993, are still 
experiencing one of their best-ever 

years. 

GE's professed commitment will 
enable Kidder to ride out the storm 
that began in April. The question, 
though, is how long GE win remain 
foe indulgent parent 

Two problems are besetting Kid- 
der First, the phantom profits 
scheme is proving a bigger drag 
than it bad hoped. Kidder blamed 
foe scheme on Mr Joseph Jett the 
former head of its government bond 
trading desk, depicting itself as foe 
innocent victim of a fraud. Mr Jett, 
though, has since hit back suggest- 
ing senior Kidder executives were 
aware of his trading strategy and 
that he is being made a scapegoat 

An investigation of Mr Jett’s trad- 
ing by Mir Gary Lynch, a former 
bead of enforcement at the Securi- 
ties and Exchange Commission, is 
faking longer than GE had hoped. 
The length of the investigation is 
fuelling rumours that Mr Lynch’s 
review lus been broadened to take 
in the activities of executives other 
than Mr Jett and other aspects of 


Kidder’s business. 

Adding to the seriousness of the 
affair, if the $350m of trading profits 
were false, then Kidder's resurgence 
of the past two years has been false 
too. GE said this week that it had 
injected 9200m of capital into Bid- 
der to plug foe hole left by the 
phantom profits. 

Kidder's second longer-term prob- 
lem is its reliance on one market - 
mortgage-backed bonds - for a 
Large proportion of its (real) profits. 
Such bonds are created when house- 
hold mortgages are packaged and 
sold to investors. Kidder’s domi- 
nance of this Sl.SOObn market (It 
handled nearly a quarter of all new 
issues of bonds last year) proved 
profitable last year as foe volume of 
new bonds soared. In recent 
months, however, mortgage-backed 
bond issues have been running at 
only about SlObn a month, com- 
pared with $40bn a month at the 
start of the year. 

Kidder has also been affected by 
being the biggest trader in foe mar- 
ket at a time when prices have been 
volatile. The attractiveness to inves- 


tors of mortgage-backed bonds 
dropped both when US interest 
rates fell last year (many mortgage 
holders paid their old loans off early 
to take ont new loans at lower 
rates, hitting the value of the 
bands) and rose this year (pre-pay- 
ments stopped, lengthening the 
bonds’ lives and, again, making 
them less attractive to investors). 

Just how badly Bidder has been 
hurt is impossible to say. At foe end 
of last year, Kidder was more 
highly geared than any other Wall 
Street house, with less than f ibn of 
capital to support its 573bn of secu- 
rities holdings. That suggests that it 
would only take a small fall in 
prices to consume a large part of 
Haider's capital 

Mr Michael Carpenter, the firm's 
ehuh- raan . again insisted this week 
that Kidder’s bond holdings were 
hedged against felling prices. He 
added chat the Ann had sold a third 
of its mortgage-backed bond hold- 
ings, thought to have been worth 
about glfrbn, improving its liquidity. 

Questions remain, though, about 
the other two-thirds - and about 
Kidder’s (and GE’s) enthusiasm for 
retaining such a large position to a 
market which has proved more vol- 
atile than. Wall Street had expected 


Bargain 

boozers 

■ Once upon a time American beer 
and French wine were modish 
choices in Tokyo - the most 
expensive city in the world. But 
now - thanks to the high cost of 
Japanese currency - consumers' 
yen for these one-time luxuries 
is more easily s ati s fi ed. 

Already this year wine imports 
hare doubled and foreign bear 
imports have increased five-fold. 
Most goes to supermarkets and 
discount outlets which report a 
roaring trade. It la easy to see why. 

A quick reccy in central Tokyo 
found a 750ml bottle of Gordons 
gin for a mere (£12.82,) and 
a range erf US beers at between Y180 
and Y210 per 850ml can, rather 
cheaper than the Japanese 
equivalent at T220 per can. 

But the best things to life are 
still very expensive in Tokyo. 
Mitsukoshi, the Tokyo Harrods, 
is asking a hefty Y4^00 for a 
standard bottle of Moet & Chandon 
Brut Imperial - two-thirds more 
than it costs in its home country 
- and Y285 for a small bottle of 
Guinness. So sushi-eating black 
velvet drinkers will stHLbave to 
hunt pretty hard to find a bargain. 


Not kilty 

■ The governor of the Bank of 
En gland might have captured the 


financial headlines at Wednesday’s 
Manwifm House dinner, but it was 
the governor of the Bank of 
Scotland who made the most 
ilatWng g nh-flnrwa fr. 

Bruce Fattullo turned up to a 
kilt for tbe first time. The tartan? 
The very apposite Ancient Bruce 
- though he is only 56. 

Pattullo is not known, as a kflt 
man and theories abound as to why 
he’s now started sporting a sporran 
sooth of foe border. 

One suggestion is that it hops 
to emphasise the perception that 
foe Bank of Scotland is more 
Scottish, than the Royal Bank of 
Scotland, whose chairman Lord 
Younger tends to abide by En glish 
evening dress rode. 

Another is that now that PattuDo 
is no longer to the running to be 
governor of foe Bank of England, 
he can wear what he likes. But foe 
simplest explanation is the correct 
one - his wife bought him his kflt 
for Christmas. 


Family business 

■ H as Sears group chairman 
Geoffrey Maitland Smith found 
a new hobby - furniture-making? 
Bargain hunters at his group’s 
Selfridges store on Oxford Street 
have spotted a new line of tables 

and rtrarr e tarrying tha Maitland 
{■SnptH • nrnnflcw . 

It is not Geoffrey who is the 
cabinet-maker, but brother Paul 
He founded a Philippines-based 
company to the 1970s making copies 


Observer 



of classic British furniture - aimed 
mainly at the American market 
- and sold it five years ago to US 
conglomerate Masco. It opened a 
concession in Self ridges to 
February, and, says Sears, is 
trading well - and not just to 
Americans. 


Wave farewell 

■ Ever wonder what happened 
to those high-speed river buses that 
once plied foe River Thames to 
London? 

They are re-surfacing in Bangkok, 
ferrying travellers between the 
airport and three big hotels along 


foe Chao Phraya river - foe 
Oriental, foe Shangri-La and the 
Royal Orchid Sheraton. 

Siam Development and Holding 
has bought the whole fleet of eight 
Catamarans fr om the a dminis trators 
of Olympia & York, which ran into 
such difficulties with foe Canary 
Wharf development in London. 

Four of the boats will go into 
service on the hotel-airport run 
from July L 

The idea is to avoid Bangkok’s 
notorious traffic jams. The journey 
between airport and down-town 
hotels should be reduced to an hour 
- it can take two hours on a normal 
day and more than five hours if 
the streets are flooded with 
rain-water. 


In their court 

■ When is Sir Michael Richardson, 
Lady Thatcher’s favourite corporate 
financier, going to retire as 
chairman of Smith New Court, foe 
City stockbrokers? 

He turned 69 in April and he 
could bow out with pride following 
yesterday's sparkling figures from 
the firm. Sir Michael, who gets into 
foe office before 8 am and works 
a frill five-day week and sometimes 
more, has told Observer that he 
has no intention of soldiering on 
till 1997, like his old chums Lords 
Hanson and White. Then, again, 
he has no plans for quitting this 
year. 

Even so, his eventual retirement 
raises the question of whether 


Smith New Court will pick another 
outsider to be rjurirmaw - Sir 
Michael was the first - or return 
to its old ways of promoting 
someone from the shop floor. It 
will be an interesting test of the 
firm's maturity. 


Brazilian bingo 

■ Hie normally friendly rivalry 
between Brazil’s two largest cities 

- Sab Paulo and Rio de Janeiro 

- took an ugly turn at the weekend. 
Sad Paulo snobbishly looks down 
on its poorer, but better-known 
cousin, Rio de Janeiro, and Sab 
Paulo’s media especially revels 

in Rio's reputation for terrifying 
violence. 

But at the weekend 42 people 
were murdered to separate 
incidents in Sab Paulo; 21 were 
killed in execution-style 
assassinations believed to be linked 
to drug-dealing. 

By Wednesday morning, however, 
Rio had recovered its reputation 
as the country's most violent city 

- in a 24-hour period, 22 people 
were shot. 


Umbrella offer 

■ One London wine bar has foe 
measure of tbe capital’s sudden 
hurst of sunshine. 

A blackboard outside The Udder 
Place to Russia Row offers private 
parties a deal on house wine and 
“free canopies". 



18 


SHEERFRAME 

Specified 

Worldwide 

UbLUMsIMW 

Tal:0773 862311 


FINANCIAL TIMES 

Friday June 17 1994 


Networking? 

NetWare 4, 
of course. 




Peugeot fails to curb 
independent traders 


By Kevin Done and John Griffiths 

The right of independent traders 
to sell cut-price new cars to cus- 
tomers across EU borders in com- 
petition with franchised dealer 
networks was upheld by the 
European Court of Justice yester- 
day. 

The court rejected an appeal by 
the PSA Peugeot Citroen group of 
France against an earlier Euro- 
pean Commission r uling , which 
stated that new car sales by inde- 
pendent traders across national 
borders to specified customers 
were legal 

The ruling is likely to pave the 
way far an increase in the num- 
ber and activities of such inde- 
pendent traders. 

The court verdict foDows a pre- 
vious Commission order that 
Peugeot lift its ban on dealers in 
Belghir 11 and Luxembourg selling 
to Ecosystem, a Rouen-based 
intermediary which resells in 
Prance cars bought at lower 
prices in Belgium and Luxem- 
bourg. 

Under EU roles, it is legal for 
intermediaries to Import cars on 
behalf of individual customers. In 


1991. Sir Leon Brittan, then com- 
petition commissioner, warned 
Peugeot that its Belgian and Lux- 
embourg dealers would forfeit 
protection horn normal competi- 
tion rules if the ban was not 
lifted. 

The verdict coincided with a 
bitter attack by the European 
motor industry on cha n g e s pro- 
posed by the Corrunissicsi’s com- 
petition directorate to the 
so-called "block exemption", 
which allows carmakers to con- 
travene EU competition regula- 
tions by restricting new car sates 
exclusively to franchised dealer 
networks. 

The carmakers have been 
thrown on to the defensive by the 
court verdict and the proposed 
rule changes, which would give 
more power to dealers and would 
provide more grounds on which 
the exemption could be with- 
drawn from a particular manu- 
facturer. 

The exemption expires in June 
1995, and a battle is being waged 
in the Commission between the 
competition and industry direc- 
torates on the terms under which 
it should be renewed. 


Consumer groups want it 
scrapped, claiming that it 
restricts competition and leads to 
unjustifiably high car prices. 

The Pengeot-E cosy stem case 
has provided one of the key areas 
of debate about whether the 
block exemption should be 
renewed. 

Mr Giorgio Ganrezo, the presi- 
dent of the European Automobile 
Manufacturers’ Association and 
head of Fiat’s automotive 
operations, warned last night in a 
speech to the UK motor industry 
that suggested changes to the 
exemption "would not lead to 
more competition but to less 
competition, not to lower prices 
but to higher prices”. 

The draft reforms suggested by 
the competition directorate 
would subject the European car 
industry to “an unprecedented 
and arbitrary experiment" and 
could “undermine the whole 
foundation of automobile distri- 
bution in Europe", said Mr Gar- 
uzzo. 

He called on European govern- 
ments to note the “dire conse- 
quences of possible changes" 
planned by the Commission. 


Shareholders greet 
freed Schneider chief 


By John Rkfcfing in Paris 

“lam very, very happy to be here 
today.” Mr Didier Pineau-Valen- 
cienne, head of France’s Groupe 
Schneider, told a packed share- 
holders meeting yesterday in the 
Automobile CZab in Paris’s Place 
de la Concorde. 

It is safe to assume he meant 
what he said. Two weeks ago, the 
head of the electrical engineering 
grotto found himself in rather dif- 
ferent circumstances - an inma te 
in Brussels’ Forest prison, facing 
charges of fraud relating to two 
Belgian subsidiaries. Last week, 
after 12 days in prison, he was 
released on bail of FFr2.5m 
($430,000). 

However, Mr Valentino Foti, an 
Italian businessman being Inves- 
tigated on the same charges as 
Mr Pineau-Valendenne, is still 
held after an appeal yesterday for 
his release was rejected by 


Belgian judicial authorities. 

If Mr Pmeau-Vatendenne had 
been expecting a difficult recep- 
tion because of the Belgian inves- 
tigation, he would have been 
pleasantly surprised. A round of 
applause greeted his arrival on 
stage, while shareholders 
expressed support for their chair- 
man. 

The reception was less warm 
for one Belgian minority share- 
holder, who was booed after his 
complaint about a Jack of infor- 
mation concerning offshore com- 
panies in the group. 

Mr Pzsean-Valendenne denied 
that Schneider had acted against 
the interests of minority share- 
holders in Ccflbel and Cofimines. 
tiie two financial subsidiaries at 
the centre of the investigation. 
He rejected charges that divi- 
dends paid by offshore companies 
had not been distributed equally 
among shareholders in the sub- 


sidiaries and denied that funds 
totalling BFr3bn (S8Tm) had been 
diverted from the two companies 
to the benefit. of their parent 
company. 

The Schneider chairman told 
his audience that he was appoint- 
ing an outside auditor with a 
view to clearing himself and the 
group of the charges. 

Mr Pineau-Valencrenne said he 
had travelled voluntarily to Brus- 
sels on May 28 to make a state- 
ment about the case. 

Hie said the group would press 
ahead with its strategy of 
expanding its core electrical engi- 
neering businesses. 

The stock market responded 
positively. Schneider shares, 
which have lost 16 per cent of 
their value since the company 
chairman’s unfortunate Belgian 
journey, bucked the trend in the 
depressed Paris bourse and rose 
2J3 per cent to dose at FFr3589. 


Russia backs China’s stance 


Continued from Page 1 

our co-operation." He said 
Moscow and Washington had 
agreed to work out a joint stance 
this week. 

Ms Dee Dee Myers, Mr Clin- 
ton’s press secretary, said in 
Washington that Ms Albright Trad 
consulted the Russian UN mis- 
sion on Wednesday as well as 
those of China, Britain and 
France. 

In addition. President Bill Clin- 


ton had spoken by telephone to 
President Boris Yeltsin cm Mon- 
day when they “ discussed what 
was going to be in” the US draft 
resolution, Ms Myers added. 

The “careftiDy calibrated" mea- 
sures outlined by Ms Albright - 
bat which were not yet available 
in detail yesterday - would begin 
with a reduction of diplomatic 
and other links, along with an 
arms embargo. Financial sanc- 
tions would come later if Pyong- 
yang had still not restored full 


cooperation with the IAEA. 

After meeting Mr Kim H-Stmg. 
North Korea’s 82-year-old leader, 
Mr Carter told CNN: “President 
Kim has Committed hirnanlf to 
maintain the inspectors on kite in 
the disputed nuclear reactor and 
to guarantee that surveillance 
equipment would remain in 
order." 

Urging that “nothing should be 
done to exacerbate the situation 
now,” he said North Korea had 
“compromise proposals”. 


Sweden 
approves 
bridge and 
tunnel to 
Denmark 

By Hugh Camegy in Stockholm 

Sweden's centre-right govern- 
ment yesterday approved the 
construction of a $3bn bridge 
ami tunnel link across the Ore- 
snnd between Sweden and Den- 
mark, one of the biggest Infra- 
structure projects in Europe. 

But the long-delayed decision 
prompted the resignation of Mr 
Olof Johansson, the environnumi 
minister and leader of the Centre 
party, «fcaking the hitherto sta- 
ble foundations of prime minis- 
ter Carl Bfidtis four-party coali- 
tion, three montlis before a 
general election. 

A row over the environmental 
impact of the 17km road and rail 
, link between the southern Swed- 
ish city of Malmfi and Copen- 
hagen has held up the project for 
months and had threatened to 
split Mr Bfidtis government It 
also strained relations with Den- 
mark, which has been anTinn< to 
proceed. 

Mr BQdt was confident yester- 
day be had avoided the break-up 
of the government, as Mr 
Johansson agreed Ms three Cen- 
tre party colleagues would stay 
on in the coalition as ministers, 
in spite of their objections to the 
link- But their decision is likely 
to be questioned at a Centre 
party national conference this 
weekend. 

Mr Johansson's resignation 
was the first split in the cabinet 
since the government took power 
in late 1991. It is a blow for Mr 
Bildt as the coalition is frail tog 
tile opposition Social Democratic 
party in the polls. 

The go-ahead for the bridge, 
which will be Sweden's first 
fixed link to its main markets in 
Europe, was warmly welcomed 
to Copenhagen and by business 
leaders in both countries. Mr 
Pool Nyrnp Rasmussen, the Dan- 
ish prime minister, said: “I am 
pleased by this decision, which 
means Denmark can now go 
ahead with the land-side con- 
struction work which was 
suspended while the Swedes 
arrived at a decision.” 

The joint Swedlsh-Danish con- 
sortium set np to build the Enk 
said the tender process would 
begin within weeks. A total of 20 
International consortia, involv- 
ing some 50 companies from 
around the world, have 
expressed interest to the project 

Fun tender details will not be 
available until late autumn as 
environmental specifications are 
not yet ready. First contracts for 
the tunnel section are expected 
to be signed early next year. The 
Enk Is unlikely to open before 
2000. 

Environmentalists are con- 
cerned that the bridge will 
impede vital salt water flows 
Into the already heavily polluted 
Baltic Sea. Mr Bfldt said yester- 
day the environmental condi- 
tions set for constructors meant 
“this is the greenest bridge yon 
can build”. 


THE LEX COLUMN 



FT WEATHER GUIDE 


Europe today 


Steady westerly winds wfl! bring cool and 
changeable conditions over northern Europe. 
Norway's coastal areas win have motet 
conditions, while inland areas will see a mixture 
of sunny spoils and a light showers. 

Sweden will stay mainly dry. but there wHI be 
some showers in Finland. The British Isles and 
the Benelux wiH be mostly cloudy as warm, 
motet air arrives from the west 
France and Spain will be sunny and mostly dry, 
except tor localised thunder storms. 

Italy will have plenty of auntitina Further east, 

cloud and showers wiH increase especially over 
Romania, the Balkan states and northern parts 
of Greece. 

Five-day forecast 

rtgh pressure will expand over the continent 
bringing Improving conditions to western 
Europe. The low countries and the British isles 
w!fl see Increasing sunshine and rising 
tefflperatunss over the weekend. France and 
Spain wfll have some local thunder storms, 
especially on Sunday. Beginning Monday, 
Europe wffl see much brighter conditions. 
Southern Europe wfll remain fairly sunny 
and warm. 


TODAY'S TEMPERATURES 




ISPSIil 




feSSIS 








'■ . Wann front AA CoW front A A Wind s peed to KPH • 


Situation at 12 QMT. Temporaftrej rnawmm tor day. Forecasts by IWw Consult of toe Netfteriands 


Abu Dhabi 

Accra 

AJflfe? 

Amsterdam 

Aihere 


B. Aims 
Bham 
Bangkok 
Barcelona 


Maximum 
Cetaun 
sun 42 
Carr 30 
fair 32 

cloudy 20 
aui 29 

fet 32 
cloudy 19 
cloudy 21 
Shower 32 
Sim 27 


Bomuda 

Boeota 

Bombay 

Brussels 

Budapest 

C-hagen 

Cairo 



fair 

35 

Caracas 

fair 

24 

Fau 

raki 

IS 

Caitiff 

Safer 

19 

Frankfut 

fair 

28 

Casablanca 

Hr 

23 

Geneva 

sun 

18 

Chicago 

fair 

34 

Gibraltar 

fair 

30 

Cologne 

fair 

20 

Gtosgew 

shower 

19 

Dakar 

Hr 

28 

Hamburg 

rah? 

29 

Dallas 

Hr 

34 

Helsinki 

cloudy 

22 

Dew 

Hr 

34 

Hong Kong 

fair 

24 

Dubai 

sun 

41 

Honolulu 

ter 

17 

Gubin 

cloudy 

18 

Istanbul 

sun 

36 

Dubrovnik 

SW» 

30 

«J8KBfl33 

rain 

16 

Edinburgh 

fair 

18 

Jersey 

Karachi 

■ 



mmamm 


Kuwait 


Lufthansa 

German Airlines 


L Angelas 

las Pafcrecs 

Lima 

Lisbon 

London 

Luswbowg 

Lyon 

Madeira 


23 

Madrid 

thund 

33 

Rangoon 

shower 

32 

23 

Majorca 

Ml 

30 

Reykjavik 

cloudy 

11 

27 

Malta 

sun 

28 

Rio 

cloudy 

23 

28 

Manchester 

cloudy 

18 

Roma 

sun 

27 

18 

Mads 

shower 

32 

S.Fnsco 

Hr 

18 

16 

Melbourne 

shower 

14 

Seoul 

sun 

31 

18 

Mexico City 

cloudy 

19 

Sngapm 

shower 

32 

28 

Miami 

Hr 

32 

Stockholm 

shower 

17 

31 

Milan 

sun 

29 

Strasbourg 

Hr 

20 

28 

Montreal 

sun 

31 

Sydney 

fair 

18 

32 

Moscow 

ttnnd 

19 

Tangier 

fair 

21 

20 

Munich 

cloudy 

22 

Tel Aviv 

SU1 

29 

36 

Nairobi 

cloudy 

23 

Tokyo 

tat 

28 

44 

Naples 

sun 

27 

Toronto 

Hr 

30 

21 

Nassau 

shower 

32 

Vancouver 

shower 

19 

25 

New York 

fair 

35 

Venice 

sun 

28 

19 

Nice 

sun 

25 

Vienna 

fair 

23 

24 

Nicosia 

Hr 

28 

Warsaw 

shower 

IT 

24 

Oslo 

Ml 

18 

Washington 

sun 

38 

22 

Paris 

Hr 

28 

Wellington 

rain 

11 

28 

**--«»■ 

cloudy 

2Q 

Winnipeg 

Hr 

23 

23 

Prague 

fas 

19 

Zurich 

Hr 

24 


Crude expectations 


Crudest $20 a barrel by the end of the 
year Is starting to look like a credible 
scenario. The sharp rise in oil prices 
this week has already taken the 
benchmark Brent price to SI?. In the 
US, the benchmark West Texas Inter- 
mediate price has risen even faster, 
touching S20 and opening what looks 
hi re an unsustainable $3 spread over 
Brent 

A firm line at this week’s Opec 
rn Paring and worries over Korea have 
clearly played their part in the price 
rise. But the decisive factor is new 
evidence that oil demand in the US is 
accelerating. The cartel's decision to 
cancel its September meeting, so 
omphajasing its determination not to 
increase production, has had such an 
impact because demand is robust. 
Green that only Saacfi Arabia, Kuwait 
and possibly Venezuela have substan- 
tial excess capacity, the chances of 
quota cheating are slim. Ihe market 
has concluded that supplies will be 
stretched next winter and has reacted 
by attempting to build up stocks now. 

Whether this is as bad for inflati on 
prospects as bond markets have con- 
cluded is less dear. The direct impact 
of higher oil prices will be fairly mod- 
est While the Saudis are happy to see 
crude at S20, there is no evidence that 
they wish to drive it much higher than 
that Of greater concern is the possi- 
bility tbpt strong oil demand may indi- 
cate that the US economy is running 
ahead fester than expected. But this is 
not the rally interpretation. The more 
comforting view is that the US has 
forgotten about conservation and is 
back to its old gas-guzzling ways. If 
that is true, robust oil demand may 
reflect the particularly oil-intensive 
nature of this US recovery rather than 
warning of inflation ahead. 

Wales 

The second rights issue from Wales 
City of London inside a year would be 
more appealing if the company had 
been able to sugar the pill with good 
news. Instead, one of Wales’s large 
investment properties has fallen to 
value since the year-end, while 
another remains nniet and will soon 
have to be refinanced. For all the talk 
of development opportunities, the 
shares fell 6 per cart before settling 
just above the rights price. 

The sight of a prominent City prop- 
erty felling to value as a result of a 
disappointing rent review should send 
a gentle warning to the rest of the 
sector. True, the lease in question is 
unusual in allowing rents to fall. 


FT-SE Index: 3030.1 {-15. 7) 


Oil price 

Brant spot 9 per bam* 

20 ; 



tens . 84 

Sourev FTGtepNto 

Wates also feels it was harshly treated 
by the independent consultant which 
settled the claim. Nevertheless the 
rent review ramn in lower than expec- 
ted when the property was last valued 
in December. The case underlines that 
a further rise in property values will 
be difficult to achieve while rental 
growth remains elusive. 

Adjusting for the revaluation, the 
rights issue is priced dose to Wales’s 
net asset value. Since many compa- 
nies in the sector are trading at a 
modest discount to net assets, that is 
hardly cheap. It would be some com- 
fort if Wates could be more forthcom- 
ing about how much of the rights 
money will eventually be channelled 
into refinancing its joint venture with 
Sumitomo. One can only assume fiat 
Mercury Asset Management, which 
agreed to sub-underwrite the whole 
issue if necessary and could have 
ended up with a 29 per cent stake, has 
a clearer view of the recovery pros- 
pects than the wider equity market 

Dairy sector 

Mrs Gillian Shephard's announce- 
ment on the liberalisation of the milk 
market in England and Wates removes 
the uncertainty of timing from North- 
ern Foods and Unigate. How the new 
regime will affect their margins 
remains obscure. But the assumption 
that higher raw material prices will 
exacerbate the squeeze on their mar- 
gins could prove wide of the mark. In 
the longer term European agriculture 
reform is likely to put downward pres- 
sure on milk prices anyway, whether 
or not Mrs Shephard succeeds in mak- 
ing production quotas tradeable. 

Milk Marque could not hid up the 


price of milk too for at the farm gate 
without Incurring the wrath of the 
Office of Fair Trading. Liquid milk 
retailers will no longer be able to take 
precedence over processors at times of 
shortage, so supermarkets may be pre- 
pared to pay up for security of supply 
from the large dairies. 

Since liquid accounts for about 
80 per cent or Northern's dairy busi- 
ness and around two-thirds of that at 
Unigate, both companies could find 
life improves under the new regime. A 
bigger threat races processors who 
may be squeezed between higher input : 
costs and cheap Imports oF butter, 
cheese and powder. Such a prospect 
could complicate Che flotation of Dairy i 
Crest, the milk marketing board's pro- ! 
cessing arm. But Northern and Uni- 
gate cannot afford to be complacent. 
They still have to cope with the inexo- 
rable decline In high margin doorstep 
sales and the risk the supermarkets 
may eventually seek to drive home 1 
their advantage by buying direct from 
Milk Marque and packaging the prod- | 
uct themselves. 


Many a media group will run its 
slide rule over Ziff Communications in 
coming weeks, the famlly-owned US 
publisher, which was put up for sale 
test week, is an attractive property. 
Ziff is the world's largest publisher of 
computer magazines, a fast- pro wing 
segment of the print media. It also 
owns ZiffNet, an on-line information 
service about computers, which 
should appeal given the current multi- 
media vogue. Not surprisingly, specu- 
lation is rife over possible bidders, 
France's Matra-Hachette, K-1H of the 
US and VNU of the Netherlands have 
said they are interested. Other names 
bandied around include Reed Elsevier. 
Bertelsmann, News Corporation. Time 
Warner and Times Mirror. 

Though many may be interested, 
few could plausibly afford the touted , 
$2bn-plus price tag. VNU is too small ' 
to buy the whole group and the Ziff 
family have made dear they would 
prefer not to sell It in several chunks. 
Similarly, the balance sheets of Hauh- ! 
ette, K-m News Corporation and Time ; 
Warner look rather stretched. Reed ; 
Elsevier, Bertelsmann and Times Mir- 
ror are more likely contenders. The . 
Asgfo-Dutch group, to particular, 1ms ! 
indicated it is keen to make further ! 
acquisitions following last year’s 
$417m purchase of Official Airline 
Guides. But though Ziff might fit the 
bill it is not the only fish in the sea. 


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■He says rr&sESTriE 
of kunniMq 
V? ^ GAR FLEET' 



— ALTERNfflTVaY: 

Oil-7063388 


FINANCIAL TIMES 


COMPANIES & MARKETS 


©THE FINANCIAL TIMES LIMITED I 9&4 


Friday June 17 1994 


CREATING THE WORLD'S 
MOST LUXURIOUS CLOTHS 



/^eict f /tiijLtl 


LANGHOLM SCOTLAND. DO 1 3 OBN 
TEL; D3B73 00311 FAX: 03873 80720 


IN BRIEF 


Radical change in 
Basque country 


Start-up venture will have several hundred employees, combine technologies and operate worldwide 

IBM tackles ‘suDerhiffhwav’ business 


Tlw Basque country’s co-operative movement, 
centred on the town of Mondragdn, is preparing 
to rap the international financial markets, martring 
a change to its 40-year-old history of worker-owner- 
ship. Page 20 

SKF upgrades forecast 

SKF, the world’s leading maker of roller bearings, 
shandy upgraded its 1994 profit forecast yesterday, 
□ring stronger-than -expected growth in volumes 
in its main European markets. Page 22 

CrMBt Lyonnais moves on the US 

Gr§<fit Lyonnais, the troubled state-owned French 
bank, became the latest foreign institution to 
announce plans for a large investment hawking 
business in the US. Page 22 


By Louise Kehoe 
in San Francisco 

International Business Machines 
has formed a division to create 
services for the ‘information 
superhighway". The services will 
include applications ranging 
from interactive televirion to per- 
sonal communications messaging 
systems. 

Mr Lou Gerstner, IBM chair- 
man and rhipf executive, has 
identified “network-centric” 
applications as one of the most 


important strategic growth mar- 
kets for IBM. The formation of 
the Networked Application Ser- 
vices division reflects IBM's 
determination to play a leading 
role in this aniwg in g field. 

Initially, the division will 
develop services that will become 
available on Prodigy, a personal 
Computer dial-up information 
and communications service 
jointly owned by IBM and Sears, 
Roebuck, on Advantis, a data 
communications network also 
jointly owned with Sears, and on 


IBM Networks worldwide. 

The market for digital network 
services for businesses, govern- 
ments, individuals mid the home 
would grow as the power of digi- 
tal communication by wire, radio 
and satellite expanded, IBM said. 
Networked Application Services 
would develop software to pro- 
vide iTitpiKg gnt communications 
capabilities on digital networks 
and IBM was making “substan- 
tial" investments in developing 
these technologies, the company 
said. The new division, which 


IBM views as a start-up venture 

with huge growth potential, will 

have “several hundred" employ- 
ees and operate worldwide. The 
division will draw together sev- 
eral developments under way in 
different parts of IBM and part- 
nerships that IBM has formed. 

For example, it is already pro- 
viding equipment and software 
for interactive television trials 
with Videotron and Cox Cable. 

The creation of software for 
personal communications ser- 
vices will be one of the initi.il 


focuses of the new division. 
These services will enable users, 
for example, to receive messages 
in different forms - voice, facsim- 
ile or electronic mail - no matter 
how they were originally sent 
and will prioritise messages 
according to the needs of the 
individual user. 

Collaborative computing, in 
which personal computer users 
work together via a network, will 
be another important application. 
Electronic publishing and elec- 
tronic commerce are also seen as 


markets with growth potential. 

The mission of the new IBM 
division is “to create services 
that will be the foundation for a 
highly interconnected world", the 
company said. As well as devel- 
oping broad service offerings, 
IBM plans to tailor services for 
specific industries and types of 
businesses. 

Networked Application Ser- 
vices will have its headquarters 
in Tbornwood, New York, with 
other locations In New York. Flo- 
rida and California. 


A different year for Morgan Stanley 

Morgan Stanley is not having a particularly great 
1994, at least when compared with the industry’s 
record-breaking results of last year. Page 23 

Peter Woo stays confident 

For a man whose personal wealth has fallen in 
value by almost USglbn this year, Mr Peter Woo, 
chairman of Wheelock, the Hong-Kong based 
conglomerate, is very confident Page 24 

Flnex opens In Ireland 

Fines, the currency futures arm of the New York 
Cotton Exchange, today opens Finex Europe at 
the new Dublin Fhtnhawg n Facility in the Interna- 
tional Financial Services Centre. Page 26 

PKI announces German deal 

FK1, the UK electrical en gineering and algrimp j/* 
components group, announced a 38 per cent rise 
In profits and the acquisition of Bhnmhna a Ger- 
man castor manufacturer. Page 26 

AAH ahead by 13% 

Acquisitions and a buoyant drugs market helped 
AAH, the UK pharmaceuticals distribution group, 
increase pre-tax profits by 13 per cent in the year 
to March 31. Page 26 

Southern Water buoyant 

Southern Water, the UK utility, was in buoyant 
mood yesterday as it reported a 7 per emit increase 
in annual pre-tax profits, and gave an encouraging 
report on the capital intensive coastal dean-up 
programme. Page 27 

Wales mowed on CHy upturn 

Wates City of London Properties, the only UK 
property company to hold all its assets in the 
City of London, yesterday announced a £3Lm 
rights issue to allow it to take advantage of the 
upturn in the City property market Page 27 

AMs advances 

Alvis, the UK defence contractor, reported 
increased profits for the six months to March 
3L Page 28 

Chloride Group back In the black 

Chloride Group, which is transforming Itself from 
a UK batteries business into an electronics group, 
returned to the blade for the year en d ed March 
31, but profits were not high enough to restore 
the dividend. Page 28 


Companies tn this Issue 

AAH 

as IBM 

19 

AT&T 

23 Inchcqpe 

27 

Adare Printing 

27 KUdor Peabody 

17 

Allied Leisure 

2B Kingfisher 

11 

AMs 

28 Locker (Thomas) 

27 

BTR 

28 London Merchant Secs 

28 

Bloomsbury 

28 Lotus Development 

22 

Bradstocfc 

28 Mondragdn 

20 

Bredaro 

26 Moorgate Smaflar 

27 

British Biotech 

28 Morgan Stanley 

23 

QrocWtampton 

27 Osprey Comms 

27 

CS Holding 

19 Parma 

28 

CamaudMetalbox 

19 Porter Chadbum 

28 

Celsius 

22 Protean 

28 

Cement os Lima 

20 ProvfeicM Group 

11 

Chester Water 

27 RCO 

27 

Chloride 

28 Rea Brothers 

26 

Citibank 

23 Rogaftan Props 

27 

Creditanstalt 

20, 19 SKF 

22 

Cr&dtt Lyonnais 

22 Safetamd 

SB 

Denmans Bactrica) 

27 Sakrt-Gobcdn 

20 

Deutsche Telekom 

17 Siemens 

26 

Editions Moncflales 

26, 20 Slough estates 

20 


26, 20 Smith New Court 

20 

Embassy Property 

27 South Wales Beet 

28 

Enso-Gutistt 

22 Southern Water 

27 

Eurotunnel 

27,19 Sprint 

17 

FW 

26 Tinsley Ftobor 

28 

Fokus Bank 

24 Ugfsndlntl 

27 

France Telecom 

17 Wates CHy of London 

27 

Hardy Oil & Gas 

26 Wheaton 

19 

Hennas 

20 Wheelock 

24 

Kicking Pentecost 

11 ZHf 

22 




■anei aiauauvo 


(Annual reports senice 

32-33 Foreign octanga 

38 

Benchmark Govt bands 

25 Gilts prices 

25 

Band futures and options 

25 UHg equity opdons Bad 

tl*0B 

Bond prices and yieKte 

» London share service 

32-33 

CoraraodWaa prices 

» London tradl options Bad 

tPage 

Dividends announced. UK 


34-38 

BUS currency rates 

38 Mnwy inmate 

38 

Eurobond prices 

® BfjMJ h|M (wwlli {MilM 

25 

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FT-A Worid mdces Back Pago 

FT Gold Mhos index Back Pan ShxMBnn et rates 

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Andrew Adonis finds challenges to views of stocks as bond surrogates 

Diverging views on 
UK utilities’ identities 


UK utilities: performance record 

Yield ratios RelaflWJtb FT-3&AAB store Addend yield 
utntlac sector 



' Share Priae < O.-'' - =T "* "SlnCaftSt 





•to#- 




X / 


Water 


*. Ikc;. "EMbbtlu BT : 

‘ wfr ■ ■■■... . ■ . 

Souri» SGWbt&WB.. 


cent Furthermore, the lifting In the convergers' view, then. 


Race BtftMiO* • BT 


CS chief 
plays down 
fears over 
Austrian 
bank bid 

By Eric Frey In Vienna 

Mr Rainer Gut, dnrfrman of CS 
Holding, yesterday said that Cre- 
ditanstalt would remain “a 
proud and independent Austrian 
bank with its own Identity" if 
Us Swiss financial group suc- 
ceeded in winning controL 
Mr Got said he was well aware 
of political opposition to the 
efforts of CS Holding to take con- 
trol of Creditanstalt, Austria's 
banking flagship. 

He fttt his group had an even 
chance of winning control 
against competition from a rival 
Austrian-led consortium. 

Mr Gut said he would prefer to 
bay all the government’s 49 per 
cent stake in Creditanstalt which 
offers 70 per cent of voting stock, 
but would also be content with a 
smaller stake in the short-term. 

He declined to disclose his 
offer price. Based on Creditan- 
start's share price, the govern- 
ment stake is worth about 
Schl4bn ($I-2bn). 

Mr Gut was in Vienna to meet 
Mr Ferdinand Larina, Austria's j 
finance minister, who wants to 
privatise Creditanstalt quickly, 
and to encourage public support 
for his offer. Mr Larina has said 
that his decision will not be 
based on price but on national 
interest and the interests of Cre- 
ditanstalt 

The CS bid for a large stake 
currently owned by the Austrian 
government should not be seen 
as a ‘Swiss solution' but an inter 
national solution," be added. 

Mr Gut’s earlier announce- 
ment that CS Holding is a i ming 
for 100 per cent control of Credi- 
tanstalt bas aroused controversy 
In Austria and led to the forma- 
tion of the rival bid. It is made 
up of Creditanstalt, Generali, the ' 
Italian insurer, Commerzbank of 
Germany and several Austrian 
institutions. 

Mr Larina, a social democrat, 
favours the CS Holding bid, but 
his coalition partners from the 
conservative People’s Party fear 
they would lose political influ- 
ence over the traditionally con- 
servative bank. 

The CS Holding offer has also 
stirred up fears of foreign domi- 
nation in the Austrian economy. 
Similar sentiments were voiced 
before the referendum on EU 
membership last Sunday. 

The outcome of a bidding race 
for Creditanstalt is quite open, 
financial sources say. 

CS Holding sees Creditanstalt, 
with its strong position in Aus- 
tria and central Europe, as a per- 
fect supplement to its subsid- 
iaries which include Credit 
Suisse, Schweizer Polksbank and 
CSSB. “We do not step an each 
other's toes, we are a perfect 
match,” Mr Gut said. Creditan- 
stalt would gain from OS’s capi- 
tal, technological assets and 

international strength. 


T his been a rHgw»»i 
week for utilities. British 
Gas’s wanting that it 
would not raise its dividend this 
year because of a new price cap 
imposed by the industry regula- 
tor had a knock-on effect on elec- 
tricity companies as they too 
await a pricing review. 

Such reverberations through 
the sector reflect the traditional 
view of utility stocks as Inter- 
changeable bond surrogates. 

A vigorous debate is under way 
among analysts and brokers as to 
the relevance of bundling 
together electricity, gas, telecom- 
munications and water compa- 
nies in one utility sector. 

The protagonists divide into 
two camps: the “divergers” and 
the “convergers". The “diver- 
gers" believe the utilities are 
going their separate ways. Their 
regulatory climates vary widely 
and their financial returns are 
fivergtng. Corporate activity and 
entry into unregulated sectors 
will reinforce these trends, as 
wfil the growth of competition in 
all the industries except water. 

On this view, gas and telecom- 
munications are prime candi- 
dates to lose their utility badges. 
British Gas and British Telecom- 
munications remain rinmmq nf jn 
their domestic markets. But they 
face stiff competition. 

Both companies are exploiting 
overseas opportunities with rel- 
ish. BT, for instance, wifi this 
year invest more in MCI, a US 
phone company, than in its UK 
network. With Mercury, cable 
companies and other new 
entrants taking market share in 
all telecoms sectors, BT chiefs 
speculate that the present regular 
tray price cap - due to expire in 
1997 - will be the last 
Mr Robert Morris, analyst at 
Goldman Sachs, sees manifold 
opportunities for BT if it expands 
its home market and becomes an 
tofor p atfmml la ^dar in new ser- 
vices. Yet tears that competition 
is a oneway street have dragged 
down BTs share price, exacer- 
bated by a slow-down in nominal 
dividend growth. Real dividend 
growth is expected to be between 
3 and 4 per cent over the next 
tew years, less than for electric- 
ity or water. 

Mr Nigel Hawkins, of Hoare 
Govett, believes the decision to 
privatise gas and telecoms as sin- 
gle entities, but to split water 
and electricity distribution, has 
created a regulatory divide 
between the two groups of utili- 
ties. “In practice where there is 
more than one operator the regu- 
lator tends to be more generous 
to the sector as a whole, as we 
are likely to see with water and 
electricity in the reviews of their 
price Caps, malrtng’ a si gnificant 
difference to expectations." 
Hence, in part, the better perfor- 
mance of water and electricity 
shares of late, although the latter 
has suffered in recent days. 

However, Mr Hawkins paints a 
sharp difference even between 
water and. electricity. With, regu- 
latory reviews ongoing in both 
industries, their regimes are 
diverging. While the water com- 
panies are set to have a price cap 
of effectively, RPI+L7 per cent, 
the Rees are likely to have to 
make a one-off cut of between 12 
and 15 per cent with a price cap 
thereafter of around RPI-&5 per 


next year of the ban an the Rees 
being taken over will open up 
entrepreneurial options. 

Far water, he expects real divi- 
dend growth of around 4 per 
cent, while for electricity distri- 
bution it will be dose to 6 per 
cent In short, the water compa- 
nies will become "akin to bonds”, 
while Rees will be less sensitive 
to bond movements. 

Not all diversifiers go that ter. 
Mr John WHeon at UBS points to 
underlying growth in electricity 
demand of less than L5 per cent 
"It is inconceivable that a com- 
pany can grow its eannngs and 
dividends greater than its growth 
of business in the long term.” He 
sees gas and electricity, where 
limited competition is emerging, 
as natural bedfellows, with water 
as a monopoly and telecoms as a 
fully competitive business. 

The “convergers" do not claim 
that the utilities will perform 
similarly In the short or medium 
term. They see the post-privatisa- 
tion history of all four industries 
as a continuum and minimis© the 
si gniffcanrft of competition and 
diversification. 

Mr Bill Dale, utilities analyst at 
SG Warburg, says: “British Gas 
and BT are, in effect, more 
mature utilities than electricity 
and water, leading to an Inevita- 
ble slow-down in their financial 
returns which will affect the oth- 
ers in due course. 

“The privatised companies find 
it ter easier to grow profits in 
their early years, when the cost- 
cutting - particularly redundan- 
cies - is easy and initial regula- 
tion is fighter.” As for competi- 
tion and diversification, "The 
track record of utilities diversify- 
ing is dreadful, and any institu- 
tional investor will initially take 
a negative view of it" 


in the long-term all four utilities 
might be expected to perform at a 
fixed discount to bonds, as in the 
US. Fleming Securities stresses 
the “increasingly close" relation- 
ship between the gilt/equity ratio 
and the dividend yield of the util- 
ities index relative to the FT-A 
All-Share. 

“As competition and regulation 
reduce the scope for unexpect- 
edly large rates of dividend 
growth, UK utilities wifi take on 
even more of the characteristic 
bond-like behaviour of their US 
counterparts.” 


Whether they will become bond 
substitutes remains problematic. 
While they serve as reasonably 
effective inflation hedges, their 
capacity to hedge against interest 
rates is more limited because in 
the UK price caps - and the per- 
mitted rates of returns underly- 
ing them - are fixed for several 
years at a time. 

For all that, “divergers" and 
“convergers” agree that no 
self-respecting Institution would 
want to do without the four utifi- 


Underwriters 
braced for 
Eurotunnel 
hangover 

By Simon Davies In London 

Eurotunnel's shares closed I4p 
lower at 303p yesterday, raising 
the likelihood that the under- 
writing syndicate may have to 
take up a significant portion of 
one of the UK’s largest ever 
rights issues. The price of the 
UK-fisted Eurotunnel units has 
fallen 18 per cent since Jane 6. 

Underwriters were confident 
yesterday that small sharehold- 
ers would take np their rights in 
the £858tn ($L3tm) share offer, 
despite the absence of free travel 
incentives, hut they can ill afford 
a further fall in the share price. 

The underwriters have a cush- 
ion with the rights shares priced 
at 265p. The burden will also be 
eased by fees: Eurotunnel is pay- 
ing £42m, including legal and 
accountancy costs. The offer 
closes on Wednesday. 
Background, Page 27 

Eurotuwwl Units 

.Shore price franco} 

45Q — 



Sore*; FT Graphite 


ties m their portfolio, given their 
size. It is all a question of bal- 
ance. 



RECYCLE YOUR 
RUSINESS CARD 
INTO 

OFFICE SPACE. 

(Attach below.) 


Packagers merge beauty units 


By Attoe Rawsftam In Paris 

CarnaudMetalhox, the Franco- 
British group, is merging its 
health and beauty packaging 
interests with those of Wheaton, 
the privately owned US concern, 
to create the largest force in that 
segment of the international 
packaging industry, 

Mr Jurgen Htntz, chairman of 
CarnaudMetalbox, said Wheaton 
International, the newly merged 
company, would be wood leader 
in the profitable health and 
beauty packaging business With a 
5 per cent market share on ann- 
ualised sales of FFtiUhn ($895m). 

“Well be the only company in 
that market with the capacity to 
Iflnfteh products dimilfampniiBl y 
all over the world,” he added. 

The merger reflects the consoli- 
dation among the cosmetic, per- 


fume and pharmaceuticals com- 
panies that are the customers of 
CarnaudMetalbox and Wheaton's 
health and beauty packaging 
interests. These areas of the 
packaging market have shown 
strong growth in recent years 
th anks partly to the trend 
towards more elaborate packag- 
ing, particularly in the beauty 
sector. 

CamaudMetalbox and Whea- 
ton, which respectively command 
annualised sates of FFKLShn and 
FFr2.Sbn in the businesses that 
will be pooled to create Wheaton 

International, shar e some multi- 
national clients such as France's 
L'Ortal, Procter & Gamble, of the 
US, and the Anglo- Dutch Uni- 
lever. 

However, Mr Amaud Fayet, 
director of CamaudMetalbox, 
stressed the two companies ware 


“very complementary in terms of 
regional spread and product spe- 
cialisations". CamaudMetalbox, 
be said, was strongest in Europe 
and in cosmetics packaging with 
Wheaton's strength lying In 
North America and the pharma- 
ceuticals field. 

The merger will speed up 
expansion in south-east Asia 
where CarnaudMetalbox has five 
production plants and Wheaton 
has a factory in China. 

The ownership of Wheaton 
International mil be evenly split 
between CamaudMetalbox and 
its US partner. 

The deal is expected to take 
effect from this autumn, subject 
to the approval of US regulatory 
authorities. Mr ffintz said that 
the effect an CamaudMetalbax’s 
earnings per share would be neu- 
tral for this year and next year. 



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FINANCIAL. TIMES FRIDAY JUNE_I7J$g4 


INTERNATIONAL COMPANIES AND FINANCE 


UK media group buys four 
French units for FFr914m 


By Dadd Wlghton hi London 
and Alice Rawsthom In Paris 


Emap, the UK media and 
exhibitions group, has agreed 
to spend a total of FFrOl-fen 
(2160m) on four acquisitions 
which will make it the third 
largest consumer magazine 
publisher in France. 

The main deal is the pur- 
chase tor FFrnOm of Editions 
Mondiales, a Paris-based pub- 
lisher with 8 per cent of the 
market Emap is also buying 
France's biggest selling motor- 
ing Tna gaTXnt*, L’Auto Journal, 
from Mr Robert Hersant, the 
press baron who owns Le Fig- 
aro newspaper. 

Mr David Arc ulus, Emap 
manag in g director, said it had 
been planning a big expansion 
in France for some time having 
first entered the market in 1990 
via a Joint venture with Bayard 
Presses “At one leap this gives 
ns 10 per cent of the French 
consumer magazine market 
with a further 1 per cent in the 
joint venture." 

He said most of the French 
titles were similar to those it 


owns in the UK and added that 
they were being acquired at 
just the right point in the eco- 
nomic cycle. “The prospects tor 
the French economy are now 
looking as healthy. If not 
healthier, than the UK with 
some signs of advertising 
starting to pick up." 

French publishing was hit by 
a severe recession with adver- 
tising and circulation falling 
off sharply and new launches 
Intensifying competition, par- 
ticularly in the newspaper 
market. 

A number of magazines, 
melting c vmdft Nasfs French 
Vogue and Le point, the politi- 
cal weekly, have cut their 
cover prices in an attempt to 
bolster flagging sales. The 
pressures have posed serious 
fhnm/»rfli problems for a num- 
ber of com panie s, notably Mr 
Hersanfs huge media group. 

Its sale of Auto Journal, part 
of a continuing disposal pro- 
gramme, heightened specula- 
tion about the fate of the 
group's remaining titles such 
as France-Soir, the loss-making 
evening paper. 


Emap has long had Its eyes 
on Editions Mandiales, a Paris- 
based pubhshar whose 28 titles 
include T&6 Poche, one of the 
leading TV listings magazines, 
which sells L4m copies a week. 

Mr Arculus said that combin- 
ing the acquisitions with 
Binap's French operation 
would result in lower over- 
heads and purchasing benefits. 

The acquisitions made total 
operating profits of £im 
($L5m) on turnover of £L38m 
last year, but Emap said the 
deals would enhance group 
earnings in the first fall year 
if, as it intends, they are 
fiznded by debt. 

Mr Arculus said the slim 
returns partly reflected the 
fact that they had been private- 
ly-owned and run “with tax 
rather thaw profits in mind". 

Emap ’a UK consumer maga- 
zines made £24m on turnover 
of £L69m last year. Mr Arculus 
said this indicated the scope 
for improvement in the French 
businesses. He said this was 
reflected in the price, which 
was less than annual turnover. 
Details, Page 18 


Smith New 
Court posts 
sharp gain 
in earnings 


By Norma Cohen, 
Investments Correspondent 


Saint-Gobain 
expects rise 
in net profits 


Peru sells 49% stake 


in cement producer 


By ABce Rawsthom in Paris 


By SaBy Bowen in Lima 


Saint-Gobain, the French glass 
and building materials group, 
expects to achieve a large 
increase in net profits during 
the first Half of this year, 
according to Mr Jean Louis 
Beffa, d ia iTTriHTi 

Mr Beffa, speaking at the 
group's annual general meet- 
ing in Paris, said the pick-up in 
activity which started during 
the final quarts: of 1933 had 
continued so far in 1934. Saint- 
Gobain last year suffered a 
sharp fall in interim profits to 
FFr452m ($79. 3m) from 
FFrl.4bn during the same 
period of the previous year due 
to the pressures of the Euro- 
pean economic recession. 

The group has benefited, 
according to Mr Beffa. from 
“improved economic condi- 
tions and the effects of cost- 
cutting” and is on course for a 
“significant improvement” in 
interim profits for 1994. 


The Peruvian g n vg rmnenf fras 
sold Its minority holding in 
Cementos Lima, the cement 
producer. The auction, held in 
lima, was Peru's first over-the- 
counter primary offering for a 
privatisation. 

Proceeds from the sale of the 
49 per holding — compris- 
ing some 309,000 voting shares 
- topped Si 03m. The 39 per 


cent auctioned fetched jagm 
while gristing shareholders 
paid $2lm tor another 10 per 
pant, the equivalent of the final 
price. 

Lead managers far the sale 
were Bankers Trust of New 
York. 

Thirteen stockbrokers pres- 
■ented bids which finally 
secured 41 per cent of the allo- 
cation at the clearing price of 
$266 a share. 


Hermes forms alliance 


By Hilary Barnes 
In Copenhagen 


Hermes, the German credit 
insurance group, and Dansk 
Kantion, the D anish credit ride 
insurance company, have 
agreed a strategic alliance. 

The German company would 
pay about DKrl05m ($16.1m) 
for a 20 per cent stake in the 
Danish company, while Dansk 


Kaution would acquire a 30 per 
cent holding in Hermes’s Swed- 
ish credit insurance company 
tor DKrl2m, Dansk Kaution 
said yesterday. 

Dansk Kaution’s articles of 
association, which prevent any 
one shareholder from owning 
more than 12 per cent of the 
company, must be changed 
before the alliaTiep ran c omp 
into force. 


This announcement appears as a matter of record only. 


June 1994 


Landesbank Rhein lan d-Pfalz 


US.$1,500,000,000 


Landesbank Rheinland-Pfalz, Girozentrale 

( Incorporated under Public law in the Federal Republic of Germany) 


LB Rheinland-Pfalz Finance B.V. 

(Incorporated with limited liability in The Netherlands) 


Amounts payable in respect of Notes of which are unconditionally and 
irrevocably guaranteed by Landesbank Rheinland-Pfalz, Girozentrale 


Euro Medium Term Note Programme 


Arrangers 

Merrill Lynch International Limited 


Merrill Lynch Bank AG 


Merrill Lynch Finance S JL 


Dealers 


Dai wa Europe Limited 


Goldman Sachs International 


IBJ International pic 


Landesbank Rheinland-Pfalz, Girozentrale 


Lehman Brothers 


Merrill Lynch Finance S. A. 


Merrill Lynch International Limited 


Morgan Stanley & Co. 


Salomon Brothers International Limited 


Swiss Bank Corporation 


Basque co-op changes its culture 


Mondragon is preparing to tap financial markets, writes Tom Borns 


Smith New Court, the 
UK-based equities marketma- 
ker and broker, reported a 
surge in pre-tax profits for the 
year ended April 1994 to 
£95£m ($i58.6m), from £3&7m 
the year before, reflecting 
gains across most of foe firm. 

The firm's shares dosed 4p 
higher at 373p, bucking the 
market trend in trmAnn yes 
terday. The dividend was 
increased to lOp per share 
from 6p. 

Return on capital was 47A 
per cent in the year, more 
than double the 20 per cent 
rate of return the London 
Stock Exchange calcnlatrd the 
average UK securities firm 
earned in 1993. 

“We are building products 
our clients want," said Mr 
Michael Marks, chief execu- 
tive, in explaining foe firm’s 
success in its niche markets. 
Despite volatile trading condi- 
tions in the last quarter, prof- 
its in the second half nearly 
doubled from the £31. lm 
recorded in the first half. 

The firm does not provide 
specific tfatafl* of foe profit- 
ability of its geographical 
regions. However, interna- 
tional income accounted for 57 
per cent of the total against 43 
per cent from UK activities. In 
1986 domestic activities 
accounted for 80 per cent of 
the totaL 

Mr Marks said that profits 
from the firm’s US-based Carl 
Marks Co subsidiary, Had 
benefited from the installation 
of a new system which allows 
regional stockbrokers to 
obtain critical share researc h 
electronically. "They pay us 
for it by their order flow,” he 
said. Also, the US division ben- 
efited from the general trend 
among domestic pension fond 
investors to increase their 
exposure to non-US securities. 

Also, Smith New Court said 
it dramatically reduced its 
dependence on market-making 
as a source of profitability. In 
the latest year, •marlratmfllriTi g 
accounted for 48 per cent of 
profits with the remainder 

coming f mm ff wiimicidiwK wwi 

fees. 


T he Basque country's co- 
operative movement, 
centred on the town of 
Mondragta, Is preparing to tap 
the international financial 
markets, marking a change to 
its 4fryear-oM history of work- 
erownerehip. 

“We are talking about a new 
culture for us," ***** Mr Miguel 
Angel Lasptur, chief financial 
officer of Mondragta Corpora- 

&6n Coopera trva (MCC), the 

corporate mrihreTIa of l(fl indi- 
vidual co-oper a ttve s which has 
assets of PtsSSZhn ($7-2bn) and 
posted combined sales of 
Pta424bu last year. 

Mr Laspiur plans to create a 
financial holding company 
later this year, ftrndwi princi- 
pally by foreign institutions, 
that win in ve st in some exist- 
ing MCC co-operative units, 
such as Fagur Ederian, the car 
component producer, and pro- 
vide additional capital for new 
ventures. 

These will be set up as lim- 
ited companies, as opposed to 
cooperatives owned by their 
employees, and will be con- 
trolled by MCC. 

“We are not tniMng big fig- 
ures [tor the holding company] 
right now and will only be 
seeking Ptal0bn-Ptal5bn but 
this is just the begmdng and 
the numbers could multiply 
tost," said Mr Laspiur. 

The development, which 
bears comparisons with the 
1989 canvaston a™* flotation 
of the UK’s Abbey National 
building society acid with the 
venture capital attracted by 
Australia's Westralian 
Fanners Co-operative, has 
attracted considerable 
interest 

Mr Javier Salaverri, manag- 
ing director in Spain of Schro* 
tiers, the UK me rchant hank, 
says the offer was “a very 
exciting prospect and very sen- 
sible move by MCC which will 
enable it to compete tor capi- 
tal-. 

Mr -SariHag n Eguldflzu, head 
of corporate finance at the 
Madrid securities firm AB Ase- 
sores agrees: The Mcmdragfin 
poop is a great generator of 
in dus tr ia l initiatives and it has 
long proved itself to be a higbr 
quality industrial manager," 
he says. 

Mr Laspiur concedes that it 
may be difFmi» to bring in the 
funds. 

•There is no precedent for an 
industrial corporation of our 


ToWnlM 

pretax 


r. .* 






*1*92 t 


■flndusWal group) 


Labour fore* 


;v|*> 








-; 1 '■/; *-. , V|4l%- 






1902 1893 


size, which is owned by co-op- 
eratives and run from the bot- 
tom up, going to the markets 
and there could be problems m 
explaining what Mondragta is 
all about” 

The most visible aspect of 
Mondragta is the output of 
machine tools, car components 
and electrical white household 
goods of its industrial division 
which had combined export 
sales of Pta6L8bn last year, 35 


trial division’s earnings and 
offset dampened results posted 
by the co-operatives dedicated 
to manufacturing capital 
goods, machine tools and elec- 
tronic products. 

Increased profits in the 
flnawrini division meanwhile 
helped to finance investments 
totalling Pta38bn last year in 
MCC’s spreading network of 

hypermarkets. 

There could be a problem 


The chief executives of MCC, such as 
Mr Laspiur, who are elected by 
their fellow employees, are confident 
they will win round their colleagues 
and the fund managers 


per cent of total sales and 19 
per cent up on the 1992 export 
figure. 

In spite of the recession, 
MCC posted good results last 
year with pre-tax profits of 
Pta28.9bn, a 28 per cent 
increase on 1992. and it expects 
to lift fowi year's gross income 
by a further IS per cent to 
33.5bn on sales of about 
PtaSOObn. 

MCC has benefited from 
diversification into three broad 
divisions: industrial produc- 
tion, distribution and finance 

and financial services. 

The strung export business 
generated by the corporation’s 
car component manufacturing 
milts helped to raise the indus- 


explaining the capital markets 
to MCC's 25,000 employees 
who, as owners of the coopera- 
tives, control the corporate 
decision making through 
elected councils and are 
Intensely proud of their indus- 
trial democracy. 

The less visible part of Mon- 
dragta is the close-knit man- 
ner in which the cooperatives 
have organised themselves into 
a cradle- to-grave welfare soci- 
ety hidden away among the 
narrow, lushly green and 
wooded valleys of the Basque 
Country. 

It was founded by a tor-see- 
ing local priest, Fr Josfc Maria 
Arrizmendiarrieta, in 1956. The 
Mondragta co-operative move- 


ment, as it was originally 
known, has grown Into a wcai> 
er-ownerahip empire that 
embraces a large technical, 
school, a highly-regarded 

applied research centre and a 
financial division buUt around 
its own savings bank and Its 
healthcare, lift insurance and 
pensions group. 

In a research paper tor Bris- 
tol University, sociologist Dr 
Martin Fairclough noted that 
Mondragta has been Tike a 
iihiins and a wholly, writ" 
co-operative undertakings ebe- 
where in the world. 

The chief executives of MCC, 
such as Mr Laspiur, who axe 
elected by their fallow employ, 
ess, are confident they wfli win 
round their colleagues and the 
fund managers. 

Outside capital udU soon be 
urgently required because the 
growth at the corporation, par- 
ticularly in the distribution 
sector whore it has ambitious 
shopping centre projects, can 
no longer be self-financed in a 
satisfactory way. " 

A degree of degeneration 
from the worker-owner and 
Industrial democracy ideal bn 
taken place. MCC has since 
1991 been buying local eotf. 
nearing companies and turning 
fa wn round into profltaMHty 
although not Into co-opera- 
tives. 

In an even more (bristle 
departure from its traditional 
approach to business, MCC is 
planning to open a white 
electrical goods plant outride 
Casablanca in a Joint venture 
with a Moroccan investment 
group. 

"Just like the Swedish multi- 
national Electrolux came south 
and set up shop on Spain, 
we‘re going south into 
Morocco," said Mr Laspiur. 
One difference is that MCCa 
Mr Laspiur. as a member at a 
co-operative organisation, 
earns at best 55 per cent of the 
salary that the chief finance 
officer of a rival multinational 
might command. 

Mr Laspiur and his follow 
senior executives want to keep 
it that way and they believe 
that tapping the markets will 
not change the essential ethos 
of the Mondragta group. 

However, some international 
fund managers might he sur- 
prised to hear Mr Laspiur 
admitting that he and his fel- 
low top worker-owners are "a 
bit like monks'. 


This announcement appears as a matter of record only 


STATE BANK OF VIETNAM 


US$100,000,000 


Five-Year Loan 


Arrangers 

Krung Thai Bank Public Company Limited 
Export-Import Bank of Thailand 


Lead Participants and Underwriters 

Bangkok Bank Public Company Limited 
Deutsche Bank AG, BIBF 
Dresdner Bank AG, BIBF 
Export-Import Bank of Thailand 
Krung Thai Bank Public Company Limited - IBF 
Thai Military Bank Public Company Limited - IBF 
The Thai Farmers Bank Public Company Limited - IBF 


Participants 

Asia Credit Public Company Limited 
Bank of America NT & SA, BIBF 
Dhana Siam Finance and Securities Public Company Limited 

Merrill Lynch & Co. 

Thai Investment & Securities Public Company Limited 
The Bank of Nova Scotia, BIBF 
Union Asia Finance Public Company Limited 


Agent 


Krung Thai Bank Public Company Limited - IBF 


June 17, 1994 



i 


1 


1 




» 





Everything. 

The names, of course. And that’s a symbol of a fundamental 

change. Fortis was created by its parent companies - N.V. AMEV 
from the Netherlands and AG Group from Belgium - to build a strong 
international insurance and banking group. 

. ,*.r - 

The names of the shares. AG shares become Fortis AG shares 

and AMEV shares, Fortis AMEV. Now, investors and shareholders will 
follow Fortis AG share quotations in Brussels and Fortis AMEV share 
quotations in Amsterdam that reflect the value and success of all the 
companies within Fortis. 

A dear corporate structure. Through a better identification with 

Fortis, further confusion will be avoided with “AG 1824” in Belgium and 
“AMEV Nederland” in the Netherlands, both major insurance companies 
in their home countries. Next to these two companies, there are more than 
100 other companies on four continents sharing a vision for the future that 
will benefit clients, investors and personnel The name of this vision? Fortis. 


And nothing. 


Each Fortis company remains the same. They retain their 

own identity, their own products and services. In every country, their 
individual brand names and logos will maintain a strong presence 
on the market as they continue to build their reputation for excellence. 

Our service remains the same. Brokers and other professionals 

will continue to work with local Fortis companies whose quality 
products and services they have come to rely on. Clients will perceive 
no change whatsoever in their individual accounts or policies: whe- 
ther they are with AG 1824, AMEV Nederland, VSB Bank, ASLK- 
CGER, Fortis in the United States or any other company of the group. 

The challenge remains the same. Now, more than ever, 

each company within Fortis will continue to strive to play a leading 
role in its own market. And the 32,000 people worldwide who take on 
that challenge every day at local level, will know that they are part of 
a widely international family. It’s name? Fortis. 


■forth ftG 


I 


50 % 

* 


forth MV1EV 


I 


50 % 




fort h 

is l il'.'si • • l r wi'.i' . j\ •?-«■ ! Uli < (>JnjO:ri> -• < l ; Sn'-iU-.3Ji'.V 

i'.'i's i !<’s : 

Belgium * tlie Aeiherlands • \ uiled Mate* - Denmark 
of Ireland * $ nu<«I Kindlon) 

Kraiur * • !rip:im * \uslralia • Si'. Asia 


(forth ftG (forth / 1MEV 


Boulevard Emile Jacqmain 53, 
1000 Brussels, Belgium. 


Arrhimedeslann 10, 

3584 BA Utrecht, the Netherlands. 



FINANCIAL TIMES FRIDAY JUNE 17 1994 


INTERNATIONAL COMPANIES AND FINANCE, 


SKF upgrades profits 

l • i* 

r a « information 

forecast for full year technology 


By Chris top her Brown-Hwnea 
In Stockholm 

SKF, the world's leading 
maker of roller bearings, 
sharply upgraded its 1994 profit 
forecast yesterday, citing 
stronger-than-expected growth 
in volumes in Its main Euro- 
pean markets. 

The group expects profits of 
SErl.Sbn ($X90ra) this year, 
compared with an April fore- 
cast of SKrlbn. This would be 
its best result since 1990, and 
follows a SKrLSbn loss In 1992 
and a SKr669m deficit last 
year. 

SKF said a recovery was 
under way in all its European 
markets, particularly in the 
automotive industry, its most 


important customer base. "It is 
probable that the favourable 
market trend will continue 
during the remainder of the 
year,” it said. 

Europe accounts for 60 per 
cart of group sales. "There is a 
strong recovery under way in 
Scandinavia, the UK and Italy. 
But we can also see that the 
German market is levelling out 
and starting to improve,” hib 
group said. It said there was 
particularly strong growth in 
demand from truckmakers. 

The company is also beiefit- 
mg from a solid upturn in the 
US market, where profits have 
increased every quarter for the 
past two years. The US is the 
group's largest single market 
with 25 per cent of sales. 


"We are taking market 
share,” the group said, 
ajthnrigTi it declined to be spe- 
cific. Its share of the world 
market, emludftig China and 
former Comecon countries, is 
around 20 per cent twice its 
nearest competitor. 

SKF made a SKr306m profit 
in the first quarter of 1994, 
after losses of SKr355m in the 
same 1998 period. Sales 
climbed 12 per cent to 
SKrS.05bn. The recovery has 
been helped by extensive cost- 
cutting — which h gq led to 
loss of 15,000 jobs over four 
years - and currency factors. 

The company's B shares yes- 
terday rose SKrl to SKrl39, 
against a downward market 
trend. 


Solid gain at Enso-Gutzeit 


By Christopher Brown-Humes 

Enso-Gutzeit, the Finnish pulp 
and paper group, saw profits 
after financial Items reach 
FM3G6m (866.4m) in the first 
four months, a sharp rise from 
last time's FM86m. 

The group benefited from 
higher pulp and sawn-goods 
prices, as well as foreign 
exchange gains and lower 
financial costs. 

The upturn would have been 
stronger, but far a 7 pm- cent 
appreciation in the value of the 
markka and higher deprecia- 
tion costs. 

Markka prices for fine paper, 
newsprint and coated maga- 
zine paper were also lower 
than a year ago. 

The group remains optimis- 
tic about prospects because of 
strengthening prices for 


most pulp and paper products 
and rising capacity utilis- 
ation. 

Mr Jukka Hfirmfiifl, Chief 
executive, said 1994 figures 
should show a “dear improve- 
ment” on last year's FMSSSm 
profit, "provided there are no 
unexpected turns in external 
factors”. 

The figures are further evi- 
dence of a broad recovery in 
the Nordic pulp and paper seo 
tor. 

Sales rose 19 per cent, to 
FM5-5bn from FM4.6bn, mainly 
because of last year’s purchase 
of forestry and board 
operations from Tampella. 
However, operating profits rose 
only 5.6 per cant, to FMTOlm 
foam FMHtem, due to the stron- 
ger markka, falling prices, and 
higher depredation. 

Lower interest rates and the 


healthier markka reduced 
f friainrifti costs to FMS74m from 
FMS08m. 

There was also a foreign cur- 
rency g«hi of FM38m, after a 
FMTOm loss last year. 

Meanwhile, Enso said it had 
tightened its grip on Berg- 
huizer Papierfabriek, its strug- 
gling Dutch paper subsidiary, 
following a public offering for 
fl it* outstanding shares in the 
company. Enso’s stake has 
risen to 77 JL per cent from 57.8 
per cent. The offer will be 
extended. 

Barghuizer specialises in 
high-quality copying and 
writing papers, in a higbly- 
competitive market 

Last year, it suffered a 
FI 14.8m loss on sales of 
Fll94Am. Its performance is 
not expected to improve this 
year. 


business 

fiy Christopher Brown-Hunes 

Celsius, the Swedish defence 
group privatised last year, 
said yesterday tt was buying 
the information technology 
concern. Dialog, for up to 
SBHMmaaumL 

The purchase will broaden 

the group's range of consult 
tog and technical sendees and 
enable it to offer software 
development and computer 
operations expertise to 
military and civilian 
customers. 

Dialog has 2,000 employees 
and an primal turnover of 
SKrlJIbn. This win lift 
Celsius's infor ma tion technol- 
ogy sales to SKrtfen, and bring 
total group sales up to 
SKrl5bn. 

Mr Ake Plyhm, Celsius 
president, said Dialog's cus- 
tomer profile, based around 
municipal authorities and 
large companies, fitted well 
with Celsius’s other IT 
operations. 

Two previous acquisitions, 
Telob and CelriasTech, have 
given the group a strong 
position In the military 
information technology 
sector. However, it has also 
expanded into the civilian sec- 
tor with Tehib’s purchase of 
the Swedish telecom company. 
Dotcom, and Celsius’s acquisi- 
tion of the voting m aj or i ty in 
Enator, a firm of IT consul- 
tants. 

Celsius will initially pay 
SKr385m far Dialog, and up to 
SKx95m more under an earn- 

ings-related formula. 

It is buying the company 
from the Swedish Association 
of Local Authorities. 


Credit Lyonnais plans new US unit 


By Richard Water* 
bt New York 

Credit Lyonnais, the troubled 
state-owned French book, 
yesterday became the latest 
foreign institution to announce 
piar\y for a large investment 
hanking business in 
the US. 

Meanwhile, CS first Boston, 
the investment banking 
subsidiary of CS Holdings, 
signalled a step in the opposite 
direction, with a move into 
arranging loans for US compa- 
nies. 

Credit Lyonnais' reputation 
in the US has bean damaged by 
its involvement with MOM. 
the film studio it has owned 
since it foreclosed on a loan 


to Gtescarlo ParrettL 

Mr Robert Cohen, the bank's 
chief executive in the US, said 
that business had been han- 
dled through the bank's Dutch 
operations, rather than its US 

harik- 

He indicated that the US 
operations have been one of 
the most profitable parts of the 
group, making after-tax profits 
of 8170m last year, equivalent 
to a return on capital of 24 per 
cent 

Credit Lyonnais has grown 
to be one of the biggest foreign- 
owned commercial banking 
operations in the US in recent 
years, with $KX5bn in coanmer- 
dal and industrial loans and a 
staff of 700, up from 400 five 
years ago. 


Mr Cohen Indicated that 
the bank intended to expand 
its 100-strong Investment bank- 
ing business at the same rate 
of about 60 people a year, 
mainly on the fixed-income 
side. 

The bank plans to sell Euro- 
pean and US government 
bonds in the US, and to under- 
write debt issues for both 
European and US companies, 
he added. 

credit Lyonnais* test loan 
growth echoes that of other 
foreign banks in tin US, 

According to a study 
released last week by the 

Office of the Comptroller of the 
Currency, foreign banks 
accounted for around 47 per 
cent of all commercial and 


industrial loans in the third 
quarter of 1992, double 
the level of 10 years 
before. 

CS First Boston said It 
had hired Mr Robert O'Brien, a 
former managing director 
of Chemical Bank - one of 
the leaden; In the 'syndi- 
cated loans market - to 
arrange loans for existing 
customers. . 

The move, unusual among 
investment bank*, fa the 
reverse Of steps taken 
by US commercial- hanks 
to extend into the bond 
markets. 

Loans originated by CS First 
Boston will be booked by 
Credit Suisse the banking arm 
of CS Holdings. 


VNU shows interest Lotus in electronic 
in elements of Ziff mail acquisition 


By Ronald mo de Krot 
hi Amsterdam 

VNU, the Dutch publisher, 
yesterday e xpress e d interest in 
buying parts of Off nnwmmii. 
cations, the US-based puhhsh- 
ing group put up for sale last 
week . However, it ruled out an 

fflitrig M hfri 

The Dutch publisher empha- 
sised it was not actively 
looking at Ziff. "We have bad 
no contact with them whatso- 
ever, and they haven’t had any 
with us," a spokesman said. 

Ziff, winch is expected to be 
sold for between J 2 bn and 
$3bu, was too big an acquisi- 
tion for VNU to contemplate, 
he said. 

Reed-Elsevier. the Anglo- 
Dtxteh pnWMitwg group with 
the resources to make take- 
overs on this scale, retoed to 
make any comment on 


whether It was amsftkartng a 

Ud. 

Ziff, the world’s hugest pub- 
lisher of computer magazines, 
was put up for sale by tike Ziff 
family last week. 

There has been speculation 
on possible Udders nmw »g the 
world's publishing groups, but 
no company has yet publicly 
expressed an interest in baying 
the privately-held group. 

Like Ziff. VNU fa active in 
computer magnates, particu- 
larly in the UK and continental 
Europe. It is also active in con- 
sumer and trade magazines, 
regional newspapers and com- 
mercial television. 

VNU carried out a share 
issue earlier this year to 
finance the acquisition of BPI 
Communications of the US, 
whose titles include the daily 
newspaper Hollywood Reporter 
and Billboard magazine. 


fry Alan Can* 

Lotus Development 
Corporation, the Massachu- 
setts software co m pany, is buy- 
ing Softswitch, a privately-held 
company, far about L3m Lotus 
shares. This values Lotus at 
juft over ITOm. 

Softswitch supplies elec- 
tronic mall message switches 
that create links between elec- 
tronic mfl s y s te m s fr om dif- 
ferent manufacturers. Mr 
Michael fflsman. Softswitch 
president, will become 
vfcfrpresUent of a new Lotus 
business group, Inter-Enter- 
prise Computing: 

The group will bring 
together Softswitch and a ven- 
ture involving AT&T called 
Network Notes, beaded by Mr 
Larry Moore, vice-president of 
Lotus Telecommunications 
Services. 


Lotus, one of the largest US 
software houses, rose to promi- 
nence through the success of 
Us Integrated spreadsheet, 
l-M. 

More recently, it has 
achieved «%««**«* sales for 
Lotus Notes, a groupware prod- 
uct which Integrates messag- 
ing fbnna-generation and doc- 
ument flow in large networked 
environments. 

Among the organisations 
using Notes to Andersen Con- 
sulting, a leading information 
technology consultancy. Lotus' 
maxtaettiir aBtence with AT&T 
is designed to hroadan Notes 
appeal. 

Mr James Cosgrove, head of 
AT&T’s data communteatioos 
services division, said recently 
intercompany networking and 
data-sharing were two of the 
principal trends driving prog- 
ress In computer net work ing. 


Korea 

liberalisation Fund 
Limited 

Placing and Open Offer 
to raise US$66,000,000 

Brokers- 

James Capel & Co 
and Lucky Securities 

April 1994 

Taiwan 

Investment 

Trust PLC 

Placing and Intermediaries 
Offer to raise £45,000,000 

Sponsored by 

James Capel & Co 

February 1994 

China 

Investment Trust PLC 

Placing and 

Concurrent Offer for CST 
Emerging Asia Trust PLC 

Sponsored by 

James Capel & Co 

April 1993 

Hong Kong 
Investment Trust PLC 

Placing of 8,000,000 
new Zero Dividend 

Preference Shares 

Sponsored by 

Allied Provincial Securities 

November 1993 


Jupiter Tyndall 

in 

the Far East. 

Enquiries to: 

Jupiter Tyndall (Asia) Limited Jupiter Tyndall Merlin Limited 

Suite 1504, Hong Kong Club Building (Member oflMRO) 

3a Chater Road. Central Hong Kong 197 K nigh [bridge House, London SW7 1RB 
Tel. no. 010 852 845 4333 Tel. na 07 1 412 0703 



jyK? 

ggraaWfa 

" • -V *£■'.. 

■ y : r : 


This Monday, and every Monday set yourself up for the week ahead with the 
Financial Times. 

Its agenda wBI not only alert you to the business opportunities and high limits of the 
week, It w01 help you make the most of life outside work too, offering a comprehensive 
&dde to everything from the Arts and fashion to health and travel, In an easy to use format 
So, to give yourself the best possible start, kick off with the FT this Monday. 

Financial Times. Europe^ Business Newspaper. 







23 


FINANC IAL TIME S FRIDAY JUNE 17 1994 

INTERNATIONAL COMPANIES AND FINANCE 

Morgan Stanley banks on new blood infusion 

The firm is pursuing an ambitious hiring plan despite the downturn, writes Patrick Harverson 



M organ Stanley. like 
other big securities 
firms an Wan Street, 
is not having a particularly 
great 1994. at least when com- 
pared with the industry’s 
record-breaking results of last 
year. 

In the February*to*April 
reporting period, its profits fell 
41 per cent to $i89m as global 
financial markets were 
suddenly unfavourable by an 
unexpected surge tn US inter- 
est rates early in the year. 

Unlike every other firm an 
Wall Street, however, Morgan 
Stanley is pursuing an ambi- 
tious hiring st r at egy , in spite 
of the disturbing downt urn in 
business. 

Last year, its payroll jumped 
by 11 per cent to 8^73. and it is 
expected to reach 9,300 by the 
end of this year. A good deal of 
the hiring has been concen- 
trated in overseas operations, 
and in investment banking, 
where staffing is due to rifrnh 
from 800 to 930 before the end 
of 1994. 

The hiring strategy at Mor- 
gan Stanley, one of the moat 
aggressive semi on Wall Street 
in a long time, is remarkable 
because it runs counter to tra- 
ditional Wall Street thinking 
that payrolls should be 
trimmed, or at least frozen, 
when market conditions are 
unfavourable and profits aze 
falling. 

“We are going to use this 
difficult period to invest 
in the business, and not figure 
out a way to cut back,” 
says Mr Dick Fisher, Morgan 


Stanley chairman 

The decision to stick with 
the hiring plan is predicated on 
two important assumptions: 
that the current downturn in 
market co nditions is only tem- 
porary and the best prospects 
for Wall Street firms lie over- 
seas, particularly in invest- 
ment banking. 

Al though the lattar assump- 
tion is widely held within the 
industry, Morgan Stanley is 
taking something of a gamble 
in predicting a recovery in 
securities markets. Mr fisher, 
admitting that many on Wan 
Street view the situation, differ- 
ently, says: “We think that the 
current period of correction is 
an interruption of a very posi- 
tive trend, not the end of the 
cycle." 

WhOe this optimistic view is 
clearly an important factor 
behind the hiring spree, there 
is another side to the story. 

The firm has been bringing 
in new people to its investment 
banking division partly 
because it needed to fill the 
holes which opened up when a 
string of top bankers followed 
the former president Mr Robert 
Greenhin out of the door last 
year. Ha defected to rival secu- 
rities house Smith Barney 
Shearson. 

The departure of Mr Green- 
hill - who left Morgan Stanley 
after 31 years when he was 
overtaken by the current presi- 
dent Mr John Mark in the race 
to succeed Mr Fisher as chair- 
man when he retires - was a 
big blow to the firm. 

Having matte bis tkhtk » dur- 


ing the 1980s as one of the top 
mergers *n6 gw pridHMi bank- 
ers on Wall Street, Mr Green- 
bill enjoyed close working rela- 
tionships with some of the 
biggest corporations in the US. 

His tit*; with the entertain- 
ment group Viacom, for exam- 
ple, ensured it was Smith Bar- 
ney, not Morgan Stanley, 
which played a pivotal (and 
hi g hly lucrative) advisory role 
in Viacom’s $10bn merger with 
Paramount Communications 
earlier this year. 

T he impact cm *ha firm of 
Mr Greenhifl’s loss last 
June was exacerbated 
by the defection soon after of 
more thaw a rfnmti other Mor- 
gan Stanley bankas, many of 
whom joined Mr Greenhfll at 
Smith Barney, whose invest- 


ment b anking unit has begun 
to gain ground cm its rivals. 

The defections catne at a par- 
ticularly httrf tim» for Mnrp m 
Stanley, because they fuelled 
the p erception that the firm's 
investment banking powers, 
winch have been waning for 
several years, were in perma- 
nent decline. 

The firm dominated the rest 
of Wall Street in the late 1970s 
and early 1980s - consistently 
ranlttng first in thfi industry 
with a near-20 per cent share of 
the US stock *"4 i—h under- 
writing market - but it now 
sits well back in the pack, 
ranking seventh ammig under- 
writers last year with a market 
share of only 6.4 per rent. 

Whiie Mr Fisher insists the 
loss of Mr Greenhfll and o ther s 
from the investment banking 


division was not a serious blow 
to the firm, he is unhappy with 
the steady decline in Morgan 
Stanley’s share of the domestic 
underwriting market since the 
mid-1980s. 

“We’re not where we want to 
be and are taking steps to 
address that," he says, steps 
that have involved reorganis- 
ing the Investment banking 
department’s top wnm»gmw<irit ( 
and hiring fresh talent in tire 
US and overseas. 

The firm's most notable new- 
comer is the former First Bos- 
ton and Wasserstein Perella 
M&A wizard, Mr Joseph Per- 
ella, who arrived at Morgan 
Stanley last summer with a 
fistful of blue-chip corporate 
clients. 

Mr Fisher says the friftiainm 
of new investment hanking 
blood has begun to pay off at 
home and abroad. “Five of the 
six largest equity deals this 
year have hp»n Ifiarj mawag aH 
by Morgan Stanley, and we’ve 
seen a significant upturn in 
European business." 

With people like Mr Perella 
on board, Mr Fisher is espe- 
cially huffish "tent Hi> firm’s 
M&A business. The current 
M&A assignment load is, he 
says, the heaviest In three-and- 
a-half years, and he sees great 
opportunities in particular sec- 
tors, notably healthcare. 

“There is absolutely no 
doubt in our minda that- we are 
in the very early stages of a 
major re st r u c turi ng of health- 
care, where you will see very 
forge transactions 

Morgan Stanley’s chairman, 


however, is keen to ensure the 
firm does not repeat the mis- 
take of the 1980s, when, in its 
enthusiasm for deal-making, it 
neglected the underwriting 
side of the business. 

T here is no question that 
we went through a 

period from 1988 to 1989 

where we were paying too 
much attention to strategic 
work - M&A and that kind of 
thmg — and not enough atten- 
tion to [customers*] capital 
needs. We iden tified that prob- 
lem in 1989, and have been cor- 
recting it" 

Part of the correction has 
involved a rapid build-up in 
derivatives capabilities, and 
further expansion into foreign 
capital markets. 

With new rdttc&t In Shanghai 

and Bombay, Mr Fisher says 
the firm is always on the look- 
out for opportunities in emerg- 
ing markets. “We are finding, 
regularly, locations where we 
can put in place something 
more than a list ening post” 
The overseas expansion is 
paying of£ last year just under 
50 per cent of the firm’s $99bn 
In revenues were generated 
overseas. 

If the current rate of growth 
is continued, with mare traders 
and bankers hired for non-US 
operations, it will not be long 
before more than half of Mor- 
gan Stanley’s revenues come 
from overseas. In an increas- 
ingly global financial world, it 
appears nothing would please 
Mr Fisher more. 


AT&T in video conferencing link 


Citibank applies for 
full Mexican licence 


By Patrick Harverson 
to Naw York 

AT&T, the US tele- 
communications group, ha? 
formed an alliance with a 
group of leading US software 
and computer equipment com- 
panies to deliver a new video 
conferencing network product 
to business customers. 

AT&T said its WorldWorx 
Solutions product would allow 
business users worldwide to 
see and work with each other 
on their desktop computers 
while sharing fli« and data 

The group said the compa- 
nies - IBM, Apple Computer, 
Lotus Development, Novell, 


Xerox, Sun Microsystems, Pic- 
tureTel VideoServer — had 
agreed to allow WorldWorx 
users to make conferencing 
walla on their equipment. 

Video cwn fe pwdng is on e of 
the fastest-growing areas of the 
business-to- business telecom- 
munications market, and inter- 
national companies are com- 
peting to provide users with 
products that incorporate the 
latest in « wnmim1ratinng and 
computer technology. 

The product is a develop- 
ment of a service launched last 
year that allowed video and 
data calls from one desktop 
Tmit to another, but not among 
people with equipment from 


different computer, software 
and camera vendors. 

Mr Alex Mandi whirf execu- 
tive of AT&T communications 
services, said customers liked 
the original video conferencing 
product, but wanted to be able 
to rail more than one person 
without worrying about com- 
patible hardware. Explaining 
how the WorldWorx Solutions 
works for thnsa mring the video 
conference network, Mr Mandl 
said: “During a conversation, I 
can eail up a ffte on my desk- 
top computer, show it to sev- 
eral colleagues, allow them to 
edit It if I want to, and then 
just elide an a single button to 
give them the file.” 


Fresh evidence 
on US drag 

By Daniel Green 

Clinical trials results for 
Antril, a US septic shock drug, 
say it Is effective In many 
cases, contradicting evidence 
published last year which led 
to a collapse in the share price 
of its Colorado manufacturer 
Synergen. 

The research, published in 
the Journal of the American 
Medical Association, says 
Antril helps very ill patients 
live longer. 

The co m pa n y’s market capi- 
talisation fell from SlJSbn to 
less than 3400m on the news 
early last year. 


By Richard Waters 
to New York 

Citibank, part of the US 
banking group, is the first for- 
eign bank to apply for a licence 
to operate as a full-service 
fhwirini institution in Mexico. 

Under the North Ameriam 
Free Trade Agreement, ratified 
last year, US hank* are permit- 
ted to carry out a wide range of 
activities in Mprim under the 
auspices of a locally-incorpo- 
rated holding company. 

Citibank said it had applied 

to or patft a holding mm party in 


Marion with minim irm capital 

Of lbn pesos ($296rn), making ft 
the first foreign bank to take 
tfiig step. It plana to develop 
securities broking and leasing 
businesses, as well as a bank- 
ing operation. 

• Bankers Trust of the US 
became the latest in a long line 

Of international hanks (O Open 

representative offices in Bei- 
jing, writes Tony Walker in 
Beefing. 

A bank representative said 
the new office move repre- 
sented Bankers Trust's com- 
mitment to China and to Asia. 


U.S. $150,000,000 



+ a 

The People's Construction Bank of China 

(EatabBshed under the laws of the People's Republic otCWnef 


Floating Rate Notes due 1997 

k» accordance with the provisions of the Notes, notice la hereby 
given that far the Interest Period from June 17. 1994 to December 19. 
1994 the Notes wffl carry an Interest Rate of 5.425% per annum. 
The interest payable on the relovanf Interest payment data, 
December 19, 1994 will be U.S. $27.86 per U.S. $1,000 Note and 
U.S. $6,969.62 per U.S. $250,000 Note. 


By: The Chase Manhattan Bank, NA. 

London, Agent Bank 
June 17. 19S4 


Q CHASE 



Mortgage Securities 
(No.2) PLC 
5250,000,000 
Mortgage backed floating 
rate notes due 2028 
For die Interest period IS June 
1994 to IS September 1994 
the notes arid bear interest at 
5.305% per annum. Interest 
payable on 15 September 1994 
wUt amount to S 1,337. IS per 
SI 00.000 note. 



JPMorgan 


assssBaaa 


BPS 


Residential Property 
Securities No. 3 PLC 


19 ^ 000,000 
Clasa At Notes 
Mortgage Backed Hauling 
RiuNotnahic XUS 

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please contact 

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FRAMATOME 


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- No. 1 nuclear power plant vendor 
in the world 

- No. 1 nuclear fuel manufacturer in 
the world 

- No. 1 in Europe and No. 3 worl- 
dwide in connector manufacturing 

Throughout the world, Framatome 
employees are displaying their talents. 
With commitment, they overcome tech- 
nological challenges to bring your pro- 
jects to life. 


Nefincome after minority interests was ] 
FF 863 million. Its decrease compared to i 
1992 (FF 950 million) is explained by the fol- } 


. '■ 'v«t iv 


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GOOD RESUiTS 
Uf 1993 * 


catfeaner ^*»*i^a.<»*.7W<«.-aUM m »i» ai hM« ^3ig>.£ -aT- iTl'aaPi'ai y-~~ 


.»•«.. ■»**<** .: 




In 19133, Framatoifie’s revenue^ reached FFs 
17 bifion, versus FF 12.7 billion in 1992. | 

This increase 5 of slightly dver 33% is!j 
mainly attributed |o revenue ftbm recently! 

Kk, U* • ••'evg.HI’r > •rtr 

acquired subsidiaries: ? •< 

- thel revenue of fjuel manufacturing com-| 

panids acquired \4 July 1992 w^re recorded ^ 
for t^ full year, J ' i 

1993| \ ? % 

- in tiie connectdr field, Daut^+ Rietz andi 

Conrjectors Pont^rlier were a^o acquired \ 
this f|ast year. $ i: ^ 

,--T^.inefease4^aisa'duatO’the^nvoicirig j* — ■ 
of non-recurring contracts: the^fuel transfer^ 
station and related systems for Superphenix ? 
(Frartiatome) ancithe Europe#! Transonic [ 
Windiunnel (ETW^test section^designed to? 

* A> siTTtufete The f Ogh t ^c gntitt ioT i s v of t ai ye Bu t H ' ■ 

pearfeommercial Aircraft (NFM^ ’ 


lowing* . • ■ ■ - • ?.%.». ******* j#* 

- in thp connector field, the drastic worl- » 

dwide decline of orders in the rfiilitary and l 
civil aviation industries, ? \ 

- at Jeumont Industrie, the implementation ;? 

-of a necessary in d&trtaf ! T 

has been costly, particularly in ^ie electro- * 

mech#iical sector. .; * s 

* * > « 

At the close of the 1 993 financial year, the ■ 
order bode reach#* the :same4evef 
year-ehd 1992. In the nuclear seqtor, it com- ■ 
prised* four nuclear' reactors in France and \ 
two nufclear islands In the F^ople^s Republic ; 
of China (Daya Bay). The first Daya Bay unit ; 
started^ ^^commerci# 

1994 ^nd the secoihd, in May, tai the entire ■: 

satisfaction of our customer. I ?• 

At the beginnir^ of 1994, Framatome j 
-submitted- an^offer to«=tbe^Taiwan- 
Company (TPC) for the supply of two ^ 
nuclear islands for the fourth Taiwanese >■ 
nude# power plant j? 


In addition, Framatome Connectors In- 
ternational (FCI) has been reorganized 
throughput the world; into divisions, and the 
-resulting profit is ©n|r starting* to be felt, in 
1994. I : • 

Industrial investment and rationalization 
efforts undertaken irv certain businesses in 
1993 continue to Bear fruit They have 
^already proctacet^ in 

results during the fir#t quarter of 1994, par- 
ticularly in the connector field. 


in 1993 are in line With the Groups strategic .3 
objectives that h#re been inf effect for r 
almost 10 years. Th£ 1993 takedter of Jeu- f. 
mont Industrie, which manufactures reactor ; 
CGQlar^ pumps^ancF oontrot FO€^€fm/e^ mectw * ^ 
anisms, rounds o^t our expertise in the i 
nuclear sector. The acquisition at the end of l 
1992 of Daut + Rietz (automotWe) and in l 
April ^993 of Conrfectors Pont4rlier (tele- | 

tial in these two burgeoning sectors. 


I - OPERATIONS 

1993 

1992 

Consofidaied revenue 
'TmmBlionsofFB 

17D11 

12.668 

Nuclear share 

10358 

605% 

QfX8 
63 2% 


~n - NET INCOME 

AND DISTRIBUTION 

1993 

1992 

Coroorate share of net income 
fmmiHionsofFB 

863 

950 

'*% of revenue 

5.1% 

75% 

Isfeimber of shares outstanding 

10200,000 10200000 

Corporate share of net income 
per share (inFF) 

81 JB 

93.1 

Proposeddivid^ 

39jOO 

4650 




RAMATOME 


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INTERNATIONAL COMPANIES AND FINANCE - 


An unsentimental view of Hong Kong’s future 

Wheelock’s Mr Woo has a clear view on the way the colony is to survive, writes Simon Holberton 





Ordinary 

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CAN OFTEN GET 
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Don’t be a don’t know. . . 
...contact McCarthy 


F or a man whose per- 
sonal wealth has fallen 
in value by almost 
US$lbn this year, Mr Peter 
Woo, chairman of Wheelock, 
the large Hong-Kong based 
conglomerate, is remarkably 

confident. 

“It’s all paper stuff,** he says. 
“Yon cant look at the share 
nwArf «nd say. tbds is real- 
ity*. It’s your businesses, it’s 
your networking, it’s your 
markets: these can’t be simply 
reflected on any one day in 
terms of what the market per- 
ceives.” 

Mr Woo’s Insouciance in the 
face of a near 30 per cent fall in 
the Hong Kong stock market 
since the beginning of this 
year (and a per rmf. fan in 
the price of shares in Whee- 
lock) may be in part due to Ms 
ownership of almost 60 per 
cart of the company leaving 
him fagifag r im per vious to hos- 
tile takeovers. 

Bat the language he uses to 
display bis lack of concern 

lmiiprHriAq an attitude to buSL- 

sess which Asian businessmen 
such as Mr Woo, moving 

between ttio nhiiwsp and fkn 

Anglo-Saxon worlds, are begin- 
ning to exemplify. 

Sporting a Columbia Univer- 
sity MBA, Mr Woo, 49, is as 
comfortable with the latest 
w e s t ern management concep ts 
and practices as he is with the 
observance of traditional Con- 
fneian values. 


He is a one of the handful of 
b usinessman in Hong Kong 
whose commitment to the col- 
ony after its reversion to Chi- 
nese sovereignty in 1997 is cru- 
cial to its long-term 
Bis group, which has a com- 
bined market value of more 
than HKJlOObn (US$119bn), 
not only owns some of the 
enduring symbols of Hong 
wrtng - such as the Star Ferry, 
and the Peak Tram - but is a 
large developer of residential 
and commercial property and 
haa sizeable i n t e rests in the 
colony's in fras tr u ct u re and 
container port. 

Tact mnwth Whpftlnrir made 

its a first step into the finart 
dal services industry by 
annnimring a US$10Qm joint 
venture with National West- 
minster Rank Of the UK, to 
form Wheelock NatWest, a 

moi-r-TniTTf hawlf 

Two months eaHier whee- 
lock teamed-up with Mr Rich- 
ard Branson’s Virgin group to 
bring Virgin’s music stores to 
Hong Tfang and China, swap- 
ping its control of retail shop- 
ping space for Virgin’s Hare in 
mqgg m arket ing music. 

Both the NatWest and Virgin 
tie-ups fit neatly fatn Mr Woo's 
strategy far Wheelock: fiat It 
sh ould Unit up with foreign 
www pa Trias which have exper- 
tise or products it lacks. But 
both deals look small com- 
pared with the main challenge 
Mr Woo has set himself - to 




Peter Woo: insouciant in. the face of a near 30 per cent share fall 


establish a substantial pres- 
ence OH China malnlanH 

Two years ago Mr Woo 
caught investors’ attention 
when he sketched an idea of 
how to wplnit file pn«Wfln Of 
Wuhan, the capital of Hebei 
province s i t ua ted on the Yang- 
tze river. 

fffa I floa was to build a big 
container port on the river, 
with road and rail links to 

■CTmngfari and HQftg ^ mt g ) and 

industrial and mnimarrial 
parks. 

Ever anrp late 13th cen- 
tury Wuhan has been tooted as 
.the Chicago of China. Like 
wmfth of fSitoa , Hum anri qqw, 
the dty was seen to have enor- 


Foodland offer faces probe 


Compl ete dric c ou po n and send it m Michael Ridgwap McCarthy 
ioioraudon. P.O. Box 12. Snnbnrj; Middlesex TW1 6 7IID. 
Telephone 0932 761444. Phase send me details of McCarthy 
loftmufoa S erried . 


Address 


■ Country 

| Telephone 


McCarthy 

Information 

Services 

Company Information 

TO ACT ON 


By Nfldd Taft in Sydney 

The Trade Practices 
Commission, Australia’s com- 
petition watchdog, expects to 
"look very closely” at the 
A$500m (US$365m) break-up 
bid launched an Wednesday for 
Foodland Associated, the 
Perth-based retail and whole- 
sale group. 

The bidder, Rank Commer- 
cial, a privately-owned New 
Zealand company. Intends to 
divide and sell on Foocfland’s 
assets if the offer gains 75 per 
cant acceptance. 

Its NZ interests would be 
sold to WhitcouDs, a stationery 
and bookshop group, while its 
Australian assets would pa ss 
to Coles Myer, one of Austra- 
lia's biggest retailers. 


Mr Alan Fels, TPC rharmurr^ 
said a malm area of concern 

Was that 1 (!n]p^ m i ght ffrwi ft 

easier to raise prices if it took 
control of FoocBand’s Austra- 
lian assets. It would move to a 
very strong position in West 
Australian grocery retailing 
and already ha* non-control- 
ling interests in independent 
wholesalers in other states. 

However, the bidding group, 
which met TPC nffiHafa yester- 
day, said it had no reason to 
think the commission would 
block the hid , which is being 
contested by Foodland. 

TPC concerns, meanwhile, 
failed to bah a 76 cent rise in 
the Foodland share price, to 
A&51 - well in excess of the 
A3527 a share bid price. 

• Brokox Hill Proprietary, the 



Registered Office in Turin 
Share Capital Gre 6,1 77,728,058,000 fully paid-up 
Registered at the Court of Turin N. 131/17 Register of Companies 
Fiscal Code N. 00580600013 


NOTICE TO SHAREHOLDERS 

Merger for the incorporation into SIP otlRITEL, ITALCABLE, SIRM and TELESPAZIO 

Method, terms and conditions for the exercise of the withdrawal right following the modification of Art. 4 (Object) of Company by laws. 

Notice is hereby given that on 6th June 1994 the resolutions of the SIP Extraordinary Shareholders’ Meeting of 19th May 1994 were registered at the Court 
of Tunn, no. 34131 of the Order Register. 

Therefore, in application of Art 2437 ot the civil code. SIP Shareholders who did not participate in the Meeting and who intend to exercise the right of 
withdrawal must send the withdrawal statement by registered post to: 

SIP - Society Italians per PEsercizIo delle Telecomunicazioni p.a. 

Sod* Legale - Direztona Generate 
Amministrazlone - Tasoreria e Gestkxw Credit: 

Rapport! con I’Aadonariato 

Via San Dahnazzo, 15 - 10122 Turin 

I]]5.- ithd I5^ a, . s ^. teri, ^ nts muat 136 sem no later than 21st June 1994 (the postmark will be proof). The Company will accept the withdrawal statements 
sen t accord Ing tothe above terms, as long as they arrive by and no later than the further deadline of five days, tnat is 27th June 1 994. Due to the limited time 
tne withdrawal statement can be sent in advance by fax (Oil -5515555) with successive confirmation by registered post. 

The withdrewalstatements must include personal details, fiscal code, address and telephone number of the withdrawing Shareholder, indication as to 
tne number of shares to be withdrawn, identification number of share certificates, as well as indication of the Depository H the shares are in custody. 

the ®h° v ^’ toe declarant will have to send, together with the above mentioned statement, or if this is not possible, by 8th July 
1994, adequate proof of being a Shareholder prior to 19th May 1994 . 


1 M IfWMWIWl • 

L or ** T.?? . 1 ! 89 centralised management through Monte Tltoli S.p-A. the representative certif i cat e s of the shares will have to be deposited at 

toj uri "’ Y la S* 0 Dalmazzo. 15 or secondary office in Rome, Via Flamlnla. 189) and at the same time It must be shown that 

tnelf transfer to the withdrawing Shareholder was executed Df lor to 19 th Mnv 1094 ' thianrnnf urill ha mnllwl- fnr mnlntMnH iharM. nrrUrtflrvandiejnrirtfH 


to® na 9C ment through Monte TTtoli S.pA., the certificate issued by the Depositary in accordance with law no. 
"jJES; JRY ^ ^ 5L t 5!5?lS! ^ £[? hl R. 0, the * hare8 * as ' nTorc8 P** to I9th May 1994. will have to be consigned: furthermore, the written notice of the 

from the account of the Depositary Monte Titoli S41A. to the SIP account, communicated according to normal banking 
Drocadureandde h/eredtoS P within thaaimuortoartHnan 4 a»H inu> 4nox ...mu.. > , ■ . .1 ■ 1 j_n — .'j— ■ - 


STo .2? [ u !S oc r au rn 01 me ueposnary Monte Trtoii S41A. to the SIP account, communicated according to normal banking 
prottedure and delivered to SIP within the above deadline of 8th July 1994, will be considered equivalent to the actual delivery of theshare certificates to 

exchan 9® and tor which, by 18th May 1994, the purchaser had not acquired the transfer, in the case of registered 

Mqutalnan In the Stock Excftang. can b. ton 


fESEM* ^fla shares, the withdrawal will be possible only H the acquisition In the Stock Exchange can be shown 

with a document dated prior to 19th May 1994. the delivery of the share certificates still being obligatory. 

Reimbursement 

5° 00 *5®. 1 r ^ u83ta ha Y® ton carried out, the reimbursement will be proceeded with on the basis of the 

average of the official daily prices noted In the Stock Exchange during the six months prior 10 19th May 1994, and precisely: 

Ut 4,078 for every ordinary share: 

Lit 3,484 tor every savings share: 

before tax. It la spec ified that the amount on which to calculate the said taxes is equal to Ut 3,122 far every ordinary share and Ut 2£55 for every Savings 

share. In the cases foreseen by present regulation the prescribed models RAD wHI be Issued. 

The amo unts due will coiTOTpond wlto the starting date of the change in the company object, which will coincide with the operating date of the civil law 
wpecta or tne metper, and teat ie: me first day of the atodc exchange month following the laet of the merger rag ietratlons accord ing to Art. 2504 of the civil 
code, or the first day of the calendar month, whichever Is earlier. 

The reimbursements will be made gradually In relation to the order of receipt of the relative statements, providing that they are complete and regular. 

Th* 1*941 Interests, from the date of assumption of the modified resolution of the company (19th May 1994)' until the day of the payment of the 
rajrroureements, which will be made public with the appropriate notice, will be recognised on the amount of the reimbursements, according to the 
CuNSOB provisions. 

Rome, 6th June 1994 The President and Managing Director 

ir’Xir (Ernesto Pascals) 

■ Amtkt mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 

*★** 


moos potential. Bat Mr Woo is 
finding some difficulties with 
his vision. Although a number 
of feastbflity studies have been 
finished, grand dpsig n for 
Wuhan has progressed at a 
slower pace than he would 
have Itked. 

“They [China’s central gov- 
ernment] have resource limi ta- 
tions themselves. In farms of 
their o wn development pi*ms 
they have their own priorities 

and ifa wftq phi g W uhan tom not 

in their five-year plan," he 


Australian resources group, 
~ha< filed its defence documents 
in the AWbn environmental 
lawsuit brought against it by 
some 6,000 villagers living 
around the Ok TedI copper 
mine in Pa pua New Guinea, 

wHrih BHP mawngp*. It «ifd Iff 

defence overall did not vary 
f nwit Us previous p osition * tlmt 
Ok Tedi operates In compli- 
ance with PNG law and with 
the support of its government. 
• FOatg fa Slewing, the Ana- 
tralian brewer, has extended 
its Hr piK w i production and dis- 
tribution x gipgnwNit with Ger- 
many's Halsten Breweries to a 

national hasfa. ft rf ai mari the 

arrangements should allow it 
to become the top-selling for- 
eign be® - in Germany. It is cur- 
rently in the number two spot 


*Tf there is no outside party 
from Hong K ong to kick-start 
these projects then they will 
take rniirh Inngar to happen,” 


Ahold group 
report 14.7% 
profits rise 

By Ronald van cte tool 
In Am ster dam 


he says. “Bureaucratic politics 
is extremely intense between 
cities and provinces, minis- 
tries, and across ministries. It s 
almost fflie if the idea is fhnn 
another bureaucracy it must 
be a bad idea to start off with. 
So they’re usually not very 
receptive to somebody rise’s 
idea, but if it’s from the out- 
side at least you can get 
to talk about it” 

Mr Woo says it is the quality 
of the proposal which deter- 
mines success or failure- I 
foin V f>ni» should be clear that 
legitimate business is done 
whereby your deal and pro- 
posal stands on its own. I 
iTMwm, you might have one or 
two ftmail deals where people 
allow yon to do things, but you 
cannot look at that as a way of 
business.” 

Any conversation with a 
Wnng Kong tycoon invariably 
ipqHb to the colony's fixture and 
fixe Bb ao-BriUah row over its 
political development While 
most of his peers shy away 
from comment Mr Woo does 
not His reaction to the row is 
practical and undramatic. 

“There was an idea about 
how nice it would be to pass 
through 1997 without any 
chang es. Wen that’s not going 
to happen, something seems to 
have gone wrong. Is fids some- 
tiling we can live with, or is it 
something which suggests the 
sky is going to fall in? Well, 
evidence of the sky falling in is 


not very strong. W* have a 
large engagement bare-arid vre 
must look ahead, we mast took 
through this.” . . 

M r Woo thinks Britain 
is wasting Its time 
fighting with China 
so dose to tiw change team 
eignty. "I believe they (tha Chi- 
nese) are sincere about civil 
rights, but they will not afiow 
political rights whereby one 
political party can get 31 aaata 
to control Hong Kong's legisla- 
ture," he says. 

The greater right tor Hong 
Kerns's 6m people is not elec- 
tive democracy but the free- 
dom to leave the colony whea 
they want " Article 81 of the 
Basic Law {China’s constitu- 
tion for Hong Kong] says that 
everyone in Hong Kong has 
freedom of m o vemen t That is 
a very important poficy. If you 
take that clause away no mat- 
ter if you have democracy hare 
or not it will not work." 

Mr Woo also has an unsenti- 
mental view of Hong Kong’s 
fixture. For him there is arity 
one way for colonial Hong 
Kong to survive. "We have to 
make sure that we enhance 
our own value and we Jmve .to 
do it in a way that is not very 
threatening to anybody who 
works with us. It Is the 
enhancement of our value that 
will put us in a good pos itio n 
to extend the lease for another 
50 years.” 


Fokus Bank property 
arm under investigation 


Ahold, . the Dutch-based 
international food retailing 
g r oup , reported a 14.7 per cent 
increase in first-quarter net 
profit, sUghtiy below the 15.4 
per cent rise In the fourth 
quarter but higher thaw the 
12 JS per cent gain posted in 
1993 as a whole. 

Net profit rose to FI 110.8m 
<$59£m) from FI 982m in the 
first quarter of 1993, on sales 
up 7.8 per cent at FI S^Sm. 

Operating results in the 
Netherlands rose by 32 per 
cent to FI 90.4m. Operating 
profit in the US was up nearly 
S per cent at IBASm. - 


By Kaon Foestf in Oslo 

Fokus Etendam, the property 
arm of Fokus Rink. Norway's 
thlrd-largest commercial bank, 
is to be investigated following 
alleged irregularities con- 
nected with property dispos- 
als. 

The transaction has already 
forced the resignation of Mr 
Leif Sevan, the bank 's manag- 
ing dfrwtnr and chairman of 
Fokus Eiendam. Mr Stein Oev- 
erteod, Fokus Eiendom's chief 
executive, is expected to 
shortly step down. 

Under Mr Kievan and Mr 
Oeroriand, Fokus carried out 
250 property disposals with an 
estimated value of NKrlbn 


($msm), since January IMS. 
i pghiding the alleged sale of a 
stake in a shopping centre. 

Norway's bulking, insurance 
and securities cnmmtaskm, the 
finance industry watchdog, has 
launched an investigation into 
Fokus and its property arm. 

Fokus Bank itself plana an 
internal audit of the property 
unit The bank said the pur- 
pose of its investigation was to 
“uncover eventual irregulari- 
ties of transactions and to eval- 
uate Fokus Eiendom's routines 
for the purchase and sale of 
property". 

The group is to submit its 
finding s on June 27. The final 
report will be banded to the 
board in August 



IMS 

Annual Results 

Year ended 31 March 1994 

Net rental income record £30 million (1993 - £292 million) 
Profit for the year £20.8 million (1993 - £162 million) 
Portfolio valuation £380 million (1993 - £321 million) 
Shareholders’ funds £319 million (1993 - £258 maiion) 
Earnings per Ordinary share 8J59p (1993 - 7p) 
Dividends per Ordinary share 4.2p (1993 - 4p) 


□ Increase in tenant interest with lettings being established 

on terms 

□ Group’s balance sheet exceptionally strong with 
aallikedseairitiestotallmg£190niillion 

□ Net borrowings at 22% of shareholders’ funds 

□ Net interest covered 2.6 times by net rental inwwtf 

BWdAaam* gmM k fnm Af Suntor 

LONDON MERCHANT SECURITIES pic 

CARLTON HOUSE. SS ROBUST ADAM STREET. LONDON W1M SAH 


GRiJPPO HU 




Fried lander 
Investment 
Funds. 


funds managed by top duality mn wg ara. 


For further details call 07 1 - 626 G226 








FINANCIAL TIMES FRIDAY JUNE 17 1994 


J 

V ~jT 



n Hank property 
intlcr imcstigatii 


\ ! ^ 



INTERNATIONAL CAPITAL MARKETS 


25 


Supply fears push European prices to new lows 


Dublin opening 
for Finex Europe 


By Conner Middetmann hi 
London and Frank McGurty 
fai Now York 

Bears continued to ravage the 
xnarfe&t yesterday, pushing gov- 
cniment bond prices in several 
European markets to new lows 
for this year in volatile trad- 
ing 1 . 

The overnight fall in US 
Treasuries got European bonds 
off to a weak start Moreover, 

supply fears continue to over- 
bang the markets, where sell- 
ers and issuers continue to out- 
number buyers. 

“At the moment it is all 
about supply,” says Mr Kirit 
Shah, international bond strat- 
egist at First Chicago. “Supply 
from bulls who didst seQ ear- 
lier on, supply from govern- 
ments and now from emerging 
economies arid corporates fat** 
the economic recovery." 

Although he says bonds are 
in for a correction, he expects 
supply pressures to cap the 


By Antonia Sharpe 

The Province of Ontario 
achieved a minor feat yester- 
day, in view of current market 
conditions, when Its YlOObn 
offering of seven-year bonds 
put it well ahead of its funding 
programme for the current 
year. 

According to joint lead man- 
ager Daiwa, Ontario has now 
raised C$4bn of its borrowing 
requirement of C$7.7bn for 
1994, although the province 
also expects to pre-borrow a 
further C$2bn to C$3bn for 
next year. 

The offering was launched 
during Tokyo’s trading day 
since the bonds were targeted 
mainly at Japanese investors, 
who were attracted by the 440 
per cent coupon. 


upside. “We could have a 
bounce, but don't expect any 
firework rallies,'’ he warned. 

B UK gilts Ml sharply at the 
open, pressured by weakness 
in the US. The short tod of the 
yield curve came under further 
pressure from Wednesday's 
statements by Bank of RngUmri 
governor Mr Eddie George, 
which were seen to prepare the 
ground for a pre-emptive inter- 
est-rate increase. 


GOVERNMENT 

BONDS 


The long end of the yield 
curve outperformed the short 
end on hopes tfta* tight mone- 
tary policy would curb future 
inflation, but weakened an the 
day. The 8% per cent gilt due 
2017 fell by g to 102%. 

This dampened expectations 
that the Bank of En gland 
today will announce an ultra- 


Syndicate managers said 
that the pricing of the bonds 
was aggressive when compared 
with other euroyen deals. 

For example, Italy’s seven- 
year bonds were t rading at a 
yield spread of around 35 to 40 
basis points over Japanese gov- 
ernment bonds. 


INTERNATIONAL 

BONDS 


However, they pointed out 
that Japanese investors looked 
at coupon levels rather than 
yield spreads when they made 
I n ves tm ent dedstons. 

When the bonds were heed 
to trade, the spread was 

nunhang ari. 

There was talk in the market 
that most of the orders for 


long-dated gilt auction, a hope 
which haa buzzed around the 
market in recent days, 

“Today's sell-off makes it 
less likely they'll fund at the 
long end," Mr Iffy Tatam , 
fixed income strategist at Mer- 
rill Lynch, who says another 
floating-rate issue is possible. 

■ German bunds fell to a new 
low in the Mores market, but 
recouped most of the losses in 
lata abortcovering to end only 
slightly lower. However, the 
mood r emains fragile and deal- 
ers expect further volatility. 

■ French bonds fell sharply, 
causing the 10-year French 
yield spread over German 
bonds to jump to 53 basis 
points, from 43 basis points an 
Wednesday. 

The Batik of France’s latest 
10 basis point out in its inter- 
vention rate to 5.2 per cent lent 
little support, having been 
widely expected. Meanwhile, 


Ontario’s bonds went to the 
joint lead managers - so much 
so that members of the syndi- 
cate resorted to selling their 
allocations hofk to therm 

There were also reports that 
a similar situation bad 
occurred shortly after the 
Tamw»h of the Kingdom of Bel- 
gium’s long-awaited $500m 
offering of five-year eurobonds, 
the other main deal of the day. 

The pricing of Belgium’s 
bonds, at 24 basis points over 
the when-issued five-year Trea- 
sury, was widely regarded as 
spot an. 

When the bands started to 
trade, the spread was 
unchanged despite the volatil- 
ity in the underlying Treasury 
market 

The market is gearing up for 
Fannie Mae’s first global bond 


although the Treasury's latest 
auction of two and five-year 
notes went relatively 
smoothly, much of it was seen 
to have ended on traders’ 
books. 

■ Southern European marfrafr? 
were again badly hit by budget 
worries in Italy, political jitters 
in Spain and a Portuguese 
bond auction where the aver- 
age yield soared by 12S bads 
paints from the previous auc- 
tion in late May. 

■ US bond prices see-sawed 
yesterday morning as the Trea- 
sury debt market encountered 
mixed economic news. 

By midday, the benchmark 
30-year government band was 
unchanged at 86%, with the 
yield steady at 7.388 per cent 
At the short end, the two-year 
note held at 100&, to yield 5A22 
per cent 

With the market reeling 
from a sharp rise in the price 


offering, which is scheduled to 
be launched next Wednesday. 

Joint -lead managers 
J.P. Morgan and Merrill Lynch 


of crude oil and other commod- 
ities the previous afternoon, 
traders were greeted yesterday 
morning by fresh signs that 
the economy was accelerating. 

The Commerce Department 
reported that housing starts 
last month had risen by 2,6 per 
cent, a big surprise for a mar- 
ket expecting a 0.8 per cent 
decline. The data suggested the 
recent tightening of monetary 
policy has so far failed to con- 
strain the rate-sensitive con- 
struction industry. 

The impression of robust 
growth was reinforced by the 
weekly report an Initial claims 
for unemployment benefit, 
which provides the most up to 
date snapshot of the economy's 
overall strength. Yesterday, it 
showed 11,000 fewer people bad 
made claims last week than 
during the previous seven 
days. 

While the two reports were 
not especially important by 
themselves, they did nothing 


held a conference call with 
syndicate members late yester- 
day afternoon. 

The offering is widely expec- 


to dispel the sense of confusion 
reigning in the debt markets. 
Recent data, taken as a whole, 
has not painted a convincing 
picture, either favourable or 
unfavourable, to lead bonds 
out of their current trading 
range. 

The same was true of the 
monthly survey of business 
conditions issued by the Fed- 
eral Reserve Bank of Philadel- 
phia later in the morning. But 
the mixed signals it conveyed 
were at feast enough to trigger 
a reversal in the market’s 
two-day decline. 

The shift came with the 30- 
year issue approaching the 7.50 
per cent level, a critical level oT 
support. Traders apparently 
seized on a big drop in the 
Philadelphia survey's current 
employment index as an 
excuse to begin buying again. 

By early afternoon, bonds 
had retraced all of their earlier 
losses and appeared to be 
poised for a move higher. 


ted to raise upto$L5bn, have 
a 10-year maturity and be 
priced to yield around 25 basis 
points over Treasuries. 


By Tracy Corrigan 

Finex, the currency futures 
arm of the New York Cotton 
Exchange, today opens Flues 
Europe at the new Dublin 
Exchange Facility in the Inter 
national Financial Services 
Centre. 

Finex Europe will trade 
Finex’s existing US dollar 
index futures. In addition, both 
floors today start trading ster- 
ling/D-Mark, D-Mark/French 
franc, and dollar/D-Mark 
fixtures around the clock, in 
Dublin and New York. 

Allied Irish Bank, Bank of 

Ireland and Ulster Bank will 
act as marketmakers in Dub- 
lin. while Nationsbank will 
make a market from London. 

So for, Finex has sold 90 per- 
mits for trading and braking 
rights in Dublin for 910,000 
each. Initially, there will be 
about 15 floor brokers and five 
“locals" or independent traders 
in the pit in Dublin. 

According to Mr Peter Bur- 
ton, director of product devel- 
opment at Finex, D-Mark/ 
Swedish krona, D-Mark/llra 
and D-Mark/yen futures will be 
phased in over the next few 


Pemex to issue 
samurai bonds 

Pemex. the Mexican state oil 
company, is to Issue Y20bn of 
samurai bonds next month to 
raise money for factory expan- 
sion, company officials said, 
AP-DJ reports from New York. 

The issue, which will be 
lead-managed by Daiwa Securi- 
ties, will be Pemex' s first and 
Latin America’s largest samu- 
rai band issue. Pemex made a 
US dollar-denominated bond 
issue earlier this rear. The lat- 
est funding will be used to 
finance equipment to process 
crude oil and petrochemical 
products. 


weeks, and other products may 
be added later. 

"[Finex Europe] has a lot of 
potential" according Ms Mary 
Fischer, a foreign exchange 
trader at Nationsbank CRT. 
"The push is towards Euro- 
pean hedge funds." 

Finex’s foreign exchange 
contracts in New York are 
mainly traded by US hedge 
fund a nd futures fund manag- 
ers such as Mr Paul Tudor 
Jones, NYCE chairman, who 
will open trading in Dublin at 
H.05am. However, some 
observers are sceptical about 
the amount of interest that 
will be drummed up in Europe, 
given the small number of 
speculative funds relative to 
the US market They fear that 
the new floor will have to rely 
on existing US clients. 

However, because of the low 
set-up cost of the Dublin floor, 
the operation does not require 
heavy volume to make money. 

“We have been trying to fig- 
ure out a reasonable projec- 
tion," said Mr Burton. “A thou- 
sand contracts a day is 
break-even, and we hope to 
achieve that within a few 
months.” 


Hong Kong to 
cut stamp duty 

The Hong Kong government is 
to reduce stamp duties on 
stock borrowing and lending to 
encourage a more active mar- 
ket Renter reports from Hong 
Kong. Hie duties are said to 
have discouraged short-selling 
in the stock market 
At present, duties axe pay- 
able on stocks borrowed for 
periods exceeding 14 days- The 
duty-free period will be 
extended to 12 months. No date 
has been set for the reforms 
but they are expected to be 
implemented soon, a govern- 
ment spokesman said. 


Ontario targets Japanese 
investors with YlOObn issue 


NEW INTERNATIONAL BOND ISSUES 


Amour* 

Coupon 

Price 

RuaiNny 

Fees 

Spread Book runner 

Borrower 

US DOLLARS 

m. 

% 



% 

bp 

Kingdom Of Bafgtum 

300 

7.00 

98.796H 

JuLIQOS 

02SR 

+24 (Wl Syr) UBS 

8E Bflrtmrtt 

300 

(ft 

B9L826R 

JU.1B97 

61B75R 

- Morgen Stanley ML 

Gknngdong BtoHprisesfHklgsftd* 
Spomta- wn B9oiben(c8 

ISO 

(ft 

loaooR 

Jun.1000 

O30R 


100 

to 

99JX3R 

JUL2004 

0.72R 

Chemical tovTiient Bonk 

FAI Inauancee* 

100 

w 

(ftR 

JU.1BB9 

1.00R 

(ft (Wl Gyri Menil lynch Intemadonal 

Oantnd OoalaenOt 

GO 

to 

100.00R 

Jun.1997 

0.75ft 

Chase Investment Bank 

YEN 

Prmfnoa of Ontario^ 

lOObn 

4.40# 

9680R 

Jurv2001 

OSOR 

«2S(jaa 14ft DelwaA3oidman Sachs ML 

SBAB 

lObn 

100 

100.1 9R 

JuLisoe 

0.15R 

Nornum Intetnaflouft 

FRENCH FRANCS 

TTrtnmo 08 94U 

l^bn 

7.10 

88JMR 

May ^002 

630R 

467 (BW%-SWBev Staom&/CnttLyannfts 

Tttrirrrno OB 846ft 

GOO 

7.90 

07.41 R 

Mttr^txe 

(LSOR 

+00 (SRK-04) Bear StMunsICnlLLyonnab 

ITALIAN URE 

P1rei»**§ 

306tin 

100 


Dsc.1996 

2-50 

- Paribas Capita] Markets 

European Imuetmard Bertet 

900bn 

ffuft 

9695 

Sep.1909 

020 

San Pootoh TUrin 

SWISS FRANCS 

Toyota Motor CrwS Corp.*-* 

100 

150 

102.00 

All 997 

standard 

Menfl Lynch CapLMkta. 

Hrari terma end nccvcaBaUe unbee dated. The yWd spread (over retauent govammenr band) at launcfi b suppfled by We lend 
ntt«n)er. wAPrftme plaoemanL dtinlMsd. §Conwr0ble. iRooHnp rate nose. fSand-mnuol coupon, ft tod re-aflbr price; toes era 
shown at the m-oftar bmL a} 3-mth Ubor +*%. ft 8-mth Ubar +2H. c} Cafeble on ooioMn detee (mm JuLOi at par. 4 3-iwh Ubar 
+114% (br 1st 7 ya end +3% thereafter. e| Priced today at 2BD-e9(Wps aver Traeaulee. Q Celsble on 3078798 at 100*96. g) 3-mth 
Unr +13%. ft Short lot coupon. 6 Amortbkig deaL Quartsrty coupons. J) Tranche A. Average Nee IS ym. k} Tranche B. Average ha: 
10 ym. Otaip aal of 1096. 9 Shwebolderwasng Its anttttammt to prerto ritfria boue. barn pries L2B8S. Onw nttto: 1 for 1. CafleWe 
from 1/1/08 et L2600L ift 3-mth Ubor +VM; max 11.1%. let coupon; BUN amuafsed. 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 

Rod Day 1 . Wot* Month 

Coupon Dm Mob change YMd agoego 


Italy 

■ NOTIONAL ITALIAN GOVT. BOND (BTTV) FUTURES 
(UTFET Urn 200m lOOtha Of 10Q% 


FT-ACTUAfBES FIXED INTEREST INDICES 

Price Indce* Thur Dey*» WIM Accrued 

Jun 16 changa % Jwi 15 brieraot 


uk am 


xd net — -Low cotyon ytoid-— — M w Sum caupon yMd — — Htfi coupon yield — 

ytd Jun 16 Jun IS Yr. ago Jun 16 Jwi 15 Yr. ago Jun 16 Jun 16 Vr. ago 


Auatraflo 


9h00 

09ID4 

910000 

-4360 

0.81 

186 

148 


Opm Sett price 

Change 

Hgh 

Law 

Esc. wol Open bit 

1 Up to e yom(24) 

12198 

-148 

121.55 

190 

547 

5ym 

138 118 7.10 

156 

187 791 187 

846 

749 

Bdgbn 


7.250 

04/04 

94.3000 

-1900 

111 

7jh 

708 

Sap 

103S0 102SD 

-222 

10390 

10227 

83169 02916 

2 5-18 yeeta (22) 

13173 

-191 

14101 

1.74 

142 

15 ym 

157 146 798 

171 

157 124 897 

189 

849 

Canada* 


1500 

06AM 

811000 

-0360 

9.12 

100 

125 

Dm 

10145 

-2J22 



a ioo 

3 Over 15 yam (9) 

18159 

-140 

157.18 

280 

596 

20 ym 

392 842 103 

171 

157 135 179 

172 

153 

Denmark 


7.000 

12AM 

917000 

-1.700 

138 

717 

7.19 



4 Imdsemefatao (ft 

1711B 

-082 

17104 

192 

138 

feradr 

892 154 841 





France 

STAN 

1000 

05/96 

1013750 

-1500 

197 

100 

OSO 







5 At Stocks (01) 

13179 

-179 

13718 

194 

595 








OAT 

1500 

04/04 

815800 

-0620 

7.63 

700 

108 

■ WAUAN QOOT. BOND (B7PJ RmiREB OPTIONS flJFFEJ LJraflflOrn lOOthe of 10096 







— — • Inflation M — 

U| _ 

— Mlerian 1 M — 


Germany 

ft* 

Japan 


1760 

1600 

4JOO 

05/04 

0V04 

08/90 

919700 

S7.B800 

1014100 

-1460 

7.10 

in nu. 

ISO 

OSS 

150 

fill 

110 

115 

Strife* 


■ 



PUTS — — — — 

Mm-flnfcad 







Jun 16 Jui 15 Yr. 

ago 

Jun 18 Jun 15 Yh 

ago 


NO 119 

- 3-53 

Mae 

Sep 

DSC 


Sep 

Oac 

8 Up to 6 yam (2) 

13175 

-118 

18105 

194 

?ja 

Up to 5 ym 

178 171 100 

270 292 291 



No 164 

4.100 

12/03 

913880 

+0070 

4.19 

4.19 

173 

10260 

238 

219 


236 

194 

7 Ovar 6 yaamfrt} 

17199 

-0.79 

17294 

187 

290 

Ower 5 ym 

ipn flna arts 

39S 393 139 


Netherlands 


1750 

01AM 

691600 

-1380 

7^3 

7J0* 

104 

10200 

2.10 

2.88 


290 

433 

B Ai stocks flft 

17217 

-172 

17342 

098 

291 






Spoin 


11600 

1Q/0B 

969000 

-1:020 

1160 

9-92 

140 

10360 

1.B8 

248 


296 

4lS3 







_ , , . 

■ 4V 

! ■rUM «■ 

E J 


UKQBto 


1000 

1750 

08/99 

11/04 

10/08 

90-24 

87-07 

102-27 

-19/32 

-25/32 

-28/32 

124 

103 

IBS 

107 

141 

148 

743 

TOO 

7S2 

Eat ML uft. Crib 2681 Pitt 2886. Pnvtaua day** opan tat. Crib ZHU Pitt 18447 

DebenBeae and Loan* 







' 8 l™ i* u — ” 
Jun IB Jun 15 Yr. ago 

11 w 

Jun 10 

1 Y—r "■ — " «c 

Jun 15 Yr. ago Jun 16 

j year yi« 
Jun 15 

m — ~ 
Yr. ago 



1000 







9 Doha & Loans (7ft 

12180 

-192 

12798 

235 

127 


279 998 892 

271 

261 992 994 

993 

238 

US Trsesuy 


7.2S0 

05AM 

101-01 

-22/32 

7.10 

190 

708 







Arnett putt leditnplfcw ylridi an showi torn Coupon Bene lac 01V- nm; Uettns BK-10WM; Htatc 11* aid ow. t R* sttkL ytd Yea id due. 




1260 

OB/23 

88-10 

-27732 

7M0 

7J0 

709 



















ECU french Qovt} 

1000 

04/04 

819000 

-1.110 

112 

7S3 

707 

Spafa 



















London ctoaMg, Tien Yrak n*Mhv 
1 GknM OncUOng wttihoMno *■* * WJ piri 
MOM US, UK ti Sfrab, ottiare b» daobnri 

US INTEREST RATES 


VMM: Local narfrat Mrt. 
by rornridetri 

Jtoutec MM8 itttnftanaf 


■ NOTIONAL 8PAMWH BOND FWUBBB (MERFj 


UncNkna 


Mir loan oN. 
MLtaKk. 


MtaftribbmritaL. 


V* Tfeonma _ 

S Ttao BJOrttL. 

Shmra® _ 
- tajw — 


Ttaouy Nto and Bond YM0B 
am Itayoir. 


Open Sett price Change Mgh Low Eft. wL Open bit 
0020 89.75 -1.64 9040 80. BO 67.774 90,268 

89.75 8196 -290 89.76 89.75 1 9 


4.M Ifraayaar- 

421 RHyttr- 

467 10-swr 
5.10 »ywr 


50 

922 

671 

7.17 

749 


BOND FUTURES AND OPTIONS 
Franca 

■ MOTTOWAL FRENCH BOW FUTURES (MATTT) 


Sep 

Dm 


UK 

■ NOTIONAL UK CULT FUTURES £50000 32nda erf 10044 ' 

Open Sett price Change Ugh Low Est vcJ Open W. 
Jin 101-04 101-05 -0-28 101-10 100-23 1578 11733 

Sop 100-00 99-29 -MB 100-11 99-10 66120 116304 

Dm - 96-29 -0-28 0 67 


FT FIXED INTEREST INDICES 

June 16Juna 15Jun* 14 June 13 Juno 10 Yr apo 


Htth* Low- 


GILT EDGED ACTIVITY INDICES 

June 15 Jiata 14 June 13 Jue ID June 9 


Qovt. saoa. (OK) 01.00 92.38 91.96 81.88 92JH 95J5 107.04 91.04 
106.73 109.12 10662 10939 11CL27 11247 13187 108JS2 


CM Edged bargaftis 


loan 117.6 105.0 92.7 

1KL5 102.9 sag 94J> 

- tor 1984. OovanaiioM Hecuba ugh atone wnA ttn 12740 p/1/55), low 49.18 (3/1/7$. Rttd bttreat Ngti rim companion: 18387 (21/UM . low 5053 071/75* . BM 10ft Oownnwi 
26 rod Mad Manat 1BZ8. SE aotMty Men rebroad 1974 


FT/1SMA INTERNATIONAL BOND SERVICE 


115.0 

sa.9 

oridao 1 S/i IV 


■ LOMQ MLT FUTURES OPTIONS (Ufq ESOOOO Sbtha 0< 100* 


Lhttd no tho Meat bttmetari bunch far whldi then Is m edacymto noonday matot UMt prion* m TOO pm on June 16 
beued 9d 06ar Cfag. YMd bound M OAr 


bound BM Prior Chg. YMd 


Open Salt price Chungs Htfi 
Sep 11L26 11482 -1.38 11444 

Dm 11130 113.12 -1-38 11340 

Mw 11266 11232 -USB 11266 

■ LORO TERM FRENCH BOND OPTIONS {V-ATIT) 


Strike 

Price 

115 

116 
117 

its 

119 


CALLS 

JiJ Sep Dk 

0188 1.69 

040 158 

0.19 0LB7 

007 OB4 

038 060 


Ein. vd tout Cda 28.656 Pitt 166833. naotaus open 


Low EeL VOL Open M. 
113L96 295166 122£88 

11018 861 8,114 

11158 2 


Jul Sep Dm 

1.62 260 

225 007 

006 071 

095 4v37 

5.17 

tot. Crib 303490 Putt 294889. 


Strike 

Price 

99 

100 
101 

EaL voi total. 


Sep 

2-56 

2-21 

1-69 


CALLS 


Ok 

3-08 

2-43 

2-17 


pure 


Catt 1365 MB 1649. Pierioue dajTa span 


Sap Dec 

1- 62 3-14 

2- 27 3-49 

241 4-23 

fat. Cda 51912 Puta 35812 


UL& DOLLAR SIRMQHI3 
AbtefNBBTiaauy S%03 1000 


Ecu 

■ ECU BOND FUTURES (MAUF) 


Opm 

82.14 


Sett price Changa 
8200 -1.12 


9250 


Low 

82.06 


Eat. voL Opm W. 
787 


■ NOTIONAL GERMAN BUND FUTURES (UFFET DM2SO.CXB 10W» ct 100% 

Open 8^ price Change Lw Eat vol Open It 

Sep 91.12 9127 


Dm 


US 


Dm 


9000 9064 


-053 

Jina 


8148 

90.70 


9080 

9040 


208199 141448 

1680 842 


■ US TREASURY BOWP FUTURES (091) SIOtXOOQ 32nda at 10036 


■ MBtD FUTURE OTTIOWS {UFFg DM250J00 pokda of 100% 


Price 

9100 

BUD 


Jul 

Aug 

CALLS — 
Sep 

Dec 

Jul 

278 

1.41 

1.88 

193 

251 

252 

1.14 

142 

191 

275 

092 

094 

1.17 

140 

195 


pure 



Opm 

Latest 

Change 

Hgh 

Lm 

Est vft. 

Open bit 

Jun 

104-14 

104-04 

-0-10 

104-20 

104-01 

5914 

37985 

Sep 

1D3-1B 

1034)4 

-0-12 

103-21 

103-02 

441,788 

333,030 

Deo 

102-28 

102-18 

-0-11 

103-00 

1QZ-13 

723 

31411 


Aug Sep Dm 

1.14 141 2.19 

1.37 155 247 

1^7 1.90 2.76 

woL total. Crito 248M Pitt 42448. Pnataua dar’a span K, Orita 103004 Pin 187381 


D NQmONAL MBEUOA Tffld OBEIANOOVT. BOND 
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Sep 


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97 JO -043 


Wgh 


Low 


EOL sral Opm ML 
9730 78 


alwfiwn 

■ MOTIONAL LONG TERM JAPANESE QOVT. BONO FUTURES 

(UFFQ YIQOm IQOthe at 100% 

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Sep 11030 - • 11040 109.76 4217 0 

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COMPANY NEWS: UK 


Hardware side moves into Europe with £25.8m castors purchase 

Materials handling boosts FKI 


By David BiackweU 

FKI, the electrical engineering 
and electronic components 
group, yesterday announced a 
38 per cent rise in profits and 
the acquisition of Rhombus, a 
German castor manufacturer, 

for £25£m. 

Pre-tax profits increased 
from £38m to £52Jfcn. Turnover 
advanced S per cent, from 
£756.1m to £794£m, fnriuriing a 
contribution of £46 An from 
acquisitions. Mr Bob Beestan, 
chief executive, said the group 
had done everything it had set 
out to do during the year, rais- 
ing margins on steady turn- 
over. 

Nevertheless, the share price 
closed 9%p down at 163V4p. 

Rhombus is being acquired 
from Albert Schulte Sdhne for 

SR dm paufi and the aggimptinm 

of £20 .4m of debt Mr B eestan 
said it would take FKTs hard- 
ware division into Europe far 
the first time, complementing 
Faultless Caster which, is the 
maihet leader In North Amer- 
ica with a 21 per cent share. 

The German company has 15 
per cent of the European mar- 
ket, with a modem factory in 
Wermelskirchen and another 
in Malaysia. Customers 
makers of shopping trolleys, 
hospital beds, and home and 
office flxmltura. 

It is not expec ted to make a 
contribution to FKTs profits 





daws and doors, last Novem- 
ber. 

Engineering profits edged 
ahead to £l0.7m (£10 .5m) on 
turnover of £974Sm (flOOAn), 
while process control profits 
were £7 An (£&2m) on sate; of 
£176 J2m (£16L4m). 

Mr Eric Bowers, finance 
director, said thy* margins had 
unproved from £LS per cent to 

7.6 per cent, with margins of 

8.7 per cant in the second half 

Gearing was 50 per cent at the 

end of the year, but would 
reach 60 per cent with the 
acquisition of Rhombus. 

Bantings per share rase from 
&2p to &22p. A final dividend 
of SL2p Is proposed, giving a 
total for the year of 3.7p (3p). 


VnvHiBtMN 

Bob Beeston, left and Eric Bowers: did everything they set out to 
do during the year, raising margins on steady turnover 


until next year. 

FKI operates through five 
divisions - hardware, materi- 
als handling , automotive, engi- 
neering and process control. 
Profits increased in all five, 
with materials handling the 
outstanding performer. Profits 
in the division rose from £&5m 
to £17.6m on turnover of 
£176£m (£173 An). 

Both the materials handling 
anH the autom o t i ve divisions 


benefited from the improve- 
ment in the US automotive sec- 
tor. The automotive division 
lifted profits from £2.4m to 
£4.6m on turnover of £L7L7m 
(£1 52.4m). 

The hardware division made 
profits of gai-flm (£16 Jm) on 
sales of £172.1m (£132.6m), 
helped by the £66An acquisi- 
tion of Truth, the US manufac- 
turer Of htng ea , ope ra ting and 
locking mechanisms for win- 


Thp mriBfamt rnn pTurete nfl mw - 

gins and the reluctance to 
push for revenue growth at 
any price has certainly paid 
dividends. It has to be asfrpfl 
whether the rate of growth can 
be maintained. However, this 
year Truth should kick in 
strongly, and the following 
jar the latest acquisition wQl 
be adding to the bottom tine. 
Pre-tax profits of £68m this 
year give a prospective multi- 
ple of 16. It looks as though 
high expectations of the cur- 
rent Tnnnn gum ont have 

folly reflected in the share 
price, and yesterday saw some 

p mflt tflMng . 


Safeland 
improves to 
£925,000 

Safeland, the property 
investment and trading com- 
pany, reported pre-tax profits 
up from a restated £166,000 to 
£925,000 in the year to the end 
of March. 

There was a further acquisi- 
tion under the facilities agreed 
with Norwich Union. The 
group is paying £610,000 for a 
retail property In Cambridge- 
shire, with gross rental 
Income of £75,000. 

Turnover was static at 
£18.8m. Earnings per share 
were &98p (0.49p) and a final 
dividend of 0.79p makes a 
total of LS9p (0.5p). 

The company is ultimately 
controlled by Safeland Hold- 
ings Corporation of Panama. 


Exceptional charge 
for Allied Leisure 


Shares in Allied Leisure foil 2p 
to 25p yesterday after the 
nightclub and ten-pin bowling 
group said that an exceptional 
charge of £500,000 relating to 
the year ended July 16 199S 
would be included in its results 
for the current year. 

hi June 1993 the company 
received £500,000 following a 
trading arrangement with a 
supplier which was treated as 
income in the accounts. 

However, the company said 
it had subsequently become 
apparent that the receipt was a 
loan and accordingly it was 
necessary to Include it as a 
charge in the current year's 
accounts. 

Also, in its interim results 


statement for the 24 weeks to 
January 2, when the company 
reported a pre-tax loss of 
£16.1m, the company said it 
was in breath, of its hanMng 
covenants. Since then it has 

antawe fl fntn a formal standstill 

agreement on capital repay- 
ments and a continuation of 

hanlrlng fanttiHas baa been 

agreed until September 19 1994. 

Allied said the agreement 
would enable it to continue its 
negotiations regarding possible 
disposals and on a wider range 
of strategic options. 

In order to aid the negotia- 
tions and the financial 
restructuring the company is 
bringing forward its year-end 
to June 19. 


Rise in direct 
activity helps 
Bradstock 

Brads tock, the . insurance 
broker, yesterday reported a 5 
per cent Increase in pre-tax 
profits from £4£7m to £4J&m 
in the six montha to March 31 
1994, w ri te s Richard Lapper. 

Earnings per share increased 
to &35p (5.32p) and the i n te ri m 
dividend is raised by 3 per cent 
to L6p (L55p). 

Turnover, fadmting income 
from acquisitions, amounts! to 
£16.2m, against £14.4m, and 
administrative expenses rose 
to £l2An (£lL3m). Investment 
and n tVinr Income faH *n gl -lQm 
(£L48m). 

A 24 per cent increase in 
income from direct insurance 
helped offset a decline in rein- 
surance business. 




investor 

relations 


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Award Winners 1994 

London Hilton on Park Lane 
Tuesday 21 June 1994 

The awards are based on a MORI survey of 
fund managers and analysts who are asked 
to rate the investor relations activities 
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To discover this year's winning companies, 
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Virgin Atlantic 


Tax credit 
and lower 
minorities 
aid LMS 


By Vaneasa Houktar, 

Property Correspondent 

London Merchant Securities, 
the property and investment 
company, suffered a 20 per 
cent foil in profits at file pre- 
tax level in the year to March 

81 from £27 An to 777. 8m 

However, a tax credit of 
£569,000 (£&53m charge) and a 
£500,000 reduction in minority 
interests to £L03m resulted in 
a net p rofit of £20£m, up 24 
per cent from £16.8m last 
time. 

Shareholders' funds were 24 
per cent higher at £319.2m 
(£25 8. 2m), excluding the 
£33m by which the market 
value of listed investments 
exceeded the balance riieet flg- 


The company's properties 
increase d In value by 16 par 
cent to £379 An, adjusted for 
sales and acquisitions. 

Lord Bayne, iflmimian , mm 
that there was a “perceptible" 
Increase in tenant interest. 
“Although tills fragile ‘recov- 
ery appears to be progressing, 
creative investment possibili- 
ties with significant growth 
potential remain rare, but 
efforts continue to be focused 
on Identifying suitable oppor- 
tunities,* he said 

LMS said a number of 
unusual factors had contrib- 
uted to the results. 

Gains from prope rty dispos- 
als «™t ventura mpfoi invest- 
ments, together with the 
release of prior years* provi- 
sions for corporation tax, more 
than offset the £2.7m negative 
effect of ceasing to treat First 
Leisure Corporation as an 
associated undertaking; the 
non-recurrence of the British 
Sky Broadcasting Holdings 
g ua rantee fee received in 1993 
(fUiait «nd tile faH in Interest 
Income from the group’s cash 
resources of £2.7m. 

The associated undertak- 
ings, which last time produced 
an attributable pretax profit 
of 24.43m, had incurred a 
pre-tax Iom of £631,000. 

The main reason was the 
change in tr eatment of First 
Leisure Cor p o rati on because 
LMS's holding fell below 15 
percent. 

Cullen's Holdings, In which 
t.ms has a 28JS per stake, 
suffered a loss of £158,000 
(002,000 pro fit). Golden Bose 

C onunTinfeBthmn, in w hich it 

has a 40.5 per cent stake, 
incurred an Increased loss of 
£4 73m (2349m). 

US venture capital invest- 
ments produced gains of £4m, 
despite the varying fortunes of 
tiw individual enterprises. 

Net rental income from 
investment property increased 
from 229.5m to £30m. LMS 
made a net gain on property 
disposals of £6>2m In 1994, 
compared with £2. 24m. 

Cash and listed securities 
totalled 2190m on March 31; 
net borrowings amounted to 
270.7m, making gearing 22 per 
mi of shareholders* ftmd*. 

LMS has completed Its 
Strathkelvtn Retail Park in 
Scotland. It has started a 
retail development in Calif- 
ornia for a 29,000 sq ft store 
near San Francisco. 

Earnings per share 
increased from 7p to 8JS9p. 
The dividend is increased by 
O.Zp to 4.2p via a 3.4p 


Slough offer for 
Bredero to fail 

Slough Estates* privatisation 
offer for Bredero closed today 
with few expectations for suc- 
cess. Slough already owns 
dose to 50 per cent of the trou- 
bled property developer, but 
the offer is conditional upon 
90 per c art acceptance, and it 
will not achieve tills. 

British Land last week 
acquired 6J par cent of the 
company, and a number of 
other shareholders, amounting 
to a total of more than 25 per 
emit, have indicated that they 
will not accept 


Acquisitions help AAH 
advance 13% to £42m 


By Peggy HoBtager 

Acquisitions and a buoyant 
drugs market helped AAH, the 
pharmarenHpflls distribution 
group, increase pre-tax profits 
by 13 per cent to £42m to the 
year to March 3L 

The outcome, strode on sales 
flhond 14 per cent to £U3m, 
were also helped by a net £2m 
ff xre m tlonal gain arising from, 
the disposal of the builders' 
supplies division. The £7.im 
profit on disposal was reduced 
by a charge for rationalis- 
ing the wholesale drugs busi- 
ness. 

Mr BUI Re veil, chief execu- 
tive, said 1993-94 had been a 
fHfwWnit year to spite of the 4 
per emit increase to the overall 

The healthcare division had 
faced tough competition and 
an Increasing government 
squeeze on prescription drug 
prices. Delays in accrediting 
AAH*s computer systems pro- 
gramme for local doctors had 


also hit praflts. 

The group had taken steps to 
improve the efficiency of 
wholesaling, including reduc- 
ing distribution outlets and 
upgrading technology. This 
programme would be acceler- 
ated in the current year. Mr 
Revell said, and paid for with 
the £5m restructuring charge. 

Operating profits were ahead 
13 per cent in the UK wholesal- 
ing division to £24 Jm. Net 
margins improved by 02 points 
to SL3 per cent. 

Cahill May Roberts, the Irish 
drugs distribution business, 
contributed £3£m in operating 
profits, against £L7m last time, 
to its first foil year with AAH. 

AAH expanded its retail 
pharmacy business with the 
acquisition of 77 outlets for 
527m. Operating profits were 
up 30 per cent at £7.3m on sales 
almost doubled from £5&8m to 
£104Am. Mr Revell said AAH 
intended to focus on the grow-, 
tog overthMxranter market, in 
spite of competition from 


supermarkets and drag store 
chains. 

The proposed final dividend 
was U.9p for a total 15 per 
cent higher at 17 .Bp. 

Earnings per share teen up6 
per cent to 3A8p. After adjust- 
ing for the exceptional items, 
earning fell by 5 per cent to 
31-lP- 

• COMMENT 

This was a year of ccntimtiag 

disappointment* tot AAH, 

leading to downward revision! 
in profits forecasts as the year 
progressed. AAH met wt pe cta - 
tions to the end, but investors 
are likely to remain waxy until 
the latest actions begin to bear 
fruit In its favour Is the grow- 
ing demand for drugs and 
AAH’s market position. Fore, 
casts are for £45.5 ol The 
shares, which foil lOp to 449p 
on the results, are tradfa^ ona 
prospective p/o of about 18 
times. AAH appears to be 
undervalued, but it I* too early 
to say much more. 


Hardy to cut back North 
Sea drilling programme 


By Paggy Hotenaw 

Hardy Oil & Gas, the 
Independent explorer, yester- 
day said it was cutting back its 
North Sea drilling programme 
as it announced an 18 per cent 
drop in net profits to £&3m fol- 
lowing UK tax changes. 

Mr Douglas Baker, chairman, 
said priority would he given to 
the appraisal of awaiting 
development The dedstan was 
taken following the govern- 
ment’s decision to eliminate 
tax shelters for drilling activity 
at the oid of this year. 


Mr Bniwr said Hardy had 
returned a creditable perfor- 
mance, in spite of weak oil 
prices. Pre-tax profits had 
jumped by 66 per cent to 2522m. 
North American gas prices had 
remained strong. About 67 per 
cant of Hardy's production is 
comprised of gas. 

Mr Baker said the current 
year would be difficult for the 
whole industry. He was confi- 
dent, however, that Hardy 
would be able to weather the 
problems associated with weak 
all prices. "The group has 
major developments in hand or 


in prospect, spread across a 
number of countries,'’ he said. 
North America, to particular, 
would show a steady increese 
in production. Hardy alio 
enjoyed a strong financial posi- 
tion after last year’s 229m 
rights issue and its policy of 
non-recourse funding for new 
developments. 

Turnover for the year to 
March 31 rose by 20 par cent to 
£80.6m. Operating profits were 
29 per cent higher at £12Aa. 
Earning s per share fell by 28 
per cent to 7.8p (10-9p) and the 
dividend ia maintained at lp. 


Enlarged Protean rises 32% 
and expects further growth 


By Dmrtd Dlad o waB 

Protean, the laboratory 
equipment and water purifica- 
tion company, lifted pre-tax 
profits by 82 per cent from 
£4D8m to £5£9m for the year 

uniting Marrh 3L 

Mr Peter Ryan, chairman, 
said the company had had a 
good year to spite of recession 
and tough times, not only in 
the UK, but to other markets. 
The return on sales had 
Increased from 124 per cent to 
ISA per cent, “and 1 see no 
reason why we should not con- 
tinue to grow". 


Turnover rose from £SS.6m 
to £42 .2m, Including £S.18m 
from Techne and LIP. two com- 
plementary companies 
acquired in December. The 
acquisitions also contributed 
£552,000 to profits. Mir Ryan 
commented: "So far every 
anqnbrition we have made has 
been successful" 

The group now comprises 16 
companies operating In four 
countries. Overseas sales 
accounted for 5L5 per cent of 
turnover, up from a previous 
48^ per cent 

The water purification side 
accounted for 57 per cent of 


turnover and 41 per cent of 
total operating profits of 
£&53m. The laboratory water 
products side did particularly 
well, gaining mark et share in 
spite of market weakness. 

Capital expenditure rose 
from £324,000 to £1.77to, mainly 
reflecting the £l.75xn new fac- 
tory in Derbyshire for making 
furnaces and ovens opened last 
August 

Earnings per share rose from 
10.44p to 12£2p. 

A final dividend of 3.7p 
(2-B5p) is proposed, taking the 
total for the year to 4,75p 
C8f»5p). 


Rea Brothers 
shares fall on 
bonds warning 

By Simon Davies 

Shares in Rea Brothers, the 
private banking group, yester- 
day fall Up to 62p after the 
rampimy fa gu ed « pmfitq warn- 
ing, indicating substantial 
interim losses against the 
value of its 27m fixed interest 
securities portfolio. 

The company said that its 
core businesses bad recorded 
profits "to excess of Urn*. But 
given tire sharp decline in the 
price of medium-term bonds, 
this would be reduced by tip to 
£700,000 of unrealised losses 
from its tend portfolio. 

KLetowort Benson, the house 
broker, has reduced its forecast 
for the year from £2 .2m to 
Cl-Bm, and tnterlw prof i ts cf 
less than £500.000 (£802,000) are 
expected. 

Nevertheless, Rea maintains 
a strong balance sheet, with 
shareholders foods of £23m, 
and its banking, corporate 
finance fund management 
businesses continue to show 

earn mg s growth 


Siemens buys 51% of 
BTR offshoot 


By Kevin Dona, 

Motor Industry Correspondent 

Siemens, the German engin- 
eering group, has acquired a 51 
per cent stake in Dunlop Auto- 
motive Composites from BTR 
as part of its strategy to 
wpanri in the automotive com- 
ponents sector. 

The venture was formed to 
19® by BTR and the electrical 
unit fiiri handling division of 
Ford in order to market com- 
posite wsmpnnnntg for automo- 
tive engines using Dunlop’s 
lost-core moulding process. 

It has a workforce of 165 
based In Telford, Shropshire, 
and will operate as Siemens 
Automotive Systems. 

Siemens said that It expected 
the business to lift from 
£8m last year to about £35m by 


1999, touting to the creation of 
an additional iso Jobs. It aimed 
to became a leading Interna- 
tional supplier to the growing 
market for composite intake 
manifolds for engines. 

The UK subsidiary will oper- 
ate as part of the Siemens 
Automotive group's integrated 
air fuel systems business based 
in Ontario, Canada. 


Chrysalis 


Friday Productions has asked 
ns to point out that they 
and not Bentley Productions 
produced the drama series Har- 
nessing P eacocks for Meridian 
Broadcasting. Mr Brian True- 
May of Bentley was product 
ion supervisor on the ser- 
ies. 


From airwaves to 
across the waves 


By David Mgfrton 

It- has been a busy and 
e xpensive week for Emap. On 
Monday it announced plans to 
make a bid for local radio 
group Trans World Communi- 
cations which would see it pay 
about £50m for the 70 pa- cent 
ft does not already own. 

Then yesterday the media 
and exhibitions group 
announced it faced a likely Mil 
of over £l08m after a shopping 
spree in France's magazine 
market 

Emap Intends to fond the 
acqidsttions with debt, push- 
tog its gearing . to a level that 
would usually raise City eye- 
brows. 

Although it will take the 
Ftanch magazine titles on to 
its balance sheet at cost it is 
mdikely to do so with Trans 
World's radio licences, which 
have a fixed term. The result- 
ing goodwill write-off would 
leave ft with gearing of about 
100 per cent at the end of 
March 1995. In August this 
year, the low point of its cash- 
flow cycle, the figure will be 
higher stflL 

But Mr Neil Blackley, wudtp 
analyst at Goldman Sachs, 


said that gearing was “totally 
irrelevant'* for Emap and 
pointed to likely interest cover 
of seven times this year. 

“This should prove a very 
good long-term deal for Emap 
although it will he dilative 
this year* said Mr Blackley 
who has trimmed his c ur re n t 
year forecast from £S6JSm to 
255m. 

The main acquisition, Edi- 
tions Mondlales, reported pre- 
tax profits of £2.4m for 1993 
on turnover, after discounts, 
of about Eiiim. Its 
were qualified by the auditors 
bat Em ap said this related to 
goodwill write-offs and unspe- 
cified rationalisation costs 
which were Irrelevant to its 
valuation of the business. 

About 40 per cent of turn- 
over comes from T6I6 Poche, 
one of France's top five TV 
listings wMgoriwfta it ^ sjso 
strong in the women's, out- 
d oor p ursuits and motoring 
sectors where Emap has simi- 
tar titles in the UK. 

The acquisitions, which 
together employ some 800 peo- 
ple to Paris, will come undo 1 
tte control of Mr Kevin Hand, 
chief executive of Emap’B con* 
sumer magazines division. 


DIVIDENDS ANNOUNCED 


Currant 

payment 


Data of 
payment 


Canoe - 
POTKUnQ 
dividend 


AAH 

Adore Printing 
a m« 


-tm 


Total 

Total 

for 

last 

year 

year 


ufh 

Jnt 

Jnt 


B rede t oc k - 

D iocM iam p tun 

Chester Water ,,fl n 

Denmans Boot § _Jnt 

™ fin 

Hardy 00 & Gas fin 

Locker (Thomas) fa 

London Me r chant fa 

Moorgate Smaller— 

Ptnna§ _fa 

Porter Ctwftian fa 

___ 

RCO ... Jnt 


-fin 


Satetand 

Smith New Court fa 

Southern Water __fa 
fa 


Ugtandkid 


-fa 


HAt 

1.0424 

OS 

iet 

74 

170 

2.1 

22 

1 

02 

3.4 
2.48 

3 

nfl 

3.7f 

4J5 

0-797 

8t 

15.4 
18.1 
0.74 


Oct 3 

Oct 3 
Sept 27 
Sept 1 
July 21 
Aug ii 
Oct 8 
Aug 4 
July 29 
Aug 27 

July 85 
July 20 

Jidy 29 

Sept 28 
Sept 7 
Aug 27 
Oct 3 
Aug IS 
Oat 3 


DMdende shown 
Increased cepttaL 


11.5 

17.9 

17.3 

0.992 

1.987 

1.892 

0.5 


1 

1.55 

_ 

5£ 

SS 

10.5 

7.8 

ISO 

253 

225 

1.9 

- 

6.4 

1.8 

07 

3 

1 

1 

1 

0.85 

0.4 

1 

3J2 

4.2 

4 

2.48 

<28 

428 

7 

4 

10 

04 

nil 

1.25 

2.7 

4.75 

3.8 

4.95 

■ 

15J 

0.44 

1.39 

0.5 

5 

10 

8 

14.2 

23.1 

21 A 

15.7 

25.8 

22.3 

- 

0.74 

- 


per sham net w^ n t 
to stock, 4Wah pence. 


where otherwise stated, 


i 





r 

/- - • 
' • '4“ 




ae§< 






North 

mine 



V. 


A 





FRIDAY JUNE 17 1994 

COMPANY NEWS: UK 


Southern Water 
buoyant with 
7% advance 


Eurotunnel gets a sinking feeling 

The rapidly falling share price is causing concern. Simon Davies and John Ridding report 



Eurwtar train: no engineering miracles this time to rescue underwriters if shares sink lower 


By Peggy HoiGnger 

Southern Water was in 
buoyant mood yesterday as It 
reported a 7 per cent increase 
in a nnua l pre-tax profits to 
£l27.5m, against 019.2m, and 
gave an encouraging report on 
the capital intensive coastal 
dean-up programme. 

Mr Martyn Webster, manag- 
ing director, said Southern had 
made excellent progress in its 
Operation Seaclean project, in 
spite of several surprising and 
uncontrollable variables; sea- 
gulls, for example. “Two sea- 
gulls equals one human, in 
terms of the polluting effect," 
Mr Webster said. 

Southern finished the year to 
March 31 vrith sales g per cent 
higher at £347.7m (£319.2m), 
helped by a strong perfor- 
mance from the nan-regulated 
businesses. 

Mr Webster said the engi- 
neering, environmental ser- 
vices, and systems businesses 
built up since privatisation 
“are more than paying for 
themselves'*. 

At the operating level, and 
after start-up costs, they 
increased profits by 20 per cent 
to £10.1m, representing almost 
8 per cent of group profits. 

Interest gains added a fur- 
ther £2m to profits, on sales up 
by 14 per cent to fl jfi-im- 

The core utility business 
returned an 11 per cent 
increase at the operating level 
to £1235m. 

Mr Webster said costs had 
risen by less than 4 per cent in 
the water and sewerage divi- 
sion. When one-off expenses 

SUCh as r atirniaHsatirtn and font 

winter's flooding were 


By Simon Davies 

Regallan, the residential 
property developer, has 
returned to profitability’ after 
two disastrous years, with 
£2. 75m before tax for the 12 
months to March 31, compared 
with a loss of £835m. 

It also nnmrrmred that it bad 
submitted a bid to redevelop 
the ZS acre site of the Royal 
Brompton Hospital, London, 
and was looking for other 
development opportunities In 
what it sees as an increasingly 
buoyant market 

During the year debt was 
reduced from £62m to £13ni - it 
has since fallen to £5m - and 
the group was able to write 
back some provisions which 
enabled it to return to the 
black. 

Some 239 houses and apart- 
ments were sold during the 
year, helping to increase turn- 
over from £57. 8m to £63m 

It has sold 19 out of the 20 
apartments in Kensington Pal- 
ace Gardens, London, the 
ambitious luxury development 
which had led to about £20m of 
provisions the previous year. 

Overall, about £&7m of previ- 
ous provisions for property 
developments were released, 
after the company had taken 


e x cluded, ongoing costs rose by 
less than 3 per cent. 

Unlike most of Southern’s 
colleagues in the water sector, 
Mr Webster said the group 
expected to increase the num- 
ber of employees in both regu- 
lated and non-regulated busi- 
ness. 

The rapidly expanding non- 
regulated businesses and the 
complex capital spending pro- 
gramme would require new 
types of skills, he said. How- 
ever, Southern remained com- 
mitted to catting costs where 
possible. 

The dividend is raised 8i> per 
cent to 23. Ip (2L3p) with a rec- 
ommended ibiai of 15.4p with a 
scrip alternative. 

W fl Tni' Hg fl, held hack by previ- 
ous scrips, rose just 6 per 
cent to 7Q.8p (6S.3p) per 
share. 

• COMMENT 

Southern was the best perform- 
ing water stock last year, and 
yesterday confirmed that sup- 
port. Net cash of £10m and 
small underlying cost 
increases reinforce faith in its 
cash management This will be 
vital in the forthcoming rigor- 
ous price regime, when the 
group wm be expended to cope 
with capital investment of 
between £lbn and £l-5bn. In 
the end, everything rests on 
the spending authorised by , 
Ofwat Southern's track record I 
may make it a ttractiv e relative 
to the sector, but water stocks 
in general are likely to lan- 
guish until price uncertainty is 
cleared up. Forecasts are for 
between £135m and £l40m pre- 
tax, with an 8 per cent increase 
in the dividend to 25p. 


£52L9m (rf provisions in 1992-93. 
Mr Bob Perdeaux, finance 
director, said further write- 
backs this year were unlikely. 

Administrative expenses tell , 
from £4.0fim to £2.76m, 
reflecting lower staff levels, 
but also a cut In directors' sala- 
ries. Interest payments fell to 
£2iJ7m (ClO ftm) . 

Regallan has reflected the 
confidence in the residential 
market recovery by lining up 
£20m of new hanking facilities 
to fund expansion. 

Mr David Goldstone, chair- 
man, said the com pany had in 
place a development pro- 
gramme with “an estimated 
realisation in excess of £U0m,” 
over the next three years. 

Planning consent had also 
been received for a L52m sq ft 
office and residential develop- 
ment in Bishopsbridge, Pad- 
dington. 

Mr Goldstone said he was 
confident that it could be suffi- 
ciently pre-let to enable Hegel- 
ian to proceed within “the rear 
sonahly near future.” 

Regalian is c urrent ly unable 
to pay dividends, due to a defi- 
cit on its profit and loss 
account ft plans to seek court 
approval for a restructuring, 
which would enable it to pay a 
final dividend next year. 


Wates 
launches 
£31m 
cash call 

By Vanessa Hotdder, 

Property Correspondent 

Wates City of London 
Properties, the only UK prop- 
erty company to hold all its 
assets to the City of London, 
yesterday announced a £3lm 
rights issue to allow it to take 
advantage of the u pturn to the 
City property market. 

Wates said the decision to 
Taimrti the rights, which win 
help it to car r y out develop- 
ments, retain existing build- 
ings and exploit new opportu- 
nities, followed talks with 
institutional shareholders. 

“People take the view that 
tihe p rop erty cycle is starting 
again. .With these big build- 
ings, yon have to start early 
rather than later,” said Mr 
John Nettieton, Joint manag- 
ing director. 

The rights may allow Wates 
to go ahead with the redevel- 
opment of Winchester House 
at 100 Old Broad Street, which 
is expected to start next year. 

The money will allow Wates 
to refinance Vintners' Place, a 
joint venture with Smnftomo 
Corporation- The 267,000 sq ft 
banding by the River Thames, 
which is substantially unlet. Is 
likely to need £L0m to £20m of 
new funds from Wates in 1995. 

Wates said that the City 
rental market has stabilised 
since the fourth quarter of last 
year, although “it still 
remains difficult to achieve 
substantial lettings on atixao- 
trve ftnanrfnl terms”. 

The 2-for-7 rights Issue, 
which involves the issue of , 
44m new shares at 73p apiece, 
follows a £24m rights issue 
last September, which was 
used to cut borr ow ings. 

The rights issue, which has 
been underwritten by Morgan 
Grenfell, has been sub-under- 
written by Mercury Asset 
Management, whose clients 
hold 9.3 per cent of the com- 
pany. Brokers to the issue are 
Cazenove and Warburgs. 

The cash call sent Wates’ 
shares down 5p to 75p. It was 
greeted cautiously by analysts, 
some of whom are wary about 
medium term prospects for 
large new City developments. 
“The development wheel is 
already rolling. A lot of stock 
already haw planning permis- 
sion. Two years out, we could 
be heading for another over- 
supply situation,” said Mr 
Marc Gilbard of Goldman 
Sachs. 

Wates said the valuation of 
one of its buildings at Queen 
Victoria Street was “signifi- 
cantly lower” than thought 
last December, after a lower- 
tfaan-expected rent review. 

See Lex 


Inchcape expands 
activities in China 

Inchcape, the motors, 
marketing and services com- 
pany, is expanding in China 
through the acquisition of a 
motor di st r ib u to r and the cre- 
ation of a consumer products 
joint venture. 

For |8m (£5 -3m) it is buying 
60 per cent of Nanjing Hong 
Kong Changjiang. It is also 
taking an 80 per cent stake in 
Inchcape (Nanjing) Develop- 
ment. 


W hile an investigation 
continues Into the 
alleged downward 
manipulation of Eurotunnel's 
share price prior to the pricing 
of its £S58m rights issue, mar- 
ket forces have now left the 
shares at the same depressed 
level. 

With four trading days to go 
before the Issue doses, under- 
writers remained optimistic of 
a strong take-up, but the rap- 
idly sliding share price is caus- 
ing concern. 

Eurotunnel shares closed 
yesterday at 303p. only 
above their low point for the 
year, and the take-up of rights 
shares is likely to fall with any 
further drop in the share price. 

The manipulat ion investiga- 
tion by the French stock 
exchange authorities was 
sparked by suspicions that 
underwriters may have forced 
the share price down before 
the price was fixed, through 
short grfKng , in order to brnff 
their underwriting risk. 

“We have no evidence that 
Unfa; the short -wtling to any of 
the underwriters,” said one of 
the leading underwriters. 

But the underlying assump- 
tion behind *h»» m«w<p niat i on 
scenario that the share price 
would reach a higher equilib- 
rium is proving unfounded, 
and the genuine level of mar- 
ket dfffnimri r wmntns in dOlfot. 

The BWian Fr ench Bharnhnlil 
ers will be a core factor in the 
take-up. accounting for about 
43 per cent of the existing 
shares. French bankers were 
yesterday suggesting that 
those shareholders who had 
struggled thus far, would take 
up the tunnel’s second rights 
issue since the tunnel is now 
opening and the revenues will 
soon start to flow in. 

'In France there will be no 


Costs posh 
loss to £lm 
at Ugland 

Exceptional and non-recurring 
costs were responsible for rais- 
ing pre-tax losses at Ugland 
International, the «hir owner, 
manager and dry dock opera- 
tor, from £391,000 to £L23m in 
the year to March 3L 
The results are the first to be 
reported by the enlarged group 
since a new management team 
acquired control last October 
from Bristol Channel Ship 
Repairers, which coincided 
with a £19m rights issue, acqui- 



sition and wamw change. 

Costs of £816,000 were for re- 
opening and upgrading dry 
dock farfHt^Pw ju Swansea and 
£171,000 in obtaining a full list- 
ing on the Oslo stock 
exchange. Non-recurring costs 
of £187,000 were mainly for 
bridge finance interest 
A maiden final dividend of 
0.74p Is recommended. 

Adare Printing 

The acquisition and turning 


problem", says Mr Christian 
Cambier, the French head of 
the association for Eurotunnel 
shareholders. “Investors would 
have sold out already If they 
were not going to subscribe, 
and the price they have to pay 
to taka up their shares is low." 

This view was, unsurpris- 
ingly. echoed by Mr Jean- 
Michel Plou, first vice presi- 
dent of Banque Indosuez, 
which led the underwriting in 
France. 

Nevertheless, brokers said 
there had been strong selling 
of both nil paid a nd ordinary 
shares in France, and the risk 
for foe under w rit e rs remains. 

Given the a mount of small 
shareholders, who traditionally 
are more likely not to take up 
rights, underwriters expected 
between 5 and 10 per cent of 
shareholders not to take up 
rights. This would leave a 
rump of up to as™ new shares. 

But once again, news on the 
progress of the tunnel has not 
been favourable in winning 
over investors concerned about 
the risks of its profit projec- 
tions. 

Stock markets have not sig- 
nificantly improved since the 
May 26 announcement of the 
rights issue, and shareholders 
are being asked to pay up to 
substantially increase their 
exposure. 

For those original sharehold- 
ers, who took up the 1990 
rights Issue, the latest cash 
call represents 73 per cent of 
their original investment. This 
time round, there are no free 
travel incentives to encourage 
take-up. 

At the current share price, it 
seems unlikely that underwrit- 
ers will be left with more than 
the expected 10 per cent, and 
this rump will be placed out to 
institutions. 


round of Waddington Business 
Forms enabled Adare Printing 
Group, the Dublin-based print- 
ing company to reput pre-tax 
profits for the year to April 30 
almost tripled at I£1.48m 
(£L45m), against 12565,000. 

Since the year and it has 
acquired Alexander Pettigrew, 
which is in the business forms 
sector, for £835,000 and Label 
Convertors, a label manufac- 
turer, for £L17m. 

Group sales increased from 
l£10.7m to I£28.5m, including 
I£l6.lm from acquisitions. 
Earnings per share were I7.3p 
(U-56p) and the total dividend 
is increased to L987p (L892p) 
with a final of lh42p. 

Thomas Locker 

A £2.6m exceptional charge 
this Bmp left Thomas Locker 
(Holdings), the general engi- 
neering group, with a pre-tax 
loss of £3-43m for the year 
ended March 31. This' com- 
pared with a £421,000 profit 
previously. 

The exceptional comprised a 
£2.6m provision for losses on 
disposal of Associated Perfora- 
tors and Weavers and APW 
Two, and a £596,000 full 
provision against the invest- 
ment in and amounts due from 
Loctor Asia and also for a 
guarantee in place to a Thai- 
land Bank. 

Tumover came to £34. 42m 
(£37.62m) and losses per share 
were &89p (0.42p earnings). 

A recommended final divi- 


In the circumstances of a 
fully sub-underwritten offer, 
pitched at a reasonable dis- 
count to the current share 
price, this process would be a 
formality. 

Institutions who sub-under- 
wrote the issue, would be 
expected to take up their share 
of the placement, rather than 
be forced to take up under- 
writing flu mmftmfuite . 

In the case of Eurotunnel, 
this will not be done with any 
enthusiasm, «nd if the share 
price falls further, so will the 
demand. 


dend of 0.2p (OiSp) makes a 
total for the year of 0.4p (lp). 

Embassy Property 

Following a year of change. 
Embassy Property Group, the 
development and investment 
company, reported a pre-tax 
loss of £852^)00 for the year to 
March 3L against profits of 
£1-2Stti_ 

Just before the end of the 
period the company completed 
a complex restructuring 
together with a £8.7m acquisi- 
tion and a £3m Chinese invest- 
ment Net assets at March 31 
were £l8.1m. 

The company said that pros- 
pects were encouraging. Fur- 
ther acquisitions wore planned. 

Turnover for the year was 
£9 ,12m (£11. 9m). The pre-tax 
figure was struck after an 
exceptional gain on the 
restructuring of £489,000 
(£8.72m) and lower net interest 
charges of £160,000 (£347,000). 

Losses per share were 0.7p, 
against earnings of 2£p. 

Brockhampton 

Brockhampton Holdings, the 
parent of Portsmouth Water, 
lifted pre-tax profits by 22 per 
cent from £4.57m to 25.58m in 
the year ended March 81. Turn- 
over rose by 8 per cent to 
£25.7m. 

Fully diluted earnings per 
share climbed from 33.6p to 42p 
wnd a recommended final divi- 
dend of 7.5p makes a total divi- 


A loading UK fund manng nr 
added: “It all gets back to who 
wants to buy the shares, and 
my sense is that there is just 
no institutional support" Mr 
Richard Hannah, analyst at 
UBS Securities, said: *1 would 
remain cautious about the gen- 
uine appetite for shares in the 
market At the moment trading 
is in the hundreds of thou- 
sands of shares. It win be dif- 
ferent if underwriters are offer- 
ing many mminns of shares.” 

One underwriter pointed out 
that in the 1990 rights issue, 
the share price bad sunk closer 


dend 40 per cent higher at 
l(X5p (75p>. 

Osprey Comms 

Osprey Communications, the 
advertising and marketing ser- 
vices group, swung back into 
the black in the six months to 
March 31- 

Turnover was flat at gi2-Rm 
- although last time’s total 
tndndpd £7m from discontin- 
ued activities - and pre-tax 
profits amounted to £357,000 
against losses of £173,000- 
Earnings emerged at 1.18p 
(losses of L29p), but thaw is 
again no interim dividend, 
reflecting “constraints on 
retained reserves”. 

RCO 

Pre-tax profits at RCO Hold- 
ings, a supplier of integrated 
site support sendees, fell by 5 
per cent from £2.41m to £ 9 . 2 8 m 
in the first half to April 1, as 
market c ondftfffl is continued to 
be unfavourable. 

Sales were down 6 per cent 
at (£2Sm). 

The interim dividend is 
main fanned at 49% an earn- 
ings per share of 13.95p 
(14.7ip). 

Chester Water 

Chester Water, the statutory 
water company, reported a 6 
per cent decline - from £2. 17m 
to £293m - in pretax profits in 
the 12 month s to March 31. 


to the rights issue at the same 
stage of the offer, but had 
thence rebounded to gain a 98 
per cent take-up. He was opti- 
mistic the same would follow 
this time. 

In 1990, however, confidence 
was restored by the historic, 
and very timely, meeting of the 
French and Tfri gHsfa ends of the 
tunnel just two days before the 
issue closed. 

This time round, there are 
no engineering miracles left to 
rescue underwriters if the 
share price sinks further 
before the dose. 


was struck after restructuring 
costs of £159,006 and £40968 in 
connection with the periodic 
review instigated by Ofwal 

Earnings per share dipped to 
GOOJjp (6i7.7p); a final dividend 
of I70p brings the total for the 
year to 255p (225p). 

Moorgate Smaller 

Moorgate Smaller Companies 
Income Trust had a net asset 
value per share of 137-96p at 
April 30, a 13 per cent rise on 
the 122J.4p of a year earlier. 

Net revenue for the year 
advanced from £2.i5m to 
£3. 12m for earnings per share 
of 4.56p (441p). The dividend is 
held at *L28p with a proposed 
unchanged final of 2.4%. 

Denmans Electrical 

Denmans Electrical, the USM- 
traded wholesaler, importer 
and manufacturer of electrical 
goods and fittings, yesterday 
reported a 33 per cent advance 
in interim profits. 

On turnover ahead 22 per 
cent to £24. lm, helped by the 
acquisition last November of 
Palmer Riley, pre-tax profits 
for the six months to March 31 
improved from £l.0Bm to 
£L44m. 

The interim dividend goes up 
from 19p to 2.1p, payable from 
earnings per share up 30 per 
cent to 21.4Bp (l&53p). 

The shares fell 33p to 825p. 


Regalian returns to 
the black with £2.75m 


NEWS DIGEST 


The outcome, which came on 
turnover of £6.02m (£5.64m), 



THIS ANNOUNCEMENT APPEARS A5 A MATTER OF RECORD ONLY 

DCC pic 

Flotation of DCC, a leading Irish industrial holding company 
focused on the food, energy, print and publishing, 
computer products distribution and healthcare sectors 

Market capitalisation of IR£182 million 
at tike Placing Price 

J O HAMBRO MAGAN & Co 

acted as joint 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 Securities and Futuro Authority 


gbgBBCf XnterwtBate 
ItotbaEMMamof 


The United Mexican States 

CoUateraHzed Floating Bate Bonds Due £019 

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Jam 10. IBM CITIBANK. N-A., Agent 


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This advertisement is issued in compliance with the regulations of The Internationa] Stock Exchange 
of the United Kingdom and the Republic of Ireland Limited (the "London Stock Exchange”)- Application 
has been made to the London Stock Exchange for the ordinary share capital of Bloomsbury Pubtishing 
Pic. arising from the reorganisation of its share capital and to be issued pursuant to the Placing, to 
be admitted to the Official List It Is emphasised that this advertisement does not constitute an offer 
or invitation to any person to subscribe for or to purchase securities. It is expected that dealings m 
the ordinary shares of 5p each will commence on 23rd June 1994. 

BLOOMSBURY PUBLISHING Pic 

( Incorporated m England and Wales under the Companies Ad 1985) 

(Registered no. 1984336) 

PLACING BY BEESON GREGORY 
of 

5,261,736 Ordinary Shares of 5p each 
at a price of 105p per share payable in full on acceptance 

Share Capital immediately following the Placing 

Issued and to be 

Authorised issued fully paid 

Amount Number Amount Number 

£700,000 14,000.000 in ordinary shares of 5p each £429,315.70 8,586,314 

Bloomsbury is one of the leading medium-sized independent book publishers in the UK. It publishes 
fiction, non-ffetkm and refe r ence books and its prestigious list tndudes internationally renowned authors. 

Copies at the listing Particulars relating to Bloomsbury Pubfishing He may be obtained during normal 
business hours on any weekday (Saturdays excepted) from the Company Announcements Office of 
the London Stock Exchange Tower, Cape! Court entrance, off Bartholomew Lane, London EC2 (for 
collection only) up to and including 2l*t June 1994 and up to 30th June 1994 from: 

Beeson Gregory Limited Bloomsbury Publishing Pic 

The Registry 2 Soho Square 

Royal Mint Court Loudon W1V 5DE 

London EC3N4EY 

A Member of the Securities and Futures Authority limited 

17lh June 1994 








Swalec achieves 19% 
improvement to £104m 


By David LascoBeo, 

Resources BdKor 

Swalec, the south Wales 
electricity utility, aims to 
maintain a progressive divi- 
dend policy whatever the out- 
come of the review of the elec- 
tricity distribution business by 
Prof Stephen LittlechUd, the 
industry regulator. 

The company said yesterday 
that the review was widely 
expected to reduce profits 
throughout the electricity sec- 
tor. But Swalec was confident 
that its costcutttog and diver- 
sification policy was correct. 

The results of the review are 
due later u™ summer, »nd will 
set controls over businesses 
which account for 80 per cent 
of regional electricity company 
profits. 

Swalec reported a 19.5 per 
cent increase iu pre-tax profits 
from £87m to £104m on sales of 

rm H mifng h nrinWM»Q flf 

(£586m). 

A 15 per cent rise in the final 
dividend to 18. Ip brings the 
full year pay-out to 25.6p 
(22.3p). Earnings were 73. Gp 
(6Qp). 


Mr Andrew Walker, the new 
chief executive, said one of the 
main fac tors behind the rise 
was the cost-cutting drive, 
which brought costs down 8 
per cent in real terms. This 
drive would continue into a 
further phase, he said, though 
he declined to give specific 
numbers for job losses. 

The group also received its 
first returns from new genera- 
tion projects: a gas-fired power 
plant on Teesside and a wind 
f py ji i in Cumbria. 

Profit growth ^ m|> from the 
distribution business which 
raised its contribution by 
£iasm to £79.3m. The supply 
business increased profits by 
£800,000 to £6.6nu Celtic, the 
contracting arm, suffered an 
operating loss of w vm in a dif- 
ficult market after reorganisa- 
tion costs of £l.4m. 

Swalec also has a 40 per cent 
interest in CSW, a new cable 
TV and telecommunications 
company, for which an invest- 
ment of £S0m is foreseen over 
the next four years. 

The result included a £KL2m 
(£9.1m) dividend from the 
National Grid. 


Mr Walker said Swalec sup- 
ported the proposed sale of the 
National Grid, and took the 
view that the shares should be 
handed straight to the share- 
holders of the regional electric- 
ity companies. 


Swalec is putting a brave fece 
on the distribution review 
because it is potentially one of 
the more exposed zees. With 
high costs due to the widely 
dispersed market it serves, 
Swalec needs higher rates of 
return, and it is up to Prof 
LittlechJld to decide whether 
these are Justified. As it is, 
Swalec's electricity prices are 
afready among the W gbaat fn 
the country. The results were 
well received in the market, 
where the shares gmnqH 6p to 
635p. With further progress on 
cost-cutting, and problems on 
the contracting side under 
tighter control, analysts felt 
Swalec should be solid 
progress. Nonetheless, the 
shares carry the aawwwi high- 
est yield in the sector - 5.7 per 
cent - due to the regulatory 

v nlnfirahnity . 


Tinsley Robor 
shows advance 
to £450,000 

Tinsley Robor, the printing 
and packaging company, 
reported pre-tax profits up 
from £15,000 to £450,000 in the 
year to March 31. Turnover 
rose 7.3 per cent to £29 ,5m, 
compared with £27.5m. 

Mr John Rose, chairman, 
said the company had made 
steady progress but the retnm 
on assets was still below the 
minimum acceptable. Earnings 
per share were l.lp (losses 
0.4p). The dividend is passed. 

He added that the present 
year had started in line with 
expectations of continued 
steady improvement “I expect 
that the coming year will pro- 
vide the results which will 
gnahlp our return to the divi- 
dend list” 

The pre-tax figure was after 
char ging termination costs of 
£218,000 and start-up losses 
for the new Netherlands plant 
of £206,000. Interest costs fell 
from £623,000 to £494,000. 


Bloomsbury valued 
at £9m in placing 


By Antonia Sharpe 

Shares in Bloomsbury Pub- 
lishing, one Of the HE’S leading 
independent book publishers, 
have been placed at 105p, 
giving the eight-year-old com- 
pany a mflffcgt capitalisation of 
£9hl 

A total of 5.26m shares were 
placed with institutions by 
Beeson Gregory at 14 times his- 
toric earnings. Dealings in the 
shares, which will have a full 
tisting , wntinwira an June 23. 

The net proceeds of the plac- 
ing to file company of £2.7m 
wdl be used to fhnd the expan- 
sion of the new paperback, 
children’s and home rp fa w w p 
books divisions and to acquire 

the ri ghts to works Of lAading 

authors. 

The company also intends to 
repay £l-l5m of loan stock and 
about £250,000 of accrued divi- 
dends and loan stock interest 

Bloomsbury made an operat- 


ing profit of £856,000 in the 
year to December an turnover 

of fflSm np 41 per and 
5.6 per cent respectively on 
1992. 

On a notional net dividend of 
254p last year, the gross divi- 
dend yield at the flotation 
price was 35 per cent 

Following the placing, Mr 
Nigel Newton, founding chair- 
man and managing director, 
will own 9.7 per cent of the 
ordinary share capital, approxi- 
mately 90 per cent of his origi- 
nal stake in the company. 
However, two other founding 
directors, Ms Liz Calder and 
Mr Alan Wherry, are selling 
virtually all of their sharehold- 
ings. 

Bloomsbury’s original back- 
ers, Caledonia Investments and 
Legal & General, will own 14.7 
per cent and 5.1 per cent 
respectively, while Baring 
Investment Management will 
hold 85 per cent 


Alvis 
edges 
ahead to 
£2.24m 

By Bernard Gray 

Alvis, the dafpw «*» contractor, 
reposted, increased pr ofi ts of 
£2 .24m pre-tax for the six 
Twmrtbw to MflTCfa 81, wwn pi^ fd 
to £2J9m last time. 

The upturn was achieved 
despite a tell in turnover to 
236.7m (245.8m) reflecting, 
according to Mr John Robert- 
shaw, chairman, reduced order 
books at the Alvis Coventry 
subsidiaries, which manufac- 
ture armoured vehicles. 

However, Mr Nick Prest, 
chief executive, said there 
were good prospects far far- 
ther export and domestic 
orders in the reodhai tem. 

After minorities «n»H the 
pre f erence dividend, losses per 
share were OJip (earnings of 
Q.lp). This primarily resulted 
fknm the sale of military opti- 
cal equipment subsidiaries to 
51 per cenbowned Avhno sing, 
apare in 1993. On a pro-forma 
bavfoi dri p pi ng out the trans- 
action, earnings would have 
been OAp. 

The interim dividend is 

imrihangwH at 05p. 

In the Avimo Singapore 
group. Hello, the maker of 
pe ris copes, t ur ret s and o ther 
equipment for fighting 
vehicles performed well, as did 
Areh hhnaHnnal OptTOnicS, 

an associate. Bnt contract 
delays hit the performance of 
Avimo Alvis Aerospace, which 
waltM vehicle t rantinlitdnM, 
and Avimo HectroOptics. 

Higher interest income, fid- 
lowing file sale to Avimo, was 
more than offset by higher 
interest charges at Alvis 
Vehicles, where borrowings 
rose as a result of the unwind- 
ing of customer advance pay- 
ments on manufacturing con- 
tracts. 

Unipower, the ro « wi fa «»biT t»r 
of specialist mflitaxy vehicles 
acquired in February, did not 
make a material contribution 
to the figures. 

However, Mr Robertsbaw 
said that the earnings benefits 
of the acquisition were expec- 
ted to show through in the 
next financial year when the 
British Army BR90 bridge- 
builder contract comes on 
stream. 

The shares closed down 7p 
at 65p. 


Chloride returns to the black 




By David Biackwefi 

Chloride Group, which is 
transforming itself from a bat- 
teries business into an elec- 
tronics group, returned to the 
black far the year ended March 
31, but profits were not high 
dough to restore the ifividmuL 

Pre-tax profits were £1.21, m 
an total turnover of 2101.4m, 
compared with a £L58m loss 
last time on sales of 2100.2m. 

After tax and the preference 
dividend losses per share were 
reduced from 2p toOSp. 

Mr Keith Hodgkinsoo, chief 
executive, described the results 
as a "significant improve- 
ment'’. The profit was struck 
after a loss of £L7m on the 
disposal of battery businesses 
in Kenya, Zambia, Zimbabwe, 
B ot sw a na and Malawi. 

Operating profits cm continu- 
ing operations were £25m an 
turnover of £38 5m, compared 
with a previous loss of £lm on 
turnover of £S6m. Operating 
profits, including disc onti n u ed 
operations, were £3 59m 
(£869500). 

The electronics division 



Keith Hodgkinsan: Chloride was in a strong position to make 
acquisitions to complement its electronics business 


made a profit of £L69m (£&26m 
loss) on sales of £78m (£74m). 
The division - comprising 
uninterruptible power supplies 
for computers, emergency 
lighting, and power converskm 


- was the key to the group’s 
fixture. Mr Hodgkinsan said. 

The uninterrupted power 
supply business performed par- 
ticularly well, helped by last 
year's purchase of Ondyne, a 


Clinical trials 
encourage 
British Bio 

By Daniel O r— n 

British Biotechnology had 
further promising results from 
dMcri trials of its drug 
Batimastat The last published 
results, in March, provided the 
basis for a «*a<h mtrfny 

pypu ' K^ by 

The number of patients tak- 
ing Batimas t at has Increased 
from 15 to 24. Some are show- 
ing a fall in the awamt of a 
substance in their —HwH 
CA 125, a widely used indicator 
far the progression of ovarian 
cancer. The fad indicates that 
the is retreating. 

Analysts at -Tam— Capel, the 
stockbroker, have estimated 
the market for Bati- 

mastat at up to $6bn (Efim). If 
rtimwii trials go wed, fixe drug 
should be bnrnrhpd in 1997. 
British Biotechnology also 
that ft had begun work on 
an oral cancer drug that works 

With a gfrrrflar n whariiqn to 

Batimastat, which must be 
injected. It also said it was 
creating a subsidiary to 
research i nto t reatments for 

multiple 


Porter Chadburn loss at £17m 


Provisions related to its 
withdrawal from the unprofit- 
able consumer products divi- 
sion pushed pre-tax losses up 
sharply at Porter Chadburn in 
the year to April L 

On sales of £133m (£138m). 
including £78 5m (£70.5m) 
from con tinuing operations, 
the partagriwg and specialist 
distribution group reported a 
deficit of £175ni (£352m). 

Mr Pat Barrett, chairman, 
said the withdrawal from the 
unprofitable division was com- 
plete. The remaining activities 


were all profitable and gener- 
ating 

The operating loss was 
2152m (£4-S4m). Exceptional 
charges of £14.6m included 
£8m of goodwill written back 
to comply with new account- 
ing standards. 

Bank borrowings at the year 
end were £9JLm (£i05m) and 
the company said they had 
fallen further in the wake of 
the disposals. However, share- 
holders* funds had declined to 
£95m (£lR5m) due to the high 
losses and repayment of the 


Penna £309,000 in red 


Penna, the USM-quoted hnMfag company for the 
Sanders & Sidney outplacement consultancy, 
hiamad gtmwg competition in a bq active mar- 
ket for a pretax loss of £309,000 for the year to 
March 31. This compared with a £L94m profit 
Turnover dropped from eiflftw to mmw- 
The nmnpany also announced its first strate- 
gic acquisition outside its core outplacement 
activity, with the purchase of GHN, a specialist 
in career managamowt fop senior executives. 
Consideration is £385,000 cash and 656550 new 
shares. 

At December 1993, GH^s net assets totalled 
£267,000 and it reported annual pre-tax 


# 


European manufacturer tp*. 
dalisUtt in the offle* JWGocti 
sector. 

Mr Hodgkinson said Um 
world office uninterrupted 
power supply market was 
growing at more than to per 
cent a year. The group wa* 
isfied with Its progrea* to Ao- 
trunks, but saw pteutytfrocia ' 
for improvement in both 
pm! margins. 

The continuing battety bait 
nesses, comprising a nb sa- 
lary company in Egypt oti 
associated companies iu 
Nigeria and South AWn, 
made profits of ELOSm on nfa 
of £ll.5m. slightly betow tht 
previous £l55m mtOJmJtb 
group is continuing to nek 
buyers for these tmriniwnfi 

Mr Hodgklnson laid On 
group wanted to return to the 
dividend list as soon as preri- 
ble. but had to be sure tint 
payments could be sustained. 

The group ended the year 
ungeared, with almost Uto net 
cash. This left it in a strong 
position to make acquWtiota 
to complement Its atocfruttloi 
side, said Mr Hodgkinaavl 


preference shares to 
and also the pro virions. ' 

In the current year £25at h 
due in conneetlos with 
deferred acquisition psymnls. 

Losses per share grew to 
i7.48p (452p) and time to no 
final dividend. Last ywnr tiwn 
was a 0.4p final out of a total 
of I55p. 

Mr Barrett said the A»ati- 
can label business had started 
the year well and in the tK 
the specialist distribution dfrrt* 
sion had made a Mtl i toto 
start r 

i' 


profits of £102,000. 

Mr John Beard, chief executive, said that with 
the GHN acquisition “we will begin to imple- 
ment our declared strategy of broadening the 
earnings base of the group through expansion 
into related sectors”. 

He said that although the kiss was "dearly 
disappointing”, the Sanders & Sidney business 
remained a strong cash generator. Cash in the 
year-end balance sheet was £904,000. 

Losses per share were 4£p (2&4p earnings). 
The recommended final dividend Is 3p, making a 
total of 4p (lOp) for the year. 

The shares fell 5p to 103p yesterday. 


This announcement appears as a matter of record only 


V 


COURTAULDS 


Courtaulds pic 

has merged its 

European viscose and acrylic fibre activities 

into a joint venture 
with those of 

Hoechst AG 

Morgan Grenfell advised Courtaulds 
on the formation of this joint venture 


ThOeBaMasaft 

Olympiad York Brides Lase 
RaaacaCorp. 

1«% Stored Kota Dm 1995 


Na darfAtalWC htH— 

A! Ac fefe i of 0 oT Or — n «f *e 
OtypU * Yott Hiirif L — e Kadultoi 
C— k Nmkmta* «Tbm KA, * 
tocccnac trotcc Ubc "Tnatot - ! un d er Ac 
M b— «te Ituleawrc'l. da cd a at 
D tcrabn 23, 19S3. at Olgnpa A Yoifc 
Miidca Uac Rnaoe Caep: (ihe -toMO. 


We lgCbelW S(ttc-Mplo-)»ac meBl .MB 

— « t snunwoS b 

a<* SUflOO orient fMdpd mart bdd b]r 



XdbyWMatc* 

fjn». *c bafl^nt rccuriag l^ No cec. tig 

bb dM tand IMe ertar X IW4. 
Airiaefly <rf*c Noto mt a ba m 

is Ac 


at Ttoeeuoc. 8LA. ■ fiOO Ew 1 

Udnoad. VhjM, 232X0-34*1 (fa. bo. fix- 

344.134$) aM MkM IM pdaetol «mb of 

l*Ki«»aedkg>*eh*k r—teWder^i 


:11,19m 


1.IU, 


Morgan Grenfell & Co. Limited 
23 Great Winchester Street 
London EC2P 2AX 



Morgan Grenfell GmbH 
Bockenheimer LandstraBe 42 
60323 Frankfurt am Mam 
Germany 


MORGAN 

GRENFELL 


THERE'S A 
HANGING 
EVERY MONTH 

Great Art demands the 
greatest space; that's why on 
tha first Saturday of each 
month tb* FT publishes a full 
colour Art section devoted to 
art and antiques. 

The weekend FT Is read by 
an estimated 1 million people 
In 160 countries, reaching 
affluent International 
Investors and coBectors; 
providing tha Art world with 
excepti on al and effective 
advertising opportunities. 
37% of Saturday FT readers 
have bought printings or 
! antiques in the teat two years 
(FT Reader Survey 1982) 

For more bdo rmet to n about 
adworBa lnp pleaae c otesefc 

Genevieve Marenghi (071) 
8733185 
Jam es Burton 
(071)8734577 

The Fwanoal Tares - 
Ptrrma the colour bacx 
wro Art 



h q> — „ 

unH M pool piam an ilwwfl 

tn art of 


way t » » «r| 

ceddon ikHv w® eafiawoe 

Om an m M amt aOamJrtmt n M po9 

MSB M m «n M naan. IWMl MM 

ait bom pad brfmdmua «* an« »sr «■ 

MMSamiMlhiaBaiMh 



,,15% 

off electricity 


021 423 3018 

Powerline 


£75,000,000 

HMC HNANGiNG 3 PLC 

CiasaA 

Mortgage Backad FkMting Rata 
Notes dua Oeoamtrer 2018 
For the htareat Period from June 

15. 1984 lo September ts. 1994 tea 

Note Rate baa bean detemrinad at 

55375% per annum. The interest 

payable on tee relevant Interest 

payment date. September 15. 1994 

**■ be £63949 per £35,623.49 

nominal amount 
By:Tto mare MHiiUm Biii* .HJL 
LMN.IKUM 
June 17. 1994 


The European market 
is a ire/y common one 

fn lie I 



The EEC is nothing new to Vita. 
Already more than 60% of our 
business is done in 
continental Europe through 
45 established operations. 

Vita. . . an uncommon Company 
in the Common Market. 

Vita BRITISH VITA PLC 

PLC ’ MkkJteton . Manchester M24 2D9 
Tel: 061- 643 1133 TeJex: 667673 Fax: 061- 653 5411 

,NTtf ^ 1 ^ L .^ DERS W P°*-YMEa FIBRE AND 

FABRIC MATERIALS AND TECHNOLOGY 

SERVING THE FURNISHINGS, TRANSPORTATION «PP*RFI 
PAOKAQWG AND 


HICM4IL 

LAURIE 

Tab on as nn 

PB=Bn«€3» 


We are uigetttly eeekmg 

investment properties upwards of 
£0^ for fer-hause funds and overeats 
ctettf*. Please forward dctaiJs ux 
Wdund von Gdttai 


WANTED 

URGENTLY 

UK 

Commercial 

Property 



Tlw ohmM tool Urn kKb 


Market-Eye 

London stock pmi^hm 




Signal 


^ 130» eoftwie am flee flone O 
O RT DATA FROM (10 A DAY O 
o sipret software oume O 

London » 44 + fo) n asi sssb 
_£nwp4de«nasionMBilaeta 













FINANCIAL. TIMES FRIDAY JUNE 17 1994 


29 


BUSINESSES FOR SALE 


A Investment in Germany ▲ Investment in Germany ▲ Investment in Germany 


Market leader 

manufacturer of tubular steel towers 
and containers 


A qualified .staff 
A modern facilities 
A DM 16 million turnover 
A hiiihly competitive 
A full order book 
A direct access to hiphwa\ 
and railroad 


PROFITABLE 
VAN/CAR HIRE 
BUSINESS 

For Sale on 
South Coast. 

Locally well known brand 
name, with 5 branches. 
Fleet size 220, 50% care. 

Principals only contact: 
Robert Haycock 
Tel: 0703 631405 
Fax: 0703 223547 


1 00% shareholding for sale to financially 

strong investor 

For further information please fits to: +49 30 - 43 90 29 99 
(attention: Mr. Claudio Wieland). 


Investment in Germany A Investment in Germany A Investment in Germany A 


STATE PROPERTY AGENCY 


TENDER INVITATION 

The State Property Agency (1133 Budapest, Pazsonyi ut.56.) announces a single- 
round open tender for the purchase of state owned stocks of FMV Finommechanikai 
Rt (Precision Engineering Rt 1106 Budapest, FehOr ut 10). 

The registered capital of the company is HUF 330.000,000 and the SPA is its 100% 
owner. The company's capital on 31 December 1934 was HUF 465,961,000 over 
the registered capita]. 

Within the frame of the tender invitation a share pocket of nominal value HUF 
297,000,000 will be sold which represents 90% of toe company's share capital. Bids 
can be submitted exclusively for toe offered quantity of shares. 

Shares of nominal value HUF 33,000,000 representing 10% of the registered capital 
were separated for employee ownership with favourable terms. 

Competitors are obliged to list shares of nominal value HUF 250,000,000 in the 
course of capital increase to be earned out in toe 4th quarter of 1994. 

The stock company's major sphere of activity is: the development, production and 
sale of professional telecommunication equipment 

Bids are to be submitted to toe address given hereunder in a dosed envelope 
without letterhead in three copies in Hungarian language. Foreign competitors can 
submit their bids in English or in German in addition to the Hungarian copy, but in 
this case too, the Hungarian is exemplary. 

Bids should be handed over in the presence of a Notary Public within toe period kept 
open before the deadline. 

The closing date and place for tender to be submitted is: 

August3, 1994 between 12.00- 14.00 pm 

State Property Agency 

1133 Budapest, Pozsonyt ut 56. 

8th floor, Room 804. 

The following text should be indicated on toe envelope In Hungarian: 

"P&lydzat az FMV Rt-ben 16v6 dltami tulajdon megv4s£/idsdfa.“ 

(Tender Invitation for the purchase of state owned stocks of FMV RL) 

The State Property Agency retains the right to deem the offer null and void. 

Those submitting a bid should pay a deposit of HUF 5,000,000 to prove their 
purchasing intention as prescribed in toe tender invitation. 

Competitors should keep their offers valid for at least 90 days reckoned from toe 
date of submission. 

Those wishing to take part in toe tender must sign a Confidentiality Agreement and 
purchase the document “Terms of Bidding and information Memorandum” toe price 
of which Is HUF 20,000 plus VAT for Hungarian parties, from the 

State Property Agency 
1 133 Budapest, Pozsonyi tit 56. 

Customer Services Bureau. 

INVEST IN HUNGARY • A SAFE EXPANSION 


LOTTERY FOR SALE 


Now available, a small traditional 
English Pottery, with unique 
historical product range, skilled 
and experienced workforce, 
excellent client base and 
growing order book. 

Based in a modem factory in 
Staffordshire. Turnover currently 
approximately £250 K. 

Por farther information, please 
reply to Box B2947, Fbumdal 
Tones, One Southwark Bridge, 
London SBl 9HL 



mg 

IBM Mi 



Perrings Home 
Furnishing Ltd 

(In Administrative Receivership) 
The Joint Administrative Receivers 
offer for sale the business and assets 
of the above company which is an 
important retailer of quality furniture 
m 1993 turnover approximately £28 
million 

m Operated front 16 owned locations 
in the South East of England and 23 
concessionary stores within major 
Department Stores 
m Approximately 185 staff 
m For further details, please contact the 
Joint Administrative Receivers, TC Carter and 
N) Hamilton, Ernst & Young, fleeter House, 
1 Lambeth Palace Road. London SE1 7EU. 
Telephone: 071-931 4305. Fax ■ 071-928 0425. 

HI Ernst&Young 


ad tr n» mum or Oh 
ataltuta marry ml 


itofWPmt 


Q 

t— H 

1 


GARRICK 


-Tj-r- 


FOR SALE 

COMPUTER SOFTWARE 
SYSTEMS COMPANY 


DAVID GARRICK LTD 
1 de Walden Court 
85 New Cavendish Street 
London W1M7RA 
Td: 071 631 0659 
Fax: 071 436 4311 


Wo we retained by the parent 

company to assist In locating a 

suitable purchaser. 

Key Characteristics: 

* Annual turnover in excess of £ I.3M. 
gross margin £1M 

* Highly developed application 
packages tor professional ami 
financial services marirats 

* Substantial proportion of contractual 
revenue 

* One of the leading suppliers at the 
upper end in the professional market 

* Growing customer base benefiting 
from open systems technology 

For further Information, contact 

ROBERT KING 


SPECIALISTS IN ACQUISITIONS AND DIVESTMENTS 


LEGAL NOTICES 


qmmcrii >a. tetMsn 

SE Coomb Ltate* 

■ 12HISQ 


rtegfctmdBOlUlMn 


No. >03329 Of 1W4 

IN THK MATTER. OF 
UN1CHEM PLC 


H .. 

SKE DtaMbatbo UM 
abstained boUSSZIS) 

Priodpl Rkc* of tamos: 

1 12 Hnval Laos, SbclttaM S 
and DnbdM 

Moadow Inc btauoM Cum, Alamo 
NOTICE IS UBKXBY GIVEN, p wwwn l to 
Scab* 48(1) of fa fao tacoey An 1986. fat t 
bum rf 1 *“ — — 4 ”* lh * 1 — J* 11 **- 

Mn Urittoetataldta 21 InWU 
the Oasts, Mediae Hows. St June* Row. 
SteflkU*tll-l 
wholly ! 


fa* fakkd m «w if ft) >tj taw Jefiwofa to ANY Clt 
■ n fa sdfan Stow Mow. W 1 1MS, fai Compray 
■ggaonmisns I994.w rittrnrtifata <*tb««fcbt» of an Ord 


fay data total fast# »■ 8 
aai fa drin tai bow htf I 
prorta toos of Rato 3.U of i 
1996c aod(b) fats has besa 

proxy wfetdi fa ooSta tac 

orbntafaK 

Doled: 2 June 1994 


i to bowed sal 


joint AbHhiall'liM Kofaww 

Cbd»a* Wfa4 1& * ftwfcSteffidriSI tiff 
mist af W14 

p< tot; HIGH qniPT -0 * JUSTICE 

fMAH<-KKYprvraO M 

WTHEWA TTEKO * 1 ' 
OvMPKtLL A ARMSTRONG PIC 

JN THE MATTER Or 
THK COMFANIESACr 19® 

uMfCK IS HKREBY CIV® fat a Fctidoa 
ZHarn* M.y l«4 Ptataafadfe H- r 
Majesty's High Co»“ ° r Josi*« 

— -s-jysssss: 

asjssttss-"-- 

^^nfaRoydC o^oflssto - 
S^^Lond* WC2A 2U. 0» Wafasotay fa 

rtNY*CmUior or S tareba ldd ““ 

CoU«y .teJrio* » fa ^ 

OritTbc fa eoofiwatwi of fa wU isfawa 


aeaxun fanld apposs ■> 

by Cbaed 


Of fa stare . 

fa Itae of fa tasitaW «■ P*"™ ' 

““Krf Mfa -a 60 taofahed to 
.nfaweodoacd Sotaaton oa pnymeol of fa 

skseMss- 

ifalWlbData 
85 Hofan Vtaba 
froaka BC1A 2DY 

iorfastanc —ad G— junf- 


IN THE MATTKR OP 
THE COMPANIES ACT IMS 

NOTICE IS HEREBY GIVEN that a 
Petition was oa 25 th May 1994 presented 
to Her Majesty’s High Conn of Justice 
for the confirmation of the cancellation 
of the share premium account of the 
above-named Company in the sum of 
fl7.022361.7 tt. 

AND rr IS FURTHER GIVEN that the 
said Petition is directed to be beard 
before Mr Reaistiar Bnddey at the Royal 
Charts of Justice, Stand, London WC2A 
2 U- an Wednesday 29th June 1994. 
ANY Creditor or Shareholder of the 
w to oppose the mating 

Order for the confirmation of the 

cancellation of the said abate premium 
ar n rum should s p y * , at the time of the 
hearing in person or by Counsel fix that 

K*copy of the said Petition will be 
famished to any such person requiring 
the same by the undermentioned 
Solutions on payment of the regulated 
charge far the same. 

Dated this 17lh day of June 1994 
RAKISONS 

27 Chancery L ia o, London WC2A INF 
Sotiritots far tho above-named company. 


No.M237t Of 094 

ns tot mr.Hc mraTo r jbedcb 

IN THE MATTER or 
DondAHHeOifaPk 
-and- 

BtTHB MATTER OF 
THE COMPANIES ACT HS5 

(iOnCS IS HKHKBY OVQI far ■ Mfefaa 
« on 26th Mar 19M pmetood » Her Mriaqft 
ffigb Cfat of IHlI Bnr (i) fa rnaBn—Inn af 
fa Btactaa af fa apbd of fa above osned 
Conp onj ha tfUXKILn to P.wmi0 ta 
(H) fa nefadon of fa Stare P iaiowm Aocnoot 
of Iks Compaaj tram £16.079.401.78 to 
ifiS&40L7&. 

AND NOTTCB IS FURTHER OfVBN nw fa 
aU FedltM i« deeded to bn brerd before Mr 
Radnor taddoy at Tho Royal Conn of Jades, 
Stnod Laodeu, WC2A 2U. ea Wefawdv fa 
29* far of he 1994. 

ANY aerftar or obueMdar rf fa Mil Conqwoy 
dorUag m eppaw fa wttiag of as Odor tor fa 
coaflneefae of tho nld refaedns of esphoi 
taoaU ^poar u fa itae af hearing b pmoa or 

by Caadtatapejne 
A copy or fa nU Fctfiloa wfll be fiunfahed to 
^ poena tapfctag toe wom by fa oader 
■lairiwi A wtkhaw oa paytaa of fa tabled 
fapbctami. 

DATED Ata lUdayofloBO >994. 
GgdtaierHIbhtanRitafaSOtYlllJ 
SoCdam tor faiboraaMedCbnooBy. 


Successful Electrical 


UNIQUE OPPORTUNITY 


accessories manufacturers 


To Acquire a small well known 


West Midlands. 


and established performance 


T/0£2m+. Assets £1M. 


car accessory business. 


Owner retiring. 


sefllng components throughout 




the UK, Europe and WorWwWa 


company preferred. 


TO; £350000, proven track recowi 


Principals only reply to Box No: 


Wite B Box No: B2S26 Rnanctol 


B2831 Financial Tunas, Ona 


Times, One Souftwailc Bridge. 


Southwark Bridge, London SE1 9HL 


London SE1 9HL 



EAST ANGLIA - 
MARKET TOWN 

■ Retail China, Class, Gifts 
MReaanm 
M Prime Location 

MVOJ&OjOOO 

B Business axd Freehold Prarisa For 
Sak 

Write Box B29Z3, Financial Times, I 
One Sotuhwark Bridge, 
London SBl 9HLr 


BANK OF ATHENS S A. 
ANNOUNCEMENT OF A PUBLIC TENDER 

for the purchase of elements of the assets (claims) of 

ATHENS PIPE WORKS S A. 

The BANK OF ATHENS, as spe cia l liquidator of the company ATHENS PIPE WORKS SA. which has been 
placed under special liquidation as per aitide 46a of Law 189390 by decision No. 3867/92 or the Athens Conn of 
Appeal, the verdid of which was construed by decision Na 592/93 of the same coon 

annonnees 

a public tender for the highest bid with sealed, binding offers for the purchase of element* of the assets of the 
ATHENS PIPE WORKS S-A. (hereunder referred u> s “the company’), Lc, claims, as described in the Offering 
Memorandum. 

BRIEF DESCRIPTION: On the basis of the company's boobs, the total claims for sale amount to GnL 
1,971,792^318 os fallows: 

Account Na 30 CLIENTS Gid. 

Account NO. 31 NOTES RECEIVABLE GnL 

Account Na 33 VARIOUS DEBTORS Grd. 

Account Na 36 INTERIM ACCOUNTS GnL 


GRAND TOTAL 


Gnl. 


159.97(US* 

128.532,754 

1 fiS 1.690,1 fiS 
U27fllO 
1,971,729,318 


OFFERING MEMORANDUM: Interested parlies can receive the detailed Offering Memorandum and any other 
information regarding the company's assets for sale following a written undertaking of confidentiality. 

TERMS OF THE TENDER 

1. General: The public lender far the highest bid will be executed in accordance with the provisions of aitide 4tta of 
Law 1892/90, the terms of the present announcement and the terms contained in the Offering Memorandum, 
regardless of whether they ore repeated or not in the present announcement. The submission of binding offers 
implies the unreserved acceptance of all these terms. 

2. Binding Oilers: In Older to lake pan in the tender, interested patties are invited to submit a scaled, written and 
binding offer up to 1200 hours on Thursday, 14th July 1994 to the Athens notary public Georgia Fiamcngou at 31 
Harilaou Trikoupi Street, 4th Floor, teL +30.1-360.9476. 

The offers must dearly state the offered price which must be the total price far the company's claims for sale and the 
terms of payment in detail (cash or credit, mentioning the number of instalments, when they fall due and the 
proposed rate of interest). Offers submitted beyond the prescribed lime limit will not be accepted or taken into 
account. Abo un a cceptable arc any clarifications, amendments, additions, improvements, etc. to the offers after they 
have been unsealed, unless these arc requested in writing by the liquidator or by the company's creditors 
representing a factor of more than 51%. The offers will remain binding up to the time of adjudication and the 
signature of the contract referred to in para. 7 of article 46a uf Law 1892/90. 

3. Letter of Guarantee: Every offer must be accompanied by a Letter of Guarantee from a bank legally operating in 
Greece, of at least (3) ™nii« r duration and able to be extended up to the lime of adjudication, to the amount of Grd. 
100 million. A specimen Letter of Guarantee is contained in the Offering Memorandum. Offers not accompanied by 
a Letter of Guarantee will not be takes into account In the event that a highest bidder fails to abide by the terms of 
the tender, he will forfeit the amount of the guarantee to the liquidating company as a penally clause and in 
compensation. 

4. Su bm ission Procedure: The offers, together with the tellers or guarantee mutt be submitted in a sealed, opaque 
envelope, in person or by a legally authorised representative. 

5. Opening of the bide This will be done by the notary public, in her office on Thursday, 14th July at 1300 hours. 
AU those who have submitted binding offers within the prescribed time limit are entitled to attend the opening of the 
bids and sign the relative act. 

6. The highest bidder shall be the one whose bid is deemed by the creditors who represent a factor of more than 
Sl% of claims against the company (hereunder referred to as "the creditors”), following the proposal of the 
liquidator and at their absolute discretion, as being the most favourable for the company's creditors. It is to be noted 
that in the event dial payment is deferred, the current value will be taken into account with an annual compound 
interest rate of 22%. 

7. The Bqnidator will invite the highest bidder in writing to present himself without fail at the time and place 
hutirataH in the invitation to sign the relative contract for the transfer of the assets, in accordance with the terms of 
his offer and any improved terms suggested by the creditors and agreed to by the highest bidder. Adjudication will 
follow the signature of the relative sale contract. 

In the event that the highest bidder fails in his obligation to present himself for the signature of the sale contract and 
abide by his obligations under the terms of tho present announcement and the terms of the tender, then the guarantee 
is forfeited to the BANK OF ATHENS as liquidator, to cover all expenses of any kind and time spent, and any 
actual loss or I ass of warning?, with do obligation to account for them. Moreover, the liquidator BANK OF ATHENS 
ai«n has the right to consider the amount of the guarantee as having been forfeited to it as a penally clause and 
rfimanH ire payment from the guarantor bank. 

8. All expenses and expenditures of any kind for participation in the tender and the transfer of the assets shall be 
borne exclusively by the interested buyers and by the highest bidder as the case may be. U is to be noted that for this 
transfer the exemptions and limitations of para. 13 article 46a of Law 1892/90 apply. 

9. Hie liquidator and the creditors have no liability or obligation towards participants in the tender for evaluating the 
offers, for proclaiming the highest bidder, for deciding to repeat or annul the tender and generally for any Other 
decision concerning the procedure and execution of the tender. Abo, the liquidator, die creditors and the notary 
public cannot be held responsible for any physical or legal defects in the assets for safe. The submission of binding 
offers does not grant any right to adjudication. In general, also, participants in the tender do not acquire any right, 
claim or demand from the present announcement or from their participation in the tender agihwt the liquidator or 
against the creditors for any reason whatsoever. 

10. The present announcement has been drafted in Greek and in English translation. At all events the Greek text wfll 
pravaiL 

11. To obtain the Offering Memorandum and additional information, interested patties can apply to the liquidator's 
representative Mr. Nicholas Taiokas ut the company's offices at 260 Pireos Street, Athens, td +30-1-482.0828 and 
481.1375. Fox: +30-1-481X1171. 

Athens, 10th June 1994 
BANK OF ATHENS 


BUSINESSES 
FOR SALE 


Appear in the 
Financial Times 
on Tuesdays, Fridays 
and Saturdays. 

For farther information or to 
advertise in this section 
please contact 
Karl Loynton 
on 071 873 4780 
or Lesley Sumner 
on 071 873 3308 


CONTRACTS & TENDERS 


o 


PETROBRAS 


FINANCIAL TIMES 

muni BUVNin nimiimii 


PUBLIC ANNOUNCEMENT 
NR 570.9.41 3.94 

CHARTERING OF NAVAL MEANS FOR 
CARAVELA 

PETROBRAS - PETR6LEO BRASILEIRO S.A. announces 

that it will be holding an International Bid for chartering of naval 

means and rendering technical services for laying submarine 

pipelines in Caraveia Field, Santos Basin, South of Brazil. 

Further information win be available at 

PETROBRAS - PETRbLEO BRASILEIRO SA 

SERVICO DE ENGENHARIA - SEGEN 

Rua General Canabano, 500 - 8 artdar - Marscand 

Rio de Janeiro - RJ - Brazil 

CEP: 20.271-201 

PHONE: 065-021-568.5408 FAX: 055-021-566.5347 


CONTRACTS & TENDERS 


I 11 

■■■ 


debis 


::== Immobilienmanagement 

Potsdamer Platz Project 

Participation Review for Selecting a Prime Contractor 


We are supervising the construction of new city premises 
in toe Potsdamer Platz in Berlin on behalf of Daimler-Benz 
AG. 


There will be a limited invitation to tender for the 
fallowing services as part of a participation competition 
under the control of V0B/A. 


Turnkey construction of 2 administrative buildings 


Data: 



Building 1 

Building 2 


- Walled-in space, approx. 

127.000 m* 

88.000 m’ 


- Storey surface area, approx. 

31.000 m* 

21.000 m 1 


- Fagade surface area, approx. 

17.000 m z 

10.000 m' 


- Roof surface area, approx. 

5.000 m J 

3.000 m* 



The building sponsor reserves the right to select 
applicants without constraint 

Completion time: 

Roughly November 1994- June 1997 


Please enclose the following documents with the 

application as evidence of capability: 

1. Turnover of company in last 3 trading years In relation 
to comparable services. 

2 . References with details of contract size and contract 
dates. 

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category. 

4. Available technical resources. 


Applications must be sent in writing by 24.6.94 to our 
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TeL: 030/21 50 954) 

Fax: 030/21 50 95-20 



COMMODITIES AND AGRICULTURE 


Korean fears help drive 
N Sea oil price above $17 


By Robert Corzine In Vienna 

Oil prices continued to rally 
yesterday with the benchmark 
Brent blend rising above ?17 a 
barrel for the first time since 
the end of September last year. 
It is now about $4 higher than 
its low of just under $13 
reached last February. 

Analysts say concern about a 
possible military confrontation 
an the Korean peninsula trig- 
gered off the latest rally, 
although publication of 08 sta- 
tistics wwifirmfng con tinuing 
domestic supply bottlenecks 
added to the upward momen- 
tum. 

Another factor underpinning 
the bullish sentiment included 
the decision on Wednesday by 
the Organisation of Petroleum 
Exporting Countries to cancel 
its September meeting; 

The move was seen as confir- 
mation that Opec is deter- 


mined to stick to its present 
production ceiling of 24.52m 
barrels day until the end of the 
year. 

Opec yesterday ended its 
conference in Vienna, with del- 
egates continuing to express 
optimism about prices. One 
Gulf Arab official thought that 
by the end of the year prices 
for Brent could move towards 
the top of the $14$21 range of 
recent years. 

But Qpec officials also con- 
ceded that rising prices could 
tem pt scone members to cheat 
on their quotas, even though 
all but three - Saudi Arabia, 
Kuwait and the United Arab 
Emirates - are producing close 
to * hg lr sustainable capacity. 

One ftfRrifli said a few Opec 
members might be able exceed 
their sustainable capacity for 
“a few weeks”. But he pre- 
dicted that the Impact an the 
market would not be that big. 


They would only damage the 
fluids as well as the price,” he 
added. 

Opec Is also considering 
additional ways to enforce pro- 
duction discipline. Members 
are presently reviewing a 
scheme under which persistent 
over-producers could have 
their quotas reduced until 
their average produ ct i on over 
a period was brought back into 
Hue. say the unused 

portion of the original quota 
would not be reallocated 
anmng other members. 

• Opec yesterday failed to 
select a permanent successor 
to Dr Subroto of Indonesia, the 
outgoing secretary general. Mr 
Abdalla Salem El- Badri, Lib- 
yan oil minister and the new 
Opec president, will assume 
the secretary-general’s duties 
until November, when member 
will again try to select a per- 
manent successor. 


Copper and aluminium lead 
base metals back into bull run 


By Our Commodities Satff 

Base metals’ bullish 
bandwagon appeared to be 
back on course yesterday after 
Wednesday's setbacks. 

The London Metal 
Exchange’s three months deliv- 
ery copper price climb ed back 
above the psychologically sig- 
nificant $2,400 -a-tonne mark 
while the aluminium market 
moved towards its next upside 
resistance area. 

Other LME contracts were 
also higher, wife three months 
zinc just manag in g to regain 
its toe-hold above $1,000 a 
tonne and lead equalling its 
recent 20 month high. 

"The other metals were 
looking softer, but when cop- 
per and aluminium start to go 
higher, people change their 
views," one trader told the 
Reuters news agency. 

Once the three months cop- 
per price became re-established 


COMMODITIES PRICES 


above $2,400 fresh speculative 
buying emerged to maintain it, 
and the market’s firmness was 
underpinned by a narrowing in 
the discount for cash metal. 
The “contango” (as the dis- 
count is known in the trade) 
against three months metal 
was reduced from $18 to $15. 

Al uminium also benefited 
from a resurgence of specula- 
tive buying, which helped the 
three months position dear the 
$l,440a-tonne level and reach a 
$3S-month high before running 
into resistance near $1,450. At 
the close it stood at $1,44-150 a 
tonne, up $10.75 on the day and 
$3&25 an the week so Car. 

Traders told Reuters that the 
recent change in sentiment - 
with voluntary output cuts 
generally expected to start 
wearing down stocks soon - 
pointed to upside objectives 
around $1,460 being secured 
before long. 

The tin market continued to 


match moves in the LME's 
major metals, with early losses 
being negated In the after- 
noon's general rally. However, 
( her e was not enoug h enthusi- 
asm behind the buying for 
prices to break significantly 
higher tha three months 
position dosed at $5,66750 a 
tonne, up $22.50 on the day. 

Nickel prices had been push- 
ing higher from the start of 
trading, with some fresh buy- 
ing helping the three months 
price to break through $6,400 
and reach $6500 a tonne at one 
stage. Chart-based resistance 
emerged around that level, 
however , and the price closed 
at $6,48250 a tonne. But that 
still represented a gain of 
93950. 

Traders ex plained zinc’s rela- 
tively lacklustre performance - 
up $150 at $1,001 a tonne - as a 
reflection of the heavy stocks 
burden that Is still overhang- 
ing the market 


Indian government plans rice export thrust 

Kunal Bose on efforts to increase the country’s 5 per cent share of the world market 


T he Indian federal gov- 
ernment, assured of 
comfortable food stocks, 
has decided to work hand In 
hand with the trade to promote 
the export of rice. 

Although India has the larg- 
est area under rice and it Is the 
second biggest producer of the 
cereal alter China, Vcs share in 
the current year's projected 
world trade of 145m tonnes of 
rice will be less than 5 per 
cent 

According to the AH initin 
Rice Exporters Association, 
however, the country's export 
ea rning s fr om rice be 

up to Rs25bn (£524m) by the 
turn of the century from about 
Rsl2hn in the year to March 
1994. 

The dggjg na tjfl fi of xice as a 
“thrust export commodity” and 
the series of measures taken of 
late by Hh* g nw m niwif to facil- 
itate export make the turn of 
the century target achievable, 
say trade sources. 

The more important export 
enabling steps that the govern- 
ment have recently taken 


include the removal of the m in- 
imum export {nice (MEP) for 
basmatl rice (a superfine, extra 
long aromatic variety), reduc- 
tion in phases of the MEP for 
the non-basmati rice to 
Imp r o ve its competitiveness in 
the world market and the abo- 
lition of the export quota for 
the non-basmati varieties. 

Meanwhile, the commerce 
ministry has accepted the sug- 


wf gniffffgni: competitor is Pakis- 
tan. Basmatl constitutes less 
than 10 per cent of the total 
wfflnwnt at rice traded In the 
world market. Of the total 
about 42m hectares under rice 
in India, less than 800,000 - in 
Punjab, Haryana and Uttar 
Pradesh - are committed to 
the basmatl variety. 


ation that an export promotion 
council for rice should he set 
up. Its constitution, according 
to traders, will give a "direc- 
tion to the growth in Indian 
rice export. We must know the 
changing consumer prefer- 
ences in the traditional and 
new THarfcgfei. One of the main 
tasks of the council will be to 
disseminate market informa- 
tion among the exporters". 

India’s rice exports grew to 
Rsl2bn in 1993-94 from 
Rs352bn in 1937-88 without a 
proper marketing strategy. But 
tmtil then India had largely 
relied upon the export of bas- 
rnati. rice, for which Its only 


Ii 


ndian production of bas- 
matl ranges from 600,000 
.tonnes to 650,000 tozrnes a 
year. Last year's exports are 
estimated at 400,000 tonnes, of 
which 75 per cent went to the 
Midd le East 

Mr ELA. Siddlq. project direc- 
tor of the Indian Directorate of 
Rice Research, has sounded a 
note of caution that in spite of 
its special attributes, basmatl 
rice is “becoming less accept- 
able in the traditional markets 
and it is often rejected In the 
western ™«rfcgt due to the fail- 
ure to conform to the quality 
norms.” 

He thinks that complaints 
regarding the quality of baa- 
matt can be tackled, provided 


that this special rice Is put Into 
two broad categories based on 
the grain length - grade one 
comprising grains 7m® long 
and above and grade two 
between 65mm and 65mm. 

Traders think it should be 
possible to sell larger quanti- 
ties of basmatl In Europe, the 
US and which are now 

markets. According to 
the exporters' association, 
there is scope for promoting 
im g grain basmatl in Japan as 
a “gourmet food 1 *. The special 
Indian rice attracted some 
good enq uiries at the recently 

held Foodex Japan. 

Thee Is & growing consen- 
sus, however, that Increases In 
Indian rice exports wQi have to 
come nwiniy from the non-bas- 
mati varieties, which last year 
accounted for only about 
160,000 *«*«««- 

According to the exporters’ 
association, the gradual reduc- 
tion in farm and export subsi- 
dies yqd the minimum access 
opportunities for agricultural 
products that are envisaged 
under the General Agreement 


on Tariffs and Trade wift 
improve India’s rict export 
prospects. 

Besides basmatl rice, bdfe 
produces high quality famv 
grain, medium qu ”‘ ’ 
grain, abort grain 
nous rice. It Is In ft „ 
therefore, to exploit a uuafoer 
of markets. 

As for non-bsamatt rice. 
market that India is tarptfitv 
specifically, it Is hi Africa 
where the demand for tonkm 
rice is growing tad fits 
exporters’ association consid- 
ers that continent to be the 
-best bet” for Indian rice 
exporters. 

As part of their effort to 
achieve a bigger share of the 
world trade in rice. Indian 
exporters have started making 
-substantial investment" in 
rice mills with the state of the 
art graders, sorters and polish- 
ers. Another encouraging 
development Is the entry of big 
houses like Hindustan Lever 
and ITC, the Indian as so ciat e 
of BAT Industries, in fofia’i 
rice export sector. • - 


Coffee futures retreat 
from IVi-year highs 


By Our Commodities Staff 

Coffee futures surged to fresh 
714-year highs at the London 
Commodity Exchange before 
surrendering nearly all the 
gains. 

The September delivery posi- 
tion peaked in the moaning at 
$2,490 a tonne, extending the 
rally following Wednesday 
morning’s shake-out to $150. 
Traders told the Reuters news 
agency that the early gains 
were in response to a report by 
the Green Coffee Association of 
New York showing lower ware- 
house stocks. 

But the trend was not fol- 
lowed up when the New York 
market opened and London 
quickly went into retreat By 
the dose profit-taking and liq- 
uidation had trimmed the Sep- 
tember price to $2595 a tonne, 
up just $7 on the day. 


“Things have gone quiet," 
said one trader. “The excite- 
ment went after New York 
failed to follow us up, and then 
we just followed them down." 

The earlier rise had triggered 
stop-loss buying and prices had 
leapt in a vacuum, other trad- 
ers said. 

It was a similar story in the 
cocoa market. Wednesday's 
Kf rang iwip was maintained in 
early trading and the Septem- 
ber price jumped £14 to £1565 a 
tonne at one stage. But it 
ended £6 down at £1,035. 

“New York failed to live up 
to expectations, which also 
hurt sentiment,* said one 
trader, who addgd that there 
was "a fair amount of book- 
squaring going on*. “The mar- 
ket is being ruled by the specs 
[speculators] and ignoring fun- 
damentals, which are quite 

b earish ," said another . 


EU warned on cost of eastern 
European farm price support 


The cost of form support to 
help central and eastern Euro- 
pean countries join the Euro- 
pean Union could amount to 
nearly Eculbn (£780m) a year, 
according to two independent 
form experts, reports Reuters 
from Brussels. 

Provision of low form sup- 
port prices and creation of 
“land banks” to provide credit 
to help private formas would 
cost between EcuSOOm and 
Ecu900m a year, Mr Haul Nai- 
ler, forma French farm minis- 
ter told a news conference. 

“We hope the eastern Euro- 
peans will finance it them- 
selves," added Mr Adriaen van 
Stalk, co-author of a report for 
the European Commission on 
EU fern trade relations with 
eastern Europe. 

The financing of form sup- 
port measures is expected to be 


BASE METALS 

LOUDON METAL EXCHANGE 

(Prices from Amalgamated Metal Trading) 

■ ALUMMUM, 99.7 PURITY (S per tame) 



Cash 

3 mths 

Ctoaa 

141S-7 

1444-5 

Previous 

14Q65-4J5 

1433.5-4 

HrfVlow 

1417J5/M17 

1454/1428 

AM Official 

1417-7.6 

1445L6-8 

Kerb dose 


1442-3 

Open bit 

282^03 


ToW OaBy turnover 

71,701 


M ALUMMUM ALLOY (5 per tonne) 


Close 

1420-30 

1430-9 

Previous 

141S-20 

1420-25 

Hghriow 


143571430 

AM Official 

1420-5 

1430-6 

Kerb doss 


1430-5 

Open kit 

3,064 


Total defy tunover 

781 


M LEAD ($ per tonne) 


Oom 

535-e 

552-3 

Previous 

3205-1.6 

538-9 

Wgh/low 


563/541 

AM Official 

S31J5-2 

547-7J5 

Kerb dose 


648-9 

Open Int 

37,130 


Total dafly tunover 

7JS87 


■ NICKEL 9 per toms) 


Ctaro 

8380-80 

8480-5 

Previous 

6345-68 

6441-6 

Hgh/kmr 

igyyi 

6610/8330 

AM Official 

6363-5 

6448-60 

Ksrb doss 


6486-90 

Open fait 

05.821 


Tote daly tummer 

7/385 


■ TIM (S psr tonne) 



Close 

85S545 

6065-70 

Previous 

5660-70 

5640-60 

Hflhrtow 


567U/5620 

AM Official 

6671-6 

8860-5 

Kerb dose 


5660-6 

Open int 

16,588 


Tote dally turnover 

6010 



Precious Metals continued 

■ GOLD COMBt (100 Troy Qt4Sftroy<gj 

W W Open 

price change Hgb low M W 

Am 385.4 .1.4 387.2 38&3 860 391 

At 3811 -M 

Mg 387-5 -IS 389.7 3883 71J501 38035 

Oct 3805 -IS 3920 3802 5,184 212 

DM 3937 -IS 3857 3834 24,587 1,454 

Feta 3972 -1A - - 8067 234 

TWM 13*324 38008 

■ PLATINUM NYMEX (50 Troy 024 S/troy ql) 


Jn 

Sep 

No* 

Jn 

Her 

tty 

Total 


At 

4054 

-19 

4099 

4057 

11,998 

3965 

Oct 

40UB 

-17 

4129 

4069 

99TO 

2977 

Jta 

4109 

-17 

411J 

4119 

1.270 

63 

Apr 

4119 

■1.7 

4139 

4139 

1,186 

18 

ToM 





24JH8 

8720 

H PALLADIUM NYMEX (100 Ttoy az_; S/troy ozj 

jn 

13675 

■055 

- 

- 

83 


Sep 

13975 

-090 

14050 

13090 

3/554 

288 

Dec 

139L48 

-nan 

14190 

13990 

818 

46 

Mar 

139.45 

-030 

. 

. 

1 

_ 

Tow 





4956 

314 


■ SILVER COMEX (100 Hoy oz.; Centa/troy ozj 
Jn 545.1 -02 651J) 951JI 

M 5400 -02 5500 5444) 88.582 33,728 

Mg 6409 -02 - - ■ 1 

5508 -02 6605 5405 27 ,870 11,368 


GRAINS AND OIL SEEDS 

■ WHEAT LCE(E par tonne) 

SMI Oaf* Open 

price cti —ga tOgfc Loir let Vol 

114.15 *085 11025 11085 180 

101.15 -040 10220 10125 478 

mao -020 10250 10175 22 m 122 

mas -oos iouo 1Q4.00 U74 

10520 -025 10525 10525 478 

10575 -015 107 JO 10890 383 

5,153 

■ WHEAT C8T ROOOtou mtn; cents/BOfc busrisQ 

Joi 335/2 -5/2 343/0 3324)111020 40380 

Sep 3428 -418 350/0 33910 67,080 10770 

On 354/4 -4/4 382/0 35010113270 28965 

Mar 357/2 -5/0 384/4 332/4 13230 4270 

May 348/0 -7/0 - 330 25 

JM 330/D -8/0 34M 33051 1,540 340 

Total 307280 M0» 

M MAIZE COT (BjOOO bo min; cents/56to buahaQ 

■tad 281/5 +1/8 284/0 278/0442^400112290 

Sep 278/4 -MUG Z79T4 274/0208700 40880 

Dee Z70/4 -018 27510 8774520280234720 

ta 27B/4 -0/B 380/4 774/0 58.485 14225 

Mar 280/2 -0/4 284/4 278/4 8205 3225 

JM 281/2 -OH 283/8 2BUB 17270 3215 

Tote I. 

■ BARLEY LCE Epar town) 


SOFTS 

■ COCOA UGE (E/toone) 


SHI Day's 

price etataP Mgta bat 


Vol 


MEAT AND LIVESTOCK 

■ UVE CATTLE CUE (tqOQOfca; centa/Bre) 

Salt Dtfa Opea . 

price change Mgb In* M 


21 

JM 

wu 

-1 

1035 

1015 15984 17*0 

Jn 

B592S -O07S 65.400 649S0 4722 

1998 

23 

*P 

woe 

-5 

1055 

1083 19786 1112 

tao 

64.190 -0700 64980 6493 30987 

7984 

122 

Dac 

1055 

-4 

1073 

1053 28.443 1.420 

Oct 

B7J00 -0.175 68.123 67JB2S 1*210 

2.188 

77 

Mar 

1073 

4 

1001 

1078 28,093 4U 

Dm 

08929 +0.075 09.180 60800 10723 

1714 

IS 

Hay 

1088 

-fl 

1105 

W» 10.478 343 

M 

09925 +0.125 70900 69900 6990 

ro 

48 

JM 

1097 

-6 

- 

- 3754 

tar 

70975 +0925 71700 70950 3,163 

383 

306 

Tote 




112490 8781 

Tate 

71,921 14*9 


■ COCOA CSCE (10 mnnanS/tainM) 


Dec 


9600 -62 


5709 5579 17974 1J15 

Sap 

9990 

+078 

9990 

WOO 

191 

32 

32 

far 

9995 

-0.10 

10090 

103.00 

340 

15 

CHL«B 46483 

Am 

10190 

. 



28 



a Mr 

10390 

- 

. 

. 

S 

. 


May 

16490 

. 

- 

- 

4 

- 


ToM 





588 

47 


JM 

1353 

-24 

1389 

1345 SjBBB 5788 

S»P 

1393 

-18 

1428 

1385 37932 8JB0B 

Dae 

1433 

-IS 

MSI 

1434 11773 029 

far 

1463 

-1* 

1490 

1458 8953 338 

May 

1432 

-14 

1510 

7490 2909 2 

JM 

1504 

-14 

- 

- 2748 - 

ToU 




72781187*3 

■ COCOA (ICCX9{SOR'a/tonaa) 

Jm 18 
IMv .. 



Fife* 

107595 

Rat day 
103X19 

18 dav arenas 


RM 

HA 

■ COFFEE LCe(Monn^ 

JM 

2398 

■a 

2500 

2400 10964 1948 

SK 

2395 

+7 

2490 

2395 19745 2978 

far 

2373 

+20 

2460 

2370 7787 813 

Jn 

2363 

+29 

200 

2380 6968 450 

Mar 

2328 

+28 

2374 

2330 2929 40 

May 

2328 

+48 

2300 

2380 128 104 


Tew 


47202 I2«1 

*C* CSCE (57.500fas: csnCa/ibeJ 


■ UVE HOPS CME (40200Bja; contaAba) 

Jn 48225 *0275 44100 45.150 1222 573 

JM 48275 +0500 44000 44175 8279 1280 

Mg 47225 +0375 44100 47225 5288 1281 

Oct 44.700 +0275 44225 44200 4,387 SB 

Dec 44J75 +0275 44200 44200 3244 155 

Fab 44,175 - 44200 44.100 781 18 

Tate 27213 4248 

■ PORK BSXIES CME (4Q(0Qabn; cents/fcef; 

Jri 44200 +2200 44200 42400 4202 1254 

tag 43225 +2000 43225 42200 3240 1,223 

Fab 48200 +0200 48200 47200 489 85 

tar 47200 - 47200 0 37 4 

Her 50.700 +0.750 50700 0 33 3 

Jri 50200 +4U00 50200 0 12 2 

Tate 8285 3,143 


LONDON TRADED OPTIONS 

Strike price $ tonne — drib-— — -Pnte — 
■ AI.IIMIHIUW 


ENERGY 

■ CBUOE CHL NYMEX (+3.000 US ipWlo. S/barcQ 


M SOYABEANS CUT ROOBm into; canMOH btebri) 


Chreo 

075-7 

1000-2 

Previous 

074-0 

999-1000 

High/low 

87B 

1HKL5/991 

AM Official 

97B-8.6 

iooas-4 

Kerb dona 


998-9 

Open Int 

105.096 


Total daily tunover 

21,755 


■ Copper, grade A (S per tonne) 



Jri 


Oct 


Oee 

Tetri 


OWe 
price change Mgb 

1923 -003 1925 
18.11 +026 ISIS 
18J2 +0.02 1678 
1648 - 1650 

1630 -023 1633 
1621 -024 1625 


ter Ml Wol 
1D22 33270 44484 
1680 89270 82455 
1655 58292 28222 
1925 28206 9294 
1618 2/282 2480 
1X10 34J08 8201 
432405160273 


JM 

701/4 

-as 

714/D 

698/2212740 S0940 

Ate 

G99/2 

-2/2 

711/0 

695/0 03985 40,520 

Sag 

691/D 

■2/D 

TWO 

mm 51900 12905 

fa 

8808) 

-4/2 

694/4 

678/0 358,1 1 0 18993)1 

Jn 

688/4 

-1/0 

098/4 

6B2/D 28940 8735 

Mar 

TOW 

aae/s 

•3/4 

702/0 

888/D 13746 3700 
782775360760 

■ SOYABEAN OIL CBT {BO/JOOtra; cents/TD) 


JM 

13395 

-MS 14290 13270 

9.785 3761 

Sap 

13400 

-420 14270 13275 2SJ21 

9965 

Dac 

131.75 

-4.40 14090 13170 12756 L110 

Mar 

12448 

-440 13490 12423 

7783 

372 

May 

127.40 

-490 13490 12890 

1900 

1S1 

JM 

12890 

... 

735 

2 

TOM 



57, 1« 14741 

■ COFFEE PCQ) (US ceoix/paund) 




Ckree 

2402-3 

2417-8' 

Prwtous 

2377-8 

2395-6 

tOgh/knv 

2402 

2428/2385 

AM Official 

24029-39 

2418-9 

fab doaa 


2415-7 

Open inL 

221,184 


Total ddy turnover 

45.625 


M LME Ml OtllelM at nata 19210 




Latest 

Oft 




Prire 

ctaaagt 

»» 

tire tat DU 

tag 

1695 

-099 

1796- 

1891 25.424 10941 

Ste 

18.73 

-098 

1492 

16.70 70929 30977 


1470 

-091 

1483 

1697 24^50 5,189 

Mar 

1097 

-096 

10.78 

1694 18,482 2932 


1694 

■094 

18.77 

1890 5931 725 

Jm 

1692 

•093 

18.72 

1467 8982 1.182 





129983 51928 

■ HEATINQ OIL NYMEX {42900 US gala; PUS |pM) 


JM 

2794 

+093 

2420 

Z7J7 19935 

7JBOO 


2798 

+0.07 

2416 

27.78 15923 

1226 

Sap 

2790 

+0.06 

2408 

Z7J3 11910 

2.404 

Oct 

2790 

+094 

2775 

27.42 7947 

859 

Doc 

2792 

- 

2795 

27.12 22928 

4,461 

Jn 

27.18 

- 

27.40 

27.12 3,188 

688 

Tote 




HU> -181844 

■ SOYABEAN NKAL CBT (100 tons: S/toffi 



LME Ctoring C/S rate; 1-5200 

Spd:1.520Q 3adheri2180 6tebc12l62 9BAS121S3 
■ HIGH GRADE COPPER (CQMEX) 

Wt Open 

Om ctange H* tar M VM 

Arn 11125 +0.65 11120 11120 484 71 

•W *11-30 +120 111. TO 10825 30203 8497 

MM 111.40 +120 11120 11070 077 6 

111-50 +120 11125 110.10 17.379 4206 
Ocl 110,70 +120 - 272 41 

ftV 11030 +125 - . 203 4 

^ 82433 15284 


PRECIOUS METALS 

■ LONDON BUUJON MARKET 

(Pricw aupptad by N M BothnMd) 

Odd (Troy OiJ S pries C equfv. 

OOM 386.1Q~388.50 

OPWIng 3B60O-3M0O 

Morning Ac 387.10 254038 

Afternoon (lx 38825 2S4433 

UaifaHlBh 38720-38720 

DtV* LOW 386.60-38820 

Pnwiouq don 38500^6700 

Uea Ldn Hun Odd Lendhg Rntna (tfs USS} 

1 month ..mu- 3 28 6 months 635 


Utat Day's 
Pries ctaegg Ogh 

At SOM +0.27 5125 

Ate 5125 +630 6145 

fap 5120 +620 52.10 

Oct 5220 +620 3230 

*» 5320 +630 5320 

OK 5420 +615 5475 

Tate 

■ QAB CML FE SltonpBl 


qm 
Lm bt 

50.10 32,767 
5045 22,104 
5140 14450 
52.48 9283 
5130 7,149 
8610 14210 
128*58 


Voi 

27241 

18249 

6287 

1272 

1,208 

4.435 

01443 


JM 

2049 

•1.4 

2045 

2029 24925 

9998 

tag 

2049 

-M 

2040 

2099 18.488 

5942 

Ste 

2049 

-19 

2009 

2039 12,478 

4958 

oct 

2039 

-M 

2079 

TfO/n 6972 

1978 

Ok 

2039 

-1.1 

2089 

2019 19922 10472 

Jm 


-19 

2069 

2019 1967 

383 

Tote 




■Ltoa 32701 

■ POTATOES LCE E/towie) 



far 

909 

_ 


_ 

_ 

Mm 

1059 

. 

. 

- 

- 

tar 

1489 

-2.6 

1619 

1479 748 

169 


1409 

. 


_ 

- 


Am 1072 ..... 

Tate 748 108 

■ FBSOHT (B1FFEX) LCE (tlOAndex point) 


Sen Bar* Open 

price ctange Mgb Lore let \m 

M <57.75 +625 16&00 154.00 29284 10225 

taUO 1562S +5.75 15650 10600 11408 15200 

Sep <8075 +650 181/00 18775 7279 6481 

« 18320 +&2B 18320 18020 7272 1271 

faV 15625 +520 18920 18220 5298 730 

0« 18728 +625 16720 16425 13,825 906 

TOM SUMS 21408 

■ NATURAL GAB HYMBt (10200 ntnWa; StamBaj 


Jn 

1278 

. 

1278 

1275 

E15 

4 

JM 

1218 

+11 

1217 

1205 

985 

88 

Sag 

1232 

+18 

1230 

1230 

193 

21 

Oct 

1299 

+1 

1300 

1299 

489 

2 

Jn 

1323 

+2 

1328 

1325 

228 

1 

Apr 

1353 

*8 

1389 

1355 

83 

1 

Tote 

Oom 

tor 



2936 

84 

in 

1318 

1321 






JM 

tag 

Sep 

0d 

tar 

Dec 

Tate 


LatHt Day's 
price ctange 

2.215 +6043 
6255 +6040 
2430 +6027 
6230 +0029 
6290 +0810 
2270 +6202 


Man lm 

2225 2180 
2J2E0 222D 
99M 9MWI 
99M jawn 
2290 2279 
2275 2285 



-423 12 months 


w426 


■ WLEADED OASOLME 
WMB (46000 U5 pals; ate pataaj 


OPK 

M W 
14202 10238 
18JKM 8280 
11210 6037 
10,095 948 

11238 724 

14270 803 

122480 263» 


Jn 15 



Pries 

Rav. day 




12894 




11795 

■ No7 PREMUM RAW SUGAR LCE (canca/toa) 

JM 

1297 

+OLOJ 

1283 

1280 

3974 208 

Oct 

1271 

- 

- 

- 

1,101 

Jaa 

IT92 

- 

- 

- 

- 

M* 

1220 

+092 

- 

- 

GO 

Total 





4036 208 

M WHITE SUGAR LCE CS/tonne) 


Ate 

35230 

+090 

35250 

35190 

12016 317 

Oct 

33190 

+620 33290 33090 

fl.Mfi 658 

DSC 

321.10 

+030 

32430 32390 

875 5 

Mar 

321 90 

+020 

- 

• 

2082 

May 

321 90 

- 

32190 

32090 

201 8 

Ate 

32000 

-390 32040 32090 

290 6 

Total 





23,1 M 082 

■ SUOAR 11' CSCE P124XXSH; centals} 

JM 

1240 

+007 

1243 

1229 28964 5,405 

Oct 

1241 

. 

1244 

1293 73901 7927 

Mar 

1203 

+001 

1294 

1197 Z79S8 2425 

May 

1199 

+091 

1201 

1195 

4047 251 

JM 

1195 

+am 

1194 

1194 

1071 312 

Oct 

1197 

4103 

1197 

1197 

806 86 

TMM 




13693616905 

■ COTTON NYCE (50,toObK cantsAbtt 

JM 

80» 

+093 

8193 

8040 

8073 2083 

Oct 

7798 

+405 

7455 

7783 

4089 1,172 

DOC 

7890 

+017 

7795 

7890 24388 4944 

Mar 

7790 

+422 

7415 

7795 

3017 131 

May 

7420 

+425 

7840 

7410 

1065 60 

JM 

7895 

+008 

7475 

na 

804 38 

TOM 





51044 7021 

■ ORANGE JUICE NYCE (15,000ttw;cent3rtt») 

JM 

mo 

-470 

9890 

8400 

7060 988 

Si P 

8345 

-500 

9890 

3445 

9.403 1081 

Rav 

9410 

-500 

10093 

9410 

1003 185 

JM 

8790 

-&Q0 

10200 

9790 

3,123 112 

Mar 

98.70 

-590 10490 

9470 

1282 278 


(90.7%) LME 

Aug 

Nov 

Aug 

New 

137S 

78 

118 

17 

32 

1426 

47 

88 

38 

50 

1473 

25 

B1 

04 

78 

HI COPPER 





(Grade A) LME 

Aug 

Nov 

Aug 

Now 

2360 

110 

129 

41 

83 

2400 

81 

105 

62 

118 

2450 

58 

as 

88 

148 

■ COFFEE LCE 

Jul 

Sep 

JM 

Sap 

2200 

314 

392 

119 

219 

22SO— ... 

284 

387 

139 

244 

2300 

267 

342 

162 

289 

■ COCOA LCE 

JM 

Sep 

JM 

Sep 

S75 

77 

123 

16 

43 

1000 

60 

106 

24 

53 

1050 

35 

82 

49 

77 

■ BRENT CRUDE 1P6 

Aug 

Sop 

Aug 

Sep 

1600 

. 

. 

20 

38 

1050 

81 

90 

32 

83 

1700 

45 

84 

52 

74 


LONDON SPOT MARKETS 

■ CRUDE OM. FOB (per berreWurt +or 


p/trey oz. 

US eta aqMv, 

JM 

30345 

58390 

Ate 

Sea 

36790 

65866 

372.10 

505.10 

OM 

38445 

58190 

fa 

$ price 

C aqMv. 

Dac 

388-301 

255-257 

Tutu 

3S&65-99895 

- 


88-92 

66-61 



teteri Baft Qpn 

Price ctange Mgb Un kd Vel 

5170 -615 5320 9325 34490 16413 

5420 -620 8428 5328 Z720 12290 

3320 -610 6698 8320 11,790 Z.7B7 

SU0 -610 5229 5120 4283 1JOI 

SOM -0.96 0120 5070 4JS1 340 

5640 -685 5670 S61S 2234 281 

88,127 36833 


Wool 

Austrten wpd prices waraagdn »m w«i MOa 
dwrtfle during #» week. Hie market Mentor 
flnWmd at fiKafts, Jiflt 3c ksww then • won 
aga Japan and Wntern Europe wwn ate eeki 
to be aett/a buyer*, but an added Mueneai 
was China, reported to be among the tearing 
Gompetito* and encouraging the view ttwt Ihe 
wool market may mume Its riring trend In the 
season due to begin next month. Par some 
weeks the bdenae has bean den between 
toon considering a period of coneofctadon and 
pertnps easier pricasln the months ahead, and 
those convinced that the main dtag trend wfl 
peretsL If CHna to more acthm, and with stock- 
pta sun soon to be medetad by a taad 
ttoponl schedule; the more buOsh a pproach 
tea sairwd a MOe (potmd. Qoed raesa er aottu- 
By h the main wool camming co mW w dur- 
ing recoueiy tram roe ea ekn Is hripfaL 


MW 


10070 -920 10690 10150 SO 2 
23437 ZJUT 


VOLUME DATA 

Open Intarast and Vbkme date shown for 
canbaeta traded an COMEX, NYMEX, C8T, 
NYCE. Cfcffi. CSCE and IPE Onida 08 am ona 
day fci araara. 


INDICES 

M REUTERS (Base: 18/0/31*100] 


Asm 18 June IB monto ago year age 
2032.0 2027.1 198821 104,8 

M CUB Futures (Base: «9/5Ba10q) 


Dubai 

Sl5.B4-6.72q 

+0.196 

Brent Blend (dated} 

tKL834L85 

+0.175 

Brant Blend (Aug) 

*1603485 

+0.173 

W.TJ. (1pm esQ 

$1B01-803q 


at ol products NWEpremptdaBvay OF (lonni) 

Piwtrn Gasoflne 

$188-187 

■«3.0 

Baa 09 

■ $157-158 

+00 

Heavy Rial 08 

$77-79 


Naphtha 

$161-163 

+3.0 

Jet Fuel 

$188-170 

+60 

Peettom Apia EaOmmea 



■ OTHER 



Gold (par troy adf 

$36030 

-045 

SDvar (per troy az)4 

5490OC 

-ooo 

PtaHman (par bay an) 

$40525 

+900 

Patadum (per troy oz.} 

$138.75 

+108 

Copper (US prod.) 

11600 


Lead (US pracL) 

35.75C 


Tin (Kuala Lumpur} 

1401m 

-018 

Tin (New Yori^ 

25960c 

+2.00 

Zinc (US Prims WJ 

Unq, 


Cattle (Bve welghgt 

128-IEp 

-108* 

Sheep fltao wMflhQtt 

11O0QP 

+1.78* 

Pigs Pm might) 


-401* 

Lon. day sugar Ohm) 

1306.60 

+2.40 

Lon. day sugar (wta) 

aasatm 

-OJ36 

Tate A Lyle export 

£314.00 

+2.00 

Barisy (Eng. feed) 

210301 

+10 

Maize (US No3 Ydiow) 

$1430 

+10 

Wheat (US Doric North} 

Cl 80.0 


Aubber (JuQV 

78JBp 


Rubber (Augff 

78.750 


RubbadKLRSSftol JuQ 

27300m 

+100 

Coconut CM (PW0§ 

$82202 

-70 

PMmOi WatayO§ 

SCOSOq 


Copra (PHDS 

$4030 

•80 

Soyabeane (US) 

£204.01 


Cottm OMtook A Indax 


+0.16 


WtMftapa (84a assn} 


«2P 


June is 
23681 


Jwe 14 month ago yaarago 
23630 22678 20343 


E per term unless otherwise stated, p penoaAtg. a 
cantsflb. r ringgR/tag. m Mataydan cantsAq. q tan. 
t OcfifOeo z JunWuL w jul f London pnyritte. S 
OF Rotterdam, f Button marital 0M4. ♦ Sheep 
(Oa wdgM prices). * Change an week, provteonal 
prices. 


ono of the most difficult Issues 
in negotiations with Poland, 
Hungary, the Czech Republic, 
Slovakia, Romania and Bul- 
garia on thalr eventual entry 
into tiie EU. 

Mr Rena Stelchen, the EU 
agriculture commissioner, said 
on Wednesday that the report 
reflected only the personal 
views of the authors. 

The European Cmwnission is 
expected to publish in July a 
discussion document on mea- 
sures to narrow the form pol- 
icy gap and assist the eventual 
membership of the eastern 
European countries. 

East European form support 
would be based on a wheat 
price of $85 a tonne, said Mr 
van Stolk, a Dutch form busi- 
ness expert. “The clue is to 
lock in a low support price,” he 
suggested, adding that $85 


would cover “hard core" input 
and labour coats and allow 
farmers to compete on ttu 
world market. 

Mr Nallet said lessons muat 
be learned from the EITs major 
error 30 years ago in setting 
corrals intervention prices 3S 
per cent above the internal 
market price. 

Price support would be 
complemented by a simplified 
system of fixed levies and 
refunds on EU form Imparts 
and exports from eastern 
Europe. 

The creation of “land banks” 
would help tackle the huge 
problem of Inflation and illi- 
quidity in eastern Europe, Mr 
van Stolk said. “It would help 
provide liquidity In a very illiq- 
uid system” while bellring pri- 
vate farmers to build up eco- 
nomically-sized forms. 


CROSSWORD 


No.8,482 Set by DOGBERRY 



1 Religion receives a light blow 
from ndfisDe Launcher (8) 

5 Hype’s about to create a 
mythic figure (6) 

9 Suppose the beast comes 
round to the point (8) 

10 Start to enter into the king- 
dom of the world (8) 

12 Epic sport In poor light, 
almost (9) 

13 One loth to pay for immacu- 
late motorway services? (5) 

14 Deferral at support (4) 

16 Sharp officer m boat (7) 

15 Bribe with camel (7) 

21 Principal part of element (4) 

24 Parasite takes In right fool (a) 

25 Replace material, swallowing 
by the second (9) 

27 I adore getting a man to shift 
gear CB) 

28 Vegetable fuel, say? Not quite 
mad (8) 

29 Ministers work on volume 
before dose of day (6) 

30 Cathy and Heath cllfr initially 
In passionate bloom <8) 


DOWN 

1 Reform copper (6) 

2 Drink put on slate - keep 
very quiet (6) 

3 Something to eat after one (5) 

4 Draw many of Tarka’s Ilk? (7) 
8 Doleful cry raised by male 

accountant in Spain (9) 


7 Holder Is breaking into a r 
( 8 ) 

8 The whole Is about to ctn 
into being (8) 

11 Betray egocentric dlscom 
(4) 

15 Loveless couple with vag 
idea of moment 0) 

17 Drunk oriental In Morecam 
not easily apprehended (8) 

18 Fodder contaminated by riv 
of waste (8) 

20 Army entertainer (4) 

21 Disease makes Irish jum 
though looking wall (7) 

22 Be left with graduate 
charge (6) 

23 Use net, perhaps, to sna 
alien idol (6) 

26 What’s left of CathoUc pile 
interred (5) 

Solution 8,481 









M 'tt ♦. 


*tiv 


' l *ihnw 



LONDON STOCK EXCHANGE 


MARKET REPORT 


Early losses reduced in modest trading volume 

Ru To n i# tUuj 


By Terry Bytand, 

UK Stock Market Editor 

Shares reacted nervously In London 
yesterday to a warning on interest 
rates from the Governor of the 
Bank of England and also to 
renewed losses in bond markets fol- 
lowing sharp rises in oil and com- 
modity prices. But there was little 
saving pressure in the stock mar- 
ket, which stood up well to the new 
setbMk In UK government bonds. 

Neither the UK riiPT^nfir of the 
pdwquer nor the Bank Governor 
had given the stock market much 
encouragement in their respective 
speeches on the previous evening at 
the Mansion House, in the City of. 
London. 

But traders said that the day’s fell 
of 15.7 for a final reading on the 
FT-SE 100 Index of 3,030.1 appeared 


“Quite good in the circumstances’ 1 . 

Equities opened lower as traders 
digested the chancellor's assurances 
that taxes will not be cut until pub- 
lic borrowing levels permit, and the 
Governor’s warning that UK inter 
fist rates will have to rise at same 
unspecified mnrngnt in the future. 

The FT-SE 100 was down just over 
20 points within a few Tnhmfrps of 
the official opening of trading, 
albeit in very thin volume. At first, 
it appeared that confidence in the 
stock market would be severely 
challenged by fells in UK gilts as 
European bonds reacted sharply to 
the weakness overnight in US Fed- 
eral securities. 

A crude oil price of nearly $20 a 
barrel in the US, together with a 
hi gher gold bullion price, reminde d 
investors that the US Federal 
Reserve Board hag identified com- 


Aocaunt PnnHng Mm 

Dm OmBibb 

Jim 6 

Jim £0 

JUI 4 

OpdoB nmtonBmn. 
Jm 18 

Jun 30 

Jit 14 

LlPeritnna. 

Jim 17 

Jrii 

JU) 13 

Aaeewit Day, 

Jun 27 

M T 1 

Jda 

baltoMedeaetS? 

nay tike 

pM Intan tan 


modity prices as a si gnificant infla- 
tion trigger. Some band market ana- 
lysts predicted that the Fed might 
soon feel obliged to tighten credit 
policy again. 

Against this negative back- 
ground, the stock market did well 
to rally quickly from the day's low 
of 3,025.4 on the Footsie and to 
trade peaceably ahead of the open- 
ing of the new session in New York. 

Little response was accorded to 


news that domestic retail sales pat- 
terns were unchanged in May, or to 
a rise in May Public Sector Borrow- 
ing Requirement to £L34bn. 

When, tba Dow Industrial Average 
opened modestly firmer, to show a 
gain of 10 paints in UK hours, the 
London market consolidated and 
appeared unaffected by renewed 
raHcertainty in US Federal bands, or 
by the absence of recovery in 
domestic 

in the wider market, the FT-SE 
Mid 250 Index finished 25.5 down at 
3,53422. Oil shares benefited from 
higher crude prices, with Lasmo 
firmer in late trading in spite of 
a generally negative view of pros- 
pects for the Increased terms from 
Enterprise OH. The utility sector, 
however, remained rattled following 
the warning on dividend policy 
from British Gas In the wake of 


FT-SH-A All-Share Index 


1.800 


the Ofgas pricing report 
Although SesQ volume increased 
to 510.1m shares from the 562Jkn 
registered in the previous session, 
traders said that the market was 
not busy yesterday. Trading in non- 
Footsie stocks made up a high 50 
per cent of overall Seaq business. 
The warning on interest rates, 
while not presenting any new factor 
for the market, encouraged fund 
managers to back away from equi- 
ties while atfll waiting for the hand 
market to settle down. Some ana- 
lysts said that equities had yester- 
day shown themselves successfully 
freed from bond market 
Retail business remained high at 
£L56bn on Wednesday, in spite of 
the reduced market attendance 
prompted by a national rail strike. 
Many traders sensed that retail 
business had fallen away yesterday. 


1,575 J4-VP 
1,550 - 



1.SBS 

1,500 


1«4?5 *- 


Hu 

Source: FTtopMa 


1964 


■ Key Indicators 

Indices and ratios 

FT-SE 100 3030.1 -IS. 7 

FT-SE MM 250 3534.2 -253 

FT-SE-A 350 1526.8 - 8.6 

FT-SE-A Afr-Shore 1518.30 -829 

FT-SE-A Ail-Share yield 3.89 

Bast performing sectors 

1 Ftetaflero, Food 

2 OB. Integrated 

3 011 Exploration .... 

4 Printing. Paper 

5 Becti Idly + 0.0 


+ 1.6 

+0.4 

- +0.0 

+ 0.0 


Equity Shares Traded 

Tunouar by vokjm© pTHSionl. ExctuQrW 

bm+nskst bwnm and overseas wncww 

1.000 — 



FT Ordinary index 2383.4 -16.4 

FT-SE-A Non Fins p/e 19.37 (19.29) 

FT-SE 100 Fut Ju„ 3025.5 -16.5 

10 yr Gilt yield 8.74 <8.59) 

Long flflt/equity ytd ratio: 2-26 (2.26) 

Worst performing sectors 

1 Bulttng Mata __.-2.a 

2 Extractive bids -1.0 

3 BuUcUng & Cons -..-1.5 

4 Engineering, Vehicles ..... -1.4 

5 Engineering ......... — -.-1.3 


Vits } ul eastern 

support 


CROSSWORD 


■ ■ 




Utilities 
in active 


gains through the sessio n, clos- 
ing 6 up at 635p. Some of the 
other “recs" trailed back with 
the market, continuing to 
nurse a hangover from British 
Gas, which fell heavily on 


Water and electricity sectors 
continued to he buoyed and 
buffeted in equal measure by 
recent results and regulatory 
moves. South Wales Electric- 
ity, the latest to report figures, 
saw profits come in at the 
top end of mar ket forecasts 
and its dividend fully meet 
expectations. 

The shares shot forward on 
the news and sustained the 


tively to the industry regula- 
tor’s latest move on pricing. 

Gas shares slid a further 3 to 
268Hp. Elsewhere among the 
recs, East Midland bounced IS 
to 592p, Man web declined 7 to 
683p and Midlands edged up 3 
to 582p. 

Water stocks were largely 
duD, with dealers reporting a 
few large sellers in the wake of 
results from Thames on 
Wednesday. The company 
reported large provisions for 


its nan-core businesses and it 
was fear that other water com- 
panies may make similar 
moves which provoked some 
selling. In contrast, analysts 
pronounced themselves 
pleased with results from 
Southern, which produced a 

good dividend increase and an 
upbeat tr adin g statement But 
the sector weakness meant 
Southern's Initial rise was 
turned into a 5 deficit at 513p 
by the close. Thames eased 2 to 
468p in another day’s heavy 
turnover of 4m. 

Smith advances 

A steep rise in profits from 
£38.7m to 295.2m at Smith New 


EQUITY FUTURES AND OPTIONS TRADING 


Nervous trading following a 
Bank of England warning on 
Interest rates marked the last 
foil day of dealings in the 
current index futures and share 


options contracts, writes Joel 
Kibazo. 

In Uffe futures, the June 
contract on the FT-SE 100, 
which will cease trading this 


a FT-SE ICO MPBC FUTURES (UFFE) £25 par fuB Max port 


(APT) 



Open 

Sett price 

Change 

rtgti 

Low 

EbL vd 

Open fed. 

Jun 

30150 

ams 0 

-160 

30350 

30120 

21111 

gnaao 

Sop 

30270 

30350 

-190 

30450 

3024.0 

12510 

99093 

Deo 

- 

80450 

-160 

- 

- 

0 

752 


■ FT-SE MD 260 INDEX FUTURES (UFFE) CIO par M Index point 

Jun 36400 3S40L0 -ISO 35400 35400 834 3817 

Sap 36624) 3562.0 -184) 35524) 35524) 634 3000 

■ FT-SE MtQ 250 (NDEX FUTURES (ONBJQ £10 pet luf Index pofc* 

Jun I 3535.0 - I I I 771 

M open Harm! Agues are tar prentaua day. + Bead values riwwn. 

■ IT-gE1M»PEXOiroON(UFFg r 9CB9) CIO per MIlndBX point 

MM 

C P 


2860 2800 2980 3000 3060 

CPCPCPCPCP 
Mo 179*z * 2 129*2 * 2 7B*z *j 29*g 2*j 1 27 

JU in 11 14712 18*1 m »2 31% 74*2 48 48*2 71 

Aug 210 28*2 172 41 T35^54fe 198 74 78*2 95*2 

Sip IB 42 189*354*2 1M 68*2 1M 80*2 M 111* 

Deet 228*2 88 188*z127*2 

08* 4334 MM MB5 

■ airosTYreFT-eeirowpEx option ffjF^eio par m index pom 


3100 3150 

C P C P 

*2 75*2 h 13 h 175 

Zft 101*2 19 139*2 7 183*z 

55 124 37 158*223*2 184 

73 140 S3 171 « 207 

118 175*2 78*2 2M 


2S7S 2826 2878 

JBI 180*2 h 108*1 *2 51*2 1 


3025 
th 8 


3075 


3125 


3178 


JU 

168*2 13 125*2 22 90 

36 -m 2 56*2 38 

B4 a 117*2 tt 

157 5*2 200*2 

Aug 

151*2 44*2 

90 82 

« 137 

t 6*2 210 

Sap 

168 59*2 

106 99 

a 152 

32*2 220 

Deri 

206*2 02 

150 130 

183*2 161 

06*2 243*2 


CM* 1,487 FU* was - ItaMptag kite tea. 
f Long Mid uplry wmBm* 

■ EURO STYUE FT-SE MP 280 INDEX OPTION (OMLX) 810 per Ml Wax point 

3800 3680 3800 3850 3700 3780 3800 3860 

Jm 35 1 4 20*2 *2 66*2 

CM 0 Mi 0 Bantamrt pram and terns m Man * 430pm. 


morning, traded in a tight 
range of around f 0 points for 
most of the session. Having 
opened at 3,015, It touched 
a low of 3,012 and a high of 
3,034, although most of the 
day's trading was carried out 
around the 3,025 level. 

Dealers continued to rod 
positions forward into the 
September contract, which 
assumes the market leader 
position after today's 
mid-rooming expiry. The 
decline in UK gilts was said 
to have had a lees than usual 
impact on trading. 

The June contract dosed 
at 3,025, down 17 from Hs 
previous ctose and at a 4-point 
discount to cash. Volume in 
June was a hefty 21,1 11 lots, 
and some 12,516 ware dealt 
In the September contract 

In traded options, which 
today see the expiry of the 
June Index options, total 
volume was 35,783, against 
33,182 In the previous day. 

The FT-SE 100 option traded 
15,100 contracts. Argyll was 
the busiest stock option with 
3,260 lots dealt but toe single 
biggest trade was carried out 
in Pflklngton, one house selHng 
2,000 of the November 180 
cate at 11V6p. 


FT - SE Actuaries 

S.ha/e Indices 



T 

he UK Series j 



tWa 

Year 

Div. 

Earn. 

P/E Xd etfl. 

ToW 


Jun IS chgeM Jun 15 Jun 14 Jun 13 

W> 

yteUSf, 

yteUW 

ratio ytd 

Retun 

FT-SE 100 

3000.1 

-00 30450 30390 30160 

2875-7 

408 

606 

1708 4603 

113103 

FT-SE MM aSO 

35340 

-0.7 3558.7 3578.7 36950 

32130 

303 

502 

2002 4403 

129902 

FT-SE MM 250 ex bnr Trusts 

3534.0 

-00 3550.9 3584.4 38030 

SMKA 

308 

B 0 B 

19^3 4400 

129600 

FT-SE-A 380 

15280 

-00 15364 15340 15270 

14350 

305 

602 

1805 23.33 

116608 

FT-SE SnwKap 

1B6206 

-00 185708 185903 1861-73 1636.00 

300 

308 

8304 2007 

1423.18 

FT-SE SraaACap ex few Trusts 

182906 

-00 183304 183604 183801 TB4403 

3L16 

4-24 

3103 2108 

1408.78 

FT-SE-A ALL-SHARE 

151800 

-05 15M0B 152803 151906 142008 

300 

642 

1808 22.77 

1179.72 

■ FT-SE Actuaries All-Share 









Day's 

Year 

Div. 

Earn 

P/E Xd ad). 

Total 


Jun 15 

chaeM Jun 15 Jim 14 Jun 13 

■9° 

ytaMK 

jMdH 

ratio ytd 

Return 


10 MHERAL EXTRACT! 00(1 6) 2677.74 

12 ExbaeUim industrial 883X87 

15 on. tntenratedC3) 263X35 

18 08 ExPtoraMon A ProddD 1M400. 


2877.57 288007 263030 223XB0 &4S 438 2B.BS 37.88 1064.08 

-13 390333 3804.74 3872.76 307340 3.46 527 23.80 43-39 104&24 

*04 262083 2632-17 2587.13 2102.10 3.48 449 27-69 4043 1071.00 

188X07188X87181X82105470 3 JS7 1-32 SOOOf 1&B2 1079JQ 


20 GEN MANUFACTUR£RS{262) 194X36 

21 Buldrifl & Confflnjcaonpi) 1153.58 

22 BuMno Malta A MarcNSI) 182340 

23 ChfirTicatepi) 236387 

24 Dtwtefled mdustrfaisflS) 1954*7 

26 Bectranfc A Beet Equfp(34) 200372 

26 e«lnMring(71) ^ 

27 Engineering. VWHc*»p2) 2 283 61 

28 Printing, Paper A Pdko(26) 2787.02 

29 Taxtttea A ApparegO)' IWMS^ 


-1.1 197033 107447 197387 1786i7D 
-1.6 1171.19118357 119747 100340 
-2.8 1075.72 188379 192032 187380 
-0 3 240396 241 m 242950 222390 
-1.0 1975.81 196352 1961 M 182370 
+0.1 2007.63 1897.20 201380 2037:20 
-13 1824.13 183317 183322 156330 
-142301.77 2307.75 231003 1744J30 

278X73 2764^8 275239 232X20 

-05 175372 178XS7 178308 180830 


307 

407 

2703 2809 

96105 

324 

406 

3009 

1502 

89603 

401 

409 

29-46 3003 

85007 

307 

405 

3106 4202 

105308 

465 

407 

2701 

38m48 

96707 

306 

6.46 

1800 

1306 

93108 

3.06 

4.17 

2903 

2102 

101800 

461 

208 

60184 3205 

108508 

300 

5.12 

23.13 

8703 

1087.82 

402 

5.74 

22.48 

20-46 

862.77 


30 CONSUMER 00008(99 2650.70 

31 BFewerias(17) 217 5 J ? 

32 Sffttts. Wines A CktereCIO) 281318 

33 Food Manufaetu«a(23) 21B6JB 

34 HouMhoU GooJte(13) 248001 

36 HaaUi Ca«C2pJ 1®£*-® 

37 ptwnweeuitaata(ll) s® 7 ®^! 

38 Totoeccofl) .. 344 3,72- 


-07 268327 2842J72 2615-38 269370 
-32 218353 2179.17 2162.32 200740 
-1JJ 2841 Zl 284506 281X88 2708X0 
-32 220354 219364 2182.83 2243L7D 
-02 2484.90 245642 2451.07 2282.70 
-0.4 187372 187007 166380 189310 
-09 2S9383 2807.98 274088 300000 
-n r 340389 351X22 3515.03 367030 


441 

704 

1503 0008 

901.48 

403 

7.74 

1505 36.16 

90909 

303 

6.76 

17.13 sara 

93704 

406 

603 

1413 42.75 

91301 

304 

741 

1001 40.74 


B-06 

S03 

7103 1800 

95642 

446 

704 

1507 4700 

89601 

6.12 

908 

1104 10205 

78005 


40 

41 Dtatribunrapi) 

42 Letoura A Hotab(23) 

43 Medtap9) 

44 RetaBers. PoodflT) 

45 Reteave. Generali 
48 Support ServkreaHO) 

48 TrwwportflS) 

51 OMrar Servkaw A BuafctewnW 


1B47S0 

274020 

2133.01 

296028 

1856^5 

1669.14 

1555.15 
2275.42 
118381 


-041954^8 
-Ol 2744D5 
-08219009 
-052975.11 
+1^ 162352 
-07166035 
-061662^1 
-1.1 230064 
-00119827 


186034 1965-35 1705JD 
275380 278044 26S5L60 
214126213421 189300 
2075.71 2950X2 233330 
163122 162033 185020 
1688.79 188321 148310 
15692B 157826 160ai0 
232427 231378 206320 
116427119319 1235.00 


3-12 306 

326 329 

343 453 

2.19 5JQ2 
324 928 

306 338 

224 305 

369 314 

4.50 230 


19.75 

1373 

2524 

2332 

1326 

1943 

1846 

2147 

80.007 


1! 

3 

25.18 


93027 

103721 

1021.18 

97943 


1375 

1314 

521 


60 UTUTESptQ 
62 BectridtyOh 
04 Gae DWributlonO 

66 Tetocomnnjnk3aBona<4) 

88 WNwfl^ 


220527 -04 221422 224525 224051 213380 

214626 214378 219045 217421 176920 

178625 -1-1 1306-26 191307 1921.06 188300 

194724 -03 188321 1944.71 194300 189310 

16S9.B1 -12 171920 173378 173055 165720 


471 

800 

1430 2002 

03101 

406 

1104 

1005 2407 

871.78 

6.71 

* 

* 5343 

81006 

404 

700 

1506 009 

810H7 

5.70 

1308 

70S 10.72 

627-63 


69 NON-FWANC1AI2P31). 

70 raiAN C ULStioa 

71 Bentaffty 

73 InsuraneefiT) 

74 Ufe Assurance® 

75 Merchant Barta® 

77 Other Bnancta«24) 

79 ProoertvCa - 


2147.48 

279307 

121306 


278388 

161088 

151429 


BO INVESTM ENT TRU9TB(122|_ 

89 FT-SE-A ALL-SHABS85Q 

■ Hourly moremert 1 

open are 


274622 


151330 


-04 216608 213809 2131.10 201600 

420 

002 

1309 

4473 

84106 

-00 280702 277304 275605 250100 

307 

629 

1402 

66.07 

62006 

-08 123040 122104 120609 133700 

029 

1102 

945 

28.44 

82407 

-00 230402 229494 230000 257400 

541 

7.93 

1500 

6606 

07102 

-00 2795.72 278307 281009 255ai0 

309 

1209 

909 

4445 

B32.76 

-02 181407 181404 182203 146600 

3.78 

702 

1606 

2507 

95504 

-Q0 151909 162142 162949 136740 

403 

415 

2900 

2300 

85625 

_p a 2799.80 274707 275001 2339.10 

223 

100 

5327 

2742 

91609 

-05 152809 162603 181906 142099 

309 

642 

1606 22.77 

1179.72 


1020 1120 1220 1320 1420 

-ZZ ZTi ttX 77 30284 3029.7 30302 30302 30322 30972 30232 30330 30254 

FT-SE 100 35 ^^ 35422 35422 35436 3539-7 3S382 35342 36812 35342 

FtS-A3^° SI 1827.1 16272 1S272 19272 1627.7 1S2&3 15284 16284 15302 16230 

Time el FT-SE >00 Hflti ftltan U*r 


p| ll li 

nWItWCluTCW 

Water 

Banks 


QfMHl 

900 

igoo 

1100 

1200 

1900 

1400 

1500 

16110 

CiOM 

ftuvtoiia Change 

10910 
2884.7 
17124 
261 60 

1008.6 

28600 

17134 

ZB 0 B 2 

10920 

28714 

1714.6 

28130 

10890 

2967.1 

17150 

28120 

1006.7 

28880 

17120 

28210 

10654 

28643 

17080 

28230 

10841 

28840 

17020 

eawta 

10830 

28503 

10990 

2821.7 

10770 

28460 

16884 

20270 

10794 

28460 

1BB70 

28324 

10992 

28720 

17170 

20420 

-200 

-DBA 

•200 

*90 



. M BNlMMVtM Thi RnvaWTkm 
a reng* of atoemita m papaNiMd pnebeta 


baDkom M oeeMHOtjr tt» 
oorapMl bj» 1h* 


£"ThaliiMtnw5Ml Stadr r 

TT^ and TWWf bSm 1 WE rrniqe 0 


I 8 d 93 F72& Attataa 3 S 0 ml to FT 6 E Aeaataa tadodry 
HHo of blind nd Sib FT-SC ActUlriM AlOha* Imtai lm 
aid die R«ta» at Unale uMr a amtard tat of (pound ntas. 
1004, C Uto Ftertt Dmaa itabd IBM. H rtottt naanmcL 
•nd Die Ftaaidri Ihae UnMeAThe FT-AEAdtasta 3hue 


Court saw the shares advance 
4 to 873p. Analysts were 
impressed by the stockbrokmg 
firm’s increasingly interna- 
tional business. Mr Chris 
Smith at James Capel called it 
“a very well-balanced set of 
results; the quality of 
is going up and it is now more 
of an investment Hr aw a punt 
on the market". He forecast 
the current year at or shghtly 
below yesterday’s figures, with 
earnings of between 6Qp to 60p 
per share. 

Mr Philip Gibbs at BZW said 
Smith was likely to extend its 
product range and market 
share in the c urren t year, and 
he expected to upgrade his 
“ pret ty conservative estimate" 


TRADING VOLUME 


■ Major Stocks Yesterday 

VtaL Ctoaha ova 
008a Mae trianoa 

ASDAOrapf 

Aoow ranowr 

AtaanFWwr __ 

Med-uonri- 1.100 EBB -6 

AnginWmr 1.700 SO? -a 

Aipoa . as 34011 - 4*3 

'* - « 

— "^1 

. - rioodaf ns bis -1 

_BrtPort* 

BAAt 
BAT bidet 
8CT 
BCC 
BOOt 

art 

sar 11 

om or oluun 2 | 

sp*' 

BbaCbdaf 
fioohar 

BomMT 
a «. 

Billtah 
Srtaab 

MHrii 

BAWiSnalt 

BH 

Burmah Caaoerf 

Bunco 

Cabla A Wfedt 

Cadbuy Sdwappaat 1AOO 441 
CbcrEhno 

§rtan*Co(nma.t 
CoanUMtat 
Comm. Ltaftatf 
CoCtaon . 

Coumtatat 

sreu 

Dtcona 
EaPamBacL 
But UhHnd Ban. 

EngChhwr 
eawprtaoC 
BmitunMH 
FM 
Ftocna 

Forefal SCoL IT. 

ForwT 

Ooa Acddantt 
Omni Saet-T 
Otant 
Qhmnd 
OamSMt 
OrendMaLt 


MOO 

56 


4C2 

841 

S3 

1.100 

66S 

1,700 

ooe 

as 

340*1 

Hum 

232 

810 

274 

70S 

610 

BUS 

236 

3*2 

830 

2400 

411 

2.100 

117 

60S 

412 

306 

731 

lAooo 

4011*1 

2,100 

28B 

6900 

4000 

sa 

9400 

302 

441 

IBS 

9000 

GSS 

2400 

917 


274 

301 


929 

432 

K9 

4BU 

4000 


4900 

268^2 

362 


IB/MO 

108^ 

1.000 

1Q4 

170 

071 

4WD 

■ft 



QKN 

Outanaaat 

HaBC(7*pdWt 

Hanwinaai 


Hw l a oua CroatWd 

iSdo-o 

M 

■at „ 

biciicapat 
Jofnaon MOtaay 
iajpTetoft 
KmASma 
Lsctmtiot 
l and fia aurMaat 

1 Ae lita IN 

Lagta A Gamralt 

UoydaAttaM 

Lkwda Barttt 

LASMO 

London Sect. 

Lonriio 

Lucaa 

»g«t 


0B2 
8» 

2A0D 

SB4 383 

3.100 1BB*i 

2.1 DO 144 

«a 130 -a 

m 2324 -»>1 

377 SBO -4 

1700 SOI 

SjBOO 676 

112 330*1 

1,300 B3B 

&T00 421 

820 873 

1400 17B 

1200 384 

1500 483 

1^00 711 

42 340 

2 jno 2SPh 

728 IBS 

048 288 

4AOO 162 

US 306*3 

070 777 

A100 461 

73 S27 

1,400 B02 

30 MO 

1300 104 

IjiOO 829 

U 740 

380 430 

MOD 343 

1JOO — 


Starts a 8oencart 
l4Und> Bml 
M oMon (WmJ 
NPCt 

NalWMBankt 


NcAiWaatVMwt 

NantmBKL 

Mgrttam Poactaf 


34J00 

087 s 70 

2 fico 1 zrk 
2J0OO ITS 
201 400 

703 148 

88 883 

*s ^ 

401 12B 

2.700 101 

iSOO 477 
IJOO 432 
1JDO 24712 
838 483 


-6 

-7 

-8 

-0 

-6 

-0 

-£ 

-a 

-4 

-a 

-5* 

-4 

47 

-7h 

-2 

-3 

-12 

»8 

•+s 

-2 

-6 

-8 

-a 


141 7 -2*1 


patTt 


308 

610 

1.400 


217 


-1 

-a** 

-7 

ta 

+1 

-7 

♦a 

-1*1 

■* 

-1 

40 

-10 


S3 


Sodrnwrt 


-ft a 1949381861.77 1844JM 1538.69 aSO 836 19J7 23.10 1144^8 iBm 



■SSL* 

SmMBaSmt . 

Ult.t S,1» 
STB 



0JOD 170*1 

008 483 

4.100 200 

1JOOO 013 

1,400 857 

S10 230 

3.100 397 

B2S 690 

WHO 470 

1AD0 815 

090 216 

1AW 488 

7.100 108*1 

4,600 422 

asoo 200 

2JSC0 4ta 

11 1183 

H5 818 

85 844 

078 sea -1 

uw 110 -aig 

1/m 177 -8 

1.100 333 42 

1,000 000*1 -10** 

4,000 714 

S87 848 

an 237 

888 487 

740 130*1 

3JB00 417 

375 
4SB 
074 


-12 


■2 

-20 


A 

<6 

48 

+1 

-1 


-15 


18-OP W.10 Watafttaff Lowfttay 


Tatar Waocfecw 

ifieat 


Thom sal- 

TsnMvt 

ItaWg* Heuaa 


a» 

174 

486 

971 

282 

1400 

304 

1,700 

MW 

026 

«/wi 

MOO 

320 

3400 

<35 

4,000 


BOB 

000 

BIS 

277 

213 

314 

338 



141 
408 
124 
224 
488 

'923 1004 

3,400 320 

2J900 87 

830 381 

1.300 WOB 

377 837 

310 813 

MOO 608 
77S 720 

1,10 0 K» 

”3 SS 

040 630 

£800 352 

8.700 164 

XflCO IS 
.256 720 

888 887 

1JH» 4BB 
1JSU 724 


■10 

-9 

40 

-6 

♦1 

-0 

-3 

-0 

-12 

-8 

-a 

-1 

-8 

-3 

-r 


-18 

-0 

44 

-4 

ie 

43 

-0 

■e 

-8 

-13 

-6 

-8 

■a 

-1 

-84 

-r 

-8 

-a 


Bated an badha vubana tar a MMtan cf m0er 
aaculdaa (tarit Siraugl] the 3EAQ 
yaatsdv irt# 4JBBm. DadM of una ntatan or 
inm « roundtd ootcl t hrfutae on FT-6E 
1001 


for current year profit of £90m. 

Turnover in Royal Insur- 
ance, up 5 to 28Qp, was higher 
than average at 5L3m, The vol- 
ume was partly due to switch- 
ing from Sun AHfence, which 
dropped 12 to 314p an prafii- 
taking after its 12 per cent out- 
performance in the past fort- 
night, but was also due to 
news that Lloyds of London 
had won a US industrial pollu- 
tion case. Royal Insurance has 
one of the largest exposures to 
p ollution damage rfaHwc 

Further consideration of yes- 
terday's good results from CJE. 
Heath boosted the shares 12 to 
3S2p, but accompanying take- 
over rumours were described 
as "wide of the mark” by Nat- 
West Securities' Mr Tony Sil- 
verman. Bradstock Group’s 5 
per cent profits Increase left 
the shares unchanged at U4p. 

A profits warning from mer- 
chant bank Rea Brothers 
pushed it down 13 to G2p. 

Royal Bank of Scotland 
bucked the market trend, ris- 
ing 12 to 42%) after a buy note 
from Credit Lyonnais Laing. 
Mr Martin Hughes said the 
bank offered excellent pros- 
pects not shown by other 
banks, with growth expected in 
business and dividends. Abbey 
National dipped 5 to 422p, with 
NatWest Securities rumoured 
to be negative but Goldman 
Sachs rumoured positive. 
Other hanks eased back from 
yesterday's gains. 

The recovery in the oil price 
boosted afl giant BP, offsetting 
recant concern that the ban on 
the export of Alaska crude may 
not be lifted following objec- 
tions in the US Congress. The 


NEW HIGHS AND 
LOWS FOR 1994 


BAKU (1) Toyo 10, 8 Bg. BriEWElWM ft) 
HoK W. BULDMO 0 CtflRRM (1) K#ma, 
■MTfimmMS PO ONBtSHH} MOU 0) 
WMtam, ELECTRMC 0 ELECT BOUP (1) 
MIMA BM. VW0CLSS d} BMOffm, 
EXTIUOTIVS DBS N HQU804QLH OOOtM 
BOtaxiineSIMa. fwaionflaiu. mulWAWCl 
01 Moog, INVESTMENT TRUSTS CQ MEDIA ea 
Dining KManiey, Mam Hadb, 00, 
WTKMUTKD (1) MoM. OTHER nKAMCML (1) 

other earn a ausm P) nnw, paper a 
PMXO m Tlnatay RfltMr, RETAURK 
OEMEML9I ta«n RmA French CMMcuan, 
LBmKV, 0UPPORT 8SWB (Q MiM, 
Mmpawar. T8XIUB A APPAREL (1) Wtnaun. 
SOUTH AHUCAM3 (Q. 

new lows em. 

OU* 08 OIHB ADDED DTTBtCBT (I) BANKS 
fl) NML AUMk, BHBWWEB (0 /met*. 
Foatare. Oreana Nng. BUURHa A CWTRN 
07) BUM IIATU A HCKT8 (17J CH8MCALB 
ft) Scope. DWTKBUTOR0 (4) Caflym, Clptaria. 
HMtam, BA ML. nVERSBWD MOU 8B0 
AdraR. BfeOy (A Hmn BMpe Cnv. Bd, 
Hanfacna 8 CreoMU. Lanrtio. Padfc Dunlapb 
OECTmiC A 8USCT BOUP « SoOham 
Butlnaa^ IMbx. BumBERMB 04 EHO, 
VB0QLC8 0) Oatatar-Bano, doiuctwe 
800 M MOD MANUF R) am FUier. Aaana 
BA Food*. Awmn A, Caabuy SehMappaa, 
DMgMy, uaboma. HEALTH CARE CQ Natt* 
-BNA, IMtad Drug, HOUSEHOLD 00008 (4) 
Black IP). Uortiaart. SfanMgtt. 8mfetanL 
w 0 Uuhce n MVBsnmr musni m 

BIVBnMENr COHMMBI 0Q LEMIM 0 
Homa 0) Altai. ItaaoAL UP« ASSURANCE 
(3} MBNA CQ BMotata. Italy MM A. ScaoWi TV, 
SalatfV, Ti%*y M, MBKHAMT BANKS 0) 
Hartra Thpo Coil W, OIL EXPUnaiON 4 
PROD 0) Hsdy 01 KOaa, OE, MTEORATB) 
0) Booi. OTHQ1 HNANCIAL 0Q OTHER 
saWS 0 BU8NS 0) Sutailta Spataoiwi, 
PHAHUACEXmCALB P) Qramgtan, Hataknd 
Nycorad A, Da 6. PRTNO. PAPCt a PACKS 

M pnopanY 04 RBWttWfc rood n 
Breta* Brea, nariiav Dnoo Cap. Qpo CmL 
2003, RETAILERS, QENBUtL (7) SUPPORT 
SOWS » TELE00MMUMCATI0N8 0) 

Sacuty Oanlcaa, TEXTILES 0 APPAREL 04 
TRANSPORT 0) Aaaan But. Porta. 
Dnwngnw NFC, OOaan, Tmneport Dw, 
MmCAHS 0) CAHADUm 02J. 

shares gained 3 at 408%p in 
trade of ilm. 

The firmer oil price also 
helped Enterprise Oil, the 
shares advancing 7 to 398p, as 
talk that its bid for Lasmo 


would fell continued circulate. 
However, the oils team at 
Strauss Turnbull believe 
Lasmo investors should accept 
the offer particularly because, 
“the revised bid terms confer 
benefits on Lasmo share hold- 
ers at the expense of Enter- 
prise share holders'*. 

The day’s turnover in Enter- 
prise of 2J)m was said to have 
included a block of 175,000 
bought at a 2p premium for the 
new account which begins on 
Monday. Lasmo eased 2Vk to 
141p, as the bid Interest in the 
stock continued to fade. 

Two-way business In Sbell 
Transport brought volume of 
4.6m as the shares closed 
unchanged at 714p. 

Eleinwort Benson, the UK 
merchant hank and securities 
house, changed from a cau- 
tious stance on the brewering 
sector to one of “cautiously 
optimistic. " Analyst Mr 
Andrew Holland said that 
recent results and company 
meetings had seemed to indi- 
cate that the worst of the 
wholesale price war was now 
over. “AH the bad news on dis- 
counting is now in the share 
prices," he said. "We could see 
some modest upturns from 
here.” The broker removed 
Scottish and' Newcastle from 
its sell list. The shares finned a 
penny to 518p. 

Hints from the Bank of 
England that interest rates will 
have to rise hit builders and 
building material groups hard. 
Among the former, Barrett 
Developments fell l0!4 to 
189 V4p, J Laing 9% to 282Kp, 
Persimmon 5 to 237p, and Tay- 
lor Woodrow 7 to I24p. Materi- 


als groups Included Marley off 
9 at 139p, Hepworth 14 to 307p, 
Redland 20 to 470p and RMC 35 
to 813p. 

High street retailers were 
also undermined by the rate 
rise specualtion and mixed 
retail sales figures. Kingfisher 
slid 8 to 502p, and Great Uni- 
versal Stores dropped 6 to 
673p. But Dixons was 3 firmer 
at 191p as the figures showed 
electrical sales stronger. 

Fears about the take-up of 
the shares from its recent 
rights issue continued to dog 
Channel tunnel operator Euro- 
tunnel which left the shares 
trailing 14 to 303p. Dealers 
reported some confusion in 
dealing forms for private cli- 
ents wishing to take up the 
issue. 

News of the restructuring of 
the Milk Marketing Board saw 
gains from Unigate, up 4 at 
891p, and Northern Foods, up 2 
at 217p. 

Figures below market expec- 
tations left Alvis 6 lighter at 
66p. 

The day’s biggest volume 
was recorded in British Steel 
as active two-way business 
sent turnover up to 16m. The 
shares closed unchanged at 
136%p. 

Allied Leisure slipped 2 to 
2Sp after announcing it is to 
tpkp an exceptional charge in 
its accounts for the current 
year. 

MARKET REPORTERS: 

Christopher Price, 

Clare Gascoigne, 

Joel Kibazo. 

■ Other statistics. Page 25 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


Opfen 


RISES AND PALLS YESTERDAY 





era* 



Pots 


opdai 


JU 

to 

Jso 

JU 

to 

JM 

AEeHjm 

540 

38H 

53)4 

_ 

7 

15M 

_ 

fSBB) 

589 

11» 

27 

— 

2954 

38)4 

— 

Aiq|9 

240 

M 

23 

27)4 

9 

14 

10 

rza2) 

200 

n 

ISH 

18H 

22 

28 

31 

ASM 

50 

7 

8H 

1054 

1H 

4 

4*4 

(B5) 

00 

2 

4 

B 

«K 

10 

11 

H Atoms 

380 

10 

29» 

35)4 

14H 

24 

29H 

C3B6) 

420 

5tt 

10)4 

23 

38 

42 

47H 

SaN Brae A 

380 

35 

40 

S3 

5H 

14V422H 

T41B) 

420 

15K 

28)4 

3BH 

17 

29H 

36)4 

Boats 

500 

34)4 

48)4 

SB 

854 

14H 

21H 

raw) 

B5D 

7 

22 

31 

31H 

39)4 

<7 

BP 

300 

20 

38 

48 

5 

14 

IBH 

r«0 1 

420 

1D4 

rm 

30 

20 

29 

34 

Braun Stan 

130 

10 

10 

18)4 

4» 

8 

10K 

n3B) 

140 

5 

10 

13H 

9*4 

13 

1554 

Bras 

GOO 

3IH404 

5* 

10)4 

19 

31 V4 

rois) 

550 

8)4 

21 

29H 

40H 

<7H 

61 

CNteSMt 

42S 

18)4 



15 

_ 

_ 

r«3) 

450 

8 

— 

— 

39)4 

- 

- 

Cararadi 

900 

21)4 

37 

47 

14*4 

25 

32 

fS03) 

558 

4 

15)4 

25 

MH 

58)4 

HZ 

QwiUdan 

500 

32)4 

*1)4 

BO 

8» 

21*4 

27 

rsis j 

550 

8 

T7 i 

28)4 

38H 

52 

54H 

a 

750 

441 

57*4 

7IH 

11 

26)4 

3554 

1*777 ) 

BSMJ 

16)4 

32 

ASH 

35H 

56 1 

8254 

RtaoBter 

500 

24)4 

M. 

•8*4 

15M 

2BH 

38 

(W) 

550 

8 

19 

2B 

53 

58HI 

WVi 

Land Saar 

BOO 

38 

48 

58 

8 

12)4 

18 

rez*> 

650 

7)4 

21 

29' 

31H. 

38M 

43 

Uriels 

300 

2HVi : 

ISH 

48 

4 

954 

13H 

rhoj 

420 

HD4 

21 : 

9H 

ibh: 

22»; 

SH 

nriMM 

400 

SB 

SB 

48 

8)4 

21 25H 

(MTS) 

500 

8» 

m 

» 

31 

*3)4 

48 

SMbuy 

360 

21 : 

JBH ' 

MH 

a 

18 

25 

r«) 

420 

9 21)4 

28 : 

2BH: 

BSH ■ 

urn 

SMTrais. 

700 

28 1 

MH 

81 

11H25H30H 

(TO) 

750 

M4 17)4 27)4 4014 

66 1 

58*4 


200 

17 22)4 2814 

4H 

854 

12 

7212 ) 

22Q 

8 

12 

KK 

ISH 

IBM 

23 

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79 

12 



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— 

0 

— 

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untow 

1000 

32 

BS 

74 : 

20*4: 

52*4 

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noo^ 

1050 

11 33» 

BO! 

SIM 

01 67H 

Zaoeca 

700 

39 

5187% 

9H2BJ4 

33 

(-724 ) 

750 

Tl 28)4 

43! 

35H! 

53)4 

GO 

OpUcn 


tei 

tori 

M 

Am 

Nov 

Ml 

tend Hat 

420 

18)4 

31 3BM 

18 

26 3254 

f«l ) 

460 

4)1 

15 

21 48H! 

S2H5SH 

Latefea 

160 

16 

21 

25 

711H 

13 

r*« j 

1BD 

5)4 

12 

10 

19 23H 

25 

IMBtocrib 

300 

95 

43 4BH 

3» 

9K 13*4 

razB) 

330 

18 

28 29H 

14 

21 

27 

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»p : 

DM 1 

Mar 

Sap 

Dec 1 

Mr 

Rm 

140 

IB 20)4 23)4 

554 

15 

17 

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100 

7U Ttli 

1S22H27H2M4 

OpBad 


tel I 

M 

Fab . 

tei 

Hov 

ftb 


Mb Puts 

Am aw M Aug tfew M 


(-252 I 


H41 > 
Lucas Ms 
078) 
PSD 

r827 ) 


me) 

PIUMM 

r»> 

RIZ 

rasa) 


240 IBM 23M2BM 3H 8M 12 
2B0 7H 12 18% 13 18M 22 
134 U 18 - 5)4 0* - 

1S4 4 9 - 17 20H - 

180 23H 28 38 3 8 IBM 

w mwi lBimrmm** 
BOO 46 88 Tim 13 28 34 
BSD IB 34 40)4 37)4 56 61 H 
180 19 26)4 28 4 7*4 11 

1B0 7H 12 17 14» 17 21 
280 2B 32)4 37 5 12 13)4 

300 13 Zt 2041ZS4 2114 23K 
850 37 81)4 78)4 25)4 48 52H 
SOD 15)4 38)4 B14 SS4 74 80 
480 27 42 48 14M 27 32 
508 10)4 23 30H 37 52 58 
280 18 24 30 12)4 22)4 23 
290 BV41SK 2114 25)4 34)4 36 
228 13)4 OK 2416 8)4 14)4 17)4 
240 S 11)4 IBM 20 2BM 29H 
500 27 48 84 ISM 31 39 
550 7» M 32H 53)4 81)4 88 
325 33)4 40)4 - 3)4 354 - 

354 14 a — T4Vi TXk - 
Jal tt* An JUI Oct Jan 

BAA 800 44 BBH 78H 14M 2B» 35 

(936 ) 850 16)4 38)4 5244 41 5ZM 80)4 

Items Mr 480 14 M 28M 18)4 27)4 35)4 

(■408 ] EDO S 18 14 53H56M 63 

(Won Sop Doc Har SBp Dec Mir 


r«7oj 

few WK0 

V280V 

Two 

(*224 ) 


rsao) 


051 1 
Optoi 


Abboy tart 
C421 ) 


1-31 ) 


("538 ) 
Buo Orcte 
(-273 ) 
BAH) 589 
f2B0> 
Mono 
(*190 ) 


M/lm 4«)33K«»6ri4 23 41 46)4 
r<67 ) 500 1D4 17)4 GO 4614 64 rot 

BAT tam 300 32 39 «K 11104 22 

C410 ] 420 15 M 3th 27)4 34)4 37K 

BTR 380 IB 26 82 1» 21* 34* 

<*382 ) 390 8 12 10 321 39)4 04 

MTfltam 300 21 26% 30 11H17H 24 
(*372) 300 6)4 12)410)4 32 30 42 

Ctf*T8rt 420 34 484 52 S14H16K 

(9441 ) 480 UM 22 29 ZB 3554 37K 

Horn Sms 560 8644 61 32h 12H 23J4 SIM 

(-394) BOO 20 35)4 47)4 3714 49 67 

B*mn 480 17 38M 3M4 12 23 20)4 

P4B2) 500 4014 21 41 48 52 

9EC 30010)4 17 22 IS 19 23 

ran ) 330 2 7Tm40)44iK43H 


( 102 ) 

Lorain 

H27) 

ttaffl M 

r«n ) 

Soot Rum 

ran ] 

Saw 

mo) 

Forts 

(-232) 

Ttanc 

n« j 

bam BA 

nm 

TS8 

r223 ) 

Tootim 

C228 ) 

wweon 

(909) 

OpgDO 


420 24 
480 9 

30 6 

35 3 

5E0 32H 
800 18 
260 27)4 
280 M4 
280 21 
280 llh 
180 UH 
200 814 

160 14 
180 8 
120 19 
130 Klh 
420 34 
400 MH 
300 22)4 
300 10W 
110 14h 
120 8 
220 25)4 
240 1414 

140 14 
160 B 
105057)4 
1100 H 
220 Uh 
aw 7 

220 18)4 
240 . 8 
600 48 
SCO 24 
Jut 


3214 39 
W 23 
0 7 

4 8 

44 S3 

23 31)4 
33 39 
33 29 
29 27)4 

1R4T7M 
34*4 28 
15)4 18 

17) 4 21)4 
9 13 

18H2ZW 
IS 17 
43 51 

24 32 
28 32)4 

18) 4 am 
16K 1BK 

11 13 
20 32)4 
17)4 23 

17 2t 
8 13 
« 94H 
98 73 

zih a 

13 1814 
24)4 S 
15 1814 
53 78 
41 54 
Oei Jm 


22 2B)1 34 
4SH 52 50 
3 4)4 5 

m 7 b 

25 3314 43 
0OH84h 73 
11 IS 18 

22 25K28H 
Oh 15 17 
19 27 2BM 
11 14 17 

22H 25 28 

8 11 13n 
22M 24 28 
8 11 14 
13H 16 19 
18)4 23)4 27)4 
38H45M48H 

23 26)4 31 
43 46 50 
3H 5» 6 
7)4 10H 11 

8 12)4 15 
18 23 25H 

10h 15 17 

24 2BH 30 
504 72 86 

88 104 118 
14 15» 22 

27 28 34 

11 1444 17* 
3 28 29 
34H404 54 
64 75 83 
Jol Oct J» 


too 550 44M 5Bh BSh lin 33 43 
rS78) BOO ISh 33M 44H 30 6214 70h 
KKttatt 700 41 E6K 84 28)4 52)4 65)4 
(708) 7S0 ISH 44h C 58 82 53W 

flautan 4Q22K M - 13W2EW - 
(MBS) 476 16 29)4 - 19W 31 - 

Pulton AW te FW Aw to W> 

Ms-ftaja 180 18 23)4 27 5* 12 14)4 
f1B9 ) 200 5 14 17)4 17 23* M 


* UnHriyteg HEUrtM p 
tamd on dbtano «tar 


(Moa. Pnn*m stoma a« 


Jun 10 . Toil comacac 36J30 emc *4.172 
PUS 21,058 


FT GOLD MINES INDEX 



JBn % otg 

W rattoy 

Jm Jm Tara 

14 13 W 

Grandto 
Wd % 

62 Msk 

Mob Lora 

SoM Mm totem 

■ PlitoMll— Mt 
tota (1SJ 

AlHIfftetoW 

Nurib Anratoa(11) 

IMS +07 

W24S WTM im» 

214 

238740 13220B 

2781*7 -09 
2641J3 +04 
1627 77 +14 

280644 275524214047 
282680 262000 1836.13 
1G01.M 1581J8 151291 

490 

158 

OJH 

mum 

301189 1 rails 
203855 138*00 


CopgnoM. Tin FtamU Ttam IMad 1004. 
Rons in MUMB Wownntaeroi comawl 
PwfceMwr Qold MtaM tad« Am 70s 
UIW **• umIM tar M Kflton. 


ta US Donan. Boa vwmc iooooo 31/12AU- 
dnnoa: +0n poten; ybbt agx 174J) t Panw 


FaBs 


Sams 


Brfttoh Finds . 


Other Fbcod interest . 
Mineral Extraction , 


Gonoral Manutacturen . 
Canaumr Goods 


Sravtcas 

uhum. 


Rnancfata 

InvwbiwnlTruBta . 
Othara 


Totals 


1 

69 

2 

0 

5 

10 

76 

48 

76 

56 

232 

373 

22 

64 

105 

55 

128 

326 

10 

26 

10 

T4 

106 

193 

31 

145 

294 

30 

63 

43 

355 

806 

1432 


dub Hoad on tan co nv *— tand on fln London Stem SantcoL 

TRADITIONAL OPTIONS 

CaBK AB Enfl^ Mmua, Comad, Coutis Conk, Raguana, QBE ML, (tanycaata, 
GUMroan, LBMS, Marina X M_, Mfcnnltae, BMrony Ebnx. priK, N8M. Omen Rn, 
Royal 4 m, agnot Pit, TUkrnr 04, Utd. Enow WBtan Puts: Coutta Cons, Gray- 
C4 NM, MuIm A N 8M, Royal km, Tottariham H, TlteMr 08 Put 6 Cat QBE Ml 

LONDON RECENT ISSUES: EQUITIES 

»«•** Aim MM. dose 

price pted cu> 1984 price Nat Db. Ora R/E 

p up (Dnj Low Swc* p */- tftr. cm. yU net 


§120 F.P. 
101 FJ>. 
255 FP. 
100 FP. 
§150 FP. 

- FP. 

- FP. 

§143 FP. 

- FP. 
4250 FP. 

130 FP. 

- FP. 

- F.P. 

- FP. 
106 FP. 
225 FP. 

- FP. 
5 FP. 

160 FP. 
200 FP. 
105 F.P. 
120 FP. 

- FP. 
FP. 

- FP. 
100 FP. 
§05 FP. 

- FP. 

- F.P. 
100 FP. 

§108 FP. 
150 FP. 


B&7 123 115*2 Aam. Hambte 

48.1 168 160 Amoy 

1489 287 250 Agent 

43-3 100 100 AutDCraMM Pmca 

308 154 150 Brawtn DolpMn 
222.7 81 72 CAMAS 

105-9 112 107 CLS 
12.5 170 143 Canal 

116 38 35 Chfnw Comma. 

170.2 249 228 DOC 

46.1 138 133 Dart&y 

77.3 93 BO Fleming Intel 

7 JO 50 42 Do Warrants 

1.46 37*2 33*3 GoWtt GW S Wl 
54 J 105 83 Heatthcd 

1063 233 225 InWmadbta 
- 77 65 JF R Japan Wru 

*20 5*2 5 Kays Food 

57A 163 ISO LombsnJ Ira. 

164.1 233 200 ^London CU» 

44 jQ 113 BB I4QW Wgrt 

34.7 130 125*2 MWWF 

2S3.0 131 118 Redraw 

45.1 92 SO Scudder LaUn 

aifl 44 43 Do Wits 

249 88 BSSttosHYSmtC 

14.1 113 108 Spngo Cora 

29.7 133 126 Speck) “ 

5fl-B 100 90 TR Etra OmUi C 

73.7 100 82 TR Prop hw C 

454 120 108 UPF 

414 163 154 Vyraura 


W3.74 

LNIjOS 

LN4.D 

IS8 

UN3.75 


*10 W3.e - zp ii.3 


122 

165 

266 

106 

150 

73 

107 

170 

35 

228 

138 

82 

47 

33*j 

00 

232 

73 

5)4 

161 

232 


129 W4.S6 

119 -1 WN2.7 

80-1 
44 
99 
113 

130 


ZB 18 12.1 
06 54 29J 

CO 4.7 35.0 
2J3 4.0 11.1 
0.7 64 34.6 


U334H 
*2 W3.1 


WN4J) 

LN9.9 


WN7J 

WT1.92 


LI .6 
L24 


82 

120 W167 

163 L4.44 


XB 3.0 11i) 
2-8 2J 13.4 


1.8 5.1 14.1 

2.1 5J S.I 


22 60 90 

1JS 64 11.8 
r.o 43 iai 
ZS J.4 11.0 
2-5 2J8 15.1 


1.6 13 44£ 
- C3 


2J 30 103 
23 3.4 108 


RIGHTS OFFERS 


todue 

price 

P 

Amount 

paid 

ro 

Latest 

Renun. 

dan 

1994 

Hgh Low 

Stock 

Ocotng 

price 

P 

■K3T- 

ISO 

M 

_ 

Gpm 

5pm 

ftttan 

5pm 


2 

Ni 

2377 

4pm 

1*2pm 

■gCarp. Services 

2pm 


180 

M 

HV7 

23pm 

ton 

Dixon Motors 

3pm 


265 

M 

- 

65pm 

23pm 

Euraamei 

23pm 

-6 

425 

M 

- 

35pm 

18pm 

Bans HataftM 

18pm 


185 

M 

11/7 

25fun 

8pm 

Itsadtam 

10pm 


106 

Nl 

20/7 

2pm 

1pm 

rtggs 4 H* 

1pm 


230 

Ni 

- 

34pm 

18pm 

Jsraia Foiiar 

19pm 


206 

ra 

ia/7 

2tosn 

11pm 

UcAlpheN 

11pm 

-2 

100 

NI 

25/7 

11pm 

2*2Pm 

NSM 

3*jpm 

-U, 

5 

M 

31/7 

9pm 

7pm 

Standard Plat 

7pm 

-1 

34 

NI 

- 

12pm 

10pm 

Unfe 

12pm 


250 

M 

27/7 

36pm 

22pm 

Waste 

22pm 

-1 


FINANCIAL TIMES EQUITY INDICES 

June IB Jura IB Jura 14 June 13 June 10 Yr ago 


-Wo»l -LOW 


23804 

23993 

23972 

238SJ 

2419J 

22482 

271X8 

23212 

42* 

4.21 

4^2 

4J4 

4.18 

4,12 

432 

3.43 

6.70 

6.68 

6.07 

5^9 

5.61 

4 M 

0.78 

XB2 

18.73 

1BJ38 

1L62 

18.75 

19.02 

26.25 

3X43 

1X58 

19.40 

19J53 

19.51 

1944 

19.72 

24.45 

30J9Q 

19.16 


Out dh>. yttd 
Bbtl ytd. N ful 
P/E ratio not 
P/E ratio nfl 

Tbr 189L Qdnny Stan taow rinea oomptetmie high 27130 2AB94; tow 404 26Mi'4a 
FT Orteny ten mdea Mas data 1/7/33. 

Ordhmy 3hn hourly chnngra 

Open OLOO 1000 1100 12J0 13L00 1480 1BL0Q 1000 Wgh Low 
230S4 2381 JS 2382.9 2385.0 23860 23860 2387 2 2364.7 2363^ 2388.7 23780 
Jima 16 Jt/rw IS Jura 14 Juno 13 June ip Yr bqq 

SEAQ bagotos 24,062 22.883 23.141 22238 22056 29090 

Equity tmwr (firflt - 1581.4 16820 0400 1264,7 i36aa 

EquAy batgolrnt - 20,063 25.196 24.854 28036 35031 

Shane traded (ml)}- - 610,8 5340 3730 517.7 556.1 

T Bcteritej teue-ntatat fe inte—i and twrawn aiwwar. 
































































FINANCIA L TIMES FRIDAY JUNE 17 1994 


LONDON SHARE SERVICE 


TTngacrtNMfICJ 78 
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184 - - 

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08% 

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343 

290 

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M2 

1M 

132 - - 

233 

173 

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1B1*j 

1«b 



87 

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223 - - 

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-12613 144 

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90b 

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a 

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128 

111 

LI - - 

a 

113b 

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- 71.4 58.7 

MS 

l»b 

U10O3 10L4 

87b 

75% 

24 BU 12S 



24 2SB.1 no 

tab 

216*2 

23 2407 10.7 

SB 

84 - - 

H 

37 

- 4&8 1S4 




a*b 



» 


mm m - 

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HBb 

£1 1174 —A 

Ino 

1674 

3J 17344 74 


mb 

10 1114 150 

90S 

447 

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108 

84*2 

44 904 -IB 


1M 

U 1014 111 


149 


177 

148 

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Ml 

142 

44 14SS -.1 


260 

74 2810 -11 


139 

OS 1817 214 


a 


173 

124 

24 1372 08 




63 

45 

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Sib 

43b 

84 47.7 0.7 


375 


67 

83% 


176 

113 

24 1317 114 

a 

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- 85.4 74 

52 

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412 

are 

S.1 3414 ZA 

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100 

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149 

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147 

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02 1112 -15 

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88 

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34% 

10 41.1 12 

m 

101 

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17 2174 414 S 

% 

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14 - - 1 

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2550 

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24 900 154 

405 

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172284 84 S 

230 

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in 

80 

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113 

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2Kt 

240 


47 

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35% 

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180 

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24 2208 234 JJ 

109 

m 

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88 

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U2S28 113 2 

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104 


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214 

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1084 -18 
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CURRENCIES AND MONEY 


muwrnr TIMES FRIDAY JUNE 17W 


HE 


n TTirr 


markets report 


POUND SPOT POrilV, 


GAINST THE POUND 


Dollar gyrates 

rhe dollar was bounced * ?& • 


The dollar was bounced 
around In choppy trading con- 
ditions yesterday as bearish 
sentiment tested the 05 cur- 
rency's terminal lows against 
the D-Mark and growing ten- 
sions in North Korea helped 
tiie dollar off its floors against 
the yen, writes Moiofco Bkfk 
A fall in the OS bond market 
dragged the dollar down but 
intervention by the Bank of 
Japan in support of the US cur- 
rency and better-than-expected 

US flmpnmfo data geva the dd- 
lar a boost 

The dollar closed In London 
at DM1.6319 against the 
Mark from DML6354 and at 
Y103335 from Y10Z.750. 

The safe haven Swiss franc 
benefited from war talk about 
North Korea and gained from 
views that the Swiss economy 
is the hgaWiiest in Europe. 

■ In early sessions, the market 
tried to break through 
DML6280, a level seen as sig- 
nificant by technical analysts. 
The US currency dropped 
below DML63 for the first time 
since October. 

“The dollar has had a slug- 
gish performance because the 
factors that have been hurting 
It in the long term are stffl 
there,” said Mr David Cocker, 
economist at Chemical Bank. 
“There is uncertainty on the 
US-Japan trade front and the 
market maintains a very posi- 
tive outlook cm. the European 
recovery, which has particu- 
larly benefited tt»» D-Mark." 

While tough talking from 
North Korea and a rumour 
that a US helicopter had been 
downed in South Korea buoyed 
the dollar against the yen, 
escalating tensions in the 
region provoked a fall in the 
US bend market, which 1 b hav- 
ing a knock-on effect cm the 
dollar. 

"Developments in North 
Korea have been upsetting 
commodity prices, especially 
ofl, and have been Interpreted 
as adding inflationary pres- 
sures to the US,” said Mr Jer- 
emy Hawkins, senior economic 
adviser at Bank nf America. 

He said concerns about ris- 
ing inflation in the US have 
prompted nervous investors, 
fearing interest rate rises, to 
retreat from IK Treasuries, a 
move reflected In the US cur- 
rency market. 


ir. 


v ■* >*:•. ? -*; K -jn* . . •. 

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lyr 1-512B 1J141 

A decent batch of US statis- 
tics pushed the dollar up in 
afternoon trading. US May 
housing starts were well above 
forecasts, rising 2.6 per cent 
after a 3.1 per cent drop in 
April Analysts had expected 
the May figure to faff Housing 
permits dropped 1.6 per cent in 
May, however, indicating a 
future slowdown. 

Initial jobless claims fell 
more than expected to 34&000 
from 358,000 in the previous 
week. The Philadelphia Fed 
index rose to 16.1 in June from 
14^ in May. 

While these figures lent sup- 
port to the US currency, the 
market remained gloomy on 
the dollar . 

"The mood in the market is 
that if it cant rally against all 
the news that has been thrown 
at it, then it must be going 
down,” said Mr Nick Parsons, 
economist at GBC- 
The Canadian dollar followed 
the US currency down and 
plummeted to C3L393 against 
the US dollar from C$1,386. “If 
the US dollar has a bad day 
then the Canadian dollar has 
an even worse day,” said Mr 
Parsons. 

It is thought that the Cana- 
dian authorities have inter- 
vened to stem the tide against 
the Canadian dollar. 

■ The Swiss franc fell back 
from highs against the dollar 
and the D-Mark but main- 
tained a strong upward Was as 
investors flooded toward the 


Swiss currency in search of a 
safe haven in the tight of devel- 
opments in North Korea. 

Some analysts believed 
North Korea was a small factor 
in time Swiss franc’s strength. 
1 think the view tint Swiss 
interest rates have reached 
bottom and that the Swiss 

prvn^nmy Is gti ghtiy hotter thaw 

the German economy has 
helped the franc,” said Mr 
Peter Luxton, economic 
adviser at Barclays Bank. 

He also said the collapse in 
the European bond market 
helped the Swiss franc, but 
also the D-Mark. Mr Luxton 
said the D-Mark was further 
strengthened by remarks the 
Bundesbank * nade in its June 
monthly report. "The recess- 
ionary tendencies in the west 
German economy appear to 
have been overcame,” the cen- 
tral bank said. 

The D-Mark closed at 
FFr3413 from FFr3.410 and at 
L98L0 from L973J5. German 
can money was quoted in a 
range of 5.00/10 per emit and 
the market was well supplied 
with liquidity. 

■ Sterling lost overnight gains 
made after the Chancellor's 
Mansion House speech and 
comments by Bank of Bngfa™* 
Governor Eddie George, in 
which he signalled a future 
interest rate rise. 

The pound was rmflffertori by 
slightly weaker than forecast 
retail sales figures and an 
improved public sector borrow- 
ing rate. 

Sterling dosed in London at 
DM2.4805 from DM2.4862 and 
virtually unchanged at SL5201 
from $1.5203. The Bank of 
England provided liquidtty of 
£339m at the established rate 
after forecasting a Shortage of 
£400m_ The overnight lending 
rate traded between 5% and 2 
pear cent. 

In the futures market, the 
short sterling contract for 
December dosed at 93.76 from 
9344. The December euromark 
contract dosed at 9<L81 from 
9445. 


dun 16 

Closing 

mid-paint 

Europe 

Austria 

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17X418 

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51X532 

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(OKtf 

9.7230 

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« 

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40.001 182 
400033 307 
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496 170348 
870 512410 I 
288 9LW78 

487 63850 

666 0*383 

814 24834 

896 377485! 
214 1.0219 

416 2434.16 ! 
S7Q 51.24101 
BOB 07886 
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Taiwan (TSJ 41.1200 -00009 079-321 413)489 41.1079 

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but aa *npM by eumrt 
Ilia DoWr Spot M*aa dar 


■ r rawd ware nuai 
tses - icnxid. Oftr and 
nttad by «ia FT. 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


Ctodkig Chang* Sd/orter D*y* mid Ona mental Hew* month* On* y 1 JJ 7 Morgan 
mu-point on day spread bigh lew Rata %PA Rata ftPA Rata KM bidCK 


(Sch) 11X745 
PFiJ 33J5S65 


-00306 720 
-0046 720 


770 110230 11X678 
010 330800 33JS200 


11.482 -08 11X855 -04 11X103 06 

33009 -28 33.6566 -08 33.7015 -03 




Danmark 

IDKr) 

exaes 

*00015 965-978 

5X087 

03741 

0406 

-IX 

6X1S5 

-1.4 

Finland 

m 

5X868 

*00029 818-918 

5X871 

5X804 

5491 

-OX 

5X993 

-as 

Franc* 

Pi) 

55686 

-00083 670-700 

sxaao 

55005 

5574 

-12 

5X823 

-IX 

Germany 

(PJ 

1X319 

-0X035 SIS -321 

1X377 

12080 

1X329 

-07 

1X397 

-ox 

Greece 

.(W 

247X00 

-015 700-300 

247.700 240320 

248X5 

-08 

2492 

-3A 


Iraiand 

Italy 

Umntxwg 


00 1X897 

OJ 160050 
(LFi) 305886 


-00039 885 
*8X5 000' 
-0048 720 


909 1X962 1.4878 

TOO 1601.00 158135 
010 33X890 333200 


1X884 1.1 1X868 1.1 1X79 07 

16062 -05 181435 -OS 104925 -OO 
33X09 -08 308605 -OX 33.7015 -03 


Netherlands 

(R) 

1X285 

-0X025 280-290 

1X338 

1X229 

1X296 

-07 

1X308 

-OX 

1X248 

02 

Nanny 

(NKr) 

7X924 

-0005 914-934 

7.1114 

7X827 

7X8G9 

-OB 

7.1009 

-OB 

7X399 

07 

Portugal 

(Etf 

109X60 

-Ol 400 - TOO 

180750 189.100 

171205 

-112 

173X25 

-9.0 

177X 

-42 

Spain 

CPta) 

135X05 

*039 980-030 

135X30 134X00 

135395 

-3X 

130135 

-03 

138X95 

-07 

Sweden 

(SKr) 

7X647 

*0X114 BOB - BB* 

7X103 

7.8300 

7X822 

-27 

7X137 

-ax 

8X342 

-02 

Switzerland 

(SR) 

12715 

-0002 711 -719 

1273S 

1X64 0 

1X718 

-01 

1X71 

02 

1X828 

07 

UK 

cq 

1X201 

-00002 19T-204 

1X250 

1X195 

1X183 

OX 

1X179 

OX 

1X124 

OX 

Ecu 


1.1785 

*0X009 783 - 788 

1.1820 

LI 781 

1.1771 

IX 

1.1746 

1 A 

1.1863 

-07 

SORf 

- 

1X2334 

re 

_ 

« 

_ 

re 

re 

re 



Americas 

Argantfcre 

Free) 

09978 

-0X006 975 - 979 

09984 

OS970 

„ 


_ 

_ 

re 

■a 


(Ctf 2270X0 *4088 839 - 641 2Z78X1 227839 


Canada 

ECS) 

1X932 

*00079 929-934 

1X946 

1X883 

1X953 

-IX 

1X004 

-11 

1.4235 

-12 

822 

Maidco (NawPtaiot 

3X825 

-0X005 600-850 

3X700 

3X800 

3X630 

-04 

3X853 

-ax 

3X727 

-03 

- 

USA 

ft 

- 

- 

- 

. 

. 

. 

. 

. 

. 

re 

982 

PacMcAridtSa Eaat/AMca 











Auatraaa 

(AS) 

1X079 

-00013 874 - 684 

1X707 

1X674 

1XB82 

-03 

1X683 

-Ol 

1X72 

-OX 

88.1 

Hong Kong 

<WJ) 

7.7315 

*0001 310-320 

7.7323 

72294 

7.731 

Ol 

7.7335 

-Ol 

7.7477 

-02 


India 

(Rtf 

31X688 

' 050 - 725 

31X725 31X850 

31,4*88 

-at 

31X838 

-19 

. 

- 

_ 

Japan 

(V) 

103X35 

*0X85 300 - 370 

103.400 102.700 

103.15 

a.1 

102.7 

IS 

100415 

2X 

1472 


Jane £ s 

i*am i5674i - man tea wo - vazn 
km 2B55J00 - 3BSUQ 174VV1 - 1791011 
Knot 0.4518 - 04528 02973 - 02978 

RDM 342092- 343300 225BOO- 225BOO 
tala 297331 - 299306 195600 - 110300 
UA£ 55785 - 65879 38715-3X735 


Maiayafa (MS) 2X995 *0003 990-000 2X000 05066 

Nm* Zealand (N2S) 1X988 -00047 981 -995 1.7047 1X918 

Phappbwa (Poao) 27.1000 - 000 - 000 27X000 209000 

SaudAntta (SR) 27808 *00001 504 - 507 27807 07303 

SUaapore fSS) 1X337 *00017 332-342 1X377 1X315 

3 Africa [Com] (R) 3X345 *00132 330-380 3X400 06138 

SAfttca(Ro) (P) 4.7650 -0X12 550-750 4J750 4.7550 

South Korea (Wton) 806350 * 300-400 800X00 000200 

Taiwan (TSJ Z7X518 *0003 500 - 535 27X660 27X500 

Thatad (B4 25.1560 *0015 500-800 25.1000 25.1400 


TflOH ataa lor Jon IS. BUM* apnada *i *» DWtar Spa mm ata eXr Ow taw am 
taaw* haredbycwnr tunM iM».UH.rerew4ECU — waa ad iameCTney. 


2X92 3X 2X885 1.7 2X195 -OX 

1.7006 -13 1.7062 -IX 1.7269 -1.7 

3.7512 -02 3.7832 -03 3.7859 -04 

1X33 OX 1X337 03 1X347 -Ol 

3X6 -Ol 3.6783 -4J 3.756 -33 

4.7967 -8X 4X575 -7X - 

80935 ~4X 812X6 -33 B3135 -Ol 

27X718 -09 27.1118 -09 - 

253275 -OS 253SS -02 25X36 -2.7 

■* daobrei ptaeaa. Aarewd WHa an not eftoatr <vmm la lw niM 
4P. Mwgre ktatare Jre 16 Baa* aware 1MM00. 






r-taafcre 

a 

E* 

i 

JgPp 

JlitiS 

S3 


1 r "I* VI 






5 r J -aS3l 

,11^ Jn v 


i < ^ ' 4 In .' . '. I 1 ). • V w- 1 1 


CROSS RATES AND DERIVATIVES 


MANGE CROSS RATES 


MAN CURRENCY UNIT RATES 


Junaie 

OPr 

DKr 

FPr 

DM 

K 


HlK 

NKr 



SKr 

Sfr 

E 

CS 

% 

Y 

Ecu 

Btfttfum 

PR) 100 

19X5 

16X9 

4X58 

1X98 

4768 

5444 

21.12 

504X 

402X 

23.41 

4X04 

1X59 

4.149 

2X77 

307.7 

1527 

Daimrek 

(□to) 8220 

10 

0705 

2281 

1X49 

2SQ2 

2XSB 

11X9 

265X 

211X 

1229 

1144 

1X28 

2178 

1X83 

151X 

1X27 

France 

P=R) 60X1 

1146 

10 

2X30 

1X06 

2875 

3X83 

1174 

304X 

2414 

14.12 

1403 

1.181 

3 *re> 

1.796 

185X 

1.524 

Oamrey 

PM) 2068 

3021 

3413 

1 

0411 

981 X 

1.121 

4X47 

103X 

82.74 

4X19 

0X41 

0403 

0X54 

0X13 

Bias 

0X20 

Mand 

(K) 5005 

9X32 

8X98 

1431 

1 

2385 

1725 

1007 

252X 

201X 

11X2 

1044 

0980 

1078 

1490 

154X 

1XS5 

«»» 

(U 1093 

0400 

0348 

0102 

0042 

100 

0114 

0443 

10X9 

0434 

0491 

0008 

0041 

0X07 

0X82 

0457 

0X53 

(Wbortanda 

(H) 18X7 

3489 

0048 

0292 

0X87 

8752 

1 

3X79 

92X3 

73X4 

4X00 

0750 

0X60 

0782 

0547 

58X3 

0454 

Normy 

47X8 

9X19 

7X82 

2X01 

0946 

2257 

2X78 

10 

239.1 

1804 

11X9 

1X34 

0X28 

1X65 

7410 

145.7 

1.197 

Portugal 

(N 18X1 

3.773 

3X84 

0982 

0398 

044.1 

1X78 

4.183 

100 

78X3 

4X37 

0X09 

0A8 

0X22 

0X90 

50X0 

0501 

tain 

(Pee# 34X8 

4.73S 

4.125 

1X09 

0497 

1168 

1X54 

5XS3 

12SX 

100 

5X24 

1X18 

0487 

1X32 

0741 

7050 

0X29 

Owtadan 

(BKi) 4172 

8.136 

7X88 

1075 

0X54 

2038 

1326 

9X21 

215.8 

171.7 

10 

1-745 

0X37 

1.772 

1X72 

131X 

1X79 

tatearireid 

(SFi) 2448 

4X63 

4X09 

1.189 

0489 

1167 

1X33 

5.170 

123X 

8842 

0731 

1 

0480 

1X18 

0729 

75X6 

0X19 

UK 

09 61JB 

8.723 

8484 

1480 

1X20 

2433 

1779 

1078 

267.7 

205X 

11X5 

1085 

1 

2118 

1X20 

157.1 

1290 

Canada 

(Cft 24.10 

4X91 

3880 

1.171 

0482 

1149 

1X12 

5X90 

121.7 

96X8 

SX42 

0884 

0472 

1 

0718 

74.17 

0009 

U8 

ft 33X9 

6X97 

5X68 

1X32 

0X71 

1001 

1X28 

7X92 

1895 

1300 

7X62 

1X72 

0X58 

1X93 

1 

1034 

0048 

Jap« 

(V) 3200 

61X8 

53X0 

10.79 

0493 

15487 

17X8 

88X2 

1840 

1308 

78X7 

1327 

0365 

1348 

9X75 

1000. 

0211 

Ecu 

38X7 

7237 

axei 

1X22 

0791 

1888 

1154 

8X57 

199X 

1501 

9284 

1X10 

0775 

1.842 

’ 1.1TB 

121X 

1 


Ecu pan. 

raw* 

Rate 

against Ecu 

Change 
on day 

W-hf-tam 
con, ota 

%«praad 
v wiatfrwt 

Dt* 

kat 

QlWffiPh 

0793200 

*0002888 

-1X1 

5X7 

13 

119072 

110000 

-0X0153 

-1X7 

5X1 

- 

402123 

39X747 

-0X493 

-1X4 

ftPB 

10 

1X4964 

1X2827 

-0X0232 

-1.10 

5X0 

- 

053883 

058083 

-000649 

0X4 

3.18 

-5 

7.43879 

7X5B87 

*000552 

1X1 

220 

-11 

154250 

159X02 

*0253 

328 

0X5 

-23 

182X54 

200274 

-0152 

3X5 

0X0 

-20 

H8SIS 

204X13 

291.167 

-0334 

1008 

-5.88 

- 

1793.18 

1885X6 

*4X2 

5.10 

-125 

- 

0780749 

0776685 

*0003216 

-128 

5.18 

- 


Van par 1JOOO; DreWi Kroner, Hooch I 


i Rane, Bicud o, Lka i 


: IOTMB g; DM 125X00 per OM ■ 4t 

Cta> Lataat Change Mgh tow Eat voi Open taL 

08109 QX1S *00011 0X136 0X098 38242 98X44 Sap 

0X114 0X125 *0X012 0X134 0X118 136 1291 


ITUW8 (B4M) Yen 12X pw Ten 100 

Latest Changa Ugh Law Eat vat Open hL 

09743 -0X066 0X604 0X721 13X64 54239 

09805 -00072 09815 0X792 157 1X99 

0X880 -0X089 0X880 0X800 4 383 


t (DM SFr 126X00 par SFT 


£62X00 parS 


1X188 -0X014 1X220 1X172 7X25 33.484 

1X180 -00002 1X180 1X160 29 275 


Baioiran 

Oannapy 

Franoa 

Danrnortc 

Spok) 

Portugal 


Bai o«aaw «awa — t by tre Cao p wi Cu i ntUntan . Ctarsncta* — ta duoandtaB wlwli w a n— a d i 
P nu w rea idraiawalBrEgeapBrehacrengt H i mM aiMareaMaiire.Ot—raanre W iowaia 
iHahww a wi awapwdcamreocMigxlBwwa i bwa re WaaBaremnretaailBBaonawlataa 
tara craiengy. oat ihe mwta u oi p eontod pmoeoag* dwtart an craw oraiancy'B iwrtl raw tan li» 
BcucaaeWnre. 

(I7/MK1 Saritafl and flam> Un aotaianetad fton BtaL Atfuaanant cWcatatad hr HHaeWnrea. 

■ IRMXPWJ^MA 66 Cl<0tPT70ta £31250 fewte per pound; 

Strfca ■■■ CALLS - — PVTB — ■ ■ ■ - 

^8 
927 
5X4 
4.72 


1X60 022 0X7 1.13 3.14 3X4 4 

PIMtoua da/» *oL CWto 4X0B Fiat £0X01 - Prer. dWa OfM* kiU CWi 304*18 n« 354270 


WORLD INTEREST RATES 


ffi— IT.. I'.M.WTD 1 !! 


HUh Low 


Bafghan 
weak ago 


»n ii?l 1 ii,v. > ,uiv;,i,-j;.C‘Zu 


UK INTEREST RATES 


LONDON MONEY RATES 

4un 16 Our- 7 days Ona Three Stx One 

right n od e* mondi montha mentha year 


Intaibarfc Starttna 5»i-2 <h'*H 4S-4R Bj-Si, Si-Si 61 , - 8 
Starting CDs - - 4B-4J3 5>a-5A 5i - - 5» 

taiyBb - - 4JJ-4B 4% - 4g 

BartcBfc - *B -4g 4®-4fl SV-5i 

Lucal airthodly depe. 5\ -55, 4fl -4fl 5-4H 6** - Si 5% - 5& B&-5H 

Dtaoount HarM daps 5*i - 4 4% - 4* 

UK clearing bank bass Mndng rata Sit par cart tan FSatanwy 6, 1994 


weak ago 
US 

weak ago 


■ 0UBOR FT London 
Marfeank FMog 
week ago 
USDobrC&a 
weak ago 
8DR Unkad Da 
week ago 


44 

44 

44 

4ft 

6X25 

3X0 

_ 


44 

44 

4* 

44 

«J8W 

aw 

re* 

Sep 

4VL 

4V» 

48 

Sft 

- 

awn 

re. 

Dec 

4K 

4» 

48 

5ft 

_ 

150 

_ 

Mar 

24 

24 

2ft 

2ft 

- 

1.78 

• 

Jun 

24 

2ft 

2ft 

2ft 

- 

1.7S 

- 

■ Hfe 

44 

4ft 

4% 

5ft 




Ore, 

44 

4ft 

4ft 

5ft 

- 

- 

- 

Dec 

4.10 

4X6 

4X8 

024 



_ 

M at 

4.16 

4X8 

4X9 

521 

_ 

_ 

_ 

Jun 

3tt 

34 

3N 

4 


_ • 

- 

■ UPF£ 

3% 

3ft 

3ft 

4 

- 

-ta 

- 



Otmn 

Salt price 

Change 

High 

Lpw 

Eat vol 

96*40 

9043 

■007 

95/46 

95X8 

4750 

90.17 

96.17 

-0.11 

9523 

86.17 

2289 

94X9 

94X3 

-013 

94X0 

94X3 

1128 

94X8 

94X1 

-015 

94X9 

94X2 

427 

■omth 

■CU FVTWtea (LIFFE) Eeulm points oi 100ft 

Open 

Sett price 

Cfmga 

Wte 

Low 

Est vol 

94.15 

84.12 

■0X0 

94L17 

94.11 

594 

93X6 

99X2 

-008 

99X6 

93X2 

812 

83XB 

90X2 

-013 

93X9 

93X4 

170 

9328 

8324 

■012 

9328 

9320 

80 


Carta of Tax dap. SlOOXOQ 1*i 

can* of ire rep. anrer eiDDXOO b i5apa np 
Aw. tawtar m» ol dteour* 4XS17pc. ECHO b 
WM. Mned nte lar peried Jon a& iao* to Jd 


4 3\ 

wahdraam »sr coWi %pe. 


S tJl *^ t> *, " lfcf Hrtta^nnae aa a mta sg.- a nat* i yrer «. • UBOR i w ta n Ung 
1**™ *** rerekT*”? reowil w w mmm by tar wtarema 0 ta» miMiawh wdrita 
dnf. 1h* bants ana Bartaa That, Bar* of Tttya, Band^a mt Nnkxal WaiMtaK 
Md IMH are tan ter ta domrere ktooqr Ream, yg * CDs and 806 Unkad Daporta ptf. 


■ THH 

H MONTH! 

imun 

nmiMS OJFFQ E500X00 poldte of 100% 



Open 

Sait price 

i Changa 

rtoh 

Law 

Eat wal 

Open tot 

Sap 

94X8 

94X5 

•012 

94^1 

94X3 

22923 

107974 

Dec 

MM 

93.7B 

-OM 

83X5 

93.74 

33150 

147003 

Mar 

93.10 

93-07 

-020 

9116 

93X4 

10027 

00892 

Jun 

92X3 

9046 

-022 

92X4 

9141 

3399 

45199 


Short 

7 day* 

Ona 

Throe 

term 

node* 

morati 

montha 

54-5* 

5A-«, 

5 

5^-Si 

5*4-6 


9-64, 

«»a-5% 

6*4% 

G‘4( 

5-« 

8-4% 

0-«H 

5-4B 

5-413 

5-4B 

ti-Sft 

ft 

S>2-5^ 

Sft-Sh 


EURO CURRENCY INTEREST RATES 

Jw 18 Short 7 dan Ona Tim 


Batata Franc 
Dantah Krona 
htak 

Dutch CuMar 

French ftanc 
RRtugpMM EtO 
Spantoh Peseta 
Staring 
State FMnc 
Can. Mar 
US Defer 

safeai urn 
Yen 

Aaian SShg 
9Wrt tern nou ta 


iSJa-MMtfa-is^iHt-isL 16-ii?* I3i,.ia 

7%-7* 74,-7^ 7t,-7A 7% - 7\ 78-7^ 

4S-4A 4»-4fi 4ti-4% 5% -Sd Sd-SA 

3%-35 35J-3H 4-(q 4^-45, 4Jb-4k 

8-St; Olg -SF% 6Jj-6i« 8* - 61? 7^-71, 

*^-4H 4i-4i 4A-4A 4i-44 4% - 4% 

flh-7 74,-71, JH.JU 8.^ 8^.^ 

24-2.V Et-S& 2^8 - 2i 2& - 2^8 2&-2£ 

3% -31, 3%-3% 4i-4i 4%-4% 5A-5A 


“ 9 - m - aOlf 

■«,-4la 4^-4k 

7J-7J« 

4&-44 4^-44, 

5-7^ M-8A 
2&-e>« 2&-2A 


I US OoBar mad Yen, 


-45 43,-4% 6£-5i 

oawa: reo dm** nodca. 


Om 

y»w 

64,-6 

0,-61, 

UL-5& 

5%-Si, 

1ft -11% 
ft-ei 

ft-ft 

2U-2S 

6H-5ji 


■ TOM MOUTH —lOPOUJUt gftag 51m pqlnta of 100M 

Opwi Lataat Chang* ttgh Low Eat voi Op«i ht 
Sep 84X8 94X8 -0X1 94X2 94X7 123X14 449 ,^ * 

OtK 94.14 94.18 - 94.16 94.14 180X24 383X34 

Mer 93X4 93X1 -002 93X7 93X0 70087 281X88 

■ US TWWtlff BOX HmXMa Oteut) tlm p*r 100% 


naiad on APT, Al Qpwi Marret flgs- ■» •* P»*» ta 


■ SHOUT STNOJtfO ownom m ESOOXOO poWa of 100M 


Strike 

Price 

Sap 

- CALLS - 
Dec 

Mar 

Sep 

- PUTS 
Dae 

9425 

021 

018 

on 

on 

084 

9480 

010 

0X9 

009 

020 

0X3 

9478 

003 

005 

003 

043 

1.04 


Jun 96 X 1 

Sep 95 X 7 

Dec 94.71 

95 X 1 

95 X 4 

94.70 -OOl 

95 X 3 

9 SX 7 

94.74 

96 X 1 

94 X 3 

94,70 

1 X 71 

3 X 47 

688 

4 X 37 

20272 

7 X 23 

Al Opan kaanac «gh ■» 

Hr pretender 






E* voLwtta, Cab 14455 Puli 9839. Pretax* dqm epra tat. Cte 167235 Puts 148345 


■ telHOmiBC OPTlOfIS (UFFQ DMlBl pteteflllOOX 


Strifes 

Price 

Jut 

a* 

CALLS - 
Sep 

Dec 

Jri 

Aug 

PUTS 

Sep 

Dec 

9500 

010 

ai3 

018 

016 

006 

008 

012 

0X8 

0585 

002 

004 

00? 

009 

dm 

096 

028 

0X3 . 

9550 

am 

002 

0X8 

0X5 

047 

046 

0X9 

074 


BASE LENDING RATES 


[WOirraFaOBWmtRMtMATi^ Pare ktatiank offers 

Opan Sett piica Chmga Fflgh Low Eat wrt Open frit 
94X8 94X3 -009 94X0 94X2 25X24 51280 

9428 84,17 -013 9426 94.16 19278 37,820 

93X3 83X5 -015 83X4 93X4 14X61 35X55 

9058 93X0 -015 93X8 93X8 S.712 25.182 

iMQimiBuiiOtfo»iJW8JFFy$impotaorioo« 


Eat *CL tore, cua BIOS Puta *700. Pmtaua dqpta open M. Call 18BB0B Mi 130387 
■ iBUm aann HUM OW1MM AJFFQ SR- Iffl poWa of 100M 


Strifes 

Price 

Sap 

- CALLS - 
Dec 

Mar 

Sap 

— pure - 

DSC 

Mar 

9620 

029 

024 

025 

oil 

0X2 

007 

9650 

015 

014 

017 

022 

047 

084 

9670 

007 

009 

Oil 

028 

066 

1X3 


at ML total, Crta o Pirta a Pmtoua reya opan ta. Can 37S Put* ifirt 



qaan 

Satt price 

Changa 

Ugh 

Low 

Eat Ml 

Open tit 

8tf> 

94X1 

94X9 

-007 

94X1 

94X9 

295 

2230 

Dec 

94.18 

94.16 

-009 

94.17 

9418 

92 

1836 

Mar 

93X6 

93.91 

-015 

83X6 

93X5 

■ 50 

1081 

Jin 

- 

9002 

■018 

- 


0 

306 


Mfen&Ootrpany 525 

AfeadTuatBank S25 

AS Bank 5X5 

•HanyAnebacrer.. 525 

Bank of Banda 525 

8m» BBtao Umayau S2S 

Bar* of Cyprus 525 

Bank of Mend 5X5 

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FINANCIAL Trvnrjg 


FTUDAY JUNE 17 1994 




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Opwi knaast Bguss n lor pwrioua day. 


To: Gatun Han. Financial Tunes fEunpel GndiH. hfibelunfenpbu 3.00316 FonUun/Miia Gemsny. 

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Roiag to press. Prices me exclusive of VAT in all £C countries except Germany and frtarf, FT VAT So. 
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To robaertbe lo Uw FT b North America contact New York Td 7524566. Fax 38*2397, far Em conraa Tokyo 
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Financial Times- Europe’s Business Newspaper. 










































































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25% 20%Bafl£Ex 152 

19% 13% EUtataPX 020 
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I 


FINANCIAL TIMES 



AMERICA 


EUROPE 


Data aid Dow 
to overcome 
early worries 


Milan under pressure after interest rate warning 


Wan Street 


Blue chips pushed moderately 
higher as investors took strong 
economic news as a positive 
sign, and shrugged off early 
weakness in bonds, writes 
Frank McOurty m New York. 

By l pm, the Dow Jones 
Industrial Average was 11.73 
ahead at 3,802.14. But the more 
broadly based Standard & 
Poor's 500 lagged behind, clim- 
bing a scant 0.37 to 46058, as 
declines led advances by 1,024 
to 895. The American SE com- 
posite lost L.69 at 44058 and 
the Nasdaq composite shed L71 

to mis. 

While the Dow industrials 
were never completely 
decoupled tram the trend in 
bonds yesterday morning, the 
b enchmar k index did assert a 
measure of independence. 

The morning's economic 


IVftSff voiame 

DHty&nHonf 

’■300.““ — ~ 



news was consistent with the 
view that the economy 
remained on sound footing, in 
spite of the recent rise in inter- 
est rates. However, many 
investors were concerned by 
the inflationary implications of 
the day’s data, and such wor- 
ries ware even more apparent 
in the secondary markets. 

The Commerce Department 
said that housing starts had 
climbed 25 per egnt in May, 
confounding expectations of a 
0.8 per cent decline, initial 
claims for im ptmpl n ympnt hcme- 

fit showed a marked decline of 
11,000 compared with last 
week. Thirdly, the monthly 
survey of business conditions 
by the Federal Reserve of 
Philadelphia was generally 
positive. 

But most of the data was 
dearly unfavourable to bonds, 
which extended heavy losses 
struck the previous session in 
early trading yesterday. Never- 
theless, bine drips opened In 
positive ground and remained 
there. A subsequent reversal 
by bands, thanks to a softer 
tone in commodity prices, was 
a bonus. 

In a switch from experience 
early in the week, Exxon 
assumed the ipfldersWp in the 
Dow’s modest rally. Most of 
the other components moved 
in a very narrow range. 

Exxon, which had reached a 
52-week low during the previ- 
ous session, climbed $1% to 


$58% as bargain hunters came 
to the fore. A commitment by 
OPEC ministers meeting in 
Vienna to hold current produc- 
tion levels was also supportive, 
though most other ofl stocks 
were little changed. 

Chevron, however, slipped 
$% to $44% after Mr Eugene 
Nowak, an analyst at Dean 
Witter Reynolds, sharply cut 
his estimates of the group’s 
operating income. 

Utility stocks were generally 
weaker, as the Dow Jones Util- 
ity Index foil L31 at 184.95. 

Entergy, a New Orleans- 
based gas and electricity sup- 
plier, dropped $2% to $26% 
pftpr analysts came away from 
a company briefing with an 
unfavourable view of its 
growth outlook. Both Merrill 
Lynch and Kidder Peabody 
downgraded the Issue. 

Merrill Lynch also lowered 
its rating on Wisconsin 
Energy, and the stock slumped 
$% to $24%. 

In banking, Shawmut Nat- 
ional weakened $1% to $21% 
after trading was halted on an 
order imhaianra* Mr Steve Ber- 
man, a NatWest Securities ana- 
lyst, had reduced his rating on 
the issue to “underperform” 
from “hold” and lowered his 
1994 earnings estimate for the 

mmparry 

Several other h anking issues 
suffered sharp setbacks. First 
Chicago lost $2% to $50%, 
NationsBank shed $1% to $54% 
and First Interstate dropped $2 
to $77%. 

On the Nasdaq, Apple Com- 
puter receded $lft to $26% and 
Oracle was $14 lower at $36%. 

Canada 

Toronto recovered from early 
lows at midday, althn ngh the 
TSE 300 composite index was 
still 1452 easier at 4.15L65 in 
volume of 36m shares. Declines 
led rises by 409 to 198, with 283 
issues unchanged. 

■ Canadian bonds led the 
bounce back, while the local 
currency also firmed. 

All Toronto's sub-indices 
were down at midday with the. 
exception of financial services. 
OBC regained C$% at 029%, 
while Bank of Montreal recov- 
ered C$% to C$23%_ 


Caracas 

Share prices rallied from a 
weak start to dose up an the 
day after foreign buyers 
returned to the market The 
Merinvest composite index 
added 2J. per cent at 14651, 
with Electriddad de Caracas 
climbing 9 bolivars to 388. 

Brokers attributed the recov- 
ery to buying by a couple of 
foreign institutions, and added 
that the banking crisis 
remained the main focus of 
concern The rise in interest 
rates at the central bank’s 
weekly auction of zero-coupon 
bonds on Wednesday was said 
to have had less effect than 
might have been expected. 


The bear market in bonds 
continued to wreak havoc In 
European equity markets, 
writes Our Markets Staff. 

MILAN came under renewed 
pressure as worries about the 
outlook for tire economy and 
interest rates further soured 
the mood. The Comit index, 
which had posted losses on 
each of the previous five ses- 
sions, fell another 14.73, or 21 
per cent, to 700.69, prompting 
expectations that it would test 
support at the 690-poizxt level 
before upward momentum 
could he regained. 

Mr Tancredi Bianchl. head of 
the Italian Banking Associa- 
tion, warned late an Wednes- 
day that Italian rates could rise 
by a full percentage point 
before the end of the year if 
there were no change in the 
international outlook. This 
compounded an already ner- 
vous mood as the new account 
began with the market facing a 
hefty round of eaife- 

BLue chips bore the brunt of 
the s elling , with Fiat off ms, 
or 35 per cent, at L6500, Oli- 
vetti down 155, or 3.4 per cent, 
at L2.405 and Pirelli losing 
L119, or 45 per emit, at 15519. 

Against the trend, Monda- 
dori, which had been marked 
sharply lower earlier in the 
week, bounced LI ,080, or 7.1 
per cent, to L16.380 as. its 
L9Q0bn share offer began. 

FRANKFURT was sandbag- 
ged again by bond market 
weakness, said Mr Eckhard 
Fr nhm .nt Mack Finch in Dfls- 
seldorf, but it was worried, 
too, about the weaker dollar, 
and about technical aspects of 
the market with DTB fontraefo 
due to expire today, and 
the Daimler rights issue to 

ASIA PACIFIC 


begin on Monday. 

The Dax index fell 19.79 to 
2,05451 on the session, hit 
2,04059 at the bottom of the 
post-bourse and recovered to 
254759 at the end of file day 
on the hope that there might 
be some recovery potential on 
options expiry today. 

Turnover fell from DM7.6bn 
to DM6.7bn. Veba, the energy, 
chemicals and oils group, 
recovered intraday, moving 

from DM49850, down DM890 

on the session to DM506 at the 
end of the afternoon. Merck 
Finds, Hoars Govett and Gold- 
man •S ar b g have all lauded the 
group's earnings potential. 

PARIS maintained its down- 
trend, pufrqm gh early weakness 
was softened slightly by a fur- 
ther easing from the Bank of 
France in the intervention, 
rate, something which had 
largely been discounted by 
investors. 

The CAC-40 index lost 2358 
or 15 per cent to 194251, put- 
ting in a late spurt at the end 
of tiie day to rise above a ses- 
sion low of 193L 

Baring Securities said that 
investors should return to the 
marke t ffarfag the third quar- 
ter before the publication of 
first half results in mid-Sep- 
tember/October, likely to show 
a significant improvement in 
company ea rnings . 

St Gobain closed unchanged 
at FFr629 and said that it 
might increase its stake in 
Essilor, the manufacturer of 
spectacle lenses. 

Schneider went against the 
trend, up FFr830 to FFr35690, 
as it announced that it was to 
sell FFr700m worth of assets 
which wou ld bring it a pre-tax 
capital gain of FFr350-400m. 


FT-SE Actuaries Share indices 


EUROPEAN EQUITIES TURNOVER 


Jem IS 

Rady dapgw 

opn 

mao 

11.00 - 1200 

THE EUROPEAN SERIES 
1X00 1400 1X00 OM 

FF-SEEmtxklW 
FT-SE Brotrec* 200 

xmm 

tSMJB 

uam 

13817ft 

138038 139147 13S8JH 
139031 1394m 13B4JB 

138010 

139X73 

135584 135SJS 
139188 139X07 



JwK 

M 14 

JUD 13 

Jm 10 

Jm 9 

H-SE Brora* 100 

fi-se baaat an 


tmwi 

140X06 

138394 

H1U1 

138X52 

141284 

1411,45 

143260 

140X97 

143X94 


Bmi MR fWMKNk UtfMr ICO - tSBJW. 20Q . I9IU0 bMflMr W0 - 138US 300 ■ 1381*5 


Hie group also said that it 
expected to report a significant 
rise i n 1994 profits. 

AMSTERDAM closed at a 
new low for the year as the 
equity market continued to 
t flky its le w! from weakness in 
bonds. The A EX index dipped 
554 or 15 per cent to 395.74, 
just above the session low of 
395.42. 

DSM was dragged down by 
FI 350 to F! 12450 as selling on 
the options exchange took 
hold. There was also reported 
qiiHchmg out of the group into 
other European chemical 
groups. Akzo also weakened in 
Ittip with the day’s trend, fin- 
ishing off FI 3-00 at FI 206.70. 

Ahold, which reported first 
quarter profits of some 
FI 110m, eased 60 cents to 
FI 4650, while Royal Dutch fell 
by a similar amount to 
FI 19850 as the oQ price hit its 
hi ghes t level for 12 months. 

ZURICH fafled to sustain an 
afternoon recovery and the 
SMI index gave up 355 to 
36665 in response to the weak- 
ness of bonds and the dollar. 

Financial shares remained 
under pressure with UBS bear- 
ers losing SFr34 or 29 per cent 
to SFrU40. CS Holding was 
SFrl5 lower at SFr550 and SBC 
lost SFrlO to SF1385. 

Among pharmaceuticals, 


Roche certificates gave up 
SFr80 to SFT6.600 while the 
recently weak Ciba registered 
lost SFrl to SFr825 and Sandoz 
registered dipped SFr4 to 
SFr715. 

Nestle fefi SFrl5 to SFrl.145: 
UBS, which recommends the 
stock, commented that the 
favourable medium-term out- 
look for the group should help 
it to outperform its European 
peer group. 

Swissair lost SFrlO to SFr767 
as the market awaited a state- 
ment after the market closed, 
following a press report that 
the group planned to take a 
near 50 per cent stake in 
gahiwi- in the event, Swissair 
said it was holding talks with 
several airlines. 

MADRID lost just over 2 per 
pgrit, the general Index closing 
6.49 lower at 31151 with turn- 
over up again, to nearly 
Fta44tan. Construction stocks 
were hardest hit with Draga- 
dos down PtalOO, or 4.4 per 
cent to Pta2,090 and Valderri- 
vas Pta4S0. or 4.1 per cent 
lower at Ptall.220. 

ISTANBUL leapt 7.4 per cent 
as the supreme court over- 
ruled an application to block 
the government's aim to speed 
up the privatisation process. 
The composite index added 
1,320.75 to 1992157, after 


Boutm 

Fab 

1994 

Mar 

1994 

Apr 

1994 

Ma? 

1994 

US 

, 

Belgium 

Emmuia 

85.76 

33.75 

69.93 

73.06 

.. 2.16 

244.62 

218.68 

143.17 

176.16 

81.H 


17659 

214.73 

16850 

15157 

9199 

Italy 

78,109 

80980 

105964 

98928 

6254 


32.00 

33.10 

2550 

2190 

1192 

Spate 

1,400.80 

1.481.24 

1.160.49 

154050 

• ' 999 


33.90 

3202 

23.93 

2&12 

rasa 

UK 

5950 

61.14 

4657 

4497 

• 8899 

yhfanm iMMBliiuicraw and tain. 

b> onmwteC Wt*P tore &cm nay * mm*t 

awwWMMSKWfel 



European volumes continued to slip back as the summer 
began to take hold last month. According to Mr James 
Cornish of NatWest Securities, who compiled the data, 
turnover in Europe declined by 8.6 per cent fa May 
compared to April, having already fallen by 12 per cent 
in April from March. 

“Once again. It was the fall in IBS Treasury bond prices 
that was the main bearish Influence on European mar- 
kets, which failed to benefit from an unexpected cot in 
German official rates an May II," he says. - 

International investors also lifted their sales, with turn- 
over in European stocks traded on Seaq International in 
London, as a proportion of business in Continental 
domestic markets, rising to 165 per cent In May from 
155 per cent in April. 

France saw the biggest rise in May’s activity - in spite of 
a 6 per cent fan in the index, turnover was up nearly 21 
per cent; bat; reports Mr Cornish, it was still down 135 
cent cm the average of the previous three months, 
a resumption of selling pressure under, the 
of rights Issues and the UAP privatisation". 
Italian volumes declined by 6.4 per cent in May after 
April's record high, with the market itself dropping 85 
cent as profits were taken following the victory of Mr 
the general election. 

ket'G rise could signal that the 
market was bottoming out 
from a two- week fall, during 
which the index hit its lowest 
level since last October. 


touching a midsession high of 
199U- 

WARSAW rallied nearly 6 
per cent but traders said that 
the outlook remained mixed. 
The Wig index rose 4525 to 
33865 and turnover by 34 per 
emit to I200bn zlotys. 

Brokers added that the mar- 


Wrtttan and edited by mutate 
Cochrane, John Pttt and Michael 


Hong Kong dips 1.4%, Nikkei makes upward move 


Tokyo 


S African golds advance 4.5% 

Gold shares closed sharply higher tn Johannesburg as domestic 
in vest o rs were heartened by the bullion price, which broke out 
of its narrow trading range to trade just short of the $388 an 
ounce resistance leveL 

The golds index, which jumped more than 3 per cent in the 
first half-hour of trade, ended 94, or 45 per cent, ahead at 2,185 
in spite of some mild profit-taking near the dose. 

Hie rest of the market was mixed in quiet trade after Wednes- 
day’s gains, with a stronger financial rand depressing some 
prices. The overall index gained 27 at 5,774 while industrials 
receded 13 to 3744. De Beers closed 75 cents off at R11555 but 
Anglos added R1 at R242. Among golds, Vaal Reefs forged ahead 
R15JS0 to R430 and Kloof put on R2.75 at R5655. 


FT-ACTUARIES WORLD INDICES 


Jotnfly complied by Tha Financial Tknaa L*±. Goldman. Sachs & Co. and NatWaat SecutWaa Lid. In con j unction with the Irutituta of Actuarial nd ihs Faculty of Actuaries 
NATIONAL AND 

HEGIONAL MAMETS ■— ■ — WEDNESDAY JUNE IB 

flSima in paranthoaes US Dart Pound^ 

NKty number at Mas Dollar Change Storing Yen DM 

* ,*»*■-. *** * Mn Ma M« 


Share prices gained ground for 
the first time in three trading 
days on buying by individual 
investors and dealers, but vol- 
ume remained low doe to lin- 
gering caution, writes Emiko 
Terazono m Tokyo. 

The Nikkei 225 average was 
up 8451 at 21,367.47 after a 
day's low of 2197395 and high 
of 2158993 Foreign investors, 
who had been leading buyers 
during the past few wedks, 
were absent, as were domestic 
institutions. 

Volume amounted to 382jkn 
shares, against 468m. The 
Topix index of all first section 
stocks put on 096 at 159853 
while the Nikkei 300 rose 055 
to 30855. Advances outnum- 
bered falls by 524 to 475, with 
184 issues unchanged. In Lon- 
don the ISE/Nikkei 50 index 
was 255 firmer at 199453 

Traders said that in spite of 
the day’s gains, the correction 
was likely to continue next 
week. However, many believe 
the downside to be limited. 
"Most corporate and financial 
investors who wanted to take 
profits did so whan the Nikkei 
broke through the 21500 
level,” said Mr Yasuo Ueki at 
Nikko Securities. 

M eanwhile, rumours that a 
US hedge fond had bought put 
options, expecting the mripr to 
fail below 20,000, kept many 
domestic investors nervous. 

Dealers took their cue from 
the rises in crude oil and gold 
prices on overseas markets, 
buying up resource-related 
stocks. 

Non-ferrous metals gained 
gm nrifl , including Sumitomo 
Metal Mining , which firmed Y2 
to Y974, Mitsubishi Materials, 
advancing Y25 to Y575, and 
Mitsui Mining and Smelting, 
gaining Y10 at Y453 

Oil shares were also higher, 
with Teakoku Oil up Y6 to Y798 


and Kflfflgi, a petroleum whole- 
saler, adding Y60 at 71,490. 

Individuals dabbled in specu- 
lative favourites. Brother 
Industries, the sewing machine 
maker, surged ahead Y27 to 
Y783, Yokohama Rubber 
advanced. YI2 to Y736 and 
Minebea rose Yll to YB85. 

Large-capital blue chips con- 
tinued to face profit-taking. 
Mitsubishi Heavy Industries, 
the most active issue of the 
day, eased Yl to Y797 and Nip- 
pon Steel shed Y2 to Y360. 

Banks were lower in spite of 
the absence of arbitrage sell- 
ing. Dai-Ichi Kangyo Bank 
dipped Y10 to Y1960 and Bank 
of Tokyo Y20 to Y1.620. 

In Osaka, the OSE average 
receded 15.65 to 23,61055 in vol- 
ume of 345m shares. 


brake on its near two-week 
decline before late profit-taking 
again left shares slightly 
easier. The composite index 
slipped 591 to 291353 

COLOMBO was depressed by 
declines in shares with a high 
market capitalisation, the 
all-share index fefi 19.45 to 
92857 in turnover that jumped 
to SLRslTTm, from SLRs76m 
on Wednesday. 

SEOUL rebounded from two 


days of steep losses caused by 
a dispute over North Korea's 
nuclear programme, and the 
composite index closed 10.16 
better at 901.08 in turnover of 
Wan 5659h n. 

TAIPEI lost some of its gains 
after late profit-taking in elec- 
tronics stocks, financials still 
landing as the weighted index 
ended 34 58 u p at 644954. 

KARACHI'S hanks, synthet- 
ics and cement stocks attracted 


investors cm the new account 
day, and the KSE 100 index 
rose 22.18 to 297380. 

BOMBAY climbed on local 
and foreign buying after Indian 
Hotels announced a one-far-one 
scrip issue, the BSE SOshare 
index rWng 4096 higher at 
4,164.03 Indian Hotels rose 
RS75 to BS1953 

SINGAPORE recovered on a 
late buying push which took 
the Straits Times Industrial 


, index from an 18-point loss to a 
‘^’gain of 053 at 298794. KUALA 
LUMPUR saw reduced activity, 
volume falling from 338m 
shares to 236m as the KLSE 
composite index ended 3.44 
higher at 153299. 

BANGKOK’S SET index rose 
491 to 1984.4, after dipping by 
more than 11 points in tin 
morning, on bargain^ hunting, 
particularly in financials, in 
the final hour of trading. 


Roundup 


A number of regional markets 
were muter pressure. 

HONG KONG fell 1.4 per 
cent, under selling pressure 
aimed at property Arnes and 
with overseas investors seen 
switching their funds into 
Japan and the US. The Hang 
Seng Index retreated 126.60 
to 9,022.92 in tiiin turnover 
of HK254hn. 

The property sub-index 
dropped 25 per cent amid wor- 
ries that the government’s 
recent measures to cool the 
overheated residential property 
market could hit the profits of 
major property developers. 
Fears were also growing that 
the government might take 
action aimed at the c omme r- 
ci al pr operty sector. 

SYDNEY continued to be 
undermined by sharply weaker 
bond, prices and equities fin- 
ished at their lowest level fin 
more than a month. The All 
Ordinaries index lost 18.4 at 
2,066.0. The All Industrials 
index fell 255 to 29955, near 
to Its 10-month low. 

MANILA attempted to put a 


i 1904' 

Local Local 
Currency 96 dig 
ErxtaM on day 


Grass 

□hr. 

YWfl 


TUESDAY JUNE 14 1804 
Rouid 

Defer Staring Ysn 
Index index Index 


US 


DM 

Index 


DOLLAR UfflEX — 

local Year 

Currency 53 week 82 week ago 
Index 


AuBfcitia ces] - . 




1124 * 

14746 







11290 

14793 

15792 

189.15 

13019 

13448 

Austria ( 17 ) 




15575 


1.03 

180.71 

187.86 

12 X 15 

17 X 66 

18391 

12521 

HNfliim p 7 ) 



1&L33 


15597 

14397 

10 X 15 




15445 

18541 

14290 

14796 

e«id*finq 









13890 

17 X 67 

14242 

14490 




24018 




193 

83.17 

10995 

12 X 48 

14541 

12148 

127.78 












22 X 07 

275.79 

20798 

21598 





8899 


157.16 

1.6 


1339 B 

16492 

13080 

161.13 

8 CL 88 

10798 

11444 

14088 

16472 

15 X 72 

8594 

8 X 30 




13144 
365 92 

87.47 

11490 

11490 

-02 

191 

X 19 

046 

199 

14 X 14 

18 X 37 

148.60 

15392 

Hong Kong ( 56 ) 



13423 

37297 

18 X 70 

8 X 08 

131.13 

87.11 

11475 

114.75 

14747 

10799 

11 X 70 

MmdtlA. - 

18 X 30 






18190 

8408 

12095 

5595 

31 X 84 

15890 

7397 

37043 

17 X 86 

102.76 

50848 

20943 

97.78 

271.42 

1 SXS 3 

5798 

29 X 80 

My ( 80 ) 

J«>-i( 4 «S>- 

844 G 

- 1.4 

82.75 

E 6.11 

72.14 

10088 

-19 

161.74 

6 X 18 

MotayitatW) 







Ul 

197 




14240 

107.78 

16644 

12454 

16190 

M«icn (IB) 


04 

09 

102444 

19042 

314.13 

1281-58 

19092 

167795 

17198 

726699 

16 X 32 


46426 

30897 

40 X 21 

47493 

62193 

31291 

34798 

Nrthwima C 27 ) 

201.41 

ai 

1j07 

198492 

20090 

67.81 

181898 

19590 

6646 

127498 

12992 

4398 

187897 

171,15 

5790 

724597 

18 X 27 

8197 

2647.08 

207.43 

7799 

144748 

16422 

4 X 80 

144748 

Norway E 3 ] _ 

< 68.73 

1.7 

6793 

4494 

12044 

22098 

18196 

97.M 

5 X 44 

62.17 

19 

395 

4947 

3 *nWW*( 44 ) 




157.68 

28012 

23797 

12081 

24007 

28296 

14491 

04 

195 

183.77 

17994 

11896 

15749 

177.85 

208.42 

15091 

1 S 293 

South Alrica pa . 





175 

33 X 68 

328.15 

21 X 63 

28798 

23792 

37892 

242.48 

26399 

Span ( 42 ) 

-- 142.09 

- 1.1 

138,57 

-19 

aon 

28094 

14 X 72 

27290 

14041 

18193 

239.86 

12295 

181.78 

28442 

14790 

24 X 68 

28034 

15 X 79 

23149 

17593 

11 X 33 

16348 

19 X 41 

13048 

17 X 12 

©wtaartend 1471 ... 

-.-21479 

14 

309.48 

19991 

18293 

24072 

04 

190 

21294 

207.78 

13 X 00 

jJJJjjBdomteM 18 X 83 

187.78 

03 

-04 

18448 

183.13 

123.71 

12196 

16094 

1 S 06 S 

13798 

18496 

187.78 

- 1.1 

Ol 

-04 

1.77 

408 

296 

16199 

18897 

18 X 49 

15797 

18404 

18418 

10483 

12244 

12292 

13 X 22 

181.03 

161.13 

13893 

18444 

18 X 48 

17 X 56 

21496 

19 X 04 

12446 

17032 

17 X 95 

12 X 18 

17790 

18240 

Nonfleins).... 

18494 

0.1 

16088 

mii 

18897 

107.13 

14024 

152.78 

- 0.4 

X 08 

16485 

161.06 

10698 

14092 

15 X 37 

17898 

14196 

14542 

P*aeB«*i{ 7 K* 

Sura-fteifcri 488 ) 

— 1729 S 


13291 

11293 

17398 

14795 

20 X 13 

11794 

04 

-02 

148 

193 

20297 

17 X 44 

19792 

18945 

13196 

11296 

17291 

14 X 27 

20495 

11790 

22090 

17 X 78 

15592 

13479 

18415 

15 X 17 

North America (aw).. _ 

18442 





131.88 

-09 

198 

18898 

18 X 78 

110.12 

14 X 06 

13243 

17078 

14198 

15142 

Bmps Ex. uk Bid 





15696 

12 X 12 

21190 

144.88 

147.77 

14897 

15699 

13398 

22395 

13493 

14 X 10 

16042 

17 X 43 

-04 

- 0.7 

08 

-03 

-04 

-03 

-09 

296 

18475 

18050 

IISlBB 

16793 

18438 

192.73 

17697 

17892 

HSMBE=SS 

07 

-Ol 

242.72 

18 X 19 

16848 

17019 

17 X 12 

aranrepW 

18195 

11098 

11298 

11395 

11892 

245 

298 

14 X 47 

24790 

14595 

24192 

8895 

18042 

12 X 82 

21192 

13450 

KB « 3 > 

157.47 

29 X 21 

12297 

10248 

125 X 8 

19099 

mna ex. UK ft™) 
Worid Ex. So. At ( 2112 ) _ 
Worid Ex. Japwt (1703 — 

Ths World Max Bint . 

— 17340 

17441 

18244 

-oa 

-02 

-Ol 

293 

292 

299 

1 70 X 7 
17490 
17492 
18299 

17029 

17080 

17 X 68 

11 X 11 

11391 

11 X 68 

14 X 88 

14940 

14893 

16694 

13 X 33 

14898 

15091 

17898 

17291 

17598 

17898 

19 X 20 

14294 

15 X 22 

15540 

16 X 72 

151.43 

150.14 

160.68 

16799 


I INANC 1AL TIMKS 


FT EXPORTER 



FT EXPORTER: Summer Issue - July 7 th 


The next issue of Europe's premier export review, the 
FT Exporter will appear with the Financial Times 
throughout the UK and Europe on the 7th July 1994. 
Written by Financial Times journalists based in leading 
business centres across Europe, the FT Exporter will 
show, through case histories, how orders are being won 
and what practical problems are being overcome. 

The Summer issue wifl include a discussion of how free 
World Trade is after GATT, at a glance Risk Profiles for 

Derek van Tlenen [display] 

Tel: 44 (0) 71 873 4882 Fax: 44 [0) 71 873 3195 


major non-European trading countries, a comprehensive 
guide to short term export credit Insurers and a look at 
good deals, bad deals and whtfs doing them. 

Detafls of the new FT Exporter WoridT/avefer Forward, 
in association with ^P SpTinL vflL also be included in 
the Summer Issue. 


Janet Kellock [classified} 

Tel: 44 (0)71 873 3503 Fax: 44 (0) 71 87330Q8 







FINANCIAL TIMES FRIDAY JUNE 17 1994 




RECRUITMENT 


JOBS: Personnel policies should be central to the overall strategy of a company, but all too often they are not 


T he personnel policies of a 
company ought to be a vital 
component of its overall 
strategy, but all too frequently they 
are not. This is the main assertion, 
of a fascinating new study on 
human resource management in 
British multi-divisional companies. 

Widespread Internal restructuring 
may be going on across the corpo- 
rate scene. Yet employee relations 
issues "are rarely taken into 
account”. Indeed, as companies 
introduce more rigorous financial 
control it becomes more for 

them to adopt management styles 
"based on beliefs about the best 
way to manage people at work". 

“The influence of personnel man- 
agement over strategic decisions is 
limited” and the “management of 
employee relations is deemed to be 
an operational matter wherever it is 
located”, argues the study. 

As a result, its authors Dr John 
Purcell of Templeton College, 
Oxford and Dr Brace Ahlstrand at 
Trent University. Ontario, argue the 
corporate institutions and proce- 
dures dealing with employees have 
had to be fitted - often forcibly - 
into a mould created by change ini- 
tiated by companies completely out- 
side the industrial relations arena. 

The authors argue persuasively 
that not enough attention has been 


Putting a fence around the workplace 


paid to the fact that “the human 
resources of particular operating 
units fail to reco gnis e that these 
units are often part of a much 
larger and complex organisational 
structure”. By constructing a fence 
around the workplace, human 
resource management enthusiasts 
obscure its integral position within 
the multi -divisional company. 

Basing their study on nine 
unna m ed companies over a 10-year 
period, Purcell and Ahlstrand con- 
firm personnel functions have 
became isolated from the strategic 
centre of the enterprise. As a result, 
personnel managers are uncertain 
of what their role ought to be 
within the company and take little 
part in devising corporate strategy. 

The book provides a useful and a 
relatively Jargon-free account of 
bow corporate decisions influence 
human resource management. The 
authors quote one personnel direc- 
tor who suggests that what drives 
change in the company is “the real- 
isation that there is no calm water 
around the next headland”. 

Apparently “it is no longer a case 
of belt- tightening or taking 
short-term action to weather a 


storm”. Instead, there is a need “to 
cope with chaos, build for flexibility 
and find ways of integrating 
employment relations into the fab- 
ric of the organisation". 

The authors are right to conclude 
that while “remarkably tew organi- 
sations seriously consider questions 
of management styles and the most 
effective way to manage their 
employees'’, doing nothing or sim- 
ply reacting to events is no longer 
good enough. “There is a rationale 
for designing human resource man- 
agement to add to competitive 
advantage and economic success”, 
they argue. Let us hope some corn- 
parties are listening to this sensible 

nwwag e. 

Source: Human Resource Manage- 
ment in the Muld-dimskmal Com- 
pany, by John Purcell and Bruce 
Ahlstrand, Oxford University Press, 
£30.00 hardback, £14.95 paperback. 

Contracting for IT 

Growth in the number of skilled 
staff on short-term contracts of 
between three and nine months in 
the information technology sector 
looks set to become one of the most 


important trends in the labour mar- 
ket during the current economic 
recovery. 

“New companies are asking for 
contractors that have never done so 
In the past", says Mr Tony 
Coombes, director at Systems 
Resources, a software and services 
company which supplies profes- 
sional services and systems soft- 
ware to corporate customers. 
“Large companies have cot to the 
bone in the IT area during the 
recession and they are not taking 
on permanent workers again”. 

The Coventry-based company has 
just announced a 58 per cent 
increase in the number of informa- 
tion technology contract staff taken 
into employment over the past 12 
months to the first week of May to 
509, compared with 322 in the previ- 
ous comparable period. 

“One of the reasons for the 
increase is that contractors can pro- 
vide the specialist skills that perma- 
nent staff do not have, particularly 
where it would be too costly to 
retrain them. The company can 
often get the job done more quickly 
and more cost-effectively than with 
permanent staff", argues Coombes. 


He expects a SO per cent increase 
over the next five years in the num- 
ber of contract workers in Informa- 
tion technology to add to the 25,000 
currently on the market “Employe 
era are reluctant to take cm extra 
permanent staff for projected-based 
work,” says Coombes. “Contract 
staff are a more favourable alterna- 
tive. Corporate organisations which 
have felt the consequence of perma- 
nent staff reductions over the last 
two years are now seeing gaps in 
the development skills they need, to 
configure the systems they require 
to remain competitive. Tim advan- 
tages of flexible contract staff is a 
huge plus for their immediate infor- 
mation technology development. 

Science PhD unease 

British employers are becoming 
concerned at what they believe to 
be a fall in the quality of PhD sci- 
ence recruits currently and in the 
future, according to a new study 
from the Institute of Manpower 
Studies in Brighton. But the 
demand for the 3,500 PhD science 
graduates who leave British univer- 
sities every year is unlikely to go up 


at least until near the end of the 
decade. 

The survey suggests “there is no 
evidence of a significant trend to a 
broader recruitment market in gen- 
eral". Just over a third of the PhD 
science graduates remain in aca- 
demic life as researchers or teach- 
ers, while 30 per cent go into the 
private sector, with a large number 
taking up employment in the oil 
and chemical industries and in 
research and development and 
almost 10 per cent to the public 
sector. “No consistent view emerged 
from employers about their satisfac- 
tion with current PhD tr ainin g,” 
suggested the study. But it found 
that they thought there was need 
“for more interpersonal skills train- 
ing and business awareness” from 
the PhD intake. 

Employers also claimed “more 
formal training had squeezed out 
creativity and original thought” 
They added they believed PhD sci- 
ence graduates bad grown too 
specialised and lacked “a breadth 
of view of their scientific disci- 
pline”. 

The Institute of Manpower 
Studies indicated that “the vast 


majority of employers have little or 
no demand at all” for PhD science 
graduates because they did not 
need people on their pay-rolls with 
that level of qualification. 

But the unemployment level for 
such science graduates remains at 
less than 3 per cent, considerably 
lower than for first degree science 
graduates which stands at over 10 
per cent. The survey suggests, how- 
ever, they are going to have accept 
much more flexible forms of work- 
ing in the future with more 
short-term contracts. 

It is also clear that PhD science 
graduates in jobs will have to 
accept a greater commercialisation 
of their activities. As one major 
electronics company told the sur- 
vey: “We are now a business first, 
which does research. We have 
changed our shape to be more cus- 
tomer focused and now have more 
worldly skills for commerce and 
finance. This has meant fewer 
PhD's and more general all-round 
stalls'’. 

Source: Science PhDs and the 
Labour Market, Institute of Man- 
power Studies, Report 266, £30.00 
from Mantell Building. University of 
Sussex, Fainter, Brighton BNl 9RF. 

Robert Taylor 


m 


CS First Boston Investment Management 

VP -Global Fixed Income 


London 

CS First Boston has developed a reputation 
over the last 20 years as one of the premier 
full service investment banking and securities 
firms with offices throughout the worid. The 
Institutional Investment Management business in 
London has over US$13 billion under management 
and its outstanding reputation has been built in 
the Foreign Exchange, Money and Fixed Income 
markets. It is a market leader in central bank 
advisory work and the remaining client base 
comprises commercial banks, pension funds, 
multinational corporations and insurance companies. 
An outstanding individual is sought to be responsible 
for the management of client portfolios, coverage 
of macro economic and market research and 
client liaison. This is an excellent career move 
for a hard working, ambitious individual and 
offers a rare opportunity to join a high profile 
team in a prestigious organisation. 


Substantial Package 

Aged in your mid 20’s to mid 30’s you will have 
a minimum of 4 years experience in Global Fixed 
Income Fund Management and possess the 
potential to progress to a more senior level. 

It would be an advantage if your experience 
included exposure to Emerging Markets and 
Foreign Exchange. 

The successful individual will be educated to at 
least first degree level, preferably in economics 
and be spreadsheet literate. An additional 
European language would be a distinct 
advantage. 

Interested applicants please send a full resume 
to Anthony Cook, Ref 2/1738 at Morgan & Banks 
Pic, Brettenham House, Lancaster Place, 

London WC2E 7EN or if you prefer, telephone 
071-240 1040. Fax number 071-240 1052. 



hAomm 6 Bam K 5 


Head of 
Support Services 


Commercial Banking 


c. $150,000 Tax Free 



Our client is one of the most progressive and successful Middle East banks. Located in a pleasant 
part of the Gulf, the bank wishes to build on its strong customer base by continuing to expand its 
range of services and its use of banking technology. 

Reporting to the Chief Executive, the selected candidate will direct the bank’s main support 
areas, namely Operations, Human Resources and Information Technology. The key tasks will be 
to develop each of these functions and to manage and improve their operational coordination and 
effectiveness. The training and development of local staff will be an important factor, as will the 
coaching of a successor. 

Salary is as shown and the package includes excellent allowances for housing and transportation, 
annual home leave and other expatriate benefits. The contract will be for two to three years and 
there will be a substantial end of service bonus. 

Candidates, probably aged around fifty, should have broad domestic and international 
commercial banking experience at senior management level with a strong background in FT based 
operations and HR development A degree or equivalent professional qualification is preferred. 
Success in the management of change-and good interpersonal skills in a multinational 
environment are essential. 

Please send full career and personal details, in confidence, to Andrew Duncan Associates, 

Oxford House, Oxford Road East Windsor SL4 1EF. 


Andrew Duncan 


ASSOCIATES 



n 



Critical role in a leading international investment bank 

Manager - Operations Control 

London c. £70,000 + bonus, car & full banking benefits 


Oar dknt is a I— «K«ff US hnnestmenc bank withan 
nrable zcpmatfcm for p rofitab il it y and innovation 
in global securities markets. We now wish to recrait 
a Ugh calibre business support professional to head 
a new project team tasked to ensure datt operational 
m i mi g ini!« wl while risk is Dunumied. 

Working with senior management in the US and in 
London your raapo n ri hfflrieK will i nc lu de ; 

• Enhancin g m H ae i i iar i nn and connofa. 

• Improving the quality and tim eBnaw of service 
delivery. 

• Proviffing sohmoo* to business support issues. 

• Specifying and implementing systems 
impro v eme nts. 

- Idexilifyiag axidadviifog on pousuiai risk exposure. 

• Managing and dndbpiag a growing team. 


This visible role demands real business 
understanding, technical, competence and strong 
man- management skills. With several, years' 
exposure to operations management within the 
s ecu riti es industry you wffl comb ine a sharp control 
mentality with an enquiring mind and a practical 
approach to solving problems. 

A strong relationship builder, you will possess the 
interpersonal skills needed to work with traders, 
management and external contacts ax all levels. 
Yotmg, energetic, of graduate calibre and ideally 
professionally qualified, yon may be an accountant, 
an auditor, a management consultant or an 
operations professions!. 

This exciting op po rt uni ty o ffers exceptional career 
development potential in an organisation which 
promotes rreceflmr e and rewards ac h ieve m ent. 


faiitiJiTtw should write to Joe Thomas at BBM Selection, 76 Watifog Street, London EC4M 9BJ 
endosntg a full Curriculum "Vitae which should include contact telephone numbers. 

All applications u*U be handled in the strictest of confidence. 


76, Wading Street, 
London EC4M 9BJ 



Teh 071-248 3653 
Fax: 071-248 2814 


APPOCmtENTS ADVHtnSING i 

xppem is ifcc UK enfikxi every WoUudaj a 

Ttinhjr *■! ■ Ur taaobom! edWoa entry 

R&fo. For further l i i lu i i uj| ii m pfa»c unmet: ; 
ramp Writer on 071 873 *55 1 


banking recruitment consultants 


Lazard Brothers & Co., Limited 

Corporate Finance Executives 

AC As (pre or post qualification). 

Lawyers and experienced Analysts 

The Lazard Houses in London, Paris and New York form a major international 
banking group. Together, the Lazard Houses were the leading advisers in 1993 on 
European cross-border transactions. 

In the United Kingdom, Lazard Brothers’ Corporate Finance Division acts for a 
large number of important clients, spanning both public and private sectors. The 
Division is enjoying sustained growth, creating further demand for Corporate Finance 
Executives. Applications are invited from Chartered Accountants with major firms, 
whether recently qualified or expecting to qualify this summer; from lawyers of a 
similar standing; from MBA’s with a demonstrably relevant background; and from 
Corporate Finance Analysts completing a training programme with a major 
institution. We are particularly keen to hear from AC A finalists considering a career in 
Corporate Finance, who expect to qualify this summer. 

These positions are highly sought after and selection criteria will be demanding: 
candidates must demonstrate impeccable credentials, numeracy, excellent inter- 
personal skills, creativity and an international oudook. In return, the Bank offers a 
competitive package, varied and challenging experience and first-rate career 
prospects. 

Those interested, are asked to write, enclosing full career details and stating reasons for applying, 
to The Halsey Consulting Partnership, 34 Brook Street, Mayfair, London W1 Y 1YA. 

Telephone: 071 495 4446. Please quote reference L/ 440/7. 


UK Operations Mutuigar 

C37 -40.000 

leading qwmI custodian arcta » ra cover UK 

Settlement. Dtrtdcnd Collection and Corporate Action 
Senten. Successful candidates will currently hare a 
simitar role within another Global Custodian. Broker or 
fund Manwmml Company. Technical knowledge or 
procedures and practices in (he UK market corerin* 
Squints and GUI* la required, aa are proven mao 
riMiwgfiWfU aWHs. 

P&L Regulatory Suporvloor 
eC3 3,000 

CKy US House has a nspUrancrd for an ACAMCMA 

quahtted WL RqpilaWrjrSuperebor for torouaU®™ 
ducrautul randtdjte will have 2-3 ywro wpenenw 
malcr house with exposure to equity deitraUra. aaoet 
swaps snd emerging markets. Role “eonpw«» W 
fwvwHwwg far ad Busman Hnes and FM. supp ort far a d 
equity deska. E a tn ir** Unison Wh frtnt Qmro ulwioc. 


Compliance Specialist 
EAAE 

A degree educated Compkimcc Officer la required by this 
International Bank aa a spectator m I la Ekmda/Equitlca 
area. The rote eflcnmpaaaca aurrdBancc aod mnpturtng of 
muting octivttlcs snd drafting and compliance of politiea 
and procedures. Training and investigations form an 
mitgral port of this tote. Aged to early 30* candidates are 
required to have experience aa a Banking Compliance 
oaSocr. 


FX Manager 
eC30,OOO 

Prime named International Bank seeks an capertenccd 
Manager for Its large global operation responsible for 


In a high volume environment yon win have a solid 
background in FX, to include implementing system 
projects, snd demonstrate Strang buvti ws acumen and 
man management shuts- Affd to 35. 


tmliu Row .Associates Ud Bell Court House 11 Blomffeld Street London EC2M 7AY 
Telephone 071 633 5286 Facsimile 071 382 9417 

A Mtvtbtr of the BtamfiM Group 


Energy Derivatives 
Broker 

New He formed to specialise in Energy swaps and options. 
Existing management with expertise are looking to augment 
staff with bright commercial talent. We are interested in: 

1. Broker to develop OTC crude swaps and options. 

2. Broker to develop end-user business. Suit a marketer 
with good contacts with aMines/shrpowners etc. 

Operating from prime Mayfair offices the company offers a 
stimulating environment with potential for growth. All 
applicants will be treated in strictest confidence. 

Apply in the first instance and in strictest confidence, to: 
Sarah Bissex 

Quanntm Energy Derivatives PIC 
15 Grasvenor Gardens 
LONDON 
SW1WOBD 


Latin American Equity Sales 


London 

Our client, a leading US financial 
institution, is seeking on experienced 
professional to join its existing team. 

The successful candidate should be 
educated to MBA level, preferably with a 
financial bias, and must be able to 
demonstrate extensive knowledge of the 
l-Mtin American markets along with well- 
developed institutional contacts. A proven 
track record in selling Latin American 


products to UK and European institutions 
is an essential requirement for this position. 

If you have the necessary skills and 
experience, please send a full cv which 
will be forwarded to our client unopened. 
Address to the Security Manager if listing 
companies to which it should not be sent. - 
Reft H 7058/FT, PA Consulting Group* 
Advertising and Communications, 

123 Buckingham Palace Road, London 
SW1W9SR. 


"PA Consulting 
JUTA Group 

Creating Business sldvanlage 


CuMm focnUtnicst - IIojbu Rcvwio CobmUoocj • AUngtiringandCoamnaicaimwi 



n 


FINANCIAL TIMES FRIDAY JUNE 17 1994 


TOP OPPORTUNITIES 


SENIOR POSITIONS IN GENERAL MANAGEMENT 


i CJE % 


Chief Executive Officer (Leasing) 


vv 


flicefffaerhouse 


EXECUTIVE SEARCH A SELECTION 


Chief Executive 


C&as lompair &reann (CIE) ifl die mam Irish authority 
for the provision of transport within the State. The 
organisation's group structure induces a holding company 
and three major operating rompanira which include 
Iamrod Eirearm/Irtnh Rail, Bus ^ireann/Irish Bus, and 
Bus Atha CKath/Duhlin Bus. 

The current Chkf Executive, who also holds the post 
of Chairman, will be retiring at the end of June and it has 
been decided to separate the two functions- Hia successor 
as Chief Executive must provide e ffective, professional 
leadership to the organisation. 

Reporting to the Board of CIE, the person appointed 
mill he responsible for overall wnmgww»nt and 
co-ordination of resources within the group in die 
provision of all group services. Key tasks will be to 
provide strategic direction; to ensure the development of 
plans and budgets; to meet the objectives and targets for 
txanspcutacioa Servian within the guidelines set by the 
Department of Transport, Energy and Communications; 
to w um n* that each operating company ban the necessary 
leadership n«mgwii*n> stdSs to plan and effect 
achievements; and, to ensure the execution of plans 


strategies once they are approved by die CUE Board. 

Vvfe seek somebody who has the ability, drive; leader- 
ship skdU and en t h usi asm to develop strategies and 
implement policies so that CIE’a goals can be aduevtd. 

The successful candidate muse have fflt c ellmt leader- 
ship qualities, strong communication and interpersonal 
gWln an well the maturity, experience a nd stature to 
mmmaml respect with management colleagues throughout 
the organisation. 

Candida tea muse have an o u tst andin g record of 
achievement and excellence in management, and 
now seek a challenging role in one of the country's largest 
c o mm ercial oyg inrsat ioos. 

Rqmggrion and cooditioQS will reflect the impor- 
tance of this top level appointment 

CIE is an Equal Opportunities Em ployer. 

Please write, mrlmwng foil career details, in strictest 

n-Mi/jyfofim*, to* 

Tom O’Higgins, Price Vfoterhouse, 

Executive Selection Consultants, 

Gardner House, Wiltoa Place, 

Dublin 2, Ir eland 




MilTsHiWsUM 


The Company 

Few European economies are experiencing the same levels of sustained growthas Poland. 
The economy grew by 4% last year and is expected to maintain or increase the level of 
growth. This major leasing enterprise is being created to meet the under-served warHmg 
needs of large operating companies in Poland. This well capitalised company should rapidly 
become one of the largest leasing companies in Poland. 

The Role 

The Chief Executive Officer will report directly to the supervisory Board of the company He/ 
she will undertake lull responsibility for the business, managing finance, Marketing and 
Operations. Specific duties will indude: Selling lease services to potenfca! k**' 
managing start-up operations; finaGsmg initial debt financing; and hiring key staff indumng 
Director of Marketing and Chief financial Officer. You will be expected to maintain a 
company focus on risk management through strategy and lease portfolio decisions. 

The Person 

dearly this is an exceptional opportunity to make dramatic progress within one or me 
strongest of the emerging market economies. You win need substantial leasing experience 
and an entrepreneurial business approach. Negotiating and dosing deals with tty 
international executives will not be a new experience. It is assumed that you are already 
forging a lead in your current role. 


Torgmg a ieaa m your current rote. „ ; 

Tal^arKfabffity are the key factors but Polish fanguageskflls would bea djstinct advantage. 
Please respond to the address (fax below) quoting reference FT 2226 on all correspondence. 
AH applications will be treated in the strictest confidence. 


Antal International 


E x e cutivc Recruitment 


Riverbank House • Putney Bridge Approach • London SW6 3JD 
Tel: +44 <Q) 71 .371 9191 « Fax: +44 (0) 71 731 8140 (24 hr*) 


like Unr New Rassiafl Mel, 
This ipprffiiy fe Wide Open! 


President/CEO 


As a leading US corporation with a history of 
success and innovation In the dtaaHM 
consumer product market, we are currently 
seeking a seasoned e xe c uii re to run our tobacco 
operations in Russia. As Prssident/CEOcf this 
writing business unit based in Moscow, you win 
be raspoaribh fcr the co tuple tkm and startrup aft 
new ra mtoriM fkeffity along with building oar 
presence and market share In the new Russian 
RepnbEc and the CIS. 

Dome talents in Marketing. Sales, Fmuoe and 
Ad/nmistratlon are a mast fcr devriopmg this 
venture to optimum levels of success and 
profitability. You vriD aim need 10 years of 
d mom tllHd SnlPn iati^pyl raiTttymp nt 
experience; preferably in die tobacco industry, and 
p n wp w thn y ptrppr HnRiif i n i {juafitiss oT initiative; 
resourcafirbess and resobs-oriauted tkwlrfng. Hi gh 
quality people skills and knowledge of Rnsrian 
business protocol Is also important, Fhtencyfa 
Russian is preferred, but not required. 

We offer an outstanding benefits package wtddi 
indudes an attractive base salary and bonus 
package, payment of all relocation expenses, and a 
comprehensive expatriate package. For more 
information, phase sod CV to: Box A2077 
1 Soatlmaric Bridge, London SE19HL An equal 
opportunity employer. 


MANAGING DIRECTOR 




One of the world's largest magazine/canfcrencc companies 
specializing in engineering, manufacturing, vertical markets, 
real-estate, finance, pharmaceutical marketing, food 
marketing, healthcare, information systems and 
environmental sciences seeks to fill the senior position in Us 
conference division located in the UK. 


The ideal candidate will have outstanding leadership and 
organisational skills and the ability to direct the division's 
rapid expansion in the UK and Europe. 


Specific requirements axe: (1) at least 2 years of general 
management experience including P&L responsibility; (2) at 
least 2 years of successful conference design and m a rk eti n g 
experience; (3) demonstrated talent in "topic identification" 
and trend-spotting. This is a results-oraented position. 


The position offers considerable opportunity for growth, 
financial security and eventual financial ludepedence 
through our generous profit participation program and 
available equity participation. For immediate confidential, 
consideration, please forward resume and salary history to: 


BaxA2072, Financial Times, 

One Southwark Bridge, London SE1 9HL 


BANKING FINANCE & GENERAL APPOINTMENTS 



British airways pension investment Management limited 


Portfolio Managers 


Central London Competitive packages 

The British Airways Pension Scheme is one of the best performing, large in-house funds in the UK. Assets under 
management are over £5bn, and growing steadily. As a result of expansion of market cuveragtv-young portfolio 
managers with ability and potential are required for the following roles: 


European Equities 


Japanese Equities 


with specific responsibility for certain geographic 
areas. He/shc will have an input into sector and asset 
allocation, and will provide bade up within the team on 
other European markets. Ref 2MJ 


The appointed candidate will work with the Pacific 
Equities Manager in running the Japanese portfolio, 
with an emphasis on smaller companies. Ho/ site will 
provide back up within the team on other Asian 
markets, and will have an input into sector and asset 
allocation. Ref 295] 


Candidates should have about two years' experience in fund management; ideally in relevant markets, and are likely 
to be aged in their mid-20s. A second class degree or better, probably in a numerate or business-related subject, is 
required. Important attributes include strong analytical skills, independence of thought and the ability to work as 
part of a highly motivated and collegiate team. 


For both positions, competitive base 
salaries will be com piemen ted by a 
performance-related bonus and the usual 
fringe benefits. Please send a full CV in 


Consultancy in Investment Banking 


npetidve base $ confidence. to GKRS at tlie address below, 

men bed by a | TCF" TD> 1 quoting the relevant reference number 

onus and the usual L '*UT dJ Kv . JJS\. frO> Jj on both letter and envelope, and 

send a full CV in -■ ■ ~ — ** including details of current remuneration. 

SEARCH 8c SELECTION 

CLA REBELL HOUSE. 6 CORK STREET. LONDON W IX IPB. TEL 07 1 287 2S20 

A GKR Group Company i 


Attractive Package & Benefits 


City 


UBS is a AAA rated international bank employing over 2,000 people in London alone. The internal 
consultancy function plays an increasingly key role in the success of the bank in the UK and Europe. 
Due to increased demand for its services, it is looking to strengthen further its capability by the 
recruitment of additional senior consultants. 




The successful candidates will have a proven track record of problem-solving and manag in g change 
working for a major consulting firm or blue-chip bank. The positions require a high level of intellect 
and good communication and people management skills. At least 3-5 years experience of business 
planning, business process re-engineering, operational and cost reviews , or the investment banking 
industry are required. Knowledge of German and/or French would be an advantage. 

These high profile positions offer the perfect opportunity for the successful candidates to make their 
mark on, and build a career with, this major international bank. 


As well as an attractive salary and career prospects, the positions cany a comprehensive benefits 
package, including participation in our performance-related bonus scheme. 

Please send full career details to: 


Assistant Fund Manager 


European Equities 


Central London Competitive salary + car 


W e have a spedaflst team of professional fond managers 
running the £8 bfflon assets of one of Britain’s largest 


W running the £8 bfflon assets of one of Britain’s largest 
penston schemes. 


A competitive salary is offered, plus car and other benefits 
hckxfing proft sharing «nd sharesave schemes. 


An opportunity has arisen far an aribMous and highly moti v ated 
peson to be involved In tt* assdfc afexaSon and management of 
part of the £750 mfflon European equity ptxtfofcx 


Please send your cn quoting reference CFT7162Q4/009/FT, to the 
Personnel Manager, Recruitment Administration. British Gas pic. 
Heron House, 326 Ugh Hofeom. London WC1V 7PL dosing date 
for receipt of appications 1st July 1994. 


Melanie Olrifc 
Personnel Department 
UBS Services Limited 
100 Liverpool Street 
London EC2M2RH 


UBS Limited 


JdeaSy you should have an economics or numerate degree and 
three to four years' experience in financial markets. The DMR 
q uJfi c a Hon Is desfrabte, aid knowledge of a European language 
would be ai advantage 


‘Maximising potential through 
equal opportunities” 


UK CORPORATE BANKING 
to c£50,000 


Our dfent, a highly effective player in the provision of banking 
services and solutions to clients needs and requirements, seeks 
an experienced professional banker to maintain, develop and 
b«Kl upon an existing porttofio at major UK corporate clients, 
me successful cancfidate will be a graduate in their 30’s with a 
stron g credit background which wffl be supported by a proven 
track record In developing profitable business across a broad 
product range wtti major UK corporations. 


EUROPEAN CORPORATE BANKING 
c£50,000 


Due to continued growth our dient seeks to appoint an 
experienced cor porate banker to assist in developing a 
European portfo&o. The successful applicant wfll be responsible 
tor client relationship development and assist in focusing and 
giving direction to a team providing a wide variety of banking 
products and services in this highly competitive market The 

appointee *31, kteafly. be a graduate calbre banker with 
extensive experience of the corporate market 


MANAGER SECURITISATION 


c£40,000 


Our client, a leading merchanWnvesJiTwnt banking organisation, 
seeks to enhance its banking activities, with the appointment 
of a banker who has Securitisation experience. FuBy credit 
trained, the successful candidate wffi be a graduate, in trick 
late 20’s to earty 30’s, (deafly professionally qualified who 
«n demonstrate experience of marketing aid structuring a 
wradiajge of banking products, which wfll have Included 
socunnsaoon. 


PROJECT FINANCE 
to £50,000 


With a record of success in the Project finance advisory sector 
throughout the worid our c&ent, a respected Merchant Bank, is a 

recognised player in the provision of fee based services. Now, 
due to continued growth, a need has arisen for an aq»ef1enced 
professional banker to join this busy team, kfeafly. candidates 
should be graduate bankers currently with the project finance 
unit of a major bank. Age to mid 30s. 


Plca>c contact Richard Lvons or Sean Carr 
Carr Lyons Search and Selection Ltd 
Asu-at House, 125-129 MidJW.v Street 
London L 1 7 II 

Tel: 07 1-62 5 9493 Ea.\: 071-626 1263 


W illiani'. \\ iiiuiirM 

L.rrculirr 




Good communication skffis are essential for meeting c ompa ny 
management and maintaining good relationships with major 
stockbrokers. Canddstes should be prepared to accept high 
levels of responsfeBy at an earty stage. 


British Gas 


CJA 


RECRUITMENT CONSULTANTS GROUP 

2 London Wall Buildings, London Wall, London EC2M 5PP 
Tel: 071-533 3538 or 071-533 3576 
Fax No. 071-256 8501 


Opportunity for No2 or No3 In Compliance in a leading bank to build and run own operation m m 
organisation planning to expand rapidly over the next 2-5 years. 


CJA 


HEAD OF COMPLIANCE 


c.£50,00Q + Bonus + Car 

CHY MAJOR EUROPEAN FINANCIAL INSTITUTION 

Due to expansion our client has a requirement for a new Head of Compliance. We invite 
applications from candidates with 3-5 years' experience of SFA compliance and preferably a legal 
background. Candidates now with a top legal firm dealing with major bank clients or with an 
accountancy background will be considered. A knowledge of capital markets and treasury products 
is essential and there is an Initial emphasis on the fast expanding area of emerging markets. The 
successful applicant will report to a member of the Executive Committee, will work closely with Audit 
and Risk Management and will maintain and build on the current compliance foundations. The 
ability to ferret out the issues on a day to day basis and ensure the range of products is covered is 
key. Initial remuneration is negotiable c.£50,000 + Bonus, Car and full bank benefits package* 
Applications in strict confidence under reference HC498Q/FT to the Managing Director CJA. 


• Bani 









FINANCIAL TIMES FRIDAY JUNE 17 1994 


Rising) 


it. APPO 


p 01NTME(T 


' V ! 


INTERNATIONAL BANKING 

Swaps and Derivatives Opportunities 




Bank of America, one of the largest financial institutions in the world, is 
seeking high calibre, experienced swaps and derivatives specialists to Join 
the Middle Office and Business Systems Group In London and the Operations 
group, based in Bromley, Kent 

Swaps Middle Office- London 

we require candidates to work with business managers to lead various 
projects and business initiatives indurfing the introduction of new products 
and systems. Candidates must have swaps and derivatives product 
experience and a general knowledge of other capital markets products. In 
addition, they must possess axceflent communication and management skills 
and have the abffity to liaise throughout the organisation at all levels. 

We also require canrfidates to prepare P & L analysis and reconciliations 
as weU as provide analytical support to the traders. Canrfidates must have 
strong technical knowledge of the products as wefl as a good understanding 
of the accounting treatment for swaps and derivatives. 

An accounting qualification may be an advantage for some of these 
positions. 

Swaps Business Systems Group — London 

This group is responsible tor working with the users of front and 
back office swaps and derivatives systems to define user requirements, 
prioritise enhancements and conduct systems quality assurance. We require 
candidates with good communication skills, management experience, swaps 


and derivatives product knowledge and systems understanding. Candidates 
will probably have gained their experience working within a systems group 
or a business support function. 

Swaps Operations - Bromley 

We have a wide range of opportunities at varying levels of seniority 
for people with experience in swaps and derivatives deal processing, 
settlements, documentation, accounting and control. Candidates must be 
enthusiastic, motivated and have sound practical experience within the swaps 
environment Individuals with a good understanding of Swaps Documentation 
including ISDA rules and regulations are also required. 

Swaps Operations - Hong Kong 

Wb currently have available a variety of permanent opportunities to work 
in Hong Kong supporting the swaps and derivatives trading activities in Asia. 
Cancfidates should possess some or all of the above experience and knowledge. 

We are looking for candidates with the ability to work well within 
a dynamic, demanding and quality driven environment where individual 
performance is recognised and rewarded. Excellent career prospects are 
accompanied by a competitive salary and benefits package. 

Please Stood your CV to Patricia Bannon, Bank of America NT & SA, 
26 Bmfietd Road, Bromley, Kent, BR1 1WA stating the position of Interest 
and salary or total compensation expectations. 

Bank of America is an equal opportunities employer. 


Bank of America 

|1 opportunity for 
HH entrepreneurial 

I ™ salespeople 

to develop an 
innovative cross 
border product 

SIP 

Michael Page City 

International Recruitment Consultants 
London Pam Amsterdam DuueUorf Sydney 


Equity Sales 
to Europe 

Prime US Brokerage House to £120,000 Package 


Our client, a leading VS financial institution, is rapidly 
strengthening its presence in the European markets 
through the successful application of a fresh strategic 
approach combined with an unparalleled level of 
service. This expansion creates a need for two additional 
EQUITY SALES PEOPLE to develop the Continental 
European Markets. Candidates must be able to 
demonstrate a proven track record of at least four yean 
institutional equity sales experience. 

A dynamic proactive approach to meeting client needs 
and commercial acumen are essential. Fluency in 
another European language is highly desirable. 


Candidates wirh a good knowledge of the French 
Institutional market are of particular interest. 

This is an excellent opportunity for a motivated and 
professional individual, displaying a thorough under- 
standing of the European and UK Equity Markets, 
to develop their career within a highly rewarding 
environment. 

Interested applicants should write to Gavin Starling at 
Michael Page City, 39-41 Parker Street, London, 
WC2B 5LH, quoting reference 189390. Alternatively, 
telephone 071 831 2000 for an initial, confidential, 
discussion. 


SENIOR TRANSACTOR 
£80,000 plus bonus 

International bank With a first das* global reputation 
seeks to reautt a negotiator who possesses significant 
expertis e within the large ticket domestic and eross-bceder 
market Candidates should have the ability to work on an 
advisory basis coupled to strong technical skflli*. As there 
Is a realistic opportunity to become unit head within two 

yean* an outstanding individual is sought. 

VENDOR PROGRAMMES 
to £60,000 plus bonus 

A m a riuHl ngprofes5>cgvaLaged28ln35 < whoha8originaied 
» significant number of profitable vendor programme^ 
covering a range of assets, b sought by a bank-hacked 
lessor. Additionally candidates should have the abQity to 
market other facilities both lending and advisory, to major 
fcdiaxfcipdienis. This is an excellent opportunity to join a 
renowned, successful and expanding unit 

FINANCIAL ENGINEER 
<£55,000 plus bonus 

A major International banking group seeks to appoint a 
graduate ACA. aged 26 to 34, who has gained excellent 
experience of tax-ad van taged transactions. Within a small 
team of peo fess j on aia , the role encompasses providing 
advice to major clients on the negotiation of """p 1 ** 
structured finance facilities, both domestic a cross- 
border. 

BIG TICKET LEASING 
£45/50,000 plus bonus 

Our client has established a large portfol i o of major 
domesticasset financing transactions. In order to continue 
to expand they seek to appoint an additional senior 
marketing executive who has proven experience, gained 
with a major printipaL of successfully negotiating and 
dosing complex £20m+ domestic leasing transactions. 
Exposure to cross-border deals would be advantageous. 

LEASING ACA'S 
£30/40,000 plus benefits 

On behalf of several major leasing companies and bank's 
leasing divisions, based in London and the dose Home 
Counties we seek qualified accountants with between 
two and four years' post qualifies tioo experience pined 
within leasing or asset finance. The roles concerned covet 

Hnanrial rwUml,. imlyti<nrtiiKlyMng»nit fatWCWttng. 

If you are interested in the above or other positions 
within the leasing and asset finance sector, and have 
relevant expertise, please contact Peter Haynes or 
Keith Snow. No information will be d isclosed without 
applicants' prior consent. 

Jonathan Wren tk Go. Ltd, 

F inancial Recruitment Consultants^ 

NoJL New Street, London EC2M 4TP 
Tel: 071-623 1266 Fax: 071-626 5258 




TRANSACTION MANAGEMENT 






- h Q8$ 

1 > * * ** 



>. « • »- 


LONDON 

Our client, a leading investment bank, provides a com- 
prehensive range of investment, capital market and securities 
services worldwide. Substantial growth, combined with a 
creative and innovative approach has placed the organisation at 
the very forefront of the world’s international investment and 
commercial banks. 

The transaction management team is now seeking 
lawyers with up to 5 years* post qualification experience 
gained in a major city practice, investment bank or 
securities house. 


GLOBAL INVESTMENT BANK 


More recently qualified individuals will be given equal 
. consideration if they can demonstrate at least 6 months' 
experience in capital markets and a genuine interest in the area. 

The roles involve the structuring, negotiation, docu- 
mentation and execution of securities transactions, 
with particular emphasis on Eurobonds and other debt 
instruments- There is constant liaison with clients, external 
advisers and other parties connected with the transactions, and 
co-ordination with syndicate, marketing, treasury and risk 
management professionals. 


ROBERT WALTERS ASSOCIATES 


Europaische AAA-Bank 

Das Unternefunen: AIs Top-Adresse zahlt die Bank an den tnteruationalen Kapita lm a rk t en zu den Major-Playero. 
Ihren Kunden steht sie mit mittel- und langfristigen Mjtteln in unterschiedlichen Wahrungen, die dutch CP-, MTN- 
Progra mme , Anleihe-Emissionen sowie Swap-Transaktionen an den Finanzmaxkten aufgenommen werden, zur 
Verfugung. Bine bedeutende Rolle a 2s Emissiosswahrung spielt die Deutsche Marie. Ffir die Leitung dieses Bereiches 
suchen wir eine ira internationalen EmissionsgeschSft erfahrene Persdniichkeit als 

Leiter/in DM-Emissionen 

Die Aufgaben: Ab Abteflun^Jeiterfm Verantwortung ffir den DM-, sfirs- und o^-EmisrionsbereiclL. Kontakte zu 
den Emissionshauseni in Deutschland, Schweiz und Osterreich, Beobachtung dieser Kapitalmarkte sowie der 
Zinsentwicklung anderer Emrssioaswahruagen, um Swap-Moglichkeiien zu erkennen, VertragsgestaJhing und 
Borseneinfuhrung sowie Marktpflege; Mitwirkung an der Entwicklung von Anleihestrukturen rater Einbeziehung der 
Zins- und Wahrungsderivate, Prflfung der von Emissionshauseni vorgeleglen Angebote und Entscheidung sowie 
kompetente Anleitung und Motivation eines kleinen Teams. 

Die Anforderungen: Wir etwarten ein Stadium, gute volkswirtschaftliche Kenntnisse, mehrerc Jahre Berufeerfahrong 
im Mofivolumigcn KonsortialgescbSft sowie im Umgang mil den Zins- und Wahnmgsderivaien; Kreditkeunmisse sind 
vortcilhaft Erfahrung in der Konzeptionierung strukuirierter Anleihen wird ebenso voransgesetzt wie Initiative, 
Fuhrungskompetenz und Integrationsbereitschaft in ein Internationales Team. Sehr gute Deotsch- und 
Englischkenntnisse sind ein "must", autsbanfihiges Franzdasch VorausseCrung. Alter. Ends 30 bis Mine 40. 

Das Angebofc Dem/der Banker/in mit ausgepragter Erfahrung im Konsortial- und Bond-Geschaft, die auch in der 
Industrie Oder bei lustitutionellen Anlegern erworben sein kann, bietet sich eine faochinteressame Aufgabe auf 
inicmationaler Ebene; eine attrakrive Vergutung sowie Vortefle, die sich aus Stellung und Standon der Bank ergeben, 
erganzeo das AngeboL 

Ihr nSchster Schritt: Infonnieren Sie sich vertraulich telefonisch vorab bei Heirn Matthias lunges am Samstag 
zwischen 17.30 und 19.30 Uhr, Telefon +49.6081.42768, am Montag bis 20.00 Uhr im Burn Oder seaden Sie ras bitte 
Ihie aussagekrifligen Unterlagen. Diskretion ist selbstverstandlich, Geeigneien Interessenten schicken wir gerne 
unserc ausfdhrtiche Unteraehmens- and Positionsbeschrabting ”JSL”. 

SSUSSSSS^ Stephan & Partner gf 

KissdeSstr- l-D-61348 Bad Homburg ® +49 • 6172 * 22044 


& EXCELLENT PACKAGE 

Given the high degree of client contact, excellent 
communication skills arc paramount. In addition, candidates 
must dearly demonstr a te academic aptitude, sound commcrcxai 
awareness and the interpersonal skills to succeed within a team 
orientated environment. 

These challenging and creative positions carry highly 
attractive salary and benefits packages. 

Interested candidates should write to Simon Hanltey at 
Robert Walters Associates 25 Bedford Street, London 
WC2E9HP. Tel 071-379 3333, &x 071-915 8714 


Emerging Markets 

Equity Analyst/Portfolio Manager 

Standish, Ayer A Wood is a Boston-based investment counsel 
company in business since 1933 with S3 billion nnder 
narifegcmcBt- 

♦ irtnHng for an equity analya/portfolia manaper with at 
l<rart 2-3 years experience in the emerging markets sector to 
comp lenient oar international team. 

♦ The experience should have been gained as a research analyst 
or investment manager, ideally in both Asian and Latin 
American markets, although this is not a prerequisite. 

4 Strong academic and p ro fessional qualifications required, 
preferably CFA level or equivalent 

♦ The successful candidate wilt work in a learn based 
environment helping to create a global strategy and emerging 
market allocation. 

Applicants should submit a resume and compensation 
req uir ements to the address below. 


Director of Human Resources 
Stan dish, Ayer & Wood, lnc. 

One Financial Center, Boston, MA 02111 

Staodbh, Ayw A Wood, Inc. is an equal opportunity employer 


EXPERIENCED ANALYSTS 

Freelance UK equity research analysts needed for new 
venture to produce reports on smaDer companies. 

Working from home to stringent standards. 
Would suit recently retired or particularly 
those on maternity leave. 

Good rates paid. 

Please write to: 

Box A2073 r Financial Times, 

One Southwark Bridge, London SE1 9HL 


Market Analyst City based 

Dow Janes lUenfc Bawbofly owned ariattuy of Dow Jones and 
Cm lne. and avoid leader In premfingoirikie financial information. 

fife hare remifiy launched a new OK tiuanrial market newswire 
called OK Markets Report service provides red-time, 

in-depth coverage of sfi OK financial markets as well as economic, 
business and poffikal news that may affect these markets. 

tIK Mnrfa>b> Bppnrt k npriatwf pnntmnnn sly t jurqighrai t Uy» fal 

preanttHnas a last, accurate and araquehenstoe service. 

Wfe are expanding the UK Marketa Report editorial team to increase 
the range and scope of market coverage and we am tookfatg for a 
Market Anafrsf wfw can act quickly as news bresis. 

fira wiB develop indudiy centacts and wade closely wilh a wide 
range of sources, fat will be eqweted to bring an analytical 
approach and keen Insight to real-time news coveagt with specific 
emphasis on UK equities. 

Sereral yeas’ espaimee fa the UK equfty mar k et; efiher as an Anafrat 
or in a research role wttbin an equity braking or find management 

ni pnhp^irm in mt nu i mm iw qnInif i g ntfiT tfria]««rftIm. 

An understanding of company accounts and an ability lo analyse 
them to pnwide an insight brio corporate performance would be 
highly desirable. 

Journalistic experience would be an advantage as would an 
undentaiHfing of PCs and BreeL 

lb dpplB please send ibD c.n fa$Btber with ament salary details 
to: Stqft8nie Haros, Homan Besomces Officeq Dow Jones Tblenie, 
12-15 Fetter Lane, London BC4A 1BR. 

This company it comatUtal to tonal opportunities aad 
appHcatvms arewdoomedfrom anyone tmapectunqfcatoar, 
ettwte origin, dhabOitg, sex or ma rital ri fl ftta* 


DowJoi 


Treasury Sales 


C REDIT AGRICOLE, one of toe world's 
leading Banks, is seeking to develop its 
Treasury Sales activities in London and, to 
this end, invites applications from faigh-calibre 
candidates with a minimum of 3 years sales 
experience. Applicants should ideally be educated lo 
degree level, and must be able to demonstrate a sound 
knowledge of all Treasury products including Swaps. 

A highly competitive salary and benefits package is 
offered, depending upon age and relevant experience. 

Please write, enclosing full career details to: 

MJ Benson 

Head of Human Resources 
Caisse Nationale de Credit Agricole 
135 Fleet Street, London EC4A 2ED 

Applications should be received no later than 
Monday 27th June 1994. 


^3^ CREDIT AGRICOLE 




rv 


t 


FINANCIAL TIMES FRIDAY JUNE 17 1994 


EMERGING MARKETS : DERIVATIVES TRADERS 

Our client, a specialist investment bank with a highly successful track record, is enjoying contmued 
growth in a variety of profitable niche markets. The Risk M a n ag ement Group has been established to 
develop a capability in derivative-linked products across a flail range of underlying instruments in a 
number of emerging markets. We now seek two risk managers to establish and develop the trading 
Sanction. 

Volatility Trader: 

To ftprfg p thp risk arising from, the Group's activities. This includes pwprtelary trading tn OTC options as well as 
mating securitised products. The underlying instruments would i nc l ud e equities, commodities, interest rates and 
currencies across a range of geographical markets. 

LDC Debt Option Trader: 

Prouiding a speriffcderwatiDe risk management aipctbility in taruiem with our client's strong presence in the Latin 
Ameriam, Eastern European and African Sovereign debt mctrkets. 

While prior experience of emerging markets is not essen tial , interested ap p li c ants should: 

- have a demonstrable track-record of successful volatility trading 

• have at least two years’ options experience 
. have exposure to OTC products 

- be graduates with a mathematical degree 

• hf individuals ca pable of taking independent responsibility in a closely knit team envir onm e nt 

- have a desire to be involved in, and contribute to, the development of the bank’s activities in these arras 

These represent i rnnsnal and ^set tin g opportunities to develop careers across a broadxange of markets, and to 
establis h market leadership in areas of enormous potential growth. 

Tn watmw it Iran icing romnnar ntinn will he geared to attract individuals rtf the highest calibre. 

To discuss this further, in strictest confidence, please contact Christopher Lawless on 071 379 1100 
or write to him ah 



We are broadening the scope 
of our global education team. 

Do your skills fit into the equation? 


Technical training in 
inka national imestnvent banking 


City-based, with European travel 


TSeBkxxnsbaryGroay, 
(Saardi mi tlS e tec ATon CpDsalta nt s), 
Tbe Second Floor, 

Bedfcttf Chambers, 

Cement Garden. 

London WC2E8HA. 

Fax No. 071 240 6382. 


THE 

BLGDMSBURY 

GROUP 


Price Vfaterhouse 


EXECUTIVE SEARCH A SELECTION 


Broker/Dealer 


Swiss Bank Corporation is one of the world’s premier 
muroatfanal investment banks. With a major presence 
in capital markets worldwide, our reputation as a Risk 
Manager and provider of creative solutions for clients is 
second to none. 

Our global Education Department is also highly 
r e g a rded for the exceptional quality of technical 
teaching delivered to business professionals. As product 
structures and risk management become ever more 
complex, so the need for strong technical knowledge 
becomes a requirement in all areas of the business. 
Consequently, we are making further investment in our 
education team and establishing a new post in London. 
This senior position will Focus on education 
development and delivery for all levels of practitioners 
primarily in the UK and Europe. The range of subject 
areas will include: 

• Derivative and rash products, including arbitrage, 
pricing, hedging and risk management techniques. 

• Corporate finance and investment banking. 

• Marketing and rales of finanaal products. 


Astrong knowledge in at least one of these areas i* 
essential, along with a thorough mwtestandingof 
multivariable calculus, matrix algebra, differential 
equations and statistics. Specific experience in a 
training/ teaching capacity is not critical providing you 
have the personality and coromuntcarion skills to create a 

dynamic and effective teaming environment. This must be 

flexible enough to meet the needs of specialists, generalists 
and new entrants aBke, and adaptable to the ever-evolving 
trends in tbe marketplace. With this in view, your ability to 
deliver entirely business-driven education is critical. 

Academically, you will be expected to hold a 
Masters or Doctorate degree in an analytical field such as 
finan ce, economics, econometrics, mathematics, s tatistics. 

physics, engineering or computer science. A second 

language, ideally European, would be an advantage. 

If your «ViH« match this considerable challenge, 
the rewards and international career prospects will be 
exceptional 

Please write with foil career details to Peter Cole. 
Swiss Bank Corporation, Swiss Bank House. 1 High Timber 
Street, London EG4V SSB. 


Europe 


Our client, a Wing European broker, is seeking a Broker/ 
Dealer to wad: with their Organisation in Europe. 

The selected candidate will be port of a very successful team 
engaged in the European Market, intermediating OTC products 
for institutional rKmta and finan aal institutions. 

You must have 4/5 years experience with a broker in 
sdEng and structuring interest rate swaps, c ur rency swaps, 
and related option derivatives. We t*rjy*-r you to have «nri | *ing 
customer relationships in Europe, and a proven track record 
of sales growth. 


An attractive compensation package will be offered, to 
relocate to Europe. 

We have undertaken to forward all replies to our diene, 
unless instructed otherwise. Please indicate any Broken to 
whom you do not wish your details to be forwarded. 

Send your foil CV with salary deads, to Barrie Whitaker as 
Executive Search 6/ Selection, 

Price Waterhouse, 

Milcon Gate, 1 Moor Lane, 

London EC2Y9PR 


Swiss Bank 
Corpor a tion 


MIS DIRECTOR. Ssvsra) ym sxp ki 
ktamtfon Systams lar raSIraafarW cerp. 
Rum Osman. Good mpm slots. Co fa 
German autMkSwy of UK pamnL CV do 
R acrattor. 15840 Vantora BhnL. #838. 
Encto; OVS143& USA or Ftac 81848* -8605- 


APPOINTMENTS ADVERTISING 
nna in the US cAta Wkteadqr * 

TkMteyUatehiwiiiwMlrilWonrwny 
Prifaj. Pot flnthcr pln%f rnwnrr 

FfcJfip Wriflcy On DTI STi 3351 


Treasury Appointments 


gfem m 

Ps? \y- 

ins 


HALIFAX 

Competitive Salary Phis Benefits 


With total assets in excess of £67 billion, Halifax Building Society is 
one of the largest financial institutions in the UK. Group Treasury, 
based in Halifax, is responsible for liquidity, wholesale binding and 
interest rate and currency risk manag ement. Now we are looking to 
further expand our Treasury team in two particular areas. 

Fixed Income Securities 

A key area within Treasury is investment in fixed income securities 
and we want to appoint an experienced bond dealer to join our team. Ideally with at 
least 5 years' experience in fixed income securities including British Government 
Securities as well as other major bond markets, you will also be able to demonstrate 
dealing expertise in both rash and derivatives markets, particularly in relation to 
asset swaps. Reporting to the Investment Manager, you will be responsible for an 
investment portfolio of both fixed and floating rate bonds. 

Investor Relations 

Halifax places the utmost importance on the development and maintenance of 
investor relations both in the UK and in financial markets throughout the world. 
With wholesale funding bala n ces in excess of £1 1 billion and plans for expanding 
funding activities, the opportunity now exists for a market professional to develop 
within Group Treasury in the field of Investor Relations. You will be expected to 
demonstrate a wide knowledge of financial markets, probably gained from 
experience in a major financial institution or corporation. Apart from proven 
experience in finance and marketing, the position demands enthusiasm and 
commitment, allied to excellent management and mm mi miration skills, together 
with the drive to fully develop the investor relations role in future years. 

These important positions both offer an attractive remuneration and benefits 
package including car, subsidised mortgage, private health insurance, contributory 
pension scheme and relocation assistance where appropriate. 

To apply, please write with full CV and salary details, quoting reference [HOP/TA] 
to the Assistant General Manager, Group Personnel, Halifax Building Society, 
Trinity Road, Halifax, West Yorkshire HXI 2RG. 


Halifax is fully committed to equal opportunities 
foralL 


CORPORATE r.X. £40,000 

US ranrrrtBMHU bank requires a senior calmer <ImIw aged 25 Is 35 with a 
iWoujgli knowledge of «U Treasury products. Hnap— alMIllI— will Include 
■aerleting mod quoting FJC. & Money Merkel prices to amparase cEeatt. Ability to 
interpret current economic & political iaioreeliou and U advfae eotttncn on 
madut trend* b eamoioL Homey in another European kgap u dniraUe. 

FORWARD FJL £30,000 

A senior FJL dealer with expertise acquired cu . Forward Brno enneney book is 

sought by a first date nArnadoBal balBlu Caadidatca agsl 2S-35 triH ban a strife 

career binary and tatnt be pnficuut with arbitrage basineaa. Working loumtedae 
of Off- Baknre Sheet mlrmHk wwlJ la ah mhuym 

OFF-BALANCE SHEET £70,000 

High profile European bonk wishes to appoint a senior trader with nrpaniao is 

PIM's & Future*. Idealfr agad 24 to 32, «w ndM— . wifi hare p twed u bw 4 
yean experience dealing in USD or DEM, and should hare a sound 
undenteodiog of the Cash market. Swops end Arbitral techniques. 

. * £40,000 

U*r dim. ■ prime European bank vlueh enjoy* a pre-eminent paction in 

global F.X. markets, b seeking a senior dealer who is currently active in Spot 
Cable. The sn occsrfal candidate will he aged 2a tn 31 with a consistently positive 
pniGt record. The incumbent will be comfortable with wbetantial ntaoense on 
en tnterbank/prtpaieuuy basis. Sigaificaal benefits apply- 


ll-i 




Pleoso <c-l Jcne hampion or 
wrilp In confidence qoorlnq 
ref- JH ) 9i>$. 

Tel: 07 I -369 0367. 

36 Cornhill. 
london. 5C3V 3PQ 


£1 

The Royal Bank of Scotland 

Where People Matter 

Committed to tqutd OpponooMes iff 

ACQUISITION FINANCE 

Superb opportunity for 
ambitious young accountant 

Edinburgh 


Opportunity to join a major 
investment bank as a 
European Research Analyst 

Do you have strong analytical abilities? 


Excellent package ■ City based 


Tb« Royal Bank of Scot la nd 


Aeqnisttloa Ft no n ca 


focused 


la lntant on becoming 
vOdpait Is tbe UK 
* and Is looidntf to 
to Its naH, highly 
, which or gan ! — tha 



Our client is the corporate and 
investment banking arm of a m^or 
financial services group. 

They are able to offer a unique 
opportunity to join their successful 
European banking research team. 
You will be required to research and 
analyse the sector and be involved in 
sales and marketing to investors. 

This role is an exceptional challenge 
for a graduate or MBA Ideally, you 
will have two years’ experience either 
in Stodkhroking research (country or 
sector^, or in an analytical role within 
the financial services industry. 

You should be a good team player, 
strongly seffmotivated, numerate and 


Associ 


articulate with a successful track and 
academic record. European languages 
would be an advantage. 

For the right individual a competitive 
banking package and excellent career 
development prospects are on offer. 


To apply, please write enclosing a full 
CV, quoting ref 58, to Alastair Lyon, 
Co nfidentia l Reply Handling Service, 
Associates in Advertising, 5 St John's 
Lane, London EC1M 4BH. 
Applications will only be sent to this 
client but please indicate any company 
to which your details should not 
be sent 


TISING 



19 Mvs Street, EDWUttH EH2 4FH 
Tot: 031 839 70S7 


EXECUTIVE RECRUITMENT 



HYDRA ASSOCIATES LIMITED 

Media Sector Consultant (MBA) 

Up to £50,000 pins package 

Hydra is a leading mwtia sector corporate advisor providing 
strategic, creative, «nd operational advice to tbe television, 
radio, nwafcj, filmed entertainment and (dated sectors. We are 

wiring an outstanding candidate to join this small, highly 
motivated team, with a business/an&lytical background, 
exceptional communication $Wll*, experience in media or 
telecoms, with the ability and confidence to deal at Chief 
Execntive and Chairman level on a wide range of 


Please reply in confidence stating enrrent salary to: 

Nikki Vane, Hydra Associates Lid, 
78-80 St John Street, London ECIM 4HR 


APPOINTMENTS WANTED 


VIETNAM 

English Businessman, residing 2 ybs Vietnam, aamrg 

NEW CHALLEN GING H OLE AS EITHER 
COUNTRY ttEPKESENTAUVE OR CK NKRat. mawacthi 
Back grou nd includes Oil Industst^Shifpinc^Mar^ 
Diverse and excellent contacts in both business 
COMMUNITY AND GOVERNMENT. 




FUnjRESMREXUBIIVATIVES 


finest. fbmtfnstLlSymafKhmamtml 
Bdoremkfno.1 nloclingfara 0 k Yaviodu uned 


I Engm Comait A MorriM- 


yn aMla a {Bodudsto bv 


8HL 


FOREIGN EXCHANGE DEALER 


with 22 years experience 
piovsi track record seeks opportunities. ' 

Write Box A2055. Pmandal Thaes, One Soudntoic Bridge, LondariSEl WL 


pjilU 


MBAJ3 Q Years Pirn 

Sates ESSE!*™* # 

• Excdtert Presentation & a'Sv" 5 

Communicatioo Skins; * Ahte to Locate World Wide. 


, •“ _ 1 

_ f ? . - 

■\ \ - A - 
- 













financial times Friday june 17 1994 


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• as a 

- * > i u Vnalvj! 


Bond Analyst/Economist 

Bond Division 


London 

Hambies Bank seeks a Bond 
Analyst/Economist to support its highly 
successful Bond Division. Located on the 
trading floor, you will provide succinct 
and timely analysis of the Australian, 
New Zealand, Canadian and UK bond 
markets, regular yield curve analysis and 
bond switch recommendations. In 
conjunction with the Hambros Bank 
Economics Unit, you will also be 
expected to provide general economic 
analysis, requiring rapid reaction to 
major data releases. 

Candidates should possess an honours 
degree in Economics, 2-3 years’ 
experience of economic analysis, 
preferably io a trading environment, and 


Competitive salary + benefits 

must be able to demonstrate a keen 
interest in financial markets. However, 
given the practical emphasis of the 
position, we would also consider 
applications from market professionals 
with a more general economic 
background. Good presentation skills, 
both written and oral, are important. 

An attractive salary and benefits package 
is available, commensurate with 
experience and qualifications. 

To apply, please write, enclosing a 
detailed CV and indicating your 
current remuneration package, to 
Ian Beauchamp, Chief Economist, 
Hambros Bank Limited, 41 Tower Hill, 
London EC3N 4HA. 


HAMBROS BANK LIMITED 


Fund Managers 

Leading UK Institution — City 

Our long established client, with £7bn under management, has two vacancies 
for Fund Managers in its Overseas Equity teams to work on Europe and the 
Far East Candidates should have a good degree, an ability to think creatively and 
be capable of being assessed 1MRO Threshold Competent within a reasonable 
period of time. 

Around 2 years experience of analysis or fund management in European or 
Far East markets is desirable but consideration will be given to highly qualified 
candidates with UK market experience. The successful candidate can expect early 
responsibility for regions and funds plus regular foreign travel 

Our client offers competitive salaries and a benefits package comprising: 
subsidised mortgage, non-contributory pension, private medical and permanent 
health insurance To apply, please write with a full CV to Catherine Edwards, at 
the address below. Mark your envelope ref 1002 so that we may pass it direct and 
unopened to our client, unless you wish to advise us separately of any company to 
which you do not wish your details to be sent 

BERNARD HODES 



.S /:/./■(' T! O ,Y 1 

Birmingham ■ Bristol - Cardiff 

Griffin House, 161 Hammersmith Road, 


Hertford ■ Leeds ■ Manchester 


(Intel 


OVERSEAS TRADERS 

A large South African bank wishes to recruit trading staff for 
their Johannesburg Head Office. 

Opportunities exist for spot currency and interest rate futures 
traders. 

Applicants should ideally be aged 22 or older and have a | 
minimum of two years trading experience. During this time 
they wiD have gained a thorough knowledge of their respective 
areas, and have a profitable trade record. 

An excellent package including relocation expenses is offered. 
Applications, including full details of career to date and 
current pactage, which will be treated in the strictest 
confidence, should be sent to:- 

Box A2075, Financial Times, 

One Southwark Bridge, London SE1 9HL. 


APPOINTMENTS WANTED 


WANTED OPENING IN CITY 

For highly motivated ambitious bright individual 
Tri lutgural - English, French, Italian 
Good computer skills, mathematical and science 
background. Currently in sales position but looking 
to gain financial experience, keen to learn. 

Any position and salary considered. 

Write Bax A2061, Financial Times, 

One Southwark Bridge, London SE1 9HL. 


EXECUTIVE PERSONAL ASSISTANT 
SEEKING NEW CHALLENGE 

T nt M'm rt iitpi fl multilingual m » h i i » Swiss woman sects new challenge — 
executive Personal Annuitant in private service. Experience In hotel 
managmant. Recent experience an personal assistant for family of 
distinction da tins included co-ordinating their many residences, 
organising receptions, social events and private calendar, directing 

p nrufinttri frp all French, GfifflUUl, fl ptmkh T hiltun 

«w bfl provided- 

Haase reply Box A2078 Financial Times, One Southwark Bridge, 
London SB19HL 


SENIOR HAUAN MANAGER 

48yzs,multiHngual > 

flxperiaioed in nwrrlcpting, «nlgt. manufacturing; pnwttrgd in financial 
report in g and control. Would examine opportunity in any major 
European town. 

Write Box 2*30, Fmmtdal Tiros, 

One Soatiaimk Bridge, London S£1 9HL 


CORPORATE FINANCIER 

London-based Chattered Accountant/Merchant Banker with significant 
commercial and financial experience within the UK and Europe seeks 
imc r cs iin g opportunity or challenging assi gnm ent anywhere in Europe. All 
replies will be acknowledged and treated in confidence. 

Wriu to Box A2068, 

Fi n a nc ial Toots, 

Oat SonShwark Bridge, 

London SEJ 9BL 



HONG KONG 

As part of its continuing programme of expansion, our client, one of the 
world’s leading banking groups, is seeking dynamic individuals to 
strengthen its fixed income distribution team in Hong Kong. 

Flaying an active role within this high profile team, you will be selling 
the bank's products to a broad institutional and corporate client base 
within the region. You should have a strong knowledge of and interest in 
the Asia Pacific region, and fluency in Mandarin/Cantonese would be a 
distinct advantage. Ideally educated to tertiary level, you will already 
have an enviable record of success in a high pressure profit-driven 
environment. 

Successful candidates will be rewarded with an excellent remuneration 
package and the opportunity to significantly advance their careers with a 
leading institution in the world's fastest growing economic region. Please 
reply in confidence to: 

Harry O'Neill or Vanessa Edwards on (852) 536 0100 
or by fax on (852) 537 1011 


Lazaid 

Investors 

Fund Analyst 

Lazard Investors, the Fund Management division of Lazard Brothers, currently 
manages assets of £5 billion on behalf of a wide range of international and 
domestic clients. 

We are seeking to appoint a high calibre individual to join our dedicated 
performance analysis team. Together with die team you will be responsible for 
evaluating Lazard Investors funds under management using the latest performance 
analysis techniques including relative attribution and risk analysis. 

You will be a graduate in a numerate discipline (preferably Mathematics /Statistics) 
with strong quantitative analytical skills and a knowledge of the financial markets. 
Ideally, you will also have one to two years experience in investment management 
and in particular in a performance analysis role. 

If you are interested in this position and meet our criteria please send your 
curriculum vitae, including present remuneration details and contact telephone 
numbers, no later than Wednesday 29 June to: 

Sarah Barber 
Personnel Department 
Lazard Brothers & Co, Limited 
21 Moorfickb, London EC2P2HT 


APPOINTMENTS WANTED 


Financial Analyst Corporate & Banks 

Fluent in English, working knowledge of German. 5 years experience on an 
international scope and in France. Sound educational and professional 
background. Recent developments: derivatives products and the setting-up of 
the ALM reporting in a branch. Seeks challenging new position. 

Write BaxA20&j, Hranctel Times, 

One Soutowarii Bridge, London S£19HL 


INTERNATIONAI BUSINESS 

British Utah BQfWav- Z7, Thyem npottnee 
la inrsnadnul Bank In London: Strang 
Commutation anti Prnamutaa SHfewHittie 
ibtBty to wnrik in an in ia i u Bonal and Ifcdfl- 
Cnltnral EnlrwimanL Languors: Frank/ 
Are Me/EngHtt sad Ponagnu- Uwd an d 
wntad <n Bnd. Seeks daloqtag posUonta 
tat ua ti Dml BudaessffinimBinaagtairaBl. 

wrtu to BarA2074. FtntadO Times. 

QneSautfrstifkBrtfga, tmdoa S£! SHL 




How do Europe's 
best business people 
get the top jobs? 


- * ;f 


They use the FT. 


Senior business people all over Europe use the FT 
throughout their working week. 

They use it to keep up with the news, views, issues 
and most importantly the opportunities. 


So for key national and international appointments, 
using the FT gives them a wider choice of the top jobs. 

Today Europe is the job market and the FT, Europe's 
business newspaper, is where to find it. 


For more information please call Elizabeth Arthur on +44 71 873 3694 

FINANCIAL TIMES 

EUROPE’S BUSINESS NEWSPAPER 






VI 


ACCOUNTANCY COLUMN 


FINANCIAL TIMES FRIDAY- JUNE 17 1994 


Crying wolf too often over the ‘liability crisis’ 

Andrew Jack reports on a lengthy but ultimately one-sided debate on an important professional topic 


T hree concepts associated with 
the creative accountancy term 
“extraordinary item" could 
rarely be more appropriately used 
than hi connection with a recent issue 
of a US academic journal: significant, 
but one-sided and questionable. 

The Journal of Economics & Man- 
agement Strategy, published by the 
Massachusetts Institute of Technol- 
ogy, has devoted an entire Issue to the 
liability crisis and its impact on 
accounting, based in turn on papers 
given at a con f erence on the subject 
In April last year*. 

There is little doubt that the topic is 
extremely important, and it is wet 
come to see it debated at such length 
in an initiative taken by an academic 
institution. The disappointment is the 
lack of balance in the analysis it 
contains. 

It is particularly ironic to see some 
of the dangerous ass um ptions made 
without supporting evidence by 
academics of economics and account- 
ing, who have a reputation based on 
objectivity, rigour and numerical 
analysis. 

Take this comment from Mr Wil- 
liam Kinney, chair at the g radua te 
school of business from the Univer- 
sity of Texas at Austin: “It is fair to 
say liti gation threatens rfo* con- 
tinued Of inflppowiAT^t audit- 

ing as we know it today”. 

Or - from the ramp author - that 
many claims against auditors “may 
be nan-meritorious”, simply because 
thft average value of legal settlements 
is a small proportion of the average 
value of claims. 

Take the oft-repeated but rarely 
analysed mantra that the downfall of 


Laventhol & Horwath, the large US 
accounting firm that collapsed in 
1990, was caused by litigation issues. 
In fact, a number of other factors 
were at least as important. 

The conference organisers clearly 
made an impressive attempt to make 
the debate wide-ranging and relevant 
to policy by including professionals in 
practice as well as academics. Sadly, 
the rhetoric of senior representatives 
of four of the “Big Six" firms (which 
have reportedly spent J 2 m apiece lob- 
bying for litigation reform) rings a 
little hollow. 

There Is an almost suspiciously 
common line foken by four of the 
firms. They all talk about the per- 
sonal pressures caused by lawsuits 
and the exposure to unlimited liabil- 
ity, and the reluctance of firms to 
continue to audit higher risk clients. 
They suggest (though none provides 
any examples) that promising accoun- 
tants are rejecting the offer of 
partnership for fear of the conse- 
quences. 

Mr Larry Weinbach, manag in g part- 
ner-chief executive of Arthur Ander- 
sen, says small and mwlhmuriw firms 

are reducing the audits they under- 
take to reduce their liability exposure. 
Yet most of the large lawsuits are 
a gains t larger firms. 

Similar points come from Mr Mich- 
ael COOk, chairman and chief execu- 
tive of Delortte & Touche. Yet Ids 
stance is in apparent contrast to the 
view of Mr Ed Kangas, managing 
partner, who in a more general inter- 
view with the FT last year did not 
even raise litigation reform when he 
was asked to list the most important 
challenges facing his firm. 


All this is not to say that much of 
the sympathy towards the current liti- 
gation situation in the US is unjustif- 
ied. It is just that many of the argu- 
ments are ter less relevant and need 
to be applied with considerably 
greater caution in the UK and other 
jurisdictions. 

For example, the firms call for “fee- 
shifting" - also known as “the 
English rules" - by which unsuccess- 
ful litigants must pay the winners’ 
legal fees if the claim was frivolous, 
in place of each side paying its own 
costs. They want the elimination of 
bonuses paid to representatives of 
nlftgg action suits which act as incen- 
tives to the emergence of professional 

p laintiff^ 

T hey also criticise the litigious- 
ness prevalent In the US, with 
plaintiffs rejecting any per- 
sonal respcmslbflty for loss, tn a pro- 
cess characterised by Mr Richard 
Breeden, former chairman of the 
Securities gT|f ^ Exchange Commission 
(SEC), as “heads 1 win, tails I sue". 

Yet ironically, Mr Breeden himself 
(regrettably absent from this journal) 
does not support proposals to reform 
joint and several liability, by which 
one defendant can be required to pay 
damages disproportionate to the 
degree of culpability. He argues that 
it “strikes a reasonable balance” 
between the in t erests of auditors and 
those of taxpayers and investors 
harmed by poorly audited companies. 

Two senior officials at Ernst & 
Young provide (though irritatingly 
without naming names) a useful sum- 
mary of legal precedents. They high- 
light an English-based company 


which offered shares only to UK resi- 
dents bat sued its English advisers in 
Montana to avoid the risk of having 
to pay the'other side's costs, ft even 
floated a zero coupon loan note to 
fund the litigation, which will pay 
bondholders a percentage of any 
award.’ 

Nevertheless, the Journal does con- 
tain same excellent articles. One of 
the best pieces is written by Mr Rob- 
ert Elliott, assistant to the chairman 
of EPMG Feat Marwick, who argues 
that “hard data should replace anec- 
dote”. 

He suggests that research is needed 
into: whether users value audits; who 
gains from litigation awards; whether 
settlements disproportionate to fault 
improves auditors’ performance; and 
what caused the crisis. 

The problem is that the accounting 
firms anfl their insurers, so willing to 
call for reform, have been equally 
reluctant to provide such infonnatian. 
At least one group of respected aca- 
demics in the UK trying to research 
litigation reform has been refused 
access to professional indemnity data 
on the large firms, for example. 

Mr Walter Schuetze, chief accoun- 
tant at the SEC, argues the liability 
crisis is a function less of auditing 
failures than failures. Cit- 

ing the collapse of the Savings & 
Loans industry, he says tighter stan- 
dards rather than ones leaving much 
to judgment would have prevented a 
position in which “ manag ement puts 
on Its rose-coloured glasses, and the 
auditor is unable prove that his or her 
client is wrong”. 

Mr Weinbach makes an inter esting 
point in suggesting that litigation, is 


forcing “defensive auditing”, in which 
- like doctors carrying out needless 
tests - accountants are forced to 
spend increased time checking and re- 
checking at the expense of efficiency, 
a process that adds much to cost but 
little to value. 

This needs further examination. 
After all, conducting needless tests 
even when jud gment dictates they are 
not necessary is one thing; but ensur- 
ing financial statements are accurate 
within reasonable levels of confidence 
is quite another. 

Mr Cook sketches out different sce- 
narios for the profession, including 
one in which the additional audit 
costs for clients without any litigation 
reform would be 25 per cent to 50 per 
cent higher. More detail would cer- 
tainly be helpful. 

Thomas Lys, from the Kellogg grad- 
uate school of management at Nor- 
thwestern University, reveals a sharp 
rise in lawsuits against auditors - but 
the total from 1960 to 1985 was still 
only 335. 

- One perspective sadly lacking 
throughout the articles is of those 
who have lost money in companies 
where the audit report was inade- 
quate. An important missing topic is 
analysing precisely what limits to 
compensation would be feasible given 
■ the firms' stated willingness to pay 
damages when they have done wrong. 
It seems that at least one more aca- 
demic conference on the subject could 
be easily justified. 

* Journal of economics and manage- 
ment strategy. Volume 2, issue 3. Fall 
1991 MIT Press Journals. 55 Hayward 
St Cambridge. MA 02142-1399. USA 
S1L50 


Hepworth Refractories, a division of Hepworth PLC* 
is afmajor supplier of heat ^etampr^sma^ 
to the steel, aluminium and glass 
business Is truly International wrth gtoWmN* 
being served from UK, European and Cmlifcl 
factories. A vacancy has arisen within our seift* 
management team for a 

DIVISIONAL MANAGEMENT 
ACCOUNTANT 

South YbrKshire Package to c. £ 30 K 

we are looking for a qualified ACMA with several 
years' experience in a multi-site, multi-national 
organisation. You will be required to help oevelopt 
implement and improve Divisional business 
monitoring systems and predictive models. 

Heading a small team of dedicated staff you must 
be able to communicate effectively at all levels and 
work to exacting deadlines. A working kn ^w ,e d9® 
of French would also be an advantage. The job 
will report to the Divisional Financial Director and is 
based at our attractive Sheffield office. Applicants 
should be prepared to travel extensively within the 
UK and Europe. 

Please submit a CV including details of current 
remuneration to: 

The Finance Director. 

Hepworth Refractories Ltd., 

Genefax House, 

Tapton Park Road, Sheffield SlO 3FJ 



, 4 ,- 


Applications to be received by 1st July 1994 


INTERNAL AUDIT MANAGER 


South East 


c.£45,000 + car 


High Profile Audit Management Role within outstanding Financial Services Group 

As one of the UK's best known providers of insurance and financial servioes, our dent has some 25 million policy holders 
and a reputation for the highest quality of service deUvcry. 

Audit is very well regarded, with an actn *2 Group Audit Committee and strong relationships with the Board. The Corporate 
Audit Department works closely with fine management to develop cammercialty sound recommendations and is staffed by high 
caHare individuals to help defiver them Recent career movement in the department has created an o pport u nit y for an Intemri 
Audit Manages -fikriy to be a quafifiad acco u ntant- with substantial audit managem ent g* p errenct> 


RepartingtotheGroi^HeadofAurfii.youwaibc 
responsible for about 7 audit professionals. Likely to be 
a graduate ACA, you wffl hare trained within a large 
Practice, and probably be aged 32-40. 

With at feast five years' p rofessional smrfit experience in 
a blue drip environment, you will demonstrate very 
strong technical and communications sk31s. 


The corporate autfit brief includes foe evaluation of 
pe for mance and controls throughout the UK and 
European operations, as well as deSvery of strategic 
review prefects to senior management 

Ffersonal qualities wifi indude dear leadership skills, 
rigorous analytical capabilities and high levels of 
energy. %ur team wffl work primarily in the UK and 
occasionally abroad 


Career prospects are excellent, wfih the Corporate Audit Department providing a regular springboard to further career 
opportunities within the Group. 

focompfete confidence, please write enclosing your CV to Phffipl^Xfldis. 

Zealand James & Company, Aakett Lane, 

Asfratt, Princes Risborottgh, Bodes HP27 917 
Telephone: 0844 275800. Fu: 0844 275805 



.... join a leading consultancy in European financial recruitment 


EUROPEAN SEARCH & SELECTION CONSULTANTS 


London Based 

Excellent 
Basic Salary 

Bonus 

Car Scheme 

O 


/, 


FSS Europe (part of FSS Financial Selection Servioes) is a leading London based specialist financial search 
and selection consultancy operating throughout Europe. 

Over the past two years we have established a team of consultants who have successfully penetrated a number 
of key European markets. We haw developed our competitive edge by providing multinational clients with 
innovative solutions to recruitment problems and by delivering an effective service of the highest quality. 
We intend to build an our current position as well as expand into new European markets. 

Wfe axe now looking for additional consultants, to be based in London, who will creatively market FSS 
Europe’s services and develop business relationships quickly leading to assignments being won and 
successfully handled. Tfou will be expected to undertake international travel. 

People wbo join us in these draDenging and highly rewarding positions will be 25-35 years old, possess a high 
de gre e of motivation and be committed to succeeding in a sales environment. We arc keen to hear from 
candidates of all nationalities but particularly those from Germany, Italy; Benelux, Eastern 
Europe and tire UK. Previous recruitment, safes or accountancy experience is preferred but not 
essential. All applicants must be able to speak and write in English and be prepared to be based 
in London. 

Bar further information please call John Bowman or Marik Stewart, at FSS Europe on (44) 

71209 1000 (evenings on (44) 474 874473, (44) 256 810286 (fax number (44) 71 209 0001) or 
write to Charlotte House, 14 Windmill Street, London W1P 2£>% United Kingdom. 



FSS 

FURUPI 


GROUP FINANCIAL 
PLANNING & ANALYSIS 


MANAGEMENT ACCOUNTANT 


South of London 


late 30’s 


Our clients are a subs tantial manufacturing pic and have 
a significant overseas presence. With a clear business 
strategy, well-respected branded products and a strong 
balance sheet they are emerging from the challenges of 
the recession with ambitious plans for future growth, 
both organic and by acquisition. 

This is a ‘fast track* appointment arising out of internal 
promotion and offering real career development 
opportunities over the next 2-3 years. The person 
appointed will report to the Group Controller and be a 
member of a small professional team which provides 
support to the Group Executives to enable them to 
monitor and enhance the performance and profitability of 
operating subsidiaries. 


to £50,000 + car 


The job therefore has demanding standards in terms of 
commercial realism, analytical precision and 
com m unication skills. The corporate culture is ethical, 
disciplined and professional. The climate is informal 

Applicants must be graduate Chartered Accountants with 
a sustained record of high achievement. Precise 
experience is less important than strong personal 
qualities although candidates with exposure to a 
manufacturing environment wifi have some advantage. 

Please write with foil CV, including salary history anrf 
daytime telephone number quoting reference 1749/FT, to 
Dick Phillips AQS, Phillips & Carpenter, 2-5 Old Bond 
Street, London W1X 3TB. Tel: 071-493 0156 (24 hours). 


Phillips & Carpenter 


Watford, Herts 


£22-£24,000 + Benefits 


Motion & Control 

The Company 

Parker Hannifin is the leading worldwide manufacturer and suppfer of motion and control technology. A US multinational with operations throughout Europe, the 
Corpo r at i on has a tumew of S2.5 BiBon and employs more than 25.000 people aroind the world The Watford location is the base lor the UK operation of four 
divisions. encompassing two manufactiaing plants and two sales service centres. The Finance Team s now seeking to recruit a Management Accountant 

The Opportunity 

This a a bey rale cowring the production and development of management infonnation for the operations, pranking a UK wide Management Accounting Service 
ResponabEties wffl include: 


.* Monthly production of Costing RSI, data and inventory valuation using a 
standard costing system. 

• Development at performance measurement systems within a changing 
manufacturing environment. 


• Development of the costing system within the context of a nwgor operating 
software imgrade- J-D. Edwards ManufactunngfDotnbution and Flnanoals b 
being implemented across the operations. 

• Ad hoc product costing and activity based casting projects for operational 
management 


The Candidate 

This position Is (deafly suited to a finalist or Newly Qualified ACMA/ACCA. The successful candidate wffl haw a thorough understanding of techracal accounting in a 
standard costing awronme n L It b ttdy that heAhe wil hove several yean experience in Manufacturing with a minimum of two yean n a costing role. Exposure to US 
reporting requirements and the use of financial software within an ASflOQ environment would be an aWanoge. The rote wffl suit a three oriented and nmaHwwh ^.,1 
This position otters a com p etitive salary and benefits package, induefing BUPA, Contributory Pension Scheme and 25 days holiday, as wed as excellent career 
opportunities within a progressive and dynamic company 


THa position b being handled mdhohreiy by Accountancy Personnel For further w ddm wi on please contact our HecnritmenT 
Advisor lisa WaSaneor write enclosing a fu0CVto> Accountancy PanonneC TO Station Road, Watford WD1 1 EG. Tel: 0923 22S332L 
dosing dote for applications^- 22nd June 1994. Parker Hannifin b an equal opportuifties employer. 


Selection Consultants 


INTERNATIONAL BANKING 

Earope/Far East/USA • Highly competitive remuneration pa ckag e 


Our client is one of the most prestigious banking organisations in the 
worid. The quality and diversity of its products together with its global 
P re *® noc * fi* envy of most of its competitors and co mmands the 
respect of all of them. Now entering a phase of growth the Bank wishes 
to recruit additional staff in London to strengthen a highly r M ay fl ri l 
audit function. 

Ideally, candidates most meet the following requirements: 

■ A depth of experience (minimum 2 years) in a financial services 
auditing environment. 

• A conunitmmr and potential to succeed to a position of greater 
seniority within 2-3 years. 

• A willingness to travel and spend periods of 46 weeks in a variety 

theUSA^ 081 Europe but also including the Par Rbst and 


Preference wfl] be given » qualified Accountants and graduates 
but consideration will be given to applicants who can demonstrate 
te c hni ca l sldlls and experience of the banking sector combing 
with enthusiasm, management skills and sound oonuneirial 
judgement. 

The experience gained in this position will considerably enhance 
a knowledge of interoatioiifll banking and creates the opportunity 
for career progression within the Bank on a worldwide bam. 

Ip the first insta n ce contact Chris French at the address below or call 
him outside office hours (up to 10 pm) on 08 1 3987640. 

AO applications made direct do the client wifi be forwarded to 
the Fleet Partnership for consideration. 


the 


ffcg /part 


nership 


Financial Recr mtmpnf Cn nwhan^ 

1 17 Newgate Street, Old Bailey, London EC1 A 7AE. Telephone: 071-600 6500 ■ Rot: 071-600 6300 


Group Finance Manager 

International Consumer Goods PLC 


N. Home Counties 


Olt client is a fully listed international branded 
consumer goods group with annual turnover in excess 
of £250 m. Following a period of reorganisation the 
group is ready to embark upon a cruaaJ stage in its 
development To assist in successfully managing this 
development at group level and to further strengthen 
the small head office team, this new position has 
been created 

Reporting to the Group Finance Director, your broad 
and challenging brief will be to develop and implement 
tight contr ol syst ems which wffl lead to a more 
structured approach to the management of cash and 
working capital throughout the group You will also be 
required to manage a variety of projects and ad-hoc 
exercises consistent with PLC activity Some 
international travel will be necessary 


c. £35,000 plus car 


a T aCf * d *»untant with 

90 a ™ yGcfll a PP«MCh and an 

You will currently be 

working either m a tine position with a large, 
distnlHittonorientated business, or in a non-audt 
pwition within the profession. Probably aqed 28-35. vnu 
wffl possess excellent communication skills and th ^ 
potential for rapid progression within the group. 


2®“* appjf in confidence with a full CV and salary 
H® 1 vine Pottflrton Ltd, Suite 2C^ 
Ludgate House, 107-111 Fleet Street London EC4A 2AB. 

VINE POTTERTON 

RECRUITMENT ADVERTISING 


FT/LES ECHOS 

The FT can help you reach additional business readers in France. Our link with the French business newspaper Lcs Echo* 
gives you a unique recruitment advertising opportunity to capitalise on the FTs European readership and tofiirthec 
Preach business world.For information on rates and farther details please telephone: Philip Wrigfey on +44 71 873 33SI 







FINANCIAL TIMES FRIDAY JUNE 17 1994 


VII 


* 


>} 




OINTMENTS I 




G^ S 



.\V 


AUGAT 


FINANCIAL CONTROLLER - EUROPE 


Midlands 

Augai lid. is a feeding intemofional supplier of 
efecirical connectors to the automotive, computer 
and telecommunications industries. Due to an 
expansion of its product lines and consolidation of 
Its Europeon operations, the company is expanding 
its accounting group In the Midlands. 

You will report to the VP-finance and 
Adminisfralion-Europe who will be returning to the 
US parent within the next few years. A qualified 
accountant, your background reflects a broad 
understanding of the commercial issues facing an 


up to £30/000 + Car & Benefits 

international manufacturing company trading 
throughout Europe. 

With full responsibility for the general ledger, 
corporate reporting and the development of systems 
and procedures, you will also be responsible for the 
personnel and I.T. functions. You will be expected 
to pfay an integral part in implementing changes, 
and in creating new systems and procedures, os the 
group continues to expand. 


Please send your CV and covering letter to: 

‘BartzueCC 

International Recruitment (UK) Ltd*, 

Crest House, 7 HtgfifieW Road, Birmingham B15 3ED. 




The Institute of Chartered Accountants in England and Wales 

Director 

of Practice Regulation 

Tlie Institute employs a Secretariat of some 450 people, supporting a worldwide membership of over 100.000. 

Based in London, the Practice Regulation Department employs 40 professional and administrative staff who service 
relevant committees, regulate members and Grins practising in the reserved areas of Auditing, Investment Busine ss and 
Insolvency, and monitor compliance by all practitioners with the professional indemnity insurance regu la tions 

A reorganisation following a retirement win create this vacancy, and both internal and external candi dates will be 
considered. Reporting to the Secretary and Chief Executive, die new Director will be responsible for the effective 
management of the department. 

Candidates are likely to be aged between 38 and 52, graduate accountants, with gihqatitja l managerial experience in a 
professional service environment It would be an advantage to have been involved in regulatory and compliance matters, 
most likely in the profession, the financial services or regulatory bodies. 

Important personal qualities will be well-developed leadership and managerial abilities, first-class administrative and 
communications skills, an analytical mind and an interest in committee work, as well as competence in the use of IT, and 
the drive and dedication to handle a diverse and rfamanding workload. 

A salary in excess of £70,000 will be negotiated; in addition there is an attractive benefits package. 

Please reply in confidence to Bryan McCleery who is advising on this appointment 

CLTVE & STOKES INTERNATIONAL 

No. 1 Derby Street, London WIY7HD. Telephone: 071-408 2192 


Group Financial Director 

London based c£45,00Q negotiable + package 

As a well established London based Construction 
company with a turnover of £d0m, we are seeking 
to appoint a Group Financial Director with a 
minimum 5 yeans construction Industry experience. 

As a member of tire board you wffl be expected to 
formulate and maintain financial policy and make 
a significant contribution to the strategic 
management and continuing profitable growth of 
the business. 

This is a challenging role requiring a qualified 
accountant (degree plus ACMA or equivalent), 
ideally aged mid 30‘s to mid 40 s with a dynamic 
proactive management style and excellent 
Interpersonal and communications skills. 

Please send full written details in confidence to: 
Box A2076, Financial Times. One Southwark Bridge. 
London SET 9HL 


FINANCE DIRECTOR 


CENTRAL LONDON 


AGE 28-35 


C.&50.000 + BONUS + BENEFITS 


This young and dynamic quoted Group is a leading independent 
provider of structured finance and related specialist services. 
From a strong balance sheet position the Group is now pofeed to 
grow its existing operations and expand into new areas. 

There Is now a requ irem ent for a Finance Director to join 
the executive team to provide strong financed management and 
to support the development of the Group In its long term 
strategy, ensuring that the highly positive cash resources are 

appHrd tn nurrtmnm rffrrr 

Participating at Main Board level, you will have 
responsibility for all accounting and finance matters, especially 


in the key areas of treasury management, control and systems 
enhancement and taxation. Hie successful candidate wfll be 
expected to contribute greatly to the commercial development 
of the Group by providing sound bur creative finan cial snj mions 
and strategies. 

Having functional control over a finance team of up to 8, 
strong man management and communication skills are 
prerequisites, especially as you will also be responsible for 
Harising with institutional investor and external advisors. 

C a ndi d at es wiD be graduates, ACA qualified and be able to 
demonstrate significant career development outside of the 


ROBERT WALTERS ASSOCIATES 


accountancy profession and display real commercial awareness. 
Experience should have been gained in a financial services 
environment and a thorough understanding of leasing, property, 
acquisition evaluation and financial instruments wifi be 
required, as wefl as the ability to deal witiileg^l documentation. 

Above all, die successful individual must have the energy, 
drive and maturity to operate at Board level, together with 
strong technical and commercial skills. 

Applicants should write to Jon Boyle ACA or Giles 
Daubeney at Robert Walters Associates, 25 Bedford Street, 
London, WC2E9HP. Tel 071-379 3353, fax 071-9158714. 


Director of Finance 

International Law Firm 

City £50- £60,000 + benefits 

Our client. a medium sized multi-national partnership of lawyers, is one of the top 
insurance litigation practices in the UK, and one of the leading City firms in 
construction law Although well established, the firm has a large number of young, 
high calibre partners with drive and a flexible, progressive approach. The Aims 
success and resulting growth have led to an increased need for financial 
expertise, and a skills, ambitious finance professional is now required for a 
challenging role. 

Reporting to the Management Board, you will play a key role in the 
strategic and commercial decision making processes, toil will be responsible for 
highlighting relevant issues and advising on the financial affairs of the firm, 
ensuring that an accurate and efficient service is provided through ihe 
management development and training of the finance team, introducing effective 
procedures and controls and developing existing systems. 

7b succeed in this demanding role you will be a qualified accountan t wit h 
direct experience of the financial management of a law firm and its accounting 
systems. A practical hands-on approach, combined with the ability to make a 
positive contribution at a strategic level, is essential. Probably in your mid-thirties 
to early forties, you will have strong management and communication 
skills. 3 mature personality and the ability to inspire confidence in partners 
and colleagues. 


IBDO 


Tb apply please send a CV with salary details quoting reference 
1733 to Richard Holland (071-489 62441 


BDO Consulting, 20 Old Bailey, London EC4M 7BH. ~£Z£" 



GLOBAL FMCG MARKET LEADER 

Operational/MIS Review 

Managers from £40,000 + fx car Senior Auditors from £30,000 + fe car 


One of the world's most successful FMCG companies, our dieot - % highly- 
focused food and drinks group - is i major player in each of the 50 
countries in which it operates. Following restructuring and a series of 
promotions, the high-profile London-based International Operational 
Review team now seeks a number of Managers and Senior Auditors. 
Coming operations in Europe, Africa and the Asia Pacific region the team 
assists senior management In achieving business objectives, by leveraging 
best practice through proactive added value reviews of financial and 
operational controls and procedures. In addition, team members undertake 
consulting, assignments including acquisition and disposal reviews and 
analysis as well as ad hoc secondments to the businesses. 

Senior Audit Manager 

Responsible to die Group Director of Audit, candidates wiD have developed 
good business acumen phis project and people management skills during 
approximately 8 years' pqe gained in a variety of inks. 

MIS Manager 

Also reporting to the Group Director of Audit this position is responsible for 
driving forward (be tcdmologica! aspects of the department Consequently, 
up to date knowledge of a variety of communications, software and hardware 
systems is important; 10 years’ experience is therefore expected. 


Senior Auditors 

Positions exist both fix - integrated autfirors and IT specialists: tbc former wiD 
be ACA or CIMA qualified with op to 4 years' pqe. Audit experience Is not 
essential; more important is a record of achievement in a Big 6 practice 
or major Pic. IT specialists wfll have had sig n ificant project management 
and systems implementation experience, or have been involved in 
developing business applications. 

In all cases, as the department uses integrated audit techniques some 
exposure to computer systems is essential. Other prerequisites include an 
excellent academic and cuter track record, enthusiasm and strong Inter- 
personal skills. With worldwide travel of c50%, foreign languages, 
international cultural and commercial sktBs would be an advantage. 

Individuals can expea to progress within 2 years; recent moves include a 
UK cootroDersfnp of one of the group's leading brands and a management 
role in Corporate Finance. The exceptional career opportunities in the UK 
and worldwide are matched by a superb salary and benefits package, which 
indodcs fully expensed car and boots. 

Interested applicants should send or Ga their CV quoting ret 068 or for 
more mfoniatioa contact us on 071 329 4649, or during the evenings and 
weekends on 071 231 8272. 


Alderwick 

CONSULTING 


SEARCH ft SELECTION 

OLDBAHEV HOUSE. 7 OLD BAILEY. LONDON EC4M 7NB. TEL: 071-529 4649 fAX* 071-329 4677 


FINANCE DIRECTOR 

C London package c£40,000 

“ There are no problems — 
there are just opportunities” 

The saying could have been coined for our property development clients who have 
not just survived the recession, they have flourished. By buying cautiously, design- 
ing imaginatively mid controlling professionally they have become a high-profile pic 
with prize-winning developments to tbeir credit 

They now wish to appoint a Finance Director to join the ma na g e me n t team. 
Experience in property is not essential but applicants must be qualified and combine 
good technical ability with a strong sense of commercial realism in a business where 
the conflicts of style and cost axe constantly being balanced and where cashflow is 
all-importanL Characteristically the company has few direct employees and an infor- 
mal ‘hands-on’ style is therefore essential Ideal age range is 32-37. 

Please write with full CV, including salary history and daytime telephone number 
quoting reference 1750/FT, to Dick Phillips AQS, Phillips & Carpenter, 2-5 Old 
Bond Street, London WIX 3TB. Tel: 071-493 0156 (24 hoars). 


Phillips & Carpenter. 


INVESTMENT 

ACCOUNTING 

MANAGER 

Central London 

circa £40,000 
+ Car + Bonus 


Diverse financial services Pic noted for their success 
in dealing in global markets, has undertaken recent 
acquisitions to the group. 

This significant growth reveals the need for an 
accountant to strengthen investment accounting 
procedures, supervise valuations for ail funds (ability 
to price stocks, bonds, swaps, options and futures 
important) produce regular management information 
and tax computations and ensure strict application to 
internal controls. 

The successful candidate will be a chartered accountant 
with at least 3 years post qualified experience 
(securities industry experience essential) and highly 
computer literate. An effective communicator with 
strong leadership and interpersonal skills he/she will 
liaise at a senior level and possess the ability to 
influence corporate decisions and demonstrate 
developed man management skills. 

For further information please contact Cary Johnson 
or Simon J, Clarke on 071-629 4463 or send your CV. 
to the address below. 


Selection Consultants 




HARRISON 02 WILLIS 

FINANCIAL & LEGAL RECRUITMENT CONSULTANTS 
Cardinal House, 39-40 Albemarle Street, London WIX 3FD. Tel: 071-629 4463 
LONDON - READING • GUILDFORD - ST ALBANS - BRISTOL • BIRMINGHAM 







vm 


FINANCIAL TIMES FRIDAY JUNE 17 1994 


Managing Director - Finance 


or 


Head of Risk Management 

Investment Bank 

£ 1 00,000 - £ 300,000 


Our cti mr is a respected and highly profitable bask baaed in the City with 
overseas offices. There is as immediate need to establish a new risk 
management function. Longer teem, a Ma n ag in g Director is required to 
all the bank’s support services: fin a n cia l control, credit control, 
systems, treasury, compliance and audit. An exceptional ca n d idat e could 
succeed the bank’s Chief Executive in the medium term. 

Our diene wffl nmfa» a tfn gfe appointment - hence the wide remuneration 
range and alternative job tides. 


Candidates may have a specific interest in establishing the risk 
management function or be ready to take responsibifiiy for aQ the bank's 
infrastructure functions and have the am b ition to be Chief Executive- 

Very high mteflecx, stature and excellent leadership and interpersonal 
skilb are essential at whatever level the appointment b made. The right 
person vriD probably have a background in financial services, but not 
necessarily in banking. An accountancy qualification would be a plus. 
Age is open, but probably between 40 and 45. 


Applicants’ names will not be disclosed to our client or to anyone else without their specific approval. 
Please apply to James Hemy-Badnmt 
KBS (Ref BN2 1 83), S4 Jentiyn Street, London SWI Y 6LX 



N B SELECTION LTD 
a BNB Rcsoorco pic company 



LONDON On 49i 6592 
Abe r de en 0224 638080 * B jra i li i gjm n 021 2334666 
Brinol 0272 291 142* Edinburgh 031 2202400 
Glasgow 041 204 4334 • Leeds 0532 453830 
Manchester 062S 539953 ■ Slough 0753 819227 


0 


TRADE INDEMNITY PLC 

Assistant Financial Controller 

c£32,000 pa plus benefits and car 

Trade Indemnity in die UK’s leading trade credit 

provide companies with payment protection on their credit sales- 1 _ ’ 

growmgportfolio gf related products, makes om^Group the w 
comprehensive provider of credit risk management services. 

The Group intends to remain the market teadcrond profitable : oBtfr 

rhe above appointment which is based from the London Head Qfnux. 

Responsible to tibe Financial Controller, the successful candidare wiU be “ ^CCA 
qualified with 5 years post qualification experience. 

is self-motivated, familiar with working wuhm tight deadlines, an excellent 
communicator at all levels and used to managing financial teams. 

Additionally, our rapid development of systems and technology means *** " n 
accounting and corporate taxation expertise, computer literacy ts essential. 

The fringe benefit package includes mongage subsidy, non-contributory pension 
scheme, free life insurance and profit share. 

If you would like to be parr of our success, then please wrirc with fiill career derails to: 
Alan Suckling, Manager - Personnel 
12-34 Gnat Eastern Street, London EGZA 3 AX. 


c. £40,000 
+ Car 
+ Bonus 


HiTech 

Multinational 


Thames Valley 




MARTIN-WARD 
• ANDERSON • 

n* m*cml itouffmiirr comic rdirrv 


FINANCIAL CONTROLLER - MANUFACTURING 

Our dient is a fast growing multinational hi-tech public company with over 80% of sales deriving from export 
markets. Manufacturing operations are based in Europe and the USA, and plans include future manufacturing in other 
international regions. 

Rapid technological change and Innovation, coupled with business expansion, now demands that the international 
manufwtiiring operations be evaluated. The objective is to ensure that optimum product sourcing arrangements are In 
place to match future strategies. 

These challenges have created a need to recruit a senior finance professional to support the Manufacturing 
management team. Reporting to the VP Manufacturing, responsibilities arc to: 
a, develop strategic and operational business planning 
a. support major manufacturing investment initiatives 
m. design and implement product costing systems 
develop bey manufacturing performance indicators 
Jk. evaluate product sourcing arrangements 
▲ assist in the negotiation of supplier contracts 

ak provide commercial advice and support for Manufacturing management. 

A qualified graduate calibre accountant is required probably aged 28 to 35. Experience of international 
manufacturing and costing is essential, preferably gained in a hi-tech, consumer goods or other product based 
organisation. Personal attributes should include good communications skills, leadership qualities, team orientation, 
strong intellectual ability and a creative approach to problem solving. 

Candidates should write to Peter Ward ACMA (enclosing a curriculum vitae and details of current salary) at: Martin 
Ward Anderson, Goswell House, 134 Peascod Street, Windsor, Berkshire 5L4 IDS. 

Please quote reference 94087. 


*ft 

The Royal Bank of Scotland 

Where People Matter 

Committed to Equo/ Oppo/fumtiet & 

CHIEF 

ACCOUNTANT 

- Branch Banking Division 
Edinburgh 

Dm co rpor a te aim of Th« Royal Bank of Scotland Is to bo rocognistd 
as tbs host financial btstttntlon In ttM UK. Branch Banking Division Is 
tbo largest part of the group, offering a full rang* of banking and 
financial services to both personal and commercial customers ta» the 
UK and offshore Islands. 

Internal promotion has created an opportunity for an axpariancod 
and ambitions professional to play a high profile role within the 
bnslnass. Hm reaponslblfftle* fSU Into two key areas; firstly man ag- 
bqg the financial planning and reporting mechanisms flron s t r a t eg i c 
plans to monthly management accounts, emphasising and explaining 
the main business banes and Mtfdtfitlng the emerging trends; 
secondly, enhancing the quaflty of the financial Information through 
mote project-based work to give greater Insight bite the fin a ncia l 
dynamics of the Division. 

Candidates will have at least 8-10 years post qualifying and relevant 
experience. Over and above this they most demonstrate strong levels 
of energy end the ability to develop snecassftd end oredMe relation- 
ships at s enio r levels. The management skills to load five managers 
and thirty staff are also necessary. 

Naturally a very att ra c ti ve salary and benefits package, tadarfing 
relocation, wflf be offered to the successful candidate. 

Please write wttb full CV to: 

Scott Black, Ffadayson Wagner Block Ltd, 

19 Alva Street, Edinburgh EX2 4PH. Tel: 03Xr6S9 7087. 


.7 I N i .\Vm)N 

/ / . \ : N !. R /.A \i K 


EXECUTIVE RECRUITMENT 


/Pcqplreitf AodOcoesuftwwiB/ 


UK 

Financial Controller 


Birmingham 




*3 


JBA la an expanding £74 million turnover international 
group operating as a computer software house. The 
Company is the largest UK based A5400 business 
application software supplier and the third largest such 
organisation in chc world. 

The current she and future potential of the UK Business 
demands the appointment of a Financial Controller. 
Repotting to both group and regional general managers 
significant strains will be put on the successful individual, 
and a very strong personality will be required to make a 
success of the position. 

Specific responsibilities wiU include the preparation and 
presentation of moodily and annual accounts, control 
of the annual budgeting process, supervision of several 
staff, and ad-hoc reporting as required both by 
group, nnd most importantly, to provide a 


Package c £30-40,000+ Car 

disciplined financial perspective to the general 
management team. 

Aged 25-35, you will be an ambitious, qualified 
accountant with experience in a fist moving, 
competitive industry, ideally liaising with general 
management as well as finance. Technical experience, 
strong personal presence and outstanding communications 
skills will be essential in this high profile role. 

Final package will be based upon experience, but the 
range is broad to reflect the flexibility offered if the right 
individual is found. 

Applicants should forward a CV, including current salary 
details to Adam Leon or Paul Kinsey at Michael Page 
Finance, The Citadel, 190 Corp o r a t i on Street, 
Bir mingham B4 6QD. Quoting reft 191460. 




li 










FISHER-ROSEMOUNT 


Senior Financial Analyst 


Redhill, Surrey 


Our diene is a $6 50m turnover manufacturer of control 
equipment for supply to faige industrial chemical and 
process industries. Part of the Emerson Electric Corporation 
of the US, the company enjoys an enviable reputation in its 
field, achieving high and consistent earnings growth, largely 
as a result of a commitment to wrong financial management. 

Reporting to ihc Director of Financial Planning, and with 
direct contact ar senior executive level, this is a key role 
focusing on driving operational benefit and maximising 
return for 40 location* and 10 factory sires. This involves: 

• Monthly analysis of actual against forecast. 

• Consolidation of management reports for Kwh financial 
and nun-financial measurements. 

• Preparation of the annual and lung term plan including 
budgets and forecasts. 

• AJ hoc projects. 


to £32,000 + Car 

The successful candidate will he a qualified accountant 
with a high level of academic achievement and 
considerable experience in a manufacturing environment. 
This is an ideal opportunity fur a financial planning analyst 
to muve from a plant or factory environment to gain 
experience at head office IcvcL Experience in a multi-site 
US environment would be a significant advantage. 

Strong communication skills with an ability to deal jt the 
highest levels will be combinud with considerable flexibility 
and a willingness to travel. It is cx peered that career 
progress trill lend to a senior financial position in an 
international location in the future. An advanced level 
of spreadsheet ability is essential and this will be tested 
at interview. 

Interested candidates should send their Curriculum Vitae 
EU Jonathan Ross at Cygnet House, 45-47 Higfr Street, 
Leatherhcad, Surrey, KT22 SAG. quoting 
reference BBFO 185490. 


Michael Page Finance 

Spcdalitts in Financial BccniilnidiL 
UwIob Bnrioi Windsor St Albans Lcatbexbcad B ir m in g ha m 
Nottingham Manchester Leeds Glasgow & Worldwide 


Michael Page Finance 

Special ten in FuuncLiI Rccnutmctu 
London Bristol Windsor St Albans ixuhohml Birmingham 
Notringham Manchester Leeds Glasgow & Worldwide 


1 

i 


4 




TOR LINE 


FINANCIAL CONTROLLER 


Excellent Salary, benefits and car 

TOR LINE Limited is the UK subsidiary of TOR LINE AB, a 
major Swedish Shipping Company and a division of the 
DFDS Group. As the leading freight carrier on the North Sea 
routes, the company serves the market in the traffic areas 
between Sweden, the United Kingdom and the Continent. 

Planned expansion of the UK operation has created an 
exciting ground floor opportunity for a talented and 


Humberside 

customer orientated finance professional to assume full 
responsibility for establishing the accounts function. 


The successful candidate iriQ be a professionally qualified 
accountant who can demonstrate a track record which 
encompasses management as well as technical skills, 
ideally gained within a customer focused environment. 
Responsive and adaptable, yon will demonstrate a hands 
on 1 approach together with good commercial judgement. 


This is a tr emen dona o pp or tu nity for the right individual applicants should write enclosing fall C.V. and 

details of current aalary lo Terry Bibby, Mercuri Ptval Ltd, Ship Canal Bouse, King Street, Manchester, 

M2 4WU, quoting refc TB/9323. 




Group Finance Professionals 


UK Stockbroker 


to £30,000 + Bonus + Benefits 


Our client is a leading corporate stockbroker with an excellent reputation for research and quality of service 

lri reC f nt ' ,ear ^ thc 7 ^ avc undergone a significant period of development and thev nni now seeking to SLrcntnlwn 
dieir finance department by rhe rrermimeru of two additional accountants. 


Financial Accountant 

You will report to rhe Group Financial Accountant and 
be responsible for preparing monthly profit and less 
accounts and balance sheets, SPA. quarterly VAT and 
other returns. You will also be involved in a variety of 
ad hoc project assignments. 


Management Accountant 

You Will report to the Group Management ALVoum.mi 
The role includes weekly financial forecasts .mil ilu- 
p reparation of monthly management account-; You 
will also provide assistance in financial nl.iimm,* 
analysis and related project work. 

Candidates will be qualified ACA. CACA or CIMA with up to two yearn post -qualification experience some 
financial or management accounting experience is essential although financial services experience K not rooum-ti 
as the emphasis will be on team players with strong interpersonal skills and the ability to work Well under pn-vane 

These are excellent opportunities to fully develop your potential m « supportive and exciting env«o ( m u .,u 

Interested applicants should eontticl 
Andrew Fisher, Parkwell Management Consultants l.td 
3 Catherine Place, Westminster SWIF. 6DX Tel: 071 233 5207 Fax: 07 1 ij'j 520-5 











* 



financial times Friday June m 1994 


International 
Financial Anah/st 


W 


IX 


‘ ''V 1 


■ v 1 

- - 1 

' 3 ! 
l'-. 

I 


■- ,vt' 

. I 

I 

• .*1 «-*_ 

: 

: -'1.-45 1 


• • 

'I-.-:* 


„ p — p with a turnover o#£l.lbn, 

has maintained its position as a dominant market leader despite 
inawsedoanpetftion in it's specialist sector. A recently appointed 
high calibre management team coupled with an increased 
Commitment to product innovation, and a corporate strategy 
o r i en ta ted towards the provision of superior customer service, will 
create substantial domestic and international business 
opportunities. 


of an exceptional 

Finance Director of the 


Lomioi 


the mana gement team with the 

Financial Analyst Reporting to 
International Divishio. 

tthe division. 

this wffleaem ma sB the evaluation of <ap^e>j«n<fituj 
the analysis of revenue, cost and margin iuha m atkm'for senior 
management and extensive business re-engineering. The 
snqgwfntcamiidate wffl! wotk closely with management teams in 
operating countries. 

This opportunity will appeal to a self-motivated, high calihrc 
accountant (aged 2S-32) with a minimum two years bine chip 


To £40,000 + Car 
+ Bonus 


European languages, is highly desirable. In addition, key 
requirement are sound commercial Judgement, a proactive weak 
style, and an ability to initiate and manage change. 

The rewards indude an attractive renninerationpadcage together 
with c om p an y car, generous pe rf ormance related bonus and 
oooefle n t career prospects in a successful and growing group. 

1 should write in the strictest confidence to 
1 ox Robert Walker, f orward ing a cmricnlmn vitae to 
our London office quoting refc BH1016. 

WALKER HAMILL 

Executive Selection 
29-30 Kingly Street 
London W1R 5LB 


Tel; 071 2S7 6285 
Fax: 071 287 6270 


OINTMENTS 



Financial 

Planning& 

Analysis 

Manager 

Specialised Financial 
Services Group 

NW London 

c£ 45 ,ooo + Gar + Benefits 


Our client is a household name and market leader In providing 
specialised insurance; together with related products and services, to 
its customer in toy niche markets. The gmitp rompriia>s 5 operating 
businesses with a combined turnover of around £250 miffinn p a. smH 
4tOoo staff The group is successful and innovative with «w*ring yet 




We seek a Financial Hanning and Analysis Manayr to join the 
executive team at corporate H.Q. Managing a depa rtment of 4 
the job holder's main responsibilities will Include monthly 
management reporting on all aspects of Group and subsidiary 
performance; financial analysis; leading the strategic planning and 
annual budgeting process; stiatvgU- brajpCBB n> ^ OTUf finanriaj rentTrtl 
over HQ. expenditure; systems development and ad hoc exercises. 
The position reports to the Finance Director and career prospects are 
excellent. 

Candidates must be graduate, qualified accountants, in their rhh-ttp« 
with at least 4/5 yeans post q ualificatio n ex perience, pmferahly c prin eri 
in a substantial multi-site service business. Ideally, they will 
demonstrate relevant experience gained in both corporate H.Q and 
fine management positions hi the financial services, insurance or 
related sectors. Computer and P.C literacy Is also important 

The a ttractive benefits package Includes a negotiable salary, fully 
expensed executive car; non-contributory pension, London weighting 
allowance and private healthcare. 

Please send your career and current salary details, together 
with a daytime telephone number to Barry Skates. Hoggett 
Bowers, George V Race, 4 Thames Avenue, Windsor, SL4 xQP, 
0753-85085 *• 0753-853339, quoting Ref WBS/4339/FI*. 

Hogpett Bowers 

EXECUTIVE SEARCH AND SELECTION 


Financial Controller 

Sevenoaks ■ c£35,000 + benefits 


The Defence Research Agency is an Agency of the 
MWahy of Defence. Our mission is to be the prime prorider 
of technical advice to the MoD. We also provide 
advanced technical services to other Government 
departments and to private industry. Under the leadership 
of a Chief Executive recruited from industry, we are 
undertaking a dramatic programme of change to 
become a progressive, professional and efficient 
commercially -fun organisation, whilst preserving our 
traditional scientific excellence, objectivity and 
International stanefing. 

In this new cfenate, high profile mhs of strategic 
importance bib being created for exceptional professionals 
whose technical ekflte are matched by teal vision and an 
appetite for the chalenge of change. 

A requirement has arisen within the Operations Group 
for a business driven. Instinctively commercial, quafifled 
accountant of graduate calibre. We are seeking an 
imfividual whose experience has been gamed within a 
professional, progressive environment with strong control 
rfisdpfines and high financial reporting standards who 
can work effectively with 
financial and non-finandal 


Reporting tfiroctfy to the Sector Director, the Financial 
ControHer wSl be responsible for the timely and accurate 
presentation of financial information to meet internal 
repotting requirements as weti as providing customers with 
meaningful explanation of financial performance. The 
Indhridual wffl also be part of the Management team and wffl 
participate in the development of business opportunities, 
which wH include introducing raid monitoring Sector 
Performance Measures. 

Personal qualities win include a practical approach 
combined with high levels of energy, enthusiasm and 
commitment 

Remuneration is negotiable and win Include a 
performance related bonus. This position is initially offered 
on a three year fixed tram basis which may be extended to 
a maximum of five years. 

Please forward your current CV, quoting ref CESFT/1 , 
by 30th June 1094, indicating why you wish to 
apply and what contribution you feel you can make 
to the work of the DRA to: Mrs Jufie Phillips, CSS 
Personnel. BuBding A3. DRA 
Fort Halstead, Sevenoaks, 
KentTN147BP. 


Defence Research Agency 


WEMB AM EQUAL OPPORTUNmES EWUtfER 


Controleur de Gestion 


Salaire Motivant 


Fihalo du groups brlunnique BTR pic. nous 
fkhriquons et dlstrlbuons des batteries indus- 
irlelies g( detsi d^to clours de gez. Notre ehfiTre 
d’affaires annuel est de I’ordro do 700 millions 
de francs el noire efTectif de 1000 personaes. 
Pour seconder notro Direetour Financier, nous 
rechorehons noire Contr&leur de Gestion. Sa 
mission comprend le reporting mensael el 
annuel, I'AubUssemoni des codes standards, des 
budgets et des pnJvisions. I’anatyso des dearts, 
r assistance decision nolle aux cadres commer- 
ciaux ct de production, la gestion financiers des 
stoeks ainsi quo des missions ponctuollos. H 
ossaxjm fifcttwe&mpcd* 
- qua ire perse ones. 
Le candidal 
retenu sera un 
comptoble de haul 
niveau ayant deji 



Arras 

(180KM AU WORD DE PAB1S) 

ddmontrd sa competence professloonello et 
Telaiiounite daa& un anvironnement industrial 
multf-produits. udlisant, de prdfiSmrca. fcs corns 
standards. U capadtfi de g&rer sunuitancnieni 
des problem es complexes, ainsi qae la fennetd 
et la dlpiomatie sont ndettsairas pour rgusslr 
dans un rftle qul 11a riguour eomptable A floxl- 
bflitA conunereiale. Une parfaite maltose de 
1'anglaVs at uoe bonne pratique du Trancals 
sont requises. 

Pour ca posts clef nous oftrons un salaire 
motivant. le ramboursament des fiais do deme- 
nagement ralsonnables. un eavlronnemam 
dynomiquo et changeattL et des perspectives da 
earrfere Interossantes. Le post® est best a Arras. 
VenlUex sdnster CV coxnplet. let ire manu- 
scrile et photo & Mr C Smith. Wrectenr 
Financier, otdluun Prance SA. BP962. 

63033 Arran Cede*. France. 


raann- 

& 


The Top 
Opportunities 
Section 

Advertise your 
senior 

management 
positions 
to Europe's 
business 
readership. 
For information 
please contact: 

Philip 
Wrigley 
071 873 3351 


Divisional Financial 
Controller 

Career growth with an expanding 
electro mechanical contractor 


Jeddah . 

c£40,000 + performance bonus (tax free) 


benefits 


Our client - a subsidiary of a major group - 
Is undoubtedly one of the fastest growing 
and profitable businesses in Saudi Arabia. 
Majoring In construction services and 
healthcare, the company has adopted the 
highest standards of management, 
investment in staff and technology, and Is 
committed to a dynamic, n on-hierarchical 
structure. 

As a result of its policy of devolving 
authority from the group bead office, the 
company now seeks a capable and energetic 
financial professional to join the management 
team of its key Electro-mechanical Services 
Division. 

Although reporting to the Group Chief 
Financial Officer, you will work closely with 
the Divisional General Manager as you will 
have full responsibility for the financial 
management, reporting and control of the 
Division. This will involve leading and 
developing your own team of high calibre 
accountants working across a growing range 
of projects and locations, as well as taking 
a central role In the introduction and 
maintenance of effective control systems. 

This is a hands-on role which also requires 


the ability to ‘stand back' and take a strategic 
viewpoint, when necessary. It also calls for a 
self-assured individual, with developed 
decision making skills, who Is In 
sympathy with the company’s team-based, 
non-tradltlonal approach. 

Probably in your mid-thirties and a 
university graduate, you will be a qualified 
accountant with at least seven years’ 
experience covering cash management, 
contract margin management, control of 
project manpower costs, purchasing controls, 
and project forecasting. A background 
within construction services or a similar 
project-based environment would be Ideal and 
managerial ability, commercial awareness 
and IT skills are essential. Previous exposure 
to the Middle East would be a distinct 
advantage. 

In return, you will, enjoy a negotiable tax 
free salary, together with a first-class range of 
expatriate benefits and the excitement of a 
truly dynamic working environment. Please 
write - in confidence - with full career and 
salary details to Ghassan Yazlgi, Ref. 1358 / 6 , 
MSL international Limited, 32 Aybrook Street, 
London W 1 M 3 JL. 


International 


Consultants in Search and Selection 



ERA 

TECHNOLOGY 


Financial and 
Commercial Director 


Leatherhead, Surrey 

ERA Technology is a well established, independent 
company providing leading-edge research, development, 
design ana testing services in electronic, electrical, 
materials, structural and general engineering. This 
international company, one of the largest of its Wind in 
Europe, and having offices in the USA and Singapore, has 
a worldwide reputation for innovation and achievement. 
It has grown steadily and been profitable for the past 
20 years. 

The current Director responsible for the financial and 
commercial aspects of the company is about to retire and 
an experienced replacement is required. 

As a member of the Board, the appointed candidate will 
work very closely with the Managing Director to ensure 
that the company performs in line with its commercial and 
financial objectives. He/she will be responsible for 
experienced teams in the Finance, Contracts, 

Personnel and Operations Support 
Departments ana will work closely with 
other Directors in this forward-looking, 
strategic role. There is strong commercial 



c£50,000 + car + bonus 

emphasis and the successful candidate will play an 
important part in leading major contract negotiations and 
reviewing collaborative arrangements and potential 
acquisitions. 

Aged m their late-30s to mid-40s, candidates must be 
qualified accountants with at least ten years' relevant 
experience in the manufacturing or engineering sectors, 
ideal Jy in a hi-tech environment Previous experience of 
contracts negotia tion is essential, and exposure to 
international operations highly desirable. Candidates 
must have the interpersonal skills, authority and self- 
confidence to earn respect and be credible 60th internally 
and externally. 

In addition to the remuneration mentioned above, the 
package will also include a pension scheme, private health 
care and other executive benefits. 

Please send a full CV in confidence to 

GKRS at the address below, quoting 
reference number 292J on both letter and 
envelope, and including details of current 
remuneration. 


SEARCH & SELECTION 

CLARE BELi- HOCSE, 6 CORK STREET. LONDON WIX IPB. TEL- 071 287 2820 



1 VSSAFSME 

TREASURY 
MANAGER 

Newbury, Berkshire 

Attractive salary 
& benefits 



With a dynamic record of growth, Vodafone Group Pic is a world leader in mobile 
telecommunications and is one of the top 35 UK companies by stock market 
capitalisation. With already aver one million UK subscribers we are also developing 
extensive interests in Europe. Australia, the Far East and elsewhere in the world. 

At our Head Office based in Newbury, we now have a challenging role for a bright, 
recently qualified Accountant wishing to develop Treasury expertise. This position offers 
the successful candidate opportunities to manage the Group's liquidity and expand 
accounting skills. 


The position: 

• Reporting to the Group Treasurer with 
responsibility for treasury activities 

• Managing group cash worldwide: acting 
as principal sterling dealer and 
proviefing advice to foreign subskfiaries 

• Developing group cash and interest 
forecasting models 

• Improving treasury systems and liaising 
with treasury accountants 

- Responsible for providing accounting 
assistance in the group finance 
department 

• Involved in ad hoc treasury and 
accounting projects 

To apply please write enclosing a full CV stating why you feel you are 
suitable for this position, together with salary expectations, to Jane 
Boiston, Personnel Department, Vodafone Group Services Limited, 
The Courtyard, 2-4 London Road, Newbury, Berkshire RG 1 3 1 JL 
Please quote Reference No. VGFN0T8 
Closing date for applications 30 / 6 / 94 . 

INVESTING IN PEOPLE AS WELL AS TECHNOLOGY 


The requirements: 

- Numerate graduate 

• Qualified ACA with experience of 
financial service companies and a 
desire to acquire the ACT qualification 

(assistance will be given) 

■ Awareness and understanding of 
financial markets and economics 

• Strong systems skills with an ability to 
construct complex spreadsheets 

• Team member with excellent 
communication and negotiation skills 
and able to pay close attention to detail 



DIRECTORSI 



SEEKING A NEW ROLE? 


APPOINTMENTS 

WANTED 


Europe's leading outplacement and career management consultancy, loterExec 
has over 15 years' experience of managing career change few senior executives and 
many of Britain's ferg^ 51 companies. 

By accessing Over 6,000 unadvenised vacancies a year, mostly at £40 - £ 1 50,000 p_a, 
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Ofl Ketti Mfcdk* m Umdon mi tfll 9» SMI 

IQ 0\»»qi Ow Band. London WCtH IKS 


tobel KwUe la ftflniMiiifl on 0JI 
64 Owxc SwtM. ftfinfangh DtZ 9C> 


InterExec 


nil-: l k'S UROKST NO! ROK OR R \ \})\\l RT I SRI> V.\( \\URS 


FCCA (37) 

6 years overseas 
experience with 
mul tina tionals. 
Fluent IT/FR/PT 
seeks position. 
Flexible on location. 

TeL- 010 39 11 205.0635 









FINANCIAL TIMES FRIDAY JUNE 17 19W 


Touche 

Boss 

__ & 


London SW1 

This position is new and will be extremely high 
profile. It will report to the Managing Partner 
and the board as a key member of the executive. 
The firm is one of the UK’s leading property 
consultants with around three hundred partners 
and staff and is now moving slowly but 
confidently out of the recession. It has an 
enviable reputation for tbe quality of its 
work, and an enthusiastic and flexible approach 
to business. 

Working closely with the Managing Partner 
and with a staff of over 20 you will haws 
accountability not only for all financial 
matters, including management information, 
planning, financial management and control, 
treasury and IT, but also will direct and 
manage the personnel and administration 
functions. 


£70,000 plus bonus, and benefits 

You must be a highly capable individual whose 
track record reflects exceptional achievements 
at a senior level. You will probably be 
aged 35 to 45 and a qualified chartered 
accountant; more important however is high 
levels of energy and tbe ability to deal 
effectively at all levels within the business. 
Strategic planning skills will be extremely 
useful as will some appreciation of the way 
partnerships work. 

If you feel capable of handling this exceptional 
challenge please send a comprehensive C.V. 
quoting your current remuneration package 
and daytime telephone number quoting 
reference 339S to Bruce McKay, Touche Ross 

Executive Selection, Friary A, 

Court, 65 Crutched friars, X| 

London EC3N 2NP. 




THE APPOINTMENT 

■ Manage an experienced team and take responsibility lor all 
aspects of financial accounting, timely management 
reporting, company secretarial duties and dealings with 
professional advtsexs. 

■ Ensure improved efficiencies through the implementation of 
additional software applications and cost control 

■ Provide signiheani input to major contract negotiations and 
acquisition appraisals. 

Please apply in writing with full CV and salary 

details quoting reference 90666/A to Geoffrey Mather. 


THE REQUIREMENTS 

■ Graduate, likely to be aged eariy thirties Mb « recognised 
accountancy quaitflcBttoft- 

■ A good track record of running* hands -on accounting and 
commercial function at least to Financial Controller level 
probably to a smaBtt company. 

si Evident experience of staff motivation and leadership 

■ Highly computer literate, with drive, initiative and strong 

negotiating stoB*. 

K/F Associate*. 252 Regent Street. London WIR 5DA 


K/F ASSOCIATES 

S election & Search 


Corporate Finance 
Systems Manager 


Management Consultants 


AmHNTTMEOTS 

ADVERTISING 


c£35,000 + car 

London Underground is committed to improving the efficiency, 
cost-effectiveness and quality of its service. In the last few 
years, we've introduced major Improvements to our finance 
systems, and this Is set to continue as quality financial and 
management information enables us to make the best use of 
scarce resources and exploit business opportunities to the fulL 

Your role will be to develop and manage the corporate finance 
systems department responsible for improving our financial and 
management accounting, asset management, revenue collection 
and cash management systems, so that departments can focus 
on their business purpose and measure the impact of business 
decisions. This wIU encompass the provision of training and 
quality assurance programmes. 

As the company’s expert on computerised corporate finance 
systems, you must have a high level of accounting expertise 
coupled with an up-to-date knowledge of mainframe, mini and 
micro computers, operating systems and technical standards. 

You wiU also need excellent organisational communication and 
negotiation staffs, rf you’re to successfully identify, evaluate and 
meet the requirements of your different customer groups. 

The salary offered is backed by a generous range of benefits. 

This appointment is made initially on a two year contract basis 
with every possibility of renewaL 

For an application information pack please contact Tracey Gabriel 
Personnel Services. London Underground Limited, quoting 
reference UOV/108X on 071-918 1 118 during normal office hours. 

Closing date for completed applications: 8th July 1 994 
Working Towards Equality 

Applications from women and ethnic minorities are partforiariyuetoame. 





Business Plan Preparation 
New Venture in Financial Services Industry 


An experienced Finance Director is required 
to join the technical innovator and a small 
team to produce a Business Plan for a new 
company in tbe Financial Services Industry. 

The product is a service that is made 
necessary due to legislation being enacted 
rapidly throughout the world. 

Initially a fixed 9 months contract will be 
offered with a view to transferring to the 
permanent appointment of Finance Director. 

We require a qualified accountant with 
highly developed business acumen aged 
between 35 and 45 years, ft is essential that 
you have a minimum of five years experience 
operating at a senior level within a 
commercial organisation, preferably in the 
finance services industry and have a good 
knowledge of large computer systems. You 


will have a Ugh level of skill in the nse of 
PCs and have good experience in the 
preparation and presentation of bosiness 
plans and budgets. 

Considerable energy, initiative and 
enthusiasm will be required allied to a shirt- 
sleeve approach. 

You will need excellent interpersonal and 
communication skills with a strong 
personality and good presence. 

As the company will be operating on an 
international basis, knowledge of major 
European languages will be an advantage. 

To apply please send your foil CV, including 
present salary, to: 

Box A2079, Financial Times, 

One Southwark Bridge, London SE1 9HL 



AMBASSADOR AIRWAYS LIMITED 


FINANCE DIRECTOR 

GATWICK 

We are the UK’s fastest growing charter airline, and a subsidiary of a large private 
international group of companies. 

Following relocation we have an opening for a financial director who will have 
overall responsibility for all of the financial requirements of the company. Although 
you will be reporting functionally to the overseas based group finance director, you 
will have a significant degree of autonomy and will be expected to bring 
considerable commercial expertise to this position. 

This is a senior role having considerable impact on group finance matters and 
requires high level liaison throughout the group's operations and with major 
external agendas. Applicants should be graduates, AGA qualified, conversant with 
computers and information technology aid possess the highest degree of drive, 
ambition, resilience and energy. 

Interested applicants should apply in writing through our accountants: 

Soteriou Baneiji 
Chartered Accountants 
253 Gray's Inn Road, London WC1X8QT 

Contact Judi Harris 


appears in the UK 
edition every 
Wednesday & 
Thursday 

and in the International 
edition every Friday 

For further information 
please call: 

Gareth Jones 
on 071 873 3779 

Andrew Skarzynski 
on 071 873 4054 

Philip Wrigfey 
OO071 873 3351 


Mutual 

Accounting 

Excellent Remsmeiati 




Citibank Luxembourg b engaged tat global finance and private banking activities. IS rapidly growing Mutual Funds 
Department administers both Citibank and third party folds. An experienced and ambitions indtvWuni is now sought to 
bead tbe accounting function far this expanding business. 


THE APPOINTMENT 

■ Manage a substantial team focusing on the accuracy and 
appropriateness of mutual fund net asset values. 

■ Play a key role in the development, implementation and 
valuation of new funds and of new instruments introduced 
into existing funds 

■ Ensure correct accounting policies and procedures are 
adapted for new tends and investment instruments 

■ Participate in client reviews and the annual budget, 
manage the auditing process 

Please apply in writing with a full CV and salary details, 
quoting reference 6440G. to Susannah TrusweN. 


THE REQUIREMENTS 

■ Graduate, with strong intellectual skills, probably aged <0- 
40. with a recognised accountancy qualification. 

■ Currently working with an audit firm focusing on mutual 
funds or unit trusts, or alternatively based within a fund 
management house. 

■ Fluent French and English a prerequisite 

■ Mature and dynamic with strong management, 
interpersonal and communication skills 

K/F Associates. Regent Arcade House. 2‘»2 Reeent Street. 
London WIR 5DA. 




K/F ASSOCIATES * 

Selection & Search - 


FINANCE DIRECTOR 

SPANISH SPEAKING 

London £38 - £48,000 + Car + Benefits 

EXPANDING FRESH FRUIT IMPORTERS, PACKAGING 
AND TRANSPORTATION GROUP SUPPLIERS TO 
LEADING RETAIL CHAINS T/O IN EXCESS £40M 

Due to continued European expansion, A G Thames 
requires applications from qualified accountants, preferably 
ACA's, aged 20's to early 40’s. Candidates should ideally speak 
Spanish and have a minimum of four years sound financial 
accounting experience in fast moving manufacturing or 
distribution environment 

The successful candidate will have experience in installing 
financial control and reporting systems. Experience of having 
worked in Europe is important The selected candidate will 
report to and work closely with the Group Ma n a g i n g Director 
and wiU play a key role in formulating and achieving Group 
objectives. Frequent visits to the Group's Spanish operations 
will be required and will include implementing effective 
reporting systems and assisting local management with 
budgeting, control systems and general financi a l management 

The successful applicant will work with the Managing 
Director as member of an entrepreneurial team and will be 
responsible for the preparation of consolidated Group 
management accounts, as well as dealing with budgets, 
forecasts and capital expenditure projects. A strong and 
assertive personality is essential. Applications should write in 
strict confidence to the Managing Director, Thames House, 
Warspite Road, Woolwich, London SE18 5NU. 


AG THAMES 
HOLDINGS LTD 


New Islington & Hackney Housing Association 

' New Islington is a leading Housing As soc ia tion which 
managao^ 5,000 hemes primarily in North East London. 

TREASURY MANAGER 

c. £25,000 

We are now looking to recruit a Treasury Manager to mar™** 
our loan portfolio, liquidity requirement and assist tbe 
Finance Director kt developing Soanes! strategies to support 
ament 3nd future commitments. 

Applicants must demonstrate tbe following: 

• A relevant qualification (eg ACA, C1CS. ACCA, IOB) 

• Two years post qualified rdcvanl experience 

• Excellent negotiating and influencing skills 

A a understanding of the current finandai pressures on 
Social Housing is highly desirable. 

Closing date: 10am 23rd Tone 1994. 

Interview date: 1st July 1994. 

An application form and further information can be 


New [sEngtott & Hackney 
Housing Association, 

Globe Bout, 8 Certain Road. 
London EC2A3NX 
Telephone 071 417 0443 
Working Towards 
Equal Opportunities 



FOR A FAST GROWING POLISH- WESTERN JOINT 
VENTURE BASED IN WARSAW (TURNOVER OVER 50 M$). 

The appointed candidate will be responsible for finance, 
accounting, budget control and MIS. Candidates should be 
graduate qualified accountant, probably ACA Leadership 
and managerial skills are mandatory. 

Fluency in Polish and English is required for this position. 
Reply in confidence within 10 days to: 


Box A2070, Financial Times, 

One Soathwark Bridge, London SEl 9HL 





Ni 


Director of Finance 

c. £38. 000 

South Thames Training ft Enterprise Council is dedicated to maximising the potential of individuals 
and businesses. By strengthening local enterprise to compete more rffectively, we aim to stimulate . 
economic growth throughout the Sooth Thames area. 

South Thames TEC. Eke ihe businesses it serves, must operate effectively. As Director of finance, you 
wfli ensure that it does. 

Reporting directly to the Chief Executive, the Director of finance is res p onsible £ot all matters relating 
lo ihe finance and accounting systems of South Thames TEC As well as overseeing day-to-day 
procedures, you wOl advise on financial policies and strategy; propose courses of action and implement 
agreed plans on finance-related topes, including staff training and IT systems. 

Applicants wiD be mature and experienced individuals with a successful record of 
financial strategic management, and be tCAEW.CTPFA or ICMA qualified. Good 
communication and management skills are required as is a 'hands-on' approach to 
practical accounting tasks. 

This is a challenging position in an organisation which has lo fulfil its own objectives 
by ensuring others achieve theirs. Commercial acumen is essential with public sector 
experience particularly advantageous. 

For an informal discussion telephone our Chief Executive Mflce Hanson on 
071 483 1 WO or send a comprehensive CV. to Jan HIM, Human Resources Manage* 

South Thames Training and Enterprise Council, 200 Great Doves Street, London 
SEl 4 YB. To arrive no later than 30 Jose 1994. fkaK quote reference DCU& 

South Themes Training 4c Enterprise Council TU)tnc 

is committed to equality Of opportunities. DMMN6 * ENTQMtSC MUUOL 


LAMBETH • SOUTHWARK - LEWISHAM * GREENWICH 
IN PARTNERSHIP FOR GROWTH 


FINANCE DIRECTOR 


We arc a division of a UK Fk engaged in stevedoring, warehousing and distribution, 

Reporting to the Divisional Chief Executive you will be on important member of the management 
team. Your responsibilities will cover all aspects of financial management but with particular 
emphasis on strategic planning; the development of computerised information systems and the 
maintenance of strict financial disciplines and controls. 

Candidates should be qualified accountants aged 30-40 with strong commercial and interpersonal 
skills and experience in freight forwarding/distribution. 

We offer a competitive salary, car and other normal company benefits. 

Interested candidates should forward a full CV to: 

Mr Colin Copland, Financial Director. 

The Global Group Pic, Cranbxook House, Redlands, Coubdon, Surrey CR55 2HY 











5CH.DIER F!E:3. C::tC*uC. 'INE li. !•»** 


BECAUSE WE DON'T WANT TO BE OUT OF 
YOUR THOUGHTS DURING THE WORLD CUR 




\ 

i 


There is more to our contribution to the World Cup than advertising boards. During the event almost 700 Canon copiers, facsimiles and typewriters will produce an estimated 7.5 million documents. /lu jbu, 

Additionally, nearly 200 of our employees will be present to support the thousands of journalists and photographers using Canon cameras and other products. So when a TV camera with iS l_" j 
a Canon lens catches our brand name in the background, think about what's behind it. Only occasionally, however. Because we would never want to prevent you from enjoying the match. APL^^IRETOWO^^^m 


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