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FINANCIAL TIMES 


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TUESDAY JUNE 21 1994 


| US judges back California’s unitary tax system 


rights issue 

Mediobanca, merchant bank at the heart of Kalian 
finance and industry, was last night forced to 
postpone its Ll.SOObn ($940m) rights Issue after 
its share price fell by nearly 5 per cent in a day. 
The bank said it would “define a new timetable 
for the operation in the light of market develop- 
ments”. Page 1$ World stocks. Page 40 

Mazda-Ford tolfcm: Mazda, Japanese carmaker, 
said negotiations had resumed after a year's break 
on possible European cooperation with DS car- 
maker Ford. Page 18 


Philip 


chairman and chief executive 



Michael MUes has quit and been been replaced 
by two fellow-executives after his plan to split 
the US company into separate food and tobacco 
companies was rejected. Page 19; Lex, Page 18 

Samper set to shift direction in Colombia: 

Colombia's new presi- 
dent-elect Ernesto 
Samper, left, is likely 
to shift the emphasis 
of government economic 
policy after winning 
a narrow election victory 
over his conservative 
rival Andres Pastrana. 
The liberal party leader 
told supporters he 
had received a “sodal 
mandate” - a reference 
to the priority he gave to increasing sodal invest- 
ment Page G 

S Korea sets out summit move: South 
Korea proposed a working-level meeting a week 
today with North Korea as the initial step in 
a rrang in g the first summit between the leaders 
of the two countries. Page 18; Seoul signals end 
to curbs on Hyundai, Page 5 

Iran bomb Mast klHs 25: At least 25 people 
wan reported killed and another 70 injured by 
a bomb blast at a crowded prayer hall in Mashhad, 
north-eastern Iran. Page 5 

Israeli soldiers ambushed: Three Israeli 
soldiers were killed in south Lebanon in a guerrilla 
attack on their patrol shortly after Israeli war- 
planes attacked Hizbullah guerrilla posts. 

Ulster Internment hint: Northern Ireland 
secretary Sir Patrick Mayhew gave his strongest 
hint that the UK government is considering intern- 
ment without trial as part of its response to the 
latest upsurge in sectarian violence. Page 8 

Bridge OB battle heats upc The bidding 
war for Bridge Oil, Australian oil and gas group, 
intensified as Texa^based Parker & Parsley raised 
its offer from 70 to 80 cents a share - and was 
promptly outbid by another US group. Page 19 

Challenge to Zantac grove s Canada’s 
Novophann became the second company to 
announce it would launch a generic version of 
the world's best-selling drug, ulcer treatment 
Zantac, which is made by the UK pharmaceutical 
company Glaxo. Page 20 

Daf compensation: Bank creditors to Daf 
NV, the Dutch truckmaker which collapsed in 
1993, have received nearly 90 per cent of what 
they were owed and are likely to be compensa t ed 
in rulL Page 20 

Mitsubishi Off of Japan a n nou nc ed the discovery 
of what could be a significant tril find off the coast 
of Vietnam. Page 4 

Former Elders DQL executive Kenneth Jarrett 
has pleaded guilty to being part of an allegedly 
fraudulent A$6&5m ($48L8m) foreign exchange 
scheme involving staff of the Australian brewing 
and agriproducts group. Page 5 

TB threat: Soaring death rates In former Soviet 
bloc nations from a resurgence of tuberculosis 
could pose a threat to western Europe, World 
Health Organisation specialists say. 

Czech anthccHTigitfon drive: The city of 
Prague and the Czech police will launch a drive 
next month to smash widespread bribe-taking 
in district and local council offices. 

Beatles reunited: Former Beatles Paul 
McCartney, George Harrison and Ringo Starr 
have made a recording together for the first time 
since the group broke up 24 years ago, a producer 
at the group's Apple recording company said. 

Wimbledon champion Pete Sampras kicked 
off this year's chase for a second consecutive 
title at the tennis championships with a 7-6 7-5 
6-3 victory over fellow American Jared Palmer. 
Spotting life. Page 8 


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By George Graham in 
Washington and Andrew Jack 
fa London 

The US Supreme Court yesterday 
rebuffed international pressure to 
outlaw California’s controversial 
worldwide unitary system for 
assessing corporate income taxes, 
rtlgmiBfifrng fViaTlpyig p^ brought by 
Barclays Bank of the UK and Col- 
gate-Palmolive of the US. 

Californian fiscal experts do 
not expect the state, which has 
introduced an opt-out, to force 


Supreme Court rejects challenge on assessing companies’ income 


companies to use the unitary 
method, but British companies 
and tax professionals were con- 
cerned that the decision could 
prompt other US states or other 
countries to rnipn»» the system. 

Under unitary asMejmiflni, tax 
is calculated on a proportion of a 
company's worldwide income 
instead of only on income earned 
in the state. 

Justice Ruth Bader Ginsburg, 


in an opinion written on behalf of 
the 7-2 majority, said Barclays 
had not demonstrated that the 
tax discriminated a gainst foreign 
commerce, nor that it imposed an 
imrine compliance burden. 

Mr Kenneth Clarke, the UK 
chancellor of the exchequer, said 
last night be was ’'disappointed" 
by the decision. "The govern- 
ment has always strongly 
opposed the imposition of world- 


wide unitary tax on UK-owned 
companies and supported Bar- 
clays throughout this litigation." 

Mr Clarke warned that the UK 
would retain its retaliatory pow- 
ers in case the US took any legis- 
lative steps that might harm UK 
companies. 

The r ulin g embraced two 
actions, one by Barclays and 
another by Colgate-Palmolive, 
the US consumer products com- 


pany, which challenged an ear- 
lier ruling that the unitary 
method could also be applied to 
US companies. 

Barclays, which has waged a 
17-year legal battle against the 
unitary tax system, expressed 
disappointment at the decision 
but said it was still "chewing 
over" the "very long and very 
detailed" text of the judgment 

The ruling comes as a huge 


relief to California which is in 
the middle of one of its perennial 
budget crises and bad counted on 
a favourable decision. Although 
tax officials expect that only 
about $500m will actually be col- 
lected, the ruling also means Cal- 
ifornia will not have to refund 
$1.4bn it has already taken in 
unitary taxes. 

Although this conflicts with 

Continued on Page 18 
UK reaction marked by 
frustration. Page 7 


Inflation and rate fears prompt hammering for stocks and bonds 


World markets fall sharply 


By PMEp Coggan, Economics 
Correspondent, in London 

World bond and stock markets 
took a hammering yesterday as 
concern about tnfifltinw and the 
direction of interest rates in the 
US and Germany continued to 
upset investors. 

Sentiment in Europe Asia 
was depressed by falls in the US 
band and stock markets an Fri- 
day, which were prompted by a 
rise in the Commodity Research 

Bureau Vnrinx and in gnlri anil oil 

prices. 

Those signs of inflationary 
pressure, allied to a weak dollar, 
increased fears that the US Fed- 
eral Reserve might be forced to 
induce a further increase in 
interest rates. 

The dollar was weak again yes- 
terday, falling to DM1.5986 in 
London, down over a pfennig on 
yesterday's opening and three 
pfennigs lower than its closing 
level in London on Friday. 
Against the yea the dollar fell in 
London to Y10L97D from Friday’s 
Y103.495. 

Analysts said that no single 
factor was responsible for yester- 
day’s bond and equity declines. 
It’s like Chinese water torture." 
said Mr Edmond Warner, bead of 
strategy and ec onomics at Klem- 
wort Benson. “A drip, drip of 
poor sentiment has accumulated 
to wear down the markets.” 

Asian stock markets set the 
tone for the day with the 
Nikkei 225 index in Tokyo falling 
351.27 points to 21,152.03. and 
in Hong Kong, the Bang Seng 
index dropped U5.7B points to 
8£S8J& 

In Europe, the German stock 
market suffered most with the 
DAX index plunging 81.9 points, 
or nearly 4 per cent, to close at 
1.968A2. Shares in Italy also fell 
by 3J) per emit and in Amster- 
dam, a ZS per cent drop left the 
AEX index at 382.84, a low for the 
year. Mediobanca, the Milan mer- 


Dofiar against the D-Mark (DM per $ 

1.79 


UK Germany 

FT-SE 100 Index DAX Index 
S60O 2A00-— • 

3^00- 



Sourcec FT Graphite 


Int e rnational bonds —Page 25 
Commodities Page 28 


.Page 29 


London shares _ 

World stock markets Page 40 


chant bank, postponed its 
LL500tm (©35.74m) rights issue 
after its share price fell by nearly 
& per cent. 

The pan-European Eurotrack 
100 index closed 41.97 points 
lower at L308J7, a fall of 3.1 per 
cent 

In London, the FT-SE 100 fell 
85-3 points to SL937.6 at the day’s 
low but recovered part of its 
losses to dose at 2371.1. down 
51.8. 

Wall Street also opened lower 


and by 1pm local time the Dow 
Jones Industrial Average was 
down 3003 at 3,746.15, after a 34 
point decline on Friday. 

Despite a rally in the after- 
noon, European bond markets 
also had a bad day with UK, Ger- 
man and French bonds all felling 
by more than thre&quarteis of a 
point 

Yesterday’s declines in stock 
and bond markets come towards 
the end of a half year which has 
seen little but bad news for hold- 
ers of paper assets. US economic 
strength, allied to signs of recov- 
ery in Europe, have turned inves- 
tors’ attention towards physical 
assets such as copper. 

With commodity prices rising, 
bond markets round the world 
have been hit by inflationary 
fears and by worries about the 


supply of bond issues both from 
governments and the private 
sector. Equity markets, which 
had risen alongside bonds in 

1993, have fallen with them in 

1994. 

Analysts said some investors 
would be cutting their losses 
ahead of the half-yearly portfolio 
valuations at the end of June, so 
they could make a fresh start in 
the second half of the year. 

Many investors entered 1993 in 
optimistic mood about the pros- 
pect for lower interest rates 
around the world. 

But first the Federal Reserve 


prompted a rise in US interest 
rates in February and then the 
mood changed about the likely 
direction of German rates. 
“At the start of this year, the 
consensus was that German rates 
would fell and keep on felling 
into 1995," said Mr Peter Lyon, 
chief strategist at Smith New 
Court 

Now signs of economic recov- 
ery and still high money supply 
growth mean many analysts 
think German interest rates have 
reached a low, causing investors 
to favour the D-Mark over the 
dollar. 


Battle 
over steel 
subsidies 
to go to 
EU court 


By Andrew Baxter fa London and 
Emma Tucker in Brussels 

British Steel yesterday raised the 
stakes in its battle against state 
subsidies to tts continental Euro- 
pean rivals by announcing it 
plans to begin legal action later 
tins week against the European 
Commission. 

The company will ask the 
European Court to annul the 
Commission's authorisation of 
further state subsidies to two 
steelmakers. Ova of Italy and 
CSX of Spain. The two companies 
received the lion's share of 
Ecn7bn ($8Jbn) of aid approved 
by European Union industry 
ministers in December and 
authorised by the Commission in 
April. 

The move by British Steel 
steps np the pressure on the 
Commission, which has been 
widely criticised by unsubsidised 
producers for allowing subsidies 
that do not adhere to the strict 
rules of the steel aid code, part 
of the European Coal and Steel 

Comm unity treaty. 

Earlier this month, the Euro- 
pean Independent Steel Works 
Association, which represents 
privately owned, independent 
steel producers, said it was also 
taking the Commission to the 
court over subsidies to State- 


Continued on Page 18 
Lex, Page 18 
British Steel lifts payout. Page 19 
High-speed steels group rolls 
towards flotation. Page 21 


European businesses urge 
state sell-offs to boost jobs 


By Lionel Barber fa Brussels 

European business leaders called 
yesterday for a sweeping over- 
haul of the public sector, includ- 
ing privatisation of postal ser- 
vices. telecommunications, 
energy and transport, in order to 
increase competitiveness and 
tackle Europe's unemployment 
crisis. 

in a move aimed at lobbying 
Europe’s political leaders before 
this week’s EU summit in Corfu. 
Unice, the employers federation, 
appealed, to governments to set 
targets for cuts in public spend- 
ing as a proportion of GDP and to 
take steps to reorganise the wel- 
fare state. 

Mr Franpois Perigot, the lead- 
ing French industrialist and 
newly appointed Unice president, 
said it was time to reduce the 
burden of the state on business 
and roll back the public sector. 
"We have kept our eyes closed 
for 20 years. We can’t go oa like 
this.” 

The Unice report, Making 
Europe More Competitive - 
Towards World Class Perfor- 
mance, is the most detailed 
response by business to the white 
paper on competitiveness, jobs 


and growth launched last year by 
Mr Jacques Defers, president of 
the European Commission. 

The report sets out several 
areas for action to shrink the 
public sector through deregu- 
lation and privatisation so 
that Europe can compete more 
effectively with the US and 
Asia: 

• Reducing the cost of health 
care through the introduction of 
new “market type" mechanisms 
to match supply more closely to 
demand. That would involve 
bringing private companies into 
the health care market 

• Trimming the costs of pen- 
sions. That would provide a 
“basic” state pension for every- 
one who has worked, with an 
optional complementary pension 
financed by companies and/or 
individuals. 

• Reducing the costs of unem- 
ployment benefits by limiting the 
period of entitlement and enforc- 
ing tougher eligibility criteria. 

• Reducing the costs of sickness 
and disablement benefits, with 
responsibility for additional 
insurance transferred from the 
public sector to companies and 
individuals. 

In addition, the report calls for 


CONTENTS 


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more flexibility in European 
labour markets through reduc- 
tions in minimum wage levels, 
lowering the costs of employing 
people, and reducing the cost of 
protection against dismissal. 
Unice also wants small business 
to be freed of bureaucratic regu- 
lation, both from Brussels and 
national capitals. 

Mr Zgymnnt Tyszkiewicz, 
Unice secretary-general, acknowl- 
edged that the recommendations 
implied a Europe moving towards 
US-style deregulation at the very 
moment when the din ton admin- 
istration was looking to the Euro- 
pean sodal model for inspiration. 
He said: “We are both trying to 
team from each other. We need 
adjustment on both sides.” he 
said. 

Mr Perigot said Unice was not 
advo cating the dismantling of the 
welfare state - rather, it was 
urging political leaders to pro- 
duce new incentives for compa- 
nies and. individuals to reduce 
their reliance on the state. There 
must also be “adequate” protec- 
tion for the employed, and sup- 
port for the low-paid and unem- 
ployed. 

Editorial Comment, Page 17 


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1994 



EU risks Brussels 
presidency deadlock 


By Quentin Peel and Lionel 
Barbar 

Fears were growing last night 
that this week's European 
summit in Corfu will be unable 
to break the deadlock over the 
succession to Mr Jacques 
Delors as president of the 
European Commission. 

A stalemate risks putting 
Europe’s political leaders on a 
collision course with the new 
European Parliament which 
had hoped to scrutinise the 
choice of Commission presi- 
dent at its opening session 
next month. 

It would also be a sharp dip- 
lomatic setback for the outgo- 
ing Greek presidency of the 
Union. 

Prospects of a deadlock have 
increased in recent days as Mr 
Ruud Lubbers, the Dutch 
prime minis ter and one-time 
favourite, has refused to bow 
to FrancuGerman pressure in 
favour of Mr Jean-Luc 
Dehaene, the Belgian prime 
minister, who formally entered 
the race last Friday. 

Germany, which takes over 
the presidency of the EU on 
July l now appears to take a 
relaxed view of the danger of 
reaching a deadlock on issue at 
Corfu. 

Senior German government 
officials now believe such an 
outcome may be inevitable, 
even if regrettable, and are pre- 


paring for the possibility of 
having to call an emergency 
summit. 

This would probably take 
place in the early autumn. 

"The federal government 
hopes that (the summit) suc- 
ceeds in deciding the ques- 
tion," Mr Dieter Vogel, the Ger- 
man government spokesman, 
said. 

“If not, we will have to do it 
later, ft is important that wb 
decide this soon." Senior diplo- 
mats in Brussels, Madrid and 
London agreed that it was 
unlikely that Greece would be 
able to broker a compromise 
during the Corfu meeting. 

Mr John Major, the UK 
prime minis ter, was also said 
to be unwilling to drop Sir 
Leon Brittan, chief EU trade 
negotiator, in favour of Mr 

Dehaene. 

Mr Antonio Martino, the Ital- 
ian foreign minister, who was 
in Bonn yesterday for talks 
with Mr Klaus Kink p.1, his Ger- 
man counterpart, also said 
later that he thought a dead- 
lode on the Commission presi- 
dency was probable. 

He did not think it would be 
“a great drama' 1 If a special 
summit had to be called to 
dedde on the presidency in the 
autumn. 

The German government has 
hitherto expressed concern 
that everything should be done 
correctly by the member states 


to respect the new powers of 
the European parliament, 
which intends to put the future 
C ommission president, and his 
individual commissioners, 
through a parliamentary 
vetting and approval proce- 
dure. 

This would mean not only 
submitting the candidacy of 
the president at the earliest 
possible opportunity, but also 
the names of his 
commissioners. 

For Germany in particular, 
with a general election in Octo- 
ber. it is politically difficult to 
finalise the mines of commis- 
sioners at an earlier date. 

The proposed solution was to 
nominate one from Mr Kohl’s 
Christian Democratic Union, 
and one from the opposition 
Social Democratic party, to 
ensure a balance whichever 
party wins the German 
election. 

Thus the prospect of dead- 
lock in Corfu, and a special EU 
summit in Germany in Septem- 
ber, could have a twin advan- 
tage for Chancellor KohL 

It would provide him with an 
additional opportunity to play 
the international statesman 
before the Germans go to the 
polls on October 16. 

It also would mean that a 
decision on the German com- 
missioners might reasonably 
be left until the election result 
is beyond doubt 


Twelve agree policy 
on foreign workers 


By David Gardner in 

Luxembourg 

European Union justice and 
interior minis ters agreed yes- 
terday on a joint approach to 
keeping foreign workers out of 
the EU, and that no member 
state should relax this policy 
without reference to its part- 
ners. 

At the same time, the minis- 
ters shelved discussion on a 
European Commission pro- 
posal that non-EU nationals 
legally resident in one member 
state should be able to seek 
work in other member states, a 
central Brussels proposal to 
help integrate foreign workers. 

The ministers, operating 
under the so-called “third pil- 
lar" of the Maastricht treaty 
- concerning home and justice 
affairs -noted that none of the 
12 was pursuing an active 
imm ig ration policy. 

Yesterday’s move was there- 
fore a first step towards ensur- 
ing that all member states 
were going about barring entry 
to foreign workers in compati- 
ble ways. 

Mr Louis Tobback, the Bel- 
gian Interior minister, warned 
the measure would project an 


image of “Fortress Europe” to 
the world. But Belgium joined 
its partners in unanimous 
agreement, confining its reser- 
vations to a statement in the 
minutes. 

The Luxembourg meeting 
also voted to go ahead with a 
feasibility study an setting up 


The Belgian interior 
minister warned the 
measure would 
project an image of 
“Fortress Europe” 


a so-called EURODAC network. 
This is a long-mooted system 
for finger-printing asylum- 
seekers and suspected illegal 
immigrants at point of entry. 
The information would then be 
circulated among member 
states to enable them to detect 
illegal immigrants travelling 
inside the supposedly border- 
free EU. 

A contract to study how best 
to set up the system was 
awarded yesterday to an inter- 
national consortium made up 
of Bossard Consultants, Team 


Consult, and Organotecnica. 
Yesterday’s restrictions “may 
not be relaxed by member 
states in their national legisla- 
tion”, which must conform to 
them by January 1996, the res- 
olution states. 

There are several exemptions 
from the harmonisation princi- 
ples. 

These cover nationals of 
European Free Trade Associa- 
tion countries that are party to 
the European Economic Area 
free trade zone which came 
into effect this year; refugees 
and asylum applicants; person- 
nel transferred within compa- 
nies operating in the EU; inves- 
tors; and a range of people 
covered by “youth exchange” 
schemes ranging from au pairs 
to training programmes. 

• Mr Jurgen Storbeck was 
confirmed by yesterday's meet- 
ing as the head of the Europol 
anti-drugs squad, the only unit 
the Europol cross-border police 
so far operating. 

The force is being set up by 
the 12 to combat organised 
crime within the border-free 
internal market The appoint- 
ment places the German police- 
man as likely fixture head of 
Europol as a whole. 


Germany spells out Europe vision 


By Quentin Peel hi Bonn 

The European Union must take 
another big step in 1996 
towards a federal future, under 
strict democratic control, and 
with dearly defined powers, a 
top-level German think-tank 


It set out an agenda for the 
inter-governmental conference 
which is intended to complete 
the work of the Maastricht 
treaty, and lay the foundations 
for an expansion of the EU to 
include member states in cen- 
tral and eastern Europe. 

In a report which reflects 
widespread thinking at the 
highest levels of the German 
government, the group spelt 
out proposals for a bi-cameral 
system which would put the 
European parliament and the 
European council of ministers 
on an equal footing. 

Such an idea would almost 
certainly pit the German gov- 
ernment against the UK *m<i 
France, which have strenu- 
ously resisted any effort to 
give the European parliament 
equal powers to the council. 

At the same time the report 
called for precise definition of 
the competences which should 
be exercised at European level, 
and those which should be 
by natfnQfl i govern- 
ments, in an effort to curb the 
process towards centralisation 
in the Union. 

The experts involved in the 
report indude Mr Joachim Bit- 
terlich, who is Chancellor Hel- 
mut Kohl’s personal adviser on 
foreign a ffai r s and above all a 


Chancellor Helmut Kohl and 
Mr Dieter Schulte, the new 
chairman of the German trade 
union federation - pictured 
right - met yesterday with 
other European trade union, 
leaders to discuss Germany's 
forthcoming presidency of the 
European Union, writes Quen- 
tin Peel in Bonn. Mr Kohl 
promised that plans for EU- 
wide works’ councils In multi- 
national companies would be a 
prio ri ty, along with measures 
to fight unemployment and 
promote faster growth. 

The union leaders called for 
pr o motion of further measures 
on social protection, inrinfflpg 
for part-time workers, and to 
ensure that trade liberalisa- 
tion was accom panied by pro- 
visions for better social stan- 
dards in low-wage cost 
countries. The unions are con- 
cerned at Bonn’s stress on 
deregulation and greater flexi- 
bility in labour markets as a 
principal way of creating Jobs. 

specialist on European affairs, 
Prof Ernst Benda, former presi- 
dent of the federal constitu- 
tional court in Karlsruhe, and 
Prof Werner Maihofer, former 
federal interior minister. 

Their aim is to start a debate 
now, on the eve of the German 
presidency of the EU. and well 
before the 1996 deadline for the 
next inter-governmental con- 
ference on the EU, which is 
supposed to complete the 
work of the Maastricht 
treaty. 

In spite of their determina- 



tion both to resolve the conflict 
between European integration 
and the preservation of 
national identity, and to resist 
the trend to European central- 
isation, their federal vision 
seems certain to arouse hostil- 
ity from anti-federalists, above 
all in countries such as 
Britain, Denmark and France. 

The self-styled European 
structural commission, 
financed by the wealthy and 
influential Bertelsmann foun- 
dation, says the greatest chal- 
lenge for the EU is to win pub- 


lic acceptance for a European 
sys tem, which must be simpli- 
fied, more transparent, more 
democratic, and more strictly 
controlled than hitherto. 

The experts admit that the 
Maastricht treaty underlined 
the widespread public fear over 
an excessively centralised and 
bureaucratic EU. It also repre- 
sented the high water mark for 
the transfer of sovereignty to 
Brussels, they suggest 

“Europe cannot be built 
against the interests of its 
nations,” they said. “But the 


opposite is also true: without 
problem-solving at a European 
level, national interests cannot 
be protected." 

The authors stop short of 
any suggestion of a two-speed 
or multi-speed EU, saying that 
such a solution would only be 
necessary only if there was a 
big expansion of the current 
(enlarged) membership. 

It calls for a new single Euro- 
pean treaty to combine the 
existing three-treaty basis of 
the European Community and 
the European Union. 


Delors rekindles Elysee ambitions 


By Lionel Barber in Brussels 

Mr Jacques Delors, president of the 
European Commisshm, is in two minds 
about altering the race to succeed Mr 
Francois Mitterrand as president of 
France. 

For at least 12 months, Mr Delors, 68, 
has disavowed presidential ambitions. 
The battle to ratify the Maastricht 
treaty on European union drained him. 
He has shown more interest lately in a 
retfremrait devoted to intellectual pur- 
suits. “Fve been working for almost 46 


years,” he has said, “it’s time to hand 
over to the younger generation.” 

The resignation of Mr Michel Rocard 
as head of the French Socialist party 
changes the picture. Mr Delors has 
always made dear that he would not 
run against Mr Rocard and split the 
Socialist party. MrSocard’s defeat in a 
vote of confidence at the weekend thus 
removes a precondition for an attempt 
on. the presidency. 

It does not, however, answer the 
question of whether Mr Delors really 
has his eye on the Klys&e Palace after 


10 years in the top Commission post in 
Brussels - period in which he has 
helped to set the political agenda for 
the Continent Those close to Mr Delors 
believe that he would find it difficult to 
resist a rail from fixe Left to become 
presidential candidate, especially if 
there was nnone of stature to chal- 
lenge either Mr Edouard Balladur, 
prime minister, or Mr Jacques Chirac, 
the GauHist leader, on the Right 
Most likely, Mr Delors would seek to 
avoid being candidate of the Socialist 
party alone (he prides himself on cross- 


party appeal with his Christian social- 
ist credentials and fiscal orthodoxy). 
He would be in a strong position to 
dictate terms to his party comrades. 

One worry is bow he would react to a 
presidential campaign, Mr Delon to 
notoriously thin-skinned about critl- . 
rism. No wonder aides were stressing 
yesterday that Mr Delors would serve 
out his final term until January 5, 
1996. It keeps him in his Brussels pow- 
er-base, storing up energy for what 
would have to be a short, sharp 
campaign. 


French Socialists make left turn 

John Ridding reports on the choice of Mr Henri Emmanuelli as the new party leader 

M 


r Henri Emmanuelli, 
a blunt, orthodox 
socialist, will need 
all his reputed toughness as he 
tackles his new task. Elected 
as provisional leader of the 
French Socialist party on Sun- 
day, following the resignation 
of Mr Michel Rocard, he inher- 
its a party deep in crisis, feeing 
an uphill struggle 1 to forge 
unity and win bank dis- 
enchanted voters. 

His election represents a 
shift to the left by the Social- 
ists as they seek to rebuild 
from a hammering in this 


INTERNATIONAL ECONOMIC INDICATORS: BALANCE OF PAYMENTS 

Trade figma ara given bt bffona of European cunncjr unto (Ecu}. 71 m Ecu exchange rate shows the number of notional currency units per Ecu. The nominal effective aw c h a noe rate 
le an index with 1 HK~ 100 . 


■ UNITED STATES 


■ JAPAN 


■ GERMANY 


ins 

ins 

in? 

1888 

ins 

1880 

TO1 

1982 

ins 


2 ren 

230.fi 

220.4 

572.1 

330.0 

308.9 

340.7 

345.8 
3974 


—174.2 

-140.6 

-131.9 

-100.0 

-99.2 

-79.3 

-535 

-64.0 

-aa.9 


-182.5 

-152.7 

-145.0 

-107.3 

-922 

-72.1 

-6.7 

-51.2 

-93.4 


0.7623 

0.9838 

1.1531 

1.1848 

1.1025 

1.2747 

1-2383 

1.2966 

1.1687 


100.0 

805 

703 

66.0 

69.4 

65.1 

845 

82.9 

85.3 


2304 

211.0 

1974 

2184 

245.1 

220.0 

2474 

2544 

3002 


76.0 
96.2 
865 
80.6 
70.4 

50.0 

83.1 
1014 
1209 


644 

874 

75.4 

664 

524 

■?» 9 

824 

89.9 

111.7 


18040 

165.14 

166.44 

151.70 

15148 

18347 

16644 

164.16 

13022 


1004 

124/1 

1332 

1474 

1414 

1284 

1374 

1424 

1734 


24 27 
2483 
2544 

272.1 

310.1 
3244 
327.7 
3304 
3104 


334 
534 
58.7 
61 A 
654 

514 

114 

164 

304 


21.7 

403 

384 

424 

524 

384 

-15.7 

-174 

-182 


23260 
2.1283 
2.0694 
24785 
24896 
24540 
24466 
24201 
1J 


100.0 

108.8 

1153 

114.6 
1134 
119.1 

117.7 
1212 
1244 


2nd qtr.1993 

3rtf qer.1903 

4th qtr.1993 
let qtr.1994 

96.4 

994 

1074 

1074 

-25.4 

-273 

-244 

-28.7 

-22.8 

-24.6 

-27.7 

12056 

1.1429 

1.1387 

1.1249 

644 

65.4 

68-4 

864 

73.4 

792 

75.6 

809 

264 

324 

304 

32.7 

263 
28 2 
26.9 
28.6 

13242 

120.74 

123.18 

12140 

172.4 

183.7 

1802 

1824 

752 

76.7 

81.7 

7.6 

62 

11.7 

-3.1 

-8.7 

-34 

-42 

14908 

14156 

14159 

1.8379 

1244 

1234 

124.8 

122.4 

May 1993 

314 

-8.9 

rut. 

12190 

634 

234 

9.4 

8.4 

134,47 

1714 

244 

24 

-14 

1.9584 

124.1 

June 

314 

-102 

run. 

1.1796 

844 

25.4 

9.1 

84 

12848 

1782 

25 2 

24 

0.7 

14498 

1224 

July 

32.7 

-92 

rue. 

1.1336 

654 

28.7 

114 

9.7 

12249 

181.1 

242 

22 

-44 

14439 

1224 

August 

334 

-94 

(UL 

1.1211 

65.7 

264 

104 

9.1 

11648 

1882 

284 

2.1 

-34 

14014 

1234 

vwjJreit'iJ" 1 

33.1 

-94 

n-a. 

1.1739 

64.7 

254 

10.7 

9.4 

123.75 

1814 

254 

1.9 

-14 

14015 

126.1 

October 

34.7 

-9.4 

114. 

1.1567 

654 

244 

94 

84 

123.71 

180.4 

274 

42 

-14 

14945 

1262 

November 

35.6 

-84 

HA. 

1.1302 

664 

25.1 

9.9 

84 

12148 

181.8 

274 

44 

0.6 

14217 

1244 

December 

37.4 

-64 

nJL 

1.1291 

674 

25.7 

10.6 

92 

12346 

1784 

264 

34 

-1.6 

14314 

123.7 

Jemmy 1994 

35.3 

-9.1 

an. 

1.1149 

674 

274 

11.4 

1CL1 

124.14 

1774 

26.0 

3.4 

-14 

14432 

1222 

February 

34.0 

-107 

114. 

1.1211 

66.7 

20.7 

112 

94 

11946 

1852 

274 

3.1 

-24 

14444 

1214 

March 

37.7 

-as 

n.a. 

1.1387 

88.1 

27.1 

10.1 

8.7 

11840 

1854 



-04 

14281 

1232 

Agrif 



n-a. 

M413 

684 

274 

114 

104 

118.09 

168.0 




14363 

122.6 


■ FRANCE 


■ ITALY 


■ UNITED KINGDOM 



heart! 

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rabiigi 

Atanp 

1885 

133.4 

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6.7844 

1004 

103.7 

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-5.4 

1443.0 

1003 

132.4 

-6.7 

34 

05890 

1004 

1968 

127.1 

04 

34 

B.79G0 

102.8 

99.4 

-24 

-1.4 

14614 

101.4 

1084 

-142 

-14 

06708 

914 

1987 

1284 

-44 

-3.7 

64209 

103.0 

1004 

-74 

-2.1 

1493.1 

1012 

1124 

-104 

-7.1 

07047 

90.1 

1988 

141.7 

-34 

-3.4 

7.0440 

1004 

108.1 

-8.9 

-8.0 

1538.6 

974 

1204 

-334 

-2S.0 

08643 

964 

1968 

1624 

-03 

-34 

74221 

994 

127.7 

-114 

-174 

15104 

984 

1374 

-36.7 

-334 

05728 

924 

1980 

170.1 

-72 

-72 

84212 

1044 

1334 

-43 

-18.0 

1523-4 

1006 

1424 

-264 

-254 

07150 

914 

1991 

1754 

-42 

-4.9 

64598 

102.7 

137.1 

-104 

-17.7 

16303 

884 

147.7 

-14.7 

-104 

07002 

91.7 

1882 

182-4 

4jB 

24 

64469 

1084 

1374 

-84 

-206 

15924 

95.7 

1454 

-184 

-13-5 

07358 

88A 

1993 

1774 

124 

84 

64234 

1084 

144.4 

174 

82 

1835.4 

79.6 

1554 

-174 

-14.0 

07780 

802 


2nd qtr.1993 

3rd qtr.1983 

4th qtr.1993 

1st qtr.1994 

44.4 

44.7 

454 

46.0 

32 

04 

42 

2.4 

1.4 
05 

3.5 
24 

64045 

6.6425 

6.6422 

64910 


38.7 

344 

404 

34 

6.1 

7.1 

1.7 

32 

3.9 

1612.1 

18104 

18794 

18834 


37.7 
404 
402 

41.7 

-42 

-42 

-4.7 

-4.1 

-44 

-24 

-3.1 

07862 

0.7605 

0.7635 

0.7S54 

804 

81.0 

81.1 

814 

May 1993 

15.1 

1-58 

2.08 

6.6796 

1094 

12.4 

12 

04 

17974 

822 

12.6 

-14 

IU5 

07856 

805 

June 

144 

041 

-0.42 

64837 

1084 

124 

14 

08 

1772.4 

824 

124 

-14 

ns. 

07837 

79.6 

•My 

152 

1.70 

127 

64218 

1074 

14.7 

4A 

24 

17944 

SOB 

151 

-14 

njL 

0.7585 

614 

August 

14.4 

049 

127 

6.8525 

1054 

74 

04 

04 

17974 

79.7 

134 

-04 

as. 

0.7545 

815 

September 

151 

129 

140 

56532 

107.0 

12.0 

09 

01 

18394 

784 

134 

-14 

05 

07685 

808 

October 

144 

1.03 

1.17 

56457 

1059 

134 

24 

24 

18501 

782 

134 

-12 

as. 

0.7712 

80.4 

November 

154 

1.19 

042 

64780 

1064 

1ZA 

1.7 

14 

1884.1 

77.0 

134 

-14 

05 

0.7620 

814 

December 

154 

242 

247 

64050 

1062 

154 

3.1 

04 

19044 

701 

154 

-14 

05 

07573 

81.7 

January 1994 

151 

030 

244 

64015 

1074 



-0.7 

16942 

782 

142 

-1.4 

an. 

07456 

82/4 

February 

16.0 

0.73 

-064 

56084 

1074 




18855 

754 

134 

-14 

as. 

07567 

814 

March 

15.9 

146 

051 

84651 

1084 




18951 

7G4 

13.6 

-14 

03. 

0.7648 

805 

April 

15.4 

1.15 


64403 

107.1 




18544 

784 



ns. 

07673 

804 


Due to Die Mnxkjakm of the Stogie Market, EC countries are curemty changing to a new system of cornpBng trade Wattstfca. Al trade figured ere seasonally actuated, except far 
the ItaBon series and the Gentian current acccuit. Imparts can be dertoaa by subtracting the vtatoie trade balance tram expom. Export and hrport data are calculated on the FOB 
(free on board) bash, except hr Gentian and Keflen Imparts wNcfl use the OF method (todudng carriage. Insurance and freight chargee). German data up to and todudm June 
1990, shown In Rales, refer to the former West Qwmany. The nom in al effective e xc hange rates ara period averages of Bank of England trade-weighted nfas. Dots suppfed by 
Datas&eem and W&A tern national g overnment and ogntm bank eoaeeo. 


month’s European elections 
and to recover in time for next 
year's presidential election. Mr 
Rocard, defeated in a vote of 
confidence which he had called 
following his party's meagre 
1<L5 per cent support in the 
European polls, himself admit- 
ted that the party suffered 
from “uncertain political and 
strategic positions, confirmed 
isolation, and an absurd mpans 
of operation". 

Mr Emmanuelli’ s task will 
be to try and overcome the 
divisions in the party while it 
addresses its problems and 
searches for a credible candi- 
date for next year’s presiden- 
tial poll. After defeating Mr 
Dominique Strauss-Kahn, a for- 
mer industry minister, by 140 
votes to 64, Mr Emmanuelli 
said it was necessary to con- 
sult with militants in the party 
to ensure cohesion. “The error 
of the Socialist party has been 
that it has been unable to posi- 
tion itself to defend the work- 
ers against the threats they 
face concerning labour protec- 
tion and social security,” he 
said, demonstrating his 
left-wing credentials. 

A former president of the 
National Assembly, the 49- 
year-old Mr Emmanuelli, 
started his career at the 
Banque d’Edmond de Roths- 
child in 1969. The deputy for 
Landes In south-western 
France has since established a 
reputation as an uncompromis- 
ing figure within the Socialist 
party. “He holds very strong 
views and is a tough oppo- 
nent, ” says me party official 
This reputation could com- 
plicate his task of steering the 



Henri Emmanuelli has inherited a Socialist party in crisis 


Socialists through a delicate 
transition period. He may be 
helped, however, by the feet 
that he is not considered a 
presidential candidate in his 
own right Party officials said 
he will bead the party until a 
party congress is held, due by 
the end of the year, and until a 
presidential candidate can be 
derided. 

Mr Jacques Defers, the presi- 
dent of the European Commis- 
sion, is clearly favoured by 
many within the party. A CSA 
poll published on Saturday 
suggested that 74 per cent of 


Socialist supporters want the 
former finance minieter as 
their presidential candidate. 
This is partly because other 
recent polls have Indicated 
that Mr Delors would offer the 
strongest challenge to the 
probable candidates of the 
right - Mr Jacques Chirac, 
head of the GauHist RPR party, 
and Mr Edouard Balladur, 
prime minister and head of the 
centre-right coalition. 

Mr Laurent Fabius, the for- 
mer Socialist prime mtin'gfw 
and bitter rival of Mr Rocard, 
said on Saturday that Mr 


Solvent emission cut may 
hit output, warns Saab 


By Hugh Camegy 
in Stockholm 

Saab Automobile, the Swedish 
car maker, warned yesterday it 
would cut production and slide 
back into losses if it was forced 
to meet demands that it 
sharply reduce solvent emis- 
sions from the paint shop at its 
manufacturing plant in the 
city of TroDMttan. 

Environmentalists are call- 
ing on the state body which 
sets industrial pollution limits 
to fores Saab, jointly owned by 
General Motors of the US and 
Sweden's Saab-Scania, to 
adjust immediately to solvent 
emission levels of 550 tonnes a 
year officially set for its plant 
instead of the concessionary 


limit of $50 tonnes Saab cur- 
rently operates within. 

“If we cannot get a deferral 
we must reduce our production 
drastically to stay under the 
emission limit which would 
lead to a loss this year, 1 * Mr 
Peter Mflller. Saab*s develop- 
meat and production chief told 
a public hearing held by the 
Concessions Authority. 

The authority, which is also 
considering emission levels for 
Volvo, Saab's Swedish rival, 
said it would rule on the issue 
in August. Swedish compan i es 
fees some of the toughest envi- 
ronmental regulations in 
Europe. The big forestry indus- 
try has been forced to spend 
heavily on reducing effluent 
emissions over the past decade. 


Saab is on target to make a 
profit this year for the first 
time in six years thanirc in 
large part to the success at its 
new 900 model launched in 
1993. But this depends on 
increasing production signifi- 
cantly. Total unit sales, the 
vast majority produced at 
Troilhattan, are projected to 
rise to more than 90,000 in 1994 
from 73,600 last year. 

The company is planning a 
SKrlbn (s&im) investment to 
install a water-based paint feo- 
tory which will bring solvents 
emissions down to the govern- 
ment target of 275 tonnes a 
year by 2000. But it insists it 
cannot bring down emigcmnc 
immediately without slowing 
or stopping production. 


m» ise 


TME FINANCIAL TIMES 
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GtnWL Njhdi w paptatt 3, 60318 I 
“™>. Tdahwe +HSM 

f ft Fn » aSSr-ran 4 ia» 

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JS®ve mmtkmtA two companies is: TIm 
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S«UJ wu* Mas. London SE( <XiL. tta 

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* 


Delors was the person “best 
placed” to lead the Socialists 
into April's presidential con- 
test Mr Delors, however, has 
remained enigmatic on bis pos- 
sible return to French politics. 
Nor is he the only potential 
ca ndidate . Mr Jack Lang, the 
former culture minister, has 
expressed his interest in stand- 
ing for the presidency. 

Whoever emerges as the 
presidential candidate, the 
flawnting challenge s feeing Mr 

TgmmOTinaTW anri hfc colleagues - 

are already dear. In addition ., 
to the factionalism that has 
long bedevilled the party and 
which erupted with a ven- 
geance last weekend, there is 
the equally ftmcLamental prob- . 
lem of restoring the party’s 
tarnished image. 

The disenchantment with 
the Socialists, and their weak 
appeal to young voters, were 
clearly demonstrated in the . 
European elections. The Mou- 
vement des Radicaux de - 
Gauche, headed by the charis- 
matic but beleaguered busi- 
nessman Mr Bernard Tapie, 
won 12.3 per cent of the vote, 
largely at the expense of the 
Socialists. 

Whoever runs on the left 
may need at least the tacit sup- 
port of Mr Tapie. The haririwg 
of President Francois Mitter- 
rand would also be valuable. 
Many French commentators 
see Mr Rocard ’ b downfall as 
the result of a long-running 
feud with the president. This, 
sentiment was expressed in a 
front-page cartoon in Le Quoti- 
dian which showed Mr Mitta> 
raud being presented with Mr 
Rocard’s head on a plate. 


Wafej. Ctrimue D.CM. 

FRANCE 

Director 0. Qcod. jra s 
Wwk P-7SM4 hi* CedexOLTdeptas 

DENMARK 

BnMfr l.Tm (Saadawhl Ltd, VI 
4JA, DK-Ilfil s37peaiHB3iK. 
ptow 33 13 44 41. Fa M9JS3JS. 



NEWS: EUROPE 


3 





( 






FINANCIAL TIMES TUESDAY JUNE 21 1994 


EUROPEAN NEWS DIGEST 

Romania moves 
on new law to 
return property 

The Romanian Senate yesterday passed a controversial 
property law, granting limited restitution rights to former 
owners of around 250,000 residential properties confiscated 
after 1945 by the former communist regime. 

Under the bill, which must be passed by the lower house 
before becoming law, former owners or their descendants may 
only claim back properties they still live in as tenants. Those 
living elsewhere or with more than one confiscated residence 
can claim cash compensation up to the equivalent of the 
annual average salary for the past 20 years. Funds for compen- 
sation will come from sales to tenets of unclaimed properties. 
The proposed law win only compensate Romanian citizens 
resident in the country. 

Former owners living abroad will have sir months in which 
to return to Romania and register their claims. Centre-right 
opposition parties, which boycotted the debate and voting on 
the law, said the bfll violated property rights enshrined in the 
constitution. The National Feasants party, the main opposi- 
tion grouping, said it would challenge the bill In the constitu- 
tional court if, as expected it becomes law. 

The opposition and former owners' groups say the move 
favours former communists living in co nfiscated properties, 
who under the bill wlQ be able to buy their homes for a 
fraction of their market value. Virginia Marsh, Bucharest. 

EU splits Finnish government 

A dispute over Finland’s move to join the European Union 
yesterday split the centre-right coalition for the first time 
since it took office in 1991 as the anti-EU Christian party 
pulled out of the government. 

But the remaining three government parties, led by the 
Centre party of the prime minis ter, Mr Esko Aho, retained an 
absolute majority with 108 seats in the 200-seat parliament, 
despite losing the backing of the seven Christian party MPs. 
The coalition, now comprised of the Centre party, the Conser- 
vative party and the Swedish People’s party, went ahead 
yesterday with the formal ratification of Finland’s agreement 
on the terms of accession with the EU following approval at a 
special conference of the Centre party at the weekend. A 
similar meeting of the Christian party rejected EU member- 
ship, forcing the leadership to withdraw from the coalition in 
which Mr Toimi Kankaanniemi, its leader, was imnigter for 
overseas aid. Hugh Carnegy. Stockholm. 

Palermo mayor refuses to quit 

Mr Leoluca Orlando, the leader of the Sicily- based reformist 
movement La Rete (Network), has refused to resign as mayor 
of Palermo following the announcement last week he was 
under investigation for alleged abuse of office. He told Pal- 
ermo city council yesterday he would not step down but 
agreed to waive his immunity as a member of the European 
Parliament His position contrasted sharply with his demands 
that politicians under investigation resign immediately. Hie 
investigation relates to his previous period in the 1980s as 
Christian Democrat mayor of the city and concerns delays in 
restoring Palermo’s opera house, the Teatro Massimo. The 
saga of the opera house is one of Sicily's better known 
instances of bungling officialdom. It has been closed since 1974 
when it was declared unsafe. So far L65bn (£ 26 - 7m) has been 
spent intermittently on restoration but at least a further 
L32bn is required. Robert Graham, Rome. 

Poles lose enthusiasm for vote 

Voter turnout for Poland’s local government elections on Sun- 
day was between 25 per cant and 30 per cent, the lowest level 
since the fall of communism. Only har&eore supporters of the 
political parties bothered to turn out to vote for the 52,173 
local government seats. Exit polls mirrored last autumn’s 
parliamentary poll, showing the ruling coalition PSL farmer's 
party doing well in the countryside. Its former communist 
partner In government, the SLD, maintained its position in the 
towns and received around one-third of the vote. The opposi- 
tion Freedom Union, a centrist group which led the last 
government also won up to a third of the urban vote leaving 
the rest to disparate, fervently anti-communist, right-wing 
groups. Christopher Bobinski, Warsaw. 

ECONOMIC WATCH 


Belgian optimism on deficit 

Belgium is on course to meet 
tins year’s target for the pub- 
lic sector deficit of 5.7 per 
cent of gross domestic prod- 
uct, Mr Philippe Maystadt, 
the finance minister, said yes- 
terday. Presenting the Trea- 
sury's seventh annual report 
on the public deficit, Mr 
Maystadt said he was confi- 
dent the federal government 
would be able to stick to its 
goal, even though it was too 
early to say how well Bel- 
gium's three regional govern- 
ments had performed. Mr 
Maystadt also announced that 
Belgium was to introduce a 
new clearing system that 
would enable private retail investors to hold government Trea- 
sury bills and bonds (OLOs), previously only held by 
banks and Institutional investors. Individuals would be 
allowed to hold the debt instruments in a special bank 
account The report said that consolidated debt represented 
66.6 per cent of the federal government's total debt at the end 
of May this year, compared with 69J5 per cent a year earlier. 
Emma Tucker, Ehvssels. 

■ Sweden's May trade surplus rose to SKr5.5bn (£462m) from 
SKr4.5bn a year earlier, the Central Bureau of Statistics said 
yesterday. Analysts polled by Reuters had forecast a SKr6.7bn 
surplus. 

■ Registered businesses in Hungary rose to 92^14 in May 
from 91,004 in April, the Central Office of Statistics said. 


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Sauna: FT Qraprtte *Powaai 


Baltic states’ varied roads to freedom 


Philippe Legrain reviews the economic records of Estonia, Latvia and Lithuania since independence 


W hen Estonia flouted 
the International 
Monetary Fund’s 
advice and ditched the Russian 
rouble, Its leaders did so in the 
conviction that a stable 
national currency was a cor- 
nerstone of their country's 
hard-won independence. But 
two years on, their initial suc- 
cess - inflation was held to 36 
per cent last year compared 
with nearly 1,000 per cent in 
Russia - has been undermined 

by recent price surges. 

Latvia's consistently better 
inflation record underscores 
Estonia's setback and has 
called into question its north- 
ern neighbour's approach to 
monetary policy. The Bank of 
Latvia, while allowing the lat 
to float, has adopted a “strong 

lat” policy and maintains high 

interest rates to stamp out 
inflationary pressures. Estonia, 
on the other hand, r um a cur- 
rency board-like system which 
leaves policy on "autopilot”. 
The kroon, which is pegged to 
the German D-Mark, is fully 
backed by foreign currency 
reserves whose ebbs and flows 
determine the size of the 
money stock. 

Large capital inflows, fuelled 
by foreign aid and investment 
and balance of pa yments finan- 
cing, have sent Estonia's 
money supply rising fast Con- 
sequently, inflation has shot 


back up to an annualised 66 
per cent in the three months to 
May, compared with 20 per 
cent in Latvia. 

Renewed inflation has also 
increased the kroon's overvalu- 
ation, sucking in imports and 
stunting export growth. Eston- 
ia's trade deficit widened to 
EEK1.3bn (£66m) in the first 


three months of this year, 
equivalent to a third of export 
volume or about 20 per cent of 
estimated first quarter gross 
domestic product 

By contrast, thanks to its 
superior inflation performance, 
the lat has not appreciated as 
much In real terms as the 
kroon and Latvia's current 
account has remained in sur- 
plus - S125m last year, equiva- 
lent to 5.7 per cent of GDP. 

Despite these drawbacks, a 
recent study by Professor Jef- 
frey Sachs of Harvard Univer- 
sity and Mr Ardo Hansson of 
the Bank of Estonia defends 


the currency board system, 
arguing that it gives the kroon 
much needed credibility. The 
authors point to the shift in 
trade from east to west -Fin- 
land has replaced Russia as 
Estonia's main trading partner 
- to back up their case. 

But Latvia has achieved a 
similar re-orientation. 


Although Russia Is still its 
main trading partner, like 
Estonia’s, about a quarter of 
its trade is with Russia. 

On April 1 the third Baltic 
republic of Lithuania, often 
considered the laggard in eco- 
nomic reform, plumped for the 
Estonian way. After a furious 
debate involving accusations of 
betraying the motherland, the 
government pegged the newly- 
issued litas to the US dollar. 
Inflation had stabilised at an 
annualised rate of 36 per cent 
in the three months before the 
decision. Lithuania recorded a 
300m litas ($75m) deficit last 


year and trade re mains angled 
towards former Soviet repub- 
lics. 

Growth prospects for all 
three countries re main murky. 
Although industrial output 
growth is still flat, the Baltic 
states are hoping for growth 
this year for the first time 
since regaining their indepen- 
dence in August 199L Estonia 
seems to have the edge but evi- 
dence is patchy. 

Estonia has also led the way 
in attracting foreign invest- 
ment. Finnish and Swedish 
companies have piled in more 
than half the EEK906m - 
equivalent to 4.3 per cent of 
GDP - that flowed into the 
small country last year. 

Latvia is catching up, haying 
overcome a legislative logjam 
which led prospective inves- 
tors to delay committing foods. 
While only about S60m (2.7 per 
cent of GDP) was invested in 
Latvia in 1993, SI 00m is expec- 
ted this year, according to the 
Latvian Development Agency. 
The UK-based multinational 
Gable & Wireless and Telecom 
Finland have announced a 
$1.3bn plan to modernise Lat- 
vian telecoms, 340m of which 
has already been invested. 
Kellogg, the US breakfast 
cereals giant, has set up a 
yagm plant near the capital 
Riga. 

Lithuania has attracted little 



Sachs: points to trade shift 


foreign investment to date but 
is furthest down the privatisa- 
tion road. More than two 
thirds of the companies slated 
for sale have been privatised, 
and more than half the work- 
force is now In the private sec- 
tor. However, allegations of 
corruption and of Soviet-era 
"red directors” buying their 
companies on the cheap have 
nearly halted the process. 

Estonia has opted for the 
East German model, having set 
up a privatisation agency mod- 


Latvia’s consistently better inflation 
record has underscored Estonia’s 
setback and called into question 
its northern neighbour’s stable 
currency approach, seen as the 
cornerstone of its hard- won liberty 


40RWAY 


FINLAND 


SWEDEN > 


ESTONIA s 


• ,1 \ . 1 LATVIA A 

* V* *“* BALTIC . 

i'yty SEA LITHUANIA 

^ ‘ «'-■%- f 

BELARUS 

POLAND 


0 Mtes 2 00S 
0 Km 320 f 


UKRAINE 


elled on the TrcuiuindanstnldL 
Of more than 500 earmarked 
for sale, 52 companies had been 
sold by the start of the year, 
with a new wave of auctions 
under way. But the volume of 
receipts ($24m) and impact on 
the economy have so for been 
minimal. 

Privatisation has barely got 
off the ground in Latvia. A 
quarrel between the newly set 
up privatisation agency and 
government ministries over 
responsibility for the sell-ofls 
and whether to opt for hard 
currency or voucher sales has 
hindered progress. Although 
Latvia aims to sell about 200 
companies a year, only 85 out 
of a list of 703 have actually 
changed hands so far. 


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NEWS: WORLD TRADE 


Production of about 130,000 barrels a day expected I Swedish call for more 

Japan strikes Vietnam oil telecoms competition 


By Robert Corztne 

Mitsubishi Oil of Japan 
yesterday announced the 
discovery of what could be a 
significant oil off the coast 
of Vietnam, an area which has 
proved disappointing for a 
number of international oil 
companies. 

The find was in shallow 
water near the mouths of the 
Mekong River, well away from 
disputed areas further off- 
shore. The exploration block, 
known as 15-2, is adjacent to 
the Bach Ho, or White Tiger 
field, which produces about 
130,000 barrels a day. 

Officials yesterday said they 
“strongly expect that the dis- 
covery will . . . lead to produc- 


•tto'Chi 



w w ■- v;:;^ 


i jT*' 






tion on a similar scale to the 
Bach Ho field." Oil from the 
newly discovered well is also 


expected to be of a similarly 
high quality, the company 
said. 

The Japan Vietnam Petro- 
leum Company, a Mitsubishi 
subsidiary, said the 10,346 bar- 
rel a day flow rate from the 
exploratory well was “one of 
the highest flow rates from a 
single production test in south- 
east Asia". 

Another exploratory wen is 
due to be drilled in the area, 
bat Mitsubishi and Petro Viet- 
nam, the Vietnamese state oil 
company with which it has a 
production sharing contract, 
have decided to begin a 
feasibility study on the 
possible development of the 
field. 

Analysts say its proximity to 


the coast and shallow water 
depths should help to keep 
development costs down if a 
decision is made to go into 
full-scale production. 

Mr Gavin Law, who monitors 
oil developments in southeast 
Asa for Wood Mackenzie, the 
Edinburgh brokers, said there 
had been “a lot of eagerness’ 
on the part of the Vietnamese 
authorities to get another 
significant offshore discov 
ery. 

Many recent exploration 
wells have produced disap- 
pointing results, while there 
has been a big revision down- 
wards in the estimated 
reserves of the Dai Hung, or 
Big Bear, field. 



Tokyo urged to ease refinery imports 


By MfcNyo Nakamoto fat Tokyo 

Japan's Ministry of International Trade 
and Industry yesterday moved closer to 
lifting restrictions on oil product imports 
with the publication of a report recom- 
mending the deregulation of the oil indus- 
try. 

In an interim report submitted to the 
trade minister, a government advisory 
panel called for the abolition of a special 
law on oil product imports which has 


restricted imports to refiners. 

The report says the restriction has 
helped perpetuate substantial price differ- 
entials between domestic and overseas 
petrol prices, and recommends the easing 
of rules on petrol station construction. 

The panel’s recommendation, which 
will form the basis for M3ti policy, comes 
as prime minister Tsutomu Hata has 
urged minis tries to come up with farther 
deregulatory measures to resuscitate the 
sluggish Japanese economy. 


• The Japanese g o v er nment win compile 
a package of deregulatory measures by 
the end of this month to present to the 
Group oT Seven summit in Naples next 
month as part of its efforts to meet inter- 
national criticism that it must do more to 
stimulate its domestic economy and trim 
its current account surplus. 

Wide-ranging regulations covering the 
oil Industry have come up for special crit- 
icism recently as responsible for shoring 
np the price of petroL 


By Andrew Adonis 


Mr Per Wester- 
berg, Sweden's 
minister of 
industry, yes- 
terday called 
for a rapid 
introduction of competition in 
the provision of telecommuni- 
cations networks across 
Europe. 

Addressing an FT conference 
In London on European tele- 
communications, Mr Wester- 
berg Said the libe ralisati on of 
telecoms services, as agreed by 
the EU, was insufficient to give 
Europe a competitive edge over 
the US. 

“Competition in the infra- 
structure is also necessary,” he 
P ointing to the potential 
for a new generation of multi- 
media services using fibre-op- 
tic networks, he argued that 
prices had to be cost-based. 

"For this to happen 1 believe 
there must be competition in 
infrastructure as well as in an 
kinds of service.” 

Sweden, whose application 
to join the EU now rests with a 
national referendum, already 
allows infrastructure competi- 
tion. Within the EU only the 
UK has adopted the same 
course. 

The European Commission 


has yet to announce its propos- 
als on the issue, but appears to 
be leaning towards infrastruc- 
ture liberalisation. 

Mr Wim Dik, chairman of 

KPN, the recently privatised 
Dutch posts and telecoms com- 
pany, supported tiie liberalisa- 
tion of infrastructure, saying 
he "welcomed" the prospect of 
competition at froma 

He stressed the importance 
of aTtfsmtva between national 
operators to the fut ure of 
Europe's telecoms industry as 
international competition 
advanced. "If there is more 
competition in your home mar- 
ket, you have to go abroad, and 
■m plHrmtinnais 8T8 driving the 
j ptamflHrmai market," he said. 

KPN has formed an interna- 
tional joint venture, caDed Uni- 
source, with the state telecoms 
operators of Sweden and Swit- 
zerland . Telefonica, the Span- 
ish operator, is an associate 
member. 

Mr C4ndido VelAzquez-Gaz- 
telu King chairman of Telefon- 
ica, told the conference that 
Telefonica was set to join Uni- 
source as a full member next 
month. “We share its philoso- 
phy" he said. 

The addition of Telefonica 
will strengthen Unisource in 
its current negotiations for a 
partnership with AT&T, the 
hugest US operator. AT&T is 


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anxious to miter the European 
tpjecntng market after the suc- 
cess of its smaller US rivals 
MCI and Sprint in forging alli- 
ances with the larger European 

operators. .. . 

However, Mr Dik and Mr 
Ruiz dashed over the question 
of universal service obligations 
on waHnnai telecoms operators, 
an issue slowing progress 
towards full telecoms liberalis- 
ation in the EU. 

Mr DDc said market forces 
ffjywiW broadly determine tele- 
coms service levels, with any 
subsidies thought desirable for 
rural dwellers paid directly to 
the subscribers. 

However, Mr Ruiz argued | 
»h at operators should | 

continue to receive subsidies to 
provide telecoms services to I 
poorer or rural communities. 
They should either be allowed t 
to subsidise such services from i 
other activities, or competitors 
should be obliged to pay them 
a fee to cover loss-making 
social obligations. 

The issue is controversial in 
Spain, which has recently 
agreed to forego an EU conces- 
sion allowing it until 2003 
before licensing “voice” tele- 
coms competitors to Telefon- 
ica. Competition in Spain will 
start in January 1998. as in 
most of the rest of the 
EU. 

Argentina 
‘backs’ 
Brazil to 
lead WTO 

By Stephen Fidsr, 

Latin America Editor 

Brazilian diplomats said 
yesterday that the Argentine 
government had wnriprimari its 
support for Brazil's candidate 
to head the World Trade 
Organisation. 

According to the diplomats, 
the support for the Brazilian 
finance minister, Mr Rubens 
Ricupero, came In a letter soft 
by the Argentine foreign minis- 
ter. Mr Guido di Telia, to his 
Brazilian counterpart, Mr 
Celso Amorim, at the weekend. 

The letter follows the cancel- 
lation by Brasilia of a proposed 
visit later this month by the 
Argentine finance minister, Mr 
Domingo CavaDo. That came 
after reports that Argentina - 
along with other head s of gov- 
ernment at the Ibero-American 
summit last week - had 
backed Mexican President 
Carlos Salinas to head the 
WTO. 

The diplomats said that Mr 
di Tella's letter said there had 
been a misunderstanding 
about the summit discussions 
in Cartagena, Colombia, over 
the new WTO bead - which 
took place after Brazil's presi- 
dent, Mr Itamar Franco, had 
left to attend a fizneraL 

Mr di Telia said the Argen- 
tines had not understood the 
talks to be seeking a consen- 
sus, and had believed the Bra- 
zilians had been consulted 
beforehand on the issue. 

Mr Salinas, who does not 
leave office until the end of the 
year, has not yet formally 
declared his interest in the job 
as head of the WTO, which is 
to succeed the General Agree- 
ment on. Tariffs and Trade next 

year. 

Only one candidate from 
Latin America is expected to 
be considered by the new body. 
Brazil has insisted that Mr . 
Ricupero, the only person to I 
have officially put his imm? j 
forward, remained a “viable" 
candidate. 


NEWS IN BRIEF 


KLM to 

transfer 

Orlando 

flights 

KLM Royal Dutch Airlines 
yesterday announced that it 
would transfer its scheduled 
service to Orlando. Florida, to 
a joint venture to set up with 
Martinair, the Dutch charter 
airline in which it owns a 
minority stake, writes R onald 
van de Krol In Amsterdam. 

Martinair will start operat- 
ing ELM’S Orlando flights an 
October 31, but the two airlines 
will have joint control over 
marketing and sales. The 
Dutch charter airline will also 
Increase the flight frequency to 
Orlando to four roundtrip 
flights every week, up from the 
current three, reflecting a rise 
In demand by holidaymakers. 
Martinair, which already 
serves Fort Lauderdale; Tampa 
and Miami, has not previously 
flown to Orlando, which is 
home to one of the Walt Disney 
theme parks ns well as other 
tourist attractions. 

The joint-venture service to 
Orlando has been made possi- 
ble by the "Open Sides” agree- 
ment reached by the US and 
the Netherlands in 1992 with 
the aim of giving greater 
aoraa? to each other's airlines. 

Israel, S Korea 
in air accord 

Israel and South Korea have 
initialled a civil aviation agree- 
ment that should allow direct 
flights between the two coun- 
tries by early next year and 
considerably boost the tourist 
trade, writes Julian Ozanne in 
Jerusalem. El AL Israel's state- 
owned airline due to be priva- 
tised later this year, has said 
that it wishes to fly to Seoul as 
soon as possible as part of its 
route expansion programme 
focussed on Asia. Israel’s tour- 
ism ministry, however, critic- 
ised the ministry of transport 
for mishandling the agreement 
by not providing for the imme- 
diate establishment of sched- 
uled flights between the two 
countries. 

Franco-German 
oil joint venture 

A joint venture between units 
of Germany's Thyssen Lurgi 
and Technip of France yester- 
day finalised a DMSbn (£L2bn) 
contract for a turn-key oil refi- 
nery in Leuna in eastern Ger- 
many, AP-DJ reports from 
Frankfurt. The refinery will 
process 8.7m metric tons of 
crude oil annually and will 
produce high octane petrol and 
diesel fuel with a low sulphur 
content The joint venture to 
design and construct the refi- 
nery was formed in February 
1993 but became bogged down 
in negotiations with authori- 
ties in eastern Germany. 

HK phone deal 
for Ericsson 

Ericsson, the Swedish telecom- 
munications group, yesterday 
said it has received an order 
worth SKrl4Qm OSlLSm) from 
SmarTone Mobile Communica- 
tions Ltd. of Hong Kong for 
Global System for Mobile com- 
munications equipment to 
allow SmarTone to expand its 
subscriber network capacity, 
AP-DJ reports from Stock- 
holm. Ericsson will expand 
SmarTone ’s original central 
exchange capacity as well as 
supply a new Mobile Switch 
Centre and Base Station Con- 
troller. 


Japan to make 
loans to S Africa 


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By Gerard Baker in Tokyo 

The Japanese government is to 
extend its first ever sovereign 
loans to South Africa. The 
credits will be part of a pack- 
age of measures expected to be 
unveiled by the prime minis- 
ter, Mr Tsutumo Hata, nex t 
month’s summit of leaders of 
the Group of Seven industria- 
lised nations in Naples. 

Foreign Ministry officials 
said a mission would leave for 
South Africa later this week to 
look at specific projects for 
infrastructural Investment. 
The total value of the loans on 
offer would be decided after 
the mission's report- Likely 
peas for investment included 
telecommunications, medical 
and educational facilities. 

The package of measures 
will also include up to $500m 
(2329m) in trade and invest- 
ments insurance over the n px t 
two years, according to the 
Ministry of International Trade 
and Industry (Mid). 

Miti officials said the deci- 


sion is in response to a recent 
US request that industrialised 
nations increase aid to Pretoria 
for its economic rehabilitation 
programme under the presi- 
dency of Mr Nelson Mhndela. 

The move comes at a time of 
growing interest by Japanese 
companies in South Africa. 
Several utility companies and 
trading houses have estab- 
lished trading links since sanc- 
tions were lifted in 199L Last 
month Sumitomo Corporation, 
one of Japan's leading trading 
companies, established a joint ^ 
venture with Associated Man- « 
ganese Mines to exploit new 
mines. 

Japan is South Africa’s 
fourth largest trading partner. 
Until recently the country was 
on® of the few in the world to 
have a bilateral trade surplus 
with Japan. But the slump in 
Japanese domestic demand has 
been reflected in a sharp fall in 
Imports from South Africa. 
Last year, Japanese exports 
totalled $2bn while Imports 
were Siabm 


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FINANCIAL TIMES TUESDAY JUNE 21 1994 


NEWS: INTERNATIONAL 


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(),.l 

‘ i him. 

t > 4 ■■lih 

i r t , . ? 


Seoul signals end to Hyundai curbs 


By John Burton 

'Rw South Korean government 
yesterday appeared ready to 
end its cold war with the 
Hyundai conglomerate by sig- 
nalling its willingness to drop 
financial restrictions against 
the nation's largest industrial 
group. 

The Korea securities dealers’ 
association, which receives its 
guidance from the government, 
said it would “favourably con- 
sider” the registration of three 
unlisted Hyundai subsidiaries 

Surge in 
growth 
rate seen 
for India 

By Nancy Dunne 
in Washington 

The reform process in India, 
begun in 1991. could enable 
growth rates to surge to levels 
experienced by its East Asian 
neighbours, the World Bank 
said yesterday. 

In a report before the June 
30 meeting of the Paris Club 
Aid India Consortium, . the 
bank praised the “remarkable" 
success at improving current 
and capital external accounts. 
Growth rose from 2 per cent in 
1991-02 to about 4 per cent in 
the last two years and manu- 
facturing, which initially 
dipped, has recovered to a 
modest growth of 2 per cent 
Foreign investment has 
soared to an unprecedented 
$4.7bn (£3.1bn). But inflation, 
after declining to about 7 per 
cent in mid-1993, has been ris- 
ing again, the report said. 

For India to fulfil its growth 
potential, however, it must 
strengthen public finances and 
improve infrastructure. 
“Reform should be broadened 
to include sectoral ministries, 
public enterprises and state 
government while at the same 
time intensifying efforts to 
strengthen social safety nets." 

The Bank warns that India 
must improve its fiscal perfor- 
mance. “At 66 per cent of GDP 
by the end oT 1993-94, the cen- 
tral government debt (90 per 
cent of the consolidated central 
and slate governments debts) 
is relatively high. Interest pay- 
ments already claim over half 
of central government fiscal 
revenues." it said. 

Improvement must be made 
in the finances of public enter- 
prises and the states. The bank 
said it was “essential” India 
accelerate reform of public 
enterprises, which generate 
one-fourth of the country’s 
non-agricultural GDP. 

“Where restructuring exer- 
cises must precede large scale 
disinvestment, public enter- 
prises' managers need to be 
given the authority to mobilise 
the resources necessary for 
financial restructuring, under- 
take large scale retrenchment 
and associate interested pri- 
vate parties where possible." 

Taiwanese 
cool to 
China call 

By Laura Tyson in Taipei 

Taipei has responded coolly to 
a request from Beijing to 
resume high-level contacts, 
insisting questions relating to 
the March murders of 24 Tai- 
wanese tourists in China be 
addressed first, a government 
official said yesterday. 

On Friday, Mr Wang Dao- 
han, Beijing’s chief negotiator 
for Taiwan affairs, faxed a let- 
ter to his Taiwanese counter- 
part seeking an “urgent meet- 
ing” to resolve differences - 
the first time the two would 
meet since 1993's ground-break- 
ing talks, when officials from 
both sides held talks for the 
first time in more than 40 
years. 

“We have sent nine letters to 
the Chinese side about the 
tourists." a spokesman for 
Taiwan’s Mainland Affairs 
Council said. “We want to 
resolve the issue. But so far we 
have received no answer* - 

The Qiandao Lake Incident 
occurred when the tourists 
were robbed and their boat 
torched. Three Chinese were 
executed, but Taiwanese sus- 
pect they were scapegoats. 
China has been accused of cov- 
ering up military involvement. 

Correction 

World Development 


Report 

A headline and introductory 
paragraph in the international 
edition of yesterday's Financial 
Times referred to $200bn a year 
in donor nations' infrastruc- 
ture investment. The $200bn 
was not limited to donor 
nations’ investment. 


on the over-the-counter mar- 
ket 

The government blocked the 
OTC listing of the three compa- 
nies - Hyundai Heavy Indus- 
tries. Hyundai Elevator and 
Hyundai Housing and Indus- 
trial Development - in 1992 
and 1993, in apparent retalia- 
tion for the 1992 presidential 
bid by Hyundai's founder, Mr 
Chung Ju-yung. 

Mr Chung's presidential 
campaign was the first politi- 
cal challenge staged by a con- 
glomerate against the govern- 


ment's traditional strict con- 
trol over industry. 

Mr Chong, who finished a 
poor third to President Kim 
Young-sam, announced his 
retirement last month from the 
group's management in an 
attempt to end the govern- 
ment’s hostility toward Hyun- 
dai. 

The OTC listings would be 
the first step in ending all 
state-imposed financial restric- 
tions on Hyundai 

The government has pre- 
vented Hyundai from receiving 


soft industrial loans from the 
state-controlled Korea Develop- 
ment Bank, issuing bonds in 
foreign markets, and barred 
the listing of two other Hyun- 
dai companies - Hyundai Mer- 
chant Shipping and Koryo 
Industrial Development - an 
the Seoul bourse. 

Hyundai claims that as a 
result of the financial restric- 
tions it has had to cancel or 
postpone some of the projects 
in its $5.6bn (£3.7bn) invest- 
ment programme this year. 

Some of the projects affected 


include the construction of two 
car factories by Hyundai 
Motor, the completion of a 16- 
megabit semiconductor assem- 
bly line by Hyundai Electron- 
ics, and the construction of a 
$l.5m shipbuilding dock and 
generator and turbine produc- 
tion facilities by Hyundai 
Heavy Industries. 

Government critics have 
argued that the financial 
restrictions were detrimental 
to the economy's growth, since 
Hyundai is the nation's largest 
producer of cars and ships. 




People in the small town of Yingde, in China’s southern Guangdong province use a boat to make their way down the street after 
severe flooding which has caused many deaths. The floods rose higher yesterday as rains lashed the southern provinces of Hunan, 
Guangdong and GuangxL State media assessments at the weekend put total deaths in excess of 400, with an estimated 160.000 homes 
destroyed and economic losses running into the tens of millions of dollars, and the lives of 20m people affected. mm* 


25 die in 
Iranian 
prayer 
hall blast 


By Roger Matthews, 

Middle East Ecfitor 

Iran's interior ministry said 
that 25 people were killed and 
70 wounded yesterday when a 
bomb exploded in a crowded 
prayer hall in the north east- 
ern Iranian town of Mashhad. 

The Is l a m ic Republic News 
Agency said the worshippers 
had congregated at the mauso- 
leum of Imam Reza to observe 
the Islamic mourning day of 
Ashura when the blast 
occurred. 

The authorities In Tehran 
immediately blamed the Muja- 
hadeen-e-Khalq, the main Ira- 
nian opposition group, which 
in the past few years has been 
more visible outside the coun- 
try than within. 

However, a statement Issued 
from the Mujahadeen office in 
Paris “strongly condemned” 
the bombing. It added: “Such 
criminal actions, which inflict 
casualties on innocent people, 
only serve the interests of the 
mullahs ’ regime.” 

Mashhad was the centre of 
serious rioting two years ago 
when official buildings, banks 
and shops were attacked and 
several people killed in pro- 
tests believed to have been 
sparked by demolition of slum 

housing . 

The protesters also com- 
plained of rising prices and 
poor living conditions, with the 
demonstrations spreading to 
other cities including Shiraz 
and Tabriz. Hundreds of people 
were arrested and several 
alleged ringleaders executed. 

There have been reports of 
minor incidents in Tehran this 
year, but none causing serious 
loss of life or damage to build- 
ings. In February shots were 
fired during a rally being 
addressed by President Ali 
Akhbar Hashemi RatsanjanL 

But with last year's fall in oil 
prices, the government has 
fallen further behind in meet- 
ing international debt obliga- 
tions, and inflation again ris- 
ing sharply, senior Iranian 
officials have been aware of 
the risks of further public dis- 
content. Parliament has 
refused to sanction price j 
increases sought by the gov- 
ernment and President Rafban- 
jani's efforts to maintain other 
economic reforms, such as a 
single exchange rate, have 
been abandoned. 


Critics of Indonesian nuclear energy 
plans oppose inactive volcano site 

Government says energy demand gives it no option, writes Mannela Saragosa 


P roposals by the Indone- 
sian government to 
develop a nuclear power 
industry are taking on an 
Increasingly determined tone 
amid widespread criticism 
from environmentalists and 
some opposition parties. 

The proposals Include the 
building of the country's first 
nuclear power station near an 
inactive volcano Mount Muria 
on the northern coast of cen- 
tral Java, an area also prone to 
earthquakes. 

International tenders for the 
plant could be held next year 
and Indonesia's leading envi- 
ronmental pressure group, 
Walhi, has stepped up its anti- 
nuclear campaign. 

A feasibility study for the 
construction of the plant was 
complete! by New Japan Engi- 
neering Corporation earlier 
this year but details of the 
study have not been made pub- 
lic. If all goes as planned, 
Indonesia could have a work- 
ing nuclear power station by 
2004. 

Proponents of the nuclear 
energy scheme at Batan, the 
state's national atomic energy 
agency, argue that soaring 
energy demand in the Java / 
Bali grid, which is home to 70 
per cent of Indonesia's 180m 
people and accounts for 80 per 
cent of Indonesia’s total energy 
requirements, leave the coun- 
try with no choice but to go 
nuclear. There are also propos- 
als for 12 nuclear power sta- 
tions in Java and Bali over the 
next 25 years. 




s^.'vy V-i 


BORNEO 


SUMATRA 


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■ w : : v^> Yx V. 




ZSOmteo j.j 
400 tan *J 


Batan predicts that at fore- 
cast rates of increased energy 
demand, Indonesia faces 
becoming a net oil importer 
within the next 10 to 15 years. 
Although the country has coal 
reserves for another 300 years, 
the environmental impact of 
coal-fired electricity generation 
limits possibilities. 

“We have to go nuclear one 
day,” says Mr Hartato, co-or- 
dinating minister for trade and 
industry. “There is no doubt 
about it” 

“We believe it is not good to 
rely on a single source of 
energy," says Mr Soedyartomo 
Soentono, deputy director gen- 
eral for nuclear industrial 
research and development at 
Batan. Critics retort that with 
so many alternative supplies of 
energy in the country, includ- 
ing geothermal and solar 


energy and gas resources, it 
does not make sense to make 
nuclear power a priority. 

Mr Soentono, however, says 
geothermal and solar sources 
of energy could not generate 
enough power to satisfy the 
requirements of a rapidly 
industrialising area. He also 
argues that Indonesia's huge 
gas deposits are located too far 
from Java and Ball 

“The government's main pol- 
icy is to diversify its sources of 
energy," Mr Soentono adds. 
Batan says that in 1992 86.1 per 
cent of the country's energy 
supply came from oil and gas, 
7.8 per cent from coal, and 
other sources accounted for 6.1 
per cent By 2019, Batan pre- 
dicts 6 per cent of the coun- 
try’s energy supply will come 
from nuclear power stations, 54 
per cent from coal, 38 per cent 


oil and gas and 2 per cent other 
sources. 

Opposition to the construc- 
tion of the Muria plant has 
also been voiced in Australia. 
Critics there argue that Indon- 
esia's frequent earthquakes 
make a nuclear power plant 
high-risk. In February this 
year an earthquake shook the 
Indonesian province of Lam- 
pung in Sumatra, killing 
nearly 200 people. 

Same Indonesian geologists 
argue that building a nuclear 
power station next to an inac- 
tive volcano is gambling with 
luck. They point to Mount Pln- 
atubo in the Philippines which 
was dormant for 700 years 
before it erupted in 1992. Batan 
says the volcano in the Muria 
pe nins ula has been dead for 
340,000 years. 

“I would not call it a vol- 
cano, I would call it a hill ... , 
says Mr Soentono. 

Environmentalists are also 
concerned at plans eventually 
to privatise the Muria plant 
Batan insists the government 
would continue to ensure 
safety requirements are met 
even if the plant is sold off. 
The government says it will 
create a nuclear regulatory 
authority. 

It Is estimated that the cost 
of building the Muria plant 
will be about $2bn (£1.3bn). 
Opponents of the scheme are 
angry that Indonesia, which 
has a foreign debt of between 
$90bn and SlOObn and an 
annual per capita gross domes- 
tic product of $660, should 


invest in developing nuclear 
power stations when, accord- 
ing to them, there are other 
more urgent issues, such as 
welfare. 

Batan executives say they 
have conducted a cost evalua- 
tion for the project which con- 
cludes that nuclear power sta- 
tions are a cheaper source of 
energy than coal- They do not 
give any figures. 

Indonesia has three nuclear 
research reactors, all in Java, 
and has been developing iso- 
topes and radiation processing 
programmes since 1964. But 
there is concern that Indonesia 
does not have the technical 
expertise to manage a nuclear 
power station. 

“We do not have a high-tech 
culture," says Mr Muhammad 
Anung. programme manager 
for energy at Walhi. 

Opponents of the scheme 
will have to fight hard to be 
heard since support for the 
development of nuclear energy 
comes from the government's 
highest quarters. The proposal 
is one of the pet projects of Mr 
Jusuf Habibie, Indonesia's 
enthusiastic minister for 
research and technology. Presi- 
dent Suharto has also indi- 
cated his support 

Mr Habibie has promised 
that the public will have the 
final say In determining 
whether the Muria project goes 
ahead. Critics are sceptical. 
"Habibie's statement is purely 
political," says Mr Anung at 
Walhi. “I think they mil go 
ahead and buOd it anyway.” 


Egypt strong 
enough to say 
no to IMF 

Reform success allows Cairo 
to resist devaluation pressure, 
writes Mark Nicholson 


T he fact that Egypt and 
the International Mone- 
tary Fund are in dis- 
agreement - this time with 
Cairo resisting IMF pressure to 
devalue - has a familiar ring to 
it That Egypt is prepared to 
resist IMF recommendations 
I out of self-confidence in its eco- 
nomic performance, however, 
is a more novel phenomenon. 

The differences surfaced last 
week, when Egypt admitted 
that IMF approval for the pres- 
ent stage or its economic 
reform programme faced a 
delay of up to six months and 
that devaluation was the point 
of contention. Cairo had other- 
wise hoped to win the Fund's 
approval by next month. That 
in turn was to trigger relief of 
about $5bn of external debt 
under a 1991 deal in which offi- 
cial Paris Club creditors said 
they would write off half 
Egypt’s then S40bn debt if it 
successfully undertook IMF 
and World Bank reforms. 

Egypt has already eqjoyed 
two tranches of debt relief 
under this agreement, having 
since 1991 undertaken 
“remarkable and broad rang- 
ing reforms", in the words last 
week of Mr Ram Chopra, direc- 
tor of the World Bank's Middle 
East department. And senior 
Egyptian officials say they are 
confident of w inning the third 
and final tranche by the year’s 
end. But they will do it, they 
say, Egypt’s rather than the 
Fund’s way. 

From near bankruptcy in 
late 1990, Egypt has cut infla- 
tion by a third to less than 7 
per cent, sliced its budget defi- 
cit torn 18 per cent of gross 
domestic product to less than 
2.6 per cent, and padded 
reserves from two weeks of 
import cover to more than 18 
months. All this while liberali- 
sing trade ami the banking and 
capital market sectors and 
stre amlinin g and improving 
the tax system. 

Egypt has also defied tradi- 
tion by holding the Egyptian 
pound stable at around E£3J 
to the dollar for the past three 
years, underpinned by the 
introduction in 1992 of positive 
real interest rates for the first 
time in decades. This stability 
the government prizes as 
among its most cherished 
achievements, one which min- 
isters say does more than any- 
thing to establish international 
confidence in the economy. 


The IMF believes 
Egypt can no 
longer afford the 
cost to its export 
competitiveness 
of an exchange 
rate 25-40 per 
cent overvalued 


But the IMF now believes 
Egypt can no longer afford the 
cost to its export competitive- 
ness of an exchange rate it 
reckons may be 25 to 40 per 
cent overvalued. It believes 
equally that Egypt cannot sus- 
tain indefinitely the high real 
interest rates (three-month 
T-bills are at 12.2 per cent) 
without constraining growth. 
So the Fund is urging more 
flexibility on both counts. 

“We will never devalue," Mr 
Atef Obeid, the public sector 
minis ter, said flatly last week, 
describing such a move as 
“destructive" and “destabilis- 
ing". 

Chief among Egyptian offi- 
cials’ reasons, perhaps, is that 
they fear devaluation might 
jolt hard-won confidence in the 
currency and threaten both to 
halt healthy flows of hard cur- 
rency - much of it in remit- 
tances from Egyptian workers 
- and to reverse the process of 
“de-dollarisation” of the econ- 
omy. Today just 23 per cent of 
broad money supply is held in 
dollars, against 57 per cent 
before the reforms. 

Mr Obeid agrees the pound 


Elders ex-executive pleads guilty to forex charge 


By Nikki Tart In Sydney 

Mr Kenneth Jarrett, a former 
executive of Elders ECU the Austra- 
lian brewing and agriproducta 
group, has pleaded guilty to involve* 
ment in a AS66.5m (£33m> foreign 
exchange scheme which waa alleg- 
edly fraudulent, and was said yester- 
day to be willing to give evidence 
against his former bass, Mr John 
Elliott 

According to Mr Brind Woinarski, 


Crown prosecutor, who is pursuing 
charges of conspiracy and theft 
against Mr Elliott, Mr Jarrett and 
five other individuals previously 
connected to the Elders KL group in 
relation to these forex dealings, Mr 
Jarrett has co-operated fully and 
intends to give evidence against his 
former colleagues, including Mr Ell- 
iott 

Mr Jarrett pleaded guilty in the 
Melbourne Supreme Court to one 
count of falling to act honestly as an 


officer of the company, between 
April 1986 and June 1990. 

Mr Woinarski told the court the 
Crown was alleging Mr Elliott 
decided who would be involved in 
the foreign exchange scheme and 
who would benefit from it. It was 
also alleging Mr Elliott and Mr Peter 
Scanlon, another Elders IXL execu- 
tive, were the architects and instiga- 
tors of the scheme. 

The charges against Mr Elliott, a 
prominent Melbourne-based busi- 


nessman and former president of the 
Australian Liberal party, Mr Jarrett 
and the other individuals, were filed 
shortly before Christmas. The theft 
and conspiracy charges related to 
two foreign exchange transactions, 
between Elders and the Bank of New 
Zealand, and then between the Bank 
of New Zealand and companies con- 
nected to executives of Equiticorp. 
the failed New Zealand-based group. 

Elders is said to have apparently 
made losses totalling A$G6m on the 


deals, with similar gains booked to 
the Equiticorp entities. The authori- 
ties allege the transactions were 
used to funnel money to Mr Allan 
Hawkins, Equiticorp’s now-jailed for- 
mer chief executive. 

Mr Elliott, released on A$450,000 
bail, has consistently maintained his 
innocence. He has claimed the 
National Crime Authority had over- 
stepped its jurisdiction in pursuing 
these matters, saying he had become 
the victim of a political conspiracy. 


has appreciated In real terras, 
but says only "modestly”. The 
government also appears con- 
vinced that this overvaluation 
is correcting itself. Inflation, at 
689 per cent year on year, is 
undercutting IMF targets and 
should fall further during the 
next Tew months, eroding the 
differential between Egypt's 
and its main trading partners’ 
inflation rates - a differential 
of roughly 3 percentage points. 

Officials suggest that the 
benefits to export competitive- 
ness will not outweigh the 
potential threat to confidence. 
While a devaluation might 
directly improve the competi- 
tiveness of non-oii exports, 
recent rough and ready figures 
suggest they are already rising 
by on annual 14 per cent. The 
government claims, mean- 
while, to be taking an axe to 

Egypt 

Consumer Price Index 

tor whan arses (annual % change) 

30 — • • 



Projected 


Jul91 1992 1993 1994 96Jul 
Souse: Government protections 
based on IMF sat u rate s 

the forest of fees and charges 
facing Egypt’s small export 
industries, which some esti- 
mates suggest can add 12 per 
cent to an exporter's costs. 

The government can also 
.argue that non-oil exports 
bring In only about 15 per cent 
of Egypt's hard currency earn- 
ings, the bulk of which come 
from Suez Canal receipts, 
remittances and oil exports. 

Senior officials also suggest 
that a greater impediment to 
export growth than the 
exchange rate is the relative 
backwardness of Egyptian 
companies in export experi- 
ence. “Our entire economic 
policy is geared towards the 
tradeable sector," says Mr You- 
sef Boutros Ghali, minister for 
international co-operation. 
“But I deeply believe the issue 
of competitiveness lies in the 
technical competence of our 
exporters - this is what we 
need to worry about" 

None of which provides 
much cheer for the IMF; nei- 
ther for the numerous bankers 
and businessmen who have 
long sought a devaluation - to 
perhaps E£3.8 or E64.00 to the 
. dollar - and, perhaps more 
urgently, a relaxation and re- 
alignment of interest rates. All 
believe the future or Egypt's 
export sector -on which they 
also argue rests Egypt's eco- 
nomic future - depends on 
improving competitiveness. 

Officials do not appear to 
rule out a continued shaving of 
interest rates and perhaps 
slight slippage in the pound- 
dollar rate. But the govern- 
ment appears otherwise con- 
tent that the main macroeco- 
nomic variables are under 
controL The reforms are at last 
becoming, some ministers 
believe, “irreversible". 

There are signs in the last 
few months that growth has 
started to pick up after the 
depressing effects of the stabi- 
lisation programme. Indicators 
such as cement sales, holding 
companies’ turnover, power 
consumption, rail freight and 
others point to growth of about 
2 per cent. Bank credit to the 
public sector is up 21 per cent 
and to the private sector32 per 
cent A recent lull in attacks 
by Islamic militants might also 
lift some gloom from the tour- 
ism industry. 

So the government will sit it 
ont for the next five or six 
months and hope that Inflation 
win fall farther, exports will 
continue to grow and that by 
the end of the year, it will have 
been vindicated. "The numbers 
will bear us out," says a senior 
official. 



Elliott: ‘conspiracy victim' 


k .V • 


6 


E 21 1994 


NEWS: THE AMERICAS 


Ecuador land Colombian poll victor may shif t course 

flfntpctc OTOW Sarita Kendall on Samper’s election win 

V w wk/ wM PI /Colombians opted by a self a strong supporting faction being assassinated. Mr Samper 

I narmW fnawin on ftlTTI. nlrmir tho marr Whan ha eturfa* Ml Ktt I Ii ft m than a ihmn 


By Raymond Cofltt in Quito 

Protests by Ecuador's 
indigenous population have 
closed some of the country's 
main motorways, hitting com- 
merce and isolating several 

cities. 

The protests, entering their 
second week and becoming 
increasingly violent, were 
sparked by a land reform law 
approved by President Sixto 
Duran Ballen on June 13 which 
critics say halts popular land 
redistribution programmes. 

In the central highlands, 
roadblocks have virtually cut 
off Am ha to and Cuenca, Ecua- 
dor’s third and fourth largest 
cities, resulting in supply 
shortages and price increases. 
The Pan-American highway 
has been blocked by protests 
from some 200 indigenous com- 
munities at several junctions 
in Cotopaxi Province. 

About 40.000 indigenous peo- 
ple gathered in the provincial 
capital Rio Bamba to demand 


annulment of the legislation. 
In Ecuador’s Amazon region 
several access roads to otlweDs 
are also reported to have been 
blocked. Last week a protester 
was shot dead by a motorist 
trying to crash the barricades. 
Clashes between irate motor- 
ists Indians armed with 
machetes have left dozens 
wounded. 

Some governors are asking 
President Durfin to declare a 
state of emergency; others say 
they would annul the so-called 
agricultural development law. 
Critics of the law say it ends 25 
years of land redistribution. 
Indigenous peoples, making up 
40 per cent of Ecuador's popu- 
lation, are now denied commu- 
nal land and water rights, they 
add. 

Government and indigenous 
leaders were due to hold their 
first talks late yesterday. Yet 
prospects for an immediate 
solution are dim; the govern- 
ment has said it will not repeal 
the law. 


C olombians opted by a 
narrow margin on Sun- 
day for a continuation 
of Liberal party rule, but the 
new president-elect Ernesto 
Samper is viewed as likely to 
shift the gra p h flsj jfi of govern- 
ment economic policy. 

In the second round of the 
election. Mr Samper polled just 
1.8 percentage points more 
than his rival, the conservative 
Andres Pastrana. 

Abstention was unexpectedly 
low at about 55 per cent and, 
with 98 per cent of the results 
in, Mr Samper had polled 3.7m 
votes. In his victory speech, he 
told supporters he had received 
a “social mandate" - a refer- 
ence to the priority he gave to 
increasing social investment 
throughout his rermpsrig n 
As he spoke, he was joined 
by two former Liberal presi- 
dents — a reminder that fho 
Liberal party is the most pow- 
erful machine in Colombian 
politics. 

Mr Samper, 43, who started 
as a Bogota city councillor and 
moved to the senate, built him- 


self a strong supporting faction 
along the way. When he starts 
his tour-year term as the third 
successive Liberal president, 
on August 7, there will be a 
Liberal majority in both 
Houses of Congress. 

Early in his career Mr Sam- 
per headed the National Asso- 
ciation oF Financial Institu- 
tions, a kind of economic think 
tank, and produced a docu- 
ment arguing for the legalis- 
ation of marijuana. But when 
Colombia’s Supreme Court de- 
penalised drug use last month, 
he was quick to warn of the 
dangers of a massive growth in 
consumption in a country 
where drugs are so cheap and 
.easy to obtain. 

T.Tkp th<» present administra- 
tion, be sees Colombia as a vic- 
tim of the drug-consuming 
countries and says he will con- 
tinue with the current policy of 
encouraging traffickers to sur- 
render in exchange for reduced 
sentences. 

In 1989, when car bombs 
were exploding in city centres 
and political leaders were 


being assassinated. Mr Samper 
was hit by more than a dozen 
bullets and was lucky to sur- 
vive. Four bullets are still 
there. This, he says, made him 
fed he bad been given a sec- 
ond rfmncp and incr eased his 
determination to became presi- 
dent and try to bring peace to 
Colombia. Mr Samper is a mod- 
erate with a strong populist 
streak and a seise of humour 
that was suppressed during the 
campaign. 

For the first time, Colombia 
will have a vice-president: 
Humberto de la CaRe. a forma: 
cabinet minister who is likely 
to be an active partner, partic- 
ularly on international issues. 

In bis victory address, Mr 
Samper paid tribute to Presi- 
dent Cesar Gaviria in whose 
government he served as min- 
ister of economic development 
He said the president’s “vision, 
and valour have given Colom- 
bia a great modernising drive 
which we shall continue with 
decision.” 

However, his own pro- 
gramme is centred on tankini g 1 




Samper and wife celebrate his victory in the Colombian presidential election 


some of the problems associ- 
ated with the opening up of the 
economy over the last five 
years, such as the gap between 
rich and poor and city and 
country. 

Colombia's economy grew by 
5.3 per cent In 1993 and, with 
the recent improvement in cof- 
fee and oil prices, this year’s 
growth rate should be similar. 
But construction and services 
have been doing much better 


thaw agriculture, industry and 
mining ; non-traditional exports 

have risen very slowly while 
imports are soaring. Mr Sam- 
per’s plans to create 1.5m new 
jobs includes an export promo- 
tion programme as well as 
industrial modernisation and 
the rehabilitation of the coun- 
tryside. 

Although Mr Samper says he 
will continue to work towards 
TjrHn American integration, he 


fevours a stronger state rale on 
sectors such as agriculture. 
Badly-needed investment In' 
roads, bridges and ports, are 
also on bis agendo. The extra 
income due from the Custana 
oil reserves from 1995 on will 
provide great opportunities but 
Mr Samper is aware of tin 
potential problems and is con- 
cerned to prevent further 
revaluation of the Colombian 
peso. 



Nigeria could be Africa’s last hope 


Germany goes for win and 
place in second round 


Simon Kuper in Boston finds 
the African challenge led by the 
continent’s more stable countries 


“We are here to win 
^ the World Cup.” 
says Nigeria’s 
Dutch coach, Cle- 
»W mens WesterhofL No 
coach of an African World Cup side 
has ever been able to make that 
boast, and Westerhof may be proved 
right 

His team are making their first 
appearance in the finals, and are 
expected to beat Bulgaria in a 
Group D first-round match in Dallas 
today. But despite the hype, African 
soccer may be getting worse, not 
better. 

Certainly Nigeria look the stron- 
gest African side ever to make the 
World Cup finals, stronger, cer- 
tainly, than this year’s ' Cameroon 
and Morocco. I do not wish to exag- 
gerate, but the Nigerian players are 
all intelligent giant sprinters with 
tremendous skills, particularly their 
two strikers, Daniel Amokachi and 
Rashidi YekinL 

For various reasons, no Nigerian 
defender has played league soccer 
recently; one player was suspended 
for six months for calling a Belgian 
referee a racist But the team cap- 
tured the African Nations Cup in 
April and some European pundits 
think the Nigerians will do 
extremely well in the US. 

European pundits have always 
loved to say that an African side 
will win the World Cup one day. 
The prediction sounds grandiose, 
cannot immediately be disproved, 
and is kind to the Third World. 

But Africa gets poorer by the 
year, and African soccer suffers too. 
“The scissors of European and Afri- 
can football will separate even fur- 
ther,” predicts Joachim Fiskert, the 
German manager of Congo. The 
World Cup is the main sporting 
event - perhaps the main event, full 


stop - for most African countries, 
yet over 20 of them failed to enter 
the current competition. 

The obstacles were famine or civil 
war or lack of funds (or all three), 
while Libya could not travel due to 
a UN air embargo. Zambia did 
enter, but its players died when the 
ancient military aircraft carrying 
them to Senegal fell into the Atlan- 
tic. The Zambian FA had been 
unable to afford a regular airline. 

Or take Ethiopia, one of the Afri- 
can countries which managed to 
play all its qualifying matches for 
this World Cup. The Ethiopians’ 
first match was in Morocco. The 
team flew via Rome, where their 
five key players sought political 
asylum. That left eight players to 
contest the match. 

The reserve goalkeeper, the assis- 
tant manager and a friend filled in, 
and Ethiopia began the game with 
11 men. By half-time, however, two 
of the volunteers had dropped out 
exhausted, and Morocco led 5-0. 
Early in the second half, three more 
Ethiopians gave up. With just six 
players left standing, the referee 
ended the game. Ethiopia did not 
mak e the fmals. 

T he three African, teams that 
are here, Morocco, Cameroon 
and Nigeria, are among the 
continent's richer countries, though 
Nigeria and Cameroon are slipping 
fast both bad to ask their fans to 
help pay for their World Cup prepa- 
rations. 

History shows that except for 
Zaire in 1974 - and they failed horri- 
bly - only relatively rich, stable 
African countries have qualified: 
Tunisia, Algeria, Egypt, Morocco, 
Nigeria and Cameroon. 

That Cameroon is becoming less 
stable shows up in this year’s 


squad. The country’s president, 
Paul Biya, has repeated his 1990 feat 
of personally pteking Roger MIT)? 
for the national team. This time 
Milla Is 42 rather than 38 years old, 
and the French c o a c h Henri Mich e l 
does not want him along, hut Presi- 
dent Biya has been, unloved since 
the elections in 1992, and was 
obliged to try something. Milla had 
predicted a “revolution” were he 
not selected. 

Political interference is the norm 
in African soccer. When I asked 
Niger’s sports minis ter whether he 
picked the national team, he 
replied; “It comes with the job.” 
King Hasan of Morocco is said to 
have a direct telephone fink to his 
team’s bench. Nigeria's military rul- 


ers wanted their team to reflect 
“the Nigerian federal character” - 
players from each main tribe, please 
- though most of the time Wester- 
hof is his own man. 

“Cameroon did very well in 
Italy,” he says. “But we want to do 
better here and I know we can.” 
When Cameroon reached the quar- 
ter-finals in Italy in 1990, the 
world’s bookmakers were shocked. 
They should not have been. 

In 1978 Tunisia beat Mexico 3-1 
and were unlucky to draw 00 with 
West Germany. Four years later 
Algeria beat West Germany and 
Chile, and Cameroon gained three 
draws in three games, while in 1986 
Morocco won England's group. At 
each World Cup the Africans do 


well, and each time it is mid that 
the African game is finally coming 
of age. In reality, it has not 
advanced much in the past 16 years. 

All over Africa you will find bou- 
levards, squares and even churches 
re-named after Roger Milla, the con- 
tinent's hero of 1990. The World Cup 
matters more to Africa than to any 
other part of the world. Only in 
sport, explains the Cameroonian 
write - Celestin Monga, “is the Afri- 
can really perceived by the big 
western media as a man.. capable 
of making a valuable contribution 
to the history of humanity.” 

Every quarter in Africa will be 
spending the next mouth around a 
TV set Let us hope Westerhof was 
not just not boasting. 




If they beat Spain today at Soldier 
Held, Chicago, defending champi- 
ons Germany could become the 
first of the 24 World Cup teams to 
clinch a place in the second 
round. 

“We don’t have a team that 
knows how to play for a draw,” 
said coach Berti Vogts. “We are 
an offensive team and that’s bow 
well play.” Vogts gave no cine 
whether that meant a recall for 
veteran striker Rndi VoDer. 

Germany beat Bolivia 1-0 in the 
Group C opener last Friday, while 
Spain wasted a 2-0 lead against 
Sooth Korea, drawing 2-2. Worse 
for Spain was the red-card expul- 
sion of captain Miguel Angel 
Nadal for an untimely tackle. 
Nadal was later given a two- 
Biairii suspension. 

Spanish coach Javier Clemente 
has criticized Fife, soccer’s gov- 
erning body, for penalising Nadal 
more harshly than the usual one- 
match suspension. “1 think it’s 
totally unfair and out of propor- 
tion,” he said. “I don't under- 
stand it” 

Vogts said it would he danger- 
ous trying to go for a draw. “In 
1984 we tried that against Spain 
and we were brutally punished,” 
he said, referring to the European 
championship. 

“Spain has more at stake and I 
expect them to be cautious, to 
play defensively, to wait for our 
mistakes and then hope to get 
three points against Bolivia,” he 
said. 

German defender Thomas 
Strunz, who missed the Germans’ 
first game because of a hamstring 
hqury, is expected to play against 


Cameroon's Francois Omam-Biyick beats Swedish keeper Thomas RaveEU to score in Sunday’s 2-2 draw puk# 


Strong TV interest in host nation’s debut game 


By Patrick Harvarson 
hi Now York 

The first World Cup game played 
by a US team on American soil was 
watched by a surprisingly large 
domestic television audience, 
according to preliminary ratings. 

Although the US-Switzerland 
game at the Stiverdome in Pontiac, 
Michigan, last Saturday started as 
early as 11.30am, it attracted a 5.8 
rating on the ABC network in the 
29 largest US television markets. 


One rating point is the equivalent 
of 941,000 homes. 

The US national team’s World 
Cup opening game aided in a l-l 
draw. In comparison, ABCs broad- 
cast later the same day of the third 
round of the US Open golf tourna- 
ment - traditionally a strong draw 
among sports fens - earned a SJ0 
rating. 

The 5JS rating for US vs Switzer- 
land was an average for the two- 
hour broadcast The data showed 
that as the game progressed, more 


people turned on their sets to 
watch it with the final 30 minutes 
earning a 7.2 rating. 

ABC, which normally does not 
broadcast sports programming so 
early on a Saturday, was surprised 
by the strong rating for the US- 
Switzerland game. Mark MandeL, 
director of sports information for 
ABC, said the network was “very 
pleased . . . particularly as the game 
was on so early." He added: “We’re 
off to a great start” 

Corporate sponsors of the tourna- 


ment were also delighted with the 
rating for the first US game. Eric 
Kraus, a spokesman for Gillette, 
which Is advertising heavily on 
television during the tournament 
said: “The high rating shows that 
there is a great deal of enthusiasm 
for World Cup soccer in the US, and 
that it is really catching on.” 
Jackie Woodward, director of 
sports marketing at McDonald’s, 
another big advertiser, said: “We’re 
thrilled.” 

Although the US-Switzerland rat- 


ing proved the pessimists who said 
Americans were not interested in 
the World Cup wrong, it is stfll too 
early to judge whether enthusiasm 
for the tournament is broad-based, 
or sustainable. 

The preliminary ratings for the 
weekend games shown on ESPN, 
the cable sports channel which is 
sharing World Cup coverage with 
ABC, are not yet available, and the 
real test for ABCwiH come when ft 
broadcasts a game not involving 
the US teani- 


Chinese authorities 
urge restraint 

China has told World Cup fens to 
turn their TVs low and stop 
shouting “Goal!” late at night. 
China did not qualify for the 
finals, hut millions of soccer fol- 
lowers are staying up late to 
watch matches live on state-run 
television. 

In a front-page commentary, 
the Communist Party’s People 's 
Daily told fens: “Keep the TV 
down low. When you see a great 
goal, keep your emotions under 
controL Don’t shont loudly or 
applaud.” Fans were urged to 
“guard against accidents happen- 
ing [at work] because of lack of 


The time difference between 
China and the US means that 
many of the World Cup matc hes 
are broadcast in the small hoars 
of the morning. 


■ Today** games 

GROUP D 

Aigenttna vs &eeca 

Boston (trMBST) 
Ngoria vs BUgarfa 
Oates (00:30 SS7) 

GROUP C 

Germany vs Spain 
Chicago pISOO OST) 


Romania tighten 
up team security 

Romania damped down on media 
access to its team after a televi- 
rion crew from Colombia broke 
into a player’s hotel room, the 
team's press officer said yester- 
day. 

The incident happened at a Los 
Angeles hotel before Romania’s 
first game against Colombia, 
which Romania won 3-1 with 
some eye-opening play. 

“We found a Colombian televi- 
sion team in the bedroom and told 
them to leave. Ten minutes later 
we found them in the dining 
room,” press officer Radn Tbnofte 
told reporters. 

The Romanians have banned 
journalists from all the side’s 
practice sessions before tomor- 
row’s Group A game against Swit- 
zerland in Detroit 

Charlton’s wake-up 
call to sportswriters 

Ireland’s coach Jack Charlton 
said that sports journalists should 
wake up. Asked how the Irish 
could upset Italy 1-0 in their 
opening Group E game, Charlton 
told reporters: “You keep writing 
ns off and we keep beating people. 
When are people going to realise 
that we have some players?” 

High achievement 
for US grass 

American grass growers have 
risen to the World Cup challenge. 
Sod growers have made valiant 
efforts to see that the world’s best 
soccer players have a prime plot 
on which to play. 

O f the nine World Cup venues, 
the surfaces of eight were entirely 
replaced. Large rolls of Kentucky 
bluegrass, hybrid Bermudagrass, 
perennial ryegrass and Tiffway n 
hybrid have been shipped to 
Michigan from California, to Chi- 
cago from Colorado, to New Jer- 
sey from North Carolina and to 
Boston from Rhode Island. 

"The US may not lead the world 
when *t comes to the pw* of soc- 
“ «P«t, “but the con- 
tn button we can make to playing 
conditions is unmatched,” 



> r 










'-‘Oll'v 

, "l VI 





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on - "ound ' 


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-FINANCIAL TIMES TUESDAY JUNE 21 1994 

UK reaction 
marked by 
frustration 


THE AMERICAS 


By Andrew Jack 

The British government and 
companies with US operations 
reacted with frustration to the 
Supreme Court's r ulin g against 
Barclays Bank in its 
long-standing feud with the 
state of California over the 
imposition of a system of uni- 
tary taxation. 

The Confederation of British 
Industry said: “We are 
extremely disappointed to hear 
this news and are awaiting fall 
details to understand its impli- 
cations." 

The Inland Revenue said: 
“We are naturally disappointed 
and we are awai ting further 
details.” 

It appeared unlikely (he gov- 
ernment would enact legisla- 
tion to permit potential retalia- 
tory action against US 
companies in the UK in the 
event of a court decision sup- 
porting unitary taxation. 

Many companies and profes- 
sionals had expected the deci- 
sion to go against Barclays, 
and downplayed its ramifica- 
tions now that companies 
could opt to be assessed 
instead on a water's edge basis, 
which assesses only income 
within US borders. 

Others expressed fears that 
the Supreme Court's decision 
could trigger other US states to 
impose unitary tax. It also per- 
mits California to reintroduce 
the system. 


Barclays said last night it 
was currently “chewing over” 
the “very long and very 
detailed" text of the Supreme 
Court judgment 

The bank is believed to have 
already handed over up to 
$30m in taxes assessed by Cal- 
ifornia on the unitary basis in 
connection with its operations 
from the mid 1970s up until 
1983. As a result ctf the judg- 
ment it may have to hand over 
an^ p. p jiom in fayw in dis- 
pute since that time. Barclays 
withdrew Its retail and most 
other operations from Calif- 
ornia in 1988. 

The wimpany said last night 
“We naturally regret that the 
court has arrived at this deci- 
sion in relation to what is an 
important issue of interna- 
tional taxation. It affects not 
only Barclays hut also numer- 
ous other UK and foreign- 
owned multinationals. 

“Any weakening of the cer- 
tainty provided by the interna- 
tionally accepted arm’s length 
approach to taratinn is likely 
to have adverse consequences 
for world trade generally.” 

Mr Tony Hughes, an interna- 
tional tax partner with Coopers 
& Ly brand, said: “This decision 
is not unexpected because of , 
the degree of political pressure. . 
1 don’t expect to see any retali- 
ation because there is not 
much at stake. But there | 
would he a war if unitary tax j 
was extended to other states.” i 


Court to rule on 
candidate curbs 


By Jeremy Kahn 
in Washington 

The US Supreme Court 
yesterday agreed to decide the 
constitutionality of laws 
restricting the number of times 
members oF Congress can run 
for re-election. 

In congressional elections 
over the past four years much 
has been made of the public’s 
anger with long-time incum- 
bents, who are often perceived 
to be out of touch with voters 
and the cause of corruption 
and political gridlock in Wash- 
ington. 

However, incumbents are 
hard to defeat because they 
usually have political and 
financial resources far exceed- 
ing their challengers. 

Canada 
to reform 
rules 
on VAT 

By Bernard Simon in Toronto 

Canada's Goods and Services 
Tax (GST), the value-added 
levy introduced in the face of a 
public uproar three years ago. 
will undergo several changes if 
the government accepts a 
report due to be tabled late 
yesterday. 

However, the suggested 
reforms fall far short of prom- 
ises by the now-ruling Liberal 
party during last year’s elec- 
tion campaign to scrap the con- 
troversial tax. 

The House of Commons 
finance committee was asked 
to draw up alternatives to the 
GST shortly after the liberals 
took office last November. 
Among its main recommenda- 
tions. according to leaked ver- 
sions of the report is a pro- 
posal that the tax be made less 
visible by including it in the 
retail price of goods and ser- 
vices. rather than adding it at 
the cash register. 

The committee has also 
reportedly urged that the tax 
be broadened to include gro- 
ceries and prescription medi- 
cines. In this way, the rate 
could be reduced from the 
present 7 per cent to about 5.3 
per cent. 

The most politically sensitive 
part of the report is likely to be 
a proposal that the federal tax 
be harmonised with retail sales 
taxes levied by nine of Cana- 
da's 10 provinces. With the 
exception of Quebec, the prov- 
inces have so far resisted Ott- 
awa's efforts to roll their taxes, 
which vary from 7 per cent to 
12 per cent, into the GST. 

The GST was introduced by 
the former Progressive Conser- 
vative government to replace a 
manufacturers’ sales tax and 
accelerate a shift from direct to 
indirect taxation. Although 
widely welcomed by business, 
the new tax became a rallying 
point for Tory opponents. 


The populist anti-incumbent 
movement has led to enact- 
ment of term-limit amend- 
ments in 15 states. 

At issue in the case the 
Supreme Court said it would 
hear is an amendment to the 
Arkansas state constitution 
that prohibits senators who 
have served two six-year terms 
and House members who have 
served three two-year terms , 
from appearing on the ballot. 

An Arkansas court invali- 
dated the law in March, citing 
a 1969 Supreme Court decision 
that Congress cannot, except 
in the case of impeachment 
and conviction, exclude any 
member meeting the constitu- 
tional qualifications - mini- 
mum age, US citizenship and 
state residency. 


US health 
bill must 
cover all 
- Clinton 


President Bill Clinton 1 
yesterday challenged Congress 
by saying it most pass a j 
health reform bill that covers 1 
all Americans - as his plan ! 
does - instead of a watered- 
down version, AP reports from 
Washington. 

“We should not walk away 
from this Congress without a 
commitment to cover every- 
one," Mr Clinton said in an 
interview cm NBC television. 

The president spoke a day 
after Senator Daniel Patrick 
Hoynihan, chairman of the 
Senate finance committee, said 
there was no way that Con- 
gress would pass a bill guaran- 
teeing healthcare for all 
Americans. Mr Moynihan said 
It was more likely that Con- 
gress would enact a sealed- 
down plan with the potential 
of insurance for everyone 
within 10 years. 

“It doesn't have to be done 
tomorrow," Hr Clinton said. 
“It ougjrt to be phased in over 
a period of just a tew years, 
but we ought not to walk away 
without a bill that provides 
health care to an Americans.” 

Mr Clinton has made solving 
the healthcare crisis atop pri- 
ority. More than 87m 
Americans have no health 
insurance, and Americans 
must spend a largo 1 amount of 
their income on medical 
expenses than residents of 
most developed countries. 

Some measures in Congress 
envisage insuring 91 per cent 
of Americans. Ms Donna Shal- 
aifl, health and human ser- 
vices secretary, has released a 
report showing 17.2 per cent of 
Americans woe uninsured in 
1992. up from 1Z5 per cent in 
1980. Most uninsured are mid- 
dle class people, she said, 
hard-working Americans “who 
get np and go to work every 
day, yet, every day they mntf 
live without the security of, 
health insurance." 


Unitary tax ruling difficult to assess 

Implications of US court decision on California method are unclear, writes George Graham 


T he US Supreme Court's deci- 
sion yesterday in favour of Cal- 
ifornia aids a 17-year legal bat- 
tle by Barclays Bank and a host of 
other foreign multinationals and gov- 
ernments against the state's world- 
wide unitary method for assessing 
corporate income taxes. 

The decision, by a 7-2 majority of 
the nine-member court, removes an 
immediate cloud from California’s 
overcast fiscal horizon: the state will 
not have to refund more than $14bn 
it fas already collected under unitary 
angp^ynngnt H , and js likely to he able 
to collect another $S0Qm next fiscal 
year in assessments that have been 
frozen for the last 10 years because of 
the litigation. 

That is no small windfall for Calif- 
ornia, which has yet to pass a budget 
for the year that begins next 

week. But the implications for the 
future of the unitary method of taxa- 
tion are less dear. 

Although the Supreme Court deci- 
sion apparently leaves the way dear 
for states to adopt the method, practi- 
cal politics are likely to deter most 
from accepting the invitation. 

Last year, the British gover nment 
set its wheels in motion for retaliation 
against Californian, companies by the 
denial of a tax credit a move which 
was partly responsible for the state’s 
decision to change its tax law in a 
way that essentially gives foreign 
companies the right to opt out of uni- 
tary awwsmff ntS- 

The UK legislation authorising 


retaliation remains in effect 
"The state of California should be 
under no illusion,” said Mr Peter 
Welch, who heads the unitary tax 
campaign, a UK business coalition 
that has battled the tax for years, 
"that if British business should be 
penalised In the future or if any other 
state should damage the interests of 
British companies by the imposition 
of worldwide unitary tax, then there 
will be a tidal wave of pressure upon 
the UK government immediately to 
institute effective retaliatory mea- 
sures." 

There are, in fact, many cases 
where foreign companies can benefit 
from unitary assessments, if their 
profitability in California is higher 
than elsewhere. 

This is particularly true under the 
current California system, which 
allows taxpayers to choose between 
unitary assessment and a method 
called “water's edge”, which assesses 
only iummp within the borders of the 
US and which comes close in its 
effect to the arm’s-length method 
embraced in all international tax trea- 
ties. 

“What we now have is what I call 
the Burger King system of interna- 
tional tax accounting: Have it your 
way,” said Mr Brad Sherman chair- 
man of the State Board of 
Equalisation. CaHforma’s tax author- 
ity. 

Several multinationals operating in 
California choose the water's edge 
method on principle, even though it 




Ginsbnrg, left, delivered judgment; Thomas dissented 


costs them more, because of their 
objections to unitary assessmenL 

The arm’s-length method is based 
on the simple principle that only 
income earned in a particular country 
ex 1 state should be taxed by that gov- 
ernment. 

Companies are required to account 
for movements of goods and services 
between their subsidiaries at arm's- 
length transfer prices -the same as 
they would charge to an unrelated 
company. 

Its practical application, however, 
can be very complicated. Many gov- 
ernments fear that multinational com- 
panies can change the amount of tax 
they pay within a particular country 


by manipulating transfer prices. 

Several US states have found the 
unitary method appealing because it 
is easier for the collecting agency to 
assess: a company's taxable income 
inside the state is calculated by multi- 
plying its total worldwide income by a 
factor based on the proportion of its 
property 1 , payroll and sales located 
inside the state. 

But because it conflicts with the 
arm's-length principle used every- 
where else, unitary assessments can 
lead to double taxation, as a company 
may not be able to deduct from its 
taxable Income in its home country 
the unitary tax assessed on it by a US 
state. 


Justices Sandra Day O'Connor and 
Clarence Thomas, in dissenting from 
yesterday’s decision, cited the risk of 
double taxation. 

The Supreme Court had already 
ruled in 1983. in the Container Corpo- 
ration case, that California's unitary 
system was legal when applied to US 
companies, but expressly set aside the 
question of whether it could be 
applied to foreign businesses. 

The essence of Barclays' case was 
that unitary taxation, because it con- 
flicts with the arm's-length principle 
preferred in international tax treaties, 
interferes with the federal govern- 
ment's right to speak for the US with 
a single voice on matters of interna- 
tional commerce, and is therefore 
unconstitutional. 

But Justice Ruth Bader Ginsburg, 
writing for the court, said that the 
federal government bad had the 
opportunity to prevent states from 
using the worldwide unitary method, 
but had not done so. 

“Congress has focused its attention 
on this issue, but has refrained from 
exercising its authority," Mrs Gins- 
burg wrote. 

Colgate-Palmolive's case, heard in 
tandem with that of Barclays, was 
that to exempt foreign but not domes- 
tic companies from unitary taxation 
would be unfair. To win, it would 
have had to persuade the Supreme 
Court to contradict its earlier Con- 
tainer decision, the sort of reversal 
that the justices only rarely contem- 
plate. 


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NEWS: UK 


Ulster violence puts internment on agenda 



By David Owen and Tim Coone 

Sir Patrick Mayhew, the Northern 
Ireland secretary, yesterday save his 
strongest hint to date that the British 
government is considering intern- 
ment without trial as part of its 
response to the latest upsurge in sec- 
tarian violence in the province. 

Q2s came as London sig- 

nalled that a meeting between. Mr 
John Major and Mr Albert Reynolds, 
the Irish prime minister, in Corfu this 
week could give significant new impe- 
tus to efforts to forge a lasting politi- 
cal settlement in Ulster. 

Downing Street made it clear it had 


not ruled out reaching a framework 
agreement on new constitutional 
arrangements in time for the nert 
Anglo-Irish summit in mid-July. 

Last Friday, Mr Dick Spring, the 
Irish foreign minister, had warned the 
document was unlikely to be com- 
pleted in time Cor the summit 

Mr Gerry Adams yesterday added 
his voice to those urging republicans 
not to retaliate for Saturday night's 
shooting in which six Roman Catholic 
men were killed by loyalists. 

The president of Sinn Fdin, the 
IRA's political wing, appealed to 
“those £ represent” for calm and 
restraint He said republican Leaders 


would reconvene to discuss Sinn 
Fgin's response to last year's Downing 
Street Declaration “within days.” 

With pressure again mounting on 
London and Dublin to show that their 
efforts are making headway, officials 
representing the two governments are 
understood to be working from the 
same draft of the proposed framework 
agreement 

But Important differences are said 
to remain over what the document 
will say on future north-south insti- 
tutions and Dublin's constitutional 
eiafm over the province. 

This is seen in Whitehall as the key 
tradeoff that will be at the core of 


any agreement Although London is 
anxious to encourage Dublin to move 
further towards rescinding its territo- 
rial claim, officials see little point in 
granting concessions on north-south 
relations that would be rejected out of 
hand by unionists. 

In Boston yesterday, Mr Reynolds 
underlined Dublin's preparedness to 
support constitutional changes, pro- 
vided this was part of “a balanced 
constitutional accommodation.” 

In Lisburn, the town where the Brit- 
ish army In Northern Ireland, is head- 
quartered, Sir Patrick said it was “not 
for nothing” that the British govern- 
ment asked MPs to renew a provision 


for . Internment every year. 

He said the provision had been 
retained because the government 
believed circumstances could be 
“envisaged” In. which it would be 
“necessary to use that power." 

Ministers have come under pressure 
from unionist s and Tory backbench- 
ers to intern suspected terrorist ring- 
leaders as part of their response to 
Saturday night’s shooting. 

Government insiders believe such a 
move is still some way off, however, 
not least because of the difficulties it 
could present the Irish government 
whose cooperation would be required 
if the exercise was to be effective. 


Figures 
cast doubt 
on housing 
recovery 

By ABson Smith, Andrew 
Taylor and Phityp Coggan 

Fresh doubts about the 
recovery of the UK housing 
market were raised yesterday 
when figures for net new mort- 
gage lending by building soci- 
eties last month showed a 
■http drop compared wtth the 
previous month. 

According to figures released 
by the Budding Societies Asso- 
ciation, societies' net new lend- 
ing was £806m in May - a Call 
of 17 per cent from the £974m 
in the previous month. In May 
last year it totalled £896m. 

However, in a more encour- 
aging sign, there was an 
increase In last month’s net 
new commitments undertaken 
by societies - loans approved 
but not actually taken up 
within the period covered. 
These rose by 4.6 per cent to 
£3.28bn, against £3.14bn in 
April 

There was also better news 
on personal savings as societ- 
ies received a net inflow of 
funds for the second consecu- 
tive month, after five months 
of net outflows as they strug- 
gled against other savings 
products. 

Net receipts totalled £370m 
in May, although they are still 
just over half the £700m 
recorded In May last year. 

Mr Adrian Coles, director- 
general of the association, said 
the lending figures appeared 
“to reflect some caution on the 
part of households, but provide 
no firm evidence of a downturn 
in housing market activity”. 

The prospects for the hous- 
ing market recovery appear 
mixed, with further signs that 
the upturn may be stalling 
reported by estate agents and 
housebuilders, amid Indica- 
tions that consumer confidence 
has passed its lowest point 
More than half of the 143 
estate agents questioned in a 
survey published today said 
sales during the three months 
to the end of May had “either 
flattened out or declined” 
against the previous quarter. 

The survey by the Royal 
Institution of Chartered Sur- 
veyors said agents blamed tax 
increases in April and 
increased interest rates on 
fixed-rate mortgages for the 
slowdown. 

Nearly three quarters of 
agents said prices remained 
stable, while 17 per cent said 
“prices were still edging 
upwards". 



En gland batsman Robin Smith torus a ball past a New Zealand fielder in the final day of the 2nd test at Lord's yesterday 


Sporting 
life for 
England 

The sporting summer moved 
into high season yesterday as 
England, saved the second Test 
against New Zealand at Lord's 
and Pete Sampras successfully 
opened his defence of the 
men’s title at Wimbledon. 

Combined with television 
coverage of the World Cup and 
the OS Open golf champion- 
ship from Oakmont, Pennsyl- 
vania, the British public was 
able to watch 13 horns of sport 
on BBC TV alone. 

England closed at 254 for 
eight - just two wickets from 
defeat. Tai Lenders Steven 
Rhodes and Paul Taylor hung 
on for the last seven overs 
with seven men around the bat 
in catching position. 

Dion Nash, despite being 
restricted by poor tight from 
bowling at the tan-end. com- 
pleted a magnificent match to 
become the first player to take 
ten wickets and score a half 
century in a Test at Lord's. 


Tussle reported 
over planned 
defence cuts 


By James Bfitz 
and Bruce Clark 

A tussle was reported 
yesterday between the Trea- 
sury and the Defence Ministry 
over forthcoming cuts in mili- 
tary spending,- and unhappi- 
ness over the economy drive 
was mounting on both sides of 
the House of Commons. 

The defence ministry is 
understood to have completed, 
its own proposals for Front 
Line First an exercise that is 
designed to shave at least 
£750m a year from the defence 
budget mainly from support 
services. 

Mr Malcolm Rifldnd, defence 
secretary, said in April that he 
hoped to save more than the 
agreed target in support spend- 
ing and he might use the spare 
fends to beef up the forces’s 
front-line capability. 

The Treasury is now under- 
stood to be challenging the 
idea that any savings over and 
above the £750m goal should be 
ploughed back into defence 
spending. A final decision on 
the project, also known as the 
Defence Cost Studies, is likely 
to be announced in mid-July. 

Mr Rifklnd is expected to 


confirm several procurement 
decisions around the same 
time, in order to soften the 
political impact of the cuts and 
up to 25,000 job losses. 

These announcements could 
include final decisions to buy 
250 more Challenger tanks and 
three frigates, and to upgrade 
the RAF's Tornado fleet Mr 
Rifkind may also confirm the 
purchase of two new amphibi- 
ous assault ships, a decision 
that has been taken in princi- 
ple but not felly funded. 

At Westminster, Mr Julian 
Brazier, chairman of the. Tory 
backbench defence committee, 
was one of a number of conser- 
vatives who attacked plans to 
cut support services. 

At the same time. Labour 
stepped up its long-running 
campaign to preserve the Ros- 
yth naval base in Scotland, 
amid fears that it will be closed 
with the loss of more than 
4,000 Jobs. Mr Gordon Brown, 
the shadow chancellor - whose 
constituency contains the 
naval base - urged Mr Mal- 
colm Rifkind to make a state- 
ment on Rosyth’s fixture before 
the publication of the Defence 
Cost Studies report next 
month. 


Confrontation looms over 
railway strike pay claim 


By Kevin Brown, 

Political Correspondent 

The British government 
appeared to be digging in for a 
lengthy confrontation with the 
RMT rail union yesterday as 
ministers repeatedly attacked 
the union's “irresponsible'' pay 
claim. 

Amid angry Commons 
exchanges, Mr John MacGre- 
gor, the transport secretary, 
condemned the strike planned 
for tomorrow and warned that 
some passengers would not 
return to the railways. 

It also emerged that Mr Mac- 
Gregor has established a com- 
mittee of senior ministers to 


monitor the strike by signals 
staff and guide the govern- 
ment’s response. 

The committee met for the 
first time yesterday to discuss 
the prospects for further rail- 
way chaos if AsLef, the train 
drivers' union, also decides to 
strike. 

As MPs waited anxiously for 
talks to begin between RMT 
and Railtrack, the state owned 
railway infrastructure com- 
pany, Mr MacGregor said it 
was “damaging to the railway 
for the unions to undertake a 
series of strikes on an 11 per 
cent no strings pay claim.” 

He told MPs that Eailtrack 
wanted to achieve a settlement 


based on talks on restructur- 
ing, which would be separate 
from the company's 2.5 per 
cent pay offer. 

Shouting down claims by 
Labour MPs that the govern- 
ment had engineered the 
strike, Mr MacGregor said the 
restructuring talks would have 
to offer “value for money." 

He dismissed claims that 
Rail track had spent more on 
refurbishing its HQ than the 
estimated cost of settling the 
strike. Labour claimed the dis- 
pute could have been avoided 
if the government had not 
intervened to order Rail track 
to withdraw a proposed pay 
increase of 5.7 per cent . 


Britain in brief 



■Jtf? 

Probe plan 
into instant 
coffee brands 

Officials are preparing to 
launch a full probe Into tile 
instant coffee market, after 
a survey showed some brands 
may contain ground stalks 
or husks, an Agriculture _ 
Ministry spokeswoman said 
yesterday. 

Scientists from the Food 
Authenticity department 
found that 15 per cent of 
instant coffee samples tested 
contained material other than 
ground coffee beans, the 
ministry said. 

The adulterated coffee, 
mainly from the cheaper end 
of the market, probably 
inducted coffee plant busks, 
drips, stems or stalks added 
before roasting the beans, it 
added. 

Ihe Ministry is due to 
riiimiuBB the survey with trade 
representatives and consumer 
groups on Thursday and will 
probably launch a feller 
Investigation, the 
spokeswoman said. 

The brands involved could 
not be named, because the 
number of jars examined was 
too small to be representative 
of any one product she added, 
noting there was no danger 
to health. 


Exclusion zone 
for Stonehenge 

A four-mile exclusion zone was 
put into force yesterday 
around the ancient monument 
of Stonehenge, in western 
England. 

The Wiltshire monument 
will be closed to the public at 
dawn tomorrow for the 
Summer Solstice, which In 
past years has led to violent 
dashes between police and 
so-called “new Age’ travellers 
trying to reach fee stones for 
the sunrise. 

The exclusion zone - wife 
an order preventing 
processions within the area 
of treeless downland - has 
been set up to prevent 
latterday sun- worshippers from 
reaching the stones and police 
have extra officers an stand-by 
if necessary. 

A check was made last night 
on the movements within the 
area, but in contrast wife 
previous years there has been 
no attempt to set up a large 
camp near the World Heritage 
Site. Police were hopeful that 
dawn would arrive without 
major Incident 


Post Office 
complaint 

The Post Office reported 
record pre-tax profits for the 
year to 31 March, but claimed 
Its future was nonetheless in 
serious jeopardy because of 
the government’s failure to 
reach a decision on 
privatisation. 

At £306m, pre-tax profits 
were 8 per cent up on 1992/ 

93 (£283m). The Post Office's 
core Royal Mail delivery 
business contributed £296m 
- far ahead of its government 

target of £225m. 

However, Mr Michael Heron, 
PO chairman, said the 
“prolonged waiting game” 
over privatisation was causing 
“planning blight which leaves 
us totally in limbo.” Mr BUI 
CocKburn, chief executive, 
highlighted investment 
shortfalls and a “worrying" 
dip in pillar-box mail as 
further evidence of the need 
for a sell-off. 

Amoco awards 
contracts 

Amoco UK has awarded 
contracts worth more than 
£46m as part of fee 
development of fee Davy and 
Bessemer natural gas fields, 
which lie about 60 miles off 
fee east Anglian coast. 

The contracts include E14ra 
to Brown and Root Highland 
Fabricators for the 
construction of two single leg 
platforms, the first time such 
designs have been used in fee 
North Sea. Total development 
costs of the two fields are 
expected to be about £l60m. 


Vote on age 
of consent 

In a free vote fee House of 
Lords rejected by a majority 
of 174 an attempt to lower to 
16 fee age of male homosexual 
consent An amendment to 
the Criminal Justice and 
Public Order bill which sought 
to overturn the decision of 
die Commons to reduce tbe 
age of consent for such acts 
from 21 to 18 was defeated. 

Lord McIntosh of Haringey. 
Labour spokesman, who 
moved the amendment 
claimed that many peers who 
took part in the debatespoke 
from “intuitive feeling rather 
th an rational argument”. 

Lord Jakobovlts, the former 
chief rabbi, called for the age 
of male homosexual consent 
to be retained at 2L He said 
“we live in a society where 
fee pursuit of happiness is 
tiie ultimate aim of life. As 
a result we pay today wife 
higher divorce rates and crime 
rates because we indoctrinate 
our youth to feel that 
whatever makes them happy 
is legitimate”. 


Underwriter manipulated figures, court told 


By John Mason, 

Law Courts Correspondent 

A former underwriter wife fee Gooda 
Walker agency was yesterday accused 
of lying to Lloyd’s agents over fee 
likely losses to be sustained by syndi- 
cate 298 following the Piper Alpha oil 
platform disaster. 

During the High Court action brought 
by 3,095 Lloyd’s Names, individuals 
whose wealth has traditionally sup- 
ported the market, Mr Stanley Andrews 
was accused of misrepresenting fee 


syndicate's losses to agents and the 
Gooda Walker board. 

Mr Jonathan Gaisman, for the 
Names, said that between January and 
August 1989, Mr Andrews had repeat- 
edly insisted that the syndicate's likely 
losses would be below the 2104m level 
at which 298 had arranged reinsurance 
cover. He had then continued to tell 
agents that he expected fee syndicate to 
break even, Mr Gaisman said. 

In April 1989 Mr Andrews reported 
losses of 274m, in line with losses proj- 
ected in the 1988 audit The reported 


figure rose to 2100m by July and 
remained at this level until September. 

Mr Derek Walker, fee former chair- 
man of the Gooda Walker managing 
agency, then discovered tbe losses were 
2125m - beyond the reinsurance level, 
Mr Gaisman said. Mr Andrews had 
manipulated the figures and given 
untrue figures for projected losses and 
results to agents, Mr Gaisman said. 
"You had not been telling the truth 
about these figures for months.” 

The claim was denied by Mr Andrews 
who insisted there was no question of 


him lying. He had reported the latest 
figures available, he said. 

Mr Andrews had also misled the 
Gooda Walker board about fee scale of 
fee losses, Mr Gaisman said. Mr Tony 
Gooda, the former chairman of the 
members’ agency, had told others in 
early 1989 that Mr Andrews was pre- 
dicting the syndicate would either 
break even or make a small profit. Mr 
Andrews said be had never told Mr 
Gooda that the syndicate might do any 
better than break even. The case con- 
tinues. 


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Telecom Markets is the essential source of regular 
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FINANCIAL TIMES TUESDAY JUNE 21 1994 


9 


_ NEWS: UK 

State support ‘needed for new N-station’ 



In a desert of 



By Michael Smith 

Significant state support Is 
Bkety to be needed if the UK is 
to build another nuclear power 
station, it emerged yesterday 
as Nuclear Electric, the state- 
owned operator, published its 
evidence to the government's 
nuclear review. 

The company acknowledged 
the cost of producing electric- 
ity from a third plant at Size- 
well, on the En gHyh east coast, 
would be about 5Q per cent 
higher than current market 
prices if the plant was funded 
by the private sector. 

Mr Bob Hawley, Nuclear 
Electric chief executive, redd 
he expected this year's market 
price of about 2.4p a unit of 
electicity to rise in future 
years bat it would still “take 
government commitment and 
support to build any 


new nuclear power station." 

Nuclear Electric's submis- 
sion, totalling more than ISO 
pages, pleads the case for the 
2,600 MW Sizewell C on the 
Suffolk coast bnt also raises 
the possibility of building a 
third, smaiter plant at Hlnkley 
Point, Somerset, on the Bristol 
Channel The company already 
has planning permission for 
such a plant. 

Hinkley C would be easier to 
finance than Sizewell C. due its 
smaller capital cost, £2bn com- 
pared with £3J>bn at Sizewell, 
but it would offer a slightly 
lower return on capital, says 
Nuclear Electric. 

In its submission. Nuclear 
Electric confirmed privatisa- 
tion was its “top priority." 

“We need commercial free- 
dom to compete on equal terms 
and to develop our business.” 
Mr John Copier, the company 


ehairpian, said. 

The company backed its case 
for privatisation by announc- 
ing sharp improvements in effi- 
ciencies, with operating losses 
cut to £224m last year against 
£564m in 1992-3 and costs per 


unit of electricity down from 
3.6p to 8.lp. 

hi addition, it said, major 
progress in quantifying and 
reducing liabilities for fuel 
cycle and decommissioning 
costs had largely removed the 


original obstacles to privatisa- 
tion. 

Nuclear Electric’s submis- 
sion will be strongly contested 
during the review which is 
likely to take up at least most 
of this year. 


Greenpeace, the environmen- 
tal pressure group, condemned 
the company’s case as wishful 
thinking 

Rival power generation com- 
panies believe the figures the 
company uses to support its 
arguments are optimistic- Tfrey 
dispute its claim that it will 
soon become the lowest-cost 
producer of electricity In the 
UK market. 

Mr Mike Kirwan, finance 
director, said building Sizewell 
C would need government help 
in securing long-term con- 
tracts, although he said the 
prices would not necessarily 
have to carry a premium to 
those in the market 

Similary sharing regulatory 
risk, another pre-requisite for a 
new power plant may not lead 
to any spending by the state. 
“It may cost the government 
nothing," said Mr Kirwan. 


Scotland wins 
record inward 
investment share 


BT entertainment ban is queried 


By James Buxton, 

Scottish Correspondent 

Scotland had an outstandingly 
successful year in securing 
inward investment projects 
during 1993/94, according to 
the annual report of Locate in 
Scotland, the inward invest- 
ment bureau. 

The report showed that 95 
inward investment projects 
were committed to Scotland, 
the highest number of projects 
since 1981. 

Total investment of £587m 
was planned which would cre- 
ate 7,688 new jobs and safe- 
guard a further 3,384. maTrin F a 
total of more than u,000. 

This compares with invest- 
ment of £352m secured in 1992/ 
93, which involved 65 projects 
and created or safeguarded 
more than B.OOO jobs. 

Though Mr Allan Stewart, 
Scottish Office industry indus- 
try minister, warmly welcomed 
the figures, the Scottish Office 
cautioned that “not all projects 
proceed exactly as planned. 

On average around two- 
thirds of p lanned direct jobs 


are achieved.” However last 
year’s performance will help 
rebut sceptics who have 
aigued that Scotland is declin- 
ing in appeal as a location for 
inward investment in of 
competition from Ireland, 
Spain and countries in eastern 
Europe. 

Some 62 per cent of the total 
planned investment for 1998/94 
comes from the US, and of that 
85 per cent was reinvestment 
in wistmg plants, gnrfi as a 
£7m expansion by the com- 
puter manufacturer Compaq, 
creating a farther 250 jobs. 

Some 22 per cent of new 
investment came from conti- 
nental Europe and Scandina- 
via, 11 per cent from the rest of 
the UK and only four per cent 
from Japan and Asia. 

Almost half of all new invest- 
ment was in the electronics 
sector, followed by investment 
in chemical and engineering 
sectors. 

The largest single sum com- 
mitted was £93.4m to be 
invested over five years by 
Hoffman La Roche in its chem- 
ical plant at Dairy, Ayrshire. 


By Andrew Adonis 

Sir Bryan Carsberg, director 
general of fair trading, raised 
fears yesterday about the 
impact of a lengthy continua- 
tion of the current ban on Brit- 
ish carry- 

ing entertainment services. 

Sir Bryan told an BT confer- 
ence in London that the ban 
“may create local [telecommu- 
nications] monopolies in the 
shape of cable television com- 
panies.” 

“If continued for too long, it 
may deny BT the opportunity 
to make its competitive contri- 
bution," he added. The tone of 


By John WOIrnan. 

Public PORcy EcStor 

Weaknesses in the way that 
London is governed are damag- 
ing its reputation as a centre of 
world business, says a report 
published yesterday by the 
Confederation of British Indus- 
try, the employers’ association. 

The report, described as a 
business plan for the capital, 
says that London lacks a 
“board and management” that 
could create a vision for the 
future and implement the ded- 


his remarks was in sharp con- 
trast with those of ministers 
anH Mr Don Cruickshank, bis 
successor as head of OfteL the 
telpwwnmmrMBitlnps regulator. 

The government’s ban on BT 
extends until at least 2001, 
although Oftel is empowered to 
report on the desirability of 
lifting it from 1998. When 
imposed in 1991 its aim was to 
encourage cable wwipaniaa - 
mostly US owned - to invest in 
local cable networks, providing 
telecommunications services in 
competition with BT. 

BT pfohrre a continnatiOD of 
the han is constraining it from 
investing in the UK, since it 


sions necessary to sustain Lon- 
don’s role as a world city. 

There are “fundamental 
weaknesses”, the CBI says, in 
“the complicated uncoordi- 
nated way policy is deter- 
mined, services are delivered 
and taxpayers’ money is 
spent”. 

The report has been submit- 
ted as the b usiness contribu- 
tion to the London Pride pro- 
spectus, being drawn up at the 
government's request by Lon- 
don First, the business-led 
organisation. It says that Lan- 


would need revenue from inter- 
active entertainment services 
to justify farther upgrading of 
its local network. 

Pointing to the cahia opera- 
tors’ success in attracting more 
than 400,000 telecoms custom- 
ers within two years Sir Bryan 
said the ban looked set to be 
“quite successful.” 

However, in his speech he 
pointedly looked forward to an 
ending of the han to ensure 
effective competition. “In this 
matter, timing is everything.” 

Only last month Mr Cruick- 
shank downplayed the pros- 
pect of even a review of the BT 


don’s aim should be to become 
the most successful city in 
Europe for business by the 
year 2020; where the key deci- 
sion-makers and market-lead- 
ers want to locate. 

The report inrJndpR 120 steps 
needed to achieve this vision, 
inrhnting the CrossRail linp, a 
high-speed rfiannri tunnel rail 
link, more bridges over the 
Thames and improvements in 
public transport 

London already contributes a 
£10bn surplus to the UK’s bal- 
ance of trade, according to Mr 


little sympathy with BT argu- 
ments that local cable monopo- 
lies would result from delay. 

“If I were a financier. I would 
not invest in a cable <*wwpany 
franchise unless the restriction 
was in place." he told the 
House of Commons trade and 
industry committee. 

Mr Heseltine, trade and indus- 
try, has taken the same posi- 
tion. Earlier this month he 
flatly rejected a Labour party 
proposal to lift the ban in 
return for BT agreeing to make 
the investment - estimated at 
about £15bn - necessary to 
extend fibre-optics into its 
local network. 


Ian Reeves, the CRTs London 
re gional chair man. 

The report recommends that 
l^ndp n First should have an 
official advisory role for the 
Cabinet sub-committee for Lon- 
don and the new Government 
Office for London. This would 
give a voice to the London bor- 
oughs which are already repre- 
sented on the London First 
board. 

The CBI aim calls on London 
MPs to form a cross-party 
group to support the objectives 
of the business plan. 


ban before 2001, and expressed 

London’s world role 'under threat’ 


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TECHNOLOGY 


G erhard Storch, financial 
director of Hoechst UK, is 
well-versed in promoting 
the idea of a global 
accounting system. He has a pre- 
pared presentation, complete with 
slides. The project has an inspira- 
tional name. Apollo, with its own 
sunrise logo. Stories about It appear 
regularly in. the Hoechst newsletter. 

Storch is clear about the objec- 
tives for Hoechst’s system. “First, it 
is not an accounting project We are 
looking to improve customer ser- 
vice. Nor is it a Gerhard Storch 
project - it involves everyone in the 
Hoechst group in Europe. The sys- 
tem we are looking for is likely to 
improve the service to our Euro- 
pean subsidiaries in the area of 
information delivery." 

Global systems, especially global 
accounting systems, are cost effec- 
tive. enforce standards and bring 
together different Information 
sources. The German-based Hoechst 
group is far from alone in its desire 
to implement such systems across 
national borders, but few companies 
can have looked into the idea so 
thoroughly, and done so much to 
prepare the ground - and the peo- 
ple. 

With annual sales of DM46bn 
(£18-4bn), Hoechst ranks among the 
world's chemical industry leaders. 
Founded 125 years ago, it was the 
originator of the vivid dyes that 
brightened clothes fabrics In the 
late 19th century. Now, It has inter- 
ests in chemicals, pharmaceuticals, 
fibres, polymers and paints. Its 
operations in 120 countries include 
research laboratories in 15 of them, 
audit employs 170.000 people world- 
wide. 

“We have a target that our Euro- 
pean business should operate in a 
seamless way in its information 
flow,” says Storch, “whether it 
comes from marketing information 
or in the process of receiving 
orders, p lanning , processing and, 
ultimately, delivering to the cus- 
tomer. People need accurate, 
up-todate information to know that 
they can deliver to the customer on 
time." 

There are problems to surmount 
in introducing such compatibility; 
agreement on aims and universal 
requirements in-house; choice of 
software; the weaning of people 
from their trusted software pack- 
ages; and. finally, the development 
of new approaches. 

Choice of software was relatively 
straightforward. Many suppliers 
claim to offer software that is 
global, multi-currency, flexible and 
capable of being customised to the 
degree Hoechst needed. But Hoechst 
found few real contenders, espe- 
cially as it had not yet moved to 
open systems and was still p lanning 
to use its mainframe computers. 
However, one German division was 
an enthusiastic user of 
the German-originated SAP 


Staff at Hoechst were thoroughly involved in the 
introduction of a new system, writes Claire: Goodin} 

A cross-border 
people project 


of workshops, miring IT people and 
end users, so that they learned on 
the hoof about business processes." 

Even so, there were logistical 
problems - some to do with ware- 
housing control and computerisa- 
tion and others with employees' 





Storch: 'A global strategy for in fo r ma tion systems has to rdy on co-operation and communkaflons, not imposing or pfeg criMn g* 


accounting software. 

The group was thus convinced 
that this modular package offered 
the most flexible and foil-function 
solution available. It chose SAP’s 
R/2 software for international use 
on its IBM 3090 and 9021 main- 
frames. (SAP now offers a Unix- 
based package, R/3, which arrived 
too late for Hoechst) 

There were a few deficiencies, 
made good by developments in 
SAP’s own software language. For 
example, Hoechst needed a credit 
management module and undertook 
a joint development with SAP in 
the UK to replace a £500,000 
in-house software project In spite of 
lower functionality, this write-off 
was a sacrifice worth making for 
the integration with other SAP 
modules. Altogether, the invest- 
ment from the UK, which piloted 
the development, was roughly £3m; 
with seven other European coun- 
tries involved - France, Austria, 
Spain, Italy, Belgium, the Nether- 
lands and Germany (co-ordinator) - 
the total cost was thus around 
£21hl 

A Hoechst man for 33 years. 


Storch did not underestimate the 
difficulty of weaning users from 
their existing systems, some of 
which had been international. 
These included a bespoke sales 
order processing system used in the 
UK, France. Italy, Spain and South 
Africa, and the mainframe account- 
ing software that MSA (now Dun 
and Bradstreet) implemented in the 
UK, Spain, and South Africa 10 
years earlier. 

Storch was keen to transfer his 

SOFTWARE 

AT WORK 


company-wide vision to the people 
who would use the software. He set 
up committees in each of the coun- 
tries contributing to the develop- 
ment “We felt that a public rela- 
tions effort was the only way to get 
it off the ground by a corporate 
agreement not a central directive. 
It was essential that it be led by 
national companies. A global strat- 
egy for information systems has to 


rely on co-operation and communi- 
cations, not imposing or prescrib- 
ing.” 

Each team bad subcommittees, 
chaired by the division director. 
Some countries provided specialist 
expertise: Spain and Italy on re- 
valuation of assets, for example, 
and Belgium on VAT rules. Meeting 
every six weeks or so, the commit- 
tees wrestled with the details of 
what turned out to be a rich but 
complex solution. Some extra mod- 
ules - cost accounting, and a trans- 
port system for dangerous goods - 
were a part of the UK pilot 

“It’s very complex. It requires a 
great amount of know-how In devel- 
opment and in presentation. Also, it 
is complex for users, and needs a lot 
of training. People have to learn as 
they go along, but we have also had 
to cope with differences in language 
and culture,” says Storch. 

IT organisation manager John 
Haywood was part of the change 
management committee. “We have 
had to train 400 users in the UK, 
some of whom have never seen a 
terminal," he says. “We imple- 
mented the scheme through a series 


The live switch was thrown an 
the entire system, fonhirHng three 
new modules, on the May bank holi- 
day weekend this year. Some 409 
users are spread across the UK 
headquarters west of Loudon in the 
accounting, - and pharma- 

ceuticals divisions. 

“After a couple of weeks live with 
409 UK users there were compara- 
tively flew problems. But we are in 
the bands of one central software 
developer - through seven national 
suppliers in the countries, with the 
master development in Germany," 
says Haywood. 

SAP, inevitably, has its own 
agenda. Product updates and 
releases cause problems to compa- 
nies such as Hoechst. even though 
g n qh maintenance is done centrally. 
SAP's new R/3 software is stall 
going through implementation in 
its first live sites. 

Other companies agree on the 
extremely rich functions available 
with SAP, even though, according 
to Starch, “only 25 per cent of the 
functionality is exploited by any 
one company” - 

Mike Demetriou, group chief 
accountant, has been using SAP 
software since the first implementa- 
tion of bou ght sales and general led- 
gers two years ago. The newly 
Implemented modules for produc- 
tion costing and sales, RKK and 
RKE, bring a fresh dimens ion to his 
job. They integrate all the informa- 
tion entered in sales and production 
to produce a detailed analysis at 
any leveL This means he can take a 
detailed view, by date, customer, 
invoice and product, of any data. “I 
log on daily looking at, for instance, 
total company performance at the 
end of the month. If I see a result Z 
don’t like, I can go into the hierar- 
chy and look at major divisions, 
starting to select the route - for 
AYampto, pharmaceuticals. 

“Ton don’t need anyone rise to 
make an inquiry for you - you can 
do it all yourselt working right 
down into the detail. If a senior 
manager doesn't like what he sees 
in the pharmaceutical budgets, for 
example, one keystroke will show 
all the costs that contributed: sala- 
ries, travelling, right down to . spe- 
cific transactions - someone’s for- 
eign trip. He doesn't have to call in 
anyone else, so long as he's 
trained." 

Business managers now have a 
broader knowledge of accounting, 
and accountants have a broader 
view of the business. Hoechst’s 
main investment, as Storch con- 
stantly emphasises, is not in the 
system but the people. 


FINANCIAL TIMES TUESDAY JUNE 21 1994 

Evening primrose 
in cancer fight 

James Buxton on promising trials 
with a dietary supplement 

A phannacentieal plant tn the win torept tetote the oU 

£e(S Hebrides of wm fro 

Scotland is being expanded Lincoln which P«ceB« seeds 


A phannacentieal plant tn 
tiie Outer Hebrides of 
Scotland is being expanded 
to produce commercial quantities 
of new drags, one of which is 
already extending - in clinical 
trials - the lives of sufferers from 
a particularly deadly cancer 
affecting the pancreas. 

The location of the plant, at 
Callanish on the island of Lewis, 

Is iransnal; so is the fact that ft 
makes its products not from 
synthetic substances but by 
extracting the active ingredient 
of the evening primrose plant 
The expansion of Callanish, 
costing ttJfm, is the latest step 
in a long process of discovery 
and development led by David 
Horrobin, a scientist and 
entrepreneur whose company 
Scotia Pharmaceuticals last year 
raised £37m in its London stock 
ayfhang y Dotation. 

Horrobin has been exploring 
the contribution to human health 
made by essential fatty adds, 
an area of medicine on which 
the big pharmaceutical companies 
have not focused heavily. He has 
found that sufferers from a wide 
range of illnesses often have a 
deficiency of SFAs. 

Scotia makes products aimed 
at making up tins deficiency. 

Since 1979, it has sold evening 
primrose oil as a dietary 
supplement under the name 
Efrunol and used the proceeds 
to finance the development of 
pharmaceuticals based on EFAs. 

It has four licensed drugs, to treat 
breast pain and skin diseases. 

It is also at different stages 
of developing drugs to treat a 
range of diseases, from cancer 
and diabetes to rheumatoid 
arthritis, Alzheimer's disease 
and schizophrenia. Horrobin bas 
found that a common thread in 
sufferers of all these diseases is 
a deficiency in EFAs. 

Scotia's baric research is 
carried out in Nova Scotia with 
farther work done in Carlisle 
and Dundee. In 1986, it acquired 
for £300,000 a plant at Callanish. 
Since then, Callanish has 
perfected a process for extracting 
from evening primrose-oil its 
most important dement - the 
EFA named gamma tinolenic acid. 

The evening primrose itself 
is not grown commercially on 


the windswept islands; the oU 
comes from a Scotia plant at 
Lincoln which processes seeds 
grown by farmers in different 
parts of the world. 

The remoteness of the Western 
Isles is not a problem, says Chris 
Conien, the plant’s manager. “We 
use relatively small volumes of 
evening primrose oil, and we 
benefit from the very high calibre 
oT scientists and skilled personnel 
on Lewis." 

The expansion at Callanish is 
intended to step up production 
of two products, DLMG fen* 
diabetic neuropathy (nerve 
rinmgg p caused by diabetes) and 
EF13 for cancer. 

Horrobin is quietly excited 
about EF13. “Most cancer drug 
tre atmen ts are unsuccessful, 
prolonging survival time by only 
10 to 15 per cent," he says. 
"Chemotherapy might increase 
a patient’s life expectancy from 
five years to 5.5 years. And these 
treatments are highly toxic, 
causing nausea and vomiting." 

By contrast, he says, clinical 
trials of EF13 (phase n trials) 
have shown encouraging results. 

“Pancreatic cancer is the most 
devastating of all cancers,” 
Horrobin says. Ninety per cent 
of cases are inoperable on 
diagnosis and life expectancy 
is only three months. Bnt patients 
given EF13 have found their 
survival time increased four to 
sixfold, in other words from three 
to up to 18 months. 

Horrobin says that the patients 
treated improve more the bigger 
the dose they receive, while side 
effects are nil. The product Is 
now moving on to a randomised 
phase HI trial which by the.end 
of 1995 will involve about 30 
hospitals in Europe and more 
than 400 patients. The next stage 
is to qualify for a license. 

Laboratory trials show that 
about 30 human cancer strains 
axe killed by EF13 without 
harming normal cells, and 
beneficial effects are reported 
from phase I and phase H trials 
on patients with breast, 
colo-rectal, brain, liver and 
melanoma cancers. And a team 
at St Bartholomew's hospital in 
London has found that EF13 
selectively kQls white blood cells 
infected with HIV, the Aids virus. 



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12 


FINANCIAL TIMES TUESDAY JUNE 21 1994 


MANAGEMENT: THE GROWING BUSINESS 


Small cheques, 
big problems 

Exporters owed tiny amounts 
face steep bank charges 


A year ago Colefax and 

Fowler, the up-market UK 
fabric and waUpaper 
maker, was facing a revolt in 
continental Europe. Export sales 
were increasing from its fabric 
division, but distributors and 
retailers were op in arms because 
of the amounts their banks were 
charging for the large number 
of small cheques Colefax 
required. 

Faced with this, customers 
tended to wait until they had 
received a number of invoices 
before paying; and in return 
Colefax and Fowler bad begun 
threatening legal action. Worse, 
many customers woe paying 
with foreign c ur r en cy cheques 
written on their local banks 
which took np to 28 days to clear 
in the UK 

The revolt came to a head at 
last July's annual dis tr i b uto rs' 
meeting. Without knowing how 
to achieve it, David Green, 

Colefax and Fowler’s chief 
executive, promised a solution 
by September. 

Colefax and Fowler's experience 
Is by no mamt unique. All UK 
exporters making large numbers 
of relatively low-value sales will 
have met the problem. Whan 
French or German customers pay 
Franc or D-Mark cheques the 
banks can charge the equivalent 
of at least £15. 

If, as with Colefax and Fowler, 
each invoice Is only £96 on 
average, these b ank ch arges stack 
up. Telegraphic transfer is no 
cheaper and even If payment is 
made directly to foreign currency 
accounts at a UK bank the banks . 
will still take up to 28 days to 
clear each cheque. 

Colefax and Fowler found a 
solution that would not be 
necessary in. a genuine single 
European market With help from 
the Bank Relationship 
Partnership, a London-based 
consultancy that helps cut the 
cost of banking Colefax and 
Fowler set up local currency bank 
accounts in each country where 
it has a significant customer base. 

Customers now pay directly 
to Colefax and Fowler’s local 
account, for which the charges 
are mfahnai and where payments 
are quickly cleared. The next 
stage is the clever part 


Instead of sending bank 

statements to the TJK, the local 
bank in Germany semis them 
dally to the local office of EDM, 
a Netherlands-based agency that 
handles the collection of huge 
quantities of small payments for 
companies such as National 
Geographic, Newsweek and New 
England Journal of Medicine. 

EDM Hi «n faroe Colefax and 
Fowler details of what they have 
received that day, enab lin g the 
company to credit the customers’ 
accounts. When cash balances 
reach a reasonable size, the 
money is transferred to the UK. 

The saving Is not only at the 
customer’s mid. Colefax and 
Fowler says that on export sales 
of£4mayear, it has saved about 
£45,000 on lost interest while its 
foreign cheques were clearing. 

The company says this may 
indirectly have increased sales; 
some customers were being 
denied credit not because they 
had not paid old invokes but 
because their cheques had not 
cleared. 

Because the customers were 
no longer hoarding invoices 
before paying, export creditor 
days have fallen from 86 to 73 
days. And as some customers 
were also deducting their bank’s 
charges from the invoice 
amounts, Colefax and Fowler also 
saved bank charges. 

"It has enhanced our customer 
service immensely,’' says Denise 
Walker, chief fiwanrini 
accountant at Colefax and Fowler. 
"They can buy more and it is very 
satisfactory from an 
administrative point of view." 

Walker says the company's own 
hank. Midlan d, were “either 
apathetic or just didn't have the 
service”. Midland said it could 
setup foreign accounts or a 
lockbox - a variant of the system 
put in place for Colefax and 
Fowler. “But that was the last 
we heard of it. They were not 
interested at alL” 

Green missed his September 
target by a month as opening 
bank accounts in some countries 
proved to be easier said than 
done. But the company says many 
more exporters are likely to use 
this kind of service. 

RG 


Q uality in management, 
manufacturing and the 
provision of services Is a 
bit like motherhood and 
apple pie; everyone these 
days Is in favour. How this elusive 
goal is best pursued, however, is 
increasingly contentious. 

Last week the quality Industry, 
which has sprung up in the UK 
around the BS575Q quality standard, 
received a broadside from the heart 
of the British scientific establish- 
ment In a 100-page report the Sci- 
ence and Engineering Policy 
Studies Unit a body whose parents 
are The Royal Society and The 
Royal Academy of Engineering, 
accuses the national quality “indus- 
try” of being inward-looking, insuf- 
ficiently focused on the customer 
and attracting its “share of cow- 
boys". 

It says the BS5750 quality stan- 
dard is but a small part of total 
quality management and that it 
tends to enshrine existing practices 
rather than encourage continuous 
improvement. Sepsu argues for 
greater recognition for companies 
doing their own quality assess- 
ments and says UK competitiveness 
needs more award schemes such as 
the UK Quality Award launched 

parKw fhia year. 

‘The quality assurance business 
Is run largely by . . . assessors, 
certifiers, accreditors, consultants,” 
the Sepsu report says. Tt Is not run 
by its customers. Indeed, there is a 
temptation for the assessors etc to 
regard each other as their custom- 
ers with the real customer nowhere 
to be seen.” 

Sepsu’s criticism comes just two 
months after Brussels entered the 
debate with a European Commis- 
sion document called Elements of 
Community Quality Policy. This 
.paper aims to put ISO 9000 - the 
European equivalent of BS5750 - in 
perspective as part but only part, of 
the quest for competitiveness. 

Elements of the Sepsu report are 
likely to be endorsed in the a utumn 
when they are incorporated in a 
Department of Trade and Industry 
document called Managing in the 
90s. 

Looming largest in Sepsu’s sights 
is the British Standards Institution, 
which not only sets quality stan- 
dards but, through its BSI Quality 
Assurance arm, certifies more than 
50 per cent of mmpaniBg seeking 
BS5750. Describing BSTs domina- 
tion of the accreditation market as 
“unhealthy”, the Sepsu report says: 
“There is thought to be too much, 
scope for partiality between the 
quasi- legislative BSI, which is 
under constant pressure to increase 
the income from non-government 
sources, and its commercially suc- 
cessful offshoot” 

Derek Prior, director of communi- 
cations at the BSI, agrees some of 
the infrastructure that has sprung 
up around BS575C certification does 


Richard Gourlay on a broadside 
attack against BS 5750 

Quality 
under fire 


I’M NOT A£?f=SS/W£ THE 0UM-f7y OF 
VOUR GOMPmy, m ASSESSING TKt 
QCftUTV OF Voue. GUM-ny ASSESSOR. 





need over-hauling. He rejects the 
report’s suggestion that BSTs certi- 
fication and standards-setting func- 
tions should be split And he also 
doubts whether self assessment 
could ever replace external assess- 
ment by certification bodies. 

The report reviews existing 
research into quality management 
and draws on interviews with 12 
companies and 58 witnesses, includ- 
ing the quality assurance director 
of Nissan Motor Manufacturing UK 
and representatives from the Con- 
federation of British Industry and 
the DTL 

“We are putting ISO 9000 in its 
place, it has a place but it is not the 
whole game," says Peter Collins, 
Sepsu director. The two standards 


address only a small fraction of 
what companies need to manage if 
they are pursuing a total quality 
approach, he says. “If unimagin- 
atively implemented, ISO 9000 can 
easily become a tool for codifying 
and freezing current practice; total 
quality management is much more 
concerned with continuous 
improvement” 

Sepsu contrasts the scope of the 
BS5750 standard with the nine areas 
the UK Quality Award seeks to 
examine - a definition of quality 
that was originally taken from the 
acclaimed Baldrige Award in the 
US. I n focusing on processes, 
BS5750 addresses only one of the 
nine areas that the award's archi- 
tects consider contribute to excel- 


lence. The other eight which are 
largely ignored, are leadership, 
pie management policy and stra 1 ’ 
egv, resources, people satisfaction, 
customer satisfaction, the impact 
on society and business results. 

Collins says more than lm copies 
of the Baldrige Award question- 
naire have been sent to companies, 
simply because they are useful tools 

for self-assessment DMnen . 

The report questions BS5750 s 
piflr* in grnaiiw companies. While 
few businesses would not ben- 
efit from adopting its basic prina- 
ples. the costs of obtaining third 
party accreditation may be inappro- 
priate. 

tt suggests the government couifl 
provide funds to spread the idea 

that self-assessed quality manage- 
ment programmes are a powerful 
catalyst for sustained improvement 
in performance. 

The British Quality Foundation 
could als o consider developing 
another quality award category for 
companies with fewer than 50 
employees. Quality awards, the 
review says, have proved an effec- 
tive stimulus to change. “The value 
of Baldrige, the European Founda- 
tion for Quality Management and 
the British Quality Foundation 
awards is that they are sophisti- 
cated tools for self-assessment, 
rooted in experience," Sepsu says. 

The review also makes recom- 
mendations about the people and 
organisations behind BS575Q. 

• As a mtnimnm measure, certifi- 
cation bodies should employ only 
registered assessors. 

• The encouragement of mergers 
between the 34 certification bodies 
should be considered by the govern- 
ment The fact that some certifiers 
are themselves not accredited by 
the National Accreditation Council 
for Certification Bodies weakens the 
whole BS5750 system. 

• The government should ensure 
that consultants used to help busi- 
nesses prepare for certification 
meet the most rigorous standards if 
they are to be used by companies 
subsidised by DTI schemes. 

• The report also questions the 
wisdom of the DTl’s decision to 
reject a suggestion that BSI and its 
certification arm, BSI Quality 
Assurance, be split The DTI has 
instead already asked BSI to rein- 
force the ring-fencing of 

fnnpfinnK, 

At the heart of Sepsu’s recom- 
mendations is the assertion that 
truly enduring quality improvement 
programmes originate within an 
organisation and are not imposed 
from outside. 

It is one view. The “external” cer- 
tification industry, worth £80m a 
year to consultants and assessors, 
according to one estimate, not unex- 
pectedly has another. 

*UK Quality Management - Polity 
Options, Sepsu. Tel 071 839 5561 


Checklist for 
staying solvent 

Many insolvencies coul d be 
avoided if company directors 
were aware of mistakes made 
by other businesses. 

London consultants Ringrose 
have produced a checklist for 
directors based on a review of 
250 insolvencies during the 
recession. 

More than a third of these 
companies could still be trading 
had they taken measures 
included in the checklist early 
enough, it is claimed. 

The list includes questions 
and skeleton solutions. It as k s 
directors to plot 12 m onths ' 
gross profit and fixed costs and 
see if the lines are converging; 
it asks whether directors always 
draw up cashflow forecasts to 
quantity the effects of accepting 
a large order; it suggests simple 
calculations of stock turn and 
trade receivables: if these foil 
to pass muster, it recommends 
management time be dedicated 
urgently to stock control and 
collection of bills. 

Checklist available from 071 
3834142. 


Barclays calls for 
business ‘Tessas’ 

Barclays Bank is calling for the 
introduction of tax-exempt 
business savings accounts to 
promote long-tram investment 
in the small business sector. 

These business “Tessas” 
would operate in the same way 
as their personal sector 
equivalent Businesses could 
invest retained profits in a 
special account which would 
be tax-deductible over a set 
period (three to five years). The 
funds could then be used for 
approved purposes such as 
capital investment, R&D or 
training. 

Barclays’ research shows that 
78 per cent of businesses prefer 
retained profits as a source of 
funding rather than bank 
overdrafts or venture capital. 
Some 87 per cent would 
re-invest more of their profits 
if the tax system were 
altered. 


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TeL No.021-236 6381 Fax: 021 236 0941 


BUSINESS OPPORTUNITIES IN HUNGARY 

Budapest based trading Ltd. looking for merger-acquisition. 
We offer opportunities in industrial tool trading and in a 
warehouse under construction on the 
Hungarian -Ukr aini an border. 

Contact us at fax: +36-27-346255 Ms. Krisztina FSsztor. 


VENTURE CAPITAL REQUIRED 
FOR ENGINEERING COMPANY 
WITH EXTENSIVE PRODUCT 
RANGE. CU RRENT T URNOVER 
c£2L0m. MARKETS INCLUDE 
PROCESS ENGINEERING AND 
WASTE PROCESSING IN UK 
AND OVERSEAS. 

Write Bax B2966, Financial 'times. 
One So uth w al k Bridge, 
London SE19HL 


FUNDS AVAILABLE 
TO PURCHASE 
'Letters of Credit 
* Bank Guarantees 

“Other Acceptable Collateral 

“ Backed by Private Investors 
THRU MAJOR tNTL BANKS 
CAPITAL SUPPORT COUP. 
US: (714) 757- 10W* fine (7W) 737-1230 


CONTRACT 

MANUFACTURER 

Cable Assembly Company 
seeks joint ventures, projects, 
partnerships to develop under 
utilised fatality. 15,000 sq ft 
factory with staff and tooling. 
Ability to assemble and market 
electronic products to 
industrial user base. 

Principles only need write to 
Bo* B2948, Furencial Times, One 
Southwark Bridge. London SKI 9HL 


IMEflKEEQJBEDMABE 


Long established South Coast 
glftware company, 
National sales force, 
importing high quality 
giftwara range from 
Far East, seeks partner wftfi 
COMPATIBLE trading 
Interesis-proferabJy wfth access 
to wholesale and multipte 
distribution. Substantial equity 
Interest available. 

Write to Bate Ntx B2938 Financial Times, 
lOneSoutwaric Bridge, London SE1 SHL 


SU CCES SFUL 

RACEH ORSE 

OWNERSHIP 

Charlie Gordofl-Waaou cm provide 
die right ownership opportunities for 
syndicates, pa rtne rships, company 
corporate and outright ownership. 

Reply in confidence to: 

Tel 071 351 5960 
Fee 071351 0078 


TRAINING/CONSULTANCY BUSINESSES 

Economic Development and Business Support 

London Region 

Greater London Enterprise (OLE) Is a successful, profitable economic development company in the 
ownership of London boroughs, with core businesses hi properly, venture capital and small bustiess 
support services. Bidding on the existing economic development expertise of its management, end 
the strong relationships with its member boroughs, it has been decided to proceed with a major 
expansion of activities into the field of specialist business and consultancy services, aimed at pubBc 
and private sector dients. 

The acquisition of companies already successful in this market is an option to be pursued in building 
this new area of activity. There would be the possftiBIty of whole or part acquisition. 

Companies of interest to GLE wffl have existing business with at least one of the fbfowing: central 
government, local authorities, TECs and the European Union. There wffl be growth potential which 
can be realised with the help of GL ETs marketing and financial resources. 

Expressions of interest, which wffl be treated in the strictest confidence, should be sent to: 

David Wafoum, Chief Executive, Greater London Enterprise 
63-87 Newington Causeway, London SEl 68D 


COMPUTER NETWORKING 
AND/OR COMPUTER 
MAINTENANCE 

Scbrid i iry of UK based pie, providing 
! cnmpntrr networking aflrf maintenance 
setview, lookin* to *apxire 'similar 
butanes or ttuaaemace contract base. 
OoMktaniMhbo given to txamcmcx 
in noctacd areas of activity. 
Wikc to: Box Financial Times, 

I One Soothwact Bridge, London SEl 9HL 


ELECTRICAL OR 
MECHANICAL 

J contiuctor/fcxJffle5 engineering 
company (or associated 
technical services). 
Cctiying out installatton or 
maintenance work. 

Based wltttin M25 but ideaty 
south/central London. 

I VWelo Bck No B2936. Rrxncfci Times. 
[OneScOhwakav^.UriciyiSEl WL 





Business for Sale 

Freehold Industrial Site For Sale in Zettz 

(30km south bam Leipzig) in East Germany. Hanning permissions and 
authorisations in place for 22,000 sqm factory suitable for nPVC and 
Aluminium door and window manufacturing. 

Interested parties please Contact: 

Bai yntu d Tmnwhfflfn & BurfrBgcr GmbH, 

Nemarla W - D-06712 Zctix (Germany) Tel/Fax: 49.344122893 


TRAVEL 

AGENCY 

Specialising in Exclusive 
Tailor Made Holidays 

Established Business 
Equity Investment Sought 
To Finance Growth 

Please wrhc to: Martin Stone 
FMCB Management Cngnplfont* itA. 
Hathaway House, Popes Drive, 
Finchley, London N3 lOF 
Tel: 081-346 6446 
Fax: 081-349 3990 


CHANNEL ISLANDS 

Of&horc Company Formation 
and Administi dUou. Also Liberia. 
Panama & BV1 etc "total offshore 
facftiiHs and novices. 

For dumb nd appotemtai *.Tde 
Cray Trail UL Bcfcrai Uobx. 

M Bdaatni Ad, $ Helier. kwn . CL 
Itfe 0534 78774, Foe QS?435MI 
Tta 4192227 COFORM C 


CONFIRMABLE DRAFTS 
BACKED BY CASH 

■* taaedia Yarn- Name 

+ ConHrmed by Major Infl Banks 
to Prove Availability of Fuads 
| * Sacked by Private Imams 
CAPITAL SUPPORT COUP 

' US. (714) 757-1070 • Rn (714) 757-UW 


FINANCE DIRECTOR 
(F.CMLA.) 

Interim executive with track 
record in business turn-arounds 
available for new assignment. 

Please apply to c o n fi d enc e lo 
Box B2953. Pram oil Tones. One 
Soutbwatt Bridge, London SEl UHL 


Insurance Brokers 

Seek Invcstix/Equlty Partner to fulfil 

Business Plan of acquiring quality 
Brokerages hr the UJL Present 
unusually low puxehase retire and 
repetitive contmnal Income mates 
tbb Investment moat attractive. 

Write to Box B2954, financial 
Times, One Soothwarit Bridge, 
London SEl 9HL 


BUSINESSES WANTED 

BUSINESS SERVICES 
COMPANIES 

Our client, an expanding UK listed group, seeks to 
acquire companies in similar and related sectors which: 

• provide business services other than catering, 
personnel, haulage, high technology and 
engineering services 

• are based in the UK 

• have a successful management team looking to 
continue 

• have a turnover of up to £20 million, no mmimufn size. 
Vendors or their advisers should contact either Tim Lyle 
or Samantha Penn on 071 388 4242 in absolute 
confidence. Your identity will not be revealed to our 
client without your express permission. 

Livingstone Fisher pic 

Acre House, 11-15 William Road, London NW1 3ER 

ai WM I II*U. I MJH ! IJ:l 

The Acquisition & Disposal Specialists 
A Msmbarot FIMBRA 


FOREIGN CLIENT 

Seeking a Portuguese Company 

involved in one or several of the 
following businesses:- 

1. Food processing equipment manufacturing/ 
supplies 

2. Restaurant equipment manufacturing/supplies 

3. Packaging equipment maniifacturing/supplies 

4. Precision sheet metal and or machine shop 

sub-contractor. J 

Business must be profitable. 

Operating management must be willing to remain. 
Business broker co-operation acceptable. 

Please respond in English language to 
Box B2943, Financial Times, One Southwark Bridge 
London SEl 9HL 


UK & MOSCOW BASED 
RUSSIA N LEGA L 
PUBLISHER 
seeks either joint venture 
partner or investor. 

Write rx 

Box KB5Q. Fanmcnl Times, 
OaeSoBdmik Bridge, London SEl WtL 


Angel Invited 

lo ta e nwre involved in a privately 
owned, profitable South Midlands 
high technology group (T.’O £L5M) 
which has a number of endian 
opportunities looming bet needs cash 
and maybe expertise. Principals only. 

Fax to: 0684 310716 


COMMERCIAL FINANCE Venture CS0M 
awiaMo from £2Sy»0 upwards. Serufcto 
Rate*, Sonata* Foe*. Brekflr enqukte* 
wafcmn*. Anglo American Vanturue Ltd. 
Tetpaaq 201386. Fa* (0Ba^»l37T 

LEGAL PUBLISHER seeks authors on 
taBmaMonBi legal, tex and trust topic*, 
wttto to Bax B2992. Randal Tkiiee, Cm 
Souinwrk EklOQK. London 8E1 9HL 


FOR SALE 

EAGLE STAR 
ENDOWMENT POLICY 
Matures 23 February 1997 
Projected value £95,000 
£70,000 ono 
SH Ross; 071 3S3 9581 


Dow yew buaiucM treed *faily vnfiUIT 
f’Vcfe\WriiPi*tif«iAayti taw ride apiMl 
caperta e to Invent Td W91 519999 


URGENT 

REQUIREMENT 

Have sold a successful 
service sector business. 
Up to £1 m available to 
purchase (min 50%) 
established company with 
prospects. London based. 

Sendee, Publishing, 
Licensing, Media, Rental. 

Reply in contidenca to 
Box B29S5, Rnanctei Times, 
One Southwark Bridge, 
London SEl SHL 


STRATEGICALLY 

PLANNED 

ACQUISITIONS 

and hard-working individuals 

/save made this International 
manufacturer specializing hi 
value-added frozen foods a 
leader in our industry. 

If you have a minimum annual 
sales volume of $10 million 
(maximum open) , we would 
like to talk to you about 
acquiring your business. 

Write Box CTW , H q —w i T im a, 

One Sootimadt Bridge. 

London SEl 9HL 


OFFICE EQUIPMENT 


QUALITY OFFICE FURNITURE 

50-75% DISCOUNT 

_WareiKKis«s full of boxed coordinated 
sraitnre from one desk to a complete fit out 

24m D ended hamUabka various woods full bttHnose 
2An D ended boordubles various woods bullnoee 
Light Oak desk and drawers 
Light Oak Bookcase 

Black ash desk vtd drawer^ 

Operators chaini 


Design meeting room chairs. 

Leather meeting room chain 
Designer high back leather chairs, 





£ 10.00 

— XM.0U 

- — £12S.Uil 

XI39.Hi 


Ftuc 071 490 5422 


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FIN ANCiAL TIMES TUESDAY JUNE 21 1994 


PEOPLE 


■C 



V ‘i ? 



DTI enlists the great and the good 
for its governance committee 

TIm Department of Trail* anil Koro ^i-ivun fy r v m aar irf Aaha 


BUSINESSES FOR SALE 


Tire Department of Trade and 
industry has announced Its 
committee of the Great and the 
Good to examine whether rela- 
tions between investing insti- 
tutions and UK corporations 
can be improved. 

Committee chai rman is pan! 
Myners, the sometimes outspo- 
ken chairman of Gartmore. the 
fund management company, 
who is viewed as a hawk on 
matters of corporate gover- 
nance. Discussing the commit- 
tee's role. Myners takes a dip- 
lomatic stance: “I thtnk it is 
primarily an issue of communi- 
cation (between shareholders 
and corporate management). 
But it can mean that managers 
arehesitant about committing 
capital to long-term projects." 

However, whether the com- 
mittee offers a radical solution 
to the perceived problems of 
short-termism in investment 
remains to be seen. The mem- 

Jack Gleeson 

Jack Gleeson. former chairman 
and managing director of con- 
struction, housebuilding and 
property group, IU. Gleeson, 
has died at the age of 84. 

He held the two top posts at 
the company for 38 years fol- 
lowing the retirement in 1950 
of his uncle MJ. Gleeson, who 


bars, drawn from leading cor- 
porations and investment 
houses, can come up with 
meaningful suggestions. "The 
challenge will be for us to pro- 
duce something interesting," 
concedes one member. 

Other members are Hugh 
Coll mn, finance director at 
SmithKhne Beecham, who has 
served there since the early 
1980s and is credited with help- 
ing restore the company's for- 
tunes. He is also a former 
rhal^man at influential 100 
Group of Finance Directors 
which at times has been at log- 
gerheads with shareholders 
over corporate governance 
issues. 

Also on the committee are 
Bernard Harty of the Chamber- 
lain Corporation of London 
which advises local authority 
pension funds. Haw Jones, 
director of corporate finance at 
Prudential Portfolio Managers 


founded the company in 1903. 

Jack's nephew Dermot 
became md in 1988 but Jack 
remained non-executive chair- 
man until Ms death 

He ran away from home at 
Cloonmore in west Ireland at 
the age of 16 to travel to Shef- 
field where his uncle reluc- 
tantly agreed to employ him 
and rose rapidly as the com- 


*nd chairman of the Associa- 
tion of British Insurers Invest- 
ment Committee Also present 
are James Jolt finance director 
of Pearson, owner of the Finan- 
cial limes, and Richard Lap- 
t.homA, currently ffaanr* direc- 
tor at British Aerospace who 
came to Ms post from Court- 
aulris following BAe’s ousting 
Of its former ohainngn Bnlanri 

Smith. 

Other committee members 
are Colin Lever, bead of the 
Investment division at actuar- 
ial consultants Bacon and 
Woodrow, Geoff Lmdey, head 
of UK institutional investment 
at JP Morgan Investment Man- 
agement and chairman of the 

National Association of Pen- 
sion Funds investment com- 
mittee, and William Stuttaford, 
chairman of the European divi- 
sion of Invesco, who formerly 
beaded Framhngton, the fund 
management company. 


pany expanded. It was under 
Jack Gleeson that the group 
went public in 1960. The 
extended Gleeson family stm 
owns about 40 per cent of the 
company. 

The business in the year to 
June 1993 made a pre-tax profit, 
of £8. 2m on a turnover of 
afiftm. It has yet to announce a 

new chairman. 


Fraser to coax investors to Britain 


The Invest in Britain Bureau, 
now a separate division within 
the UK's department of trade 
and industry responsible for 
internationally marketing 
Britain as an investment 
opportunity, has created a new 
port of chief executive. Andy 
Fraser, 43. will be the first 
incumbent, as from July 4. 

Fraser's background is sol- 
idly within the world of inter- 
national advertising. Bora in 
Kuala Lumpur, since April 
1992 he has been manag in g 
director of CDP Europe, the 
advertising agency now 43 per 
cent-owned by the Japanese 
agency Dentsu. 

Before that he was executive 
vice president and director of 
business development for Saat- 
chi & Saatchi advertising 
worldwide. He spent 197660 in 
Thailand , where he was man- 
aging director for McCann- 
Erickson. A graduate of Sussex 
University, where his degree 
was in English and American 



studies, Fraser’s first job in 
advertising was with Young 
and Ruhicam, which he joined 
In 1972 in London. 

In the part financial year 
more than 3Q0 foreign projects 
worth an pgtimahvi £i^bn and 
generating more than 56,000 
jobs have been attracted into 
the UK via the operations of 
the EBB. which is the UK gov- 
ernment’s main inward invest- 


BU5INESS SERVICES 


I 


I - . i'i < 1 


TTITF! liiii 


Prior to purchasing potenttaBy contaminated commercial and 
industrial real estate to the United States, let DRAI conduct 
a thorough investigation. 

DRAI specializes to Phase I Environmental Ste Assessments 
and Phase 11 Sol and Ground Water Investigations. 


Dan Rnrtv Associates, Inc. 
57EntVWowSBM 
UBBun, Nmjamy 07041 USA 
(Z01)3B*«a0B (201) 584-6442 

S*u&a***tc*£al @o*tAcdfab*t & diace 19X1 


USA only 24p per min 
Australia 40p per min 
No VAT 

Ash about oar lour rates 
to other countries. 

$ka[iback 

FREEPHONE 
Call 0800-96-0806 
Fax 0800-96-0807 


EUROPE/OVERSEAS 

Need Help Buying A Selling 
Businesses. Finding Partners. 
Managing, Opening New 
Markets Business 
& Strategic Plans 

FCA, French, German, Spanish 

Tel or Fax 44-81-946 5980 


TRAFALGAR SQUARE • Your burtnou 
mt&osa and ctedfcated tatophoro Una In 
London. Paris, eartn. Fkanttat. UkM and 
SO other top locations worMwida. Can 
RngunonQTI 872SS0CL 




CONTRACTS & TENDERS 

British Forces 
in Germany 
Market Testing 
Seminars 

Monday 19 September - DOmetdorf HOttm Hotel 
Monday 26 September - Hannover Airport Markka Hotel 
1000 HRS • 1600 HRS 

British Forces Germany intend seeking bids from co m mercial 
organizations for the provision of some services in their Military 
E stab lishments in North Rhine Westfalia and Lower Saxony. Two 
seminars arc being held in DOsseldorf and Hannover to provide details 
of die support services that are to be market tested. These include: 

Domestic Services & Farilitks Management 

Security Services 

Transport and Vehicle Repair 

Estate and P rop e rty M a n ag eme nt 

Catering and Hotel Management 

in most cases feasibility studies have already been completed and ITTs 
will he issued next year. The Consul General will also run an information 
workshop on "Doing Business, in Germany". 

If vuu wish 111 attend, pkase send details of your rum. a point of coman 
and the service in wich you are interested by latest at the beginning erf 
August 1994 to: 

Market Testing Support Team 
Headquarters United Kingdom Support Command 
(Germany) 

British Forces Post Office 140 
41179 Mdnehengiadharii 
TeL: 01049-2161-4723300/4722582 
Faxt 01049-2161/4722057 

Early honking is recommended as the number of delegates has to be 
limited. 


ment promotions agency. 

By tempting a well-paid and 
successful marketing executive 
from the pr iva te sector to take 
up this new post, the DTI 
appears to be si gnalling a 
determination to make the 
IBB, which was first set up in 
1977, a mere flou rishing , out- 
ward-bound entity. 

Three core tasks await 
Fraser farthering the cross-fer- 
tilisation between the DTI and 
business, both British and for 
eign; stimulating greater 
inward investment by a more 
vigorous marketing campaign 
which preaches the virtues of 
the UK’s economic base; and 
establishing the IBB firmly in 
the minds of wonldhe inves- 
tors as the first stop for advice 
and assistance. 

The current director of the 
IBB. Christopher Priston, who 
has been a civfl servant since 
1973 after working for Fisons, 
Courts ill ds and others, will 
become deputy chief executive. 


Non-executive 

directors 

Nigel Rudd, 47, chairman of 
w illiams HnitiirtgR , is severing 
ids ties with one of the three 
Derby companies he has been 
involved with for many years. 
He is stepping down as a direc- 
tor of Baine Industries, the 
building materials group t tvri 
he chaired for six years. He 
will retire as vice chairman 
and leave the board after the 

TWIf t 

Trevor Firm, 36, chief execu- 
tive of PendragoiL the up- 
market car distributor floated 
off by williams four years ago. 
joins the board on July L Peter 
Parkin, Blaine's ^jhairman, says 
the fact that Rudd is flhatrrogn 
of Pendragon, which is based a 
block away from Wflhams on 
Derby's Sir Frank Whittle 

Ttnari, hail nothing to do with 

Finn's appointment. Parkin, 
who chairs Raine’s nomina- 
tions committee, says he had 
been looking for “a young, sue- ! 
cessful chief executive of a pic 
operating in tire Derby area". , 

■ Donald McFarlane is 
chairman of SENIOR 
ENGINEERING and not the ■ 
former chairman. 

■ Malcolm Argent, a director 
of BT. at CLERICAL MEDICAL 
AND GENERAL LIFE 
ASSURANCE SOCIETY. 

■ Clive Lewis, joint chairman 

of Erdman Lewis deputy 

chairman of the Merseyside 
Development Corpo ration, at 
TOWN CENTRE SECURITIES. 

■ William Proby, president of 
the Historic Houses 
Association, at BOOKER 
Countryside. 

■ Geoffrey Boulton has 
resigned from INGHAMS 
having completed an lBmonth 

I executive contract. 

1 ■ John Hockaday has retired 
from CHARLES BAYNES. 

■ David Dngdale, former 
deputy chairman of James 
Capel at BARONSMKAD. 

■ Robert Fray, md of Lloyds 
Bank Stockbrokers, at 
McLEOD RUSSEL HOLDINGS. 

■ Geoffrey Detth, former 
chairman of Aynsley Group, at 
ACAL; Derek Kingsbury is 
retiring: 

■ David Bucks, former deputy 

chairman of Hill Samuel Rank 

and John Morgan, ex-chief 
executive of Imro, at 
YAMAICHI BANK. 

■ Anton y Chattwe ll at 
UNITED BREWERIES. 

■ Tony Robinson, md of 
Hoskyns. at ATI .AN GROUP. 

■ Janies Cowan at 
EDINBURGH FUND 
MANAGERS. 


70 MILES -LONDON 

3STARAA 

NEW HOTEL 

BgtnnramyFivriia ge/ Fanrtton Roeoi i 
M«a'A' Rome -tain sppfax. 7 Acres 
Wk&in I hour of many major 
population centres 

Ext. £750,000 4- T/O in first outing year 
OoastmdaVEqnqtpcd to exceptionally 

high ■ p n ’ lf af g tinn 

OSes mvaettSOLE AGENTS 

GOADSBY & HARDING 

Teh (0202)299300 

^ Non League 1 
Football Club 

A well established Non League 
Chib st the lap of the pyramid is 
fox sale. Prospective persons 
should write demonstrating their 
ability to take over the Binm4»i 
requirements of the Club. 

Principals only. 

Write to Bax B2946, Potential 
Tones, One Sauthtvark Bridge, 

l London SEJ 9HL JJ 


MOOTA COUNTRY HOTEL 
Nf? COCKERMOUTH CUMBRIA 
Fitly licensed high volume hotel & 
function business, superb A road 
ate. 33 en sufte bedroo m s, 
balroom, bar, restaurant etc. 
Large she, dav, potential. 6 rite 
net t/o £232.295 (unaudited) 
£460,000 FREEHOLD 
ROBERT BARRY & CO. 
HARROGATE (0428) 566368 

FOR SALE 

FLAT PACK FURNITURE 
MANUFACTURER 

Turnover £3m + 
predominantly export. 

Writ* to Bex B2944, Financial 
Times, One Southwark Bridge, 
London SEl 9BL 


Specialist Civil 
Engineering Contbactors 
engaged in No-Dig insertion 
of services throughout the 
UK- Turnover £1 .Lm. 
Healthy order book. 
Expanding market. 

Write ax 
Ben B2957, 

One SoUtnndc Bridge, London SBl 9HL 


BUSINESS OPPORTUNITY LOG 

U1P* aKM uoapleti md op to dot damb am 
* RmrivnaUprt bpiMtfira 
•ComaaniMk 


Pmfaocd by i bjhj . .. i J wrtti 

xrio0 hsBCD pcopjn Band 
Handrail of Co*, wd contacts in each lane. 
Tel: 89 1070 Fzc 0273 890740 


55 


6 E I f I I C T 


Transport & Crane Hire Company 
based in the Northwest of England 

Tlie company's trade comprises opera lore oi road transport, crane and fork htt hue. 
tndistrial and machinery removals end storage. 

Principal features include: 

■ Freehold premises situated in town centre location comprtsng some 1.4 acres ste area. 
The premisas include: 

FabrreatWri /Maintenance Workshops 
Warehouse/Stornge lariWy 
Yard and office accommodation 

■ Plant and equipment 

■ Experienced management and workforce 

■ Annual turnover of approximately El. 1m 

For further information please contact Mike Seevy at KPMG Peal Marwick, 

Edward va Quay, Navigation Way, Ashion-on-Ribble. Preston. Lancashire PR2 2YF 
Tel: 0772 772822. Fare 0772 736777. 


By order of the Joint Administrators Geoffrey Martin and 
Brendan GuDfoyle. 

For sale as a going concern the business and related assets of 


SUNSEEKER LEISURE pic. 


Turnover 1993 £16 million 
Forward bookings 1994 £3 million approx 
Capacity for a further 45.000 holidays 
Leasehold facilities in Huddersfield 
Computer system 


Canted the 
MmUstrstoreat 
36 tat Cross Sheet. 
Leeds LSI 2QH. 
W0S8445ML 
Far 0532 <23851 



iseeher 

LEISUREPLC 



CAA 


mi*) a lwRiii a w Ea a mz inti sms 


German Insurance Company, previously inactive in the insurance market, now 
available immediately to undertake all forms of insurance. 

All relevant licences pertaining to the company have been granted from the 
German B.A.V. in Berlin. 

Your financial references will be essential before consideration. 

For serious enquiries, which must arrive in letter form only, please write to: 
Richard Joslin, 24 Melrose Road, London SW18 1NE, Great Britain 


BUSINESSES FOR SALE 


The Administrative Receiver Daoid Bottomley 
offers fbr sale the assets and goodwill of: 


GAYJON PROCESSES LiMltH) 

•The company is based in Hyde, Cheshire. 

•The company » well known as a manufacturer of footwear: 

•Long leasehold premises, approx. 24,500 sq. ft 

•Shoe Manufacturing plant including malting, clicking & 
dosing equipment. 

•Stock. 

•Current turnover of approxX1.7 million. 

For flintier Information please contact 0. Booomiey. Hodgsons, Georgs House. 
48 George Street Manchester. Ml 4HF.T* 061 228 7444 Fax: 061 228 7358 


GUARD LITE LIMITED 
TRADING AS HOMELIKE FURNITURE 
M ADMINISTRATIVE RECEIVERSHIP. 

Ian Clark Esq. of Clark & Co, Administrative 
Receiver, offers for sale the business and 
assets of the above company located 
at Dudley, West Midlands. 
Principal features mdiider- 

■ Annual turnover £15 mBfion. 

■ rV a at igioua leasehold production/office premises 
extending to approx 55*000 sq ft. 

■ SIdfied workforce. 

■ Blue chip customer base. 

■ Considerable work in progress and forward Older book 

■ Extensive product range. 

■ Extensive range of modem CNC and conventional plant 
and machinery. 

FOR FURTHER DETAILS CONTACT: 
ChrteHafl tanOark 


HODGSONS 


I Bache Treharne 


021-212 0005 

FAX 021-212 0009 

PEAT HOUSE. 4S CHURCH ST 
tMRMtNOHAM B3 ZHT 


CLARK & CO 

insolvency practitioners 

0625 548180 

FAX 0625 548503 

P.O. BOX SOU S HALL ROAD 


COMMISSION 
SPINNER OF QUALITY 
CARPET YARN 

The Joint Admtoistraffve Receivers offer for sole 
as a going concern, the business and assets of 
Tower Spinning Company Limited. 

♦ Tunover of £1 mfflon pa to an 
established customer base. 

♦ Freehold mill premises In Huddersfield. 
West Yorkshire. 

♦ Fu#y equipped carpet yam spinning 
plant Inducing 6 recently refurbished 
carcBng lines. 

♦ Skied workforce of 55. 

For further information please contact 
the Joint Administrative Receivers, 
Michael Here and Keith Hinds 



ROBSON RHODES 

— lOiannffdd nmwm Bl^— 


RSM 


Hotel For Sale 

Costa Del Sol, Spain 

48 Unit Aparthotel comprising one bedroom apartments and studios. 
Totally renovated to a high standard and fully famished. Situated only 
100 ntetets from tbe beach and dose to shops. Complete with all facOitks 
including restaurant, bar. swimming pool, children’s pool, terraces and 
wen kept gardens. Price £950,000. Fall details on appGation ttx 

The Fielding Partnership 
T el: UK 081 3329939 Fax: Spain (34V5-28Z-9754 Sole Agents 



COMPUTER, OFFICE SUPPLIES 
AND STATIONERY WHOLESALER 








FOR SALE 

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14 


BUSINESS AND THE LAW 


FINANCIAL TIMES TUESDAY JUNE 21 1994 


Commission loses 
in PVC cartel case 



EUROPEAN 

COURT 


The European 
Court has dis- 
missed the Euro- 
pean Commis- 
sion's appeal 
against the deci- 
sion of the Court 
of First Instance in 
a case involving 
an alleged cartel in the European 
chemical industry. The ECJ 
annulled the Commission's deci- 
sion for procedural irregularity 
because it failed to authenticate 
the decision in accordance with its 
rules of procedure. 

However, the court set aside the 
CFI’s ruling of 27 February 1992 
on the grounds that it had been 
wrong to decide that the Commis- 
sion's decision was non-existent 

In December 1988, the Commis- 
sion adopted a decision ordering 
several chemicals companies to 
terminate an alleged cartel agree- 
ment in the plastics sector and 
imposing fines totalling $27-5m. 
Fourteen PVC companies appealed 
to the CFL In the course of the 
court proceedings, the Commis- 
sion admitted that it could not 
produce a copy of the original 
decision signed by the president of 
the Commission and the executive 
secretary as required by the Com- 
mission’s internal procedural 
rules. 

The CFI also found breaches of 
the Community law principle of 
the unaiterability of Community 
decisions. Differences existed 
between the various legally bind- 
ing language translations of the 
decision published in the Official 
Journal and notified to the parties 
after adoption by the C ommiss ion 
in December 1988. 

The CFI decided that the lade of 
authentication of the decision by 
the Commission was so serious 
that Community law required the 
Commission's decision to be 
declared non-existent 
The Commission appealed 
against the CFI’s ruling to the 
ECJ. It relied on four grounds. 
The ECJ only considered one, 
since it found in favour of the 
Commission and set aside the 
CETs decision of 27 February 1992 
because it contained an error of 
law. 

The ECJ agreed with the Com- 
mission that a procedural defect 
such as the Commission’s failure 
to authenticate a measure in 
accordance with its procedural 
rules had to be of sufficient grav- 
ity before it could be treated as 


legally non-existent 

The ECJ said acts of EU institu- 
tions are in principle presumed to 
be lawful and accordingly produce 
legal effects, even if they are 
tainted by irregularities, until 
such time as they are annulled or 
withdrawn. 

By way of exception to that 
principle, acts tainted by an irreg- 
ularity whose gravity is so obvi 
ous that it cannot be tolerated by 
the Community legal order must 
be treated as having no legal 
effect and as legally non-existent 

The purpose of the exception, it 
said, was to maintain a balance 
between two fundamental, but 
sometimes conflicting, require- 
ments with which the legal order 
must comply, namely “stability of 
legal relations’’ and “respect for 
legality”. 

The ECJ went on to state that 
when it sets aside a decision of the 
CFI, it had the power to give final 
Judgment in the original appeal 
where the state of the proceedings 
permitted. 

The court only dealt with the 
argmnent raised by the PVC com- 
panies relating to the Commis- 
sion’s failure to comply with the 
authentication requirements in its 
own rules of procedure. They 
stated: “Acts adopted by the Com- 
mission, at a meeting or by writ- 
ten procedure, shall be authenti- 
cated in the language or 
languages in which they are bind- 
ing by the signatures of the presi- 
dent and the executive secretary.” 

The ECJ said that contrary to 
the Commission’s claims, the 
authentication rule was not a 
mere formality but was intended 
to guarantee legal certainty by 
ensuring that the text adopted by 
the College of Commissioners 
became fixed in the languages 
which were binding. In the event 
of dispute, it could then be veri- 
fied that the texts nnHfioH or pub- 
lished corresponded precisely to 
the text adopted by the college. 

The ECJ, therefore, annulled the 
decision for infringement of essen- 
tial procedural requirements, 
ordering the Commission to pay 
costs. On 15 June, the Commission 
stated in a formal press release 
(IP/94/538) that it intended to 
adopt the decision again without 
any procedural defects. 

C-137192 R Commission o BASF 
etc, ECJ FC, 15 June 1994. 

BRICK COURT CHAMBERS, 
BRUSSELS 


T ransatlantic mergers 
between law firms are back 
on the agenda. After a lull 
of three years - the result 
of recession on both rides of the 
Atlantic - commercial lawyers in 
the UK and the US will today wake 
up to the news that two firms are 
joining forces: Titmuss Salner & 
Webb, a medium-sized City of Lon- 
don firm wifi throw in its lot with 
Dechert Price & Rhoads, a large 
Philadelphia-based ■ US firm. 

The new partnership will be 
known as Titmuss Sainer Dechert 
DechertTs London office will close 
and its London partners will 
become partners of the new alliance 
while remaining partners of 
Dechert in the US and in Brussels. 

What most City lawyers will want 
to know is whether the flifiance rep- 
resents the start of the long-expec- 
ted rush to form transatlantic part- 
nerships, or whether it is merely 
the extension of the type of exclu- 
sive mutual referral of work which 
has been the basis of several trans- 
atlantic relationships, such as that 
of Los Angeles-based O'Melveny & 
Myers and City solicitors Macfar- 

laiw»s 

Mr Michael Smith, senior partner 
of Titmuss, Mir Eddy vung , the 
partner in charge of Dechert’s Lon- 
don office, say the arrangement is a 
merger in all but name. Together 
the two firms wifi have more than 
450 lawyers in eight locations 
enabling them to advise Homre tic 
and international clients on a 
broader range of UK, European and 
US issues. Certainly, Mr and 
Mr KUng believe, the arrangement 
goes beyond any of the current 
referral arrangements between US 
and UK firms. 

In the heady period of the late 
1980s there had been much talk of 
mergers between large US and UK 
practices to form multinational law 
firms capable of meeting the chal- 
lenge of providing legal services on 
a global scale. But the economic 
slowdown in the US and the UK put 
such plans on hold. As the two 
economies move out of recession 
and firms look to expand once 
more, transatlantic mergers are 
been actively considered again. 

Firms which struggled during the 
recession are busy pondering what 
they should do to regain market 
share. With significant overcapac- 
ity in the domestic legal markets 
both in Europe and the US, expan- 
sion overseas is one obvious option. 
But funding international offices is 
expensive for all but the most prof- 
itable law firms. A merger with a 
strong US law firm could provide 
the answer for medium-sized Euro- 
pean firms. 

Does the Tltmuss/Dechert alli- 
ance fall into that category? Mr 
James Wyness senior partner of 
City-based international law firm 
Linklaters & Paines saysthe market 
would interpret the Titmuss/De- 


Transatlantic 

alliance 

Robert Rice considers the 
implications of a US-UK legal merger 



Partners in tow: Michael Smith of Titmuss, Salner & Webb, Tom Morris, 
senior partner with Dechert' Price & Rhoads and Dechert’s Bart Winoknr 


chert aitianra as, in affect, a take- 
over of Titmuss by Dechert 

Dechert is by for the bigger of the 
two. Dechert, ranked 47th by size in 
the US, had i 3 g partners and 336 
lawyers according to the American 
Lawyer magazine’s 1993 league 
table of America’s top 100 law films. 
Titmuss, in contrast, is ranked 39th 
by size in the UK with 48 partners 
and 147 lawyers, according to Legal 
Business magazine’s 1993 top 100. 

There is also a big difference in 
the financial performance of the 
two firms. According to American 
Lawyer Dechert was ranked 56th by 
gross revenues in 1993 with a turn- 
over of $108m for the 1992-93 finan- 
cial year. It was ranked 67th in prof- 
itability with profits per partner of 
1315,000. According to Legal Busi- 
ness Titmuss had a turnover of 
gi gftiu in 1992-93, placing it 39th in 
the UK top 100 law firms with prof- 
its per partner of £158,000 (36th). 

In spite of these differences, Mr 
Wyness says that the link-up still 
faDs short of a frill merger. “For a 
start it doesn't involve frill profit 
sharing,” he says. “Yet it is more 
than an arrangement to refer busi- 
ness to one anothe r.” 

In effect, Titmuss is taking on 


Dechert’s London and Brussels part- 
ners. The arrangement will give 
Dechert a stronger English law 
capability and Titmuss a strong US 
referral stream, a Brussels office 

and a tranaaHanHft dimension. 

Both firms have assessed the 
impact of the loss of referral work 
from other law firms and the 
im part nn t heir «igH«g client base 
and concluded that their link-up 
would lead to an increase in turn- 
over, an improved image and better 
services to clients. Mr Wyness says. 

The firms say they are keen to 
secure a bigger slice of the global 
legal services market and believe 
they would be better placed to 
achieve this as a single trait 

Most legal observers say the alli- 
ance is unlikely to have a big 
impact on the legal services market, 
largely because the two firms are 
both mgriinrn - siTPd in their respec- 
tive markets. *Tt’s not a block- 
buster”, Mr Wyness says. The big 
shake-up will come when two top 
firms - such as Freshfileds and 
Davis Polk WardweQ - deride to 
form an allinnm 

Medium-sized London firms 
which compete head on with TTt- 
muss may be more shaken by the 


alliance, he says. "A number of 
them may well say "why don't we 
do the same’. But they will have to 
ask themselves whether they are 
better able to serve their clients 
independently or In an arrangement 

such as tins. A lot may be tempted 
by the idea that such an arrange- 
ment might enhance their image, 
says Mr Wyness. 

What do tile clients of Titmuss 
think about the arrangement? 

Mr Darren Clayton, company sec- 
retary of Travelex, the international 
bureaux de change operator which 
tiaq frpgfj using Titmuss for some 16 
years, srid his initial reaction was 
“very positive." The law firm's 
approach squares with Trave lex’s 
entrepreneurial style, he says. Last 
year Travelex opened up bureaux at 
airports throughout the US and has 
a considerable demand for US legal 
services. 

hi the US, Travelex has tradition- 
ally used New York-based law firm 
M Uha nk Tweed Hadley & McCloy. 
But Mr Clayton recalls that on sev- 
eral o <y«!ctong when he has needed 
advice on a US matter, he was 
unable to get it immediately 
because of thp time difference 
between London and New York. 
With the new Titmuss-Dechert 
arran gement, Mr Clayton should be 
a hte to get first-hand advice on US 
jiagnPB in London without having to 
wait until New York wakes up. 
“That’s a superb benefit,” he says. 

M il hank is also a large 
firm, he adds, and 
although Derchert is 
big by US standards 
its style appears closer to that of 
Titmuss, a factor that appeals to Mr 
Clayton. So will Travelex use 
Dechert in the US? 

Mr Clayton says he will deride 
after meeting the partners in 
Dechert’s New York office next 
month. Ideally, he would like to use 
Dechert in the US. “I've had very 
good feed-back from the US about 
them so 1 can see no reason not to. 
We are an international company, 
so for our chosen law firm to 
become more international can only 
be good.” 

But will Dechert's longstanding 
US-based multinational clients feel 
the sflmft way about using Titmuss 
in London? Mr Wyness suggests 
that Dechert’s US-based clients, 
accustomed to being referred to 
leading City firms on big transac- 
tions. may raise eyebrows if they 
are suddenly steered towards a 
(medium-sized) London firm they 
have never used before. 

“I wander whether the arrange- 
ment will bring Titmuss deals it 
would not have otherwise got,” Mr 
Wyness says. 

That will be the litmus test If the 
link-up does bring Titmuss more 
global work, then other City firms 
could also start to dust off their 
own transatlantic merger plans. 


legal briefs 



Nicholson 
gets its 
Butler 

N icholson Graham & Jones, 
a medium-sized City law 
firm has appointed Mr Jim 
Butler, former senior partner of 
KPMG Peat Marwick, as a 
non-executive member of its 
partnership board. Mr Buffer Is 
chairman of European Passenger 
Services and a non-executive 
director or British Rail, Tomkins, 
the conglomerate, and Camelot, 
the consortium put together to 
run the UK National Lottery. His 
role at Nicholson will be to advise 
on management issues and act in 
an ambassadorial capacity. 

Mr Michael Johns, Nicholson’s 
managing partner said the firm 
was looking for a non-executive 
with a professional services 
background to take an objective 
look at the partnership. By 
appointing Mr Buffer the firm was 
“trying to say we’re ambitious, 
that we want to be seen to be 
different and that we are flexible", 
he said. 

Nicholson Is not the first firm 
to take on outsiders in a 
non-executive capacity. Freshfields 
has two non-executive members 
of its partnership board. Mlschon 
de Reya also has a nonexecutive 
chairman. But Nicholson is the 
first medium-sized City firm to 
take-on a non-executive and Mr 
Johns believes Mr Butler’s 
appointment could spark a trend. 
Management is an Issue for all 
law firms at the moment, he says. 

An unhappy lot 

O ne in three UK businesses 
is unhappy with its 
professional advisers 
according to research by 
accountants Levy Gee. Less than 
40 pa- cent of companies surveyed 
thought their solicitors had a good 
understanding of their business. 
Half thought their lawyers were 
good value for money. Only 15 per 
emit said they were satisfied with 
advice received. 


•**.•*%. • A «! ■ 

iT; 



On Monday, Juno 27 the Financial Times will publish a survey on Russia. 

It Is a country that has gone through a period of profound change and the survey 
will take a detailed look at what effects the events of the past year have had on Its 
economy and politics. 

Economically Russia remains poised between success and failure. The survey will 
examine the increasing business opportunities, from long term investments to high-risk, 
low priced stocks. 

On the political front It will discuss the performance off Boris Yeltsin’s government 
and the prospects for stability and democracy. 

: Because business is never black and white. 


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v 


















FINANCIAL times TUESDAY JUNE 21 1994 


* 







own A 

This is not art but a product marketed as such, argues William Packer 


I * their very different 
ways, the two exhibitions 
now filling the Anthony 
d Oflay galleries say much 
the same thing of the present 
avant-garde, at least in its hi^ 
commercial aspect None of it 
is shocking, any more, and 
goodness knows it must sell 
very well or it would hardly be 
where it is. In one sense, at 
least it makes very good sense 
indeed. 

But while none of us objects 
to the successful taming of an 
honest crust we are left with a 
legi t ima te question hangup uj 
the air: what has any of it to 
do with art? For what seems to 
be on offer here is not art as 
such but a product marketed 
as art, which is not quite the 
same thing. Perhaps it is but 
the cynical exploitation of a 
gullible market - but need we 
weep for those in a position to 
be thus exploited? No: a fool 
and his money, and all that 
Only when it begins to ta ke 
itself seriously, to seek to Jus- 
tify itself in high and abstract 
terms, does the cynicism 

betray itself. 

Of the two artists on show. 
Georg Baselitz is at once the 
more interesting as an artist 
and, in consequence, the more 
seriously dispiriting. For here 
is the once powerful and origi- 
nal painter who, in the late 
1970s, adopted the bare for- 
mula of turning his pictures 
upside-down. He has never 
looked back. At the Venice 
Biennale of 1980 he showed a 
monstrous reclining and gesti- 
culating figure. It was rudely 
carved but possessed even so a 
raw energy and primitive 
authority. His sculpture, like 


his painting, has grown ever 
more crude and perfunctory in 
both image and execution ever 
smce. 

In this latest show are three 
large wood-carvings, though 
hacked rather than carved 
would be a better description. 
One is a monumental head, 
faintly reminiscent in its pro- 
file Of the Indian tradi tion 'Hie 
others are one-armed torsos, of 
which the larger retains what 
passes for a head AH three are 
presented in their raw state. 


but for the selective applica- 
tion of bright red paint to 
breasts, eyes and mouths. 
Again, to say the paint is 
applied is generous, for in 
truth it is slapped on, to stick 
where it hits. 

This is what Heinrich Heil 
has to say in his catalogue 
note: “Baselitz is on the move, 
a man possessed... he cris- 
scrosses the quarry of past 
forms, preparing the way for 
his pandemonlc will to return 
in ever new formations . . . 





Celebration of kitsch: Topples’ by Jeff Koons 


Heathenry pervades the entire 
body of Frau Pagantsmus (Ms- 
tress Pa ganism ) - instilled in 
her by Rasrfifv tha intellectu al 
iconoclast, not in order to cast 
out the Alien but to find the 
Other beneath the gashed 
smoothness of sacred sculp- 
ture." Is it only such rubbish 
as this, that would have us 
take it so seriously, that gives 
cynicism its bad name; or do 
HeO and Baselitz themselves 
believe in it? 

The thought that Baselitz is 
not a cynic at all, but a true 
believer, would be a matter for 
real and lasting despair. 
Whichever the case, the trag- 
edy is that he remains the art- 
ist in potential he always was. 
Even as they stand, these carv- 
ings are possessed of a remark- 
able physical presence for 
being the lumps of wood they 
are. What Baselitz offers us in 
such things, alps , is only the 
proposition of image and idea, 
never the resolution. 

Jeff Koons could never be 
accused Of not taking thing s 
for enough. In the face of his 
excesses, how we wish he 
could. His mystery lies only in 
how he has advanced so for in 
his reputation as an artist at 
all We are back to Marcel 
Duchamp again, and, with his 
urinal and bicycle wheel, to his 
ironical play on the nature and 
status of the work of ait - only 
the poor old innocent was not 
to know that his ready-made 
would become the byword for 
all that is mfnriteBK and ftmfle 
in late 20th century art 
Koons has made his fo rtune 
by it first declaring himsdf as 
an artist, some 10 years ago, by 
showing squadrons of 


brand-new Hoovers in gallery 
cabinets, and floating basket- 
balls - eat your heart out, 
Damien Hirst - in tanki; of 
water. So he has progressed, as 
we can see, through model rail- 
way engines in stainless s tee l; 

St John the Baptist with a pig 
and penguin in porcelain; 
naked children; a pile compris- 
ing a pig, goat two dogs and a 
bird in painted wood; a bear 
and a policeman; to vases of 
carved wooden flowers, and 
wooden poodles. Only the 
works from the “Marriage 
Made in Heaven", to Timm 
Staffer, “la Cicciolina” - now 
on the rocks - are mfcgjpg' 

H ere then is the cele- 
bration of the 
kitsch and the 
banal, with its cir- 
cular and self-serving justifica- 
tion that goes back to Da da, 
though the wit gets ever thin- 
ner - object, and you have 
missed the point accept, and 
still you have missed the point 
What does Koons have to say 
about it all? "I believe that 
taste is really unimportant 
salesmen are today's great 
communicators: I believe art- 
ists must exploit themselves, 
and they must also take the 
responsibility to exploit their 
viewers: I am completely 
adaptable. In the art world I 
have always found everyone 
very weak. The art world 
realty has been up for grabs." 

He at least is an open cynic. 

Georg Baselitz: Frau Paganis- 
mw, until July 80: JefT Koons: 

A Survey; until August 18. . _ 
Both at the Anthony d’Offcy I I 
galleries. Dering Street, Wl. 


T he fortunes of Shake- 
speare's lesser-known 
plays cast a fascinat- 
ing light on social atti- 
tudes. The modern age tunes 
in clearly to the wavelength of 
Trotius and Cressida, for exam- 
ple, with its bleak cynicism 
towards romantic love and bil- 
ious vision of ruling classes 
bickering over war as they 
would at croquet Now comes a 
Measure for Measure which 
underlines our current obses- 
sion with the private weak- 
nesses of public figures, hom- 
ing in on the outward puritan 
who burns with inner lust 
Angelo's hypocrisy is less 
important than his abuse of 
power as ducal deputy to grat- 
ify his lust Unlike today's Brit- 
ish popular {Hess, the Elizabe- 
thans distinguished between 
the domestic habits and the 
professional abilities of their 
rulere. They would not auto- 
matically agree that a bureau- 
crat is unfitted to negotiate 
defence contracts, say, because 
he wears panty-hose at home, 
when indeed the reverse might 
well be true. 

Cheek by Jowl has toured its 


Theatxe/Mardn Hoyle 

Measure for Measure 


new version through such 
exotic localities as Tokyo, Rio, 
St Petersburg and Parting ton 
At the Lyric, Hammersmith, 
for a month, Declan Donnel- 
lan’s updated production 
begins ominously. With Peter 
LiUey’s hairline and John 
Gammer's devoutness, the 
sleekly-suited career politician 
Angelo portends heavy-handed 
satire. Will the well-meaning 
but out of touch Duke be 
played as Prince Charles? 
When he yells “Supply me 
with the habit!” is he demand- 
ing a monkish gown or a quick 
fix? 

The production is not that 
crass. Over the years Cheek by 
Jowl has evolved a style that 
might be defined as the 
unthinking man's Jonathan 
Miller. This can result in fresh- 
ness and vitality or the overeg- 
ged pudding of a Twelfth Night 
when almost every line was re- 


interpreted, even working in 
an implied affair between a 
weepy Feste and a hunky 
Texan Aguecbeek. The suspi- 
cion lingers that the compa- 
ny's main aim is to show 
A-Ievel students that the clas- 
sics can be cooL 

T he new Measure for Mea- 
sure avoids such 

excesses. It skips 
through the low-life scenes 
with restraint (Mistress Over- 
done is modelled on a Dora 
Bryan chirpy tart, c.1950). It 
inspires some excellent acting. 
It oddly makes little of the cen- 
tral dilemma - should Isabella 
sleep with the man who can 
spare her brother's life? - and 
leaves a moral puzzle at the 
play’s heart 

For Stephen Boxer’s Duke, 
incognito among his subjects 
and foiling his deputy's tyr- 
anny in the nick of time, is 


seen as a melodramatically 
excitable and really rather silly 
protagonist of a silent-screen 
cliff-hanger. He is cut down to 
size as a meddler who toys 
with people's lives. The final 
scene of retribution, reconcilia- 
tion and mercy finds the 
assembled company grim-faced 
with resentment The Duke 
has played God and we live in 
a secular age. This Is 20th-cen- 
tury editorialising; if you 
accept the Duke, not Angelo, 
as the (unwitting) villain of the 
piece, it paints a desolate pic- 
ture of a society with no point 
of moral reference. 

It also turns Lucio into a 
romantic hero. The “fantastic", 
a louche man-about-town, para- 
site and name-dropper, is bril- 
liantly seen as a gossip-colum- 
nist figure. One of life’s free 
butchers, he blossoms in sca- 
brous anecdotage about his 
alleged familiarity with the 


great In Mark Bazeley's perfor- 
mance, a near-s chizo id aware- 
ness gives glimpses of self- 
loathing. 

In this climate of rottenness 
even the most blameless char- 
acter is reduced to status of 
bawd: the jilted Mariana is a 
cackling drank, though when 
allowed to Ma rianna Jean-Bap- 
tiste shows a moving dignity. 
Yet even in this corrupt 
Vienna, there are two perfor- 
mances that would fit magnifi- 
cently into a traditional pro- 
duction. 

Anastasia Hille’s Isabella, 
long-eyed and with the wide 
mouth of a Greek tragic mask. 
begins as fluttery, uncertainly 
bossy as she pleads for her 
brother, meeting Angelo's ped- 
antry with her own. Her even- 
tual focus on rage, shock and 
grief Is almost painful to 
watch. Adam Kotz lends 
Angelo tragic stature: the (fry, 
bloodless inhumanity that can 
blaze helplessly into passion. 
Even in sexual blackmail, his 
bureaucratic logic remains: he 
rightly makes “Who will 
believe thee, Isabel?" the most 
chilling ting in th<> play. 



AbMair Mnb- 


TOWerillg in co mmand : Steven Page as a potent, saturnine Nick Shadow 

Opera/David Murray 

‘The Rake’ renewed 


R iccardo Zandonai’s Fran- 
cesca da Rimini may not 
be a first-rate opera, but 
it is one of the best pieces of its 
kind and the Chelsea Opera 
Group, which places us all in 
its debt with regular concert 
performances of neglected 
works, made a good case for it 
at the Queen Elizabeth Hall on 
Saturday. 

Operas by Puccini's younger 
and lesser contemporaries 
have received a bad press here 
recently - Giordano's Fedora 
at Covent Garden got a decided 
critical unwelcome last month 
- but Francesca, a more 
deserving cause than any of 


Opera in concert/John Allison 

Francesca da Rimini 


Giordano's operas, does not 
seem to have had a chance to 
prove itself in England since it 
reached Covent Garden just 
five months after its Turin 
premiere in February 1914. 
Francesca has fared better else- 
where: it is done from time to 
time in Italy, the Metropolitan 
Opera revived it ten years ago, 
and it turns up next month at 
the Bregenz Festival. 

D'Annunzio's late-Roman tic 


elaboration of the story from 
Dante's Inferno gave Zandonai 
(who died 50 years ago this 
month) rich scope for atmo- 
spheric writing. Francesca is 
thickly scored - consistently 
colourful, seldom cloying - 
and the orchestra rose to it, 
despite some tentative playing 
in the “silent love duet”. The 
chorus projected the battle 
music - irrelevant, but a spec- 
tacular diversion - effectively. 


Though the lush score substi- 
tutes melodramatic gesture for 
dramatic urgency, Nicholas 
Braithwaite conducted a lively, 
loving performance. 

In the title role, Hannah 
Francis gave an expressive per- 
formance, using her creamy 
soprano to make the most of 
the character’s surprisingly 
undramatic music. The three 
brothers in the plot were all 
clearly characterised: the tenor 


Richard Berkeley-Steele 
(ENO’s recent Lohengrin) sang 
Paolo, the handsome brother 
with whom Francesca falls in 
love, with plenty of unforced 
tone; the brutal Glanciotto. 
who Francesca is tricked into 
marrying, was taken with 
vivid power by the bass Philli p 
Joll; and the unpleasant Mala- 
testino, who out of jealousy 
alerts Giandotto to the lovers, 
was sung with tenorial venom 
by Gareth Lloyd. Two soprano 
ladies-in-waiting, Jiflian Foster 
as Garsenda and Helen Astrid 
as Biancofiore, stood out from 
the rest of the large cast for 
their lively performances. 


D avid Hockney has 
done sane repaint- 
ing for Glynde- 
boume’s celebrated 
production (from 1975) of The 
Rake's Progress, and in the 
new house his designs look 
more brilliant than even w itty , 
imaginatively apt, visually sen- 
sational John Cox has come 
back to direct it again, and 
with the odd bright new detail 
the whole conception rings 
true. This is an unforgettable 
staging. 

Musically - well, it is nearly 
as good. Andrew Davis takes 
the London Philharmonic 
through Stravinsky's score 
with his usual lively intelli- 
gence, and due care for his 
singers. The darkest, sternest 
passages are a touch light- 
weight; the soft-edged attack 
that Davis cultivates so appeal- 
ingly in Richard Strauss alter- 
nates here with nervy brittle- 
ness. 1 found myself wishing 
that he could swop places with 
Elgar Howarth at the Garang- 
ton Opera: Davis to lavish 
more unashamed tenderness 
upon Strauss's Capriccio, 
Howarth to emphasise the 
tough muscle in the Rake. 

Tom Rakewell hims elf fa 
sung by an interesting Ameri- 
can tenor, Stephen CMara (his 
first time): a nice edge of hyste- 
ria, genuinely moving when 
ruined, but too much tight 
tone and too often unintelligi- 


ble in the Anden/Kallman 
Words. Promising, thoug h; and 
so is Christiane Oelze’s sweetly 
frail Anne Trulove, though she 
misses the brave resolve of her 
climactic Act I aria. It is left to 
Steven Page's potent, satur- 
nine Nick Shadow - the 
Mephistofigure - to wield the 
full weight of his character, 
and thus to dominate the even- 
ing. 


On the new 
Glyndeboume 
stage David 
Hockney's designs 
look more bril- 
liant than ever 


It was only two years ago 
that this Iatecoming star 
essayed the role for Glynde- 
bourne's young touring com- 
pany; but Page should expect 
an international demand for 
his Nick in many future sea- 
sons. Besides the advantage of 
imposing height, he is a sharp 
and subtle actor, in towering 
command of his words and his 
music. 

For Baba the Turk, the 
Rake's rash choice of a circus- 
wife. Jane Henschel’s throaty 
comic delicacy matches her 
luxuriant beard, more plausi- 


ble than any I’ve seen on a 
Baba. Cox has given her an 
affecting moment when she 
plucks out a hair of it - at 
some evidently painful cost - 
for one of her admirers. 

On a cameo scale Robert 
Tear’s ripe, preening auction- 
eer is perfect too, lending a 
vital theatrical charge to the 
post-prandial third act (spe- 
cially important at Glynde- 
bourne, as the audience fa lia- 
ble to drift off). Frode Olsen 
makes a fine, upstanding Tru- 
love pitre, and Angela Hickey a 
cheery old trout as Mother 
Goose, the brothel-mistress. In 
the brothel scene and every- 
where else, I missed more of 
the eager Glyndebourne cho- 
rus's words than expected. 

As with O ’Mara's Tom, how- 
ever, I was unsure whether the 
fault lay with them or with the 
tricks cf the acoustic. For Fig- 
aro three weeks ago I sat in the 
rear stalls, a bit higher, and 
heard almost every word; 
nearer the stage this time, I 
lost many more of them. That 
may be one or the uncontrolla- 
ble accidents of the theatre, 
and in any case the losses were 
marginal compared to the per- 
suasive certainties of the pro- 
duction. 

Revival sponsored by British 
Airways; in repertory until 
August 14 


* »?'.■ 

\ ■ 1 

■ AMSTERDAM 

Muztektheatar Tonight: Dutch 
National Ballet in choreographies 
by Rudi van Dantzig. Toer van 
Schayk and Hans van Manen. 
Tomorrow, Fri: Riccardo ChaiUy 
conducts final performances of Uuis 

Pasqual's Netherlands Opera 

production of Falstaff, with cast 
headed by Bruno Pratico. Next Mon: 
Mere© Cunningham Dance Company 
gives first of four performances of 
Ocean, based on an idea by 
■** Cunningham and John Cage 
' (020-625 5455) 

Beurs van Berlage Tonight Lev 
Markiz conducts NIeuw Sinfonietta 
Amsterdam in arrangements by 
Henze and Adams, with mezzo 
soloist Jaiti van Nes (020-627 0466) 
Co n c ertge bouw Tomorrow: Marc 
Minkowski conducts Rotterdam 
Philharmonic Orchestra and Chorus 
in concert performance of Bruno 
Madema's arrangement of 
Monteverdi's Orfeo, with cast 
including Judith Howarth, Kathleen 
Kuhtmann and Guy de Mey. Sun 
afternoon: Hans Vonk conducts 
Radio PhHharmonk: Orchestra in 


International 

Arts 

Guide 


works by Zimmermann, Stravinsky, 
Lutostawski and Skryabin. Next 
Mon: Reintoert de Leeuw conducts 
Radio Symphony Orchestra and 
Chorus in concert performance of 
Max Brand's opera Machinist 
Hopkins, with cast including Henk 
Smit and Suzanne Murphy (24- hour 
i nfo rmation service 020-675 4411 
ticket reservations 020-671 8346) 
Bellevue Thure: first of seven 
performances of Peter Brook's The 
Man Who, based on the book by 
neurologist Ofiver Sacks (070-320 
2500) 


■ ANTWERP 

de Vlaamse Opera Tonight, Sab 
Stefan Sottesz conducts Petrika 
Ionesco's production of Die 
FJedermaus, with cast headed by 
John Hurst and Cynthia Lawrence 
(03-233 6685) 


■ BRUSSELS 

Palais des Beaux Arts Tonight 
(Conservatoire): Jos van Immerseel 
conducts Anirrra Efoma in works 
by Matthew Locks, Bach and others. 
Tomorrow: Antonio Pappano 
conducts Orchestra and Chorus 
of the Monnaie in Mendelssohn's 
Sijah, with soloists Including Keith 
Lewis and Josd van Dam. Fri: 
GOnther Herbfg conducts Hague 
Riahamionte Orchestra in Webern, 
Schoenberg and Mahler, with mezzo 
Catherine Robbln and tenor Stephen 
O' Mara (02-507 820(9 
Monnaie Tonight Thure, Sun, next 
Wed: Antonio Pappano conducts 
Kari-Emst and Ursel Herrmann's 
production of La traviata, with cast 
headed by Bzbieta Szmytka. 
Laurence Dale and Victor 


Ledbetter (02-218 1211) 


■ CHICAGO 

THEATRE 

• Libra: Steppenwoff Theatre's 
most famous alumnus, John 
Malkovich, has returned to direct 
his own adaptation of Don Delffio’s 
novel, a fictionalised account of 
the life of Lee Harvey Oswald. Final 
week (Steppenwoff 312-335 1650) 

• Breaking the Code: Hugh 
Whitemore’s 1986 play about loyalty, 
national expediency and 
homosexuality. In repertory with 
Anthony Ctarvoe’s The Living, a 
new play about the London plague 
of 1600 (Interplay 312-654 1055) 

• A Little Night Music: Michael 
Maggio directs this Sondheim 
classic, hailed as the perfect 
romantic musical comedy. Just 
opened (Goodman 312-443 3800) 

• Guys and Dolls: Jerry Zaks' 
award-winning revival of the timeless 
musical fable of Times Square 
gangsters, gamblers and good-time 
girts is now on a national tour, and 
runs in Chicago till July 3 (Shubert 
312-902 1500} 

RAVINIA FESTIVAL 
Tonight's concert features Dionne 
Warwick, Burt Bacharach and the 
Ravinia Festival Orchestra. 

Tomorrow; five-woman group Zap 
Mama. Sun: Mflton Nasa'mento. 

The Vermeer Quartet gives the first 
dassicai music concert of the 
season on Thure, and the Chicago 
Symphony Orchestra begins its 
annual residency on Fri with the 
first of six conceits conducted by 
Christoph Eschenbach. His first 
programme is Bruckner's Te Deum 
arid Beethoven's Choral Symphony. 
On Sat, Eschenbach is soloist in 


Beethoven's Second Piano 
Concerto. Next Mon: Claire Bloom 
and Anna Steiger present an 
evening of Shakespeare, with 
musical settings by Copland, 
Prokofiev and others. The festival 
runs till August 28. Ravinia is 
situated in Highland Park, within 
easy reach of downtown Chicago 
by train, bus or car. To order tickets 
by phone, call 312-ravinia. Outside 
the metropolitan Chicago area, call 
1-800-433-8819. Tickets can be 
ordered by fax 24 hours a day: 
708-433 4582. 


■ GENEVA 

Com&fie Tonight, Sat and Sun: 
John Duxbury conducts 
Pierre- Alexandre Jauffret's 
production of Purcell's King Arthur 
(022-310 9193) 

Grand Thddtre Fri, next Mon and 
Thure: Christian Thielemann 
conducts Robert Careen's 
production of Lohengrin, with cast 
headed by Thomas Moser, Hartmut 
Welker, Eva Johansson and Marilyn 
Zschau (022-311 2311) 


■ THE HAGUE 

Dr Anton Phffipszaal Sab GOnther 
Herbig conducts Hague 
Philharmonic Orchestra in works 
by Webern, Schoenberg and Mahler 
(070-360 9810) 


■ VIENNA 

Staatsoper Tonight, Fri, next Tubs: 
Riccardo Muti conducts Ls nazze 
dl Figaro, with Bryn Terfel as Figaro. 
Tomorrow, Sab Los Contes 
d ’Hoffmann with cast headed by 
NeM Shicoff. Thure: Utf Schirmer 


conducts Marco Arturo MareW’s 
new staging of CardHlac, with Franz 
Grand heber. Sun: GdtterdSmmerung 
with Gabriele Schnaut, Siegfried 
Jerusalem and Matti Salminen. Next 
Mon and Thure: Tosca with Raina 
Kabaivanska, Luciano Pavarotti and 
SheriU MUnes (51444 2955) 
Konzerthaus Tonight Friedrich 
Gulda is director and piano soloist 
with Vienna Symphony Orchestra 
(712 1211) 

Musikverein Tomorrow: Yevgeny 
Kissin piano recital. Sun morning, 
next Mon evening: Rudolf 
Buchbinder is director and piano 
soloist with Vienna Symphony 
Orchestra in works by Haydn, 
Schumann and Beethoven (505 
8190) 


■ WASHINGTON 

• Jazz trumpeter Wynton Marsalis 
arid vocalist Nancy Wilson join 
forces tomorrow at Wolf T rap. The 
programme on Sat and Sun is a 
jazz and blues festival, with guest 
artists Including Milton Nasdmerrto, 
Dave Holland Quartet, Jimmy Scott 
and many others (703-255 1860) 

• Christopher Hogwood conducts 
National Symphony Orchestra in 

a Mozart Festival on Fri, Sat and 
Sun at Kennedy Center Concert 
Hall. Soloists Indude pianist Robert 
Levin and tenor Curtis Rayam 
(202-467 4600) 

• David Locklngton conducts 
Baltimore Symphony Orchestra in 
outdoor concerts on Fri, Sat and 
Sun at Oregon Ridge. Fri: popular 
classics. Sat big band, blues and 
Bernstein. Sun: Copland, Bernstein 
and Beethoven (410-783 8000) 

• Max Roach Double Quartet 
presents spirituals, ragtime and 


modem jazz on Sat at Columbia 
Festival of the Arts (410-715 3055) 

• The main summer show at the 
Kennedy Center is Miss Saigon, 
the musical love story set during 
the Vietnam War. Dally except Mon 
(202-467 4600) 

• Shenandoah Shakespeare 
Express performs Much Ado About 
Nothing, Othello and The Taming 
of the Shrew in repertory at Folgar 
Shakespeare Library. Opens tonight, 
tiH July 3 (202-544 7077) 

• The Trip to Bountiful, Horton 
Foote’s play about an elderly 
woman's search for peace in the 
midst of famHy struggle, runs till 
July 3 at Ofney Theater (301-924 
3400) 


■ ZURICH 

Opemhaus Tomorrow, Sat Un ballo 
in maschera with Vincenzo La Scola, 
Giorgio Zancanaro and Mara 
Zampierf. Thurs, Fri: Mozart ballet 
production, choreography by Bemd 
BtenerL Sim: Franz Weiser-Mdst 
conducts first night of Erwin Pfplits' 
new production of Rusal ka. The 
season runs till July 3 (01-262 09(H) 
TonhaSe Thure: Vogler Quartet plays 
string quartets by Kurtag, Haydn 
and Brahms. Sun: Edmond de 
Stoutz conducts Zurich Chamber 
Orchestra in a Bach programme 
(01-261 1600) 

Schausptelhaus Tonight tomorrow. 
Sat DQrrenmatt’s The Visit Thurs, 
next Mon: new production of 
Pirandello's Man. Beast and Virtue, 
directed by David 
Mouchtar-Samoraf. Fri, Sun: David 
Mamet's Otearma. There is also 
a studio production of John 
Osborne's Look Back in Anger. The 
season runs tHI July 8 (01-221 2283) 


ARTS GUIDE 

Monday: Berlin, New York and 
Parte. 

Tuesday: Austria. Belgium, 
Netherlands, Switzerland. Chi- 
cago, Washington. 
Wednesday: France, Ger- 
many, Scandinavia. 

Thursday: Italy, Spain, Athens, 
London, Prague. 

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 
(Central European Time) 
MONDAY TO FRIDAY 
NBC/Super Charnel: FT Busi- 
ness Today 1330; FT Business 
Tonight 1730. 2230 

MONDAY 

NBC/Super Channel: FT 
Reports 1230. 

TUESDAY 

Eunonews: FT Reports 0745, 
1315, 1545, 1815. 2345 

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY 

NBC/Super Channel: FT 
Reports 1230 

Sky News: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News: FT Reports 0430, 
1730; 











16 


BRETTON 

WOODS 


Hall a century 
after its sign.* 
ing in New 
Hampshire in 
1944, the Bret- 
ton Woods 
Agreement on 
currency con- 
vertibility and 
exchange rate stability holds 
its mystical allure. 

In the industrial countries 
today - with resurgent proteo 
tionism, recurrent over- or 
under-valued exchange rates, 

high unemp loyment, and slow 

growth - people talk wistfully 
of recapturing the spirit of 
Bret ton Woods. It seems a 
noble quest. But is the 1944 
agreement the right starting 
point for international mone- 
tary reform today? 

After 1945, currencies in 
western Europe and Japan 
remained inconvertible and in 
inflationary disarray. Trade 
remained bartered, narrowly 
bilateral, and so limited that 
output in Europe and Japan 
stayed unnaturally depressed 
well into 1948. Furthermore, 
either because its mandate was 
incorrectly drawn or its finan- 
cial resources were too slender, 
the International Monetary 
Fund did nothing to relieve 
this currency and the 

post-war economic crisis. 

The great rescue operation 
was engineered not by the IMF 
but by the Marshall Plan, from 
mid-1948 through early 1952, in 
Europe, and by the 1949 Dodge 
Plan in Japan. By 1951, the vir- 
tual elimina tion of inflation in 
western Europe and Japan was 
followed by 20 years of stable 
(some would say unduly rigid) 
ggehangn rates based an the 
US dollar - whose pu rchasing 
power over tradeable goods 
also remained constant until 
about 1968. What can be called 
the “Marshall-Dodge fixed-rate 
dollar standard” led a healthy 
life until 1971, when President 
Nixon insisted that the dollar 
be devalued, to avoid dJsmflat- 
ing the American economy. 

Both the Marshall and Dodge 
plans Hp ppndft d an direct dollar 
assistance from the US. But 
surprisingly strong conditions 
- the elimination of fiscal defi- 
cits and inflation, and the step- 
by-step elimination of currency 
restrictions on current trade - 
were attached. In Europe, the 
capstone was the European 
Payments Union (EPU), estab- 
lished in September 1950 for 
securing full multilateral clear- 
ing among central hanks of 16 
western European countries. 

To ensure credibility, the US 
dollar was enthroned both as 
the unit of account and means 
of settlement within the EPU. 
European governments 
declared exact dollar parities, 


Recapturing 
a lost spirit 

Ronald Mc Kinn on in the first 
in a series on the 50th 
anniversary of Bretton Woods 



to facilitate clearing Interna- 
tional payments and secure a 
“nominal anchor" for their 
war-ravaged financial systems. 
Similarly, Japan fi™d the yen 
at 360 per dollar, as anchor for 
its successful disinflation in 

1949- 50. To maintain their dol- 
lar parities, European coun- 
tries and Japan subordinated 
their domestic monetary policy 
to their fixed exchange rates. 

In what ways did the 

1950- 1970 Marshall- Dodge stan- 
dard differ from the spirit of 
Bretton Woods? Marshall- 
Dodge imposed a common 
monetary standard on the 
industrial countries at the out- 
set of the policy of fixing 
exchange rates. Participating 
industrial countries experi- 
enced roughly the same low 
rate of price inflation in trade- 
able goods - about l per cent 
per year - as the US. 

Why deny that the negotia- 
tors at Bretton Woods in 1944 
wanted a stable common mone- 
tary standard, or at least 
wished for something similar 
to Marshall-Dodge? Keynes, 
who dominated the thtnki ng of 
the conferees, drew up the 
Bretton Woods articles to give 
each national gove rnment flex- 
ibility in choosing its own mac- 
roeconomic policy, to secure 
foil employment 


Remembering fa** failure of 
the international gold standard 
in the inter-war period, Keynes 
did not want to establish any 
common monetary standard. 
Nor, because of his concern 
with "hot” money flows in the 
1920s and 1930s, did he want an 
unrestricted world capital mar- 
ket He and his intellectual 
hears subscribe to the principle 
of national macroeconomic 
autonomy. After the war,- both 
Keynesians and monetarists 
rejected the idea that monetary 
autonomy be limited by inter- 
national obligations. 

H owever, the Bretton 
Woods negotiators 
did want to restore 
normalcy in foreign 
trade an current account Con- 
tinual exchange rate fluctua- 
tions, and prolonged misalign- 
ments that upset a country’s 
macroeconomic equilibrium, 
were to be avoided. A new par- 
value system restricted short- 
run exchange rate fluctuations 
within 1 per cent on either side 
of “parity”. Exchange parities 
would be easy to enforce as 
long as capital controls 
remained in place. With econo- 
mies insulated from each other 
on capital account, the main 
criterion for the IMF to agree 
exchange depreciation would 


be whether a country had an 
ongoing net trade deficit 

Thus did the negotiators of 
1944 Imagine they had recon- 
ciled the principle of national 
macroeconomic autonomy with 
limitations upon exchange risk 
in International trade. 

With hindsight (and Milton 
Friedman), we now know Infla- 
tionary national monetary poli- 
cies cannot sustain higher lev- 
els of employment But that 
was not the prevailing view at 
Bretton Woods in 1944. Despite 
its great success in practice, 
the "accidental" advent of the 
Marshall-Dodge standard was a 
conceptual anathema to most 
professional economists in the 
1960s and 1960s - with echoes 
to the present day. 

How does this potted history 
matter for reforming today’s 
international monetary sys- 
tem? 

First, because international 
rapjtai markets are now fatly 
open, a trade deficit no longer 
warrants an exchange depreci- 
ation - which the old spirit of 
Bretton Woods encouraged. 

Far mrample, the nngnmg US 

current-account deficit has 
encouraged the American gov- 
ernment to cajole the Japanese 
into two serious episodes of 
yen overvaluation - in 2966-87 
and again in 199894. In both 
cases, a slump in private 
investment, because of the 
exchange overvaluation, 
caused a sharp downturn in 
the Japanese economy with no 
reduction in its current 
account surplus. 

Second, as with the Mar- 
shall-Dodge standard, securing 
more stable exchange and 
interest rates must proceed 
triiwifampraisi y with the inter- 
national harmonisation of 
national monetary policies. 
The keystone must be a low or 
zero rate of inflation in a broad 
basket of tradeable goods. 

A second-best technique for 
providing a common nominal 
anchor is to turn the job over 
to a single dominant country 
whose own internal price level 
has been relatively stable. In 
some unusual historical cir- 
cumstances, this may work 
well for a while. Yet any such 
asymmetrical standard 
remains vulnerable to upheav- 
als in the centre country. Far 
better to negotiate a felly sym- 
metrical agreement among 
hard-currency countries - like 
Japan and the US in the 1990s 
- for anchoring the price level 
of the group in a manner con- 
sistent with keeping nominal 
exchange rates stable into the 
Indefinite ftrture. 

The author is William Eberie 
Professor of International Eco- 
nomics at Stanford Univers it y 



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Joe Rogaly 


Ghosts of Labour past 



The world has 
turned. The 
British Labour 
party, founded 
by the trade 
unions, is no 
longer wholly 
their creature. 
This is about to 
be demonstrated, perhaps con- 
clusively, during the leader- 
ship election. It is a historic 
change. Some of us have long 
believed that Labour would not 
form another government until 
it maiifl itself as institutionally 
separate from the unions as 
the American AFL-CIO is of 
the Democratic party. In 
Britain we are nowhere near 
that happy state, but the man- 
agement of the party by power- 
mi trade union leaders has 
become so diminished as to be 
a mere irritant 
It did not seem like that in 
1992, when the late Mr John 
Smith was elected leader with 
heavy and visible union sup- 
port Progress was made at last 
year’s conference, when one- 
member-one-vote was adopted 
for the selection of parliamen- 
tary candidates, but it looked 
then as if the price Mr Smith 
paid - a speech appearing to 
offer the unions favourable leg- 
islation by a future Labour 
government - was too high. 
Now it can be seen that the 
most celebrated decision of 
that conference was worth the 
effort expended in engineering 
iL For the new method of vot- 
ing for a leader, Mr Smith’s 
successor, is closer to genu- 
inely democratic than any- 
thing in the party’s history. 

The electoral college is 
divided into three: Labour rep- 
resentatives in the Westmin- 
ster pa rH«mi»nt and the Euro- 
pean assembly; constituency 
Labour party members; and 
trade unionists who are also 
Labour supporters. Most, but 
not all of the 3.75m or so indi- 
viduals entitled to vote in the 
union section may make their 
decisions without benefit of 


guidance or pressure from 
union leaders. Of Britain's big 
five unions only the T&G - the 
Transport and General Work- 
ers - has recommended a can- 
didate. Mrs Margaret Beckett. 
Yet all five will send Labour’s 
standard ballot forms to mem- 
bers' homes. These will be 
accompanied by a leaflet pro- 
duced by Labour party HQ, 
with e ach candidate allowed a 
photograph short election 
address. The last page will 
invite recipients to join the 
party as direct members. 

With fond memories of my 
long service in direct mail, that 
sounds c on v in cing to me. Yet 
if Labour is turning postal- 
democratic, it is the Tories 
who must take some of the 
credit. Two ■ 


companies, the 
Electoral 
Reform Soci- 
ety’s ballotting 
subsidiary and 
Unity Security 
Ballotting Ser- 
vices, will scru- 
tinise, and 
count the 
returns. They 
have had much 
practice as a 
result of Con- 
servative legislation obliging 
unions to consult their mem- 
bers every other afternoon. 

Nothing is perfect The T & 
G will stuff its envelopes with 
a statement urging recipients 
to vote for Mrs Beckett It may 
regret that When tts general 
secretary, Mr Bill Morris, was 
elected there was a 24 per cent 
return. Perhaps with all the 
publicity there may be 30 per 
this timn That suggests 
that only the most politically 
aware in the T&G will partici- 
pate. There is no telling how 
much those who do bother to 
mark their ballots and send 
them in the reply-paid enve- 
lopes win be swayed by their 
union’s leaflet as against all 
the other influences on their 


The new method 
of voting for Mr 
Smith’s successor 
Is closer to 
genuinely 
democratic than 
anything In the 
party's history. 


some bias in favour of Mrs 
Beckett. There had better he a 
bit or Mr Morris and his exec- 
utive will be seen to be as 
politically impotent as in truth 
they have become. 

The big five will account for 
something like three-quarters 
of the vote. Some of the 
t jjnaiiar unions have stated a 
preference for Mr John Pres- 
cott- One is the railway union, 
the RMT, to which Mr Prescott 
offered strong support yester- 
day. H will conduct a full 
postal ballot of 80.000 of its 
members. Another, the GPMU 
printers' rminn, will hold work- 
place ballots for 97,000 political 
levy-paying members. Natu- 
rally it expects a higher turn- 
out, perhaps 75 per cent. We 

' can be sure 

that these vot- 
ers will be 
influenced by 
the union offi- 
cials who dis- 
tribute and col- 
lect the papers, 
and may even 
watch while 
the choice is 
made. 

Such wrin- 
kles aside, the 
national pri- 
mary that is now being con- 
ducted should produce a result 
that reflects the views of 
Labour supporters, or at least 
those interested enough to 
vote. Some expect that propor- 
tion to reach 40 per cent, on 
the grounds that the winner 
may well be the next prime 
minister. Whatever the figure, 
the process will set union 
influence where it belongs, on 
the margin of party affairs. 
Sooner or later the union block 
vote at party conferences, 
already diluted, will be swept 
away, thus concluding the 
divorce between party and 
“movement”. Everyone should 
now be able to see that coming. 

What a pity, then, that none 
of the three leadership candi- 


fhfnking J but there has to be dates - not even Mr Tony Blair 


_ has yet had the courage to 
say directly and in trenchant 
terms that the BMT does no 
service by bringing its mem- 
bers out on strike. In 1964. 
when an unofficial stoppage 
shut down London’s under- 
ground railway during election 
week the then Mr Harold Wil- 
son described it as “intolera- 
ble". and went on to win with 
the greatest swing to Labour 
sine® 1945. In the current, offi- 
cial dispute the RMT has done 
everything by the book. The 
management has played the 
government's band badly. 
There is some sympathy for 
the railway workers. That Is 
still no reason for Labour’s 
putative leaders to be mealy- 
mouthed about on action that 
causes great inconvenience to 
many people. 

Such fearfulness of the spint 
of union power past is Old 
Labour talking. It still burbles. 
When the BBC went on strike 
on the night of the Euro-elec- 
tions the party ruled that none 
of its leaders should cross 
picket lines. That was plainly 
absurd. Over the weekend Mrs 
Beckett contrived to show that 
she was more sympathetic to 
secondary picketing, that 
scourge of the 1970s, than 
either of the other two candi- 
dates. Mr Prescott neatly 
stepped aside from that one, 
but he was not so robust as Mr 
Blair, who has made it clear 
that his programme Cor labour 
legislation would not start 
with a clear-out of the Thatch- 
erite union laws. 

The ideal Labour leader 
would replace the habit of sup- 
porting all official strikes with 
a less predictable approach. 
Yet Mrs Beckett and Mr Pres- 
cott evidently believe that they 
need the unions’ approval. 
That may be why Mr Blair, the 
likely winner as leader, and 
the most robust on unions, has 
declined to state a preference 
for deputy. He must find it dif- 
ficult to choose between a mill- 
stone and an albatross. 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Letters transmitted should be dearly typed and not hand written. Please set fax for finest resolution 

No evidence of need for London council 


From Dr Graham M Lomas. 

Sir, Would international 
business be more likely to 
come to London, and that 
already here stay, if the capital 
had an elected council for the 
whole of the built-up area 
grounded in the English sys- 
tem of local government? The 
study London Factor (“Lon- 
don's image at risk, says 
report”, June 16) argues pre- 
cisely that. The report says 
financial service companies 
feel London is drifting aim- 
lessly in the absence of such a 
cormefl, and is destined to lose 
out to other cities. I framed 
and did the interviewing for 
the study, but feel oblige! to 
dissociate myself from this 

Interpretation. 


Businesses with a high cleri- 
cal component reduce 
operations in London because 
costs and managerial complexi- 
ties are too great - things a 
London-wide council would not 
mitigate. Foreign banks that 
leave do so because London is 
over-banked. International 
companies remaining have 
seen London became more 
important recently to global 
business strategies revised in 
the wake of the worldwide 
recession; but costs and poten- 
tial returns will loom ever 
huger in future in their loca- 
tional d erisi ons and may lead 
some to move business away. 
A London-wide council would 
have little impact on either foo- 
ter. Those interviewed felt 


London’s standing specifically 
vis-a-uis Europe would on the 
whole not be significantly 
reduced by financial centres 
and a central bank developing 
on the mainland - though 
again, some work would inevi- 
tably move that became more 
suited to a European location. 

Problems mentioned by busi- 
nesses interviewed - man- 
power. training, transport, reg- 
ulations - could be noticeably 
reduced through, higher quality 
decision-making and adminis- 
tration in existing local, cen- 
tral, and institutional govern- 
ments. None raised would 
appear to be better addressed 
through a new local authority 
for (heater London. 

It is important - unquestion- 


ably - to sustain London’s 
image and its unique status 
among world metropolises. 
Special, and highly flexible, 
arrangements have to be found 
to bring real strategic thinking 
regularly to bear on big Issues, 
Systems of city-wide govern- 
ment elsewhere, and continual 
failure in London’s past to 
orchestrate land-use planning 
successfully as between hous- 
ing transport and jobs, show us 
what to avoid, not what to 
repeat A London-wide local 
authority has been superim- 
posed on the London Factor 
study. I fear it does not emerge 
from the evidence. 

Graham M Lomas, 

49 Smithamdoums Road, 

Parley, Surrey CR8 4NJ 


Vodafone 

valuation 

From Mr Patrick Earle, 

Sir, Be Lex’s comment on the 
relative valuation of Cellnet 
and Vodafone (Securicor, June 
13). The valuation would be 
more comparable if it took 
account of two important fac- 
tors. First, the differing levels 
of debt in the companies; Voda- 
fone haft more than £lO0m of 
net cash while Cellnet has sev- 
eral hundred million pounds of 
capitalised finance leases. 

Second, unlike Cellnet, Voda- 
fone has substantial interna- 
tional investments which could 
be worth aim. If these factors 
are taken into account Cellnet 
wold be valued at 65 per cent 
of Vodafone's UK operations, 
rather than 45 per cent con- 
tained in Lex. The higher per- 
centage seems a more reason- 
able level; as Lex pointed out 
Vodafone has double CeUnefs 
cash flow and operating profit 
Patrick Earle, 
vice president, 

J P Morgan Securities, 

SO Victoria Embankment, 
London EC4Y0JP 


Concorde, but not Cleveland fallacy 


From Mr Bruce Stevenson. 

Sir, Once again your Leader 
writer devalues a well-argued 
examination of the failings of 
the Local Government Review 
(“Councils and the Concorde 
fallacy", June 14) with toe rep- 
etition of the myth that there 
is case for abolishing a conur- 
bation- wide authority in the 
Teesside area because Cleve- 
land County is "unpopular”. 

• Fact Results of Mori opin- 
ion polls for the Local Govern- 
ment Commission show the 
level of community identity 
with Cleveland Is above aver- 
age, higher, for example than 


Idncolnshire, Dorset, Wiltshire 
and Gloucestershire - and 
twice the level of Avon with 
which you seek to bracket us. 

• Fact When Harris Opin- 
ion Research surveyed local 
people on behalf iff the Insti- 
tute for Local Government 
Studies it found satisfaction 
levels with Cleveland County 
services among the highest 
recorded for any local author- 
ity in recent years. 

• Fact Cleveland County 
Council has not argued for its 
own survival, but for the recre 
ation of a Teesside-wide 
authority, with a separate 


authority for HartlepooL The 
Mori survey figures show thal 
the identity level of Teessiders 
with a Teesside-wide authority 
is one of the highest recorded 
anywhere in the country. 

You are quite right to com- 
pare this ill-fated Review with 
the "Concorde fallacy". But 
please - stop repeating the 
“Cleveland Fallacy." 

Bruce Stevenson, 

chief executive and treasurer, 

Cleveland County Council. 

PO Box IQO, 

Municipal Buildings, 
Middlesborough, 

Cleveland TSl 2QH 


IT will end generations of exclusion for deaf 


From Stuart Ethermgtan 

Sir, Your excellent supple- 
ment an Telecommunications 
in Business (June 15} omits to 
mention one group of ritiTens 
who have more than most to 
benefit from the Information 
technology revolution, 

Britain's 7.5m deaf and hard 
of hearing people stand to 
profit from a great break 


through in communications, 
especially as video-phone tech- 
nology becomes common-place 
in the home and office. For 
deaf people - whose first lan- 
guage is British sign lan g ua ge 
- video phones allow indepen- 
dent access to the telephone 
network for the first time, as 
curren t trials at the RNID are 
proving. 


The IT revolution, which is 
changing all of our lives, will 
end generations of exclusion 
and second-class status for 
deaf people in Britain. 

Etherlngton, 

Chief Executive, 

Royal National Institute for 
oeaf People, 

105 Gower Street, 

London WClE BAH 


No conflict in investigating accountants becoming receivers 


From 5b- Derricks Woolf. 

Sir, 1 refer to Andrew Jack's 
article, "Debate Reopens on 
Accountants' Insolvency Role" 
(June 16) which refers to Mr 
John Jackson's letter pub- 
lished the same day. Mr Jack- 
son “launched an attack on the 
process by which Investigating 
accountants appointed by 
banks are permitted to take on 
the receivership of the busi- 
ness they examine". 

I am a partner in Levy Gee, 
chartered accountants. We 
cany out a si gnifirenit nnmher 
□f viability reports on behalf of 
a good cross-section of lending 
bankers. Each assignment 
commences with an agreed let- 
ter of engagement which 
makes dear that our duty of 


care is owed to the lending 
h anker and not to their cus- 
tomer. A recent legal judgment 
stated that it is not possible to 
owe a duty of care to more 
than one party. 

A bank will not appoint a 
receiver if there is a viable 
alternative and any Insolvency 
practitioner who recommends 
this course, simply to improve 
his fees, will soon see his work 
flow dry up. 

Lending hanks are relnctant 
to lose customers. What is 
rarely emphasised by banks 
and accountants is the sub- 
stantial amount of diligent 
work each does in rescuing 
companies and businesses. 
About half of the cases we han- 
dle do result in a receivership 


appointment. Therefore, the 
other half do not and 1 hope 
benefit from our involvement 
promoting a better communi- 
ration and understanding 
Between banker and customer 
Costs and efficiency is an 
important factor. Where receiv- 
e . rsl S p 5 avoidable, it is 
ctearly cheaper and more effi. 
aent to have the same firm 
conduct toe viability asS 
ment and the recelverehto 

They will be famtiiai- 
company's situation ^ 

nfog”. A fresh receiver wouW 
have to waste valuahioT* 
tanging itself up to^^i Sv 

and a IJg 


do n °t agree with Mr 
Jackson that there may be 
some dangerous conflicts of 
interest where he perceives 
~}“ l a reporting accountant 
exercise considerable eco- 
S?® 1 * P?wer. Consider the 
of the surgeon or barns- 
“ 5 recommend surgery 
° r Proceedings to trial is it 
envisaged that they would 
nave to say “sorry, please go to 
another surgcotv'barrister as I 

nnw a - pePceived economic 
power m pursuing ynnr case 
“ d therefore you need to go to 
somebody else to take toe mat- 
ter further". 

{^Tiek $ Woolf. 

Levy Gee. 
f Wiffinore Street. 

Um dan WlHoHQ 


* 


i 






FINANCIAL TIMES TUESDAY JUNE 21 1994 


FINANCIAL TIMES 

Number One Southwark Bridge, London SEI 9KL 
Tel: 071-873 3000 Telex: 922186 Fax: 071407 5700 

Tuesday June 21 1994 


The left in 
disarray 


Tine French Socialists' decision to 
ditch Michel Rocard Is hardly sur- 
prising, after their miserable score 
in the European election. But it 
would be sad if this marked the 
end of Mr Rocard’s political 
career. For 20 years he has been 
the leading spokesman within the 
party for the arguments of reason, 
of economic as well as political 
liberalism, and indeed of reality. 
He has been handicapped through- 
out by President Mitterrand's ill- 
concealed, and on the whole CL 
deserved, resentment 

In pure politics Mr Rocard was 
never Mr Mitterrand's equal, and 
the fact that he has failed to 
revive his party's fortunes after its 
landslide defeat in last year’s par- 
liamentary elections can hardly be 
dented. It seems that Mr Jacques 
Delore may have a better chance 
of success. But it is also clear that 
the crisis of French socialism, 
indeed of socialism Europe-wide or 
even worldwide, goes well beyond 
questions of personality. 

The existence of such a crisis Is 
only loosely connected to the foil 
of communism in eastern Europe. 
It was already visible well before 
1989. The central doctrine of 
socialism, namely collective own- 
ership, had been seen to be ineffi- 
cient More modest goals - the 
levelling of economic differe n tials, 
the welfare state, the right of 
workers to organise and defend 
their interests collectively within 
the workplace - had long since 
been accepted in principle by most 
European conservatives. The lat- 
ter challenged them only at the 
paint where they they became dif- 
ficult to defend: where redistribu- 
tive taxation put too great a bur- 
den on the taxpayer, where 
deficit-financed public spending 
threatened national bankruptcy 
and hyperinflation, or where trade 
union power became a serious 


obstacle to economic growth. 

In Britain and Germany, during 
the 1980s and early 1990s. social- 
ists have foiled, repeatedly in their 
attempts to regain power, and 
have been driven to accept more 
and more of their opponents* poli- 
cies. In France and Spain socialist 
parties were able to remain in 
power through most of this period, 
bat only because voters trusted 
them to blunt the sharper edges of 
a policy shift towards economic 
freedom, which the socialists 
themselves acknowledged as nec- 
essary and were prepared to carry 
out But in the recession of the 
early 1990s they found themselves 
unable to deliver on that promise, 
and are now paying the electoral 
price. Fairness might seem to 
require that British and German 
socialists should now be given a 
chance But, on last week's show- 
ing, Gorman voters may not be 
ready to take that risk come Octo- 
ber, while British voters will not 
have the opport un ity to do so for 
at least another two years. 

The European left may find 
encouragement in the efforts of 
President Bill Clinton to elaborate 
a new agenda on such issues as 
healthcare and welfare. But that 
has to be tempered by awareness 
that espo using policies similar to 
those of Mr Clinton would involve 
a shift to the right for greater 
than most European social demo- 
crat parties are prepared to con- 
template. In much of western 
Europe, the left has ceased to exist 
as a dear alternative to conserva- 
tism or neo-liberalism. That may 
be a good tiling in as much as the 
old left’s economic policies were 
misguided and ruinous. But in as 
much as democracy is supposed to 
be about choice it is rather trou- 
bling. Disgruntled voters may be 
tempted, as in Italy, to plump for 
the unknown. 


Agency dangers 


The creation of executive agamies 
has been one of the successes of 
the Conservative reforms of the 
civil service. More than 60 per 
cent of civil servants now work in 
more than 80 agencies, providing 
services such as the payment of 
social security benefits, the manr 
agement of prisons and the testing 
of heavy goods vehicles. By allow- 
ing managers to focus on the 
delivery of a particular service, 
the agency approach has improved 
the efficiency and effectiveness of 
government services. 

The success of agencies has also 
encouraged managers to adopt a 
more entrepreneurial approach to 
the businesses they manage, seek- 
ing ways of developing and 
expanding them. In some cases, 
the result has been to squeeze the 
agency's assets - for example, by 
encouraging more foreign tourists 
bo visit historic royal palaces. In 
others, new business has come 
from “ value-added” services at 
premium prices, such as testing 
heavy goods vehicles on operators' 
premises to improve fleet utilisa- 
tion. 

There are dangers, however, in 
this new entrepreneuriahsm If it 

brings agencies into competition 
with the private sector. This is 
what appears to be happening at 
HMSO. the agency that publishes 
government Legislation such as 
acts of parliament, statutory 
instruments and codes of practice. 
Legal publishers have complained 
that HMSO is using its power to 


license the reproduction of crown 
copyright texts to freeze them out 
of the market. 

For example, HMSO will no lon- 
ger license the reproduction of 
some Legislative source materials 
that are available under its own 
imprint And it is dana ndm g roy- 
alties at foil commercial rates for 
electronic publishing, while itself 
entering the business through 
joint ventures. The publishers say 
that the more restrictive approach 
dates from the conversion of 
HMSO to an agency in 1988. 

In any other line of business, 
such behaviour would soon foil 
foul of the competition regulators. 
Yet as part of government, agen- 
cies are not covered by the legisla- 
tion on restrictive practices. While 
the Office of Fair Trading would 
investigate a complaint, there Is 
no legal remedy it could take to 
stop anti-competitive behaviour 
against a crown organisation such 
as an agency. 

HUSO'S new approach to licen- 
sing crown copyright materials 
indicates that stronger supervi- 
sion is needed to stop agencies 
using their privileged position to 
damage potential competitors. II 
government bodies are encour- 
aged to trade and compete for 
business, they should be subject to 
the same regulatory regime as the 
private sector. And if agencies are 
in a position to compete with the 
private sector, they should be at 
the top of the list for early privati- 
sation. 


Competitiveness 


luch as the US and Europe worry 
bout their ability to compete, 
tiey lead the world in the busi- 
iess of studying competitiveness, 
adeed, the issue has been so 
Eteoslvely analysed recently that 
here might seem little left to say. 
to its credit, yesterday's report on 
he subject by Unice, the Euro- 
ean employers' federation, man- 
ges usefully to advance the fron- 
lers of the debate. 

As well as making predictable 
alls for more flexible labour mar- 
ets, lower social costs and action 
i help small business. Unice 
mb races a more radical idea. It is 
iat the governments to which the 
fport is addressed are mainly 
ssponsible for the problems they 
re being called on to solve. The 
nly way out, it suggests, is to 
iduce permanently their tradi- 
nnal roles, particularly In respect 

f public expenditure. 

Unice's argument is not just 
iat public spending is becoming 
lcreasingly difficult to finance, 
ut that much of it retards, rather 
lan enhances, productive eco* 
omic enterprise. It urges more 
mbitious privatisation and rigor- 
us appraisal of future govem- 
ient investment, to ensure that it 
antributes to economic welfare 
ad does not squander resources 
a activities which could be per- 
»rmed more efficiently by a com- 
etitive private sector. 

Sucb notions, though dear to 
ritish ministers, are far less 
‘idely shared elsewhere in 


Europe. Among many continental 
governments, EU policymakers 
and left-of-centre politicians gener- 
ally, there remains a strong con- 
viction that increases in public 
expenditure are self-evidently a 
good thing, while cuts are almost 
always economically and socially 
regressive. 

They would do well to read the 
World Bank's latest World Devel- 
opment Report, published this 
week. It mounts a devastating 
case against governments’ record 
as investors, citing widespread 
evidence of waste and economic 
distortion, particularly in infra- 
structure projects. True, Europe’s 
performance has been superior to 
that of most developing countries. 
However, that makes no less valid 
the Bank’s central argument that 
public investment focuses too 
much on increasing the stock of 
infrastructure for its own sake, 
and for too little on the quality of 
services delivered. The unambigu- 
ous message is that if the invest- 
ment is to serve productive ends, 
the state must make way for mar- 
ket forces. 

That conclusion will not be easy 
to sell politically in Europe, nor to 
Implement. Unice's report, at 
least, offers a starting point. It 
also provides timely support to Mr 
Gttnter Rexrodt, Germany's eco- 
nomics minister, who says he 
wants to use his government's EU 
presidency in the second half of 
this year to lead a crusade in 
favour of deregulation. 


I n the centre of Syntagma, or 
Constitution Square, in 
Athens there Is a big black 
hole, emitting a 24-hour 
whine. It might work as a 
symbol for those among Greece's 
European Union partners who 
regard its economy as a hopeless 
case and its government's policy as 
little more than sustained pleading 
to maximise revenue from the EU 
budget 

But the bole is, in feet, a main 
locus of the ElTs most ambitious 
regional and structural aid plan, 

agreed at the 1992 Edinburgh sum- 
mit Overall, this plan hap funds of 
Ecul56bn (£120-12bn) for 1994-99, 
more than double the Ecu64bn 
spent on regional policy in 198948. 
Its admirers claim this is, in real 
terms, more than twice the US-fi- 
nanced Marshall Plan which helped 
reconstruct post-war Europe. 

Syntagma Itself is the hub of 
what win be the Athens metro - 
two 17.6km lines from north-to- 
soutb and east-to-west, to help tum 
the traffic-clogged and polluted 
Greek capital into a modem city. 
The permanent whine comes from 
the ventilator in the tunnels, which 
are progressing slowly towards the 
metro's completion in 1996, about a 
year behind schedule. 

It is the largest European Union 
structural aid project and, with the 
completion of the Channel Tunnel, 
one of the biggest public works pro- 
jects currently under way in 
Europe. The two lines are expected 
to cost Ecu2-4bn, and if additional 
branches are added later, another 
Kcu2bn will be needed. 

The EU provides SO per cent of 
the finance as a grant, a further 40 
per cent comes through long-term 
loans from the E uropean Invest- 
ment Bank (EIB), and the Greek 
government puts up the 10 per cent 
remnant 

It is the grandest example of what 
the EU calls “cohesion’', transfer- 
ring money through the Union bud- 
get from the rich heartland of 
Europe to the poor or run-down 
regions and the periphery, in an 
attempt to pull up their income to 
average EU levels and make them 
attractive to investors. 

At the Corfu summit of EU lead- 
ers on Friday and Sa turda y, hosted 
by the current Greek presidency of 
the Union, there will be a good deal 
of grumbling from the main net 
contributors to the EU budget - 
Germany, the UK, France and the 
Netherlands - about whether the 
redoubling of the “cohesion” effort 
is worth it 

The German finance minister Mr 
Theo Waigel has warned several 
times this year that Bonn, by for 
the ElTs main paymaster, feds hard 
done by. In March, the UK foreign 
secretary Mr Douglas Hurd told a 
Brussels audience that some 
BFi80Qm a day went to Greece as 
part of “very large flows” of EU 
resources, “but there are too many 
reports of that money being 
wasted”. 

But is it? What is the quality of 
this spending, and does it, as 
in t en de d, pull up the average per 
capita income of the poorer coun- 
tries and regions? 

The only completely comparable fig- 
ures for regional and national devel- 
opment within the 12 measure per 
capita income growth, against an 
EU average of 100, between 1980 and 
1991 - too early to register the lull 
impact of the 1989-93 cohesion 
effort 

Of the four poorest or “cohesion" 
countries, Spain saw average earn- 
ings per head rise from 71 to 80 per 
cent of the EU average; Ireland rose 
from 60 to 72 per cent; Portugal 
from 53 to 60 per cent; while Greece 
slipped back from 52 to 49 per cent 
Such bald figures do not provide 
the answer, however. They incorpo- 
rate Germany’s eastern Lander for 
the first time, thereby raising every- 
body else's average. They mask 
regional slumps from the Lorraine 
to the Portuguese Alentejo. Most of 
all, there are no reliable figures 
which disaggregate how much of 
this growth might have occurred 
anyway. 

In Brussels, and in the govern- 
ments in Spain, Portugal, Greece 
and Ireland, there is general assent 
that these countries have been able 
to modernise, particularly their 


Is EU structural aid a black hole of 
funding from Brussels, or an effective way 
of raising incomes, asks David Gardner 

Poverty trap 
with an exit 


EU structural spending? value for money? 



' * ' V % OfGNP ' 

.•{Ecubfty"' 

~ f -V i p t r”. i .f 



(Ecu bn] 


;Gorto**nv 


: fjSSjw* 


W* : - ' 


GNP per head 
(J=U ov&agOr=10(# 


! “■ » 



ytoo ... .. •• '• y 

^ ry’V \i " v: 


-7 ' o. 2- .4;- e. 

9oi*c* TJwHowi Inattnte of tntara*^ AnftsfflpwW) gmvmaMrjr, : . 



114 

,07 _ _ Net contributors 
729 Net recipients 

106 


road and railway Infrastructure, 
much foster as a result of EU help. 

An examination of EU structural 
and regional spending in the poorer 
member states, particularly Greece 
and Spain, suggests some prelimi- 
nary conclusions. 

• The quality of Brussels spend- 
ing, on projects and programmes, is 
generally high; 

• The volume of spending, the 
Brussels revenue collection system, 
and the legal requirement that 
national and regional governments 
“match” EU finannn with their own 
ftmds in varying proportions, puts 
additional pressure on the budget 
deficits, not only of donor, but of 
recipient, countries; 

• A great deal of EU cohesion 
money flows back to donor coun- 
tries, whose construction and engi- 
neering companies are bestplaced 
to carry out funded projects. 

The EU aid is run from Brussels 
with parsimony and detail by the 
regional policy commissioner Mr 
Bruce MiUan, the former UK 
Labour government’s Scottish sec- 
retary. Ms DG16 directorate of 
about 240 is headed by a Spanish 
Basque, Mr Eneko Landaburu, one 
of the Commission's most highly 
regarded director-generals. These 
two have often been ruthless in 
witholding or transferring money 
from projects they regard as dubi- 
ous or lacking rigour. 

One senior DG16 official says, in 
reference to southern Italy: “My 
impression is that much of this 
money went to the Mafia", referring 
to the average EculSbn a year flow- 
ing to the Mezzogiomo in 1989-83, 
only 14 per cent of which, however, 
came from the EU- 

Brussels has withheld nearly 
Ecu3bn from southern Italy, appor- 
tioning some of it to projects else- 
where in the country that can be 
monitored regularly. Partly as a 
result, Rome now requires regions 
seeking national funding to comply 
with EU criteria on regional aid. 
Using outside auditors, DG16 says: 
“We can generally ensure the big 


projects are dean.” The Commis- 
sion's antifraud unit is, however, 
currently Investigating a hydro- 
electric project in Lazio where there 
is a dam hut no water. 

In Greece in 1989-93, Brussels 
withheld the bulk of financ e ear- 
marked for large projects, regarding 
them as inadequately thought 
through and badly managed. 
Scarcely 80km of motorway was 
built, for instance, because Brussels 
objected to the Greek practice of 
parcelling out small stretches to dif- 
ferent companies, which regularly 
underbid to secure the contracts, 
and thereby often foiled to complete 

There is little 
doubt contractors 
from donor countries 
get big shares of 
~ ebi 


the business 
generated 


the link with other stretches. 

The money was instead spread 
around smaller regional pro- 
grammes, reducing internal income 
disparities, but not boosting 
Greece’s economy relative to its 
partners. 

But a sea-change in Greek govern- 
ment attitudes in 1991 - which the 
current Socialist administration 
appears to endorse - has meant 
that a good deal of the 1994-99 
money, worth about Ecul9bn to 
Greece, will go to projects such as 
the Athens metro and an EctoLSbn 
550km gas pipeline being built from 
the Bulgarian border to Athens. 

The metro is the showcase for the 
change. Commission pressure for 
strengthened management brought 
in Bechtel, the US civil engineer, to 
set up the Attika Metro company, 
overseen by a six-strong board of 
Greek business figures. Bechtel has 
a contract for EcolBSm to manage 
the project A 25-company consor- 
tium known as Olympic Metro, led 


till 

4 e. e 10- 


by Siemens of Germany and Interin- 
fra of France, is doing the building. 

Squabbling within the consor- 
tium, and recurring rich archaeo- 
logical finds, are the main source of 
hold-ups, which the Bechtel hwm 
riinminB as tn significant in compari- 
son to, say, the Channel Tunnel, or 
metros they have been involved in 
building from the US to Taipei 

Mr Bill Stead, the Bechtel man 
put in as chief executive officer of 
Attika Metro, says: “I’ve never 
received less public pressure, or as 
close to zero as you can get.” 

Lack of a similar integrated man- 
agement structure has helped to 
hold up the half-built Greek gas 
pipeline, where the project man- 
ager, PLE, a subsidiary of Ruhr 
Gas, has been "bolted on” to more 
dispersed contractors, rather than 
integrated on the Attika Metro 
model 

Moreover, having contracted with 
Russia for the gas, Athens, in the 
Brussels view, has yet to decide 
fully what it will be used for. The 
Commission believes the project 
needs a low pressure network for 
domestic gas users to be viable, and 
is proceeding cautiously with fund 
disbursement. "This could be the 
first [EU-funded] cathedral in the 
desert” if it does not get such a 
network, one senior Brussels offi- 
cial warns. 

While successful projects leave 
something of lasting value, there is 
little doubt contractors from donor 
countries get big shares of the busi- 
ness generated. 

On the Athens metro, non-Greek 
companies supply everything from 
the tunnel boring machines 
(designed by Mitsubishi and assem- 
bled by Framatome of France), to 
the rolling stock (Siemens, AEG and 
GEC/AJsthom), and the signals and 
communications systems (Siemens 
and Alsthom). The factory which 
makes concrete segments for the 
tunnels was assembled in France. 
Inside it, only the labour and the 
cranes are Greek. One senior Attika 
Insider says German contractors 


Observer 


Czech this 
bitter brew 

■ fn the second world war, Brits 
grew accustomed to - if not exactly 
in love with - that culinary 
miracle, the powdered egg. But 
has anyone spotted the beer 
drinker’s equivalent of a doodlebug? 

The reason for asking is the news 
that somewhere in central Europe 
powdered beer will Boon be hitting 
the street It is being launched by 
Jan Oliva, a Czech brewer who 
hnfla from the land which gave 
us the original Budweiser. 

Oliva, like many Czechs, is keen 
to break into the Busman beer 
market but has been hindered by 
high transport costs. Hence his 
recipe for powdered beer. Far from 
feeling shameful at committing 
such sacrilege, Oliva stoutly 
defends his product “It looks like 
beer, It tastes like bear and it has 
a head, too," he says. It also has 
the big advantage of costing the 
equivalent of 8p a pint 

Initially he is selling 40 tons of 
beer powder to the Rushans. But 
who knows how long it will be 
before British pubs are ringing to 
the cries of a *^mt of your best 
powder. Landlord!” 


Rutting season 

■ Who is JIB Rutter, toe shadowy 
member of the prime minister’s 
Downing Street policy unit, who 


satin an. a Railtxack board meeting 
last Friday? Surely she is not the 
same Jill Rutter who, as a Treasury 
civil servant, was seconded to the 
team which dreamed up the poll 
tax? Many regard her as one of its 
real architects. 

If they are one and the same, 

tom her presence behind the scenes 

at Rail track strengthens the 
suggestion of the late Robert Adley 
MP: that rail privatisation is a “poll 
tax on wheels”. 


Mail shot 

■ The last word in high-tech 
communications snobbery. A 
colleague's fag machine has 
received a letter from a US 
corporation, ending with the 
following apology: “Our company 
does not have an Internet address, 
but you can fox a message at .. 


Stone turned 

■ Argentina's President Carlos 
Menem rarely misses a chance to 
emhplTigh his image of playboy, 
sportsman, racing car-driver and 
hcfcndbbea: with glitterati. 

So when Oliver Stone sought 
his support for a film version of 
the musical Evita, he agreed to 
open the doors of the Casa Rosada 
presidential palace - the famous 
pink house in Buenos Aires that 
was the seme of Juan and Eva 
Feron’s greatest triumphs 40 years 
ago. 



*We couldn't find a chairman so 
we settled for a mascot* 

But he soon realised that the 
rank and file of his Pmmist party 

- which still worships the Perons 

- abhorred the notion of a Yankee 
film-maker desecrating the image 
of Evita. 

The president is even more 
interested in getting reelected next 
, year, so he just as quickly pulled 
out again. Bitte tears from Oliver. 


Missing inaction 

■ Mohammed NashashM, 
Palestine’s new finance minister, 
was not in his office yesterday. 

Not surprising really, as he doesn't 
have an office, a telephone, or a 


secretary. He may or may not - 
depending on who you talk to - 
have a home in Jericho, the 

flarig lin g capital of Palest inian 
self-rule. 

Mohammed Shaker, the only man 
officially allowed to talk to the 
press on behalf of the Palestinian 
administration, said the minister’s 
whereabouts were unknown. 

He may have gone to Nablus, 
or east Jerusalem, or perhaps was 
indeed somewhere in Jericho. 

Nastaashlbi has said that his 
finance minis try would be the 
“most important department” of 
the new Pales tinian administration. 
If he had a secretary, that message 
could probably be passed on to his 
fellow officials. 


Tea-tray travel 

■ Now that the Thais have found 
a purpose for redundant Thames 
river-buses, perhaps Britain's rail 
commuters might follow their 
practice regarding rail networks. 

In provincial Thailand, people 
use rail tracks for their personal 
transport, improvising their own 
rolling stock from wheels placed 
under a tea-tray-sized platform. 
Standing, they punt their way 
briskly down the line, with the help 
of a long pole. 

How many have not yearned to 
be their very own train driver? 
Imagine the advantages: fitness 
addicts would take to it like ducks 
to water. 

It might take a day to get into 


17 

supply even the wire mesh for the 
concrete segments, first "setting the 
specifications to ensure the Greeks 
can't compete fairly”. 

The imported content of the total 
project is estimated by Attika to be 
75 per cent “I would say that most 
of the D-marks go back,” one senior 
officer says. A Commission study 
shows that four out of every 10 
Ecus for Portugal - which gets 
roughly the Ecul9bn Greece gets - 
flows back to donor member states. 

The EU Dows strengthen recipi- 
ent countries' capital accounts, but 
worsen their trade accounts and fis- 
cal position because governments 
have to put up public money to 
qualify for the EU finance. 

In Spain, the biggest nominal 
recipient of about Ecu38bn in 
1994-99. a senior Treasury official 
says that "the synergy” or the cohe- 
sion idea, “once translated into 
Spanish, means that we buy from 
Siemens". 

Apart from the import content of 
the high-speed train (AVE) from 
Madrid to Seville, this is an exag- 
geration; Spanish construction com- 
panies are not only competitive at 
home, but currently Involved in 
building the Toulouse metro. 
Spain's particular gripe is different. 

As column Tour of the table 
shows, the poor countries make 
above-average gross contributions 
to the EU budget, which is raised 
more from VAT receipts than on 
the basis of relative prosperity. 
Even though they are net winners 
after EU spending is distributed, 
gross outlays are made by the cen- 
tral government and much of the 
EU inflow returns to local authori- 
ties, leaving a hole in the central 
budget “This is a diabolical mecha- 
nism for our budget deficit” the 
Madrid treasury official says, and 
obliges governments to keep public 
spending high. 

So for the EU has provided only 
about 10 per cent of Spanish infra- 
structure spending, rising to 15 per 
cent in 1994-99, but this official fears 
the EU flow could still Induce 
spending on unnecessary projects. 

EU rules channel most funds 
towards the poorest areas, to try to 
iron out regional imbalances rather 
than reinforce relative comparative 
advantage in more developed areas 
such as Madrid, Valencia, Catalonia 
and the Basque Country. 

The Pta600bn Madrid-SeviUe AVE 
link - to which the EU contributed 
more than Ecu400m - fits in with 
this policy, even though starting 
with a link from the French frontier 
to Madrid, which Spain will largely 
have to fund itself, would appear 
more logical. 

T he benefit of this and 
new road links to 
Spain's depressed south 
has yet to translate into 
significant investment, 
much less jobs. But as Mr Jose Bor- 
rell, Spain's minister of public 
works, says: “You may not have 
industry in Andalusia and Extre- 
madura, but you have the chance of 
putting some there; without roads 
and rail links you haven’t” 

The link runs through Castilla-La 
Mancha, the land of Don Quixote, 
where Ciudad Real, a slumbering 
backwater now only 50 minutes 
instead of nearly three hours from 
Madrid, has become a dormitory 
town for the capital and alternative 
investment site for companies based 
there. “It’s been a sort of unex- 
pected miracle ” says Mr Jose Bono, 
Socialist president of the regional 
government 

In his office in Toledo - once the 
Emperor Charles Vs bedroom - Mr 
Bono says EU funding amounting to 
40 per cent of his budget is bringing 
the region into the 20th century. 
Roads, electricity and telephones, 
modern sewage plants and more 
rational irrigation, new schools and 
hospitals, have drawn in more pri- 
vate investment since Spain joined 
the EU in 1966 than in the previous 
half-century. 

He and. other Spanish officials 
acknowledge that Spain might have 
grown foster by funding its more 
dynamic regions, but only at the 
cost of “disarticulating” the coun- 
try. "That debate has been resolved 
for us by the European model,” Mr 
Bono says, with gratitude and feel- 
ing. 


the City from Tunbridge Wells. 
But on Wednesdays at least it 
would avoid sitting in traffic 
jams... 


Ex- directory 

■ So you want the number for 
Heathrow airport? Readers or 
British Telecom’s latest telephone 
directory are requested to “see 
Airports’’. 

Chi arrival at this page in the 
directory, they are redirected to 
“see our display advertisement”. 
Then toe trail goes cold. 

The same fote awaits anyone 
wanting to discover the number 
for Gatwick and Stansted airports. 
Of course, pay 45p to directory 
inquiries and toe number is yours 
for the asking. 


Keep your station 

■ The news that Airtours, which 
specialises in ferrying the sun and 
sangria crowds around the 
Mediterranean, is encouraging 
customers of its new cruise ship 
venture to dress for dinner, reminds 
Observer of an old tale of a wealthy 
scrap metal merchant who took 
his wife on a round-the-world 
cruise. 

Two days out of Southampton, 
toe retired couple were invited to 
dine at the captain's table. 

“Certainly not!” snapped the wife. 
“We didn't pay all that money to 
eat with the staff" 



18 


brother. 


TYPEWRITERS • WORD PROCESSORS 
PRINTERS • COMPUTERS • FAX 


FINANCIAL TIMES 

Tuesday June 21 1994 


MU-WASJ 



Carmakers’ discussions to focus on co-operation in Europe 

Mazda reopens talks with Ford 



By MIeblyo Nakamoto In Tokyo 
and John Griffiths bi London 

Mazda, the Japanese carmaker, 
yesterday said negotiations lad 
resumed, after a year's suspen- 
sion, on possible European 
co-operation with Ford, the US 
carmaker. 

Ford has a 245 per cent stake 
in the Japanese company and 
earlier this year strengthened its 
representation on the Mazda 
board. It had been expected that 
Ford and Masria might renew dis- 
cussions on the possible produc- 
tion by Ford in Europe of Mazda 
badge cars for sale in European 
markets. 

However, Mazda said no spe- 
cific projects or details of 
co-operation had been decided, 
and Ford of Europe executives 
insisted that no fresh initia- 


tives had been launched. 

Senior Ford executives said 
earlier this year that European 
production for Mazda would be 
one of the priority issues to be 
examined, as a result of the 
closer strategic relationship 
being developed between the two 
groups. 

The prospect of Mazda being 
drawn into closer collaboration 
with Ford has also been rev iv ed 
following the “gtobaHsaficoi" pro- 
gramme announced several 
weeks ago by Ford. 

Ford is restructuring its 
operations into “world" car divi- 
sions in which Europe is taking 
the main responsibility for 
Horfgning an d developing small 
and medium-sized cars for pro- 
duction worldwide. 

Mr Alex Trotman, Ford chair- 
man, has held out the prospect of 


Mazda becoming part of these 
“world” operations. 

European collaboration talks 
between Mazda and Ford were 
suspended in March last year 
after the two companies decided 
that a co-operative deal being dis- 
cussed at that time was not to 
cither's advantage. 

Cooperation between Mazda 
and Ford then was considered 
within a certain framework and 
focused on a specific car model, 
Mazda said. For that particular 
model, the companies decided a 
deal was not at tract i ve. 

However, talks have restarted 
on a different basis and a variety 
of options are likely to be dis- 
cussed, including joint venture 
manufacturing and own-equip- 
ment manufacturing in which 
Ford would make cars to be 
sold by the Japanese car com- 


pany with the Mazda badge. 

Mr Yoshihiro Wada. president 
of Mazda, however, denied specu- 
lation that M g! wia will commis- 
sion Ford to assemble «rnau pas- 
senger cars in Europe at Ford's 
UK yn anpfartnrrng - plaTtf 

The Japanese car company, 
which has seen its European 
sales battered by the high yen, 
has been eager to find a way of 
manufacturing its cars within 
Europe. 

“The European market follows 
the US market in impo rtance to 
Mazda, so local sourcing is cru- 
cial,” MiwHa said 

The company, which has also 
seen sales in Japan slump, does 
not intend to set up manufactur- 
ing an Its OWll, as its market in g 
capacity in Europe would not 
support a foUscale independent 

fflami f afftiT ri ng plant. 


Supreme 
court backs 
unitary tax 

Continued from Page 1 


the method embraced by the US 
federal government by inter- 
national tax treaties, the court 
said California’s use of the 
method did not infringe on Con- 
gress’s sole right, under the US 
constitution, to “regulate corn- 
mace with foreign nations, and 
among the several states”. 

Legal experts said the decision 
showed the court's determination 
to leave matters of policy up to 
Congress, even when, as in the 
Barclays case. Congress has indi- 
cated its stance only by rejecting 
administration requests to legis- 
late a gainst unitary tar. 

California last year passed a 
new tax law which essentially 
removed compulsory unitary tax- 
ation by allowing companies to 
choose instead a “water’s edge” 
assessment, in which only 
income within the US is taxed. 

California governor Pete Wil- 
son's budget for the financial 
year which starts on July l had 
counted on a favourable Supreme 
Court ruling allowing the state to 
collect about $G00m in past tax 
assessments during the next 12 
months. 

Earlier estimates by the state 
bad put the amount of money at 
stake at more than $4bn. 


South Korea offers talks as 
move towards first summit 


By John Burton in Seoul 

South Korea proposed a 
working-level meeting with 
North Korea on June 28 yester- 
day as an initial step in arrang- 
ing the first s ummit between the 
leaders of the divided Korean 
peninsula. 

In Washington. President Clin- 
ton said there were “hopeful 
signs” that a Hash over North 
Korea's nuclear programme 
could be averted, but cautioned 
that Pyongyang's offer to freeze 
the programme had to be veri- 
fied. 

“If it’s going to be frozen, then 
clearly that is grounds for 
talking, but we have to know 
what the facts are, so well be 
attempting to determine that.” 
Mr Clinton said. 

The US continued efforts to 
line up support for sanctions 
through a UN Security Council 
resolution in spite of weekend 
reports that the proposals had 
been suspended. US officials were 
consulting their Russian counter- 
parts and said “we are being very 
cautious” about the proposed 
freeze. 

North Korea’s response to the 
South's proposal will provide an 
early indication of the sincerity 
oflast week’s offer by the North’s 
President Kim Il-sung to meet 


Clinton hopeful of averting clash 
over North’s nuclear programme 


Seoul signals end to curbs on 
Hyundai .. Page 5 

President Kim Young-sam with- 
out any preconditions. The work- 
ing-level miw»Hng will riiflmuR the 
time ami place of the summit. 

Mr Lee Hong-koo, the South’s 
deputy prime minister for unifi- 
cation, said: “Results should be 
produced in the near future so 
that this preparatory contact 
does not drag on or pose prob- 
lems in procedure agenda- 
setting as in past contacts. The 
sooner the summit occurs, the 
better.” 

Other government officials cau- 
tioned that it might, fcalcp several 
months to prepare for the meet- 
ing. The Seoul bourse reacted 
positively to the summit pro- 
posal, with tiie general share 
index rising by L76 pea* cent to 
94230. 

A summit would guarantee 
that South Korea will have a role 
in resolving the North Korean 
nuclear dispute and complement- 
ing possible North Korean talks 
with the US and the Interna- 


tional Atomic Energy Agency an 

in ter national n \\ftear inspections, 
the foreign ministry in Seoul 
said. 

The South Korean president 
said his main s ummit goal would 
be to secure agreement on 
mutual nuclear inspections 
between the two Koreas, as prom- 
ised in their 1991 non-nuclear 
pact “It is very important for the 
South and Noth to make mutual 
inspections in the end,” Mr Khn 
said. 

Disagreements over the issue 
led to the collapse of contacts 
between Seoul and Pyongyang in 
late 1992. The North refused the 
South’s demand for inspections 
of suspected nuclear facilities, 
which would be more intrusive 
than those requested by the 
IAEA. Foreign ministry officials 
predicted that inter-Korean talks 
leading up to the summit would 
progress in tandem with pro- 
posed discussions between North 
Korea, the US and the IAEA. 

That would prevent the North 
from using the summit as an 
opportunity to disrupt Seoul’s 
dose cooperation with Washing- 
ton on the nuclear issue. 


Steel subsidies battle to go to European Court 


Continued from Page l 

owned companies in Italy, Spain, 
Germany and Portugal 

The association has asked the 
court to rule that the aid be 
suspended fwmwrifateiy until the 
court has reached a final judg- 
ment on the legality of the subsir 
dies, a process that could take 
two to three years. 

British Steel said it was acting 
because it had no other means 
remaining to express its dissatis- 
faction about European steel sub- 
sidies. “We cannot get the politi- 


cians to address the problem, so 
we are forced to go to the court,” 
Mr Brian Moffet, chairman and 
chief executive, said yesterday. 

The company’s assault appears 
to be a high-risk strategy, as it 
cannot be guaranteed victory 
even if, as Mr Moffat said, 
“the arguments are basically 
with us". 

But British Steel made clear its 
aim was to stop any further aid 
by using the Italian and Spanish 
subsidy approvals as test cases. 

If British Steel wins. Commis- 
sion nfffcriflis would have a prece- 


dent to help them turn down 
future requests for state aid. But 
Mr Moffat hopes the case will 
cause member states “at least to 
look more than once" at using 
Article 95 of the treaty, which 
allows state subsidies to be paid 
to companies but only after 
unanimous consent from the 
Council cf Ministers. 

The Commission insisted yes- 
terday it bad acted legally under 
Article 95 of the treaty. 

British Steel made its own deci- 
sion. to begin the action, but it is 
understood that the UK govern- 


ment was consulted. The Depart- 
ment of Trade and Industry said 
it “understood the frustration 
which lyw driven some efficient 
unsubsidised private sector com- 
panies to take this independent 
action”. 

British Steel's move coincided 
with its announcement of pre-tax 
profits of £80m (J 122 m) for the 
year ended April 2, compared 
with a £149m loss a year earlier. 
The news helped the company's 
shares buck the trend in a 
sharply faTHnp stock market, ris- 
ing 5%p to 138p. 


FT WEATHER GUIDE 


Europe today 


A cold front will bring overcast skies and rain to 
the British Isles and Norway. Sweden wiD start 
with sunny spefe, but cloud wm Increase, 
followed by rain. Finland wiU have frequent 
sunny spells. The Benelux and north-western 
France wiU be partly cloudy wHh only a small 
risk of light rain over the northern regions. 
Germany, Poland, the Czech Republic and 
Slovakia wffl have sunny spells. Sunny intervals 
and thunder showers are likely In the Alps and 
northern Italy. Central and southern France and 
Italy. Portugal and Spain win be sunny. Thunder 
showers win develop over the Balkans, while 

Greece and Turkey will be sunny. 

Five-day forecast 

A high presire area win keep the continent 
and most parts of the British Isles mainly dry 
until the end of the week However, ran wifi 
persist in Scotland Over the weekend, the 
likelihood of thunder showers wlfl increase, 
especially over France. Temperatures wQI 
gradually rise to well above normal over 
western Europe. Scandinavia will be cloudy with 
some outbreaks of heavy rain, although on 
Friday a small high pressure area win bring 
sunny spelts. 



TODAY’S TEMPERATURES 


r _ - Warn front te M. Gold feint A A. Wind spaed to KPH -. **• 

Sfluaflon at 12 Tamperriures maxtown for day. Forecasts by Mvtao Gonsdt ol tfie Netherlands 


Abu Dhabi 

Accra 

Algfare 

Amsterdam 

Athens 

Atlanta 

B. Aires 

BJwm 

Bangkok 

Barcelona 


Maximum 
Celsius 
sun 3S 
shower 29 
an 29 
cloudy 21 
fair 33 
6*r 36 

fair 18 
ram 19 
rain 32 
am 27 


Beta 


Serin 
Bermuda 


CJiagan 

Cano 


shower 
rain 
shower 
» 
Wr 
cloudy 
rain 
fair 
sun 
cloudy 
sun 


Cape Town cloudy 


31 

Caracas 

fa* 

27 

Faro 

aim 

27 

Madrid 

SWI 

33 

Rangoon 

rain 

28 

17 

Cardiff 

rain 

18 

Frankfurt 

Ur 

27 

Majorca 

shower 

28 

Reykjavik 

shower 

11 

31 

Casablanca 

aim 

24 

Geneva 

mm 

26 

Mate 

sun 

33 

Rw 

Wr 

28 

28 

Chicago 

atm 

30 

Gibraltar 

aw 

29 

Manchester 

rafn 

IS 

Romo 

mm 

28 

29 

Cologne 

Ur 

25 

Glasgow 

rain 

17 

Mania 

shower 

32 

S. Fracc 

Ur 

20 

18 

Dakar 

Ur 

28 

Hamburg 

doudy 

23 

Melbourne 

doudy 

15 

Seoti 

sun 

31 

31 

OaSdft 

fair 

34 

1 Inlnfc ilil 

nasna 

bfr 

22 

Mexico Cfty 

fat 

22 

Singapore 

shower 

31 

23 

DeH 

Ur 

40 

Kong Kong 

rain 

29 

kfianri 

thund 

32 

Stockholm 

doudy 

24 

31 

Bubal 

aim 

38 

KonoMu 

fair 

31 

Man 

fair. 

30 

Straoboug 

fair 

28 

21 

DubBn 

rain 

18 

btstbd 

thund 

31 

Montreal 

doudy 

25 

Sydney 

doudy 

18 

38 

DtAiovnSc 

sun 

31 

Jakarta 

Ur 

31 

M08COW 

doudy 

IB 

Tangier 

sun 

23 

13 

Edinburgh 

rain 

18 

.Jersey 

doudy 

17 

Munich 

shower 

27 

TeiAvtv 

mm 

33 



Lufthansa, Your Airline. 

Lufthansa 

German Airlines 


Karachi 
Kuwait 
LAngafes 
Las Palmas 
Lbna 
Lisbon 
London 
Luumg 
LV 


fair 
sun 
ft* 

Ml 

cloudy 

Ml 

shower 

fatr 

fair 

fair 


33 Nairobi 
42 Naples 
21 Nassau 
25 New York 

20 Nice 
25 Mcosia 

21 Oslo 
25 Paris 
27 Perth 
23 Prague 


Ur 

Ml 

fair 

fair 

Ml 

Ml 

rain 

tat 

fair 

SUI 


25 Tokyo 
29 Toronto 
32 Vancouver 

29 Venice 

28 Vienna 

30 Waeaw 

21 Washington 

26 Wdngton 
17 Winnipeg 

29 Zurich 


thund 

sun 

arm 

tlumd 

fa* 

sun 


26 

29 

22 

29 

30 
25 


Mr 32 

rah 12 


sun 

fair 


29 

24 


THE LEX COLUMN 


Steeled for recovery 


Since British Steel’s profits were more 
or less in line with expectations. Its 
heroic 4 per cent rise in yesterday’s 
sony equity market must have been 
due to the doubling of its dividend. 
But investors may be optimistic if 
they tfrfok soch generosity is a harbin- 
ger of things to come. Quite apart 
from fhp fact the payout is cov- 
ered only L7 times, the recovery will 
present new challenges for British 
Steel which may limit the room for 
dividend growth. As long as there are 
no real signs of the capacity problems 
in Europe being resolved, the next 
d ownturn promises to be as brutal as 
the last The company must position 
itself to survive. 

The primary task is to reduce its 
depenttoncy on European markets. 
The planned investment in Tuscaloosa 
is clearly part of such a strategy, but 
it will mean an increase in capital 
spending which has been held down 
during the recession. British Steel’s 
balance sheet again contains net cash, 
but it survived the recession as well as 
it did only thanks to the substantial 
«ash endowment with which it was 
privatised in 1988. It will need to main- 
tain that balance sheet advantage 
throughout the recovery. 

European revival should see British 
Steel generating handsome amounts of 
wish its UK plant, though, is already 
operating at between 90 and 95 per 
cent of manned capacity. More capac- 
ity could be created with only rela- 
tively modest spend on bottlenecks, 
but g i v en its complaints about over- 
supply in Europe, it would look odd 
for British Steel to add more produc- 
tion. For now the recovery looks likely 
to be frit more in prices rather than 
volume. To restore its peak dividend 
and cover it twice, British Steel's earn- 
ings would have to rise fivefold. That 
may take longer than the market 

thtntos 

UK equities 

It will be cold comfort to investors 
that yesterday's sharp foil in UK equi- 
ties was brought about by nan-domes- 
tic jitters. The main trigger was Fri- 
day's rise in the US commodities 
index , which fuelled inflationar y fears 
and savaged bond markets. There is 
also little comfort in the fact that UK 
equities fell less far than con tinental 
markets. The FT-SE 100 index dropped 
through the 3fi00 mark with few signs 
cf institutional buying. Trading was 
thin, with most of the action in the 
futures market Though it is now 
hards- to argue that equities are am- 


FT-SE Index: 2971.1 (-51.3} 


JMttab-Stael ‘ . 

Sbera price retathm to the' 
FT-S&WAS-SharehTCtBX 

110 n 



SQtnxc FT QnpHtB . 

valued on fundamentals, institutions 
are unlikely to move in until the mar- 
ket fitahilfaes. 

The main hope remains that shares 
will be carried higher as the strength 
of the recovery in corporate earnings 
becomes apparent. But the higher 
bond yields rise, the greater the scope 
for disappointment on this score too. 
Profits will notonly be constrained by 
higher borrowing costs; the increased 
cost of capital could curtail invest- 
ment, leading to less robust growth 
thaw currently antiripated. So far, the 
only indications of interest rates curb- 
ing activity are in the housing market, 
where inflation forecasts are being 
downgraded. But the government’s 
need to plug its deficit seems likely at 
some stage to crowd out corporate sec- 
tor investment too. An anaemic recov- 
ery would damp inflationary fears and 
so could be good for bonds. But such 
an outcome would hardly be bullish 
for shares. 

Philip Morris 

It would be too simple to blame 
Marlboro Friday for the sudden depar- 
ture of Mr Michael Miles from Philip 
Morris. True, $12bn was wiped off the 
company's market value following its 
decision to cut the US price of its 
leading cigarette brand. Shareholders 
are understandably concerned that 
they will never see a decent return on 
that investment, but the shares had 
been driven up by margins an Marl- 
boro that were unsustainable. The big- 
ger cm t»p earlier, when the 

price differential between Marlboro 
and cheaper brands was widened 
despite failing market share. 

Since Mr Miles took Charge in 1991, 


though, the bind was partly of his own 
making, itu? episode underlines the 
fact that, despite its food interests, 
Philip Morris feces bigger challenges 
in tobacco. It is no coincidence that 
Mr Miles, who arrived with Kraft 
Foods in 1988, has been replaced by 
two tobacco veterans. The margin 
squeeze experienced across the US 
industry following Marlboro Friday is 
likely to change the competitive land- 
scape. BAT Industries' acquisition of 
American Tobacco in April may be a 
sign of consolidation to come. The 
introduction of a new federal excise 
tax also poses problems, although the 
sums iwng mooted are less fearsome 
than a few months ago. 

A gains t that background, Mr Miles’ 
advocacy of plans to split food from 
tobacco may have seemed like a dis- 
traction. While some measures to 
increase shareholder value would be 
welcome, squeezing the most from the 
tobacco business would be a good 
place to start 

Electra 

Eiectra Investment Trust has often 
been compared to 31, the venture capi- 
tal group on the point of being floated. 
But 3i’s advisers, who are to a nn oun ce 
the launch price tomorrow, will be 
hoping Investors do not take the anal- 
ogy too far. Not that there is any rea- 
son to complain about Electro's under- 
lying performance. Its interim results 
- in particular, the 11-6 per cent rise 
in net assets over the half year to the 
end of March - exceeded expectations. 
It is rather that Electra is now trading 
on a 17 per cent discount to net assets. 
The implied discount on its unquoted 
investments is even greater if its 
quoted investments are valued at aver- 
age market discounts. 3i is thought to 
be looking for a 13 per cent discount 

There are. of course, real differences 
between the two groups. £ invests in 
smaller companies, which are expec- 
ted to outperform larger companies at 
this stage iff the economic cycle. More- 
over, many of Si’s stakes are valued ou 
the basis iff naming s relating to the 
year to June 1993 or earlier. Since then 
profits will, in most cases, have moved 
ahead strongly. It could also be argued 
that Electro's discount to net assets is 
only so large because of yesterday's 
sharp fell in the equity market Its 
shares rose only 9p, despite net assets 
per share exceeding expectations by 
about 30p. The snag is that this point 
cuts both ways. 3i may have to accept 
a fractionally larger discount, given it 
is being floated on choppy waters. 


Handelsbanken 

Investment Banking 

Selected recent advisory assignments 



Stockholm 


London 


Helsinki 




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Daf creditors 

Bank cretfflars to Daf, the butch truckroaker ?'i 
which coB ap sad JnL1993, .have recen^ fcnt^j y- - ^ 
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20 



FINANCIAL TIMES TUESDAY JUNE 21 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Daf bank creditors likely 
to get full compensation 


By Ronald van de Krol 
in Amsterdam 

Bank creditors to Daf NV, the 
Dutch truckmaker which col- 
lapsed in 1993, have received 
nearly 90 per cent of what they 
were owed and are likely to be 
compensated in full 

A report by the Dutch receiv- 
ers said it was realistic to 
assume that Daf NV*s 11 bank 
creditors would receive the full 
FIT3&5in (S40Qm) claimed. On 
May 1. they had received 
FI 645.7m, or 88 per cent of the 
total, after three rounds of pay- 
ments. 

Daf sought protection from 
creditors in February 1993. It 
was later resurrected in 
slimmed-down form as Daf 
Trucks NV, a new company 
that excluded Leyland Daf. the 
former Dafs UK business. 
Shareholders in the old Daf NV 


Gas Natural 
completes 
Enagas deal 

By Tom Bums in Madrid 

Gas Natural, the Spanish 
domestic natural gas distribu- 
tor which is controlled by the 
partially-privatised Repsol 
energy and chemicals conglom- 
erate, has completed the 
delayed takeover of Enagas, 
Spain’s government-owned 
monopoly gas importer. 

The acquisition, priced at 
Pta51.Zim ($379m) for 91 per 
cent of Enagas, turns Gas Nat- 
ural into a leading participant 
among European gas compa- 
nies. 

The takeover had first been 
signalled nine months ago but 
had been delayed over pricing 
disagreements - the govern- 
ment had sought PtaSObn- 
Ptai20bn for the sale of Enagas 
- and by Repsol's insistence 
that it would not take on the 
burden of a pipeline that Ena- 
gas was constructing between 
Spain and the Algerian gas 
fields. 

To complete the deal, Enagas 
has put the Pta300bn pipeline 
project Into a separate com- 
pany that remains under pub- 
lic ownership and which Gas 
Natural has an option to buy 
in 2000. 


were left holding worthless 
shares. 

The money raised so far for 
bank creditors has been gener- 
ated mainly by the sale of 
assets owned by three Daf NV 
subsidiaries. 

These assets, which were 
pledged as collateral to the 
banks during Dafs financial 
crisis, have been sold to Daf 
Trucks. 

The second main source of 
money is the transfer of funds 
from the UK receivers of Ley- 
land Daf. 

Holders of a bond Issued by 
Daf NV in 1988 have lodged 
claims of FI 157m, and they 
have sought, so far unsuccess- 
fully, to win a share of the 
assets belonging to these sub- 
sidiaries. 

Dafs largest bank creditor, 
ABN Amro of the Netherlands, 
had received FI 294.6m of its 


claim of FI 32.6m by May l 
1994, the receivers' report said. 

Among the old DATs UK 
bank creditors, Lloyds Bank 
had received FI 48.5m out of 
FI 54.8m claimed, NatWest 
FI 37.8m out of FI 42.5m and 
Barclays FI 25.5m out of 
FI 28.8m. 

The receivers’ figures, pub- 
lished in an interim report, are 
exclusive of interest and facil- 
ity fees. 

The debts of the Daf Finance 
Group, the former Daf financ- 
ing arm, have been reduced, to 
FI 1.06bu from FI 1.86b n, 
reflecting the strategy of grad- 
ually selling the com- 

pany's portfolio. 

Foreign rather than domestic 
creditors have benefited so fer 
from these sales, but the final 
unravelling of the financing 
company's affairs is expected 
to take years. 


UK society may take 
new savers this month 


By Alison Smith In London 

Cheltenham & Gloucester 
Building Society is likely to 
announce before the end of the 
month that it is once again 
open to accept savings from 
new customers. 

Almost two weeks ago, C&G 
closed its doors to new cus- 
tomer deposits after the High 
Court reding the day before 
which barred the terms of 
Lloyds Bank’s SlJBbn ($28bn) 
agreed cash bid for the society. 

The society said then that 
this was a short-term measure 
to prevent people trying to 
make a speculative gain from 
the Lloyds offer. 

C&G said yesterday it would 
announce its plans for re-open- 
ing for savings when it was 
slightly further forward in its 
thinking in terms of under- 
standing the judgment. The 
society has sought to play 
down the financial impact of 
the closure. 

While the court ruling would 
not allow new depositors to 
receive a windfall benefit from 
the Lloyds offer, C&G said 
some potential customers 
might wrongly interpret the 
judgment in this way. 


Sir Donald Nicholls, the 
vice-chancellor, said in his rul- 
ing that C&G could not make 
cash payments to more than 
220,000 C&G investors who had 
been shareholding members of 
the society for less than two 
years. This would ™»kn it diffi- 
cult to win the necessary 
majority in fevour of the deal 
C&G’s emphasis that the 
move is for the short term only 
appears to suggest that it does 
not see closing the society to 
new members as a way of get- 
ting round the terms of the 
judgment, by raising the pro- 
portion of members of at least 
two years’ standing, and so - 
in theory - increasing the 
prospect of w inning the high 
majority pf investing members 
needed to support the deal 
Alongside its work on produ- 
cing a revised offer to put to 
members in the wake of the 
judgment, the society also has 
to take a decision shortly on 
whether to ask the Court of 
Appeal for leave to appeal 
against Sir Donald’s decision. 

If C&G seeks an expedited 
appeal it must launch the pro- 
cess within 28 days of the origi- 
nal judgment - before the end 
of lbe first week in July. , . 


Glaxo faces 
more ulcer 
drug patent 
challenges 

By Daniel Green In London 

The chaHenge to the world's 
best-selling drug, ulcer treat- 
ment Zantac, made by the UK 
company Glaxo, intensified 
yesterday when a second com- 
pany said it would launch a 
generic version of the drug at 
the end of next year. 

Canada's Novopbarm has 
applied to the US Food and 
Drag Administration (FDA) 
for approval to sell a version 
of Zantac, whose patent 
expires is December 2995. 

Glaxo said it may file a 
patent Infringements suit 
against Novophann. 

At stake are the $2bn a year 
revenues that Zantac makes In 
the US alone. Total Zantac 
sales are $&5tm a year. 

The active ingredient, raniti- 
dine, exists in two versions. 
The older Form 1 is patent 
protected until December 5 
1995 in the US but is unstable, 
says Glaxo. Zantac is made of 
Form 2 under patent protec- 
tion until 2002. 

In April Glaxo filed a law- 
suit against Geneva, a US sub- 
sidiary of Swiss drug company 
Clba, which like Novophann 
plans to market Form 1. It 
alleged infringement of Form 
2 patents in both the manufac- 
turing and the final product 

Mr Leslie Dan, president of 
Novophann, said that there 
were several ways of making 
ranitidine. Novopharm’s was 
different from that used by 
Glaxo and "we checked ont 
that there was no production 
of Form 2", he said. 

Novopbarm filed its applica- 
tion with tiie FDA cm June 10. 
If Glaxo takes legal action 
within 45 days of that date, 
the launch of the drug can be 
delayed for 30 months. 

Mr Dan said Novophann and 
Glaxo lawyers were in talks. 
He would not comment on 
whether Novophann had 
devised or would manufacture 
the Form 1 version. 

Novopbarm is still awaiting 
the outcome of court action 
surrounding Form 2*5 patent 
One of the company's argu- 
ments was that Form 1 could 
not be made without produc- 
ing Form 2, which therefore 
should not have separate 
patents. 


This onnouncemml appears as a maiUr of record only. 


Mjy 1994 



$2,5 00,000,000 

Revolving Credit Facility 


Managing Agents: 

Union Bank of Switzerland 

Bank of America NT & SA 

The Chase Manhattan Bank, MA. 

Chemical Banking Coip. 

Citibank, NA- 


Co- Agents: 

Sodetc Generate Banca Comma-dale Italians The Bank of New York 

The Bank of Tokyo, Ltd. Commerzbank AG Credit Lyonnais First Interstate Bank 

Lloyds Bank Pic The Sakuia Bank, Ltd. Westdentsche Landcsbank Girozentrale 

The Daf-Ichi Kangyo Bank, Ltd. The First National Bank of Chicago Royal Bank of Clsmada 


Managers: 

Drcsdnex Bank AG Australia and New Zealand Banking Group Ltd. 

Canadian Imperial Bank of Commerce Mellon Bank, N-A. The Mitsubishi Bank, Limited 
The Mitsubishi Trust and Banking Corporation Basque Paribas NationsBank of Geotgja, NA 


Participants: 

Shawmut Bank 
Banco di Napoli S.p A. 
Banque NatiooaJe de Paris 
The Datwa Bank, Ltd. 


Arab Bank Pic Banca Nazionalc del Lavoro S-p-A. 

Bank Austria AG Bank Brussels Lambert 

Continental Bank NA. Credito Italiano 

First National Bank of Boston The Fuji Bank, Limited 


Cautious steps in a new direction 

Andrew Hill outlines Cariplo’s plans to come to the stock market 


Gulf International Bank ILS.C. Harris Trust & Sav ing s Bank 

Bayerischc Hypotheken-und We disc 1-Bank AG The Industrial Bank of Japan, Limited 

Istituto Bancario San Paolo di Torino S.pA. Kredietbank N.V. Meridian Bank 

The Northern Trust Company PT. Bank Negara Indonesia The Sanwa Bank, Limited 

The Sumitomo Bank, Limited Svens ka Handelsbanken 

The Toyo Trust and Banking Co., Ltd. * United Jersey Bank 

United States National Bank of Oregon The Yasuda Trust and Banking Company Limited 


This transaction was structured and arranged by: 


Union Bank of Switzerland 



C ariplo, Italy's contender 
for tiie title of the 
world’s largest savings 
bank, looks the part Its head- 
quarters is one of the most 
imposing buildings in ce ntr al 
Milan and its chairman, Mr 
Sandro Mohnari. is of equally 
solid construction. 

This is just as wen, because 
from July u, Cariplo is hoping 
that investors will stump up as 
much as Ll,650bn ($lbn) for 
new shares in the hank , failring; 
it on to the stock market for 
the first time winre its founda- 
tion hi 1823. 

However. Mr Molinari. who 
launches a European invest- 
ment roadshow to promote the 
issue this Thursday, knows he 
will need to offer more than a 
firm ha ndshake and a wnlury . 
and a half of history to get 
potential Investors to open 
their cheque boobs. 

He took over as chairman in 
April after his predecessor 
stepped down facing corrup- 
tion charges. That allowed Mr 
Molinari, 61, to become the 
first fully-fledged hanker-chair- 
man of the Milan-based group. 
He joined Cariplo in 1954 and 
rose through the ranks. All his 
predecessors and their deputies 
were political appointees, 
mainly Christian Democrats. 

What is more, Mr Molinari 
knows that if his sales pitch 
fails flat this time, it will be 
particularly difficult to push 
through the sale of a second 
tranche of shares, in the form 
of a convertible bond issue 
expected before the end of this 
year. 

Cariplo Is the latest bank to 
take advantage of 1990 legisla- 
tion which allows public-sector 
banks - many owned by chari- 
table foundations - to restruc- 
ture and float up to 49 per cent 
of the capital of their banking 
operations. The two-stage issue 
should raise well over L2£00bn 
and reduce the Cariplo founda- 
tion’s stake in the bank to 
about 78 per cent 
With total assets of 
L150,893bn, and deposits of 
L122.536bn, the Cariplo group 
is bigger than the next five big- 
gest Italian savings banks put 
together. But analysts stress 
that it is a high-quality bank. 
In the fast-changing Italian 
h anking field It can no longer 
be compared only with small 
savings banks, they say. but 
counts as a full-service univer- 
sal bank, competing with, for 


Upto15% 

off electricity 


021 423 3018 

Powerline 



Italy** biggest banks* 

ToMaMisiL.niOM' '• ' Net eandngtf’’* 0- bn) 


Total assets (L .'OOO fan} 
200 San Patted Torino" 


7QQr 


Branches (TOO* 


/“"Hm •--- 

1 Rfesr 


TM - 300 


Souic«lSM«n«wrfiwwrta ' *jdixw*»Kt^u«l393 




T-A 02 


*Acgusted tar VWKters to tax 1 


\ tor comparison 


example, the newly privatised 
Banca Commerclale It al ia ns 
and Credito Italiano. 

Geographically, Cariplo - 
short for Cassa di Rispanrho 
delLe Provinde Lombards - is 
dependent on the wealthy 
Lombardy region, which 
accounts for some 70 per cent 
of the hank's 700 or so 
branches. But it has taken 
advantage of its knowledge of 
the savings bank sector to 
h iniri strategic alliances with 
its counterparts in other 
regions. 

By buying minority stakes in 
about 15 savings banks 
throughout the country, Cari- 
plo has gained access to a fur- 
ther 700 branches. Through 
these it can sell its insurance, 
fund management and mort- 
gage products nationwide. The 
group has bought a stake in 
imi, the recently privatised 
financial services group, rais- 
ing expectations that tiie two 
companies might link up in 
due course to offer home- 
grown competition to Medio- 
banca, the powerful Milan mer- 
chant hank. 

For now, analysts prefer to 
compare Cariplo with conser- 
vative counterparts such as 
Lloyds Bank in the UK - 
which has also concentrated 
on retail business, and hnks 
between hanking and Insur- 
ance - or Credit Agricole in 
France, which has a similar 
mix of businesses. 

They underline Cariplo’s 
cautious landing policy. The 
Milan hank was one of the first 
into the Italian personal loan 
market, picking its risks very 
carefully, while certain com- 
petitors launched themselves 
into business lending with 


ghandnn , and 81*6 OVeT-eSpOSed 

to big. bad corporate loans. 
Although unknown on interna- 
tional equity markets, Cariplo 
is recognised outside Italy as 
an issuer of high-quality debt, 
and has one of the best credit 
ratings among Italian banks, 
equal to that of the Italian 
republic. 

“We never looked for results 
at all costs, but gradual 
growth," says Mr Molinari, 
about the strategy he has 
supervised mice 1983 as deputy 
fthinf executive, chief executive 
and chairman. It is a strategy, 
which has brought results - 
group net profit last year rose 
■L2 per cent to L323bn - and 
the admir ation of analy sts for 
the straight-forward approach. 
“They’re very plain vanilla 
about their market," says one. 

T he bank is clearly upset, 
therefore, that its plain 
vanilla attitude should 
have got mixed up with the 
rather more exotic flavours of 
Italy's widespread corruption 
s candals . Mr Roberto Mazzotta, 
Mr Molinari’s predecessor, 
stepped down in February after 
Milan magistrates deepened 
their investigation into allega- 
tions of phoney property trans- 
actions involving the Cariplo 
pension fund. He has 
suspended himself from chair- 
manship of the bank's control- 
ling foundation, and is await- 
ing a decision on whether he 
will stand triaL 
His successor firmly rejects 
any suggestion that the affair 
will have knock-on effects on 
the bank or the fund. It is a 
personal, rather than corporate 
problem, says Mr Molinari. 
Moreover, he points out that 


Cariplo’s internal investiga- 
tion, aided by outside experts, 
produced no evidence that pro- 
cedures for valuing property 
had been infringed, or that the 
bank or pension fund bad suf- 
fered any damage. . 

As for the legacy of political 
control. Mr Molinari is ada- 
mant that “the structure of the 
bank and the staff of the bank 
were never politicised”. To 
underline his desire that the 
hank should remain apolitical, 
the new chairman has rebuffed 
Mr Umberto Bcssi, the strident 
northern politician, who has 
suggested that his federalist 
Northern League could now 
step into the shoes of the 
Christian Democrats and adopt 
Cariplo as the pet financial 
institution of a more autono- 
mous northern Italy. 

In theory, the League could 
achieve this ambition, if it 
were to consolidate political 
power in its northern heart- 
land, because directors of Cari- 
plo’s controlling foundation 
are appointed by local and 
regional Lombard authorities: 
These rules used to allow local 
parties to reward the faithful 
with boardroom seats, and 
direct the foundation’s statu- 
tory charitable contributions 
towards clubs and associations 
with party links. 

In practice, the League’s sup- 
port is wavering in the north, 
and in any case, local authori- 
ties have tended in recent 
years to nominate neutral 
directors, such as professors. 

If that means a Cariplo chair- 
man is free to manage the 
bank, then Mr Molinari’s satis- 
faction at rising from branch 
level to the top job will be com- 
plete. 



[This announcomenr appears as a matter of record only.) 


KLM 

Royal Dutch Airlines 

(Konlnklljke Luchtvaart Maatschappij N.V.) 

(A Netherlands Corporation) 


21,275,000 Common Shares 

(20 Netherlands Guilders Nominal Value) 

At a price per shore of 

NLG 44/USD 23% 

Joint Global Co-ordinators 


ABN MffiO Bank N.V. 


MarrU Lynch & Co. 


Advisor to KLM Royal Dutch Airlines 
MeeaPtarson N.V. 


The above shares were underwritten by the following group of International and United States 

Underwriters. 


ABN AMRO Bank N.V. 


MerrM Lynch International Limited 

DiBoij, Read & CoJnc. 


NatWest Securities Limited 


Credft Lyonnais Securities 


°!SSSSSS k Internationale Nederianden Bank N.V. 

Kieinwort Benson Securities Swiss Bank Corporation Rabobank NodeHand UBS Limited 


Merrill Lynch & Co. 


ABN AMRO Bank N.V. 


DBion, Read & Co. Inc. 


NatWest Securities Limited 

CSRrelBorton AImBjomJSoo, 

KWd *'fJ 252 ly, ‘Co. 1 — *F*»*C. J.P. Morgon Sand. Inc. 

fcmeWobb«,M )W Md 

Prudential Sacuritiealnccnpariited Smith Bmwy Slwanon Inc. W«lm™ Sd™*, * Co. 
Ad™*.™. AmhoW^SBI^,^,.^ RcbMWLBjhd * Co. Wm™ STcm^ 
J.C. Bradford & Co. Cowan* Co.np.ny Crowrt.Wo.dOKS Co. Items m, 

Ooml^hCjminh* Hm.Alb.nyCwpwrton 

G«rard Kteuer Itatthon A Co„ Inc ^ ^, gmwy Scon te*. 

EdwwdD. Jonos&Co. UMpmSmutitim. , nt CLJ. 

IsalltejonWoodV.-^ McOonjWiCcmp"-, Mow Inp. &°£^ lnyi he 

Tha Oteo Company Hp-taSmylno Th. Primnpal/Epph.. Gmrfo * To™-. ^ 

.R^nltecK^zi. RmchvPiM.RAmn.lnc. Rayonm. J™, * A^ctotm. tec. 

Th. RcbtenmRumphm, Company. Inc. Row,* Co. Scon * SWnstollom. he Stoplwolnc. 
StHcl.NtooUm&Compwy Soon a Co. Incorporated Whoat Hrat Butchor & SJaoar 

April, 1994 















a p I 


T3 ?■ 
•*•**?■ ' 
5 % i 


FINANCIAL TIMES TUESDAY JUNE 21 1994 


21 


INTERNATIONAL COMPANIES AND FINANCE 


High-speed steels group 
rolls toward flotation 


Kenneth 

Gooding 

examines 
Eramet’s plan 
for a year to 
remember 

T his is a year to remem- 
ber for Eramet, the 
French group which is 
the world's biggest producer of 
both ferro-nickel and 
high-speed steels. 

It has just put the finishing 
touches to a FFrZbn (8360m), 
five-year investment pro- 
gramme and Mr Tves Ram- 
baud, chairman pnfl chief exec- 
utive, says that, as long as 
there is no collapse in share 
prices, Eramet wifi be listed on 
the Paris bourse before the end 

of 1994. 

A meeting on June 15 marto 
the changes necessary to per- 
mit Eramet’s shareholders - 
ERAP, the French state hold- 
ing company, with 70 per cent, 
Elf Aquitaine of France and 
IMetal. the Paris-based indus- 
trial holding company, with 15 
per cent each - to reduce their 
holdings. 

Eramet has embarked on a 
series of roadshows and Mr 
Rambaud says he expects the 
first tranche, of np to 20 per 
cent the group, to be placed 
privately with European insti- 
tutional investors. 

Banque Paribas has been 
retained for this exercise 
which he hopes will be fol- 
lowed by full flotation In Paris. 
This would involve the present 
shareholders selling at least 
another 10 per cent of Eramet 
to the public. 

However, ERAP will still 
retain majority control of Era- 
met This, says Mr Rambaud, is 
to give comfort to the 2,000 
people Eramet employs in New 
Caledonia, the South Pacific 
island which contains the 
heart of Eramet's nickel 
operations. 

“The French government 
does not wish to give the 
impression it is ready to desert 
them,” he says. In all, the 
group employs 3,400. 

Dominating New Caledonia's 
economy is SLN (Socifite Metat 
lurgique Le Nickel), 82 per cent 
owned by Eramet SLN dates 
back to 1880 and owns nickel 
mines and a smelter on New 
Caledonia. Its new FFrflOOm 
Nfepoin-Kopfe mine was for- 
mally opened last month . 
While the mine was being 
developed, annual capacity at 
SIN’S smelter at Doniambo 
was boosted to 50,000 tonnes. 
Mr Rambaud says that by 
spending modestly to remove 
bottlenecks, its capacity could 
rise by 2,000 tonnes to 60,000 
tonnes 

Last year Eramet, ranked 
third among the world's nickel 
(as distinct from ferro-nickel) 
producers with 8 to 10 per cent 
of the market, lifted output 
from a depressed 40,750 tonnes 
to 46,310 tonnes. This year's 


I#*#?® 5 ** 

.rv N: 


■Ml- 





>i . ' .. '■.'itA/.V. ■■ 

v?:SvV .',j* i- :V 
Us‘ : i7.VWjvi 

Vh.l-5 . .r:£'.*K 

•xfi 


Tves Ra mb aud : hopes for Paris bourse listing before end of 1994 


output should be between 
48,000 and 50,000 tonnes. 

A long-term relationship 
between SLN and Nisshin Steel 
has recently been strengthened 
at the Japanese company’s 
request. By October Nisshin 
wifi have paid about FFr400m 
for 10 per cent of SLN and for a 
contract guaranteeing Nisshin 
10 per cent of SIN’S output at 
a fixed price. 

Mr Rambaud points out, 
however, that, although the 
Nisshin deal apparently indi- 
cates a value of FFr4bn for 
SLN, the supply contract con- 
fuses the arithmetic. 

Nickel operations contrib- 
uted 68 per cent of Eramet's 
total sales of FFr2.63bn last 
year. World rimumri for niricpl 
has been growing at more than 
2 per cent a year, driven 
mainly by its use in s tainless 
steel - a material for which 
annual deman d is growing by 
4Jt per cent 

Stainless takes 62 per cent of 
all the nickel produced but 
accounts for 80 per cent of Era- 
met's output Despite consist- 
ent demand , nickel prices last 
year were the lowest for 20 
years (with the exception of 
1987) because the market was 
distorted by a sudden surge in 
Russian exports to the west up 
from 40,000 tonnes a year in 
Soviet days to 120,000 tonnes. 


E 


ramet's sudden emer- 
gence as the world's big- 
gest producer of 
high-speed steels - which have 
a value four times as great as 
stainless steel - dates back to 
decisions in 1989 when, like 
other producers, it benefited 
from extraordinarily high 
nickel prices. 

The group decided to invest 
part of the proceeds in the New 
Caledonia expansion and mod- 
ernisation programme while 
beginning a search for a “sec- 
ond leg” or a logical industrial 
and geographic diversification. 
First it bought Commentryene 
in France in 1991 and quickly 
merged it with Kloster Speed- 
steel of Sweden. The total cost 
was FFrflOOm. 

Mr Rambaud says Eramet 
found that the French 


and Swedes can work 
well together. 

The high-speed steels busi- 
ness has prospered under new 
ownership and a unified inter- 
national marketing team is 
doing better than when Kloster 
and Commentryene were in 
competition separately. 

The steel operations use no 
nickel to make their metal - 
employed for such things as 
high-speed cutting tools. Era- 
met wanted to make sure it did 
not compete with its custom- 
ers, says Mr Rambaud. 

Last year Eramet was one of 
the few nickel or steel groups 
to remain profitable, if only 
just. It made net profits of 
FFri20m, down from FFr229m 
in 1992 when there was an 
extraord in ary gain of FFriOOm. 

More important, in Mr Ram- 
baud’s view, is that Eramet’s 
cash flow remained stable last 
year at FFr356m. The group’s 
balance sheet remains strong, 
with cash and near-cash of 
FFrl-3bn, compared with finan- 
cial debts of FFr635m. 

As the expansion programme 
has been completed, capital 
expenditure will come down 
from last year’s FFrSSlm (fol- 
lowing a record FFr6 14m in 
1992) to about FFrtOOm in 1994 
and even less next year. 

Mr Rambaud says the nickel 
operations are in good shape - 
the group has at least 40 years 
of reserves in New Caledonia 
and costs were reduced last 
year by 15 per cent to 1980 lev- 
els in real terms. 

Eramet last year could break 
even with the nickel price at 
32.78 to $180 a lb when the 
London Metal Exchange price 
averaged $2.40. 

Eramet is likely to use its 
cash to add a third industrial 
"leg". I, ike the high-speed steel 
operations, this will have to 
have technology and custom- 
ers with which the group’s 
management are familiar but 
does not compete with Era- 
met’s present customers. 

Mr Rambaud says that no 
list of likely candidates has yet 
been drawn up. He explains: 
“Our first priority is to arrange 
a smooth change in Eramet's 
shareholders." 


This unruuncenuTiz appears as a maxier of record tmi> 

y 

Vestel Elektronik Sanayi ve Ticaret A.§. 

US$ 25,000,000 


Medium Term Revolving Trade 
Letter of Credit Facilities 

(Phase V) 


Provided by 


Banca Popolare di Novara 

London Bunch 

Berliner Bank AG 

Loadoo Branch 

Credit Suisse 

Anglo'Romanian Bank Ltd 


Security Agent 

Credit Suisse 

London Branch 


Foreningsbanken AB 
Fokus Bank AS 
United Mizrahi Bank Ltd 
UMB Bank and Trust Company 


fcciliry Agent 

United Mizrahi Bank Ltd 

London Bond) 


Transactions initiated and arranged by 


MIZRAHI BANK 



United Mizrahi Bank Limited 

FINSBURY HOUSE, 23 FINSBURY CIRCUS, LONDON EC2M TUB. 
TEL- 071-628 TWA FAX; 071-5B8 3361. TELEX: 896654/5 UMB C, 


Majtm 


Banca del 
Gottardo in 
rights issue 

By Ian Rodger ki Zurich 

Banca del Gottardo, the 
Lugano-based bank specialis- 
ing in asset management, is 
p lanning to raise new ca pital 
through a rights issue of 
100,000 participation certifi- 
cates. 

Gottardo also said it was in 
talfca with Sumitomo Bmilr of 
Japan, which holds a control- 
ling interest in the bank, 
about its wish to convert all 
Its participation certificates 
into bearer shares in 1996. 

Conversion would mean that 
S umitomo would have to make 
an additional investment in 
Gottardo equity or see its 
holding diluted to under 50 
per cent 

Sumitomo holds 55 per cent 
of Gottardo’s voting bearer 
shares and 12.4 per cent of the 
non-voting participation certif- 
icates. This represents 44 par 
cent of the hank’s total equity 
capital. 


IBM unveils large 
disk drive products 


By Alai Cane 

International Business 
Machines yesterday announced 
a family of innovative, large- 
scale computer memories 
which it hopes wifi regain it 
the Initiative in the big 
drive business. 

The world's largest computer 
manufacturer invented disk 
storage more than 30 years ago 
but its revenues from storage 
systems have been declining, 
although it is still the domi- 
nant supplier. It is also facing 
fierce competition. 

IBM’s latest storage systems 
are designed for mainframe 
computers and feature high 
security and protection against 
failure. Called the Ramac 
Array Family, they use a tech- 
nology called Raid (redundant 
arrays of inexpensive disks). 
IBM claims the drives are the 
first high-end disk storage 
systems coupling high perfor- 
mance with fault frilftranpp 

A Raid system is a set of 


small low-cost drives which 
appears to the user as if it 
were a single, expensive drive. 
The IBM drives have been 
developed to the highest level 
of performance and reliability, 
known as Level 5. According to 
IBM, the new drives take up 
only one-third the Door space 
and use half the power and 
cooling of conventional main- 
frame disk storage. 

The technology involved in 
Raid drives, while simple in 
principle, is complex in prac- 
tice. Storage Technology has 
only just launched its own 
Raid system code-named Ice- 
berg after several years of 
delayed development 

"While other storage vendors 
have sought to develop 
systems aimed at high avail- 
ability or high performance, 
we have taken the lead in pro- 
viding what our customers 
need by providing both," said 
Mr BUI Nelson, director of mar- 
keting in IBM's storage 
systems division. 


FT CURRENCY 
EXCHANGE RATES 

supplied directly to your PC 

FINSTAT 

Electronic Currency Feed 

With FINSTAT, yon have direct access to the Financial 
Times currency tables - online or on disk. No more keying 
data into your system or clipping and archiving daily tables. 

FINSTAT delivers data the evening 
before it is pobSsbed in foe FT 

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This announcement appears as a matter of record only. 




»««*» 




Koninklijke PTT Nederland NV 

t Incorporated with limited liability in The Netherlands with its corporate seat in Groningen) 

Offer of 138,150,000 Ordinary Shares 
by the State of The Netherlands 
Offer Price NLG 49.75 per Share 


Globed Coordinator 

ABN AMRO Bank N.V. 


ABN AMRO BankN.V 


NIBStratnig Financial Markets 


Managed domestically in The Netherlands by. the, following 

Internationale Nederlanden Bank N.V 


Kempen & Co NV 


Bank Labouchere N V 


KBW Effectenbank N .V. 


E van Lanschot Bankiers N .V. 


Rabobank Nederland 


MeesPierson N V 
SNS bank Nederland NV 


Managed in the United Kingdom and the Republic of Ireland by the following 


Hoare Govett Corporate Finance Limited 
Barclays de Zoete Wedd Limited 


S.G.Warburg Securities 


Cazenove & Co. 


Nat West Securities Limited 


Kleinwort Benson Securities 


Managed outside The Netherlands, United Kingdom, Republic of Ireland. United States and Canada by the following 

CS First Boston 


ABN AMRO BankN.V. 

Kredietbank Securities N.V. 

Bank Brussel Lambert NV 
Jar dine Fleming 

Argentaria Bolsa 

DC BANK Deutsche Genossenschaftsbank 


Credit Lyonnais Securities 
Nomura International 

Daiwa Europe Limited 
Paribas Capital Markets 

Banca Comm erci ale I tali ana 
Enskilda Corporate 

Skandiiuvislui Rnskiloa Sunken 


Indosuez Capital 


Internationale Nederlanden Bank N .V. 


Dresdner Bank 

AklirfipurtL.+iaCi 

Swiss Bank Corporation 
Deutsche Bank 

Akniiipvrlbrhufi 

IJBS Limited 

Creditanstalt-Bankverein 
Generate Bank 
Istituto Mobiliare Italiano SpA 


Managed in the United Stales and Canada bylhefolhuring 

Morgan Stanley & Co. 

[uroqjarswl 


Lehman Brothers 
ABN AMRO BankN.V 

J.P. Morgan. Securities Inc. 
Smith Bamev Inc. 


PaineWebber Incorporated 


RBC Dominion Securities Inc. 
Merrill Lynch & Co. 

Salomon Brothers Inc 
Wood Giuidy Corp. 


Financial Adrisers 


To the Stale ofThe Netherlands 
NM Rothschild & Sons Limited 


To the Company 

Goldman Sachs International 


June .1904 


j 





INTERNATIONAL COMPANIES AND FINANCE 


Domos forms alliance in 
Mexico telecoms race 


By Damian Fraser • 
in Mexico CHy 

Grupo Domes, the private 
Mexican telecommunications 
company, plans to apply for a 
longdistance telephone licence 
In Mexico as part of an alliance 
with Grupo Fmandero Safin, 
Mexico's third largest bank, 
and a large international tele- 
phone carrier. Domos last 
week agreed to purchase 49 per 
cent of Cuba's national tele- 
phone company. 

Bell South already has an 
alliance with Domos, and it 
may he the international car- 
rier with which Domos is now 
negotiating. 

Domos and its partners plan 
to form a new subsidiary 
which will invest more than 
|4bn in Mexico’s telecommuni- 
cations sector, Mr Javier Garza 
Calderon, company chai r man, 
told the Mexican news service 


InfoseL Apart from applying 
for a long-distance telephone 
licence in Mexico, the company 
is (xmstdering investing In a 
basic wireless telephone sys- 
tem in the country, in mobile 
telecommunications, val- 
ue-added services, and in sub- 
scription television, 

Mexico will open up its 
long-distance twipq^hnm» market 
- currently controlled by Tel$- 
fonos de Mexico, the national 
telephone carrier - to competi- 
tion from. August 1996. So far, 
Banamex with MCI, Iusacell 
with Bell Atlantic, and Grupo 
Alfa have expressed interest In 
applying for a licence. 

Bancomer, the second largest 
bank. Is reported to be looking’ 
for a foreign partner before 
declaring its interest 
Although Domos has plenty 
of money, having recently sold 
its tyiU iiar interests in the 
north of Mexico to Motorola. 


the US company, Its ambitious 
investment plans will almost 
certainly need a substantial 
injection of new capital. 

Domos is controlled, by Mr 
Garza Calderon, a member of 
the extremely wealthy Gam 
family in Monterrey and a 
director of Serfin. In the 1980s, 
Mr Garza Calderon’s father 
unsuccessfully sought to seize 
control of Grape Visa, one of 
Mexico's largest conglomer- 
ates, from his cousin, Eugenio 
Garza Laguera, in a family 
squabble that turned into a bit- 
ter takeover battle. 

Last week, Domos agreed to 
pay some $L5bn over several 
year years for 43 per cent of 
Smtel-Cuba. The investment 
includes the cost of expanding 
and modernising the island’s 
d ila pi dat ed telephone network. 
Doanos is looking for a foreign 
partner in Cuba to proride tele- 
communications technology. 


Smart card details agreed 


By Alteon Smith 

Three leading international 
payment card organisations 
yesterday agreed the first of 
three sets oF common technical 
specifications for “chip” or 
"smart” cards. 

The payments groups - 
Europay International, Master- 
card International and Visa 
International - plan to agree 
full specifications before the 
end of the year. 

The move marks a further 
step towards the introduction 


of chip cards that can operate 
across borders and systems. It 
enables manufacturers to 
begin work on developing 
microprocessor chips in pay- 
ment cards. 

The agreement announced 
yesterday covers the electrical 
and mechanical specifications 
for making chip cards and for 
point-of-sale terminals. 

The second port will define 
how the chip card and the 
terminal wfll together deliver 
the services to the card- 
holder, while the last phase 


should deal with how a 
transaction would be 
completed. 

The initiative stems from the 
three organisations’ decision 
last December to work together 
to develop global standards for 
chip cards. 

Separately, Visa has agreed 
with a number of bank-led 
groups to try to devise com- 
mon iiitATn^timuii standards 
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Comcast to 
pay $1.27bn 
for Maclean 
Hunter unit 


- n n hi ni r ■ ■ ...^ n 

tsy rozncK nsrvenon 
hi New York 

Comcast, the US 
te lec ommunications group, 
has agreed to buy the cable 
television operations of 
WacjHin Hunter, the Cmdltt 
communications and media 
group, -for $1.27bn in 
cash. 

The acquMtion Is the latest 
Mg deal in the consolidation of 
the US cable TV market, which 
is becoming rapidly dominated 
by a few large operators. Two 
weeks ago, Atlanta-based Cox 
Enterprises paid $2.3bn for 
Times Mirror’s cable TV 
unit 

Comcast is buying the cable 
interests of Maclean Hunter, 
which include s er vi ces and 
Operations for about 550,000 
subscribers in New Jersey, 
Michigan and Florida, from 
Maclean Hunter's parent, 
Sogers Communications, Can- 
ada’s largest cable TV group. 

Rogers bought Maclean 
Hunter three months ago for 
$2.2bn. Rogers said then it 
would sell Maclean Hooter's 
US cable operations. 

The purchase will make 
Comcast the third largest 
cable TV operator in the US 
with. 3.5m subscribers, behind 
TCI, which has 10m sub- 
scribers, and Time Warner, 
with 7m. Comcast also 
provides cellular telephone 
services to more than 7.4m 
people. 

Mr Brian Roberts, president 
of Comcast, said: “For some 
time, we have considered 
Maclean Hunter's systems to 
be a logical strategic extension 
of Comcast's cable business. 
The acquisition allows us to 
increase our presence in three 
of the top 15 television mar- 
kets." 

Comcast's purchase, how- 
ever, has several regulatory 
hurdles to overcome. Not only 
is the deal subject to US gov- 
ernment approval, but Rogers’ 
acquisition of M aclean Hunter 
is also awaiting approval in 
Canada, where the federal 
Radio-televiskm and Telecom- 
munications Commission and 
the Bureau of Competition are 
nice ly to scrutinise the merger 
between the country's two 
largest cable TV operators. 


Krupp Hoesch breaks up steel side 

. thnnumo can only exist in com 


By Michael Undemam 
hi Bom 

Krupp Hoesch, Germany’s 
second biggest steelmaker, has 
broken its steel division into 
several independent companies 
in a further effort to push the 
business tack into profit 

The decision was approved 
at an extraordinary meeting of 
the supervisory board on Sun- 
day, in spite of protests by the 
IG Metal! union. It is angry 
that workers will have toss 
say in the running of the busi- 
ness. 

Three new companies will be 
created for special steel flat 
products, special heavy sec- 
tions, and long products. A 
fourth unit - tin plate - will 
become a joint venture ran by 
Thy s sen, Germany’s biggest 
steelmaker. 

Ostensibly, the changes fit 
the strategy outlined by Mr 
Gerhard Cromme, cHjrf execu- 
tive, who has repeatedly 
argued that separate compa- 
nies were needed to manage 
the various steel products, 


because th pir market condi- 
tions were so different 

However, sources said the 
changes would also make fur- 
ther jobs cuts easier, as the 
indepndent companies would 
no longer be subject to the 
rules of Montanmitbestim- 
rmmg, a form of workers’ code- 
termination in the German 
coal and steel industry. The 
system is seen as an obstacle 
to faster restructuring of tire 
industry. . . . 

Managers at the indepeident 
companies have already indi- 
cated they will need for fewer 
stag to sendee overheads. This 
mpans that up to 1,000 of the 
3,600 people working in admin- 
istration at the existing steel 
division will lose their jobs. 

Management is also likely to 
be more effective. “Each com- 
pany will have to meet their 
own costs,” said Mr JQrgen 
Claasen, the Krupp Hoesch 
spokesman. “In the past, every- 
thing in the steel division went 
into one big pot and it was 
difficult to tell what was work- 
ing well what was not.” 


Krutfp first mounted an 
unusually secretive bid to take 
over Hoesch. its long-standing 
rival, in 1992- The dust had 
hardly settled on that acrimo- 
nious merger when jt was 
decided to close the integrated 
steelworks at Rhemhansctt, 
prompting massive union pro- 
tests and further job cuts. 

Hie going is still tough in 
spite of the overhaul. The steel 
division is one of six divisions 
within the Krupp Hoesch 
group, representing about 35 
per cent of external sales. How- 
ever, the DM780m <$48l.6m) 
loss it reported last year was 
its biggest, and it is expected 
to incur another deficit this 
year. 

Diluting workers’ rights is 
likely to make life easier for 
management The extensive 
workers’ rights which exist in 
the German steel industry is 
the main reason why Riva, the 
private Italian group, pulled 
out of its planned purchase of 
Eko Stahl, the ailing east Ger- 
man steelmaker. 

The law says JAontonmitbes - 


Repola back in black with FM737m 


By Hugh Camegy 
in Stockholm 

Repola, Finland’s largest 
industrial group, swung to a 
pre-tax profit of FM737m 
($1 35.7m) in the four months to 
end of April from a loss 
(restated) of FMl3m in the 
same period in 1993. The result 
consolidates a recovery that 
took hold last year. 

The improvement stemmed 
in part from a foil in financial 
expenses, to FM441m from 


FM851m, as interest charges 
tumbled. 

Repola, whose operations 
include forestry, forestry 
machines and other associated 
production, said reduced finan- 
cial expenses would help drive 
a considerable improvement in 
full-year profits from last 
year's pre-fox figure of FM29m. 
Repola restated its 1933 figures 
to reflect accounting changes 
made to conform with EU 
directives. 

Gronp sales were barely 


changed in the first four 
months at FM9.18bn, compared 
with FM914bn last time. 

Turnover was held back by a 
strengthening of the Finnish 
markka this year, and restruct- 
uring moves in 1993. Overseas 
operations accounted for 88 per 
cent of sales. 

Operating profit, however, 
was well ahead, reaching 
FMl.lbn against FM838m. 

Much of this was attributed 
to unexpectedly better profits 
at United Paper Mills, the for- 


estry unit UPM sales were up 
4 per cent at FM6.l2bn, but 
operating profit moved up 
more sharply, to FM906m from 
FM756m. 

Repola said although eco< 
nomic recovery in Europe was 
strengthening demand for 
paper, prices were still 
restrained by oversupply. 
Meanwhile, manufacturers 
would fore rising raw material 
costs for paper and sawn tim- 
ber production towards the mid 
of the year. 


Forestry group makes turnround 


By Hugh Camegy 

Kymmene, the Finnish f ore s try 
group, returned a FM176m 
($3&5m) profit after financial 
items in the four months to the 
end of April, a sharp turn- 
round from a FM164m loss 
(restated) made in the same 
period last year. 

The. improvement was partly 
due to lower financial expenses 
stemming from reduced inter- 
est charges. Net financial 
expenses fell to FM46Qm from 
FM657fcL 

Sales moved up to FM544bn 


from FM5.64bn, while group 
operating profit reached 
FM604zn, compared with 
FM49lm last time. 

The figures for last year 
were restated to conform with 
a shift to European Union- 
based accounting principles. 

Kymmene said markets for 
forest products had "clearly 
improved” during the first four 
months, with prices incre asin g 
for fine papers and chemical 
pulp. 

It added that it expected 
improvements in earnings in 
chemical pulp, panels and 


sawn timber by the year end. 

The company said operating 
profits for the frill year would 
be ahead of last year’s 
FMl^Sbn. surplus. 

Kymmene spent FM295m on 
capital projects during the first 
four months and expected capi- 
tal investment in production 
facilities to reach FMlJlbn for 
the year as a whole. 

The projects Include two oxy- 
gen bleaching plants, an 
expansion of plywood output, 
the rebuilding of a paper null 
and anti-air pollution projects 
at two chemical pulp mills. 


timmung can only exist in com- 
panies whose primary purpose 
Is to make steeL It, therefore, 
does not apply to companies 
who are merely “processing" 
steel, as Mr Claasen puts 1L 

IG MetalL however, says Its 
lawyers are checking the deri- 
sion with a view to taking the 
company to court. It argues 
that workers’ codetermination 
must be guaranteed in compa- 
nies which operate any form of 
warm production or rolling 
mills. ‘ 

• The German steel federation 
said yesterday steel production 
In the first six months of 1994 
had risen 9 per cent above the 
that for same period the year 
before. Orders were up 13 per 
rent 

However, it warned that 
much of the new steel was 
being used to fill stockpiles, or 
was being exported, tt said 
steel consumption in the 
all-important German market 
- which accounts ter about 60 
per cent of production - had 
risen just 15 per cent in the 
first six months. 


VNU acquires 
results service 

VNU, the Netherlands-based 
publishing group, has bought 
Institutional Brokers Estimate 
System from Citicorp for an 
undisclosed amount, agencies 
report It said IBES was the 
world’s largest and best-known 
supplier of corporate earnings 
estimates, covering companies 
in 42 countries. 

VNU said the acquisition, 
made through its US unit Dis- 
closure, was an important step 
in its strategy to increase the 
added value of its financial 
data products. 


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FINANCIAL TIMES 


nssssssscs 

USD 300.000.000 
UNDATED FLOATING 
RATE CAPITAL 

NOTES 

For the period 
June 20, 1994 to 
December 20,1994 
the new rate has been 
fixed at 5,5156% PA. 
Next payment date: 
December 20, 1994 
Coupon nn 16 
Amounc USD 280,38 
for the denomination 
of USD 10 000 
USD 2803,76 for 
the denomination of 
USD 100 000 

THE PRINCIPAL 
| PAYING AGENT 
1 SOGENAL 
SOCIETE GENERALE 
GROUP 

15, Avenue Ernie Reuter 
LUXEMBOURG 


CREDIT LYONNAIS 
USD 500,000,000.- FRN 
Undated 

Bondholders arc hereby 
informed that the rate for the 
Coupon N° 12 has been 
fixed at 55625%, for the 
period starting on 
20/06A994 until 18/09/1994. 
inclusive, (represecting a 
period of 91 days). 

The coupon mil be payable 
on 19/09/1994 at a price 
of USD 140.61. 

The Priori 


EScHEPTTIYDNNAJS 


SGA SOCIETE 
GENE RALE 
ACCEPTANCE N.V. 
FRF 300.000.000 
REVERSE FLOATING 
RATENOTES DUE 
DECEMBER 1999 

For the period 
June 17 , 1994 
to September 19, 1994 

the new rate has been 

fixed at 12 % PA 
Next payment date : 
September 19, 1994 
Coupon nr: 6 

Amount: 

FRF 3133,33 for the 
denomination of 
FRF 700000 
FRF 31333,33 for the 
denomination of 
FRF 1000 000 

TIC PRINCIPAL PAYING 
AGENT SOGENAL 
SOOETE GENERAL GflOUPl 

15, Avenue Emile Reuter 

LUXEMBOURG 


SSK 80CET EGBBWE 

ACCEPTANCE N.V. 

FRF 300,000.000 

FLOATING RATES 
DIFFERENTIAL NOTES 
DUE DECEMBER, 1995 

Notice is hereby given to 
the Noteholders that 
pursuant to the Terms and 
Conditions of the Notes, 
the rate of interest 
applicable to the period 
from March 18, 1994 
(Included) to June 20,1994 
(excluded) is 8,40670*1%. 
This rate of interest has 
been determinated 
according to the formula 
provided ror in Condition 
4. “Interest" b) fi), Ie. 
"10.25% + 

(3 month USD LIBOR * 
(Final Spot/43435)- 
3 month PIBORJ". 
Therefor, the interest 
payable on June 20,1994 
against surrender 

of coupon nr 6 is: 

FRF 2195,08 per .Note in 
the denomination of 
FRFICKMJOO 

FRF 21950,84 per Note In 
the denomination of 
FRF 1,000,000 

THE PRINCIPAL PAYING 

AGENT SOGENAL 
SOCETE GENERALE GROUP 
15, Avenue Emile Reuter 
LUXEMBOURG 



£150,000,000 

Floating Rate Notes doe 1997 
In accordance with the provfeioxis of 
the Notes, notice is hereby given 
that the Rare of Interest tor the 
three month period ending 19th 
Sep temb er, 1994 has been fixed at 
5-34375% per annum. The interest 
accruing for such three month 

period will be £137.62 per £10,000 
Bearer Note, and £L37&20 per 
£100,000 Bearer Note, on 19th 
1994 against pceseotaooa 
iNo.8. 

Daian JBaofc of Swtoertand 
London Branch Agent Bank 

f7th June, 1994 


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Everything. 


And nothing. 


The names, of coarse. And that’s a symbol of a fundamental 

change. Fortis was created by its parent companies - N.V. AMEV 
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international insurance and banking group. 

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 
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A clear corporate structure. Through a better identification with 

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NOTICE OF PAYMENT 
To the Holders of 

N airn Finance Trust XI 

U-S-$ 129,880,000 
Floating Rate Notes due 1999 

Re the buercst Period March 31. 1994 in June 30. 1994. die Tocal Repayment Amount of 
the Note) is USD 1 4. 490 .000 ar 13.325363% of the current ouacamiing principal amount. 
Principal in the amount of USD 1,13154 per USDlOjJOO aggregate principal amount of 
Nocot will he payable on June 30, 1994- After June 30, 1994, interest on the portion of the 
Nutct to repaid will cone to mxnie. HuUm of Bentor Nates mine deliver the opimipriau 
inmot coupon tu a Paying Agent Kuctadu of rhe U aired Saxe in receive repayment on 
such Notes. 

NATFIN FINANCE TRUST U 


□ 


Qp Bankers Tnut Company, 
mTium 


Uarak June 21, 1994 


Advance Bank Australia 
Limited 

US$250,000,000 
Floating Rate Notes 1999 

The notes will bear interest at 
4.9125% per annum for the 
interest period from 21 June B94 
to 21 September 1994. Interest 
payable value 21 September 1994 
will amount to US$125. 54 per 
US$10.000 note. 

Agent: Morgan Guaranty 

Trust Company 

JP Morgan 


S liimm an In tematinin l 
Finance (USA), Inc 
Yen 5,000,000,000 

Tranche A Floating Rate Notes 
Doe 1996 

In accordance with the provisions of 
the Notes, notice is hereby given 
that the Rate of Interest far the 
three month period coding 22nd 
September. 1994 has been fixed at 
2.5375% per annum. The interest 
accruing for such three month 
period will be Yen 6,484,722 per 
one Billion Note on 22nd Septem- 
ber, 1994 against presentation of 
Coupon No. 8. 

Union Bosk of Switzerland 
London Branch Agent Bank 

28th Jane, 1994 



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mmnxL TIMES TUE SDAY JUNE 21 1994 

INTERNATIONAL COMPANIES AND FINANCE 


Goodman Fielder predicts 
long-term margins growth 


By NUddTait in Sydney 

Goodman Fielder, the large bat 
ailing Australian foods group, 
fihnnM achieve ‘Tong-term mar- 
gins on sales of 9 to 10 per 
cent, across the business," Mr 
Barry Weir, chief executive 
told shareholders. 

In a letter to investors, made 
public yesterday, Mr Weir said 
the target had not been 
achieved. In the half-year to 
end-December. for example, GF 
recorded sales revenues of 
A$L94bn (US$L49bn), and prof- 
its before interest and tax from 
continuing operations of 
ASISOBm for a group margin of 
about &9 per cent. 

But Mr Wear, who took ova 1 
as chief executive six months 
ago, rejected the notion there 
was a quick solution. He added 
that the problem could not be 
solved simply by the “straight- 
forward cutting away and dis- 
posal of one or two of our 
major business groups. 

"Our closer analysis shows it 


is primarily a few specific geo- 
graphic or product segments 
within each major group which 
drag down overall perfor- 
mance,'’ he «rtri 

Mr Weir acknowledged that 
many industry observers saw 
GF as a commodity-based food 
group - with products such as 
flour, bread, gelatine and pout 
try, placing it at the competi- 
tive, lower value-added end of 
the industry. 

Therefore he acknowledged 
that making higher margins 
was more difficult to achieve. 

Mr Weir argued that the 
group needed to use. "innova- 
tive branding and marketing” 
as well as concentrating on 
low-cost production, if it is to 
move towards its target mar- 
gins. 

He outlined a four-point plan 

inHnrirng - 

• Further “non-core assets 
disposals,'’ although Mr Weir 
claims the bulk of this process 
is complete; 

• Organisational restructur- 


ing, jnCrJndiing integration of 
wifiirng ynH facin g operations 
and moves to improve effi- 
ciency on the poultry side; 

• Encouraging Industry 

raHnwaliiffltirin in particularly 

competitive areas, such as bak- 
ing; 

• Targeting Asia for 
long-term expansionary 
growth. Existing Asian busi- 
nesses win be brought under a 
single regional office, and sev- 
eral new ventures are being 
“evaluated". 

More generally, he added, 
Goodman was still looking for 
“bolt-on” acquisitions. 

Mr Weir’s letter follows a 
series of management depar- 
tures foam the food group over 
the past year. 

There has also been talk of 
large disposals or a takeover of 
the underperforming group, 
but to date no suitors have 
emerged. 

Goodman shares stood at 
A$L36, just cents off their 52- 
week low. 


Competition breaks up Nordic 
banking co-operation venture 


By Hutfi Camegy 

In Stockholm 

Increasing cross-border 
competition within Nordic 
banking has led four of the 
region’s top banks to break up 
a 10-yearoM co-operation deal. 

The four - Unibank of Den- 
mark, Union Rank of Finland, 
Den norske Bank of Norway 
and Sweden's Skandinaviska 
EnskUda Barken — had ban- 


died each other's interests In 
their respective markets under 
a venture called Scandinavian 
Banking Partners. 

At the height of the accord, 
they opened a joint venture in 
London called the Scandina- 
vian Ranking Group, but this 
was bought out by SE-Banken 
in 1990 and merged with its 
existing London operation. 

R b]ro then, thp partnership has 

been slimmed down to focus on 


a small range of business 
areas. 

SE-Banken's move to open 
its own branches in Oslo and 
Waiiriniri, part of an increasing 
trend among Nordic banks to 
move into neighbouring mar- 
kets, precipitated the decision 
finally to dishand the partner- 
ship. 

SE- Banken said no financial 
settlement was involved in the 
decision. 


Saudi Hollandi to double capital 


By Mark Nicholson in Cairo 

Saudi Hollandi Bank, the 
Riyadh-based joint-venture 
hank 40 per cent owned by 
ABN-Amro Bank, has won 
approval from the Saudi Ara- 
bian Monetary Authority to 
double its capital to SR42Gm 
($U2L5m), according to the offi- 
cial Saudi Press Agency. 

The bank said it would issue 
2.1m bonus shares to existing 
shareholders, paid for by the 
transfer of SR210m from 


reserves into the bank’s 
capital 

Saudi Hollandi is set to 
become the last of Saudi 
Arabia’s commercial banks to 
recapitalise since the end of 
the Gulf war - during which 
period most commercial banks 
have tapped a large influx of 
repatriated Saudi money in the 
local stock market to issue new 
shares. 

Saudi Investment Bank, the 
Kingdom’s smallest, last week 
announced its plan to double 


capital to SRlSOm through a 
bonus share issue. 

Saudi Hollandi, which is 
completing a reorganisation 
and expansion, last year 
reported a 34 per cent rise in 
net profits at SRlSOm. 

Total assets at the aid of the 
1993 financial year stood at 
SR15bn. 

Mr Sheldon Boege, the 
hank’s managing director, 
recently forecast a 10-12 per 
cent rise in earnings in 
1994. 


Australian 
directors 
face share 
register call 

The Securities Institute of 
Australia, representing profes- 
sionals working in the 
nation’s securities industry, 
has called on the Australian 
Stock Exchange to set up a 
register of directors’ share- 
holdings “so that the market 
can publicly track the stock- 
market dealings of company 
directors". 

Directors of Australian com- 
panies are now required only 
to notify the company 
involved if they buy or sell its 
shares, and there is no formal 
requirement for them to tell 
the stockmarket generally. 

The SIA is proposing that 
Australia follows the US 
model and places a legal obh- 
g n tj c m on directors to notify 
the stock exchange of any 
share dealings. 

The proposal is the latest in 
a series of moves by local 
fund-managers, the ASX, and 
other market professionals, 
ahnpd at improving the corpo- 
rate governance and disclo- 
sure standards of the Austra- 
lian market. 

• Mr Kerry Packer’s Sky 
fihaimrii has signed an agree- 
ment with the Australian 
Jockey Club, allowing the for- 
mer to beam Australian horse 
racing into Nevada casinos 
from next month. 

Mr David Dodds, Sty’s man- 
aging director, said there will 
be a 90-day trial of the satel- 
lite broadcasts, and Hilked bet- 
ting operations. Racing In the 
US oris In the early evening 
and the notion is that, because 
of the time difference, Austra- 
lian races could take over. 


MHS expands 
aerospace side 

Malaysian Helicopter Services 
(MHS) has bought 66.7 per 
cent of Aerospace Industries 
Malaysia for M$9.62m cash 
(USSSAm), Reuter reports from 
Kuala Lumpur. 

MHS said the AIM shares 
were bought from the national 
carrier, Malaysian Airline Sys- 
tem and UMW, a unit of UMW 
Holdings. 

AIM owns SI per cent of 
Airod Sdn Bhd which over- 
hauls military aircraft . 


Norsk Hydro’s 
chemical interest 
to double output 


By Karen Fossfl in Oslo 

Norsk Hydro. Norway’s largest 
publicly quoted company, said 
yesterday- Qatar Fertilizer 
Company (Qafco), in which it 
holds a 25 per cent stake, is 
planning to spend about SSOCtai 
to nearly double capacity for 
aj pmnnifl and urea production 

in Qatar. _ , 

Hydro and Qatar General 
Petroleum Company (QGPC), 
which holds the remaining 75 
per cent of Qafco, are to 
ovparid an mip i ammo nia pro- 
duction capacity to L3m tons 
from 750,000 tons and urea 
capacity to 1.55m tons from 
820,000 tons. 

The Oslo-based company 
said it had agreed to become 
project manager for the expan- 
sion project . 

Hydro said that a technical 
assistance agreement with 
Q flfm had also been extended 
for a 10-year period. 

Qafco and Hydro also signed 
a 10-year marketing agree- 
ment, giving Hydro marketing 


rights for ammonia and urea in 
niina and East Africa where 
the Norwegians are upgrading 
their sales and distribution 
network to meet increasing 
demand. 

“Tids expansion and related 
agreements combine QGPCs 
policy of increased industrial 
development of Qatar’s vast 
natural gas resources with 
Hydro’s requirement for a reli- 
able product source destined 
for the growing fertiliser mar- 
kets in China and Africa, H 
Norsk Hydro said. 

• Norsk Hydro said its 
NKr4.74bn rights issue was 
oversubscribed, but it did not 
yet know by how much, Reu- 
ters reports from Oslo. 

“There is a clear oversub- 
scription. This we can say 
already," financial director Mr 
Georg Stoermer told the 
agency. 

The issue totals NKx23.68m 
ordinary shares at a price of 
NKr200 per share. The sub- 
scription period in. Norway was 
set from June 3-17. 


Kvaerner profit up 36% 
despite weak oil unit 


By Karen Fosafl 

Kvaerner, Norway's second 
largest stock market listed 
company, has increased pre-tax 
profits by 36 per cent to 
NKrS90m ($812m) in the first 
four months of 1994 against the 
same period a year earlier. 

The performance was aided 
by an upturn in unrealised for- 
eign exchange gains which 
almost doubled to NKrl33m- 

Operating revenue rose by U 
per cent to NKx8.7bn while 
operating profit increased by 
10 per cent to NKr399m_ 

But the results fell short of 
analysts’ expectations of 
NKr500m. 

Mr Erik Toenseth, president, 
predicted that profits for this 
year as a whole, before unreal- 
ised currency items, would be 
on a par with last year's 
NExlibn. 

The shipbuilding division 
lifted pre-tax profits to 
NKr406m from NKr246m on 


turnover of NKr3.63bn, against 
NKr£56bn. 

The oil and gas division saw 
pre-tax profits more than 
halved to NKr57m from NKrl35 
on revenues up to NKr2.47bn 
from NKr5L33bn. 

The oil and gas division 
made an operating loss of 
NKrSm after a profit of 
NKrll6m last time, and is 
expected to post a weak overall 
result Kvaerner warned that 
the division was suffering 
losses on the Norwegian North 
Sea Troll oil project 

The mechanical engineering 
division turned in a pre-tax 
profit of NKrl6m, against a 
loss of NKr33m, on sales which 
rose to Nkrl.62bn from 
NKrL5bn. 

Pretax {unfits of the pulping 
division tumbled to NKr25m 
from NKr53- The shipping side 
lifted pre-tax profits to NKr95m 
from NKr21m on revenues 
which increased to NKr395m 
from NKi337hL . 


THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF HOLDERS OF SHARES AND OF SPARC5 
(ms defined below) . IF THEY ARE IN ANY DOUBT ABOUT THE ACTION THEY SHOULD TAKE. THEY SHOULD CONTACT 

THEIR PROFESSIONAL ADVISERS IMMEDIATELY. 



SASIB S.pJ\. Registered office Via dl ConfccOa, 87/89 - 40128 Bologna 
Company Register: Bologna Tribunal teg, no. 30663 - C.CLA A. no. 26M37 
Capital Stock Lire 125311^77,000 fully paid-up. composed of 71.876.3W ordinary stares. 

00,432 privileged abates and 53324,335 non -convertible savings shares. aO with par value of Lire 1,000 each 

NOTICE 

to the holders of the above shares and of those of the Lire 65,000,000,000 W per cent. Small Premium Advantaged Brfnm 
C on ve r t in g Sconriites 1997 - SPARCS of SASIB International B.V. presently oats la riding •( the “SPABCS n ) of a 
CAPITAL INCREASE BY SASIB S-p-A. FROM LIRE 1253^277,000 UP TO A 
MAXIMUM OF UR£171J13J923,000AND OF THEIR RIGHTS IN RELATION THERETO 
brae of ordinary and non-convertible savings shares with warrants exercisable into SASIB S-p-A. ordinary and 
turn-convertible savings shares respectively 


io be earrifd cm by offering w entering Hotter* of SASIB duns and holders of SPARCS: 

- lLW.7V0SAStB new ordinary stares; 

- KJ.'JOJJJJ SASIB new ram-ctravotlbic svtnp stars: 

- n.W.T’W "\\5t80nittTjrxy WirrantsKNr. Klacbedto ita nrwonJinaty sharo; 

- t0.Q03.Jl) "SASIB Savings Woman IW, attached u the new non -convertible savings 
stales. 

On Mav 19. 1994, the Bond of Directors of SASIB SpA-, In exercise of die power given by the 

Stan- Holders' Meeting held on April 2b. N94, resolved U Implement • capital Increase to be 

anted oat by atm of- 

- tone at amutstaa of n,W7,7W new ottiiwrjr stares. p«r value HreLOOOacd dividend 
n«hts jcmnog iattuav L WM, w be offend la option to balden of owtoury or privileged 
stares m a rsno of 1 new ordinary share far rmy 6 ordin a ry state orb privi leged dares 
held M a price bttwren a minimum a! Lire 7JMJ (of which Uie 6j000 above par) and a 
muimma of lire UJQUO Cat whtefa Urr K1J0D0 above pst h 

- bsu* of a madman ofn.mjD new mm-convenlble savings stares, par vibe UreliXX) 
and dividend rights accruing Jammy L 1994, to be ofEered In option to holders of noo- 
cwnrrUWe saving! shares in a ado of 1 new noo -c on vertible savings stare for every 
b non-coavtitible savings stares held and to ihe holders at SPARCS in a ado of 163 new 
nonconvert ib le savings stares lor each SPARCS of Lire SjOOUjOOO par wine or L6JJ 
new non-convembte savings stares (or och SPARCS of Lite 50,000.000 par value held at 
a price between! m i n i mu m plUreLUOO lot which Lire 3JOO above pw) and a nraxtaaim 
at Lire 6JOOO (of whkfa Lire UIOO above fur); 

- Ihe SMhKTtpdon price of the new primary stares bring determined Imwediaieiy before the 
mr ■» the avenge of ihe market prices of dvr ordinary stares recanted bi the three days 
prior m Its dncnnhuikm. dfeamMtd by a nuxinnun ol U pea oenL, sach price la tory ease 
bring metal e d between the above mentioned iTrimmum and maatanm prices: 

- the subscription price of the new nonconvertible savings stars being determined 
tatmedlsidv before the taue as the overage of the morkel prises of the noa-amvertlUc 
savings stares l eco rd ed In the three days prior to Us dcurnrinoitan. discounted by a 
maaianun of □ per coil, such price to any case being Included between the above 

The Board of Dtaaem ol SASIB S-p A. fan dso resolved to Implement an addidoraj capital 

tacreaoe to be canted out by taming 

- li.W7.7W new ordinary stales, pm ndne Lire ijOOO, to be reserved exclusively far the 
ocictie of 11,997,790 "SASIB Ordinary Warrants 1997” attached u the Bcwonttwy shares 
«™l gritng the rfa^ht la satacrlbe such shares In ■ nth) of one stare for each warrant held: 

- U2SOJS33 new uoocomvrahfo mvtap shores, par value Lire 1000. to be reserved 
ea c lmiveiy far the exercise of BJW32S33 "SASIB Savings Warrants W97* attached to ihe 
new DOncwretliWc avlojp shares and gmnR the right to wtwrft* such non-crwertlble 


taw tlw 'hinnaluiiiahii 4if ** 


s riven bp June 30. S97. The 
e dividends bmacbe same daw 


July H. 1997 (both kndudvd. provided i 
stares subscribed through ibe exercise of the warns will i 
» SASIB oedtoary and nonconvertible aarings shores Haded on dx Itsltai aomoricd qootatton 
system ('Tcknatico") at the daw of exercise of die wamnits. 

An eppHadon far (hr fottat on the Teferradcoof ^ASJB Ordtany Warrants tKT and -SASIB 
Savings Warrants «W rriS be nude. 

The rights to new dares whb warrants attached wgl be exerriaabte between Jane IB. SSH and 
July 17, 1994. by presenting'ihe coupon no. B to be detached hum ordtaary. privfleged and non- 
convertible ssvtnp dares. Such coupon wtH represent option right*. Holders of SPARCS any 
sell ortswreise ihdr rights by foflowtiig the procedures hntkswd to paragraph* 2J and 3) below. 
Holders o( SPARCS vrho do not follow swell procedures vriil not rec ei ve ray rompensaikm for 
my rights to which they may have been oufaled. The rights will expire it the end of the 
subscription period. As agreed wkh d* Italian Stock Exdtange Cwncfl. die rights will be 
tmderi on the Tefenaatico ham Jane lb. 1994 to July 8. B94. 

Upon vuteeripUon. the fall price for the shares mdntive of par valne and pahi-up surplus will be 
due for each of dse stares subscribed. At the eapteamm of ihe mentioned term, gncwras nl 
rights will be anointed an the latem Stock Marker potman to Article 2441 of ihe Indian Ciril 
Code and Ita proceeds retained by SASffi LpiA. 

in Uk case of holders ofstaics.ihc subscription may be anted om through Home TlwHS-pA. 
for those shares odmitibtered by it. and through the following Banes Commentate 
ttalkma. Bmca Naztonole dd Lavoro. Crerfim haUnm, Credlio Snmgacdo, Bonca 'dl Bonn, 
tstimro Bancario & Paolo <B Torino. Mo me dd Etaehi <fl Skna. Bmoo dl Slcfita, Casa dl 
Mspnmki defle Provinde Larataide. Bonn dl NapoU, Cassa dl Bl s pa n nk i «H TcstDO, Banea 
Popobre dl Novara. Bane* <T America e dlsta. Bancs Nariouale dcfTAgrioilnira. Credtao 
Commerdde. Bona Toeeana, Bana Popahre dl Sondrio. Bina PopcdsR dcfTEmUfa, or, in the 
cue of a US. Peann, ihnwgh the U-SWrius Agaa each as defined bdow. AH new shares and 
the wonams wfll be made avadabfe to anhsoiben it Monw HtoU S4LA. The ddhrrny of tta 
certihcaies may be requested only through ibe agent wtw recehred the appheatam. 

The p tu s p c ctu sdacrtbinaibe capital Inotaac and all othc do en me n tt reqdred by ConsobY 
Rale no. 3B3 of Novgittcr 14, W1 have been dfpmdicd at the Comp an y's regtstar office, 
tatan Stock Marker CnundL the agend and ibe Ganvaiioa Agents refared to In parapnpti 3) 
below. Copies noy he otatacd fore of charge upon request. The snhsotpctar price of dw new 
ontinoiy and new MMonsertible Brings (fans together wldi die excreta 'price of "5ASB 


Otthnary W^remt* IW md "SASIB Savings Wirams 1997" are described below. 


On June 13, W94.the Board rfDIreemrs of SASIB S.fjAd ftemln editaMl>ia1ntinTi price far newordUnry and new notxoarenlbtcsavliiKsshges. as well ptbeeaerclae price for "SAaBOtdfaary 

Warrants 1997" and -SASIB Savings Warants S97*. as follows: 

- lire 7,' HO. of which Urt UNO par value and Lire 6.4M prid-np surplus, far each of the 0997,790 new ordinary starts; 

- Lire 4,700, of whidilucliXM par vahw wd Lin 3. TOO ptid 4ips8ipha, for each of the 10^0133 3 new nan-cmivenfljle savings shares, 

- Lire 8540. of which Lire LOOO par wine and Lire 7,940 paid-up smptas, for each of the 1L997.790 new ordinary stares to be roier»ed exdoslvdy for ihe excreta oH1^97,7«l "SASIB Ordbtxry 
WortantiMr; 

- Lire SjMO. irf which LlreLOOO par wine and Lire 4 AW pad-op snrphis. for each of die B.903J33 new nmw»nvotltjk swings shares u be trasredodaifvdy for the excreta; of KL903J33 
-SASIB Siring Warms BUT. 

Precednrgt- tack i dh mkiiBeCBrlLS. Per t o osoc d Ptrs ewa O tfi l tlr hnly 

1) RKjHTS MAY KHTHER SOLD OR EXBK3SSJBT OR ON BEHA1J CR= PEKSOftt IN THE UNITED STATES AND LLS. PERSONS (AS SUCH TESMS ARE DEFINE} IN RjeCULATlON S 
UNDER THE U5. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITtB ACT) AND COLLECTIVELY HEREIN *U5. PERSONS”) INCLUDING HOLDERS OF SPARCS ONLY 
UPON CERTIFICATION AS DESCRIBED BELOW THAT SUCH PERSON IS A -QUALIFIED INSTITUTIONAL BUYER" [AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND 
REFERRED TO HEREIN AS -qiBS-l AND IN ACCORDANCE Wim APPLICABLE STATE SECURITIES LAWS. 

2) Holden of SPARCS with le^K ter id addresses In the Untied Scaenrtll recriwtfat ip pixyri al e Ibnricf ce T tlfli-giun iraiothrr In io rmetton - t ncindfaig dtemost rctxnl Rnnidal results for 5AS1B 
S.pA - f rear ibe Ralstnr as spotted on ihdr SPARCS. Olher holders of SPARES who are Ui Fasona and who uiad to sell or eraose ihdr rights should oomact ihe Regjsnar to receive such 
oertiAcaHim and Information. Holden of SASIH stales who are UA Persons and who Intend to sell arowrebe ihdr rights should eootsa Morgan Ouaraaiy Trust CoraptnyofNew Yorh, at ihe 
address *a forth below, who is acting m da UX. tidus wet* (the ITS. Rlgjns A^bm*} to receive «ch cenUkation and faifoniiatioa 

3) fn order cither in sell or io enecdse ihdr K^a».hoflaiBf gARCSIn bearer form moss present to any e o u ve ts t dO ogO M cpecilled in the SPARCS and set Icvth below (a ‘Conversion Agent") the 
rtterant SP ABCS wUb ihcEntitlctteta Notice no. l»aacl>HlhyJniy>0,B94hiottier in obuln ihe uriesatry luvratmau certifieatiop and other neassaiydocnmenn, which, tnmtierioexerctir 
intdi rights, mow then be oompkied and fodydwltiiiConve j eai oa Agcw prior mjoly 17, BW.HofdegafsPARCSfore gfa wied lorn mnalodgradalyeocqpletbdliMwamemeettiBeation and 
other ncccaxnydocninmtawlih a Convetstoo Agent prior u July 17, N94 is order u sell or eaeretee their ti^n. Hofakss of SASIB rfeurawho are UiPnsons most present » the U5.nghts 
A®*i prior njnly 17, B94 a daiy completed icRatmcntcerilfkteLkra and must arrange far the presentation of eoapm no. Bdemebed Emm nidi aharetu Monte TboBSpA. or theageia tank 
that holds ihdr stars In order either to acfl or to essndsc ibrir rights, AU wrestaeni certifications mttst be In ihe font provided bf the Regsmr md ihe UJS. Rigfm Agaa. 

4) TtaordliMiysliawAiioit-tiMitnlbfc swings stares andteananabBiafalctaouerendsc of the rights hare not been lowered tmdpifae Securities AcuBdaflMmatfynwyBW be reoBered or 
rcaold emwptpnnnaniM the cmmiptiQBEt^ \ t g b u i «km pro ri^ by BttamA or RcgBlritonS ttarea ndg and baoawdaact with appllcahlc state scctiriirp tan. 

3) Appll£iitan(oritaeieidwofita"SA51BOithwi7WtetMi5B97'iiKl"SA52BSavfapWanaiitsl997*h7oronbehalf(rfUiPeij<ranioKtaprcBaacd»itaUiivarraMageiu*npo4iHetlbr 
SA5IB S4>A. (tab (ally. Morgan Gorewty Tiuh Componv of New YocM. The "SASIB Onhoary Warrants 199T and *SAS(B Savings Warrants 1WT may be ewrtfecd by or an britaU of US. 
PtesoBSOofy upon txnlflcmommhcUJliatani agon timagdipeaonbisqiB tad In Bflconlaacewlih apphcable sme semrliks hva. The onfinary ad noo-oonvenlblc aorings stares taued 
upon exeretsc of the warrants wU abo be subject 10 restrictions 00 their reside and may only be retdfeied or resold pursuant u an exemption bmn regtstmtion provided ly Role M4 a or 
Rcgoimoa S nnder the Sremttles An and tnaocoitiara wlih applicable sore scotiMcs tan. 

Comeition Agents: 

Mo^m Gnoranty Tnst Company of New YoriL 69 Victoria Emtankmcm. London EC4Y (HP. Et#nnf. 

Mmgon Guaranty Trent Company of New York. Corporate Tnm Operations Departtoeni, 33 Enctange Place, Hsscmcni a. New York, NY U21KMH23, UiA. 

Bam^Po rth a s ljuie ni bcmtg.MABotilevaidRoyaLLJOSi3 1 . ir«enm oing.Ln«iaboiMig. 

U5. Rights Agent and UA wrani agenc 

MonanGoarawy Treat Company oi New York Qpporaw Tnm Opr M ta ra Dep«iTm«H Vi PTrtanp. phw, utimwii ^ ptfw yorh. NY HBNMMTl. U 5 A. 

to>*n.v* ' SASraSqtA. 


\ 

yj 


BANK 

GESELLSCHAFT 
h BERUNAG 


17 


6 SKS 


BMfeSjJ® 


We hereby invUe the shareholders or our 
Company to lire Annual General Meeting, which 
will be held on Friday, 22 July 1994 ol lftOO ajn. 
at the Berlin International Congress Centre, 
Hail 1, Messedonun, 14095 Beriin-Chartoitenburg. 

Agenda 

1. Presentation 

a) or tire adopted Annual Accounts os or 
31 December 1093 with Ihe management 
report for the 1993 financial year and the 
report of the Supervisory Board 

b) or the Consolidated Accounts os of 31 De- 
cember 1993 with Ihe Group mortage meet 
report for the 1093 fhuindal year 

2. Hesotntion regarding tire utlllration of the 
profit for the year 

The Board of Management and the Supervisory 
Board propose that the profit for tire year be 
utilized for Ihe distribution of a dividend of 
DM 0.- for each share having a nominal value 
of DM SO.- of (he equity capital of DM 
480.872,050.- ns at St December 1993. 

5. Resolution regarding formal approval of 
the actions of tire Board of Management for 
the 1993 financial year 

The Board of Management and Ihe Supervisory 
Board propose that the actions of the Board of 
Management be given formal approval. 

4. Resolution regarding formal approval of 
Ibe actions of Ibe Supervisory Board for the 
1995 flmmrial year 

The Board of Management and tire Supervisory 
Board propose Uud (be actiOM of Uw Board oT 

Management be given formal approval. 

5. Election of the Supervisory Board 

In view of the creation of tin new Bank Group 
and In accordance with agreements In this res- 
pect, all current members of the Supervisory 
Board hare resigned from office effective as at 
the end of the 1994 Annual General Meeting. 
Paratarn 10 Section 98 (1) and Section 101 (1) 
orihe German Companies Ad and Section 7 (1; 
No. 2 of the Low on the Codetermination of 
Labour of 4 May 1978 In connection wltb Sec- 
tion 8 (1) of the Articles of Association of Bank - 
eesdbchail Berlin AG, the Supervisory Board 
la composed of Leu representatives of the 
shareholders and ten representatives of the 
employees. Of the members of the Supervisory 
Board representing the shareholders, eight are 
elected by the Annual General Meeting and two 
are nominated to the Supervisor? Board by the 
State of Berlin In Its function as shareholder. 

The Annual Generel Meeting Is not bound by 
these nominations. 

The Supervisory Board nominates the follo- 
wing shareholder representatives to the 
Supervisory BounL- 

Hcrfret DOrr, Berlin 

Chairman of tire Board of Management, 
Deutsche Bahn AO 

Horst Kramp, Berlin 

President of tire Berlin Chamber of Industry 
and Commerce 

Dr. Klaus Munnana, Kiel 
President of the German Federation of 
German Employers Associations 

Dr. Jens Odewald, Beigtscfc Glad bach 
Chairman of the Board of Management, 
Kaolhor Holding Aktiengesellschaft 

Dr. Wollfeang Feiner, Cologne 
Chairman af the Board of Management, 
Gothaer Venlcherungeo 


Edzard Reuter, Stuttgart 

Chairman of the Board of Management, 

Daimler-Benz AG 

Frtede Springer, Berlin 
Managing Director, Axel Springer 
GescUschall for Publbdsllk GmbH fe Co. 

GOnter Wilhelm, Wlesentiuu 
Member of the Board of Management, 

Siemens AG 

8. Resolution re g a rding approval for a Control 
and Profit Transfer Agreement with RB- 
Betriebsservfce GmbH Bn Unteruebmen 
dev BankgeaeOsctian Berlin 

The Board of Management and Uie Supervisory 
Board propose that the Control and Pro fit 
Transfer Agreement concluded with BB- 
Betriebsservfce GmbH Efn UnLenwhmen der 
Baukgesenschalt Berlin (taerdnaller referred 
10 as “BB-Betriehsservice GmbH*) on fll 
December 1993, with a term lasting from 1 
January 1994 until 91 December 1998. be 
approved pursuant to Section 293 (?) of the 
German Companies Act. In summary, the 
Agreement has the following contents; 

- BB-Betriebeeerrlce GmbH puis Ibe manage- 
ment of its Company under the control of 
Bankgesenacban Berlin AG and accordingly 
undertakes to follow the instructions of 
Hun hge getiscfaaf t Berlin AG. 

- BB-Betrlebsservlce GmbH has undertaken 


vant stipulations or Section 301 or the 
German Companies Act. 

- SB-Betri^bsserrice GmbH may not transfer 
more or Us profits for the year to other retai- 
ned profits than can be deemed reasonable 
Emm « commercial point of view. 

- In accordance wtth the relevant stipulations 

ol Section S0e2 of ihe German Com pani es 
Act, Banhgesdlschaft Berth AG undertakes 
to make up any kiss for foe year occurring 
during the term or ihe Agreement, inslr-aa 
sue* lose Is being made up through the 
withdrawal of amounts transferred to other 
retained profits during the term or the 
Agreement 

The Agreement shall be extended automati- 
cally from year to year after the expiry of the 
fixed term of duration thereof by one year res- 
pectively unless notice of termination is given 
al least six months prior to foe eodoTihe finan- 
cial fear. The contractual relationship shall 
continue unchanged. 

The Control and Profit Transfer Agreement Is 
available for esamlnollnn by the shareholders 
si foe premises of Bankgrsellachnn Berlin AG: 
a copy or which will be posted to shareholders 
upon request. The Agreement will also be avai- 
lable for examination at Ihe Annual General 
Meeting. 

7. Resolution regarding a u thorization for 
BankgesctischaJt Berlin AG to purchase Us 
own shares 

The Board Of Management and foe Super- 
visory Board propose the following resolution: 

foal. In foe event of foe Second Law on foe 
Promotion of Financial Markets and foe 
amendment U entails to Section 71 oT the 
German Companies Act coming Info force, 
BonkgeseBschilt Berlin Akllengeullacbaft be 
authorised, for the purpose of securities tra- 
ding, to purchase and sell Us own share* at pri- 
ces not exceeding or below the average 
standard quotation of foe shares at the Bertin 
Stock Exchange by more than 10% for the ten 
trading days preceding foe purchase or sale of 


the shares. The trading portfolio of shares lobe 
purchased for this purpose may not exceed 5% 
or the equity capital or BankgueUschnfl Berlin 
Aktiengesellschaft at foe end of any one day. 
This authorization shall be valid for a period of 
IB months. Should the final version or the law 
foil short or the current draft In some of Its 
points, the authorization shall then apply in an 
appropriate form. 

&. Election of the auditor for the 1994 
financial year 

The Supervisory Board proposes that XPMG 
Deutsche Treuhand-Gesellschaft Akllenge- 
sellschaft WlrtschaftaprOIUngsgeseUschaft, 
Berlin and Fro nkfurt-on- Main, and Hl)0 
Deutsche Warenlreuhand Aktiengesellschaft 
WlrtscbaAsprflftingsgeseDschaft, Berlin and 
Hamburg, be appointed as auditors for the 
Annual Accounts and Consolidated Accounts. 

In order to participate in foe Annual General 
Meeting and exercise their right to vote, sha- 
reholders must have deposited their shares by 15 
July 1994 at the latest at 

a) Bonkgesellacfaaft Berlin Aktiengesellschaft or 
one of the branches or Berliner Bank 
Aktiengesellschaft or Landes!) auk Berlin 
- Gfrosentrale - 

b) one of the branches of the following banks: 

Deutsche Bank AktlengesellscbaR 

Baden-Wtirtfembeiigfocfce Bank 
AktiengeseOschaft 

Bayertscbe Hypotheken- und Wecfasel- 
Bank Aktiengesellschaft 

Bayeriache Yendnsbank 
AkliengeseLbcbaR 

Berliner Handels- und Frankfurter Rank 
Commerzbank AkUeogesellsrtialt 
Detbrflck t Co. 

DG BANK Deutsche Genoasenschaflahank 
Dresdner Bank Aktiengesellschaft 

Norddeutache Landeabaak 
Glrozentrale 

Sal. Oppenhelm Jr. & Cie. 
Kommandllgesetiscbafi auf Akden 

Trtnkaus A Bnrkhnnfl 
KnmmandftgesellECbaft auf Aklien 

Verclna- und West bank 

AktiengeseUschaft 
MM. Warburg & CO 
BIG Book AG 
Merck, Pinch & Co. 

leaving foem tiiere until the end or the Annual 
General Meeting. 

awes shall also be deemed duly deposited If, 
wuh foe approval or one of the places of deposit, 
fojg are blocked at another bank from 13 July 
1994 unUl the end of foe Atm uni General Meeting, 

Hiares may also be deposited hi the care oT a 
German Notary Public or at a securities clearing 
and dMoslUng bank. A certificate 10 this efffect 

%£.“"S5 b1 “ *• <=“"1 “i * I® iuj 


Berlin, June 1994 


BANKGESELLSCHAFT BERLIN 
AUtengesethcbafl 

The Board of Management 









r vlr <n 

1 ">t«h 


FINANCIAL TIMES TUESDAY JUNE 21 1994 


25 




% 


{) % 


’ r,,fi tup3i 

l) ii unit 


INTERNATIONAL CAPITAL MARKETS 


US prices drop as dollar comes under pressure 


By Frank McGuty In New VoiK 
and Graham Bowley and 
Conner Mkideltrtann in London 

US Treasury bonds slumped 
yesterday morning amid fea rs 
that the Federal Reserve might 
lift interest rates again to sup- 
port the weakening dollar. 

By midday, the benchmark 
30-year government bond was 
down & at 85& The yield rose 
to 7.463 per cent, just shy of 
the upper limit of its recent 
trading range. The two-year 
note was off & at 5.873 per 
cent to yield 5.873 per cent 

Jitters over monetary policy, 
never too far from the surface 
in recent weeks, resurfaced as 
the dollar came under renewed 
selling pressure in the foreign 
exchange markets. 

The persistent weakness of 
the US currency has alarmed 
bond traders because it could 
force the Fed to tighten mone- 
tary policy for the fifth time 
this year, perhaps as early as 
next month. 

At least one Fed governor, 
Mr Lawrence Lindsey, is on 
record as saying the dollar’s 


decline contributed to the cen- 
tral hank’s decision to lift rates 

last raqntii 

Traders were anxiously 
awaiting a statement by Mr 
Lloyd Bentsen, the treasury 
secretary, who was expected to 
address the issue of the US cur- 
rency’s instability later in the 
afternoon. 

Amid these misgivings, Trea- 
suries moved moderately lower 
in early trading, following 
through on overseas activity in 
which the yield on the long 
bond tested its 7 JO per cent 
support level 

Later, bonds were given a 
sorely needed boost by reports 
that central banks were quietly 
entering the foreign exchange 
markets to support the dollar. 
US-denominated securities 
would likely benefit from the 
reinvestment of such pur* 


The bond market also bene- 
fited from a decline In com- 
modity prices, whose sharp 
rise has complicated the out- 
look. The softer tone in gold, 
ofl and other products by mid- 
morning helped bonds trim 


their losses to modest levels as 
the afternoon commenced. 

After last week’s barrage of 
economic data, traders were 
looking ahead to a rather quiet 
week. The most significant 
news is due on Thursday, with 
the release of May durable 
goods orders and weekly fig- 
ures on claims for unemploy- 
ment benefit 

GOVERNMENT 

BONDS 

The market is also facing a 
fresh influx of supply this 
week. The Treasury is sched- 
uled to auction $17bn in two- 
year notes today and Sllbn in 
five-year securities tomorrow 
afternoon. 

■ European government bond 
markets fell to new lows in vol- 
atile trading yesterday, on 
weakness in US Treasuries, a 
falling dollar and worries over 
rising inflation and talk of a 
global capital shortage. 

After opening lower on the 
back of the mark-down in Trea- 


suries on Friday, markets rose 
in the afternoon on a technical 
squeeze before heading back 
downwards. Futures trading 
dominated, with little activity 
reported in the cash market 

Traders said many US-based 
investors took advantage of the 
weakness of the dollar to 
switch from European into US 
assets. Dealers also reported 
position-squaring by Investors 
ahead of the end of the second 
quarter. 

■ Although German govern- 
ment bonds were the least 
affected by the seltoff, the Sep- 
tember bund futures contract 
on Ijffe fall by mine than 1 
point to a new low for the year 
before settling around 90.33, 
down 0.78 points on the day. 

“The market is taking the 
worst-case scenario on infla- 
tion and interest rates,” said 
Mr Ifty Islam; fixed income 
strategist at Merrill Lynch. 
"They are taking nothing on 
trust and want to see actual 
proof that [German] money 
supply growth is under control 
and inflation ig falling.” May 


M3 money supply data are 
expected this week. 

■ The French market was 
dragged down with the rest of 
Europe, with some added polit- 
ical uncertainty following the 
resignation of Mr Michel Roc- 
ard as head of the French 
Socialist party. 

The September future con- 
tract settled at 122.84. down 
OJM points. 

■ UK gilts also had a roller- 
coaster day, falling sharply on 
early selling in the futures pits 
and recouping some of their 
losses on late abort-covering. 

In the absence of market- 
moving domestic news, gilts 
tracked international markets 
lower. The September long gilt 
futures contract fell by about 
% paints to 983. 

■ Italian bonds fell sharply 
early on but recowed some- 
what on late shortcovering. 

A sharp rise in the repo rate 
at the Bank of Italy's latest 
open-market operations aggra- 
vated weak market conditions. 


The minimum rate rose to 8.05 
par cent, from 7.75 per cent at 
the last repo and above the 8 
per cent Lombard rate. How- 
ever, the central bank said this 
was an an o m a l y »wri it had no 
intention of pushing rates 
higher. 

Spanish bonds fared even 
worse, with the September 10- 
year futures contract falling 22 
points to 87.75. Its early plunge 
prompted the Spanish futures 
exchange to widen its daily 
limit up or down for the con- 
tract to 300 basis points from 
200 points. The Spanish 10-year 
bond yield spread over bunds 
widened to 362 basis points, 
from 336 points on Friday. 

B Japanese bonds took another 
tumble, dogged by jitters over 
domestic politics, the rise in 
commodities prices, tears of an 
expanding budget deficit and 
worries that economic recov- 
ery may lead to monetary 
tightening by the Bank of 
Japan. Since May 30, the yield 
on the benchmark government 
bond has risen by about 80 
basis points to 4J1 per cent. 


Treasury sets date for 
UK privatised debt sale 


By Antonia Sharpe 

The UK Treasury's 
previously-announced sale of 
debt issued by privatised com- 
panies will take place on July 
18, Salomon Brothers, the US 
investment hank acting for the 
Treasury, said yesterday. 

The sale, which the Treasury 
hopes will raise between £ibn 
and £I.5bn, includes bonds 
issued by British Telecommu- 
nications, London Electricity, 
Manweb, National Grid, 
National Power, Scottish 
Hydro and SeeboanL 

Issuers have been invited to 
submit firm offers to buy back 
their debt by noon on July 18. 


National Grid has pre-emp- 
tion rights to repurchase the 
two bonds selected for inclu- 
sion in the sale. If these rights 
are exercised the bonds will 
not be available for sale to 
third parties. 

The Treasury holds debt 
with a face value of £2.7bn 
issued by privatised utilities. 

‘ This summer's sale of debt 
forms part of the £52bn priva- 
tisation programme for 1994-95. 

The programme, which was 
announced in last November’s 
Budget, includes the receipt of 
final payments for BT3 shares 
and the sale of remaining 
stakes in the electricity genera- 
tors. 


Canada issue to replenish its reserves 


By Antonia Sharpe 

Fresh volatility in European 
government bonds brought 
new Issuance in the eurobond 
market to a virtual standstill 
yesterday, the only deal of note 
being a $ 2 bn issue of three-year 
eurobonds from fianafla. 

Syndlcate managers said 
that while the pricing of the 
issue was correct, they feared 
that the market would have 
difficulty in absorbing the 
bonds in view of the latest 
seB-aff in the markets and wor- 
ries about the dollar. They also 
questioned whether there was 
enough retail demand for 
short-dated dollar bonds to 
ensure swift placement. 

The Canadian finance minis- 


try said the size of the offering 
would enable it to become the 
new three-year benchmark in 
the eurodollar sector and 
would ensure a liquid second- 
ary market. The proceeds wlQ 
replenish the country’s foreign 
exchange reserves following its 

INTERNATIONAL 

BONDS 

recent sales of US dollars in 
the foreign exchange market to 
protect the Canadian currency. 

Lead managers Deutsche «nd 
UBS reported steady sales to 
investors in the Far East and 
Europe. However, syndicate 
managers expected loose bonds 
coming back into the market. 


especially from banks wi thin 
the syndicate, to cause the 
yield spread an the bonds to 
widen, even though the joint 
leads would be under pressure 
to defend the spread. At launch 
the bonds were priced to yield 
17 basis points over three-year 
Treasuries and when they were 
freed to trade the spread 
remained unchanged. 

The market is lnnfciwg ah^ad 
to Fannie Mae’s first global 
bond offering, due to be 
launched tonight to coincide 
with Tokyo trading hours. Pri- 
cing of the $L5bn issue of 10- 
year bonds is scheduled for 
Wednesday afternoon London 
time. They are likely to be 
priced to yield around 23 basis 
points over Treasuries. 


Later in the week, UCB 
Group, a subsidiary of Compag- 
nle Bancaire of France, is 
likely to raise £250m to £300m 
through an offering of mort- 
gage-backed bonds through its 
special-purpose vehicle, Leo 2. 
J.P. Morgan is believed to be 
handling the issue. 

• Standard & Poor's, the 
international rating agency, 
has affir med the long-term 
debt ratings of Barclays Bank 
and its nnlts (double-A for 
senior debt, double-A minus 
for subordinated debt and 
single-A plus for junior 
subordinated perpetual debt) 
and removed them from 
CreditWatch, where they were 
placed In March. The rating 
outlook is stable. 


Strong demand for 
Hungarian offering 


By Nicholas Denton 
in Bu d apest 

Hungary's largest initial public 
offering so far this year opened 
yesterday, a 29 per cent state- 
owned tranche in pharmaceuti- 
cals producer Egis. 

Part of the $44m issue is 
available on preferential terms 
in exchange for "compensation 
coupons,” special state securi- 
ties granted to victims of com- 
munist expropriation. 

The issue met strong 
demand from local investors. 
Some compensation coupon 
holders and speculators bad 
begun queueing last Friday 
and police had to intervene 
yesterday in Budapest to pre- 
vent scuffles and restore order 
to the queues. 

Foreign institutional inves- 
tors, for whom 16 per cent of 
Egis is earmarked, have also 
shown keen interest 

Although subscriptions for 
cash payment only begin 
today, early indications are 
that the foreign component 
will be two to three times over- 
subscribed. 

Egis shares have been priced 
at about half the Budapest 
Stock Exchange average, at 
just 7.3 times forecast 1994 
after-tax earnings of Ftl.87bn 
(518m). 

The London-based European 
Bank for Reconstruction and 
Development bought a 30 per 


cent stake in Egis in December 
last year and the purchase 
price Is linked to the Dotation 
value of the pharmaceutical 
company. 

The EBRD will therefore pay 
$45m for its shareholding, 
bringing the total raised in the 
privatisation of Egis to $89m 
and making the complete 
transaction the largest so far 
in Hungary this year. 

Egis will also become the 
second largest company on the 
Budapest Stock Exchange 
when it gains a listing in the 
middle of July. 

Lead manager for the Egis 
transaction Is CS First Boston, 
the international investment 
bank. CSFB and CA Securities, 
a subsidiary of Austria's Credi- 
tanstalt group, have dominated 
Hungary's new issue market 
this year. 

The Egis IPO is one of a 
series of equity issues by Hun- 
garian drugs groups, a sector 
in which the country is tradi- 
tionally strong. Shares in Chi- 
noin and Pharma vit go on sale 
later this week. 

Richter Gedeon, Hungary’s 
largest pharmaceuticals com- 
pany, is expected to follow Egis 
on to the stock market next 
month in a transaction of com- 
parable value. 

Schroders, the UK merchant 
bank and CA Securities are 
advising on the sale of about 30 
per cent of the company. 


Venezuela rating may fall 


By Tracy Corrigan 

Standard & Poor's may lower 
the Republic of Venezuela's 
doubled minus debt rating, 
which applies to the country's 
$ 2 bn worth of eurobonds. 

The country’s Brady bonds, 
consisting of $ 20 bn of debt 
issued as part of its 1990 com- 
mercial bank rescheduling 
agreement, are not rated. 


The rating was placed on 
CreditWatch with negative 
implications due to “the disar- 
ray in the Caldera administra- 
tion’s economic policies [and] 
the deepening crisis in the 
financial sector”. 

The move comes at a time 
when other La tin- Ame rican 
countries, such as Mexico, are 
hoping that their ratings will 
be raised. 


I WORLD BOND PRICES 1 

BENCHMARK GOVERNMENT BONDS 

fled Day’s 

Coupon Data Price change YMd 

Weak 

ago 

Morrih 

«*to 

Italy 

■ NOTIONAL ITALIAN GOVT. BOND (BTP) FUTURES 

0B=FQ* Lira 200m lOOthn at 10096 

FT-ACTUAIinSS FIXED INTEREST INDICES 

Price Indcas Mon Da/« Frl Aocruad 

UK Gffta Jun 20 drags % Jun 17 totaresi 

xd a 4- 
ytd 

— Low coupon yield — — Medium coupon yield— — High coupon yield — 
Jun 20 Jun 17 Yr. ago Jun 20 Jun 17 Yr. ago Jun 20 Jun 17 Yr. ago 


AustraRa 8000 09/04 09-8900 

EWutom 7.250 04AM 94-3500 

Canada" 8300 08/04 B1.9500 

Denmark 7.000 19/04 900200 

France BTAN 8.000 05/98 10Z2500 

CAT 5.500 04*04 84-2400 

Germany TrorJiand 6.750 0B/04 96.0800 

Italy 0500 01/04 85-0000 

Japan No 110 4400 08*09 10X8370 . 

i No 184 4.100 12/03 97.4030 

NaOMrianda 6.750 0104 88.1000 

Spotn 11X500 1MB 07.2000 

UK oats 6.000 Oa/99 80-29 

6.750 11/04 88-08 

9.000 1MB 101-24 

US Traosuy * 7.250 05/04 100-20 

6250 09/23 B8-20 

ECU (French Govt} 0000 04/04 85.0000 

London ddvbig. "Nrer Ytoifc mW-dw 
r Grass flmJtafing idWiaidhs un at 12J6 per osnt pqefcto 
Pries* US. UK kl raids, gttian In dKtorel 

US INTEREST RATES 


-2.480 0L62 &85 8S7 

+0050 8.10 7.90 7.43 

-0.750 933 8.78 &20 

-0.730 848 8j06 730 

-OHO 7X0 077 008 

-A 430 7.88 7.47 078 

-1.210 7.32 7.00 064 

-1.860 ll-O&f 10.04 926 

-0800 323 092 325 

-0520 4-40 423 3.75 

-0.720 726 7.12 082 

-2600 1097 1008 041 

-26/32 047 824 723 

-30/32 079 058 726 

-39*32 079 083 005 

-a/32 7.18 727 7.16 

-12*32 TAT 735 739 

-0800 829 721 7.16 

Write boat ratal stsndml 
by norraridorSJ} 

Saute; IMS hnmstfensf 


Open Sett price Change Mgh Low Eat wf Open Int 
Sap 10020 101.76 -*015 10248 9920 84696 86136 

Dec 100.70 +0.15 0 100 

m ITALIAN GOVT. BOND (BTPJ FUTURES OPTIONS (2JFFQ Ura2Qtkn 1MHt» of 10096 


1 Up to 5 yearn (24) 

12036 

-038 

121.12 

1.43 

5.77 5 ym 

053 

832 

750 

088 

054 

730 

081 

082 

738 

2 5-15 years (22} 

13733 

-033 

13833 

137 

042 15 yis 

&06 

058 

7.78 

081 

070 

014 

013 

000 

041 

3 Over 15 ^as p) 

16433 

-0.50 

166. BS 

239 

5-41 20 yrs 

857 

850 

7.96 

081 

070 

025 

090 

080 

046 

4 Irredeemables (B) 

17434 

-031 

170.15 

1.7B 

036 brad-t 

858 

858 

035 







5 AS Brocks (01) 

13533 

-aa 

13730 

1-84 

639 
















— 

— (nOaHon 694 — 

— 

— 

'Mation 1095- 

— 



Shftfi 

Price 

Gap 

■ CALLS 

Dec 

Sep 

- PUTS 

Dec 

10150 

250 

331 

235 

451 

10200 

234 

250 

259 

439 

10290 

010 

2.78 

255 

458 


tndeoc-lnfccd 


6* WL UWL Coat *144 Puts 2873. tadaus Opm int. CMS 23850 Puts 50686 


Spain 

■ NOTIONAL SPANISH BOND FUTURES (MEFF} 


8 Up to 5 years (2) 

7 Over 5 years (11) 

8 AJ stocks (13) 

Debentures and Loans 


18526 

16071 

17047 







Jun 20 Jun 17 

Yr. ago 

Jun 20 

Jun 17 

Yr. ago 

-0-15 

-0.64 

-059 

18553 

171.15 

171.79 

159 

058 

053 

253 
2. 55 
063 

Up lo 5 ynt 
Over 5 yra 

356 3.79 

096 351 

5 yww yietd — 

2-97 

353 

079 

078 

-15 year yMd- 

072 

071 

019 

034 

—25 year yield 


Jun 20 Jun 17 Yr. ago Jun 20 Jun 17 Yr. ago Jun 20 Jun 17 Yr. ego 


9 Debs & Loans (78) 12091 *021 127.19 226 525 020 073 8.78 929 068 012 

Avwaga grass nMm preai yields sra An n tema, Cwpen Bands; Law: Mt-THM; Usrihnc BK-10KH; HJ0c 11* and over, t Fin ytefct ytd Year to data. 


920 060 927 


Lunchtime 


Print rats 

Marrams. 
Fed Anb. 


FedJtmb at Usmttn. 


One oonh _ 
7% Itenerant.. 

ItoBB BOfflL- 

Sh month _ 
One year — 


Treasury HBs and Bond YWtfc 
an iteoyar. 


55 


4.14 TTnnor- 
422 Fhejw_ 
488 10-jear 
5.17 Shew 


589 

02S 

823 

7.16 

746 


BOND FUTURES AND OPTIONS 

Franc® 

■ NOTIONAL FRSiCH BONO FUTURES (MATF) 



Open 

Sett price 

Change 

»9h 

Low 

Est vol 

Open Int 

Sep 

11040 

11254 

-094 

11098 

11180 

• 297809 

120891 

Dec 

111.54 

111.94 

-0-94 

11180 

111.00 

2831 

8.756 

Mar 

110.74 

111.14 

-158 

11074 

11074 

2 

- 


■ LONG TERM FRENCH BOW OPTIONS (MATTF) 



Open Sett price 

Change 

Hgh 

Low 

Esl vaL 

Open int 

Sep 

8856 67.79 

-230 

8070 

8656 

88326 

92816 

Dec 

" 

“ 

" 

- 

" 

” 

UK 







■ NOTIONAL UK GU.T FUTURES (LlFFQ* £50.000 32ndS Of 100% 



Open Sett price 

Change 

High 

Low 

Eat vol 

Open tnL 

Jun 

100-06 99- ZB 

-1-06 

100-08 

99-14 

1038 

10275 

Sep 

99-02 96-19 

-1-06 

93-11 

97-31 

74338 

118458 

Dec 

97-19 

-1-08 



0 

67 

■ LONG GILT FUTURES OPTIONS (UFR3 E50800 64ths of 100% 


Strike 

Price 







Sep 

Dec 


Sep 


Dec 

98 

2-45 

3-02 


2-07 


3-28 

99 

2-12 

2-38 


2-38 


4-00 

TOO 

1-47 

2-13 


3-09 


4-39 


GILT EDGED ACTIVITY INDICES 

Jim 17 Jtna 18 June 15 June 14 


June 13 


FT FIXED INTEREST INDICES 

June 20 Jute 17 June iBJrene IS June 14 Vrago mgh~ Low 

Oovt.Seca.4MK) 91.14 91.79 9120 9228 9125 9041 107.04 9124 OR Edged bargains 901 905 1022 1172 1052 

Fixed Interest 10031 10037 10073 10012 10082 11040 13327 10821 6-day average 101.9 1012 1006 1032 909 

* ter tees. QoMsmmaat flacurttw Waft dntre tum pflariore 127^0 (9^735). low «ai8 pn/TBL Rued Irewoa Hgti atwa OTteterion: IM*7 pi/iW . tow 5033 0/1/7S) . Brts 10ft Oav*rom«n Socuftfco 15*10/ 
a and Rnd Manat lean. SE scMy Mm rabasod 1074 


FT/1SMA INTERNATIONAL BOND SERVICE 


Uded era 8» Hast taunuBonal bonds to which tores Is a adequda secondary mart*. Ufeat prices at 720 pm an June SO 

tsauad Bd Otar Chg. YkM toured Bfcf Offer a*. YMd 


rated BJd Otter Chg- YMd 


U& DOLLAR STHMGH13 


M. ji 


... | . 



DIRtt 


area v«*-w 

Price 

JuJ 

Sep 

Dec 

M 

Sap 

Dec 

115 

026 

139 

1.40 

050 

049 

- 

118 

012 

098 

156 

032 

4.15 

016 

117 

008 

072 

080 

- 

454 

- 

118 

054 

043 

057 

- 

050 

- 

119 

. 

030 

- 

- 

753 

- 

Est wL uteri, CM 83 810 

Puts 1ST 801. 

Previous dsjTs open Int. CM 310B16 Pure 340880 


Esl vdL KM. Ctfs 6172 Puts 8840 Pmtous day's open In, Cans S2142 Pm 37079 


Ecu 

■ ECU BONO FUTURES (MftHF) 

Open Sett price Change 
Sap 8090 81.42 -078 


Hfch 

8120 


Low 

8030 


Esl voL Open Int 
1.487 0372 


Germany 

■ HOmONAL GERMAN BUNO FUTURES (UFFET DM3SQ.000 IQOtfa of 100H 

Open Sett price Change «Q*i Low Eat wri Open M. 

9041 0033 -078 9073 6921 170991 156479 

8927 89.65 -OBI 9000 8922 792 2043 


Sep 

Dec 


US 

■ US TREASURY BOND FUTURES (COT) $100200 32t>da ol 10014 


■ BUNO FUTURES OPTIONS (LfTQ DM260200 polnta at 100% 


Suite 

Price 

Jd 

Aug 

CAULS — 
Sep 

Dec 

Jd 

Aug 

PUTS 

Sep 

Dec 

9000 

058 

158 

1.79 

135 

035 

1.15 

1.46 

230 

9060 

040 

1-20 

151 

1.72 

057 

137 

1.68 

237 

9100 

0.21 

098 

1-27 

150 

088 

185 

154 

235 



Open 

Latest 

Change 

W0*» 

Low 

Est vet 

Open toL 

JW 

103-29 

103-23 

-0-07 

103-29 

103-12 

19.430 

29,788 

Sep 

103-00 

102-24 

-0-07 

10300 

102-12 

466358 

349570 

Dec 

102-08 

102-02 

-0-08 

102-08 

101-24 

1,775 

37342 


Eat. <ML mdL CM 18807 PM 23100 Prwtom dsy 1 * open ML. CM 214162 Puls 228*12 

■ NOTIONAL MEDIUM TERM GERMAN GOVT. BOND 
(BOBUfUFFET DM250200 lOOfta of 100% 


Open 


Sep 


Soil price Charge 
9045 -070 




Lew 


Eat. vdl Open tnt 
0 76 


■ NOTIONAL LONG TERM JAPANESE GOVT. BOND FUTURES 

(UFFE) YIQOm IQOths af 10094 

Open dose Change High Low Est uoi Open W. 
Sep 107.78 10025 107.79 2991 0 

* URE eoomete tadad on APT. Al Open merest «g «l are lor previo us dwr. 


UK GILTS PRICES 


Had Pries E* or - 


_19M_ 
Noh Low 


M— — 1984 _ 

Bod htotva- Hffi UM 


Wte H) 


U_ — 1884 _ 

Q] Moat vor- HR UM 


gusts- {UMOWtaRn nan) 

Trees. ioocLu. lflMtL- 1M0 


MKteelSM— 

Trees ape I99ttt- 
tzpc 1905. 


hanc&sw-M- 

iQUpciaas 

Treat lSItff: 19B5tt- 




1248 
088 
1155 
088 
Ml 
11J5 

1038 

Borii (31tSe T99B&- — tL9S 
enmudon tone 1W» — 048 

COW 7pc 1997#-— — 

Tress I3 l vpc1897tt — 

EuJllDi»Ct9W- 

Tmasaitpc 1SB7# 

Each ISpc 1997- 

9%ciua 

Trara r^pc 

TrwaBJtPC l995-8tti_. 
14pc96-l. 


ihastSijps'Wtt- 
tttb )2pc 1998 -y. 
Haaa9»2pe1099»- 


HvataMMTaare 

EsdilJLipc 1999 

Tran lO'ajc 1900— 

rrsraapciew#---- 
CBiwa'Jten IQItfQ 1909— 

TnsoFltoBete* 

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26 


COMPANY NEWS: UK AND IRELAND 


Closure costs cut East 


Midlands Electricity 


By DavM Wighton 

East Midlands Electricity is 
increasing its dividend for the 
year by 16 per cent to 22.7p In 
spite of a sharp fall in profits 
due to the costs of closing most 

of its contracting operations. 

In May the company 
announced its decision to 
reverse its expansion into con- 
tracting and to writedown the 
asset value of its home secu- 
rity and retailing businesses. 

This resulted in a total 
exceptional cost of £129.5m 
which reduced pre-tax profits 
to £51 -2m (£155. lm) in the year 
to March 31. Turnover fell 8 
per cent to £1.44bn (£1.57bn) 
following the separation of the 
retail business. 

Mr Norman Askew, the new 
chief executive, said the divi- 
dend rise from 19. 5p, with a 
recommended final of I5.9p, 
reflected the strength of the 
underlying business. Operating 
profits advanced by 13 per cent 
to £18&8m (£162Jm). 

Mr Askew also pointed to the 
strong cash inflow last year 
which cut net borrowings from 
£141. 4m to just ram. More than 
half the inflow was due to one- 
off factors with underlying 


wish generation improving to 
£57.4zn (£3S.7m) 

East Midlands is to seek 
shareholder approval for the 
purchase of up to 10 per cent of 
its shares in life market 

Mr Askew, who conducted a 
full review of the group follow- 
ing his appointment in Septem- 
ber 1992, said this was consist- 
ent with its new strategy of 
focusing on its core electricity 
business. 

He said: “The first call on 
the group's cash is to invest in 
the core business to get costs 
down. However, the surplus 
should not be left tied up in 
the company but released to 
shareholders.” 

The company had ruled out, 
for the time being, the idea of 
moving into the provision of 
any other utility services, he 
added. 

Operating profit from the 
electricity distribution busi- 
ness rose by 10.6 per oent to 
£169 ,9m with the number of 
electricity units distributed up 
1.7 per cent 

Last year's restructuring of 
the electricity business, which 
will yield annual savings of 
£15m, resulted in the loss 
of 400 jobs and a further 100 


have gone so far this year. 

The retailing business, 
which was put into a joint ven- 
ture with Yorkshire Electric- 
ity, lost a total of £5.7m and Mr 
Askew said that farther 
restructuring was required in 
the electrical retailing market. 

Earnings per share fell to 

12l?p (53 ,3p) but before excep- 
tional rose to 63.7p (59.2p). 

• COMMENT 

Given the slump in earnings 
the 16 per cent rise in the divi- 
dend might seem over-gener- 
ous. But it is stfH covered 2J8 
times by earnings before excep- 
tional items anil the halpnrfl 
sheet Is in fine health despite 
the diversification damage. 
Although East Midlands * distri- 
bution business is already one 
of the most efficient in the sec- 
tor the new team, with a 
wealth of private sector experi- 
ence behind them, believe 
there is still a long way to go. 
For the moment all City atten- 
tion is focused on the sector's 
new price which the regulator 
will announce in August. Now 
yielding 5 per cent. East Mid- 
lands shares appear to he dis- 
counting all but the worst pos- 
sible outcome. 


Electra’s net assets improve 



DnvHuifMii 

Michael Stoddart (left) with Hugh Mumf cud, managing director: 
will retain holdings if market is not receptive to new issues 


nies, he added. 


By Bethan Hutton 

Net assets at Electra, the 
venture capital investment 
trust rose by 11.6 per emit to 
380Jp per share over the six 
months to the end of March. 

Total net assets stood at 
£65Bm at March 81, but have 
declined slightly since then. Mr 
Michael Stoddart, chairman, 
said he viewed the future with 
“tempered optimism''. 

Electra’s portfolio consists of 
about one third listed compa- 
nies and two thirds unquoted 
companies or listed stocks 
where there are dealing restric- 
tions. 

About 30 per cent is invested 
in the OS. Most of the remain- 
der is in the UK, with a few 
small holdings in continental 
Europe. The fond does not cur- 
rently invest in east Asia, but 
said it had plans for the region. 

The listed portfolio grew by 
17.6 per cent over the half year, 
compared with a 3.7 per cent 
rise in the FT-SE-A All-Share 
Index. The nnlisted portfolio 
grew by 12 per cent 

US growth lagged behind the 
UK because of declining US 
stock markets and poor perfor- 
mance by a number of compa- 
nies, including Atlantic Coast 
Airlines, Sphere Drake Hold- 
ings and US Long Distance. 

New unlisted investments, 
amounting to £7 1.2m, were 
split almost equally between 


the US and the UK. Realisa- 
tions of unlisted investments 
brought in £29fon. 

Daring the half year, four 
companies in the portfolio 
were listed and since the end 
of March a further three have 
floated. Two more, EunxDollar 
and Pillar Property Invest- 
ments, have announced plans 
to seek a London listing. 

"Although we take advan- 
tage of market conditions to 
realise investments through 
flotations, we are happy to 
retain our shareholding if the 
stock market is not receptive 
to new issues," Mr Stoddart 
said. Trade buyers were also 
interested in several compa- 


Net available revenue for the 
half year rose to £6. 94m 
(£6.05m) and an interim divi- 
dend of 3-55p (3j45p) is declared 
from earnings per share of 
4.0lp (3.5p). 

Electra will shortly lose its 
position as the UK's largest 
venture capital trust, with the 
flotation of 3L Its results will 
be watched closely for its pos- 
sible influence on the pricing 
of the 3i issue, due to be 
announced tomorrow. 

Electra shares closed up 9p 
at 306p yesterday, a discount erf 
about 19 per cent to the latest 
net asset value of 378p. 

See Lex 


Critchley 26% ahead at £3.85m 


By Paul Taylor 

Critchley Group, the electrical 
cable accessories manufac- 
turer, reported a 26 per cent 
increase in pre-tax profits from 
£345m to £3£5m in the year to 
March 31, 

The outcome, achieved on 
turnover ahead 21 per cent to 
£28. 9m. was struck after a 
£750,000 provision to cover 
moving and other costs. 

It was in line with forecasts 
made last month when the 
group announced plans to buy 
Men to, a German cable identi- 
fication products group, for 
DM27. 5m (film). 

The acquisition was funded 
in part by a £10m open offer 
to shareholders and was com- 
pleted last week. 

The Critchley Label Centre 
business acquired from BT in 


May last year contributed 
S3 33m . 

Earnings per share grew by 
10 per cent to 2Lip (I9.lp), held 
hack by a slightly higher tax 
charge rate and the dilutive 
effects of the shares Issued at 
the time of the flotation in 
November 1992. 

The proposed final dividend 
is increased by 15 per cent to 
5Jjp, making a total of 8.1p for 
the year. The shares closed up 
6p at 444p. 

Mr Ian McCallum, chief exec- 
utive, said he was pleased with 
the results. 

"Margins Improved across 
the group and we are particu- 
larly encouraged by the 
increase in sales overseas 
which represent nearly 40 per 
cent of the total," he said. 

Operating profits increased 
by 24 per cent to £3.73m (£3m). 


Organic growth accounted for 
about a third of the increase. 

The core Critchley electrical 
cable accessories and identtfi-. 
cation business repeated only a 
modest domestic sales 
increase, reflecting the discon- 
tinuation of some low mar gin 
products and the slow down in 
the Implementation of some 
large projects in the UK. 

However, accessories sales 
improved from £17.4m to 
£20.4m, helped by an li per 
cent increase in exports and 
the Critchley Label Centre 
acquisition. Divisional profits 
increased by 6.3 per cent to 
£2. 7m, Including a £237,000 con- 
tribution from Critchley Label 
Centre. 

Net interest receipts fell to 
£120,000 (£152,000); the group 
ended the period with net cash 
of £3.7m. 



LMS 


Annual Results 

Year ended 31 March 1994 

Net rental income record £30 million (1993 - £29.5 mflfioo) 
Profit for the year £20.3 million (1993 - £16 J million) 
Portfolio valuation £330 million (1993 - £321 million) 
Shareholders’ 1 funds £319 million (1993 - £258 minion) 
Earnings per Ordinary share 8.59p (1993 - 7p) 
Dividends per Ordinary share 4.2p (1993 - 4p) 


D Increase in tenant interest with lettings befog established 
on improving terms 

D Group’s balance sheet exceptionally strong with cash 
and listed securities totalling £190 milli on 

□ Net borrowings at 22% of shareholders’ funds 
O Net interest covered 2.6 times by net rental income 

Rtfortmi Aamodt amtiatirfim tkt Sxntory 
LONDON MERCHANT SECURITIES pic 
CABLTOM BOUSE. 33 ROBERT ADAM STREET, LONDON W1M SAH 


British Steel sees future in the east 

Andrew Baxter on the company’s long term growth possibilities 


TURNOVER 

1993 

Cm 

1994 

£m 

By destination 



UK 

Rest of Europe 

Other arees 
row 

2,187 

1.465 

641 

4£Q3 

2,233 

1,223 

735 

4,191 

By product grouping 



Unseated strip products 

Coated strip products 

Sections and plates 

Tubular products 

Stainless products 

Other steel products 

Total finished products 

Semifinished products 

Total steel industry products 

860 

854 

871 

436 

189 

65 

34277 

228 

3,505 

955 

918 

931 

390 

74 

3^68 

237 

3£05 

OEsMbutton 

Others 

Total 

685 

113 

4,303 

566 

120 

4,191 


Emap 
approach 
rebuffed by 
Trans World 

By Raymond Snoddy 

The board of Trans World 
Communications yesterday 
rebuffed an approach from 
Bim^ the media nil exhibi- 
tions group, for a recom- 
mended takeover that would 
have valued the commercial 
radio group at about 
£70m. 

The statement came after 
last week’s announcement that 
Emap, which already owns 30 
per cent of Trans World, had 
an agreement giving it until 
June 22 to buy at 181p a share 
the 22 per emit stake owned by 
Mr Owen Oyston. 

Hie six members of the 10- 
strong Trans World board who 
did not exclude themselves 
from the decision concluded 
that the premium on offer was 
not high enough. 

The hoard also expressed 
concern that the deal could 
face a legal challenge. 

A full Emap takeover of 
Trans World would breach the 
legal limit on the number and 
size of commercial radio 
hoences which can he held by 
one company. 

The Radio Authority, the 
industry regulator, has agreed 
"an ownership structure'’ that 
could be put in place for part 
of Emup's existing radio inter- 
ests to enable it to comply 
with the rules. 

The directors of Guardian 
Media, publishers of The 
Guardian, which owns 20 per 
cent of Trans World, sepa- 
rately made it dear yesterday 
that it was considering a legal 
challenge to the ownership 
arrangements. 

The Trans World board said 
yesterday that the 18lp price 
represented a premium of 5 
per cent over the 172^p aver- 
age of marked bargains on the 
day before the Emap 
announcement. 

The board also emphasised 
yesterday that under the City 
Code on Takeovers and Merg- 
ers, Emup’s statement that it 
would not increase its 181p 
offer was now binding. 

Emap declined to comment 
yesterday, although it Is dear 
that if, as seems likely, it 
deddes to go ahead with its 
purchase of the Oyston stake 
before tomorrow’s deadline, it 
will hold a majority of the 
company. 

That in turn could lead to 
considerable uncertainty if 
there is a legal challenge. 

For now the Trans World 
directors urged shareholders 
to take no action at the 
moment 


T ucked away in British 
Steel’s results statement 
is a figure which could 
hold the key to the group’s 
long-term growth strategy as it 
grapples with the maturity of 
its traditional markets and 
fl^ntiniring confusion over sub- 
sidies in Europe. 

Turnover outside the UK and 

continental Europe, classified 
as other areas, rose from £641m 
to £735m for the year to the 
end of March. As British Steel 
says. North American and east 
Aslan rnarlrpts were Mining. 

Stripping out North Amer- 
ica, turnover in the rest of the 
world was between £350m and 
£400m, compared with £340m. 
of which Asia accounted for 
£26im. The year before it bad 
reached £390m as British Steel 
In the depths of the UK reces- 
sion, desperately sought mar- 
kets where steel was in 

The figures are Important 
because they encompass devel- 
oping countries where demand 
for steel is still growing fast, 
notably east Asia, and is set to 
continue that way for a decade 
or more. But they also present 
a challenge to British Steel, 
which accepts that tfw» num- 
bers cannot grow much, more 
unless it develops its presence 
in these markets. 

British Steel has been one of 
the mam beneficiaries of Asia's 
net deficit in steel production, 
helped by a joint venture it set 
up with Jardine Matheson of 
Hong Kong in 1986, and by a 
network of British Steel sales 
offices. The latest one, in Ho 
Chi Mirth city, is just about to 
open. 

Among the record 30m 
tonnes of steel imported by 
various producers into China 
last year were more than 
100,000 tonnes of British Steel 
long products used in construc- 


tion. 

The company has followed 
and supported British industry 
in the region. Its structural 
steel has been supplied to big 
projects in Hong Kong, the Phi- 
lippines and Taiwan. It 
recently received its first order 
from Vietnam, for 100 tonnes 
of structural sections. 

But along with most of its 
European and US competitors, 
British Steel has no mins in 
Asia, and most of the steel it 
sells in the region is exported 
from the UK. The company is 
thus faced with heavy trans- 
port costs and the threat from 
countries such as China and 
India which want to become 
self-sufficient in steel or even 
net exporters. 

"If you have not turned your 
export sales into domestic pro- 
duction, you will lose out," 
said Mr Edward Hadas. steel 
analyst at Swiss Bank Corpora- 
tion. "At some point that 
export market won’t be there.” 

British Steel’s three-pronged 
strategy for the region and 
other steel markets such as 
central and eastern Europe, 


recognises that it must have a 
presence there, although it 
fiiiig short of turning them into 
"core” strategic regions. 

ft believes it ought to be able 
to optimise revalues by being 
aware of opportunities in these 
markets and becoming 
involved In projects when 
something more than a com- 
modity grade of steel is needed. 

Having built up a worldwide 
marketing capability it has the 
necessary shipping, financing 
gnri other skiQs to make a suc- 
cessful steel sale. 

T hirdly, and most signifi- 
cantly, it is developing 
what it sees as a “path- 
finder” role, recognising the 
difficulty of predicting which 
markets will have the stron- 
gest growth. The aim is to posi- 
tion the company within indi- 
vidual mar kets to increase its 
knowledge, and identify possi- 
ble investment decisions and 
potential local partners. 

Investments could be any- 
thing from a service or distri- 
bution centre to a full-blown 
mm . For example, if .British 


Steel was to become a large 
supplier in flat-rolled steel 
markets in Asia, as demand for 
cars and domestic appliances 
accelerates, it may have to 
make such Investments. 

Mr Brian Moffat, British 
Steel’s chairman and chief 
executive, said the company 
was more likely to invest to 
add value to the steel process 
rather than manufacture raw 
steel. Characteristically, 
though. British Steel is not 
rushing, and Mr Moffat said 
"nothing is immediately immi- 
nent". 

However, some observers 
believe the company should 
not wait too long, or risk being 
shut out by the expansion 
plans of indigenous producers 
- especially the Chinese. 

Mr Hadas said the rational 
strategy for British Steel would 
be to use any excess cash flow 
to invest in processing or prod- 
ucing steel where demand 
growth was higher. 

Expansion outside Europe 
and North America should be 
at the top of the company's fist 
of strategic priorities, he said. 
The risks may be relatively 
high, but the company had 
technical, management and 
marketing expertise to offer. 

Ultimately, the world’s 
expanding steel regions look 
like providing a test for Mr 
Moffat in one of his two key 
taoto; at British Steel - finding 
ways to grow its revenues. His 
prowess in the other task, con- 
tinuing the fight to contain 
-costs and boost productivity 
further, is already proven. 

Meanwhile North America is 
not being ignored. The com- 
pany said it was finalising a 
study to make a significant 
investment in Tuscaloosa 
Steel Its Alabama subsidiary, 
to create a "world competitive" 
mini- mill producing steel plate. 


Aer Lingus flies into fresh turbulence 


By Tim Coone In Dublin 

Aer Lingus, Ireland’s state airline , is again 
running into turbulence as 2$00 staff at 
Team, its aircraft maintenance subsidiary, 
yesterday rejected new p roposals on pay 
and working practices. Also 750 cabin 
crew are threatening industrial action 
over new rostering arrangements. 

The disputes come exactly six months 
after the European Commission approved 
a I£175m (£172m) equity Injection by the 
Irish government into the airline, to 
finance a restructuring package to return 
it to commercial viability. Same I£56m has 
been used on redundancies, while the 
remainder is being used to cut debt 

After a year of tense negoti at ions and 
repeated threats of strike action, last 
November the airline’s 5,500 workforce 


finally agreed to 800 redundancies and sig- 
nificant changes in work practices, the 
overall effect of which has been to strip 
some I£50m out of annual operating costs. 

However, trade union representatives 
for the cabin crews and the aircraft main- 
tenance staff say that the Aer Lingus man- 
agement is now seeking further pay cuts 
and new rostering arrangements which 
break last November's agreement. 

A transatlantic Boeing 747 flight was 
cancelled at the weekend following a crew 
dispute, causing disruption for some 900 
passengers who had to be accommodated 
in hotels in Boston, Dublin and Shannon. 

The cabin crews have voted by nine-to- 
one in favour of industrial action, which 
will begin in two weeks' time unless agree- 
ment can be readied in the interim, and 
will affect all Aer Lingus flights. 


Mr Paul O’Sullivan, the union negotiator 
for the cabin crew said: “The strength of 
feeling can be gauged from the feet that 
cabin crews have never in the past voted 
in favour of going it alone on industrial 
action.” 

Management at Team have warned that 
unless the workforce accepts proposals 
now before it, 850 compulsory redundan- 
cies will have to be made beginning this 
week. Such a move would trigger strike 
action by the union. It is thought this 
would rapidly spread throughout the Aer 
Lingus group. 

Analysts believe that Team's financial 
problems will be compounded by the air- 
line’s decision to replace its ageing Boeing 
747s with European Airbus A330s, the first 
of which recently entered service. Team is 
tooled up to work an Boeing aircraft only. 


Hasbro may raise its 900p a 
share offer for JW Spear 


By David Blackwell 

Hasbro, the biggest US toy and 
games group, yesterday did not 
rule out raising its bid in the 
battle for JW Spear, the British 
company which owns the 
rights to the Scrabble board 
game outside North America. 

So far Hasbro, which owns 
Scrabble in the US and Can- 
ada, has received no accep- 
tances for its 900p a share bid, 
launched at the end of last 
month. Yesterday it extended 
its offer, which values Spear at 
£4&9m, to July U. 

Mattel the rival US toy 


group which made a last min- 
ute bid for Spear, yesterday 
posted its offer document to 
Spear shareholders, offering 
£10 a share in cash or loan 
notes. 

Mr Nigel Hutton of Hasbro 
UK said the group was still 
considering all its options, and 
would he looking at both the 
Spear defence document and 
the Mattel offer document 
closely. 

The Spear defence document 
is expected later this week. 
The board is not expected to 
find either offer fair and rea- 
sonable, although the higher 


Mattel bid will be preferred. 

Hasbro, winch already owns 
more than 26 per cent of Spear, 
launched its bid after trustees 
of some Spear family trusts 
had given nTfdftrfeil. to mil 
a further 249 per cent unless a 
higher offer was received in 
three walking days. 

The Mattel bid was launched 
at five minutes to midnight on 
the last day. Last week a High 
Court judge released the trust- 
ees from any obligation to sell 
their shares to Hasbro, who 
had claimed that Mattel's late 
offer had not been properly 
announced. 


Acquisitions help lift Filofax 


By Carotins Southey 

Four acquisitions in the last 12 
months helped Filofax, the 
USM-quoted personal organiser 
group, lift pre-tax profits by 48 
per cent, from to £3 -26m, 
and total sales by 39 per cent 

Turnover from continuing 
operations rose from £l4.4m to 
£17.7m while acquisitions con- 
tributed £2L37m in the year to 
March 31. Three acquisitions, 
including Swedish and German 
distributors, helped continen- 
tal European sales rise by 84 
per cent to £7m (£3 An). UK 
sales increased by 30 per cent 
to £7m and on a Kke-fOr-like 
bams by 20 per cent to £6£m. 

A final dividend of ip lifts 


the total to L75p (L25p), pay- 
able from earnings per share of 
10-lp <7.7p). 

The group ended the year 
with net cash of £2 .41m 
(£&35m) after investing £4£m 
in acquisitions. 

Mr Robin Field, chief execu- 
tive, said Filofax looked for- 
ward to increased growth, par 
tlcularly In continental 
Europe, where current sales 
represented a “small part of 
future potential". He said the 
group remained alert to oppor- 
tunities for further acquisi- 
tions. 

The UK market for ring 
binder organisers was growing, 
he said, and the group had 
Increased its market share to 


between 55 and 60 per cent 

The acquisition of Drakes in 
December had enabled the 
group to increase its sales 
force jn the UK It also pro- 
vided scope to develop new 
product lines, such as the self- 
stick and carbonless paper 
products in which Drakes spe- 
cialised. 

Mr Field said the group had 
moved to secure Its own sales 
and distribution networks in 
Germany and Sweden follow- 
ing the success of its sales sub- 
sidiary in France where turn- 
over had trebled. 

He said the Filofax and 
Drakes brands would be 
launched in Denmark in the 
current year. 


Signet chairman’s pay 
jumps 78% to £512,000 


By Neti Buckley 

Mr James McAdam, executive 
chairman of Signet, the jewel- 
lery group formerly known as 
Batners, enjoyed a 78 per cent 
pay increase to £512,000 last 
year, according to the annual 
report. 

His total pay the previous 
year was £288,000. Signet said 
an increase in Mr McAdam’s 
bade salary from £240.000 to 
£300,000 reflected bis taking 
over the group chief execu- 


tive’s role from Mr Gerald Rat- 
ner, in addition to the chair- 
manship, in November 1992. It 
had been reviewed by external 
consultants. 

Mr McAdam was also paid a 
£130,000 bonus, reflecting his 
success in returning the group 
to an operating profit for the 
year to January 29, and in 
meeting targets for control of 
borrowings and costs. His pen- 
sion contributions and other 
benefits increased from £48,000 
to £82JX». 


Towles advises no 
action on offer 

Mr Bill Moss, chairman of 
Towles, the lossmaking cloth- 
ing maker, said there was 
nothing new in the offer docu- 
ment from London City, the 
Australian investment group 
which has made a M.Mm rash 
bid for the company. 

London City would have to 
offer an adequate price, he 
said, and advised shareholders 
to take no action. 

He also aiwiminwi riia sale 
of the Derby Hoad factory and 
premises, In Loughborough, 
Leicestershire, for £550,000. 


Low orders 
push JFB 
into the red 

By Caroline Southey 

Low order books pushed 
Johnson & Firth Brown, the 
specialist engineering group, 
into the red at the interim 
stage, with pre-tax losses of 
£842,000 to March 31 against 
profits of £2.07m last time. 

Turnover rose from £63 ,3m 
to £64.7tn while operating prof- 
its fell from £2i3m to £177.000. 

The Firth Rixson Division - 
which includes alloys and cast- 
ings - saw profits halve to 
£749,000 (£L55m) an turnover 
up from £3&Sm to £44m. 

The light engineering divi- 
sion Incurred operating losses 
of £2.19,000 (profits £L71m) on 
sales down from £24. 4m to 
£20.7m. 

Mr George Hardie, joint 
group managing director, said 
JFB appeared to be u t u rning 
the corner after a most difficult 

18 months”. 

Although margins remained 
depressed at Firth Rixson, 
order levels in the rings and 
forgings businesses had 
improved. 

Mr Hardie said there were 
plans to sell companies in the 
tight engineering division as 
part of the group’s efforts to 
focus on core activities, partic- 
ularly rings and forgings. 

He said he did not anticipate 
further lay-offs following the 10 
per cent cot in the workforce, 
net of the US acquisition, in 
the last 12 months. 

The interim dividend is 
passed (lp). Losses per share of 
05p compared with earnings of 


Redrow and 
A McAlpine 
combine 

By Andrew Taylor, 

Construction Correspondent 

A plan to build a £l45m 
housing development sooth of 
Northwich, Cheshire, was 
announced jointly yesterday 
by A lfred McAlpine, the con- 
struction group, and Redrow, 
the housebuilder which came 
to the market earlier this year. 

The companies have com- 
bined to acquire 220 acres of 
land, payment for which is to 
be phased until 2001. The total 
cost of tfae land purchases, 
including 1 acquiring certain 
properties and c onstru cting a 
spine road, is thought to be in 
the region of £18m. 

This would be equivalent to 
13 per cent of the expected 
total value of the development 

Planning permission for the 
development of about 1,800 
homes over 10 years has been 
granted by Vale Royal Bor- 
ough Council. The develop- 
ment, to be known as Kings- 
mead, will provide shopping 
and co m munity facilities and 
more than 40 acres of open 
space and a new access road to 
Northwich town centre. 

Construction is planned to 
start this auburn and will pro- 
vide a range of homes from 
social housing to low density 
executive homes. 


£62m on his owi 
shares, priced 
closed at ugp y 


DIVIDENDS ANNOUNCED 


CHtcWey — fln g» 

East Mttands fln 15 a 

Beetra tnv T« lm ass 

Bootee Data fm 0.667 

f™** 9 .. . — -fin it 

FtatehertCng 1 

Johnson Firth ... . ^ 

Mot Jnv Trust _J m 0.9 ft 

Mot Inv Trust fin n « 

.... f in li 

shown pence per sha 


Aug 17 4.8 

0« 3 13.78 

Aug 11 a 45 

Aug 3 CL667* 

Nov 1 Q .75 

0 « 1 0.5 

July 22 1 

July 22 
Aug 11 


Equiwala « after aHowingf 





mi turhulen 


5 - i ' 

lull: 


> \ I • \ ■ 

\ t 


O'liil’!:- 


FINANCIAL times TUESDAY JUNE 21 1994 


27 


COMPANY NEWS: UK 


Chains side 
behind Renold’s 
advance to £6m 


By David Blackwell 

Renold, the chain and gear 
manufacturer, more than 
doubled its dividend after 
reporting a fivefold ingrafts in 
profits. 

For the year to April 2, pre- 
tax profits were Mm on sales 
of £130m, up from a previous 
£l-2m on sales of £125m. The 
shares closed yesterday up 4%p 
at 145Kp. 

Mr David Cotterill, chief 
executive, said the group had 
succeeded in bringing in the 
profits and generating signifi- 
cant cash, with little i n c rea s e 
in sales. At least £4m of the 
increase in sales represented 
currency going 

There were modest signs of 
recovery in Europe, which he 
hoped would lead to increased 
volumes this year. "There is 
same fire in the order book at 
the moment,” he 

The profits were struck after 
£lm of redundancy' costs, 
mainly in Germany, compared 
with £l.4m last time. They 
were helped by a tumround in 
the Milnrow gears business 
after two years of losses. 


However, chains remain the 
group’s chief earner, account 
ing for 60 per cent of sales. 
Productivity gains and market- 
ing focused on higftw margin 
goods were behind the strong 
improvement in the UK. said 
Mr CotterilL 

The fact that most of the 
profits increase arose in the 
UK, where tax losses are avail- 
able, led to a substantially 
lower tax charge of 18 per cent, 
compared with 50 per cent last 
time. 

Capital expenditure was 
£3.5m, below depreciation of 
£f>m, Mr Cotterill said spending 
would increase to £5m this 
year, much of it at Holroyd, 
which makes rotors used in air 
conditioning refrigeration. 
Holroyd has won a Long-term 
contract with a leading US 
compressor manufacturer, 
commencing next January. 

Net interest payable fell from 
£l.9m to £1.4m, and gearing 
was reduced from 23 per cent 
to 2 per cent 

Earnings per share were 7.4p 
(0.9p). A recommended final 
dividend of 1.8p gives a total 
for the year of 2J5p, up from Ip. 


Eldridge Pope expands 
estate with Hovetop buy 


By Graham Defier 

Eldridge Pope, the USM-traded 
brewer and wine shipper, is 
expanding its pub estate 
through the acquisition of Hov- 
etop, which runs 22 houses, 
mainly in Bristol and along the 
Thames Valley. 

The vendors are Mr Miehapi 
Collins, a director of Eldridge 
Pope, and Mr M Jackson. Ini- 
tial consideration of £2.6m in 
cash and shares will be 
adjusted either way to between 
£2.15m and £3-3m depending an 
Hovetop's performance in the 
12 months to end-April 1995. 

Mr Christopher Pope, chair- 


man, said the purchase would 
increase the nvjmngnd estate by 
more than 20 per cent, enlarge 
its catchment area and 
increase the food element. 
Some 40 per cent of Hovetop’s 
turnover of £2Jta in the year 
to April 2 comprised food sales. 

He anticipated “significant 
cost savings” within the Hove- 
top estate, "particularly in the 
areas of distrib uti on, adminis- 
tration and central overheads". 

Eldridge Pope, best known 
for its Thomas Hardy and 
Royal Oak brands, recently 
announced pre-tax profits of 
£606,000 for the half to March 
31, on turnover of £17 .3m. 


Growth by successful targeting 

Andrew Bolger looks at how Castrol has expanded worldwide 


C an Castrol keep it up? 
The famous brand is 
the centre of the lubri- 
cants business which is mainly 
responsible for the buoyant 
performance of Burmah Cast- 
rol in recent years. 

While the group’s chemicals, 
liquified natural gas, fuels and 
energy businesses have all suf- 
fered during the recent reces- 
sion, Castrol's profits have 
maintained a compound 
animal growth rate of 14 per 
cent since 1985, except for a 
flat patch in 1990 caused by the 
Gulf conflict 

Operating profits from the 
lubricants side increased last 
year by 22 per cent, and now 
contribute two thirds of group 
profits. This steady growth has 
helped offset disappointment 
over Bunnah’s purchase in 
1990 of the metallurgical chem- 
icals businesses oT Foseco for 
£26Qm. 

The group has admitted - 
with hindsight - that it paid 
too much for a business which 
had to he shrunk after the 
foundries it services plunged 
into recession. In spite of this, 
Burmah Castrol's shares have 
outperformed the market by 44 
per cent since the beginning of 
1992. 

Castrol has Increased sales 
at a compound annual rate of 
almost 6 per cent, although the 
world lubricants market has 
been relatively flat over the 
last 10 years. 

The group has a high mar- 
keting spend, sponsoring rally- 
ing, Formula 1 racing and the 
Indy Car Series in the US. Tele- 
vision adverts encourage 
motorists to cosset their engine 
by paying a bit more for the 
“liquid engineering” of Cast- 
rol's high-margin GTX brand, 
rather than a standard lubri- 
cant 

One of its greatest marketing 
successes has been in the US, 
where over the last 10 years 
Castrol has raised its share of 
the DIY lubricants markets 
from 5 per emit to more than 15 
per rent - just behind the mar- 
ket leader, Pennzofl. 

Castrol baa also spent ywim 
(£13m) on launching a syn- 
thetic motor oil in the US, tar- 
geted at the enthusiast and the 


Btunuto -Castrol: lubricants tfnista 


*1983 turnover: £L63bn 


North America 
£502501 .■ 



Etaope . . Europe 
ESTSAm ' f 


Operating profit £15&4m 
(after chape at £47m (or 
aortal research, moketoig a other costs) 


North America 
£50.7m 


As&CMaLZm 


more terhnirally ad v anced ? pd 

of the American market In 
spite of selling at nearly four 
times the price of ordinary 
lubricants. Syntec has been 
well received and is expected 
to move into p ro fit thi« year. 

Although such products may 
never gft fo a large share of the 
market, the establishment of 
“flagship” products allows 
Castrol to create gradations in 
the market of two or three 
products at intermediate 
prices. 

Castrol has operations in 50 
countries and sells to 100 more. 
Some of its greatest successes 
have been in developing coun- 
tries. where economic growth 
hag fuelled consumption. Last 
year Thailand came Uifli in 
Castel's profits league - one 
step above the UK. 

In Asia. Castrol is targeting 
what it calls the “have somes” 
- consumers with annual 
incomes of more than $18,000 
per household. It estimates 
there are currently 56m to 60m 
in this category, and the figure 
could swell to 300m by the end 
of the century. 

Castrol says this group has 
emerged as the real middle 
Haas in Asia and hag typical 
middle Hass aspirations - it 
wants to buy houses, cars and 
consumer durables. Right 
under this level are the "near 
haves”, which could be as 
many as 600m by 2000. 

Mr Ian Pringle. Castrol's 
Asia director, says; “The “have 
somes’ are key to Castrol 


Improving market lifts imry to £18.3m 


By Vanessa Houkler, 

Property Correspondent 

Imry Holdings, the property company that 
was taken over by Barclays after one of 
the biggest debt writedowns in corporate 
history, yesterday announced a return to 
profitability. 

It made a pre-tax profit of £l&3m tor the 
12 months ended March, compared with a 
loss of E245m last time. 

Net assets increased by 26 pm- cent from 
£71m to £89.3m, while gross property 
assets rose from £290m to £367ttu 


Mr Martin Myers. rWrf executive, said 
be believed that "Imry Is well placed to 
take advantage of a generally improving 
market, which I expect to continue for the 
next few years”. 

Mr Myers said Barclays did not intend to 
continue to own Imry in the long term, 
although there were no immediate plans 
to float the company. “We are not really 
thinking about it We are too busy build- 
ing up the company." he said. Barclay’s 
involvement in Imry stems from 1989 
when it financed a Leveraged takeover. 

During the year, Imry bought £145m of 


NEWS DIGEST 


property, while sales totalled £39.6m_ The 
largest deal - in partnership with GE Cap- 
ital - was file acquisition of 77 properties 
for £U2 ul This was funded by loans from 
GE Capital, Barclays Bank and Imry Prop- 
erty Holdings. It also bought 13 develop- 
ment properties for £5-9m from General 
Accident 

Following the year end, Imry has 
reached agreement with Southampton 
City Council to develop a 30 acre site in 
the centre erf the city into retail ware- 
houses and a 500,000 sq ft retail scheme. 

No dividend is proposed. 


EDP falls 
to £2.06m 
at midway 

Electronic Data Processing, the 
computing services company, 
reported pre-tax profits down 
from £L34m to £2.06m for the 
haW year to March 31. Turn- 
over fell from £7 85m to £7.18m. 

The company attributed the 
foil to <witinnin ff pressure on 
hardware prices, tough trading 
conditions and reduced inter- 
est income of £251,000 
(£300,000). Cash balances at 
March 31 were £l2£m. and the 
company is seeking to acquire 
compatible software busi- 
nesses. 

Mr Michael Heller, chairman, 
said takeover discussions were 
taking place but were depen- 
dent on a more “realistic" atti- 
tude to pricing on the part of 
the vendors. 

Earnings per share dipped to 
5,l2p (6p). but the interim divi- 
dend is maintained at 0.667p. 

Brooke Tool in the 
black at £76,000 

An increase in export business 
helped Brooke Toed Engineer- 
ing (Holdings), the compo- 
nents, cutting tools and 
springs company, to report a 
turnround from pre-tax losses 
Of £397.000 to profits Of £76,000 
for the six months to end- 
Mareh. 

The outcome was achieved 
on turnover up from £ 7 . 2 2 m to 


£7.71m, of which some 40 per 
cant was in export sales. 

There had been little 
i>np nB Bii|Mit in the hump mar- 
ket, the directors said. 

The interest charge was cut 
to £166,000 (£257,000) and earn- 
ings per share emerged at (L2p 
(l.lp losses). There is, however, 
no interim dividend. 

Property side lifts 
Fletcher King 34% 

A strengthening property mar- 
ket helped Fletcher King, the 
commercial estate agency, to a 
34 per cent increase in pretax 
prefits and a 50 per cent divi- 
dend rise for the year raided 
April 30. 

Pre-tax profit rose from 
£224,000 to £301.000. The 
improvement came from the 
property side, with Howard 
Associates, the building ser- 
vices subsidiary, breaking 
even. Turnover was static at 
£4J3m (£4jS7m). 

Earning s per Share came out 
ahead at 21p (L6p). A recom- 
mended lp (0-5p) final gives a 
total l-5p (lp). 

Provider of wood to 
the stars seeks £1.6m 

The producers of Batman and 
Robin Hood, Prince of Thieves, 
among others films, had no 
need to worry where they 
would find wood when they 
came to the UK They merely 
went round to the Pinewood or 
Shepperton depots of John 
Mansfield Group. 

Now the timber processing 


BANCO DI NAPOLI 
US$100,009,000 

SUBORDINATED FLOATING RATE DEPOSITARY RECEIPTS DUE 1»6 
fvlotic* is hereby given lluk in accordance with the provisions of the above 
MMiioMd Floating Rate Depositary Receipts. the rale of interest for the six 
months period from June 21. 1994 «o December 21, 1994 (183 days) b « 
been fixed at 5.2255> per annum. 

The micro* payable on December 21. 1994 will be USS 265.60 in respect of 
each USS IMttl New: and USS 2.65&JM ia aspect of each USS 100,000 


Note. 


Agent Bank 


BANQUE INTERNATIONALE 
A LUXEMBOURG 



anij manufacturing company Is 
coming to the market in a plac- 
ing to raise £L6m for expan- 
sion and to cut debt. 

The studio division, which 
also supplies the television and 
advertising industries, 
accounts for sales of about 
£lm. Total sales in 1993 were 
£6.88m (£5 .33 m) for pre-tax 
losses down from £359,000 to 
£90,000. 

Its biggest activity is the pro- 
vision of timber products to 
housebuilders. 

rente & Partners is placing 
534m shares at 3p apiece, rep- 
resenting 63 per cent of the 
enlarged capital and valuing 
the Staffordshire-based com- 
pany at £2Sgm 

Eidos cuts annual 
loss to £77,000 

Eidos, the USM-quoted devel- 
oper of video compression and 
decompression software, has 
announced that arrangements 
for its proposed £582,000 
l-for-10 rights issue had been 
completed. 

Dealings in the rights nil 
paid commenced yesterday. 

The arniflimrwnBnt coincided 

with publication of the compa- 
ny’s results for the year to and- 
December 1993, when pre-tax 
losses were cut from £190,449 
to £78£28 on turnover up from 
£U0£Q0 to £130,872. 

Net interest payable and sim- 
ilar charges totalled £24546, 
against income of £3,550 last 
time. Losses per share worked 
through at &3Sp (8.66p). 

The directors said the net 
proceeds of £517,000 from the 
lights Issue would be used first 
to repay the company's out- 
standing borrowings of £42*500 
with the balance being used to 
fund research and development 
and marketing plans 

Dares Estates on 
the recovery road 

Dares Estates, the property 
investment and development 
grow, reported a pre-tax defi- 
cit Cf £369,000 for the 1993 year, 
against lasses at £22rfm in the 
previous 12 months. 

The accounts, again pre- 
pared on a going concern basis. 


showed operating profits of 
£5.1m (losses of £9 -21m) from 
turnover of £6 -84m (£5.53m). 
Profits on the termination of 
operations contributed £3 -3m, 
against losses of £3. 18m. Inter- 
est payable amounted to 
£&76m (£l0.43m). 

Losses per share were 
reduced from 6634p to 0.69p. 

Greenwich Comm 
losses little changed 

Greenwich Communications, 
the USM-traded group which 
mctaite sa tellite TV receiving 
equipment in Portugal and is 
involved in property re n t al in 
the UK, reported losses little 
changed at £24,000 for the six 
months to February 28, against 
£23300 last time. 

Mr Alfred Stirling, rhairman, 
said the Portuguese subsidiary 
was still feeling the effects of 
the recession and the delayed 
launch of the new NEC prod- 
uct range for Europe. 

Mr Stirling said the company 
had achieved a settlement erf 
the outstanding litigation and 
all claims a gainst the company 
had been dropped. 

Losses per share came to 
034p (03Ip). 

Pilot Trust net asset 
valne at 141. 6p 

Pilot Investment Trust, the 
smaller companies fund, 
reported a net asset value of 
14L6p per ordinary share and 
107.8p per C share at the March 
31 period end. 

Net revenue for the period 
from incorporation cm January 
14 1993 to the end erf March was 
£498,000. Earnings per share 
worked through at U93p. 

The directors declared a sec- 
ond interim dividend of 0£p 
along with a recommended 
final dividend of aiA making a 
total of L5p. 

The C shares, issued In 
November 1993, raised £15.4m 
and at the period end some 80 
per cent of this had been 
invested, the directors said. 

The C shares were converted 
cm May 32 1994 into 2L5m ordi- 
nary shares, w hich will qualify 
for the second interim and 
final dividends. 



because they buy vehicles. But 
so too are the ‘near haves’ 
be c a u s e this group are likely to 
buy a motorcycle as their first 
vehicle”. 

Mr Pringle says one of the 
most striking features of con- 
sumer demand in Asia is what 
he calls leapfrogging: the rapid 
assimilation of technology 
which allows people to go from 
having no telephone to a 
mobile wHniyr phrmp- op from 
no radio to owning a compact 
disc hi-fi system. 

He also believes that a cer- 
tain degree of brand loyalty 
remains with consumers when 
the "near haves” graduate to 


Castrol has operations 
in 50 countries and sells 
to 100 more. Some of 
its greatest successes 
have been in developing 
countries 


cars. It is because of this that 
Castrol ha« maiip the motor- 
cycle market the nucleus of its 
entry strategy in Thailand and 
Vietnam. 

Castrol started modestly in 
Thailand in 1972 in a joint ves- 
ture with a local distributor, 
but was inhibited through the 
seventies and much of the 
eighties by government price 
controls. It therefore concen- 
trated on establishing a distri- 
bution network, and on bund- 
ing its image among the 
motorcycling population, 
despite the profit restrictions. 

When, during the late eight- 
ies, the number of motorcycles 
in Thailan d leapt from im to 


5m. Castrol was well posi- 
tioned and now holds the lead- 
ing share of the motorcycle 
market The number of cars 
doubled between 1980 and 1990, 
and Castrol has the biggest 
share in the franchised work- 
shop business. 

Hanging on han also proved 
a lucrative strategy in India, 
now Castrol’s third most profit- 
able market after the US and 
Germany. Castrol established a 
branch office there in 1919 and 
stayed on even when a wave of 
nationairgatinn in the seventies 
caused all of its main competi- 
tors to quit. It kept the Castrol 
name in front of the Indian 
public by floating 60 per cent 
of the subsidiary's equity on 
the Bombay stock exchange 
and maintaining management 
control. 

When liberalisation came in 
1991, Castrol was able to 
exploit its strong image and 
distribution network. Volume 
has grown by 50 per cent in the 
last two years and Castrol now 
has nearly 10 per cent of 
India’s lub rication marke t 

Mr Tim Stevenson, chief 
executive of Castrol, empha- 
sises that Castrol is not just 
about automotive products, 
although they do account for 
78 per cent of profits. The 
remainder comes from indus- 
trial and marine lubricants, 
both of which are targeted for 
further growth. 

Mr Stevenson told a recent 
meeting of institutions and 
analysts he was confident that 
Castrol would "prove wrong 
the sceptics who for years have 
been arguing that Castrol is a 
maturing business, liable to 
get snuffed out by the oil 
major dinosaurs”. 


Titmuss Sainer Dechert 


T *he partners of 
Titmuss Sainer & 
Webb of The Gty of 
London and Dechert 
Price & Rhoads of New 
York, Washington, D.C., 
Philadelphia, Harrisburg, 
Princeton, London and 
Brussels are pleased to 
announce that from today 
their London firms have 
been combined. 

The new firm in 
London is now called 
Titmuss Sainer Dechert. 

Together Titmuss Sainer 
Dechert and Dechert 
Price & Rhoads have over 
450 Lawyers in Europe 
and the U.S. 


Titmuss Sainer Dechert 

ZSeqeMnh- hot. London ECU' ICE feiqihaneOTI-MJ 5353 


We help 

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i 







28 



COMMODITIES AND AGRICULTURE 


Commodities’ 
underlying trend 
remains strong 


By Our Commodities Staff 


The overall trend remained 
strong in the commodity mar- 
kets yesterday. Gold continued 
its rise while leading base met- 
als touched fresh peaks before 
running into profit-taking. Oil 
prices rallied after sustaining 
early foils. The biggest losers 
were coffee and cocoa, which 
surrendered some of last 
week's advances in thin trad- 
ing. 

Gold prices surged upwards 
in London following the pat- 
tern set in New York, where in 
late trading on Friday the pre- 
cious metal moved up sharply. 
According to dealers this US 
lift-off for gold was caused by a 
combination of higher grains, 
oil and base metals prices coin- 
ciding with weakness in the US 
dollar and bond markets. 

The gold price reached $381 a 
troy ounce at the London 
morning “fixing”, the highest 
“fix” for three months. But it 
opened weaker in New York 
and a wave of fund selling on 
the New York Commodity 
Exchange caused uncertainty 
during the London afternoon 
"fixing” session. Instead of 
lasting only a few vninntoa the 
session went on for 40 minutes, 
according to one dealer the 
longest “fix” since August 
1992. However, the volume of 
trade was not big. 

The London price closed at 
390.40 an ounce, up &L20 from 
Friday's close. Analysts said 
there was very strong techni- 
cal resistance between $392 
and $396 an ounce and gold 
would have to work hard to 
break through that LeveL 

Copper reached a 21-month 
peak of $2,477 a tonne on the 
London Metal Exchange in 
early trading but then some 
investment funds decided to 
take their profits after the met- 
al’s recent heady performance 
and halted the rise. However, 
the important technical sup- 
port at $2,420 a tonne held firm 
and copper for delivery in 


three months closed only $7 a 
tonne down at $2,43850. 

Aluminium was affected by 
copper's weakness but dealers 
said speculative interest was 
still being attracted to a mar- 
ket whose fundamentals were 
Improving daily. Three-month 
metal closed yesterday another 
$4 a tonne up at $1,47450 on 
the LME. 

The International Primary 
Aluminium Institute helped to 
steady the market when it 
reported that average daily 
production in countries outside 
the former Soviet bloc fell by 
another 500 tonnes in May to 
38,900 tonnes. That was the 
third successive monthly fall 
The foil has followed the 
agreement reached between 
some of the big aluminium 
producing countries early this 
year to cut output so as to 
reduce the huge stocks that 
have been depressing prices. 

Oil prices weakened 
somewhat In early trading 
before recovering most of their 
losses. The price of the bench- 
mark Brent blend was $17.40 a 
barrel in late London trading, 
near its $17.41 closing level last 
Friday. 

It fell to $17 Jfl at one point 
in the day, but traders said 
bullish factors still rirtTninatori 
the market in spite of an 
apparent easing of tension 
with North Korea, the main 
factor behind last week’s price 
rally. 

Coffee and cocoa futures fell 
sharply on profit-taking after 
last week’s gains. But trading 
volumes were thin, and there 
were bursts of buying in coffee 
at lower levels. 

At the London Commodity 
Exchange, the robusta contract 
for September delivery ended 
$52 lower at $2,282 a tonne, 
well below the morning peak of 
$2^62 but off the low of $2557. 

LCE Cocoa prices followed 
coffee’s folL The second posi- 
tion finished down £14 a tonne 
at £1,022 after trading in a £30 
range. 


Bio-technology offers a safer, more secure world 

Widespread fears that safeguards already in place are inadequate are probably based on ignorance 


B io-technology designed 
to produce genetically- 
modified organisms via 
the manipulation of deoxyribo- 
nucleic add is not just a 
mouthful - it is beyond the wit 
of most people to comprehend. 

Reduce that acid to its ini- 
tials, DNA, and its meaning 
becomes slightly more accessi- 
ble to the average person. DNA 
is, after all, constantly being 
quoted as a means of solving 
violent crime through genetic 
fin g erp rinting , And most of us. 
I suppose, are vaguely aware 
that it has something to do 
with our bodily makeup and 
with food and fanning. 

But multi-syllable words and 
scientific jargon are a big turn- 
off for most people, and as we 
do not understand them we 
tend to fear the techniques 
they describe. They conjure-up 
images of bespectacled boffins 
in white coats and dangerous- 
looking laboratories. I confess 
to having had some of those 
»amp fears imHi the common- 
place nature of bio-technology 
in everyday foods was 


FARMERS VIEWPOMT 



’*****■ > 


By David Richardson 


py piainpH to me. 

I am assured, for instance, 
that it is possible to extract the 
DNA from an onion using table 
salt, washing-up liquid, a nor- 
mal household liquidiser, a cof- 
fee filter and very little else. 
Furthermore, it can be done in 
any kitchen or, as is already 
happening. In third-form 
school chemistry classes. 

Not all of (hose people who 
defy concern over cholesterol 
and eat cheese may be aware 
that the traditional way to pro- 
mote the Initial curdling of 
Twiiir is to add a small quantity 


of rennet, an enzyme extracted 
from a calf 8 stomach. Bio-tech- 
no logy has now made it possi- 
ble to produce an exact copy of 
chymosin, the necessary 
enzyme, which Is indistin- 
guishable from the original in 
both make-up and function, 
and , following approval by the 
UK government’s Advisory 
Committee on Novel Foods and 
Processes, it is increasingly 
being used in cheese-making, 
much to the delight, I im agine, 
of the animal welfare lobby. 

Other foods and drinks 
whose production Involves the 
use of living organisms, hke 
yeast - such thing s as hread 
and beer - will also soon bene- 
fit from improved versions of 
raw material that are the 
result of bio-technology. 

My own particular interest, 
however, is in the field of plant 
breeding. In the past - and it 
has been going on for centuries 
- the development of improved 
varieties has been done by the 
selection of desirable charac- 
teristics in individual plants 
and crossing them with one 


annthw in the hope that the 
result would be favourable. 

hi recent years, however, It 
has become possible to identify 
the qualities required from 
DNA analysis and achieve 
mare accuracy in the breeding 
process. Plant breeders can 
now select far more specifically 
than before for such things as 
milting quality in wheat; resis- 
tance to debilitating fungal dis- 
ease; tolerance to certain pests; 
and the ability to yield well 
with lower levels of fertiliser. 


U ltimately, for it still 
k pr many years for 
these characteristics to 
be fixed and for the resulting 
seed to be multiplied to suffi- 
cient quantity for it to be made 
widely available, this work will 
lead to crop varieties that will 
require lower inputs of chemi- 
cals and fertilisers and there- 
fore be more environmentally 
friendly. It will also open new 
doors for agriculture. 

Take oilseed rape, for 
instance. Genetic manipula- 
tion, which will make it one of 


the most versatile crops in the 
world, is well advanced. By 
modifying the gene mix for dif- 
ferent purposes, scientists are 
already confident that the oils 
produced by the different 
strains they are developing can 
become general purpose, envi- 
ronment-friendly, feed stocks 
for Industry. 

It could not only be used for 
cooking and lubrication, as at 
present, but also for the manu- 
facture of plastics, polymers, 
pharmaceuticals, inks, deter- 
gents. nylon, cosmetics and 
probably many more. And. 
minim the mainly fossil-based 
raw materials used for those 
processes at present, oilseed 
rape would amount to a renew- 
able resource. 

Scientists say that bio- tech- 
nology will be our only hope as 
the population of the world 
doubles during the next 50 
years. That to have any c h ance 
of putting food into those new 
mouths and to be able to con- 
tinue to enjoy the conve- 
niences of modern life, it is 
vital that the developments 


they can foresee continue to be 
introduced. 

But 20th century successors 
to the Luddites see dangers. 
Their fears, as mine were, are 
probably based on ignorance. 
They are not s ati s fie d that the 
wea of safeguards already in 
place will protect , them from 
some horror being released 
into the environment - fears 
which I have been persuaded 
are groundless. 

The government’s response 
is to organise a Consensus 
Conference of interested but 
uninvolved people to assess the 
evidence during the coming 
au tumn and c om e to conclu- 
sioos in November. 

It is a welcome and appropri- 
ate step, which I for one - hope 
will promote a public debate in 
which some of the mystique 
and misunderstanding about 
bio-technology will tie dis- 
pelled. 

Given proper regulation and 
controls, the new technology is 
likely to produce a safer, more 
secure and more environment- 
friendly world. 


World Bank accused of attempting raid on gene reserves 


Geoff Tansey on a row over control of germplasm, a vital resource for the world’s plant breeders 


S ome 40 major environ- 
mental and development 
NGOs (non-governmental 

organisations) have accused 
the World Bank of attempting 
a coup to take over control of 
the 500,000 crop samples held 
in gene banks in the various 
international agricultural 
research centres, such as the 
International Rice Research 
Institute in the Philippines and 
the Mexico-based International 
Research Centre for Wheat and 
Maize, which developed the 
green revolution varieties of 
rice and wheat 
The row over who controls 
this germplasm - a vital 
resource for future plant breed- 
ing and a major asset gathered 
from the poor farmers and 
countries of the world - looks 
set to dominate an interna- 
tional meeting on biological 


diversity that began in Nairobi 
yesterday. 

The NGOs want the second 
gggginn of the Intergovernmen- 
tal Committee of the Conven- 
tion on Biological Diversity to 
ensure that control over these 


Group on International Agri- 
cultural Research in New Delhi 
at the end of May after post-UN 
Conference on Environment 
and Development negotiations 
between the UN Food and 
Agriculture Organisation's 


The row looks set to dominate 
an international meeting on 
biological diversity that began in 
Nairobi yesterday. 


germplasm collections stays 
with an intergovernmental 
body run on a one nation one 
vote system and that recog- 
nises farmers' rights. 

Agreement on such a body 
was expected to be endorsed at 
a malting of the Consultative 


flnnnmfgrinn on Plant Genetic 
Resources and the individual 
research centres. 

However, this was rejected at 
the consultative group meet- 
ing, at which the hank sought 
to strengthen its “leadership" 
of the international agricul- 


tural research system. 

The research centres are 
funded by the consultative 
group - an informal group of 
donors mainly from the indus- 
trialised countries and interna- 
tional agencies, which is 
chaired by the bank - and 
faces the worst funding crisis 
in its 23-year history. Funding 
fell by 7 per cent ($18m) last 
year and another 6 per cent fall 
is projected for this year. 

As part of its support to the 
group, the Bank announced in 
New Delhi that it would for- 
give existing debts, increase its 
normal grant to $4Gm and offer 
to match new funds from other 
donors up to a total of S60m. It 
also announced the creation of 
a new $25bn fund over five 

years for landing to national 
agricultural research linked to 
the consultative group. 


COMMODITIES PRICES 


BASE METALS 


LONDON METAL EXCHANGE 

(Prion tom Amalgamated Metal Tiadng) 

■ ALUMINIUM, 0X7 PURITY (t per tonne} 


Precious Metals continued 

■ GOLD COMEX (lOOTToyogj $/troy czj 


GRAINS AND OIL SEEDS 

WHEAT LCE (g per tonne) 


SOFTS 

COCOA ICS (BAonne) 


MEAT AND LIVESTOCK 

■ LIVE CATTLE CME (40.000lba; conbribe) 


Caetv 3 mow 

Close 14445-95 1474-5 

Previous 1441-2 1470-1 

HgMow 1488/1463 

AM Official 1441^2 14705-1.5 

Kart) doss 1475-8 

Open feri. 273,818 

Total daBy turnover 57.810 

■ ALUMMIUM ALLOY (8 par tonne) 

Ctoaa 

1460-60 

1465-70 

Previous 

1455-65 

1465-76 

Hghflow 


1465 

AM OfflcW 

1445-60 

1460-70 

K«rt» doss 


1465-70 

Open lot 

2554 


Total riaOy turnover 

613 


■ LEAD (X per tome} 



Ctoaa 

546-7 

S64-4£ 

Previous 

542*95 

5595-80 

ragtWIovi 

541 

587^558 

AM Office 

541-1^ 

669S-9 

K4rt> doee 



Open InL 

37,714 


Total dally hanavar 

8.072 


■ NICKEL (Spar tonne} 


Ctoaa 

8486-95 

BS80-5 

Previous 

5440-50 

8935-40 

IfigMow 

0490 

0700/6606 

am om«a*s 

8486-00 

0690-5 

Karp CtoM 


0500-5 

Open M. 

58.410 


Total defly turnover 

16,917 


■ TM (S per toms) 



Ctoaa 

6690-600 

5670-80 

Previous 

5586-95 

5000-5 

HlQtWjm 


9786/5640 

AM Official 

5575-80 

5665-60 

Kerb don 


6060-00 

Open mt 

16,540 


Total deny turnover 

3.938 


■ zme, apadM Mgh gratia (t par taring 

Ctoaa 

995-6 

1020-1 

Previous 

984-5 

1009-10 

Wgh/tow 

999 

1026/1017 

AM Official 

999-9.6 

1024-4.5 

Kerb dosa 


1017-8 

Open ire. 

109337 


Total dMy turnover 

24390 


■ COPPER, grade A IS per tonne) 


Ctoaa 

2428-9 

2438-9 

Previous 

2437-8 

2445-6 

h4tfVtow 

Z43Z 

2477/2416 

AM Official 

2432-3 

2441-1,5 

Kttb dose 


2435-8 

Open InL 

223,071 


Total daBy turnover 

55261 


■ LME AM Official C/S rata: 1-5408 

LME Ctoatna C/9 rata: 1.5380 


SflOCI-5335 3 rntKl J364 SmUttl 5345 9mtSl J334 

■ KttHQAADE COPPER (COMEX) 

tar's 


Oran 

One donga 

ffigO lev 

kit 1M 

Am 112.15 -140 

112.15 111.00 

418 126 

M 112.15 -1.45 11Z45 11970 24,070 7^1 

AM 11250 -ISO 112.00 1112} 

702 2 

Sa» 112-30 -155 11260 Him 2X507 ^515 

Oct 11125 -1.40 

111.10 11020 

275 8 

NOV 11120 -1J0 

• 

239 4 

Tetri 


W 15425 


Sett mqrc Open 

prim Crimea Hyk Ion tat M. 

Jaa 38X8 47 XtJ) 3SW 791 IBS 

Jri 3843 -ZS 

Aog 3909 -ZB 385.4 3905 81,207 51,113 

Oct 39X9 28 393.8 5307 113 

D*C 397.1 -ZB 401J1 39X7 25,199 21480 

Fefa 4008 -28 4048 401.0 &314 89 

Total 181,232 64A63 

PLATWW NYMEX (50 Troy qi^ Srtroy at) 


Jri 

4084 

-4.6 

4134 

40X1 11419 

3,899 

Oct 

40X4 

-4S 

41X0 

4084 10.829 

2492 

Jaa 

4114 

-4S 

41X5 

41X5 1418 

12 

tov 

41X7 

-46 

41X0 

41X0 1,187 

10 

TaU 





8,113 

■ PALLADIUM NYMEX (100 Troy at; S/I roy OZj 

JM 

13X25 

-ISO 

. 

80 

. 

Sep 

13X75 

-ISO 

141-00 

13X50 3442 

182 

Deo 

13X95 

;1JS0 13X50 

13840 828 

12 

Mar 

13X95 

-140 

- 

1 

- 

TMri 




V29 

194 

■ SILVER COMEX (100 Troy ou Ccntartroy oct.) 

Jm 

547.0 

-11.7 

94X9 

5484 

. 

Jri 

S47J 

-114 

8814 

8444 63467 29494 

Nl 

55X4 

-T1J 

- 

- • 

2 


5S2.4 

-114 

58X0 

5904 27 871 

7481 

Dee 

5599 

-114 

5754 

5574 18 091 

2494 

Jea 

BIS 

-114 

- 

32 




Salt 

Oaf* 



Op* 



Sa« 

DW* 


Open 


Sett nqn 

Ofan 



price 

range 

agh 

Low 

IM 

vot 


prica 

tap 

«9h 

law M Yd 


price ctun «gk Low 

U 

Yd 

Jbr 

11545 

-X55 11BM 

11525 

ITS 

13 

Jri 

1000 

-15 

7020 

695 14.433 3,57 0 

Jta 

64450 -0.150 8X650 64600 

3672 

827 

Sep 

10140 

-065 

102.15 

102.15 

475 

10 


1022 

-14 

1044 

1014 TX134 3450 

Aog 

64400 *0225 64400 63600 32461 

3779 

Nor 

10240 

-040 10340 102.45 

2467 

109 

Oac 

1040 

-16 

1063 

1034 2X430 1,259 

Oct 

57478 40360 6X500 67.150 16642 

1495 

Jaa 

10440 

-025 

10540 

104.10 

1459 

171 

■tor 

1062 

-12 

1083 

1053 2X082 1,173 

Dec 

69.150 -0.125 69460 5X500 10404 

1,113 

Mar 

10X73 

-0 2S 10X25 10X73 

438 

12 

m*i 

1074 

-12 

1091 

1070 10J82 65 

ft* 

60400 -0275 7X700 8X400 

76K 

855 

**■» 

10740 

-025 10745 

107.73 

380 

12 

Jri 

1088 

-10 

1087 

1084 3464 50 

Apr 

70475 -0250 71.600 7X500 

X454 

318 

TeM 





4484 

327 

Tetri 




1H472 7407 

Trial 


7X271 

M14 

■ WHEAT CBT (5400bu min; centa/BOto OuaheQ 

■ COCOA CSCE (10 tomaa; 3/tonma) 

■ live H0OS CME ptuxubs; canta/toa) 


Jri 

322m 

-13 12 

333/0 

321/2 96440 3X115 

Jri 

1338 

-27 

1385 

1332 1438 1,112 

Jnn 

48425 -0200 49425 4X400 

987 

322 

sra 

327/2 

-14» 

339/4 

327/0 88415 

9430 

Sep 

1370 

-32 

1424 

1365 41438 X217 

Jri 

4X475 -0,450 4X100 4X050 

7693 

2440 

Dec 

338/4 

-14/8 

351/0 

338ffl 121435 27225 

Dec 

1411 

-30 

1463 

1405 1U41 979 

Aog 

47425 -fl.875 4X700 47.125 

8.773 

1,491 

Bar 

342/D 

-14/4 

352/4 

342/0 

17,125 

2450 

tar 

1441 

-30 

1489 

14S3 8427 114 

Oct 

44.450 -0275 45400 44.100 

4257 

422 

»>r 

333A) 

-15/0 

- 

- 

335 

5 

mgr 

1480 

-30 

1510 

1484 2,941 1 

Dee 

44475 -0425 44450 44250 

3278 

182 

Jri 

320 10 

-UW> 

330/4 

3204) 

1445 

5 

Jri 

1482 

-SO 

- 

- 24« 

to 

44275 -X100 44400 44.125 

813 

117 

Talri 




303488 70480 

Total 




72401 7423 

DM 


2X237 



■ MAIZE C8T fiOOO bu min; cantaffiBto buaheQ ■ COCOA (ICCO) (SORVtonna) 


■ PORK BELLIES CME (40^KX*js; Conta/fca) 


Jri 27U2 -12/0 27803 Z71/2 38X803 89,965 

Sep 267/0 -12/0 27210 287/0210580 46£70 

See 263/0 -ISO 267/4 2Ba/0S812B5231A95 

Her 288/4 -IW3 273/0 268/4 63,560 8,723 

Ml 271/6 -12/0 270/0 271/0 10J605 965 

M zm -12/0 277/4 272* 18,010 3,850 

Telel 13 W 80. 5 05 

■ BARLEY LCE (E par tonne) 


ft* 7 


17 


Mm 
, 1071 33 


PlBT- Wf 
106X50 


10 day 


.KM 


M 


HA 


UCEff/tontie) 


TeUI 


125,773 3 8. 202 


ENERGY 

■ CRUDE OIL NYMEX (42,000 US patta, S/banrel) 


Jut 

to 

Oct 


Dec 


Latmt Dap's 
prtn cfengs Haft 

20.44 -OZ7 2086 
fOJM 4X21 10,77 
10J37 -0.17 1X30 

ISA) -014 1888 
1081 -013 1070 

1080 -012 1057 


Urn ht W 

2035 37,018 30371 
1045 02,034 68,180 
1097 58J25 25,355 
1070 30458 7,151 
1055 24,128 0640 
1040 35,443 0056 
421,499150908 


to 

9X50 

-1X35 

. 

- 196 

. 

Do* 

10X10 

-0.15 

10X50 

10X10 339 

31 

Jm 

101.75 

+025 

- 

28 

- 

Mar 

10100 

• 

. 

26 

. 

tar 

10440 

- 

- 

4 

- 

Triri 




582 

31 

■ SOYABEANS CBT (XOOOba eric cerii/BQb MriwQ 

Jri 

681/0 

-son 

892/4 

881/0191400 91430 

Aag 

678/2 

-son 

691/0 

678/2103480 31415 

to 

670/4 

-son 

682/4 

6704 51400 

7456 

no* 

68 an 

-30/0 

6758) 

665/0389480202266 

Jan 

B89/0 

-300 

878/0 

688/0 30455 

X120 

tar 

6/2/6 

-300 

682/D 

872/9 14285 

3496 


Jri 

2295 

-51 

2370 

2205 

7445 

1,197 

to 

282 

-52 

2382 

2257 1X284 2607 

He* 

2298 

-44 

2388 

2234 

7.188 

681 

Jm 

2249 

-38 

2320 

2217 

X75B 

810 

tar 

2215 

48 

2290 

2194 

2490 

32 

■to 

2187 

-78 

- 

- 

227 

. 

Trial 





43471 

44*7 


TOW 


40475 -0473 44.400 40180 
40350 -0375 44400 
40275 -0278 40000 40200 
47.100 40100 47.100 
50.450 -0050 50450 4X800 
60700 -0200 50700 90000 


1610 1,185 
31946 884 

491 84 

37 4 

32 1 

12 2 
8,129 2,144 


LONDON TRADED OPTIONS 

Duke price $ tome — Cefie — — Pure — 
■ ALUMINIUM 


■ COFFEE ■C' CSCE (37/SOOtee; oanta/lbaj 


5*P 

Dee 


12935 
13136 
12055 
12825 
127 JO 
128.00 


■ CRUDE ttUPEg/bacraQ 


PRECIOUS METALS 


■ LONDON BULLION MARKET 
(Mew suppled by N M Rolhgchhfl 


OoM (Troy oz-) 

S Price 

£ eqiiv. 

dose 

39020-390.60 


Opening 

390 70-38160 


Morning tot 

391.00 

255.022 

Aflamotai Rx 

38030 


Day's Htcfi 

39360093.60 


Day's Low 

389.00-38840. 


ttwrioua close 

38X00-38040 


Loco Ldn Mean CMd Landng Rata 

»(VaUS^ 


1 mourn 4.01 

2 months 407 


12 


.436 

.4.84 



Latest 

tafe 


Open 



prka 

toe 

•to 

law 1st 

M 

Abb 

17.45 

4044 

17 AS 

17.18 73400 

X657 

to 

1749 

4042 

1741 

1744 29424 

1468 

Oct 

1748 

*005 

1746 

1649 12453 

1.147 

iov 

i72) 

- 

1742 

1X97 8442 

571 

Ok 

17.18 

- 

17.19 

1X83 9474 

*07 

Jm 

17.16 

44106 

17.16 

1X99 2412 

662 

Trial 




M0y«ie 34y030 

■ HEATING OIL HVUEX (42400 IB pta; e/US gato) 


Latest 

ta* 


Ope* 



Pries 

ctanpe 

Hgfe 

Low tat 

Vd 

Jri 

51 AO 

-082 

5242 

61.15 30435 11473 

to 

5140 

-4L55 

52.10 

5140 27484 

9499 

to 

5240 

-041 

52J0 

5240 14444 

1720 

Od 

5345 

421 

5155 

5125 9,836 

847 

Hev 

5440 

-021 

54A5 

5440 7.190 

398 

Dec 

5X10 

-041 

5X30 

3440 1X820 

2419 

Trial 




135,788 30468 

■ GAS 00. PE Stem} 




Sett 



Opm 



price 

etage 

Man 

LM M 

Vol 

Jri 

1SX2S 

4240 159,75 16X25 30111 

7.789 

to 

18140 

4225 

16140 

18X00 12272 

2J8S 

to 

16240 

4200 

18275 

16140 8J38 

1473 

del 

16X75 

+240 16X00 164J25 X233 

174 

Oh 

18740 

4225 16740 16X25 X3» 

94 

Dec 

18925 

4225 18X50 16X50 13482 

637 

Tttri 




88452 13432 

■ NATURAL GAS NYMEX (1X000 nnflfc; SftmBh) 


um 

Of* 


flpwi 



price 

change 


Low W 

VM 

Jri 

2.123 +0438 

2135 

2470 12428 

8441 

to 

2-155 +0419 

2170 

2ia 1X172 

4407 

Sep 

X165 

• 

2165 

2145 12498 

1.196 

Oct 

2.180 40401 

2183 

2170 10499 

647 

Rev 

2248 4X004 

2248 

2245 11431 

78 

Dec 

2350 40405 

2450 

2440 I442S 

350 

Trill 




122909 1X887 

■ UNLEADED GASOLINE 



KUO (42400 US ffrixicrtJS gab] 



TUN 8I1JBW3MHB8 

■ SOYABEAN Oh- CBT [BO,QOabo: cantata) 

Jri 2734 -089 27.75 27.18 18,067 4276 

Ae« 2726 -006 2778 27.18 15232 3244 

2722 -0JB4 27.70 27.14 12,002 1,828 

2523 -088 27.50 2828 6343 1,543 

28.70 -028 2727 2842 22587 4239 

Ja& 2X68 -084 2720 2840 2,793 74 

TOW 83229 15/834 

■ SOYABEAN jtaAL CBT (100 tone; S/jgn» 


-425 13220 12020 6294 3JJ50 

-325 13320 1292S 2X068 7283 

-328 131.50 12X00 12.788 1285 

-126 12925 12525 7248 317 

-1.75 12X00 12X75 1,108 125 

-025 12X00 12820 194 1 

87,13412281 

(KX9 (U3 canta/pound) 


Jem 17 
Cemp. My 
15 day 


.12X97 

.11908 


127.13 

11909 


Oct 

Dee 


Jri 

19X7 

-9.3 

2005 

19X0 23462 

7.415 

to 

197.1 

-X9 

2014 

1974 1X572 

5473 

to 

19X9 

-1X0 

2805 

19X9 13468 

4488 

on 

19X2 

-1X0 

1994 

19X2 

XB17 

1.762 

tan 

19X3 

•1X0 

1994 

19X3 21424 

61426 

Jn 

19X4 

-1X0 

2004 

19X4 

1490 

130 

TUri 





8X»W 25486 

■ POTATOES LCE (£Aome) 




Ha* 

9X0 

- 

. 

. 

. 

. 

tar 

10X0 

• 

- 

- 

- 

• 

Apr 

1514 

-as 

1944 

1514 

805 

77 

tar 

14X0 

- 

• 

w 

. 

- 

Jn 

1074 

• 

- 

- 

- 

. 

Triri 





806 

17 

■ FREIGHT (BFFBQ LCE (SIO/Mrit palffi} 


Jn 

1285 

+10 

1265 

1278 

478 

22 

Jri 

1253 

+23 

1250 

1230 

992 

79 

to 

1253 

+8 

1250 

1249 

181 

2D 

Oct 

1340 

+2 

1345 

1333 

491 

38 

Jen 

1366 

+18 

1355 

1345 

228 

6 

to 

1366 

-3 

1370 

1360 

87 

10 

DM 

□at* 

Prsv 



2417 

115 

OH 

1311 

1811 






■ No7 PREMIUM RAW SUGAR LCE (centataa) 

Jri 1228 -912 1X55 1226 133Z 13 

Del 1140 -930 - - 1,101 

Jm 1122 

■er 1128 -925 60 

TcW 4,513 13 

■ WHnre SUGAR LCE (ytonrel 


Aag 

ON 


TUN 


34820 -430 3SX80 34720 11200 988 

32420 -730 331.40 32220 9381 629 

31X00 -980 31020 31950 847 9 

31520 -720 32220 31320 2353 107 

31420 -720 31720 31720 ■ 201 4 

31410 -820 31720 31X70 296 12 

2Sjm 1248 
■ SUGAR *11* CSCgpilOOOfca; centataa) 

JU 1220 -930 1224 1101 2X833 3241 

Oct 1227 -935 1135 1222 74759 0.794 

■er 11.75 -931 1120 1122 28,718 1225 

■V 11.71 -931 1127 11J0 4240 424 

Jri 1127 -031 11.70 11.70 1252 216 

on 1129 -991 11.70 lire 809 10 

TeM 13828011209 


(B9J96) LME 

toi 

Nov 

Aug 

NOV 

1480 

51 

81 

38 

63 

1475 

39 

78 

48 

04 

1500 

28 

66 

63 

77 

■ COPPER 





(Grade A) LME 

Aug 

Nov 

Aug 

Nov 

2400 

87 

115 

66 

108 

2460 

02 

93 

70 

135 

2500 

43 

74 

108 

166 

■ COFFEE LCE 

Jri 

Sap 

Jri 

Sep 

2200 

229 

287 

147 

209 

2250 

203 

244 

171 

236 

2300 

180 

228 

188 

287 

■ COCOA LCE 

Jri 

Sap 

Jri 

Sep 

875 

77 

112 

30 

47 

1000 

63 

97 

41 

67 

1050 

40 

73 

88 

83 

■ BRENT CRUDE 1PE 

Aug 

S«P 

Aug 

Sep 

I860 

106 

- 

26 

46 

1700 

81 

80 

37 

62 

17S0 

49 

- 

- 

81 


LONDON SPOT MARKETS 

■ CRUDE OH. FOG (par banri/AugQ +or- 


3 months 
Shcr Rx 
Spot 

5 months 

6 m o n ths 
1 year 
Q4M Coin* 
Krugerrand 
Maple Leal 
New Sovereign 


..412 

prtray Q£ 
38446 
38980 
373.45 
38986 
S price 
388-381 
39929402^5 


US CtS equfcr. 
68050 
566.45 
572.7$ 
589.75 
£ equhr. 
255-257 



LMM 

PWt 


Op™ 



Prtea 

change 

m 

(AW lot 

IM 

Jri 

6L55 

-045 


505 314t9S 

16425 

to 

5440 

•042 


54.60 30288 

12420 

to 

5445 

■042 

6445 

5423 1IJ84 

1130 

oa 

52.73 

-047 

5140 

6285 4,868 

291 

Kav 

5140 

■0.17 

52.00 

5145 4482 

550 

Dec 

5X00 

■042 

SX50 

5X00 24S2 

193 

Total 




8X513 

32,713 


88-81 


Tee 


There was way strong demand, partocUnrty lor 
brightest East Africans, which alien gained 10 
to is pence, report# the Tea Broken 1 Aasoda- 
tian. Median and plainer Africans were Mao 
well supported at generely dearer rates. 
Brighter Ceylon bopfa also advanced with 
other docripfans firm. There was imprawed 
demand lor cokxiy Ceylon bopfs, which often 
gained several pence, but bop's end thin, 
green types mat DnAed internet and were moBy 
easier where sold. The few Africans on offer 
ware dearer. QuotatfortK beat avaflafala 200 p/ 
kg, good 170p/kg. good medfcim 148p/kg. 
medium 122pfltg> low nudum S&p/kg. The 
highest price reeisad Oda week was 325p/ko 
ter e Rwanda pd. 


Jri 

7748 

■240 

7940 

7746 

7490 2400 

IM 

7X38 

-144 

7740 

7X72 

7394 1407 

Dec 

75L13 

-144 

7X45 

7440 3X843 4450 

Mar 

7X12 

-143 

7730 

7549 

1830 343 

tar 

7X40 

-147 

77.40 

7X10 

2433 265 

Jri 

7X68 

■147 

7740 

7845 

875 120 

Trial 





82402 4333 

■ ORANGE JMCE NYCE (ISJMQba; canteAfae) 

Jri 

8930 

riMO 

8140 

3X75 

7450 877 

to 

»JB 

+X30 

9X50 

9140 

8.794 1,432 

ta* 

9440 

■035 

9X50 

9440 

2480 315 

Jn 

9745 

+UJ0 

9835 

9X£0 

1201 102 

Mir 

8935 

+036 

10040 

8X00 

1398 87 

to 

10135 

4X30 

10135 

10X00 

53 3 

Total 





219BS 24M 


VOLUME DATA 

Open Interest and Valuma data shown for 
contracts traded on COMEX. NYMEX, CBT, 
NYC£ CME, CSCE and JPE Grade 08 an one 
day tn arrears. 


INDICES 

B REUVma (Baas: 18/9/31=1018 


Jm 20 ihai 17 month ago year ago 
20295 20294 1971.8 1674J3 


OUbri 

81X18-X25q 

+031 

Brant Blend (datet^ 

$1747-749 

+022 

Brant Stand (Aug) 

$1746-748 

+031 

W.TJL (1pm eat) 

$1944-846q 

+0.14 

■ OX. PRODUCTS MMEpRirptclelwry QFpanrnj) 

PrenVum Gasotae 

$186-187 


Gas CM 

$158-159 

+2 

Heavy Rjd OH 

$78410 

+04 

Naphtha 

$164-168 

+14 

Jot Fori 

Si 06-171 

+24 

mirisum Ai\r* bamc 



■ OTHER 



Gold (par troy az)$ 

$39040 

+230 

SBver (par tray ozft 

561.50c 

-440 

Ptateum (per fray oz.) 

$40X26 

+240 

Patafium (par troy oi) 

$13X78 

+035 

Copper (US prodj 

lIXOc 

+24 

Lead XJS prod) 

3X750 

-1.11 

Tin (Kuala Lumpur) 

14.44m 

+047 

Tin (New Yore) 

25X50C 

-2.00 

Zine (US Prime W.) 

Unq. 


Ca«o (Hve welghqt 

124. 72p 

-xir 

Sheep the weJflhtJtA 

105J3p 

-740" 

Plga (Hve wrigW) 

8X72p 

•1.73* 

Lon. day sugar (row) 

$312.70 

+340 

Lon. day sugar (wtaj 

$36000 

■040 

Tata X Lyle export 

£31X00 

-1.00 

Bartay (Eng. teed) 

£10X51 


Matte (US Nog Yelow) 

$1434 


Wheat (US Darit North) 

£1804 


RuMor (Jriff 

7738p 

-140 

Rribber (AugW 

77.75p 

-140 

BuMaaqKLRSSNol Jri) 

27440m 

-140 

Coconut 01 (PWl>§ 

$84O0z 

+154 

Prim at (Mriay.)§ 

$S374q 

+274 

Copra (PW« 

$40X0 


Soyabena (US) 

£19742 

+24 

Cotton Ourioak a Meat 


•030 


■ CRB Ruturaa (Brew: 4/B/SfrrtQQ) 


Jwn 17 Jun 18 month ego year age 
23758 233.03 2QS4Q 


Wooftap8 (B4a Super) 422p 
E per torno uniem athenifee stated, p poneeAg. o 
oenta/fc. r ringgB/hg. m Meteytrtm oanu/kg. q 


t OcVDm z Jun/JuL w Jri. ¥ London PlwdceL 
m. 4 Shoe 


OF Rotterda m. A BuOon market close. 4 Sheep 
(Pm vwlgl* prices). • Change an week, peovtalonal 
prices. 


Along with this cash came 
the creation, for the first time 
in its 23 years, of a group 
steering committee chaired by 
the bank. It also announced 
that it would consult the World 
Trade Organisation about the 
Intellectual property provi- 
sions in General Agreement on 
Tariffs and Trade and the dis- 
position of the group’s germ- 
plasm. 

The NGOs see this as aimed 
at preventing intergovernmen- 
tal control oT the germplasm, 
which will become increasingly 
important once countries begin 
rfiarg in g for collecting crops 
within their borders. If they set 
Ugh prices than searching out 
materials from the existing col- 
lections will become more 
important for users. 

At present, the legal status 
of the research centres' collec- 


CROSSWORD 


No.8,485 Set by ALAUN 



ACROSS 

X Girl with whom I am return- 
ing borne (6) 

4 To order Italian vermouth 
would be to court trouble 
CW.2) 

9 Going back with a gun to 
appropriate all the money (6) 

10 Shoo off the mule wandering 
about in the vineyard (8) 

12 Number took the route mis- 
guldedly through the marsh 
(8) 

13 Having a skin that a gauche 
person never could? (6) 

15 Scarecrows are meant to 
frighten ft - and dof (4) 

16 A bracing shower and a 

drink? (5,5) 

19 Getting leave when through 
with the job (10) 

20 Don’t remain unmoved by the 
commotion (4) 

23 Taking less care with the 
breakfast food (6) 

25 Suggestive of the state hand- 
out there’s a split about (8) 

27 A fet sailor is boarding when 
you embark (5*3) 

28 The mother, I Interposed, is 
more friendly (6) 

29 Some, caught in the act, took 
to their heels (8) 

30 Asked humbly for breakfest 
m bed (6) 


“ S SSSgtaa- tsayjgr A 


Of broking and jobbing the Mihm'tfmd, 
tv I out sweetly he jiuts your u.'ord onto bond. 


SfkHItan © 


JOTTER PAD 





■ .-.i * 

j 4 


profits 
boost f or 
Steel 




» Wl 
4JA 
>*Ai 1 


J 

1 




i :■-*« 

!*# P 


llw 


tions is not clear. Countries 
where they are based, such as 
the Philippines, which boats 
IRRI for example, might be 
tempted to exert national con- 
trol over the collections if they 
feel that developing countries 
will be kept out of policy-mak- 
ing over the use of these collec- 
tions, according to Rend Vellvd 
of Grain (Genetic Resources 
Action International). 

In a statement on plant 
genetic resources to the Nai- 
robi meeting, Ismail Seragel- 
rfin chairman of the consulta- 
tive group and a vice president 
of the World Bank, confirms 
that the research centres 
“should not seek to benefit 
fteanr-ifllly from the commer- 
cialisation of germplasm, but 
should help developing coun- 
tries obtain financial benefit 
when opportunities occur 1 *. 


x r '-4 




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a •- , 

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DOWN 

1 Being custom-built helped to 
bring it about (4,3) 

2 Irritability Tm going to 
indulge (3,6) 

3 Wrings from, as a divorcee 
does (6) 

5 A drink you’d rather not have . 

in the garden (4) w 

6 Back up (4,4) 

7 The proportion that didn’t gat 
the full allowance (S) 

8 Animals allowed to be sent up 
in a satellite (7) 

11 Take her up river and find 
her somewhere else to stay 
(7) 

14 Spotted many going inside 
with a guide (7) 

17 Tying the thing to a tree, 
clumsily (9) 

18 Matchwood held to be really 
first class (44) 

19 Read through and turned to 
account (7) 

21 (if 11 * ^ ep ^ a PP°‘ ntment 

22 SL 8 ™ appeared at one. to 
cheer one up (g) 

24 T5? h fayy walk that is a 

characteristic feature (5) 

ourselves by a 

aubforfuge (4) 


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MARKET REPORT 


^cnc rc'stW’ 


Kvia 


CROSSWORD 


An 

mi 

■ ni 


X * 

■ 


Li 


Heavy setback on renewed inflation concerns 


ByTeny Byfamd, 

UK Stock Market Editor 

A sudden wave of inflation 
“®cems, reflected in «* ftacks in 
bond markets across Europe, hit UK 
stocks hard yesterday. At midses- 
slan the equity market was heading 
for its worst one-day fell of the year, 
but losses were significantly 
reduced when UK government 
bonds steadied, helped by ahmlai- 
trends in the US d ollar and Federal 
securities. 

The FT-SE 100 Tnrttrr dosed 5L8 
off at 2*9TL1, but bad earUer shown 
a fall of 85.3 for a session’s low of 
2*937.6. Renewed fears that - 

pressures in the US will herald a 
general raising of global interest 
rates left no sector of the stock mar- 
ket unscathed on the first day of 
the new equity trading account. 


However, tradtag volume wee rel- 
atively znifal and there was no ques- 
tion of panic selling. Jjmdnn fared 
bett er than th» German stock mar- 
ket, where the prospect of a switch 
to upward pressures on interest 
rates came as more of a shock. 

Weakness in the US dbQar was a 
bearish factor far multi-national 
stock s, and UnQaver, ICS, Hanson; 
HSBC many other big names 
sufD er edai gnfflcant losses, Even the 
oil shares sector, which at first 
responded' strong as US crude tffl 
{vices moved - above (20 a barred, 
reacted Tatar as-the US stock mar- 
ket conthmed;to coma under pres- 
sure. lie ’-Do# Jones /-Industrfef 
Average, was aofpOizxts ail when .die 
UK markets closed for the day. - 

As soofteii'in:, current market 
conditiaDS, much of the downward 
pressure was exerted from stock 


business in equities. Seaq volume London stocks clearly remained vul- 

tqfalled only 460dm shares, com;':' nerable to the head move In bonds, 
pare! with 73&8m on Friday, when- and suggestions of decoupling sud- 
ratafl-husiness was worth EL46hn. 1 - denly sounded even lass convfodhg. 
• - Trade rs' yarned that the-low level _ Moreover, it was clear that securi- 

of 'tmwwerfn the market yesterday 1 "ties markets are" now highly iter' 
gtibuld not be taken as cause for, vous of the- gains. in commodity 
camfortTThere was no time to sell prices, which are likely to continue 
much stock, 1 * ccroments&one head as the recoveries ta woiidindusii&l 
dgjdgyTbut the selling wg&draie in economies gather pace. ■ • 

tl»iirtre^mark£t9" •' ' i>- . Domestic factors, including the 

At^Jast^dgbfs close, fjhe FT-SE, apnoiiiicgnient . thL^ hiPw mni- tgaga 
M&Indeikwas Just over 89 paints ^commitments by UK buQdtng sod- 

B ar's low reached at the - eties had edged higher .to. £3&8jn4n 
this month. , May, .were largely__.ignored 1 yes$m> 

year’s lowof 2,931.9 is-: day. Markets also appeared upper- 
fed area for the mdex^ - tarbed by pn»pd^ far^Britain's 
arest support jleyel not ^ .non-EU.trade deficit fooFMay which 

tej tiuitIi above;. Footsie is due for p nhHnnti^ . thU morning 

* . V- - - Tfor the near term; there is little 

* strategists found it.* doubt that trends to #ie UK stock 
flifflcult fcffSdjfew heart from yestex- market are at ttm.inercy of the US 
tfd^ra&y^am the session's lows. , band markets. 


/indexrfotcres. flailing of the Septam- 
/ ber contract an tbe Footsie, which 
:took over market leadership on Frt •> 
day, 'drove the contract ; jto a dtei,]/ 
jcoqntn ft . jnar ke tUiaking fft ni g- - 

Jgled to protect themselves against a ’- 
coRapHlng .stock market- 
. •?: j’nag-^RSK-^fid 2So fades dosed 
V4&.4 JtioTOi'af 8478.7 buC with the 
T focus atrbngly an Hue cfafe. stocks. 1 . 
‘tradiiig.ln.jQoii-Foatsle issues made -. 
op oriy -about 48 per castoff total / 



■ ‘/P 



UKmg 


FT-SfE IDO . . 2971.1 

FT-SE Mki 250 3478.7 

FT-S&A350 . 1498.4 

' FT-S&A AS-8para 1401.12 

FT-SE-A AB-STw^ytoW 305 
V?| " A* 


1 CM E ap ior afl on^^od. 

2 BUftSnfl AC&at ^ 

3 Enofntwd-q' 

4 Djatributorar. 

5 EnQbNMrino, VncU . 

• - fJ *£ i 

z*ik- 


-5118 FT Ordnwy Max 2316.1 <600 

-ASA FT-SSA Won Fhs p/a 78.01 (19.32J 

',-24*9 FT-SEIQOFut Jun 2973.0 -400 

-23-89 lOyrGStyWd 833 (8.75) 

(339) tong gPt/eqitity yid ratio:. 225 (201) 

■ui*i |MqonMng muiuii 

— 40 0 1 Wrtff — ! -23 

— 40.1 g Dtv*atyed Ms AB 

— -02 3 Merchant Banks -2ff 

— - -0l 5 4 Transport —...*-2.4 

— -05 5 Tateoom mu ntoaflooa -a..* 


Profits 
boost for 


The spotlight fen an British 
Steel as analysts hastened to 
upgrade profits and dividend 
expectations after the group 
returned to profit with fig- 
ures at the top end of mark"* 
expectations. 

The shares responded by ris- 
ing 5% to 189p and it was file 
day’s best performing stock 
among FT-SE 100 nmmtitnHQfo 
as 11m shares were traded. 


Profits for the year to April 
1994 came to at £80mr against a 
loss of £149m in the previous 
year, but it was the 50 pgr. cent 
increase m. the finaP-jifiridaiirf/ 
making a year's total - of 2P, 
which brought mosti'suii^se. 

Analysts ;Were pleased by the 
positive, tone ;of the. resides 


challenge to tb^graupean. 

Commission asktog .Ht v to 
adhere, nmpe ^strf^y^ to fii 
Steel Aid code wasja:^lgn of 
the -renewed crnifidence'^at the 
group. ■ ■ : ■ i 1a K '\ 
The rimgradlng cunent 
year exp^tations Shoved the 
range foran a previous. £L99m't6 
£800m, to £2TOm to .raa5m, 
while that qf the /dividend 


moved frtm prertous expecta- lsh SteeL The -too Jotnt^: o’Au 
tians<rf3ptoanewrangeof^p p^'-ccssHl^^^jjltefr'Siigi- 
to 5^p. ■; " nreringSted^^ i v-i 1 -i5 ; . 

: . • Hi^ijer off prtce^aM al bro- 

<«i>U J ; k^r*s ’ upgrade^ffiaed to" sfop 

GKN bought British Petroleum "sMing- 

Engineering group - GXN, to40^), with arpfrqfr^n sh#es 
which yesterday returned to traded* .The '.market was 
tbe^prepjjer list of FT-SE' 100, behe#d to be^fretttog over the 
(wryniniiy, was azpcsig a band-,' fisfce'af t h e ij&'HpptKfflit 
fal /ot stocks .fiat, bucked fife’ riteke^faeld . bjf\he:-Mmit 
porac%iapM trmuL The shuts ‘T\ Office (KlO)?!^.; 

’ - at &94p in teade' of /, v Wlth the shares ,ehcUhgj£last 


■LDQMMKfMCHmfir lW dK. 
M HI I UIU M (t) MortartB. WKIHIIO 

mm* eg MohQMn. maonwc a euBcr 
■buppI p i — w *khwciw— m 
HHsariwg name mophiwaw Pit. 
LJFSASaulWNCC .rQ m4(l)IMnRldA 
o«* nrummoH ■ moeii) bmw ca. : 
aiMnamtMiMiniisMm 
acMWLVQ te. itoty,' auraraM 


frqmThdfix ftmda. tbe Emirate’s ’internafronal 

Sentiment - (wasji vfurther investm^d azmjmgbt ^mt-to 
boosted by repeats of ^positive take -profits from' Ife - 64ftm- 
note from. ELeinwOrf Benson , share bolding. .Efawever^same 
and-the fffcxi.basSeAin some - analysts said a#:dakBrtras a 
of the ^OW ssmwm^bg'Brit----' prestige holding for the-icoun- 
•• fr .-t. -v r> • • : /-’ivV 


EQUITY FUTURES AND OPTIONS TRADING 


The sharp setback in European heavily, writes Joel ftibaZo. >>■ 
bohd markets on renewed' ' OrHts fifstfuirtjas'aa the-;,’ 
fears on US inflation hit the market leader, tile September 
derivatives sector, sending contract oh jtbe^FFSE lOCtesr 
stock index futures faffing opened at ?$85; ^antfaftet^p 

■ FT-SE 100 WP6X fUTUWBB (UITQ E2Sparfufl -- (Mm 

. Open Snttprica Ctarws Htfi " at.'yof Opm pr*. 

a.* “ ssj 

■ FT-ne MDXSO N3EX HmjRE8 (UFF0 eiO pok^ ' : ' :'‘ s 


Hkh w/'i- Uw. - ; Eat. yd Opn Jnt 

vmagjgnojr"; Iftgi- 

EtO par^lndm' ribln^ 


brief rise to <2, 909 iqlhe first- j.-:. 
fswjminutes of the sessioa, .^ .v 
thadkectkxi wasdawmvants ;;r. 

llte^o^ect^^igberr^ ^ ' * 
krtsreet riies tacounta^lS 
Inflation fr^ereda^-dff in . ' 
bondmarketffWNcb'in&m- 
affeeded sentrnont lrvfulikea. . 




ABOAQnm^ 1 

SSELl 


■m-mh 

Si 

-R12" 

> aw flDB.»*7-V ; 

■: ia*.' 2aa -y 

45S39 1 ' 


Sep 8485J0 -800 . ■' '/ .:0 ;• 

• : •# - . . - ■ £ rj .‘ =,-- r » ••'’'"•i •':? 

■ Ft-ae mp mo iNoex iomuq eio/pwlJinaMtpoiat.- ! r - 

Sap - 3475.0 - - 7 -. 'aS-rs^ 

M opm Mm* flgira m hr pnwkM d«. t Ow» w*Bpii Aon ' 

• -fc, -v ! 

... : ■ 

■ rr-se top wetex opnow r^’: . : 


were: said to haveTedfoe/. C |: .' 

to haws been unwBlinglo take 
partteto^^a<*Wfyfpra- •'£ 
(aroeparttof tttoriay/ j „ 
Tte low wM;ft« 3 ied-«t : . 


BET 



MOO MOO ' UMV.MeDl’WH 

c p c p. e i pj 'cv-'jf??.* 

a vh«b 

. Oacf Wb 


ftofo . »ioo~ >•«*».' 


arm 
nth 13 
m &2 




& *tA' : SMB. 


astoi 


advance. T^jb.i 


S-conW 


■f, . -sB-fim 


.NEW HIGHS and’ 

uncertainty. LOWS FOB 1094 

Meanwhile, Nomura’s, oils TT — — ' 

team raised its 1994 average oQ toiiauf Mcwirtteiiisa 
price forecast by a dollar to H7 nwmnwuioM m Hwa wi. own— mu 
a barrel und advteed djqfrs to 

make ashrat-tenn swltchfltHn unmmiT'THuis toaph«»*7»p Pit. 
Shell. Transport into BP **M****x.n m*. 

because# the respective. 1)enj^ 

fits to eandngs. The Japanese — Mna te li an. uw»owr M ww » 

house said Bp’s 1995 eangjngs - 
will improvB ®y 18.4 p» cent aMcjwcq V 

because,^ the rise in oil prices ■ meumejm. : 2f, 

***&*im***#m- tgjwSSSi.'gsaLw 

by nan as rautiL *■ .: Mmjam&cHanwirqBiiMiMnBa 
Thq djyidend race between- ncKrafai tm n f< ii btp. ‘ 

rues (toes) continued apace, . cbw» mant. 

With Rllrf . MMlaii% producing.' - *4^48N^nmMdBte :.HMia>WD MDU 
a vhe^hy 16.4 per Sent 1 

indrea^, altbirmgh Jodis' i nm^MigMiknv^ta. 
slumDed- after a-heftv excen- oifaa cby.rooo uwwr 

rional cfairge. The pretax fig^. cwwM/^awci^ecfaaHouiawu* 
ure jrf -£5L2rn was ^t 'OdtoJ)!0fe;Yli«naaw.l«i^* (fltafcMikis 
ftpm^gfend •- of . . 

• expectations and followed a .. j invMniifr 
£129^3^ rfiarge 'tekan agmst • 

resfrodturiiig costs. The -xam- 

seek ^^^eholderi'appro^^to 

w m* aw ?#• • 

its IsssM Aare«captaL ••;• : i-y*cica»j:c«fn. U d n^r . 

ThetBast Midland- perfori^- .M^^ °* 

■manc^as desdfoed a s 
erately-1 good” by analystss, 

altifotuto tbb* J9WWM (QM ,back . ; myoBfMwwaie.i w ton MMi cAuy 

««k nHBtfes ffiefei :. 

-dosing 9;4own?at 568p, Jfan-. < * .iRMo^TMueoMwi*,- . >; 

^jSS&SSSSSi»- 


tfonal ( 


Ei; MEDtUfl) Hmctiiwi 
eCBVUMKnoCa pnpo pj ; 
.wpeiWipp h» 


■:« 

ItfiOO 1 

va - im 


3 ,t» ; 6T9p^ Andysfe are Jodi 
tefffofito of around £230m 
^feldt^tend^df 22^p. ^ 


- jfhmta. ; V(iph Vo*.' 
.MBecaiwntoif 


jfif 22^p. ■?? ^ optiimsHhtoialysis' peudBing 
^beks, WSssex / 'to 213pi agabist'last year’s 


at- & 

m ti ; 
xrvi ws- 


n SWWW^'SBfT'SR 

■ EUWO gYLETT-«e MP aBOMbeXiO^iO 

3480 am- ' a aeo' ■■4-SMMff- 

M mhs*h**h to millMC.i': 

MCMOMiMvtaiWtantwH^ir 



"- -r r S- 


option and tho EuroiFTr^SE 1-J®S2^S» .. ' w '■» WH*m * 5<o sw m 7 w - 

S fl Slfe Vj g° *•-' *S ' i2S ISM) l.M MM - 31 41 - 

bad 8,471 tate deei^itortson.. ^ £*!: -£* naans ra « 17 

was the busiest stock optiop- 7 * SSP^ -- a i 1 © 'S - ^ : - -&** ) : *3o ika u iirnta ao 

Witoatotdbf I^Jfcontracto ®*^sSSSt f “ *g * «» - m 4« 

SWtoi • :-'T ,ss -S'' siM ta 


'^SSRSSSpml 1 


.. 5 


'held up: well, Closing just a 2LSp. Profits should came in at 
■$ pemiy ijff at 6Q8p- Tbe roariErtt*5-aro^i'£10Sm_ : •>' ?v • .-■ 

* f to* today’s fihils, -with -bobht ‘<®ai stocks going ex-d^Us. 


J Am. 

Pharmaceuticals group 
Glaxo Ml 15%,-to 569Hp fbllow- 
. tog shato rises recently. There 
wap same negrotiahtos over a 
statemehl that* the . «nnpany 
wasrconslderlngif legal action 
atednst plans- ^{INa^pphann, 

the nq^nffiftw phgrmnrfT lrirail 

group, to ver- 

sion of -Its beebMto^ -ulcer 
.- treatment drugv^mtoc dh the 

tjs.' m *'.*W*g ' 

. TSB Group hdd steady - ad 
22^) to^^PTOre :to'^^re CT^^^ 

• expe^^^jyroflt. of around 

casm - ifo fram.^i80m previ- 
- auffly -hMpiWsf 8 sharp fcij 
tobi^ddrt.ptoidBiflnsiTtodfifs 
’ said there was also tab that 
Nomura was recommending 
the stock 

Ejsewhere, former building 
-society ^hbey Natlomal wits 
polled .^sck irC .early trading 
alter; cgiarioas yreeKe nd press 
cramnenti on . tiw^recqvery in 
fife brAkrtftg - - wipTfcw t . . Rm the 

shares recovered -from a low ef 
1 40ft) tojetoi) dfat-41^). , 7 

r* torthe tol secton the possiMl- 

itylof a^ BUccBssftd lbld for 
Lasmo ^ Enterprise contin- 
ue* to^ecede in spito- Of . .a, 
shaky ijtoioto^#r-lier in the 
day th^ S.Gl Warburg had 
bmn'askM to buy Ifi ^ cent 
ofTLasm<fts sharps;: By the dose 
• Enterprito b wf . ffrnwd a half to 
4i5p while Lasmo ' added .ia 
pentiy atvlSOp/- -i 
r Tbarii JSlfl Was' the subiecx 
of^some ddwte as the nuohd 
; aw^lted^ the verdict on two 

8ng*SaHy n c ouri case is due to. 


be decided to the next few 
days, with Thom supporters 
hopeful of a positive outcome 
for Sony and to. their view tbe 
record industry as a whole. 
Later in the week, the Monopo- 
lies and Mergers Commlsslan's 
report into compact disc prices 
is also expected, with leaks 
from official sources WpWng 
that the record companies wffl 
■ escape censure over prldpg. 
Thom shares slumped with the 
market, but later rallied to 
. .ckwe 20% down at 1089p.: 

■’ Speculative buying buoyed 
' up Shoprite Group, the to»- 
epunt Bupermarket operator, 
the shares gatotag 6 to 659.” 

Channel tunnel operator 
iSnrptunnel remained -under a 
cloud as talk that a large part 
of the £858m rights issue may 
be left with the undowriters 
continued. 'Die shares relin- 
quished another 5 to 28^. The 
■fights issue price is 265p. 

There were' selective gaihs 
among btdlding and djostruo- 
tonr groi®8 fpHowing the hefty 
netbacks suffered last week ah 
toe back off interest rate rise 
fears. Amonk tofosebuiUtore 
, and, developers, Taytar Wood- 
Towadvanced 3 to 12^>,A2iEC 
! v 9 to llSp, Barratt Develop- 
ments 5 to 19^> and Beaus- 
Homes steady. at 147p. • • 

USM-quoted Border Teletd- 
cgion rose 15 ’to I84p after la 
’recoamnehdation hi the week- 
end press. 

Cil^9(KT HEPORTVR8S ' 

Kitir jonn, 

Chrtstophar Price, 

A . . . .v-',. : 

■ ■Ottwr«aa»fic»M*aq»2S 






?a & 


■ ■■ - 1 

- 

FT-SE 100 tonjL 

FT-SE MM MO 34787 

FT-5E MM 20O «c Inv Trusts 34800 

FT-SE-A 100 1S8S4 

Ft-ae Smaocap isaass 

FT-aE SMOCap wc few Tracts I815ff9 

FT-8S-A ALLpSHARE 1401.12 

■ FT-SE Actuavtos AU-Sharw 


10 MMBIAL OCnMCnOHpSl 
12 exMBttv* MwWn(8 

15 OB. Int^MBdre 

16 00 SnOowflon S Prodtlll 

20 CHEN MANUFAOTURenBtKai 

21 BuitSog A Conrtucflon{32} 

22 BUMInfl Matt* A MsrctwpD 

23 Qwnleata(21) 

24 DfoaraHad IndurtrtaEtlQ . 

29 Sacbonks & Beet EqdpfM) 

3S EnglnaerkiaPI) 

Z7 Engineartno, VaMdN(12) 

28 Prindno. Paptr * PohoPW 
2fl TMOflw A AoptbICT 

30 COMUmR 0000804 

31 BravMriao(17) 

32 SpMtm, Wines & Cktora(10) 

33 Food MwiubduraraCM) 

34 HouMhokl QoodKIS) 

38 Hoalth Con(2q 

37 RiannB0«idMta(12) 

38 TObaecoffl 

40 80MC8Sf229) 

41 DWribtAorepiJ 

42 Lsfewn* & HOMK24) 

43 MadMOSA 

44 bSS; Pood{17) 

48 RMMwm. Qwortl(4a 
48 Support Bowie — 1 40 8 
40 Trtnopontlfl) 

si Other Son4— ■ A fta j—flOL 
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FINANCIAL TINBS KNIITY IMNCNS 

2 Jdnt ao Juna 17 Jura 16 Juna 15 June 14 Yr aqo JHgi low 
Onflraajr Stare 2316.1 23730 2883ff 23990 23970 2274ff 27130 23111 

Ord ter. yMd 403- 406- 404 401 402 407 . 409 3ff3 

Eottl *L 9^jut 502^ 173 - - 170 160 - 507 402 502 302 

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23240 ZaaSff 23290 231 B0 23030 ^02S 23091-23110 23170 2991.1 22040 
June 80 Juae'i7 June 16 Jme 15 June 14 Yr app 

SEM2>beigal» 24086 31007 24,062 22083 29141 30092 

Equity tunow pbn)t , - MS11 13730 iSBIff 15822 10492 

EqUhtargalnst - 84^67 . 25,742 29093 25,199 34092 

Shame traded {mW - ■ ' 5317 5111 6100 5946 4742 

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CURRENCIES AND MONEY 


markets report 


POUND SPOT FORWARD 




Dollar slides 


Hie dollar struggled to keep off 
its lowest level against the 
D-Mark in eight months yester- 
day alter negative market sen- 
timent forced it through tech- 
nical and psychological 
barriers, writes Motoko Rich. 

The markets held a grudge 
against the dollar after its 
downward performance on Fri- 
day when an independent 
think tank in New York said 
the DS currency could drop by 
10 per cent against the D-Mark 
within the next 18 months. 
Traders flirted with the dol- 
lar's lows against both the 
D-Mark and the yen, and 
awaited concerted central bank 
Intervention, which was not 
forthcoming. 

In London the dollar closed 
at DM1.5986 against the 
D-Mark from DM1.6299, and at 
Y1QL970 from Y103.495. 

Meanwhile the D-Mark was 
gaining strength on a Call-out 
in the European bond and 
equity markets and optimism 
that Germany’s economy is in 
recovery. 

■ The US currency extended 
its Friday losses against the 
D-Mark as bearish traders rat- 
tled at central bankers’ doors 
and pushed the dollar through 
new technical support levels. 
The dollar also slid against the 
yen on the back of its down- 
turn against the D-Mark. 

"There was no news to trig- 
ger the dollar’s fall,” said Mr 
David Cocker, economist at 
Chemical Bank. "When you 
have a large foil Uke last Fri- 
day, you would expect to see 
some profit taking, and that is 
exactly what happened. It ral- 
lied a little bit, but not much, 
so the traders sold it again.” 

By the close of European 
trading there had not been con- 
certed central bank interven- 
tion to support the dollar. Ear- 
lier in the day, Bundesbank 
president Mr Hans Tietmeyer 
declined to comment on the US 
currency, dampening expecta- 
tions of Bundesbank action. 

Mr Cocker said the US cur- 
rency win need central bank 
intervention before it will 
rally. “To see a turn-around in 
the dollar you need to see the 
Fed raising rates above the 
short-term German rates," said 
Mr Cocker. "To say we do not 
have an active devaluation pol- 
icy is not enough. They need to 


i.y: 

Apsidst «e Swte? ftvoq (DM perSft).- 





SOBOaFTOlWJlTlI®'/-. . - ’xi v 

■ Pwd la H«w York 

Jb 8 — 1M — — Raw. dan — 

£*nt 1.5380 1.5345 

1 fflth 1.5372 1.8337 

3mUi 1.5350 1-5342 

Ip 1.3293 1.5260 

taTir the dollar higher." 

Attention today will be 
turned toward the US trade 
balance. Analysts expect that If 
the figures are bad, traders will 
continue to sen off dollars. 

“The US trade figures wfll 
take on an importance not jus- 
tified by itself;" gatd fife Alison 
Cottrell, senior international 
economist at Midland Global 
Markets. “The markets are ner- 
vous and thin and the trade 
figures are the only thing to 
look at." 

■ While the market has been 
shunning the dollar, the 
D-Mark has come Into favour. 
“The market is re-rating pros- 
pects for the D-Mark," said Mr 
Neil MacKinnon, economist at 
Citibank. “We have seen many 
indications that the German 
econom y has tamed the cor- 
ner." 

He said the markets have 
sensed German interest rates 
have bottomed out and are 
forecasting the next rate move 
will he upwards. With gener- 
ally disappointing economic 
indicators mrwrg in g from the 
US in the last few weeks, the 
market has also trimmed its 
expectations for Fed tighten- 
ing. 

A blood bath In European 
bonds fuelled by Friday’s foil 
in US Treasuries, rising com- 
modity prices and fears of 
inflation gave the D-Mark a 
ftirther boost as investors fled 
to cash. “Of course they could 
be buying any currency but 


investors seem happiest to be 
in D-Marks,” said Mr Cocker. 

German call money 
remained steady at 5.00 to 5.05 
per cent 

■ The dollar’s weakness also 
benefited the Swiss franc 
which closed higher against 
the US currency. The dollar 
fell through the SfrI-3500 level, 
its lowest since October 1992. 
Against the Swiss fianc, the 
dollar dosed at SFrL3488/3498 
from L3740/50. 

Swiss franc/D-Mark cross 
trading was thin, and the franc 
ended the day weaker against 
the D-Mark. .The D-Mark dosed 
at SFrO.843, from SFr0841 on 
Friday. 

■ Sterling was unable to break 
away from its link to the dollar 
and was quoted below the cru- 
cial level of DM2.46 at seme 
points during the day. 

“The pound has weakened 
steadily against the D-Mark 
because people are buying 
D-Marks against the dollar 
rather than sterling against 
the D-Mark,” sa id Ms CottrelL 

UK statistics on M4 money 
supply and lending, as well as 
building society net new mort- 
gage commitments, had little 
effect on the market as inves- 
tor attention focused on the 
flailing bond and stock mar- 
kets and the spiralling dollar. 

The pound closed down in 
London at DM2.4606 against 
the D-Mark from DM 2.4765 and 
up at $L5393 from $L5195. 

While remaining quiet in 
early sessions, the Banfc of 
England provided liquidity of 
£78m at established rates and 
late assistance of ESSm after 
forecasting a shortfall of 
£450m. The overnight lending 
rate traded between 6 and 4K 
pm- cent 

In the futures market, trad- 
ing volumes were high at 
2AJ600 on the December short 
sterling contract, which closed 
at 93.70 from 93.75. The Decem- 
ber Euromarket contract 
traded 32fl00 lots to close at 
94.78, from 948L 

loim “*1 111 1 in t - 

JU12B _ £ 5 

Mm 157.455 - 157J80 1023100 - 102410 
to a 265500 - 288100 174800-175000 
Mm* 04502-04675 02884 -02072 
(Uni 3*5107 - 34654.1 224300 • 228100 
Santa 301057 - 302028 198140-188800 
UAE 510418 - 50833 3JJ715 - 30739 


otre epa 

Austria 

Mgkm 

Derma* 

Finland 

Franca 

Germany 

Greece 

Ireland 

to* 

Lummboug 

Netherlands 

Norway 

Portugal 

Spam 

S w e den 

Swfcnrtmd 

UK 

Ecu 

son 


CSctl) 17.3097 
QBF* 50.7337 
OOKi} 90590 
<FM> 8X293 
(FFi) 8.4099 
5DM) 24006 
(Dr) 371083 

(tq 1.0173 

W 2436.44 
(U=i) 507337 
(HJ 2-7501 
NO) 106873 
fl&O 250209 
(P to) 205X21 
(SKr) 110786 
(3Fk) 247762 


-01724 030 
-02691 947 
-00485 658 
-00341 203 
-04739 068 
-047168 596 
-2306 063 
-047013 188 
-024 424 
-02601 947 
-047199 579 
-04)59 940 
-1X62 030 
♦0.133 149 
-00286 709 
-04X172 743 


IBS 1747491 
727 SI 47620 
621 9.7014 

389 841020 

129 &d414 

614 2.4775 

713 374.713: 
17V 143224 

884 246255: 
727 514)520 : 
603 2-7706 

000 10.7504 
481 268X25 I 
292 20SA31 : 
683 1247749 
7G0 P.0 TO9 


- 1X828 

- 0X37395 


Argentina (Peeo) 15384 
Bred (Cr) 3634X9 

Canada {SR 2.1477 . 

Modes (NiwPoooj 6.1788 
USA CD 15393 

PaeMeMddkr East/Africa 
Austrtoa (AD 20860 

Hong Kong (HK3) 11X958 
India (Rs) 48X824 

Japan (V) 150856 

Mriayria (MS) 34*944 

Near Zealand (NZS) 25855 
PhBpptoes (Poao) 41.7138 
Saudi Arabia (SR) 5X727 
Sing a pore (S3) 2X513 

3 Africa (Com) (R) 5.6058 

S Africa (FtaJ CT 7X730 
Soutti Korea (Won) 1248X4 
Tahm (TSJ 415383 

Thailand N) 38-6352 

1S0R nta far Jwi 17. Odfeder ipmads 


+0.0187 961 - 387 15388 15276 

+1 12473 388 - 489 3840430 3548.00 
+043388 468 - 484 2.1516 2.1268 

+04)838 741 - 836 3.1835 5.1544 
♦04)198 390 - 395 15417 15304 


4047172 861 - 889 
40.1509 931 - 985 
405191 707-941 
-0X98 888-029 
+05625 929 - 858 
400188 839 - 870 
405388 991 - 284 
404)738 714 - 740 
+0.0212 601 - 624 
+04*582 036 - 078 
+04)404 984-895 
+■19 607 - 700 
+05299 278-450 
+04088 135-588 
>h ha Round Spot I** i 


OMMOrih Thiaa mautha 

Ona yaw 

Bank of 

R toe 

SPA 

Rate ' 

%PA 

Rate %PA Eng. mow 

17X069 

OX 

17X003 

02 



114X 

50.7237 

ox 

507887 

-OX 

50.8037 

OX 

115,9 

omuir 

-IX 

a Mares 

-OX 

9X948 

-04 

1104 

• . 


. 



. 

807 

M144 

-ox 

0*197 

-05 

8.4023 

0.1 

1008 

24802 

ox 

24998 

Ol 

2.4405 

08 

125.1 

1X177 

-04 

1X186 

-OX 

1X197 

-02 

104.7 

2442.14 

-ax 

2454X9 

-3X 

2504X9 

-ZB 

roe 

90.7237 

02 

507887 

-03 

90X037 

03 

115X 

Z7585 

-ox 

2.7581 

01 

2.7374 

OX 

1201 

108917 

ox 

107042 

-03 

106964 

ao 

803 

257.T84 

-4X 

250129 

-4.6 

- 

- 

- 

205X31 

-3.0 

200X01 

-SL9 

209X71 

-2X 

84-8 

11X016 

-ax 

11X305 

-2.0 

12X346 

-IX 

75X 

2X742 

ox 

2X714 

07 

2X485 

IX 

1201 




- 

- 

800 

1X84 

-1.1 

1X799 

OX 

1X881 

-02 

- 

2.15 

-IX 

2.1568 

-1.7 

2.168 

-IX 

804 

1X388 

05 

1X37 

OX 

1X3 

08 

84.1 

2X853 

04 

2X637 

0 A 

2.0828 

02 

- 

11X877 

ox 

11X839 

04 

11X107 

-Ol 

” 

158X9a 

2X 

155.788 

ax 

151X73 

3.4 

188.4 

2X848 

03 

2X884 

-ox 

2X948 

-04 

- 

- 

- 

- 

- 

- 

- 

- 


on Mr Spot uMta dated tom TIC WM i H fcU fBB CLOflWQ SPOT miBk 


i dKtari piacMc Hnoad n*M ■« not ramcoy qualad IB >w marM 

BOM MW ISM - 10030 Otar ml l*Mi ta bod» Mm and 
wfaw MB imkM fartta FT.TM low lor T7AM - 2 47BB 



rTBNNB 





DOLLAR SPOT FORWARD AGA NST THE DOLLAR 


■fun 20 

Oaring 

irUd-potm 

Burapa 

Austria 

CScti) 

11X455 

Belgium 

<P*1 

+>n«nn 

Danmark 

<DKO 

8X751 

Finland 

ffV) 

03483 

France 

m 

5.4838 

Germany 

(D) 

1XS68 

Graeco 

PO 

241X00 

Ireland 

W 

1X132 

duty 

(ti 

1582X3 

Luxembourg 

(LB) 

32X600 

Netherlands 

0=9 

1.792S 

Norway 

(M<r) 

8X497 

Portugal 

(EB) 

180450 

Spain 

(Pte) 

133X25 

Sweden 

(SKf) 

7X172 

Switzerland 

(SFr) 

1X482 

UK 

n 

1X393 

Ecu 


1X000 

son 

- 

1.42231 

America, 

Argentina 

(PMC) 

09982 

Brad 

(Q) 

2381X8 

Canada 

<CS) 

1X953 


Day's mid 
Ngh tow 


One month TMwa moHta Ona year JJ 3 Morgan 
Rata HPA Rata %PA Rata %PA tods* 


-0X6 430 
-05 400 
-0-1124 741 
-04)821 413 
-04)999 826 
-OL 0313 983 
-47 100 
+04)213 125 
-20.77 170 
-05 400 
-04)383 920 
-0.1294 487 
-3 300 
-156 300 
-0.1174 134 
-04)223 478 
+047198 390 
+04)207 906 


■ 480 11X515 

■ 800 33X050 

■ 781 8X350 

- 613 54090 

647 55100 

• 988 15135 

■ 100 243.400: 

138 15184 

-275 15884X) 

• 800 33X050: 

■ 930 15077 

■ 507 74)169 

■ 600 168X00 

• 350 133.760 

■ 209 7X072 

-466 1X806 

■ 395 15417 

005 1X000 


- 981 -082 09962 09961 
+424*8 107 - 109 2381.10 2381417 
+0008 960-965 1X968 1X897 


Mexico (NawFena) 3X845 

usa m 

PadOcMdde EastfAMca 


Austria (AS) 1X652 • 

Hong Kong (HKJ) 7.7283 
todto IRs) 31X875 • 

J *on CO 101X70 

Malayata (MS) 25960 
New Zealand (NZS) 1X797 
PtiEtpptooe (Peso) 27.1000 
Saudi Arabia (SR) 3.7504 
Stogapore (SS) 15275 
SAMoa(Com) (R) 3X418 

S Africa (Fto.) (H) 4,7290 

South Korea (Wcr$ 809X00 
Taiwan (Ft) 274)488 

ThaBand (BQ 25.1000 

1808 m far Jon 17. Bdfloltar apraada 
bra ere kepaed by curare toanet ran. 


Saudi Arabia 
Stogapore 


-04)084 648 -656 
-00014 278 -288 
-00013 980 - 700 
-1525 940 - 000 
+04)007 945 - 956 
-00096 790-804 
- 000-000 
-00003 501 - 506 
-0.006 270-280 
-0X085 410 - 426 
-0035 150-350 
+1X6 400 - 000 
-00037 485-510 
-006 900-100 
i ta the Dote Spot ufcM 
UK. Moral & ECU w c 


11X5 

-OX 

11X58 

-04 

11.1955 

04 

103.7 

32X835 

-09 

33X3 

-08 

33.075 

-OX 

105.1 

8X841 

-IX 

03031 

-IX 

03470 

-IX 

104.7 

5X495 

-07 

6X623 

-IX 

5.4288 

-IX 

75X 

6499 

-IX 

5478 

-1.1 

04349 

OX 

105X 

1X998 

-07 

1X004 

-06 

1X952 

02 

105X 

242X6 

-07 

243.8 

-3X 

2401 

-IX 

599 

1X118 

1.1 

1X091 

1.1 

1X007 

ax 

— 

1S87X3 

-3-9 

1597X3 

-3X 

1836X8 

-3X 

77X 

32X838 

-09 

33X3 

-08 

33X75 

-03 

105-1 

1.7839 

-07 

1.7945 

-04 

1.7893 

ox 

104X 

6X642 

-OB 

09687 

-1.1 

08687 

IX 

98X 

160105 

-11X 

170X26 

-0X 

174X 

-00 

92X 

133-72 

-3X 

134.485 

-3X 

137X5 

-29 

BOX 

7.7352 

-2-6 

7.7682 

-2X 

7X162 

-29 

803 

1X483 

OO 

1X477 

Ol 

1X889 

07 

1000 

1X388 

05 

1X37 

06 

1X3 

OX 

808 

1.1964 

1.8 

1.1858 

IX 

1X093 

-ax 

- 

1X974 

-IX 

14033 

-2X 

14288 

-24 

824 

3X655 

-04 

3X873 

-03 

3X747 

-03 

— 


- 

• 

- 

- 

- 

99-1 

1X555 

-OX 

1X556 

-Ol 

1X593 

-ox 

88X 

7X278 

01 

7.7303 

-Ol 

7.7445 

-02 

— 

31.4475 

-3.1 

31X925 

-29 

- 

- 

- 

101.785 

2X 

101X45 

2X 

99.13 

2X 

1408 

2X87S 

3X 

2X84 

1.7 

2X15 

-08 

- 

1X815 

-IX 

1.6881 

-IX 

1.7078 

-1.7 

- 

3X61 

-02 

3.753 

-OX 

3.7867 

-04 

_ 

1X288 

OX 

1X286 

03 

1X285 

-Ol 

- 

3X573 

-5.1 

3X866 

-4X 

3-7623 

-3X 

- 

4.7587 

-08 

4X175 

-7X 

- 

- 

- 

812X 

-44 

816.2 

-3-2 

834,7 

-3.1 

- 



•- r 

■-+ZX ■ 

a 


-CSi 


.vntwr 1 

1 ar»4 






a 1- 

*... *“i. 

' . ■ -ta * 


- t“ 

•• - . 


. 4.-U. 




. ritvl.^l 

"■M 


27X000 28X000 
3.7507 3.7601 


810000 807X00 812 J -44 816X -3X 

27.0620 274)486 274)898 -OX 27.1008 -OX 

23.1500 254)900 25.1725 -35 25X -32 


rim owy aw tan One decanal ptaoaa 

luawd In US currency. JLP.Mocgnncm 


2SX -3X 25X8 -2.7 

Rawud mac an not dkoedy quoad fa tba mater 
ri tadfcee Jun 17. Baaa towage 1B9O-W0 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

Jun 20 Bfr OKr FFr 


EMS EUROPEAN CURRENCY UNIT RATES 


SKr SR- 


EA) 100 
(DKr) 5252 


1858 4X51 

8.707 2X48 


214*9 5054) 

11.08 2B5X 


Ftanca 

(FB) 

80X2 

11.49 

10 

2X26 

1X09 

2896 

3X81 

12.72 

304X 

244X 

14.13 

2.467 

1.189 

2X54 

1X30 

188X 

1X28 

Qennany 


2061 

3X25 

3417 

1 

0413 

9394 

1.121 

4X48 

104.1 

83X8 

4X27 

0X43 

0408 

0X73 

0X25 

63.75 

0X21 

Iralend 

OQ 49X8 

9498 

8X09 

2420 

1 

2394 

2.713 

10X2 

251X 

201 X 

11X8 

2X40 

0983 

2.112 

1X13 

164X 

1X62 

jtohr 

W 

2X83 

0X97 

0X46 

aioi 

0X42 

100. 

0113 

0439 

10X2 

0427 

0488 

0X86 

0X41 

0X88 

0063 

8444 

0.053 

Nathartanria 

W 

18X9 

3X01 

3X48 

0X92 

0X89 

882X 

1 

8X78 

92X8 

74X7 

4X08 

0782 

0382 

0779 

0X68 

56X7 

0465 

Norway 

(MM 

4741 

9927 

7X80 

2X00 

0950 

2278 

2X79 

10 

2394 

191X 

11.10 

1X39 

0938 

2X07 

1438 

146X 

1.199 

Portugal 

(Eri) 

19X0 

3.770 


0951 

0X97 

9504 

1X77 

4.178 

100 

80X9 

4X37 

0X10 

0X90 

0X38 

0601 

61X4 

0501 

spam 

(PN 

24.72 

4.707 

4X98 

1.199 

0486 

1187 

1X46 

5X14 

124X 

100. 

5.789 

1X11 

0487 

1X47 

0780 

78.48 

niPB 

Sweden 

(SKr) 42-70 

0130 

7X79 

2X72 

0X56 

2050 

2X22 

9X07 

215.7 

172.7 

10 

1747 

0X42 

1X08 

1X95 

132.1 

1.080 

JWUlnl IBU SI 

(SFr) 

2448 

4X55 ‘ 

4X53 

1.186 

0490 

1173 

1X30 

5.157 

123X 

98X8 

5.725 

1 

0482 

1X36 

0742 

75X1 

0X18 

UK 

« 

5073 

9X80 

8410 

2461 

1X17 

2435 

2.759 

1070 

2502 

2002 

11X8 

2X76 

1 

2.148 

1X39 

158X 

1X83 

Canada 

(CD 

23X2 

4497 

3X15 

1.148 

0473 

1134 

1X84 

4X81 

11BX 

96X3 

5X31 

0988 

0-466 

1 

0718 

73X4 

0587 

U8 


32X6 

0278 

5466 

1X99 

0681 

1582 

1.793 

0963 

1606 

133X 

7719 

1X48 

0X50 

1X96 

1 

IdX 

0834 

Japan 

PO 

mu 

81X8 

53X0 

16X9 

0482 

15510 

17X8 

68X0 

1833 

1308 

75.72 

13X2 

6X73 

13X9 

9X09 

ioaa 

8.177 

ecu 


38X4 

7X28 

0585 

1X18 

0793 

1888 

2.190 

8X40 

199.7 

150X 

9X80 

1X17 

0779 

1X74 

1X00 

122X 

1 


Jun 20 

Ecu can. 

Rate 

Change 

94+/- bom 

% spread 


rates 

against Ecu 

an day 

can. rate 

v weakest 

Natfwrtonde 

2.19872 

2.15509 

-0X0619 

-1X0 

5.70 

Ireland 

0X08828 

0794827 

+0001887 

-1.73 

6X2 

Belgium 

402123 

39X874 

-00838 

-1X5 

5X3 

Germany 

1X4964 

1X22S8 

-000520 

-1X9 

5JS 

Franco 

6X3883 

6X7365 

-0.001 B5 

0X4 

3.14 

Danmark 

743879 

7X6377 

+0X0428 

1X7 

2X9 

Spare 

154X80 

189X01 

+0322 

3X3 

0X3 

Portugal 

192X54 

199X75 

-0383 

3X9 

0X0 

NON EHM MEMBERS 





Gnmco 

264X13 

291.029 

+003 

10X2 

-378 

Italy 

1793.19 

1905X4 

+12X3 

8X4 

-2.40 

UK 

0788749 

0781001 

+0004831 

-073 

448 


, Maer pn Now, and i 


i Franc. Escudo, Lto i 


■ D-MARK HnURD (MM) DM 125,000 pvOM 




■ JAPAMMM m 

PUTURRS 0MM) Yen 12X par Yen 100 


Open 

Latest 

Change 

«9h 

Low 

Eat. wri 

Open tot. 


Open 

Latest 

Change 

Hgh 

Loir 

Sap 

0.6207 

0X249 

+00040 

0.8258 

0X185 

54,107 

77X72 

Sap 

0X810 

0X847 

+00088 

0X882 

0X795 

Doc 

0X254 

0.6260 

+00039 

0X259 

06260 

388 

1X14 

Dec 

0X895 

0X913 

+0X008 

0XB23 

0X885 

Mar 

- 

- 

- 

- 

- 

- 


Mar 

- 

- 

- 

- 



Baiemwl woe, are by taa Om paan CU i M la riu iLCMwactaate In dogwatog relute atonal 
Pwarip changea we tar Ecu a potato ri ranga anei a merit us im n y . Dhwpanea ahnma the 
rrifa barnwi taro apnadK Bm parartaaa dttnnoa twman ta acturi nwrtat and Ecu canM rrin 
tar a camera, red itei unrtiiuui paanBed p ercentage dteadcnafdiacuiwicy'iiDariaitreta tarn to 
Ecu canbta rata. 

(17AW3) StetoB and Kalp> Uni auapandad turn BM Artuahnant catariawf by ths Fhmdri Tims*. 
■ PMLAP U WAaa ITS 0PT10H9 E31.28Q (cunta per pound) 


RAMC FUTDWS 0MM) SFr 12S.0Q0 per SR 

0.7375 0.7432 +04XM8 0.7450 0X958 28X20 47X45 

a 7407 0X442 +04)053 0X462 0X407 477 1,042 


WORLD INTEREST RATES 


MONEY RATES 

June 2D Over One Three Sbt One Lamb. Ota. Repo 

night month iwtha mtha year briar. rata rata 


W* WnWM (9Xri) EB2500 par E 

15314 15370 +04X718 15384 15288 19,104 38X95 

15380 15340 +00006 15352 15340 229 299 ' 


Strike 

Price 

Jii 

- CALLS - 
Aug 

Sep 

Jul 

— PUTS — 
Aug 

Sep 

1429 

11.19 

11.10 

11X9 

- 

- 

004 

1460 

071 

068 

061 

- 

002 

019 

1476 

8X1 

042 

074 

- 

018 

048 

1X00 

4X0 

4X2 

4X9 

016 

0158 

0X8 

1X26 

2.10 

2X9 

3X1 

0.70 

1X0 

1X4 

1X80 

0X2 

140 

2.12 

1X1 

2X4 

3X8 


neriaua dqre eel. Orita anx*/ Ptas A7» . Flan. rtagTe opnlnu CWa 4TSXM Pria 3B2X77 


II UK INTEREST RATES 


IflJFFQ- DMIm points Of 100% 


Bettfum 

514 

84 

514 

sv- 

64 

7.40 

4X0 

- 

week ago 

s* 

54 

64 

5Mr 

5* 

7.40 

4X0 

- 

Prance 

814 

m 

5M 

eg 

34 

5X0 

— 

075 

week ago 

5Vk 

514 

5H 

54 

SIS 

5.30 

_ 

6.75 

Germany 

5.00 

5X3 

6X0 

000 

015 

6X0 

4X0 

5.05 

week ago 

SXS 

5X3 

5X3 

SX3 

5X8 

6X0 

4X0 

6.10 

Intend 

64 

54 

5& 

39 

34 

- 

- 

02S 

week ago 

54 

54 

54 

5% 

64 

- 

- 

aen 

Italy 

8k 

34 

04 

04 

9)4 

— 

7X0 

7X0 

week ago 

7B 

84 

7* 

7)4 

816 

- 

7X0 

7X0 

Hethertenrta 

003 

5.01 

5-02 

5X7 

5X4 

— 

5XS 

- 

weak ego 

008 

5X1 

5.04 

006 

821 

- 

025 

_ 

Aritoeriand 

4tt 

*4 

414 

44 

4 m 

8X26 

3X0 


weak ago 

314 

44 

414 

44 

44 

6X25 

3X0 

- 

US 

44 

4)4 

4)4 

43 

54 

- 

3X0 

- 

week ago 

*4 

4M 

414 

48 

54 

- 

3X0 

- 

JMpan 
weak ago 

24 

24 

24 

24 

24 

24 

24 

24 

2)4 

214 

- 

1.75 

175 

- 



Open 

Sett price 

Change 

Hgh 

Lour 

Eat vri 

Open tot 

Sap 

95X0 

95X4 

+001 

95.03 

96X0 

?»!tojdjr 

182481 

Dec 

9478 

9478 

■003 

94X1 

94.75 

31985 

200670 

Ma- 

94X0 

94.45 

■0X7 

94X1 

94.40 

51763 

201234 

Jun 

64.11 

94X8 

-0.06 

8011 

93X9 

20084 

103838 


i wimaas (uffe) uoaom poretao 1 100% 


Open 

Sett price 

Change 

High 

Low 

Bet. voi 

Open tot 

91 AO 

BITS 

*0X2 

91.42 

91.09 

19830 

47381 

91.10 

90X6 

-0X4 

61.10 

90.78 

7338 

49183 

90.07 

9049 

-028 

90X7 

qp.y; 

2777 

13433 

9010 

89X8 

-0X1 

90.10 

89X8 

1815 

8278 

MONTH 

UNWSWW 

B nUMC FUTURES flJFFQ SFMm points of 100H 

Open 

Sett price 

Change 

hBgh 

Low 

EaL vd 

Open tot 

e&xo 

95.48 

-0X4 

95X0 

96.40 

4184 

30781 

95.18 

98.18 

■007 

95X4 

95.14 

1480 

9757 

94X8 

94X5 

-005 

94X7 

94X0 

488 

8013 

94X0 

94.47 

-006 

94X2 

94.42 

231 

896 


LONDON MONEY RATES 

Jwi 20 Over- 7 d ays One Three Stx One 

night notice month mo nt hs months 


briabank Staring 8-4*i 453-4^ 6-4% 64 - 5A S* - 5% 84-84 

StwtogCOs - - *3-4% 5j)-U 5% - 54 84-Si 

Treasury Ms - 43-4% 4R- 

Bach BBS - - 4^ - 4fi 5 - 4fl 5-4(1 

Loeri Bjdnrity daps. 5%-6% 4JJ-4IJ 5-43 5% - 54 5% - 5* 64-53 

□taoouit Marhat dope S^-4%43-43 _ » «aa_a»e 

UK ctoaring bank tone tavflng rate 51* per cant Item February a, 1994 

-3 


Carta of Tax dip. {2U)04XKB 1% 4 3% 3% . 3*2 

Carta ol » dm imtar CtOOOOO la 1 OaoMto aMUttaan far caah W 

Am. tanctarrria at ^coum 4X7 H|m. SMO tad raw Sag. Brpert Rnanea. Mriw ■« d» May 31. 
1SB4. Asra^Mtaj to partod Jun aa 1» » Jri 25. 1994, Sdmaa 1 6 ■ Iflbc. RatawicanM far 
**£• 1 “* “ "tor*. IBM. Scheme. IV a Visaspc. nm HwwrS^ntas^ton 
June 1, 1Bu4 


I Ecuim points of 100% 


■ S LBOR FT London 
W itm* FWng 4ft 4ft 

weak ago — 4} 44 

US Oolar CDs 4.18 4^*0 

week ago - 4.18 4XS 

SDR Utdwd Da 3V4 3J 

Traek ago - 3% 3J 

SCO Unhid Da add nUa 1 mUx 81 3 m« a ; ( 
ratal nritarad ntaa brSlOm oiotad to Dm mirtoi 
day. The banka ana: Barters Treat 8mk n I Tokyo. I 
MM mm mm ttam far ttas rta m mki Mousy U ri el. 






Open 

Sett price 

Change 

Hgh 

LOW 

Eri. «ol 

Open tot 


m 


Sap 

94X4 

93X3 

-016 

94.04 

93X0 

1877 

12378 


"" 


Dec 

93X3 

93.70 

-018 

93X8 

93X7 

860 

8088 

- 

- 

- 

Mar 

83,52 

93X5 

-0X1 

S3 59 

93X1 

432 

3380 

- 

- 

- 

Jun 

93.00 

92X8 

■019 

93X0 

93X0 

7 

149 


4* SVt 

4» 5% 

4.70 5X0 - - - 

4X7 5X4--- 

9K 4 — — — 

3% 4 - — - 

6 rrihK Oi; 1 yam 85- 9 UBOR Mritnnk Iring 
m by tour ratatanca t»da at Horn oacfi wottona 
Ctardma Mid Nrifanri WMmhMr. 
b US S COs read SDR LHwd Doporiw p*). 


twnuMeqx=FqeaoftflOQ ports qmook 



Open 

Sett price 

Change 

Hgh 

Low 

Sep 

84X9 

94X2 

-005 

94X4 

94X8 

Dec 

93X3 

9370 

■000 

0374 

93X1 

Mar 

92X8 

83X0 

-0X8 

93X5 

9287 

Jtn 

92X7 

9235 

-aio 

82% 


Traded on APT. fit Open intaear flga. 

•ms tar pwritti day. 



24782 147801 
11834 61450 
MU 46362 


EURO CURRENCY INTEREST RATES 


Jun 20 

Short 

Mnn 

7 aays 

nottoB 

Ona 

month 

Three 

months 

am 

months 

One 

yera 

Bristol Franc 

5%-S 

5%. 5% 

5%- 8% 

5% - 6% 

5%-S% 

6%-6 

Danish Krona 

5%-S 

S%-5% 

6-5% 

8% - 8% 

6% - 8 

6%-8 

D-Mark 

5i'«-43 

si-*a 

5-4% 

5-4% 

G&-43 

5&-5A 

Dutch Gutter 

5-43 

5-412 

5-4iJ 

5-4JJ 

5-43 

BA-Si, 

French Franc 

5A-5ft 

3A-5A 

«%-6% 

5%-S% 

5%-5% 

6&-1& 

Portuguese Eat 18% - 15% 16% - 15% 17% - 16% 15% • 14% 14% . 14% 

14-13 


■ THR 

MOHVH EURODOLLAR 0MM) Sim pakita Of 10D96 




Open 

Latest 

Change 

Hgh 

Low 

Eat voi 

Open tot. 

Sep 

94X9 

94X0 

-0X1 

94X0 

94X8 

69X01 

442384 

Dec 

94.18 

94.15 

-0X3 

94,18 

94.13 

130342 

403,420 

Mar 

93X1 

83X1 

-003 

93X1 

93X8 

58X04 

289X09 


| OPTIONS (UH=q £500,000 pobita of 100% 


■ U« HI8ASURY HIU. FUTURE8 (ft&i) Sim par 100% 


Strike 

Price 

Sop 

- CALLS - 
Dec 

Mar 

Sap 

“ PUIS 
Dec 

9495 

0.10 

0.14 

0X9 

0.14 

0X9 

9400 

0X8 

0.06 

QXS 

0X8 

088 

9478 

0.02 

004 

0X3 

046 

1.09 


Spent* Ftasta 7lj - 7% 7ft • 7& 73-73 84 - 7}J 8% - 

Sttrfag S-4% 5-4% 4fl.« 54-6* 5fl-Sfi| 

SartsaFtonc 3% -3% 3U-Wi 4-3% 4% -4% 4%-4V 


Jut 

95X1 

95X2 

-0X1 

95X2 

95X1 

682 

4X98 

Sep 

95X2 

95X3 

-004 

96X3 

95X2 

1,135 

22X00 

Dac 

94X8 

94.71 

-002 

94.71 

94X0 

284 

7,686 


Est wL tataL Crib 27061 Pub 14404. Prmkxra day^r apart h, Cato 108273 PuH 158*35 


Can. Dciar 
US Deter 
Briton Ura 
Van 

MtoiSSng 
9 total tSRN nest I 


3%-3% 3U-3H 4-3% 4%-4% 4%-4% 

0-5% 6-5% 94.84 8S-6H 74-74 

4% -4% 44**4 <4-*4 44 - 44 4% -4% 

81j.7 8%-7% 8% - 8% 84 - 84 84 - 84 

2%-2,\ 21,-24 a%-24 24 - 2% 24-2% 

3% -3% 3% -3% 44 - 44 4% -4% 34-54 

• ctri tar toa US Me aid Ym, etoM: tan dayri* no Urn, 


A* Open bmreit Dos. «a tar pcerrtDut day 

■ PJROMARKOWnOWBtUFFg DMIm potota of 100% 


Sell price 


7WBKMAT1F) Parta tottrtiank offered Ufa 
Change ffgh Law Eat vai 


Sep 

94X4 

94X6 

-014 

94X5 

94.19 

Dec 

94X4 

93.87 

-0X4 

94X7 

93.78 

Mar 

8378 

9048 

■031 

83.78 

93X9 

Jun 

93XS 

93.16 

-0X8 

93X5 

93X7 


Open tot 
80511 
38X45 
34X80 
24X59 


SMra 

Price 

At 

Aug 

CALLS - 
Sep 

Dee 

JUI 

— pure — 
Wifl Sep 

Deo 

9800 

0X9 

013 

018 

015 

0X6 

009 012 

0X7 

9826 

nna 

005 

0X8 

0X8 

023 

026 0X7 

055 

9880 

0X1 

0X2 

0X3 

0X4 

0.47 

0.48 0.49 

are 

EaL ML HIM. CMtal 6887 PUIS +922. Plwtaua datf% open H. CMk 108088 Puts 1322BB 
■ EURO 38RS3 FHAMC OPTIOMI (UFE) SFr 1m potota of 100% 

PtaAra A1IIA _ HIM 


Price 

Sep 


Deo 

Mar 

Sep 

ruio — — 

Deo 

Mar 

9628 

0X1 


0X4 

026 

aio 

0X1 

088 

9SB0 

016 


0.15 

017 

0X0 

047 

082 

9673 

007 


0.08 

0.11 

0X6 

065 

1.01 



1 KUKOoamtB tuffs)- $im potoa of iqq% 


Eri. tot total. Cdh 0 Puts 0. Rmtaus rfa/s apan tat. Cato 273 Puts 1973 



Open 

Sett price 

Change 

Huh 

Low 

Stf-vri 

Open in 

sep 

94.88 

94X9 

-002 

94X8 

94X8 

140 


Dee 

94.13 

94.13 

-004 

94.13 

94.13 

25 

1635 

Mar 

93X0 

93X1 

-0.05 

93X1 

93X0 

42 

1056 

Jtre 


93X1 

■007 



0 

305 


Adam* Company sxs 

AM That Bank 5X5 

AS Berta ... 6X5 

•Henry Arcfaachar >mi S2H 

Batacf Baroda 525 

Banco Btoao Vtosqo-. 5X5 

Bark of Cyprus 6X5 

Bar* of Ireland SXS 

Bank ol Mb ...5X5 

Bartcofficotand sxs 

Barclays Bw* 5X5 

MBkofMdEaat 5X5 

•BnwiSMayaCoUdXXS 
CLBankNadarfand^ 323 

CUbenkNA 525 

caydBadatoBartt 525 

Tl» Ctwpenriv» Bank. 5X5 

CQtotoACD 5X5 

Great Lyonnais SXS 

Cypna Popular Bank _5XB 


Duncan Lawfe.,^_ 525 
Brator Bank Umtod„ 8X5 
Ftaandal&GwiRa*- 6 
•Robert Ftartng & Co_ 525 

6Wri»- —525 

•GufavtoU Mahan- S25 

Hriab Bank AQ ZUrich. 9X5 

•Mantaua Bank SXS 

Hat«able& Gan tovBk. GX5 

•HP SamueL.., m . M 525 

C. Horae & Co -SXS 

HanqkcngiShanohaL 3x5 
•Um Hodge Bank — 5X5 
•LeapoU Joseph & Sons 5X5 

UoydsBerk SXS 

Meghrei Bark Lto 5X3 

MktoriEM 6X5 

•MouriBarfdng 6 

NaMtaftrmfer 32S 

•ReaBnrihea - 9X9 


* Ftafauqpe Guaantoa 
GopotokaiUiSMtsm 
kn^erautooriaodaB 
abaUngtiHUtoi s 
Royal 8k c* Scottnd- 5X5 

•Snrih S Wtonsn Saca . 3X5 

TSB SXS 

•UritodatafNiwIt— 5X5 
Un%>Truat8«S(Pto„5X5 

Waatom Treat SXS 

VMtoawwLaMari ... GXS 
Yortahkete* .6X6 

• More bare erf British 
Merchant Banking & 
SecurttJos Houaaa 



toa d rirto H ritan 





















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*70 1766 1£53 42 

Ftertt 

135 

-£50 182 

136 £9 

Foncty 

BOB 

+16 S3B 


FrroBd 

4,480 

-100 flXCT 4,480 IJ 

CTOElH 

411 

-12 STB 

408 £7 



-40 £754 £020 00 

Gsunte 

642.1 

-IB 1020 

042 OJ 


556 

—32 64S 






krwUH 

543 

-2 6” 

525 £8 

knmft 

512)0 

+1 7104BH.ro 4.7 

knn*nq 

8*4 


8” 80 


7890 


72 £8 


soo 

... 570 

403 72 


630 

-5 709 

500 50 


827 

-13 854 

727 £2 

UdCao 

390 -£50 491” 

377 £5 


29” -120 3,100 1JB4 Z3 
£300 -66 32001.650 ._ 

_ £115 -145 £5951282 ... 

COffin 1918 -54 2910 1906 — 

— Cr to £023 -85 £820 2925 4J 

~ OnMO 10735 -468UOT1DJW — 

— FarfM 1944 -45 296* 1 258 _ 

— Rat 0085 -190 7J30 4971 19 

— FWPr 3.720 -150 4920 £119 £7 

~ Ml 5985 -65 79501,670 11 

— FonSpa 10880-1.1* 1790011 200 4J 

— Ganm 1 451id -0919851*6 £1 

40.450—1, 




240 
108 

278 
110 
118 
105 
105 
1» 

140 

ioe _ . 

107 —4 142 0-30 

45.70 -1.10 78 « _.. 

W -51S0HI979O 29 _ BoYcK 
153 -8 233 153 £1 — bxSaE 

367 -11 475 387 19 — bum* 

388 -II 490 3S0 19 _. _KX 

8390 -4JO 144 9150 11 — JGC 

S3 -1 110 SI 12 _ jnSewM 

BO -1 122 88 32 

103 -3 126 76 6J 

830 -25 775 530 1.1 

680 -34 780 SB 1.1 


iJEdi Z SSe' 

1950 _ _ ta«=d 

+7j,i?s Sdi z W 

-14 897 723 _ _ NBDr* 
-30 1,1* 072 _ — Mann 

"5*B*8-z z 

-30 2970 


-m iso 


— CldH 

— «pt 


IJ50 40200 37 J» 09 
4,120 -130 4965 £675 _ 
23,150 -1JOO 20100 1SJD0 19 

— no 10.470 -250 M9WHJ.43S _ 

— IbdCO £430 -450 12100 8200 27 

— totem 1£10Qr -580 1S0<6 8952 09 

— non 4J50 -210 6.4* 4.071 £-3 

— lSw 14900 -480 18000 13H» 20 
HatK 14J1Q -9551170013410 14 

1 J61 -17 19*9 870 _ 

g . gM -125 £1* 1015 — 
49S0 -in 8.1” 3910 — 
2.450 -55 1385 1970 — 

24,800 -ijooiOawaao ij 

9.780 -3SO 121B0 BJB8 29 

_ SASBa 7JBDU- -16010,15* 7,5*0 2.8 
“ 3950x1 -200 5,195 3.363 £2 

SCO -70U088 *0 
*.815 -2361350 4965 £1 
5420 -1M7JOO 4.145 _ 
*920 -65*9101875 _. 

9970 -8*11900 9933 10 
10.700 -600 liJDD SJ01 49 
£320 -50 2,730 1 302 2J 

25^00 -1900 Sjco 255* 19 

16930 -B50J*.0621t«T 13 


SWROtAK) frto 20 / Frs.) 


Z «®ST 

— Aiuta 

— AlliLHO 

— BfllP- 


— wm 


•••• Pespa 

— RAS 


— BrB»80 
esar 

E sa 


— an 

— siET 

— saflaA 

— Sncmn 


Z Bvte 

„ HsrtB 
— Froeflr 
_ «flt*9 

z 253 


z BS? 

Z S 2 S& 1920* _ 19* 1,430 49 

_ __ _ PWSflr 4,775 -10559404970 — 

_. Urfleam 12J00 -480 ifliioo Wjeo 19 _. Prtffl 


— SM 

— SrtxflP 

— TcraAo 
_ ToaFr 


222 -a 202 101 _ 

K3 -10 Sn 588 19 

552 -9 898 587 19 

£180 -180 3985 £1*19 
1.181 -1713*1915 19 

218 -7 250 190 1.7 

511** -22 747 501 15 

810 -25 STB 808 19 

787 -24 942 775 1.9 

354 -11 <22 3*8 _ 

19” -60 29” 19” 39 

1,350 -23 19” 1,080 39 

2.400 -110 £332 24” 39 

016 1900 876 19 

350 -10 450 110 11 

800 -35 071 782 19 

158 -4 17314X50 19 

702 -10 991 782 1 9 

1980 -70 19201.4” 24 

1,1” -331.43719D4 2J 

128 -10 ITS 128 


199 -4 283 190 89 _ 



1030 

*s 

728 
700 
19*0 
808 
881 
822 
IJ” 

'•£2 

573 

4.9OQ 

+20 1 JZ7 1910 09 — OnMCto 1430 
-18 448 284 _ — Ortart 7” 
-11 755 80S 0L7 _ Orb _ 4.1” 


2970 

552 

6*7 



-5 910 702 13 — 

38^8*8 z z 


-2 6BS 470 _ — 

-30 £110 1910 _ — 

♦1 400 286 

-14 9*6 SBO _ „ 

-4 715 431 _ — Uadi 
+101,310 822 0-5 _ Ftewi 
+10 280 2950 00 — Royal 
-a» t£40o iajoo _ 

-30 1.470 1310 08 
-23 1930 625 — 

— 1960 1980 _ 

-10 £4821918 — 

-S *20 339 _ _ 

♦a 770 518 00 _ 

♦1 870 4S0 — — 

—10 2970 2990 - - 

-5 0” 425 — 

-10 1J10 1.150 — — 

-10 5” 338 _ — 

-7 412 271 — — __ _ 

-2 431 303 _ — SfltyoF 

-2D 720 am — — Balyu 
-a BIS 515 — — SBHOir 
-28 970 825 09 — SahHaa 
_ 1936 1963 as — Saoau 
-1 877 80* — — 

-20 1 380 1.130 — — 

-4 320 250 — — 

-0 0C0 748 _ — 

-30 £2501.7” — — seep 
-20 £880 £150 — — STopI 



- 595 170 09 — 
-.1411.12 9.16 84 339 
+.10 6.10 178 13 — 
-301190 895 39 819 
♦ 833 290 £3 — 
-.16 6.72 108 11 — 

-90 4.81 100 4.1 — 
-.10 £55 196 49 89 
-921090 16 13 289 

-94 1SB 292 39 79 
->11 492 135 59 — 
— 1J6 09* — — 
-38 16-06 1200 49 310 
+.07 098 047 24 — 
-91 1.10 094 17 — 
-96 693 392 4.7 173 
-90 646 4.40 53 109 
-.18 10321180 39 


80” AMMx 
388219 AlenAJ 
322065 Amfiarr 
700 MddQx 
19375 A rmor 
123” BCSUOA 
42157 BCTMX 
5388” BCE X 
7835 BCE Mb 
17280 BORA 
5600 O nto* 
588117 BUtont 


1 

i3 Zt^ioS 

si^ssst 

12b -% $13 12b 
20 -b«0^ IBb 
Bb -bSBbdSb 
ZSb — b S*3S 23b 



636” PtoMt 

333” POCDP 
670014 PWA 
513” PagmA 
8180 PmCnPx 
4175 
17483 
8331 


31043 BaauEa 
281538 Bunas 


1 415790 Bmtea 
3 3 /Mi BretoA 
8775 Bractrx 



78800 PoacGp 
85” PonrFn 
105” RoyiKV 
2” naAms 
070 RHtarui 
115450 ftXJOl 
1864 ReedSIx 
02383 toiEn 
22011 Rapap 

28004 Rte* 
38275 RtoUg 

102829 ftjgCma 
513552 toy0kC 
55SOT RqOBk 


-i^^tSSSS 
116 120 111 

ssr 

24^ 3p2h£l 

i*b -bsi*b£S 

40b -2b SCb 40b 

11 9n%io% 

22b -l»b22b 
8b — b S8b Bb 

”55 

10 810 Ob w Ana 

43 -1 44 048 WDW 

350 -15 385 350 Wh£»T 

41b 141b 41b 


11 ... 11-50 7-25 4 5 

2890 +.50 31 2150 39 

38 -1.75 *0J5 30 4J 

118 — 118 B4J0 09 

88 +.75 80 53.75 5 7 

1210 +.10 1ZJ0 7.04 3.7 
127 +2 127 8790 1.7 

25 -90 2790 =3-25 _ 

25.75 — 28 1175 69 

W » 18 19 

14B -.11 392 2JO 1.7 
82 -90 8290 55 1.7 

1” +1 106 76 1 J 

8490 +390 8490 8390 £9 

57.75 +190 60 41 3.1 

1” +190 1” 75 1.3 

1990 -J5 22 1190 — 

34 —3490 20 1.7 

-1 91 6890 49 

8* _ 775 590 104 

44.75 + JS 5390 37.60 3J 

2890 -.75 3175 26-25 1.4 
lire ->25 2090 17 1 j4 

BO -4 103 72 1.7 

127 -3 135 07 1.9 

1175 -90 20 1590 7.4 

93 -210450 7$ 1.7 

47 — 52-50 2050 1.1 

147 +2 104 102 1.9 

40 _ 554390 1.4 

a — 65 2BJO 19 

420 +8 4” 350 £2 

4*25 -*-.25 * 33 _ 

187 +3 215 151 29 

55 +2 804490 39 



z as? 


49* 

19” 

810 

1*0 

883 

2J7D 

£090 

£210 

001 

583 

949 


-301,710 

+Tn 19501, _ 

-30 £6701 Wo 09 
-15 6S3 
-IB BOS 
-10 773 

-301,1” 


-10 1 J* 999 _ _ 

-30 1990 1*0 _ „ 

-15 620 4” _ _ 

-*591D 4JS0 OJ 

-10 1*0 1.050 U _ H0IIB 
-27 744 500 _ _ HmsfltE 
-SO 4J2D 29” 04 559 EM” 
-8 538 490 _ 

-11 779 60*1.1 
-7U3J4C Z.41B _ 

-6 582 3” 09 
-17 686 440 1 A 

Z 



Z ■ TOKYO -MOST ACTIVE STOCKS; Monday. Jim 20. 1004 


... 3J 

60 £7 
_ £2 _ 

495 49 _ 

*JO 1.1 _ _ 

8J0 59 _ OW Bedric 

192 0.78 £5 _ 

158 095 4.7 _ 


— torn 1 Motors 

492 12 220 Wtaubiahl Ofl — 
<U , „ 1-S 10 ,-s SumHomo Metal — 
-97 396 247 19 _ ^ H«my md . 

-93 391 290 _. _ 

-J7I 1.47 108 59 _ 

-jjt 290 293 17 1£1 
-90 960 2.40 BJ _ 

_ 1.7B 1.12 £3 £4 


Stocks 

Closing 

ChsioB 


Stocks 

Ctoskig 

Change 

Traded 

Plicae 

on day 


Traded 

Prices 

on day 

&2m 

806 

-7 

Mitsubishi Huy 

5.1m 

782 

-18 

79m 

545 

—14 

UnHfta 

5.0m 

410 

+5 

79m 

1000 

+25 

Tokyo Gas — 

4.1m 

506 

-9 

8.3m 

B98 

+28 

Nippon stsel 

49m 

351 

-11 

£2m 

507 

+7 

NKK 

4.0m 

280 

+1 



-404910L — 

-10 1980 1 J” _ 
-12 0*6 *47 „ 
-20 19* 1930 _ 
-8 704 SIB — 
-70 2960 £210 04 
+30 £160 1910 _ 
-40 2970 2910 _ 
-919” 806 _ 
-16 609 <15 _ 
-10 901 870 
-2D 72” BJSO 09 
-90BJ40 7J10 — 
+30 4930 3J7D _ 
-1019” 19” 09 
— 1 J40 I960 _ 
-2019101280 _ 
-20 1.1” BS6 — 
-101*01280 14 
-2 512 361 19 
-90 8960 7,460 — 
-2019701920 — 
—30 29” 29” _ 
-11 1910 776 _ 
_ £3201 91 Q — 
-1719* 8* _ 


— 1.78 193 £1 _ 
-96 £05 £20 72 IS 
-9= 292 1.12 13 — 
*92 292 195 _ _ 
-.101190 B.7E 29 429 
+ 06 490 J AH 6.4 _ 
-JD1B94 16.10 47 309 

a* + at ij _ 

+93 3J0 £55 19 789 
-.15 1094 7.70 18 239 
-96 421 3* 49 __ 
-JS 1398 1090 47 1£A 
+.10 750 525 19 _ 
-27 1090 OJA 04 10 
-.16 BJB 429 39 — 
-92 £70 1-35 £7 __ 
+93 4.1S 395 82 889 
-92 592 415 5.1 _ 
+92 £15 1JB _ _ 
-9= 243 192 _ _ 
-.15 342 £80 54119 
-95 390 240 19 _ 
-JO 925 599 09 _ 

- 4J0 £96 3J _ 

^ -.11 898 59* 41 _ 

— QCTRi 192 -92 1.74 l.lS 69 

— Rnmed 495 -.IB £25 450 09 _ 

— nonan £75x1 -.10 7.13 170 79 B9 

_ Sanaa 398 +96 4J2 398 18 09 

— SrranHw 6.12 -.06 7.10 5.95 49 _ 

_ SaoGwa a. 70 -99 991 110 £2 _ 

__ £Hc-p £8* -95 390 £7S _ _ 

— 8*3*1 3.03 -94 370 3 79 219 

_ TOT 2J8 -90 298 191 _ _ 

— TetCpM 4.06 _ 4JC 3*2 *J „ 

— Wslnrr a” -.10 996 110 39 _ 

— WUXI 828 -97 894 £36 IJ _ 



INDICES 


US INDICES 


Juo 

17 


Jn 

16 


rtpN 


LOW 


Genuaf(Z9«t/r7) 

a &*M*aC19f80) 

Al Mntagn/1/80) 


M 1329694 1B26197 2547040 1&? T775U0 20*4 


20244 

1043J 


3512 

10482 


20569 234090 3/2 
1(649 T13£10 3/2 


Cm® AMIa^3O/1204) 

IraW smcriwi 


BaJOd/liW) 


408.71 41568 *1621 49008 2/2 

104594 107550 107178 122223 1/2 

142031 144591 145192 15005 02 

M 323789 303300 3237*00 17* 

(10 374052 3724/44 3B7SJB 193 

M 4156.78 4163.45 488088 23d 

M 183190 153191 215290 UZ 

M 4525J 45549 485790 40 


aprtBBMSEG/l®* 360J1 36163 36594 4UUB 20 


198110 H 
90490 5/5 


401 JO 6* 

181198 8/6 


1420JJ a» 


PCfftar 19 781 

OS TOWart&d 83) 
CSS Al Sr |M 83) 

Cap. 40 (1/7*61 


a*iSEMen&9 


iCDnu(2/IA9 


C2BMJ83\ 


IM8ElMf(ia73 
COqntof (19^) 
RortWoS H/UB3I 
CMe 

PGA Gan 01/12OT 


BJAn877) 


HEX Ganaracsanw 
Ram 

S» 30 (31/12/901 
CAC 40(31/1297) 


16829 17043 1678L2 190200 4/2 

1277J4 130098 130895 16K20 20 
1803 04 133595 10C91 235193 2/2 


FA2M0M3in2« 

Conaasdw*a/l2«5 

DAxoonacrj 


7S1.11 781J3 781J8 893 18» 

21525 mos 221890 2465” 2/5 

196892 205072 205491 2278.81 16/5 


21*4 
010590 20/4 
191397 19*4 

3B01 JD 4/4 

38031 20* 


T27734 20* 
190394 2M 

78LTI 2(M 
215290 20* 
196892 20* 


SBW-Spon(2M/79 
toBMfei 
JSE Octd (2B/9/78) 
JSEnl. (2BA/7* 
SeoNNom 

(Snaai*B04n«r 

spokl 

tto*tdSEpan2«9 


Jun 

20 

Jin 

17 

Jill 

IB 




JB 

17 

Jro 

« 

Ju 

IS 

1994 

■ph Lour 

Snctca 

np9*a 

Low 

HP 

low 








3776.78 

381104 

37*041 



387839 

4102 

M 

231050 

232B0O 

288117 8/2 

195/03 204 





m 

m 

(31/1*4) 

<2/7*5 






More BOM* 

9£33 

9£57 

*845 

W501 

K45 

non 

5493 

4119 

4210 

4244 

45480 31/1 

41190 2D* 





pi m 

(13*1 


(1/10*1) 

2BQ9 

2879 

2££4 

20480 31/1 

28000 20* 

Import 

185240 

1GB145 

163505 

188229 

154892 

186229 

1232 










(2/3 

PQK) 

(Z«90 

(8/7*2) 

2S7£7Q 

210197 

210376 

243084 3 a 

20(202 56 

Wes 

18251 

18455 

IflflJfl 

22796 

177.75 

2SB4S 

IOL50 










(3h) 

02«J 

pi«n 

(W*Z) 

93144 

102492 

1031 05 

wna ■an. 

99144 20* 

OJ End. Dare M” 

3SZ1.A8 PS3O08 ) LOW 378*99 (5771 X ) (TlMaedctf*) 







Day’s high 381201 

(981108 

) Low 377501 P7H605 1 (Aetute« 



285498 

288203 

291556 

330807 4/1 

250703 DS 

Coonato t 45345 

46193 

48001 

48280 

<3892 

48280 

440 










(20) 

W* 


(1*®) 

20120 

2723 S 

27*80 

371*80 182 

2BT20O 20* 


53391 

537 JE 

55497 

68058 

51095 


£82 










P8J 

(2W4) 

oww 

I2imq 

55523 

S5607 

58154 

8*101 4/1 

52329 4/4 

Rwtri 

46.13 

4857 

4878 

4894 

4109 

4840 

884 










(14*1 

m 

(28/9*31 

(1/1174) 


22Z7 98P 

B8239tf 


21809 

67310 


21659 233190 4/1 
67439 675790 15* 


B4250 91154 80195 0X426 2/2 


30200 307.79 311J1 36131 3” 


1(1/2/371 13542 14079 142BJ 180390 3W 


toW Bk kd (31/12/59 1227.79 125061 
S8C texnl (1/4*7) 00174 93160 


127171 1423J4 319 
B4592 K>912fl 31/1 


174890 14/2 
10/1 


AST W 


30200 20* 


138490 20* 


1ZZ7JS 20* 
80U4 20* 


VWNtoflflOWSBr e03£41 615174 014a84 645452 & 519463 1W 



SEC31/12/8Q 

tongtooe 

Hang BMfWUW 


BSE ShiMISTSI 


fq 84191 119486 18/1 UU7 25* 

£88.18 911396 SQ2ZS2 1229190 4/1 08944 4ff 

4332.9 42625 41677 033250 20/5 305490 STi 


135128 137093 136444 175133 4fl 


MkhOnUlNW 47S73 47155 <77.13 08ZB0 S/I 


26#* 


Bstfz* SET BOM/73 

HaWf 

btartMl G”Uan 1906) 

1902117 202314 103219 

mu 

wc^toHfuvnys si is- Bias szos oturoi/z 


mass 4/4 


T290OJD 24* 


50190 4/4 


G8X*a*t*m 125196 177095 177147 20511* 201 1751JB 2« 


Banca Comm IS P9721 
W GawN 141*4} 

JNNfi 

Md® 225 (165M9 

mm aoo (i/io® 

Toplx (471*8) 

2nd Seed” 


67193 

16849 


09890 

11210 


76098 88117 1015 

11329 138890 IK 


2115293 2150130 21367.47 2IR91 13* 

30164 30993 30155 3J1J1 83* 

168447 170593 168153 T712J3 13* 

202.10 24ES9D WtU* »BflD 17* 


101 

101 


172074 4H 
20422 4/1 
144597 4/1 
157333 4/1 

4M 


Euvtack IDO^E/IKQ 130693 135CL34 135576 154119 31/1 
Eao Top-100 114149 118043 111645 131101 Z/2 

XaueDdt (JVT2W) M 3T25S 31064 20115 5/1 
Bvftxp Emar^{7/tro3 15S02 15S92 15118 182J2 14/2 
■ CAfi-M STOCK MB£X pOIMB (MATT) 


2K 
TI464B 2D* 
29Q28 2U3 
14105 ZU4 


WSCOto 

»n«l 

25499 254.14 

2H7.71 

24114 

287.71 448 




m 

com 125/4/43 

Anet ISO Vri 

44028 

44108 44207 

48709 

42750 

48700 2901 




(2/2) 

pn/4) 

(2/2/9* pH 2/73 

wsmo imp 

72905 

73437 7358* 

■mm 

1*551 

WV3S 5457 



(1W 

cm 

(18/3** pt/IO/73 

■ RATIOS 








Jun 17 

Jun 10 

Jun 3 Year ago 

Dew Jones hid. C*v. YWd 

2.85 

zjja 

£08 £95 



Jun 15 

Jim 8 

Jun 1 Year ego 

S £ P IneL Dhr. yield 

£42 

£44 

£47 £51 

S & P tod. P/E redo 

23-51 

2301 

23-41 25.42 

■ STANDARD AND POORS BOO 9DB 

( KTIMBS SGOO ttoas todoc 

Open 

Lstaai 

Chtrae 

Hah 

Low 

EsluoL Open In. 

Sep 469.00 

46700 

-200 4600 0 

456.10 

64085 186,772 

Dec 

- 

- 


- 

- 

Mar 

- 

- 

• 

- 

- 

Opan toaraet Cguraa 

am far piaxtoie day- 




■ mw vonx Aeron vrocies ■ tnAom acttvity 



Opan 

Sett Price Change 

wgh 

Low 

Eat wot Open tot 

Jun 

18939 

18800 

•349 

19009 

18489 

43055 

50046 

Jul 

18005 

18859 

-34.5 

1BB59 

18479 

2.100 

B527 

8ep 

18069 

1B019 

-35.0 

19109 

18635 

0508 

15546 


u 0*9 Cop 
Ben Bee 
Merck 
feHftrt 


£532/00 

5721900 

5913900 

5lS7£000 


Ctoe 0*806 
price an toy 

a _ 


47V 

30*8 

24H 


-H 

■V 

■b 


• Votoaa dRBer) 

Jn 17 Jtr 16 J® 15 
tonVcriiSE 373^08 254080 251805 
Amax 26.282 17403 14979 

gaga 27B473 aSJK 2B5J8Z 


mss 


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IOSE'Oai»i4M*6) KB54B 10BUM I03Z39 «M0B 5H 

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MRno - 
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Montreal 


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" 1B . : ™g E*£!"p5S 7w( Oan. MB Oan. 9BF2EA CACME Elite Top-101 18EQ OvMft T«n» CampAbteh 8 
7i J8E 29 UdtoM - 26«Ji NYSE Al Conran - SO and DmiMr! end Pure - 11 55 

8riMKMtororoWto:J«2D.185M£+«X38 


£814 
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1,178 

m 
« 
35 

T ConqofcxL. - CMcctoid c 1590 QMT. 9 Exrtudkp bondk t mduteto, p Re UHto FtoM and ItorooMion 
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■tedo alwnto Vw aeterf l*pB md tow (M*0ad by UMaa^ npmaem tea i*pro md toaoR tekiaa m Bw ateto has leaoM 
etoing dia a*f. (Tha ki bntoete ate p u dfl u f SMjeet to S/Itim n eca l cuMl B n . 


Ban Motors 

nyotwi 

5» 

-M 

Ishbhb Ttokd 

2519 

2037 

AT S T 

8548900 

SDi 

•U 

nm 

760 

1.151 

8om 

4092000 

59 

+M 

FA 

1,415 

950 

OmCtD 

45t050D 

40 

-44 

Untangad 

644 

736 

EMC Cap 

t.lflUM 

14H 

+1 

Nw Hpta 

4B 

44 

r**»i*i 

3599500 

32) 1 

-1U 

New Lows 

47 

44 


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FINANCIAL TIMES TUESDAY JUNE 21 1994 


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SurASc 117258 20% 19% 20 

SwdtTia 3410131134% 33% 33% 

Sybase tnc 5711812 51 49 49% 

Symaaec 303171 1i%dll% H% 

Synatoy 036 18 95 19 18 18 

Sjnweom 70 32 3% 3% 3% 

Synergen 2 739 9% 9 9% 

Syne* 58 184 14% 13% 14 

Synopses 14 4896 IB 15% 15% 


SysftnSotr 012 15 945 14% 13% 13% 


2 

*& 

-% 

-1% 

-II 

J* 

J4 

+% 


Sytem&co 

Sytemtd 


25 718 16d15% I&4 -% 

£71714 6% 6% 6% +ft 


T-Ce*Sc 7 570 

TjowePr Q02 181476 
TBCCD 171146 

TCACaMe 044 27 195 
TMCBte 10 1767 
Teamtoi 1 0J0 14 51 

Teielac 2 37 

Telco Sys 8 777 

TetaCommA 3O3 077P 

TetetW 81604 

TeflBte 21 2472 

TetxnnCp OW 77 188 
Te&nTec E8 64 
TnaPtiMTO 020 24 1381 
line Com 3319254 
TJ Irl 022 37 82 
Iotas Mod 2 705 
Tokyo Mar 032 39 2 

Tom Brom 78 154 
TOPPS CD 028371 S95 
TOt Enter 3 557 
Transited 10 61 

Tlareteckx 1.00 H 20 

Trtcare 5 97 

Tiunbte 53 202 

TnctcoBkC 100 it 25 
Tseng Lap 028 12 279 
TySFdA 008 17 2842 


- T - 

4 3% 
30% 29% 
12 % 12 % 
Z2% 22 

1S?» U1S 
55 53% 
9% 9% 
12 % 11 % 
21 % 21% 
6 5% 
31 X 
14% 14 

8% 8% 
24% £3% 
48% 45% 
25% 24% 
4% 3?fi 
64% 64% 
15 15% 
7% 7% 
7 % 6 % 
10% io"e 

42% <1% 

3% 2^3 
10% 10 
22 21 % 
7% 6% 
22 % 21% 


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29’s --B 

12% -% 
22 % +% 
15% - l 4 
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17% -1% 

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29 -1% 

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23% -1 

48 +1% 
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3% -A 

64% 

15 -% 

7 7 - 1 

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41% -I* 

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18% +% 
22 *% 
6% -ft 
21% -% 


US Itthcr 
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UCXtefiS 
US Tat 

Urdteda 
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US Energy 
UST Core 
Utah Mad 
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DEB 1521428 43% 
21363 61e 
100 13 ® 15% 
£00 12 90 51% 

040 9 23 >0% 
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1.40 22 643 *1 % 
HOB 103176 
30 10 4% 
1.12 9 551 14 

II 99 7% 
10 671)47% 
16 *6 5% 


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5% 6 

15% !5>j 
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27% 26% 

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757 s 26% -% 

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WM B 08* 18 823 89% 87% 0B% 


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VtoshMoSB 0E8 7 729 21% 20% 
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Was One 072 1 2 1156 31 30% 

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Ytrt ftZ* 129 £07 < ft 3% J( 

ZknsUDh 1.12 10 188 41% <1 <1 -1 



40 


r?nwT /i xt/^t /I r ^TTAyrrc 


Tuesday June 21 1994 



AMERICA 


EUROPE . # j 

Fresh setback Fearful bourses shaken by roller-coaster rule 
for Dow as 
dollar declines 


Wall Street 


US stocks suffered their second 
big setback in a row yesterday 
morning as a fatting dollar 
excited fresh concerns over the 
direction of monetary policy, 
writes Frank SfcQurty m New 
York. 

By 1pm, the Dow Jones 
Industrial Average was down 
30.13 at 3,746.65, and the more 
broadly based Standard & 
Poor’s 500 was 3.15 lower at 
455.30. 

The secondary markets also 
registered solid losses, with the 
Nasdaq composite down 1.19 
per cent, or 8.70 points, at 
720.65. The American SB com- 
posite, off 4.14 at 436.12, held 
up only a little better. 

Activity on the NYSE 
returned to a more sedate pace 
after a frenzied “triple witch- 
ing” session on Friday. By 
eaFly yesterday afternoon, vol- 
ume was 137m shares. 

The continued weakness of 
the dollar sent a shiver though 
the US financial markets, 
destroying any hopes that 
stocks would rally on the heels 
of Friday's 34-point plunge. 
The market often recovers 
strongly on the Monday after a 
triple-witching rout, as the 
quarterly expiration of options 
and futures tends to exagger- 
ate any under lyin g trend. 

Yesterday, however, bargain 
hunters were thin on the 
ground. Stocks were In retreat 
from the opening bell amid 
fbars that the Federal Reserve 
may have no choice but to 
raise interest rates as early as 
next month to support the 
slumping dollar. 

The potential impact of such 
a move an the economy under- 
mined any induration by the 
stock market to rally. Bonds 
were no help either, though 
the Treasury market was but- 
tressed by a softer bone in com- 
modities. 

Amid these cross-currents, 
economically sensitive stocks 
were leading share prices in a 


determined march lower. 
Deere, a farm-equipment man- 
ufacturer, dropped 51 Vi to 57314 
and Eaton, a supplier of motor 
vehicle components, lost $1% to 
$52%. Reynolds, the aluminium 
producer, shed $1 to $8%, while 
Bethlehem Steel fell $1 to $20% 

In other Dow industrial 
issues, Sears dropped $1% to 
$47%. However, Philip Morris 
added $% to $50% following 
news of the resignation of its 
chairman . Mr Michael Miles. 
He was believed to be an advo- 
cate of a proposal to split the 
food and tobacco businesses 
into separate companies. 

US Healthcare jumped $1% 
to $42% on speculation that 
Johnson & Johnson was con- 
sidering a takeover bid for the 
company, a pioneer in the field 
of health maintenance organi- 
sations. J&J edged $% lower 
to $43%. 

Meanwhile, the Nasdaq gave 
up more ground as the technol- 
ogy sector stumbled again and 
financial issues weakened. Cir- 
rus Logic was marked down 
$2% to $28%, while Atmel 
receded $1% to $24% 

Canada 

Toronto foil at midday as the 
Canadian bond market and dol- 
lar declined and the TSE 300 
Composite index was 56.75 
lower at 4,100.03, in volume of 
23.3m shares. Declines out- 
weighed advances by 529 to 
116, with 232 issues unchanged. 

All 14 subgroups were down 
at noon, led by precious met- 
als, financial services, indus- 
trial products, metals and oils. 
Inco was off C$% to C$35 and 
Imperial Off lost C$% to C$41%, 
while Placer Dome dropped 
C$% to C$31% 

BrsuH 

Sao Paolo slipped in nervous 
trading In the aftermath of the 
morning's options settlement, 
and the Bovespa index of the 
56 most traded stocks was 202 
lower at 32,202 by noon. 


Bourses took a frightening 
roller-coaster ride, led down 
initially by a percentage 
point drop in US bonds after 
Continental market hours last 
Friday, writes Our Markets 
Staff. 

The gloom thickened on 
weekend comments suggesting 
that UK interest rates would, 
soon be an the way up, said Mr 
John Blackley at James Cape! 
in London. Bond markets 
around the Continent took 
fright, fell on heavy selling, 
and equities followed suit 

In the European afternoon, 
US Treasuries foil, firmed, and- 
fan hat* a gain on profit-taking. 
Germany’s September bund 
future followed this pattern, 
said Mr Blackley, falling 110 
basis points, and recovering to 
only 36 points down; but It lost 
ground a gain , showing a drop 
of 68 at 90.37 la te in the day. 

FRANKFURT'S technical 
analysts offered a dismal pros- 
pect after the Dax index fell 
81 A0, or 4 per cent, to L969.82 
during the session. If support 
did not hold at L95Q, said one, 
1,750 was the next stop. 

As it happened, bonds then 
staged their intraday recovery 
and the Ibis-Indicated Dax 
recovered to 1,986.42 affer an 
intraday low of 1.953J.5. How- 


tntSBeenbmet 
130 ‘ 



so t . . 

.•An . . 

Sourt«.fTGwpW* : ' 

ever, a number of analysts 
were saying that the index 
might test L950 again today. 

Hopes of German, economic 
recovery had been tarnished 
by a succession of corporate 
disasters, said observers, in 
MetaUgeseDschaft, Schneider 
and, most recently, Procedo. 
Banks weakened with Deut- 
sche down DM38A0, or 5.3 per 
cent to DM693.50 and Dresdner 
DM26, or fi A per cent lower at 
DM350. Meanwhile, the drop In 
the dollar below DM1.G0 hit 
Lufthansa, DM13, or 7.4 per 
cent lower at DM163. 

Turnover fell from 


May 


Jtai 


DM25.6bn, inflated by last Fri- 
day’s DTB contracts closures, 
to DMBAbn. 

Mila n saw heavy selling 
ease late in the day but the 
Comit still ffni'qhfjri 27-27 
or 3A per cent lower at 67L63, 
sharply below the 690 support 
leveL 

Among the blue chip losers. 
Fiat fell L218 to L6.038, in the 
wake of weekend comments by 
Mr Lamberto Dim, the trea- 
sury minister, who said that 
the government had not yet 
discussed the issue of incen- 
tives for the motor market 

Mediobanca lost L748 or 4 3 


per cent to U4.411. The mer- 
chant bank has yet to set a 
definite price for its rights 
issue later this week although 
it had indicated at least U5.000 
per share. 

PARIS fell sharply, but 
nnflpd off its lows on short cov- 
ering, the CACM0 index foiling 
3251, or L7 per cent to 2^03.04 
after a drop of over three per 
cent at worst 

Turnover was heavy at 
FFr5.7bn. Traders said that 
much of the selling came from 
French retail investors who 
had suffered losses on bond 
hiding s held in savings plans. 

Transnational partnerships 
were shaky, Euro Disney hit- 
ting FFr14 before recovering to 
go ex rights and 70 centimes 
higher at FFr16.25. Euro- 
tunnel’s rights issue, mean- 
while, seemed to be running 
into more serious trouble as 
the shares closed another 45 
centimes down at FFr2520, 
af ter a low of FFr2JL85. 

ZURICH was dragged down 
by interest rate worries, the 
weak dollar and derivatives 
related aoiiing. The SMI index 
fell 82.6 or 3.1 per cent to 
2^45.0, after picking itself up 
from an intra-day low for the 
year of 2,5123. 

However, analysts com- 


FT-SE Actuaries Share indices 


junM THE EUROPEAN SEMES 

HwWdwgn 0MB 10-30 12J0 ia " ** *” -*■ 

cc r -i j. . i r/n i wtBi i tw ib 131 4J0 I99U1 13U1 130038 13045B H66/0 

ggggSlS SS iSS Ss? -M.H 1»H ma MU, 


Jun 17 J* « 


15 Jw 14 M 13 . 


craiM^iir 135034 13SSJB 078.41 13819* 1 38X32 

SSaKS ISS 138197 140X06 M1M1 Ml W 


mented that since the index 
had now convincingly fallen 
through support at around 
2,565, the way could be. open 
for a further decline to around 
the 2,400-point leveL 

The interest rate outlook 
continued to hit hanks. CS 
Holding bearers fell SFr22 to 
SFf511. 

SBC lost SFrlS to SFr363 after 
Credit Suisse downgraded its 
1994 fra min g s estimate follow- 
ing reports that SBC had lost 
SFrlOOm in a currency deaL 

AMSTERDAM fell per 
cent to its low for the year, the 
AEX index losing 9.78 to 382J84. 

Cyclical stocks were among 
the hardest hit with NedHoyd, 
the shipping line, FI 3 or 4^5 
per cent lower at FI 64 and 
ELM F12J20 or 4.4 per cent 
down at FI 47.3Q. 

Shares and options in KPN, 
the partially privatised tele- 


communications and postal 
group, were heavy jdd by 
retail investors. The shares 
lost R 1.60 to El 47.70. 

MATiBin recovered from a 
3JJ per cent drop to end with 
the general index down 5JS, oc 
1.7 per cent at 302.60 after a 
low of 296.01. Turnover contin- 
ued to climb, at Pta5&2t m . The 
food and construction sedan 
seemed to sustain most dam- 
age; Tabacalera. after disap- 
pointing results recently, fell 
another Ptal65 to Pta3,475 fora 
six-day foil of nearly 15 per 
cent 

WARSAW dropped 5.9 per 
cent as hopes of a recovery, 
which grew after (he previous 
session, gave way to a renewed jl 1 
lack of confidence. The WIG 
index foil 492.7 to 7,883-8. 

Written and edited by WRfiam 
Cochran* and Mchael Morgan 


ASIA PACIFIC 


■linked sales leave Nikkei 


Tokyo 


MARKETS IN PERSPECTIVE 


% dung. In loc* Currency t 

%dnmn 

Kdtoip 

tallSSt 


1 WMh 

4Wwha 

lYw 

3Mrt of 

m 

awtor 

aw of 
1894 

Austria — 

-004 

+0.96 

+2355 

-6.68 

-3.71 

-1.10 

Belgium . 

-1.72 

-6.44 

+13/48 

-451 

-0.16 

+254 

Denmark 

-1/41 

-157 

+1850 

-3.06 

+040 

+3.12 

Finland 

+0.38 

-9.04 

+52.73 

+650 

+1054 

+1353 

France - 

-4.21 

-9.71 

+553 

-1355 

-1041 

-759 

Germany — 

-3.49 

-859 

+1854 

-10.09 

-6.74 

-451 

Ireland 

-1.44 

-254 

+1453 

-556 

-245 

+0.19 

Italy. . .. 

-8.14 

-10-43 

+3152 

+1250 

+1X781 

+19.93 

Netherlands 

-2.48 

-3.62 

+1X70 

-6.15 

-255! 

-053 

Norway 

-229 

-1056 

+1952 

-455 

-1.08 

+1.62 

Spain 

-5.61 

-0.16 

+1351 

-655 

-4.06 

-1.46 

Sweden 

-2.75 

-6.88 

+26.80 

+021 

+3.81 

+6.62 

Switzerland 

-4*27 

-355 

+15.00 

-9-14 

-4.14 

-154 

UK . .... ..... 

-151 

-3.75 

+5.48 

-11.08 

-1158 

-8.08 

EUROPE 

-257 

. -556 

+1157 

■*57 

-648 

. -358 

Australia . 

-1.02 

-2.78 

+1756 

-454 

*056 

+257 

Hong Kong 

-0.63 

-5-95 

+26.74 

-24.18 

-28.19 

-2450 

Japan 

+0.12 

+353 

+X09 

+17.45 

+2352 

+2655 

Malaysia 

+3JB3 

+2-B2 

+4857 

-20581 

-1950 

-1751 

Now Zeeland — 

-1.19 

-0.73 

+2X40 

-3.44 1 

-051 

+2.18 

Singapore — 

•052 

-350 

+29-20 

-1151 

-951 

-7.47 

Canada 

-1.09 

-257 

+7.07 

-257 

-851 

-656 

USA 

-0.07 

+050 

+255 

-158 

-4.17 

-158 

Mexico .... 

-352 

-153 

+4X38 

-0.71 

-1859 

-1X70 

South Africa 

*3.00 

+6.19 

+4654 

+1854 

+3.78 

+656 

WORLD INOEX 

-0.74 

-058 

+753 

+059 

+141 

+4.15 


t Bawd on Jm IWi iHt. Copyright. Hm I 


Weaker bond prices and a 
higher yen depressed investor 
confidence, and share prices 
fell sharply an technical sell- 
ing, writes Emiko Terazono in 
Tokyo. 

The Nikkei 225 average 
declined by 35L27, or L6 per 
cent, to 21,152.03 on futures- 
linked. selling. The index 
opened at the day's high of 
21,515.60 and fell to a low of 
21,125.63 in the late afternoon. 

Bond prices declined on con- 
tinued expectations of an eco- 
nomic recovery, while fears 
that the Bank of Japan had 
foiled to inject enough funds 
into the money market exacer- 
bated the fall, raising worries 
of higher interest rates among 
stock market participants. 
Meanwhile, the strength erf the 
yen, which rose bade to the 
Y102 range against the dollar, 
depressed export-related 
stocks. 

Selling of Nikkei futures by 
foreign investors triggered liq- 
uidation of arbitrage holdings. 
Traders said dealers, who had 
accumulated positions in the 
futures market last week on 
hopes of increased participa- 
tion by domestic institutions, 
followed suit Although indi- 
vidual investors and some 
domestic institutions sought 
bargain prices, many investors 
remained nervous of the large 
arbitrage overhang. 

Volume totalled 410m shares, 
against 518m. The Topix ftiflor 
of all first section stocks shed 
21X16 to 1,684.47, while the Ntk- 
kei 300 fell 3-99 to 305.64. 
Declines led rises by 841 to 215, 
with 131 issues unchanged. In 
London the ISE/Nikkei 50 
index dipped 14.75 to L363.50. 

Export-oriented, high-tech- 
nology shares lost ground on 
the higher yen. Hitachi slipped 
Y30 to 71,060, NEC 730 to 
YL270 and Sony Y60 to Y6.280. 


Oki Electric, a recent favourite 
among retail investors, was the 
most actively traded, declining 
Y7 to Y308. 

Rising commodity prices 
helped mining and oil related 
stocks. Mitsubishi Oil 
advanced Y25 to Y1.000 and 
Sumitomo Metal Mining 726 to 
Y998. However, Dowa Mining 
lost Y7 at Y 620 on profit-tak- 
ing, and Showa Shell Sekiyu, 
the oil refiner, receded Y40 to 
Y1.480 on index-linked selling. 

Banks declined on arbitrage 
selling. Industrial Bank of 
Japan by Y5Q to Y3.2Q0 and 
Mitsubishi Bank Y30 to Y2£80. 

Nippon Shoji. a pharmaceuti- 
cal wholesaler, fell Y80 to 
YL570 on allegations of insider 
trading among its employees. 

Speculative buying sup- 
ported Nippon Zeon, which 
rose Y20 to 7595, Hanwa, the 
steel trader, up Y7 to Y642, and 
Saniio, Y3Q higher at Y2J390. 

In Osaka, the OSE average 
retreated 222J3 to 23^60.91 in 
volume of 82.2m shares. 


Roundup 


Much of the region was under 
pressure, while Karachi was 
dosed for a two-day religious 
holiday. 

HONG KONG was concerned 
about the weakness of the US 
dollar, and the Hang Seng 
mdpg . which fen more than iso 
points at one stage, finished 
115.78, or L3 per cent, lower 
at 8,998.18. Turnover was a 
thfo HK$JL2bn. 

Property issues weakened on 
pro&t-taking and in further 
response to government mea- 
sures to cool rocketing prices. 
HSBC Holdings dipped Hiqp. to 
HK$85 and nhanng Kong TTK$i 
to HKS35.25. 

SYDNEY was unnerved by 
inflation worries and the All 
-Ordinaries index closed 26.8 
down at 2,024.4, its lowest 
level since May 10. 

NAB fell 26 cents to a 10- 


“The fundamentals tell us that Italy Is expensive and not 
priced to allow for risks of any kind.” Mr Robin Griffiths, 
a senior technical analyst at James Capel in London, 
wrote this last week - just as the new Italian government 
was studying ways to respond to a constitutional court 

eminent up to 
F concerned 
ration, led a 

sick Europe down last week with a drop of 8.1 per cent 
Cash calls during the current account areestimated at 
more than Lio.ooobn. and there were rumours earlier in 
the week that domestic stockbrokers were selling equities 
to cover the cost of losses in the bond markets. 


Johannesburg awaits budget 

Stocks in Johannesburg fefi sharply, in line with other markets, 
and ahead of the new government’s first national budget tomor- 
row. The firmer financial rand also depressed equity prices. 

Gold’s inability to hold a $392 an ounce high and its subse- 
quent dip below $390 took the steam out of the golds sector, 
although shares still managed to end higher on the day. Tbe 
overall Index fell 73 to 5,712 and fndnstrlals lost 109 at 6,621. 
Golds gained 30 at SL227 after touching 2^73. Anglos came under 
pressure, shedding R&50 to R234. De Beers fell R3.25 to R1 12-75. 


FT -ACTUARIES WORLD INDICES 


JOMV compiled Of Ths Rnanefe* Timas UU, GoWroan. Sacfts 4 Ca and Natives* Socuftna Ud ii conjunction w«r tf» tnOuta of Actuates and tfw Faculty of Actuaries 

NATIONAL AND 

FWDAY JUNE 17 1894- 


REGIONAL MARKETS 

Rginea » fxranttwms 

Show number of Bms 

Of stock 


US 


THURSDAY JUNE 16 1894 ■ 


-DOLLAR NDEX- 


Austria (89) __ 

171.83 

Austria p7) . 



. .18X78 

Canada (I aq 


Denmark {3^ 
FWandPfl- 

2S452 






Mand <141 

. -105.58 

Baty (BD) 


Jaoan .. 


Malaysia (96) . „ 

-48X72 

Mndca (1R) 




New Zealand 

6X39 

Sfneaoorei44) 


SoumAWcaM) 

784.60 

Spam (4?) 


Swindon DK) 


M7) 


Untod Kingdom tZ05)»» 
USA 1518) 

EUROPE (720) 

Noirfe film . .. 

18756 

18851 

182.88 

20irr 


5a/» 

hmfle 

% 

Pound 

Staring 

Indax 

Van 

indax 

DM 

Index 

Local Local 
Currency % dig 
Indax cm day 

Gross 

Dfv. 

YWd 

US 

Dollar 

indax 

Pound 

Staring 

Indax 

Van 

Indax 

Local 

DM Currency SB week SS week 
m dax indax hfoh Low i 

Year 

ago 

foppnwl 

05 

1875S 

11X41 

14550 

16650 

-05 

064 

171.48 

18754 

11260 

14547 

15558 

18X15 

130.16 

134.25 

OI 

17X48 

11X68 

155.02 

1GX42 

04 

163 

182.72 

17X23 

11X36 

15X02 

15452 

105.41 

14280 

14S57 

-65 

162-73 

mu 

14152 

13X03 

-05 

460 

167.81 

18348 

10848 

14220 

13853 

17X87 

14262 

144.86 

04 

123.40 

82.74 

107.17 

12754 

0.1 

2-66 

12555 

12255 

8257 

10856 

127.06 

14561 

12146 

12851 

05 

248.72 

1B8.77 

21X01 

22146 

04 

153 

253.48 

24754 

16557 

21668 

22052 

276.70 

20758 

21653 

2.7 

13X63 

91.74 

11X83 

16068 

15 

an 

13X62 

13X16 

89.17 

11X83 

15750 

16X72 

8654 

8X71 

-02 

15767 

10552 

137.18 

14152 

-03 

3.19 

18253 

1«54 

10S57 

137.84 

141.71 

18S67 

14X60 

132.71 

OI 

13167 

8758 

11353 

11353 

-0.1 

152 

13453 

13093 

8758 

11358 

11358 

147.07 

10759 

11158 

05 

38158 

24255 

31450 

36X08 

05 

352 

38X75 

35968 

24057 

31268 

36X03 

506 SB 

271.42 

28245 

01 

18165 

12140 

15754 

17556 

0.0 

347 

18X31 

18075 

12164 

15762 

17558 

20963 

16653 

16055 

-01 

8058 

535? 

8X71 

9X48 

01 

153 

S251 

9058 

53.78 

8953 

9868 

97.78 

67.88 

6X7* 

05 

16051 

107.82 

13958 

107.82 

04 

0.71 

16446 

18041 

107.42 

13963 

107.42 

16664 

12454 

147.98 

15 

477.80 

32038 

41458 

48951 

16 

158 

48X71 

47151 

31556 

41059 

48457- 

621.83 

31251 

384.12 

1.0 

194058 

130154 

188X44 

7321.17 

1.1 

166 

196059 

192052 

128852 

187075 

723958 

2647.08 

146754 

146754 

-0.7 

183.83 

12X83 

iuai7 

18555 

-07 

043 

19960 

19459 

13051 

169.62 

18X75 

S07M 

16452 

16752 

05 

67.70 

4559 

5850 

8254 

-OI 

354 

6964 

6754 

45.10 

5X58 

8258 

7758 

4080 

4X18 

-04 

17X11 

119.42 

154,88 

17X40 

-06 

158 

18351 

17X70 

11957 

15644 

17857 

20X42 

15051 

154.74 

-05 

331.80 

222.47 

28X16 

24032 

-05 

1.75 

34059 

33251 

22254 

28965 

24X79 

37X92 

242.48 

24X78 

0.8 

277.78 

18X24 

24152 

23X18 

os 

2.13 

28X10 

27X14 

18452 

540)9 

29458 

28458 

17X98 

19452 

-15 

13357 

8953 

11X35 

14040 

-16 

4.12 

13X66 

13554 

9067 

11754 

14151 

1GX70 

11663 

12X15 

-09 

20457 

13X97 

17741 

24252 

-15 

155 

21151 

20X01 

13756 

179.19 

24X91 

23165 

16356 

17X62 

-15 

15354 

103.16 

13351 

13357 

-15 

151 

16959 

16658 

10454 

13569 

13X69 

17X56 

12446 

12759 

-03 

182.71 

12251 

15858 

182.71 

-05 

4.11 

187.76 

183.14 

122.64 

16960 

193.14 

21456 

17032 

17758 

-08 

18258 

12258 

15X38 

18X91 

-05 

257 

16X34 

183.70 

12002 

189.79 

18854 

196.04 

17866 

18X14 


P*etteBa*i(7B01_ 

Euro-PacHie ( 1470 }. 


~ 17259 
. 16X25 

North America £26) 163.10 

&*P« fa. IK{51S) _ 146.14 

Pwtfte fa Japan (ten 248.16 

fa. 08(1659 16931 

Wo rid Ex. UK naST) 172 86 

Wcrtd Ex Sol At (21131 —17X48 

WQrtfl Ex Japan (17031 HU 38 


0-0 19656 132.00 17U97 202.12 

03 16830 112.78 146.08 117.34 

04J 164.10 110.07 14257 131.14 

-0.7 178.71 110.82 1ESJHJ 18252 

-04 14269 tekl 12163 131.42 

0-5 242.13 10235 21020 «?« 

0.1 16620 11077 143-47 13447 

-02 188.84 113-08 14846 14750 

-02 169,24 11348 14098 14081 

-<U 17087 11850 163.70 175.15 


Th.WggJnrig, glT?) 17*^4 ^ 18M1 lla32 1d7M 

QWWW. mwiM nsw uad^a rL^—— ...ll— . J~ : 




-04 aio 
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0.1 1.67 

-0.7 288 

-06 240 

an 267 
0.1 160 
-02 2. M 
-0-2 223 

-05 291 


18240 

201.73 

171.83 

16822 

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16922 

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17X68 

18218 


15238 

180.76 

107.70 
164.06 

17X93 

14207 

24X77 

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18829 

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177.70 


106.73 

13127 

11231 

10928 

12020 

8521 

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11024 

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11X00 


13823 

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20943 

14327 

148J9B 

14723 

15426 


15123 

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11623 

131.06 

184.15 

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150.14 

17529 


17628 

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15747 

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17221 

17528 

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19520 


14128 

15582 

134.79 

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14425 

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167.75 


month low of A$10.68, while 
ANZ raided down 15 cents at 
A$&91. CBA lost 12 craits at 
A$7^1, its lowest dose since 
March 199% and Westpac fell to 
a seven-month low of A$4J4, 
off 12 cents. 

BANGKOK was concerned 
about rifts within the ruling 
coalition that could lead the 
Palang Dharma party to pull 
out of the coalition. The SETT 
index fell 17.25. or L3 per cent, 
to 1,353.28 in turnover of 
Bt&2tm, after Friday’s Btl4bn. 

KUALA LUMPUR staged a 
sharp reversal to early gains in 
the afternoon to close lower as 
investors took profits. The 
composite index 258 

down at 1,035.48 after a day’s 
high of L04L93. 

Construction and Supplies 
House, which resumed trading 
after signing a M$2£9bn tim- 
ber deal, led activity with 22m 


shares traded. The stock rose 
to a high of MSll.20 before 
closing at MS950, against its 
pres uspen sion price of MJ7.95. 

TAIPEI saw profit-taking in 
the heavily weighted Rnninraal 
sector, which led last week's 
rally. The weighted index 
retreated 12L33. or 2 per cent, 
to 6,038.41 i n tum aver that con- 
tracted to T$57.7tm from Fri- 
day’s T$68.66bn. 

Among the hardest hit finan- 
cials, China Trust dropped 
T$4A or R3 per cent, to T$ff7A 

MANILA fell 1 per cent as 
investors waited for new issues 
to be listed and sentiment was 
dampened by PLDTs fall over- 
seas. The composite index 
receded 28.25 to 2354.68 as 
PLOT lost 40 pesos at 1,695 
pesos. 

SINGAPORE turned volatile 
on rumours that Malaysian 
Prime Minister Mahathir 


Mohamad might a at call a gen- 
eral election this year. 

A report quoting Mr 
Mahathir as advising investors 
to avoid speculation on stock 
market rumours and tips also 
dampened business, and the 
Straits Times Industrial index 
closed 21.73 lower at 2£8450. 

WELLINGTON lost 15 per 
cent in response to weaker 
world bond and equity mar* 
kets, particularly in the US 
and Australia. The NZSE-40 
capital index slipped 30.63 to 
2,072.70 in typically thin Mon- 
day turnover of NZ$32-8m. 

SHANGHAI'S A share index 
fell 5.1 per cent after 200m 
shaufifta i Petrochemical shares 
made their debut in an already 
weak market, crushing inves- 
tor confidence. The index shed 
27.23 to 50851 to turnover of 

Ynl.lhn. 

Petrochemical declined 55 


per cent to YnL91 to volume of - 
vbff i shares. • • 

SEOUL continued to rally to y 
active trade as hopes abouttfef : 
possibility of summit talks- 
between South and North' 
Korea spurred buying interest - 

The composite index movof . 
ahead 1651 to 94250 .to 
response to reports that South 
Korean President Kim Young- 
sam had accepted a proposal 
by his Northern counterpart 
Kim Il-sung for a first-ever 
summit 

Trading was active, with a 
total of 495m shares changing 
hands, compared with tbe 
dally average of about 31m for 
the past week. 

BOMBAY was buoyed by the 
better than expected perfor- 
mance of the corporate sector 
and shares finished at a 26- 
month peak. The BSE 30-share 
index dimberi 50.4 to 45329. 


-0-2 2-23 17425 17028 11422 14X09 15121 17X97 15X17 139.68 


10S7 

LMM won unmriaUa iw OHaodBcn 




Investment 

Management 

Best Fund Management Group 

Best Large Fund Manager 

Group, 1 to 3 years, 1993 

Emerging Markets Asian 
Equity Fund Award for 1995 

Emerging Markets Group of 
tbe Year Award 1993 -JF 
Investment Management 

Winner of Japan Funds One 

Yem Performance Category 

Winner of Best Overall Fund 
One Year Performance 
Category 

Winner of Ear Eastern and 
Hong Kong Funds One Year 
Performance Category 

Capital Markets 

No.l Arranger of Asian US 
dollar Euroconvertible bonds 

No.l Arranger of Hong 
Kong Euroconvenihle bonds 

No.l Equity- Linked House 
of the Year 

No.l Equity - linked Issues 
Deal Of the Year 

No.lAnauger<rfThai 
Euroconvertible bonds 


The 

Winning 
Edge in 
Asia 
Pacific 



Securities Broking 

No.l in Ail Asia Research 
ex-Japan 

No.l Hong Kong Research 
House 

No.l in Hong Kong 
Research 

No.l in Hong Kong Blue 
Chip Research 

No.l in Japan Research 

No.l in Shanghai “B’ Share 
Turnover 

No.l in Australian Market 

Turnover QTF Qrd Mlnnett) 1993 

No.l in India Research 
Sales Transactions 

No.l in Philippines Market 
Turnover 

No.l in Korea Research 

No.l in Pakistan Sales 
Transactions 


(Sources: Asiamoney, South 
China Morning Post, Greenwich 
Survey, Micropal, Offshore 
Financial Review, Investment 
International, World Equity, 
Institutional Investor. ) 


$ 


Jardine Fleming 

Tbe leading edge in Asia Pacific, 


For further information on Jardine Fleming's award winning service, 
please contact; Penelope Hill Tel: (852)843 8888 Fax: (852)5 30 4698 

Investment Management ■ Securities Broking - Corporate Finance & Capital Markets * Banking 



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