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FINANCIAL TIMES 



Europe'-s-Business Nev/soaDer.' 


Europe backs law 
to set up elected 
works councils 

AH European Union member states except the 
UK agreed on a law to set up elected works councils 
in up to L500 large trans-European, companies. 

The councils are intended to ensure that workers’ 
representatives in companies employing' more 
than 1,000 people are consulted and informed 
an cross-border business de cisi ons that affect 
them. Page 18 

Franco ready to sand troops to Rwanda: 

Prance said it could begin sending troops to 
Rwanda today after winning United Nations 
approval for the mission- Page 4 

Nasdaq plans European market: Nasdaq, 
the US screen-based exchange which is the world's 
second-largest stock market by turnover, is holding 
talks with potential partners about creating a 
pan-European exchange for small and medium-sized 
companies. Page 19; Lex, Page 18 

Mqt aUgese flscfaaft, the heavily indebted 
German metals, mining and industrial group, 
has entered negotiations to seQ its headquarters 
site in the centre of Frankfurt. Hie site could 
have a market value of DM750m ($460m). Page 19 

Imperial Chemical Industries, the UK bulk 
chemicals company demerged from the old IGI 
a year ago. has underlined its break with the 
past by appointing as its new chief executive, 

Charles Miller Smith, an accountant from the 
Angto-Dntch consumer products group Unilever. 
Page 19; Lex, Page 18 

Foster's, the Australian brewery group. Is joining 
forces with Wbeelock, the Hong Kong-based trading 
house, to mnhB a push into the brewing business 
in China- Page 19 

Koqpw urges slow approach for Nato: 

Andrei Kozyrev (left), 
Russia’s foreign minister, 
urged Nato not to risk 
provoking public opinion 
in his country by rushing 
to welcome east Euro- 
pean countries as mem- 
bers of the alliance. 

The appeal was made 
as representatives 
of Nato’s 16 member 
states gathered to 
honour Russia as the 
Zlst, and most important, 
member of Partnership 
for Peace, the military co-operation programme. 

Page 18; Russia on course. Page 3 

Guinness scores at Worid Cup: Ireland’s 
success in the World Cup is creating a windfall 
for Guinness, the London-based brewer, which 
has seen stout sales skyrocket on both sides of 
the Atlantic. Page 18 

Optimism over Korean summit: South 
Korean officials expressed optimism that an unprec- 
edented summit meeting with North Korea would 
take place, after Pyongyang agreed to discuss 
arrangements. Page 4 

Hata coalition starts talks: Japan’s minority 
government of Tsutomu Hata started talks with 
the opposition Social Democratic party to save 
the ruling coalition from imminent defeat Page 4 

KaBan milk row threatens summit: 

The row over the way Italy exceeds its European 
Union milk production quota threatens to disrupt 
the Corfu s ummit of EU leaders which begins 
tomorrow. Page 2 

Samper denies drug link: Colombia’s 
president-elect Ernesto Samper, vehemently 
denied accusations that his election campaign 
had benefited from contributions by the country’s 
Cali cocaine cartel. Page 6 

US Democrats attack religious right: 

Democratic party organisers, searching for ways 
of hea ding off defeat* in November's US congressio- 
nal elections, have embarked on a strategy of 
att acking the rival Republican party as a captive 
of radical, religious right wingers. Page 6 

Rail strike hits France: A strike against job 
cuts badly disr upted French train services and 
fewer than half the trains were running in much 
of the country. Row over government role in 
UK rail strike, Page 10 

Second shock defeat at Wimbledon: 

In another upset at Wimbledon. No- 2 seed Michael 
Stich was beaten by Bryan Shelton in straight 
sets. Stich, men’s singles champion in 1991, joined 
fellow German Steffi Graf the women’s top seed, 
who was also beaten in the first round by an 
unseeded American. 



■ STOCK MARKET INDICES 


FT-SElOfc 

Yield 


.2960.4 

... 4.18 


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FT-SE Enrols* 100 -.13218 (tl9S2) 

FT-SE-A A* Stare 148105 (AS*) 

Wdra 21581.32 (JJIJMI 

fewToric luncfetirae 

Dm June ind Are 372536 (*1539 

StfCodipsta 46138 02M) 



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DM 24579 £2.4812) 
FFr 84113 0.4123) 
SR- 2J*W (10747) 
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£ Index 718 (713) 

■ DOLLAR 


Ne* York luncWner 

DM 180375 

FFr 5485 

SR- 1.3505 

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London: 

Dll IjGDOB < 1.6009 

FFr 54775 (5-4718) 

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THURSDAY JUNE 23 1994 


: : ;D8 




US currency steady B Investors urged to concentrate on ‘strong fundamentals’ 

Clinton defiant over dollar’s fall 


By Michael Prowse in 
Washington and Philip Coggan in 
London 

President BiQ Clinton yesterday 
responded defiantly to downward 
pressure on the dollar in global 
financial markets, urging inves- 
tors to pay more attention to 
strong US economic fundamen- 
tals. 

“Ms is the first time in 30 
years that we have had growth in 
the economy with no inflation fed 
by investment that will create 
jobs,” he said. 

Mr Clinton’s comments were 
reinforced by upbeat comments 
on the US economy by Mr Alan 
Greenspan, the Federal Reserve 


fhaVrTnnn | and Mr Lloyd BentSCO, 
the US Treasury Secretary. Their 
conceited remarks followed over- 
night i nterve ntion by the Bank of 
Japan combined to help the 
dollar anrt stock and bond mar- 
kets. 

But in Tokyo, Mr Hirohisa 
Fnjii. Japan’s finance minister 
warned that “rapid fluctuations” 
in exchange rates “would do 
harm not only to the Japanese 
economy but to the world econ- 
omy”. The Japanese government 
had called an emergency cabinet 
meeting to discuss the yen's 
renewed strength. 

In London, the dollar dosed at 
Y101.225 and DML6009, having 
briefly dipped below DML59 and 


Anxious Japanese -fearful of 

yen’s strength Page 4 

Greenspan seeks to aHay 

inflation fear Page 6 

Editorial Comment Page 17 


Samuel Brittan . 
Lex 


-Page 17 
-Page 18 


Bonds — ..Pages 19 and 23 

Currencies and world 
stocks Section U 


Y1Q0 - a post-1945 low - earlier 
this week, in New York the dol- 
lar was trading at YI00.7 and 
DM1.602 in the early afternoon, 
while the Dow Jones industrial 
average was up 19.19 at 3,72735, 
its first advance in three ses- 
sions. 

The benchmark US long bond 
was trading up 8 by early after- 
noon at 86A, pushing the yield 


down to 7.46. Mr Clinton gave no 
sign of wanting to change domes- 
tic policies in response to exter- 
nal financial pressures: “Well 
just have to keep working on our 
fundamentals and know that in 
the end the markets wffl have to 
respond to the economic reali- 
ties,” he said. 

The US is in its fourth year of a 
steady economic expansion. The 


unemployment rate has fallen to 
6 per cent and the annual infla- 
tion rate is less than 3 per cent. 
Most countries are still strug- 
gling to emerge from recession 

Behind Mr Clinton’s words is 
the confidence that the US econ- 
omy is less vulnerable to damage 
from currency volatility than 
most countries because the share 
of trade in gross domestic prod- 
uct remains low. 

Mr Clinton's claim that US eco- 
nomic achievements were being 
undervalued was echoed both by 
Mr Greenspan and Mr Bentsen. 

Mr Bentsen said he was “con- 
cerned by recent movements In 
the exchange markets”. The US 
and its Group of Seven partners 


would “continue to be prepared 
to act as appropriate” - a veiled 
reference to possible concerted 
intervention by central banks in 
support of the dollar. 

Speaking on Capitol Hill, Mr 
Greenspan said the economic out- 
look was “as bright as it has been 
in decades”. 

Mr Greenspan said many inves- 
tors were too pessimistic about 
the outlook for US inflation. Long 
bond yields were “higher than 
they should be” because they 
embodied an excessive “inflation 
premium." 

European bond and stock mar- 
kets took some comfort from the 

Continued on Page 18 


Package aims to balance social j ustice and strong growth 

South Africa 
imposes wealth 
tax in budget 


By Patti WWdmet and Mchael 
Holman in Cape Town 

South Africa’s new government 
yesterday presented its first bud- 
get, a cautious document demon- 
strating a commitment to fiscal 
and financial discipline while 
attempting to meet the needs of 
the poor. 

The budget was the first real 
test of the economic policy of the 
multi-party government of 
national unity which took power 
just six weeks ago. It was widely 
welcomed by investors, who 
approved of Its restraint on 
spending. 

Mr Derek Keys, finance minis- 
ter, who presented the budget to 
parliament in Cape Town, said 
bis aim was to have “the best eff 
both worlds" - “social justice 
and aggressive growth". 

It was a difficult balancing act, 
achieved in part by imposing 
what amounts to a wealth tax to 
cover the costs of transition - in 
particular, the expense of integ- 
rating guerrilla armies into the 
South African Defence Force and 
of excess spending on April's all- 
race elections. 

The one-off tax will primarily 
affect white taxpayers and white- 
owned companies and is levied at 
5 per cent on annual incomes 
above R50.000 (*13,700). 

If white taxpayers received a 
shock, poorer blacks will be no 
better pleased. Excise on ciga- 
rettes was raised by 25 per cent 
and on some beers by as much as 
33 per cent 


Analysis _____ Page 4 

EcfitoriaJ Comment and 


Observer 

Worid stocks. 


— Page 17 
..Section II 


The extra revenue wfll make it 
possible to reduce last year's bud- 
get deficit of 63 per cent of gross 
domestic product to 63 per emit 
in the year to March 1995. 

Government spending w21 rise 
only marginally in, real terms, in. 
spite of R23bn spending on Presi- 
dent Nelson Mandela’s “recon- 
struction and development” pro- 
gramme, a plan to build houses 
and provide health care and edu- 
cation denied to blacks under 
apartheid. 

Thai spending will he funded 
entirely from savings in other 
budgetary areas. Government 
spending on reconstruction is 
due to rise to R5bn next year, 
R73bn the following year, RIObn 
and Rl23bn in subsequent years. 

Chief Mangosuthu Buthelezt 
leader of the Tnkafha Freedom 
Party and a cabinet member of 
the government of national 
unity, said the budget “could not 
have been better". Johannesburg 
financial markets closed little 

Mr Keys defended the wealth 
tax, which is likely to be the 
most controversial measure of 
his budget “We think that every 
income earner in this country 
can be profoundly grateful that 
our transition has gone so very 
welL" 



South African finance matter Derate 
Keys on Ms way to parliament in 
Capa Town to present Ns budget He 
said his an was to have “the best 
of both worlds - social Justice and 
agr tt w g rowth”. The budget was 
widely welcomed by investors, 
who approved of its restraint on 
spendng 

Picture: Ashley Ashwood 


AT&T to form alliance with 
European telecoms venture 


By Andrew Adords 
in London 

AT&T, the largest US 
telecommunications operator, 
will today announce an alliance 
with Unisource, the joint venture 
between the Dutch, Swedish and 
Swiss national telecoms groups. 

The deal is the third and poten- 
tially most for-reaching of the 
alliances between US and Euro- 
pean telecoms groups forged in 
the last year. 

Unisource will become the 
European arm of Worldsource, 
AT&T's international venture 
launched last year to provide 
one-stop telecoms services for 
multinationals. AT&T has 
enlisted several Asia-Pacific oper- 
ators for Worldsource, but until 
now lacked a European partner. 

Last week the state telecoms 
operators of France and Germany 
signed a $4-2bn alliance with 
Sprint, the third largest US 
longdistance operator. 

At the same time, British Tele- 
communications gained final US 


regulatory approval for its $53bn 
alliance with MCI, the second 
largest US operator. 

All three alliances are geared 
to providing one-stop telecoms 
services to TrmU-inatirmniq a mar- 
ket that is expected to grow rap- 
idly with the opening of Euro- 
pean services to competition. 

An industry source said: “Last 
week's Sprint deal forced AT&T 
to stop dithering: It believes it is 
in danger of missing the Euro- 
pean boat entirely.” 

The alliance between AT&T 
and Unisource is expected to be 
far looser than the tie-ups 
between the other two US- 
European groups. Unlike MCI 
and Sprint, AT&T Is far larger 
than its European partners, and 
the deal is not expected to 
involve any exchange of cash or 
equity. It may not be exclusive, 
although Unisource will agree to 
market AT&T-branded services 
in Europe. 

For AT&T, the deal fallows a 
year of painful negotiations to 
find a European partner. Until 


late last year the company was 
negotiating with Deutsche Tele- 
kom and France Telecom. But 
problems about the shape of such 
an alliance, and fears of regula- 
tory barriers preventing a deal 
between three of the world’s four 
largest operators, are believed to 
have scuppered the talks. 

Unisource has maria a signifi- 
cant impact in the corporate mar- 
ket since it was established a 
year ago. Earlier this year it bid 
successfully in partnership with 
AT&T for potentially Europe's 
largest corporate telecoms con- 
tract; to provide facilities for 
more than 30 European multina- 
tional companies. 

Telefdnica, the semi-private 
S panish national operator, is an 
associate member of Unisource. 

The industry source said: “The 
prospect of Telefonica coming in 
made Unisource for more attrac- 
tive to AT&T. They couldn't find 
Holland or Switzerland on the 
map." 

World stocks, Section H 


CONTENTS 



FT Wodd Actuates 40 Stentafenralon — 30,31 

Fttogi Bartnoss 36 TbtfkraOptos 40 

GokJ Matas 26 London 86 _ — 29 

OpdJB — — 4Q WaSStt** 37-40 

K. Bud Sovfce 23 Borne* 37,40 

Ma na ged Fmfa — 3fe%>6 Si nmt 

Money MattS 96 ■ Korea 


tat Economic Mceton _2 


ftaearetnas. 


.40 


(Sepansa Seoof 


9 THE FINANCIAL TIMES LIMITED 1994 No 32,400 Week No 25 LONDON ■ PARIS - FRANKFURT- MEW YORK 


TOKYO 


GE replaces top 
man at troubled 
Kidder Peabody 


By Richard Waters in New York 

General Electric yesterday 
replaced Mr Michael Carpenter as 
chairman and chief executive of 
Kidder Peabody, its troubled 
securities subsidiary, in a move 
intended to shore up sagging con- 
fidence in the firm on Wall 
Street 

Mr Dennis Hammerman, GE's 
finance director, has taken over 
full- time management of Kidder. 
GE has also created the post of 
president and chief opera ti ng offi- 
cer at the securities company for 
Mr Denis Nayden, an executive 
vice-president at GE Capital, the 
group’s financial services arm. 

In a ftuther attempt to restore 
confidence in the firm, Mr Jack 


Welch, GE’s chairman took the 
unusual step of anno uncing tha t 
Kidder was likely to report a loss 
of $25m-$30m for the three 
months to June 30. The firm has 
been beset by reports that it had 
taken for bigger losses in recent 
weeks on mortgage-backed 
bonds, a market which it domi- 
nates in the US. 

Mr Welch added that GE expec- 
ted to report second-quarter earn- 
ings of $L5bn. 

The management shake-up at 
Kidder comes two months after 
Mr Welch expressed confidence 
in Mr Carpenter and his manage- 


ment team in the wake of a phan- 
tom profits scheme which rocked 
the Wall Street firm. Kidder has 
claimed that the head of its gov- 
ernment bond trading desk. Mr 
Joseph Jett, created fictitious 
profits of S350m to boost his 
bonus, although Mr Jett has said 
that he acted wider instruction 
from senior Kidder executives. 

Mr Welch said yesterday's 
management changes were being 
made to demonstrate GE's con- 
tinuing commitment to Kidder. 
The company came dose to sell- 
ing Kidder two years ago, and the 
recent troubles have led to specu- 
lation that it may fry again to 
dispose of the business. 

“Kidder's fundamentals are 
strong and we intend to provide 
whatever financial and h uman 
resources are appropriate for the 
firm to realise its potential." Mr 
Welch said. 

British-born Mr Carpenter had 
also been appointed by Mr Welch 
to run Kidder after a troubled 
period at the firm. In 1989, when 
he was made chairman, the firm 
had been rocked by insider trad- 
ing allegations and poor profit- 
ability after the 1987 crash. 

GE called Mr Dammerman’s 
involvement at Kidder “a transi- 
tion role”, and said he would 
return to his position as chief 
financial officer at the parenL 



A Faster 
Bus for 

the City. 



T HE average speed of a London bus is 
lOJhnph. The new Sun SPARCstation 20's 
MB us is about 66.000,000 times quicker. 

The MB us is tlie route data takes to and from 
Sun’s SuperS PARC processors. With a top 
speed of 400 million bytes per second, the 
MBub can handle up to four processors work- 
ing away simullaneously. 

Not surprisingly then, the City's biggest money 
movers choose Sun. 

Flag down the SPARCstation 20 at one of 
Horse Computers’ Banking Technology Days. 
For a free ticket, phone Robert Osborn. 


fySun 


Morse Computers. 081-8760404. 









NEWS: EUROPE 


German Social Democrat leader revives party’s hopes of beating Chancellor Kohl 


SPD loves Scharping 
when he’s angry 


By Quentin Pad and 
Judy Dempsey in Hafle 


Mr Rudolf Scharping, the embattled 
leader of Germany's opposition Social 
Democrats, lost his cool with his 
party comrades yesterday, and they 
loved it. 

In an angry and even pass iona te 
Speech to the pre-election, conference 
of the SPD, he demanded party disci- 
pline, denounced his detractors, and 
sought above all to galvanise the dele- 
gates oat of a mood of mid-election 
blues. 

They responded with a resounding 
vote to him as the party candi- 
date to ehallmg p Mr Helmu t Kohl fOT 
the chancellor's office in nest Octo- 
ber's general elections - with 479 
votes out of 502 in his favour, or more 
than 96 per cent 

For a man yvhO hag mad e Ms name 

as super-cool and massively self-con- 
trolled, to the point of being dull and 
wooden, it was a r emarkab le perfor- 
mance. It was also an essential one 
for the party and its leader, to revive 
their hopes of defeating Mr Kohl in 
October. 

The venue was the giant Indoor ice 
rink on fhn outskirts of Haiia in he 
heart of east Germany’s once-thriving 
chemical industry in the state of 
Saxnny- Anhal t And an Sunday, the 
local electors vote in another critical 
poll for a state parliament, which the 
SPD most hope to win to recover 


momentum in the current election 

mara+hnn 

Yesterday's conference came just 10 
days after the party suffered a severe 
reverse in the European elections, los- 
ing five percentage points to score 
just 32 per cent - Its worst result 
since direct European elections began 
in 1979. It also foiled to break the 
dominance of Mr Kohl's Christian 
Democratic Union (CDU) in local 
council elections in four of the five 
eastern states, partly thanks to a 
resurgence in support for the Party of 
Democratic Socialism - the former 
East German communist party. 

When Mr Scharping rose to speak 
yesterday, it was against a back- 
ground Of bitter recr imina tions in 
party ranks and widespread blame for 
his lacklustre leadership anH failure 
to challenge Mr Kohl head-on for the 
chancellorship. 

"He is absolutely colourless, much 
too bland. No wander the PDS are 
stealing our votes,” said Mrs Edith 
Braun, mayor of Stendal In Saxony- 
Anhalt, before he started to speak. 

And yet he was preaching to the 
converted, for they were longing to 
hear good news. 

"There is a majority for change in 
this country," he said. “A party which 
believes In itself, in itself and its 
goals, can win the confidence erf Ger- 
many, and a majority." That was 
what they wanted to hear. 

He flatly rejected any suggestion 


the SPD should commit itself to a 
future maHHtm with the Pr eens, as 
its left wing wants to do. "We are not 
for spelling out our alliances," he 
said. "We are involved in an election 
campaign, and every other party is 
our competitor. Anyone who suggests 
otherwise damages the chances of the 
SPD to win a majority." 

He admitted he was accused of 
being too dry and emotionless, but he 
was capable of being angry, too. 
"Anyone who wants to defeat me 
wants to defeat the SPD. That is what 
is behind it,” he said. The applause 
rolled in. 

Then he turned on his main rival 
for the party leadership, Mr Gerhard 
Scfardder, the prime minister of Lower 
Saxony. He flattered him for winning 
an absolute majority - of just one 
seat - in bis state parliament. And 
then he warned him to toe the party 
line. 

"I would be quite grateful if we 
could talk a little bit more directly to 
one another sometimes,” he said, very 
softly. 

H there bad ever been any doubt 
that there might be a backlash 
against his nomina tion as chancellor- 
candidate, it was gone. 

He safely won a five-minute stand- 
ing ovation. 

Mrs Braun was equally ecstatic. 
"It was a great surprise,” she said 
in the queue for sausages outside. 
"This was what we wanted to hear. 


1 


Call to arms: Scharping addresses yesterday’s SPD conference 


We are on our way." 

Pnt if Mr Schar ping bag m«nng pri to 


was still U5 points behind the CDU in 
the state, according to last week's 


give his party an essential lift in its local council elections. Mr Scharping 


spirits, modi still depends on the out- needs a dear win to launch, his cam- 


come of Sunday's state poll The SPD paign for the chancellor’s office. 


Rome gives debt and 
inflation priority 


Italy milk row threatens summit 


By Robert Graham 

bi Rome 


Mr Lambert© Dini, Italian 
treasury minister, yesterday 
signalled a shift in economic 
policy of the new Berlusconi 
government, emphasising the 
battle against inflation and the 
need to tackle the budget defi- 
cit and Italy's debt 

His Stateme nt to the annual 

meeting of the Italian Bankers’ 
Association was an attempt to 
win back the financial mar- 
kets’ confidence in the govern- 
ment's economic policy. It fol- 
lows a Treasury statement, in 
a similar tone, on Monday and 


pledges by Mr Dini last Friday 
to carry out a tough 1995 bud- 
get 

"The priority of Italian eco- 
nomic policy most be to deal 
with any risks that mi gh t arise 
from the recovery,” Mr Dini 
said. The economy is expected 
to grow 2JS per cent next year. 

The two fundamental guide- 
lines were to “maintain a low 
rate of inflation and restore the 
health of public finances”. The 
former director-general of the 
Bank of Italy added: "Without 
restoring the health of public 
finances, none of the macro- 
economic objectives can be 
reached." 


By David Gardner 
in Luxembourg 


The row over the way Italy 
exceeds its EU mQk production 
quota threatens to disrupt the 
Corfu summit of EU leaders 
which begins tomorrow and 
jeopardise the agreement 
reached at the 1992 Edinburgh 
summit to increase the EU rev- 
enue base from next year. 

After three days meeting in 
Luxembourg, agriculture min- 
isters of the 12 looked unable 
to resolve the milk contro- 
versy. 

1 can't see that it’s going to 
be done except at Corfu," a 
E u ropean Commission official 
said. Ministers at the meeting 


said 1131/3 delegation appeared 
to be under instructions from 
prime minister Silvio Berlus- 
coni to stick to its guns. The 
ramifications of the conflict 
are wide. 

After former Italian prime 
mmister Giulia Andreotti star- 
tled his partners by forcing 
milk on to the T.ishnn s ummit 
agenda two years ago, Rome 
agreed to cut its excess output 
In exchange for a quota 
increase tonnes. But in March, 
Brussels said Italy had not cut 
enough- 

Italy then produced new fig- 
ures saying its output had all 
along been overestimated. 

The UK meanwhile had 
taken the Commission to the 


Smaller Digits 


On Your Digital Bill 


European Court, because it 
had reduced the fine for excess 
output by Italy, and to a lesser 
extent Greece and Spain, from 
Ecu32hn to EcuL3bn ($L5bn). 
Mr Berlusconi wants the case 
dropped, and the new quota 
arrangements made retroactive 
to take account of the revised 
output figures. This would 
wipe out a large part of the 
fine, a move Germany opposes, 
saying it would cost its taxpay- 
ers EcnSOOm. 

But Italy says that unless it 
gets satisfaction, it will not rat- 
ify the Edinb urgh agreement 
on revenue, necessary to 
Increase flows of regional aid 
from next year. ' 

Senior officials from Ger- 
many and the UK - the two 
largest contributors to the EU 
budget - hint that a block on 
the increase would not make 
them especially unhappy. But 
it would be "a bit of a mess”, 
as a British official under- 
stated it The EU would be 
unable to agree a budget for 
1995. 


The row could also affect rat- 
ification in other countries, 
notably the Netherlands, 
which is set to become the 
largest net contributor to the 
EU budget on a per capita 
basis. 

Officials in Brussels and at 
Luxembourg are speculating 
that Mr Berlusconi may have 
reached a deal with Chancellor 
Helmut Kohl at their recent 
meeting. 

This would include milk. 
Italian backing for Belgian 
prime minister Jean-Luc 
Dehaene to succeed Mr Jac- 
ques Delors as Commission 
president, and German efforts 
to mobilise the EU behind an 
Italian candidate - former 
trade minister Renato Ruggi- 
ero - to head the new World 
Trade Organisation. 

That would still leave the 
British court case to he 
resolved. But senior EU diplo- 
mats note that the UK is anx- 
ious to ramgnt an alliance with 
the more Eurosceptical Berlus- 
coni government 


•Peak rate calls from lOp per minute 
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Ministers back 
flexibility over 
Europe state aid 


By Emma Tucker 
h Luxembourg 


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A majority pf EU industry 
ministers yesterday threw 
their weight behind a commis- 
sion proposal to allow a flexi- 
ble interpretation of state aid 
roles, in order to secure crucial 
capacity cuts In Europe's bat- 
tered steel industry. 

At a meeting in Luxembourg 
ministers were persuaded by 
Mr Karel Van Miert, competi- 
tion commissioner, that this 
was the only way to resurrect 
the steel rescue plan, which 
now - after weeks of uncer- 
tainty -looks set to survive. 

Only the UK and Denmark 
had reservations. They were 
worried that the commission 
would set a bad precedent by 
allowing state aid to be paid to 
steel mflls in northern Italy in 
return for only partial closures 
of the enterprises. 

Under EU law, state aid is 
not supposed to be used to 
fund partial closures, hut 


THE FINANCIAL TIMES 
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because of complex cross-own- 
ership itnkrt among the Brescia 
mills, not all companies ifairafl 
to steelmaking will close undej; 
the terms of the rescue plan. 

“I am not entirely happy 
with what the commission pro- 
poses to do,” said Mr Tim 
Sainsbury, UK industry minis- 
ter. "That part of the plan that 
does not involve closure of full 
enterprises is not justified. I 
have reservations about how 
effectively the closures can be 
monitored and whether or not 
they wifi, result in real reduc- 
tions in capacity.” 

But Mr Van Miert said the 
commission intended to 
improve monitoring of the 
capacity cats. It has agreed to 
take action against enterprises 
that do not meet the concdtions 
for state aid payments, possi- 
bly by asking them to repay 
the aid. It also agreed to 
involve outside consultants in 
the monitoring process and 
said it would be particularly 
careful to ensure that debt 
accumulated by those parts of 
the steel enterprises that were 
not dosing would not be off- 
loaded onto those parts that 
were. 

Mi- Van Miert believes the 
reductions at Brescia will 
secure a further 5m tonnes erf 
capacity cuts, taking total pro- 
duction reduction under the 
plan to around 16m, still short 
Of the envisaged minimum 
capacity cuts of 19m tonnes. 

Although the commission 
did not need council assent on 
the steel plan, which falls 
under the competence of the 
commission, it was eager to get 
the political support of the 
member states. 


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in the Financial Times of June 
3, it was reported that MTV 
Europe has an audience of 25m 
households. MTV estimates 
that its audience is over 60m 
households. 




bnfrtJAisid-iAL TIMES THURSDAY JUNE 23 1994 


EUROPEAN NEWS DIGEST 


Hundreds of 


companies in 
Czech sell-off 


The Chech Republic is to begin a big sell-off in the next two 
months of stakes in several hundred companies wtere the 
state remains a majority shareholder. Mr Roman Ceska, dep- 
uty privatisation minister and chairman of the National Prop- 
erty Fund, the state holding company, said yesterday. It is 
expected that up to a third of the Kd50bn (ELSbn) worth of 
assets involving ™ainiy commercial and industrial companies 
in which the NPF retains a majority stake, will be offered for 
sale to domestic and foreign buyers by the end of this year. 
Some of the offers will be advertised internationally. Compa- 
nies to be included in the sell-off include Chemicke Zavody 
Sokolov, one of the country’s biggest c hemical companies, in 
which the US company Dow Chemical attempted to buy a 
gfafep two years ago. The deal fell through after the two 
companies foiled to agree a price, and the NPF has remained 
as the company’s majority shareholder. Mr Ceska, who took 
over from Mr Tomas Jezek as NPF chairman 13 days ago. said 
the state intended to offer each stake in its entirety to a single 
buyer and sell to the highest bidder. 

The move is likely to be the last big sell-off by the govern- 
ment. Its voucher privatisation system, in which an estimated 
6m bought vouchers enabling them to bid for shares in 
two tranches of companies being privatised, has so far 
resulted in the partial or complete privatisation of nearly 2,000 
enterprises, representing over 80 per cent erf the coun- 
try’s economic activity. Vincent Boland, Prague 


Electrolux purchase approved 


Electrolux, the world's leading household appliance maker, 
said yesterday it had received approval from the European 
Commission for its DM730m (£294 -3m) acquisition of AEG 
Hausger&te, the white goods arm of Germany's AEG industrial 
group. The takeover, which will now take effect from October 
1, will bring Electrolux alongside Whirlpool of the US in global 
white goods sales, extend its lead in total appliance sales and 
give the Swedish group a commanding position in Europe's 
white goods markets. Together, Electrolux and AEG Hausger- 
Ste have annual appliance sales of more than $9bn. Combined 
with AEG, Electrolux will have a white goods market share in 
western Europe of at least 25 per cent, against 15-19 per cent 
for Bosch-Siemens of Germany and 11-15 per cent for Whirl- 
pool Europe. In Germany, the AEG deal will give Electrolux 
some 35 per cent of the local market 
The Commission issued its approval of the takeover after a 
one-month review. Electrolux said the Commission’s main 
concern had been over its position In Scandinavian markets, 
where its share is now set to rise significantly above its share 
in other European markets. Although Finland, Norway and 
Sweden are not yet members of the European Union, they are 
covered by EU competition rules under the European Eco- 
nomic Area agreement Hugh Camegy, Stockholm 


French rail workers strike 


A strike by French rail workers against planned job cuts badly 
disrupted train services yesterday, and fewer than half the 
trains were nooning in many areas of the country, according 
to SNCF, the state railway company. The strike, which is due 
to last until this morning, forced the cancellation of most of 
the trains on the highspeed TGV network between Paris and 
the southeast, SNCF said. TGV traffic between Paris and the 
southwest was cut In halt while service to the north was 
normal. Commuter services into Paris were cut in half except 
from the eastern suburbs, where they were only slightly 
disrapted. The communist-led CGT union called the 34-hour 
strike. Another drivers’ union, tire FGAAC, backed the strike ! 
to demand talks on working conditions on the Channel tunnel 
line. Reuter. Paris 


Assembly to vote on Tapie 


Mr Barnard Tapie, tire French entrepreneur turned politician, 
win on Tuesday face a National Assembly vote to decide 
whether to endorse yesterday's recommendation by a commit- 
tee to lift his parliamentary immunity. Mr Tapie, whose 
left-wing Emerge Radicale movement won 12 per cent of the 
votes in this month’s European elections, could then face two 
separate fraud charges concerning the purchase of the PhocOa. 
his luxury yacht His immunity was previously lifted late Last 
year so he could be examined in a fraud case concerning 
Testut, one of his old business interests. Mr Tapie’ s critics 
have accused him of becoming a EuroMP to stave off further 
legal threats. A cartoon on the front page of today's Le Monde 
shows him manocyding across a tightrope stretched between 
the French and European parliaments. AHoe Ratostham, Paris 


Ciller denies impropriety 


Turkey's prime minister Mrs Tansu Ciller went an the record 
yesterday to deny allegations of official impropriety in her 
business dealings after newspaper damns that she h ad used 
her office to acquire property in the US. Mrs Ciller is under 
pressure to clear her name after a whispering campaign about 
her business deali n g s and those of her husband, who publicly 
gave up his licence as franchisee of the US fast food rhain 
7-Eleven when she became prime minister last year. Mrs C31er 
told the official Anatolia news agency she bad not declared the 
assets when she became an MP in 1991 because the properties 
were owned by Marsan, a Turkish-registered company in 
which she and her husband are shareholders. Moreover they 
were acqu ired before she became a minister. MUliyet, a Turk- 
ish newspaper cited do cume nt ation alleging the prime minis- 
ter and Mr Ozer Ciller were the owners of a hotel shopping 
centre and villa near Sai«m in Oregon, properties acquired 
since she was appointed to the catenet in 1991. John Murray 
Brown, Istanbul 


ECONOMIC WATCH 


French consumption down 


Arinuat % growth irfhoutehCkt.' 

consumption of menutactwwt v 

products (1980 prices)- 


...... . French household 

.Franca. . ; consumption of manufactured 

v • " " :™ goods fell 09 per cent in May, 
Anw rf go atti of botAsho h i> compared with April but the 

SSSSmSot ".T trend for the current quarter 

proaucs Cl.MOp'to^, - - - ^ upwarfs ^ 

j /- ics Ministry said yesterday. 
• ••••• " • j' "• ' / •••' The ministry said decline in 

' „ ~ - ! household consumption 

• frj' ' • reflected the sharp increase 

o 7| \ V P; " fr spending in April House- 
S n j "■ ■ hold consumption in April 

'-i I \ l \ l- ' sre w by a revised IB per cent, 

I i I fr ' i i S reflecting government 

. 1 ' * V ; incentives for car buyers. 

• i* • Economists in Paris said 

.Mv 1993. ..- . "• 94 jut spending in May was still 0.6 
Scerasf* Graph#*, ■' P« cent higher than March 

and l j per cent higher than 
the average for the first quarter. Even with flat consumption 
in June, they said second-quarter consumption should still 
show an increase of 1.5 per cent over the first three month a 
John Ridding, Paris 

■ Dutch seasonally adjusted mnnirfapti n-i ng production fell 
2-0 per cent in April compared with March, but non-seasonally 
adjusted manufa cturing' production was up 13 per cent year- 
on-year, the Central Bureau of Statistics said. 

■ Swedish gross domestic product rose by 0.1 per cent in the 
first quarter of 1994 from the fourth quarter of 1993 and by L4 
per cent compared with the first quarter of 1993, the Central 
Bureau of Statistics said. Industrial production rose 2 J per 
cent in April against March and 10.6 per cent yearon-year. 

■ Hungarian industrial producer prices rose 0.9 per cent in 
April from March and were up 9.7 per cent from April 1993, the 
Central Statistical Office said. 


.•mv 1993. .. 

Soots Ft Graphftu 


a 


a 






FINANCIAL times THURSDAY JUNE 23 1994 


NEWS: EUROPE 


First-quarter growth figures confirm central bank’s optimism over recovery 

Spain faces recession aftershocks 


By David White in Madrid 

Spain’s recession is now over but its 
consequences will be felt for a consider- 
able time, the Bank of Spain said in its 
annua l report published yesterday. 

Its optimism about the turnaround 
was confirmed by figures from the 
National Statistics Institute showing 
economic growth of 0.8 per cent in the 
first quarter against the same period 
Iasi year. This was the first positive 
growth in year-on-year figures for Span- 
ish GDP since the thud quarter of 1 93 3, 
and exceeded the central bank's earlier 
estimate of 0.5 per cent 


The figure compared with a 02 per 
cent flgftiina in the last quarter of 1993 
and a 1 per cent reduction for last year 
as a whole. It reflected a 19.1 per cent 
growth in exports in the quarter. 
Imports also rose by 42 per cent, the 
first increase stnce 1992. 

Internal riprnanri ramtln npri to fall but 
at a reduced rate of 2.1 per cent com- 
pared with 32 per cent in the previous 
period. The fall in gross fixed capital 
formation, meanwhile, slowed to 52 per 
cent from 82 per cent 
The Bank of Spain report said recov- 
ery had begun to affect internal 
demand, which could soon show “mod- 


erately positive** growth. However, 
Spain faced “enormous difficulty” 
absorbing its high level of unemploy- 
ment, now running at almost 25 per 
cent, and the effect that this would in 
turn have on the country’s economic 
growth potential 

Prospects for sustained growth and 
economic convergence with the richer 
countries of the European Union were 
conditional on “more balanced macro- 
economic policies” and on greater suc- 
cess in reducing inflation and tariffing ' 
the high public sector deficit, the bank 
said. The inflation differential between 
Spain and the three bestperforming EU 


members remained at about three per- 
centage points. 

Mr Luis Angel Rojo, Bank of Spain 
governor, said there was little room for 
farther reductions “In short-term inter- 
est rates, after a succession of cuts ear- 
lier this year. He said there would be 
“great cautiousness" about interest rate 
levels In Europe generally, and there 
would only be room for further cuts in 
Spain if they reduced inflation and the 
public deficit 

“Any relaxation of monetary policy 
not justified by these factors would 
only help to increase the risk of an 
imbalanced recovery," he said. 


Yeltsin defied 
as deputies 9 
militancy grows 


By John Lloyd In Moscow 

Russia's lower house of 
parliament yesterday failed to 
pass the 1994 budget at a third 
reading and came out strongly 
against President Boris Yelt- 
dn)s decree against crime as it 
“seriously limits the constitu- 
tional rights and liberties of 
Russian ci tizens ” 

The votes, together with a 
swell of protest against propos- 
als from Mr Vladimir Shu- 
meiko, leader of the upper 
bouse and an ally of Mr Yelt- 
sin, to prolong the terms of 
both the parliament and the 
president by two years without 
election, marks a sudden mili- 
tancy in a body which has 
been relatively restrained in its 
six-month life. 

The ground on which it is 
preparing to fight - that of the 
constitution - is similar to that 
on which Mr Yeltsin and the 
previous parliament divided 
and ultimately fought. The dif- 
ference this time is that the 
constitution is Mr Yeltsin’s cre- 
ation. 

The vote on the budget, 
which had been expected to go 
through after two lower house 
readings in which it gained 
large majorities, followed its 
rejection by the upper house 
earlier this week. The upper 
house had demanded an .. 


increase in military spending 
in the budget from Rbs37,500bn 
to Rbs55,000bn, following sus- 
tained lobbying by the military 
and militar y industr y. 

A large majority of deputies 
voted for the budget hut bailed 
to secure the required 225 
votes. Between 215 and 220 
voted in favour, with 43 
against and GO atattaining 

There was overwhelming 
support - 246 against 6 - for a 
resolution railing on Mr Yelt- 
sin to withdraw his decree 
announced last week “on 
urgent measures to protect the 
citizenry against banditry and 
organised crime". The size of 
the majority shows that oppo- 
sition to the unconstitutional 
nature of the decree has spread 
across all parties. 

Mr Viktor Ilyukhin, a lead- 
ing tnwmhAr of the Communist 
faction, said it broke as many 
as eight articles of the consti- 
tution, while Mr Boris Fyodo- 
rov, reformist leader of the Lib- 
eral Democratic Union, said 
that “untfi the government and 
president obey their own laws 
and its own constitution we 
will not have reform here”. 

The decree allows for a sus- 
pect to be held without charge 
for 30 days, against the 48-hour 
limit specified by the constitu- 
tion. 


Russia on 
course for 
EU free 
trade zone 


By David Gardner 
in Luxembourg 

The last obstacle to conchiding 
a wide-ranging partnership 
agreement between ^ p«1 

the. European Union, leading 
to a free trade zone by the end 
of the century, was removed 
yesterday when the Nether- 
lands endorsed the deal. 

President Boris Yeltsin is to 
sign the accord tomorrow 
morning in Corfu, at the sum- 
mit of EU heads of govern- 
ment The EU readied a simi- 
lar deal with the Ukraine in 
Luxembourg last week. 

The Dutch were unhappy 
with Moscow's conditions for 
the five EU banks already 
operating in Russia when a 
December 1993 decree restrict- 
ing foreign hanking activity 
came into force. Two Dutch 
banks were among the five. 

These banks and the Dutch 
government have now received 
written confirmation from the 
Russian central bank that 
under a subsequent decree, 
passed earlier this month, they 
are “authorised to carry on all 
operations mentioned in 
[their] licence", including with 
Russian residents. 

Nancy Dunne adds from Wash- 
ington: Mr AI Gore, US 
vice-president, yesterday pre- 
dicted “mnltibilliOD dollar 





x 




*-v. V;\. 

■’ • HVv 

1 / 


s 


Frederico Mayor (left). Unesco secretary-general, is greeted by 
Rnssian President Boris Yeltsin during a meeting yesterday in 
Moscow, where the UN agency is to open an office 

contracts’* for oil and gas 
exploration and in investment 
in sectors such as housing and 
transportation in Russia. 

There would be “new markets, 
new trade in both directions" 
between the US and Russia. 

He was speaking in a televi- 
sion interview before a meet- 
ing with Mr Victor Cherno- 
myrdin, Russian prime 
minister. The two head a com- 
mission, which meets this 
week In Washington, to press 
joint .efforts on business, sci- 


ence, defence, energy and the 
environment 

A senior administration offi- 
cial said US investment in 
Russia could leap from its cur- 
rent $llm“to $40bn-f50bu by 
the end of the decade if Russia 
developed a liberalised trade 
and investment regime. The 
official added there would be 
talks about proposals for a 
large oil exploration agree- 
ment involving Marathon Oil 
and McDermott, both of the 
US. 


Ukraine’s economy 
not on poll agenda 

But links with Russia are, writes Jill Barshay 


U krainian president 
Leonid Kravchuk 
appears to be defying 
the rule that incumbents stand 
little chance of re-election in a 
recession. Despite the record of 
his 30-month tenure - which 
has included a 40 per cent drop 
in gross domestic product over 
the first four months of this 
year alone - Mr Kravchuk is 
gaining in the opinion polls 
against bis main challenger on 
Sunday, the former prime min , 
ister, Mr Leonid Kuchma. 

Indeed, repairing the econ- 
omy, the main challenge facing 
Ukraine’s next president - Is 
barely on the campaign 
agenda. 

Instead, campaigning has 
focused on the shape of a pro- 
posed new constitution, the 
status of the Russian language 
in a country with an llm- 
stnmg ethnic Russian minority 
and the extent of alignment 
with Russia itself. 

Though Ukraine's leaders 
succeeded in creating an inde- 
pendent state freon the disinte- 
gration of the Soviet Union, 
they have foiled to make it eco- 
nomically sustainable, leaving 
its statehood fragile and 
beholden to Russia. 

Ukraine is kept afloat by a 
large Russian subsidy (Slbn.- 
$2bn annually in un paid oil 
and gas debts) while Kiev 
props up its energy-wasteful 
heavy industries and subsid- 
ises its state forms with money 
it does not have. 

While the west has woken up 
belatedly to the fact that 
Ukraine's stability is important 
for Europe, Ukraine has yet to 
face up to the fundamental eco- 
nomic choice of whether to 
remain dependent an Russia or 
restructure its energy-inten- 
sive industries and diversify its 
markets. 

Asked why no one is talking 
about economics, Mr Mykola 
MTkhaiirhfmftn , the president's 
chief domestic adviser, says: 
“The majority of Ukrainians 
are satisfied with the current 
path of reform.” 

In foot economic dissatisfac- 
tion is widespread, but 
Ukraine's main power brokers 
- the collective farm bosses. 
Industrial directors and Soviet: 


Ukraine 



GDP (% Change) 


First 4 months 1994 
compared with same 1993 


1993 annual 
compared to 1992 


1992 annual 
compared to 1991 


Jin 1093 94 May 0 -10 -20 -30 -40 

Somes: UhraMan Mnfe&y rt StnHMtrt . tmemadono! Centre to. Advanced Studes. Kiev 
and Ec o n om i c TIuwlT i Prelect In the fanner Sovta Unton, Cure UnhwnJty 


era bureaucrats - are more 
interested in maintaining their 
positions than reforming the 
economy. 

The slow pace of privatisa- 
tion - only 150 enterprises in 
the first wave of the sell-off 
programme - has also meant 
the lack of a class of indepen- 
dent owners with an interest in 
reform. Many private entrepre- 
neurs have gone underground 
to form a black economy which 
probably equals the official 
economy because it Is the only 
way to survive in Kiev's 
thicket of restrictions and high 
taxes. 

The only presidential candi- 
date running on an economic 
reform platform, Mr Volody- 
myr Lanoviy, is tr ailing with 
less than 10 per cent support in 
the opinion polls. Even 
Ukraine's nationalist west has 
abandoned him, unconvinced 
this “Ukrainian Gaidar” could 
beat their main foe, Mr 

Tfnrii ma 

The two main contenders 
offer populist promises. Mr 
K uchma, a Soviet-era missile 
plant manag er who resigned as 
prime minis ter last September 
after a power struggle with the 
president, says he will resur- 
rect Ukraine's economy by “re- 
establishing ties with Russia". 
But he does not say whether 
he means economic union, 
whereby part of Ukraine's 
sovereignty would be sacrificed 
to Russia, or freer trade, which 
would require Ukraine to lift 
subsidies and price controls as 
Russia itself has done. 

The largely Russian-speaking 


eastern Ukrainians, particu- 
larly communists and factory 
bosses, seek a return to pre- 
independence relations where 
orders from Russian plants 
flowed in. They are strongly 
criticised by Mr Mikhailchenko 
for not understanding “that 
Russia is just not the some it 
was two years ago - you can't 
just recreate the old connec- 
tions now''. 

President Kravchuk offers an 
even vaguer platform of simply 
“developing Ukraine's socially- 
oriented economy", but observ- 
ers do not regard his record as 
encouraging. Only last week he 
called for the indexation of 
savings, a move which would 
cost Ukraine about $22bn at 
the current depressed 
exchange rate for the Ukrai- 
nian currency, the karbova- 
nets. 

Last winter the government 
tightened monetary policy and 
managed to reduce inflation 
from 90 per cent monthly last 
December to only 52 per cent 
last month. But the political 
fallout from the credit squeeze 
was too much to bear and Kiev 
loosened the monetary screws 
in early spring. In April alone 
the money supply grew 60 per 
cent 

With the desire to bail out 
ailing state enterprises win- 
ning out over the battle 
against inflation, most observ- 
ers believe that the next presi- 
dent is likely to inherit a resur- 
gence of inflation by the end or 
the summer and a host of other 
problems which the campaign 
has not addressed. 


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NEWS: INTERNATIONAL 


Anxious Japanese fearful of yen’s strength 

William Dawkins on worried industrialists and financiers - and contented consumers 



T he un thinka ble sud- 
denly became thinkab le 
yesterday after the yen 
briefly voyaged, for the first 
time, through the psychologi- 
cally emotive barrier of Y100 to 
the dollar. 

This historic trip into 
unknown territory has reawak- 
ened corporate Japan’s fears 
that the unexpected strength 
of the currency might stifle the 
country's fragile economic 
recovery, just as an unsched- 
uled rise in the yen did this 
time last year. 

An anxious Tokyo govern- 
ment yesterday said It would 
step up efforts to reach a trade 
agreement with the US, sus- 
pense over which has contrib- 
uted to the yen's rise, and seek 
co-ordinated currency market 
intervention with other mem- 
bers of the Group of Seven. 
The yen hit a new closing high 
of Y 100.65 to the dollar in 
Tokyo yesterday, 12.6 per cent 
above its level at the turn of 
the year. 

“Rapid fluctuations would do 
harm not only to the Japanese 
economy but to the world econ- 
omy,” warned Mr Hirohisa 
Fujii, finance minister, after an 
emergency cabinet meeting to 
discuss the yen's break 
through Y100 in New York the 
previous night He would not 
comment on why, by yesterday 
evening, central banks had not 
jointly intervened, as they did 
last time the dollar fell sharply 
against the yen, in May. 

“There is a scream arising 
from Japanese industry,” 
added Mr Eijiro Hata, minis ter 




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lead to a nearly four-fold 
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stabSse currencies 



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of international trade and 
industry. The rise could not 
have come at a worse time, in 
European and US markets 
after the Japanese government 
had gone to bed, celebrating 
the day’s atiTinunrornpnt Of 3 
3.9 per cent annualised 
increase in gross domestic 
product in the first quarter, the 
best performance for three 
years. 

A satisfied Mr Tsutomu Tan- 
aka, vice minister of the gov- 


ernment’s economic planning 
agency, had at the time 
announced that - barring a 
yen shock - Japan had now 
turned the comer, from its 37- 
month long economic slow- 
down, the longest post-war 
decline. 

The currency turmoil 
prompted the third consecutive 
daily £811 in share prices yester- 
day, leaving the Nikkei 225 
Index down 231.8 points at 
20,581. The Bank of Japan 


84 88 88 so. 82 94. 

Source: fTGrapfilfe 

bought dollars heavily. But 
officials said there was no 
change in monetary policy, on 
the grounds that the yen’s rise 
was more of a function of the 
dollar’s weakness against the 
D-Mark, even if this could be 
“negative for the economy”. 

Most Japanese companies 
based forecasts of a recovery 
this year from four years of 
profits decline on an exchange 
rate of about Y105 to the dol- 
lar. They may therefore have 


to reduce their forecasts if the 
yen sticks at the present level 

The impact however, will be 
uneven. Export dependent sec- 
tors, such as electronics lose 
6.7 percentage points from 
annual pre-tax profits with 
each one yen rise of the Japa- 
nese currency against the dol- 
lar. estimates Mkfco Research 
Institute. Car manufacturers 
lose 10 per cent of their profits 
for every yen rise, estimates 
Miti's Mr Hata. 

Car importers; by -contrast, 
have been achieving record 
sales recently - 8.6 per cent of 
the Japanese market in May - 
thanks to the yen’s strength. 

Japanese consumers have 
seen prices of imported goods 
fall accordingly. Unsurpris- 
ingly, they find it hard to 
understand the routine cries of 
alarm from government and 
companies at every time the 
yen rises through a psychologi- 
cal barrier. 

This invites the question of 
whether the Finance Ministry 
is right to be as worried as it 
is. The currency rise is not 
enough to choke the general 
economic recovery, as hap- 
pened last year, believes Mr 
Yusuke Kashiwagi. senior 
adviser to the Bank of Tokyo 
and former vice minister of 
finance for international 
affairs. 

“I don’t think this will hit 
recovery prospects. This recov- 
ery is consumer led and not 
export led, so the exchange 
rate will affect the minds of 
business rather than consum- 
ers,” he said. However, he 


admitted that the volatile 
jumps in the yen's value were 
getting “more and more 
unbearable” in casting uncer- 
tainty over Japan’s economic 
performance. 

Mr Jon Salto, senior econo- 
mist at the government’s Eco- 
nomic Planning A gency , 
believes managers are getting 
more worried by the yen’s 
appreciation, rather than 
learning to to live with 
exchange rats volatility: “They 
are having to make bard deci- 
sions on how to adjust.” 

So far. corporate Japan has 
avoided the toughest decisions. 
It has avoided making redun- 
dancies to reduce its high-yen 
inflated costs in line with 
interna tional competitors, so 
that consumers have been 
partly insulated. However, 
mmpanipg have started to cut 
recruitment and have 
increased the pace at which 
they move production out of 
Japan to cheaper locations. 

According to a recent survey 
by the Yomiuri Strimbun daily, 
70 per cent of Japanese compa- 
nies will recruit fewer new peo- 
ple this year. In the mftantfmft, 
the proportion of overseas pro- 
duction will rise from 7 per 
cent of the total now to 12 per 
coot in the next two to three 
years, forecasts the Tokyo 
office of Morgan Stanley. The 
latest yen shock can only rein- 
force those trends, suggesting 
that Japan is unlikely In this 
decade to recover to the fast 
economic growth of the 1980s. 
The yen’s strength makes for a 
weak economic dawn. 


Hata starts talks on coalition with Social Democrats 


By Wiinam Dawkins in Tokyo 

The minority government of Mr 
Tsutomu Hata, yesterday started 
talks with the opposition Social Dem- 
ocratic party to save the ruling coali- 
tion from imminent defeat. 

Government officials will this 
morning meet the SDP for a second 
time, in an attempt to persuade it to 


rqjoin the coalition, so restoring its 
parliamentary majority. This would 
ensure the failure of a no-confidence 
vote by the largest opposition group, 
the Libera] Democratic party, which 
could be launched as early as today. 

The markets will watch the talks 
closely because the latest bout of 
political instability has been a factor 
in exchange rate turmoil. It has 


fuelled fears that the government 
will be unable to produce a convinc- 
ing package of deregulation and tax 
reform measures, due next week, so 
stoking US frustration and putting 
more pressure on the yen. 

If the SDP refuses to join forces 
with Mr Hata, and sides with the 
LDP, the no-confidence vote will 
probably succeed, forcing Mr Hata 


and his cabinet to resign. Mr Hata 
has said that he would not call an 
election, because that would delay 
completion of a new electoral system, 
but leave it to other parties to form a 
coalition. 

SDP leaders yesterday indicated 
they are interested in rejoining Mr 
Hata's camp. The party has agreed, in 
a document presented to the govern- 


ment, to a rise in indirect taxation, 
the most controversial part of the 
coalition’s economic policy. 

The SDP party also wants promises 
it will be more closely involved in 
decision making, a sensitive point 
because formation of a centre right 
grouping within the coalition, but 
excluding the SDP, prompted it to 
walk out of the government in April 


UN agrees to French troop deployment in Rwanda 


By Michael Littlejohns, UN 
Correspondent, to New York 
and David Buchan in Paris 

The United Nations Security 
Council last night agreed to 
independent deployment of 
French troops in Rwanda to 
protect civilian lives until a 
UN force is adequate for the 
task. 

The council acted with some 
reluctance, even though the 
resolution does not mention 
France by name, speaking only 
of a temporary multinational 


operation “tinder national com- 
mand and control". Ten of the 
15 members voted for the plan. 
Brazil. China, New Zealand, 
Nigeria and Pakistan 
abstained, 

France has said it expects 
one or more other European 
countries to join a mission 
that, according to the resolu- 
tion, will be strictly humani- 
tarian and “conducted in an 
impartial and neutral fashion”. 

The troops will “not consti- 
tute an interposition force" 
between the warring parties. 


But Mr Claude Dusaldi, UN 
representative of the Rwandan 
Patriotic Front, was uncon- 
vinced. Shortly before the vote, 
he accused France of trying to 
block an insurgent victory in 
the civil war “We shall resist 
French intervention with all 
the means at our disposal.” 

The rebels' opposition was a 
factor cited by members who 
abstained on the French pro- 
posal 

In Paris, Mr Franpois Leo- 
tard, defence minister, said 
“Operation Turquoise" could 


start today Paris is mobilising 
some 2ji00 men by drawing on 
L500 troops stationed in Gabon 
and Djibouti and flying the 
rest out from France. 

Mr Lfeotard said an advance 
party had landed in Coma in 
Zaire, near the northwestern 
border of Rwanda. Officials 
said French troops would seek 
to protect pockets of Tutsts in 
the western part of the country 
held by the mainly Hutu gov- 
ernment forces. 

He said he had given his 
troops “very precise instruc- 


tions to avoid any confronta- 
tion with the [rebel] forces’’. 
Mr Eduard Baliadur, the prime 
minis ter, told the National 
Assembly. France could count 
on the military participation of 
Senegal and hoped for at least 
logistic help from several Euro- 
pean countries. 

He said he had been in con- 
tact with Prime Minister Silvio 
Berlusconi of Italy, who has 
made Italian militar y participa- 
tion conditional on agreement 
of both sides in the conflict 
France also had “active politi- 


cal and logistic support" of the 
US, Mr Baliadur said. 

The operation is mandated 
far two months. R could be less 
if Mr Boutros Boutros-Ghali 
UN secretary general manages 
to bring the UN force up to 
strength sooner than that 

His strong backing for the 
French initiative was critical 
to its success in the coundL 
Members were also Influenced 
by his warning that it could 
take up to three months for the 
projected 5,500-man all-African 
UN force to be fully deployed. 


Pakistan 
chambers 
‘to strike’ 


By Fartian Bokhan 
In Islamabad 

Pakistan’s largest organisation 
of trade associations and busi- 
ness chambers last night 
threatened to strike from Sun- 
day if the government does not 
withdraw its plan to widen an 
existing net of a VAT-style 
general sales tax. 

The government said it was 
extending GST to include up to 
277 items in last week's budget. 

Businesses are opposing the 
measure on the grounds it 
would fuel corruption by giv- 
ing extra powers to govern- 
ment inspectors to clamp down 
on various factories unless 
they were paid an illegal “grat- 
ification". 

“This budget will ruin the 
economy. Its no good," said Mr. 
S.M. Muneer, chairman of the 
Federation of Pakistan Cham- 
bers of Commerce and Industry 
which represents 120 associa- 
tions and 30 business cham- 
bers, after the first round of 
discussions with government 
ministers and officials. 

“They (businesses) want to 
pay more taxes but not the 
GST because it will only give 
birth to corruption" Mr. 
Muneer added. 

Mr Ahmed Mukhtar, com- 
merce minister, said some of 
the objections from businesses 
were being considered by offi- 
cials for possible changes, but 
the government would not con- 
sider any of the demands 
“under pressure". 

Such confrontation between 
the government and business 
leaders is not unique in the 
days after the budget In previ- 
ous years too, businesses have 
resisted various budgetary 
measures, eventually forcing 
governments to back off or par- 
tly tone down some of their 


However, it was not clear 
last night if the two sides could 
reach a compromise without 
one of them backing off on an 
important issue of interest 


Seoul officials optimistic 
over talks with North 


By John Burton in Seoul 

South Korean officials 
yesterday expressed optimism 
that an unprecedented summit 
meeting with North Korea will 
take place, after Pyongyang 
agreed to discuss arrange- 
ments. 

“The North Koreans' sincer- 
ity seems higher than at any 
other time in the past” said 
Mr Han Sung-joo. South 
Korea’s foreign minister. 

He described as “encourag- 
ing” the North's quick 
approval of a proposal from 
Seoul to hold a preparatory 
meeting for the summit on 
June 28, to be attended by each 
side’s deputy prime minister. 

Previous attempts to arrange 
inter-Korean talks have been 
plagued by procedural dis- 
putes, but this does not appear 
to be case so for this time, Mr 

Han said. 

North Korea suggested the 
summit last week when fanner 
US President Jimmy Carter 
visited Pyongyang in attempt 
to mediate in a dispute over 
international inspections of 
North Korean nuclear facili- 
ties. 

Officials in Seoul believe the 


summit could be held as early 
as mid-July and coincide with 
a new round of high-level talks 
between North Korea and the 
US to discuss possible diplo- 
matic ties. South Korea has no 
objection to the normalisation 
of US-North Korean relations 
as long as Pyongyang “is will- 
ing to fulfil its international 
obligations and start behaving 
as normal and law-abiding 
nation,” Mr Han said. 

The US has suggested it will 
recognise North Korea if 
Pyongyang allows the - Interna- 
tional Atomic Energy Agency 
to conduct full inspections of 
its nuclear facilities. 

In Brussels yesterday, the US 
and Russia agreed on a com- 
mon approach towards a possi- 
ble United Nations Security 
Council resolution on sanc- 
tions to be imposed on North 
Korea over the refusal to allow 
inspections. 

The agreement between Mr 
Andrei Kozyrev, Russia's for- 
eign. minister, and Mr Warren 
Christopher, US secretary of 
state, appeared designed to 
exert pressure on Pyongyang 
to make good its assurances to 
Mr Carter that ft was willing to 
freeze its nuclear programme. 


“We have developed a com- 
mon approach towards a sanc- 
tions resolution which will 
integrate a possible interna- 
tional conference as well” Mr 
Christopher said. 

Mr Kozyrev said: “Right 
now, we should show quite 
clearly that sanctions would be 
inevitable if North Korea does 
not take any positive steps.” 

Mr Christopher said on Tues- 
day that the US was ready to 
put the campaign for UN sanc- 
tions in abeyance if North 
Korea confirmed the assur- 
ances it gave to Mr Carter. 

A senior US official said the 
proposal agreed with Mr 
Kozyrev meant an initial phase 
of sanctions against North 
Korea would take effect 30 
days after a resolution was 
enacted by the Security Coun- 
cil Mr Kozyrev said: “These 30 
days should be used for the 
international conference, to 
avoid the sanctions which of 
course are an extreme mea- 
sure." 

The conference would 
Include representatives of the 
UN, IAEA, South Korea, North 
Korea, China, Japan. Russia 
and the US, American officials 
said. 



South Korea’s Foreign Minister Han Sung-joo 
at a press conference on plans for talks with 


FVuur 

answers questions 
North Korea 


Omo and Persil under analysis as Unilever and Procter differ over triazacyclononanes 

Scientific press takes up detergent wars 


By Tony Jackson 
and COve Cookson 

The soap war between 
detergents giants Unilever and 
Procter & Gamble has bubbled 
over into a new arena: the sci- 
entific press. Today’s issue of 
the leading science journal 
Nature carries a highly techni- 
cal analysis by 13 Unilever sci- 
entists of Persil Power and 
Omo Power, the detergent 
recently launched by Unilever 
across Europe- 
Procter has claimed the new 


powder, which was developed 
at a cost of several hundred 
million pounds, damages 
clothes. 

The paper gives a wealth of 
technical detail on the manga- 
nese-based catalyst -known as 
the Accelerator - which allows 
the new powder to wash at 
much lower temperatures. 
However, it does not address 
the two main charges levelled 
by Procter: that the Accelera- 
tor harms fabric, and that the 
manganese builds up in clo t he s 
over repeated washings. 


The magic ingredient in the 
new powder turns out to be a 
complex of manganese metal 
with a series of organic chemi- 
cals known as triazacyclonon- 
anes. It acts by speeding up the 
bleaching process which 
removes stains. 

The traditional bleach in 
detergents is hydrogen perox- 
ide. which Is slow to act at 
temperatures below 60®C. 
According to Unilever's 
researchers, powder containing 
the Accelerator is two to three 
times more effective at remov- 


ing tea stains from cloth 
at 40*C than the current 
generation of European pow- 
ders. 

Unilever said the article had 
been written before the row 
with Procter had erupted. "We 
felt it was not an article on the 
general use of detergents, but 
on the chemistry of manganese 
catalysts,” the company 
said. 

• Ronald van de Krol adds 
from Amsterdam: Unilever 
said sales of Omo Power in the 
Netherlands fell in late April 


after Procter’s claims were 
publicised. Sales have partly 
recovered after widespread 
newspaper advertising, but 
remain below the “excellent" 
results when the product was 
first launched. 

The company has asked 
Dutch shops to put stickers on 
Omo Power recommending it 
be used at 4Q*C or 60*0. Test 
results have shown that dam- 
age to clothing is highest when 
the detergent, designed for 
low temperatures. Is used at 
90*0. 


Keys budget 
confirms 
fiscal caution 

Tony Hawkins on 
spending plans 


Mark Suzman and 
new South Africa s 

A ny fears that South 
Africa’s business com- 
munity weight have had 
that spending on righting the 
wrongs of apartheid would 
dept the new government's 
commitment to fiscal discipline 
proved unfounded yesterday 
when the finance minister. Mr 
Derek Keys, presented the Afri- 
can National Congress-led gov- 
ernment’s first budget to par- 
liament 

Indeed, initial reaction m 
markets both at home and 
abroad was favourable, with 
business welcoming the bud- 
get's pro-investment thrust 
At the same time, an ANC 
election promise to abolish 
VAT on baric foodstuffs and 
drugs was ditched because the 
fiscal implications would have 
been “significant". In the 
words of one economist “it 
comes as a surprise to see an 
ANC government handing out 
goodies to the corporate sector 
but not to the masses”. 

Mr Keys managed to keep 
the projected budget deficit 
dose to the 6 per cent of gross 
domestic product limit agreed 
with the International Mone- 
tary Fond. 

He is forecasting a deficit of 
6.6 per cent of GDP for the 
financial year March 19S5 on 3 
par cent growth, or 6.4 per cent 
when the frill collection of a 
temporary income tax levy is 
taken into account This com- 
pares with 6.9 per cent last 
year and, with some analysts 
arguing that the revenue fore- 
casts are conservative, the 
actual deficit could well be 
lower. 

"The deficit’s still a little 
high, but the emphasis is on 
investment rather than con- 
sumption, which will help sus- 
tainable growth,” notes Mr 
Nick Barnardt, economist at 
broker Ed Hem Rudolph, 
Increases in social spending 
will be focused on the new gov- 
ernment’s Reconstruction and 
Development Programme 
which, as previously 
announced, will amount to 
R2£bn (£458m) for the current 
financial year. Expected future 
allocations come to R37.5bn 
over five years, although this 
figure is subject to change, 
depending on future economic 
growth and political pressures. 

Ministers defended the deci- 
sion not to abolish VAT on 
basic foods saying that tar- 
geted spending programmes 
such as free health care for 
infants and a school feeding 
scheme would do more to 
achieve poverty reduction than 
tax cuts. 

Particularly striking was the 
size of the costs of the transi- 
tion at nearly Rflm. This was 
largely due to greater than 
expected costs from the elec- 
tion the incorporation of 
former guerrillas into the 
army. To help finance this, rev- 
enue will increase 1LZ per emit 
in the current year, thanks pri- 
marily to a R2.6bn transition 
levy on individuals and compa- 
nies. 

Individuals Drill pay a 5 per 
cent surcharge on that portion 
of their income in excess of 
R50.000 a year. Companies will 
pay a similar 5 per cent sur- 
charge on their profits. 

Mr Keys and his deputy Mr 
Alec Erwin stressed that the 
transition surcharge would be 
temporary and that the govern- 
ment would not seek excuses 
to maintain it into the next 
financial year as a “wealth 


tax". Mr Keys’s also 

announced the appointment of 
an independent Tax Commis- 
sion to restructure the tax sys- 
tem, 

A cut to 35 per amt from 40 
per cent in the corporate tax 
rate is partly compensated by 
the increase to 25 per cent 
from 15 per cent in the 
sthcalled secondary tax payable 
on dividends. 

The net effect will be an 
increase of R2bn In direct 
taxes, partly offset by a RSOOm 
reduction in the Import sur- 
charge on capital and interme- 
diate goods. Mr Keys will also 
raise an extra R350m from 
increased “sin taxes" on alco- 
hol and tobacco. 

At 23.6 per cent of GDP. the 
tax take will be virtually the 
same as last year, reflecting an 
anticipated 3 per cent growth 
in output this year. Govern- 
ment spending at just more 
than 30 per cent of GDP, is 
forecast to be slightly lower 
than last year. 

After taking account of loan 
repayments, Pretoria faces a 
borrowing requirement of 
R36.Sbn (R33bn last year) 
almost all of which (R34.5bn) is 
to be funded from domestic 
borrowing, with Rl.Sbn raised 
offshore. Mr Keys said the 
breakdown between domestic 

South Africa 

Budget deficit as a % of OOP 



Beijing to double 
telecoms spending 


By Tony Walker ki Beijing 

China plans to spend 
Yuan450bn ($52bn) on. its tele- 
communications network to 
the year 2000, double previous 
estimates and including $7bn 
in funds from abroad. 

Western experts In Beijing 
said the jump in projected 
spending reflected a recogni- 
tion by the government of a 
need to accelerate provision of 
telecom m uni c ations services to 
match China’s commercial 
aspirations. 

Mr Wu Jichuan, minister of 
posts and telecommunications, 
said the funds would be used 
to instal sophisticated switch- 
ing equipment; provide 
2Q,OOOkm of optical cables and 
15,000km of digital microwave 
lines; build land satellite sta- 
tions and purchase sophisti- 
cated lette r sorting equipment 

Investment in telecommuni- 
cations has been rising rapidly 
In the past few years with 
expenditures increasing from 
Yn40.4hn in 1993 to this year’s 
budget of Yn53.6bn_ 

Mr Wu said a. "small 
amount” of the telacommtmi. 


1988 1991 1983 1096 
SouroKMMa&yainnanca 


and foreign borrowing would 
depend on market conditions 
and the outcome of South 
Africa’s quest for an interna- 
tional credit rating, expected 
by the end of the year. 

Social spending will absorb 
45 per cent of the budget, up 
from 44 per cent last year, with 
education accounting for 22 per 
cent, health 1<U and social 
security 9.3 per cent Within 
health, 25 per cent of the bud- 
get will now be diverted to pri- 
mary health care, which has 
become a focus of President 
Nelson Mandela's government. 

Also notable has been the 
increase in the defence budget 
which the ANC before the elec- 
tion had repeatedly identified 
as a sector from which much 
money could be diverted to 
development. However, this 
year's allocation, which has 
been swollen by transitional 
costs of incorporating former 
ANC guerrillas into the army, 
rose to R12.1bn from RIO.Gbn. 
The total share of defence has 
actually increased to 8.7 per 
cent of the budget from last 
year’s 8.1 per cent, but remains 
well down from 13.7 per cent In 
1990/91. 

Mr Keys' announcement that 
there would be no change to 
the current exchange control 
regulations, despite widespread 
speculation in business circles 
that some liberalisation was 
imminent, did not affect the 
markets and the rand 
remained steady. 


cations’ funding requirements 
would be covered by capital 
grants from the state The bulk 
would come from domestic and 
overseas loans, 

China plans to have UOm 
lines installed by 2000- This 
would be sufficient, according 
to telecommunications experts, 
to service 30 per cent of urban 
dwellers and 5 per cent of 
those living in rural areas. 

Mr Wu raid China would be 
the world's largest telecommu- 
nications market next century. 
"Foreign investment fa encour- 
aged in all areas except the 
direct management of telecom- 
munications businesses or £.■ 
gaining control of a company 
through buying stock,” Mr Wu 
told the official Chinn Daily. 

China is making determined 
effort to source most of its tele- 
communications requirements 
locally by 2000. 

Western experts say China 
will be “pretty well self-suffi- 
cient” in switching gear by the 
year 2000. They also expect the 
Chinese will seek more sophis- 
ticated items from the interna- 
tional market to build its elec- 
tronic “super highway”. 


( 


i. 


1 





FINANCIAL TIMES THURSDAY JUNE 23 1994 


5 

NEWS: WORLD TRADE ' 


Political jostling could lead to bruising transatlantic row 

Salinas joins race to head WTO 



Salinas (left) free-trader, Ruggiero (centre) uncertainty, Ricopero (right) backed by Brazil 


Singapore Airlines 
in $10.3bn order 


By Damian Fraser in Mexico 
City, Guy da JonquMres in 
London and Frances Williams 
in Geneva 

The race to head the World 
Trade Organisation, the suc- 
cessor to the General Agree- 
ment on Tariffs and Trade, has 
entered a new phase with the 
decision by President Carlos 
Salinas of Mexico formally to 
put his name forward. 

His nomination was con- 
firmed as it emerged that 
South Korea plans to become 
the first Asian country to pro- 
pose a candidate for the WTO. 
The name, believed to be that 
of an experienced trade policy- 
maker, will be announced in 
Seoul today. 

Meanwhile, a note of uncer- 
tainty was injected into the 
European Union's plans to 
hack Mr Renato Ruggiero, a 
former I talian trade minister, 
for the post, when officials in 
Brussels said he might not he 
formally endorsed by EU lead- 
ers at their Corfu summit this 
weekend. 

The officials said that 
though Mr Ruggiero remained 
the only declared European 
entrant, EU leaders were 
expected only to discuss his 
candidacy informally in Corfu. 
They would probably leave it 


to their foreign ministers to 
deal with the question next 
month. 

Mr Salinas* decision to enter 
the race comes earlier than 
expected, and almost two 
mnnth-g before the election in 
August which will choose his 
successor as president when he 
steps down after a six-year 
term in December. 

His nomination follows his 


broad endorsement at last 
week’s Ibero-American summit 
by the heads of all i-atin Amer- 
ican states except Brazil, 
which has proposed Mr Rubens 
Ricupero, its financr* minister, 
for the post “My personal feel- 
ing is that the US, as well as 
Canada and most Asian coun- 
tries, will support the Salinas 
candidacy," Mr Manuel TeDo, 
Mexico’s foreign minister, who 


is running President Salmas * 
WTO campaig n, said. 

Mr Salinas is the best known 
of three candidates to have 
declared so for. A committed 
free-trader, he was the driving 
force behind agreement on the 
North American Free Trade 
Area embracing the US, Can- 
ada and Mexico. While be is 
widely considered to have out- 
standing political credentials 


for the WTO post, his nomina- 
tion could further complicate a 
decision on a candidate. That 
likelihood would increase if he 
were actively supported by 
Washington, while the EU pro- 
moted Mr Ruggiero. 

In that event, some interna- 
tional trade officials believe, 
the outcome could be a bruis- 
ing transatlantic confronta- 
tion, into which other coun- 
tries could be drawn, or a 
stalemate which could open 
the way for a compromise can- 
didate. Furthermore, Mr Sali- 
nas' candidacy threatens to 
divide Latin America if Brazil 
s tands by its nomination of Mr 
Ricopero. Mr Tello has written 
to Mr Celso Amorim, Brazil’s 
foreign minister, oairing him to 
withdraw Mr RLoipero's name. 

He add Mr Amorim told him 
on May 30 that Brazil would 
reconsider its position if Mr 
Salinas chose to run, and b ad 
assured Mr Salinas Brazil 
would look favourably on the 
candidacy of the Mexican pres- 
ident. Since then, Brazil 
appears to have persuaded 
Argentina to retreat from the 
hacking it gave Mr Salinas at 
tha Ibero- American summit in 
favour of Mr Ricopero. Mexico 
says it has not been informed 
of any chang e in Argentina's 
stance. 


By Paid Betts, 

Aerospace Correspondent 

Singapore Airlines (SIA) 
yesterday placed one of the 
world's biggest aircraft orders 
- for 52 Boeing and Airbus 
large wide-body airliners, 
worth $10.3bn <£6.6Sbn). 

The order surpasses the 
$8.6bn order SIA placed in 1990 
and covers 22 Boeing 747-400 
jumbos worth $4.9bn and 30 
Airbus A340-300E long-range 
airliners worth $5.4bn. 

Both the US manufacturer 
and its European rival com- 
peted fiercely for the SIA order 
in view of the reluctance of 
airlines to commit themselves 
to significant new aircraft pur- 
chases. 

Earlier this year SIA told the 
bidders it planned to buy a 
combination of Boeing and Air- 
bus wide-body airliners, but it 
also suggested it would con- 
sider opting for just one air- 
craft type if it got a sufficiently 
attractive proposal, further 
intensifying the competition. 

However, SIA finally opted 
for a mix of 399-seat Boeing 
747s and 271-seat A34Qs, which 
it will deploy on long-haul 
routes that do not require the 
capacity of a 747. 

Ail three leading engine 


Lucas Aerospace. the 
aerospace arm of the UK engi- 
neering group, yesterday 
signed a 910m joint venture 
agreement with the Taikoo 
Aircraft Engineering Company 
(Taeco) based in Xiamen, on 
the south coast of China, to 
establish an aviation repair 
and overhaul facility for 

engines, flight control systems 
and other aerospace equip- 
ment 

The venture, 65 per cent 
owned by Lucas and 35 per 
cent by Taeco, will begin 
operations in early 1996. Taeco 
itself is a joint venture in 
which partners include Cathay 
Pacific, Singapore Airlines and 
Japan Airlines. 


manufacturers, Pratt & Whit- 
ney and General Electric of the 
US and Rolls-Royce of the UK. 
were competing to supply 
power equipment for the new 
SIA aircraft 

SIA selected Pratt & Whitney 
engines for its new 747s and 
CFM engines jointly developed 
by GE and Snecma of France 
for the AMOs. 

Although Rolls-Royce was 
regarded as an outsider in the 
SIA competition, the decision 
is a disappointment for the 


UK aero-engine manufacturer. 

Of the 22 Boeing 747 airlin- 
ers. li are on firm order and 
the rest on option. Of the 30 
A 340s 10 are on firm order and 
20 on option. The total value of 
the firm orders placed by SLA 
is $4.25bn. 

SIA said it had the flexibility 
to convert the options to other 
aircraft types. The Boeing 747- 
400s can be converted to any of 
the three models of the new 
Boeing 777 twin-engine wide- 
body aircraft, while the A340- 
300E options can be converted 
to the twin-engine A330 or 
another version of the A340. 

SIA. one of the world's most 
profitable airlines, expects to 
finance the orders from its 
cosh flow, but if necessary it 
will resort to borrowing or 
leasing. 

The new aircraft, to be deliv- 
ered from 1996 to 2003. will 
expand SIA’s fleet as well as 
replace older aircraft. SIA at 
present operates 63 aircraft 
and expects to see its fleet 
grow to 111 aircraft by 2003. 

“The latest order is an 
expression of our faith in the 
long-term health of the avia- 
tion industry and the promis- 
ing future of SLA." said Dr 
Cheong Choong Kong, the air- 
line's managing director. 


Quotas for EU 
TV programmes 
come under fire 


By Emma Tucker in Brussels 

Television quotas in European 
Union couutne? ^re damaging 
develo, ment of Europe's audio- 
visual sector and work against 
the interests ui the film pro- 
ducers. lights holders, artists 
and tecruiicians they are sup- 
posed to protect, according to a 
report published today. 

Prepaied by consultants Lon- 
don Economics on behalf of 
Sony Europe, the report argues 
that quin as are anti-competi- 
tive, hanuiui to the promotion 
of European relevisfon produc- 
tion, a drag on the creation of 
jobs and culturally ineffect i ve. 

Its findings come amid indi- 
cations from the European 
Commission that it 'f- willing 
to consider changes tu the 
existing broadcasting directive. 
This directive recommends 
that EU-based TV channels 
allot at least half their broad- 
casting time to European-made 
programmes “wherever practi- 
cable”, excluding time allotted 
to news, sports, games, adver- 
tising and teletext services. It 
also says at least 10 per emit of 
programming budgets should 
be devoted to European works 
from independent producers. 


Earlier this week Mr Jo&o de 
Deus Pinheiro, commissioner 
responsible for the audio-visual 
sector, said proposed changes 
to the directive would not be 
anti-American and quotas 
WOUld not be tightened. 

The existing quotas are 
intended to nurture Europe's 
broadcasting industry, and pro- 
tect social and cultural values 
from the strong competition of 
cheap US imports. 

But the report - based on 
studies of TV in France, Ger- 
many and the UK - says quo- 
tas are anti-competitive as they 
do not affect the programme 
output of well established 
channels such as the BBC, ZDF 
and TF1 (which already exceed 
quota requirements), but that 
of new entrants. 

“Quotas make it more diffi- 
cult for new entrants to com- 
pete, either by reducing the 
attractiveness of their sched- 
ules as a result of switching 
out of imported programming, 
or by forcing up their program- 
ming costs," says the report 

The Economic Impact of Tele- 
vision Quotas in the European 
Union, London Economics, 91 
New Cavendish Street, London, 
WIM7FS. 


Li presses 
for power 
progress 


Taiwan in 
aerospace 
talks 


China’s premier, Mr Li Peng, 
has urged speedier progress in 
negotiations on a $2bn (£1.3bn) 
power project in southern 
China involving GEC-Alsthom 
and Chinese partners, Tony 
Walker reports from Beijing. 

Lord Prior, GEC chairman, 
said in Beijing yesterday Mr Li 
had left no doubt he was anx- 
ious for the project to move 
ahead quickly because of elec- 
tricity supply problems. 

Lord Prior, who met Mr U 
on Tuesday, said he expected 
negotiations on the coal-fired 
Jiaxing plant in Zhqjiang prov- 
ince to finish next year, but 
financial discussions were 
proving complex. 

This will be GEC’s first 
power project in which it will 
take an equity stake through a 
build-operate-tran sfer (BOT) 
funding arrangement. 


Taiwan is renewing its efforts 
to rater the commercial aero- 
space business, after ea rlier 
partnership negotiations, first 
with McDonnell Douglas of the 
US. then with British Aero- 
space, collapsed, writes Paul 
Betts. Aerospace Correspon- 
dent 

A Taiwan aircraft company. 
Aero Industry Development 
Centre, said it was considering 
producing aircraft components 
for a new McDonnell Douglas 
100-seater twin engine air- 
craft the MD95. 

AIDC officials have held 
talks with the US company, 
which two years ago foiled to 
forge a $2bn (£1.3bn) commer- 
cial aerospace alliance with 
Taiwan. McDonnell Douglas 
was proposing to invite 10 
partners jointly to produce the 
new aircraft 


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FINANCIAL TIMES THURSDAY JUNE 23 1994 


THE AMERfCAS 


Greenspan seeks to 
allay inflation fear 

Fed chief aims to bolster confidence in dollar 


Risky strategy to fend off Republican challenge in elections 


Democrats hit at ‘religious right 


By Michael Prows* 
h Washington 

Mr Alan Greenspan, Federal 
Reserve chairman, yesterday 
sought to bolster international 
confidence in the dollar by 
arguing that many investors 
were too pessimistic about the 
outlook for US inflation. 

He said an increase In US 
long-term bond yields this year 
was to be expected given faster 
economic growth and an 
increase in global demand for 
capital But long-term rates 
were higher than they needed 
to be, because they embodied 
an excessive “inflation pre- 
mium". 

"I think that the inflation 
premium Is too hi g h , that nom- 
inal long-term rates. . . are 
hi ghw t h an they should be” 
and would decline if the Fed 
hpiri “inflatio n increasingly to 
a path of stable prices”. 

This situation was partly a 
lingering consequence of high 
US inflatio n in the 1970s which 
mwtermiTmd confidence in US 
monetary policy. The inflat ion 
premium in long rates 
reflected a “still sceptical 
world financial market view 
that American fiscal and mone- 
tary policies retain some infla- 
tion bias”. 

Speaking before the House 


budget committee, Mr Green- 
span did not comment directly 
an the AqTIft but tnstpad tried 
to address tears underlying 
heavy recent selling. 

There bad been some “recent 
firming of prices of some prod- 
ucts and raw materials". How- 
ever, “owing to constrained 
increases in unit labour costs, 
broad measures of producer 
prices for final goods have not 
generally reflected the 
increases in those input costa 
In addition, monetary and 
credit growth remains quite 
muted.” 

The outlook for inflation was 
thus “quite reasonable" and 
monetary policy was “dedi- 
cated to ensuring it remains 
that way”. Mr Greenspan gave 
no 3 i e u that present inflation- 
ary pressures were sufficiently 
intense to require another 
increase in short-term interest 
rates in the near fixture. Hie 
seemed, instead, inclined to 
wait and see what effect the 
rate increases already 
announced would have on 
prices and output 

Questioned about deficien- 
cies in the consumer price 
Index, he agreed that it over- 
stated the underlying rate of 
inflation for various te chnical 
reasons. 

The upward bias probably 


lay in the range of 0.5-1 .5 per- 
centage points, he 

This would imply that the 
“true” rate of inflation was 
closer to 2 per rant than nearly 
3 per cent as indicated by the 
official index. It would also 
imply that real short-term 
rates were higher than gener- 
ally assumed. 

Mr Greenspan cautioned 
against assuming certain levels 
of unemployment or industrial 
capacity utilisation would 
automatically trigger upward 
pressure on inflation. 

He said manufacturing 

i»M£MU!l ly iitfUsa>Hnr> > at a charip 

under S3 per cent was well 
above its historical norm. How- 
ever, “there is no cleaixnat trig- 
ger point for capacity utilisa- 
tion as a si gnal for emerging 
inflationary pressures”. 

He also reacted sceptically to 
claims by some economists 
that the US jobless rate, now 6 
per cent; was at or below the 
“natural rate” of unemploy- 
ment - a national threshold 
below which inflation is 
assumed to begin accelerating. 
The "enormous complexity and 
dynamism of our labour mar- 
kets” TWflrig such calculations 

TTnprai^i^ l 

He would watch carefully for 
signs of resource pressures in 
Hib labour market. 


Hopes rise on healthcare bill 


By George Graham fa Wa shington 

Democratic party organisers, searching 
ter ways of heading off a possible land- 
slide of defeats in November's congres- 
sional elections, have embarked on a 
strategy of attacking the rival Republi- 
can party as a captive of radical, reli- 
gious right-wingers- 

The plan is a risky one that could 
backfire in areas of the US such as the 
south and west, where conservatives 
and Christian evangelicals dominate 
the electorate. 

Many Democratic strategists, how- 
ever, believe religious extremism 
could become a “wedge issue" they can 
use to peel voters away from their oppo- 
nents - just what they need at a time 
when some of them fear their party 
could lose as many as 45 or 50 cf its 256 
seats in the 435-seat House of Represen- 
tatives, throwing control to the Republi- 
cans. 

Mr Vic Fazio, the California congress- 
man who chair s the Democratic con- 
gressional campaign committee, 
sketched his party's Hue of attack in a 
speech in Washington this week in 
which he said the Republican party was 
now dominated by a radical and intoler- 
ant fringe group. 

“The Republicans accept the rehgious 
right and their tactics at their own 
peril, for these activists are demanding 
their rightful seat at the table, and that 
is what the American people fear 
most," Mr Fazio maid. 

Democratic candidates in Penn- 
sylvania, California, Oregon, Missouri 
and Idaho have already launched 
attacks in a similar vein on their 
Republican opponents, calling them 
extremists and “mouthpieces for the 
radical right" 

The attacks have been fuelled in 
recent weeks by Virginia Republicans’ 
choice of Mr Oliver North, the cootro- 



Preskfent Bill Clinton, pictured addressing business leaders, is struggling to avoid 
Republican party victories in congressional elections in November <v* 


versdal Iran-Contra figure, to run for a 
Senate seat, by the Texas party's choice 
of a new chairman backed by religious 
groups, and by Minnesota Republicans’ 


selection of a Christian right candidate 
for governor in preference to the sitting 
Republican governor. 

Republican party officials and the 


Christian Coalition, a right-wing reli- 
gious organisation that has worked to 
get Republicans elected in many states, 
hit bads by accusing the Democrats of 
“Christian bashing" and religious big- 
otry. 

And some Democratic campaign man- 
agers cautioned that their party had to 
be very careful to focus its attacks on 
its opponents' positions on issues such 
as abortion, school syllabuses mid the 
position of women, and to avoid being 
seen as attacking people for their reli- 
gious beliefs. 

The charge of religious extremism 
could prove effective in reducing the 
electabHity of Republican candidates In 
suburban areas. 

But it is likely to be counterproduc- 
tive in rural districts, especially In the 
south, where as many as half of the 
voters may count themselves as born- 
again Christians. 

Mr Fazio said the 1990 redrawing of 
district boundaries had made many 
more districts competitive and reduced 
the Democrats’ incumbency advantage. 
In addition, of the 49 salts left open by 
a sitting member’s retirement, 30 are 
currently held by Democrats. 

“Of those 30 seats held by the 
Democrats, we classify only two ’likely 
Democratic’. The other 28 are extremely 
marginal and could go to either party 
on election day,” Mr Fazio said. 

Dissatisfaction with President 
Bill Clinton and continuing dis- 
trust of Washington incumbents also 
maifp the Democrats’ task more diffi- 
cult 

But while Republican party strate- 
gists are confident of being able to build 
on thii; to fashion a substantial victory 
in November's congressional elections, 
some warn that they will need to 
develop a much more positive message 
if they want to win back the White 
House in 1996. 


By George Graham 

Senator Daniel Patrick 
Moynihan yesterday promised 
that the Senate finance com- 
mittee he chairs would start 
detailed drafting work on a 
healthcare reform bill next 
Monday, possibly signalling 
that President Bill Clinton’s 
deadlocked reform initiative 
may at last be starting to move 
forward again. 

The finance committee has 
long been regarded as the key 
to the healthcare bflL Because 
the committee's membership of 
nine Republicans and 11 Demo- 
crats, including several cen- 
trist swing voters, closely mir- 


rors the political halamnn erf the 
full Senate, any bill that could 
not win the committee's back- 
ing is reckoned to have little 
chance of final passage. 

Mr Clinton and Mr Moyni- 
han have engaged in a 
tug-of-war over the last few 
days. The bookish New York 
senator has repeatedly insisted 
that legislation guaranteeing 
universal health, insurance cov- 
erage cannot pass Congress 
this year, while Mr Clinton has 
refused to back down on what 
he calls his single non-nego lia- 
ble demand. Mr Clinton this 
week begged business leaders 
not to walk away from the 
healthcare debate, and casti- 


gated rival reform plans that 
might end up covering only 91 
per cent of the population. 

“Unless we can provide cov- 
erage for every American in a 
reformed system which focuses 
on both quality and control of 
costs, the deficit will grow, 
your costs will continue to 
grow and unde rmine produc- 
tivity, and more and more 
Amer icans will lose tbeir cov- 
erage or be at risk,” Mr Clinton 
told the Business Roundtable, 
a gathering of the heads of 
some of the US’s largest com- 
panies. By agreeing to sched- 
ule a committee “mark-up” on 
Monday, Mr Moynihan seems 
to have blinked. 


Colombia poll victor denies drug cartel link 


By Sartta Kendal hi Bogota 

Colombia’s president-elect Mr Ernesto 
Samper yesterday vehemently denied 
accusations that his election campaig n 
bad benefited from contributions by the 
country’s Cali cocaine carteL 

A tape containing conversations 
allegedly detailing possible contribu- 
tions was released in Bogotd yesterday, 
only three days after the the election 
success of Mr Samper, a member of the 
r uling Liberal parly. 

The tape was released by Mr Sam- 
per’s defeated opponent, the Conserva- 


tive Mr Andres Pastrana. He was given 
the tape in Cali just before the election 
and passed it an to outgoing President 
C£sar Gaviria. The prosecutor general 
is investigating the case. 

Mr Samper said his campaig n trea- 
sury had not received any money “of 
doubtful origin" and offered his 
accounts to the prosecutor general for 

gramma tinn. Mr Past rana played the 

tape and said it could not in any way be 
interpreted as involving his own cam- 
paign. He asked Mr Samper to issue a 
statement saying he would resign as 
president-elect if It was shown the Lib- 


eral treasury had received money from 
drug traffickers. 

Three conversations are recorded an 
the tape, the first two allegedly between 
a journalist and a senior memb er of the 
Cali cartd. The third is between the 
same journalist and a man considered 
to be leader of the Cali group. 

Nicknames and elliptical references 
are used in the conversations as well as 
some direct mention of figures in the 
presidential campaign. At one point the 
journalist says multi-million dollar con- 
tributions are needed and the answer is: 
“Those are there. That is defined.” 


The context suggests tins refers to 
the Samper campaig n. However, tran- 
scripts of the tape released in the 
Bogota press also refer to a meeting 
with a member of Mr Pastrana’s cam- 
paign, and to contacts with independent 
law-and-order candidate Mr Miguel 
Maza Marquez, who later backed Air 
Samper after defeat in the first round. 

Diplomats have said they would be 
surprised if some (hug money bod not 
oxtered the campaig n of both the run- 
off candidates, though they stressed 
this could have occurred without the 
candidates' knowledge. 


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NEWS: THE AMERICAS 


Addiction or taste in battle for smokers’ allegiance 


By Richard Tomkins in New York 

A re US tobacco companies 
deliberately manipulating 
the amnimt of nicotine in 
cigarettes to keep the nation’s 46m 
smokers addicted? Damning 
evidence presented to Congress 
this week seemed to suggest as 
much. 

On Tuesday, a House of Represen- 
tatives subcommittee heard allega- 
tions that Brown & Williamson 
Tobacco, a US subsidiary of 
Britain's BAT Industries, had 
secretly developed a genetically 
engineered tobacco called Y-l that 
contained more than twice the 
nmnnn* of nicotine found in normal 
tobacco plants. 

Mr David Kessler, commissioner 
of the US Food and Drug Adminis- 
tration, told the committee that 
B&W had earlier denied breeding 
tobacco plants for high or low nico- 
tine levels: yet the company bad 
several million pounds of Y-l 
tobacco stored in US warehouses 
and had been using it in 
five domestic brands of 
cigarettes. 

Mr Kessler’s purpose in present 
ing the evidence was to bolster his 
case for bringing cigarettes under 
his agency's control Previously he 
has threatened to regulate ciga- 
rettes as drugs if it could be shown 


that manufacturers intend people to 
buy them to satisfy a nicotine 
addiction. At the hearing on Tues- 
day he said there was no longer any 
doubt that the tobacco industry was 
manipulating and controlling 
nicotine levels- in its 
products. 

B&W win reply to the allegations 
at a further hearing today, but ft 
has already accused Mr Kessler of 
blowing the issue out of proportion. 
There was nothing secret about Y-Z. 
it said: it was Just one of a variety 
of domestic and foreign tobaccos 
used by the company to provide the 
unique “recipe" of ingredients that 
went into each brand. 

In reality, the history of Y-l is 
almost an irrelevance. At issue are 
two questions: first, whether ciga- 
rettes are addictive, and second, 
whether manufacturers intend 
them to be addictive. If the answer 
to both questions is yes, the FDA 
may be able to bring them under its 
jurisdiction as a drug. 

That manufacturers control the 
levels of nicotine in their cigarettes 
is not in doubt In the 1940s. nico- 
tine and tar occurred in cigarettes 
at more than three times today's 
levels, but manufacturers gradually 
reduced them through refinements 
in the processing technique to 
satisfy demand for smoother and 
Tighter cigarettes. 


Anti-smoking campaigners, health 
officials and industry experts in toe 
UK were yesterday in broad agree- 
ment that the world beyond the US 
had little to fear from toe Y-l high- 
nicotine tobacco, toe commercial 
use of which was revealed this 
week by Mr David Kessler, head of 
toe US Food and Drug Administra- 
tion, reports Jimmy Burns. 

Mr Stephen Woodward, deputy 
director of ASH, the anti-smoking 
lobby said: “Our experience of 
tobacco companies is that any new 
product that is judged to give a 
competitive advantage, very 
quickly spreads throughout the 
industry”. 

However, ASH said that it had no 
evidence to contradict toe assertion 
by BAT Industries, parent of 
Brown & Williamson Tobacco of 
the US which developed cigarettes 
containing the Y-l strain, that 


these had been largely withdrawn 
after proving unpopular with con- 
sumers. 

Mr Woodward said he did not 
believe that Y-l has been widely 
used on unsuspecting guinea pigs 
in the Third World. Tobacco compa- 
nies, he pointed out, have no prob- 
lems in toe Third World marketing 
high-nicotine high-tar cigarettes 
without having to resort to new 
technologies. 

BQs views were echoed by Mr 
Nicholas Wall, a professor to envi- 
ronmental protective medicine at 
St Bartholomew’s Hospital, Lon- 
don. 

“I can’t see who would want to 
go through all the trouble and 
expense [to the Third World where] 
there is less reason to use high-nic- 
otine strains of tobacco because 
there has been less public pressure 
to reduce tar yields," he said. 



Kessler: accused of blowing toe issue out of proportion 


So why not eliminate nicotine 
altogether? Because, say manufac- 
turers, it is an essential contributor 
to cigarette flavour. When nicotine 
levels to cigarettes fall below a cer- 
tain point, smokers no longer enjoy 
fliftwi. So companies adjust the nico- 
tine level and other flavourenhanc- 
ing ingredients of particular 
brand by usin g blends of tobacco 
leaves. “Y-l was a blending toed for 


flavour,” B&W said. 

Mr Walker Meniman, vice presi- 
dent of the Tobacco Institute, the 
industry’s trade association, said 
yesterday that- c onsum er prpfar pnrg 
was the specific reason for having a 
particular level of tar and nicotine 
in any particular cigarette. One or 
two US brands had almost insignifi- 
cant levels of nj ppHne, he said , but 
commanded very low market share. 


and earlier no-nicotine brands 
had failed through lack of 
demand. 

Mr Kessler has recently backed 
oft from earlier suggestions that 
tobacco manufacturers deliberately 
“spike” their products to keep 
smokers addicted, but has more 
recently said it is s uffici ent to show 
that cigarette manufacturers have 
the ability to control the level of 


nicotine in their products and have 
allowed it to remain at addictive 
levels. 

The industry position is that ciga- 
rettes are not a drug as defined in 
the 1938 Federal Food, Drug and 
Cosmetic Act because they “do not 
piiwid to affect the structure or any 
function of the body”. In any event, 
manufacturers say, smoking cannot 
be addictive because more than half 


of US citizens today who have ever 
smoked have quit - more than 90 
per cent of them without profes- 
sional help. , , 

Mr Kessler’s ultimate objective 
annears to be to bring the tobacco 
industry under his agency’s control 
so that he can force manufacturers 
gradually to reduce levels of nico- 
tine in their products ami w wean 
smokers away from the habtt. 

Critics say a possible risk in swfa 
a nolicy is that it could lead smok- 
ers to smoke more cigarettes to 
compensate for the loss of nicotine 
intake, so increasing their exposure 
to the carcinogenic ingredients of 
cigarettes without hurting industry 

profits. ... 

On past form, however, it will be 
a long time before things get this 
far. If the FDA moved to take con- 
trol of the industry, the tobacco 
manufacturers would undoubtedly 
f-aire the agency to court. Armed 
with vast resources of cash and 
extremely experienced lawyers, 
they would stand a good chance of 
emerging unscathed. 

Until now. US courts have taken 
the view that the hazards associ- 
ated with smoking are so well 
known that anybody taking up the 
habit assumes all the risks 
involved. In the eyes of the courts, 
the industry, it seems, is bla me less: 
it has never lost a ease yet. 


WORLD CUP 


Testing time for middle men 


Peter Berlin in 
San Francisco 
on the role of 
the referees 



Tucked away in the 
corners of US book- 
shops is a depress- 
ing collection of 
World Cup titles. 
There are shelves piled with begin- 
ners’ guides that explain the 
world’s game to the language of 
John and Janet 

One of the better publications is 
by Pete Davies, a British author, 
called Twenty-Two Foreigners in 
Fumty Shorts. Any American who 
has taken an interest to the 
matches so far will know that 
Davies gave his book the wrong 
title. This is a game for 25 foreign- 
os in funny shorts. 

Flfa, world soccer’s governing 
body, has changed the officials’ uni- 
forms from dull black to eyecatch- 
ing patterns in yellow and red. Flfa 
wants fats of red and yellow from 
the referees, and has given instruc- 
tions that were bound to increase 
the attention focused on them. 

Joao Havelange, Fife’s president, 
announced before the competition 
that any referee who did not 6how a 
red card - and thus expel a player 
from the game - for a tackle from 
behind would find himself on the 
first flight home. 

There have been enough nasty 
tackles from behind to fill a seg- 
ment which ESPN, the US sports 
network, has been showing at half- 
time during matches, but, after the 
first five days, only Miguel Nadal of 
Spain had been sent off for such an 
offence, and no referees had been 
spotted at the airport 

One Fife official told me that Hav- 
elange had been speaking figura- 
tively. But this did not mean that 
the threat lacked bite. Referees who 
did not follow Flfa directives would 
not be selected to referee matches 
In the later rounds. 

It was even possible that a referee 
who especially upset the referees’ 
committee might be pulled from a 
first-round match he had already 
been assigned to. In other words, 
referees who are seen to make mis- 
takes cannot expect support from 
Fifa; instead, they will get a public 
humiliation designed to make dear 
that they, not Fife, are at fault 

In truth. Flfa wants black and 
white (and yellow and red) where 
there is often only grey. When top 
athletes tangle at high speed, with 
arms and legs ah over the place, it 
is often impossible, even with slcrw- 
motion replays, to determine 



whether the tackier touched the 
hall or the opponent first 
And players exploit that doubt 
Defenders often try to make sore 
they connect with ball and oppo- 
nent; the attacker’s first reaction is 
often to fall to the ground as if shot. 
Understandably, referees have been 
inconsistent 

A merican newspapers, which 
bow to no-one in the art of 
second-guessing referees, ran 
pictures showing that Thomas 
Dooley of the US played the ball in 
the crucial tackle from behind in 
the US-Switzerland game. The ref- 
eree gave a free kick but did not 
send Dooley off. From the kick, 
Switzerland’s Georges Bregy sooted. 

Unsurprisingly, Fifa offered a 
clarification. Sepp Blatter, Fifa’s 
general-secretary, said: “If the tack- 
ling player does not touch the ball 
then he should be sent off. If he 
takes the ball away then obviously 
he has played the balL” 
Nevertheless, waving a red card 
is stm a drastic action from which 
referees flinch. Khalil Azmi, the 
Moroccan goalkeeper, escaped 
unpunished after a frontal assault 
on Belgium’s Josip Weber which 
saved a certain goal Azmi had the 
presence of mind to stay down 
injured and have himself carried 


from the field. It takes a degree of 
courage to wave a red card at a man 
on a stretcher. 

to general, referees have appreci- 
ated a little help. Marco Etcbeverry 
of Bolivia barely poked Lothar Mat- 
thaus to the bottom with the toe of 
his boot But the German captain, 
always willing to guide the referee, 
turned on Etcbeverry to indignant 
fury. Result: a red card. The Rus- 
sians pushed and wrestled the Bra- 
zilians all afternoon; it was only 
when they sent their opponents fly- 
ing through the air that the referee. 
An Lan Kim Lee Chong of Mauri- 
tius, reacted. 

Referees have been inconsistent 
to handling the tackle from behind, 
and have largely refused to inter- 
fere when attackers back into 
defenders and defenders shove 
back. But they have been refresh- 
ingly steady on a couple of modem 
soccer’s nastier fouls. 

A glimpse of raised studs when 
the ball Is on the ground, or raised 
elbows when the ball Is to the air, 
inevitably attract a penalty. The lat- 
ter has not been a problem so far 
unlike their British counterparts, 
most players at the finals do not 

seem to believe that they must raise 
and lower their elbows vigorously 
to jump for headers. 

Referees have also responded 


with a will to Fifa’s demand for 
increased productivity. By Tuesday 
evening, 47 yellow cards and two 
red cards had been waved at players 
in the first 13 matches, up from 30 
yellow and four red four years ago. 

And yet the soccer has been far 
superior. There have been a few 
cynical fouls, but games have not 
been dominated by foul-minded 
defenders. On the other hand it is 
not clear yet whether the blizzard of 
yellow cards has helped produce the 
sparkling play, or resulted from 
over-reaction to what foaling there 
has been. 

Blatter is to no doubt where the 
credit belongs: “It is such a plea- 
sure, after what we have done to 
improve refereeing over the past 
three years, to see how good the 
refereeing is here." 

However, nearly 20 per cent of 
first-choice players are one mis-step 
away from a suspension. If Fifa’s 
decision to ban Etcheverry and 
Nadal for two matches, instead of 
the more usual one, is a sign of 
intent, many teawic could find 
themselves with gaps to their line- 
ups to the knock-out stages. 

Since most of the missing players 
will he defenders, that will tip the 
balance even more towards attack- 
ers. No doubt that is what Fifa and 
the watching bflfions want 


Norway braced for Italian 
backlash in toughest group 


Erland Johnsen and the rest of 
Norway’s defence are bracing 
themselves for an Italian ha**i**h 
to their World Cep Group E clash 
in New Jersey today. “E" is con- 
sidered the toughest of the six 
first-round groups. Qualifying 
matches for the second round con- 
tinue for another week. 

“The Irish did us a favour by 
showing us that it is possible to 
play our way to this beat but they 
didn’t do us a favour by beating 
Italy,” said the Chelsea ddender. 
Ireland beat Italy 1-0 last week- 
end. 

“The pressur e is now on Italy 
and that’s a problem for ns, hav- 
ing to meet them next It’s not 
going to be easy because they will 
be desperate to win,” he said. 

The Italians are seeking more 
than the three points that will put 
than back into group contention 
and restore their battered reputa- 
tion. “We have to play like we’re 
convinced we’ll win, 4 said Italian 
midfielder Demetrio Alberthii. 
“We let Ireland dictate the game 
to ns when It should have been the 
other way round.” 

In the Italians’ favour is that 
Norway felt the strain of their late 
win over Mexico. “We were all 
knackered after the game against 
Mexico,” said Johnsen. “These 
conditions are a definite advan- 
tage to the South American and 

Tjrtin teams. " 

Ireland remain favourites to win 
the group. Johnsen said: Tm sure 
Ireland will beat Mexico on Fri- 
day. They are very similar to ns 
and Mexico will find it hard to 
play against that style. They don’t 
like the muscular defensive play. 
You have to keep your concentra- 
tion all the time. They showed 
with a couple of late chances that 
if yon make a mistake they might 
punish you.” 

Striker Roberto Baggio was 
declared fit to play against Nor- 
way, having suffered an inflamed 
right Achilles tendon. Bat out for 
the game, and possibly the tourna- 
ment, is mid-fielder Alberigo 
Evani, who strained his right teg 
in training. The injury appeared 
to be serious, team doctors said. 

S Korean shipyard 
set for stoppage 

Thousands of workers at the 
world’s largest shipyard, to South 
Korea, plan to go on “temporary 
strike” during today’s Group C 
match between South Korea and 
Bolivia in Boston. The labour 
union at Hyundai Heavy Indus- 
tries in Ulsan, south-east of Seoul, 


said it plans to call a three-hour 
stoppage to enable its 25,000 mem- 
bers to watch the match. 

South Korea need to beat the 
Bolivians if they are to reach the 
second round for the first time. 
They drew 2-2 with Spain last 
weekend with two goals to the last 
six minutes. 

Hyundai union leaders the 
plan for a temporary strike was 
part of their efforts to put pres- 
sure on their management, which 
had been unco-operative In 
months of wage negotiations. The 
union wants 13 per cent more; the 
company is offering 5 par cent 
Hyundai’s management called the 
planned strike illegal. 

Prisoners in Bangladesh have 
already pulled the same stunt - 
going on hunger strike before 
relenting and agreeing to resume 
eating when their custodians 
agreed to let them watch World 
Cop matches five. 

Easy victory for 
stylish Nigerians 

A partisan Cotton Bowl crowd in 
Dallas cheered every Nigerian 
move throughout an easy Group D 
3-0 victory over Bulgaria on Tues- 
day. 

“I didn’t believe It when I saw 
the crowd,” said Rashidi Yekini, 
who scored Nigeria’s first goaL “It 
was our first time in the World 
Cup and everybody loved us. 
That’s why we had more confi- 
dence.” 

As expected, the Nigerians, Afri- 
can champions, showed an always- 
attacking approach that the crowd 
enjoyed. “I told my boys they 
want entertainment to the USA - 
good football with action,” Niger- 
ian coach Clemence W ester hof 
said. “We are not afraid. We came 
from far away to show that 
Nigeria can play footbalL” 

US coach banks on 
high-tech approach 

It may not guarantee success, but 
the US team has an array of high- 
tech gadgets to help them assess 
rivals teams. Coach Bora Mlluti- 
novic’s portable fax marfiinp runs 
almost non-stop, his tape 
machines bom and the man brings 
a steady flow of videotapes and 
publications. 

The US team played Colombia 
last night in Los Angeles in their 
second Group A game. It is feared 
that US Interest in the tournament 
will slump if the home twain is 
brusquely bundled out 


■ Standings 


GROUP A 


p 

w 

0 

L 

p» 

Romania 

1 

1 

0 

0 

3 

Swteertaml 

1 

0 

1 

D 

1 

USA 

1 

0 

1 

0 

1 

Colombia 

1 

0 

0 

1 

0 

GROUPS 


p 

w 

□ 

L 

Pts 

Brazil 

1 

1 

0 

0 

3 

Carnarvon 

t 

0 

1 

0 

1 

Swtxton 

1 

0 

1 

0 

1 

Russia 

1 

0 

0 

1 

O 

GROUP C 


p 

w 

0 

L 

Pts 

Germany 

2 

1 

1 

0 

4 

spam 

2 

0 

2 

0 

2 

S. Korea 

1 

0 

1 

0 

1 

Bomb 

1 

0 

0 

1 

0 

GROUP D 


p 

w 

0 

L 

p» 

Atgntira 

T 

1 

0 

0 

3 

MfidUl 

1 

1 

0 

0 

3 

Bidgvte 

1 

0 

0 

1 

0 

Grama 

1 

0 

0 

1 

0 

GROUP E 


P 

w 

D 

L 

Pts 

Ireland 

1 

1 

0 

0 

3 

Norway 

1 

t 

0 

0 

3 

Italy 

1 

0 

0 

1 

0 

Mwdcc 

GROUP F 

1 

0 

0 

1 

0 


P 

w 

D 

L 

Pis 

Hotand 

1 

1 

0 

0 

3 

BsgJum 


\ 

0 

0 

3 

Saudi Arabia 

1 

0 

0 

1 

0 

Morocco 

■ Today's? 

1 

an 

0 

— 

0 

1 

0 


GROUP E 

Italy v» Norway 
Nmn Jsnoy &OO pm SSI) 

GROUP C 

South Koreo vs BahU a 
Bost on (1200 am Fit. BSTJ 


By last Sunday night the US 
players were reviewing computer- 
generated assess m ents of the pre- 
vious day’s 1-1 draw against Swit- 
zerland. The coach knows how 
many times opposing players went 
right, how many times left - and 
how many times straight up the 
middle. 

Each US player gets an indivi- 
dualised videotape before each 
game, analysing opponents’ styles 
and habits. Miluttoovic has three 
videotape decks hi his hotel room 
to prepare the materials. “In 1990 , 
we just looked at videotapes of oar 
opponents’ games,” (JS defender 
Paul Caligiuri says. “This is much 
more sophisticated.” 

Quarter of Germany 
watches Spain game 

In Germany, an estimated 25 per 
cent of the 80m population tuned 
in on Tuesday evening for the 
defending champions’ l-i draw 
with Spain. The ZDF network said 
20j£m viewers were ready at 10pm 
to watch the start of the game. 

The draw gave Germany which 
beat Bolivia in its opener, four 
points to Group C and an almost 
sure passage to the second round. 


an 


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four W or Id Cups. won three 
times and scored 
twelve goals. What more do 

vou have to do to vet 

' •«_ 

into a World Cup ground? 


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FINANCIAL TIMES THURSDAY 


JUNE 23 1994 


NEWS: UK 


Treasury rules out quick interest rate rise 


By Phfflp Coggan, 

Economics Correspondent 

The “bias towards easing” in UK 
monetary policy appears to be over 
but an immediate increase in interest 
rates is unlikely, the Treasury dis- 
closed yesterday. 

Minutes of the monthly monetary 
meeting, held on May 4, show that Mr 
K enneth Clarke, the chancellor of the 
exchequer and Mr Eddie George, the 
governor of the Bank of En gland 
agreed that It was not appropriate to 
change interest rates at the moment” 

When the first set of minutes was 
published, in April, it was revealed 


that the chancellor and governor had 
adopted a "Mas towards easing” in 
monetary policy, indicating that far- 
ther rate cuts might be matin got In 
the May meeting, the two men 
s eem ed to move towards a more neu- 
tral policy. 

The minutes show Mr George say- 
ing that *B now seemed less likely 
(although stOl not impossible) that 
inter est rates would need to be cut 
further in order to prevent an 
Increase in spare capacity. There was 
no longer a clear bias towards easing 
policy, but also no case (at least far 
the present) for a ti ghtening either.” 
The chawcflliw is then described as 


being "in broad agreement with the 
governor’s assessment.” 

Since the meeting was held, the 
governor indicated in the annnai 
M an si on House speech that a pre- 
emptive rise in interest rates, - 
designed to prevent inflationary pres- 
sures from building, might be neces- 
sary at some point 

Mr Simon Briscoe, UK economist at 
S G Warburg, paid that “the condi- 
tions are not yet in place for a rate 
rise. To get one in the next three to 
four months, we need something fun- 
damental to change in the economy.” 

The May minutes show that while 
the governor and chancellor are 


mainly in agreement on the strength 
of the economy, they still have some 
differences of view on inflation. 

Mr George said that "while inflation 
was likely, to remain subdued in the 
near term, there were some risks sur- 
rounding the prospect farther a he ad." 
He pointed to strong monetary 
growth, a build-up of inflationary 
expectations and the rise in average 
earnings as three indicators of infla- 
tionary risk. 

But while the governor said that 
the "increase (In average earnings) 
had occurred both sooner and faster 
than anticipa ted", the chancellor said 
that "the rise in earnings growth in 


recent months had been anticipated 
and reflected to some degree higher 
bon us payments and overtime;” Both 
agreed that the earnings data had to 
be carefully m o ni to red. 

The two men concluded that there 
was little evidence, to date, that that 
tax increases had derailed the recov- 
ery. 

Kb- Clarke said "it would not be 
surprising if there was some 
short-term reaction to the tax 
changes, with consumer spending 
pausing temporarily before it started 
to move ahead again. But at this stage 
there were no signs of a sharp fall in 
consumption.'’ 


Row over government role in rail strike 


By Kevin Brown 
and Robert Taylor 

The row over the extent of 
government intervention in 
the rail dispute grew yesterday 
as the opposition Labour party 
claimed that transport secre- 
tary John MacGregor had 
threatened to veto any pay 
deal for signalling staff that 
breached the government’s 
public sector pay bill freeze. 

The claim followed a BBC 
radio interview in which Mr 
MacGregor appeared to agree 
with the interviewer’s asser- 
tion that he would block any 
deal he did not HVa- 
Mr Frank Dobson, Labour’s 
transport spokesman said Mr 
MacGregor had made an 
"unhelpful” intervention, 
which made negotiations of a 
settlement “much more diffi- 
cult". 

Aides of Mr MacGregor arid 
that he never used the word 
veto and that his remarks 
made in a BBC radio intervie w 
had been misinterpreted. The 
row was dfsmiwwd by a Down- 
ing Street nfHriai as a media 
invention. 

The transport secretary said 
that the government was "ask- 
ing Rafltrack to negotiate on 
the basis of the approach to 
public sector pay that the 
chancellor set last autumn”. 

He agreed he was in regular 
contact with Hailtrack chair- 
man Bob Horton. 

Mr Barton said that he was 
being driven by a “business 
and commercial imperative" 
and he would not "buy peace” 
to end the Bi gnaTKng dispute. 

About 1,000 trains ran yester- 
day despite the strike com- 


The second one day strike og, British Rail hit visitors too - this unhappy Swiss traveller was stuck in London en route for Edinburgh 


pared with a normal service of 
15,000 though they carried few 
passengers who pfflw did not 
know the services were run- 
ning or feared they might not 
be able to use them to return 
home. 

The BMTrafl union, said yes- 
terday it was aia rmad about 


reports that tmqnaijfiwi man- 
agers had been used to operate 
the si gnal boxes during yester- 
day’s 24-hour stoppage. 

Mr Jimmy Knapp , the 
union’s general secretary has 
written to the Chief Inspectin' 
of Railways, urging him to 
investigate the allegations. 


Citing pxampten he said that 
"the possible disastrous impli- 
cations of such practices are 
quite apparent and need no 
explanation". 

*T am extremely cnnrAm«f 
that in various parts of the 
country signalboxes and sig- 
nalling centres are being oper- 


ated by persons who have not 
been properly trained”, com- 
plained Mr Knapp. 

The RMT, which holds its 
annual conference in Liverpool 
next week, has announced two 
further 24 hour strikes for next 
Wednesday June 29. and for 
another on July 6. 


CD pricing probe to clear music industry 


By Michael Skapkiker, 

Leisure Industries 
Correspondent 

The Monopolies and Mergers 
C ommi ssion is expected today 
to blear the music industry of 
over-charging consumers for 
compact di«y, 

The commission is also 
expected to say tha t although a 
small group of retailers 
accounts for a substantial 
share of the market, this does 
not operate against the public 


interest. The commission 
report will be the second 
important victory for the 
music industry this week. On 
Tuesday, the High Court 
rejected a bid by George Mich- 
ael, the pop star, to have his 
recording contract with Sony 
declared unenforceable. 

The music industry feared 
that if George Michael had 
won, other artists would have 
attempted to change their con- 
tracts. 

The commission's decision 


on CD prices was widely expec- 
ted, but retailers were uncer- 
tain whether or not action 
would be recommended 
against them. A finding that 
retainers are acting properly in 
se llin g CDs will come as a 
relief to the companies con- 
cerned. 

A report last year from the 
cross-party national heritage 
committee said WJET.Smith, 
Our Price. Virgin, Woolworth 
and HMV together controlled 
54 per cent of music stores. 


The MMC’s inquiry, 
la unched last year, is expected 
to find that UK compact disc 
prices are the lowest in 
Europe. 

Altho u g h CDa cost more in 
the UK than in the US, the 
commission is expected to con- 
clude that this is in line with 
differences in the price of other 
consumer goods. 

The commission’s findings 
are expected to confcratfict the 
nationa l heritage committee’s 
report last year. 


The committee, under the 
chairmanship of Mr Gerald 
Kaufman, the Labour MP, 
severely criticised both record 
companies and retailers for 
charging excessively high 
prices for CDs. 

The committee said that 
while it had "found no evi- 
dence of formal or overt collu- 
sion, it considered that the 
major record companies and 
the retailers are effectively car- 
tels, and indeed partly inter- 
locking cartels.” 


Deadline 
set by 
City 

regulator 

By ABaon Smith 


The Securities and 
Investments Board, the City's 
chief regulator, yesterday set a 
deadline of October 1 for inde- 
pendent financial advisers to 
decide whether to apply for 
membership of the new Per- 
sonal Investment Authority. 

The move gives fresh Impe- 
tus to the PLA, which will be 
the watchdog for Britain's pri- 
vate investors, and came as the 
SIB gave the go-ahead for the 
body to begin operation in mid- 
July. 

Yesterday’s moves bring to a 
dose a long debate over the 
controversial new watchdog. 

The SIB’S decision to set a 
firm deadline just over three 
months away will force inde- 
pendent financial advisers to 
apply for membership of the 
PlA, seek direct regulation by 
the SOB, or leave the invest- 
ment business by the end of 
the year. 

Fimbra, the existing regula- 
tor for independent financial 
advisers, and Lautro. the exist- 
ing regulator for the life insur- 
ance industry, are intended to 
disappear altogether in Octo- 
ber 1995. 

Mr Andrew Large, SIB chair- 
man, yesterday called on finan- 
cial advisers and life compa- 
nies which had not applied to 
the PIA, to do so immediately. 

Moreo ver , the trade asaoda- /. 
tions for independent financial ’ 
advisers, which had previously 
urged their members to delay 
applications, now say they 
should not wait any longer. 
They had previously been 
among the most vocal oppo- 
nents of the PIA, claiming that 
new regulatory arrangements 
reflected a "hidden agenda" to 
cut the numbers of indepen- 
dent financial advisers. 

As it completed the formal 
process of approving the PIA 
as a suitable regulator, the SIB 
e mp ha s ised it would exercise 


dose supervision to see that 
the watchdog delivered higher 
standards of investor protec- 
tion t ha n existing arrange- 
ments had done. 


- If your corporation is 
looking for a foothold in Ger- 
many or intends to broaden 
its existing base by an acquisi- 
tion, we can assist in search, 
approach and negotiation. 

As our domestic clients 
are usually entrepreneurs, 
proprietors or shareholders 
of privately-owned German 
companies, we are well ac- 
quainted with their mentali- 
ty- We are sensitive to this 
when making approaches 
and during negotiation and 
valuation. 

If local competence is 
needed to realize yonr acqui- 
sition goals in Germany suc- 
cessfully, please contact us 
for further information. 






i 




J^NANCtAL TIMES THURSDAY JUNE 23 1994 


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NEWS: UK 


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T ougher code for regional aid 


By Chris Tighe 

The government is tubing a 
tougher line on applications 
for regional aid from inward 
investors considering England 
as a location and indigenous 
companies wanting to expand. 

The Department of Trade 
mid Industry yesterday con- 
firmed that it is now scrutinis- 
ing applications for Regional 
Selective Assistance in 
En g l and more stringently, as 
part of the constraints on pub- 
lic spending 

The tightening up on the 
allocation of RSA grants has 
not been publicly announced 
but its effect is arousing con- 
cern among many of those 
dealing with inward invest- 
ment, an internationally 
highly competitive field. 

Teachers 
‘should 
learn from 
Europe’ 

England’s classroom teachers 
need to learn from colleagues 
in the rest of Europe if the 
country is to compete effec- 
tively, MPs heard yesterday. 

Mixed-ability teaching and 
low expectations are allowing 
the least aide pupils on tins 
side of tile Channel to slip far- 
ther behind, with the Govern- 
ment’s education reforms not 
going for enough to redress 
the balance, it was stated. 

The evidence to the Com- 
mons’ education select com- 
mittee came from Ur Stg 
Prais, of the National Institute 
of Economic and Social 
Research, and Mr Roger Lux- 
ton, principal inspector from 
the London Borough of Bar- 
king and Dagenham. 

They reported research into 
schools in France. Germany, 
Holland and Switzerland, 
where they found less differ- 
ence between inner-city and 
other schools, and between 
children of different back- 
grounds within schools. 

They blamed clear differ- 
ences in teaching practices 
and organisation. 

Continental teachers saw 
their role as ensuring that vir- 
tually all pupils readied the 
standard set for each year 
group, they said in written evi- 
dence. In contrast, English 
teachers tried to cater for the 
differing abilities of individual 
pupils, and raided up by rein- 
forcing them. 

“The better provision made 
in a great variety of aspects of 
Continental schooling - espe- 
cially for those who are low 
attainers - leads to higher 
average standards and less 
variability,'' they said. 

They did not advocate 
wholesale importation of Con- 
tinental teaching practices, 
but said that many aspects of 
schooling in England “need to 
be reconsidered.’’ 


Mr Tim Salisbury, industry 
minister, has been lobbied by 
development agencies and 
local authorities worried that 
the tougher approach will dis- 
advantage the English regions 
in their pursuit of economic 
regeneration, as mobile inward 
investors shop around interna- 
tionally for the best deal. 

“If you aren’t in the shop 
window, they won't mmo in 
and talk,” warned one develop- 
ment agency boss yesterday. 

Another said; “Securing 
inward investment is highly 
competitive, a grant regime is 
a major element in being able 
to secure projects." RSA alloca- 
tions, he added, also had a 
great bearing on the competi- 
tive edge in internationa l mar - 

kets of indigenous English 
companies seeking grant 


aid for capital investment. 

Mr Sainsbury’s response to 
the complaints baa been that 
since the recession is lifting, 
more projects are now bidding 
for funding and that more 
areas of England are compet- 
ing, following last Sommer's 
redrawing of the Assisted 
Areas Map. 

The DTI said yesterday this 
year's RSA budget for England 
- which includes an undis- 
closed number Of nmrnnitmant-S 
made in previous years - is 
£102m, compared with lSS3ft’s 
£3fl.2m. “There's no less money 
available overall, bat we’re 
being increasingly careful 
about who gets the money, ” 
said a spokeswoman. 

But some economic develop- 
ment bodies are fearful the 
government’s belief that the 



The British Horse Raring Board altered its rules to let racehorse owners seD advertising space on 
the sleeves and collars of jockeys’ sSks. The board, the governing body for horse raring in Britain, 
will also allow advertising on paddock blankets and the backs of stable lads’ jackets. 

Warning on Lloyd’s agents 


By Richard tapper 

The Lloyd’s insurance mar- 
ket’s relationship with new 
institutional investors could be 
damaged by Lloyd’s agents 
who attempted earlier this 
year to dismiss some Names 
from their synd ic a t es, a senior 
corporate financier warned 
yesterday. 

The agents had acted in 
anticipation of new rules that 
guarantee Names continued 
participation in syndi c ates. 

Sir Laurie Magnus, deputy 
head of UK corporate finance 
at Samuel Montagu, the mer- 
chant bank, told a London con- 
ference on corporate capital 
that failure by agents to 
“respect the spirit” of the new 
rules on pre-emption rights 


would be seen as “diabolical” 
by the investment community. 

The rules are designed to 
allow the Names, whose assets 
support the market, to increase 
their parti cipation in line with 
any overall increase in syndi- 
cate capacity. 

Pending introduction of the 
changes last May. eigh t agen ts 
are understood to have written 
to Names - both individual 
and corporate - giving than 
provisional notice, effectively 
cancelling their participation 
as of December 31 this year. 

Sir Laurie last year co- 
ordinated the launch of the 
London Market Investment 
Trust, the biggest of more than 
12 new investment vehicles at 
the market 

Corporate investors pressed 


hard for Lloyd's to introduce 
pre-emption rights last year, 
when they supplied more than 
£800m to support syndicates. 

Lloyd’s syndicates obtain 
about 10 per cent of their 
capacity from corporate 
sources, but are seeking more 
funding as a result of the 
expected foil in the number of 
individual Names. 

A new round of losses 
reported last month, which 
brought Lloyd’s cumulative 
deficit since 1988 to ETbn, is 
expected to force many individ- 
uals to leave the market 

Sir Laurie said that most cor- 
porate investors were now 
focusing on new so-called “ded- 
icated” investment funds in 
which they would back syndi- 
cates managed by one agency. 


Britain in brief 


M0& r 


UK is now a highly attractive 
location for inward investment 
is lessening minis ters’ commit- 
ment to a grant regime. 

Their worries have been 
heightened by the govern- 
ment’s decision, unveiled in 
last month's competitiveness 
policy paper, to lay greater 
stress ta granting RSA on the 
quality of jobs created. This 
policy may make it more diffi- 
cult to win grants for projects 
offering the kind of less skilled 
work attractive to many job- 
less people in high unemploy- 
ment areas. 

There is also concern that 
the English r egions are losing 
out not just to overseas com- 
petitors but to Wales and Scot- 
land, whose applications for 
RSA are dealt with by the 
Welsh Scottish offices. 



Irish-based 
insurer for 
London buses 

London Transport has been 
forced to set up its own 
Irish-based insurance company 
to provide affordable 
insurance cover to the 10 
London bus companies which 
are due to be privatised later 
this year. 

Rontfimaster Reinsurance, 
named after the best-known 
of London’s red buses, is 
intended to fill a gap in the 
estabMMd insurance market 
which is reluctant to insure 
bus companies. 

Tim new company will also 
allow newly established 
management buy-out tepnm , 
which have no operating 
record to potto the Insurance 
industry, to buy insurance 
at reasonable rates, Mr Clive 
Praey, head of risk 
m yn flgemen t at 
Transport, said. 

Insurance premiums are 
expected to be the second 
largest cost item in the bus 
companies' accounts after 
wages. 

This move by London 
Transport will be watched 
closely by the soon-to-be 
privatised train operating 
companies which also face 
problems hi obtaining 
affordable insurance. 

Initially, each of the 10 bos 
operators will become a 
shareholder in the new 
company though membership 
could be widened later to 
indude bus companies from 
other ports of the UK. 

Aid targets 
‘met by UK’ 

Britain’s £K2bn overseas aid 
programme was the sixth 
largest in the world and 
targeted closely on the needs 
of developing countries, Mr 
Alastair GooeQad, foreign office 
minister, told the Commons 
last night 

He raid statistics soon to 
be published by the 
organisation for economic 
co-operation and development 
(OECD) would show that at 
0.31 per cent of gross national 
product Britain's overseas aid 
budget was above the average 
for all donors in 1993. 

Mr Tom Clarke, Labour’s 
overseas aid spokesman, 
condemned the linkage 
between British aid and the 
sale of arms. 

He cited the Pergau dam 
project in Malaysia as an 
example of the government's 
failure to target aid cm 
countries in greatest need. He 
maintained that if the project 
appraisal documents and other 
information had been made 
public the provision eg aid for 
the Pergau dam would never 
have been approved. 


13 directors 
convicted 

Thirteen company directors 
were convicted in criminal 
cases in the first quarter of 
1994 compared with three In 
the previous quarter, the 
Department of Trade and 
Industry said yesterday. 

A further four directors 

were disqualified for periods 
between two years and seven 
years as a result of civil 
proceedings. 

Case put for 
equality 

Companies need to be 
convinced there is a good 
business case for them 
providing equal opportunities 
for men and women in the 
workplace, Ms Kamtesh Bah!. 
o>e chairwoman of the Equal 
Opportunities Commission, said 
yesterday. 

“Employers must understand 
the economic arguments for 
equal opportunities", she 
added. "Our aim is to ensure 
we make the most of human 
potential individual choice 
and that such strategies are 
cost efficient". 

Investment at 
record level 

Net investment by UK 
institutions rose by £&2bn 
in the first quarter of 1994 
to a record level of £15Abn, 
the UK government’s Central 
Statistics office. 

Of that, the greatest single 
beneficiary were UK 
government securities which 
had a net inflow of £5.229bn, 
the highest single quarterly 
figure for investment in this 
category since at least the 
fourth quarter of 1962. 


Newspaper 
war begins 

Mr Conrad Black last nig ht 
declared war in Britain’s 
broadsheet newspaper market 
by cutting the weekday price 
of the Daily Telegraph to 30p, 
the price to which Mr Rupert 
Murdoch reduced the Hines 
last September. 

“Ibis is war and no one goes 
to war in other than a sober 
mood but we are market leader 
and we will protect our 
position,” s«id Mr Black, the 
Telegraph’s chairman. He took 
the decision yesterday after 
consulting senior executives. 

Hie retaliation came after 
10 months in which the Daily 
Telegraph insisted it bad no 
intention of cutting its price 
to match The Times. 

But in April the circulation 
dipped below lm for the first 
time in more than 40 years. 

There was a further fall in 
May to 993,395 in circulation 
as The Times reached record 
sales of 515,000. 

Mr Black said Telegraph 
sales were now above lm but 
he was not “going to sit like 
a suet pudding" and allow any 
competitor to attack his share 
of the market 


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12 


TIMB TBK.SOAV JU» » '»• 


TECHNOLOGY 


Global gallery 
for Irish art 

Mail McKay on plans to use the 
Internet to display paintings 


T echnology is an unlikely 
ally of art, but two private 
organisations in Ireland 
hope to change this. They aim 
to promote Irish art abroad by 
using digital technology to 
display paintings over (he 
Internet the international 

information network. 

Toppsi is a Dublin-based 
bulletin board system, which has 
its roots in providing information 
systems fin* social services. Its 
founder, Martin Maguire, wants 
to hold an international art 
exhibition over the Internet. It 
will be initially targeted to 15 
ED capitals and extended to 
include Toronto, New York, and 
Las Angeles, featuring local 
artists from each city. 

Fifty paintings will be scanned 
in at each site, stored cm a central 
server In Dublin, and then 
relayed over the Internet to art 
galleries and museums in each 
dty. Each site will have a 
high-quality printer and prints 
wffl be sold for around £35 each. 

Internet users will later be able 
to dial into the server in Dublin 
and download images of the 
paintings. Maguire also plans 
to publish the exhibition on CD. 
Another Internet provide: based 
in Galway on the west cost has 
already steps to bring Irish 
art to the rest of the world. 
Ireland On-tine is running a pilot 
scheme for Kennys book shop 
and art gallery. 

Kennys is well known in 
academic circles as a provider 
of frish-interest books. Its 
customers include DS universities 
and libraries. 

Kennys is also famous among 
the artistic community for its 
exhibitions oflrisb artists. Driven 
by the need to communicate with 
its DS customers and a desire 
to promote its art exhibitions, 
Kennys will put a database of 
all its books on the Internet and 
offer a free service for people who 
want to go on-line and get a sneak 
preview of the next exhibition. 

The service provides biographies 
of the artists and examples of 
their work. 

One of the artists whose work 
is displayed on the system is 
Kenneth Webb, known for his 
watercolours and depictions of 


rural Ireland. 

"In the early ’60s and 70s 1 
travelled a lot between Ireland, 

New York, Paris, London and 
even Africa, but now I am not 
interested in aQ that I have my 
painting and my interests here 
so I think tins is a great 
opportunity to display my 
paintings. The beauty is that this 
is a visual medium. I have never 
read anything that has dime 
justice to my or anybody else’s 
painting s, but with this people 
can see for themselves." 

Webb believes there are further 
advantages in the concept of 
exhibiting paintings an aa 
international network. 
"International ait has became 
very sterile; there is a sameness 
between paintings from almost 
anywhere in the world. It's made 
up of the sort of paintings that 
architects like. I see myself as 
more of an ethnic painter. I like 
to express the peculiarity of the 
landscape around me. This 
[Internet] win allow painters 
from anywhere in the world to 
be exhibited internationally." 

Barry Ffanmigan, head of 
Ireland On-Line, sees a trade-off 
between the quality of the image 
exhibited and the cost of 
downloading that image. "It’s 
a balance really; most compute- 
screens have a resolution of about 
75 dots per inch but we provide 
150 dots per inch and include 
about 250 colours, which is a long 
way off being good enough to 
prirtlftbogTEqducally. It’s just 

a taster, if toe user likes the 
painting then they can buy it" 
Maguire has approached the 
problem from a different 
perspective, mainly because as 
well as providing the images over 
the Intranet, he plans to produce 
CDs of the paintings. "The 
solution is so simple and already 
tried and tested, ft’s share ware. 

If people like toe Images then 
they can pay a licence fee to the 
artist" 

Maguire has teamed up with 
toe artist Faddy Graham, who 
says the potential of the Internet 
for artists Is staggering. 

"The question is whether 
technology will inhibit the 
intuitive process of an artist or 
simply expand if” 



Want to send roses 
to your sweetheart, 
buy a new car, 
choose a cookbook 
for your mother’s 
birthday or pur- 
chase computer soft- 
ware One of the quickest, if not toe 
cheapest ways to mate these pur- 
chases in the ITS is via on-line com- 
puter Information and communica- 
tions services. 

On-line computer shopping lias 
been around for several years, bat 
until recently most of toe products 
available were aimed at computer 
hobbyists. Now the proliferation of 
home computers, with about 
one-third of US households 
equipped with a personal computer, 
is attracting the attention of a 
broad variety of retailers to online 
shopping as a potentially important 
new sate channel. 

Prodigy, the on-line service 
jointly owned by Sears Roebuck, 
the US retailer, and international 
Business Machines, offers products 
from. 125 merchants including 
Sears, Spiegel, Patagonia, L'Eggs 
tights and the TJS Postal Service. On 
CompuServe, another on-line 
service, choices range from a 
Brooks Brothers suit to contact 
lenses, life insurance or a 
honey-baked ham. America On-line 
allows subscribers to offer their 
homes tor sale. 

Shopping centres are also being 
built on. the Internet, a global 
network that links an estimated 
20m computer users. The Internet 
Shopping Network, for example, 
offers an "electronics superstore", 
offering more than 15,000 
computers, software and related 
products. 

Global Network Navigator, a free 
on-line service for explorers of the 
Internet, has its own “marketplace" 
which is supported by advertising 
revenues. While nobody is 
predicting that computer shopping 
whl replace every trip to the mall, 
on-line merchandising is expected 
to grow rapidly over the next few 
years as multimedia technology 
becomes cheaper and more 
accessible to consumers. 

To date, on-line shopping has 
gpnpratod only modest sales. Less 
than 5200m (£132m) in goods were 
sold on-line in the US last year, 
compared with a total of ILSOObn 
retail sales (of which mail order 
rertalng iips accounted for $53fan). and 
$2j5bn in sates by television home 
shopping channels that take orders 
by telephone. 

However, on-line shopping will 
generate about $4£bn per year by 
1998, Forrester Research, a US 
market research company, predicts. 
Growth will be driven by the 
proliferation of home computers 
and by improvements in on-line 
product presentation, Forrester 
researchers say. 

The largest US publishers and 


Louise Kehoe continues a series on electronic retailing 
with a look at the growth of shopping by home computer 

On-line for a 


speedy sale 



retailers are rushing to offer their 
products on-line, says Gene DeRose, 
head of research at Jupiter 
C-nwiTn i mifiitiftTHi , a market research 
company that specialises in the 
on-line services market 
"For media companies, getting 
on-line means instant 
communication, new revenue 

‘Getting on-line 
prepares companies 
for all forms of 
electronic 
distribution’ 

streams and access to a 
fast-growing, high demographic 
customer base hungry for new 
services. 

"More importantly, getting 
on-line prepares companies for all 
forms of electronic distribution 
while selling their products today to 


millions of on-line consumers." 

The low costs c£ selling on-line 
are a big incentive for merchants. 
In contrast to mail order marketing, 
which bra hi g h upfron t costs tor 
the publication and distribution of 
catalogues, retailers «»ning on-hne 
have minimal start-up costs and 
typically pay only about $15,000 to 
$30,000 annually to reach millions of 
subscribers. 

The market for on- line retailing is 
expanding as commercial on-line 
computer information and 
communications services such as 
Prodigy, America On-line and 
CompuServe expand. At year-end 
1993, there were 35m subscribers to 
these services and this number 
should grow to about &2m by toe 
end of 1994, according to Jupiter. 

And the on-line services say their 
shopping centres are drawing more 
customers every year. The number 
of people coming into CompuSave’s 
"Electronic Mall" has increased 80 
per cent this year and sales are up 


by more than 30 per cent 
For consumers, the main 
attraction of compote shopping is 
convenience. The services draw 
"too busy, two-income families", 
say the merchants that are selling 
on-line. The computer can also 
provide new shopping opportunities 
for the house-bound or disabled. 


A Chicago-based 
venture £ offering 
grocery shopping by 
computer in Chicago 
and San Francisco 


notes Peapod, a Chicago-based 
venture offering grocery shopping 
by computer in the Chicago and 
San Francisco areas. 

With home computer software 
supplied by Peapod. San Frandsco 
consumes can shop at their local 
Safeway supermarket without 


leaving home. On-line shopperscan 
either wander through toe 
supermarket" aisle by aisle, as they 
might when making a weekly 
shopping trip, go directly to spedflc 
typesof products like coffee or 
cereals, or type in the name of the 
product they want. Personal 
shopping lists, with the items you 
buy regularly, can ate be created. 

Special requests, such as ripe 
bananas or fine ground coffee 

brans, can be added to the shopping 

list Special offers avails We in the 
store are highlighted on-line and 
money-off coupons are accepted. 
The grocery order is delivered at 
the shopper’s convenience. 

Bargain hunters may not, 
however, be impressed by computer 
shopping. Most of the merchandise 
available on-line is priced at, or 
above, toe prices available ^stores 
and delivery charges are typically 
added to the selling price. 

Another shortcoming of computer 
shopping is that it usually lad® the 
pictures of products that are 
typically found in mail order 
catalogues. Although some on-line 
shopping services make pictures of 
products available, it typically takes 
several minutes to “paint these 
pictures on » a home computer 
screen. 

Multimedia PCs are, however, 
beginning to make computer 
shopping malls more attractive. 
CompuServe, for example, recently 
launched a CD-Rom catalogue to 
augment its on-line shopping 
service with pictures and videos of 
products available. The 
combination of CD-Rom and on-line 
ordering may be a winner, 
Forrester’s market researchers 
believe. While each approach has Its 
limitations, in combination they 
provide the immediacy of on-line 
shopping and the multimedia 
capabilities of CD-Rom. 

Today’s computer shopping 
services are, however, quite 
pr imitiv e in comparison to the 
"interactive shopping" planned by 
several US cable television 
companies. These services will 
feature full video and sound and 
may provide customers with 
"agents" to help them shop. 

You might, for example, have 
decided to purchase a sweater and 
trousers but be unsure about which 
odours would look best together. 
Your personal shopping "agent” 
could lend a hand by displaying 
various combinations, or even make 
the decision for you 

It may be several years, however, 
before interactive television 
shopping becomes widely available 
because it wSi require substantial 
investments by the cable television 
or telecom m unications industry in 
broadband networks. 

In the meantime, on-line 
computer shopping is drawing both 
retailers and consumers in 
im-rBHfiing numb ers 



PEOPLE 


Turton takes up arms for Citizens 


A woman tipped as a future 
permanent secretary in White- 
hall has been given , the high- 
profile job of fronting the 
prime minister’s drive to 
smarten up the public services. 
Genie Turton, deputy secretary 
in the environment depart- 
ment, becomes director of the 
Cabinet Office Citizen’s Char- 
ter unit on July LL 

Turton, 48, is currently bead 
of the cities and countryside 
group in the environment 
department and a member of 
the Chancellor’s Private 
Finance 

She is one of the growing 
number of senior mandarins 
with experience of business, 
gained through the Cabinet 
Office programme- for strength- 


ening links between the public 
and private sectors. After a 
secondment to Midland Bank, 
she was a non-executive direc- 
tor of the Woolwich Building 
Society between 1387 and 199L 
A graduate of Orton College. 
Cambridge. Turton joined the 
ministry of transport as a fast- 
stream entrant in 1970. After a 
spell in toe Cabinet Office as 
head of the machinery of gov- 
ernment division in the early 
1980s, she became director of 
heritage and royal estate in toe 
environme n t department with 
responsibility tor royal palaces 
such as Hampton Court and 
the Tower of London. In 1991 
she was promoted to deputy 
secretary in charge of the 
department’s housing and 


urban group. She lists her hob- 
bies as bocks, music and shop- 
ping- 

She replaces Brian Hilton, 
who returns to his old depart- 
ment, Trade and Industry, to 
take charge of the research lab- 
oratories. Hilton. 54, was spir- 
ited from the Ministry of Agri- 
col tore, Fisheries and Food in 
1391 to create a unit that would 
implement Major’s Citizen’s 
Charter. He says he has hugely 
enjoyed toe task of giving life 
to the charter. "It is now com- 
mon currency in the language. 
It is inconceivable that we 
should ever retom to the days 
when there were no standards 
of service in toe public sector, 
and nobody cared whether per- 
formance targets were met.” 


■ Owen Jenkins, md of 
Kuwait Petroleum Benelux, 
has been appointed md of 
KUWAIT PETROLEUM (GB). 

■ Martin Anderson, director, 
international corporate finance 
with BBfl Samuel Bank, has 
been appointed finance 
(flrector of HARRISONS & 
CROSF2ELD. 

■ Gfrcg Tufoell, buying and 
merchandising director of Next 
men's huo'u ps , is rejoining 
BURTON GROUP, as md on 
toe retirement of Martin. 
McNamee. 

■ Danny Kitchen, formerly 
a director of IBI Corporate 
Finance, has been appointed 
fina nce d irector erf GREEN 
PROPERTY. 

■ Gareth Rhys Williams has 
been promoted to md of 
Rexhaa n Cu stom, part of 
BOWATER. 


Bodies politic 

■ Peter Brown, European 
group md of Tamy Europe, 
has been elected chairman of 
the BRITISH TOY AND 
HOBBY ASSOCIATION. 

■ Richard Rowlatt, chairman 
and md of J Rowlatt & Sons, 
has been elected premdait of 
the BRITISH HARDWARE 
FEDERATION. 

I Jennifer Bands, former 
chair of the National Women’s 
Enterprise Development 
Agency, and Michael Reopke, 
former general manager of 
Reuters, have been appointed 
members of the RADIO 
AUTHORITY. 

■ Bernard Legrand, executive 
vice-president of the Pechiney 
Group, has been elected 
president of the 

INTERNATIONAL PRIMARY 
ALUMINIUM INSTITUTE. 

■ Boh McBnlay. former 
chairman of British Aerospace 
Airbus division, has been 
appointed president of the 
BRISTOL CHAMBER of 
Commerce and Initiative. 

■ Bob Simpson, director of 
Newman Tanks Architectural 
Products Sub Group, baa been 
elected presid ent of toe GUILD 
OF ARCHITECTURAL 
IRONMONGERS. 

■ Pete Mitchell, strategic 
affairs director at GUINNESS, 
has been elected president of 
the WORLD FEDERATION 
OF ADVERTISERS. 

■ Judith Shepherd, a partner 
at Stephenson Harwood, is to 
be seconded for two years to 
toe TAKEOVER PANEL; Mark 
Gearing has returned to Allen 
& Overy and Charles Penney 
returns to Lovell White 
Durrani at the end of 
September. 


LWT millionaire quits for the BBC 


Nick Elliott, managing- director 
of LWT Productions, has 
become the latest senior execu- 
tive to leave London Weekend 
Television since its takeover 
by Granada earlier this year. 

Elliott, who has worked at 
LWT for the past 22 years and 
played a leading role In devel- 
oping programmes such as 
London’s Burning, Agatha 
Christie’s Poirot and The 
Charmer, is moving to the BBC 
as head of drama series. The 
head of the drama group is 
Charles Draiton, himself a for- 
mer rrv executive. 

Elliott, 50, is a dose friend of 
John Birt, the BBC director 
general but it is believed that 


Birt was not involved in the 
appointment. Elliott was 
approached by a group of BBC 
executives including Alan Yen- 
tob, controller 0 i BBCl. 

He made it dear yesterday 
that he was not leaving 
because of the Granada owner- 
ship; he had actually begun his 
career with Granada. 

After working for LWT for 
more than 20 years, he had 
decided some time ago that he 
would like to change his job 
but for toe past four years was 

prevented by LWTs "golden 
handcuffs” from moving. 

As the former head of drama 
and director of programmes. 
Elliott benefited greatly from a 


management share scheme; he 
made around £&5m from it He 
says he will miss LWT greatly, 
but adds "the job the BBC has 
asked me to do is an exciting 
challenge that I could not 
resist". 

His appointment is an indica- 
tion that the BBC is trying to 
strengthen its popular drama 
and maintain its ratings on 
BBCL 

Meanwhile, the LWT board 
is in the process of reviewing 
the top management structure 
of the company and says a key 
objective is to facilitate the 
d ev elopment and growth of 
LWTs programme production 
business. 


‘Minister without portfolio' becomes 
chairman of Barclays Metals Group 


Barclays Metals Group, part of 
the UK banking organisation, 
is gearing up for a further 
phase of expansion with the 
appointment of Chris Green, 
one of toe best-known person- 
alities in the London metals 
business, as chairman. It Is 
also recruiting Pete SeEars, 
at present mawagmg director 
of toe metals division of BICC 
Cables. 

Sellars becomes deputy chief 
executive, working alongside 
Laurence Jones, also deputy 
chief executive of BHG, as 
well as managing director of 
Barclays Metals Ltd, a ring- 
dealing membra* of the London 
Metal Exchange. 

BHG has grown quickly 
Since Barclays decided to enter 


the metals business about 
three years ago. 

Green, now 59 and with 36 
years’ experience In the indus- 
try, joined as a director soon 
afterwards. He had previously 
been forced out of Cerro Met- 
als, where he was chief execu- 
tive, because the new Ameri- 
can owners were unhappy 
about his spending so much 
time as chairman of the LHB 
board. 

Leaving Cerro meant that 
Green was no longer eligible 
to serve as an LMK director so 
he ended up losing not just 
one job, but two. 

Hie said yesterday he no lon- 
ger harboured ambitions for 
an LME appointment and, in 
any case, the BMG chairman- 


ship would give him a "higher 
profile" in toe Industry. He 
bad been “like a minister 
without portfolio" since join- 
ing Barclays, In feat he had no 
Particular responsibility. 

Meanwhile, Sellars’ role at 
BMG will be to concentrate on <1 
strategic development and 
Jones will continue to have 
responsibility for, among 
other things, Barclays* LME 
activities. Both report to Rob- 
ert Bfoinprixe, the diief execu- 
tive. 

■ Alan Baker, a director and 

bead of bullion at Deutsche 
Bank Sharps pixley. has been 
elected chairman of t he 
LONDON BULLION MARKET 

association. 


‘I 









FINANCIAL TIMES THURSDAY JUNE 23 1994 


13 






LS400. 


GS 300. 


It used to be said, “y° u can?t indulge 
in a bit of real driving if you’re sitting in 
the lap of luxury” But now, there is a car 
which enables you to do both. 

Because here’s a Lexus (so it must be 
luxurious) designed by Giorgetto Giugiaro, 
the man behind some of the world’s most 
exciting cars. 

It’s die Lexus GS300. To use Motor 
Trend’s words, “a luxury car with style, 


stamina and a solid dash of enthusiasm.” 
There’s the description. 

Here’s the proof. First the luxury half 
of the equation. How well equipped is the 
Lexus GS300? 

Air conditioning? Yes. Six way elec-, 
tronic seat adjustment? Of course. Seven 
speaker stereo with CD? Naturally. And 
for complete tranquillity just turn it off. 
The Lexus is as quiet a car as you’ll find. 

But enough about comfort for the 
moment. There’s the driving to consider. 
At your right foot, 21 2 HP (156kW.) An 




Output few other sue cylinder, three litre 
.engines even match;. Beneath both feet, 
stabiliser bars check body roll. (Specially 
sculptured seats check the other kind of 
body roll, incidentally.) 

Double wishbone suspension keeps the 
wheels perpendicular to the road (should 
the urge to test die tews of physics get the 
better of you) . . ' V . . 

Why not see your Lexus dealer about 
the GS30O? You’ll soon realise that being 
driven by ambition doesn^i exclude you 
from having the ambition, to drive, • 


© 


I Hi-. LUXURY HIV1MON Or TOY 1 - r ; 



«v. . r*e •. .jp 

:/ 4 * . , , , Vk 4 


Lexus GS300. 


npi 

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will wa] 





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14 


FINANCIAL TIMES THURSDAY JUNE 23 1*M 

MANAGEMENT: MARKETING AND ADVERTISING——-- 


Charged up over 
competition law 

David Waller reports on why American Express’s 
credit card promotion hit legal barriers in Germany 


P roduce a credit card in a 
German shop or restaurant 
and it is likely that the 
proprietor wiH look at you with 
c o nsternation, before 
that plastic is strengst verboten 
and that D-Marks or Eurocheques 
are the only means of payment 
allowed. 

There are just &9m credit and 
charge cards In Germany, 
compared with 37m in the OK. 
making Germany one of the least 
developed plastic card markets 
among Europe's Trading 
economies. Relative to the size 
of the economy and its 80m 
population. Germany is the most 
important plastic card market 
in Europe, says Colm Lorigan. 
senior counsel for Europe at 
American Express International 
ta Frankfort 

Cracking the market is no easy 
matter, though, and not only 


launch, American Express was 
sued by an organisation called 
the Zentrale zur BeMmpftmg 
nnlarfteren Wettbewerhs, the 
Centre for Combating Unfair 
Competition, a Wiesbaden-based 
body which has policed Germany’s 


centnry. The company was 
charged with breaching the 
soraffed Zugabeoavrdmtng, a 
law which prevents the offer of 
free gifts in connection with the 
sale of goods. 


The amendments 
passed by the 
German parliament 
leave American 
Express ‘stranded' 


because of deepseated cultural 
hostility to credit and charge 
cards. Marketing tactics which 
are standard hi other countries 
can hit legal barriers in Germany, 
as American Express found after 
lflimCfanig a promotion far its 


product in November last year. 

That month, cardholders in 
Germany received with their 
monthly statement a brochure 
outlining American Express 
Membership Bfzles, a promotional 
scheme which the company has 
introduced in the US and other 
European countries. The scheme 
offered members bonus points 
for each B-Maric they spent on 
the card. These points could be 
used towards air travel with three 
airlines and hotel mwirnmndati nn. 

Although the programme was 
successful - spending by 
cardmembers enrolled in the 
scheme rose by 50 per cent - the 
promotion had to be quickly 
halted. Within a week of the 


band in band with the 
Rabattgesetz, forbidding the offer 
of certain types of discounts, and 
is connected with the 
Ladenschutzgesetz, which limits 
shops’ opening times. 

All three laws were introduced 
m the early ld30s to protect small 
shopkeepers from free 
competition, and are stiff popular 
with shopkeepers today. Last year 
the government unveiled plans 
to abolish all three as an 
unnecessary impediment to 
competition. 

But so great was the uproar 
from shopkeepers and unions that 
Chancellor Kohl intervened 
personally to ensure that 
Ladenschutzgesetz would remain 
until after this awi taimn ’f ele cti flPfc 
Contrary to the government's 
original plans, 

Zagabeverordmmg and ibe 
Rabattgesetz were not abolished 
bat merely amended. 

The amendments, passed by 
the German parliament last week, 
leave American Express 
“stranded”, complains Lorigan. 

Under the revised Rabattgesetz, 
service providers such as the 
Bundesbobn, the federal railway 
network, or Lufthansa, the 
soon-to-be-privatised German 
ahHne, can offer discounts to 
their own customers. But 
American Express is caught by 
the Ztigabe v &vrdrtung, which stiff 
holds that the offer of another 
company’s products (in this case, 
flights) is not permitted as a 
means to boost your own sales 
tin this instance, spending on the 
American Express card). 

Lorigan said that American 
Express introduced the product 


-with launch expenses of at least 
DMlm - knowing that there could 
be legal difficulties. But it bad 
hoped that the Zugabe v trvrd mm g 
and the Rabattgesetz would be 
abolished. 

The legal structure of the offer 
was also designed to take 
advantage of EU legislation 
guaranteeing free trade of goods 
and services across European 
borders; the offer to German 
card-members is technically 
administered out of France. 

But recent European Court case 
law has gone against American 
Express, suggesting that foreign 
compa ni es ope r at i ng in a second 
country cannot claim that their 
freedom to trade Is bring muzzled 
if domestic competitors suffer 
the same restrictions. 

While American Express 
prepares an intensive lobbying 
campaign in the US and Europe 


Marcus Kisseler says 
the American 
Express scheme is in 
breach of the 
Zugabeverordnung 


to support its case, Lorigan claims 
that it has suffer e d discrimination 
at the tetwig of the Zentrale 
because it Is a foreign company. 
He notes that the bonus scheme 
started by Lufthansa - the Miles 
ami More promotion winch has 
attracted 900,000 members since 

last year - was permitted by the 
Zentrale last year even when it 
was manifestly in breach of the 
Rabattgesetz. 

Marvel Kisseler, head of the 
Zentrale, dismisses the etabn- He 
says the American Express scheme 
is in breach of the 
Zugabeverordnung. 

After an unsuccessful appeal 
against the original lawsuit, 
American Express is now 
permitted to continue with the 
service, but not to advertise it 
This means that it is effectively 
dead as a promotions tool, and 
will remain so far years as 
litigation with the Zentrale 
continues. 


A t least there was no army 
of aggrieved consumers. 
But the public relations 
crisis facing Norwich 
Union this summer in the wake of 
its highly embarrassing regulatory 
troubles has been serums by any 
standards. 

The problem first surfaced pub- 
licly on 29 March when the com- 
pany, one of the UK’s largest insur- 
ers, announced that its 600-stxong 
direct life insurance and pensions 
sales force, as well as some 200 sales 
agents in companies acting for the 
insurer, were being temporarily 
suspended for retraining. 

That statement came some 
months after NU had identified seri- 
ous weaknesses in its selling pro- 
cess which h had begun working to 
rectify. Unfortunately for the com- 
pany its initial plans were over- 
taken by Lautro, the regulator for 
the life insurance industry, which 
insisted on more radical re medial 
action, including taking the sales 
force off the road for a month. 

The March announcement meant 
that NU had to deliver an effective 
training programme within a short 
space of time. It than had to cope 
with a n other bl ast of bad publicity 
at the mid of April, when Lautro 
imposed a record flue of £300.000 an 
the insurer for its faflures to meet 

proper stenflaTfia 
The new training programme is 
made up of three elements. The first 
entails gtwmp the financial Plan- 
ning Certificate, the basic qualifica- 
tion for independent financial advis- 
ers, which is administered by the 
Chartered Insurance Institute. 

The second is a test of knowledge 
of Norwich Union products, cover- 
ing both regulatory issues and the 
products themselves. 

The third test involves a residen- 
tial sales skiffs coarse, based an vid- 
eoed rule play: a sales agent inter- 
views a colleague acting as a client 
and baa to gather ennng h informa- 
tion to make a recommendation. 
The following day there is another 
videoed interview, in which the 
recommendation is put to the “cli- 
ent”. 

While the sales skiffs assessment 
has been praised by those who have 
taken part in it, NU has faced some 
criticism from participants for rely- 
ing too much In the rest of the 
programme on galas agents study- 
ing by themselves and not enough 
on lectures. 

Gary Cornish was among the 60 
per cent of NU sales agents who 
passed all elements of the course at 
the first attempt “The (sales skills] 
course was very well done. Before 
that course it w as ludicrous, we 
were just told to read the manuals,'* 
he says. 

One extra difficulty faced by NU 
was managing the introduction of a 
single training p r ogramme for both 
the direct sales force and appointed 


Norwich Union’s 800 

salesmen suspense £300,000 'misconduct 


«o-Wc U„, M 
?«M £300,000 



Norwich Union 
sends salesmen . 
back to school • ‘ • 

Ipwr vrqeef 


Back from 
the brink 

Alison Smith on Norwich Union’s troubles in 
an increasingly tough regulatory market 


representatives - firms of financial 
advisers who do not work for NU 
directly but act solely for the 
insurer. Previously there had been 
two. 

Philip Scott, NU life and pensions 
general manager, says that the 
appointed representatives, used to 
running their own businesses, were 
in some cases less inclined than the 
direct sales force to be told by NU 
how they should sell life 


is sharply critical of the way in 
which NU reached this point 

"We were very angry, particularly 
because we felt it was avoidable,” 
be says. "There were enough people 
telling NU they were not happy 
with the quality of training.” He 
believes the failure to act earlier 
was a symptom of a more general 
malaise of “corporate arrogance”. 

Scott and Jayne- Anne Gadhia. 
who set up the training arrange* 


Some sales agents have met negative 
reactions from customers 


Insurance and p ensions. 

Significantly perhaps, the pass 
rate for all elements of the training 
programme at the first attempt was 
lower among appointed representa- 
tives - at 40 per cent 

Robin Sainty, who runs Inte- 
grated Business Analysis which 
acts for NU, has a rather different 
perspective. His team of advisers 
has all passed the training pro- 
gramme and is enthusiastic about 
the changes to the training. But he 


e ve n t s, emphasise the benefits to 
those who have passed the pro- 
gramme. "The vast majority of 
them are proud of their achieve- 
ment because they know they have 
been through a testing process,* 
Scott says. 

Whether that sense of pride is as 
strong for those who manage to suc- 
ceed only at later attempts remains 
to be seen. Over the coming weeks 
the final stragglers will return to 
selling, while those who have faffed 


at their last chance lose their 
authorisation. 

Even among the first successful 
agents, there have been mixed 
feelings as they meet negative reac- 
tions from customers. 

“When I first came hack 1 was 
very pleased to have passed all the 
exams, but that has been followed 
by several lows" says Stewart 
Davidson, who joined NU last 
aut umn, as he talks of decisions 
deferred and customers who have 
gone elsewhere in the meantime. 

Sainty reports some negative 
feedback from potential if not exist- 
ing, customers, though he sees a 
longer-term benefit from the 
improvements in the sales process, 
"The next ample of months will 
inevitably be a hit sticky, but then 
we will be back beyond where we 
were: September Is my target dam 
for getting back into foil swing,* ha 
says. 

NU can take comfort from know- 
ing that although it has been, the 
first to face this difficulty, in an 
increasingly harsh regulatory cli- 
mate, itisunffkslytobethelastiifo 
insurer to do so. 



I 

tt* ■4R3I « 

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■c 




ARTS 


15 



4 


l 






FINANCIAL TIMES THURSDAY JUNE 23 1994 


Cinema/Nigel Andrews 


Cautionary tales of 
the cultural divide 


T he tug-of-war custody 
hearing over the British 
film industry continues 
this week, with impor- 
tant new testimony from 

both sides. 

The evidence produced on behalf 
of the first party, Mr America, is the 
movie Shopping. Paul Anderson's 
urban thriller - a loud, dark-toned, 
pacy British film made in the style 
of that currently popular retro- 
genre, “film noir” — will be used to 
show that Hollywood has hwn pow- 
erfully influential in the forming of 
modern UK screen culture. 

But Miss Europe, who was of 
course Mr America's common-law 
partner until a recent quarrel 
involving a Gatt, will elaim that 
John Scbiesmger's The Innocent 
proves the opposite: that this ver- 
sion of Ian McEwan's Gold War 
novel set in moody murder-prone 
Berlin shows that the last best hope 
for British film is an aTHawira with 
our friends across the C hann el. 
Look at the evidence. EvWhtt A 
British director and leading man 
f Anthony Hopkins}. Exhibit B: Ital- 
ian leading lady (Isabella Rossel- 
lini). Exhibit C: German locations 
and co-fun ding. 

Each side is then expected to 
attack the other mercilessly for its 
poor record of care and gnarfian. 
ship. Mr America win accuse Miss 
Europe of involving Britain in the 
deadly quagmire of the “Enro-pud- 
tting" arid wfll point out certain spe- 
cific shortcomings In The Innocent. 
Its peculiar compote casting, for 
starters. Why is Sir Anthony Hop- 
kins playing an American army offi- 
cer - with an ap palling sub-James 
Cagney accent - while America's 
Campbell Scott (better accented) 
plays the young British telephone 
engineer Leonard, brought to Berlin 


THE INNOCENT (18) 
John Schlesinger 


SHOPPING (18) 

Paul Anderson 


BEVERLY HILLS COP 3 (15) 

John Landis 


ROBOCOP 3 (15) 

Fred Dekker 


in 1955 to help with an anti-Soviet 
surveillance scheme? 

McEwan's novel was a bizarre 
blend of Le Carrt spy stuff with sex, 
passion and murder. When Leonard 
falls for the German Maria (played 
in the film by Italian Mfaa Ros- 
sellini), a nasty encounter with her 
husband in rfpgth »nH dismem- 
berment. “What will the lovers do 
with the body?” becomes the nov- 
el’s big question, nwffl finally the 
object is folded cunningly, ironi- 
cally into the espionage plot. 

Schlesinger’s film is best when 
most intimate. Scott excels as the 
ftissy, vir ginal communicatloM bof- 
fin marooned in a cut-off world -• 
his dingy love nw* - with the dis- 
traught, high-strung girl and the 
carnage she brings him 

But whenever the film moves out 
into the “real” world, all reality 
pease s, SchlesmgET pr omises much 

with a virtuoso opening tracking 
shot through a crowded, HahMing 
hotel lobby- But then the individual 
voices start Hopkins’s “You dlrdy 
rat” American; a number of Ger- 
man supporting actors dubbed into 
transatlantic; and finally Miss R 
herself, who is fine right up to the 
last scene when she too is tipped 


tn*o the open air. Her scene of fog- 
gy-voiced tearful parting on a foggy 
airfield seems like a crazed reprise 
of her mother's finest hour in Casa- 
blanca. 

After Mr America has had bis say 
about The Innocent, and the mish- 
mash of vagabond ingredients typi- 
cal of Euro-puddings, Miss Europe 
will have her say about Stopping. 
She will attack the debnqra"* ten- 
dencies of an ex-colonial culture 
based on the worship of crime 
violence. Shopping which stars 
Sadie Frost and Jude Law as two 
carstealing “ram-raiders,” who like 
to enter shops through tha shop 
window, is, she will point out, like 
Bonnie And Clyde meets Absolute 
Beginners, possibly over the prone 
body of Blade Rwmer. 

Over-the-top visual atmospherics 
— mist And smoke, Stygian chiar- 
oscuro, drizzle-haloed street lights - 
are wedded to daft script-lines. The 
p Tf-Vi a ng p earning thw largest giggle 
at the press show when Mr 
Law ventures to plant a tentative 
kiss on Miss Frost's lips and she 
says “Cut it, Joe, this is the 90s. Sex 
isn’t safe anymore.” Nor, in the 
wrong hands, is portentous epochal 
dialogue. The film is a second-rate, 
second-hand thriller in debt, far 
beyond repayment, to its Hollywood 

jararHgnrw 

The judge presiding over the cus- 
tody hearing will admit that he 
finds this case difficult to resolve. 
Each ghfe , America and Europe, has 
powerful arguments concerning the 
decrepit artistic standards of the 
other. Alter long consideration, 

Himrg h, he haa niadp hie darigirm 

He will award custody to neither 
party. He will instead urge and if 
ruu-ogggr y compel th e British film 
industry to become self-reliant. For 
a short time it will be made a ward 



‘Bonnie and Clyde’ meets ‘Absolute Beginners*: Sadie Frost in Pan! Anderson's ‘Shopping* 


of court Then it will be required to 
make its own way in the world with 
no more than a minimal reliance on 
any other nation. 

It will not be allowed to beg at 
Number Ten Downing Street nor to 
spend its life creeping towards the 
EC or US for cultural resuscitation. 
Soon rather than late it must learn 
how to please and interest other 
cultures and societies, without com- 
promising its own culture or treat- 
ing its own society as a charity 
institute. 

After all (sums up the judge), if 
Four Weddings And A Funeral and 
The Crying Game end A Fish Called 
Wanda and My Beautiful Laun- 
drette can do it so can everyone 
aim Gasp dismisse d 


In the week of Beverly EBOs Cop 3 
and Robocop 3, what better time to 
distance ourselves from Hollywood? 
When sequel sagas hit stage three, 

three thing s happen. Script inven- 
tion plummets. Plots reach for tor- 
tured novelties of location or moti- 
vation: in BHC3 a theme park, in R3 
a whole lot of inner-city anarchy 
requiring emergency policing. And 
favourite actors drop out 
So no Peter Weller as Robocop. 
His lips and jaw - nothing else 
being visible below the hydrauli- 
cally whining visor - are replaced 
by those of Robert Burke. And over 
in Beverly Hills no John Ashton, 
who for two films played fat-solemn 
police sidekick (alongside tall-slim 
Judge Retahold) to Eddie Murphy's 


grinning dementia praecox case 
from Detroit 

Mr Murphy has now been sec- 
onded to California so often that we 
wonder why he does not keep a 
hotel room there. Beverly Hills Cop 
3 is an exhausted replay of the old 
tics. Its desperation is most evident 
in the wheeling forth of Bronson 
Pinchot, who stole Cap 1 with his 
fluttery, shrieking art gallery owner 
and who is asked to do it again here 
- no, to overdo it - so that he 
becomes victim rather than saviour. 

Robocop 3 features another cop 
called Murphy (hero's name not per- 
former's) and also begins in Detroit 
But this film has the sense to stay 
there. Here is the much-loved 
Motown sound: not Diana Ross but 


the music of crashing cars, scream- 
ing extras and our hero's bullet-zap- 
ping bio-metallic arms. Here too, for 
20 minutes of tolerable reacqualnt- 
ance, is Hollywood’s attempt to 
force the futurist vision of Lang’s 
Metropolis into intimacy with the 
weaponry of the Star Wars era. 
The n, like the other film, it tail- 
spins into diminising circles. 

Should they not have combined 
the two trequels and given us £et>- 
erty Bills Robocop ? That way famil- 
iarity could have been spiced with 
hybridisation. And we would have 
warmed to the idea of a knockabout 
black cop clamped in a head-to-toe 
metal casing from which only the 
best wisdoms and witticisms would 
be allowed to emerge. 








Compelling: Richard Briers and Paul Eddington 


Theatre / Alastair Macaulay 

Storey’s ‘Home’ revived 


Y ou should have seen it with 
Gielgud and Richardson: the 
people who said that two 
years ago about David Lev- 
eaux's staging of Pinter's 1976 No 
Man's Land can say it again now 
about ins staging of David Storey’s 
1970 Home. They are, of course, right 
- yet they miss the paint Home, like 
No Man’s Land, is less substantial 
without its great original double-act, 
but it still holds together remarkably 
well Its new cast, led by the 
well-known double-act of Paul Edding- 
ton and Richard Briers, completely 
holds the attention, shifting between 
comedy and poagnance with consum- 
mate ease. 

This is the more impressive, since 
nothing happens in Home more event- 
ful than a minor character lifting fur- 
niture and removing it from the stage. 
The “home” of the title, the play grad- 
ually allows us to realise, 
is an institution for the mentally 
disturbed. A large part of the play's 
comic entertainment consists of 
wandering small talk between the 
two men. and a large part of its pain- 
ful impact lies in what they leave 
mreaid — with the qnginsh they can 
never bring themselves to addres s in 
words. 

Harry and Jack are educated and 
clubbable upper-nriddle-class types, so 
sensitive that, if someone else so 
much as suggests that a spade might 
be a spade, they hasten to discuss the 
weather. The play's most striking 
irony lies in their conversations with 
the dissimilar Marjorie and Kathleen, 
who are lower-class, outspoken, quite 
p repare d to air sexual, lavatorial, and 
psychological issues - and thereby 


expose the pathetic evasiveness of the 
two men. 

It was Gielgud, as Harry, whose per- 
formance left the most inriaTihlp and 
stffei’Hng fmp r pssinn CO me when in 
my teens I saw a TV broadcast of the 
ori ginal cast. Yet Paul Eddington’s 
account of the same role is so fully 
alive to the larger mental issues that 
dwell amid the details of the play, 
that- Gielgud’s ghos t never haunts the 
stage: an exorcism even more success- 
ful than his account of the Gielgud 
role In No Man ’s Land. 

E ddington’s Harry is a ravaged 
shell. It helps that he now 
looks far more haggard than 
two years ago; more vital, 
however, is the beautiful weight of 
sorrow he conveys. It is there before 
he speaks a word, simply as he closes 
his eyes on first sitting down alone. 
And it is there at the end in the hush 
in which he says “The sun has set". 
His mastery of comedy surfaces to 
marvellous effect in tiny crises of 
uncertainty, as when Jack asserts 
that a friend of his “was introduced to 
George VI at Waterloo”. With utter 
tact, yet also with appalled bewilder- 
ment, Eddington simply echoes 
“Waterloo?" “The station". Jack 
explains, and relief returns. 

Every device in Richard Briers's 
armoury works to characterise Jack 
to fine effect: light charm, merry 
chuckle, mouth hanging open in 
pleasant stupidity, ingratiating cute- 
ness, spiffing delivery of ordinary 
banter. Briers does nothing wrong, 
but his way of tackling the role’s 
timer misery is flyweight Richardson 
brought to the role, among other 


things, graviias; and my ear kept tell- 
ing me how he surely delivered the 
lines. Briers’s m ental pain r emains 
hidden from us, as Eddington’s does 
not Nor is anything in Briars’s per- 
formance a surprise. 

The roles of Marjorie and Kathleen 
are harder to achieve with complete 
success. Storey gives them a fcind of 
verbal shorthand, with few pronouns 
or verbs, that seems mannered now. 
This apart both Brenda Bruce and 
Rowena Cooper catch the 
contradictions that make each roles 
interesting. Brace’s Marjorie is hard, 
sceptical, only sometimes revealing 
the tenderness that has made her 
sometimes wail for days: Cooper’s 
Kathleen hardly ever lets a radiant 
grin leave her face, even as she talks 
of her several suicide attempts. 

In terms of the larger history of 
modern theatre. Home is not a 
momentous play. It has clear achnnq 
of Beckett {Godot, Happy Days), and 
its treatment of mental disturbance is 
scarcely radicaL But so what? It is 
written with such skill that the 
attention never flags, and its 
ambiguity of tone is compelling. 1 
have a few minor cavils about 
Leveaux’s staging. (Some pauses 
should have been weightier, the 
women are sometimes too close to 
caricature, the role of Alfred Is 
miscast, and one change of lighting 
says too obviously “The mood 
darkens”.) But everything about this 
24-year-old play is alive; the ensemble 
playing is exemplary; and Eddington 
gives one of the finest performances 
now before the London public. 


At Wyndham’s Theatre 


Concert/Richard Fairman 

Sanderling' s Brahms 


T he gigantic themed 
festivals that towered 
over London’s musical 
life in the late 1980s 
have riisappporoH In the pres- 
ent economic conditions the 
nearest one comes to anything 
similar is the short series, 
which is never so adventurous: 
the Ptulharznonia has sched- 
uled a Beethoven symphony 
cycle next season and a 
Brahms cycle to and this one. 

Hiese would not be of any 
import, were it not for the con- 
ductors - Harnoncourt for the 
Beethoven, Kurt Sanderling for 
the Brahms. Keen record col- 
lectors may have come across 
a cycle of the Brahms sympho- 
nies with Sanderling and the 
Dresden Staatskapelle. 
Although th e sound quality 
from the original East German 
tapes was poor, there was no 
mistaking that here was one of 
the two great Brahms conduc- 
tors of the day. 

Those performances were 
characterised by a strict, 
almost fierce, adherence to the 
idea l of Brahms as a classicist. 
Over the years Sanderling 1 s 
outlook seems to have mel- 
lowed a little (can he really be 
81 when he is only just starting 
to go grey?) but the classical 
discipline is still in place. His 
Brahms now is very orach the 
product of maturity - wise and 
noble, absolutely unforced. 

What a splendid move on the 
part of the Philharmonia to 
bring him to London for these 
four concerts, featuring the 


symphonies and the concertos. 
In Tuesday’s opening pro- 
gramme he held the First Sym- 
phony to a steady pace, though 
without digging into the 
rhythms as trenchantly as he 
used to. He also kept the Phil- 
hannonia’s enthusiastic timpa- 
nist fi rmly under wraps. 

There was to be no over-em- 
phasis, no hammering home of 
climaxes too early. Only a con- 
ductor who had years of expe- 
rience would dare restrain the 
symphony for so long, holding 
off the resolution right until 
the triumphal brass chorale of 
the finale. In these last years 
Sanderling's mastery becomes 
ever more subtle and unpre- 
dictable, but it is there none- 
theless. The Philharmonia, sig- 
nificantly Klemperer's old 
orchestra, played well for him. 

The First Piano Concerto 
was more problematical. Sand- 
erling set out at a magisterial 
pace, sinking down founda- 
tions of granite. Unfortunately, 
the pianist, Mitsuko Uchida, 
needed speed above all to com- 
pensate for her lack of weight. 
The result oscillated uneasily 
between one type of Brahms 
a n d another, hers headlong 
and shallow-toned, his patient 
and massive. Despite some 
exquisite moments in Uchida's 
slow movement, I know whose 
side I was on. 


Sponsored by AFG, Automo- 
tive & Financial Group- The 
other three concerts are on 
June 26, 28 and 30 


International 



■ ATHENS 

ATHENS FESTIVAL 
The international programme of the 
1994 festival opens on Sat with 
a Three Divas concert featuring 
Grace Bumbry, Katia Ricdareffl and 
Lucia Valentinl-Terrani. Riccardo 
Chailly and the Concertgebouw 
Orchestra give concerts next Mon 
and Wed, featuring Tchaikovsky’s 
First Plano Concerto (Lazar Berman) 
and symphonies by Brahms and 
Mahler. Other visitors over the next 
two months include the Peter Hafl 
Company production of Hamlet, 
Cristina Hoyos Ballet and the Vienna 
Philharmonic, St Petersburg 
Philharmonic and Berlin Symphony 

Orchestras. Most events lake place 

at the Odeon of Herodes Atticus 
(Athens Festival, 4 Stedlou Street, 
in the arcade. Td G1-J22 14KJ/ 
01-322 3111) 


■ BARCELONA 
Richard Bonynge conducts 
performances of Lucia di 
Larnmermoor at Palau SanTJord^ 
on June 28, July 2, 6 and 10, with 


cast headed by Edita Gruberova 
and Alfredo Kraus (318 9122) 


■ FLORENCE 

MAGGIO MUSICALE 
Semyon Bychkov conducts concert 
performances of Shostakovich's 
Lady Macbeth of Mtsensk tonight 
and Mon at Teatro Communal e, 
with cast headed by Tatyana 
Potoektova and Jan Biinkhof. Lorin 
Maazd conducts Pittsburgh 
Symphony Orchestra on Tues In 
works by Rakhmaninov and Ravel. 
The Maggio Orchestra brings the 
festival to an end next Thurs and 
Fri with Beethoven’s Ninth 
Symphony 0)55-277 9236) 


■ GENOA 

Teatro Carlo Felice Sat and Sun 
afternoons, next Tues evening: 
Oanandrea Gavazzeni conducts 
find performances of RHppo 
Crivetii's production of Leoncavallo's 
operetta La reginetta deUe rose, 
with cast headed by Denia 
Gavazzeni Mazzola and Luca 
Canonid ( DIO-588329) 


M LONDON 

THEATRE 

• The Cryptogram: world premiere 
of David Monet’s new play about 
the relationship between a woman, 
her child and a male visitor. 
Stand-up cometian Eddie tzzard 
mates his serious acting debut 
alongside Lindsay Duncan. Now 

In previews, opens next Wed 
(Ambassadors 071-836 6111) 

• Glengarry Glen Ross: San 
Mendes directs David Mamet's 1983 
afl-male classic about real estate 


salesmen whose insecure egos 
thrive or perish in the claustrophobic 
atmosphere of a downtown office. 
Just opened (Donmar Warehouse 
071-887 115(9 

• The Birthday Party: Sam 
Mendes’ revival of Harold Pinter's 
second play features Bob Peck, 
Anton Lesaer, Dora Bryan and 
Nicholas Woodeson. In repertory 
at the Lyttelton with Richard Eyre's 
new production of Sweet Bird of 
Youth, Tennessee Wiliams’ 1959 
drama (National 071-928 2252) 

• Murder in the Cathedral: 
Stephen Pbnlott directs a new RSC 
production of T.S. Biot’s greatest 
play. In repertory with Ibsen’s 
Ghosts, directed by Katie Mttchefi 
(The Pit 071-638 8881) 

• Arcadia: Tom Stoppard's witty 
and mind-expanding masterpiece, 
combining intellectual debate with 
depth of feeling. Roger Allam and 
Joanne Pearce head Trevor Nunn's 
new cast in this West End transfer 
of a production originally s taged 

at the National (Haymarkst 071-930 
8800) 

• The Queen and I: Pam Ferris 
plays the Queen In Sue Townsend’s 
stage version of her bestselling 
novel which places the Royal Family 
on a housing estate. Directed by - 
Max Stafford-dark (Royal Court 
071-730 1745) 

• Copacabana: Barry Maniiow’s 
musical opens tonight with Gary 
Wilmot in the lead role (Prince of 
Wales 071-839 5887) 

• FJdcfier on tire Roof: Topol 
returns to play Tevye in tills 12-week 
season of the Bock and Hamick 
mitecal. Now in previews, opens 
next Tues (London PaSadium 
071-494 5021) 

• A Midsummer Night's Dream: 


Deborah Page directs 
Shakespeare’s supernatural tale 
lathe open-air setting of Regent's 
Park (Open Air 071-486 2431) 
OPERA/DANCE 

Covent Garden The Royal Ballet 
gives the world premiere on Sat 
of Ashley Page’s Fearful 
Symmetries, set to music by John 
Adams, as part of a mixed bill 
including MacMillan’s Danses 
concertarrtes and Winter Dreams. 
There are also performances of 
Anthony Dowell’s staging of the 
Baryshnikov production of Don 
Quixote next Wed, Thurs and SaL 
The Royal Opera has a new 
production of Alda, conducted by 
Edward Downes and staged by 
Elijah Mosh insky, with cast headed 
by Cheryf Studer, Ludana D'lnt/no, 
Alexandre Agache and Robert Lloyd 
(071-240 1066) 

Coliseum ENO’s season runs til 
July 2 with performances of Jenufa, 
La boheme and Peter Grimes 
(071-836 3161) 

Sadler’s WeHs London City Ballet 
presents CoppeJia tonight, tomorrow 

and SaL The Cape BaUet, a 
mteti-racia! dance group from South 
Africa, opens a two-week season 
on Tues with the first of two 
programmes (071-278 8916) 
CONCERTS 

South Bank Centre Tonight 
Midnight Follies Orchestra pay 
tribute to Adelaide Hal of the Cotton 
Club. Sat Mark Shanahan conducts 
Forest Philharmonic In Berfloz's La 
Damnation de Faust, with Adrian 
Martin and Della Jones. Sun, next 
Tues and Thurs: Kurt Sanderling 
conducts Philharmonia Or c h es tra 
in works by Brahms. Wed: Edward 
Downes conducts BBC P hi harmonic 
in Delius, Hoist and Bgar, with cello 


soloist Lynn Harrell (071-928 880(9 
Barbican Tonight Kent Nagano 
conducts LSO in works by Rave!, 
John Adams and Prokofiev, with 
violin soloist Gidon Kramer. 
Tomorrow, Mon and Wed: Borodin 
Quartet continues its cycle of 
Shostakovich string quartets. Next 
Thurs: Mariss Jansens conducts 
LSO, with piano soloist Alfred 
Brendel (071-638 8891) 


■ MADRID 
Teatro Lirieo La Zarzuela 
Tomorrow, Sun, next Tues: Antoni 
Ros Marba conducts JosA Carlos 
Plaza’s production of Wozzeck. with 
cast headed by Gerardo Vera, Anja 
Silja and Graham Clark. Mon: Maria 
Bayo song recital (01-429 8225) 


■ MILAN 

Teatro aRa Scala Tonight Pierre 
Boulez conducts Bissmble 

InteiContemporaln In works by 

Varese. Mon: Wolfgang SavvaHtsch 
conducts revival of Giorgio Strehler’s 
production of Die BrrtfQhreng aus 
dem Seraii, with cast headed by 
Mariella Dev la. Barbara KHdufF. Kurt 
Moll and Kurt Streft (repeated June 
29, July 1, 4, 5, 7, 9, 12). Next Tues 
and Thurs: RJgotetto (02-7200 3744) 


■ RAVENNA 

HighKghts of this year’s Ravenna 
Festival include a concert tomorrow 
by the Dresden Staatskapelle under 
Giuseppe Sinopofi, the Scala 
Orchestra under Wolfgang 
Sawaflisch on July 3, a staging of 
Bellini's Norma starring Jane Eaglen 
on July 16 and performances of 
Verdi’s Requiem conducted by 


Riccardo Muti on July 20 and 22 
(0544-32577) 


■ SPOLETO 
The 1994 festival opened last night 
with a Poulenc double-bffl - his 
surreal opera Lee mamelles de 
TirSslas paired with a reconstruction 
of Nfllnska’s original choreography 
for Lea Biches (repeated June 25, 
29, July 1, 3, 6, 9). Wozzeck opens 
on July 2 in a staging by GQnter 
Kramer, conducted by Christian 
Badea. The dance programme 
features Baflet National de Nancy 
et de Lorraine (opening tonight with 
guest soloist Alessandra Ferri), 
Martha Graham Dance Company 
(June 29-July 3) and Roland Petit's 
Baflef National da Marseille (July 
5-9). The drama programme 
includes the St Petersburg Maly 
Theatre and Arthur Millar's The Last 
Yankee (Tickets and information 
from Teatro Nuovo 0743-40265) 


■ TURIN 

Teatro Regio Tonight, Sat, Sun 
afternoon, next Tues afternoon end 
Thurs: Bruno Cam panel la conducts 
Roberto De Simona’s production 
of La Cenerentola, with cast headed 
by Jennifer Larmore/Susarme 
Mentzer. Rockwell Blake/Mario 
Zaffiri, Enzo Dara and Michele 
Partusi (011-881 5214) 


■ VERONA 

Arena The season opens on July 
8 with Bellini’s Norma. This year's 
programme also includes La 
boheme, Oteilo, Aida and Nabucco, 
plus a gala for Pfacido Domingo 
on August 9 (045-59651 7) 


ARTS GUIDE 

Monday: Baffin, New York and 
Paris. 

Tuesday: Austria. Belgium, 
Netherlands, Switzerland. Chi- 
cago. Washington. 
Wednesday: France. Ger- 
many, Scandinavia. 

Thursday: Italy, Spain, Athens, 
London, Prague. 

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 

(Centra! European Tima) 
MONDAY TO FRIDAY 
NBC/super Channel: FT Busi- 
ness Today 1330. FT Business 
Tonight 1730. 2230 

MONDAY 

NBC/Super Channel: FT 
Reports 1230. 

TUESDAY 

Euronews: FT Reports 0745, 
1315. 1545, 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; 










Enigma at the heart 
of the bloke 


H e’s blokeish, with, a 
hail-fellow-well-met 
quality, always pop- 
ping up on our tele- 
vision screens or disturbing a 
quiet breakfast by trying to 
outsbout the presenter of BBC 
radio's Today programme. But 
Kenneth Clarke, Britain's 
chancellor, is still a puzzle. 

He defies easy categorisa- 
tion. He hails by tradition and 
intellect from the left of the 
Conservative party, bnt has 
nevertheless spearheaded some 
of the most bruising confronta- 
tions between government and 
recalcitrant employees such as 
doctors, ambulance workers 
and teachers. Although a stick- 
ler for upholding the powers of 
Parliament, he has facilitated a 
steady increase in the Bank of 
England's say in monetary pol-, 
icy. Thai there is the sartori- 
ally challenged Clarke with, his 
famously crumpled suits and 
suede Hush Puppy shoes. 
These are shouting out a mes- 
sage of some sort but what? 

This book, in spite or per- 
haps because of being “com- 
pleted with Mr Clarke's full 
co-operation", leaves the 
reader still unclear as to what 
really makes this ambitions 
politician tick. However, 
author Malcolm Balen, the edi- 
tor of BBC TV's Nine O 'Clock 
News, has provided the next 
best thing in this readable 
account of the ups and downs 
in a career that put Clarke in 
charge of the UK’s health, edu- 
cation, law and order and now 
the Treasury. 

It would be a heroic story if 
John Major had not already 
overcome greater handicaps in 
his background to become 
prime minister. But the tale of 
the Nottin ghamshire watch- 
repairer's son (from what Tory 
canvassers would identify as a 
C2 skilled working-class fam- 
ily) who resolved early in life 
to became an MP and who has 
climbed high enough up the 
Tory party’s greasy pole to eye 
the prime minister’s job is still 
sufficiently unusual and topi- 
cal to be Worth tolling 
Of obvious importance were 
the scholarship successes to 
the upmarket Nottingham 
High School and to Cambridge, 
and the discovery of like- 
minded souls at university 
who were later to form a 
“Cambridge mafia" of friends 
and rivals in the Tory govern- 
ments of the 197Ds and 1980s. A 


KENNETH CLARKE 
By Malcolm Balen 

Fourth Estate, 302 pages, 
hardback £18.99 


stable family life, which Clarke 
takes care to keep out of the 
public eye, and outside inter- 
ests such as jazz have doubt- 
less given him greater stay- 
ing power than many politi- 
cians. 

But the story is not without 
its dark moments. Clarke's 
mother developed a drink prob- 
lem when he was in his teens 
and, according to his younger 
brother Mirfiawi . rffed an alco- 
holic. WhSeKke’s childhood 
appears to have been happy 
enough, Balen suggests that he 
started early in life to fashion 
a tough outer shed. 

Many people in these pages 
describe Clarke as “self-con- 
tained". Balen says his subject 
is "a gregarious man who is 
intensely private" and “an 
uncomplicated enigma”. For 
Michael Clarke, “Ken is like an 
iceberg. Seventy five per cent 
of him is underwater. To get 
where he's got, he must be lie 
that rm not saying his person- 
ality is a facade - it isn’t - but 
there’s a very large inner per- 
son. He can be very emotional. 
But he tonris to him- 

self.” 

That submerged 75 per cent 
no doubt helped Clarke 
through the frustrations of the 
1980s. As not “one of us” he 
failed for many years to pros- 
per under Mrs Thatcher. He 
only entered the cabinet in 
1985 and then as Commons 
spokesman for the employment 
secretary, Lord Young. Once in 
high office, Clarke developed a 
talent for getting into fights. 

A love of controversy had 
always been there. The book 
recounts how, as head of the 
Cambridge University Conser- 
vative Association, Clarke had 
caused an almighty row by 
inviting Oswald Mosley, the 
head of the British fascists in 
the 1930s, to speak. He rode oat 
the storm but it delayed his 
rise to the politically important 
post of president of the Cam- 
bridge Union, the students' 
debating society. Similarly, 
Balen says Clarke’s later bat- 
tles with doctors and ambu- 
lance workers “set back his 
career and ultimately cost him 
a place in the leadership race 


when Mrs Thatcher resigned”. 

That Clarke is now chancel- 
lor is a measure of the policy 
failure culminated in ster- 
ling’s exit from the European 
exchange rate mechanism and 
the presentational ineptitude 
of Norman Lament, his imme- 
diate predecessor. 

Balm's book, winch finishes 
with Clarke's tax-raising Bud- 
get of last November, wisely 
steers clear of predicting 
whether the chancellor will 
move next door to Number 10 
Downing Street For Clarke's 
performance at the Treasury 
will be crucial in determining 
whether he wfll one day suc- 
ceed John Major as prime min- 
ister or leader of the opposi- 
tion. 

Clarke has so far been both 
lucky and sknfh? fri tunning 
his second (after the Home 
Office) of the three great 
offices of state. From the hap- 
less Lament, he inherited an 
economy with low inflation 
and law interest rates that was 
recovering from recession. He 
had the guts to tackle the prob- 
lem of the atwinal £5Qfan Hpf jrit 
head-on through unpopular toy 
rises. 

True, “Clarkes" took a 
pounding earlier tufa year on 
the Westminster gossip 
exchange when the impart of 
the tax increases dawned. But 
with the economy still growing 
.and the setback that John 
Smith's death caused to the 
leadership hopes of Michael 
Heseltine, trade and industry 
secretary, Clarke’s stock 
appears to be rising again - at 
least within the Tory party. 

The nagging worry, which 
Balen’s book does nothing to 
dispel, is whether Clarke is an 
accident waiting to happen. 
The book chronicles how ill 
considered remarks when 
health secretary exacerbated 
his disputes with the doctors 
and ambulance service. There 
was also the television debate 
after Black Wednesday's EBM 
exit in which he admitted that 
he had never read the Maas- 
tricht Treaty. 

Such mishandling can. be 
excused and o verc om e in a bat- 
tle against vested interests. 
But will financial markets be 
so forgiving if they turn 
against the pound and this 
chancellor? 

Peter Norman 


C loser than Switzer- 
land” says the adver- 
tisement for a large 
private bank in the 
newly independent state of 
Latvia, which nestles between 
Russia and the Baltic Sea. The 
slogan could apply to the 
entire country, as it tries to 
rejoin the capitalist west from 
which it was tom by Stalin in 
1940. With a strong currency 
P7id hopes of humming a finan- 
cial centre, Latvia is emerging 
as an island of relative eco- 
nomic stability within the for- 
mer Soviet Union. 

However, Latvia's ambitions 
for a speedy reintegration with 
the west are threatened by a 
political problem which has 
festered for the past three 
years: whether non-Latvians, 
who make up almost half the 
population, should be given cit- 
izenship. On Tuesday, the Lat- 
vian partiwmflrxt fin ally passed 

a law giving non-ethnic Latvi- 
ans bora in the country a 
chance to apply for naturalisa- 
tion by 2000. But it imposes 
draconian citizenship quotas 
on non-Latvian residents who 
were not bom in the country. 

These quotas nwm Latvia, is 
unlikely to join the Council of 
Europe, the 32-nation forum for 

human ri ghts ayd democracy 

regarded as a stepping-stone 
for integration into western 
Europe. This is because such 
organisations, as part of their 
membership requirements, 
Insist countries should not 
leave residents stateless. More 
Importantly, the Latvian par- 
liament’s rinriainm moans any 

longer-term ambition to join 
the European Union and Nato 
- which. Latvia sees as its best 
guarantee of security and inde- 
pendence - has been pushed 
further into the distance. 

Mr Hugh Hamilton, local rep- 
resentative of the Conference 
on Security and Cooperation 
in Europe, the 52-nation forum 
regulating borders and secu- 
rity, said yesterday. “Interna- 
tional opinion in general will 
be expressing concern that this 
law really does not accord with 
the norms of the western com- 
munity which Latvia has been 
seeking to associate itself 
with." 

Mr Valdis Birkavs, Latvia's 
prime minister, recognised the 
new difficulties created by par- 
liament’s vote when he told 
deputies: “Let us cherish no 
illusions that we will wriggle 
out, that nothing bad will hap- 
pen. These quotas can only 
complicate matters." 

The ramifications are consid- 
erable. The curbs on citizen- 
ship will binder economic 
progress because citizenship 
brings the right to own land as 
well as to vote. They are also 


Quite simply the Royal Oak, 


m 

AUDEMARS Plgdet 

The master watchmaker. 


For Infnmuitofi and catalogue, plea*. 1 write to- 
Auik-oua ISgutf* A Cic Sjl, 1 3-Jit Lf Bww. Switzerland. 
Ttf. it ±1 S45 -19 31 Fax 41 21 BhS 42 Is 



Held up on the 
western line 

Leyla Boulton says Latvia’s tough citizenship 
rules are a blemish on its international image 



hampering Latvia’s attempts to 
mend relations with Russia 
amt restore trade ties da mag ed 
by tiie collapse of the Soviet 
Union. 

Had it been able to devise a 
more internationally palatable 
solution to the citizenship 
issue, Latvia would have been 
better placed to buM on its 
economic strengths. Since 
recovering its pre-war indepen- 
dence in 1991, Latvia has run a 
near deficit-free budget. Its cur- 
rency. the lat, is fully convert- 
ible and last year appreciated 
against the main western cur- 
rencies- Under the monetarist 
stewardship of a fiercely inde- 
pendent central hank , inflation 
and recession have been milder 
in Latvia, and in next-door 
Estonia, than in their former 
Soviet neighbours. 

Latvia’s GDP contacted by 12 
per cent last year but has 
retained to modest growth this 

year. An inflation rate of 35 per 

cent last year is forecast by 
economists to foil to about 20 
per cent this year - low by the 
standards of the former Soviet 
Union. Hig h real inter est rates 
and lack of foreign exchange 
controls have attracted capital 


fleeing instability elsewhere in 
the former Soviet Union. Mr 
Alexander Rannikh, Russian 
ambassador to Latvia, 
described the country as “a 
Switzerland for second-class 
capital which is not ready for 
Switzerland bat unsafe in Rus- 
sia”. 

But the financial orthodoxy 
which has made Latvia a 
favo u rite of the International 
Monetary Fund contrasts 
sharply with its clumsy han- 
dling of its demographic arith- 
metic. As a result of the migra- 
tion of Russians, Ukrainians 
and Byelorussians to work at 
factories built under Soviet 
rule, ethnic Latvians today 
account for only 52 per cent of 
the population, compared with 
three-quarters before the coun- 
try’s annexation in 1949. 

Fearing Latvians could be 
swamped by “Russian-speak- 
ers”, parliament decided in the 
run-up to independence to 
restrict citizenship to pre-1940 
ri tiams and their descendants. 
This arrangement effectively 
disenfranchised 700,000 people 
who had the vote when Latvia 
was part of the Soviet Union. 

The legislation approved this 


week will enable spouses of cit- 
izens, plus more than 200,000 
Russian-speakers bom in Lat- 
via, to apply for citizenship by 
2000. But Mr Hans-Peter Fur- 
rer, the Council of Europe’s 
director for political affairs, 
said the quotas in the new law 
would mean only about 2,000 
people bom outride Latvia (out 
of a total of 300^00 in this cate- 
gory) would qualify for citizen- 
ship each year after 2000. 

Latvia can argue that it faces 
a unfap ift dilemma ~ few coun- 
tries’ demography have been 
so radically altered in a rela- 
tively short period. But while 
sympathetic to its circum- 
stances, Mr Furrer and the 
CSCE’s Mr Hamilton believe 
Latvia could have protected its 
national Identity and security 
without quotas - via, for 
instance, a requirement that 
citizens can speak Latvian. 

Mr Nils Muiznieks, a US-bum 
academic, explained the reluc- 
tance to grant citizenship as a 
mixture of a desire by extreme 
n ationalists to encourage Rus- 
sian speakers to leave, and 
fears among more moderate 
politicians that giving them 
the vote could "slow" Latvia’s 


market reforms and create* . 
•fifth column" o f potentially 
disloyal citizens. Many Russian . ... 
speakers work In Soviet-era 
factories now likely to close 
^SfregBnied by ethnic Ut-§ 
vians as inclining to the oa«^ 
rather than to the west. 

The irony is that many Rns-4^ 
suns, who constituted the|>.; 
local elite in the Soviet era,^ 
have become akin to the Jws - fv 
of the Tsarist empire. Excluded: . 
from government posts, they 
have thrived on business, 
which they now dominate.. 
Local Russian-language rartw 
in the capital Riga pkys wou- 
ly-produced pop songs with lyr- 
ics about the delights or gotag . - . 
info “biznfiz". Mr Boris Tsflev- 
ich, a Jewish writer who has 
n»i«m up the cause of non-citi- 
zens, said a large segment of 
the population is being unnec-.. 
essarily alienated. “If Russian- 
speakers turn out to be th© 
•fifth column' Latvians talk 
about, it will have been built 
by Latvian hands.” 

P erhaps more worrying . . 
is the reversal of prog- 
ress in repairing refer 
tions with Russia 
which could ensue from parlia- 
ment’s decision this week. Last 
month the two countries 
signed an agreement on the 
withdrawal of the remaining 
Russian troops by August 31. 

In return, Latvia agreed to give 
residence permits to retired 
Russian officers who decide to 
stay. Russia made dear its dis- 
pleasure at the reappearance of. 
quotas in the draft cit iz e nship 
law earlier this month when it 
postponed indefinitely a 
planned visit to Latvia by Mr 
Victor Chernomyrdin, Russian 
prime minister. In anticipation 
of the visit, a trading agree- 
ment between Russia and Lat- 
via, halving import and export 
duties on trade between the 
two countries, came into force 
at the beginning of this month. 

Latvia’s eagerness to recover 
markets in the east is being 
spurred by fears that in spite 
of its pro-western outlook, 
overpowering competition 
from mare developed capitalist 
economies could see its 
national interests subjugated 
to those of foreign investors. - 
The danger Latvia faces is of 
upsetting both east and west. 

Chi the cue hand, the citizen- 
ship law may fuel the demands 
of Russian nationalists in Rus- 
sia, thus creating greater 
regional instability. On the 
other hand, Latvia has harmed 
its of winning accep- 

tance by tiie western organisa- 
tions that could protect its 
independence - and taring eco- 
nomic benefits - whatever hap- 
pens in Russia. 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Leners transmitted should be dearly typed and not hand written. Please set fa x fo r finest resolution 


Labels of 

candidates 

confusing 

From Dr Keith Cameron. 

Sir, On May 12, immediately 
after the dose of nominations, 
the Devon branch of the Euro- 
pean Movement held a public 
meeting at which six of the 
eight candidates for the Devon 
and East Plymouth Euro-con- 
stituency were given equal 
opportunity to speak. 

One candidate, named to us 
over the telephone from the 
returning office shortly after 4 
pm as the Direct Democracy 
Candidate, arrived at our meet- 
ing some three hours later as 
the Literal Democrat. As a 
result of concerns raised after 
the meeting we sent a fax on 
May 13 to the returning officer 
about the dear scope for confu- 
sion between the labels of two 
candidates, already both 
described in Express and Echo 
of May 13 as Liberal Democrat 
We pointed out that this could 
have "a not inconceivable per- 
nicious effect on the represen- 
tation of this area in the Euro- 
pean Parliament". Our request 
for clarification of the descrip- 
tions was not acted upon. 

The election result folly jus- 
tifies our concerns; the Literal 
Democrat, unknown and with 
no campaigning literature, 
obtained some 10,000 votes by- 
deceiving large numbers' of 
understandably very upset 
electors. The liberal Democrat 
was a mere 7D0 votes behind 
the Conservative. It should be 
noted that the misleadingly-de- 
scribed candidate was in a 
higher position on the ballot 
than the liberal Democrat 

In the interests of fair and 
proper representation my com- 
mittee considers it necessary 
for a new election to be held in 
this constituency. 

Keith Cameron, 
c hamnan, Devon Branch, 
European Movement 
Exeter 


Lottery and fair competition 


From Mr Paul Route. 

Sir, You reported in your 
story, “EU seeks views an Cad- 
bury link with lottery” (June 
15), on the European Commis- 
ston’s examination of the Cam- 
riot joint venture agreements. 
The Commission wishes to 
ensure that the agreements in 
no way contravene EU rules on 
free and fair competition. It 
seems likely that Camelot will 
have taken great care to for- 
mulate its agreements in such 
a way as to minimise the risk 
of their being overturned by 
the EU. 

I wonder, however, whether 
as much consideration has 
been given to potentially seri- 
ous competition issues by 
those who will be distributing 
the proceeds of the National 
Lottery. Such issues could 
arise iS the distributing bodies 
grant funds to companies or 
other organisations which 


compete in genuine markets. 
The lottery legislation may 
have excluded private individ- 
uals and companies from 
receiving grants from the 
National Heritage Memorial 
Fund but I am not aware that 
any such exclusion applies, for 
example, to Arts Connell or 
Sports Council foods. Competi- 
tion among theatres and 
among sports venues, to name 
just two examples, could thus 
be affected. 

Companies which bid for 
grants and propose to co-fi- 
nance the projects concerned 
will surely be seeking some 
competitive advantage as a 
result An effective subsidy for 
a capital project provided to 
just one player in a market but 
not other (potential) competi- 
tors, might constitute a signifi- 
cant banter to the competitors’ 
entry or growth. Grants could 
directly or indirectly support 


changes in pricing, investment 
or other competitive behav- 
iour. 

I believe that such effects 
could well be thought of by 
some non-recipients of grants 
as distortions of competition in 
their markets. The chances of 
this are increased by the 
National Lottery's high profile 
and the substantial funds 
likely to be distributed. Com- 
plaints to competition authori- 
ties seem distinctly possible. 

My experience is that they 
consider the dtebuisement of 


subsidies carefully. Some of 
the distributing bodies may 
need to think equally carefully 
about developing appropriate 
guidelines to deal with these 
issues if they are to avoid the 
authorities’ investigations. 

Paul Rowe, 

Coopers A Lybrand, 

1 Embankment Place, 

London WC2N 6NN 


Standard not necessarily 
to do with product quality 


From Mr Alan W Bateman. 

Sir, As a former business 
director for commodity chemi- 
cals in one of the world’s larg- 
est chemical companies, the 
attacks on BS 5750/ISO 9000 
provide me with a belated 
sense or “I told you so” (“Qual- 
ity under foe” June 21). 

I regarded the socalled stan- 
dards as one of the biggest con 
games ever perpetrated on the 
chemical industry, since they 
did not necessarily have any- 
thing to do with the quality of 
the final product or its fitness 
for use. If the BN5/BO certifi- 
cation defines a process which 
is less than optimal product 
quality can be affected. 

For chemical products of the 
physical and chemical specifi- 
cations agreed between the 
customer and the producer 
should be the prime criterion. 


The manner by which the pro- 
ducer makes the chemical or 
acquires it In the event that 
bis plant cannot produce for 
any reason should be irrele- 
vant to the customer. The 
guarantee to the easterner 
most be that the product sup- 
plied is “on spec". 

The only winners in the BS/ 
ISO game have been those that 
carried out the certification 
process which is unbelievably 
thne-consuming and expensive. 

An American friend of mine 
(also in the chemical business) 
assured me that the Initials 
“BS" had a meaning other than 
“British Standard" when the 
number 5750 was involved. 
Alan W Bateman, 
chemical industry consultant, 
Oberhustrasse 7, 

CH-8134 Adhstail, 

Switzerland 


No nannying 

From Mr Edward de Bona 

Sir, Many of your readers 
expect to find valuable and 
useful information in your 
pages. Some of them are not 
too happy to be patronised by 
an interviewer (Lucy Kella- 
way) who planks her magnifi- 
cent ego between them and a 
subject they might like to learn 
more about (“Put on your 
inkin g caps”, June 17). 

Since “parallel thinking" ham 
now been taken up by many 
corporations which find it 
more constructive than tradi- 
tional argument the personal 
opinion of your interviewer is 
probably of less value to your 
readers than an opportunity to 
find out about the method. 
Your readers can mak» np 
their own minds without befog 
nannied as to what to think, 
Edward de Bono, 

L2 Albany, 

Piccadilly, 

London W1V9RR 


Fears about biotechnology are not based on ignorance 


From Dr Alan Wnrttan. 

Sir, I feel I most take issue 
with. David Richardson's asser- 
tion (Farmer’s Viewpoint, June 
21) that fears about the ade- 
quacy of biotechnology safe- 
guards are “probably based on 
ignorance". 'While I would not 
dispute that genetically modi- 
fied organisms offer great 
potential it is important to 


appreciate that, once released 
into the environment such 
organisms will he- outside of 
our Immediate control and, 
potentially, wfll be subject to 
evolutionary and adaptive pro- 
cesses. One does not have to 
assume a worst-case scenario, 
involving the transfer of 
genetic material between spe- 
cies, to foresee problems. For 


example, it is obvious to any- 
one that oilseed rape is colonis- 
ing set-aside land and marginal 
habitats, such as motorway 
verges. 

A . genetically modified, her- 
bicide-resistant strain of this 
crop could prove difficult to 
eradicate, presenting an insidi- 
ous competitive threat to the 
native flora and hence the 


fauna. History Is littered with 
toe good intentions of scien- 
tists who failed to consider 
ftdty the Implications of their 
actions. I do not regard myself 
as an ignorant Luddite because 
I have no desire to see the mis. 
fakes of the past repeated - I 
have a PhD in biology 
Alan Wrriton, 
finest (Sofa London E7 



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7 


FINANCIAL TIMES THURSDAY JUNE 23 1994 


FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Tel: 071-873 3000 Telex; 922186 Fax; 071-407 5700 

Thursday June 23 1994 


Dumping of 
the dollar 


Dollar weakness is an old story. 
Until 1971, the once an-canqaering 
greenback was worth 360 yen. 
Until 1969, it was worth four 
D-Marks. How has the mighty 
fa l l en 1 The questions to be asked 
are why this latest bout of weak- 
ness has occurred, whether it is 
possible to do something eff ect i ve 
about it and, finally, whether 
actum should even be attempted. 

The problem in explaining the 
dollar’s weakness is not that thane 
are two few explanations, but that 
there are too many. While move- 
ments in relative interest rates in 
1994 should have been favourable 
to the dollar, fingers can still he 
pointed at external balances, at 
fears of inflation, at the US fiscal 
deficit, at the Federal Reserve’s 
somewhat modest monetary tight- 
ening since February and at the 
currant caution of investors, it is 
tempting to draw the sage conclu- 
sion that the dollar has been weak 
because too few want to buy it 
Can one do better Hwn that? 
Perhaps. If the dollar is to remain 
stable, the rest of the world must 
be a net buyer of claims on the 
US, at existing exchange rates, of 
same $l40bn in 1994, says the IMF 
in Us latest World Economic Out- 
look. Similarly, Japan must be a 
net buyer of claims on the rest of 
the world, to the tune of £L33bn 
this year. Unless the US offers rel- 
atively attractive returns on 
assets (Including on the dollar) 
and Japan relatively unattractive 
ones, these capital flows will occur 
only after exchange rates reach 
self-evidently under- or overvalued 
positions. 

Convinced investors 
Until then, current account 
flows are likely to become over- 
whelmingly important They are 
still more likely to determine the 
fate of the dollar once the US 
authorities have convinced inves- 
tors that they do, foolishly, hope 
to eliminate the bulk of the Japa- 
nese current account surplus. 'Hie 
US current account deficit must 
then also fall, which suggests the 
dollar’s real exchange rate will 
have to decline. 


anese did, following the Louvre 
Accord in February 1987, not an 
experience they wish to repeat 
The problem fa that they can sta- 
bilise the dollar only by abandon- 
ing domestic monetary control. As 
Professor Ronald McKinnon 
painted out in the FT on Tuesday, 
the two countries must, in effect; 
form a joint monetary policy. 

Frighten speculators 
The effectiveness of all other 
measures is uncertain, limited 
intervention particularly so. If 
central banks bit the markets 
unawares, they can frighten spec- 
ulators for a while. They can 
make announcements, as secre- 
tary of the Treasury Beoisen did 
yesterday, about how strong the 
US economy is. Such talk is cheap 
and win sot work for long. That 
leaves changes in monetary policy 
itself But the effects even of that 
are uncertain. They depend on 
what happens to prospective 
returns on longer-term assets. If 
higher short-term interest rates 
are thought to prove that a central 
bank is hysterical about inflation, 
they may harm the cause of the 
currency as modi as they help. 

The final question is whether 
the authorities should, in fact, try 
to something about the dollar’s 
decline. A partial answer to this 
question is that the dollar's 
decline is probably not particu- 
larly harmful. But the policy 
changes suggested by the foreign 
exchange markets are, in any 
case, in the right direction. Devel- 
opments in the US economy and 
band markets would justify some- 
what higher short-term rates of 
interest and a tighter fiscal posi- 
tion, toe latter muterimuri by Mr 
Alan Greenspan yesterday. 
Despite faint signs of recovery, 
there also is a case for a more 
expansionary monetary policy in 
Japan, something that unsterilised 
foreign exchange intervention 
would ensure. 

Why is toe dollar weak? We are 
not certain. Can something be 
done about it? Yes, but nothing 
decisive wifl be. Should something 
be tried? Yes, because the 


fa there anything the authorities *■ required changes in policy would 


can do about that decline? The 
answer is yes. Tbs central bank in 
charge at the strengthening cur- 
rency can always stabilise the 
exchange rate, by purchasing the 
weakening one, without limit. 
This was pretty well what the Jap- 


push the two main players in sen- 
sible directions. Does dollar weak- 
ness matter that much? Probably 
not. However unhappily, the 
world economy has survived 25 
years of it It can, no doubt sur- 
vive a few more. 


South Africa’s 
balancing act 


South Africa's government of 
national unity has passed Its first 
test Yesterday’s budget is a brave 
attempt to reconcile two critical 
constituencies. The concerns of 
toe business community, looking 
for evidence of fiscal discipline, 
were met with the pledge to cut 
the budget deficit from 6J9 per 
cent to 6J5 per cent of GDP. It will 
be harder to satisfy a domestic 
constituency anticipating a libera- 
tion dividend. The provision of 
9685m for the first year of the 
country’s development plan may 
seem modest at first sight, but it 
will be hard to spend this amount 
efficiently in the time available. 

This cautious approach suggests 
that the new ANC-led government 
is determined not to repeat the 
mistakes that have proved so 
costly elsewhere in Africa. But the 
toughest tests are yet to come: 
cot. trolling spending while keep- 
ing promises to provide a better 
life for the country's black major- 
ity. The budget wifi came under 
pressure from several sources 
including the costs erf an expand- 
ing dvfl service, erf a multi-tiered 
system of local, provincial and 
central government, and of integ- 
rating the armed force s. W inding 
op the old apartheid structures 
and replacing them with a new 
system wifi almost certainly prove 
more costly than anticipated, even 
if in the long run it will prove 
more efficient. 

Apartheid’s legacy 

Redressing toe legacy of apart- 
heid involves undoing one of the 
twentieth century's most radical 
experiments in social enginee ring, 

Involving the forced removal from 

so-called “white areas” of over 3m 
people. Making restitution to toe 
dispossessed, poking available 
state-owned land to ease pressure 
in former “black areas”, and redi- 
recting fin ancial and other assis- 
tance foam commer cial farmers to 
peasant fanners without disrupt- 
big agriculture will be an awe- 
some task for a government most 
of whose members have no previ- 
ous administrative experience. 
Scarcely less demanding is the tar- 
8®t of meeting a housing backlog 
of over L5m units while keeping 
op with annual extra demand of 
Kane 200,000 homes. 

The new government must also 
resolve unfinish ed constitutional 
msiness: determining the rela- 


tionship between toe central gov- 
ernment and the nine provincial 
governments. It is becoming 
increasingly dear that there will 
be a tussle for power between the 
provincial premiers and the execu- 
tive, involving some of the most 
critical issues such as the alloca- 
tion of state resources for housing, 
health and education. 

Working relationship 

Fortunately, the four-year tran- 
sition which culminated in Presi- 
dent Nelson Mandela's inaugura- 
tion last month has helped forge a 
working relationship between the 
ANC, Deputy President de Klerk’s 
National Party, and the business 
community. It 1s significant that 
both the deputy to finance minis- 
ter Mr Derek Keys, Mr Alec 
Erwin, and Mr Jay Naidoo, the 
minister responsible for the social 
upliftment programme, are 
preaching the virtues of fiscal dis- 
cipline as enthusiastically as Mr 
Keys himself. This has allowed 
much of the important ground- 
work for development to take 
place. The foreign debt burden, 
dating back to the freeze on far- 
ther lwtfHwg imposed by commer- 
cial banks in 1985, has been eased. 
Similarly, the transitional team 
has negotiated an International 
Monetary Fund facility and made 
trade liberalisation proposals to 
the General Agreement on Thrift; 
and Trade. 

Now what Mr Keys called the 
“golden triangle of government, 
business and the unions’* has to 
deliver jobs and improved living 
standards. As he acknowledged, 
success in a challenging interna- 
tional environment requires liber- 
alisation of South Africa’s 
exchange controls, a significant 
obstacle to investor confidence, as 
soon as conditions are right But 
first South Africa needs to build 
up its foreign reserves, which cur- 
rently cover barely six weeks of 
imports. Above all, restored access 
to international fimmmai markets 
should not be seen as a way of 
funding a larger budget deficit. 

If South Africa can realise the 
vision set out by Mr Keys in yes- 
terday’s budget - an open society, 
trading freely with other nations, 
investing liberally to increase pro- 
ductive capacity, and creating 
more jobs and an attractive 
domestic market - it wffi have 
broken the African mould. 


L 


eaving aside politics and 
the bond market, the UK 
recovery is doing better 
than might have been 
expected. Output is rising 
at trend rates or slightly above: that 
is sufficiently fast to make inroads 
into unemployment and unused 
capacity, but not so fast as to stoke 
up inflation. Indeed, the April 
increase in earnings growth has, for 
the moment at least, reversed itself. 
The official index of underlying 
retail price inflation is 25 per cent, 
lower than predicted in any of the 
Bank of England Inflation Reports. 
The Bank’s own index, stripped of 
indirect tax increases, is even 
lower, at around 2 per emit or less. 

Moreover inflation worriers 
should be reassured by recent evi- 
dence that the pace of home 
demand is moderating. Retail 
spending, although well up on a 
year ago, is increasing less quickly. 
Monetary conditions have tightened 
themselves owing to the rise in 
bond yields; and an increase in toe 
cost of fixed interest mortgages has 
fatm the edge off the Hmrefag mar- 
ket Thus, as the world economy 
recovers, there should be room for 
exports to take over some of the 
momentum from home spending. 

What, than, are tha finWia i mar- 
kets worrying about? The political 
weakness of the British government 
is not a good explanation. There 
have been plenty of bull markets 

under Labour gov- 

enrments and bear 
markets under 
Conservative ones. 

Labour leaders 
are, if anything, 
hypersensitive to 
international and 
financial market 
sentiments. Have 
finaii trial analysts 
already forgotten 
the prawn cocktail offensive in the 
(3ty before toe last election to per- 
suade the City of Labour’s financial 
responsibility? The real dangers erf a 
Labour government are from the 
harm it might inflict an its natural 
supporters through devices like 

m'mtmrmi wages. 

Another false worry fa that the 
present government will refuse to 
ti ghten monetary policy when the 
Bank at England advises it to do so. 
The chancellor, Kenneth Clarke, fa 
‘philosophically* in favour of central 
bank independence, but does not 
think the time right for a fall-fron- 
tal move. Meanwhile, the pufahea- 
ttou of toe minutes of his monthly 
meetings with the governor has put 
the latter in the driving seat If the 
-Bank of England fa really intent on 
raising interest rates - which it fa 
not at present - the most that the 
rfwncriifw is able to do, as he well 
recognises, fa to interpose a mino r 
delay. Moreover, a Blair-Brown 
Labour government would not 


Economic Viewpoint 

Steady as she goes 
but watch bonds 


reverse the moves made so far to 


give the Bank more scope. Indeed 
Labour's mood at the moment fa to 
settle for a transitional set of 
arrangements quite nrmilar to the 
government's owzl 
What then fa worrying markets? 
The source of the trouble fa clearly 
the US- Even here, there may not be 
anything all that fundamental. We 
may simply have seen the bursting 
of a moderate speculative bubble. 
The Dow Jones Industrial Average 
fa still much higher than in most erf 
1992 and 1993. The same applies to 
the FT-SE 100 Index in the UK The 
German Dax index has seen nothing 
more titan a hesitation in a two- 
year upward trend. 

Similar remarks apply to bonds. 
In the US and the UK. bond yields 
have more than reversed their 1993 

fall, but are still 

lower than two 
years ago. The rise 
in German yields 
has been less, but 
sufficient to put a 
brake on the suc- 
cession of 
short-term interest 
rate cuts. One way 

of patting what 

has happened is 
that, a year ago, inflation was 
widely held to be dead and deflation 
declared to be the new problem. 
Today's perception is of a normal 
upward phase in the business cycle, 
bringing with it the familiar need 
far vigilance g pringt any inflation- 
ary takeoff. 

The most striking feature of 
world financial markets is the 
weakness of the dollar against the 
yen. But this fa not yet a general- 
ised dollar weakness. The US cur- 
rency is a good deal higher, for 
instance, against the D-Mark than it 
was in the closing m onthu of the 
Bush administration, when it 
touched DML39. Sterling has weak- 
ened less thari the dollar and it fa 
still well above the low levels it 
reached after the 1992 ERM exit 
But having said all tins, the weak- 
ness of bond prices will indeed 
became a severe warning signal if it 
goes much further. The rise of 
nearly 3 percentage points in UK 
bond yields since last wint e r be 
decomposed into two elements. 


By Samuel Brittan 

• The switch In bonds 


a jo 


tO-yaar benchmark bond yield (%) 


The chancellor is 
looking at ideas 
for selective 
top-up to pay of 
those accepting 
low-wage jobs 



ao •- 


as 


. 2J) i> 


X 


■ Owr 6 yams, Mamins 5*6 Matkm 


10-ywr yield minus index linked yWdfl*) 



. 4J0 


aoh 


Jtn 

SaemrJFrSBvMH 


1903 


1904 


Jim 


There has been a rise of over l 
point in the return on index-linked 
securities, which now yield around 
4 per cent. This fa an approximation 
to the real rate of interest not only 
in the UK, but in the world - fin- 
real rates tend to equality in a 
worldwide capital market 
This real component erf the rise in 
rates could be a sign that the world 
capital shortage, which was prema- 
turely diagnosed after toe fall of toe 
Berlin wall, has at last really 
arrived, hi the words of David Hale 
of Kemper Financial Services, “toe 
potential exists for toe old indus- 
trial countries to experience a cycli- 
cal economic recovery coincident 
with rapid economic growth in 
countries making 1 the transition to 


market- based economic systems. 
This fa likely to put upward pres- 
sure an real interest rates, because 
it will generate investment activity 
and credit demand from countries 
which have not been players since 
the first world war." In addition, 
there win be the need to finance 
budget deficits in most western 
countries. 

On top of these structural forces, 
there fa an apparent rise of more 
than 1 percentage point in the UK 
‘inflation premium 1 , derived by sub- 
tracting the yield on indayed gilts 
from that an normal gilts. 

The one worldwide force suggest- 
ing the possible return of inflation 
has been a 25 per cent jump this 
year in commodity prices, hi fact, a 


sharp rise here in toe course of a 
world recovery fa quite normaL An 
occasional bump of this kind is an 
illustration of the point by former 
UK chancellor Lord Lawson that we 
cannot expect either output or 
prices to move in a straight line. 
However, a continued commodity 
price increase of recent dimensions 
could not be so readily ex plained 
away and would be a sign of world- 
wide pressures on capacity. 

I can still hear critics saying that 
the true constraint on UK recovery 
is not inflation but the balance of 
payments. Let us cut out the scho- 
lastic argument about how much 
this matters and conduct the argu- 
ment in terms of capacity instead. 
For what could make it necessary 
to slow down the recovery well 
before a reasonable level of employ- 
ment had been reached, would be a 
shortage of capacity. Here the for- 
mer Nedo economists, whose book 
Britain 's Economic Performance was 
reviewed by Edward Balls in the FT 
last Thursday, have a point Kith 
the cost indices showing Britain 
being highly competitive against 
the rest of the world, further deval- 
uation would just be inflationary. 

Despite the peculiar left-right 
coalition which regards such a pros- 
pect with indifference, if not joy, 
continuing depreciation of sterling 
is not an option for governments 
even half serious about a 1 to 4 per 
cent inflation rate. Admittedly, in 
toe Treasury model sterling is not a 
good predictor of inflation for up to 
two years ahead But this fa just a 
question of forecasting techniques. 

T here can be little doubt 
that, if sterling contin- 
ued to drop year after 
year against the world's 
main currencies, the UK 
inflation rate would be correspond- 
ingly higher. Britain has already- 
had, when it left the ERM. the one- 
off devaluation which might be 
benign. 

Where, however, the ex-Nedo 
economists are obstinately wrong fa 
in failing to see that toe capacity 
shortage is at bottom a labour mar- 
ket problem. For in the end busi- 
nesses will install the amount of 
capacity that they regard as profit- 
able. In the long ran extra workers 
are taken on. and the capacity to 
employ them installed, if the gains 
from so doing exceed the extra costs 
involved. If labour markets were 
more flexible, it would pay to add 
capacity and employ more people. 
(Readers who disagree should write 
“to toe editor”, not to me.) 

It fa at least a good sign that the 
chancellor is using the present 
respite from monetary controversy 
to investigate ideas for improving 
the workings of the labour mar kets 
in a humane way, so that it 
becomes possible to create low-paid 
jobs for the less skilled, while top- 
ping up their pay by other means. 


Europe's pensions quandary 



Personal 
View 


The question of how 
pensions should be 
financed and who 
should pay them 
remains at the top 
of the policy agenda 
across toe world. In 
the UK, today's 
white paper in 
response to toe Goode report wfll 
propose new solvency standards 
and regulatory reforms, while in 
Italy the government fa faced with a 
budget “hole” of perhaps one-filth 
of the planned 1994 deficit as a 
result of a court decision this 
month on state pensions. There is a 
widespread feeling that something 
has to change but - as demon- 
strated by last week’s abandonment 
of the troubled European Union 
pensions directive - no agreement 
as to what 

But the problem cannot be swept 
under the carpet. The adverse 
demographic trends at toe heart of 
the. pensions quandary are a source 
of s tra in for public sector budgets 
already swollen by unemployment 
due to an explosion of low-cost com- 
petition. The extent of the strain 
cannot be ganged from published 


public sector statistics, which are 
purely backward-looking, with no 
inclusion erf unfunded pension lia- 
bilities. 

Researchers at ABP, the Dutch 
civil service pension fund, have 
quantified the present value of 
unfunded pension liabilities in 
Europe. If toe present value of tax 
receipts from public and private 
pensions is deducted from this sum, 
and the conventionally measured 
debt burden fa added, the result 
gives a measure of "true" debt (see 
chart). While this does not repre- 
sent a complete set of adjustments 
to gross public debt data - which 
would include assets to be sold off. 
as well as future liabilities - there 
fa merit in singling out pensions. 
First, pensions are among the most 
important categories of public 
expenditure. Second, to toe extent 
that they are unfunded, they are 
most vulnerable to demographic 
trends. 

The “true" debt/gross domestic 
product ratios are more than doable 
conventional ratios almost through- 
out the EU, The UK - with both the 
lowest public pension in the EU and 
one of the best developed private- 


fill mombers’debt - 

>9Bbp6 .(*8DC9- . . . 
MHK’Trixy L T . l Conventional 



200 


funded sectors - stands out as hav- 
ing the smallest unfunded liabilit ie s 
in relation to GDP, and that ratio 
will have fallen after the 1993 
announcement of a phased rise in 
toe pension age for women. 

Financing problems are not con- 
fined to pensions promised by the 
public sector. In Germany, private 
schemes are usually of the defined 
benefit type and more than 60 per 


cant of private pension obligations 
are held within company balance 
sheets. But undo: the pressure of 
redundancies, some companies have 
begun to create separate pension 
funds, partly because the employee 
contributions which are proving 
increasingly necessary must by law 
be made into a hypothecated fund. 

Some means of encouraging 
savings needs to be found. An alter- 
native solution to underfunding fa 
to reduce the real value of pensions, 
but there are clear political limi t s to 
this; In the Netherlands the Pen- 
sioners’ party won six seats in 
May’s elections. In the UK the state 
earnings related pension scheme 
became less generous in 1988, and 
since 1981 the basic pension has 
been linked to prices rather than 
wages. Greater availability of appro- 
priately supervised private sector 
pension funds, free to invest as 
their managers see fit, fa the only 
realistic way forward. 

Make no mistake, governments 
will progressively renege on their 
pension payments. The only way to 
head off political consequences fa to 
encourage saving, particularly via 
private pensions. In continental 


Europe, where cross-border sales 
and investments are commonly con- 
strained, Sir Leon Brittan gave the 
lead in 1991 with the draft Pensions 
Directive. But although all Euro- 
pean leaders support free capital 
movements in principle, in practice 
the ERM and the Maxwell crises, 
coupled with lingering resentment 
of the UK's tactics during the Maas- 
tricht negotiations, destroyed the 
political support for the directive, 
and it has been abandoned. 

Europe’s pensions quandary fa 
not a suitable case for “muddling 
through”. A directive which genu- 
inely liberates capital would radi- 
cally improve the allocation of 
savings, raising growth and gener- 
ating jobs. In stark contrast to last 
year’s Commission white paper, free 
cross-border pensions in Europe 
could help finance investment with- 
out adding to high government 
debts - both revealed and bidden. 

Jonathan Hof&nan 


The author is a director ol economics 
at CS First Boston. London 


Observer 


Warsaw’s 

honeypot 

■ This weekend Warsaw plays 
host to an event that would have 
warmed the cockles of the heart 
of Jacques Attati, former president 
of the European Bank for 
Reconstructkm and Development. 

International aristocrats. 
Citibank, Barger King and, yes, 
the EBRD are hel ping with the 
organisation of a series of events 

— tnfflnrBng a halt and ran rite - lit 
dinn ers - to raise funds for a new 
children's cancer hospital, which 
will receive almost half the 
proceeds. 

The EBRD in London says if s 
providing “no financial support 
whatsoever”, though it thought 
it may have given permission for 
its name to be used. 

Warsaw’s Royal Castle, rebuilt 
in the 1970s by Edward Gierek, then 
Communist party leader, will, for 
toe first time since it was destroyed 
during the second world war, be 
toe scene of a “Red and White” 
dance - “carriages at two" - on 
Saturday. Sunday will he devoted 
to visiting stately homes. 

Sereena Balfour - her husband 
Nefl has been acting as an EBRD 
consultant in Warsaw mice 1992 

- fa the gala's moving spirit 

She has assembled a glittering 

crowd of toe great and toe rich, 
tnchiding Rocco Forte, whose 
Bristol Hotel will be housing some 
of toe prominent guests. 


Balfour says that, besides charity, 
toe aim of the exercise fa to erode 
Poland's foreign image as a 
desperately dull and dreary place. 

In a personal capacity, Guy de 
SePte re, a d eputy vice-president 
of the EBRD, fa one of 200 guests, 
including Wieslaw Kaczmarek. 

Poland's privatisation minister, 
who has been invited to attend at 
a reduced rate. 

Other guests wfll be paying 
3L310, plus $290 for their room in 
the Bristol; not exorbitant, but still 
rather beyond the average monthly 
Polish salary, equivalent to $200. 


Yankees out 

■ It's all change at the American 
University erf Beirut where Richard 
Debs, the ex-New York Fed man 
and more recently Morgan Stanley 
hot-shot, has taken over as 
chairman of the board of trustees. 

The only problem is that Debs, 
phis hfa new vice-chairman. 
Occidental's Ray Irani and Tam 
Morris, former chief executive of 
New York’s Presbyterian Hospital, 
are not allowed to walk AUB’s 
tree-lined squares. 

Three years after Lebanon's civil 
war, which brought bombs, killing 
and kidnapping to AUB, the state 
department still bars Americans 
from travelling to Beirut 

“I suspect well be able to go back 
in a year or so,” says Debs, who 
learnt his Arabic when he was a 
Fulbright Scholar In Cairo back 
in 1952. 



Tm a professional slave 
to my ego’ 

Until the state department 
decrees Lebanon safe, therefore, 
daily running erf toe oldest US 
institution in the Middle East 
remains in the hands of its now 
non-American staff. 


Not tongue-tied 

■ Anyone wishing for an instant 
assessment of toe state of the South 
African econo my need look no 
further than the attire of finance 
minister Derek Keys. 

Yesterday he was sporting what 
he calls hfa “good news" tie, a truly 
appalling confection of broad 
stripes in yellow, purple, maroon 


and blue. 

This garish combination heralded 
an upbeat introduction to 
yesterday’s budget an economic 
rec o very boosted by a higher gold 
price, solid export earnings, 
improved access to foreign markets, 
favourable agricultural conditions, 
improving local and international 
business and consumer confidence 
“with each day that passes”. 

If an hfa next public appearance 
Keys sports an even more 
Spectacular choice of neckwear, 
brace yourselves- hell most likely 
be announcing the abolition of toe 
financial rand 


Right pair 

■ The menu in the Columbia 
Restaurant of the QE2 luxury liner 
this week offered pasiwig mi a 
chance to taste some tr aditional 
Old English dishes: Spaghetti 
Bolognese followed by Coupe 
BeBfrBiBne. 

No doubt they should be washed 
down with some of that good old 
Somerset drink Dom Perry-gnon. 


Nice one, George 

■ Always thought that George 
Mathewson, the restless chief 
executive erf toe Royal Bank of 
Scotland, was a bit of a rum cove. 

On the day 8i celebrated its stock 
market humph, Mathewson 's bank 
damped (sorry sold) Its entire £U5m 
stake in toe venture capital 


company. 

Given that Mathewson speot nine 
years learning hfa trade at the old 
ICFC, toe forerunner of 3i, it doesn’t 
sound much like a vote of 
confidence in hfa old employer. 

"I hope nobody thinks that I am 
saying 3i is a bad company. It fa 
a very good one,” says Mathewson 
who blames less favourable 
accountancy rules for his change 
of heart 

Quite so. But it probably would 
not have happened if the Royal 
Bank was still ran by old fashioned 
clearing bankers. 


Bristol fashion 

■ George Mathewson fa not the 
only ex-Si veteran at the Royal 
Bank who clearing bankers love 
to hate. 

Derek Sach, recruited by 
Mathewson to run the bank’s 
intensive care ward after 20 years 
at 31, has even dared challenge the 
usefulness of the floating charge, 
an ancient banking method 
whereby banks can get their money 
back even if no one else can. 

He told the FT earlier this week 
that it should be abolished. As one 
pained clearing banker noted 
yesterday this would mean that 
students of Institute of Bankers 
exams would no longer be able to 
answer the stock question; 

*How do you secure a ship 
mortgage?" with the hoary old 
answer “with a floating charge and 
a sinking fund." 


r 


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FINANCIAL TIMES 

Thursday June 23 1994 


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UK opt-out keeps it exempt from directive ( Guinness 


EU states agree law to 
set up works councils 


By David Garcfcner in Luxembourg 

All European Union member 
states, except the UK yesterday 
agreed on a law to set up elected 
works councils in up to 1,500 
large trans-European co m pa n ies. 

The councils are intended to 
ensure that workers’ representa- 
tives in companies employing 
more than 1,000 people - or more 
than 150 in at least two member 
states - are consulted and 
informed on cross-border busi- 
ness decisions that affect them. 

A jubilant Mr Padraig Flynn. 
EU social policy commissioner, 
acclaimed yesterday's decision as 
“a historic breakthrough'’ for 
workers’ rights in the border-free 
single market “This flexible leg- 
islation is good for business and 
will improve competitiveness 
through better industrial rela- 
tions," Mr Flynn said. 

The deal follows 24 years of 
wrangling. 

The UK is exempt from the 
directive through its opt-out from 
the Maastricht social chapter, 
under which yesterday's legisla- 
tion was passed. However, just 
under 100 British companies 


operating on mainland Europe 
will be affected. 

A recent German study sug- 
gests that 450 German compa- 
nies, 250 US corporations operat- 
ing in Europe, and 220 French, 
companies will be the most 
affected. Nearly 300 UK compa- 
nies would have been in the net 
bad ft covered British territory. 

Attempts to include UK-based 
employees of British multination- 
als were rejected by EU labour 
and social affairs ministers meet- 
ing in Luxembourg yesterday. 

Mr David Hunt, UK employ- 
ment secretary, said he was 
“very pleased that the UK will 
not be forced to accept trade 
union-dominated works councils” 
which “will impose unnecessary 
costs' and bureaucracy on 
companies’*. 

The directive replaces the origi- 
nal Brussels plan for a uniform 
structure of compulsory consulta- 
tion with provision for individual 
voluntary agreements at com- 
pany level. 

The process is triggered when 
“at least 100 employees or their 
representatives in at least two 
member states” ask for informa- 


tion and consultation procedures. 

If tqTtrg tail after three years, 
t hap a set of mfahtm jn standards 
contained in an annex to the 
directive will apply. If manage- 
ment refuses talks, the annex 
will be imposed after six months. 

Assuming the measure is 
rubber-stamped by ministers in 
October after a second reeding by 
the European parliament, and 
allowing two years for transpos- 
ing the directive into national 
law, the ftwwwla chnnlri be up 
ami running by the end of 1999. 

Unice, the Euro-employers' 
lobby, said on the eve of the deci- 
sion that it “violated the veiy 
principle of consultation that it 
seeks to endorse”. 

British employers also 
denounced the decision. Mr Peter 
Morgan, director-general of the 
Institute of Directors, said works 
councils would damage European 
competitiveness. 

The European Trade Union 
Confederation said workers had 
waited a long time for this deci- 
sion which gave “a new push to 
EU social policy”. Hus was the 
first Euro-law passed under the 
Maastricht social chapter. 


Russia warns on pace of Nato 
expansion into east Europe 


By Bruce Clark, Defence 
Correspondent, in Brussels 

Mr Andrei Kozyrev, the Russian 
foreign minister, yesterday urged 
Nato not to risk provoking public 
opinion in his country by rushing 
to welcome east European coun- 
tries as members of the alliance. 

The appeal was made during a 
visit to Brussels for a Nato meet- 
ing hailed as a landmark in Rus- 
sia’s links with the west Repre- 
sentatives of Nato’s 16 member 
states were gathered to honour 
Russia as the 2lst, and most 
important, member of Partner- 
ship for Peace, the military 
co-operation programm e . 

The partnership is intended to 
broaden military co-operation in 
Europe and the former Soviet 
republics, setting up programmes 
for joint peacekeeping exercises 
and grooming countries for even- 
tual Nato membership - 

Mr Kozyrev told Nato that a 
large section of the Russian pub- 
lic needed convincing that the 
alliance was sot intent on a “tri- 
umphant march eastwards”. 


The Hessian minister said a 
“major psychological adjust- 
ment" would be necessary before 
bis follow c i tiz en s could accept 
the idea of countries like Poland, 
Hungary and the Czech Republic 
joining the alliance. 

In welcoming the Russian par- 
ticipation, Mr Warren Christo- 
pher, US secretary of state, said 
that “by widening the reach of 
the great postwar security and 
economic institutions, we can 
help ensure that war, poverty 
and oppression never again 
engulf this continent". 

Mr Kozyrev stepped back from 
previous ripmanrts tha t Nato be 
subsumed by the Conference on 
Security and Co-operation in 
Europe, a loose chib of 53 nations 
whose current brief is more diplo- 
matic than military, and said 
time would tell which was the 
most important institution. 

“Let us not make any of them a 
fetish . . . experience will show 
the correct combination and 
determine the real value of each 
of them." Mr Kozyrev said. 

As well as signing up to the 


partnership, Mr Kozyrev and his 
hosts approved a separate docu- 
ment that will usher in a broader 
relationship between Russia and 
Nato, including a dialogue on 
European security issues. 

But allowing Russia to negoti- 
ate this side agreement in 
advance of joining the partner- 
ship has dismayed central and 
east European states, who were 
told they must adhere to PFP 
first and then refine their links 
with Nato. 

Nato officials, however, said 
they were satisfied that the docu- 
ment’s final text did not give 
Moscow any automatic right to 
sit in on their private discus- 
sions. Diplomats said that in four 
days of haggling, Russia showed 
goodwill by agreeing to work 
from a Western draft but it won 
important concessions. 

One was the exclusion of a 
phrase that would pledge Russia 
and Nato not to interfere in each 
other's decision-making process. 
Another was the inclusion of a 
reference to Russia's importance 
as a nuclear power. 


Clinton defiant over state of US economy 


Continued from Page l 

more stable dollar and from Mr 
Greenspan’s testimony. 

German bunds rose almost 2 
points, helping the rest of the 
European bond markets to 
recover, but volume was thin. 

In Frankfurt, the Dax stock 


market index rose 1L15 paints in 
normal trading hours to 1994.42. 
After hours, ft added another 10 
to 2004.93. In Paris, the CAC 
Index jumped 26:26 points to 
1917.04. In London, markets were 
also given a boost by the publica- 
tion of the minutes of the May 
meeting between Mr Kenneth 


Clarke, chan c ell o r of the exche- 
quer, and Mr Eddie George, gov- 
ernor of the Bank of England. 

The minutes indicated no 
immediate need to increase UK 
interest rates. The FT-SE 100 
Index rose 2QJ2 points to 2960.4, 
while the September long gilt 
future gained nearly two points. 


cashes in 
on Irish 
World Cup 
triumph 

By Paul Taytor in London 
and Tim Coone in Dublin 


Ireland’s success in the World 
Cup Is creating a windfall far 
Guinness, the London-based 
brewer, which has seen stout 
sales rocket on both sides of the 
Atlantic. 

Some pub landlords in Britain 
have had to order “emergency 
supplies" of Guinness after 
Ireland’s football triumph over 
Italy sent sales soaring up to five 
times normal levels. 

In Britain, where Guinness 
generally sells around lm pints a 
day, pubs and Irish dubs, partic- 
ularly those in areas such as 
north-west London and Mersey- 
side, which have large Irish pop- 
ulations, report strong sales. 
"The Irish have a knack for turn- 
ing a sports event into a party,” 
said Guinness. 

But English, Scottish and 
Welsh football fans, bereft of 
their own teams to support in 
the World Cup, are jumping on 
the Irish bandwagon and order- 
ing pints of Guinness - pro- 
moted on television by Jack 
Charlton, the Irish manager. 

Guinness, which is sponsoring 
the Irish team, readily admits 
that much of the evidence for the 
sales surge in Britain is 
anecdotal, since it has yet to 
compile actual sales figures. 

Nevertheless, one pub landlord 
in Peterborough, Cambridge- 
shire, reported that his custom- 
ers drank more than 1,000 pints 
of Guinness on Saturday as they 
watched Ireland’s 1-0 
victory over Italy - more than 
quadruple normal sales. 

hi the Irish Republic, where 
420m pints of stout are downed 
every year and Guinness is esti- 
mated to have 90 per cent of the 
market, the company says sales 
have gone op by 15 per cent 
since the World Cup started. 

This was despite a barmen’s 
strike In Dublin last Saturday, 
timed to coincide with Ireland’s 
opening match against Italy, and 
which closed half of the pubs in 
the capital. Happily, the dispute 
has now been resolved. 

In the US, Guinness sales were 
already gr owing strongly. Irish 
bars in New York and in 
Orlando, Florida, where the team 
is now staying, are doing brisk 
business with the estimated 
18,000 Irish supporters. 

Sales in Orlando during June 
are Tunning at mare than double 
the 1993 level and at Mnlvany’s 
Irish Pub last Saturday, 32 bar- j 
rels of Guinness were drank j 
compared with between five and 
eight on a normal Saturday. 

In New York where Ireland’s 
first match was played, the 
Guinness regional sales repre- 
sentative believes 50,000 pints of 
Guinness will be sold this month 
- up between 70 and 80 per cent 
on the same period last year. 
“It’s like a month-long St 
Patrick's Day,” she said. 

Norway braced for Italian 
backlash. Page 8 


FT WEATHER GUIDE 


Europe today 

A depression over Finland will produce a lot 
of rain over northern Scandinavia. Showers 
and cod breezes win reach the western 
coast of Sweden and winds wfW be gate or 
strong gale force over the Baltic. Meanwhile, 
high pressure wtO make western Europe 

more settled Northern France, Germany and 
the Benelux will be dry with sunny spells. 
Southern Europe and northern Africa will be 
sunny and warm. The Balkans and the 
Ukraine will be warm with thunder showers 
developing this afternoon. Wanner air will 
move slowly across southern England and 
Ireland, resulting in Increas in g doud and 
occasional drizzle In Ireland. 

Five-day forecast 

A vigorous depression ova" Finland wfll 
weaken as It moves Into Russia. As a result, 
more settled conditions wj! develop over 
northern Europe. Warm air over Spe/n ba 
drawn further into France and later towards 
the Benelux. However, a depression wffl 
develop over France causing thunder 
showers to form on Saturday. These win 
reach The Benelux and western Germany on 
Sunday and It win soon become coder. 


loio v -. : iooo 










isLsXsi 


tm. 


4 ^ M3 




Warm tod , 


TODAY'S TEMPERATURES 

Maximum fishing 
.. Casks Safest 

AtxiDhaW sun 40 Batons; 

shower 39 Bartn 


sausfton at fa GMT. Trnsmtma maximum far day. Forecasts by Metw Consult of bra NethotanCa 


Afgtats 

Amsterdam 

Athens 


B. Aim 
BJm 
Bangkok 
B a noe to n a 


Ur 31 Bermuda 
Ur id Bogota 
31 Bombay 
ttond 32 Brussels 
lair IB Budapest 
eUrty 20 Cingen 
mm 33 Cairo 

27 Capetown 


fair 33 
cloudy 17 
fair 33 
cloudy 21 

Mr 30 
Cloudy 18 
fair 32 
dowdy 23 
nr 32 
cloudy 18 
sun 38 . 
shower ie 


Caracas 

cadrr 

Casab la nca 

Chicago 

Cologne 

Dakar 

Date 

Dettti 

Dubai 

Dutfn 

Dubrovnik 

BdHiwgh 


Lufthansa, Your Airline. 

^ Lufthansa 

German Airlines 


26 Faro 
19 Ranfcftit 
25 Geneva 

30 Gfcratov 
24 Glasgow 

31 Hamburg 
33 HeteMd 
42 HongKong 
44 Honolulu 
17 btenM 
30 Jaterfa 

19 Jersey 
Karachi 
Kuwait 
L. Angelas 
LaaPaknas 
Lima 
Lisbon 
London 
LujUmuw 
L yon 
Madato* 


30 Madid 
20 Majorca 

30 Matte 

24 Manchester 
IB Marita 

18 Melbourne 
13 ModcoCIty 
23 Warm 

28 Men 
26 Montreal 

31 Moscow 

19 Munich 

34 Nakrtt 
44 Naples 
22 Nassau 
26 New York 

19 Nice 

35 Nicosia 
22 Oslo 

20 Paris 
30 Perth 
28 Prague 


37 Rangoon 
30 Raykfcw* 
30 Rk> 

18 Rome 

32 S. Fraco 
13 Seoul 

22 Singapore 

33 Stoddnfm 
33 Strasbourg 

26 Syttoay 
20 Tangier 
28 TsiAvtv 

23 Tokyo 
30 Toronto 

30 Vancouver 

31 Venice 

27 Vfema 
35 Warsaw 

20 Wa shington 
88 WsUrnton 

21 Winnipeg 
27 Zurich 


dowdy 27 
cloudy 10 
Wr 25 
Hr 30 
sun 21 
fair 28 
cloudy 31 
cloudy IB 
cloudy 28 
cloudy 20 
fair 32 
sun 34 
fair 28 
sun 24 
shower 21 
Idr 31 
lair 30 
fair 26 
sun 32 
tioudy 10 
fair 30 
fair 28 


THE T EX COLUMN 

Investors in 3i 


Stormy financial markets have forced 
& to trim its sails a touch but sot 
prevented its flotation. The issue has 
been priced at a 115 per cent discount 
to net asset value, which Is somewhat 
higher than the venture capital 
group’s gyi sting bank shareholders 
were originally looking for. Barings, 

3i‘s merchant b a nl^ b*s piko thoug ht 

ft wise to choose a price which, will 
Tnppn that institutional shareholders 
will on average receive less than half 
the shares they apply for. That should 
ensure a healthy aftermarket provided 
equity prices do not take another dive 
in fftTning 1 weeks. 

But it would be wrong to conclude 
that the pricing offers investo r s the 
prospect of quick profits. Thnngh the 
bulk of Sfs portfolio is unquoted, ft is 
valued by reference to market price/ 
earnings ratios. Similarly, the drying 
up of new issues means it will take 
longer for 3i to realise the value of its 
assets. The 272p issue price merely 
reflects these factors. It is not particu- 
larly generous. 

Si's main attraction is as a long-torn, 
investment. The company has out- 
performed average venture capital and 
smaller company investment trusts 
over the past decade. The source of 
this success is a branch network that 
3i to invest in a much broader 
range of small companies than rival 
investment trusts are able to tap. 
Though there are costs in maintaining 
31’ s network, they have been cut in 
recent years. Because the competition 
in supplying finance to tins sector is 
not severe, the prospective returns are 
higher. 


The stock market’s reaction to the 
appointment of an outsider as ICTs 
chief executive was muted compared 
to the celebration which greeted Mr 
Martin Taylor’s arrival at Barclays 
last s ummer But Mr Charles Miller 
.Smith who is moving to ICT from Uni- 
lever and was rumoured to be in the 
running for the Barclays job. should 
not feel slighted. The process of cut 
tural change is already well estab- 
lished at 1CI following last year’s 
demerger of Zeneca. The main comfort 
in the appointment is that there is less 
danger of IG sliding back into compla- 
cency mm feat pr ofi ts are starting to 
improve. 

Mr Miller Smith may also be able to 
add value to ICTs investment deci- 
sions, which will be just as important 
for the company’s long-term success. 
The chemical group’s record on this 


FT-SE Index: 2960.4 j+20.21 


Stare price rotate to the 
FT-S&A Af-Shars Index 

m It — 



1987 88 88 90 91 82 83 94 
SoutoFTQrapte * 

score has been patchy. With, its bal- 
ance sheet restored to health t hanks 
to the demerger, IQ has money to 
spend. But without the cash flow from 
the biosdence side, it cannot afford 
expensive mistakes. 

While Mr Miller Smith will not bring 
specialist knowledge to investment 
derisions, IQ is sot short on chemi- 
cals industry experience. The chair- 
wi*twteg»grori«> and most other execu- 
tive directors have risen through fee 
ranks. Neither has specialist know- 
ledge always brought the right result 
in the past It may be more important 
Hint Mr mnw Smffli brings a dispas- 
sionate view, unencumbered by the 
pest 

BAT Industries 

It Is not only pharmaceutical 
companies that catch colds when the 
US Food and Drug Administration 
sneezes. BAT’S shares, too, have 
spluttered after the FDA attacked 
high-nicotine tobacco. Whatever the 
rights and wrongs of the latest row, 
the trend towards tighter regulation is 
unmistakable. BAT describes the FDA 
as an “agency with an agenda” aiming 
"to acquire jurisdiction over tobacco 
so that it can regulate it out of exis- 
tence”. That makes its $lbn acquisi- 
tion of American Tobacco appear all 
the more heroic - or foolhardy. 

BAT'S shares have underperformed 
the market by & per cent since it 
moved to increase its exposure to US 
to bm yo. although other unsettling fee- 
tors have been at work. BAT has been 
fait by the dollar's weakness and it has 
only recently became apparent how 
badly Farmers was knocked by the 
Californian earthquake. Yet if BAT’S 




•* V 

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tobacco worries are confined to the. 
US. its rating looks decidedly a ten. 
Its tobacco interests are valued in 
earnings multiple of around flve Jh m 
insurance is given a market tmtog. 
That may only reinforce the 
hiving off tobacco, even though Philip 
Morris has just baulked at the Mm. 
After all, cigarette sales in the devel- 
oping world should more than offset 
shrinking US demand. 

Small companies 

A pan-European market for smaller 
company shares of the type being dis- 
cussed by Nasdaq, the US market, is ] 
an attractive idea. Institutions tend to | 
be interested in fee minnows only at 
fee top of the investment cycle, so 
retail investors are required to under- 
pin liquidity. Yet no single European 
country has a deep enough pool of 
retail money to allow the lower eche- 
lons of national markets to flourish. 
Harnessing interest across Europe 
might provide enough liquidity to rep- 
licate the success of Nasdaq in the 
US. 

But in practice it is not clear that 
European investors have the same 
enthusiasm for equities as their U$ 
peers. And though the technology to 
run such a market is available, per- 
suading notional exchanger to hack 
the venture will be hard. The London. 
Stock Exchange for one is determine# 
to go it alone. Even if a number « 
existing markets could be convinced 
in principle, ticklish problems of 
accounting harmonisation and regula- 
tion would have to be overcome. None 
of this amounts to an argument 
against trying to establish such a mar- 
ket But there are powerful reasons to 
doubt whether it is an idea whose time i 
has come. j 

Telegraph i 

A recent study by management can- : 
sultan ts McKinsey argued that the , 
only reliable way to win price ware 
was to avoid them. On that reckoning, 
the Duly Telegraph can only Ion 
heavily by cutting its cover price. The 
Telegraph accepts it could lose S4Qm j 
in annual circulation revenue, | 
although that will be partly offset by 
increased advertising and lower costs, 
Thenwre worrying thought is that the 
Telegraph has ceded control of its dee- 1 
tiny to Its chief competitor. The 'felt 
graph’s move only makes sense if The | 
Times now stops hostilities. Sadly, Mr : 
Rupert Murdoch is not reknowned for 
such generosity. 


(tffra “ v ' 














19 


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Li L * i 

FINANCIAL TIMES 

COMPANIES & MARKETS 

BOMBS 

VANDALISM 

BREAK-INS YOU NEED 

Ml ?! ; 1 0 .< =8 

I III Sirmashield 5 1 1 

I TOTAL GLASS PROTECTION SYSTEM II 

^SbsSbsS TELQ482 593828 

{g THE FINANCIAL TIMES LIMITED 1994 TtrUXSCl.£iy JlXIlC 23 1994 

Tat 0481 82358 $ Fax 0481 823576 | 


IN BRIEF 


All change on top 
at Tetra Laval 

Packaging group Tetra Laval has announced 
a shake-up of senior management, following the 
sudden departure of Mr Uno Kjellberg as chiof 
executive of the group's biggest division, Tetra 
Pak. Page 20 

Handbags to bo rationed 

Louis Vuitton is rationing customers to one or 
two purchases at a time because of a surge in 
demand for its products. Page 20 

Royal Bank of Scotland sells 3i stake 

Royal Bank of Scotland has sold its stake in 3i, 
which is priced at 272p per share for its flotation. 
Page 20; Observer, Page 17; Lex, Page 18; Details, 
Page 26 

Deal boosts Japan’s multimedia hopes 

A co-operation agreement between Japan’s NTT 
and the US's Microsoft to develop an interactive 
multimedia system could further Japan’s ambitions 
in this area. Page 21 

Bridge battle enters new phase 

Parker & Parsley, suitor for Bridge OH, has begun 
legal proceedings against the rival bidder Gantry 
alleging breaches of the US Securities Exchange 
Act Page 22 

DTP’S 48% rise beats expectations 

BTP beat City expectations with a 48 per cent 
jump in annual pre-tax profits. Page 24 

First Leisure warns on consumer spending 

Profits ahead 15 per cent did not prevent First 
Leisure from warning there has been no substantial 
increase inconsumer spending. Page 24 

Carpetrtgh t moves ahead 

Twenty-nine new stores helped Carpetrigbt boost 
profits by 79 per cent Page 26 

Restructuring charges hit Wagon 

Wagon Industrial posted better-than-expected 
profits, though still down on the previous year 
because of re st r u ct urin g charges. Page 26 

Lunins reduce the trade deficit 



A new strain of lupin which can be used for 
animal feed could soon take over British fa rmland 
and reduce the trade deficit. Page 28 

Investors shy away from China 

Investors have been fighting shy of China, with 
the Chinese equity market foiling 37 per cent 
in dollar terms this year. Bade Page 

Correction 

The picture on this page yesterday was of Mr 
John Simons, finance director of Hazlewood Foods. 
The caption wrongly identified him as Mr Peter 
Barr, cha ir man. 

Companies In tills Issue 


Si 

AT&T 
Accor 
Aar Lingus 
Air Franco 
Allen 

Amber Industrial 

BAT 

BOC 

BTP 

Barclays 
Bombardier 
Bridge Ofl 
British Land 
Buns PWp 
Butte Mining 


20,18 

Hardys & Hansons 

26 

1 

ICI 

1ft 18 

21 

King & Shaxson 

26 

28 

LPAInds 

26 

21 

LWT 

12 

24 

Lalng (John} 

26 

28 

Leigh Interests 

20 

16 

Lotus Development 

20 

28 

Louis Vuitton 

20 

24 

Lucas Inds 

26 

12 

MEPC 

20 

21 

Medobanca 

21 


Capita] Inds 

Carpetright 

Oartmora tnv Trust 

EFT 

ERF 

Snap 

Eurotunnel 

Exxon 

FCS Currency Mfl merit 

Rnsbtay Ave Estates 

Ffot Leteire 

Forte 

Fosters 

General Bectric 
Guinness 


22 

28 

22 

26 

26 

28 

28 

26 

24 

24 

24 

21,24 

21 

20 

26 

24 

21 

19 

1 

18 


Meridian 


Microsoft 

NTT 

Nasdaq 

Old Mutual S Africa 
Palter & ParsJey 
Peugeot 

Portugal Telecom 

Ftedand 

Royal Bank Scotland 
Second Cons Trust 
Shanks & McEwan 
Shns MofcHngs 
Standard Life 
Tetra Laval 
Trans World Comms 
Wagon Industrial 
West Trust 
Wheetock 
Zambia Copper 


21 

19 

21 

21 

19 
28 
22 

20 
20 
24 
26 
28 
24 
26 
24 
20 
24 
26 
26 
19 
22 


marimt scbusucs 


30-31 

23 

23 

23 


Foreign exchange 38 

Gfl!s prices 23 

LfflB equity opflona BttkPage 


London share nreks 


^Annual reports Gonrfce 
Benchmark Gwt bonds 
Bond ifflurea and opttara 
Bond pricra and yields 
ConrnodWes prices 
DMdenda announced, UK 
SC currency rates 
Eurobond prices 
fixed Interest fortes 
FT-A World hrfleas Bm 
FT Goto Mhos Index Ba 
FT/1SKA fntf bond avc 
FT-ffi Actuaries fodfoes 


Chief price changes yesterday 


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Back Page 

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38 

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23 

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2B 

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38 

23 

US interest ratm 

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Metallgesellschaft to sell HQ 


By David Waller in Frankfort 

Metallgesellschaft. the heavily 
indebted German metals, mining 
and industrial group, has entered 
negotiations to sell its headquar- 
ters site in the centre of 
Frankfurt. 

The move follows the sale last 
week of an 80 per cent stake in 
its Buderus engineering subsid- 
iary, which raised DML2bn. 

The Frankfurt site could have 
a market value of DM750m 
($460m). Metallgesellschaft said, 
but cautioned that not all the 
proceeds would flow to its coffers 


as the land is jointly owned with 
a company controlled by Dresd- 
ner Bank. 

The group said it had entered 
into negotiations to wll the land 
as it made no business sense to 
have administrative offices, a car 
park and research laboratories on 
so valuable a site. 

The planned sale of the land 
and the disposal of the Buderus 
stake come against the back- 
ground of continuing business 
problems at MG Carp, the group’s 
New York-based trading subsid- 
iary. whose speculative trading 
in ofl derivatives brought Metall- 


gesellschaft to the brink of col- 
lapse in January. 

MG Corp was still a “machine 
for losing money". Metallgesell- 
schaffs chairman Mr Kqjo Neu- 
kirchen warned yesterday in an 
interview in the employees’ mag- 
azine. Problems in the US repre- 
sented die biggest challenge to 
MetallgeseUschaft's recovery 
plans, he said. 

MG Corp has become entangled 
in the affairs of Castle Corpora- 
tion, a US oil refinery with, which 
MG Corp has entered into a num- 
ber of what Mr NetUrirchen called 
“inexplicable" contracts. 


The contracts oblige MG Corp 
to supply Castle with crude oil 
and help it finance the oil pur- 
chases. Then MG Corp is obliged 
to buy back the oil from Castle - 
40 per cent owned by MG Corp 
itself - at above the market price 
until the year 2000. Mr Neu- 
kirchen said he was trying to 
extricate MG Corp from the con- 
tracts but he could not predict 
when a solution might be found. 

These contracts have required 
Metallgesellschaft to set up fresh 
provisions to cover risks arising 
from the north American 
operations. The scale of the pro- 


visions has not been disclosed 
but they are thought to be at 
least DMlbn. 

Mr Neukirchen insisted that 
the sales of land and assets were 
not a direct result of the north 
American problems, although 
earlier in the year the sale of the 
Buderus holding had been ruled 
out 

Analysts had suggested that 
the change of heart implied that 
the Buderus disposal was a 
“forced sale". 

Metallgesellschaft had total 
debts of more than DM9bn at the 
end of March. 


Nasdaq 
holds talks 
on forming 
European 
exchange 

By Nonna Cohen, 

Investments Correspondent 


Nasdaq, the US screen-based 
exchange which is the world’s 
second largest stock market by 
turnover, is holding talks with 
potential partners about creating 
a pan-European exchange for 
small and medium-sized compa- 
nies. 

Mr Joseph TTawKman, Nasdaq 
president said the new exchange 
could be formed quite quickly - 
perhaps in the next 12 to 15 
months. Nasdaq wonld seek to be 
a minority shareholder, he said. 

Potential participants include 
the European Venture Capital 
Association, the UK-based City 
Group for Smaller Companies 
and several European bourses. 

Before Nasdaq would commit 
itself, Mr HardUbman said, “we 
have to make sure there are no 
overwhelming regulatory hur- 
dles and we have to make sure 
there is a critical mass of buyers 
of these securities". 

Mr Jean-Franpois Theodore, 
president of the Soci&te des 
Bourses Franpaises, which runs 
the French market, has con- 
firmed that be is one of the par- 
ties to the discussions. 

Mr Theodore intends to form a 
French-based working group of 
investors, regulators and inter- 
mediaries to study the issue and 
hopes that a report can be pre- 
pared by October. 

Should the bourse participate 
in a pan-European exchange, it 
too would hope to hold a minor- 
ity stake. 

A bourse official said there 
was a particular need to provide 
an exchange for companies for 
which the Paris unlisted securi- 
ties market was inadequate but 
for which full listing was not 
feasible. 

Mr Hard im an said: “We are 
hoping to jointly develop a true 
international securities market” 
He added that the ability to 
trade securities at “all hours” 
might be one of its attractions. 
One possibility might include the 
opportunity for companies listed 
on tile exchange to be simulta- 
neously listed on Nasdaq, giving 
access to toe US capital markets. 

“We are still in the very early 
stages of fleshing this out;” Hr 
Hardiman said. While Nasdaq 
attributes much of its growth to 
its specialisation in the shares of 
small, entrepreneurial, high- 
growth companies, it is not clear 
that a European version wonld 
be equally successful. 

Mr Hardiman expressed disap- 
pointment that the London Stock 
Exchange had rebuffed bis ear- 
lier suggestion that It should 
become a participant 

The London exchange recently 
announced its own plan to pro- 
mote trading in shares of smaller 
companies. 

Lex, Page 18 


Conner Middelmann and Graham Bowley report on a continuing bear market 

Vtekfe diverge and short-term Interest rates t ur n, even though Inflation remains low 




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US 

t'.-VN. 



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« UK 

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B ond fund managers have 
had a rough ride in the 
first half of this year, and 
the second half is shaping up to 
be just as difficult 
Most investors expected last 
year’s bull run to continue, 
fuelled by further cuts in Euro- 
pean short-term interest rates 
and low-inflation economic 
growth. Instead, government 
band markets have experienced a 
collapse in sentiment which has 
pushed up nominal 10-year yields 
in Europe by between 170 and 250 
basis points since the end of 1993. 
Reversing last year's conver- 
gence trend, yields have diverged 
sharply, with the higher-yielding 
markets worst hit 
The yield spread of the UK 10- 
year gflt over the German bund 
has widened to about 150 basis 
points, from 41 at the start of the 
year; the French spread has 
expanded to plus 62 from minus 
9; and the I talian yield premium 
has jumped to more than 350 
from 256in ApriL 
The sell-off began early in the 
year, when hedge funds and 
other highly leveraged players 
took profits, offloading massive 
bond holdings. When on Febru- 
ary 4 the US Federal Reserve 
raised short-term interest rates, 
this signalled the end of the low 
interest rate era and inflation 
fears prompted further selling. 

Since then every piece of data 
showing strong growth In the US 
economy and recovery In Europe 
has triggered further foils in the 
bond markets. Rising commodity 
and oil prices have further 
fuelled fears of inflation. 

In this bearish environment, 
most bond funds have put in a 
sorry performance. According to 
Micropal, the fund performance 
measurement service, 96 UK- 
based global bond funds posted 
an average loss of 6.4 per cent in 
the first five months of the year, 
with performances ranging 
between plus 5.2 per cent and 
minus 15.8 per cent 
So, what now? “Judging by the 
fundamentals, with low inflation 
and low interest rates, bonds 
everywhere look extremely 
cheap,” says Mr John SheppenL 
chief economist at Yamaichi 
International. “Yet we have been 
saying that for three months now 
and they are still getting cheaper 
by the day.” After getting their 
fingers burnt. Hug markets, most 
investors have embarked on a 
“buyers' strike" and are refusing 


Rocky road offers 
no respite for bonds 


to take on new positions. 

Many say the markets' infla- 
tion paranoia is overdone. They 
point to the current , benign envi- 
ronment - with inflation rates in 
the US, Germany and the UK at 
or below 3 per cent - and to 
forecasts that inflation will 
remain subdued for the rest of 
1994. Yet bond markets continue 
to foil, and implied future inter- 
est rates in the money markets 
indicate that dealers expect Euro- 
pean interest rates to rise before 
the end of the year. 

But while inflation fears and 
other perceived risks may. have 
contributed to the rise in nomi- 
nal yields, “the key is the rise in 
real yields", says Mr Shepperd. 

Real yields * over and above 
inflation - have risen to about 4 
per cent in the UK from £9 per 
cent at beginning of the year. 
The main reason is a sharp 
increase in supply: investors 
nffinarting their bond holdings, 
financial institutions offsetting 
losses in their marketmakmg imri 
proprietary trading activities, 
and, most importantly, govern- 
ment issues to ffaanpp large bud- 
get deficits. 

Real yields have also been 
driven higher by the pick-up -in 
world economic growth- Capital 
will be needed to fuel that 
growth, and there is talk of an 
impending global capital short- 
age. 

What is more, “there has been 
a sea change in the international 
economic policy environment”, 
says Mr Neil MacKinnon, chief 
economist at Citibank In London. 
"Governments' commitment to 
keeping inflation down, rather 
than stimulate growth to 
reduce unemployment, is being 
doubted.” 

Political uncertainty in 
Europe’s election year, further 
fiscal slippage, continued growth 
of German money supply and 
hints of disagreement in the UK 
between the central bank and the 
Treasury are fuelling doubts. 
“My advice to investors is to use 
any rally to reduce exposure to 
bands,” says Mr MacKinnon. 


Ironically, the sharp rise in 
long-term yields may turn out to 
be a blessing. Higher long-term 
interest rates, to which a large 
amount of borrowing is pegged, 
may damp some growth opti- 
mism and resulting inflation 
fears that initially contributed to 
the bond sell-off. Mr John Lipsky, 
chief economist at Salomon 
Brothers in New York, says the 
increase in European yields “will 
undermine growth expectations 
directly”. 

Moreover, “the latest bond 
yield rise up will Increase the 
pressure on European govern- 
ments to tighten fiscal policy fur- 
ther, rather than watch passively 
as higher debt financing costs 
push budget deficits - and real 
long-term bond yields - still 
higher”, Mr lipsky argues. 

Some take an even gloomier 
view. “The risk is high that the 


world will stok back into reces- 
sion before the end of the year,” 
warns Mr Stephen Lewis, direc- 
tor of research at the London 
Bond Broking Company. 

Many say the outlook for the 
second half hinges on US devel- 
opments. If growth there shows 
signs of slowing, fears of further 
interest rate tightening may ease, 
allowing treasuries to stabilise. 
Until then, European bond mar- 
kets are expected to be volatile. 

“We are running defensive 
positions consisting of cash, 
short-dated paper and reduced 
exposure to the peripheral mar- 
kets in favour of the core mar- 
kets,” says Mr Paul Abberley, 
head of fixed income at fund 
managers Lombard Odier. Histor- 
ically. bear markets have lasted 
for two to three years. By that 
standard, the current bear mar - 
ket is still in its early days. 


Foster’s 
makes 
big move 
in China 


By Nikki Talt m Sydney 

and Louisa Lucas in Hong Kong 

Foster’s, the Australian brewery 
gronp, is joining forces with 
Wheelock, the Hong Kong-based 
trading house, to make a push 
into brewing in China. 

The companies said yesterday 
they were evaluating projects in 
the cities of Tianjin, Wuhan and 
Chengdu. They plan to spend 
USSlbn over five years. 

Foster’s already has two joint 
voitures in Guangdong province 
and Shanghai, and said its aims 
fitted neatly with Wheelock’s 
strategy, which centres on the 
development of five “regional 
hubs” - Guangzhou, Shanghai, 
Wuhan, Chengdu/Chongqing and 
Befling/TianJin. 

The Australian group has cre- 
ated a Foster's Asia division, 
incorporating existing Chinese 
interests. The decision to exploit 
Aslan expansion opportunities 
comes as Foster’s UK and north 
American interests are suffering 
from slnggish demand and 
extremely competitive condi- 
tions. 

By contrast, Foster's pointed 
out yesterday that the beer mar- 
ket in China grew by about 23m 
hectolitres in 1993, to around 
123m hectolitres - making it the 
world’s second largest market 
after the US, easily surpassing 
the Australian total of 17m 
hectolitres. 

It also pointed out that the 
Chinese brewing industry 
remained fragmented, with more 
than 800 breweries, only 10 of 
which produce more than lm 
hectolitres and none above 2J>m 
hectolitres. 

The move marks Wheelock’s 
first foray into brewing. Mr John 
Hung, an executive director, said 
the group recognised brewing’s 
massive potential in China. 

Less than 10 per cent of Whee- 
lock’s assets are in China, but 
there are plans to increase thi$ 
to a maximum of 20 per cent 

The venture win marry Fos- 
ter's brewery skills with Whee- 
lock’s China know-how and prop- 
erty development expertise. Mr 
Hung said: “Wheelock has 
always been the party, in any 
joint venture, that brings to the 
table a number of things: local 
knowledge, financial strength, 
corporate muscle in Hong Kong 
and China connections, and will 
help seek sites.” 

The market leader is Tsingtao, 
the local brewer whose shares 
are traded In Hong Kong. How- 
ever, foreign brands are jockey- 
ing for market share. 


ICI picks outsider for chief 


By Tony Jackson ki London 

Imperial Chemical Industries, the 
UK bulk chemicals company 
demerged from the old ICI a year 
ago, has underlined Its break 
with the past by appointing an 
outsider as its new chief execu- 
tive. 

Mr Charles Miller Smith, an 
accountant, will join ICS from the 
Anglo-Dutch consumer products 
group Unilever. A former finance 
director, he now runs its food 
operations In southern. Europe. 
He wfll take over next April on 
the retirement of Sir Denys Hen- 
derson as chairman. Sir Denys 
will be succeeded as chairman by 
the present chief executive, Mr 
Ronnie Hampel 

The appointment of an outsider 
to such a senior post in ICI is 
thought to be unprecedented. 


The present finance director, Mr 
Cohn Short, was brought in from 
the US oil company Chevron in 
1990. However, Mr Miller Smith 
wfll be in day-today charge of 
ICI, since Mr Hampel’s job as 
chairman will he part-time. 

hi the old Id before demerger, 
the tradition was for file top job 
to be contested between rival bar- 
ons from the operating divisions. 
However, as a result of the 
demerger and retirement, the old 
guard has been largely swept 
away. Besides Sir Denys, Mr 
Hampel and Mr Short, the mem- 
bers of the slimmed-down execu- 
tive board are all recent arrivals, 
and most are under 50. 

Mr Idler Smith, 54, is thought 
to have been an unsuccessful 
candidate last year for the chief 
executive's job at Barclays Bank, 
which went to Mr Martin Taylor 


of Courtaulds. In December he 
was pipped for the job of chair- 
man elect at Unilever by Mr Niall 
Fitzgerald. His present job at Uni- 
lever involves running a business 

with a turnover of some £4bn 
($6hn) about half the size of ICL 

ICI described Mr Miller Smith 
as “somebody different” from 
most other ICI directors. He has 
worked In Unilever's speciality 
chemicals division, and has spent 
time abroad, in India and the 
Netherlands, like Sir Denys and 
several other ICI bosses before 
him, he is Scottish. He has also 
been a nonexecutive member of 
the Id board for the past year. 

Mr Miller Smith might be 
expected to succeed as chairman 
on the retirement of Mr Hampel, 
who is 62, in around three years' 
time. 

Lex, Page 18 




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FINANCIAL TIMES THURSDAY JUNK 33 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Top-level shake-up as 
Tetra Laval chief quits 


Rationing 
introduced 
at Louis 


By Hugh Camegy 
in Stockholm 


Tetra Laval, the leading 
Swedish packaging group, yes- 
terday announced a shake-up 
of senior management follow- 
ing the sudden departure of Mr 
Uno Kjellberg as chief execu- 
tive of the group's biggest divi- 
sion, Tetra Pak. 

Tetra Laval said Mr Kjell- 
berg', in charge of Tetra Pak for 
three years, was quitting due 
to differences with the group 
board over strategies at Tetra 
Pak, which makes systems for 
liquid food processing, packag- 
ing and distribution. 


The privately-owned group 
gave no further details on the 
decision. "We cannot go into 
details without revealing infor- 
mation about our future strate- 
gies to our competitors," the 
company said. 

It said Mr Giumar Brock, 
head of Alfa Laval, which 
makes packaging machinery, 
would succeed Mr Kjellberg at 
Tetra Pak. Mr Lars Halida n, 
Tetra Laval group chief execu- 
tive, would head Alfa Laval 
until a new chief executive was 
appointed. 

The shake-up was the first 
sign of differences at the top 
level since Tetra Laval was cre- 


ated when Tetra Pak, owned 
by the Ra using family, 
acquired Alfa Laval for $2.5bn 
in 1991 in Sweden's biggest 
takeover deal- The two merged 
operations at the beginning of 
last year with the aim of pro- 
viding complete food process- 
ing and packaging systems 
from the form to the end con- 
sumer. 

The secretive group, which 
employs 33,000 people world- 
wide, is divided into four divi- 
sions. It does not reveal profit 
figures, but says it had turn- 
over In 1993 of SKnSibn. Tetra 
Pak accounted for SKr43.4bn 
($lT7m). 


Vuitton 


By Diane Summers and 
Afica Rawsthom hi Paris 


Portuguese telecoms merged 


By Peter Wise hi Lisbon 


Portugal's three state-owned 
telec ommu nications companies 
are to be merged today into a 
single unit The new utility 
which will he the country’s 
largest company, is to he par- 
tially privatised by mid-1995, 
government officials said yes- 
terday. 

The creation of Portugal 
Telecom is the first step in a 
restructuring that wifi bring 
all the country's main telecom- 
munications services under the 
management of a sin gle state 
monopoly. 

The utility is to be progres- 
sively privatised but the state 
will keep a “golden share," 
enabling it to veto strategic 
decisions. Privatisation is to 


begin next year with a public 
offer of 25 to 30 per cent The 
operator would later seek an 
international partner, officials 
said. 

Portugal Telecom will be 
formed Cram three companies: 
Telefones de Lisboa e Porto, 
which operates basic services 
ip Lisbon and Oporto; Telecom 
Portugal, which runs services 
in the rest of the country and 
with Europe and the Mediter- 
ranean area; and Teledifosdo 
Portuguese, which beams tele- 
vision signals. 

Subsidiaries of the three 
companies that operate mobile 
telephone, cable television and 
data transmission services are 
also to be brought into the new 
utility. Portugal Telecom will 
have 22,000 employees and an 


estimated value of more than 
Esl,000bn. 

Radio Marconi, which oper- 
ates Portugal's intercontinen- 
tal telecommunications ser- 
vices, will subsequently be 
merged with Portugal Telecom. 
The officials said private inves- 
tors, who own 49 per cent of 
Marconi, were expected to be 
given a choice of selling their 
shares to the state or exchang- 
ing them for shares in Portugal 
Telecom. 

The government has not yet 
decided whether to sanction, a 
proposal for a EsSObn ($224m) 
manag ement buy-out of Marco- 
ni's 40 overseas subsidiaries 
and its 33 per cent holding in 
Telecomunicapbes M6veis 
Nacfonais, a state-controlled 
mobile telephone operator. 


Peugeot sees ‘real chance 7 of profits 


By John Ridding In Paris 


Peugeot CitroSn, the French 
car group, has a “real chance" 
of returning to profit this year, 
despite an expected slowdown 
in the growth in the European 
car market, Mr Jacques Cal vet, 
chairman, said yesterday. 

Addressing a shareholders’ 
meeting, Mr Calvet said it was 
still too early to say whether 
the company would achieve its 
three financial alms for this 
year - a return to profit after 
losses of FFrL4hn (5250m) in 
1993, covering investments 
through cash flow and a 


sharp reduction in group debt 

The Peugeot chief said, how- 
ever, that "tiie first indications 
we have been able to get lead 
us to think that barring a 
shake-up in the car or currency 
markets, our chances of suc- 
ceeding are real". 

According to Mr Calvet, sales 
rose strongly in the early part 
of tire year. In France, he said, 
sales had increased by 16 per 
cent in the first five months, 
partly because of government 
measures to stimulate the 
industry. These measures 
incl u ded paying FFr5,000 to car 
owners who trade in vehicles 


more than 10 years old to buy 
a new one. 

The impact of these mea- 
sures has, however, begun to 
wear off. Mr Calvet described 
the recovery in the European 
and French car markets as 
fragile, and partly artificial. 

Mr Calvet said that hard 
times still lay ahead, resulting 
from overcapacity in the mar- 
ket , and uncertain demand. As 
a result, Peugeot Citroen will 
continue to cut costs. This 
year, the company would again 
aim for a 12 per cent improve- 
ment in productivity, Mr Cal- 
vet said. 


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Co-managers 

Banco Latino Americano dc Exportaciones (B LAD EX) 
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Dc Nationalc Investeringsbank-N.V 
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Participants 
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Map 1994 



I'll tu reVie’ 


Lotus enters the persuasion market 


The computer group is convinced it 
is taking the right path, says Alan Cane 


Lotus Development 


Louis Vuitton, the French 
luxury luggage manufacturer, 
is rationing customers to one 
or two purchases at a time 
because of a surge in demand 
for its products, Mr Yves 
Carcelle, chairman, said yes- 
terday. 

The company, part of the 
LVMH group, saw sales of 
more than FFrSbn ($890m) last 
year - an Increase of more 
than 20 per cent on the year 
before. Hew factories are 
under construction to meet the 
demand, which is particularly 
Strong from Japanese custom- 
ers who buy op to half of the 
2m exclusive Items a year. 

The rationing means that 
customers visiting any of 
Louis Vultton’s 175 shops 
around the world are being 
told politely they can only buy 
one item or, for some lines, 
two items. 

Handbags are typically 
priced at £250-2400, while 
cabin trunks are upwards or 
£4,000 (26,080) apiece. 

The rationing barks back to 
bullish era of the mid-1980s 
when Chanel, the Paris fash- 
ion house, faced so much 
demand from Japanese tour- 
ists for its classic quilted 
leather handbags that it lim- 
ited them to one bag each. One 
group of tourists was caught 
trying to bribe passers-by out- 
side Chanel's flagship store on 
Rue Cambon in Paris to per- 
suade them to go in and buy 
more bags from than. 

Lotas Vuitton is not the only 
luxury company to have expe- 
rienced healthy growth since 
the start of tills year. Cartier, 
the French jewellery group, 
has fared well, as has Herutfes, 
the silk and leather house. 

One of the chief catalysts for 
the revival has been an 
improvement in the OS and 
OK markets as economic con- 
ditions have improved. 

However, the main source of 
growth in the late 1990s is 
expected to be the emerging 
Asian economies - such as 
Taiwan, the Philippines and 
even China - which could, or 
so the industry hopes, become 
as dynamic as Japan was in 
the mid-1980s. 


I s Lotus Development Cor- 
poration suffering one of 
those bouts of technical 
gaucherie which overtakes 
every software house from 
time to tf™*, or is ite predica- 
ment evidence of a deeper 
malaise? _ 

If the latter, is it a local diffi- 
culty or one that Is af flictin g 
the entire packaged software 
industry? There is growing 
speculation that Lotus’s trou- 
bles are harbingers of a wave 
of c h ang e which will reshape 
the global packaged software 
industry. “AH the large soft- 
ware houses axe in for a very 
rough time until the end of the 
decade,” says Mr Ric hard Hoi- 
way, a leading industry ana- 
lyst 

Lotus warned on Monday 
that its quarterly earnings to 
the end of June were likely to 
be only 20-25 cents a share 
compared with 34 cents a year 
ago and analysts’ expectations 
of nearly 50 cents. 

The market, surprised and 
shocked, reacted by marking 
the shares down $14% to $37, 
some $50 off the peak for the 
year. It Queried whether Lotus 
was losing market share to 
Microsoft, its princ ipal rival 
Lotus this week brazened it 
out. claiming that the slippage 
was a one quarter issue, the 
result of delays in upgrades to 
a number of its software prod- 
ucts. The underlying strength 
of its communications products 
business was not in doubt, it 
said. 

Mr Ed Gillis, Lotus chief 
financial officer, yesterday 
that software houses find their 
sales boosted for the two quar- 
ters after new product intro- 
ductions. Lotus intended to 


launch six new products in 
July and August, so he was 
confident of an improved finan- 
cial performance in the later 
part of the year. 

It Is a persuasive argument 
Every software house experi- 
ences technological difficulties 
which force them to delay or 
postpone products and 
upgrades. It took Microsoft, the 
world's largest personal com- 
puter software company five 
years, for example, to bring a 
commercially successful ver- 
sion of “Windows", the best- 
selling graphical interface for 
its MS-Dos operating system, 
to market 

According to Mr Gillis, the 
present delays are because of 
the complexities of integrating 
suites or collections of pro- 
grams so they interwork with 
ftm» another; a chang e to np»» 
program means further work 
on all the others. 

Lotus, furthermore, seems to 
be an exception to the rule that 
software houses are "one prod- 
uct wonders" which cannot 
replicate early successes. 

After making its reputation 
in the 1980s with tin market 
leading spreadsheet “1-2-3”. it 
had a fallow period in terms of 
new, exciting products until 
the past couple of years when 
“Notes”, software which makes 
it possible for groups of people 
to share information, began to 
find favour with large organi- 
sations. Andersen Consulting 
has installed Notes worldwide 
and AT&T has formed a joint 
venture with Lotus to market 
Notes to a broader audience. 

Notes is the undisputed 
leader in this “workflow” soft- 
ware which accounts for 30 per 
cent of Lotus’ $tbn revenues. 


Stem price (S3 - 
SO 


60 , — 


SO ■ — 


ii.f. 


20 - — 


1890 

Samoa: FT GrepNM 


1888 1994 . 


The larger threat, however, 
which applies to every soft- 
ware house, including Micro- 
soft, is pricing. The cost of 
packaged software is falling In 
a fashion reminiscent of the 
collapse in computer hardware 
prices. Global figures are hard 
to come by but Mr David Trem- 
blay, research director of the 
Software Publishers Associa- 
tion whose members include 
aU the large US software devel- 
opers, points out that unit 
shipments of packaged soft 
ware grew 75 per cent in 
Europe last year but prices 
foiled to keep pace. : “Aggres- 
sive pricing by publishers has 
limited revenue growth for 
Europe to ll per cent” - a 37 
per cent decline in unit price 
In a year. 

The pattern is evident in the 
US, where software publishers 
have taken the lead in offering 
software at seemingly unprofit- 
able prices. Borland Interna- 
tional, for example, cut the 
price of its spreadsheet to 


$49.99. ft has since sold Us 
spreadsheet product line to 
Novell 

A second approach, pio- 
neered by Microsoft, has been 
to sell a bundle of programs at 
a heavily discounted price. 

Lotus is advertising a suite 
of five of its most popular pro- 
grams for £399 ($454) (£199 to 
existing Lotus users), a price 
which one analyst described as 
“suicide”. One of the programs, 
1-3-3, has a recommended retail 
price in the £300 region. 

Analysts believe that the 
trend to lower prices is Inexo- 
rable and that software houses 
must branch out into services, 
a tack now being adopted by 
most hardware companies, If 
they are to maintain margins 
and survive. Mr GiULs says 
Lotus is already moving In 
that direction with its Notes 
workflow products. The decline 
in Lotus’ share price over the 
past year indicates that inves- 
tors may not share his confi- 
dence. 


Royal Bank sells its £116m stake in 3i 


By John Gapper, 
Banking Editor 


Royal Bank of Scotland 
yesterday disclosed that it had 
sold its entire £U6m ($l7&32m) 
stake in 31, the largest Euro- 
pean investor in unquoted 
companies. The announcement 
came as 3i set a price of 272p 
per share for the flotation of 
£711m of equity. 

Royal Bank sold because a 
diluted stake would have 


stopped it taking increases in 
3i’s net assets into profits. 
Bank of Scotland retained its 
shares, while National West- 
minster remained the biggest 
bolder, with 17.9 per cent 

31 said it was pricing the 
shares at a 115 per cent dis- 
count to net assets, and it was 
selling 45 per cent of its equity 
- rather than 40 per cent - 
because of strong demand. 

The company, owned by 
seven high street banks and 


the Bank of England since ite 
formation in 1945, revealed 
details of a £36m share option 
scheme for 140 senior manag- 
ers intended to discourage 
them from leaving. The options 
would cost £l8.7m to exercise 
and net the managers £l7.3ra 
at the offer price. The scheme 
has been in place since 1984 
and requires managers to wait 
for three to 10 years to exercise 
options. 

Mr Rwen Macpherstm, chief 


executive, said that although 3i 
had a unique franchise, it was 
“an extremely good training 
ground for a variety of other 
companies 1 *. 

3i confirmed it had received 
bids of £L3hn from mainly UK 
institutional Investors during 
the bookbuilding exercise. This 
was more than twice the £533m 
placed firmly with, institu- 
tions. 

Lee, Page IS: Banks’ decisions, 
Page 26; Observer, Page 27 


All of these securities having been sold, this announcement appears as a matter of record only 


June 1994 


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FINANCIAL times THURSDAY JUNE 23 1994 

Air France asked 
to speed up sale 
of hotels chain 


INTERNATIONAL COMPANIES AND FINANCE 


By John Ridding hi Paris and 
Michael Skoptaker 

The French government has 
asked Air France, the state- 
owned airline, to reopen nego- 
tiations with bidders far a con- 
trolling stake in its MeridSen 
Hotels chain for a rapid conclu- 
sion of the sale. 

The negotiations will be 
based an a report by France’s 
privatisation commission, an 
Independent body which 
advises the government on the 
sale of public sector assets, 
according to the economics 
ministry yesterday. 

Forte, the US hotels group, 
and Accor of France, are vying 
far control of the MerMwm , in 
which Air France holds a 57 
per cent stake. A decision on 
their bids was delayed in April 
and the dossier was sent to the 
privatisation commission for 
its dpinino. 

The economics ministry said 
Ur Edmond Alphandfery had 
recently received the views of 
the privatisation commission 
on the relative merits of the 
two bids. 

The ministry said the report 
identified the questions which 
needed to be discussed in 
greater detail with the bidders. 
However, it indicated that it 
did not express an overall pref- 
erence. 

Once an agreement has been 
reached between Air France 


and the successful bidder, the 
choice will be presented to the 
privatisation commission. 

No has set. 

Yesterday's announcement 
coincided with news that the 
Marldinn hotels group fall into 
a net loss of FEr29L7te Q5J2m) 
for 1993, compared with a 
profit of FFril2m for 
1992. 

The battle for control of 
Meridien has become highly 
sensitive. 

Forte’s is the higher bid, 

valnnig tb6 hnt yl rhartn 

at FFrUSbn compared with the 
FFri-Sbn offered by Accor and 
its partner. Prince Ai-Waleed 
pin Tajaal of Saudi Arabia. 

Meridien’S Tnflnngwment has 
expressed a preference far the 
Forte bid, bnt political pres- 
sure has been brought to bear 
to keep the hotels nbam under 
French control. 

Forte yesterday welcomed 
the French government’s 
for the decision to be taken 
quickly. It said that further 
delay could lead to Maridien 
managers leaving and the 
i»iwin ifwing twtir afttai to man- 
age hotels. 

It said it expected to be given 
farther details of the govern- 
ment annnniirHBent in the 
next few days. 

Air France, which suffered 
losses erf FFr8.48bn last year, 
needs to raise cash to reduce 
debts. 


Bombardier buys 
Eurotunnel shares 


By Robert Gbbens In Montreal 

Bombardier, the Canadian 
aerospace and transport group, 
has been baying Eurotunnel 
shares on the stock market 

Mr Laurent Beaudoin, chair- 
man, speaking at Bombardier’s 
annual meeting, said he 
regarded Eurotunnel’s share 
price following the rights issue 
as hi g hl y attractive. Bombar- 
dier would not reveal the size 
of its purchases. 

“We may well buy more 
Eurotunnel shares in the near 
future, though we don’t have 
any specific target," he said. 

“We are convinced Euro- 
tunnel shares will rally sharply 
as the Channel Tunnel system 
comes into full operation in the 
next year and revalues build 
up. We are confident the stock 
wiU prove an excellent invest- 
ment for Bombardier share- 
holders." 

Bombardier took delivery of 
25m Eurotunnel shares follow- 
ing the completion of the Euro- 
tunnel rights issue as partial 


compensation for design 
r-hang ra and cost over runs on 
its $60Qm shuttlecar contract 
for the tunnel, it also has 
received C*I57m (USS120.7m) 
in cash 

However, it cannot sell any 
of the block of Eurotunnel 
shares until the last shuttlecar 
is delivered next year. 

Mr Beaudoin announced a 34 
per cent increase in Bombar- 
dier profits for the 1994 first 
quarter and said the gain was 
indicative of results far the fall 
year. 

Business is strong in an divi- 
sions from aerospace, transit 
equipment to snowmobiles, 
watercraft and financial ser- 
vices. Losses on the transit 
equipment side have been 
reduced and aircraft deliveries 
wfll total more than 100 units 
this year. 

Bombardier is dose to 
approving plans to build a 70- 
sea ter re giona l jet Mr Beau- 
doin said the decision would be 
made before the end of the 
year. 


A HYUNDAI 

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US$100,000,000 
Floating Rate Notes Due 1997 

tuvand IM» 

In Bcowdance with the provisions of the Boating 

Rate Notes, notice Is hereby given as foflows: 

Interest Period ; 22nd June, 1994 to 

22nd December, 1894 (183 days) 

Rale of interest : 5¥» % per annum 

Coupon Amount : US$ 1,334.38 

(per note of US$50,000) 

US$ 13,340.75 

(per note of US$500,000) 


LTCB Asia Limited 


The Republic of Italy 
U-S.$500,000,000 
Floating Rate Notes due 2000 

In accordance with the provisions of dm Notes, notice is hereby 
given that (or the Interest Period from 23rd June, 1994 to 23rd 
December, >994 the Notes wiU cany an tamest rate of 4.9375® 
per annum. The interest payable on Ike relevant interest payment 
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Microsoft 
and NTT in 
multimedia 
alliance 

By UcNyo Nakamoto In Tokyo 

NTT, the Japanese tele- 
communications company, end 
Microsoft, the US software 
group, have agreed to co-oper- 
ate In developing an interac- 
tive multimedia system that 
could take Japan's ambitions 
In this area a step further 
Inwards realisation. 

Multimedia provides interac- 
tive text and video services to 
the home and office. 

The two companies are to 
develop the hardware and: soft- 
ware, such as video-on-de- 
mand, from both the supplier 
and customer ends. 

The agreement follows a 
deal announced in March for 
the two companies to develop 
a software distribution sys- 
tem. It brings together two of 
the most powerful companies 
in their respective industries. 

Under the deal, NTT wiU 
participate at the end of this 
year in an interactive multi- 
media system being tested by 
Microsoft and TCI, the US 
cable company. 

Microsoft, in turn, will pro- 
vide its multimedia system 
software for tests by NTT, 
which w£Q begin in 1995. The 
outcome of the joint develop- 
ment will be used for these 
tests. 

The interfaces the two com- 
panies will co-operate to 
develop could include the 
links between the set-top box 
and telecommunications net- 
works, the server and net- 
works, applications and set- 
top boxes, and the server and 
service programmes, Microsoft 
said. 

The set-top box is the hard- 
ware connected with the ter- 
minal, typically a television 
set, to allow users to send and 
receive Interactive informa- 
tion. 

The server is a storage and 
processing unit that stores | 
information such as video, 
sound, voice and data and 
sends such information to 
users or receives information 
back from users. 

Mycom expands 
in lottery group 

Mymm , t ho Malaydan g aining 

and property group, plans to 
acquire a 51 per cent stake in 
Richland Worldwide which 
has interest in a Papua New 
Guinea gaming company, Reu- 
ter reports from Kuala 
Lumpur. 

Mycom will buy the Virgin 
Islands-incorporated Richland 
stake for USfSm in cash. Rich- 
land owns a 70 per cent inter- 
est In The Lotto, a company 
which operates a lottery busi- 
ness in Papua New Guinea. 

r MITSUI MARINE 
AND FIRE 

INSURANCE CO. IXD. 

NOTICK TO HOLDERS OF 
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bum greed w rettateg Director* ead 
Sutwocy AnSton tor theta totvlm. 

Hambros Bank limited 

41 Tbwcrlfin, London EC3N4HA 


COMPAGNIE BANCAIRE 

5300.000. 000 
Floating rate notes due 
1995 initial Tranche 

5200.000. 000 

For che interest period 21 June 
1994 to 21 September 1994 the 
no tea tri g bear interest at 
S. (875% per annum. Interest 
payable on 21 September 1994 
per SI 00,000 note tofll amount 
IOS1J07.S3. 

Agent: Morgan Guaranty 
Trust Company 

JPMorgan 






mm 




Searching for consensus on risk assessment 

Traders and market regulators are changing their focus, reports Tracy Corrigan 


F ears abont derivatives 
risk have tended to cen- 
tre on credit risk, poten- 
tially snowballing Into sys- 
temic risk and bringing about 
the collapse of the interna- 
tional financial system. 

But there is a growing school 
of thonght which argons that 
tins focus is misplaced. Accord- 
ing to many market partici- 
pants, market risk is a much 
more fundamental danger than 
credit risk, and existing mea- 
sures for risk management are 
often misguided. 

Because derivatives are 
highly leveraged, losses on 
market positions have been 
exaggerated, and volatile con- 
ditions this year havB caused 
assumed correlations between 
markets, on which hwigfap of 
derivatives Is often based, to 
evaporate. Consequently, vola- 
tile markets can prove more 
dangerous for the derivatives 
trader than far the cash mar- 
ket trader. 


In fact, many derivatives spe- 
cialists argue, credit risk in the 
derivatives market only 
becomes a serious problem as a 
result of market risk: in most 
cases where heavy losses have 
been incurred, it has been as a 
result of a lack of understand- 
ing of market risk. Credit risk, 
an the other hand, is arguably 
the same for de ri vat iv es as for 
other markets. In its recent 

DERIVATIVES 


report an derivatives, the US 
General Accounting Office con- 
cluded from its survey of 14 US 
participants that the net credit 
risk from derivatives at the 
end of 1992 was only $68bn - 

much BWiaUpT tVinr» for Inarm 

( This assumes that netting of 
derivatives is enforceable). 

Regulators who are prhnar- 
fly concerned about credit risk 
could be barking up the wrong 
tree. Many market participants 


think they are, arguing that 
regulators pay too little heed 
to the way that derivatives spe- 
cialists look at risk. For a 
derivatives trader, the key 
issue is the present value of a 
particular position, and an 
important part of the job is to 
create models to calculate this, 
using historical data. 

The Basle Committee is cur- 
rently working on new capital 
rules far market risk, but the 
approach detailed in consulta- 
tive papers circulated last year 
has been widely criticised by 
market participants as bureau- 
cratic and antiquated. 

In a recent speech, Mr Wil- 
liam McDonough, president of 
the New Yoik Federal Reserve, 
noted that market participants 
are arguing that “the market 
risk measurement models the 
banks had developed for their 
own risk management offered 
a means to measure capital 
requirements with greater pre- 
cision and with much lower 


regulatory burden than the 
proposed supervisory modeL" 
Mr McDonough described the 
consideration of a model s- 
based approach as “a major 
step for the international 
supervisory community,” but 
did not rule it out 

The problem, though, may 
extend beyond regulators, 
touching the entire conceptual 
approach to derivatives. Many 
regulators come team a loan 
officer tradition or an account- 
ing tradition, and therefore 
their approach may be funda- 
mentally at odds with the way 
the market actually functions. 

This explains, too, the grow- 
ing sense of dissatisfaction 
with the accounting treatment 
of derivatives, which means 
that information in company 
reports on derivatives business 
is often meaningless. 

“Accounting should reflect 
economics," argues Mr Flavio 
Bartman, manag in g director, 
commodity derivatives at Mer- 


rill Lynch. "We have principles 
of accounting that were drafted 
for a world where you only had 
bonds and stocks."' 

According to Mr Michael 
Black, head of consultancy at 
CSC Index, who advises firms 
on derivatives risk manage- 
ment, “accounting systems 
define value in terms of capi- 
tal: derivatives in terms of the 
net present value of a position: 
these are apples and pears.” 

Similar problems may arise 
within the senior management 
of banks, which often focus too 
closely on return on capital, 
according to Mr Black. 

Derivatives traders them- 
selves, of course, have their 
own vested interests and pre- 
conceptions. But, increasingly, 
finding transferable values 
which allow traders, regula- 
tors, accountants and senior 
managers to discuss risk man- 
agement in the same terms is 
becoming one of the goals of 
the current debate. 


Police seize papers at Ferruzzi unit 


By Robert Graham in Rome 

Police yesterday seized 
documents from the Milan 
headquarters of Gaic, the 
finance company controlled by 
Ferruzzi Finanzlarla and the 
family of Mr flamflin De Bene- 
dfittL 

The move was ordered by 
Ravenna magistrates investiga- 
ting the parallel accounting 
and alleged illicit financial 
operations of the Ferruzzi 
group that forced its collapse 
last June. 

It is a potentially important 


development, in that part of 
their investigation concerns 
the behaviour of Mediobanca, 
the Milan merchant bank, 
which was given a mandate to 
restructure the Ferruzzi 
group's L30,000bn ($i8.7bn) 
debts on June 4 199a. 

Until a year ago, Gaic held a 
majority stake in Fondiaria, 
the insurance group. The docu- 
ments seized relate to a board 
meeting of June 29 1993, which 
decided to raise Ll.OOObn for 
Fondiaria. Since Gaic lacked 
the funds to subscribe to the 
issue, the capital move in 


effect removed Fondiaria from 
Ferfin's control. The Ravenna 
magistrates are trying to estab- 
lish at what point Mediobanca 
was given full control over the 
Ferruzzi rescue, and the role 
played by the merchant bank 
in the Fondiaria affair 

Executives at Mediobanca 
and three other hanks involved 
in the Ferruzzi rescue have 
been questioned as to whether 
they had prior knowledge the 
group's accounts were false, 
concealing losses of L430bn. 

All have denied improper 
hanking conduct. 


S&P changes outlook 
for Exxon to negative 


By Richard Waters 
In New York 

Standard & Poor's, the US 
rating agency, put another 
question mark over the top 
credit rating of Exxon after 
last week's jury verdict that 
the US oil company had acted 
recklessly in the Exxon Valdez 
oil spill in Alaska in 1989. 

The agency affirmed Exxon's 
triple-A rating, but changed 
the outlook to negative. This 


echoed an earlier move by 
Moody's, the other leading US 
rating agency. 

The jury verdict leaves 
Exxon open to an assessment 
for punitive damages of up to 
SIGbn. in addition to actual 
damages claimed of ?l.5bn. The 
company has argued it should 
not pay any punitive damages. 

Exxon, with Royal Dutch/ 
Shell, has long been seen as 
one of the strongest credits in 
the energy industry. 


All ef these securities having tarn aold, tins announcement appears at a matter ef rrotel only. 




On behalf of the French Republic 
Global Co-ordinators 


Banque Paribas 


Credit Lyonnais 


French Public Offering of 38,641,489 Shares 
Offering Price: FF 385 per Share 


Banque Nationals de Paris 

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cMssENxnONAisot credit ACRicoLmaimanwrraEBASQtn 
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CREDIT COMMERCIAL DE FRANCE BANQUE FEDERATIVE DU CREDIT UITTUEL 

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didosuez capital 
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CAISSE DE DEPOTS ET CONSIGNATIONS 
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banque sjl warburg 


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COMPAGNIE FTNANCIERE DE CTC ET 
DE L UNION EUR OPEENNE-j. HENRY SCHRODER WACG fir CQ LIMITED 
BANQUE WORMS 


SOOETT DE SANQUE SUISSE (FRANCE} SA. 

CAISSE CENTRALE OES BANQUES POPULAIRES 
HSBC INVESTMENT BANKING 
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DONALDSON, LUnJNE rf Bf JtCrrE 
LAZARD FKERCSCTCIE 
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RBC DOMINION SECURITIES INC 

CS FIRST BOSTON 
ABN AMRO BANK N.V. 
BEAR. STEARNS INTERNATIONAL LIMITED 


KLEINWORT BENSON SCCURTTIES 
NBUCO EUROPE PUT 
PRUDENTIAL SECURITIES INCORPORATED 
SMITH BARNEI SHEARSON INC. 

BANQUE DU LOUVRE 
CPR - COMPAGNIE PARISIENNEDE REESCGNlfPTE 
UNION DC GARANTTE ET DE PLACEMENT 


french Selling Syndicate Members 


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oaen-utMws smalms mmi wc 
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SOatRDE BANQUE SUBS (BUNCO SA. 
Adviser to the French State 

Cnfdit Lyonnais 


Japanese Selling Syndicate Members 
MNti stCuR/nisca an 

MIIMiClRIUtfUaiSLMIID CUDiTCnWHABSOliniCSdAMin 

MunMawtn nit miwiuw •it: urrms tv. tm 

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Rest of the World Selling Syndicate Members 
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m notnscnetc wNeBuom*NOTO»u. 

YAHAOU IMntXCTOiVjU HWDfVJ 1 UB 7 TO 

Advisers U the Company 

Banque Nationals de Paris • Banque Paribas 





FINANCIAL TIMES THURSDAY JUNE 23 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Parker & Parsley 
files suit against 
Bridge bid rival 


By NBM Taft h Sydney 

' Parker & Parsley, the 
Texas-based oil independent 
which is bidding for Sydney- 
based Bridge Oil, has begun 
legal proceedings against Gan- 
tt?. the rival suitor for Bridge, 
in the Dallas district courts. 

Gantry is the bid vehicle 
being used by JEDI, an invest- 
ment partnership owned 
jointly by Enron, the OS natu- 
ral gas company, and the Calif- 
ornia Public Employees Retire- 
ment System, one of the 
biggest US public pension 
funds. 

On Monday, Gantry entered 
the bidding for Bridge, offering 
85 cents a share in cash, and 
valuing the Australian com- 
pany - whose assets span both 
the US and Australasia - at 
A$356.7m (US$27L3m). 

This topped the P&P offer, 
Increased only min utes previ- 
ously. of 80 cents at share. 

P&P said that its suit alleged 
breaches of the US Securities 
Exchange Act, under which 
companies makin g a tender 
offer are prohibited from pur- 
chasing shares outside that 
offer, unless a waiver has first 
been obtained from the US 
Securities and Exchange 
Commission. 

It has also sought an order 
barring Gantry/JEDI from buy- 
ing shares in Bridge, outside of 
the tender offer. 


Meanwhile, P&P said it 
planned to have “petroleum 
engineering staff examining 


and evaluating data" related to 
Bridge Oil's US subsidiary with 
the aim of "fully evaluating 
options regarding the current 
offer of 80 a share”. 

P&P claimed that Gantry, 
whose bid has been recom- 
mended by the Bridge board, 
had access to additional, non- 
public information at Bridge 
Oil (USA), it has demanded 
similar 

Bridge shares remained 
pegged at the 85 cents price bid 
by Gantry for most of yester- 
day, although one trade after 
the market closed lifted the 
shares to 86 cents. 

• The A$500m bid by Mr 
Graeme Hart, a New Zealand 
businessman, in conjunction 
with Coles Myer, for Austra- 
lia's Foodkmd Associated has 
been referred to the federal 
Treasury, "to examine poten- 
tial Implications for competi- 
tion policy". 

Under the proposed deal, 
Coles - one of Australia’s larg- 
est retail groups - could end 
up owning the Australian 
assets of FoodlantL This could 
give Coles a significant stake 
in the West Australian grocery 
market 

In the federal parliament, 
Senator Peter Cook, industry 
minister, said the government 
was watching events closely. 


Zambia Consolidated 
Copper falls into red 


By Kermeth Goodins, 

Mining Correspondent 

Zambia Consolidated Copper 
Mines, the world's fourth- 
latest copper producer, yes- 
terday revealed a net loss of 
K72.6bn ($99m) for the year 
ended March. It had previously 
warned of a poor result 

In the previous 12 months 
there was a net profit of 
K41.6bn. 

However, Mr Edward Shamu- 
tete. chief executive, said last 
month that although produc- 
tion difficulties caused a loss 


in 1993-94, ZCCM expected to 
break even in the current year 
and to be profitable In 199546. 

ZCCM, which is listed in 
London, is being prepared for 
foil privatisation by the Zam- 
bian government which owns 
GO per cent but the timing is 
for from dear. Anglo American 
Corporation of South Africa 
owns 27 per cent of ZCCM via 
Zambia Copper Investments. 

At the operating level, ZCCM 
made a profit of K49bn last 
year down from KlOSbn. Cop- 
per production fell from 432,000 
tonnes to 392,000 tonnes. 


Burns Philps 
in A$117m 
German 
purchase 

ByNBddTait 

Burns FhQps, the Australian 
group winch has been pruning 
its diverse business interests 
in order to concentrate on 
"core" food and ingredients 
operations, is buying Deutsche 
Hefewerke, a German baking 
yeast and yeast (extract busi- 
ness, for around AJllTm 
(USS90m). 

DHW is being sold by Vdw# 
the large German energy, 
chemical and trading group, 
and comprises three factories, 
in Hamburg; Nuremberg and 
Leipzig, it has sales of 

around D Ml 00m ($61 -3m) and 
employs some 315 people. 

In Sydney, Burns said that 
the deal, which la still subject 
to approval by Germany's Fed- 
eral Cartel Office, would lift 
tts share of the global yeast 
extracts market to around 15 
per emit. Its share Of the Ger- 
man baking yeast market 
would stand at around 30 per 

cent 

Burns Philps already owns 
Mauri Products, a yeast manu- 
facturer in the UK and has 
been aggressively building up 
overseas food ingredient inter- 
ests recently. 

Earlier this year it pur- 
chased Ostmann, Germany’s 
biggest retail spice manufac- 
turer. Burns said It saw "syn- 
ergistic benefits" from comb- 
ing its existing yeast and 
spices businesses with DHW. 


Petron shares 
up for auction 

The Philippine government 
will auction to the highest bid- 
der 300m shares in Petron, the 
country’s biggest oil refiner, 
Reuter reports from Manila. 

Mr Delfin Lazaro, Energy 
Secretary, said: "It is possible 
that a single bidder can 
acquire all 300m shares." A 
further 700m will be sold at a 
fixed price of between seven 
and 11 pesos (US 40 cents). 

The government plans to 
retain 40 per cent of Petron 
through Philippine National 
Off. 

Petron is- expected to be 
listed on the Philippine Stock 
Exchange by September. 


Liberation movement lifts Latin America 

The region has been one of the main beneficiaries of free capital, writes Philip Coggan 


T here have been many 
liberation movements 
over the last 30 yean. 
But while women and some 
national minorities may still 
be battling for their freedom, 
there is one constituency 
which has been r e markably 
successful in liberating itself - 
capital 

Before the breakdown of the 
Bretton Woods exchange rate 
system in the early 1970s, it 
was time-consuming, expen- 
sive a nd di fficult for c i tize n s of 
most industrialised countries 
to buy foreign assets. 

Now, after two decades of 
liberalisation and deregulation, 
freedom to own capital abroad 
has extended beyond the indus- 
trialised countries to include 
the "emerging markets'* of 
Asia and Tatin America. 

Figures from the Bank for 
International Settlements’ 
annual report, published last 
week, show the scale of today's 
futomatinnal capital markets. 
In the first half of the 1980s, 
gross capital outflows from the 
major industrial countries 
(excluding official and short- 
term banking transactions) 
were around $l00bn a year. By 
1993, flows reached J850bn. 

While the recent falls in 
world bond and equities mar- 
kets may have slowed the 
relentless acceleration of such 
flows, it seems likely that 
growth will resume. 

In the 1990s, the emerging 
markets have been the fashion- 
able home for international 
investments. According to the 
BIS, net inflows into the devel- 


tffobaf net capital flows 


fbn. annoal averages 
150 - 



-too - 


1070-80 1961-85 1966-90 tBOl 


Source BIS 

oping world rose to around 
$l60bn in 1993, from an aver- 
age of $37bn a year in the 
period from 1986 to 2990. 

The BIS said that capital has 
been particularly directed to 
Latin America (where inflows 
amounted to almost 5 per catf 
of GDP last year) and to lower 
wage Asian developing coun- 
tries (about 4 per emit). 

These capital inflows have 
been broadly welcomed as a 
return to the “correct" flow of 
capital between developed and 
developing countries - a trend 
which was in terrupted by the 
debt crisis of the 1980s. 

But the BCS warns that there 
were important differences in 
the nature of the inflows to the 
two regions - differences that 


1992 


1993 


might create problems for 
Latin America in later years. 

According to the BIS: “A 
large proportion of Asian capi- 
tal inflows has been closely 
linked to increased domestic 
investment and imports of 
investment goods. This has 
contributed to real exchange 
rate stability in the region and 
has also helped to prevent 
excessive increases in domestic 
liquidity. In Latin America, by 
contrast, the influx of foreign 
capital - dominated by portfo- 
lio and short-term financial 
flows - was less directly asso- 
ciated with increased imports 
of investment goods and there 
was a greater degree of upward 
pressure on real exchange 
rates." 


One reason why so much 
short-term capital flowed in to 
Latin America was high real 
interest rates. Combined with 
liberalisation measures by 
local governments, this encour- 
aged the rep a t ria tion of some 
of the flight capital which left 
the region during the 1960s. 

Many currencies to tin Latin 
American region foiled to 
depreciate against the dollar as 
quickly as inflation differen- 
tials suggested. As the BIS 
comments, “this made invest- 
ing in short-term assets 
denominated in local currency 
attractive at a time when US 
short-term interest rates were 
unusually low." 

The real appreciation of the 
Latin American currencies was 
probably boosted by the scale 
of the continent’s economic 
and financial reforms. The 
Asian countries had been 
much better at controlling 
inflation and restraining their 
fiscal deficits, hi Latin Amer- 
ica, however, policies in both 
areas bad been lax; and accord- 
ingly the change In sentiment, 
which followed the Implemen- 
tation. of reform programmes, 
created sharp upward pressure 
on the region’s currencies. 

But the impact of an appreci- 
ation in the real effective 
exchange rate, says the BIS, is 
likely to be a deterioration in 
the competitiveness of an econ- 
omy's tradable sector and 
therefore a deteriorating cur- 
rent account deficit 

Investment in Asia has been 
n> m »h higher tlnqn in TreHn 
America, helped by high 


domestic savings rates. By 
investing in the exportcreat- 
ing manufacturing sectors, 
some (but not all) Asian coun- 
tries have been able to offset 
pressure on their current 
accounts. 

The BIS says further reforms 
are needed in Latin America if 
the ratten Is to hold an to the 
benefits achieved through 
recent stabilisation pro- 
grammes. Infrastructures need 
to tie improved in many conn- 
tries; the problem of poverty 
needs to be tackled, to prevent 
social unrest undermining the 
reform climate; and domestic 
financial markets need to be 
reformed to help countries 
cope with the effects of the 
massive capital inflows they 
have received. 

i urtfaermore, the inflows 
have increased Latin 
America's vulnerability 
to external shocks, such as 
higher international interest 
rates. This problem has 
already been seen this year in 
the sharp fell in Latin Ameri- 
can debt markets, which fol- 
lowed the US Federal Reserve’s 
decision to push up short-term 
Interest rates. 

To date, the devefoping coun- 
tries have mostly seen the posi- 
tive side of the expansion of 
the international capital mar- 
kets. The strength of their 
financial systems (and their 
commitment to liberalisation) 
may be tested when the flows 
start to reverse. In this regard, 
Latin America may be more 
vulnerable than Asia. 


SA eco-tourism group expands 


By Mark Suzman 
in Johannesburg 

Conservation Corporation, the 
South Africa eco-tourism 
group, plans a R66m ($18m) 
expansion into east Africa 
through the purchase of two 
wildlife lodges in Kenya and 
Tanzania and a share of an 
important hotel group in the 
region. 

The two lodges, Klchwa 
Tembo Camp in Kenya and 
Ngorongoro Crater Lodge in 
Thmania, and the hotel group, 
Windsor Hotels, are part of the 
Abercrombie and Kent Group. 

The deal has been financed 


through a RlSm issue of new 
Conservation ordinary shares 
to the vendors and R51m in 
cash, which was raised 
through rights issues partially 
underwritten by Hambros 
Bank in London. 

Mr Geoffrey Kent, Abercrom- 
bie and Kent chairman, will 
become joint chairman of Con- 
servation with Mr David Varty, 
the current chairman. Mr 
Steve Fitzgeral, former chief 
executive of Halcyon Hotels, 
has been appointed managing 
director. 

itixording to Mr Alan Ber- 
stein, Conservation’s deputy 

chairman , fixe move rd gnijbi a 


belief in the strong potential of 
African tourism. 

"We expect to be very well 
positioned to take advantage of 
a positive trend in the South 
aid east African tourist mar- 
kets,” he said. 

Conservation, which was 
founded four years ago, is 
regarded as <me of the premier 
economist operations in South 
Africa, where it runs four 
game lodges. 

The Abercrombie deal is 
widely seen in South African 
financial circles as a precursor 
to a stock market listing in the 
next couple of years, either In 
London or Johannesburg. 


Investment bank set 
up in Czech Republic 


By Vlncart Boland In Pragua 

Three former executives of CS 
First Boston’s Prague 
operations yesterday launched 
the first fully Czech-run invest- 
ment bank catering to the 
country’s growing n umb er of 
corporate mid private clients. 

The new bank, Patria 
Finance, is headed by Mr Zde- 
nek Bakaia. who once worked 
in corporate finance with 
Drexel Burnham Lambert in 
New York. 

Patria Finance has start-up 
capital of KcslOOm ($3.57m), 


and is 75 per emit owned by its 
management A group of Swiss 
investors owns the balance. 

Mr Bakaia said Czech corpo- 
rate clients are largely Ignored 
in the country’s financial ser- 
vices market Investment bank- 
ing services are currently 
offered either by commercial 
banks as a supplement to their 
core lending activities or by 
International investment 
banks which cater to overseas 
clients and operate with “little 
regard for the specifics of the 
emerging local capital 
market”. 


[sml 


THE SECURITIES 
AND INVESTMENTS BOARD 

Notice of Ksyocat ioh of Recognition of 
LAUTRO 

as a Seif- Regulating Organisation 

The Securities and Investments Board in exercise of die powers 
conferred by Section I i (l) (c) and Schedule 1 1 paragraph 5 of 
the Financial Services Act 1986 has revoked the orders of 28 April 
1988 recognising LAUTRO Limited (Life Assurance and Unit 
Trust Regulatory Organisation) as a self- regulating organisation 
and as a self- regulating organisation for friendly societies for the 
purposes of the Act, 

The revocation orders make transitional provisions for protecting 
Investors and the legitimate Interests of LAUTRO members. They 
come into effect for certain purposes on V October 1994. 

Details of the transitional provisions may be obtained by any 
person likely to be affected by the revocation orders from SIB at 
Gavrelle House, 2-14 Bunhlll Row. London ECIY BRa (Telephone 
071 658 1240). 


|SBBl 

THE SECURITIES 
AND INVESTMENTS BOARD 

Notice of Revocation of Recognition of 
FIMBRA 

as a Self-Regulating Organisation 

The Securities and Investments Board in exercise of the powers 
conferred by Section 11 (t) (c) of the Financial Services Att 1986 
has revoked the order of 14 December 1987 recognising the 
Rnandal Intermediaries Managers and Broken Regulatory Asod- 
ation as a self-regulating organisation for the purposes of the ACT. 

The revocation order makes transitional provisions for protecting 
Investors and the legitimate interests of FIMBRA members. U 
comes into effect for certain purposes oti I October 1994. 

Deulb of the transitional provisions may be obtained by any 
person likely to be affected by the revocation coder from StS at 
Gavrelle House, 2-14 BunhiD Row, London kit ska (Telephone 
071 638 IZ40). 



"SERaft LEASE Pomouo 

S ECURI TISATION 92-1 LIMITED 

nominal of th« nSSTtSh TJ 1 £ ,T ct U.S^55,7QO 

“HZSisJSSSiSLiaESflKJi - 

June 23. 1994. London ~~ — — . 

CTT1BAN<€* 


petroleum Argu: 


CALL Nn Argus 



U.S. $150,000,000 
Finandere CSFB N.V. 

Junior Guaranteed 
Undated Floating Rate Notes 

Guaranteed on a subordinated basis 
as to payment of principal and interest by 

Finandere 

Credit Suisse-First Boston 



Interest Rate 
Interest Period 

Interest Amount due 
23rd September 1994 
per US. $ 5,000 Note 
perll-S. SIOOjOOO Note 


4.75% per annum 
23rd June 1994 
23rd September 1994 


US. $ 60.69 

U.S. $1,213.89 


CS First Boston 

Agent 


Standard & Chartered 

Standard Chartered PLC 


£300,000,000 

Undated Primary Capital Floating Rate Notes 
of which £1 50,000,000 
comprises the Initial Tranche 

m accordance wtti the Terms aid CondKtans of Bw Nones, natfra to hereby given 
that for the three months period (92 days) from 22nd June 1994 to 22nd 
September 1994 the Notes wU carry an Interest Rate of 5 671 8 per care par 
annum. 

The Interest payment date wff be 22nd September 1994. Coupon Na 37 w* 
therefore be payable on 22rtd September 1994 at 677.39 per coidion tram Notes 
cf £50.000 nominal and 67.73 per coupon ton Notes of £5,000 nomtnei 


J.Henry Schroder Wagg & Co. Limited 
Agent Bank 



AIRCRAFT LEASE PORTFOLIO 

SECURITISATION 92-1 LIMITED 

UjSJt104JtoA» secured CtawA2 Heating Hate Note* due June 1997 
Naftea la hereby given that the Rate of Interest has been fixed at 
6.8% and that the Interest payable on the relevant interest 

Payment Date December 23, 1994. In respect of U-S410.000 

Tfl! 1 U.S.S294 A3 and in respect of 

U-S4i100,000 nominal of the Notes w<B be U.S.S&94&33 l 

London 

(hauer Sendees), Apart &xik OTJBANCO 



FUTURES i C?7'CN£ E30KE=K 




ROUND 

TRIP 


BAWAG 


BANK FUR ARBEIT UND 
WIRTSCHAFT A.G. 

(Incorporated wflh SroHed Bahihy h Austria) 

U.5. $75,000,000 Sufaon&mtod Rooting Rato Notes due 1999 
In accord an ce with the terms and conditions of the above-me n tioned 
Notes notice is hereby given that As Rate of Interest has been fixed 
at 5.25% per annum and that die interest payable an the relevant 
Interest Payment Date December 23, 1994, against Coupon Na 20 
in respect of UJS.510,000 nominal of the Nates *nH be UAS266.88, 


June 23, 1994, London 

By: (hsiw Services}, Agent Bonk CITIBANK O 


U.S. $750,000,000 


NHdland Bank pie 

ftocapinMiite anted laMte* Bn^mO 

Undated Floating Rata Primary 
CepM Notes 

Notice b hereby given But tor Bw six 
monlhs Wares! Period tram June 23, 

1994 to December 23, 1994 (183 

days) the Note Rato ha 

datennfrwsl at &25K par 

The bearcat payable on the 

repayment data, 

wft» U-S.S26 


i. OecwrrtxK'ZS, 

1994 wtif be ILS. S26&88 psr-U-S. 

* 10,000 nominal amount. 


Bylto am 




June 23, 1994 


U.S. $125,000,000 


American Eqran Bawf flsfaM 

Soiices Company, bic. 
0 ncorpcra»dlnN*w>WO - 
Hosting Rata Natoa Due 1999 

(IM -Notes') 

Noilca ts hereby given teat lor ttwihraa 
mantes Internal period Iran June 
23, 1894 to Ssptombar 23. 1094 tha 
Notes wffl carry an HareM rate of 5% 
per annum. The interest payable on 
the Wwe^iaynw* date. Septenteer 


83,19841 


.8127.78 and UA 


8L277V7B raepeefttejy lor Name in 


810,000 and 

UA.810OJH0. 

B r Tto Oto te M tei totePteL BA 

Lwdaa.pihdpilPatefltodK _ 
red Agent Bite Q 

June 23, 1994 


RIGGS NATIONAL CORPORATION 
US 8 10 0,000,000 

FLOATING RATS SUBORDINATED NOTES DUE 1996 
In accanfamce with ttw prnvtelana or Lhe Notes, notice b hereby given dun Tor 
the period 22 Jnne 1994 to 22 Septanber 1994 the Motra ivfll cany a rate of 
tatmatoTBXHper mourn *ttb a coapoa amount of US* 134. 17 

fftaBHAtt 

An A#f»t 


LOW COST to a ' t i '' ' : ; 1 

SHARE DEALING SERVICE 08 1 -944 Oil! 


H«>\i €10 MP.1 MI \1 

vvi >.u\ur. 


JiL 


WOgOOftOWHatengReto 


gorfceterw-rew EJ i m * a 
Brenmbw^eenmMicanr an kMaw 
re«4.7a> c ifw iM iM iiu4B iaiiiiyire 
iHwaoapwusetj*en«r^^^ 

UteM on m UramMurg Sax* EsMogg. 
ngent Mnyre Seamy tear OmpMiy 


BUSINESSES FOR SALE 


Appear h tha FiterictotTimea 
on Tuesdays, Fridays and Saturdays, 
ftsrtatfwrli ‘ 

ibithbi 
contact 

Ken Loynton on 071 873 4790 
or Meteflto Mies 071 873 39M 


TBE THAILAND INTERNATIONAL FUND LIMITED 
bueraakflul Depotiay Receipts breed by 
Megan Cnuuiy Trad Goapuy of Now York 
Evkfcndagbencfidil GenUkates Bapnantiqg 1^0 Unite 
Ntticc is hereby gym tg the ani/bridea Bat the Ttogaarf lManHoBal Brad deefareri a 
dtoriboiioa a dtatribaimi of USD 030 per share. The Record Date for tkia dividend is 
Man* 31, 1994. 

As of hma 27. 1994 payment of empoa number S of the lateoiaiioinJ Depubary Receipts 
will be nude hi US dollani ar the rate of 300 per IDS 1 cm U»d 0,73 dcpashaiy feta. 
Payment win be made re ore of the teDcrwiag offices of Motgn Gonaiy Tmsr Cotnpaay 
of New Yates 

Brands, 35, A*em* <tes Ass 
London, 1. Angel Gum 

Fraofcfnrt, 44/46 Majnrrr I j iu ln mm 

Zurich, 38, SuekentmfM 
ngadarrMtegm Guaranty TYireCbmpaay of Mw 


Maxine Midland 
Bank N-A- 
■UA $125,000,000 

Floating Bate Subordinated 

Capiail Notes due 1996 

For the three months ZJadJuoe. 
1994 to 23 id September, 1994 
the Notes vriQ cany an inrerest 
rare of 3K% per annum With a 
coupon amount of U.S. 8134.17 
per US. 510,000 Note and US. 
5670.83 p« U.S. *50.000 Not*. 
The relevant ioreresr payment 
date will be 23rd September, 
1994. 

Daed on d«e LooJon Stock Eachangc 




C o re p aa yj^wtog Agre e— k 


THE BUCKS 
START 
HERE. 


At your newsagent every Friday. 



THE CITY INSIDE OCT 


u,,15% 

off electricity 


021 423 3018 

Powerline 


i W ttm re«w» rereu «*> 



MMtolt 

MMa 

VtoM 



mttMiH 




rwn 

Iona# 




reM 

Mat 








1720 

11.00 

11J» 


11M 

WL87 

1097 


11.88 

11.00 

11XXJ 


1188 

UJU 

1118 

os» 

ITS* 

1*M 

lira 

0800 

114» 

iaaa 

1119 

0530 

11JN 

u-aa 

1115 

0*00 

11M 

t-Cffl 

lira 

0*30 

11-89 

11 XX) 

11. on 

r 

1188 

11.00 

11.00 


VMO 

1128 

17.58 

rvi* 

10.70 

11.73 

11.73 


1070 

11A6 

11.80 

am 

22j63 

2742 

3148 

l^r 

20.78 

232M 

27 JW 

PTB 

23JXJ 

27.48 

31.78 

0830 

3408 

2100 

3120 

oooo 

2U2 

m I-r, 

3129 

0B30 

38.0 

m r Ty 

4422 

1000 

30-80 

B ' 'j 

4423 

1030 

38J91 


4427 

nan 

37^1 

» ' >4 1 


1130 

38.10 

W } 


1200 

tens 

■ 

52-58 

1230 




1300 

2a9a 



1330 

25-45 



1400 

as 22 

27.48 

31.74 

1430 

25.18 

27*4 

31.73 

1300 

28.12 

31 JO 

3117 

1530 

aaio 

31J» 

3117 

WOO 

2520 

2744 

31.72 

1830 

2020 



1700 

SUM 



1730 

29.18 

36JH 


1800 

3402 

2744 

31.72 

1830 

24-08 

2740 

31.89 

1800 

%un 

2742 

3148 

1830 

»ai 

2742 

site 

2000 

S2MS 

2742 

site 

2030 

SUM 

23J5 

3103 

2100 


2740 

3ite 

2130 


S&SO 

38179 

2200 

33.74 

2030 

33J8 

2230 

33.74 

2740 

site 

3300 

2aas 

ZtjtO 

site 

2330 

17J3 

21 M 


MOO 

17.64 

20-80 


Mw n 


" : ti -i 

y 1 . 1 'Jill 

f ' -1T T1- 





CjTJj 




1 tej cte £i© rtf 







kmliidcn tor -V<MV Oreo 

NMMnqwAU«pMiMto 

■MateMMn «t PwJ PuMTW*. Kto. FutoW 

tereteaiMplwkreNritntiMlill. 



Currency or Bond Fox - FREE 2 v/eek trial 
also daily gold and silver faxes Ann., wh.i-,, 




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17>e Marina (aria* la tfnad bailee • «re Sawn. Frc « 

re nm ■pp&atUm Human 071 2 U 
Attil-,** u* feWmxSji Qtwnre wrtlre 78 
Sa.-ru t M» < te.|re B a,S» M r»Og» oairetorewiwH 





Wi 


FINANCIAL TIMES THURSDAY JUNE 23 1994 


INTERNATIONAL CAPITAL MARKETS 


Fed reassurances help recovery in US and Europe 


1 tv in 


hank <ci 

KcpuH 


By Frank McGurty in New York 
and Graham Bowtey in London 

US and European government 
bond markets recovered snmp 
of their recent losses yester- 
day. prodded by a firmer dollar 
and reassuring comments on. 
inflation from Mr Alan Green- 
span, chairman of the US Fed- 
eral Reserve. 

By midday, the US bench- 
mark 30-year government bond 
was g higher at 85g. The yield 
eased to 7.43 per cent, well 
below the 7.50 per cent mark 
breached the previous session. 
At the short end, the two-year 
note was ■£ better at 99$, to 
yield 6 per cent 

Mr Greenspan told the US 
House budget committee that 
the outlook for US inflation 
was “quite reasonable", and 
that “monetary policy is dedi- 
cated to making sure that it 
stays there". 


The improvement followed a 
finning trend by the US cur- 
rency , which had set a post- 
war record low against the yen 
during Tuesday’s trading ses- 
sion. Gains struck by the dol- 
lar yesterday allowed, traders 
to take advantage of bond 

GOVERNMENT 

BONDS 

prices driven lower in recent 
days by fears of an tryi^hwnt. 
ti ghtfiiring of mon e tar y policy. 

The market’s attention was 
focused on Capitol HHL, where 
the Federal Reserve chairman . 

Mr Alan Greenspan, testified 
before the House budget com- 
mittee. Fixed-rate Investors 
were looking for dues an the 
timing of the central bank’s 
next rate Increase, especially 
during the questlon-and-an- 
swer period which followed the 


Fed chiefs remarks. His com- 
ment that the Fed could not 
ignore currency movements 
did not pass unnoticed by trad- 
ers. 

Meanwhile, commodity 
prices were cooperating again, 
with gold and the Commodity 
Research Bureau's 21-product 
index both extending their 
recent string of declines. 

■ The European rally, which 
to tup late in the afternoon, saw 
German government bonds 
rise by about one point It fol- 
lowed an earlier technical 
squeeze upwards In most Euro- 
pean markets, as traders 
moved to cover short positions. 

“The rebound was largely 
technical, and a result of the 
largely bullish, noises coming 
from the US," said Mr Ian She- 
pherdson, economist at Mid- 
land Global Markets in Lon- 
don. 


"There was nothing new 
from the Fed, but in a bear 
market where people are 
expecting only bad news, reas- 
surance that what the Fed is 
doing is moving monetary pol- 
icy into neutral to combat 
inflation is welcome," he said. 

■ German government bonds 
moved higher in response to 
Mr Greenspan's comments, 
and as a result of the slightly 
firmer tone to the dollar. 

The market moved higher in 
early trading, as investors 
moved to cover short positions. 
“It broke through Important 
technical levels around 90.65 
and found support to move 
higher from there," said one 
trader in Frankfurt 

Analysts said attention 
would be on today’s Bundes- 
bank meeting at Potsdam, near 
Berlin, after which there will 
be a press conference. They 


will be keen to hear the Bund- 
esbank’s latest views on infla- 
tion and M3 money supply 
growth. Also of interest is US 
durable goods data published 
today. 

The Bundesbank yesterday 

allowed the repo rate to tell 5 
basis points to 5 per cent This 
was in line with expectations 
and had little impact an the 
market The September bund 
contract was up 153 points at 
92.29 in late trading. 

■ UK government bonds 
moved higher, taking heart 
from Mr Greenspan's remarks 
and the fact that the published 
minutes of the May 4 meeting 
between the UK chancellor and 
the governor of the Bank of 
England showed no immediate 
inclination to raise interest 
rates. 

“There was some relief, espe- 
cially for the short-end of the 


market, that a rate rise was 
not considered and, after Mr 
Greenspan side-stepped the 
issue of the recent dollar weak- 
ness, fears of an inwnhiBnt rise 
in US rates {were allayed],” 
said one analyst 

The long gilt future was up 
lg points in late trading at 
lOOi. 

■ The French and Italian gov- 
ernment bond market moved 
higher in line with the rest of 
Europe. Italy in particular per- 
formed well, buoyed by 
remarks from Treasury and 
Bank of Italy officials concern- 
ing the need to control the Ital- 
ian budget deficit. 

The September notional 
French band futures contract 
on Matif closed at 113.44. up 
L14 points on the day. The Kal- 
ian September BTP futures 
contract on LiSe was up 2JE0 
paints at 103A5 in late tr ading . 


Stpone^ ank Warm reception for Fannie Mae global debut 

By Antorta Sharp© ing rates than in the domestic ~ - - ■ * * 

ngnts launch us market, where its bonds NEW INTERNATIONAL BOND ISSUES 


Bayerische Hypotheken-xmd 
Wechsel-Bank, Germany’s fifth 
largest bank, has postponed a 
DM1 bn rights issue indefinitely 
because of weak stock market 
conditions, writes David 
Waller in Frankfurt. 

The l-for-10 issue was 
announced in early May. 
shortly after the Bavaria-based 
bank reported a 33 per 
rise in earnings for last year. 
Since then, bank shares have 
underperformed the DAX 
index of leading German 
shares. 

Meanwhile, Daimler-Benz, 
Germany’s biggest industrial 
company, insisted it would not 
pull its DM3bn international 
offering. This Is in spite at a 
narrowing erf the gap between 
the price of the new shares and 
the market price, from 20 per 
cent when first announced to 
13 per cent yesterday. 


Fannie Mae, (me of the world's 
biggest issuers of long-term 
debt, could become a regular 
borrower in the international 
bond market following its suc- 

INTERNATIONAJL 

BONDS 

cessful debut yesterday. 

With extensive pre-market- 
ing, the triple-A rated US mort- 
gage agamy's £L5bn offering 
of 10-year global bonds was 
received favourably by inves- 
tors. The warm reception 
enabled the bonds to be priced 
to yield 25 basis points over US 
Treasuries, in line with market 
expectations. 

Joint lead manager Merrill 
Lynch said strong demand 
from European investors, and 
the feet that the bonds were 
not callable, had allowed Fan- 
nie Mae to achieve better fund- 


ing rates than in the domestic 
US market, where its bonds 
traded at a yield spread of 
around 29 basis points over 
Treasuries. Many of Fannie 
Mae's domestic bonds are calla- 
ble. 

Ms Linda Knight, Fannie 
Mae’s treasurer, said the 
agency had delayed its entry 
into the International bond 
market to await the fruits of 
its efforts to build up a domes- 
tic market in callable bonds. 
IUb market was now a power- 
ful funding tool for the agency, 
which last year issued $46.4bn 
worth, of long-term debt. It is 
Hkely to raise similar amounts 
this year. 

However, Ms Knight said the 
rhang p tn Hia interest rate cli- 
mate this year had prompted 
Fannie Mae to Increase its issu- 
ance of non-callable debt. Sh » 
said she had opted for the 
global bond market, where 
spreads were tighter than at 
home and whore the lack of 


NEW INTERNATIONAL BOND ISSUES 


Amount Coupon Price Maturity Fm Spread Boo* runner 
Borrower m. % % bp 

US DOLLARS 

Fannie Man IJbn 7 AM 99, 75ft >13004 1326R +2S |71*9M)-q Men* LynrtVJP Maprei 

STBtLBM 

BapuMc ot Aimria 200 900 98JB8R JH2004 03250 +22 [ffttrirW) Marti Lynch International 

CANADIAN DOLLARS 

Rabobank Nedariand 100 9.75 99.77SH AugJKXM 03291 +20 tfMH-04) Wood Gutfy 

PmdenMel FUnfflng Conx 75 100 99.40R JU.1997 O20R +89 W Hembree Bank 

M tarns and nan-catatte unless sued. The yfefcl spread (over relevant government bond) m launch b auppBed by the lead 
manager. fSamtanud coupon. Ft Gated re-offer price; fees are sham at the re-offer leveL a) Over Interpolated yield. 


Hembree Bank 


high-quality borrowers worked 
in Fannie Mae's favour. “Now 
that we have developed the 
capability in the global bond 
market, we could well come 
back." she said. 

J. P. Morgan, the other joint 
lead manager, said at least 60 
per emit of the offering had 
been placed with European and 
Asian investors. 

However, other syndicate 
managers said only time would 
tell whether or not such a 
large proportion would stay 


outside the US in the long 
run. 

Fannie Mae’s smooth entry 
bodes well for Freddie Mac, the 
other US mortgage agency 
scheduled to launch its first 
global bond offerin g early next 
month. This deal is likely to 
raise at least flbn, but have a 
shorter maturity. 

The market was less enthusi- 
astic about Austria's £200m 
offering of 10-year eurobonds, 
which several syndicate man- 
agers said was hampered by 


continuing fragility in the UK 
government bond market. 
They also thought the pricing, 
to yield 22 bass points over 
comparable gilts, was at least 
five basis points too tight. 

• Standard & Poor’s, the inter- 
national rating agency, has 
lowered the long-term senior 
rating of Credit Lyonnais, to 
A-mlnus from single-A, to 
reflect the severe asset quality 
pressures which have affected 
the French hank. The outlook 
on the rating is negative. 


Taiwan groups 
on the road with 
$700m in issues 


By Laura Tyson in Taipei 

Two big stock market-listed 
Taiwanese companies are 
launching global roadshows 
this week for equity-linked 
bond issues worth STOOm. The 
deals reflect the increasing 
appetite of local companies for 
overseas funds. 

President Enterprises. 
Taiwan's biggest foods con- 
glomerate, will kick off an 
international roadshow in 
Hong Kong today aimed at pro- 
moting the flOOm issue of what 
will be Taiwan's first 
exchangeable brad issue. 

The issue will be lead- 
managed by Bankers Trust, 
with Sanque Paribas as co- 
lead, a senior finance manager 
at the group said. 

TO avoid dilution of shares in 
the parent company, the bonds 
may be exchanged into shares 
in Tonyi Industrial Carp, a 
listed subsidiary and Taiwan’s 
biggest producer of tin plate. 

Formosa Chemical & Fibre 
and Naziya Plastics, part of the 
Formosa Plastics group, earlier 
this week began a joint tri- 
continental tour in Singapore 


to raise $300m each through a 
convertible bond issue. 

The coupon rate is expected 
to be between L75 and 2 per 
cent, and the conversion pre- 
mium will be set at between 5 
and 10 per cent, according to a 
manager in Formosa Plastics' 
finance department 

The funds will be used to 
finance a $7.8bn naphtha 
cracker complex. Formosa 
Plastics is Taiwan's biggest 
private-sector conglomerate. 

Formosa Plastics itself p lans 
to issue another S300m in con- 
vertible bonds later this year. 

Euroconvertible bonds have 
now been issued by 16 Taiwan- 
ese companies, and five have 
issued global depository 
receipts. 

Under existing Taiwan 
securities regulations, foreign 
holders of equity-linked bonds 
issued by Taiwanese compa- 
nies are not permitted to 
convert them into listed 
shares. 

However, it widely under- 
stood the government is con- 
sidering a change in the con- 
version laws, possibly within 
the next two years. 


Bond specialists named 


Ten banks will become super 
primary dealers on the Italian 
bond market from July l, Reu- 
ter reports from Milan. 

Ranr-a OoUUMIChlB BlUlM, 

Banca di Roma, BankAmerica 
Corp’s Bank of America, 
Cabot o, Cassa di Risparmio di 
Torino. Credito Italiano, Isti- 
tuto Bancarlo San Paolo, 
Monte dei Paschi di Siena, 
J. P. Morgan and Sigeco will all 
become “bond specialists”, 
according to the Bank of Italy. 

The banks will be able to 


underwrite auctions and enjoy 
special rights to subscribe to 
paper. 

The central bank said the 
new bond specialists must 
have net assets of at least 
L75bn (S47.4m) from March 
next year. The list of super pri- 
maries will be reviewed annu- 
ally. Primary and super pri- 
mary dealers will now have to 
inform the Bank of Italy every 
month erf their auction activi- 
ties, including those for non- 
resident clients. 


5 ~f 


rm 






WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 

RKf Day'} Week Worth 

Coupon Date Price change Yield ago ago 


Australia 

Belgium 

Canada* 

Dmwk 

Franca 


9000 09*04 

7260 04/04 

6-600 06AM 
7.000 12/04 

STAN a 000 0508 

OAT 5.500 04AM 


95.1900 +0.070 9.75 <L84 8.75 

MJ800 +1050 niO 707 708 

810900 -0060 M 000 M 

90.3000 40500 042 809 708 

103.1250 40880 7.03 801 808 

850900 4-1050 703 705 7.13 


Italy 

■ NOTIONAL ITALIAN OOVT. BONO (BTPJ FUTURES 

jUFFET Ltt 200m IQOtfta of 100% 

Open Soil price Change H^i Low Eat vol Open taL 
Sap 10101 10305 +2.10 104.46 10101 56441 84370 

Deo 102.80 +2.10 0 100 


ITALIAN GOVT. BOND WTURP OPTIONS (UFFQ Ltt20Ctn lOOttw ot 10096 


Germany Treuhand 

1750 

05AM 

96.8700 

♦GBSO 720 

7.12 

091 



- 

— — .... , .. — 


Ks/y 

&500 

01/04 

88JSOOO 

+2JOO 10L47t 

1027 

8.46 






Japmt No 1 1B 

4.800 

06/90 

103.9380 

+0.170 aao 

2L53 

A08 . . 

Price 

Sep 




No 184 

4.100 

12AJ3 

970260 

+OJBO 4.41 

<20 

3.73 

10330 

. . 2J98 

030 

221 / 

4J». 

Netherlands 

5,750 

01/04 

90.6800 

+1500 7.12 

7.18 

'098 

1M00 

229 

3.08 

2.44 

128 

Spain 

10500 

ions 

97.7000 

+0680 1080 

1032 

. 068 

10480 

204 

as? 

2BQ 

457 


UK Gflta 8000 08190 

8.750 11/04 

9000 10/08 

US Treasury * 7050 05AM 

6.250 08/23 

ECU French Go*) 6000 04AM 

London daring. "New Yolk raU-dey 
t Greea fndtttig wWmoMng <n at 12-5 par i 
mow.- US. UK o 32ncn «n In decree 

US INTEREST RATES 


tr /teH 

FadJrarts tt hteunflnu. 


7% ftmiNHl. 

Pa TTmoanrt /1 

<4 ami. 
- Owjtw — 


426/32 BJ31 809 7-79 

452/32 &SB 8-50 827 

457/92 803 804 BOB 

+13/32 7.18 7.01 7.18 

+23/32 7.44 702 7.44 

40940 8.18 704 705 

YttUtoLoett marioat ttnndanL 
i by nengaUantt) 

Soome ABUS Mormnamt 


Treasury BAs and Sand YMris 

374 uniter 

4.10 rime me 

43 Rwyear 

— 477 TC-ynr 

525 30-fBW 


EM. voL Mri. cm 2684 Putt 2183. Pratttta open k*. cm 85857 Putt 22132 


Spain 

■ NOTIONAL SPANISH BOND FUTURES ffffiFF) 

Open Sedpifce Change Wg/i Law Eat voL Open fra. 
Sep 8795 88£4 4084 88.64 87.25 93.182 83843 

Dec 8786 8883 -3.00 8785 8883 2 3 


■ NOTIONAL UK Ot-T FUTURES OUFFET £50000 32ndsoM 00% 


BOND FUTURES AND OPTIONS 
Finance 

a NOTIONAL FRENCH BOND FUTURES (MATIF) 
Open Sntt price Change High 
Sep 112/44 11344 +1.14 11384 

Dec 11186 112-52 +1.12 112.42 

Mar 11088 111.72 +1.1 2 11180 

■ LONG TERM FRENCH BOND OPTIONS (MATIF) 



Open 

Sell price 

Change 

High 

Urn 

EA vol 

Open tm. 

Jun 

100-00 

101-01 

+1-19 

101-00 

9129 

828 

9095 

Sep 

88-18 

B&2S 

+1-18 

100-08 

98-12 

65705 

122219 

Dec 


98-35 

+1-18 



0 

67 


a LONG QB.T RJTURE3 OPTIONS (UFFE) £50800 6481 Pf 100% 


Low 

Est voL 

□pen hit 

Strike 


■ CALLS — 


■ PUTS 

11238 

273JM5 

188*08 

Price 

Sep 

Dec 

Sep 

Dec 

111.48 

874 

10.758 

99 

2-48 

3-33 

1-452 

3-47 

110M 

4 


100 

2-13 

3-08 

2-27 

4-19 




101 

1-48 

2-43 

2-52 

4-57 


Strike 

Price 

JU 

- CALLS - 
Sep 

Dec 

Jui 

“ PUTS — 
Sep 

Dec 

112 

1.77 

- 

- 

0-43 

1.75 

110 

m 

1.10 

260 

- 

173 

215 

- 

114 

004 

206 

204 

124 

253 

- 

115 

0.30 

1.® 

- 

- 

306 

- 

118 

0.09 

1.12 

120 

- 

- 

<73 


Em. wl com. cm 34.557 Putt 41800 . Rwtaui <tey» open ht, Cate 330040 Puts 360461. 

Germany 

B NOTIONAL (HERMAN BUND FUTURES (UFFg* PM 2 SO.OOC IQOthe of 100 % 

Open Sett price Chang* « 0 h Im E*. vd Open InL 
Sep 9022 BU90 +184 9235 9020 183532 780494 

Dec 9000 91.17 +1.50 9080 9080 2458 2397 

W BUND FUTURES OPTIONS flUFFE) OM2KLOOO pOtts of 100% ' 


. cm non Pin im. nttere owe open tm. cm se+ra pin *som 


Ecu 

■ ecu BOND FUTURES (MATIF) 

Open Sett price Change «gh Low Est voi Qpen Jnt 
Sep 8180 8288 +180 82.10 8180 1804 6801 

Dec - 8184 +1/40 .... 


B US TREASURY BOND FUTURES (C8T) SI 00.000 32nde o< 100K, 


Strata 

Price 

Jul 

Aug 

CALLS — 
Sep 

Dec 

Jul 

Aug 

PUTS — 
Sep 

9150 

DOB 

1.41 

1.75 

1/B8 

ais 

101 

125 

9200 

130 

1.14 

1.48 

1-63 

0.40 

124 

1S8 

9200 

114 

190 

123 

1.41 

0.74 

ISO 

123 

Em. vol mol cm «36S0 Pina ieun. Pievtaus daytt qpan UU cm 225661 Pitt 2SS 



Open 

Late* 

Chraige 

High 

Low 

Est. voL 

Open InL 

Sep 

102-14 

102-27 

+0-14 

102-80 

102-13 

490.430 

388,574 

Dec 

101-23 

102-02 

+0-12 

102-07 

101-22 

1-979 

37«3 

Mar 

101-18 

101-14 

+0-17 

101-18 

101-14 

48 

3045 


a NOTIONAL MEDIUM TERM GERMAN GOVT. BOND 

(BQBLKLlFFEr PM250000 100tt» of tOO% 

Open Sett price Chow Hgh Low EsL vol Open InL 
fSap 9788 +OB1 0 78 


Japan 

■ NOTIONAL LONS TERM JAPANESE GOVT. BOND FUTURES 

flJFFQ YIQOm iQOttia at 100% _____ 

- Open Close Change High Low EeL vol Open Ira. 
Sep 10872 10980 10082 2539 0 

* UFFE contract! esdnd on APT. M Open HM Igs. an for pnMua (tty. 


_1WI— — 19M 

lot Had Mce£ +nr- Hge Loe 


BKf_ ^.1991— . 

tad PrtwB+tr- H» Lee 


StarfertUMeepNRMVttre 

but 12«jpe 199*—-— 1246 
tnswciMttt aw 

13*1995 1»W 

BKH3KQU3M6 &00 

mVpcISSS 981 

Treat 12*iPC ISBStt 1< W 

UK 1996 — <U2 

Em* 13 U PC 1*4^ 11W 

Caamke lOpc 1996 — 9.47 

d»hKi«m rjl 

nnii3^Kin7tt — 11-n 

Earil1D>lR19S7 M* 

Trees MrfciMW— sa 

ExhlSpc 1997 lin 

9Vpc 1999- 934 

Treat 74*pc 1998tt 7.49 

nesi6\ff199MRtt- 7.11 

14pcW-1 na 

Tmtthprun <a« 

ee*12pci998 ion 

TtteiVffCISBttt an 


ftae II RAM Yen 



TwIlftpeiW 

TttoBpc T990tt 

CMvriMimtpeim 

TkaangRaVS 

RK20D0» 

Tnael3pc 2000 

10W 2001 

JWVTtt 

7pcV1 A— — — 

ovwsne— 

owaoat* 


- too 

484 100ft 
S.14 101U 
S2Z1IO^tt 
486 98.', 

ifflTM'zld 
625 raw 
ofii noari 
691 114A 
694 11KI 
730 105% 
73T 86U 

758115*14 
793 1D6fi 
7.97 10?* 

an it* 

8.151WJ44 

aw m 

912 * 

038 lilH 
830 

838 H2J3 
838 103 s } St 


aw ii3ft 
832 W& 
830 Wh 
an iosi* 
- 100ft 
a 82 10l£ 

891118 s ** 

US raqj 

882 30% 

896 30ft 
899 104 

a77 94 s * 


107,1 

— tow 

— raw 

107ft 

894, 

— 1071! 

lift 

+ft 117ft 
+A HIS 

117B 

— IWi 
+ft 100ft 

121ft 

+A n«A 

+ft 110,5. 

+ft <31« 

— lira 
+A 109ft 
102 

— 131ft 
+ft 1«ft 
+ft 12® 
♦ft 1T9ft 


+ft 129ft 
4ft 121fti 
♦ft inn 

3 121 S 

— 100ft 
♦ft KM 
♦ft I36fl 
+H 122ft 
♦ft 106ft 
+ft 101ft 

+l( 173ft 

+4 mu 


1 0pe 2003— — _ 946 

100 JrmllhneSBBI-* — . 1034 

100ft FnttraShpeie-A 491 

101 a oattttlP»c!l»- ais 

1®> IttwSVpcHXW 792 

fTJ* Caw 9 Hue 2005—. — H8 
Taeil2 1 2Pe 2003-5 — 10W 

’jra 73,peZ006Lt 643 

110} taC2002-B» 853 

TfetallteSBBW 1W« 

S TttttB»2j*a»7« 872 

W*p eVW — 10W 

Tran Bw 2009 tt 09S 

10W 

10IU 

llffi 

104ft 

a tWRDMimM 

Dees 8pe MOB R68 

ktj iraeiBU«w 2 Dio — . 795 
cwowmaoutt — an 
]«A iran ope 291 2 tt an 

,fl *» Two 5%pe 2006-1 2tt_ 731 
Treaa 8pe 2013S 832 

r%pcwi2-i3tt aw 

TranaiHKsnrtt — ass 

E*fli12W , 13 J 17 932 

113fe 


105% 

TOO 

111 ft Qaafe4K. 
io*ft wrismSttj 
soft Cm3 s 2W'B < 

aw TweSpB'tti 
ion houhSfae 
84ft Tnel2>2K_ 


899 105B 
9.06 111ft 
793 TS-m 
6.70 103 s . 
838 06ft 
EM 103B 

aw iiw 
896 91 H 

871 BOV 
117114ft* 
894 97 U* 
an 129ft 
832 1018 


691 930 

8.41 TSfe 

a»ia2W 
655 102ft 
627 73A 
648 93* 

645 B2ft* 
6*8 101* 
an im 


* 3t 

-A 

-ft 105>i 
-A 125*2 

tsS 

+* i«% 
-ft 189ft 
-ft 119ft 
~~ 15lft 
-ft <«ft 


-fe 129ft 
-A 1271* 
-ft w* 
-A TUB 
44, 1U2i 

-ft <28ft 
-A 158 s * 


+ft 58ft 
-ft *ti 

-ft 71 

«S| 

♦ft 38ft 
♦ft 37ft 


+or- w5h 1W Litt 


ac-96 P73) 297 3L8B 188ft 203ft 1970 

iftperam — (135,6) 295 634 107ft +ft 1134 105ft 

2ft»1H (789) 343 395 16(4 +4 176ft 168ft 

PftpcTB (769) 154 396 100ft +4 173ft IBM 

4ftpeM# — (1352* 359 39) 10721 *4 113% 107ft 


20036 MLS) 391 3971964* 

SftpOH £76* 3J0 193 T46*J 




ZftpeTl (7*J) 173 393 T54JJ 175ft 154ft 

Zftpc-13 (0OJ3 177 394 1274 *S MSft 125ft 

2ftpc1B (81 -E) 380 197 13Sft +ft 1574 134ft 

ZftWSD -JS5M8 683 696 129ft +ft 152fl 128ft 

V&Vft 00-7) 183 6871®%* +ft 129A 106ft 

(ftpc'SOti — 035.1) 385 490108ft* +ft 128tf 105ft 

FtaMpecOee rael ratttmptlon rate e«i prafeclad Motion at (1) 10% 
and (g 5ft. {N Hgues In (nranUmes show RP1 Oew tar 
InSmUng 0e 8 months prior 10 Ieew9 end hwe been eOMted » 
reflect rebaslng of RP1 to 100 In Jsueiy 1987. Conveotan tacur 
6846. RP1 lor October 1993: 141* aid tar May 199« 144.7. 

Other Fbcad Interest 


-VUI_ -1894- 

(Was tt tad PdceE + or- Urn 


/Btt»Dtt1lft2DlO>- 

AttnnerJOftwSOflO— 

BTbb 1 1 2012 

MmlCttiBftllc 10^— 

OK CM 1899 

130CV7-2 

iWoQwMcispcani-. 

I«ni1« |^l ^pr?niw ■_ 

UMpOBflftjttlBBd. 

LCC3pc-20*L 

Ittnda lw 1 lljr 70H7- 

llet.Wr.3pc'& - 

ITNkfcMata3ftpc2fi2t. 

*ftWL2D2* 

DriltatSHn IPajeSM 


654 110 
138 100 
098 an 

nan _ 
100 
11 JB 

1059 1100 
1178 
679 
1 E0 

1024 182 
M8 140 

- 454 

- 494 
1213 


♦ft 1424 11® 
ra 138% im 
A M2 115 
>4 118ft 85ft 
— 1»ft 100 
_ 115ft 109ft 
+8 1«1 13W 
-ft 148ft 125ft 
-ft *4ft 33ft 
-ft 40ft 2Bft 
+ft 130ft IIS 
♦ft 78 BBft 
-ft ISOft 129% 
-ft U5ft 123% 
ififift 1* 


rr-ACTUAMES FIXED 1NTERBST INDICES 

Price InrSces Wed Day’s 7Uo Aooued 

UK oam Jun 22 change 95 Jin 21 Infereet 


— Low coupon yMd — —BleiWim coupon yield— —Ugh ooipon yield- 
Jun 22 Jun 21 Yr. ago Jun 22 Jun 21 Vr. ego Jun 22 Jun 21 Yr. e| 


1 Up to 5 yam (24) 

2 6-15 year# (22) 

3 Over 15 yean (9) 

4 kradeanehin W 

5 Al stocks (Bl) 


+0.06 12041 149 5.77 5 yre 

+ 0.08 137.69 1-94 842 16 yra 

-007 15409 208 5.41 20 yre 

-004 17301 108 808 hred-T 

+004 13809 1-91 609 


852 

854 

753 

168 

168 

721 

17S 

181 

759 

858 

857 

852 

853 

183 

113 

112 

9.12 

859 

181 

8.71 

850 

171 

118 

134 

853 

153 

824 

8.92 

851 

144 

— 

— liritaSon 5% — 



_ 

-taftetlon UMfc- 





ftKttHrOnked Jun 22 Jun 21 Vr. ago Jun 22 Jun 21 Vr. hqo 

6 Up to 5 years (2) 18507 +025 18542 1.12 2-53 Up 10 5 yra 301 300 2-99 2.75 203 2-21 

7 Over 5 yew* ft 1) 17002 t053 168.12. . 081... 2.65 Over 5 yra 306 309 304 3.75 3.79 305 

8 AD stocks (13) 170.79 +050 180.94 088 2.83 

a yeer yield ■ — — — ■— IS year yield — — — -25 y— r yfetd— — 

Dabentmea and Loena Jun 22 Jun 21 Vr. ago Jun 22 Jun 21 Vr. ago Jun 22 Jun 21 Vr. eg» 

9 Debt 6 Lome (76) 12001 +008 125.14 208 505 905 900 074 9.77 907 111 909 176 027 

Average gne iwta m pBon yWcb m ewum ttxwo. Coupon Bands Low. DH- 74*46; MsAnr 8K-KH6H: life end over, t Rat yWoL yw Year to dtt 


6 Up to 5 yearepq 

7 Over 5 yew* (11) 

8 AD stocks (13) 

Debentures and Loena 


Git Edged ban 
&day average 
tNlpiakm ujnpia 


FT FOND INTEREST INDICES 

June 22 June 21 June 20Jina 17Jme 16 Yr ago mph* Lost* 

Govt Secs. (UK) 9105 9009 91.14 91.79 9100 96.63 10704 9009 
Ffead Interest 10703 107.70 10801 10807 108.73 11309 13307 107-33 
* tar 1994. Qoramam SoeuUMa Ngli rince ooRpinttn: 12749 (BTU3E), law 4B.18 (3/1/7S). Rod toft 
20 and Rnd kearara 1921 BE aaWty Men rafaeaM 1874 


FT/ISMA &4TERNATIONAL BOND SERVICE 


Lhtad se B» Waal MmOarM faonris far mhkh Im if an adequate ttcondvy ravtat imst prices at MO pm an Jkne 22 
Issued BM Otar Cbg. YlaM taeued Bd Offer Chg. 


QH.T EDGED ACnVVTY INDICES 

June 21 Jixia 20 June 17 June 16 Jim 15 


m 92.9 98.7 93.1 98.5 1020 

960 1000 101.9 101O 1050 

: WJB (21/1«6 . taw GOES prw7q . Bare 100; O w e ict us Searttte 1 V 1 IV 


UO. DOLLAR STRAIGHTS 
«*ey Nri Tranam flft 08 - 
Afcana Rnfeva 7% 98 

AetfsBftOO 

Bank d Tdtyo 8% S6 

Bcl*in5ftQ3 

BFCE7ftB7 

BMhGesOZI 

Quads 9 96 

(Swung King Rn 5ft 98 — 

ChhaBftO* 

Coud Bnpa 8 98 

Craft Fender 9ft 90 

Dora* 5ft 90 

EaaJtttti RBttvy 8ft 0* _ 
BOG 8ft 96 

aC8ft9B .. 

BB 7ft 99 

m aft w 

Bee do Franca 9 BB 
EuoGmegftn 

Ex-kn Eta* Japan 8 02 __ 

Export Dw Cop 9ft 98 

FHandSftW 

FVrttl Export 9ft SS 

Fred Mokx Oecft 6ft 98 — 

Qei BK Opld 9% 96 

GWC 9ft 98 

hid Bk Japan Fin 7ft 97 

WrAm»Dav7%98 — 

WF 23 — 

Jgpwi Ctev Bk 8ft 01 

Kara* Bsc Flews* 

Korea Bee Power 6ft 03 — 

LTC8 Rn897 

Wbutttt Bac 7ft 02 

Mppai Cred Bk 10ft 95 — 

Nanwy Tft97 

Crtsrta 7ft 03 

Ottr KanMbrek 8ft 01 __ 

PeeeCansdsTft 96 

FaMM5ft03 

driloc Hydo Sft 98 

Quebec Pu* 998 

SeinriuySft96 

5451099 

SM* flft 88 

SpttlBftW-; 

SMeBkN9MBftS6 

SSa^SSeftM^I 

Tdqio MebepettBft 96 

UMad Nrgdoai 7ft 02~1! — I 

VW8 Bank 8ft 98 

Werid Be* 8ft 97 


.1000 sift 
. 1000 101ft 

- 400 105ft 
_ 100 102ft 
. 1000 BBft 

- ISO «B% 

.1500 10ft 
. 1000 104ft 
-500 80% 

-MOO 06ft 
_ 100 102ft 
-300 108ft 
. MOD BBft 
-800 nft 

- 193 103ft 
_ 100 KBft 

- 250 102ft 
. 1000 107% 
_ 200 106 
-100 Wft 
-500 102% 
-150 WB% 
. 3000 99ft 
-an imft 

. 1500 97% 

-an 105 % 

- 200 103% 
-200 1C 

- a» 102 % 
.3900 82% 

- 500 104% 

-®0 105% 
. 1350 85% 

-200 102% 
. 1000 97% 

-ISO HB% 
. WOO Knft 
. 3000 97% 

- 200 105% 

-200 101% 
.1000 87 

_ 150 107% 
_ 200 105% 

- 150 104% 

-an 107 

- 150 108% 

.1500 97 

-an hb% 
.2000 99 % 
.no 103 % 
.ion 89ft 
-an msft 
.1500 96% 
.3000 88% 

.1800 105% 
.1600 105% 


oanscie imrk sirushts 

*a «*6ft24 2000 

Cra* Fonder 7% CB 2000 

Dmnafc6%8B SOD 

Deptt Have 6% 03 1500 

DauKhQBkRnTftC 2000 


EECefcOO 

2900 

BB 6% 00 ... 
FHandTftOO 

1500 

snrai 

tty 7% 98 

UettdBvWJHttBftOS 
Ncp«y 6% SB 

5000 

2250 

1500 


1500 



9Mckn8 97 2500 


92% -% 
101% -% 
105ft 

103% -% 
85% 

103 -% 

11 

104ft -ft 
91% «% 
87% 

W3% -% 

«B% -ft 
soft 

92% 

103% -% 
HO% 

103 -% 
W7% 

106% -ft 
105 -% 
102 % -% 
108% 
raa -ft 

104% -% 

97% 

105ft -ft 
IM -ft 
102 % -% 
weft -% 
82% ■*% 
105 

108% -ft 
88ft 

waft -ft 

97% 

104% -ft 
101ft 
97% 

105% J* 
101 % -% 
87% 

W8% -ft 
105% +ft 
105% -% 

107ft 
WB% 

87% -% 

108% -ft 
96% 

waft 

90% 

103% -ft 


108% 

105% -ft 


83% +1% 
flflft A 

33% +ft 
93ft +1% 
100 % + 1 % 
98% 4% 

W1% ♦% 
Wlft 4ft 
88ft +1ft 
99 4% 
91 ♦% 
88% ♦% 
104 4% 


Urtod KtaQdom 7ft 37 .. 

782 IMoaegan M Fhi 7 03 . 
720 WreM Be* 015 


.5500 101% 
.WOO 35% 
.2000 20 % 




Wartd Bank Bft 00 

— 1290 

SWISS FRANC SnWGKCS 
Aslan Dev Barit 6 W 

100 




ton 

m aft 0 * 

300 

FhM7%90 

Hyuttl Motor Rn 8% 97 — 

SCO 

100 

100 

KtbeSiM 

2« 

Ontario 6% 03 

CtoebacHyCtoBOa 

— 400 

WO 

4S0 


150 



YW SIMIQH1S 
Bdgiuri599 

. 75000 

FrtandSftflS 

31000 

30000 

tty 3ft 01 

Japan Der Sft 5 89 

100000 

120000 

KSppon Td Td 5ft QB — 

.90000 

9CF 6% 00 

SpBto&ft 02 

30QOQ 

’l25000 


1ffi% 4% 
96 4% 
20 % -% 
afil 4% 
109% 4 % 


99ft 

«% 4ft 
105ft 
106ft 
107 4 % 


104 4% 

102% 4ft 
94 4% 

109% 

« 4ft 
W7ft 


726 Sweden 4% 96 — 
Ml VtaUBrekSft 02 . 


. 190000 102ft 
.250000 10*% 


746 

MM 7ft 95 Lit 

_ 800 

100 

101 

748 

192 

Ganftsnie Lib 9% 99 LR WOO 

107 

10B 

733 

756 

WridBarasgeiA- 

_ 1000 

100 

101 

ISO 

751 

Bank Hiar Nad Geer 7% (& F3 

. 1000 

WOft 

«H 

7S3 

735 

Bmgb Beh&er 0ft BB R 

SOQ 

1»% 

109ft 

828 

6l83 

Atoatnftonrce 10% 96 CS „ 

_ 500 

102% 

102% -% 

110 


ai2 Ba*CWa*W%99CS 150 un% 

7TB BM Cchanba 10 96 CS 500 101% 

7.19 BB10%9SCS 130 HB 

173 Bee da Frame 9% 99 CS Z7S 99% 

&94 GanBacCap4M1098CS 300 101% 

621 raw Ir* Fin ID 01 C* 400 BBft 

7.73 Fftpon Td Tel 10% BB CS 200 100% 

156 OraartoBOSCS 1500 88% 

882 QrttPO Mycta tt% 99 CS 500 100% 

725 Qear KonCdbark 10% 99 CS — WO Wl% 

7.1* ODBOBcRaTOftafla 200 Wlft 

159 Bayun 3ft 96 Ecu 1250 103% 

Could Gtaope 9 01 Ecu __ 1100 103% 

Oe«L«uraia9SB&u VS M?% 

am BB 1097 Ecu ItS W5% 

7/48 Feno dd Stal 10ft 98 Ecu 500 106% 

&33 UyTOftOOEcu 10CD 110% 

722 Span 906 Ecu IOC 103% 

725 Ltafcd Ktagtrn 9% 01 Ecu 2750 104ft 

193 ADC 10 SB AS — - 100 100% 

097 8P Amato 12% 86 AS 100 105% 

723 CarmBkAunateOftOBAS- WO 115 

179 BB 7ft 99 AS 350 95 

7.75 MDuHttCaada 1596* 100 107% 

MB MSWTrea'jiy ZeoO 20 A3 1000 7% 

m BI,IB**7ft03AS 125 84% 

7A4 9h Auri Oovt Rn 9 02 A$ 160 82% 

174 iMewAittriBUMAS ISO 107ft 


-ft 1113 
-ft 116 
-ft 111 

-ft IBB 
-ft 927 

-ft mu 
-% moo 
-ft 1022 

-ft 198 
-ft 911 
-ft nu 
896 
4 ft 821 
f% 7/44 
7/44 
4 % 796 

4ft 836 
-% 7.11 

♦ft 821 
-ft 177 
-% 856 
-ft 892 
-1% 819 

4% 172 

-ft 1023 
4ft W/47 
♦ft HUB 
4% 862 


laaued BU OOar 0«- YlaM 


647 Abbey Nal Treouy 8 03 £ . 
7 88 Atasrlcta 11%97£ — 
771 Btaldi land 8% 23 £ 


1000 91 

.100 W8 
-150 BBft 


91% 4% 955 
108% 4% 113 


4 % 424 

4% 445 

4 % 325 

4 % 4 JO. 
♦ft <76 
♦ft 421 
♦ft <61 
♦ft 119 
♦ft 380 
4ft 4A6 
♦ft <74 
4ft 32B 


Darararii6ftm£ — 

800 

84% 

94% ♦% 147 

EB W97C 

HOtan W%97E 

637 

WO 

Wft 

105% 

105% ft 708 
105ft -ft 804 

Kttnson 10%S7C 

500 

104% 

105% ♦% 804 

HSBC Hdringa 11 j8B02 E 153 

lOBft 

10 B + 1 % mo 

Wy Wft 14 c 

400 

107 

187% +% 908 

JapreiDwBkTOOC 

200 

91% 

91% ♦% 165 

tend Sto flft 07C 

ZB 

on 

98% +1% ITS 

Omio 11 % 01 e 

TOO 

wft 

107ft ♦% ass 

Puwergen 8ft 03 E — 

250 

85ft 

86% +1% BUD 

Sawn Tiara lift 88 E 

- — 150 

W6ft 

10ft ♦% 902 

Tckjoaoc Power 11 01 C 150 

107ft 

WBft +ft 943 

MfaeyrMfcreiOOGNa, ino 

83% 

64% -% 122 

TOC fin 9% (PNZ5 

— _75 

100% 

104% -ft 189 

CEP** 1095m 

_ 2000 



Bae da France Bft 22 HFr_ 

Tr . 3000 

101% 

HJ1% ♦% 104 

SNCF9% 97FFr 

— 4000 

105% 

W5% ♦% 7.15 

FUMTMQ RATE NOTES 





Inad 

BU 

Oflor Ccpn 

ftiaai NxS Trererey -A 93 1000 

9117 

9929 <5000 

Banco Bona 0 BS 

ZOO 

9978 

9995 30750 

B^jun i 97 DM 

SOD 

10114 

10023 58750 

0FCE-OJEB0 

350 

9972 

9966 <7300 

Bnannli 110 96 C 

150 

B8J91 

■HDOI 53500 

Canada -% 99 

_ an) 

8125 

9933 <3125 

CCCEOKEcu 

200 

»H2 

9106 10156 

CraSLymm ,',00 

300 

87 JE 

9647 50000 

Dameik-% B6 

WOO 

9941 

9952 175(0 

LYwdntr finaxa? A 98 DM __ WfflJ 

9957 

10007 54586 

Fono del Slat 110 97 

420 

10081 

10Q20 <4750 

FWand 0 97 

TOffi 

9908 

9195 34141 

Hatta ss SS C 

350 

8998 

10006 52500 

kahndOBB 

300 

8961 

gin <8800 

»%%98 

2D00 

10034 

10041 41250 

LAB tade+Wrel fin -ft 96 

1060 

B938 

BBL40 <5625 

Uoyda Bank pep S HO 

600 

8108 

8338 <1000 

MttirdaiDS 

oso 

9906 

9942 52500 

rtteZeomi-%99 

10 m 

9952 

8958 31125 

OnutoOSB 

_ _ TOGO 

9939 

0033 <6125 

tanfaOBB 

500 

auB 

9951 51250 

GocueOttwIaOBa 

300 

9941 

9154 4JJJQ 

Sttatabenk Bata -095 « DM _ 6000 

9987 

warn 519W 

SWaBkrictartalUeBS^- 

125 

BBJ5B 

9985 35344 

SttdenOOB 

1500 

100XB 

10ai3 <6290 

Uttd/avbni-ftSS 400 3 

8978 

8915 31350 

CONVERTIBLE BONDS 





Cent 



laaued Mce 

BU Oder Pttn. 


Omwnirg-r uie 6ft OS — 

Chubb opfe/eas 

QoUKalOBCrieTftOO — 

Hawn eft 06E 

Hbnsui Amts 23901 . 

Hatty FWG02 

Lmd Sera Oft 02 c 

Lome 7ft G5£ 

MtaUtai*2%03 

Mart tt Rn 8ft 97 

NriffftMv£%OB£ 

OgdenS 02 

P*mzcl 4ft 03 ,. . 
SuTtonoBf* 3% M _ 

SuiAtataaTftOBC 

Team Cap* 90S E — 
TsashaBunrta^ft 02 . 

I u_ t e - — 

no iKiiiumi 

J CMy nn* mttet mekar 


400 52ft 

250 88 

65 1JJ554 

500 25875 

— WOO 

— 400 mi 
w on 

SO SM 

200 

10B 2283 

— 250 433 

86 39077 

— 500 568087 

SCO -TBnftg 

— 155 39 

— 200 251 

— 300 82% 

— peAae Ouft pr 
aqMinb 


96ft 97% 
104% 105 

114 115% 
106% WBft 
74% 75% 
135ft 13Bft 
96% 98% 
85ft 88% 
88% SOft 
105ft 108ft 
106% W7% 
SB 90 
92% 93% 
S 89% 
83% 94% 
111% 1Q% 
104 105 


SlRNQKr BONDI The «Wd ta «W8 lo rednnpitti rt be bkHstre toe amount bend • i» mtani tt omney uft Cha dnaGnarapon do/. 

Ftowwa BATE Nome Danontt a ad h dettra irtaea neienvhe Wtattd. Oopan riwai e irananan. Swad-Maflta Kart abHitarth nBerad rara |g iwn un rai taeaai iraei raal tar U3 BBtan. Ccrewnn aim 

COMMRfnBLS BONDSc Dmfftattd »j do*" attantte Mfcattd. Oh ntaxMmbal anon t/baaO pm am apnaaed w anemy of rim tt aMHnkn rale bed if ttue treraAretnttpa Pantan « »e 

cum eflwttre pdn rf acquiring umm At fee bend war da moo need uta d 9ta dam 

D The Raanelii Tanas Ltd- INK tapottaBon In whde er In pet ta any tore net pasittad vttvu vrim avert, tktt m<AmI lv vaaraattiu saoerira Mata Asrecttkn 


• -T-p-T^ n r M .i^, BM MttdanttttBre*tt»te.vEairt^ 






Speedy input from MTM purchase and good start to current year 

BTP jumps 48% to £30.3m 



DMeramUH 

Frank Buckley (left) with Steve Harmam, managing director 


by BTFs new industrial bio- 
cide in the last quarter. 


By David Wlghton 

BTP, the speciality chemicals 
group which paid £l06.7m for 
most of MTlTs assets a year 
ago, beat City expectations 
with, a 48 per cent jump in 
annual pre-tax profits, from 
£20 .5m to £30Bm. 

Earnings per share of 154Sp 
( 12 . 7p) topped the previous 
record of I5.4p set in 1991. 

Hr Frank Buckley, chair- 
man, described the figures for 
the 12 months to Hatch' 31 as 
"not a bad performance” con- 
sidering that most of the 
group’s markets were in reces- 
sion for a large part of the 
year. "The results from the 
MTM acquisition have come 
through more quickly than the 
market anticipated. " 

The shares rose 8Hp to 
309%p, helped by Mr Buckley’s 
comments on trading: "There 
tiaa been an encouraging start 
to the current year and there 
are positive signs that the 
recessionary conditions experi- 
enced in a number of our mar- 
kets are now behind us.” 

The MTU assets contributed 
profits of £7.76m in nine 
months on sales of £58&n out 
of total group turnover up 
gflim at £23SL8m. 


US operations bad performed 
“very much better than expec- 
ted”. BTP Introduced some of 
its biocides, leather and tex- 
tiles chemicals into the MTM 
plants in the US, replacing UK 
imports which attract duty of 


Annual growth in the global 
industrial biocide market is 
about 15 per cent, largely due 
to environmental pressures. 

Profits from biocides and 
ffnp chemicals jumped to £ 12 m 
CEk84m), including £EL3Sm from 


the MTM assets. Sales more 
t h a n doubled to ga.lm. 

Performance chemicals, 
which includes ta n n ing prod- 
ucts, contributed £8.4m 
(£5,79m). The mainly UK-based 
industrial division turned in 
£&63m (£4JH m) but adhesives 
and textile coatings slipped to 
£5^6m (£G49m). 

A &55p final dividend gives a 
lOp (9Jp) total, covered 1.6 
times. Mr Buckley said the 
long-term a*™ was for divi- 
dends in be twice covered by 
earnings. 

• COMMENT 

Shareholders who supported 
last year's rights Issue at 185p 
have been wall rewarded far 
their faith. The MTM deal has 
paid off as predicted, giving 
BTP under-used capacity 
almost tailor-made for its 
needs. The full benefits are yet 
to come and combined with 
strong growth in areas such as 
Industrial biocides and recov- 
ery in other markets BTP looks 
well-placed for the next couple 
of years. Assuming profits of 
about £39m this year, the 
sham s are trading on 16 times 
forward earnings. Not expen- 
sive for the sector and there is 
a yield of 4 per cent 


Eurotunnel 
take-up may 
be ‘adequate* 

By Simon Davies 

The 3pm deadline for 
E uro tu n nel's £858m rights 
issue passed yesterday with 
the shares still weak, but 
underwriters expressing 

confidence in the Ukdy level 

of take-up. 

Figures for the UK-listed 
portion of the issue, 
representing 25 per cent of 
Eurotunnel shares, will be 
released today. Analysts 
suggest that between 10 and 
20 per cart af the UK shares 
may not be taken up. 

Shareholders were offered 
new units on a Mar-5 basis 

at 265p, which compared with 
the price of 275p at 3 pm. The 
shares rose at the end of 
trading and closed at 279P- 
Having maintained a lOp 
premium, underwriters expect 
the response to be “adeq uate 1 * . 

The more significant figure, 
acceptances from the 75 per 
cent of bearer shares traded 
(and primarily owned) in 

France, will not emerge until 
the end of next week; but the 
figures should be better. 

tee underwr i t e r expressed 
confidence in the heavy 
trading in the nil paid bearer 
shares, since bsyos would 
be almost certain to take up 
rights shares. Under the 
French s y ste m, investors who 
take no action lose their 
rights. 

Fttr Eurotunnel itsejfl the 
take-up makes Httie 
difference, ft has raised its 
money aflanum* tM« 
is the last rights issue. Its only 
concern is that Its w a r rants 
are c on ve rte d. 

Next year the company is 
anticipating revenues of 

£I 98 tn from warrant 
conversions. Following the 
decline in its share price, the 
shares are at least 10 per cent 
below the likely adjusted 
conv e rsion juice for the 1993 
warrants (the largest tranche), 
and conv e rsion cannot be 
automatically assumed. 

This underlines the stiD 
precarious nature of 
Eurotunnel’s finances, untB 
it can demonstrate real traffic 
flows at least in line with 
projections. 


more than 16 per cent 
US sales were also boosted 


Shanks & McEwan cuts dividend 


By Peggy HoIIlnger 

S hanks & McEwan, the waste manage- 
ment company , yesterday cut Us dividend 
by 43 per cent and warned that uncer- 
tainty over government plans for bans on 
imported hazardous waste could lead to 
further disappointment in its Rechem 
business. 

Hr Gordon Waddell, chairman, was 
announcing the group’s plunge into the 
red with pre-tax losses of £8m (53.02m prof- 
its) for the year to March 26. The swing 
info loss was the result of a £2Cta excep- 
tional charge, which was flagged in a let- 
ter to shareholders in March, for losses on 
construction contracts and rationalisation. 

Sales were down by 9 per cent to £120m, 
largely due to declines in the construction 
division and Rechem, the hazardous waste 
business. 

Mr Waddell said Rechem’s results had 
been disappointing, with lower waste ton- 


nages and technical problems In the 
plants. This division would continue to be 
plagued by uncertainty until It became 
dear whether the government would ban 
imports of hazar dous waste. 

The UK incineration industry faces a 
difficult period over the next few years. 
Currently the government can ban hazard- 
ous waste Imports, on which the group 
increasingly relies for revenue, but regula- 
tions to stop the dumping of treated haz- 
ardous waste into landfill sites are not 
expected for some time. 

The dumping ban is widely expected to 
prompt a surge in demand for incinera- 
tion. 

Mr Waddell welcomed a recent govern- 
ment comment that incineration of 
imported waste could continue in limited 
quantities for up to three years. This was 
not enough, however. "Until we get same 
clarity, we are in serious trouble,” he said. 

To reflect this uncertainty, the final div- 


idend is cut from 3.44p to ip, for a total of 
3.24p (5.68p). Losses per share were 5p 
a gains t earning s of 4.ip last time. 

The other businesses were doing well, 
Mr Waddell said. The solid waste division 
had pushed through price increases of up 
to 15 per cent in the sooth of England 
without any reduction in volume. 

• COMMENT 

Mr Waddell's blunt warning on the regula- 
tory risks s u rro u nding the high margin 
hazardous waste business overshadows a 
further problem - volumes are felling as 
wefl. While this may be offset by rational- 
isation and an improved performance from 
landfill and construction, the shares will 
almost certainly reflect the above difficul- 
ties. Forecasts are equally uncertain, rang- 
ing from £l3Jhn to £19m for this year. A 
prospective multiple of 12J5 on the most 
optimistic forecast m i g ht just attract high 
risk/high reward investors. 


First Leisure shares fall 
despite advance to £14m 


By Michael SkapMur, Lateura 
Induatriee Cocreapondant 

First Leisure yeste rday 
announced interim profits 19 
26 per cent to £l4Jm pre-tax, 
but warned that there was still 
no «n gu of a substantial upturn 
in rrmgnmw spending. 

Mr John Conlan. chief execu- 
tive of the discotheques, bowl- 
ing and tourist attractions 
group, said consumers did 
appear to be going out more 
em it spending more; 

He added that market condi- 
tions were more encouraging 
than they had been far some 
H yry , but be said: "What we 
haven’t semi, is a boom around 
the corner. We shouldn't over- 
anticipate the speed and scale 
of the recovery." 

The City reacted badly to the 
anwfflmrgmant . mark i ng First 

Leisure's shares down 19p to 
289p. Analysts said this was 
more of a comment on tile 
prospects for leisure spending 


generally than on First Lei- 
sure, which is seen as a weDr 
pi f wa g wri group. 

Turnover in the six mouths 
to May 1 rose 23, per cent to 
£GL9m. Earnings per share 
were up 7 per cent Drum &.74p 
to &15p. The interim dividend 
is raised to 2J3P toft- 

Frafits from tourist resorts 
fell 19 per cost to £L3m, result* 
tag from an increased depreda- 
tion charge and accelerated 
pre-season marketing costs. 
The group expects to benefit, 
however, from the publicity 
surrounding the centenary of 
the Blackpool Tower. 

Profits from the sports dfvi- 
sion. which indudes bowling; a 
marina and a health chib, 
dipped 13 per cent to £6.6m. 
The fen resulted from bowling, 
where price increases in 1992 
ran Into con su mer resistance. 
Ur Conlan said the group was 
in the process of introducing a 
new pricing policy with the 
atm of enticing bowlers back. 


The discotheques division 
saw profits Increase by 13 per 
cant to ttJSn. Spending per 
head was up 2 per cent ' 

• CO— MBIT 

Reservations about First Lei- 
sure reflect doubts about the 
nature of pottraceastai spend- 
ing throughout tin economy. 
Few knowwhether consumers 
wflDl resume their treaapendtag 
habits of the late l9WB, even 
when the good timae have fully 
returned. Eariy evidence from 
First Leisure is that leisure 
consumers are not about to 
abandon their caution. A good 
summer in Blackpool might 
restore enthusiasm for the 
group. That parity depends on 
the vagaries of the British 
summer. Expected frill-year 
pretax profits are £3&5®, with 
earnings of iTp. The prospec- 
tive multiple of 27 fitirly 
reflects the balance between 
competent m anagem en t mid an 
uncertain economic future. 


Reduced deficit at ERF 


By John Griffiths 

ERF (Holdings), the truck 
maker, returned to profitability 
in the second half of last year 
for the first time since the UK 
truck market collapsed Into 
recession in 1990. 

However, it was not suffi- 
cient to affect the first-half loss 
and for the frill year to April 2 
there were pre-tax losses of 
£28^00, compared with £412ro. 

Mr Peter Foden, chairman, 
said ERF had begun recruiting 
more workers to allow a 40 per 
cent rise in output rates over 
the next three months. 

The increase is mainly to 
cater for rising demand in the 
UK, where the truck market Is 
firmly into recovery after its 
steepest d«*Hne since the sec- 
ond world war. Output is to 
rise ffom. 10 to 11 trucks a day 
to IS, with the workforce 


increasing by nearly 100 to 840. 

Prospects for continental 
markets were likely to remain 
bleak until next year, said Hr 
Foden. 

However, ERF expects to 
receive a boost from the 

i-hawg wrt p olitical atfaiatftm In 

South Africa, where it has an 
assembly plant ERF is predict- 
ing a rise in demand there of 
SO per cent over the next 12 to 
18 months. 

The Cheshire-based com- 
pany, the UK's last remaining 
publicly quoted truck maker, 
made a profit of £4534)00, after 
interest payments. In the sec- 
ond. half 

For the frill year, losses per 
share were cut to 498p (4&25p) 
while the proposed final divi- 
dend is held at2p. 

Gearing was reduced to 44.7 
per cent at the year end after 
peaking at nearly GO per cent 


half-way. The latter figure was 
inflated, however, by the £&5m 
cost of launching new tracks 
designed for continental 
Europe and the setting up ofa 
network to sell them. These 
coats ware treated •• an excep- 
tional item lad time. But the 
venture could hardly have 
bear wane timed, with centi- 
nental truck markets derifafog 
sharply last year. ERF sold 
only about 50 trades an the 
Continent bat in the next tew 
years hove* to capture 1 to 2 
per cent of the region's heavy 
trade market, representing up 
to 1,000 trades a year. 

Turnover roee by 34 per cent 
to £l4R5m (£U1.7m) with unit 
sales 20 pa- cent op at 2JJ39 
(1,942). There was exception- 
ally high pressure on profit 

mftygins as fft pHnwntal truck 
makers discounted heavily, 
said Mr FOden. 


Allen expands as profits double 


This offer notice is issued in compliance with tee requirements of and has been approved by The International Stock Exchange of the United Kingdom and the Republic of belaud 
Limited (the “London Stock Exchange”) pursuant to Section 154(lXa) of the Financial Services Act 1986. This offer notice docs not contain full information about OM Mnmal South 
Africa Trast pic and should therefore be jrad in conjunction with tbe listing Particulars dated 22 Jane 1994 (the “Listing Particulars") which alone cowain full deaak of Old Mutual 
South Africa Trust pk; and of the Ordinary Shares and Warrants available under the Offer for Subscription (fee “Offer”)- Application has been made to the London Slock Exchange 
for tbe undennendooed Ordinary Shares and Warrants to be admitted to the Official List It is expected that listing will become effective and that separate dealings in the Oedhmy 
Shares and Warrants will commence on Friday 8 July 1994. 


O ./ 


T L" , 


SO I'T ( :( AFRICA TRUST ,,l 


(Incorporated in England and Wales under the Companies Act 1985 with registered number 2939312) 

Placing and Offer for Subscription sponsored by Smith New Court Corporate Finance 
. Limited of 70,000,000 Ordinary Shares of lOp each (with Warrants attached on a one 
for five basis) at an issue price of lOOp per share payable in full on application 

Old Mutual South Africa Trust pic is a new j — 


investment trust which will aim to provide capital 
growth from investment in companies the majority 
of whose assets are located in, or tbe majority of 
whose profits are derived from. South Africa. 
51,000,000 Ordinary Shares (with Warrants 
attached) have been placed and 19,000,000 
Ordinary Shares (with Warrants attached) are being 
offered to the public under the Offer. The Offer has 
not been underwritten. 

Copies of the Listing Particulars are available for 
collection during normal business hours 
(930am-5.30ptn) on any weekday (excluding 
Saturdays) up to and including 8 July 1994 from any 
of the following: 

Smith New Court Corporate Finance Limited 
Smith New Court House 
20 Farringdon Road 
London EC1M3NH 
Bank of Scotland 
New Issues 

Apex House 38 Threadneedle Street 
9 Haddington Place London EC2P 2EH 
Edinburgh EH7 4 AL 

fo addition, copies of the Listing Particulars can be 
obtained, by collection only, for two business days 
from and including 23 June 1994 from the Company 
Announcements Office, the London Stock 
Exchange, London Stock Exchange Tower, Cape] 
Court Entrance off Bartholomew Lane, London 
EC2. Applications for Ordinary Shares (with 
Warrants attached) should be made by completing 
die attached application form and returning it by 
post or delivering it by hand to Bank of Scotland, 
New Issues, Apex House, 9 Haddington Place, 
Edinburgh EH7 4AL or by delivering it by band or 
by courier only to Bank of Scotland, New Issues, 
38 Threadneedle Street, London EC2 so as to be 
received by 12 noon on Friday 1 July 1994 . 

Important Ne« 

Ordinary Share* (with Vtemtiattatibed) vptiedCor 
« a^tl 0jro.p»yTiCT riwaklbtnnde by meant oficfaegne drawn by 
“fTf ta ** 41 rfl ■*»' hi ** mA yea use t cheque 

■MnsMaddtfrafKrtorifc! pom nmed* hm 3 on flu back of d» 


Dnd P*W you mm taui dm quo of tfa ftrifarin* rf nu i. 

■ 23 June 1994 


OLD MUTUAL SOUTH AFRICA TRUST pU 

APPLICATION FORM 

IMPORTANT: Before completing this form you should read the Listing Particulars relating to Old Mutual South Africa 
Treat pic. Boxes 1-4 must be completed and year remittance must be pinned at Box 5. 

Applications must be for a minimum of 2,000 Ordinary Shares (with Warrants attached) and thereafter in multiples of 1.000 
Ordinary Shares (with Warrants attached). 


Wfe offer to subscribe for 


Ordinary Shares twirii Womans attached an a. one for five basis) it 100p 
each or such ksser number of Ordinary Share* (with Warrants anaohed 
oo a ooe for trve basis) for wtik± this application may be accepted 

E 


fa OM tta i il Sooh Afrtai Tnaa pic OP ^ law art ul)ca to fa wniWd af«ffla«lointto< la fa Urie PM iie^ n deed 22 tea IW 


and [/we attach a cheque or banker's draft for the amount payable now. namely 


PLEASE USE BLOCK CAPITALS 


ForcnameCs) in fiill . 
Mb. M«*. Mi* or Ale 

Surname 


Minor's foreuamefs) (in full) . 
Surname 


Date of birth. 


Addms (in full). 


Postcode . 


Dare 


>994 Signature 


m Fb your cheque or banker’s draft for the amount shown in Box 2 made payable m "Bank of 
Scotland A/C OM5A“ and crossed “A/C payee only". You may send the completed Application 
Form by post to Bank of ScoUaod, New Issues, Apex House, 9 Haddington Place, Edinburgh EH7 
4AIx alternatively, it may be deBveted by hand only during normal business boms to Bank of 
Scotland, New Issues, 38 Thnradneodfc; StroetAondoo EC2, so as to be rewired in either case not 
later than 12 aooo on Friday I July 1994. 


Band6must be completed In the case of Joint applicants oofy 


to/MnAGn/lWe 


P on a MBwOlOafam 


AddmadnftitD 


FMKodc 


MdMn/NBn/TUki 


Pomametsl On falQ 


Stamms 


Addren (infos) 


McMn/Mm/ntit 


F onamn^t) (fa fall) 


SornartM 


Ob Ml 


Roomie 


Slgmac 


By CaroHne Southey 

Allen, the construction and property 
development group, yesterday announced tbe 
acquisition of DJ Ryan. & Sods, a cable laying; 
civil engineering and building contracting busi- 
ness, fix: about £6J9m, to be financed by tbe 
issue of 4J4m shares. 

The Wigan-based group also reported a dou- 
bling' of pretax profits, from £L51m to £S .05m. 
on turnover up 23 per cent, from £5lm to £62.7m, 
in tiie year to April 3. 

Tbe group ended a two-year dividend freeze, 
recommending an Increased final of 3-fip fix* a 
total of &25p (5p). Bantings per share rose from 
SJJSp to 8J57p. 

(tearing at the year-end was 16.7 per cent, 
a gains t 38U per cent last time. 

Mr Donald Greenhalgh, chai rman, said that 
bouse completions, which bad risen from 208 to 
305 over the period, were expected to rise by 
some 25 to 30 per cent in the current year. 


The acquisition issue will represent 14 per 
cart of the enlarged share capital. Some 2JS5m 
shares are to be placed at 150p apiece. Of the 
balance of L79m shares, Ryan has agreed to 
retain 1.2m fix- one year. 

Ryan, based in Preston, Lancashire, reported 
pre-tax profits of £ 1 j 02 u on sales of £3L8m in 
the year to March XL. At that date its net asset 
value was £3£m. 

Mr Greenhalgh said the acquisition would 
allow Allen to expand into a related market in 
tire north-west 

Ryan has fixed-term contracts with British 
Gas, with which it has a 26-year relationship, as 
well as North West Water and Severn Trent to 
fey, replace and repair gas and water pipes. 

The company recently won its first contract to 
lay cables in the UK for Nynex, the east coast 
US telecommunications group. 

After completion of the acquisition by Allen, 
Ryan’s bufidisg contracting hoosebuMng 
divisions will be sold. 


Standard Life diversifies 
into health insurance 

Standard L i fe , the UK’s largest Bell, manag i ng director, said 


Redland floats 
Belgian arm 

By David BlackwaR 

Tbe Benehzx brick interests of 
Redland, one of Britain’s big- 
gest budding materials compar 
ides, have been floated cm the 
Belgian bourse with a valua- 
tion of BFrfLZbu (2161m). 

The flotation raised about 
BFrLSbn* which will be used 
to pay off debt incurred in 
expanding the business. 

Redland said that its benefi- 
cial interest in the company, 
which has been renamed Terca 
Brick Industries, had been 
reduced to 35 per cent. 

The Benelux in t ere sts were 
known as Redland Koranic 
Bricks, jointly owned by Bed- 
land and Koranic, a privately 
owned Belgian industrial 
group. 

Last April Redland Koranic 
merged with the brick inter- 
ests of Van BiervUet, also a 
privately owned Belgian 
group, reducing Redland's 
interest to 42 per cent. 

Terca will have annual turn- 
over of £l35m and produce 
more than lbn facing bricks a 
year from 25 sites in the 
Netherlands, Belgium, France 
and Germany. 


mutual life insurer, is to <nver- 
sliy into health insurance with 
the purchase of Prime Health 
from Municipal Mutual, the 
local authority-owned insur- 
ance company, for an undis- 
closed amount, writes Alison 
omnu. 

Prime Health policies cover 
some 250,000 people. Last year 
it had gross premium inmmp 
of £54m making it the fifth 
largest health insurer In the 
UK 

The move is Standard Life’s 
first venture outside life and 
pensions policies. Mr Scott 


EFT plans to raise about 
£ 2 £ 6 m net via a placing and 
open offer of 5.4&n new ordi- 
nary shares at 49p each. 

The Glasgow-based asset 
finance group also said that its 
principal bankers had agreed 
to increase available borrowing 
facilities to SSSJBm - up gL3£m 
from the facilities available at 
December 31 1993. 

The new shares are being 


the acquisition would allow the 
group to move quickly ahead 
in the rapidly growing health 
insurance market 

Standard Life will lose an 
important element of its UK 
distribution next year, when 
Halifax Building Society ends 
tts agreement to sell Standard 
Life policies and sets up Its 
own life subsidiary. 

Prime Health is the latest in 
a string of subsidiaries to have 
been sold off by MML which 
transferred most of its continu- 
ing local autharity.business to 
Zurich Insurance. 


tunons. subject to a clawback 
to qualifying shareholders on a 
l-for-6 basis. 

EFT said that revenues for 
the first five months erf the cur- 
rent financial year were more 
than 15 per rent ahead. The 
directors forecast the interim 
dividend would be &525p and 
the final L225p, making a total 
of 1.75p (L5p). 


EFT £2.56m placing 

conditionally placed with tasti- 


Emap bids for Trans World 


By David Wlghton 

Emap yesterday launched its 
expected lfllp a share hostile 
bid for Trans World Communi- 
cations, the local radio group 
where it owns or has agree- 
ment to buy 5L7 per cent of 
the Shares. 

The hid, which values Trans 
World at £70 8m, follows the 
agreement by Mr Owen Oyatan 
to sell Ms 22 per cent stake to 
Emap at the offer price. 

Mr Robin Miller, Emap’s 
chief executive, said the final 
cash offer represented a "gen- 
erous” price for Tram World. 
It is pitched at 58 times lest 


year’s earnings end 5J trow? 
turnover, both higher than any 
previous deal in the sector. 

However, earlier this week 
the Trans World board 
declined to recommend such 
an offer, arguing that the price 
was too low and that the bid 
could face legal problems. 

This is because a fun take- 
over would breach the legal 
limit on the number and size of 
commercial radio licences that 
can be held by one company. 

However, Emap pb»n« to sell 
two or its licences to a joint 
venture with merchant bank 
Schraders, which the Radio 
Authority has said would com- 


ply with relevant legislation. 
The authority has recon- 
firmed Its position following an 
announcement by the Guard- 
ian Media Group, which owns 
20 per cent of Trans World, 
that it intends to ask for a judi- 
cial review of the decision. 

Mr Milter said: “We have no 
idea- whether they will get 
leave to proceed or what the 
timetable would be, but mean- 
while the offer goes ahead.” 

Emap said the acquisition 
would ehance its earnings per 
share in the first frill financial 
year of ownership. 

Trans World shares added 2p 
to 175p, 












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FINANCIAL TIMES THURSDAY JUNE 23 1994 


25 


• ,*? • rm- 






A network that pulls 
more weigh t in 
financing world trade 


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The financing of international trade has been a core 
business of Standard Chartered Bank for over 140 years. 
It is one of the strengths on which our international 
network has been built. 

Today, that network operates through more than 
600 group banking offices in over SO countries — with 
particular strength in the developing economies of Asia 
and the Pacific, as well as Africa and the Middle East . 


Creating links between emerging markets, and 
making connections between them and the developed 
economies. Standard Chartered is ideally placed to 
help finance some of the worlds fastest-growing flows 
of trade. 

To do so, we aim to combine the practical skills 
which ensure the efficient handling of routine docu- 
mentary credits, with the technical and creative expertise 


required for innovative, sophisticated financings. 

Standard Chartered has a long-established reputation 
as a leader in financing international trade. By building 
on the strengths of our network and our people, we are 
building on that reputation still further. 

Standard £ Chartered 


NTERNATIONAL NET WORKING 



i 



FINANCIAL TIMES THURSDAY JUNE 23 1994 


COMPANY NEWS: UK AND IRELAND 


Wagon slips less than 
expected to £15.6m 


NEWS DIGEST 


Company will realise £52m net profit from sale of entire holding 

Royal Bank explains 3i decision 





St George Russell: NatWest wanted to be long-term shareholder 


3i's net assets, Royal Bank 

New stores and organic growth 
boost Carpetright to £14m 


would be left with a net profit 
of £52m from Its sale. This 
would be taken w an excep- 
tional Item In the second half 
of its financial year. 

Mr Mathewson said that 
Royal Bank had decided to sdl 
Its stake immediately rather 
than "leak it out in little hits", 
because although si was a good 
company, “we are not In the 
business of outguessing the 
equity market". 

He emphasised that the rais- 
ing of extra capital had no stra- 
tegic implications for the hank. 
which indicated Its interest in 
buying a building society. 

“This has no broader tactical 
Implications whatsoever, 1 * he 
said. 

The banks have agreed not 
to sell any further part of their 
remaining stakes within a year 
without the agreement of Bar- 
ing Brothers, the merchant 
bank sponsoring the issue. Any 
bank selling more equity will 
consult the others first 

Mr Hugh Young, general 
manager erf Bank of Scotland, 
said the bank's stake had 4 
fallen to2A7 pea: cent ban 3.02 
per cent because at dilution. It 
had never equity accounted its 
stake, taking only 31 dividends 
into profits. 


King & Shaxson 
declines 17% 
to £2.6m 

An initial £148tt from Creig 
Middleton Holdings, the 
recently-acquired stockbrok- 
ing firm, c ont r i b ut ed the balk 
of pretax profits of ELSm at 
King 4 Shaxson H oldi n gs for 
the year ended April 30. 

The resalt, however, was 17 
per cent lower than the previ- 
ous year’s restated 

After-tax profits of the 
financial services group 
dipped 10 per cent to £l.7m. 
and earnings per share came 
to 4Sp (lip). A recommended 
final dividend of 5p makes an 
unchanged total of 9p. 

Mr David Pearce, chairman, 
said the discount house had an 
unsatisfactory year with oper- 
ating losses of £113,000 
against an ‘'exceptional'* profit 
of £&59m. Profits from money 
broking dropped from £971,000 
to £781,000 while there was a 
£152,000 loss from futures 
manag ement d 


By Pad Cheeserfght, 

Midlands Correspondent 

Pre-tax profits at Wagon 
Industrial Holdings last year 
declined less than the materi- 
als handling , engineering *md 
automotive products group had 
predicted as productivity rose 
and trading conditions 
improved in the UK and conti- 
nental Europe. 

In the 12 tnnntha to March 
31, pre-tax profits were £15.6m, 
against £18.1m. The group 
last June warned that its 
results would be similar to 
those of the previous year 
before meeting restructuring 
costs of £3m at Forkhardt, its 
German power chuck subsid- 
iary. 

Although naming s per share 
dipped from 29p to 19-58p, the 
dividend is slightly increased 
and only just coveted; the final 
is li.5p, making a total of 
17-825p C17.308P). 

Wagon would like to have 
the dividend twice covered by 
the *ynd of the next financial 


Sapphire option 
for Butte Mining 

Butte Mining, the London- 
quoted company, has acquired 
an option on certain sapphire 
mining rights and interests in 
Montana and will explore a 
500-acre property there in 
exchange for a significant 
minority Interest in a new 
company. International Gem 
Corporation, being set up to 
exploit the prospect j 

If full-scale production is 
merited, up to 32m (£L3m) of 
equity funding will be needed 
and Butte shareholders will i 
have the right to subscribe for 
shares in International Gem. 


year. That implies an increase 
in profits over two years of 33 
percent 

There has been a strong start 
to this year, reported Mr John 
Hudson, chief executive. 
Trading conditions started 
to Improve last year. “The 
important thing was an 
acceleration of the improve- 
ment towards the end of the 
year, which is exactly the 
opposite of the previous year," 
he said. 

Turnover was £279. 9m, of 
which £9.07m cazne from acqui- 
sitions, against £247. 6m. But 
operating profits, largely 
because of Forkhardt, fell from 
£16.5m to £14.7m. 

In the automotive division, 
where recently Wagon has 
been concentrating its 
expansion, operating profits 
fell while turnover increased. 
This reflected a tailing-off 
of profits in France. But, 
said Mr Hudson, “we see the 
automotive division being 
our strongest division this 
year”. 


By Graham Defler 

Hardys & Hansons, the Nott- 
ingham-based independent 
brewer, yesterday reported a 10 
per cent increase in interim 
profits. 

On turnover marginally 
ahead to £15. 6m, trading pro fi ts 
advanced to £3 .35m (£2L94m); 
after reduced net Interest 
receivable of £292,000 (£338,000) 
the pre-tax line for the half 
year to April 1 amounted to 
£3.66m, up from £3-32m last 
time. 


• COMMENT 

Wagon rode the UK recession 
with aplomb. Everything it 
might have done it did; kept 
cash in the bank, reorganised 
management, raised productiv- 
ity, made acquisitions to build 
up market position. It was 
Europe which made it look 
more ordinary; takeover of 
Polypai in Belgium only to see 
the markets tumble, capacity 
at Forkhardt far too high for 
reduced demand. Last year it 
grasped the European nettles. 
Manufacturing sites for materi- 
als handling equipment have 
been concentrated and Fork- 
hardt is back in profit, albeit 
small. With its European mar- 
kets starting to bounce back 
and demand in the UK rising, 
recovery should be swift 
enoug h to justify the company 
broker’s prediction of £22m 
pre-tax and earnings per share 
of 30 .sp for the current year. 
On a price, up 3p yesterday, of 
479p, that would put the shares 
on a modest prospective multi- 
ple of 155. 


attributed the “very satisfac- 
tory” improvement to the con- 
tribution from new or recently 
modernised houses. 

T be outcome was also aided, 
he added, by an early Easter 
with sales in the run-up to the 
holiday failin g in the first 

half 

The interim dividend is 
raised 13 per cent, from 3p to 
3.4p, payable from aamfngs of 
9.827p per share, compared 
with &975p. 


MEPCto 
buy Belfast 
shopping 
centre 

By Vanessa HouWer, 

Property Correspondent 

MEPC, the UK’s second largest 
property company, has agreed 
to buy the Castleooart 

shopping centre in Belfast 
from John Laing, the 
construction and 

housebuilding group, for 
Initial and deferred payments 
expected to exceed £80«5m. 

The deal is in line with 
MEPCTs stra te gy of increasing 
the retail component of its 
portfolio. John Laing is setting 
the property because it does 
not wish to be a long term 
holder of developed 
investment properties. 

John Laing intends to use 
tiie proceeds from the disposal 
to ygpffnfl existing activities, 
particularly projects to the 
pacific Wtu, and in priv ate 
infr as tr u ct ur e in the UK. 

MEPC has agreed to pay an 
initial sum of not less thmi 
£72 .5m next month, and a 
further uttriiiiimn amount of 
£1.65m next February. There 
will be additional payments 
np to 1998. based on the 
capitalised value of rents 
achieved on farther lettings 
and the outcome of rent 
reviews. The deal is subject 
to shareholders* approval. 

The 320,000 sq ft shopping 
centre opened in April 1990. 
Rental income in 1993 was 
SSJSm. It has been valued on 
an open market basis at 
£80 .5m. 

The net book value of 
Castlecourt at the end of last 
year was £60m. The disposal 
will generate an extra £7.im 
of pre-tax profits for Laing*s 
fall year and will realise net 
cash of £30m, after the 
deduction of costs and 
repayment of £40m of bank 
borrowings. 

Laing has also agreed to sell 
Cbnrcfagate in Peterborough 
far £2.5m, payable on 
completion and a nrinimgm 
further consideration of £2£xn, 
payable within five years. 

Laing said trading 

condition remained difficult 

in its UK construction 
activities and margins 
remained under pressure. 
However, work intake 
compared favourably with tins 
time last year. 


Amber 
achieves 
35% rise 

Helped by a profit of £717,000 
on the sale of operations, 
Amber Industrial Holdings, the 
specialty rfi fti iri c flis company 
in which Cayzer Trust holds a 
75 per cent stake, achieved a 35 
per cent pretax advance from 
£3. 07m to £4-14m in the year to 
end-March. 

Turnover grew from £21m to 
ffw. ifp and earnings per share 
emerged at 67p (43.7p). An 
improved final dividend of 14p 
is proposed, raising the total to 
20p (ia5p). 

Directors said that cash bal- 
ances had improved from 
£3 .2m to £5.Lm, reflecting in 
part the disposal of the Cause- 
way Steel Products business. - 

Since the year-end Amber 
has acquired two small busi- 
nesses - Proplastics and New- 
bury Aerosols - and further 
purchases are under consider- 
atiotL 

Capita to pay £10m 
for software supplier 

Capita Group, a supplier of 
professional support services 
and owner of the UK’s second 
largest bailiff services com- 


At its last quarterly meeting; 
the FT-Actuaries World Index 
Policy Committee decided that 
Thailand and Brazil should be 
added to the World Indices 
with rifect from October 1 1994, 
subject to satisfactory resolu- 
tion of several outstanding 
technical issues. 

Users of the World Indices 
are i n vit e d to contact the com- 
pilers (below) detailing any £oo 
tors they would wish to be con- 
sidered before the calculation 
of these new country indices. 

Other stock markets that 
may comply fully with the 
Construction and Maintenance 
Rules of the World Index wffl. 
be added as fast as practicable. 

The Committee does not 
intend to change its policy 
regarding the inclusion of 
"emerging*' markets in the 
daily calculation of the World 
Index for the time being, since 
it does not wish to introduce a 
second, less demanding set of 
rules for countries which can- 
not meet current World Index 
criteria. 

In response to recent 
changes in investment pat- 


By John Gappcr, 

Banking Editor 

Mr George Mathewson, Royal 
Bank of Scotland's chief execu- 
tive, yesterday explained the 
bank's decision to dispose of 
all its 12 per cent sta ke in 
the investment trust c ompany 

which was floated yesterday by 

the h igh street banks 

Royal Bank, one of seven 
hanks which owned 3i jointly 
with the Bank of England 
before the offer of £7lim of its 
equity yesterday, was the only 
bank to dispose of its entire 
stake. In contrast. Bank of 
Scotland did not sen any of its 
existing stake. 

National Westminster Bank 
will retain the highest stake of 
the banks, with its stake faH- 
iug to 17.94 per cent compared 
with the previous 223 per cent 
All the stakes were dilated by 
a £288m rights issue element of 
the flotation. 

Sir George Russell. 3i chair- 
man, said that NatWest 
wanted to be a “major and 
long-term shareholder, which 
we certainly welcome". The 
bank said that it viewed 31 as a 
good company which it wanted 
to retain as a long-term invest- 
ment. 


By Peggy Hdfinger 

Carpetright Sir Philip Harris's 
carpet retail drain, yesterday 
announced a 79 per cent jump 
in profits for its first full year 
as a public company. 

The pre-tax return rose from 
£7.8m to £14m for the year to 
April 30 on sales ahead 40 per 
cent to mOAxn (£7&6m)_ 

Sir Philip, chair man and 
chief executive, said the profits 
performance was satisfactory 
against a background <rf stable 
prices. 

The improvement was due 
both to the addition of new 
stores and organic growth, 
with Kke-for-likfi sates ahead 16 
per cent in the year. Sir Philip 
implied that the rate of sales 
growth had slowed in the first 
few weeks of fixe current year. 
“We would be very happy if we 
get that again”, he said. 


pany, is to pay up to £l0m for 
Sims Holdings, which speci- 
alises in software for educa- 
tional institutions. 

Up to £fim is payable an com- 
pletion and a further £4m is 
payable under an earn-out 
There will be a placing of 
2.6m new ordinary 2p shares at 
173p apiece to raise £4.2m. 

BOC makes R88m 
South Africa deal 

BOC Group’s African Oxygen 
subsidiary is to acquire fee cyl- 
inder portion of Engen's 
liquefied petroleum gas busi- 
ness in South Africa, Bot- 
swana, Lesotho, Swaziland and 

Namibia. 

The R88m CELSJSm) consider- 
ation is to be satisfied in cash. 

Strong asset growth 
at Dartmoor Lay 

Dartmoor Investment Trust 
reported a net asset value of 
il8.45p as at April 30, a rise of 
mare than 49 pesr cent on the 
comparable figure of 79-33p. 

The trust, which invests 
mainly in split capital funds 
and is managed by Exeter 
Asset Management, easily out- 
performed its benchmark, the 
FT-SE-A All-Share Index, 
which rose just 1&8 per cent 
during the same period. 
Attributable profit tor the 12 


terns, publication in the FT of 
the World Ex-South Africa 
inrimr wffl cease at the same 
time that Brazil and Thailand 
are added to FT-AWL 

In addition, the North Amer- 
ica index will be renamed 
Americas and will consist of 
the US, Canada, Mexico and 
Brazil. The Mexico index will 
then be based on the most 
up-to-date prices, rather than 
on prices taken one day to 
arrears as is currently the 
case. 

A clarification of the word- 
ing of the guidelines f alling 
within Section Q of the Con- 
struction and Maintenance 
Rules has been proposed by the 
Committee with effect from 
October 1 1994, subject to con- 
firmation at the next meeting- 

"When a government is a 
holder of shares but either the 
shares are not Listed or the 
government is constrained 
through requiring legislation 
before bring able to sell them 
then a weighting factor will be 
applied." 

Changes to the Constructing, 
and Maintenance Rules are 


Mr Mathewson said that 
Royal Bank had sold its stake 
in a placement because the 
rights dilution of its stake 
would have prevented it from 
continuing to equity account 


The housing market 
remained flat and any substan- 
tial improvement in prices was 
not expected. 

Sir Philip was confident, 
however, that Carpetright 
vroald generate substantial 
growth through net wiar g i " 
improvements and Its 
increased share of the UK car- 
pet market 

Since flotation in June oper- 
ating margins had risen from 
9.5 per cent to 12L2 per cent and 
market share had risen from 6 
per cuit to 9 per cent Sir 
Philip said his ambition was 
for a 20 per cent share with 250 
outlets. 

Carpetright opened 31 new 
stores in toe year, taking the 
total to 148. A further 26 stores 
are scheduled to open this 
year. The group ended the year 
with cash of £lS.Tm (£8m). 

There is a final dividend of 


months to end-April dipped to 
£2.78m (£2jJ4m), for earnings of 
lL57p (12.09p) per share. 

Nevertheless, the total distri- 
bution tor the year is main- 
tained at lL6p via a same- 
again final dividend of 33p. 

Lucas in joint 
venture in China 

Lucas Aerospace, part of Lucas 
Industries, has signed a joint 
venture agreement with Tai- 
koo Aircraft Engineering Com- 
pany of Xiamen, China. 

The venture is to establish a 
repair and overhaul facility for 


Exceptional push 
LPA to £88,000 loss 

Exceptional losses on the dis- 
posal of its Acrokooi drinking 
water fountain subsidiary 
pushed LPA Industries, the 
electrical accessory group, to a 
pre-tax loss of £S8JXK) tor the 
half year to end-March against 
a profit of £18,000. 

The £142,000 exceptional 
included a £39,000 loss on dis- 
posal and a £103,000 write off of 


announced after the quarterly 
meeting at which they are 
agreed, but wffl not be put into 
effect until after they have 
been confirmed at the follow- 
ing quarterly meeting, in order 
to allow for comment 

There are no quarterly 
changes to current FT-AWI 
constituents. A list of constitu- 
ent changes to the FT-AWI 
Large Cap and FT-AWI Medi- 
um-Small Cap Indices as a 
result of the half-yearly rebal- 
ance will be available from 
NatWest Securities Limitad 
and Goldman, Sadis & Co on 
July 5 1994. The changes will 
be effective July 15 1994. 

The FT-Actuaries World Indi- 
ces are jointly compiled by The 
Financial Times Lfrmted, Gold- 
man, Sachs & Co, and NatWest 
Securities Limited in conjuno- 
tion with the Institute of Actu- 
aries and the Faculty of Actu- 
aries. 

All enquiries should be made 
to Symon Bradford, NatWest 
Securities Limited, on 
031-243-4258 or to Barbara 
Mueller, Goldman, & Co, 

On 0101-212-902-6777. 


the holding, and so include 
rises in 3i's net assets in prof- 
its . 

He said that after deducting 
the already accounted rises in 


4£p, for a total of 7p. This com- 
pared with L23p. adjusted for 
the capitalisation issue. Earn- 
ings were 12p <&25p). 

• COMMENT 

The Impressive performance in 
the first year may be hard to 
sustain in the longer-term, 
given the glaring absence of 
any substantial recovery in the 
boosing market. Yet Carpe- 
tright appears to be throwing 
off a significant amount of 
cash which should fund the 
aggressive expansion pro- 
gramme and give comfort an 
the thin dividend caver. Fore- 
casts are for profits of £19m 
this year, for a prospective p/e 
of 15. This is not aggressively 
priced, but the share perfor- 
mance may be constrained by 
concerns over whether the 
company's strategy can be sus- 
tained. 


good wffl. Turnover was £2.6m 
(£&S5m). 

Earnings per share from con- 
tinuing operations came out at 
0.45p (0.3 lp) and there Is a 
reduced interim dividend of 
08p(L65p). 

Second Consolidated 
asset value ahead 

SecondC<ms(rfidated Trusthad 
a net asset value per share of 
llL2p at April 30, against 
109 Jp a year earlier and 1092p 
at the October 31 year-end. 
Both comparatives have been 
adjusted for capital repayment 
Net attributable revenue 


aims to provide capital growth 
from investment to medium to 
smaller-sized companies. 

Up to 19m ordinary shares at 
loop each wffl be available to 
the public offer which opens 
today. Warrants will be issued 
an a l-for-5 basis. The offer 
doses on July Z and dealings 
are expected to start on July 8. 

Leigh Interests 
makes £4m purchase 

Leigh Interests, the environ- 
mental services company, is 
buying Bride (Church Lawford) 
for £4m, satisfied by the issue 
of 2.03m shares. The shares 
have been conditionally placed 
at I97p. 

Capital Industries 
makes £2.9m buy 

Capital Industries, the finan- 
cial services and packaging 
materials group, has acquired * 
a 4_2 acre freehold industrial ^ 
site at Maidstone, Kent, for 


to be integrated on one site. 

The consideration will be 
funded partly by a new term 
loan facility and partly from 
Capital's hanVIng fiarflilj p q 

Loss on disposal 
hits West Trust 

West Trust, the specialist food 
manufacturing and distribu- 
tion group, ran up a pre-tax 
loss of £1,42zq 1q the year 
aided March 31, after making a 
£2. 12m charge for the disposal 
of Ken Moore, its former Lycra 
making subsidiary. The loss 
compared with a £129,000 profit 
previously. 

Losses per share were 53p 
(02p earnings), but this came 
out at earnings of &34p before 
the Ken Moore loss. The final 
dividend is 2.8p for an 
unchanged total of 2£p. 

Turnover increased from 
£&84m to £l3.21m. 


FINANCIAL TIMES 

LONDON ■ PATHS • FRANKFURT ■ NEW YORK ■ TOKYO 


3 


MANAGEMENT REPORTS 


AUTHORITATIVE 

MARKET 

REPORTS 

Accountancy * Automotive 
• Banking & Finance • Fneriiy 
* Fn v iron men t • Insurance • Media • 
Pharmaceuticals * Property * 
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FOR FURTHER 
INFORMATION CALL: 

+44 (0)71 814 9770 
OR FAX 

+44 (O) 71 814 9778 


is declared. 

Finsbury Avenue 


debenture stock 


Finsbury Avenue Estates said 
that FCS Currency Manage- 
ment had bought £17.4m of its 
11 per cent first mortgage 
debenture stock 2014. 

The two companies are sub- 
sidiaries of British I-and- 

The stock is not being can- 
celled and, accordingly, £40m 
remains oatstanding, of which 
£17.4m is held by FCS. 

Old Mutual South 
Africa raises £51m 

Old Mutual, South Africa’s 
largest life assurer and mutual 
fund manager, announced that 
51m ordinary shares in Old 
Mutual South Africa Trust had 
been successfully placed with 
institutions, stockbrokers and 
intermediaries by Smith New 
Court at lOOp. 

Old Mutual South Africa 
Trust is the UK’s first South 


African investment trust. It 


DIVIDENDS ANNOUNCED 


Current 

payment 


Dale of 
payment 

Correa - 
ponding 
dividend 

Total 

tar 

yew 

Total 

last 

year 

July 29 

335 

SL25 

5 

Aug 8 

13 

20 

IAS 

Aug 19 

8.05 

10 

&3 

Sept 15 

- 

7 


duly 29 

3.9 

11.9 

11.6 

Aug 17 

2 

2 

2 

Oct 31 

2 

. 

8.53 

Aug 8 

3 

. 

8.5 

duly 29 

5 

9 

8 

Aug 4 

- 

- 

2.11 

Aug 15 

3.44 

&24 

5JB8 

- 

3.7037 

6.25 

6.2963 

Oct 3 

11.175 

17.825 

17.308 

NOV 1 

SL5 

ZS 

2.5 


0 


jlHin „ _ ^ — — — — 
Amber Industrial . 

BTP - ■ - - 


.fln 


.fin 

-fln 


Carpetritfit —..fin 

Dartmoor bwTst fin 

EHF fln 

First Leisure 

Hardys & Hansons kit 

Kbig&Shaxaon fln 

Second Consol irrt 

Shank* XMc&wen -fin 

Smith St Aubyn fln 

Wagon Indl fin 

Watt Trust — fin 


3.6 

14 

6.55 

4.3 
3.9 
2 

2.12 

3.4 
5 

1.5 
1 

nfl 

11. ST 

2.3 


^. 8 *°^ wh8m othwwta* stated. TOn 
Increased capital. §USM stock. JFw 11 months. 


Aer Lingus lays off 850 
staff as dispute continues 


By Um Coons in Dublin 

Team Aer Lingus, the aircraft maintenance 
division of Aer lingus, toe Irish state airline, 
yesterday laid off more than 40 per cent of its 
workforce, amounting to 850 of its 2,000 
employees, as trade unions warned that the 
dispute over pay and staffing cats could spread 
through the whole airline. 

The division has been losing Kim (£980,000) 
a month and currently has no heavy mainte- 
nance contracts as airlines have transferred 
business elsewhere over concerns that the 
simmering dispute would leave their air- 
craft stranded to Aer lingus maintenance han- 
gars. 

Earlier this week craft unions rejected a res- 
cue package for the subsidiary recommended 
by the Labour Relations Court, arguing that 
their own proposals to return the company to 
commercial viability had not been considered 
by toe management or the LRC. 

The LRC recommended a pay freeze until 
July 1996, rather than pay oris sought by the 
management. 

Backbenchers of toe Labour party, which 
forms part of toe coalition government; yester- 


day criticised Am* Lingus for its handling of the 
dispute. The government however, has backed 
the management and recommended acceptance 
of toe LRC proposals. Senior politicians are to 
question Aer Lingus today on toe dispute to a 
special Bail sub-committee hearing convened at 
the request of toe unions. 

Mr Dennis Smith, chief negotiator for the 
craft unions, said that strike action was not 
planned for the time being, but Sipto, one of 
toe trade unions involved to the dispute, said 
yesterday that if non-union labour was taken 
on while staff were laid off “there certainly will 
be a reaction”. 

The government and Aer Lingus are mean- 
while facing pressure from another direction. 
Aeroflot, tiie Russian airline. Is to begin non- 
stop flights from Russia to the us this summer 
as new long-range aircraft come into service, 
bypassing the reftteDtog stop at Shannon to the 
west of Ireland. 

It has offered to continue tile Shannon sto- 
pover if passengers from other CIS airlines can 
transfer to Aeroflot there. But the government 
and Aer Lingus are opposed to this as it is seen 
as a threat to Aer lingus* transatlantic busi- 


ness. 


Hardys & Hansons rises 
by 10% to £3.66m 

Mr Richard Hanson, chair- 
man and managing director, 


FT-Actuaries World Index 


engine and flight control 
systems, electrical power gen- 
eration and other aerospace 
equipment. It will be 65 per 
cent owned by Lucas and 35 
per cent by TAECO and total 
investment will be more flam 
?10m $&5m). 


rose sharply to £L12m (£233,000 
for five months) equivalent to 
earnings of _3-28p (0.68p) per 
share. 

The trust was incorporated 
in October 1992 and a final div- 
idend of 2.lp was paid last 
year. A maiden Interim of LSp 


£2.9m cash. It will enable its 
finishing and label operations 











COMMODITIES AND AGRICULTURE 


Buyers come to 
copper’s rescue 
after early fall 


By Kenneth Gooding, 

Mining Correspondent 

The copper market burst Into 
life again late yesterday after 
pausing for breath earlfer this 
week. However, analysts 
warned that the copper price - 
and prices of other London 
Metal Exchange- traded metals 
- might be heading for a Hall in 
the third quarter. 

Copper for delivery in three 
months, which a t one point 
yesterday dropped to $2,417 a 
tonne, closed on the London 
Metal Exchange at $2,45L50, up 
$1&25 a tonne from Tuesday's 
close. 

Traders said that some Japa- 
nese buying stopped copper's 
price fan and later the Chinese 
also came in with "buy” 
orders. 

Mr Nick Moore, analyst at 
Ord Minnett said the market 
was still unsure whether there 
would be the usual summer 
lull in business. He added: “I 
suspect that there will be a lull 
and the onset of the third-quar- 


ter seasonal demand weakness 
will indeed witness lower 
metal prices In the coming 
quarter. These lower prices 
will, however, offer a period of 
consolidation as a prelude to a 
fresh acceleration [in copper’s 
price] in the final quarter". 

At GNI, analyst Mr Law- 
rence Eagles suggested that, if 
copper should begin to fall 
ha ck, other instate would fol- 
low. The seE-off was likely to 
be most aggressive for those 
metals, such as zinc, which 
had the worst over-supply 
problems. 

Mr Ted Arnold, metals spe- 
cialist at Merrill Lynch, 
re main ed more bullish. 
Although he accepted that the 
copper market might be very 
volatile in coming weeks and 
he would not he surprised to 
see daily trading ranges of 3 to 
5 cents a pound, he forecast 
that three-month copper would 
trade over the next two to 
three months between $2JZS0 
and $2,550 a tonne ($1.02 to 
$116 a pound). 


Italy to 
import more 
Algerian gas 

By Robert Graham In Rome 

Italy has signed a new gas 
deal with Algeria, committing 
Snam, the gas supply subsid- 
iary of ENL the Italian state 
oil concern, to buy 2bn cubic 
metres of liquefied natural gas 

a year from 1996 from Sana- 
track, the Algerian state oQ 
company. 

Algeria already accounts for 
about 40 per cent of Italy's gas 
supplies. The latest contract 
will bring to 26bn cu m the 
ai^wnal Imports as of 1996, 
when the second leg of the 
Tunis-SicHy Trans-Mediterra- 
nean pipeline becomes opera- 
tionaL Coming at a time of 
increasing political uncer- 
tainty in Algeria, the contract 
is seen as evidence of Italy's 
strategic choice of tills North 
Afrifflw supplier. 

The LNG* will be trans- 
ported from Sfclkda in Algeria 
to Panigaglia near La Spezla. 
By 1996 2USbn cu m of gas a 
year will be contracted 
through Snam while an 
additional 4bn cu m is being 
bought directly by RneL the 
Italian state electricity 
authority, but transported by 
Snam. 


UK boffins breed a better lupin 


By Deborah Hargreaves 

Lupins, the early summer 
stalwarts erf most British gar- 
dens, could soon proliferate 
over much of the country's 
farmland, and contribute to 
reducing the trade deficit. 

Government research has 
developed a new strain of 
white lupin that is suitable for 
growing in Britain on a com- 
mercial basis and ran be marin 
into animal feed. The white 
flowers could be grown by 
formers for sale to cattle feed- 
makers in two to three years. 

The new variety grows seed 
pods that are rich in protein - 
unlike the poisonous seeds of 
their country garden counter- 
parts. The seeds, which con- 
tain almost 40 to 50 per cent 
edible protein and 10 to 12 per 


cent oil, can be crushed to 
mate animal feedstuff. 

Much of Britain’s animal 
feed is now made from soya- 
beans, which are imported 
from the US at an annual cost 
of around £350m. Some 30,(100 
tonnes of lupins are imported 
from Australia as an additive 
to livestock feeds. 

Research at Cranfield Uni- 
versity has shown that the new 
strain of lupin would be suit- 
able for grow in g on 43 per cent 
of fa rmland in England and 
Wales. “In the past we had a go 
at growing the old varieties of 
lupin, hut they couldn't stand 
the cold and frost,” says Mr 
John Hollis at the university's 
Soil Survey and Land Research 
Centre. 

The new hardies: variety can 
he planted in September to pro- 


duce a flower the following 
summer. The plants have also 
been genetically manipulated 
so that the flowers grow closer 
to the top of the stem and are 
exposed to the maximum 
amount of sunlight, with the 
result that they ripen more 
quickly. 

The plants are partial to 
add, or poorer soils, but will 
not grow on lime-rich soil. 
“Providing you don’t have a 
natural limey sod and you hit 
the crop planting window right 
at the beginning of September, 
yon can expect yields of 4 to 5 
tonnes an acre,” says Mr Hol- 
lis. 

Lupins are grown commer- 
cially in Australia a nd parts of 
South America. In Chile the 
seeds are fried up and eaten as 

a snarlc. 


US official attacks Canadian wheat 


By Laurie Morse In Chicago 

A top-ranking official of the US 
Department of Agriculture 


operations ‘’monopolistic’* and 
incompatible with the new free 
trade climate in North Amer- 
ica. 

The comments, made by Mr 
Eugene Moos, Undersecretary 
for International Affair s and 


US Department of Agriculture, 
may indicate that the US will 
push for an overhaul of Cana- 
da's entire grain marketing 
system, rather than just a 
short- term fix to a cross-border 


Mr Mickey Kantor meet with 
their f^nariian counterparts in 
nhteagp an Monday. 

The Clinton administration, 
under pressure from congress- 


wheat imports from Canada, 

tend flanab has promised tO 

retaliate. The US claims Can- 
ada is unfairly marketing into 
US wheat-producing regions, 
atthnn gh os flour millers and 
pasta processors conte nd that 
shot supplies of high-quality 
US wheat have forced them to 
buy from Canada. 

Mr Moos went beyond the 
domestic trade issues in his 
remarks on Tuesday, saying: 
"The predatory practices of the 
Canadian Wheat Board must 
end". 

Although Canada does not 


directly subsidise grain exports 

in the way feat the US and the 
European Union do, Mr Moos 
said the Wheat Board's pricing 
pntiries allowed It to undercut 
suh gwWring competitors- 

He said he had asked to be 
allowed use the US grain 
export subsidy program, 
h t tf i im as EEP, against trade 
competitors other than fee EU, 
warning: “We in the USDA 
(wtomri to use all of the tools at 
our disposal to encourage 
other competitors to trade 
fairly”. 

Although national grain 


arketing 

marketing boards like those hi 
Canada and Australia were not 
addressed In the recently-con- 
cluded Uruguay round of the 
General Agreement on Toritti 
and Trade, they have recently 
become the focus of unfair 
trade practice complaints. Mr 
Winston Wilson, president of 
fee largest US wheat export 
trade group, said: "I think it 
boils down to the feet we are 
now involved wife two free 
trade agreements with Canada, 
and we have two different 
systems of grain marketing 
that are not very compatibler. 


Commodit y Programmes at the 


tiiffl t fruH farm states bordsF* 
mg Han «ria, is threatening to 
impose emergency quotas an 


took aim at Canada’s entire 
wheat marketing system in a 
speech made in Fargo, North 
Dakota on Tuesday, calling the 
Canadian Wheat Board’s 


grain trade dispute, when US 
agriculture secretary Mr Bfike 
Espy and top trade negotiator 


India clears way for private forestry boost 

Kanal Bose on moves to allow wood-based industries to join in the replanting effort 


I ndia, which is far from 
achieving Its target of 
bringing at least one-third 
of tha total fond area under 
tree cover finally wn the 
merit of allowing the wood 
based industries to start for- 
estry plantation in 
forest land. 

Captive plantation by indus- 
tries ralfo, however, for major 
amendments to the national 
forest policy ci 1988. 

Mr Kamal Nath, Tnrrristar of 
e n v jr n T|TT|fln t and forests, harf 
given manufacturers of paper, 
plywood and viscose fibre to 
understand that the govern- 
ment will allow thprq to 
large tracts of degraded forest 
on leases of at least 30 years to 
grow an lifaul mix Of long and 


short maturing trees. The les- 
sees wifi also have the right to 
grow rash crops in among the 
trees. 

Of India' s total waste land of 
nearly 160m hectares, the 
share of degraded forest is 
about 40m ha with a c ro w n 
density of less than 20 per cent 
The National Wastelands 
Development Board was given 
a target to hring sm hectares 
under tree plantation every 
year. But the resources at its 
wirniMTiH have not allowed flu 
board to plant an more than 
2m hectares a year. 

According to Mr SP Goenka, 
p resident of the Federation of 
Indian Plywood Industry, the 
induction of the pr i v a te sector 
into forestry plantation would 


not only “ease the pressure an 
the g n ww ’iiTngnt, which is short 
of foods, but it would also cre- 
ate mflhons of job opportuni- 
ties in the Indian villages". 

The forestry plantation 
industry, a totally new concept 
in India, will create jobs for 
three wdekers a hectare. So the 
policy ini tiat i ve would appear 
to have fee potential to create 
I20m jobs. 

As the forest cover in India 
is barely 12 per cent and for- 
estry productivity is only one- 
fifth that of Europe, the gov- 
ernment has imposed severe 
restrictions on the procure- 
ment of wood and bamboo ter 
industries. It is, however, the 
demand for fuel wood by fee 
poor villagers and Illegal foil- 


ing erf trees to make room for 
food production that have actu- 
ally played havoc with Indian 
forests. 

The government has sought 
to give relief to the wood-based 
industries by allowing them to 
import timber, pulp and waste 
paper. Some paper and ply- 
wood manufacturers have gone 
in fin* social and form forestry 
by establishing direct contact 
wife the formers, as allowed by 
the 1988 forest policy. Accord- 
ing to the In dian Paper Mills 
Association, “the social and 
form forestry cannot be a 
dependable source of raw 
material for the Industry since 
the formers are free to sell the 
trees to anybody”. 

Mr Goenka says the success 


of private sector parti cip a ti on 
in forestry plantation will call 
for an “attitudinal change of 
the agencies at the fed- 

eral and state level The g ov- 
eminent financial institutions 
should be ready to provide ade- 
quate fimds by accepting mort- 
gage of trees”. . 

Tree plantation has a seven 
year eyrie. If the private for- 
estry plantation work is 
flagged off soon, then the 
Indian wood based Industries, 
which have not seen much 
growth in recent years, will 
have the confidence to plan for 
new capacity. India could also 
emerge as an important 
exporter of wood and wood 
based products within ten 
years, says Mr Goenka. 


Computer model could 
cut nitrogen applications 


MARKET REPORT 

Coffee and cocoa prices fall sharply 


By Deborah Ha-greaves 

Predictions of the nitrogen 
needs of crops on different 
fields at varying timac of year 
ran be made available to farm- 
ers on a computer model devel- 
oped by Horticulture Research 
International, fee company 
said this week. 

It claimed the computer pro- 
gramme would enable formers 
to target their nitrogen appli- 
cations more accurately so that 


crops grew weU. It should help 
eliminate fee environmental 
damage and waste of money 
associated with using too 
much nitrogen fertiliser. 

The company said the com- 
puter model, which had been 
tested over 3,000 hectares, 
offered nitrogen predictions for 
a wide range of crops. The 
model comes as fanners face 
mounting pressure from envi- 
ronmentalists about cutting 
their use of nitrogen fertilisers. 


COFFEE futures foil sharply at 
the London Commodity 
Exchange yesterday afternoon, 
emulating a drop in New Y ork. 

The September delivery posi- 
tion finished $66 lower at $2,278 
a tame, sli g htl y off fee lows, 
mainly on profit-taking, with 
little news to drive the market 
one way or fee other. 

“I don’t think anyone has a 
genuine idea of where the price 
is going,” one trader com- 
mented. 


The LCE COCOA market, 
which was also influenced by 
the trend in New York, had a 
lacklustre day, nudging below 
fee opening lows and finishing 
£15 down at £1,000 a tonne, its 
low of the day, in the Septem- 
ber position. 

A trader said the producer 
selling seemed to be largely 
“on hold", wife much of die 
activity Rmninatari by specula- 
tors following general commod- 
ity market trends. 


At the London Bullion Mar- 
ket GOLD finished unchanged 
after firing at a 5%-month high 
in the morning in response to 
New York’s overnight rise. But 
fee US market weakened yes- 
terday as the dollar put in a 
stronger performance. 

Dealers said gold was still 
tied to currency markets but 
had shaken off Us allegiance to 
moves in the Commodity 
Research Bureau index. 
Compiled from Reuters 


COMMODITIES PRICES 


BASE METALS 

LONDON METAL EXCHANGE 

(Prices from Am N g am atad Metal TrarSnft 
■ ALUMJMUM, 99-7 PURITY (S py tonne) 



Cuh 

3 mth* 

Close 

1441-2 

1471-2 

Piwrtoua 

14440-50 

14740-5 

Ugh/kw 

1433 

147371462 

AM Official 

1433-30 

1484-40 

Kerb Nose 


1473-30 

Open int 

271,782 


Total da*y turnover 

48.404 


■ ALUMINKJM ALLOY (S per tome) 


Close 

1440-50 

1458-60 

Previous 

1450-60 

1465-70 

High/low 


1460/1455 

AM Official 

1435-45 

14S0-5 

Kerb done 


1456-60 

Open Int 

2030 


ToW doty turnover 

746 


■ LEAD (5 per tame) 



Close 

638-0 

668-7 

Previous 

540-1 

668-80 

Htflh/taw 


566/547 

AM OfficW 

5305-1 

5*7-70 

Kerb dose 


555-6 

Open Int 

37,488 


Total dally turnover 



■ NICKEL (S per tonne] 


Close 

6390-400 

6480-80 

Previous 

6400-10 

8490-500 

HlgMow 

6270/6265 

6616/6346 

AM Official 

6268-70 

6360-6 

Kerb dose 


6490-600 

Open Int, 

56052 


Total dally turnover 

10097 


■ TIN (S per tame) 



dose 

6570-60 

5640-50 

Previous 

5670-80 

5655-66 

KflhAow 

5576 

5650/5615 

AM onew 

6638-42 

5620-1 

Kerb dose 


563040 

Open M. 

10,313 


ToW dsHy turnover 

4.186 



■ ZINC, apectal high grate g per tflnnri 


Close 

984-5 

10090-10 

Previous 

9890-906 

101500 

HtfllVIow 


1012/1002 

AM Official 

877-8 

1003-30 

Kerb ck»e 


1009-10 

Open bit 

106,195 


Total defly turnover 

20.742 


■ COPPER, grade A 8 per tamri 



2436-7 

2419-20 


2461-2 

243*30 

24650421 

2420-1 

2484-6 


Previous 
HflMcw 

AMOffldH 2*030-40 

Kerb cfcne 

Open W. 281.456 

Tool (tefly Hanover 69.380 

■ LME AM OfflcM C/S rate: 1-5362 
UC CtoNng C/S rate 1 .8304 

spetl^au 3iNte10tgs 6 BUJK1.5Z77 BmttK:l6257 

■ MOW GRADE COPPER (COMBO 


VN 




UftT* 

Open 


Qua 

an* MM fa* 

tat 

JOT 

11205 

+1.15 11295 11295 

321 

Jot 

11120 

+1A5 11405 11000 20013 

AOB 

113.40 

*105 11200 11220 

7D2 

sot 

11300 

+105 114.75 110.70 25098 

ON 

113.00 

+105 

775 

He* 

11200 

+10G 

239 

TOM 



HA 


02 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
(Prtca* OTppfad by N M RwhacMd) 

Gold (Troy az.) 

Close 
Opening 
Morning fix 
Afternoon fix 
Day's HJgn 
Day 1 * L«w 
Pmvious close 
Loco Un Meant 


JN 



S price 

380.50- 39090 

aassMsaa 

393.10 28&024 

392.45 255501 

38300-38400 
390.10-390.60 

390.50- 390.90 

<*1 Lending Rates {Vs USJ} 

<04 s months 4^*1 

<09 12 months 401 

4.16 


36045 

365.25 


55-MO 

660.75 

567.20 


C«Mv. 

259-262 

61-64 


Precious Metals continued 

■ GOLD OOMEX flOO Troy ce^ S/frt>y <a.) 


GRAINS AND OIL SEEDS 

■ WHEAT LCE (E per tonne] 


SOFTS 

■ COCOA LCE (C/tameJ 


MEAT AND LIVESTOCK 

m LIVE CATTLE CME (400009?*: centa/faft 



9Nt 

Osyta 



teen 



SNt 

Day* 

Op* 



Sea 

BOTto 


'tem 



to*" 

Mange 

M* 

fear 

tot 

VaL 


price 

Manga Mgli Uar 

tot 

1M 


Price i 

tangs 


low W VN 


JOT 

3890 

<8 

3825 

389L7 

534 

87 

Jen 

11400 

- 11600 11600 

73 

27 

JN 

997 

-10 

BOB 

905 13771 10W 

JOT 

JN 

3900 

-40 

- 

- 

- 

- 

SOT 

10200 

+005 10200 10175 

444 

X 

*ot 

1000 

-15 

1016 

WOO 19085 1048 

•m 

Mg 

3810 

-40 

3950 

3900 88050 57,195 

Hot 

10273 

+0.70 10275 10255 

2001 

110 

tee 

1020 

-12 

1033 

UJ» 202«8 981 

ON 

ON 

384ft 

-40 

398.4 

3937 

5.497 

787 

JOT 

10405 

+065 10400 1DM0 

1052 

68 

Mar 

1039 

•8 

1052 

»» 28070 8H 

Dae 

Dec 

3870 

-40 

4010 

3960 2B0S9 

2073 

OTr 

10600 

+080 10015 10015 

450 

11 


1050 

-7 

1085 

1056 10773 65 

n* 

FN> 

4010 

-40 

4050 

4010 

8040 

737 

May 

10700 

+066 10000 10775 

378 

106 

JN 

1061 

-7 

1078 

1066 3029 52 

Hr 

TsW 




161083 63009 

Total 



<898 

358 

TaW 




771054 50*0 

TaW 




■ PLATBHIM NYMEX (50 Troy oz^ S/troy tc.) 

JM VBA -17 4120 4055 <093 1/178 

Oct 4105 -35 4145 4065 11,806 1545 

5b 4130 -22 414.0 4110 1.218 9 

Apr 415.4 -29 4160 4140 1,168 3 

TOW 24086 80S 


Jan 

13905 

+605 13505 13800 47 

_ 

SOT 

13805 

-095 14000 13800 3780 

183 

DOT 

13875 

-0-65 14000 13805 1011 

1 

MB' 

13073 

-005 - - 1 

- 

Total 


<84B 

164 

M SO.VB1 COMEX (100 Thjy oz.; CantaAroy ez.1 

JOT 

5360 

-223 - - 1 


JN 

5370 

-220 S60 5340 54008 24039 

Am 

5401 

-220 - - 4 

_ 

HOT 

542.1 

-224 5610 5380 35048 

8,191 

Dot 

6405 

■220 5690 5460 13012 

680 

Jot 

5510 

■225 - - 32 



TOM 


ENERGY 

■ CRUDE OB. NYMEX (42.000 US gate. S/hamaft 


lasst 09 * 


s«p 

ON 

Hot 

Dot 

TbtH 


1951 +0.13 19J4 
1809 +009 1520 
1859 +O06 1801 
1800 +007 1803 
1805 +005 1&E 
1802 +0.10 1542 


I* N M 

1905 13096 32,487 
1584 92000 87098 
1568 68,175 25688 
1580 29076 7045 
1535 24035 5758 
1850 33003 5808 
395S5 150044 



Latest 

Dm* 





Nfca 

cOTge 


lari hit 

VN 

toft 

1743 

+013 

1701 

1708 73,136 28001 

6W 

1706 

+010 

1733 

17.18 36027 

9023 

ON 

17.13 

+002 

1707 

17.11 10,121 

3052 

No* 

1706 

- 

17.19 

1705 6031 

1092 

DOT 

1705 

+004 

17.13 

1706 10441 

1,171 


- 

■ 

- 

- 2088 

2OT 





1*0720 42*87 

■ ICATWG CM. IfftCX <42000 US 0Mt:r4K™*,^ 


Jd 

Asg 

fcfi 

ON 

Nw 

DM 

ToW 


n* 

90.10 -058 SOTS 
5050 -035 81.18 

5104 -530 5105 
6525 -025 *g"n 
5140 - 3570 

540S -020 M.75 


Low tat 

saio 27067 

50.40 20032 

8100 15,008 
6225 10060 
5540 7099 

54.05 18,727 


8041 

<489 

814 

599 

1008 


■ 0A8 OIL IPE gnome) 


s* Oar* Open 

Pria ctasge N* law tat 

15075 -1.75 13575 15550 25445 

15075 -1.75 18575 15575 13061 

lean -1.75 19200 iblso 5244 

16326 -225 16525 16325 80(3 

I65J5 -1.75 18700 165.75 5024 

167a> .100 10525 16700 13028 

90167 13094 


Abb 

38p 

ON 

Hot 

Dot 

Total 


VN 

8048 

4095 

1035 

490 

257 

674 


*9 

ON 


D Wft 

ton Mwga H* low 

-0,048 2070 2030 
2112 -0013 2125 21 TO 
2.138 -0009 2146 2130 
2-160 -0006 2165 2.150 
2228 -0004 2230 2220 
0330 +0002 2380 2321 


Das 
ToW 

■ WHUAnED GASOLINE 
_ wnex (4200005^0^,^6 


ten 

it Yd 

12.139 131455 
76019 3083 
11070 1050 
10055 783 

11086 721 

14.473 650 

122811 22089 


pAroy to. US eta eqiiv. jm 


Utart Oar's Op., 

9*8 data te >■ H w 

SL70 -513 5135 5300 28060 11675 

SUS -517 5180 9300 32294 7072 

5? -a* -0.M SUQ 5300 12066 3,106 

te 9230 -020 S2J5 5230 4086 6l2 

61.10 -040 51.75 51.10 1647 85 

111 

87030 2*384 


DOT S&J0 -ftIO 6600 55.70 2985 
Bra* 


Sot 

Dot 


■ WHEAT COT ftOOObu msy canta/BOB? buaheQ ■ COCOA CSCE (10 tamee; Starmeft 

JN 319/4 -an 325ft 319IO 74095 35485 

Sop 326/4 -4/4 333n 32fift 66035 21,490 

Ok 337/4 -SO 344ft 337/0115020 53000 
NOT 341ft -4/2 34772 340ft 15140 4070 

Hay 33474 -1ft 338ft 334/4 335 

«M . 320ft -1/4 322ft 32Dft 2055 250 

TOM 27O4B01159BB 

■ MABE CBT (5000 bn rnfci; cana/56fi> buahN) 


61000 -1.125 61000 82050 2033 
62550 -0880 63000 62000 31018 
68050 -0775 87425 60400 17008 
80400 -0050 68580 80000 10094 
10275 -0350 OT<mn warm 7059 
70075 -0425 70750 70175 3.438 
75016 

■ LIVE HOPS a*E(4O0QOOT«;centaribta 


M 

1061 

8003 

2001 

1,104 

503 

188 


1281 

-48 

1335 

1290 

746 

188 

JOT 

47000 

•0525 47075 46050 

550 

546 

1297 

-87 

1376 

1285 40018 702* 

JN 

48050 

-0950 *7050 48J50 

6080 

1031 

1336 

•63 

1415 

1330 12,1*7 1003 

AOT 

48000 

-0525 47000 46025 

8060 

2,125 

1366 

•64 

1445 

1365 

7071 

24 

ON 

<1460 

-0475 43075 43000 

4034 

<38 

1361 

-57 

1395 

1391 

2038 

5 

Dot 

43850 

-0500 4050 43000 

3011 

233 

1413 

-57 

. 

- 

20*6 

4 

M 

40700 

-0350 44J50 43000 

814 

89 





70018 9,129 

TUN 



25071 

S.T74 


124,718 33090 Jot 


JN 

2SBft 

-8/2 

266/* 

258M 338.1 25 112025 

Sot 

2S2/4 

-7/4 

280ft 

200224035 51040 

Ok 

2*4/4 

•6/4 

253ft 

244ft 576005 287035 

Mar 

252/4 

-8ft 

260ft 

252/4 63050 

IWl 

Hay 

257/4 

-7/2 

255ft 

257/4 10030 

1020 

JN 

258/2 

-7/2 

268/* 

2S9ft 18085 

3070 

Total 




WA 

WA 

M BARLEY LCE (E per tame} 


SOT 

9900 

-000 

- 

- 196 

- 

No* 

10000 

-005 

10025 

10000 359 

32 

Jn 

10108 

- 

■ 

28 

- 

M v 

10300 

- 

- 

25 

“ 

May 

10400 

- 

- 

3 

- 

TOW 




911 

32 

M SOYABEANS CBT CLOOOOu Ote cartaffiOto IMbBl) 

JN 

887ft 

•6/4 

680/4 

664/0160010 76,190 

toft 

E62ft 

-10/2 

87770 

861/0107065 34090 

Sot 

6406 

-12ft 

88*0 

8456 50485 

7075 

Hot 

638/4 

-14/0 

852/4 

634/4 386030 204075 

Ja 

643/4 

-14ft 

858ft 

640/4 30020 

5,180 

Iter 

649/2 

-13*4 

663ft 

546ft 14095 

1055 

Total 




tUA 

K/A 

M SOYABEAN OS. CST pOftOOB* oonta/te 

JN 

MW 

-608 

2706 

2803 14010 

5,788 

tot 

2700 

•008 

2702 

2694 15013 

6,711 

sap 

2801 

-60* 

27.40 

2600 12004 

2075 

Od 

28-54 

-058 

27.10 

28.48 9,106 

740 

DOT 

ana 

-058 

2800 

2808 23070 

8044 

JM 

28.18 

-05* 

9BB4 

2805 2796 

70 

ToW 




WA 

Nflt 

M SOYABEAN lEALCST {TOO WOT «tafr 


JN 

IWJt 

-20 

1954 

1910 16084 

6,186 

tag 

1920 

-20 

1960 

1920 19,760 

8072 

SOT 

1320 

-OZ 

1950 

1910 14078 

2079 

ON 

1890 

•20 

1927 

1880 8030 

988 

DOT 

1880 

-3.1 

1620 

1883 IB, +66 11063 

Jn 

1»1 

-27 

1910 

.1880 1002 

154 

ToW 



WA 

WA 

■ POTATOES LCE $/tome) 




Total 

■ COCOA POCQ) tSOR'tatanma 


■ PORK BELLES CMS (4O0OOfee; centaftW 


Jwa 21 


Wee 

Praa. day 

JN 

42000 

-2000 44150 42000 

3019 

960 

Mr 


103807 

105203 

*« 

41050 

-2000 43.460 41050 

4009 

849 






<7000 

-1.150 49000 47000 

533 

74 

lOdtaawraoe — 


HOt 

NA 

Mm 

48075 

-0.125 47000 46075 

37 

4 

■ COFFEE LCE (S/tamA 


"w 

50*25 

- 48000 

33 

2 





JN 

40500 

-1000 - 40500 

13 

1 

JN 2285 

-68 

Z3S0 

2265 7079 1.101 

TaW 



70*1 

1076 

8 k 2279 

-68 

2340 

2Z78 20053 2095 







2267 -54 2315 2282 7042 499 

2255 -54 2290 2280 8043 334 

2229 -51 2270 2220 2003 109 

2225 -55 - 227 

43047 4098 

•C CSCE (37000b*; ONlMbM 


TOW 


JN 

127.40 

-300 13300 128.10 

2.178 5080 

sot 

12906 

•405 13800 12705 30063 0,175 

dot 

129.45 

-000 133J3 12800 

13.138 1038 

Hot 

127.40 

■300 131.75 12700 

703* 878 

mm 

127.75 

-250 129 JO J290O 

1.108 83 

M 

12705 

•200 12700 12700 

200 22 

ToW 



8*05517072 

■ COFFEE (1CC9 {US eentsfcound) 



Jots 21 

CdOT-eWy _ 

15 dqrsnsga 


12500 • 12164 

12042 11904 

■ No7 PREMIUM RAW SUGAR LCE (cema/toaj 

JN 1205 -006 - - 3085 

ON 1209 -031 1,101 

Jot 1102 

Wm 11.73 -008 60 

Total 4048 

■ WHTTE SUGAR LCE CS/iotnej 

Aa 9 347.70 -200 35300 34700 11007 2014 


ON 


IfaW 


Mil Pfl 

31140 

31100 

31100 

31000 


-400 32800 32000 
-400 31900 31400 
•400 31700 31100 
-400 31400 31300 
-400 31300 31300 


9070 904 
847 14 

2085 224 

201 8 

306 5 

25032 30 BI 


W Not 


900 

1050 - 

1880 +70 1580 1310 

1400 

1075 


■ SUGAR 'll' CSCE (1120OOfesi cenWfc^ 


835 130 


121,736 2*783 — 

Job 


iter 

Jot 1070 

TOW OS 130 

■ BBglQHT{BIFraQLCEe310fe»dOTpGtnO 


M 

ON 


ON 

TsW 


1103 -007 U15 1100 18039 7087 

1103 -003 12.19 1100 71188 7001 

1107 <4L2B 1107 1106 28,129 1078 

1107 -021 1100 1107 1Z2S 247 

1103 -die 1108 1106 1020 61 

11.47 -C.15 1103 tOC BSS Si 

12118717,224 


M 

ON 

JOT 

AW 

ToW 

Bn 


1323 

1303 

1290 

1357 

1367 

1389 


+15 1315 1313 420 

+25 1306 1294 9ZB 

+14 1300 1290 


■ COTTON NYCE (SO/DOKk; cantsAbs) 


+3 

+1 

+13 


488 


109 

2090 


1312 1*12 


OB 

163 

’ JN 

73.14 

JIM 

77.10 

73.14 

5088 2778 


ON 

7500 

-1.13 

7801 

7570 

7,75* 1751 

_ 

Bee 

7805 

-aeo 

7500 

75J8 28029 5050 

. 

Ma- 

7805 

•60S 

7805 

7900 

4220 237 

389 

ter 

7606 

■040 

77.10 

7800 

2.172 19* 


JN 

ToW 

7702 

•0.18 

■ 

- 

798 87 

4D0»1O0H 


■ ORAHQE JUICE NVCS tjgMjfcg cantaflbaj 


Cotton 

Spot and iWpmwit safes In Liverpool 
vnountad to 9 nmss far the vrssk ended June 
17, w*"N none in fr* previous week. Stft- 
«»d cAWte tfld not bring many operxlons. 
Slfipert wot to rt coming In ostti s p ed a fat 
styles, notawy Hi 0* a*!*"® range. 


JN 

9000 

-ai5 

SOTS 

8075 

8053 

982 

Sot 

8&70 

-0.10 

8340 

9200 11,144 1081 

Hot 

9400 

-020 

WJfi 

8400 

2.197 

100 

Jot 

97.10 

-015 

9700 

9800 

3034 

55 

Mar 

99.15 

-000 

pi 

9905 

1080 

29 

Mar 

101.15 

-000 

. - 

- 

58 

5 

ToW 





23088 2022 


VOLUME DATA 

Open Interest end Volume dNa shown for 
contacts traded on COMEX. NYMEX. GET, 
NYCE. CME. CSCE and IPE Crude Oi » one 
day In 


INDICES 

■ HBITBO (Base: 

Am 22 Jim 21 month ego year ego 
2007ft 2006,8 1983.7 1671ft 

■ CM BNur— pass! 4ftfiSg10q 

Jim 21 Jun 20 month ego year ego 
23129 23407 23409 20502 


LONDON TRADED OPTIONS 

shot prlee S tome C eB e — — •Ata — 

■ ALUMNMM 


(99.736) LME 

toft 

Nov 

Auo 

Nov 

1450 

47 

89 

37 

54 

1475 

36 

76 

49 

65 

1500 — 

28 

64 

68 

78 

H copra 





(Qnde A) LME 

toft 

Nov 

toig 

Nov 

2400 

116 

139 

36 

89 

2450 

88 

114 

55 

113 

2600 

61 

92 

75 

140 

m conns lce 

JN 

Sap 

JN 

Sap 

2250 

200 

247 

171 

230 

2300 

177 

228 

198 

261 

2360 

188 

210 

229 

233 

N COCOA LCE 

JN 

Sep 

JN 

Sep 

975 

60 

98 

39 

53 

1000 

47 

65 

47 

65 

1050 

28 

63 

78 

83 

M BRBn-CHUOEIPE 

Aug 

Sep 

toft 

Sep 

1660 

110 

_ . 

20 

- . 

1700 

84 

S3 

32 

57 

1750 

45 

- 

80 

77 


LONDON SPOT MARKETS 

■ CRUDE ON. FOB frier benWAug} +ar 


Dubai 

S1BJ0-£L33q 

-ai* 

Brent Stand (dated) 

$1700-702 

-008 

Brent Bend (Aug) 

*17^-7^49 

-0.11. 

W.TX (1pm eat} 

S1909-O01q 

-0.17 

M OB. PRODUCTS NWEprangX dafcery CtP (torn*) 

Premium Ctoaofine 

$185-187 

-10 

Gas Ofi 

S1K-156 

-20 

rissvy Fuel Of 

S79-82 

+00 

Naphtha 

SI 65-188 


Jet Riel 

$187-109 

-1.0 




M OTHER 



Gold {per troy oft} 

$39070 


Star (per troy oftf 

64400c 

-7.00 

PtaSnuD (per troy azj 

yanawt 

+205 

PeltaSum (per troy at) 

$13800 

-0.76 

Copper (US prod.) 

1170C 


Lead (US prod) 

35.75C 


Tin QCutaa Lwpu) 

1400m 

ft06 

Hu (New Yorft 

26800c 

-100 

2nc (US Prime WJ 

Ifeq. 


Cette (Bva wNghlil 

122.16p 

-805* 

Sheep (ta weight) ! A 

SS07 p 

-1307* 

Pigs pve weight) 

8O05p 

-201- 

Lon. (fey sugar (raw) 

$308.10 


Lea day sugar (wfe) 

S350SQ 

+300 

Tala & Lyia export 

£31200 


Bertey (Eng. feed) 

£10501 


Mate (US No3 Ydknv) 

$143.0 


Wheat (US Dane Norffi} 

£1800 


Rubber (JN* 

77.75p 

+005 

Rubber (Aug* 

77.75p 

+006 

RubbergaRSSNoi jn) 

27500m 

+100 

Coconut Of (FHT/§ 

*82 ftte 


Palm 09 (MaiayjS 

S5OS0a 

-60 

Copra (PbS)§ 

$4080 



Sovdsons flJSI 
Cotton Ouflook A Index 
WooKopa (64 «Si«ot] 


etBBJfe 

N7A 

422p 


-4ft 


fi per torme imfeSB ostenrise stated, p penorftg. s 
csrtsftji r rfngglMeg. m MateySan centsftg. q Aift. 
t Oct/Dec z JurVJki w JN. f London RiyNcaL S 
Of Rtaerdem. f Bufion mariet Nose. 4 Sheep 
(Urt we^rt prtses). * Chaige on week. provWonN 
prices. 


CROSSWORD 


No.8,487 Set by DANTE 



ACROSS 

1 An eight foot long snooker 
rest (6) 

4 A tramp is making a stew of 
beef (S) 

9 Cathy's rocking the boats (6) 

10 It's for drawing daily fuel (8) 

12 Introduce girl to mysteious 
rite wife incense ffi) 

13 A binding affair is arranged 
<B) 

15 lighting the gas? (4) 

16 A rendition becoming exces- 
sive (10) 

19 Untidy diary reads badly (10) 

20 Strike action when mates are 
sent bade (4) 

23 A number sail out east, in 
case (6) 

25 I covered for ax-union mem- 
ber® 

27 Looks np to certain relations 

( 8 ) 

28 Cowardly sort of spirit? (6) 

29 Old Italian civilisation's wild 
centaurs (8) 

80 Entry an the right (6) 

DOWN 

1 Staying oat In the dark? CD 

2 Contract debts without Inter- 

est <9) 

3 Set tea served in a stately 

home (6) 

5 Long for a piece of Gouda 
cheese (4) 

6 Aquatic creature softly goes 
into ground (8) 


7 A look of being indifferent (5) 

8 As enjoyed by a sick ceteb- 
rity? (3,4) 

11 Antoine may be from a public 
school (7) 

14 Country foil of males in song 
CD 

17 Iftcal date incorrectly given 
out (9) 

18 Shakespearian magician’s 
ring vanishes with flourishes 
<8> 

19 rd come up with poetry that’s 
different (7) 

21 Here and now CD 

22 It will flatten a canary (6) 

24 Not a game- k eeper? (5) 

26 Mount hotly tipped when it 
runs (4) 


Solution 8,486 


QuaEHH 

□ o □ 

□□OUUQ 

□ DU 

HHQinnEj 

□ □EH 

naODEDG 

□ a a e 

HD 

□ □ □ D 

□QKBHDQft 

□ ana 

HaaaciQ annHDBBH 

ana u u m q 

aanaaQ DEEHanoni 











v;it 


ll,;| rL ; — FINANCIAL. TIMES THURSDAY JUNE 23 1994 


LONDON STOCK EXCHANGE 


MARKET REPORT 


' \V 


Confident close as dollar sentiment improves 


By Terry Bytand, 

IHC Stock Market EdDtor 

Reports that President Clinton 
ptetmed to make a statement on the 
US dollar reached London towards 
the dose of trading, underpinning a 
rally m share prices as British gov- 
en *nwnt bonds rose sharply. The 
stock market, already encouraged 
by a steadier trend in the dollar and 
by the minutes of the latest w<wtin g 
between the UK chancellor of the 
exchequer and the Governor of the 
Bank of England , moved higher in 
the final hour of trading to at 
the day's best levels. 

President Clinton’s statement fol- 
lowed comments from Mr Alan 
Greenspan, chairman of the Federal 
Reserve, that the inflation outlook 
in the US appeared very reasonable. 
Bond markets, taking the view that 


defence for the dollar might wrrinrin 
higher interest rates in the US. 
advanced strongly. 

The FT-SE 100 Index ended 202 
hig h e r at 2^60.4, the first recovery 
after four sessions of losses. By 
Tuesday’s close, the index had 
fallen by about &5 per cent since 
the market began to slide In the 
middle of last week. 

After a slow start, equities began 
to edge ahead early yesterday with 
the help of a steadier trend in the 
US dollar and in Federal bonds at 
the dose of the New York session. 
But an early Footsie rise of 19.5 was 
not held, in the absence of ganning 
investor support, gains were halved 
as investors waited for Mr Green- 
span to begin his testimony to the 
House Budget Committee. 

Seaq volume was very slow to 
develop, and barely reached 200m 


A cc ount OsaRaa Dates 


*HW DMfelQK 

June 

Option OBcknUtoos 
JURIS 


Account Oops 
Ju>2 T 


jd it Juias 

may t#k# pfnon from 


shares by mid-morning. Underlying 
confidence continued to improve 
when the minutes of the May 4 
meeting: of the UK chancellor and 
the Bank of England Governor indi- 
cated that tears that domestic inter- 
est rates were poised to rise might 
have been overdone. Another mod- 
est reduction in money market repo 
rates in Germany also helped to 
cobl nervousness. 

However, the London market was 


still no more than quietly firm 
when New York opened and Mr 
Greenspan began his testimony by 
saying that he would not speak 
about the dollar. It was late in the 
session when the President's state- 
ment reached London, and the sud- 
den recovery in share prices owed 
as much to technical factors as to 
genuine Investment buying. Market- 
makers were only too happy to buy 
stock to meet the wave of selling 
commitments tafcnn aboard on Mon- 
day and Tuesday. 

Second line stocks were left 
behind as the market turned, and 
the FT-SE Mid 250 Index remained 
In the doldrums, closing 0.7 down at 
3.46L2. 

There were strong recoveries in 
some interest rate-related stocks 
which had been hit hard in the- mar- 
ket shakeout. Oil shares, too, 


returned to favour as crude prices 
continued to make progress. Among 
the market’s bid features. Enter- 
prise Oil moved higher, reflecting 
growing belief in the stock market 
that its bid for Lasmo will fail; 
shares in Lasmo gave ground but 
remained well above their level at 
the time of the Enterprise approach. 

The late rush to buy stock caused 
delay in the Stock Exchange calcu- 
lation of total Seaq business. At 
430pm, the Seaq total stood at 
462.4m shares, compared with 
5445m in the previous session, with 
non-Footsie shares making up only 
about 52 per cent of the day's equity 
business. However, retail, or cus- 
tomer, business on Tuesday was 
worth only £926.4m. Indicating that 
the big investment funds had not 
been heavy sellers of stock as the 
market plunged. 


FT-SE-A Aft-Share index 


U600 ~ -j. 

1,550 


1300 

1,475 >■— 

Apr Um 

Sour* fT QtapMM 191 

■ Key Indicators 
Indices and ratios 


Equity Shares Traded 

TumtHw&yvolurmtrAhir^. Endwfrig: 
lntra-moket buotoee ana owenmi wnover 
1300 



FT-^100 

FT-SE Md 250 

FT-SE-A 350 

FT-SE-A AB-STrant 
FT-SE-A AB^hara yteid 

2960.4 

3461.2 

149M 

1485.05 

3.97 

+20^ 

-0.7 

+7.B 

+7.02 

P-99) 

FT OrtSnary index 231 1.6 

FT-SE-A Non Fins p/e 18.95 

FT-SE 100 Fut Sep 2968.0 

10 yr Gflt yield 8.77 

Long gltl/equity ytt ratio: 2^5 

+15.7 

(18.88) 

+30.0 

0.01) 

(2-23) 

Best perfonning sectors 

+-3.6 

Worst (mrfomalng ssetors 

-.-1.5 

2 BuBdng Matertala ... 


+2.3 










.... +1J3 


-fl.4 

5 08. Integrated 


.... +1J 

5 Household Goods - 

-0.4 


i" ^ - fill! s';.- 


CROSSWORD 


+ 


I I 


■ ■ I IE 

■ ■ HI 

■ V 

■ III) 

*. .1 

■ s ■ »* 


m m 


+ 


•4 

*<» 

■i! 


Glaxo 
out of 
favour 

Pharmaceuticals heavyweight 
Glaxo led the sector down on 
speculation that the company 
had, as one dealer put it, 
“taken a bath in the bond mar- 
ket”. These suggestions were 
accompanied by a downgrade 
of Glaxo shares by one US 
bank and rumours of negative 
comments by another. 

Analysts have been scrutin- 
ising Glaxo' s investment port- 


folio over the past few days as 
the group approaches its year- 
end and some believe that as 
much as half of its S2bn securi- 
ties investments are In the 
badly hit global bond market. 

Yesterday there were whis- 
pers that the company might 
have lost heavily in bonds. 
Although some analysts were 
sceptical, the shares were 
marked down in early trading. 

Then, dealers heard that 
Goldman Sachs had cuts its 
Glaxo profits forecast for the 
current year by £50m to £L9hn, 
telling clients that sales 
growth of both Zantac, the top- 
selling anti-ulcer treatment, 
and also of its anti-emetic 
treatment for cancer patients. 


EQUITY FUTURES AND OPTIONS TRADING 


Footsie futures rallied strongly 
on the back of a recovering 
bond sector and talk of an 
impending statement on the 
US dollar, writes Joel Klbazo. 


The first trade in the 
September FT-SE 100 contract 
was struck at 2,948. But for 
a brief decline to 2,941, buyers 
carried the contract forward 


■ FT-SE 100 MPEX FUTURES (LffFg E2S par fcjU tnOBDC point (APT) 

Open Sett price Chongs Htfi Low Eat. vd Open H. 
Sop 29400 2968.0 *300 2992.0 2941.0 14304 60269 

Dec 2077.0 +300 0 8S2 

■ FT-SE HP 280 INDEX FUTURE) (L1FFQ CIO per fuB Indeet point 

Sap 3482.0 34484 -1J0 348Z-0 3445.0 201 3898 

■ FT-SE MO 2» INDEX FUTURES (OMUQ CTO par MlndaK print 

iep " 3449 jO - - - - 577 

Al apm interest figure* ate Mr urerieua day. t Butt vofcjma mown. 

■ FT-SE 100 INDEX OPTION gJFFE) (*2957) 210 per tufl index pofcit 

2900 2950 2000 SBSO 3000 SOSO 3100 8150 

CPCPCPCPCPC. PCPCP 
M 178*2 14 134% 21 BB% 34 54 92*2 38 78*2 22 112*2 12 152*2 8*2 195% 

Aug 187 34 182 47*2 127 62*2 98*2 84 72*2 107*2 52 138%35%«»% 22 207*2 

Sip 215 48 178*2 62 1« 79%t15% 99 19 121 «%149%«% 18! 35 217% 
OH 226 80% 189*2 72*2 189*2 91*2 131% 112196*2 137 87% 167 68% 197% 55% 235 

Dwf 3B 79% 198 113% 131% 190 98% 215 

Coes V50 fa* 7.733 I"- ' 

■ EURO STYLE FT-SE 100 B4DEX OPTION QJFFE) ClO per tuB Index pofre 

2775 2825 2B75 2925 2975 3025 3075 3125 

U 198% 12 193% 17% 114% 28% 79% 41% 30% 64% 29 92% 16 128% 8% 178% 

An 219 25% 178% 36% 141% 51 110 B9% 83 92 68% 119 42 150% 28 186 

Sm W 47*2 125 82% 78 132% *1 186 

Dec 233% 65% 171% 121 111 196 78% 22* 

Mart 238 107% 209% 143 158 188 11S%2«1% 

Ms MZB ptf 4590 * Itatertjtag W mm. (Mm taft « taw) « Moment prim, 
t Long (bad eq*y mufti. 

■ EURO STYLE FT-SE MP ZSOWrfDEX OPTION (OM1X) CIO per ful index polrrf 

3480 3500 3650 3800 8850 3700 8750 3800 

JU S3 55% 32% 84% 18% 120 10 181% 5 
Cm 0 Puts o BnUemwfl pitas and rim are Won * 430pm. 


FT *• SE Actuaries Share Indices 


were slowing more than antici- 
pated. Finally, there were 
reports that Lehman Brothers 
bad prepared a negative report 
on weekly prescriptions for 
Zantac. 

The stock ended the day 14% 
lower at 538p. The tell unset- 
tled SmlthEtine Beecham, 
whose “A" shares slipped 5 to 
403p, and Zeneca, off 4 at 712p. 

Builders strong 

There was a positive tone 
again evident in the construc- 
tion and b uilding materials 
sector, with the good news 
flow continuing. Construction 
group Y.J. Lovell said price 
levels in the residential sector 


throughout the day. The 
smaller broking houses and 
independent operators (locals) 
were reported to have been 
the main buyers m the first 
half of the session. The 
reduction In interest rates in 
several European countries 
and the Improvement in bonds 
underpinned the buying 
activity, helping September 
to maintain a premium to cash. 

Reports that the US 
President was to make a 
statement on the dollar, and 
the strong buying on Wall 
Street, gave further 
encouragement to derivatives 
traders In London which 
brought a squeeze on the 
contract towards the ctose. 

September ended at 2L968, 
up 30 from its previous finish 
and at a premium to the cash 
market, -although .at a slight 
discount to its fair value 
premium to cash of 13 points. 
Dealers reported a further rise 
in after-hours' trading. Closing 
volume was 14,304. 

Turnover In traded options 
improved to read) 33,792 
contracts. FT-SE 100 option 
volume was 12,720 lots, and 
2,154 were traded in Land 
Securities to make it toe 
busiest stock option. 


! he UK Series 


Day* Y«*r Dtv. Earn. P/E Xd aq 

Jun 22 chge% Jun 21 Jun 20 Jim 17 ago yUUK yMdtt nito ytd 


FT-SE 100 2360 

FT-SE MM 250 3481 

FT-SE aftf 250 «k fenr Thata 3465 

FT-SE-A 850 1492 

FT-SE SmsKGap 18244 

FT-SE SlaalCap mx hw Trusts 1806.1 

FT-SE-A ALL-SHARE 14854 

■ FT-SE Actuaries All-Share 


+0.7 29402 2971.1 30222 2900.7 4.18 726 

3481.9 34717 3827.1 32155 359 183 

-4X1 3467.0 34809 3927.0 3231.0 3.75 030 

^05 1484.7 14914 15233 144*9 4.04 178 

-0.1 182168 183158 1350.73 1644.48 34» 4JK 

-02 180173 181189 1827.87 185096 123 AM 

+06 147103 1491.12 151101 143049 197 1SB 


Day's Year Dtv. Earn 

Jun 22 chaavt Jun 21 Jun 20 Jur>17 ago yieteK y iek)H 


10 MINERAL EXTRACHON(18) 

12 Extractive fcvkistrieBW 

15 01 Integrated^] 

16 OB gaftgflgfl 3 Prodnn _ 
20 OBI MANUFACTUREBSP83J 

31 BuBcOng & ConstnxZ)on(32} 

22 BttkBiV *MiS A Marehspi) 

23 Ctemicat9f21j 

24 Dtveretted InduaMatafie} 

25 Electronic 6 Beet EquipCM) 

26 Englneering{71) 

27 Engineering. VeWcteS(l2) 

26 Printing. Paper A ft*g{2$ 

29 Taxman & ApperegXB 

30 COHSUMBI QOOOS(96) 

37 aaworteaPT) 

32 Spirits. WInea 1 CMerepO) 

33 Food MonutectixereG3) 

34 Household Gooda(13) 

38 Hearth Carapq 

37 Phwmac««cataf12) 

38 Tobaccod) 

40 S8WICESC222) 

41 DWributespi] 

42 Leisure & Hotaia(24) 

43 MedepS) 

44 Rataflors. Fooc*17) 

45 FtetaOera, Ganoraff4S) 

48 Support Senriceo{40) 

49 Transportfie) 

51 Otar §aajaa * BJ8ln«^iq_ 

60 imunspB) 

B? Bectric#y(17) 

64 Gas DtatrftuUon0 
66 TeiecomnudcatlonaM 

68 Waterpa — 

BS WQtWWAMCIAiSIBSB 

TO BNANCIALBflOO 
71 Banksftq 

73 InsuranoellT) 

74 Lite A3stmnce(6) 

75 Merchant BantefB ) 

77 Other HnancMP4) 

79 PropertyWl) — . — 


+1J 2B0AJJB 2846S6 268143 224100 
+13 372438 381134 384736309430 
+13 255131 2592.122634.40217100 
+1.0 195038 195332 196018 195170 
+0.7 190335 1915.48 194238 179160 
+13 114175 115145 1154,43 106140 
+23 178010 1791.12 1812.78 16S170 
+07 231172 233018 237135 231120 
+13188167 190930 195936 188930 
-02 1943.49 196236 199631 2057.70 
-0-1 178138 178932 1793.13 156110 
-03 2207.77 2247.47 225933 176430 
+03 2722.18 274190 278233 2367/10 
-03 1707^47 172235 1742.12 181090 
-03 2574.16 2SB932 284134 269230 

214032 2153.12 217236 203130 

+0.1 274136 277433 280133 2814.10 
+0.1 2117.78 214175 2184.56 227170 
-04 2394.17 2409.77 243173 219160 
-0.1 184437 184047 168733 170100 
-13 2793.12 280177 287532 291170 
-03 328433 338432 340537 3831 50 
+04 1904.73 191122 194185 181930 
-04 272031 274437 275156 269010 
+03 2097.78 208835 212105 186130 
+0.1 2851.47 2888.10 293182 239170 
+04 184231 105936 188831 196S/W 
+0.7 184133 164230 1884.72 150430 
+13 150433 152125 154932 152170 
+06 221079 221339 228734 207830 
+03 1171.84 118030 118557 125230 
+03 21 3533 2147.72 219335 214430 

2081.78 208731 212136 174230 

+33 169638 1741.18 178731 198130 
+071899.14139001 1945.13203530 
-03 163732 166548 170335 1B41AO 
+04 158736 160199 163637 1549.74 

+0.7 208110 21 1433 2144.48 2032.90 
+03 270532 278072 2803.44 251330 
+1/4 1192.73 120089 121235 13S230 
+1.1 2241.07 225331 227145 282130 
-02 270178 271734 276431 256530 

180238 1601.10 1817.74 148330 

+08 148139 147733 180048 135170 
+04 285132 2692.84 274436 2350.40 
+03 147103 1491.12 131501 143049 


334 4.44 

331 535 

330 438 

339 130 

335 4.73 

339 430 

309 4.15 

198 4.12 

4.74 439 

330 171 

114 4.77 

4.78 236 

104 530 

4.13 531 

438 731 

4.41 739 

4.02 7.01 

432 151 

168 7.71 

111 113 

433 734 


149 434 

237 530 

336 839 

3.10 130 

2.70 6.10 

3.77 S37 

436 231 

4.64 167 

404 1131 

182 t 
432 112 

535 1439 

338 138 

438 166 

338 IBB 
133 1131 
149 104 

3.7D 1148 
331 738 

4.04 432 

23S 132 

337 168 


1177 5231 110191 
20,76 5177 127739 
1935 5157 127144 
1705 2164 114235 
3134 22/48 140145 
29.19 2101 1332.72 
1114 2100 115831 

P/E Xd «*. Total 
mio ytd torium 

2835 3733 104121 
23/43 4339 102188 
27.13 4043 104183 
80301 1637 112118 
2109 3035 96633 
2167 1532 900.79 
3179 3133 85535 
3131 4337 102435 
26.44 4000 96837 
1119 1442 9ZB82 
2115 2331 100128 
5186 3332 104199 
2231 3733 107231 
2035 30.60 95736 


1431 S239 87137 
1156 3631 96230 
1635 5178 91190 
1187 4104 88430 
1538 4130 84935 
37-88 2158 8*7-35 
14JZ 4730 88134 
103810235 72149 
1156 2183 93232 
1145 3734 92933 
2123 1942 101935 
2230 3731 98548 
T121 9230 881,78 
1177 2101 87101 
1104 117B 91638 
21.00 3136 88194 
aiOOt 1130 100539 
14.14 3139 91633 
1036 30.07 84100 
t S343 80238 
1438 150 79930 
737 5241 91434 

119S 2182 tT21.61 
1128 4117 82435 
1230 59.07 80539 
138 2106 81154 
1126 6138 859.67 
140 5168 811.78 
1433 3136 95331 
31.10 2632 84737 

5230 2934 89138 
1114 2530 115631 


89 FT-SE-A ALL-SHARHWI 148536 +ft5 14/UB iwi.iz lOiauntiau.™ Me ie.w «uuu ..wlu. 

■ Hourly nwwenwnts 

fjft 1030 1130 1230 1100 1430 1530 1110 MaMfeW Low May 

~ Z T~ ^71 2954.1 28593 29417 2B«3 29314 2851.7 28533 29S73 29604 29341 

»J 34811 34818 34803 34573 34673 3457.4 3466.4 34612 34683 34618 

SIS 14B\S 14003 14823 14873 1487.7 14813 14817 14893 1491.1 14811 14819 


FT-SE-A 350 


Tkne t* FT-SE KM HKjti t30am 

■ FT-SE Actuaries 350 Industry baskets 

Op^, pop 1030 1130 1230 1330 1439 1100 1110 Ooee Ptevfam Change 

„ . . . r _ ^ inerts 10814 10942 10908 10812 10913 ™~1 CkJ" 10948 1*005 11046 MXB.4 40. 2 

gdfl & Cn ttTCT 1W03 2780.! 27513 27493 27416 27212 27223 27116 2725.8 27683 -403 

inn; 1(538.3 16419 19343 16333 1831.7 13313 16323 18311 1B30L4 16343 -44 

jjjj£ 2^48 27408 27483 27413 27417 2744.1 27440 2747/4 2749,4 27617 27314 +153 

. , nr. an rr^ Etee b pttMad h 8 bb^w Imuw. Ite e* eanattwes aa natttte Sem THa Rnmael Thao 

Adl ?2 , ^?cir222AaSi^Sid»*l | **- 3* P 7 -® Mart# Sham Mteae Smce, Midi raw a mge « •tottwrto wd piMueti 

I n-rl ™~Tjr«!_.ri uuiiijiT ■! iim umiii attw 

"“ts uoreiwaii Mx Hie FF« 1 01 Ha PISE Md ISO. FT-8E Mfefttas 36D Ml the FT-SE Wusey 

Th ^‘ 800 lK^i?SrSBBnttlBndi atom EttMnn tt tee United Mwfam and RepiAle tt Watt m* Hie FI-86 Actual* AFSwMndwto 

boBi h etxfunttkxi wtti the InetjUa n( MmriH end me Focute o( Acweriee under a iterated ett el gnvnd nfte. 

Wand IJrtad 199*. O TtenwroM 'TTm** Unfad 18B4 M itBft wwed. 

£3 l SS^!I , S2t3^iB£^Snwte«nd»*vleen«»itattB»lflndan8B«Ewlanw“ rf 7f» B,, ^ ,IT1,, “ lA *^ 7, * ,:T -S Efl “Miwae™ ™T 


were showing an upward trend 
and sales incentives were 
being steadily reduced as it 
reported an interim loss of 
£L13m, against £3J93m the pre- 
vious year. The shares slipped 
3 to 83p. 

There were also encouraging 
words from John Laing as it 
announced a £72ten property 
deal. The shares rose 13 to 
287p. The building group said 
it believed prices for new 
bouses in the UK had stabi- 
lised and Laing Homes was 
beginning to see some price 
increases in the south east 

Elsewhere, Beazer Homes 
added 5 to 247p, Taylor Wood- 
row 9 to 133p, Barratt 6 to 201p 
- with NatWest said to be post 


TRADING VOLUME 


■ Major Stocks Yesteniay 

UoL Coring Doyti> 

OtiOn ptlee ttmqa 

MOO EWi -4 

408 +% 

M 

u»o sea +c 

Angfao Wrier 639 +73 +3 

Aram a?t 337 M 

AqylOnupt 3JB00 239 -3 

1J00 257 -1 

Aaaoo. EML FoodSt 202 50+ -1 

Assoc. Brit Port* 1.S00 237 « 

BAAt 1.100 006 

BATMLt 7,100 3001; -i 

BET 020 114 +1*2 

BICC 1£00 387 -4 

aocf 390 no 

BPt 11JM0 +02^ *4 

BPS bids. 1,400 292 +10 

btt itLooo an +a 

mjWPak* 2JS00 248 +4 

BTRf «^00 362*2 43% 

Bart, of 8ooOMt 291 184 +1 

Ekdrnt 2£00 630 47% 

Bust 802 G10 +1 

BkriCftttot 1900 208 +18 

Bookar 104 400 +8 

Bootet 1^00 827 *4% 

Bomoat 1S00 454 +10 

Brfe. Aamapaowt 948 485 +4 

Brtfati AOwojwt 1100 309 «J*2 

BMafaQnt ajsoo 204 ^ 

ante* Land 39 301 +4 

BtfebAStsalt 5.700 133*4 

Bond 400 196 -1 

Btamh Casattt E7S BS7 -4 

&**■, -1A00 88*4 

CaMnAWkat 1400 425 41 

OrtxsySttnNOOaef.' 003 04 4S>4 - 

CrtorSinop - 39 776 

Cteredrat 1AOO EB3 +13 

Colton Consns-t “ 

Coats Wjrtrit 
Conan. Unlonf 
Coohaon . 

DoumMat 

sreu 

Owm 
EastamBecL 
Ettt MiSand Beet. 

Eng CMra Cbfyfi 


ASDAOnpt 
AOboy Ntttanttt 
Mban Rahar 

zsxz 


633 45 

223 -1 


m +12 
5^ 4 


Enotmnri Unta 
Rd 

Ham 

RmrfgntCrt.LT. 


334 +13 

423 +7 

270 +3 

173 43 


Oan. Acrtdart 

oyisrirt 

Oanrirt 

OmndUri-t 


OkftnaWt 

HSBCpfipahatt 


M 

Jtitirawflaswioy 
MnrtWMt 
KMkSam 
Lsd&raWf 
Land Ssoiattaaf 

Logaft Omrelt 

ass® 

LASMO 
London Ban. 
Loretio 


1SOO 270 43 

2.700 173 43 

1,600 141 41 

1.800 131 +1%i 

1.100 330 A 

1.100 582 410 

2J00 200*4 41 


1400 QZ7% *2>a 

3-SOO 405 -4 

1200 664 t&*2 

I 101 1M ft 

1.100 574 -7 

1200 453 +5 

2200 002 ,6 

BO 348 +1 

8.000 143 43*1 

7B0 167 -T*2 

1.100 278 +1 

2.100 157 +1 

SB 2n*2 -5% 

4.100 rae +17*2 

312 467 -1 

55 615*4 -3*4 

1.000 GOO 48 

IBS 5«3 

13 00 >58 « 

600 +4*2 

723 -* 


1300 148 * 

278 540 - 

1/*00 ISO *1* 

3jB00 170 -* 

■%m 413 4i 

2AOO 138 H 


Marta ttamcot 2J9U 4tw*2 +9 

MriandsBset 113 BOB -IS 

Maolson (Wtn) 185 127 

WCt ^ 1JM0 100*2 +3*2 

HaWsriBankt 3.ro<> 4S3 yi5 

Nartoari P wwf 497 426 <0*2 

N<nt 2 A*» 244 +| 

North Was Wrtwt 598 43B -1 

Nottam B XL 118 641 -12 

1.100 ISO -2 

203 812 -12 

716 805 +*i 

688 617 *1 

1J»0 166 +3 

PbamOanT 644 408 +7*» 

Rixtenarif aso 0 SSO t* 

RMCf 002 B» +19 

mzt 2J00 641 48 

878 234 

UOD 30® 4*4 

460 -S 

490 46 

770 <fi 

RartsMt 1,300 206*1 40 

Hwmf 1.700 449 42*2 

Rflanoycnf . VX» 162 -1*2 

Ryl Bk ScxMandt 1/WO 428 -h 

Hnri Imnnter 282 +8 

aSnatwyt ijaoo an +4*2 

SdrcOtn 64 1160 -10 

SoddMl & Nnn.t 383 617 43 

Soul mrtti-aao. 484 339 -1 

ficonfahRwwt . 828 354 44 

teat 11JDQ0 119% 44 

IJOO 172 -a 

es® 319 -10 

SttOrtlTimi 1,600 487 J 

3M Trtnopofit bAOO 6SS +12% 

«aMt 898 530 41 

SStartsBBs 4Z5 238 44 

BmBfilWJUA 376 477 +1 

Snrftti5NMhMt 339 148% 

CmW a* V vsnit 3.700 «n 

3aH Baacham Uri-T 2J00 366 -5*1 

CmBhafcri*. 164 442% +% 

BorthenBaeLt 166 553 -4 

5ouSi WalW Bart. 2M 601 -19 

SarfhWtaatlMrtm 115 484 -6 

SouhWem Bact 101 665 -14 

StMlwiVUacar 18 4S5 -7 

SundonUMraLt 1^00 2 » 40 

8uiriv»M 672 216 +4 

amASanmt 3600 208 44 

TBN tfiK SB1 S 

HOMupt 1.400 373 +8 

rest 3.100 220 -ah 

Tarmac 2.700 147 43 

DBMS Lite 681 394 +1 

Tljtor Woodrow ZJMO 133 +0 

Taaeot . 2^00 E2B (£% 

IhmDHft 1,100 490 +3% 

Ikon EUlf SM® 1046 +11 

Turtontf 1J 00 223% +1 

TittricwHoate um 89 4% 

LHgaao 221 363 -e 

UnSwait 893 973 -8 

UnMBkcuUt SCI 321 48 

md, H— wapan 97 583 -6 

VadrtteMt 883 490 +2 

wart»gDGOt 483 698 

Wtricomnt 1/300 602 *2% 

IMMlWnr 493 598 -2 

Waaan WHO 213 572 -14 

W lrf ft m aBt 448 517 4 

VManvHkspt BIO 344 a 

WOki Conrad 322 154 -1 

khM . 1.100 187 +1 


m 


M^Poftonf 

p23ft&N«w.t 


lass 

Smwti Timer 
Sm Ttanapon 




572 -14 

517 4 

344 43 

154 -1 


214 551 

466 
1.708 712 


187 +1 

72B +15 


Zmaor p 1,708 712 -4 

toad on MK teO ao to nato^agd^^rt n^a 
ywSanter LBitfl 4 jam. Tradas of on# Mlanor 


tive on the latter two - and 
Berkeley "Group ? to 403p. 
Among materials suppliers, 
Caradon gained 13 to 293p, 
BPB Industries 10 to 2S2p, Blue 
Circle - being recommended 
by Paumure Gordon - 16 to 
285p and BMC Group 19 to 


News that Singapore Airlines 
had placed a firm order for 10 
Airbus A340-300 and 20 options 
helped British Aerospace gain 
4 to 46Sp. The company builds 
the wings of the aircraft and is 
a 20 per cent stake holder in 
the Airbus consortium. 

Sentiment was further 
boosted by reports that SAe 
has renewed t alks with Taiwan 
Aerospace Corporation over a 
joint venture to produce 
regional aircraft. Overseas 
interest in the stock continues 
and the group said foreign 
holding s in the company stood 
at 28.7 per cent, just shy of the 
29.5 per cent permitted under 
the company’s articles of asso- 
ciation. * 

The engine order for the new 
Singapore Airlines aircraft 
went to US group Pratt & 
Whitney dampening sentiment 
in Rolls-Royce. The shares 
eased 1% to I82p, in trade of 
4.7m with reports of a delayed 
order from Malaysia also hurt- 
ing the stock. 

Conglomerate Tomkins 
edged a penny forward to 224p, 
with Smith New Court 
reported to be recommending 
the shares. 

A stock overhang in engi- 
neering group GKN which 
returned to the list of FT-SE 
100 companies this week, saw 
the shares relinquish 8 to 574p. 


NEW HIGHS AND 
LOWS FOR 1994 

NBW MOHS n. 

BUM MAILS 4 MCHTO fll Mttad Uk 
CHEMICALS (1) Ambar Ind, ENOBCBnU ft) 
NaMmuh (LX EXTRACTIVE UtiTS A FOOD 
MANLRF fl) 1MB, StOTTO, WINES A CtDStS 
(1) M a ertri iri d Martin A. SOUTH AfHtCANS (1). 
HEW LOWS |S01|. 

OTHER FIXED IKTBREST (4} BANKS 53 
HHHNEMES W fiaarii OraaM Hno Mautcn 
IHcnOriOrt, VMbl BUHJ3SM 5 CNSTfM rill 
BLOG MAILS 5 MCHTS P) CRH. Griftara. 
Haywood MMoma. Do Cm. nt- PBdngaon WTte, 
CHEWCAlsa AGA. Ebsta. Seapi 
MSmBUTORS n cnarfoa Sttnoy. Cewia. 
IncftcapA Lh Saiwoeb lino Ptoduca. 
DWERaREn MDL3 R) Bftby (A Cana 
Street tm.. atom r, Hottaon mote Cnr. Bd. 
FowM Dttkyn. Unftra. BJSClnSCnv (1) South 
Wriao. ENQMEBma ft Btach A DsCMr. 
Chanricrtn 5 +■. B4L Johnaon MaaSioy, 
MeKachnte, uagWL Wtif. Mmoo. ENO. 
VBSCLS5 n B8A Group. Do BVfic Cnv. Pit. 
Benson. Lucas tads, EXTRACTIVE MBS (9) 
FOOD MAMUF (H8 Asaoo. EMl Roods. Canoitan 
Pizza. D^w, Dam ML OoUai Vila. 
l laihi wOO tL Wartham Food*. To# A Lyta. 

UnAavor. Da MV. HEALTH OWE M AAH, Court 
Cavenririi, CrosnCte^ O wtaamad. 
GoldobtrtanJi, Quafity Care Hanss, 
HOUSSIOLD GOODS (3) U%xR. RatidB A 
Cstnai OHpc Cm Bd- sagnM^o. 

INSURANCE WWVESTOSJT TRUSTS pfl 
INVEEIMmr COMPAMEB 0) UFE 
ASSURANCE 0J MBXA M Aubicol Carton 
Comm*. «Hp Pit, Drty Mai K BrevNr. Maura 
ML Raad ML MBKHUfT BANKS P) OB. 
EXPUHIAT10H A niOO (II OB. KTEGRATED 
p) OTHER nUNCIAL |B| 

PHARMAcaumCAW a rniNO, PAFQt 5 
RACKS (I) Stare S PROPERTY fT4) 
RE1WLBI8, OOBIAL M CrepalrlghL DFS. 
Efloex. Lloyds Chemfato 7Wp Prt, E*T. Uenzloi 
(A NoMsghm Borhdbya A. Wyeuria Oaidan 
Canteaa. SPIRITS, WMES A OOBte Brimar 
|HPL Gnsid MaL Manydoaoi, SUPPORT SEms 
M Comae. Gaatiare Tn laoam p tttaft Maoo 4, 
Mkrogarv May*. OIS hflL RCO. VMuftjr. 
TELECOMMUNtCAUONS ft GbeuKot A. 
SaaaW Briwaa. TEX1BXS 5 APRARa. (B) 
Oort BHL teete, Ledo Who. Mulng. 

Sbaaott TOBACCO (1) BA Y. TRANSPORT « 
Ettrtunal Ute. M»soy Doeto A Hribour. 
WATER (Q Northurrfcrion, Wrnoea. AMERICANS 
M CANADIANS HQ. 

The stock was initially hit by 
vague talk of a profits down- 
grading. 

Royal Bank of Scotland trod 
water as the bank said there 


were no strategic implications 
over what it would do with the 
cash raised from the sale of its 
7.3 par cent stake in venture 
capital group 3i, which was 
Coated yesterday. The shares 
dosed steady at 428p. The offer 
of £71im of equity in 3i was 1.7 
times oversubscribed and the 
shares will be placed with 
institutions at 272p each, a 13.5 
per cent discount to net asset 
value. 

Lloyds Bank shares fell l’A 
to 548p as Smith New Court 
turned seller and cut its cur- 
rent year forecast by £150m to 
£110Qm. Mr Richard Coleman 
of Smith’s banking said: 
“Even if they get Cheltenham 
and Gloucester it doesn't trans- 
form Lloyds into a high growth 
dynamic stock.” 

Chemicals group IC1 jumped 
17% to 756p in reponse to a 
positive presentation by the 
company to analysts and sub- 
sequent recommendations. ICI 
said that conditions in its Tiox- 
ide subsidiary were improving. 
Many brokers were recom- 
mending the Shares Tnrhtrting 
Smith New Court, UBS and 
Klein wort Benson. 

BAT Industries fell sharply 
in early dealing as the market 
digested news that its Brown & 
Jackson unit in the US had 
sneaked through a high nico- 
tine tobacco and used it in 
some cigarettes. However, the 
shares recovered later to dose 
barely unchanged at 390%p. 

Mildly disappointing results 
from First Leisure was the sig- 
nal for a sell-off in the shares, 
which finally ended the session 
IS off at 289p, althoug h turn- 
over was a measley 380,000. 


Analysts lowered their full- 
year profit forecasts by around 
5 per cent, representing largely 
the tell in margins in the ten- 
pin bowling division. 

Relief over the result of the 
George Michael versus Sony 
court case lifted Thorn EMI, 
with investors likely to be fur- 
ther buoyed by the publication 
of the MMC report into com- 
pact disc prices, due today. The 
commission is widely expected 
to exonnerate the record com- 
panies, although retailers are 
thought more likely to come in 
for some muted criticism. 
Thorn shares gained 11 to 
lM5p. 

Drinks stocks were subdued, 
although Guinness managed a 
rise 5 to 453p on reports of a 
five-fold rise in Guinness sales 
due to the soccer World Cup, 
as well as a Bell's whisky pre- 
sentation to analysts. 

Good results from Carpe- 
tright could not stop the 
shares from being subject to 
profit-taking and they 
retreated 6% to 249Vip. 

Freight group NFC continued 
to be powered by a James 
Capel buy recommendation 
issued on Tuesday. 

The shares added another 3'/* 
to 190'Ap. The company said 
after the market dose that it is 
to terminate plans for a scrip 
dividend in respect of the first 
interim dividend for the year 
1903/94. 

MARKET REPORTERS: 

Peter John, 

Christopher Price, 

Joel Klbazo. 

■ Other statistics. Page 23 


LONDON EQUITIES 


UFFE EQUITY OPTIONS 


•—Mb — — Pub — 

Orton .M net Jm m Qo jm 

MhHjiu 540a38U5ZH - 6 15 - 

CSB9 ) BOB 814 25W - 2814 38 - 

Amjl 220 2ZH3M98M SM 7 12 
(-237) 240 81BMZM 9H 16Z1M 

ASM 50 7 SM IBM 1M 4 4M 

T9 ) 60 1M 4 ■ BH 9K 10M 

murnm 3B0 3548M6IM 3» 10» 10 
(-388 ) 380 T4M 28M 34M ISM 23 2BM 

MOBdnA 390 22M33M G BH 18 77V, 
(-403 ) 42D 7M 19 23M25M 38 44 

BOOH 500 34M48K SB 5H 14 Z1 
(-525 } SO SM aaow 30 38W46M 

BP 380 H 33 8BM 7 IBM 22M 

(-401 ) 420SM182SH 35 33H38H 
BUMiBM 130 BM 14 17 4M 8H 11 
P3S ) 140 4 B 72M 10 14 16 

Ban SCO 26 41 4*tt 11 2? 33» 
(-610 ) 550 a 18M 26M 44M 5DM 64H 

QttlMi 380 42 - - 3M - - 

(*4W) 425 16 - — 15 - 

Cmbrift 460 38 51M 6BU 4 13 19M 
(*488 ) 500 12 27H38H2DH 31 38 

Onus tint* 500 2B3BM4BM 8M23M28H 
(-515 ) 5G0 SM 15 M 40 55M 57 

O 750 2SM 41 STM 16 37 45 

r756) BOO 7 2IM 35 49MB7M74M 
mgbbar 460 45 64M BBM 4 14 2DM 
C<97 ) 500 T«4 30 CM 17 31 38 

Lori Sxu BOO 21 36M 43 II 17M25M 
r«7) 650 415MT9M 44 4SH 54 

Mate 0 S 380 21 32% 40 5 11H ISM 

r«4 ) 420 JM 17 25 20M 20 SOM 

KrtNtet 420 38M 46 6354 4K 13 17 
0*452 ) 460 IlM 23 33 18M31M35M 

SBtaCtuy 390 9 3BM43M 7M 17 24M 
(“404 ) 430 7M 2JM 2BM 25 32 39M 

Mina 650 50 68M 87 3 15 19 

(■684 ) TOO 14 28 37Wr IBM 34M 39M 
Sfcretwuse 200 IBM MM 2BM 3 7M 11 
(*216) 220 6 13 17M12M 17 21 


Ml--!-- 
97 3 — — 11 — - 
950 1M 64M 7SM 13M23M 31M 
1000 UM 37 53 37M 49 5S» 
700 28 44H 5BM 11M 20M 38H 
730 0M21M 34 41M58H 05 
Ana MW Ml Aug Hat Frtj 

380 25 37M44M 9 17 24 

420 IBM 2SM 20H 2S» 33 40*4 
140 23M 28 31 2H 6M 7M 
160 11 WaOM 9M 14 17 
300 2BH 38 39M 4H 12 ISM 
330 I2 28M 25 18 28M 31 
Sap Dec War Sag Oac Mar 

140 H 17M 21 11 16 IBM 
180 0 BM 13 24 29 31M 


Grand Hit 

f406) 

Lambs 

hsb) 

utd emft 

C3T0J 

Opfcn 


Opto 

Hamm 
P241 ) 
Lasmo 

ri48) 

Lutes tads 

H71 1 
P B 0 
roi7i 
Pfktagm 
no4) 


T488 I 

Royal tan 

ra»> 

Tosco 

rzz? ) 


(•343 ) 

Option 

BAA 

r*»i 

TftHHMr 

r *« ) 

OpBai 

Afidey tea 
T405) 
Amatrad 
P29) 
Bwttr* 
1*536 ) 
Bk» ante 
C28S | 


HOadmn 

ns8i 

Lmtn 

n»» 

NadPiwv 

) 

Gcal Pamr 

rss3) 


Opttn Abb Mat Mi Bag Mat Feb 

Btt ABO 460 29* n N 23 42 SOM 

(-463 1 200 14 34M 47 48 85H 73M 

BAT tads 300 ISM 29 3819M27M X 

(-390 ) 420 8 17M 2BW 43M 48M 50 

BTR 360 IS 24 SIM 12 21 24M 

(-362 ) 380 4M11M18M3IH39M4SM 

MTdKoai 380 WM22M2EM 13 19 25 

(-367 ) 380 «M HM 14» 38 38M 45 

(MtaySI* 420 *19 29 31 12 23M5MM 
pC3 ) 480 4 13M 22 *1 48M 50 

UnBa S5B 44 54 88 M S6 34« 

rsao ) EDO 14 3I42M42M53M61K 

atom 420 41 ED SB 4 BM 14» 

r«5S ) 480 14 25 25 IBM 2BH 30 

GEC 280 ISM 19 MM BM 14 17 

ra») 300 4 11M IBM 23M 26M 29 


Dta Pots 

Ang to Fft Aug No* Fft 

240 IBM 15M 19 7M 13 IBM 
260 4 B 11 20M 25M 2SM 

134 IBM 23M - SM 7 - 

1M BH 12 - 12 10 - 
160 17 22M 25 3M 9M 12M 

180 0 T2M 15M 13M 21M 24 

600 37M51M B3 14M33M37M 
850 13M Z7M 41 43 63M 67 
180 13 to STM 7 11 14 

100 4M 10M 1ZM IBM 2ZM 28 
280 20 31 36 5 12 14 

300 12 19 25M12M 22 23M 
BOO 58 79MM10M 28 34 
850 20M SI BB 30M 51M 58 
4G0 3BM 54 B9 7M 19 24 
500 17 32 38 2SM39M 45 
280 14 Z3M28M11M 22 23 
280 0 15 19M24M 34 34M 

220 18 21 2GM BM 13 16 
240 5M11M 17 16M24M Z7 
480 to 98 05M 8 18M 25M 

500 17M 38 44M Z5M 38H 45M 
325 23 33 - 5 12 - 

354 8M 17M - 19 27M - 

Jri Orf Jan JU Ort Jaa 

900 2SM54M 07 IB 32 42 
950 9 SOM 44 SOM 81 «8M 

420 » 47M 61 3 ID 1BK 

460 10 23 27M IBM 26M 35M 


3S0 30M 38 46 T3 10 35 

420 15M23M 38 30 34 42 

25 6 7 7M 2 3 3M 

30 3M 4M 5M 4 5 6 

500 51MS9M 99 12M 18 27 

550 23 32 43 38M42M 52 
230 22M 29 34M 14 IBM 22 
300 14 20H25K 2B 31M 33 
260 17M 20 23M 11 17M IB 
280 fl 13 14U 22M 30 31M 
180 1SM2BM 24 13 16 IB 
200 7 12M10M 2BZBM31K 

140 23 »28M 3M SM 6 
160 IBM 14 17 11M13M14M 
130 10 16 18 11 15 16 
140 8 11M 14M 17 21 24*4 

420 2SM 37 45M 1BE 26 30 
480 10M IBM a 4+ ABU 53* 
330 33 38M 41 13H I7M 20*4 
360 ISM 22 2BM28M 32 38M 
110 14 IBM 16 3*4 5 EH 

120 7M MM 13 7M 9H I1M 
220 21M 2S 30 8 13 IBM 

240 12 1514 SOM 20H 25 Z7M 
140 T7M 2BM 24 7M 12J4 14M 
180 BM 12 ISM 19*4 25 27 
1000 70M 92M W7 38 55M EB 
1050 44 88 81M68M 82 95 
ZOQSBM 36 32M 6 til 11 

220 14 18M21M 15 17 21 

220 15 20M 23 T3W 16M IBM 
m 7 TS T9M 27 2SH 32 
600 43 BBM 70 37 50M 58*4 
650 21 M 38 4SM 58 B1M 86M 

to 08 J« to DO JM 

500 45MB8M 86 7Z7M35H 

590 IBM 31 41 M 29*4 58 E3H 
650 SBM 83M 181 14M 40H SO 
700 3 5B77M 358m 76 

4375 um -m 22 - 


Qb» S00 45M68M 86 7 27H 35H 

(*535 ) 550 IBM 31 41M 2BV4 56 G3H 

IfiSCTtf dn 650 BBM 83M 181 14M 40M SO 

(*689 1 700 a 5B77M 35 B3H 76 

(Mbs 4375 24 35M - IDM 22 - 

1*4480) 4600 17 28M - 16M 2B - 

Otto top Hoa Mi Aug Hw ftp 

MHtofCB 180 TIM 19 23 8 14*4 T7 

(~182 ) 200 4 11 14M21M 27 29M 

- Ltazta^tag Mtzriiy frtM. PiwoUw rttaMi are 
baaad on rioatag on* prton. 

Jim 22 Total ewnacu 33JB5 cm ISMS 
Putt 17A17 


FT GOLD MINES INDEX 


toH NkM into (30) 202636 +&7 281336 20M32 1737J2 139 2S87/40 152231 

■ Raotoal Indices 

Altai (IQ 297609 +03 2S0751 2915.79 233986 4A4 344080 19012! 

MffltottH 2574.11 -10 2G2235 282482 166025 2A3 301188 1603.11 

Borfli America (12) 187038 +M 1643^54 «35tSJ 1528^9 082 M&BS 13810 

dxnrtaht, Da Ftarttial Dm Unrftad 198*. 

Flgmata Onckrta mem nunaor of comportta. fiaata US Ware. Bare* Wuere 100000 Sin M2. 
Ptmcmre Ortd HtaM Mtec torn 22: 233A rtwno> -1-3 PtocYMr ago; 1808 1 Patel 

Herat prices «w iMurtfafcta tar Ws aftton. 


Graft A 

IB MS 

WMK 

Mgb let 

129 

2387/40 uaaa 

AM 

344080190123 


301188 1603.18 

002 

ansifis 138100 


RISES AND FALLS YESTERDAY 


Brttati Funds 

Otar Fated Interest- — 

Mineral Extraction 

General Manutecnxere l 

Consumer Goods ..... ... 

Sarvlcea— — . 

Unities 

Hramdato ■ 1 

Investment Dusts — 

Otara — 

Tomb t 

Dm bond on m cori+joirfua latsd on th# London Share Swvtoe. 


TRADITIONAL OPTIONS 

Rrat DeoBnga Jira 13 Last Dedaradons Sept T5 

Last Deaflngo Jm24 For eattianwnt Sect 26 

CeBc Aran Energy, Cfuff Rea, RO, Hsztewood Fds, Hinterpftit, OSH, Trthm 08. 
Puts A CeSK Amatrad, Hanson Wla, Lon Hn & bw, Low (Win). Rhino. 

LONDON RECENT ISSUES: EQUITIES 


Htaoa 

Fetia 

Same 

40 

15 

17 

G 

G 

3 

87 

34 

78 

132 

129 

399 

30 

57 

105 

82 

104 

322 

13 

23 

ID 

101 

88 

184 

98 

57 

316 

31 

620 

84 

577 

40 

1473 


tone Amt 
price petal 

P UP 

ML 

cap 

(Em.) 

1BQ4 

Won Low Stock 

Ctuee 

price 

P 

+/- 

Net 

dv. 

Dv. 

w. 

Ore 

yw 

WE 

net 

§120 

FP. 

69.7 

123 110% Aero. Nambk* 

122 


W3.74 

2-6 

38 

12.1 

161 

FP. 

46/4 

166 

160 Amey 

160 


LN1.08 

06 

S3 

30.1 

255 

FP. 

143/B 

267 

256 Aigont 

262 


- 

- 

- 

— 

100 

FP. 

43J 

108 

100 Automotive Praca 

108 


LN4jO 

OB 

4.7 

350 

100 

F.P. 

31 JJ 

103 

100 Bafta Gad Shn C 

103 


- 

-» 

- 

- 

§150 

FP. 

30/5 

154 

148 Brawfai Drtphta 

148 


L5S 

M 

49 

109 

_ 

FP. 

219.7 

81 

87 CAMAS 

72 

+2 

UN3.75 

0.7 

&5 

34.1 

_ 

F.P. 

10L9 

112 

108 as 

106 


- 

- 

- 

- 

§143 

FP. 

12J3 

170 

143 CBftflB 

168 


W3P 

- 

2J9 

HP 

- 

FP. 

19.3 

38 

34 Ctkne Comma. 

34% 


— 

- 

— 

- 

130 

FP. 

48JB 

143 

133 De toy 

140 


W3.1 

ZB 

2A 

139 

_ 

FP. 

77J 

03 

SO flaring Man 

92 

+% 

- 

- 

- 

- 

- 

FP. 

7.73 

50 

42 Do Warrants 

48 


- 

- 

— 

- 

225 

FP. 

10&3 

233 

226 kitemwdtato 

232 


LN9.9 

2.1 

53 

81 


FP. 

6&2 

06 

W J"9on Fry Euo 

96 

+1 

052 

- 

&£ 

- 

- 

FP. 

- 

77 

65 JF FI Japan WHs 

as 

-1 

- 

- 

— 

- 

5 

FP. 

420 

5% 

6 Kays Food 

S% 


- 

- 

- 

- 

200 

FP. 

163.4 

233 

200 jtondon ClubB 

231 

♦l 

W11S2 

IjB 

BS 

119 

105 

FP. 

45 A 

113 

98 NtghtbelaM 

99 


R3SB 

ZD 

A3 

iai 

120 

FP. 

34/4 

130 125% Nora* 

128 


W4jSB 

2S 

43 

109 

100 

FP. 

582 

109 

IDO PWencrief Res 

101 

♦1 

- 

- 

- 

— 


FP. 

2HL8 

131 

117 Redraw 

118 


WN2.7 

05 

29 

150 


FP. 

AAJB 

92 

89 Scuddar Latin 

89 


— 

- 

- 

- 

- 

FP. 

6.02 

44 

43 Do Wrto 

43 


- 

- 

— 

- 

100 

FP. 

242 

99 

98 sram hy ara c 

99 


- 

- 

- 

- 

§95 

F.P. 

132 

113 

108 sporgo Cons 

111 


LIS 

1£ 

19 

439 


FP. 

582 

100 

98 7R Bra Qorth C 

98 


- 

- 

- 

- 

100 

FP. 

73J 

100 

91% TR Plop few C 

91% 


- 

- 

- 

- 

§108 

FP. 

ASA 

120 

106 UPF 

120 


W3L07 

2.7 

as 

103 


RIGHTS OFFERS 


Issue 

price 

P 

Amcuit 

prat 

up 

Latest 

Rama*. 

dtate 

IBM 

High Low 

Stock 

Closing 

price 

P 

♦of- 

50 

to 

57 

6pm 

5pm 

Briuon 

5%pm 

-% 

2 

to 

23/7 

4pm 

tepm 

fCoip. SenrfoM 

lipm 


180 

to 

20/7 

23pm 

3pm 

Eteon item 

3pm 


240 

M 

28 n 

65pm 

30pm 

Etdos 

espm 

+15 


ra 

17/8 

235pm 

180pm EuD-OBney 

180pm 

-25 

265 

ni 

14/7 

6&pm 

3%pm 

Euotunnel 

10pm 


425 

to 

6/7 

35pm 

5pm 

Evans Hotahaw 

5pm 

-6 

425 

to 

1/8 

60pm 

67pm 

Faber Prett 

B9pm 


105 

to 

20/7 

2pm 

%pm 

Higgs A HM 

%t»n 


205 

ni 

18/7 

28pm 

3pm 

McAIpbreW 

3pm 


100 

to 

25/7 

11pm 

1pm 

NSM 

ipm 

-1 

9 

HI 

3/8 

3*pm 

\pm 

Peramouni 

torn 


5 

to 

21/7 

9pm 

6pm 

Stendaid Plat 

6pm 


250 

to 

27/7 

aspm 

14pm 

Wgrasal 

14pm 


73 

to 

5/8 

3pm 

Wi 

Wstin Crty erf Lon 

J»pm 

-% 


FINANCIAL TIMES EQUITY INDICES 

June 22 June 21 June 20 J*«*e 17 June 16 Vr ago -itigh 1xw» 

Ontenry Share 2311^ 229SJ 2316.1 2373.0 2383.4 2276^ 27133J 22^9 

Out dtv. yield 4&i 437 4J33 4M Alt 4.07 AST 3M 

Earn. 1*1 % tun 5.78 5.B1 SJS2 5.73 5.70 4JQ &82 3 l82 

WE ratio ia<1 18J7 iBJW 1RB4 1&73 26.57 3343 1&34 

P/E ratio rfl 19,18 19.05 19H0 1031 19.40 24.00 3000 19.00 

"Tor 199*. Onsnery Share Irate* rtno# cwnpArttaK N(pi 27118 2X32W, law *BA JM MO 
FT Ordtawy Stan Indw bw Mot 1/705. 

Ordinary Shor9 hourly chmngea 

Open 9:00 1000 11-00 1230 1X30 14JW 15J0 1640 totfi Um 
22913 2306.1 23132 230AS 23043 2306JJ 2305J5 2306.0 2&Uk2 2313 A S2B13 
Jure 22 Juno 21 June 20 June 17 June IS Yr 


SEAQ ba/gpns 

20JM9 21.724 

24MB 

31,307 

24.062 

20487 

Equity turnover ffmff 

- 920.4 

8505 

14SS.1 

13703 

13339 

Equity twgalnsT 

- 23927 

20868 

34,457 

28.742 

33,184 

Shares traded ftnDT 

391 Jl 

3502 

633.7 

513.1 

5348 


t Enctadtag wnureatoi buskins and reran naa tumrar. 



• T 





























































financial times Thursday june 23 1994 


LONDON SHARE SERVICE 


IM__J ujL 
to he —JO W 


IK 

YU 


°e 

Grt 

3 L 7 

HE 

279 

tsr 

— 

— 

4722 

20 

10.1 

128 



1071 

<7 

35.7 

343 

41 

344 

774 

4.1 


30 B 

27 

247 

3437 

48 

_ 

180 

— 

140 

147 

— 

— 

360 

40 

110 

UO 

40 

170 

701 

_ 

_ 

2 M 

35 

110 

50.1 

43 

no 

343 

— 

— 

380 

107 

- 

1014 

47 

2 S 4 

400 

02 

_ 

742 

41 

245 

BOS 

u 

220 

ia 


_ 

330 

_ 

_ 

159 

24 

100 

19.1 

43 

_ 

317 

57 

— 

150 

34 

170 

37.1 

17 

205 

636 

00 

2 S 7 

148 

20 

141 

tu 

— 

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43 M 

— 

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27.1 

44 

— 

nos 

110 

a 

227 

22 

372 

370 B 

40 

ZL 1 

3021 

70 

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— 

114 

170 

50 

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2750 

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430 

44 

107 

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TUB 

22 

247 

371 

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4461 

1.1 

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ISO 


17.1 


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3 X 8 


3.4 

iso 


1.1 

80 

220 

141 

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w 


Swcm 

Grt 

HE 

3087 

43 

104 

7021 

42 


SOU 

2062 

£0 

50 

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3,128 

22 

170 

2039 

40 


2070 

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110 

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60 

ISO 

sss 

55 

142 

44 

1 B 0 

1,175 

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357 

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349 


t 0 M? 


m 


ISM at nd 

m i«w w> w* w 

* 14 % MtW 27 «JJ 

BOB 811 1705 to 18 J 

■eng E28 tsgn 4 a 

«• 1 % Ml - 

A na eshm/M 3.1 

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+A £ 12 % fio% wo S 4 

-SB emit £ 183 % 4040 88 33 / 

+2 C77 am? sum u isj 

+2 210 % ITSt S 842 45 ■ 

12 % HB SSI Z 3 JOS 43 21 . 

m 75 MO 82 ■ 

"a 8 K 1 


IBM MU 
EM tar CwAn 
98% 71 TIM 

11B K 8M 

b a ai 
EU £M% 1JB0 
■MB 10B 2M 
MB 81 
tM gg sa 
IB SB 147 
OW SSttl 
IBB 118 157 
31 22 448 

2 Pa 20 177 

1ST 823 S7L7 

ITS £19 625 

■a? i3% as 

SSB 483 HU 
no 135 I4BLB 
SB SB HI 

as 60 1 M 

017U £92% SJSS 

no S3 W2 

lim, 748 WBB 
88 % W> 10 JB 

SO 513 mo 


£ 2 W 


3 ES 3 C 


«<*£ 
BIS 386 BBS 
465 3S7 281.7 

*38 27% UBS 
125 105 71.0 

1208 STB 1BU 
38% 2S% 3M 

251% 155? 4B8S 

288% £170 MS 
486 450 7.18 


SO IBS 
317 214% 

m 206 

366 246 

11V 132 

46 24 

SB 181 

m os 

no 823 
S3 247 
778 654 

s * 

m 145 

78 SI 
tm an 
m 70 
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281 158 

368 m 

a 2 i% 
98H 281% 
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IBB 131 


■4M 342 

235 166% 

WO 119 
tm 440% 

2M ISO 
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112 70 

74 45 

*OB 132 35.1 20 

si m am 1 2 

Bi 110 2SL0 54 

BUSINESSES 

IBM HU W 
Waft tow CMtti Oft 

* z% a3 - 

97 75% 207 25 

IB 73 -HU 
ISO m mi 5.1 
n B% 186 - 

206 180 278 t7 

44 30 191 U 

124 82 JJJ7 - 

11 8% 481 - 

4 * aS u* - 

220 16B 823 44 

47% 28% 382 - 

18% 41* 3 M - 

68 38 «7 38 

88 65 HU SJJ 

157 ISO 140 &1 

no 13 u u 

JO& $m 167.1 23 

227 IS 480 1.1 

114 73 017 0 25 

818 462 720 28 

M 78 US 17 
60 33 844 22 

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M3 BS 8708 20 

248 no tm 50 
K HS »3 to 
BO 43 BOB 14 
274 ZH 305 27 

31* Z20 146J 24 

lie *2 »5 46 

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12% 6% 108 - 
51% 7% 14.1 

« 77 303 30 

120 79 162.1 47 

108 75 U1 5.1 

68 53 209 - 

235 195 822 43 

708 524 2.122 

72 HS SB7 


£ 


224 

s=d3 IS 

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....... 4 >Q 117 

470 


sfe* 


IBM 

at 

HOB taw Cflpfm 

17 11% 

828 

as in 

3324 

121 05% 

8M4 

813 803 

3800 

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842 

31 138 

449 

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3323 

132 a 

300 

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320 

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nro 

140 90 

mo 

IBM 

MU 

hU> tow 
m 44z 

C**jw 

1401 

nan bts 

880 

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2M 

473 300 

004 

413 330 

420 

305 294 

683 

an 472 

1771 

751 532 

3817 

SB 470 

1748 

UK ISO 

HO 

STB 484 

8288 

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8148 

811 446% 

UM 

744 985 

138% 972 

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2 


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- 2500 00 - 


nfffcofl 


JFPMpptoB 


wNca %3 — — 


IBM at w 

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114 % 483 JOS - 

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380 4 B 34 07 ftS 

114 % 1470 87 - 

400 214 5.7 - 

434 STM 57 70 
57 224 10 1*7 

1050 1,108 lO IDS 
1043 3170 10 102 

84 «24 4.5 ULB 

STB 1023 IB SS 
310 2710 41 ^ 

PRODUCTION _ 7 %j*o»P! 

IBM MU VU 

low casern &*» HE 

4Z 187 - - 

24 % 860 - - 

35 270 - - 

■ 3 T 3 “ : 

656 % - - 

a 1870 20 124 

200 ISO 41 I LI 

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45 - - - 

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» 168.1 
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21 580 

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429 % 

54 B 12 

31 380 


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110 % 10 » 
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2 875 

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57 % - 

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153 840 
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118 320 
129 2 U 

825 mo 
4 % 412 
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49 SSI 

50 297 

10 984 
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1 % 501 

16 572 
54 320 
4 % M 2 

11 120 


4 ""S B. f a 


PAPI 

1 

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Price 

— 

total 

low 

148 U 



»l 

148 



444 

3 K 

257 

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318 

237 

171 

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145 

415 


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296 

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287 

257 

446 

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210 

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120 

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387 



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629 

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114 

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433 

98 


m 

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43 D 

369 

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271 

223 

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129 

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126 

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5$ 

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■ 48 % 

27 

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573 

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SS^S 

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881 

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mm 


m 

101 

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37 

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73 

■ 



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18 % 

224 


284 

tu? 

nan 


133 

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230 

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233 

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— 


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MM 

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31 

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120 

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230 

30 

200 

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123 

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140 

20 

150 

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36 





• *■ * * * 


FINANCIAL TI MES THUR SDAY JUNE 23 1994 


CURRENCIES AND MONEY 


urrg 





MARKETS REPORT 


Dollar above lows 


The dollar bounced off its 
postwar lows yesterday as mar- 
kets hoped comments from US 
Treasury secretary Mr Uoyd 
Bentsen would give an indica- 
tion of central hank intentions, 
writes Motoko Rich. 

As the US Federal Reserve 
chairman Mr Alan Greenspan 
refrained from commenting 
directly on the dollar in his 
testimony to the House budget 
committee, the dollar heLd 
above the Y100 level, dosing in 
London at Y100.695 from 
Y10 1.225. Against the D-Marfc, 
it closed in London at 
DM1.6006 down from DML6009. 

Sterling turned in a gloomy 
performance, shadowing the 
dollar's downward trend 
against the D-Mark and 
responding negatively to the 
publication of the minutes of 
the May 4 meeting between the 
UK chancellor and the Bank of 
England governor. 

■ The dollar was fluctuating 
close to its post-1945 lows, 
around Y 100.70, after Mr Bent- 
sen said he was "concerned by 
recent movements in the 
exchange mar kets ** and that 
the G7 partners were "pre- 
pared to act as appropriate”. 

After over nig ht intervention 
from the Bank of Japan, the 
dollar had retrieved some of its 
Tuesday losses. The markets 
were hesitant to drive the dol- 
lar back down as they watched 
Mr Greenspan’s testimony for 
dues about the Fed’s interven- 
tion plans. The US currency 
was not on the agenda how- 
ever, and the Fed chairman 
kept largely to his script 
The dollar skipped up whan 
Mr Gfreenspan said he and Mr 
Bentsen were "following cur- 
rency movements”. Althoug h 
infl ationary pressures were 
subdued, he warned of a future 
re-emergence of inflation 
Publication of the Fed’s 
beige book, which helps the 
Fed evaluate the state of the 
US economy, gave the dollar a 
boost It showed the US econ- 
omy still expanding but at an 
easier pace. 

Analysts predicted the dol- 
lar’s bounce would not hold, 
however. "I do not think there 
has been any convincing 
strength,” said Mr Brian Hil- 
liard. economist at SGST. “I 
would expect the markets to 
have another go at the dollar 


Dollar 

.. .. •••«... , * 

Against the Yen Qf par $) 

106 - r-M .. - . - 



Mar ia** : jw*e t 
Soutaf.WQofe^''" vis 

■ Bound In M — r Yatfc 

Jn 22 1 amt — -Prw. ctoaa- 

tapot 1.5310 1.5415 

1 0ft 1.5303 1-5407 

3 BtD) 1.5290 1.5395 

IF 1-5232 1.5333 

to test the resolve of the cen- 
tral banks but I do think a half 
per cent rise from the Fed 
would be neither here nor 
there.” 

The US currency’s recent 
slide against the yen has been 
helped by strength in the Japa- 
nese currency. Ms Jane 
Edwards, economist at Lehman 
Brothers, said good export fig- 
ures and worries that a vote of 
nocoxifidence in prime Hams- 
ter Tsutomu Hate's govern- 
ment will set bade trade talks 
between the US and Japan 
have driven the yen up against 
the dollar. 

■ Sterling was near its eight- 
month lows against the 
D-Mark after the miuntes of 
the May 4 meeting between UK 
chancellor Kenneth Clarke and 
Bank of England Governor 
Eddie George revealed a neu- 
tral stance on UK interest rate 
policy. 

Although both Mr Clarke 
and Mr George appeared to 
have abandoned their "bias 
towards easing” rates, the min- 
utes showed that an interest 
rate hike Is not imminent 
The pound was hit by trad- 
ers who were hoping for a 
near-team rise, sterling closed 
in London at DM2.4579 against 
the D-Mark, from DM2.4612. 
Against the dollar, it ended in 
London at SL5356, from SL5374. 

Analysts said that while the 
minutes helped push the 
pound down, it was mainly 
t rading on the dollar’s weak- 


ness. “The pound's perfor- 
mance against the D-Mark is 
just a reflection of the dollar’s 
fall against the D-Mark,” said 
Mr Mark Geddes, economist at 
Midlan d Global Markets. 

The Bank of England pro- 
vided the UK money markets 
with £340m liq uidity at estab- 
lished interest rates and late 
assistance of £90m after fore- 
casting a shortage of £ 600 m. 
Overnight lending rates traded 
between 6 and 4% per cent 

■ As attention was focused on 
the fragile dollar, the D-Mark 
ended little changed against 
most of the European crosses. 
Against the French franc, it 
closed in London at FFr3.422 
from FFr3.418, against the Bel- 
gian franc it ended in London. 
atBFr20-58 from BFT2059 and 
against the lira, it closed in 
London at L983.3 from L987.4. 

The Bundesbank’s five haaia 
point cut in the repo rate to 
5.00 per cent was largely expec- 
ted had little effect OH the 
markets. 

German call money 
remained at five per cent. 
Largely unchanged from Tues- 
day’s levels. 

■ The futures market was 
characterised by volatility as 
rumours of a no-confidence 
vote in Hata's government In 
Japan sparked off selling of 
yen and helped the long aid of 
the markets in bunds, gilts and 
futures contracts. 

"We have seen a dramatic 
change in what has been a 
bearish market,” said Mr Rich- 
ard Philli ps, broker at GNL 
The December Euromark con- 
tract traded 44,000 lots and 
rose to 9187 from 94.78, dis- 
counting the short-term inter- 
est rate at 5 J3 per cent. 

The short term storting con- 
tract for December was trading 
at thin volumes of 19,000 lots. 
"Short-sterling has seen a rea- 
sonable rally very much led by 
the longer aid of the yield and 
the gilts market,” said Mr 
P hillip s. The December con- 
tract dosed at 93.74 from 93.68. 

■onm cun-Mcai 

JOB 22 £ 1 

ltang*7 167.174 - t57.«9 1023500 - 102460 
ho 268100 - 269200 174800 - 175000 
KUWOI 04592 - 0.4582 02985 - 02970 

rand 344030 - 344715 224100 -224450 
Bnota 3015S2 - 302160 195400 - 190900 
UAL 50158 - 50257 18715 - 30735 


POUND SPOT FORWARD ^GA;NS7 THE F 


-0031 787 
-00054 448 
-00194 403 ' 
-00173 837- 
-0001 088 > 
-00033 an- 

-1.204 058 - 
400002 185 
-1136 487 
-00654 448 
-0X063 523 
-002 768 
-1.174 076 - 

-(£424 904 ■ 

-00386 026 
-00063 671 


Are 22 

Ctoahg 

rakHninr 

Ewope 

Austria 

C3ch) 

17X871 

Belgium 

Pft) 


Oerntaric 

pKi) 

9X471 

rrana 

(FM) 

8.1732 

Ranee 

m 

6X113 

Qannany 

(DM) 

22S79 

Qreeca 

fft) 

371X85 

Ireland 

m 

1X175 

Italy 

w 

2417X4 

Luxembourg 

«LFr) 

50X668 

* ■ -a l„,|L 

pn™b™b 

(FJ 

2.7538 

Noraaf 

(NKri 

10X812 

Portugal 

m 

254X19 

Spain 


204X27 

Swaden 

tSKt) 

11X118 

SwfEHriand 

(SR) 

20684 

UK 

« 

• 

Ecu 


1X812 

SORT 

- 

0X34867 


Onunoafc TTw*4 reonttre One yaw SanfcoJ 
Rata HPA Rata *PA Rata Wft Big. Intto 


EE 


03 172777 
-05 506808 
-in aaaea 

•OS 0432 
at 2 j45» 

-04 13187 
-05 2437X8 
-05 608508 
Ol 07845 
08 106881 
-43 257.139 
-02 206.117 
-ZX 11X896 
07 £0841 


02 - 
-05 5OS608 Ol 
-09 9.6827 -04 

-03 04087 ao 

02 Z487B 08 

-05 1X198 -02 
-04 2487X4 -09 
-05 505508 Ol 
-Ol 2.7334 OX 
-03 10X793 OO 
-4.6 - 

-£S 209X52 -04 
-OO 11X678 -IX 
08 2X401 1A 


m 


-Hi 


1-818 1X844 12784 12823 -IX 12783 09 1X649 -OX 


Argentina (Peeo) 1X328 -00016 323 - 332 1X392 1X291 

Brazil (Cl) 3784X4 -I6&47 394 - 003 376000 368000 - - - - - 

Canada (CS) 2.1282 -00066 282 - 301 2.1371 01247 2.1318 -IX 2.1382 -12 01699 -IX 88X 

Mexico (New Peso) 5.1885 40X018 613 - 9T7 52037 5.1782 - - - 

USA 1X388 -0001 0 352 - 360 1X423 1X320 1X349 OX 1X337 OX 1X381 06 83X 


Austrrtta (AS) 

Hang Kong (HKS) 

mdta (Rfa) 

Japan (Y) 

****** IMS) 


-839 00702 2X819 2X84 04 00824 04 2X814 02 

- 721 11X170 11X416 11X801 OX 11X863 04 11X831 -Ol 

- 843 46X740 46X390 - - - - - 

- 706 156.140 154X50 154X53 09 150418 3.1 146X03 04 188X 

-752 09992 3X64S - - - - - - 

-634 05966 05706 2X83 03 2X686 -04 2X831 -04 


Ptfltarfnas [Pwoj 


00847 -00035 634-839 00702 2X619 

11X682 -0X131 643-721 11X170 11X416 

401679 -00584 515 - 849 48X740 400380 
154X28 -0996 549 - 706 156.140 154X50 

3X734 -OD182 718-732 3X992 3X848 

2X837 403006 819 - 834 2X966 05796 

41X613 -00488 434 - 792 400284 408811 


Saudi Arabia 

(SR) 

07502 

-0X068 

575 - 609 

Singapore 

(SS) 

2X474 

-0X029 

464 - 484 

8 Africa (Com) 

(P) 


-0X147 

012-118 

S Africa (At) 

PI 

7XS58 

-0X315 385-730 

South Korea 

(Wool 

1237X4 

-3X3 

601-817 

Tafaai 

(m 

41^4094 

-aisss 

775- 413 

Thdand 

«Bt) 

384301 

-0.1005 

107 - 614 



1S0R arts far Jut 21. Bfctt 
bur are knpM by surer* I 
fan Oolar Spot bum dart) 


aoswa SPOT RATES. Soon «*■ «ra ninfad fay fan F.T. 


a. frmmrd raws are mt draedy quoted la fan araM 
I teas - 100XU. OOar and HMn fa both Ms and 


DOLLAR SPOT FORWARD AGAINST THE 


Closing Change BMAsdar 
mW-paW on day spread 


Ofay's raid 
high low 


On# month Thrae moniha One year -LP Morgan 
Rata Km Rata KPA Rata KPA Max 


Europe 

Austria 

Belgium 

Denmark 


rwy 

Luxembourg 

Netherlands 


<3ch) 

112878 

-0X07 

560 - 600 

112836 112375 

11262 

-as 

1127 

-OX 

112075 

a4 

1032 

(BFk) 

32X420 

-0X17 

240-800 

33X000 32X700 

32X998 

-IX 

nnw 

-IX 

33.127 

-OX 

106X 

P*4 

Sanaa 

-0X053 

795 - 860 

6X017 

62721 

82913 

-1.7 

6X103 

-IX 

8X648 

-12 

104.7 

V *0 

8X225 

-0X05 

177 - Z73 


5X150 

5X257 

-a7 

5X385 

-12 

6X06 

-IX 

76X 

WFA 

8X775 

40X067 

790 - 700 

8l4810 

5.4556 

5.4828 

-1.1 

5L4914 

-IX 

0448 

ax 

106X 

CO) 

1X008 

-0X003 

002-010 

1X042 

1X945 

1.8014 

-ox 

1X02 

-03 

1X962 

OX 

1062 

(Pd 

241X50 

-OX 

700 - 000 

242X00 241X00 

2432 

-07 

244X6 

-XX 

248X5 

-IX 

68X 

« 

1X083 

-0X021 

082- 103 

1X174 

1X046 

1X079 

L.1 

1X062 

1.1 

1X988 

OX 

- 

w 

1574X0 

-8X6 

300 - 600 

1581.00 157X00 

157925 

-4.0 

1589X5 

-32 

1628 

-04 

77X 


inal 

rorugai 

Spain 

Swaden 

Switzerland 

UK 

Ecu 

SORT 


(LFi) 32X420 
(R) 1.7933 

04Ki} 6X557 

pr) 165X60 
(Ptn) 1332SS 
(SKr) 7X918 
(SFi) 1X470 
£0 1X356 


-0017 240 
-00013 928 
-0X049 547 
-057 500 
-012 210 
-00148 880 
-nnnwi 455 , 

-00018 352 


1.1986 400006 963 
1.43788 


600 33X000 328700 
938 1.7975 1.7884 

587 5X748 8X388 

600 168X00 165X80 
300 133X00 132X10 
955 7X249 7X842 

474 1X510 1X435 

360 1X423 1X320 

988 1X036 1.1668 


-IX 33X27 -IX 33.127 -08 

-0.7 1.7951 -04 1JB81 OX 

-OB 8X747 -1.1 6X747 IX 

-12.0 166X25 -9X 173X -5.0 

-3.7 134X65 -04 197X85 -2X 

i -2X 7.7428 -07 7X908 -2X 

' -Ol 1X459 OX 1X351 OX 

I OX 1X337 OX 1.5281 OX 


Argentina (Paso} 0X982 40X001 961-882 0X982 0X980 - - - 

BrazB JCO 2451.77 448.11 178 - 178 2451X1 2451.78 - - - - 

Canada (CSJ 1X866 -0002 863 - 868 1X873 1X852 1X887 -IX 1X942 -02 1X201 -04 

Maodoo (Now Peso) 3X775 40X05 750-800 3X800 3X730 3X785 -04 3X803 -03 3X877 -03 

USA «... 

padBcflMdde EaatMMea 


US 

1 5.1S 
*ta 

1 4JS 

w 

MB 

iS 

}SJ5 
[ A9D 

1 see 

U1 1 

XV 

ire 


1 uo 

Mad 

H 

SSI 

in 

UOO-C4.Wi f 

a. treasure If ita 
UM 400 

fareat » 
3xn 

MOO 

AOS 

is 

MB 

adr 



mi. 


z at Or 

MT Ok 

zn air 

131 Ofa 


Austntta 

(AS) 

1X446 

-aooor 

441 - 450 

1X468 1X398 

1X448 

-OX 

1X461 

-ai 

1X488 

-03 

Hong Kong 

(HKS) 

7.7287 

400005 

282-292 

72292 72275 

7.7282 

at 

72307 

-ai 

7.7449 

-02 

India 

(R») 

31X875 

-0X013 

850-700 

l 

i 

31.4475 

-3.1 

31X925 

-22 

- 

- 

Japan 

M 

100X06 

-0X3 

670 - 720 

101X50 100X20 

1005 

23 

100X4 

2.6 

97.706 

33 

Malaysia 

m 

2X875 

-00075 

870-880 

2X99S 2X840 

2X8 

35 

2X7EG 

L7 

2X075 

-OX 

Newr Zealand 

va* 

1.8825 

*0X022 

816-832 

1X8H 1.6764 

1X843 

-IX 

1X000 

-IX 

1.7106 

-1.7 

PhSppinm 

(Paso) 

27X000 

- 

000 - 000 

272000 26X000 

- 

- 

- 

. 

- 

- 

Saudi Arabia 

(SR) 

3.7505 

. 

503-508 

32506 32503 

3.7511 

-02 

32531 

-ax 

3.7868 

-04 

Sngam 

(S3) 

1X207 

- 

284 - 289 

1X298 1X267 

1X278 

OX 

1X276 

ox 

1X297 

-ai 

S Africa (Com) 

(R) 

3X810 

-0X083 

485 - 535 

3X665 3X086 

3X885 

-6.1 

3X046 

-4X 

3.7715 

-3X 

S Africa (Hn.) 

(R) 

4.7250 

-0X15 

150 -350 

4.7450 4X950 

<7587 

-ex 

4X175 

-7X 

- 

- 

South Korea 

(Mfard 

805X00 

-1X6 700-100 

807200 805200 

808 X 

-4X 

812.4 

-32 

6302 

-3.1 

Taiwan 

CTS) 

26X663 

-0X715 525-800 

27.0280 28X525 

20X683 

-09 

27.0263 

-OX 

- 

- 



CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

Jun 22 Bfir DKr 


Norway 

Portugal 



BFr 

DKr 

FFr 

DM 

K 

L 

H 

NKr 

Ea 

Pta 

SKr 

SRr 

C 

C$ 

s 

Y 

Ecu 

(BFr) 

100 

1SX7 

16X3 

4X80 

2311 

4779 

5446 

21.12 

5023 

4045 

23X5 

4389 

1X77 

4209 

3337 

3007 

2X33 

(DKr) 

5043 

10 

0719 

2X48 

1354 

2505 


1137 

2605 

212.1 

1224 

2.144 

1337 

2207 

1X02 

1803 

1X28 

(Fft) 

6014 

11X7 

10 

2X22 

1209 

2874 

3274 

12.70 

3022 

2433 

1434 

2459 

1.189 

2X31 

1328 

183X 

1X23 

(DM) 

20X8 

3jPS 

3422 

1 

0414 

8832 

1.120 

4X45 

1034 

8324 

4X05 

0X41 

0407 

0X86 

0325 

82X0 

0X21 

(K) 

4073 

8488 

8270 

2417 

1 

2377 

2708 

1050 

2 sao 

2012 

11X1 

2333 

H.ggg 

2383 

1X10 

1523 

1260 

w 

2393 

0X99 

0X48 

0102 

0342 

100 

am 

0442 

1052 

8485 

0489 

0388 

0041 

0088 

0064 

6X96 

0053 

(R) 

18X7 

3X03 

3354 

0833 

0X09 

677.8 

1 

3X78 

92X0 

7429 

4288 

0751 

0X83 

0773 

0X58 

5014 

0488 

(NKr) 

47X8 

0 rrw 

7X76 

2X01 

0-862 

pong 

2X78 

10 

2383 

1913 

1138 

1338 

0X38 

1393 

1438 

1443 

1.199 

m 

19X0 

3.795 

3X09 

0X67 

0400 

960lB 

1383 

4201 

10 a 

8049 

4848 

0X14 

0393 

0838 

0804 

80X2 

0504 

(PtB) 

24.72 

4.715 

A111 

1201 

0497 

1181 

1X48 

5220 

1242 

Ilk). 

5.772 

1311 

0489 

1341 

0751 

75X8 

0X28 

(&Kr) 

42X3 

B.1BB 

7.122 

2381 

0X61 

2047 

2X32 

9.0*3 

2152 

1732 

10 

1.781 

0847 

1303 

1X01 

1309 

1385 

(SR) 

2448 

4X86 

4367 

1.189 

0492 

1169 

1X32 

5.164 

1223 

98X4 

5.711 

1 

0484 

1329 

0743 

74J8 

0818 

« 

80X8 

9X47 

8411 

2468 

1317 

2417 

2754 

iaas 

2542 

2048 

1131 

2368 

1 

2.129 

1X38 

154X 

1281 

CCS) 

23.78 

4X31 

3251 

1.165 

0478 

1135 

1294 

5.018 

1194 

9010 

6X47 

0971 

0470 

1 

0721 

7232 

0602 

W 

32X3 

0281 

5478 

1.600 

0682 

1574 

1.793 

8X53 

1653 

1332 

7X68 

1X48 

0X51 

1X86 

1 

1007 

0X34 

(V) 

3272 

8240 

5440 

19X0 

0578 

15834 

17X1 

6938 

1844 

1323 

78X9 

13X8 

8468 

13.77 

9X35 

1000 

6288 


3048 

7X31 

8X88 

1X18 

0794 

1887 

2.150 

8X37 

1904 

159.7 

9219 

1X14 

0781 

1.682 

1.199 

1207 

1 


Ihafend (91} 25X300 -0X4 200 - 400 25X600 25X200 25.1025 -05 25X3 -3X 2SJ1 -27 

130B me far .fan 2LBfclfetfar spreads In are DoauBpor Ufa show warfare fared— tfaa tn rtpfaree. P oi — d rarea — n ot dksctfr quoted to fare mwim 

twnre tepdal fay curare kw e re w r res s UK. Men d 4 ECU are quoted In US asrency.JLP.Mre^rnomcreeireoasJur 21. n ew i m age 1900-100 


EMS EUROPEAN CURRENCY UVHT RATES 

Jun 22 Ecu con. Rata Change KW-ftom Kapraad Oh. 

rate* agairatEcu aufay can, rata tnadafa M. 

Nettre rta nda 2.1902 2.15566 -0X0115 -1X7 5-78 

Ireland 0X08828 0795948 40X0172 -1X7 5X3 . 11 

Belgium 40X123 38X013 -0X085 -1X2 5X8 11 

Oarmanjr 1X4864 1X2345 -0X0086 -1X4 5.19 

Franca 6X3883 8X7770 40X0414 059 3.16 -S 

Datanarit 7.0679 7X4983 -0X0197 1X2 2X3 -10 

Portugal 182X54 199X97 -0.477 3X4 ’ 0X2-22 

Spain 154X50 180X75 40174 378 0X0 -28 

NON BN MEMB0S 

Greece 264X13 290632 -0X13 9X7 -5X5 

Italy 1793.19 189011 -4X4 5X7 -1.70 

UK P-78S748 0782185 40001683 -0X8 4X8 








tr - • 


35 




Yan pre ijOOOt DmWi Kroner. Fraud) I 


1 nano. Eacudo, Um 1 


t (ROM PM 125X00 par DM 
Latest Change High 

9.8242 00039 0X270 


Low Est vol Open InL 
47X67 82X96 

732 2X14 


07455 07433 -0.0041 07457 07404 21X82 48X16 Sep 

07472 07452 -00035 07472 07433 232 1,120 Doc 

Mar 


I RTTWRteS (ttftq YenT2X par Yen 100 

Lataat Change Hgh Low Est, vd Open H. 

0X987 -00077 1X055 09938 51X31 89X84 

1X060 -0X074 1X068 1X025 1,149 2X65 


awmBMOM^ceaxcoperc 

1X402 1X310 -0X120 1X428 1X308 10411 ' 39X21 

1X400 1X312 -0X098 1X400 1X290 268 513 

1X300 - - 1X300 1 17 


far a aram ey. end fare nwdn—n pmWWd irau e re e gu rt reto ito n ai Bw curancyfa nrefaetme tarn to 
Q7/Ma| Stafang tad Man Ifaa w pande fl fawn HW4. Anfaua wwn t udud — J Nr fato Rwadd Item. 
■ WLAWaNflAaS as Q»mOW»E31XSO (cants pw pound) 


CALLS - 

Arej 

®te» 

JU 

— PUTS — 
Aug 

Sap 

821 

8X3 

- 

QOQ 

osa 

831 

6X2 

034 

0X2 

072 

432 

4X1 

0X0 

031 

1X3 

246 

330 

098 

1X8 

228 

1X2 

138 

2X5 

2X8 

3X0 

0X3 

139 

428 

4.78 

628 


r.mira/l 


Margined Foreign Exchange 
Trading 

Fast Competitive Quotes 24 Horns 
TO: 071-815 0400 or Fas 071-329 3919 


Pradeia *** <rdL Cdb 82.10* Puta 2M85 . Pra». day 1 )* apan tat. Ofafai 4KZX Pda 403,783 


iirrrTTTT 


-TBADBBS«COKPORATE TREASURERS 

SATQUOTE™ - Your sin^e service for real tnoe quotes. 
Futures^ * Options * Stocks * Fores * News * Via Satellite 

LONDON +71 329 3377 

LONDON +71 329 3377 IWWTOKX +212 26*4484 IBiraiTT J 4141 IM9T1 





II UK INTEREST RATES 


MONTH — WMKHmWB QUFFg* 1 DM1 m points el 100% 


weak ago 


weak ago 
Ireland 
waek ago 

Italy 

weak ago 


wreak ago 


wreak ago 
US 

wreak ago 


wreak ago 2j 

■ 8 LIBOR FT London 
kitarha nk Ffadng 
wreak ago 
USDatar COa 
weak ago - 

SDR Linked Da 
wreak ago 


Md raae an dnan lor faa danastic 

BIRO CURRENCY IN 

22 Shari 7 1 


5ft 

5ft 

6 ft 

5ft 

5% 

5ft 

6 % 

5ft 

5% 

5» 

5% 

5ft 

5X3 

5.00 

5.00 

5 03 

530 

530 

Si 

Sft 

5ft 

54 

5ft 

5ft 

8 U 

8 % 

aft 

814 

m 

8 ft 

530 

532 

539 

530 

532 

635 

414 

4% 

4ft 

4K 

4ft, 

4ft 

414 

4% 

4ft 

4)4 

4% 

4B 

2 ft 

2 ft 

3ft 

2 ft 

2 ft 

2 ft 

4ft 

4& 

5 

4ft 

4ft 

4ft 

420 

444 

4.77 

420 

4X4 

432 

3)4 

3ft 

3W 

3M 

3ft 

3% 

di; S3; 3 


• mtiKflJ 

quoted u the mm 

Mfayfaur 


614 7.40 

5fl 7 j40 
6% 6X0 

SB 5X0 
5.18 6X0 


LONDON MONEY RATES 

Jw 22 Over- 7 days One Three 

night notice month months 



4X0 

4X0 

- 8.75 

- 8.75 


638 

630 

4X0 

635 


Open 

Sell price 

Change 

High 

Low 

8ft 

- 

- 

825 

Sap ' 

9127 

9144 

4018 

91X8 

9127 

8ft 

— 


625 

Dec 

9130 

91.14 

4OI8 

9125 

90X9 

9ft 

- 

730 

730 

Mar 

90X3 

90.70 

4023 

9078 

90X3 

Si 

- 

730 

730 

Jun 

9031 

ga 18 

4021 

9018 

9001 


520 

4ft 8.025 
6X25 
54 
5% 

24 

214 


94X0 94.78 43949 201671 

94X6 94.46 29961 194518 

94X3 94X5 11714 103939 

PUT1W8 (LgTE) LI 000m points ol 100% 
High Low Est vol Open InL 
91X8 91X7 10372 45183 

91X5 90X9 4225 47699 

90-78 90X3 2364 12822 

90.18 90X1 1221 9083 

wmJWB(U=FqSRr1m ports of 100% 


HMrtMnk Staftng 6- 4\ 5i-4H 8 - ^ ^ ■*■?£ 

Skdng CDs - - 5-4fl 5&-5A 0-5JJ 

Treaauy BBs - - 4H - 4^t ^ - 4g - 

*Tn. - - 4%-4iJ 5-4fl. tft-SA 

Local authority daps. 5^» - 6*8 5-4fi 5% - 5i S^-Si 6i-5 

Discount Markot deps 54 - 4l« - 4JJ .... 

UK dsartig bank bssa Mndkig rata 54 par cant tom Fflhraary 8, 1994 

Up to 1 1-3 3-6 69 9-12 

monfai month months months month 

Carts OF Tax dap. (EIOOOOO) 14 4 A 84 34 

Cara of Hat fate. «xfar£lMW»le I4pa npofata .HUxtuui fcroarii \pc. 

dhsowa -MTWpe. B30D fliod rata Sfla. Export Reance. Mdca w dw May 31. 

1994. toead MM far pariod JW) 3M0M la Jul 29. 1B94Sdiareaa a 8 ■ 847p« FWarenca nu> k 

pvtodAprSa W»f lal^ai. 1994. SdianM IV S V &222pe. Rmoea Houaa Baaa Ms Shpo tw 


44 -4S 5-4fl. 54-6A • - 

8-413 S4-5i 54 -6& 6&-5B 


Satt price 

Change 

"Bh 

Low 

Eat. vd 

95X2 

4010 

9635 

95X6 

5262 

95X7 

4011 

9540 

95X0 

1903 

9536 

4013 

9637 

9439 

889 

94X7 

4012 

94X7 

94X2 

1ST 


Eculm porta ol 100% 


Open 

Sep 93X5 

Deo 93X4 

Mar 8130 

•km 92X4 

* UFfE Urn faadad < 


Sait price 


Change 

High 

Low 

EaL vol 

Open InL 

4006 

9430 

93X5 

1348 

12175 

4009 

83.71 

3334 

835 

8098 

4011 

9340 

93X0 

392 

3691 

4000 

9330 

9234 

140 

226 


IM« fay law rrtaranea bwfaa at 11am each waddna 
^ Wrtroirtdra. 

». US t COS and SOR LMrad 0+pMb P4- 

!T RATES 

One Three She One 


I MONTH BraOPOiJLAfl flMfcQ Sim potKg at 100% 


Sa^an Franc 
Oanfati Krone 
D-Mark 
Dutch Quldar 
Ranch Frpac 
Portuguese Ess. 


SwteFrene 
Can. Oofar 
US Data 
mean Lka 
Yen 

ArtrtSSing 
Start Man an 


54-6 54 

54 -5 54 

SA-43 Si 
5-413 fi- 

SA-54 54 

154 ■ 154 15 

74-74 74 
45-44 5- 

34-!ft 3,” 

Sj»-64 5% 
44 - 44 44 

9 - 7h 84 
24 - 2 i 24 
34-34 34 
weal far fait USD. 


1-5 5A-5A 

■54 6-54 

-4fl 5-44 
-4fl fiA-5 
-54 5&-5,i 
-14 16 - 14 

-74 711-74 

■44 5-43 

-3H 4-34 

-54 6A-53 

-4ft 4ft - 4ft 

- 74 84 - 64 

•2ft 24 - 2 ft 
-34 4ft - 4ft 
dfar aid Ym, ofawn: 


5ft - 5ft S3 - 5ft 

64 - 54 6*«-6 

5,-44 5ft - 43 
5ft- 5 Sft‘5ft 


54-84 54-54 
16-13 14-12 

® - 73 64 - aft 

6ft-6ft 54-Sft 

44 - «4 44-44 
64-64 74-74 

4ft - 4ft 5 - 44 
84 - 34 3ft - 8ft 

6 ft - 24 2 ft - 24 

44-44 5ft - fift 

two days* notice. 


Open 

Infamy 

Change 

Hgh 

Low 

EaL vd 

Open InL 

94X2 

04X4 

4002 

94X5 

94X1 

129364 

443326 

9437 

04.11 

4033 

94.11 

9437 

273X08 

415307 

93X0 

93X4 

4033 

S3X5 

93X0 

134329 

291,148 


m THHM MONTH imtQ PimKB f-JjTQ 2800,000 pofeita of 100% 
Open Sett price Change K3gh Lew Eat vd 
Sap 94X0 94X4 -*004 94X7 94X9 10372 

Dec 93.70 ‘ 9374 +0.06 93.79 93X6 19197 

My 82X5 93X1 4006 93X8 92X3 8599 

jun 82.30 S2XS +a06 92X7 9230 2038 

Tladad oa MPT. M Open Mean ios- ae tr pmfoiB day. 


‘ OTHLHW OWIWW {UFFg £500X00 pokita Of 1QW 



i m |il IT 


as dovkr Street, London wix skb 
TH cOTLSStllSS FAX: 971 496 0022 


FOR TRADERS ON THE MOVE 

Watch tbe eoartceta move wrtth the screen in your pocket that receives 
Cunremy. fawflore and News updates 24 bom a day. Ftar your 7 day 

tree Mal, ca8 Futures FagcrUd on 071-395 9400 now. 9 

FUTURES PAGER 



l AX-I Rf-I- S I>1- C I I AI K >\ 

inhurfs 


8ft - 5ft 

04-6 

5ft -5ft 
54 -5ft 
64-6 
13-12 
8ft * 84 

eft -aft 

44-44 
aft - 7a 
64-54 
94-9 
24 - 2ft 
6H-53 


N THrteM IWItTH PWQH WHIBBI [MATW Paris Intnrhank nffanarl mtn 


■ »3 TBRA9U«Y8ai. WTUBM gMi^ 31m par 100% 

98X1 98X1 - 95X2 98X1 783 3X59 

*>P 9M8 95X8 +0X1 95X9 95X5 4710 24X22 

Dm 94.67 84X8 +a03 94X6 94X7 472 8*443 

f» 4m unarm tgs~ aa far pmriow <*v 

■ 6U*KMMBKOPTTQiW (LBTQ Dari m pokria 0(1 00% 

Strike ■ 1 Mita PUTS -—■■■ 

Price Jul Aug Sep Dae Jul Aug Sap Dae 

6600 0.12 ais ai9 ais 0X3 0-06 aio 0X1 

9525 aoz 0X4 aOB aiO ai8 020 0X4 046 

6660 0X10X20X30X6042043 0.44 0X0 

^ ”j- “"L Of* 8076 Bute ayil. Bredeue d *ya epan fat. Cdfa 20*700 Pua 1371B7 


SHC* 

Price 

Sep 

- CALLS ~ 
Dec 

Mar 

Sap 

— PUTS - 

Dac 

Mar 

9428 

021 

016 

009 

012 

068 

1X3 

9400 

039 

039 

035 

025 

0X6 

1X4 

0475 

002 

035 

003 

043 

136 

1.77 


, Odto 1GD3 Pufa 6210. Rwrleua dW« RH" M, CMa I829U Pula 1G8214 


r "-- v '' >' • •-<? G -:cc. jr-o'co/ •.o.vj; r ,5T 


FOREXIA FAX $ £ E L v 

CHARre. FOR E CASTSAND„ E ^i“|^^ 
Tel: +44 81 948 S316 . - v . n . A ,ONS 


RASE LENDING RATES 


Sett price 

Change 

Hgh 

Lore 

Est vd 

Open int 

SMta 

9432 

4009 

94X3 

94X1 

23.118 

65302 

Price 


4012 

9399 

9334 

18.123 

39,473 



4018 

MBS 

93X4 

17318 

36.128 



4020 

93X4 

9323 

7,411 

25,083 

9000 


■ T7BM MO UTH KUHOOQLIAB &JFFE)- Sim porta at iqq% 

Sett price Change Hgh Low E*. vol Open M. 

Dec flaw **** 9483 100 2409 

Mw 9410 ■ 0 - 01 64,10 94.10 150 1856 

T® 93.81 -0.03 „ 

* fcB1 83J4 6^ -9X2 93X4 93X4 SO 304 


«, VOL UHL ch 10 PUB 0. PreriM dor’s opart fau Ufa 37S Puts 1Q2& 


AJamlCompdrty 6X6 

Afcd ThNt Barit — -5XS 

AASank SXS 

•HorayAnstachar 8X5 

Bank of Banda.. 5x5 

Brew Obeo Iftacayau 62S 

BankofCyprmr S25 

Bmkof kafand 525 

Bankoftncfa 528 

Sank of Scotland ...™ 525 

Ban%sBank &2B 

Bril Bk of MU East £26 

•Brnn SNptoy A Oo LU S2S 
CLBnkNedadand...' 626 

GtaeftNA „..S2S 

QFfaadglB Bank 525 

The Qocpemfera Bonk. SXS 

Ooiito 8 Co SXS 

GredkLyomia sxs 
Cypne Popular Bar* _52S 


Duncan Laarle — 525 

ExaMr Bank Umtaod— 625 
Rnandal&GanBank.. 6 
MUHrt Fleming ft Co. 5X8 

Qhtenk „52S 

•ftimau Mahon 529 

HaW Bank A3 Zurich. 5XS 

ttHamfao a Bari t 525 

HarteUe&GenfakQk.52s 

•Hi Samuel 625 

C. Ham 8 Co 5XS 


•UwpddJoMfrti&SaneSXS 

UOyd# Berts 526 

MeghrafBredtUd SXS 

MkbndBartt SXS 

* Mount BarMng 6 

•Haa Brahaa . . 325 


"BcwHugha Guarantee 
CotpomaonLMKdleno 
longer arthorfaadas 
a banking Mfajfcn. 0 
Royal Bk ol Sodtand _ &2S 
•Smtei 8 VWnsn Sacs . 525 

TS8 — 525 

•LWtedBkOfHMdK— 525 
Urtty That Bank Ho _ 825 

VfestemThtS 525 

WNtemayLaMaw 525 

Ya kareaBra * 52s 

• Mambara of Brittaft 
Mer chant Banking 8 
Securtttes Houses 

MsooMon 

* biateiMafaaBon 


■s^rt-waa.i^ jat.aS^lfaataaaaa 


;j CuTOn cy FOX ■ FREE 2 week t," 

■xo' ' •' - Anno Whitby 

X w- Ttl 0?|-734 7i?d 

- -- rjt£ spe-ca i-*!s ever 2Q voari Fa* 071-439 <4^ 



44 HOUR 

rORfcIC.N EXCHANGE 

! ojutoii 

Po.it hit; Oosk 


L’trrtf., 


0tWM **VMWrLC 

POMlrmjy 

^«*H8C2»9DO 

ToL 071855^0 


r , „ v 9 62 87Q7 aa 


























$? fc 


AJNCIAl^TOv^Es^HURSDA^JXJNE 23 1994 


WORLD STOCK MARKETS 


EUROPE 

«JSTJwyifli22/Sch) 


fc£ 'Ml****'*™ 


ilknS/R&l 


*6 2,200 
-a 1^70 

▼5 B34 
*13 4JSQ 
*2! 1.713 
-4 1.3W 
-ei i jmi 

-? «B 
*7 791 

*2 BOO 
*5 404a 


1,730 £7 
995 OB 
638 1j» 

£235 ELS 
1.180 1.4 
1050 04 
845 1.7 
BOS £2 
403 22 
171 ZB 
338 1.7 
548 £8 
430 1J 
3.411 1.1 


Baat * wuwa «0IJ8a(J^2z/^ 


Mm am 7.560 

£3*0 4.400 

B8L 4JJ20 

MnU 18230 

BGnun 24.000 
BK)H0 37,9/5 

2.180 

23 sm 
onckn 12,500 


mm s.xao 

BMC 3.530 
£530 

s a 

2ES KB 

ParUia 19XW0 
FHVn 10.125 
2820 

il§ 
^ as 

Soft® 1XJ2S 

££ JS 3 

Tiaa 8.7io 
■“* ■ 23J7S 


"ISiSSS-ZS? 17 

-TOBJ BW Tjau 12 
-40 5^04^100 _ 
-80 4J7D 1B80 1 J) 
-TOO 1M9D 162S0 28 

__ 28250 22248 2 £ 
58 

-1025* 2.1 B0 _ 
+3753^20350 1.7 
+12318875 11823 2_0 
+102200 2200 38 
£200 1E10 4.1 
— 202 154 7.1 

♦10 8800 8,100 1J 
+8 1350 1.330 10 
-130§iOT 5.450 78 

- 7 £!$ 82 £S“ 

-10 14100 1,420 15 

-SaMSS 

— SJ50 4.180 2 J 

SggHBH 

rSSg|S| 3 J| 

+25 UL7JB 8088 ZB 

■ J 7 3 HB*'aB 

->581200 4840 4L4 
-70 GJBg 4080 4.1 
♦S 2038 1130 58 
—25 2838 2,193 5.1 
+123 15,7001 Jiao 4 A 
-20 1.07S 1.482 8.9 
+25 17,330 14850 4.7 
+11011860 0^00 4.7 
+50 26.160 22,200 28 
+25 2JQ0 2.440 4.6 


JrUs 

^AW 

830 +814)05 BIB — 

jg JiTiMS’i 

J§ 

mm 

a Jill 

MSB 

37^-880 BS^SSS 

5 s?aS£g 


ABNAnr 5780 +10Q7£7O 56 58 

AEGON 3280 +1.401105000* 4.1 _ 

AM# 4SjB0 +1 53.4044.40 _ „ 

MOON 187.10 +40 CEB 15786 38 — 
BobVfa 3UD +1.70 4780 3880 38 - 
3880 +80 SIM 28 _ 
5580+180 7780^00 _ - 

LED +180 14811680 18 - 

E:JSi 35 S 2 ?S = 



— 1.640 1.125 _ 

+ 100110 * 011 . 3 ® ba 
+105 7,2706.150 0.7 
+40 £Mffl 1JBD0 28 
+1014E5 710 1 A 
+3 227 148 18 
+2 688 707 — 

+12 870 883 

+15 1850 1/400 2.7 
+10 1.100 846 3L0 
+16 531 3S2 4.1 
+10 269 177 4.1 
+12 SIB 590 _. 

+9 770 G26 

*14 80S 735 

+33 1803 1.065 £9 
+14 832 010 28 
+18 1,6161820 18 


MO 

♦6 #97 733 



-4 749 BOB 


898 

707 

+8 930 848 _ 
-6 754 551 _. 

- 

488 

-4 541 425 10 


480 

-8 623 318 


1000 

— 1X250 1.010 


588 

-2 63Q 406 


£750 

-10 £810 apart 


ft 930 

-30 7JB0SJ0P 

— 


Ml 1000 +10 1890 1.140 - _ 

Snaau 1890 — 1.3801,120 ~ — 

8MUI 588 —17 838 60S 04) — 

EHhUi 572 -3 BID 411 — _ 

-fl 3S6 256 _ _ 

300 — — 

461 _ — 

ShwSHS 1.420 -0018801.110 — — 


H 3 -S 8 lg 


PACIFIC 

JAPAI Ulin 22/Yan] 


3.1 
40 18 
10O7&5O 18 
131 11470 11 
69 87 58 

11820 2.7 


4» ia Sfl ~ Horenl 65.40 +50 11050 6400 58 — 

H ~ FEUH1 19180 +1X021X4018620 48 — 

wg ga ~ Statu S2JB3 +80 5080 4080 18 — 

ZM 33 Z OnUp 18280 +80 236 181.49 12 — 

MTJ0 4A ««_ 18U0 +3 2008018170 2.1 — 


r{J«i 22/Dm.) 


BMMMC(Jun22/Kr) 

730 BBS 28 
— . -4 28i d 5 28 

CsrM 270 — 333 257 1.1 

Oman 5.700 7000 5.700 £LB 

OTGlM 1214)00 -3800 UU» TW5» 14 
Mu 88# +7 1.140 882 18 

Dmdsk 319 +155 42730&BB 38 
BUM 174 +4 26326 162 62 

FLSB 49783 -287 BIS 397 24 
■M 63389 -684 043 446 22 
(SS6 207 -3 Z/B 204 18 

J**AR 340 -5 42E 332 24 

LitanS 1240 +210 1050 1,140 08 
MCMS 28985 -585 386 262 38 

NMRB 639 +84 78391 

fmm 53886 -686 737 — , ** 
SoptaA 353 *130 BIS BX 0 7 
SDftaS 66S +8 675 473 27 

SuprtB 408*r -3 495 321 28 

won 314 +2 339.49 300 — 

TopOan BED -10 1.372 DIB 18 
UnunA 223 +4 267 8)786 48 


FBftMDgui22/MIQ) 


-2 105 
-80 46i0 : 

-4 233 
+.10 17.40 
-80 SB 
+10 705 
+1 132 
-1 2*7 
— ZH> 
_ 250 
-7 290 


+9 4«5 
-80 102 
-2 104 
-80 102 
+.70 1201 
+5 225 
-1.10 31 

+80 2080 


RMHCE(Jun22/Fre.) 


«F 43080 +480 879 423 ID _ 
AMT 643 +9 7EB 595 17 

Atllq 749 +3 BOB 721 28 

MOM STB +8 913 956 38 
An 273.70*1 +3.70 330 217155 
BTC 1.166 -33 1/4391.146 28 

BSN 794 -1 1J02 784 28 

BNP 24180 +8028860 238 18 
Bncair 530 +30 683 488 28 

Bonom 28U -151750 2881 3.1 
Swum 677 +2 787 662 28 

COP 1,137 +57 1.480 1,097 48 
Ctm*+ 873 +S 1.156 843 *A 
CBpGum 17160 — 50 22BJS0 16BBD 6.1 
MMMlEIJOd -80202018830 _ 
MM 1.770 -29 2.105 1.711 38 
Cnhia 138JWO +2 20913260 9 j4 

Cnqn 1821 +11 1870 1883 U 

CM#M 385 +7 4S5 348 23 

CCF 21180 +2J0 300S0 20480 28 
QfbnF 986 -14 1865 972 53 

Olya 520 +£ 956 600 28 

CdocF 39280*1 -110 486 365 _. 

CnM 488 -2 7S7 402121 

Oanwl 5.260 „ 9,160 123) 0.7 

OoOrf 648 - «SO W4 - 

mus 41* -1 430 Mrs 14 

EBP BOB -14 960 769 28 

EmnOft 2^50 +60 2894 2.181 OJ 

to 732 -16 840 830 28 

EHflqu 39880+12JO 43696650 48 
QiSSl 327-1750 392 327 _ 

QISH 015*1 +13 1.1Z7 784 4.4 

EiBSat 860 —20 1,088 850 _ 

ErBOa 740 -10 B85 740 _ 

Eour 645 +5 830 835 20 

EM 1450 — 1487 2.760 IS 

EtaaO* 1870 +46 2589 1.755 17 

EiAtSCQ 923 -7 jm 584 16 

EortSo 1750 +j»S 18.70 1250 38 
AM 136.10 +110 1BZ 132 98 

RwKLy 840 +20 SOB 783 2L8 

FrmBel 4.440 _ B.02D 45« 12 

GTMEiS 394 _ 579 385 28 

Eg!La3 2190 — 2754 2020 08 

Oulu* 639*1 -3 1.02C 63B 08 

8DI1M 556 +6 646 535 22 

f*Si 42SJW +7804^80 3BB 2.B 

tostSal 5Z8 -7 BBO «6U 

Wr*nfr GOOD —.25 J9948 

Mvnbnq GBO +51/078 ^ 8-° 

WNH 79 +1 110 72 38 

men 484 +280 87048110 78 
Mfc 625 -10 709 MOM 

IWIH g3 +32 954 727 28 

LafCop 386 +9 401 JO 377 14 


1BBJ0 153 08 

+B B35 S44 12 

+201,4461.13) 1.1 
2285 -17 2811 2275 08 

+2 870 37B 20 
1809 +1730 1.181 887 _ 

900 -21X126 787 08 

3038D +0.70 K3JO Z7B 18 
M»»4fc 4flE-H3 -JO SID 436 1JB 
g^QP * 3S7W +0 485 348 26 
ova 345.30 +Z804MJO 338 3.2 
406 +8053150 3B7 3.8 

BMW» 764 +2 820 639 18 

Bays rtf 438 _ 675 428 ?n 

MM -80 *90 ms li 
BMCr 26850 >_34UO 238 1 8 

«* -1 828 384 U 

---w 770 -230 051 750 l£ 

CotKm 1295 +15 1830 1.140 OB 

MW 030 +W1830 840 12 

Qnma* 306 .SO *SZI 398 303 38 
Qnb* 23350*1 -2 280 226 1 J 

WJ8 475 -3 900 480 04 

DUmV 71*50 +680 504 8» 1.1 

DIMM 482 +G 688 443 15 

DiBati 228 +(L50 JBB50 2KX50 

DKtlBk BS650 — 7BB750Q0550 14 

DWWm 159 -350 188 132 25 

Douob 528 -0 807 626 23 

D«0wH 280 _ 310 280 18 

DnOk 34750 —250 4668) 348 38 
648*1 +10 61 B 405 12 

270 -7 307 2B0 18 

776 690 28 
■— •» -10 246 190 14 

HtfdZm 1JSB -26 1880 1,160 18 
«1 W> BBT +6 am 682 1.7 
l+ttz 358 _ 440 355 25 

HkOW 1/010*1 +51282 1800 13 

HU* 326 +4503fija2M5) 11 
+61808 830 1 5 
+1 293 214 25 
-2 334 27+18 
+2 433 393 13 
-5 109 132 — 
-2 648 515 23 
+7 556 451 2.7 
_1BlJDn310 _ 
JODCMV 133 -1 ITS) 70278 35 

Utuwr 650 _ BOO 660 1 8 

L*W« 735 -S 850 £05 18 

Unto 875 +19 960 B3D 15 

LfcmH 348 -2 410 348 13 

Lutom 178 +4802060 163 — 

lx*8*T 172 +50 2)6 156 15 

"" +050 470 37B II 
+850 887 295 25 
+4 48850 387 15 

770 -5 822 756 _ 

MtofS 20050 -50 286 17650 38 
tttoflltt 2500 +40 1517 2580 M 

PWA 2Z7 +2 282 210 _ 

FWtonm 604 -50 530 604 38 

” 700 +4 888 698 08 

432 +150 406 410 13 
40170 +150 62SJD 300 38 
Pf 331.50 +140 424 329 &5 
1822 +1215201840 08 

_ -7 372 296 13 

222 -350 2B7 222 3.6 
-a 313 262 13 
-auafl 960 15 
_ 438 350 18 
+5 79850 633 28 
+8 £«B5 BIO 15 
_____ 520 -5 650 480 15 

TlfM 27950 +250 30623850 11 

307 +150 380 304 13 

40450 +070 SS2 459 17 
37050 -550 397 317 25 
300 +2 415 3GB 25 

447 +4 611-50 438 28 

405 +150 664 418 14 

387 +750 443 338 05 

KMH> 809*1 +30 979 780 14 
271) 220 15 


r(Jun22/KnxM) 


74 _ 112 72 4.7 — 

S5D +350 180 130 17 — 
1180 +J» 10901150 _ _ 

163 -150 189 12B 15 _ 
06 +450 114 77 _ _ 

10* +4 149 100 45 _ 

2SS +8 3B6 282 18 _ 
93 +2 1155) Si 35 — 

214 +4 200 208 18 — 

146 _ 208 140 03 — 

21* +3 305 211 18 _ 

135 _ 16450 136 3.0 _ 


7SJ0 

+30 

01 

72 

£6 

76 


97 

72 

£3 

106 


1Z2 6XS0 

IA 

116 

-1 

151 

117 

20 

3a so 

*3 04SO 

31 

... 

SB 


M 

69 

106 


- SMUM (Jkn 22/ Pte) 



- nxur(Jui 22 /Un| 


w 8% 

BRoM 1J83 

M ieo 
26,1000 
BM9D 10585 
CB 2415 
1460 
2500 
1580 
1100 
11/400 
1851 
8580 
3500 

6855 
13560 
154£W1 

GMAM 4256 a 

W 4535 

Pr 24500 

I0jn» 
Mb# 10800 
IMCffi 11260* 
BMU 5500 
UdAW 1*800 
MNtoc 15.189 

HP?* 1-SS 

2.430 
5886 

sjao 
25500 
10.1 BO 
752fflr 
4;1203* 


S& K 3 

tr££ KS 

— 1150 a 


INDICES 


n tWNrtSfl/l/KI 
A1 MMog{V1/B0) 

AB«a 

CRdtAkaentaonzm 

DKkdMGBQ/UBI) 


1 * 1 1 

4 « .h * * 




B aap/t/Bi) 


Ittfc MtotOOTS 
OnqMAB^ (1873 
ftxtMsS HA/K? 

OH 

ra6hi pinaaq 


Jn Jn in 1»4 + 

22 21 20 W U« 

06 18/97.48 M2S*m»1OT T77»M 2W 

anas i9su 2024,4 2 mmo m isb&m m 

1036.1 10%1 10413 1138.19 3/2 90*80 56 

39337 40a48 406.71 460flB 2/2 38957 226 

102906 10Z7J7 104554 122235 VZ 101158 66 

140517 140539 142031 DOS 6/2 M05.17 226 

M 312750 323790 3237860 206 380050 3/1 

M 362057 3654.17 387559 IB/3 329586 2DH 

M 40*760 4C885D 496990 23/3 4M7J0 216 

M T680J3 180729 218288 U2 186963 216 

M 442311 44875 486750 4/2 80OUO W 




Cap«jtMP)SQ371/83) 35560 3S9J1 38531 416-79 30 3B80 226 

HOGM«sd(2B/1260| 16613 16645 168£0 187280 40 WLH 3fl 


SBF 2SD pl/1260) 
ac 4001/1287) 



FAZ 6M3III266I 
CBBWH8)BM(1/r2/53) 
a« ptnawtf 

Gmn 

A8m SE0I/126Q 

RM0 

Hans Sgng(31/764) 

Mb 

8SESm(iS7S9 


126181 127051 127754 166520 S2 127051 216 

1917.04 168078 100301 239503 22 «93S 216 

78250 76269 781.11 CBZT IBS 761.11 206 

21603 21607 21823 24B5S8 26 215SLI0 206 

,89442 1883JZ7 1B6&82 2Z7LH 166 196082 206 

83012 84503 Id HBC3B W1 80687 2S6 

887584 685778 896518 VOBUO 4/1 836544 4/5 

43 MI |d 43325 433289 2M 345456 5H 


. 4 “ 



Jtoara CgmpJIO/MB) 473.13 4755* <75.73 8I28B 5/1 45432 2 M 

SCQ DiWtoM/1/88) 173556 174151 17B156 2082.19 20/1 173538 22A 

taSaOxm U(197a 69153 87833 67153 817.T7 IQS ** ^ 

MBBm((/l/94) 11175 10BW 1084X1 13IM0 10S »* Un 1OT 


mazapBUM* 
MM 300(1/1MEQ 
Ta0bc ivues 
ansaMonipnfiQ 


2DGB152 50813.18 2113283 21S8UN 13/6 

van 30152 30554 3tU1 13A 

16*097 1BB3L07 168447 tTB73 13* 

240727 242271 2*82,70 B«MD 17# 


173657* 4/1 
26522 4t\ 
144587 4A 
187333 4/1 


t m 

MTO 
3JC0 

£630 

BEWBr 4^85 
DPS|Ar 14JU0 
BEanld 1670 
KtaSfid® 960 
ces* isao 
Mtaffl 1660 
ClMt* 10.430 
Dn**K £110 
BxnAQ 1/436 
BVISI £400 
EntoSr 6J80M) 
Fccm ““ 

GrOuf 

men £615 

bank 950 
Kolpa B.SOO 
Mapbv EJOO 
HUW* 4.BS0 
PDrtV 10310 

« 

Swito 

9»B _ 

TBOacA 1410 
TOMB 1J40 
Tutor 1315 
Un Fan 829 
ItfW 1JB5 
Iktott 1300 
VaBtan £340 
Vkdn 3370 


+ao 6380 9.150 £2 
+10 6.700 5.140 4.7 
+30 £636 2320 SJS 
_ £400 £600 S3 
+5 4350 3375 43 
+?40 17.700 M.D00 £6 
-80 6321 *380 63 
-Ifll^SS 700 214 
+10 3390 £410 34 
-014^70 3400 £6 
+150 1£**) 0320 £1 
+70 £VlS 1370 43 
-613761315 13 

3360 £360 33 

+120 0.100 6780 24 
+301,100 655 — 
_ 924 416 11 2 
+55 5.140 £810 38 
+261310 891 — 
+100 7/400 4300 2-2 
-10 7330 4300 3 2 
+50 8400 4.450 23. 
+210 12500 9,71 □ 1.7 
+30 4300 3.775 £0 
+2 366 102 _ 
-5 096 361 8.G 
+3 815 610 63 
+105 4430 £305 an 
+30 £1851305 33 
. 050 13 

+3 730 STB 73 
♦30 £400 1/41511.4 
+40 1.710 1,180 54 
+60 3.120 £280 £1 
+23 £580 2330 13 


— 1,4201300 — — 

-10 600 4G6 __ _ 
-201300 981 03 — 
-301360 879 _ _ 
-30 1,220 681 _ _ 
-30 1350 1370 — 

+1 744 583 14 _ 

— 1330 EM-0 — — 

-12 534 402 13 — 

— 6300 3460 

-180 5340 4!d70 08 — 

-2D 1JD01330 — _ 

♦3013501390 — _ 
-st mm bbo 1 3 _ 
—IB 1J00 1340 _ — 
-10 823 410 05 — 

— 513 380 1.0 — 

+7 678 660 — — 

+23 MS 850 _ — 
-20)3001390 06 — 
+14 im 415 — — 
-GO 3J00 £410 „ _ 
-401320 642 £6 _ 
-7 718 438 — _ 
-10 13201330 — — 

+10 3460 £508 _ 4£8 
-ID 1.410 132D 03 — 
—13 BOD 315 — — 
-10 4R2 337 13 — 

-21 997 841 „ _ 

-40 144013*0 03 — 
-14 TB8 571 13 — 
+10 2370 £580 — — 

+20 1330 1.130 — _ 

-30 2.790 2.400 _ _ 

— 1.600 1310 — _ 
-1084 604 08 — 

-I2B00 788 - — 
-8 8Z5 410 — — 
— SOB 387 — — 

-2013701.420 — — 
-30 1.400 1,050 03 — 
-10 2380 1.720 _ 

-20 1.610 1400 — — 

— 861 660 — — 

-10 1,220 800 _ — 
-12 910 591 — — 
-11 S70 415 — — 

-201370 993 _ - 

—20 2320 1360 — — 

-7 S27 345 — — 
-201300 979 — — 

— 805 697 03 — 

— 1,120 961 _ — 
-10 1^101400 —903 
-2013791330 03 — 
-GO 4350 D3GD 0.6 — 
-12 70S 545 13 — 

— 638 460 — — 

+ 101.7G01JS0 — — 

-40 1JB0 1,720 — — 

— 1.170 093 _ — 
-OO 4320 3300 — — 
-TO TUB 321 Q.7 — 
-30 2450 1320 — — 
-17 5B5 445 — — 
-20 £680 2300 — — 

— 719 GOB 13 — 

+2 513 276 — — 

-27 SB3 360 — — 
+313*0 719 _ _ 
-10 1270 SSO — — 

—10 2300 1300 — — 

— 1.180 8*1 - - 
_ 788 “ 


814 -7 B» 768 — — 

938 -291390 90S - 

*718 = Z 

1,1 BO -101,230 788 — — 

1.130 -10 13*0 986 03 — 

823 -2 840 312 — — 

£110 -20 £2201388 — — 

640 -IS 580 426 — — 

B29 -1 876 790 13 - 

42G -If 4® 3?) _ __ 

1230 —10 liBBQ 142 O 13 — 

1,770 -101,8501,700 — — 

t.780 -3013201300 - - 
1.160 +101320 MO 13 — 

3430 -SO 3J40 £720 — — 

676 -22 060 

806 -20 B«fl 

790 -13 BBS ... 

ffiSB -0 720 SS7 _ — 
733 -31 792 562 £7 — 

1340 -1013401310 03 — 

098 -8 883 400 — — 

554 -8 533 386 _ — 

1.120 -10 1330 780 03 — 

2340 -2033102300 _ _ 

1.160 -10 1350 1320 — — 

674 -6 724 320 — — 

1.170 -101300 905 — — 

491 -10 533 325 

774 +3 833 003 — — 

515 -6 642 425 — — 

665 -4 564 394 — — 

SSI -21310 7BB — — 

1350 —1370 8*2 — _ 

737 *12 792 467 — — 

705 +5 738 500 _ _ 

640 -5 500 407 — — 

410 -7 445 318 — 

Bll —IB MS 396 — — 
1310 -1013601,140 — — 

(380 ^20 1.6)01.460 — __ 

S -14 TO® 456 — — 

-7 644 072 — — 

388 -S 400 301 — — 

1300 +101.4201.100 03 — 

820 — 890 755 09 — 

443 —8 400 378 — — 

419 +3 4S3 337 — _ 

845 -7 WO 678 

iwi -10 940 770 07 — 

404 -6 449 310 —76.1 

1-730 -201.400 MS — 

1340 -101.100 790 — — 

1 JM 0 -20 £230 1300 OJ — 

718 -10 702 810 — — 

1,130 —20 1.190 B59 — — 

23GQ -30£34913B3 £4 — 
57] -16 824 405 03 — 

7350 -50 2.700 2300 — — 

MW -240 4340 3320 — ._ 
1330 -101310 858 — — 

1350 -10 1,170 985 — — 

1.370 -201.gM.020 _ - 

270 5 ™ » 

am -4 840 MB — — 
789 -10 768 E38 13 ._ 

732 -11 774 493 — — 

443 -17 464 316 — — 

823 -15 910 711 — — 




SunBM 
sattBm 309 


-nrea - 


WKMO 77S -.10 932 740 13 — 

WHITT £36 +39 235 £27 43 - 

wane *30 +.12 535 4.15 13 — 

Woodn *75 -32 432 3.7D 17 „ 

wwm 239 +.13 192 £74 £1 — 

HONE KDHG (JU 22 /HAS) 


TotaA* 

TodbCo 
Tom 
Two 19400 
T«M8> £610 

noAt 1360 
TtoCa 
ToMco 
ToHdM 13*0 
650 
13» 
ijm 
IMWna 2300 
TkHP** 3300 
TkBai 3.160 


6*5 

£460 

TVSM 1310 
TluCr 741 
HoiOo 737 
TKaLn) 644 
1340 
1/480 
742 


«z z 


— SWEBBI pun 22 / Kronor) 


+170 6405 4,410 43 
+10 £985 £341 — 
+123 2450 1770 13 
•6 211 79 — 

+900 Vt m 23390 13 
+2BS12JG0 6,110 — 
+11511001364 11 
♦6012001360 _ 
+30 2385 13® - 
+56 23101398 — 
4100 2320 1385 43 
+50 13/m 10200 — 
+75 £60* 1368 — 
+226 7330 4371 13 
+206 4320 £119 £5 
♦85 73» 337B 3.1 
+38017310117® 44 
+691385 1 S 0 13 
+17004820037220 09 
+^43662378 — 
+13502810015200 13 
+260 14300 HL400 — 
+680 12,100 6300 23 
+190156*6 8,862 03 
+220 04*0 4371 B.1 
+«1D1D300l3.ia> £7 
+680 IILT0 13410 13 
+0* 13*9 670 
+150 3,1401315 — 
♦MO £100 IBID — 

♦JssoafaMTSM 17 
+200 12.150 £288 £0 
-SO 1B.1M 7430 27 
+165 5.1W 3383 2.1 
+30 1.089 400 — 
+160 £960 *386 13 
+140 7700 4,145 — 
+20 4310 2376 — 
+52011700 9.000 37 

+74® raim 9701 *3 
♦70 £»» 1392 2.1 
+1J80 


— 88 62153 

+30 05.76 61 HU) 

+S 600 540 1.7 
+10 685 438 1.7 
_ 197 1*6 1.1 
+1 194 144 1.1 

_ 1 

-1 1 

+9 439 292 13 
-1 406 208 17 
-1 134 101 £7 

— 134 100 27 
+3 110 B3 £3 

+11 430 251 13 
+.70 69 4830 £4 

-8 811 2*1 £9 
-1 312 240 £0 
2)6 IBS 37 
216 152 32 
-4 360 17 23 

+1 156 308 13 
-1 166 10# 13 

+1 IBS 103 33 
+1 156 09 3L3 

+4 16* 126 — 
+6 198 129 33 
-1 143 102 £2 
-1 142 £30 22 
+.70 734130 — 

+3 MUD B7J0 13 
M3 148 22 
351 13 
480 360 13 
tw 144 92 2.1 

-1 110 91 13 

_ 122 87 14 

-1 128 79 63 

+5 775 530 1.1 
+9 780 525 1.1 


710 
567 
4BZ 
BBS 

HSeft 1 . 0-10 
497 
'867 

BIB 

Hroe 6770 
628 
1320 
904 
1330 

HUM 2.110 

** 

is. is 

693 
7.000 
£140 
404 

me 1700 

‘ - 950 


— smrtaurnnims 2 ;Fm.) 


+4 292 191 — 
+12 690 568 13 
+10 098 567 13 
+85 3.095 2180 13 
13401315 13 
. 230 190 1.7 

+21 747 SSI S3 
+3 870 BOB 13 
+13 942 775 13 
-1 422 3*2 — 

+30 £0001300 33 
+10 1300 1360 33 
+302932 2*00 29 
-01300 675 13 
10 460 330 33 
+8 971 7B2 1.7 
+3 175 MUD 1.7 
+2 991 790 13 

+25 13201^00 23 
+22 1.437 1384 £3 
•1 175 127 — 

— 1.740 1.430 43 
+60 5340 4,470 — 
+13 263 183 £1 


1,160 
307 
819 

HAS) 2.190 
KoBaqo £570 


— 13901.140 — — 

— BOG *28 09 — 

—10 1360 938 — — 

—13 639 440 — — 

+4 73* 002 1.1 — 

-0 640 38* _ _ 

-0 32S 438 _ — 

-18 780 650 — — 

-101.130 785 — — 
-3 550 397 13 — 

—9 050 079 — — 

-41JM0 S26 — — 

— is'asa z z 

- 201.120 — 

;> b«o 

+1020401.6-0 _ - 
“ijj1J30 

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-2D 2340 USD a9 — 

^•a*«z z 

+201370 525 06 — 
_ 197 723 _ _ 

3*1 Z 

-9 910 792 13 — 

^•ara - - 

-I* 1 ™ : 

-10 1,727 1310 £7 — 
-7 448 28*— — 
—16 756 606 OJ — 

11 ^:: 
8 ’S z z 

-10 9*0 590 — _ 
-21 715 431 _ — 

-30 1310 822 03 — 

— £500 £050 OS — 
-EDO 13.400 ULDOO — — 

-201,470 1310 06 — 
-151JH0 82S — 

E E 

-15 770 516 03 — 

-3 570 430 — — 

£970 236$ - — 
-a soo « _ — 
-1013101.150 _ — 

— 500 
-7 412 

+1 431 303 — — 

-17 720 601 — — 

-11 616 516 — — 

-a 970 83G 0i8 — 

-4013381363 05 — 
.1 077 BO* — — 

+1013901.130 — — 

-1 320 260 — — 

-11 960 74# _ — 

—10 2380 IJTO — — 

-30 2380 £150 — — 


Nann tjQIB +101JB0 781 03 — 

MM 639 -11 508 500 — 

JhBHM <370 -20 2390 1.780 — — 

1^0 -20 1 -©43 1,430 — — 

708 -9 615 090 — — 

711 -19 706 628 — — 

469 -0 518 400 03 — 

770 -30 BIS 678 — — 

48) -9 520 412 — — 

1350 — 1,440 1 J)B0 06 — 

1940 —1,140 656 — _ 

(rand 6.«K) +40 73D0 0.150 — — 

RDOSk 8360 -30 £6*51 4.660 — — 

NUMB 436 -4 462 316 — — 

23*0 -1O29SO1310 — — 

2000 —£0701330 — — 

1330 —1,110 937 — — 

754 +1 002 702 19 — 

568 -8 BE® . 

1.900 +20 £190 1330 £8 — 

776 -ID BGO 629 — — 
738 -8 799 476 — — 

1470 -301.0601470 1.0 — 

M 750 -8 79* 653 — — 

Pi* 703 +10 742 GOB — — 

731 -11 788 484 — — 

1.100 -30 1,290 1J060 19 — 

672 -8 617 400 — — 

1,140 -801,300 1/071) £7 — 

553 -7 015 441 

96S -1 1.110 

1.660 -10 1.620 1. 

1J260 — 1J1B1J40 — — 

4M -19 SW 
352 +2 361 

404 -8 530 



3 747 2 S 

ai 1 * 

-f®iS 
-i S 3 g 

+1 1.030 B51 
-8 309 352 
-17 uno B84 
-II® 734 611 
+101.120 815 
-10 1 J20 1090 
-12 BIS 674 
-80 1,530 1JB8 
-20 EiSSO 3.780 
-1 749 810 

— £219 1830 
-13 732 670 
-10 BC2 B7S 

— 1/4BD 1JJ70 
-30 1^40 1090 
-IB UHO 870 

-1 677 490 

-2 BK BIB 
-2* 1,100 705 
+13 832 608 
-4 555 3S7 
-4 720 BUS 
—7 831 070 

-IB 807 533 
-200 21.3)0 17, ■>«" 

-30 3^30 2j 

-80 1/420 1,110 
—7 536 326 
+1 GOO 41S 
-40 1JB0 1,190 
-10 689 421 
-30 1.720 1.450 
-70 £020 1,310 
-80 £200 1£70 

— £6*0 3,040 
-60 3^60 2.740 

-1 570 461 

-2D TIB 520 
-40 £720 £200 

-18 829 867 
—6 730 505 
-101J801J80 
+10 IJM 1.190 
+12 77S STS 
-8 678 670 
-101.2601J)GO 
-2 736 433 
-18 906 SOO 
—3 414 265 
-ao sow i.no 

+0 696 421 

-2014301/430 
+16 738 615 
-IB 733 524 
-80 3je0£B8B 

— £220 1.780 
+10 527 330 
-30 1,350 965 

-0 605 330 

-8 680 432 

—24 576 346 

— ass a® 
+4 418 272 

-101.600 835 
+30 1.330 1,170 
-20 1.430 930 
-28 909 820 
-3 1J010 BB2 
-30 £2301.600 
—40 1010 1,850 
-401.110 900 

— 1JSD 1,110 

— £2901,970 
-30 1 J50 1.190 

-3 SB* 350 
-1 669 727 

—25 1,030 734 
-101,110 TOO 

-80 BBS HO 
-12 745 S28 
-S»J 1,100 860 
-10 1.180 021 
-7 783 442 

-1 T4S 406 


— — Amaj/Pr 9J5 

— — KM 3SJ2S 

— — CM 1090 

— — rMCnn 34 7S 

*0.75 

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21 JO 

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,~= — HSSC 6450 

1-3 — MjmO 1£GQ 

— — HSonoD 5£50 

~ ” HtolKSi IOJO 

— — Hflofcw £10 

“ — HBflLMf 3£2S 

— — KtXstS 1*70 

— HK56W 11. *0 



3BM 

WMDGh 16-70 

WtooOn il£0 
Wkwor 11.70 


-J51SJ0 025 39 80 

— SD2U0 2.1 24.1 
-.10 15.70 10J0 3J — 

— 52 SMS £9 ... 

+J5 57 37 2_B 30.1 

— . 81 » £7 673 

— 14 &1E — _ 

-J9 27J018J0 1.7 — 

— 19.10 1£50 M 111 

-.10 1£2D 10 £5 — 

-JB £05 4.17 £7 — 

„ 45 29-30 (.7 _ 

-SO 131 60 £0 — 

-.10 21 JO 11 JO *3 3fi7 
+J50 80JD 47.73 3.7192 
-.IB 13J0 10.40 £4 £7 
-.10 9J0 £05 4.1 _. 
«£S SOSO 3SL2S Si — 
-.IQ 24£5 14.40 24 218 
-.101080 1090 1J 1A 

-X 54 37.75 2A l£8 

♦JO 35.50 2030 £7 — 

+.1031.7519.10 06 — 

— 30L2S 10.40 3.7 94* 

+.10 17.70 ia £4 — 
+05 1OJ0 ELDS 5.1 — 

+JS42J027J0 £1 - 

+.0Q 33£5 IBS# 4£ — 
-.10 1310 7 .00 0.7 „ 

-JO 84-50 4&7S OJ 

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+.10 25 1£fitt 2X3 33 

-.40 12.50 9-20 OS — 
*£D 42S0 21.10 3J — 
-33 39 30 — 6£7 

+£# 77 42 SL7 5&1 

_ 16JD 11 ZJ 42.1 
-JOS £15 17S £1 14 J 

1£40 B.BS1U3TJ 

5.45 3.90 £7 _ 
+02 700 323 94 _ 

... 71 SO £0 670 

— 11 JO 8 £6 538 

-00 35.75 23 £B — 

+.30 41 2SJ0 £3 — 

+.10 2300 149) _. _ 

— 1860 11 £1 „ 
-.10 17.40 10.70 £8 — 


50200 IMgi 
3400 CMFW 
73776 BnHar 
25455 CM*SB 
1800 Ctonxa 
S mW CwWepk 
90000 CwOcc 
586370 Q»tei 
3 CWTIr 
29661 ClfllTrA 
7G7E CBM8A 
950 Drttf 
61090 Canter 
69 2 CMiTnp 
912 CanBra 
1480 Cam 
iS7i anew 


Z Z MMJDISUl (Jan 22 / KYiQ 


Bouxu 420 — £80 £90 £0 — 

atom 32 +7 JO 3900 25 8.3 — 

HLCniil 1300 -.10 1700 12JW £7 — 

UHBnk 1420 -00 19-80 1300 00 ... 
MaKtoi 300 -.10 600 3-ID 18 — 

IWUP 4.42 +.18 £85 2.SS 00 

PBB 402 +04 6-05 3J2 U — 

3mD £55 -JB a*0 £90 3.1 — 

Tatokm 1£7D — C4.1O1B09 00 — 

Tnaoa 1430 -.IQ 20.90 1200 — — 


3507 FnMAl 
1000 Font) I 
0804 FTIteJ 
I8G5D Franvl 

57400 FeAlAl 
14950 4Swan 


“741 GNU 
350*9 Sot Cl 
| 4100 EMHM? 

62400 Sootml 
■11500 0 UKHI 
130983 QHCB 
■1200 HaiStAxB 
■ 500 HtoMSac 

breao Hnomn M 
■35912 HnnoG 
120213 

■11788 wiV^B 
4ina >«»Mk 
32400 HlKBiyM 
3575 »L i 
21503 (manern 
■49351 imocnl 
737419 kra| 


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3922. mwi FT am* P aMu Ma amm w. HU 
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■ MWAMMIWIIIW ■“FTJWMdMtoym 

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■ TOKYO - NKMST ACTME STOCKS, Wadneaday, Jtme 22. 1994 


hGtsufaiahlOa 

OMBactric 

MKsubfch) Hvy __ 

HWoW — — _ 

Nippon Stool — 


Stocks 

OooJng 

Change 


Stocks 

Closing 

Change 

Trotted 

Prices 

on day 


Traded 

Pi rises 

on day 

1Z0FT1 

1JJS0 


Kawasaki stool 

6.7m 

400 

+1 

11.5m 

779 

-7 

Toshiba 

B.4m 

814 

-6 

103m 

774 

+3 

NEC 

5.9m 

1,230 

-10 

S. 4m 

1,020 

-20 

Fujitsu . . . - 

5.6m 

1.120 


8.0m 

352 

+2 

Sagarrd Ralway ._ — 

5.3m 

505 

-9 


INDICES 


Stnea coapMoi 

m Uw 


fCjpwlOT 

tS8TRnGw4U89 

CBS MSrfM 83) 


ft* 22S70B 228301 am.UB/2 

100 4083 4110 45490 31/1 

60.7 2570 2609 29tH) 31/1 


195703 m 

*0830 2UB 
25700 21A 


Cap. *0(1 nm 202903 20*3.74 ZD7370 2(3084 3/2 


tmSBM&im 99*09 99001 8914* 1211.10 280 


Ooap&im 281505 281409 285*08 33BC37 4/1 


2843.1 26160 26120 322B0O 16/2 2B120O 20/6 


SESA8-Srporal2W75) 55141 55206 55623 B4101 *n 


224309 22*50 22270 23H0D 4/1 
65B1QV 059*0 68210 675700 15fl 


JSE ODU B6H/71# 
J5E ML (28/&/7B) 


174600 WL 

544800 1SH 


nngQm£4VUBUr 930J9 bssjs 94200 STUB 2/2 

UBMSEPO/iaffi) 30075 29886 3026D 35831310 

MaswdfignflA/37) 13587 1320 136*2 180300 31/1 


H tt B U M i 370707 374100 37703 STUB 3SB305 32836 4102 

(jirtj m dwag 

Km Bnd3 9604 0810 9603 HUl 9M3 10877 5*93 

Cl/1) fW5) n«/tW3) (1/1M1) 

Dmsoat 161643 164106 1851*0 160229 154802 H082S 1202 

VI 1 »W) (ZfflB4J 9/7/33 

UUBHes . 17842 18066 18201 21706 17728 SMB 1000 

can) 02/5) (31/603) w 

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(2/2) (4/4) (2/Z/B4) (UE/S2) 

hksntf 52503 52807 533X71 66058 51005 06859 302 

(212) (21/4) (2/2/94) (2WE) 

F tomrM 4507 4508 4813 4064 4109 <848 864 

(14/S (4/4) (2BW83) 0/10174) 

HYSE caw. 248.10 SI .40 SS09 267J1 24114 267.71 4,46 

(272) (4/4) (2/2S« (2SX4M2) 

AnacMdW 43107 43819 44826 48709 42700 46709 2901 

(2/g 08«) pom envn) 

HHOAO Quo 703.79 71885 72905 08191 70501 68361 5407 


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FT 


SHta KM 01/12/56) 123892 122308 122709 142X3* 31/1 
S6C brad (1/4/87) 82108 90862 B0BJ4 106X29 31/1 

Taftmn 

MMpMFfcJSOaUr' SBS7S) 00*807 603841 6*842 Bft 


Kfltfak SET 00/4/75) 131101 132902 135328 175X73 4/1 

IMqr 

fetnN8OnpL0aai6BS 1970X9 2(71940 1992817 26M09 TV) 

KHD 

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anon* 1OO06nOM| 132300 190148 1303X3 154819 3I/I 
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JCwAgm01/12flq H 30556 30657 395.19 5/1 
BMvtBtm^TVBD 15103 15300 15502 t8£EM4S 

■ CUbO-40 STOCK INPWC WrftJHEa (MATTF) 

Opan SonPrico Domes Kg/1 Low 

Jun 16850 19090 +380 19140 18840 

JU 1880-5 1905.0 +3S0 16090 18800 

Sap . 16970 1921.0 +35-0 19240 13870 

Open memLlowM tor pwilc w dby. 


122X48 2U6 
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1299000 240 


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»28 21/3 
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hfigft Low Est wL Open W. 
19140 18840 29 JOS 44099 

18090 1880.5 1,689 11039 

19240 13870 1028 19021 


Dow Jones bid. Dtv. YMd 

S & P bid. Dhi. yfrfd 
S a P hcL P/E ratio 


■ STANDARD MB) POORS BOO I 


na» tm naowj (H/HW3 


Jin 17 

Jun 10 

Jun 3 

Year ago 

2/85 

208 

208 

2.96 

Jun IS 

Jin 8 

Jun 1 

Yew ago 

242 

244 

247 

£51 

2301 

2301 

23.41 

26.42 


Toe Glliaii Han, financial Time. lEioopei GmbH. Nibelm^xnpteu 3. b03l« FnmUun/Mam. Gcrmanv 
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SUBSCRIBE NOW AND GET THE FIRST 12 ISSUES FREE. 

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YES, I radii Uke to subscribe id the Financial Tunes, and enjoy my tiisi 12 issues free. I will allow up lu 21 Jays 
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Aimria OES 5000 France FFR 2.040 Nclhertaaih DFL87S 

Bdpum BFR 13J00 Gernumj DM750 Norway NOK 3020 

DcnmarL DKK3^00 Italy UT6OO0DO Pomjpli ESC 60.000 

Ftatand FMK 2000 Lmcmlwure LFK 13J0 0 Spain PTS 63000 

For BAscripiiaB m Turitey . Cypiun. Greece. Malta, pk«M oootacl +32 2 5 1 3 28 In. 


Open Law* CtwgB Hcfti Law EsLuoL OpanhL 

452-40 45X00 +1.40 464^45 452.05 88,144 1B3013 


Sweden 

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SEK 3.22H 
SFR71U 


□ Bin I — | Charge ray American Eapms/Dioen CToh/ 
me 1—1 Eurttcaid/VTaa Accouhl 


Expiry Dale 


Op«l totraMM ■» tee pravtaw (toy- 
■ NEW VOHK AC1WK STOCKS 


RJR Kabbcra 5,75Bj600 

Carnpaq 4J2£300 

6m Baortc 4.059000 

Pt^j Monts 3^94000 

nan Tech £162000 

K Mart 3049000 


RISE 0DNM4/4/86) 101S43 W11.46 KOS46 13M06 5/1 9»S3 


Ctayriv 
Font Motor 
DM 


sods cue Chngg • 

traded prtca 08 ditr 

4750000 0i +» »*•*** s 

4022000 32 -1* 

4056000 4» -1M SfiBBaft— 

£494000 S1H +«i IIVSE 

£162000 OH - hnu Trad/ 

3049000 16H +» DUB 

£044000 SIM -1*4 Feta 

2,760000 47 lUMIOMl 

2081000 SOW -M NMHB/H 

£477000 61 -41 Nm Lome 


■ TRAPUQ ACTB/TTY 

• VNUBS (maw) 

Jtto 21 Jan 20 Jun 17 
ftwtokSE 29X087 22*254 37£40B 
Aran 19J77 16074 29262 


2037 2015 2019 

485 492 780 

1,715 1.721 1015 

627 602 644 

7 IB 45 

106 » 47 


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; Its SSJaaS, On. MB Max. saraeo. OC*0, an Top-ioo, bed o wa t««bo Cohummu a 
•** » InduraU) - 86**^ W8E A9 Carreer _ SO and SMM and FWa - V). §5 

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t Carnctai. - ra w +Aw w i a lift) GMT, • Exdudkia bonds, t bKbntrW. d*jb UUm, PtnancW «d DanApnrwtan. 

♦ Tba DJ bsS. Mn itawiWW oof* H ghs ra d laws era atonwa w n» Bio W gh«M yd fan? P»U» tm ** l jWng m » erah 
atoekt wtwees 8 m asm/ day% ««l hMns. tsnWM by Thtohn) rapreerai 8» hfchMtand lowM mhira ttwt tie Mbs ho reodied 
ftrtifl dw dap. (Hu flguras to mcna era pretoou* dpf4. f &Ai*g b afetol fteek oUUi 


•Curmcv ram are on/* aJUf.tr /hr (many in which they are ifuoted. Sohsmptiaa Prim are carreer at (Sue ■■/ 
going to press. Prices are eschulve of VAT in all EC countries carpi Germane and France. FT\A7 Nik 
PEI 14220192. 

T» wb*T*e to the FT ta Nor* Americs ctnlad New Y srfc Td 752450& Fax 3082J97, Far East hmUkI Tokyo 

Tel 3295)7] 1, RnJ295] 712. 

□ Pfctof ttoLboe tor mult te fc en toito e 0 rad y iwandi ^ ner tpa«i aoo. ernm fef 

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Financial Times. Europe’s Business Newspaper. 



38 



ittnt iMHAl. TTMES THURSDAY JUNE 23 1994 



COMPOSITE PRICES 


taw 

up LMtm 
17% 141* AM 
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AMEX COMPOSITE PRICES 


4 pm dose Jane 22 


Stock Ote. E 100a 

Adalfagn 462 422 
ABtate* 3 2 

Atphahd 2 51 
Amtah 164 11 27 

tVnMafcn A 0641010 37 
AmtaN 065 2 7373 
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AnpaNpA 40 064 
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ABasOiB 01066 
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060 21 9 16$ 16% 16$ 


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DoplBX 0.48 9 5 8% d8% 


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CmputraE 1 12 fl 8 . 

Coned FW 5 3 7$ 7$ 7$ -$ 

CroseAT A 084550 1U lrt 18% 18% 

Crawl CA 040 42 30 18% 18% 18% 

Crawl CB 040 14 325 18$ 16% 18% 

era* 063 n 46 18$tff8% lrt 
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Ekn 181787 35$ ® 35$ 

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Fab latex 064 12 4 34 34 34 >$ 

FtaaA 120 16 4 74 74 74 

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Fluke 16 062 73 32 2S% 29$ 29$ -$ 

ftxeaia 271730 45% 45$ 45% 

Frequency 2 30 4$ 4$ 4$ 

Gann 080 7 87 Z2$dZ2$ 22$ -$ 
Start FOA 072 12 2302 20 19% 19% -$ 

BtaWr 070 38 122 16$ 18% 18$ +$ 

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UStronCp 012 25 109 lffl% ID 10 
Irt. Dorns 2522S $'•<□% 3% -A 

tatnnagn 93 237 19 1B% 18% . 

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Jan Bel G 825 8% 5$ 6% +$ 

Katana 21 344 14$ 14% 14% +% 

KbakCp 20 3 4$ 4$ 4$ . 

KH9B9 22 185 10% 19% 19$ +*4 

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MMd 7 7 6% 7 

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GET YOUR FT DELIVERED TO YOUR HOME OR 
OFFICE IN THE GRAND DUCHY OF LUXEMBOURG. 

A subscription hand delivery is available in the whole of the Grand Duchy of Luxembourg. 

We will deliver your daily copy of the FT 10 your home or to your office ai no extra charge to you. 

If you would like more information about subscribing please call Philippe de Norman 

on tel: i322) 51 3.28.16 or fax your requirement to (322) 51 1.04.71 ' 




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ABS boa i 020 20 34 15 14% 14% 

ACC Crap M2 60 380 14% 13% 14% +% 

totem E 3E4423 17 15A 18% -1 

tom MBs 20 89 23% 22% 23% +% 

Action Cp 29 263 20$ 19^4 »% +1% 

AriaillBrti 15 2821 16$ 15$ 16 

AOCTeta 33 405 39% 38% 39% +1 

AHhgtan 22 537 17 16% 1B% 

Ada Sen 018 21 52 35% 35 35 -$ 

Adobe Sys 020 2210322 27% 25% 27+1% 

Un»C 7 138 10$ 10 10$ -% 

Mv Logic 9 145 5% 4% 5% +$ 

AduPdym 7 84 5% M$ 5% +$ 

AduTOtata 24 101 13% 13% 13% 

Advsnta 020 17 705 35 34 34% -% 

Aflfreax 9 72 13% 13 13% +% 

Agency Fte 21 519 12$ 12$ 12$ 

AgnteoEa 010134 1E32 12% 11$ 12$ -$ 
AliExpr 0J0 14 153 22$ 22 22 

Alan ADR 224 19 85 55$ 5«% 54% -$ 

AMU3CP 35 4080 24% 23$ 24$ +1% 

AtaHd 088 17 159 28% 2S% 25% -$ 
Alegh&W 14 336 7$ 7$ 7% +% 

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ASretPh 5 484 IOI4 9% 10 +% 

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AH Cap x on 12 107 14% 13% 13$ -$ 

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ARaGrtd on a 6B0 1$ IA 1$ 

Aten Co 285718 27 28% 26% +% 

Am Bartrer 072 8 375 23$ 22% 22$ •$ 
AmQyBu 14 385 15 14% 15 -% 

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AmfirzA 050 176102 30$ 29% 29* +,V 

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ArePwrCuw 311B2M 17%d16% tell -ft 

Am Tran 10 313 13$ 13$ 13$ 

Angentac 1626534 45$ 41$ 42$ -2$ 
AnriediCp 006 18 6349 13%012% 13% +% 
Amfin 4 2 9% 9% 9% +% 

An*0c 15 20 18>2 16% 16% -% 
Anatyste 048 13 167 16% 15% 16 

AnangrtAre 1JD 14 41 16$ 16% 16$ 4$ 
Artteew Cp 20 2077 36% 35% 36% +% 
AndrasAo 9 10 16% 16 18%. +% 

ApogmEn 030 27 356 Irt 12% 13% +% 

APPBto 8 539 6$ 5$ 5$ -% 

AppMMrt 2713341 41% 38% 40% +1$ 

AppiaC 048 231 DM2 28% 26 26% +% 

Appiebdes 004 33 5901 13% 11% 13% +1% 
Ariu Di ■ 0J4 41 8 18% 1B% 18% 

Araa 020 20 734 27 26% 28% -% 

Aiguari 1.18 7 43 27l 2 27 27 ■% 

AmrerN 0J4 21 58 21% 21% 21% +% 

AmoMbi 040 17 564 19% 19% 19$ +$ 
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AspedTef 23 1593 28 d2S 2B +% 

Antccomni 279 45 25$ 26% 26% ■$ 
AST Hath 813876 13%H12% 12$ •% 

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ABGEAlr 032 18 2998 24% 23% 24% +$ 
AlridSt 048 28 7742 51% 48 50% +2% 
Ainno 12 15 3% 3$ 3% 

Awrtrte 092 16 3S2 8$ 7$ 8$ 


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BabbaoK 9 32 
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Baodac 141025 
BnkSoutex 044 11 7028 
BankeraCp 0X0 9 3 

Barfmrtti 080 12 lie 
BantaGu OS 18 220 
BassetF OJ0 18 209 
Bay Ware an 14 50 
BaytHds 1X0 13 873 
bbkthi in 101194 
BE Aran 21 100 
BemrtCoc 028 3* 257 
BHAJeny 17 199 
ButteyWRx044 15 27 
BHAGrp 01214 379 
Htac 95 » 

B^B 016 15 218 
B4XflB*W*a08 13 12 

Btagen 30 5411 

Btamet 1712917 

BtachDigx 1X4 11 158 
BMCSallw 158320 
Boatmens 1J4 102370 
Bob Evans 077 19 4B7 
Boata&B 147100 
Borland 33599 

Boston Bk 07B 5 6 

Boston Tc 38 3434 
BradyWA on IB 55 
Branco x 020 29 783 
Brian S 024 15 543 
BSBBnqi 078 8 15 

BTaipng 0X8 B 58 
BrtMs 2617083 

BirtdaraT 24 114 
BurBmn 27 530 
BiBbtesaR 58 65 
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19 18% 
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Cabot Med 9 288 8$ 7$ 8 +$ 

CHScttaps 137 15 103 2B$d2B$ 28% 

CadreuaCoreOJO 21 053 18 17% 18 +$ 

Caere Cp 114 909 7$ d6% 6$ -ft 

Crtgene 2T5 8 917 13$ 12% 13$ +% 

Cat MHO 20 23Z7 32% 21% 22 +1 

CanBafita 1 1035 1$ 1$ 1ft 

CaniataL 1 57 3$ H3 3 -% 

Cndee 1 118 1$ 1$ 1$ -$ 

canon toe 060119 3 88 86 88 +% 

Canorde 2 12 3? a 3$ 3$ +$ 

Caikal 012 25 144 48% 48% 48% 

CarttonQT? 081 21 5 25$ 25$ 25$ -% 

Cascade 080 2D 40 21% 20% 21% 

GaeeyS 0X8 17 423 12% 12 12 

CrtDBDB 5 395 7$ 6$ 7 

CeBufar 8 334 18$ 19$ 

CEMCp 19 510 12% 12 12% +% 

CanaXTrt 77 12 10$ 10$ 10$ 

Camxat 4 4126 12 11% 11% -% 

CntrtFWx 1.12 11 71 32 31% 31% -% 

CHriSpr 231122 11%610% 11% 
Cbandtor 8 20 4% 4ft *ft 

Owner 1 060 8 381 22% 21$ 22% +$ 

CmnSh 0X9 13 4039 9$ 9% 9JJ +ft 

□wndsgn 42 47 u6% 8ft B% 


Cbantta 

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Charepanr 

Odpa&Te 

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1 290 % d$ % 

12 15 3% 10% 3% 

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54 4583 50$ 56% 56$ 


CKranCp 54 4563 50$ 56% 56$ -$ 

CmFblX 1JB12 191 99% 52% 52$ -$ 

CtataaCp 017 31 379 32% 31% 32% +% 

CtousLgc 3010308 29$ 28% 28% +% 
CSTech 121 292 2$ 2ft 2ft 

CtacoSys 1225422 24 23$ 23^ 2 -$ 

CtzBancp 1X8 18 282 28 % 28% 28% -$ 

CtoanMr 29 86 8% 7% fl% +% 

Ob Or 41 305 12% 12 12 -$ 

CMhB3&n 8 789 5$ 5 5$ 

CoeaCrtaB 1X0 17 29 28% 27% 28% +% 

Coda Engy 1271624 6$ 8% 6$ -$ 

CodaAtann 27 42 10$ 10$ 10$ +$ 

CognexCp 2D 3809 13% 12% 12$ -$ 

Copta ■ 122 1385 13$ 12% 13% +1 


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Coreshara 55 2T5 12% 12 12% ^ 
ConsbXkR 433035 4% 3£ 3K 

Corftap 1J0 3 554 42 % 41% 42% +1% 

Conartum 7 199 6% 8 8$ +$ 

Oonatel 1X4 1B5Q2fimi% 10$ 11 

ConiaCrt 31 159 16% 16 

CrtriDate 14 274 10 9% 9$ -$ 

CMnA 050 18 365 19$ 18$ 19$ 

Cantab 78 550 9% 9% 9$ -% 

CaasCb 18 5544 42 41$ 41% +% 

Cup 01 A 45 108 16% 18% 18% +% 

CtBCkirB 0X2 282186 23% 23 23% 

Cray Camp 0 781 1ft 1ft 1% +ft 

Orem Res K 20 5JJ 5$ 5$ -ft 

Cyiogen 3 3062 5$ 4$ 4% -% 


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5 606 10 

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8$ 6 
Z1%d20% 
15% 14% 
29% 29% 
18$ 17% 
13 12% 
6% 6 
7$ 7% 
16$ 15$ 
11$ 10ft 
14% 13% 
22 % 21 % 
8% 8 
11 % 10 % 
21 % 20 $ 
U21 20 

28% 28% 
14$ 13$ 
3% 3% 
18% 17% 
»$ 25$ 
2$ 2$ 
25 24% 
4$ 4$ 


6$ *$ 
21% +% 
15 -% 
29% +% 
17% -$ 


11% +$ 

14 Jg 


11$ +A 
20$ -1$ 
20% 

25% -% 
14$ +% 
3% ■$ 
18% +% 
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2120951 
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30 581 
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0X0 33 99 
1.18 20 553 
024203 161 

16 649 

17 2841 
0X8 14 124 

30 5587 
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OH 15 13 
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131333 
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18 66 
1.17 37 25 


7% 7% 
7% 7% 
5% d5$ 
5% 5 

4$ 4$ 
17% 17% 
<0$ 39% 

14% d14 
14% 13% 
15% 14% 
10 % 10 % 
25% 24$ 

io% daft 

2$ 2$ 

59% 56 

2% 1$ 
17$ 17% 
9$ 9$ 
11 $ 11 $ 
a% 9$ 
6% 6% 
10% d9% 
7% 7 

18% 17 

3% 3% 

5$ d4 
28% 27% 
2% 2$ 
17% 16% 
201 189 


4$ 

17% -$ 
40% +% 
14% 

13% -% 
14$ -% 
10$ ♦$ 
25 +$ 


59$ *1$ 
2% 

17B +ft 
9$ -% 
11$ -$ 
9% *ft 
5% +% 
9% -% 
7% -ft 
17 -% 
3% -ft 
5% +% 
27% -% 
2% +% 
17% +% 
201 


ftSOBS 

KamanCp 

KaydsaCo 

KrttayOb 

KeOySv 

Kentucky 

UtUMk 

Kascnnu 
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Kofl A 

Komagtac 

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044 5 513 
>D4D 12 275 
72096 
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011 11 21 
034 13 23 

14 2 

442088 
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21% 021 
9% 9 

20 % 20 
8 7$ 
29 28% 
6% 8% 
23% 23% 
6% 6% 
33% 31% 
8% 08 
ft dft 

19% 18% 
13$ 13$ 


01% ■*% 
9% 

00$ 

7$ +ft 
28% -% 
6% 

23% 

6% 

33% *1% 
8 i- 


J&J Snack 14 

Jason tac 02816 
XC tad 010 26 
JHiraonW a 

Jones tat 10 

Jones Med aHIO 17 
JortynCp 1J0 11 
JS8HD 06* 18 
JtaoLlgk 028 18 
JusHn x 018 9 


- J- 

m 12% 
12 11 
20 31% 
22 23% 
102 13% 
260 11% 
171 25% 
37 25% 
83 1B% 
129 12% 


12% 12% +% 
10 It +1 
30% 30% -% 
23% 23% 

13 13$ +% 

1013 11% +$ 

25 25$ -$ 
25$ 25% +% 
18% 1B% -% 
12 12 


Ladd him 012 «i «54 8 07$ 7$ 

Iran REdl 31 4840 28% 27% 27% 

Lancastu 0X4 21 176 *3% 47% 4X> 4 

Iran to 0X8 18 1B2 ia% 10 ia 

LamhAEph 36 425 28 % 26% 27ft ■ 

Lsnspacs 0 28 7 d7 7 

Lssaracpe 56 33 5% d5$ 5$ 

LBtoS 15 1240 18% 17% 18% 

lraKonPT 0X8 17 635 23% 23 23 

LOOS 21712633 15% 15 15% 

LOICp 016 1 26 4 3% 3% 

Ladners 16 1655 13 12% 13 

Legem Cp 16*953 27 $ 3% »!2 
LBriyMBcx 0 7B IS 277 31% 31 31% 

UbTedii 020 ?5 81 17% 16% 16% 

UteBne Zl 113 4$ 4 4$ 

LNytott 028 13 51 14% 14 14% 

Unte 100 82118% 118118% 

UncotaTx 052 15 194 16> 2 16 16 

LndsayMt 13 199 32 31% 31% 

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UqUBffi 040 18 12 36 d34 36 

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Lana Star 22 85 7$ Bft 7$ 

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LTXCb 2 1596 2$ d2 2$ 

LVMH 1 OJ5 * 52 30% 30% 30% 


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MS Can 19 8iB 22% 
Mac UH 060 39 177 12jA 
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Magma tor 12 381 26% 

Magna Era are 12 73 1 9$ 
Maasax 12 137 8 

MxranCp 30 581 10% 
Mam Dr 15 973 6$ 
MaricrtCp 9 4 40 

itenpxBt 0 77 1$ 

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tontial 060 11 1859 20% 
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Uarioi tot 40 2071 53l 2 
UaxiarCp 01918 5$ 
UcGraUiR 04412 12 16% 
McCorrdc 048 161508 20% 
UcCauC 48 2268 51% 
Mad bag 0 25 ft 
Medexhe OiB 15 18 12% 

MaktonS 048 13 425 22% 
Udamtae 034 7 43 6$ 
Mentor Cp 016 45 20 14% 
Memo 924 21 2901 10$ 
MHsart£x068 11 215 20% 
Mmay 6x070 B 148 30% 
Muttaii 1J6 (2 847 31% 
Uafert 94637 9 

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UdrartF 02016 150 11% 
UilHaffl 2X0332 733 74 

IftartM 9 85 4% 

Ucraaga 141198 20% 
Mtorecore 5 574 8$ 
ICognb 17 171 8% 
beopets 2 36« 5ft 
Ues& 1528732 53 

UdAdU 48 5145 54$ 
Urtatac 0/0 11 1339 28% 
MMraGrah" 050 27 41 34 

IBerH 052 18 287 25% 
Mon BIB 22% 

Unrtacb IS 420 11% 
MobleTrt 43 4308 17$ 
Modem CO 020 IB IB 7% 
ModbnMt 052 18 41 27 

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Manns 004 10 1589 6 

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MISSys 058 11 85 28$ 
Htresd 13 488 29% 
Mycngtn 5 202 11% 


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10% 10% 
5% S% 
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1$ 1$ 
8% 8$ 
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20% 29$ 
B 8% 
51% 52% 
d5 5ft 
18% 16% 
d20 20% 
51$ Sill 

ft ft 
11 % 12 % 
22*4 22% 
5% S% 
13% 13% 
10$ 19% 
20% 20% 

30 30 

31 31% 

8% 9 

16% 17% 
11 $ 11 % 
72% 73% 
3$ 4ft 


51ft 51% 
52% 52$ 
28$ 28% 
33% 33% 
25$ 25$ 
21 % 21 $ 
11 11 $ 
17$ 17% 
7% 7% 
26 26 
35 35% 
37% 37% 
5$ 5% 
31 31 

14% 14M 
28 28$ 
29% 29% 
11 11 % 


MACfex 018 12 926 
Marti Fndi 07211 126 
MrtPtsa 14 150 
KdCorept 036 73 478 
HbsSui 020 19 34 
Martov 12 12 
(EC 0X6105 30 
Hates 16 306 
NemkGan 21 3303 
NBMkS 86 380 

Keurogai 25 3 

NbVH 027 19 37 

KewEBui 0X0 21 228 
Haw Image a 1246 
MsrigeNef 2320937 
Hewprt Cp xCLM 13 35 

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Non ton 058 25 70 
Hdsbm 040 28 6847 
Honzanl 14 151 
N Star Un 4 3 

NortonTd 0X8 141136 


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17% 16% 17 

6 5% 6 

12 % 11 % 11 % 
13% 13 13 

18 17% 18 

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26% 25% 28 

15% 15 15$ 

8% 0% 8% 
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19% 16% 18$ 
IS 18% 19 

10$ 9$ 10 

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U8% 5$ 6% 
a 7% 7% 
56 55 55 
45% 43% 45$ h 
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13$ 13$ 13$ 
15 14% 15 

33% 31 31% 

3ft 3ft 3ft 


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Octal Con 
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OragonMH BJi 
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ID 209 34 

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532SW8 36$ 
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10 ZlOO 14% 

10 124 5% 

6 40 2$ 

43 379 14% 

11 158 10$ 
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16% 17% +$ 
13% 13$ +$ 
24% 24% 

29% 30% 

33% 34 +% 

36$ 38$ 

32% 33 *% 

16% 17% +1% 
21 21 $ +$ 
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19% 19 1 * +1% 
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dual Fond 020 17 419 ^1% 73% .1. 

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SBCp 

SrtbrisB 

Sotocte 

Saquen 

Soqurta 

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SeruTrocl 

Sctmcan 

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SHLSysbn 

Shoremod 

stmbcp 

StonaOn 

StenaTuc 

SrenAl 

SigmaDes 

SWcnVBc 

SfficnVGp 

SWipenn 

Smttfld 

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SaHranraP 

Sunoco 

SartMS 

Sptogri A 

SlJudeMd 

SrPaife 
StyBI 
Sopka 
State Sir 
Sid Mem 
SURagte 
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SlotdyUSA 

State 

SbrarteCI 

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SumnKBc 

SumreATe 

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SunMto 

Sarflt Tra 

Sybase he 

Symantec 

Synatoy 

Synaronre 

Synergen 

Synedc 

Synoptics 

SystmSoit 

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-FI- 

13 297 14% 
P 456 6% 
3 M5 5 

25 222 19% 
28 253 31% 
15 2601 17% 
2 300 4% 
& : 3$ 

14 950 R% 
2J4 14 1661 41% 

1 44 6% 

060 10 6 35 % 

1 40 22 1309 68% 
01? 13 39 b% 

056 4 11B9 20 

015 3 2W4 17 

020 10341? 13$ 
23 309 19% 
068 59 31? 19% 
UK! M 17% 
(140 13 43 ?J% 
14 1565 7% 


13% U 
5% U 
4% 4$ 
ia% ia% 
28% 29% 
16ft 16ft 

d3% 4% 

3% 5$ 

09 8$ 
40$ 41% 
5% 6% 
3S$ 3S% 
W.% GB 
li% 6% 
l'J$ 19% 
1G% 17 

13% 13il 
18% ta% 
10% in 

17 17*0 
?2 'j 2? -’+ 
■% 7ft 


196 0 1611 
030 13 JJ7 
OJO 20 IGliB 
7 24BO 
11 rxs 

G 1150 
052 7 1395 
B 4?1 
120 45 62 

W056D 
0 ID 23 MW7 
036 I 1G3 
1.12 14 117 
65 2309 
24 441 
11 467 

21 44 
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084 is 4451 
3 903 
28 252 
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033 18 990 
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58 7919 
1 664 

056 151128 
068 10 3503 
020 451165 
040 12 2739 
OJO 11 1688 

1 356 
40 3019 

OBO 171225 
ID 2995 
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OXB 20 297 
OJO 37 486 
132 20 
1.10 12 226 

22 213 
028 22 901 

22 673 

0X0 25 7 

084 13 133 

36 740 
13 66 
105232 
331333 
5713628 
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036 17 188 
72 10 

2 626 

59 208 
134823 

012 14 334 

23 660 
27 5E6 


50% 57 % 
17% 17% 

27% »% 
Ji% ?5% 
14% 13$ 
6% dR 
16% 15% 
8 7% 
38% 37 

70$ 70$ 
10% 17$ 
1$ 1$ 
25% ?J% 

14 13$ 
3 vJ 3% 

0% n 

4% 4 

17$ 17$ 
25% 24 

7$ 6$ 
17% 17$ 

11 10% 

18% 17 

3ft 3% 
40$ 39% 
6 $ d&% 
10% 10% 

12 H% 

21% 21% 
26% 26 
23% 22 

4% 4$ 
21 % 20 % 
29$ 20 

2T% 21 

28% 20 
22$ 21$ 
2% 62$ 
26% 25% 
40% 39$ 
14% 14% 
22 $ 21 % 
18 17% 
10$ 9$ 
16$ 18% 
20% 20 
10 $ 10 % 
28 27 

15 14% 
23 22% 

21 % 21 % 
27% 26% 
5ft 5$ 
19$ 19$ 
32% 31% 
50% 48 
11$ 10$ 
17$ 17% 
3$ 3$ 
B$ 8$ 
IS 13% 
15$ 14$ 
13% 13 

14$ 14% 
*% 6% 


17 j -a 
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b$ 

17% % 

10% 

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39% % 

6$ 

10% 

11% +$ 
?1% 

26 -% 
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4% -ft 
21 

20$ -$ 
?1% +$ 
28% ♦% 
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26$ *1% 
40$ +$ 
14$ +$ 
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20$ -$ 
10$ *% 
27% *% 
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22% 

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19ft +ft 
32% +% 
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17% 


14% 

1412 -ft 
13 
14$ 

6% +ft 


T-CrtISc 6 164 3$ 

T.mePrx 052 181916 2»% 
TOCp 171961 12% 

TCA Came 044 27 S3 22$ 
ToftData 10 36*1 15% 
Tacuraan 080 14 3 55% 

Teketoc 2 56 9% 

Teton Sys 8 079 11$ 

TrtaCBmmA 283 9738 21 

Tefcbt 82521 6 

TataM 2110017 31% 

Trtxon Cp 901 S3 *61 15 

TetnTac 70 552 a$ 
TfvaPTvADfl 020 24 1035 24$ 
Three Com 5114930 48$ 
TJhtX 922 32 2430 24% 
Tokos Med 2 644 4% 
Tokyo Uv 032 37 37 62% 
Ton Brown 75 209 l«7 B 
Tapps Co OJ835B2921 7% 
TO Enter 3 762 6$ 

TrenswU 10 338 11$ 
TienuKk 1X0 1? G8 42 
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TrtaiUe 53 91 10*4 

TnaicoBkC 1X0 11 20 21% 
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TyrfdA OXB IB 4496 22% 


d3$ 3$ 
29% 29% 
12 $ 12 $ 
22 $ 22 % 
15 15% 
53% 53% 

3 9 

10 $ 11 $ ■ 
20ft 
5% 5% 
29 30% - 
14 15 

8% B% 
23$ 24 

47$ 47% 
21 21 $ 
3$ 4ft 
62% 62% 
14$ 14$ 

7$ 7ft 


42 42 

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2 1231 6 5% 

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2X0 11 38 51% 50% 

0X0 9 230 19% 10% 
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0X8 10 3275 27 $ 26% 
30 2100 4% 4% 
1.12 10 4? 13% 13$ 

11 263 7% 7 

10 3 46% 4B% 

16 «1 5$ 5ft 


40% +% 

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13% *$ 

7$ 

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5ft *it 


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Vrtntanlx 030 32 ZlOO 14% 14% 71% -% 

WgrtCeg 67 2817 U35 34% 34% •% 

Veittora 18 506 16% 16 16% »% 

War 31 2202 20% 20 20 -% 

Vtanpflsf 9 403 14% 14 I4ft +ft 

Vtewtogfc 1915249 15%074% 15% +% 

VLSI Tech 301428 13$ 13$ 13% 

Vblw B 084 16 297 88$ 88 88$ +2 


Hamer En 010 22 1462 
Wamtedi 67 558 
WasWutSBaX8 7 1643 
WashffcEL 0X0 9 97 
waUrtndA 022 10 331 
WauouPMrtlM IS 88S 
WHO 2001S 2S5 
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West One 072 121161 
WStfUb B 842 

Vttp&A 11154 

wre Skua 11 20 
Wlrelfa 096232927 
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WDUraiL 028 12 16 
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29 28 

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20 $ 20 $ 
22 % 21 $ 
25 2<% 

24% 23% 

39% 39$ 
4$ 3$ 
30% 30% 
12 $ 11 % 
13% 01 2% 
2$ 2$ 
48% 47% 
32% 30 
14%d13$ 
29% 19% 
3$ Sft 
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2B$ *1 

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34% 

24% 

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-X-Y-Z- 

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Kama Cop 2 431 3% 3 3 -$ 

YrtkM OB4 26 1003 17% 17% 17$ +$ 

VtrtRsdi 129 310 4$ 3$ 3$ •$ 

ZkraUtah 1.12 10 114 u42 41 41$ 




40 


FINANCIAL TIMES 


Thursday June 23 1994 


WORLD STOCK MARKETS 


AMERICA 


Dollar recovery, bond 
rally end equity slide 


Wall Street 


US stocks ended a three-day 
slide yesterday morning as 
investors responded to a mod' 
est recovery by the dollar and 
a subsequent bond rally, writes 
Frank McCarty in New York. 

By 1 pm, the Dow Jones 
Industrial Average was 16.80 
higher at 3,724.77, after drop- 
ping more than 103 points 
since last Friday morning. 
The more broadly based Stan- 
dard & Poor’s 500 was L88 bet 
ter at 453.22 in moderate trad- 
ing. 

In the secondary markets, 
the American SE composite 
was up 1.52 at 43329. The Nas- 
daq composite, badly hurt in 
the previous session by a 
sell-off in computer-related 
issues, recovered 3.77 to 712£& 
The dollar again set the 
direction for stocks. Yesterday 
the tone was positive, as the 
US currency moved above 
Y100, a day after dropping 
below that mark for the first 
time. 

The bond market, concerned 
about the likelihood of an early 
move to higher interest rates 
to support the dollar, was 
relieved. Treasuries staged a 
solid rally after a long slump. 

Meanwhile, investors were 
casting an eye toward Capitol 
FED to glean hints about mone- 
tary policy from Mr Alan 
Greenspan’s congressional tes- 
timony. The Federal Reserve 

flhflinngn said that he had nn 

fixed target for economic 
growth. 

His remarks coincided with 
the release of the Fed's Beige 
Book summary of economic 


conditions which found a mod* 
eration in growth and no rea- 
son to be concerned about 

iwflaHrm. 

A profits warning issued by 
Sun, the energy group, called 
attention again to the impact 
of higher rates on corporate 
earnings. After the group «rifl 
that it expected to break even 
in the second quarter, its share 
price was marked down $% to 


Tesoro Petroleum made a 
rare appearance on the NYSE’s 
most active list after filing for 
an offering of new 5 -35m com- 
mon shares priced at $10%. The 
stock added $% to $11% in 
heavy volume of nearly 1.2m 
shares. 

The previous session’s three 
big losers stablised yesterday: 
Caterpillar gained $% to $102% 
after plunging $4y« a 'day ear- 
lier. But SG Warburg down- 
graded the issue, rfWrig risks 
related to a strike being staged 
by the United Auto Workers. 

Quaker Oats limped $% 
ahead to $73%. Its share price 
went into a $8K tailspin after 
NestlS deflated investors' 
hopes that it would launch a 
takeover bid for the food 
group. 

Lotus Development, whose 
profits warning had prompted 
Tuesday's flight from technol- 
ogy issues, dipped $% to $36%, 
adding to a 28 per cent decline 
in the previous session. 

However, relative calm 
returned to the sector, and sev- 
eral leading stocks rebounded 
smartly. On the Big Board, 
Compaq climbed $1 to $32% 
and Micron. Technology recov- 
ered SI to $32%. 

Silicon Graphics gained $2% 


S Africa eases on ‘neutral’ budget proposals 


The budget had little effect on the country’s 
financial markets, the initial reaction being 
that it was broadly “neutral”. Among the pro- 
posals was a 5 percentage-point cot in corpora- 
tion tax to 35 per cent 
Brokers repented that gold stocks were aided 
in the afternoon session by a further advance In 
the price of bullion. The overall Index receded 
15 to 5,706, industrials declined H to 6,583 
and the gold shares index dipped 2 to 2^43. 


Remgro, which had lost ground recently on 
fears that the budget might contain proposals 
lifting cigarette and alcohol taxes, improved 75 
cents to R2&25. 

Among gold issues, both Vaal Reefs and 
Kloof lost Rl, to R56.75 and R429 respectively. 

De Beers relinquished R1J25 at R113L75 an 
rumours that negotiations with Russia concern- 
ing the sale of ifiamnnrfc had been called off. 
Barlows finished 25 carts softer at R3&25. 


EMERGING MARKETS: IFC WEEKLY INVE8TABUE PRICE INDICES 


Market 

No. at 
Stacks 

June 17 
1994 

Dollar terms 
% Change 
over weak 

% Change 
an Dec ‘93 

Local currency terms 

June 17 % Change % Charge 
1994 over week on Dec *93 

Latin America 

(21Q) 

61205 

-25 

-53 




Argentina 

(25) 

889.84 

-43 

-105 

546,02937 

-4.0 

-105 

BrazS 

(57) 

264X4 

-13 

+13.0 

834,084,6082 

+75 

+7203 

Chfle 

(25) 

67531 

-02 

+225 

1,13956 

-OX 

+195 

Colombia 1 

(11) 

933X8 

+2.7 

+443 

1,377X6 

+2.1 

+483 

Mexico 

(60) 

84136 

-32 

-16X 

1222X6 

-3.0 

-9.4 

Pern* 

(11) 

150.05 

+02 

+24.1 

200.02 

-0.1 

+25.8 

Venezuela 1 

(12) 

543,82 

-4.6 

-7.1 

2,15251 

-13 

+51.4 

Asia 

(558) 

25051 

+23 

-133 




China* 

(18) 

9435 

-15 

-363 

10321 

-1.6 

-37.1 

South Korea* 

(156) 

126X7 

-02 

+7.0 

13353 

-0.6 

+6X 

Phfflpplnes 

(18) 

290.16 

-2.1 

-143 

37231 

-32 

-162 

Taiwan, China* 

m 

137.43 

+33 

+1.6 

139.01 


+4X 

India 1 

(76) 

135.81 

+13 

+16.6 

150.19 

+13 

+163 

Indonesia* 

(37) 

10229 

-13 

-180 

120-44 

-12 

-15X 

Malaysia 

(105) 

275.77 

+43 

-187 

263.94 

+33 

-21.7 

Pakistan* 

(15) 

37930 

+73 

-22 

527.60 

+73 

-0.1 

Sri Lanka* 

(5) 

16039 

-63 

-92 

17326 

-7.0 

-0.3 

Thailand 

(55) 

385.63 

-0.7 

-193 

38555 

-1.0 

-202 

Eura/Mid East 

(125) 

109.16 

+73 

-355 




Greece 

(25) 

211.43 

+4.1 

-7.1 

34831 

+1.1 

-OX 

Hungary” 

(5) 

18027 

-05 

+82 

224X9 

-15 

+112 

Jordan 

(13) 

161.09 

-03 

-2.7 

23230 

-03 

-3.0 

Poland" 

(12) 

520.12 

-11.7 

-36.4 

745.79 

+12.1 

-325 

Portugal 

(25) 

10939 

-13 

-33 

126.04 

■52 

-83 

Turkey" 

(40) 

107.61 

+20.7 

-49.4 

158736 

+162 

+7.7 

Zimbabwe** 

(5) 

27927 

+03 

+362 

32838 

+0.1 

+640 

Composite 

(882) 

31323 

+03 

-113 





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MAC A MB rune ’ van; COOK 3f i&aajm s two: &D*! 31 rate BJma laazwjm* I09t. (?**» 6 imz js rsset (av+r 1 ism: net 
DSC 31 1335 ( ryosc at T905 {IQ the 31 (335 P3M« 4 1BBK ft^jUy 2 JS93. 

The Chinese equity market has been one of this year’s disappointments, reflected in a 
37 per cent fall in dollar terms. Both the S hang hai and Shenzhen B markets - which 
trade in stocks available to foreign investors - have slipped back to the levels seen at 
the start of 1993, while H stocks, traded in Hong Kong, are down almost 40 per cent so 
far this year. 

James Capel Asia has identified a number of reasons, some of them, in its view 
misguided, why the Investment community has been fighting shy of China: the effect on 
earnings per share growth of a depreciating local currency: the fear that a tax 
advantage currently, available to companies with B shares will be removed; and the 


on that the level of company disclosure is below average, 
in the H stocks has become the preferred method of ' 


Kong and New York before the end of the year. 


FT -ACTUARIES WORLD INDICES 


Bourses recover on better news front US 


to $21% after agreeing to form 
a product development venture 
with AT&T Network Systems. 

Canada 

Toronto fielded a reaction in 
August gold on Comes, off 
US$130 at US$39240 per ounce. 
Gold shares held back a fledg- 
ling recovery, and the TSE 300 
composite index was L96 softer 
at 4,04549 at noon in volume of 
27.99m shares valued at 
C$388.6m. 

Declines led advances by 332 
to 256, with 273 issues 
unchanged. Toronto’s gold sub- 
IiMct fell by 2 per cent, while 
upward momentum was con- 
centrated in flwgTiriai services 
and forest products. 

Placer Dome was off C$1 at 
C$30%, while American Bar- 
rick fell C$% to C$33%. Active 
issues included Falconb ridge, 
which traded at CS17% in 5J2m 
shares after being listed yester- 
day at C$L8% In an initial pub- 
lic offering. The company said 
that poor nickel prices were to 
blame for its weak perfor- 
mance. 

Brazil 

Sdo Paulo had improved 14 per 
cent by midsession, helped by 
the recovery of the dollar an 
the foreign exchange markets. 

The Bovespa index was up 
408 at 31,692 after an earlier 
high of 32438. Turnover was 
about Cr9L6bn ($37 Am). 

Most of the activity was seen 
in major blue chips, with Tele- 
bras preferred up 44 per cent 
at Cr914, Electrobras preferred 
ah pad 4_{ per «»nt and Vale do 
Rio Doce up 54 per cent. 


The news from America was 

better. Mr Stanley Fischer, the 
fixture IMF deputy managing 
director, said the world econ- 
omy was “in greet shape”; Mr 
Alan Greenspan, Federal 
Reserve chairman, made the 
requisite noises about domestic 
inflation as he testified in 
Congress to the House Budget 
Committee; and presid en t Clin- 
tan raised hopes by saying that 
a statement on the dollar 
would be forthcoming later in 
the day. 

In Europe, bonds responded, 
equities followed and short- 
covering did the rest, writes 
Our Ma rkets S taff. 

FRANKFURT regained Tues- 
day afternoon’s losses, rose fur- 
ther to close the session with 
the Dax index at 1494.42, and 
climbed again in the post- 
bourse to 2,00443, up 4745, or 
2.4 per cent, over 24 hours. 

Ms Barbara Altmann of B 
Metzler in Frankfurt said the 
recovery started in the bond 
market, encouraged by Tues- 
day's M3 figures which were 
lower than generally expected 
and by yesterday's further cut 
in the repo rate, 5 basis points 
to 5.00 per cent. 

Germany has high long bond 
yields and a reducing inflation 
rate, said Ms Altmann. indicat- 
ing high real yields on the 

ASIA PACIFIC 


Jongs potentially, a profit- 
able switch from short-dated 
instr uments. 

In that context the cha n c es 
for equities, after a Dax fall 
from nearly 2400 in xnid-May 
to just above L950 this week, 
were better than the risks, she 

maintained. 

F inancials , however, were 
weak, looking at the prospect 
of end-June figures based on 
bond trading performance to 
date. Deutsche Bank fell a fur- 
ther DM7 to DM68640 and Alli- 
anz DM17 to DM2485. 

Turnover edged up from 
DM3.3bn to DM&Sbn. The best 
rise of the day came from 
Deckel Maho, up DM5.70, or 20 
per cent, to DM3420 on talk of 
a rescue plan for the ailing 
marhfaie tool maker. 

MHAN’sjstrong rebound sur- 
prised most observers, 
although the equity market 
took its more positive outlook 
mainly from strength in bonds. 
Sentiment was also helped 
by expectations that the gov- 
ernment would make an 
announcement today on pro- 
posals to restrict growth in 
this year’s budget deficit 

The Comit index improved 
1340 to 89L63. 

There were gains across the 
board, with no specific stories 
predominating; but the good 


I pt-se Actuaries Share indices | 

Jim 22 

Hnsti creran Om 

ii.ao urn 

THE EUROPEAN 9GHE3 

1100 1490 1W0 On' 

FT-SE Eomut* ICO UU39 1318.39 
FT-SE Eorattack200 135510 1351*7 

II 

II 

131937 UKW mat 

mw m» soar 

Jun 21 

Jan 

Jan it 

Jnn 

FT-SE Eurocrat* 100 130148 

FK5E Enron* 200 1MU3 

1300X3 

asijo 

133034 

138847 

«SJi tsrexi 

tmta 140908 


wm ion own* «e ■ inw » - «w imm* n ■ bmp m • «mu» 


rises were seen especially in 
the Industrial sector. One of 
the day’s best performers was 
Montedison, up L86 at Ll T 473. 

PARIS made gains In line 
with the more optimistic pic- 
ture throughout the Continent 

The CAC-40 index advanced 
2646, or 1.4 per cent, to 
1417.04. but brokss cautioned 
against reading too much into 
the rise as sentimgni remained 
edgy. 

Peugeot gained FFr8 at 
FFr783, although the vehicle 
m anu f a ct urer forecast a slow- 
down in market growth dozing 
the rest of the year. 

Skis Rossignol put on FFr95 
to FFM440 as it said that it 
expected to cut its debt burden 
this year, and forecast a rise in 
turnover. 

Eurotunnel ended up FFrL15 
at FFr25 with the group due to 
announce the take up of its 
rights issue by the weekend. 


ZURICH was among tha best 
bouraqwfonnersvrithariseof 
2 per cent, the SMI index end- 
ing 5L5 higher at 2£85.7. The 
recovery was led by banks. 
UBS rising SFr33 to SFri,119, 
CS Holding by SFr21 to SFr539 
and SBC by SFrl6 to SFH89. 

Pharmaceuticals also gained 
with Roche certificates rising 
SFr55 to SFrt.405. 

HOwever, the recovery was 
said to be vulnerable. Volume 
was low and dealers said that 
the gains were too fragile to 
lay the basis for a new upward 

AMSTERDAM needed little 
encouragement to break out of 
the downward trend experi- 
enced for more than a week 
and, drawing inspiration from 
bonds, the AEX index gained 
6.05. or U5 per cent, at 382.74. 

ELM added 10 cents at 
FI 45.70, the stock having been 
upgraded recently to a buy by 


Paribas Capital Markets. In 
explanation Mr Chris Avery, 
the analyst, said the airline’s 
results for the year to March 
hid confirmed its recovery 
stay, even though it had bene- 
fited from a pension holiday. 
Ha added that Northwest, in 
which wtm has a 20 per cent 
stake, was now making a posi- 
tive contribution to the group. 

MADRID’S technical recov- 
ery, tentative for such a vola- 
tile market, left the general 
index just above the 300 mark 
again with a rise of 173, or 14 
per cent to 300.76. A reduction 
in block trades left turnover 
considerably lower than in 
recent days at Pta34bn. 

Utilities were relatively 
strong, Iberdrola recovering 
Pta25. or 2.7 per cent to Pta950 
after recent lasses aggregating 
around 10 per cent Banks were 
mixed, even after some late 
buying interest 

ISTANBUL fen 2.4 per cent 
on profit-taking following the 
market’s recent strong run last 
week when It gained more 
than 20 per cent in dollar 
terms. The composite index 
lost 490.58 to 19,70343. after an 
early high of 20.402. K 

Written and edited by WHHani 
Cochrane, John Pftt end Jyoti 
Jeet un 


Nikkei weaker on dollar’s low against yen 


Tokyo 


The rise of the yen, and the fall 
in the dollar to a new post-war 
record low of Y99J35 late on 
Tuesday in New York took Jap- 
anese equities to their third 
successive decline yesterday. 
writes Our Markets Staff. 

The Nikkei 225 average 
ended 23144. or 1-1 per cent, 
lower at 20481.32 in rising 
activity, volume climbing from 
318m shares to an estimated 
500m. Brokers said there was 
heavy arbitrage selling, but 
that the Rank of Japan’s active 
intervention in the currency 
markets, in support of the dol- 
lar. had invited buying an the 
dips in equities. 

This “bottom-fishing" 
allowed the index to dose weD 
off the day’s low of 20,37147. 
although it also registered a 
high of 20,742.65 in the process. 

The broad market was also 
weak, the Topix index of all 
first section stocks closing 
15.00 down at 1,643-97. Declines 
led advances by 887 to 152, 
with 115 issues unchanged. 

The Nikkei 300 fell 244 to 
29948 and the second section 
index shed 22.44 to 2,407.27 in 
17.15m shares, but later in Lon- 
don the 1SE /Nikkei 50 index 
finished 3.43 up at 1.34&99. 

Japanese equities had risen 
this year on hopes that the 
economy would improve dra- 
matically, said an analyst at a 
Big Four brokerage; but this 
scenario was formed an esti- 
mates that the dollar would 
stay at around Y105. Many 
companies would be forced 
into downward earnings fore- 
cast revisions if the yen stayed 
around Y100. 

Failing a recovery In the dol- 
lar, said brokers, the Nikkei 
225 could fall to 20,000. Foreign 
investors were net sellers of 
Japanese stocks yesterday, and 
it took active domestic buying 
linked to the launch of new 
investment trusts and other 
institutional investment 
requirements to prevent equi- 
ties from falling further. 

The key declines were in the 
transportation, rolling stock, 
fishery and steel sectors. Also, 
many high-technology issues 
were weaker as investors sold 
off exporters’ shares on a 
higher yen. Oki Electric dipped 
Y7 to Y779 and Sony, in spite 
of its legal victory in the 


George Michael case in 
England, fell Y90 to Y6,070. 

Mitsubishi 00, which per- 
formed well on Monday and 
Tuesday, dosed nwhangpd at 
Y 1,05ft it anra wmeeri on Mon- 
day that it had drilled a suc- 
cessful test well yielding 10,346 
barrels per day of ofl off the 
coast of Vietnam. 

Roundup 

Interest rate uncertainties 
remained, but the region 
offered indications of recov- 
ery. Colombo was closed for a 
holiday. 

PAKISTAN climbed on bull- 
ish sentiment in blue chips, as 
institutions moved in before 
tiie dose of corpor a te books on 
June 30l 

The KSE 100 index rose 38^1, 
or 1.65 per cent, to 2348.70. 


Higher cement prices, and 
privatisation in the fuel and 
energy sector, took constituent 
stocks into an uptrend. 

SYDNEY rose for the first 
time in a week on a steadier 
bond market and an advance 
in the gold price. The All Ordi- 
naries index was ahead 174 at 
2,0109. after slipping to 1.988X 
Industrials, resources and 
golds were strong performers, 
the golds index putting cm 35.1 
at 2,259.1 after the rise in the 
bullion price on Tuesday night 
HONG KONG overcame over- 
seas selling and negative senti- 
ment to end modestly higher. 
The Hang Seng index closed 
19.06 better at 8,876^4 after 
falling below the 0800 level In 
the early morning. Turnover 
was a light HK$257bn. 

Uncertainties about US inter- 
est rates and gloomy financial 


markets worldwide kept for- 
eign investors at bay. 

SINGAPORE was mixed. It 
featured a strong rebound in 
Malaysian shares traded over 
the counter, but the Straits 
Times industrial index, com- 
posed of domestic blue chips, 
ended &57 easier at 2£ft30. 

Brokers said Malaysian OTC 
stocks benefited from bargain 
hunting, and from rumours 
that a date for Malaysia’s gen- 
eral election would be 
announced this week. 

BANGKOK finished L3 per 
emit down in moderate trade, 
with stocks faBIng across the 
board. The .communications 
sector was the biggest loser, 
while the flwawwi group was 
the most active. 

NEW ZEALAND tested its 
2.012JB low for 1994,. the 
NZSE-40 index bottoming at 


2,017.9 before ending 14.21 
■ down at 2,029.53. Turnover was 
healthy at NZSSLfim. 

TAIPEI was mixed in thin 
trade. The weighted index 
edged forward 8.64 to 5,957.61 
as turnover shrank to TS40Abn 
from Tuesday's T$46.7bn. 

United Microelectronics con- 
tinued its run of strength with 
a rise of T$3 to TS12&50. 

SEOUL ended fractionally 
lower, fearing that the South 
Korean central bank was about 
to cap money supply which 
would result in heavy institu- 
tional selling. The composite 
index dipped 0.44 to 93639. 

MANILA broke a nine-day 
slide as the composite index 
finned 136 to $815.95. but the 
market was stfil subdued by 
global concern over the possi- 
ble rise in US interest rates. 
Volume eased to 1.15bn shares. 


Jokf^rampflacl by Ths Hnanetal Timas Lm, Sokinmi, Sachs & Co. and NatWdst Sacurfttee Ltd. In carfuneUan with the Institute at Actuaries and the Faculty at Actuaries 

HA I HI«M 


REGIONAL MARKETS 


Figures in parentheses 
show number ef km 
el stock 

US 

OoBar 

Index 

Australia (69) __ 

168.01 

Austria 0 7)-.. 

179.32 




Finland (24) 


Franca (37) 

—.160.75 

Germany (SB) 

.re. 132.72 

Ireland 1141 


Itatv (GDI « ak 

^i»n (4691 


Malaysia (38) 


Mmdco (18) ... 


NeOwrtand 


New Zealand (145 . 



Shgapore (44). _ _ 


South Africa flai... 


Spain (42) — _ 


Swdan(36) . . 


Switzerland (47) _ 


u*«iwngttom(B05) 

USAB19) _ 

EUROPE (75W) ... 

- 18438 
— 18404 

Nonfcma ." 

Pacific Baain OGI 1 
Euna-Pacfflc (147Q) 

1 & P t 

nr 

North AmartCB 


Europe Ex. UK {510 „ . 


P»*e &. Japan (281) 

W6cldEx.USlllW.-n 

— 24251 

WwW Ex. UK (1BB71 

WtecMBLan.Ar.gna}- 

-17031 

17138 

WoddEx. JaeanfiTtra 

—17836 


Day's Round 


TUESDAY JUNE 2f IBM ' 


Mac Mac 


Locfri Uxdi 
DM Currency K dig 
Mac Mat on day 


MONDAY JUNE SO 1984 DOLLAR MHDC — — 

Gross US Pound Local Year 

Dhr. Dofcr Staring Yen DM Currency SZ week 52 weak ego 
'Obm Index Index index Index Index Hgi low (epprnQ 


-oa 

- 1.7 
-09 
-02 
-03 
- 1.2 
-07 
05 
- 1.6 
-02 
1.4 
-06 
-03 
-1.7 
-12 
- 1.6 
-1 A 
-07 
-02 
- 2.0 
-143 
- 0.1 
- 1.1 
-09 


162. BB 

172432 

15907 

11082 

24029 

134.98 
165.00 
127417 

34025 

178.07 

7054 

16028 

46080 

1B72.16 

187.82 

BOOS 

171.18 

32055 

27030 

128.88 

19009 

14061 

177.99 
177.47 


108.08 

14039 

151.13 

-15 

356 

17054 

16456 

10920 

14127 

1S8S4 

188.16 

13819 

114.74 

14925 

149.16 

-12 

1.07 

182X0 

175.72 

11721 

1S1.64 

15121 

195X1 

14220 


138.08 

13484 

-15 ■ 

410 

16720 

16121 

10726 

139.21 

13816 

17857 

14252 

7SLB4 

10235 

12320 

-07 

2.74 

12323 

11897 

7922 

102.66 

12421 

14621 

121X6 

161X4 

20929 

215.78 

-0.1 

127 

263.12 

243.78 

163.16 

21027 

21853 

275.79 

20728 

6957 

11630 

15651 

-12 

021 

141.70 

13847 

9123 

117.76 

15659 

15872 

8624 

10236 

133.79 

13727 

-06 

325 

16152 

15525 

10427 

13457 

138.77 

18837 

149.60 

8492 

11048 

110X6 

02 

127 

132.08 

12720 

86.13 

106.77 

103.77 

14757 

10729 

231.09 

30050 

33853 

-12 

321 

367.1? 

36352 

23807 

305.18 

36431 

50858 

271X2 

11B33 

15457 

173.12 

-0.1 

HK3 

188.12 

17925 

11927 

15429 

17322 

20823 

15653 

52.12 

67.79 

96.16 

15 

1.07 

8023 

7726 

61.76 

8870 

9492 

97.78 

5728 

105.03 

13651 

10553 

-12 

0.73 

16555 

15826 

10629 

137.18 

10839 

16824 

12454 

303.12 

39428 

473X5 

-25 

1J2 

48493 

46754 

31257 

403.03 

48425 

62153 

31221 

124229 

1015.60 

71 5699 

-15 

159 

197523 

190220 

127325 

164124 

7267.12 

2647.00 

148158 

124.46 

16154 

15850 

-12 

326 

187.19 

18921 

127.10 

16329 

10123 

207X3 

16422 

43.16 

58.14 

60.18 

-15 

327 

8823 

6650 

4417 

5896 

61.12 

7729 

4860 

11336 

147.78 

187.72 

-12 

127 

18004 

173.40 

11655 

14923 

16923 

206X2 

15021 

216JH 

261 50 

23827 

-0.6 

1.77 

34027 

32826 

219.78 

28329 

24052 

37652 


181.35 

23656 

293.63 

ai 

2.16 

283.94 

273X6 

18352 

23028 

29324 

284.68 

175.93 


11124 

13S54 

-25 

428 

13844 

131X0 

87.94 

113.39 

137.81 

16879 


130.12 

Iftft 2£ 


-1.1 

1.73 

20527 

19750 

13228 

17029 

23453 

23125 

16325 

8921 

12955 

129.72 

-0.1 

157 

16526 

14854 

10059 

129.06 

129.79 

17658 


117.78 

15353 

153.18 

17759 

18404 

-02 

-02 

422 

222 

18824 

165.66 

17626 

17861 

12024 

11927 

155.04 

15490 

179.68 

18526 

21496 

19804 

17022 

17890 


-06 154,86 

-OS 19044 
-07 165.08 

-07 160.66 

-08 17083 

-04 13097 

-1 X 233185 

-or 181.60 

-07 164.71 

-07 16623 


13081 

14021 

142X2 

129.70 

214.69 
67,71 

151.64 

109.34 

28001 

15037 

68.10 

13069 

33539 

1514.02 

106.14 

4930 

151.12 

247.88 

194.71 
12048 
17056 

125.69 
17531 
18237 


toon 

120.50 

10935 

106.61 

11536 

9232 

166.16 

10733 

10839 

109.64 


13065 

16434 

14149 

138.67 

130.04 

119.95 

20136 

138.48 

142.10 

14232 


140.48 

194,71 

11439 

127.60 

17933 

127X9 

21633 

13090 

14432 

146/40 


-06 

-09 

-13 

-13 

-09 

-03 

- 1.6 

- 1.0 

-08 

-13 


3.18 

133 

135 

131 

231 

266 

235 

133 

206 

238 


16131 

199.46 

17238 

167.72 

18131 

144.67 

24008 

16839 

17232 

17233 


1S534 

19210 

18632 

10133 

175.10 

13933 

237.00 

16247 

166167 

16628 


104.17 
12056 
111.11 
108.11 

117.18 
S3J2S 

15831 

106.73 

11088 

11137 


13431 

165.77 

14337 

13939 

151.10 

12023 

20452 

14020 

14256 

143X7 


14737 

19058 

11533 

12831 

18150 

127.67 

22056 

13221 

145.70 

14732 

17233 


17856 

22060 

17275 

17078 

19272 

157X7 

29631 

17251 

17658 

17856 

19530 


14158 

15S32 

134.79 

14138 

175.67 

12237 

18238 

14294 

16222 

16530 

166.72 


143.19 

16648 

14132 

14136 

17901 

123X1 

186.79 

14294 

16332 

155.00 

16836 




Net Profit 
up 130.9% 


CONSOLIDATED FIGURES 

mmSIkmsqfBEF 

31/12/93 

Change 

Balance sheet total 

2,614,259 

+ 77% 

Shareholders' equity 

67^00 

+ 85% 

Group net earnings 

6,733 

+ 130.9% 

Net dividend (in BEF) 

145 

+ 45.0% 

RATIOS OF THE YEAR 


33/12/93 

Return on equity 


1038% 

Cooke Ratio 


8.98% 


1994: New Challenges 

To achieve a return on equity of 11%, thus securing an improved level 
of cash flow for internal funding 

To selectively reinforce the existing international network 
and open new offices in Qfina and Poland 

To strengthen and improve efficiency and flexibility by adapting operational structures 
in order to keep operating costs under control 

To improve service by setting up main branches providing financial advice 
to customers and expanding the use of electronic banking services 



BBL 

Bank Brussels Lambert 

Head Office 

Avenue Mamix 24, B-1050 Brussels - teL (322) 54721.11 - fax (322) 547.38.44 

The annual report is available in English, French and Dutch on request from 
BEUa Secretary General avenue Mamix 24, B-1Q50 Brussels 

BANGKOK • BARCELONA • CHICAGO - DUBAI * DUBLIN « GENEVA * HONG KONG - JAKARTA 
JERSEY - LONDON • LUXEMBOURG • MADRID • MILAN - NEWYORK • PARIS ■ SEOUL • SINGAPORE - SYDNEY - TOKYO 







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■ Defence market opens up 
to European contractors 
Page 4 


FINANCIAL TIMES SURVEY 

KOREA 


■ An antipathy - as well as 
an affinity - to the Japanese 

Page 6 


Thursday June 23 1994 


Seoul tries to throw 
open the doors 

South Korea is striving to overcome its legacy of 
isolationism and to push for economic liberalisation. 
But it is a hard struggle, writes 


I n his second year in office. 
President Kim Young-sam 
is struggling against South 
Korea's traditional isola- 
tionist attitude toward the out- 
side world. 

He is trying to open his 
country’s economy to full 
international competition for 
the first time in its histoiy. 

But bureaucratic resistance 
and public doubts about the 
benefits of increased foreign 
economic influence on Korea 
could undermine Mr Kim ’s lat- 
est crusade to ■'international- 
ise” the country, which follows 
his successful political reform 
programme last year. 

Moreover, the campaign for 
domestic economic reforms has 
been overshadowed in recent 
weeks by the North Korean 
nuclear dispute, whose origins 
lie in the xenophobic national- 
ist doctrine preached by 
Pyongyang. 

The challenges confronting 
Mr Kim reflect the fact that 
Korea has never completely 
escaped from the legacy of the 
Hermit Kingdom, when the 
country went into self-imposed 
isolation almost 400 years ago 
in response to repeated inva- 
sions by the Japanese and 
Manchus. It was one of the last 
countries in the world to estab- 
lish contacts with the west in 
the late 19th century. 

Subsequent colonial exploita- 
tion by Japan during the first 
half of this century re-enforced 
a defensive mentality among 
Koreans that still exists today. 

The clearest example of this 
can be seen in North Korea, 
which has adopted juche 
(self-reliance) as its guiding 
principle. But the Korean pen- 
insula's tragic history has also 
produced considerable psycho- 
logical resistance in South 
Korea to accepting the fuQ rig- 


ours of the modem global trad- 
ing system in spite of the con- 
siderable benefits that the 
country has reaped from it. 

One recent survey found that 
almost half of South Koreans 
opposed direct foreign invest- 
ment in the country, while 
two-thirds were against the 
lowering of trade barriers. 

But Mr Kim 1ms tried to turn 
the historical record to his 
advantage in persuading 
Koreans to accept foreign com- 
petition. “A ce ntury ago, we 
foiled to internationalise on 
our initiative and were thus 
forced by others to open up our 
country. This was why Korea 
remained backward, soon to be 
reduced to a colony of a for- 
eign power (Japan)," said Mr 
Kim in a speech on the first 
anniversary of his inaugura- 
tion in February. 

“We must learn the lessons 
of history. Instead of deploring 
the fact that our doors are 
unlocking, we should ourselves 
throw open our doors and 
march out into the wider 
world," he urged. 

S everal opportune factors 
support Mr Kim 's push 
for economic 
liberalisation. The economy is 
once again booming after two 
years of the slowest growth 
since 1980. The GNP growth 
rate is expected to exceed 7 per 
cent this year as exports 
increase due to a weak Korean 
won and industrial invest- 
ments grow in response of 
o v e rseas demand. 

Labour disputes, which have 
disrupted industrial production 
in the past several years, are 
on the wane as living stan- 
dards rapidly improve. Wage 
negotiations are being settled 
at an unprecedented rate this 
year, although troubles may 


John Burton 

still lurk in the car and ship- 
building sectors, two of Korea's 
main export Industries. 

Mr Khn and his Democratic 
Liberal party enjoy a solid 
political position with a secure 
parliamentary majority. The 
opposition is in disarray, with 
the Democratic party failing to 
reinvigorate itself under the 
somewhat hapless leadership 
of Mr LI Ki-task. 

The president does not have 
to worry about immediate elec- 
toral considerations since the 
next parliamentary elections 
will not occur until 1998, one 
year before his mandatory sin- 
gle term ends. 

This should give the Kim 
administration ennng h time to 
lay the foundation for its eco- 
nomic reforms »nd make South 
Korea eligible to join the 
Organisation for Economic 
Co-operation and Development 
by its desired deadline of 1996. 

The government wants to 
reduce strong state interven- 
tion in the economy. The myr- 
iad barriers to foreign invest- 
ment and goods are gradually 
being lowered as Korea seeks 
technology and capital from 
abroad to improve its global 
performance. 

Korea neglected research 
and development as it concen- 
trated on building an impres- 
sive industrial base. The coun- 
try consequently needs foreign 
technology if it is to achieve its 
goal of becoming an advanced 
industrial power. It is now 
actively seeking foreign part- 
ners as it builds high-speed rail 
systems, advanced telecommu- 
nications networks and an 
indigenous defence industry. 

Korea is also overhauling Its 
antiquated and tightly regu- 
lated ffa ancifll system that h as 
created distortions in economic 
development, particularly at 



Korea's World Trade Contra In Saoiri 


the expense of small busi- 
nesses, and prevented large 
industrial concerns from 
obtaining cheaper credit 
abroad. 

The government argues that 
the reforms will make the 
economy more efficient 1 as it 
switches from governance by 
bureaucrats to market forces. 
Foreign competition In the 
home market will help to 
improve the performance of 
the large conglomerates, or 
chaebols, as they increase their 


operations abroad. 

It has even used the "Visit 
Korea 1994” camp ai g n primar- 
ily as a means to encourage 
Koreans to accept Internation- 
alisation by playing host to for- 
eign visitors. 

But Mr Kim js already dis- 
covering that he lacks the pub- 
lic support for trade liberalisa- 
tion that he enjoyed on 
political reforms. Public atten- 
tion has focused on the imme- 
diate disruptive im pact of the 
changes. 


Farmers have protested 
about the dpelmg of the agri- 
cultural industry caused by the 
opening of their protected mar- 
ket under the Uruguay Bound 
of Gatt. Labour-intensive 
industries as well as the ser- 
vice and financial sectors are 
also ill-prepared for foreign 
competition. 

Public opposition, encour- 
aged by bureaucrats afraid of 
losing power, remains a poten- 
tial obstacle to the successful 
introduction of the reforms. 


But an even bigger threat Is 
now emerging with the Neath 
Korean nuclear dispute, which 
could eventually throw the 
economic liberalisation pro- 
gramme off course. 

A military conflict, though 
still unlikely, would obviously 
force the government to re-ori- 
ent its priorities. A possible 
economic collapse of North 
Korea, caused by stiff interna- 
tional sanctions, might also 
force file government to scale 
back the reforms as it concen- 


M THIS SURVEY 

□ The economy 

A hard climb up the 
ladder 

□ Labour relations 
Hunger strikers’ faith 
may deter foreigners 

Paige 2 


□ Investment in South 
Korea 

Uphill battle for investors 
Page 3 

□ Investment fn North 
Korea 

Pyongyang must wait 

□ Defence market 
Europe's chance 

G Foreign policy 
US gets the blame 

Page 4 

□ The Japanese 

So close - and yet so 
far apart 

□ Automotive industry 
Trade barriers foster 
overseas growth 

□ Impact of Gatt 

Samsung in the global 
village Page 6 

□ Cheju 

Island’s charm is under 
threat 

□ Tourism 

Overseas publicity 

criticised Page 8 


Editorial production 

Gabriel Bauman 
Design Robin Coles 

Map Bob Hutchison 


trates the country’s economic 
resources on reconstructing a 
post-communist North Korea. 

Even If these two worst-case 
scenarios do not occur, the 
nuclear dispute is creating sus- 
picions among some South 
Koreans that the looming cri- 
sis is the result of interna- 
tional meddling , primarily by 
the US, on the Korean penin- 
sula. That is likely to increase 
public scepticism about the 
government's calls for interna- 
tionalisation. 



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FINANCIAL TIMES THURSDAY JUNE 23 1994 



O nce known as the 
Miracle on the Han, the 
Korean economy has 
reached a crossroads. It can 
adapt and join the ranks of the 
industrialised nations; or, 
crippled by dwindling 
productivity and com- 
petitiveness, the heavy hand of 
government intervention and 
restrictive regulations, it can 
follow the downward track of 
Japan, its neighbour. 

Mr n Sakong, a former 
minister of financ e and now 
chairman of the Institute for 
Global Economics in Seoul, 
says: "Korea has reached an 
awkward stage of development 
It Is a Newly Industrialised 
Economy bat not quite yet an 
industrialised economy. It Is 
about to enter this new stage 
of industrialisation to join the 
ranks of the Industrially 
advanced nations. The 
question is how it will move up 
Hwa ladder.” 

For Korea to become a mem- 
ber of the Organisation for 
Economic Co-operation and 
Development as it plans to do 
in 1996, it must adhere to its 
programme of deregulation, 
especially in financial marke ts; 
improve labour com- 
petitiveness and efficiency, 
maintain downward pressure 
on both wage and price 
inflation; open domestic 
markets to outside competition 
uni! introduce housing and 
land reforms. 

There are also public sector 
issues to be tackled. To do so 
win not only win Korea credits 


Louise Lucas looks at progress towards industrialising the economy 

A hard climb up the ladder 


South Korea; key facts 


Area • — 

Population — 44.1m 

Crerency — 

Average exchange rate 


99.000 tq lan 

Heed of state Kim Young-ram 

South Korean Won 

1992 SlaW 782.0 

..l993$1»WaQ2J> 


in the eyes of the OECD; ft win 
also secure the next phase of 
economic growth. 

It iS a tough taalr 1 but 
which the government at any 
rate believes it is up to. South 
Korea's first civilian president 
in 30 years, Mr Kim Young- 
sam, is regarded as reformative 
and forward-looking, although 
whether he «w mm rM m p the 
vested interests and lower 
ranks of minis try officialdom is 
a question over which many 
analysts harbour doubts. 

Last April, Mr Kim’s 
administration unveiled a 
five-year economic plan to 
restructure the fiscal system, 
slapping ter *** on speculative 
property gains and scaling 
back taTpg charged to foreign 
Investors, to liberalise 
flnflTwriai markets, turning the 
present government- 
orchestrated system into a 
market-based version more 
akin to those in the rest of the 
developed world. 

The five-year programme for 
financial liberalisation, 
introduced last year, aims to 
overcome the inefficiencies 
bred by the non-price 
allocation of credit, both in the 
economy as a whole and in the 
financial sector itself. 

Under the plan, lending rates 


and then deposit rates will be 
freed at the same time as the 
government loosens its grip an 
international capital 
movements. 

However, the guiding 
principle Is for gradualism - a 
policy which, while avoiding 
all the mayhem d a “big bang” 
approach to dereg ulati on, may 
not best serve Korea at a time 
when so many of its 
neighbours are attracting 
foreign cash and technology. 

Industrial development may 
also come too slowly to keep 
up with the rest of the world. 
Korean industry has lost its 
competitive edge at a time 
when world demand is on the 
upswing. Economists reckon 
there are too many vested 
interests and Interlinked issues 
to allow for speedy progress. 

Mr Lee Hahn-koo. president 
of Daewoo Research Institute, 
says: "We need foreign 
investment, and the govern- 
ment wants to reduce the 
obstacles to investment. But it 
cannot be so speedy because 
the public mentality does not 
change so speedily. I believe 
we are now starting to get out 
of that vicious drde, but not 
so fast” 

The gove rnment is eager to 
avoid any currency apprec- 


iation, which would hurt 
trading competitiveness. Mr 
Shin Myoung-ho, assistant 
minister of finance says: 
"There is a trend towards 
liberalisation, and so foreign 
governments and companies 
want us to speed onr pace. Bat 
we have also to take into 
consideration some 
disturbances to the 
TnftArrwvytnnmip. variables. 

"There is still a substantial 
gap between domestic i n t er est 
rates end international rates, 
so If we open op capital 
movement at this stage, we 
could suddenly have a huge 
Inflow resulting in a sharp 
jp py p rwtinn of our currency, 
or excessive liquidity causing 
inflationary trends.” 

F or now, inflation is 
pitched to end the foil 
year at under 6 per rent 
despite a bad harvest which 
sent food prices soaring - 
although many Korean 
economists expect it to rise 
sharply next year. This is 
twinned with an upturn in the 
economy, which this year is 
forecast to grow at 7.6 per cent 
Interest rates, now dose to 
the record lows of 1982, are 
also expected to remain soft 
until 1996. Less positively, the 


current account is on trade to 
move back into the red this 
year (after posting a modest 
$500m surplus in 1993, which 
ended a three-year ran of 
deficits) as imports, largely 
capital goods, surge. However, 
Baring Securities is looking for 
improvements in the second 
half of the year which will 
cmtafri the 1 994 deficit at a 
manageable SLShn, or 05 per 
cent of GNP. 

Mr Lee, who is not confident 
of Korea’s ability to continue 
riding this wave after two 
years' stag na n t growth, paints 
to several factors which could 
further undermine Korea's 
dfanb op the industrialisation 
ladder. 

He says that if the yen starts 
to depreciate against the 
dollar, so enhancing the price 
of Japanese exports, and 
demand from China retreats as 
its gr o wth slows and its own 
industry becomes an ample 
source of oil and steel, Korea 
could find its trade flows are 
penalised. He also questions 
whether Korea can adapt to 
nmwpgte fo the national arena. 

Wage rises are out of line 
with improvements in 
productivity. Korea boasts the 
most expensive workforce in 
Aria after Japan, and Mr Lee 


estimates wages this year will 
rise around 12-13 per emit, in 
line with union expectations. 

However. Mr D believes that 
a restructuring of industry into 
more sophisticated value-added 
areas will enable Korea to 
regain its competitive edge, 
and says companies have 
started out on this path by 
upping their investment in 
BAD in acknowledgement of 
the changing nature of 
competition, which now comes 
from the developed world. 

“Companies themselves are 
in a transitional period. In 
financial structure terms, 
Woman companies have a high 
debt to equity ratio compared 
with tiie advanced countries, 
while BM) capabilities are not 
as high 

"But they realise they can no 
longer remain competitive the 
way they are now, so they are 
taking steps towards 
intensified R&D and 
restructuring - hut it is just 
beginning. If they are 
successful, of course the 
Korean economic restructuring 
will succeed, but it all depends 
on the companies* 
performance. And, based on 
our track record, I think we 
will do iL The question is how 
long it will take,” he says. 


ECONOMY 

Total GOP (W ’OOObiO- 

Real GDP growth (%). — 

GDP per capita (9 — - 

Components of GDP {%) 

Private consumption 

Total Investment — 

Government consumption 

Exports * — 

Imports-'.——- 

Annual average % growth In: 

Consumer prices (%) — 

Wholesale prices (%) — 

Average earnings {%) *. — 

Industrial production (%) 

Unemployment rate (%) 

Employment (m) ---"■■■■■■■ — 

Yield on corporate bonds (%) — 

Govt- bond yield (%) 4 — 

Official cfiscount rate (%) 

Total reserves minus gold ($bn) *.. 

Narrow money growth (Ml) - 

Money growth (M2)— — — 

FT-A index <% change) •. 

Current account balance ($bh) 

Merch a nd ta e exports (Sm) 

MerchancSse Imports (Sm) 

Ttade balance ($m) — 

Main trading partners (%) 

US 

Hong Kong 

Germany ........ — — — 

0) 19B3 ftgur* b October C2) Manufacfcirlnfl. P) 3-y»ar I 
{4} Matutfy up to 5 yoarK ® Docwnboc (6) Ya*r nod- 

SOUCM.' t 


6.2 

2.2 

15.7 

5.3 

2.4 
18.9 

14.0 
13.2 

7.0 

17.1 

13.0 
1S.6 

11.1 
-4.5 

75.189 

-77,316 

-2.147 

Exporta 


4.8 
1.5 

7.8 ■ 

5.9 
2.8 

19.2 

12.2 
12.0 

5.0 

202 

19.0 

17.4 

27.7 

as' 

61.024 

-7*946 

2478 

Imports 


Visitors to the Federation of Korean 
Trade Unions in Seoul these days will find 
their nostrils assailed by a thin, acrid 
email redolent of sick rooms. A series of 
erode primary colour posters gives details 
of the binder strike taking place on the 
sixth floor. 

Here, in a large bare conference room, a 
handful of men lie around, reading comic 
books and computer manuals. One 
worker, in a suit, has not eaten for 20 
days, "ft is very painful but I have a 
strong faith that we win win,” he says. 

If the strikers’ 107 colleagues who were 
fired for imian activities are reinstated, 
faith will have pro ved a more powerful 
adversary than the FKTU and President 
Kim Mraeif. But either way, the outcome 
win give little faith to foreign i n vestors, 
who cite Korea’s turbulent labour rela- 
tions as a reason to avoid equity partici- 
pation deals in the peninsula. 

Mr Lee Jim-wan, gene r al secretary of 
the FKTU - which, he says, takes in L4m 
of the country’s L8m organised union 
members — add« his su p po rt to the strik- 
ers. Hie dispute, affecting workers at the 
automobile insurance arm of Tongpn, (me 
of Korea’s 30 biggest chaebols or conglom- 
erates, has been going for over a year and 


Though there are fewer disputes than in past years, labour relations remain tense 

Hunger strikers’ faith may deter foreigners 


is, he suggests, a symptom of the stronger 
power wielded by the chaebol’s head, Mr 
Ktm Jnng-ki, a relative of President Kim. 

A court ruling early last month found 
Mr Khn not guilty, and the president is 
power less to overrule the decision. Mr Lee 
says: "FKTU offered to solve this problem. 
President Kim ordered the Ministry of 
Labour very strongly to solve this prob- 
lem. But thee is still no solution." 

Desp ite Mr Lee’s prote sta t i ons as to the 
mixes strength, the hunger strikers on 
the sixth floor suggest otherwise. If those 
lethargic figures represent hope to any- 
one, it is to the Korea Council of Trade 
Unio ns, a n ew illegal union Hurt plans to 
give FKTU a run for its money from next 
yea r. 

KCTU, owin g no loyalties to govern- 
ment (unlike FKTU, which reaps some 
W7-5bn from government for educational 
purposes), claims it wiH more truly repre- 


sent the workers’ interests . It will cer- 
tainly have a more milit ant edge, and 
stands to put a «p a "™ ,r in the works of 
labour relations which Mr Lee believes 
could be e n t erin g a more peaceful, non-vi- 
olent aa. 

Korea has been a crucible of labour 
strife and disputes since 1987, when the 
Cheat Workers’ Struggle erupted. A strike 
involving about lm workers, it lasted 
from June to September and was one of 
the factors Miind tire emergence of a new 
democratic trade onion, set up in January 
1990. However, government pressure 
weakened the new union, and a more 
loose-knit, organisation sprang np to fill 
the gap: the Korean Congress of Indepen- 
dent Industri al Federations (KCUF). 

KCTU seeks to bring together KCUF 
and the dissid ent Korea Trade Union 
Congress (KTUC), which was formed by 
the Democratic party. Its proponents 


believe it will win over 600,000 members. 

Mr Shin Rnrwhpn^ the rhain-*innlring - 

executive secretary of the KTUC, says: 
“The union movement is still p ower f ul. 
We are facing a challenge so if we work 
well the union maintains Its strength but 
if we tail to meet the challenge then we 
may also be rained." 

The government still has uneasy rela- 
tions with unions that do not come under 
FKTU. KTUC says some 300,000 workers 
have been dismissed far union activities: 
there is even a Struggle Committee for 
Dismissed Workers’ Reinstatement For- 
mer KTUC president Pan Byung-ho 
remains in hiding - allegedly with a $lm 
price an his head — after lecturing union 
lead er s during the 52-day Hyundai strike 
last summer. 

Even the government steers dear of 
putting a brave gloss on labour relations. 
An official at the Ministry of Labour says: 


“The major problem is how to succeed in 
completing tins year’s wage negotiations 
between labour and management In some 
enterprise s we are afraid there could be 
labour disputes which will cause strikes. 

“it is not only a question of wages. 
Workers in some big e nter prises are mak- 
ing various demands, such as workers’ 
participation in management That is Why 
management feds it is very difficult to 
imrrcrfl in si gning labour contracts,” 

Two years ago, in deference to workers’ 
demands, the gover nm ent set up an 18- 
member labour reform study committee, 
which duly came np with a dutch of 
recommendations. The labour ministry 
insists: "We are going to try to make 
these amendments, bat it is very diietewW- 
to say now what tire timeframe wQl be.” 

However, some rfmngpg to labour policy 
have been effected under the civilian gov- 
ernment and statistically labour strife is 


on the wane: from 3,617 labour disputes 
in I9S7 to 200 last year and just 26 "small 
scale” disputes in the first five months of 
1394. Wage rises have been negotiated at 
an average 8.7 per cent (the consumer 
price index stands at around 6 per cent); 
and almost half of the WOO biggest com- 
panies' wage negotiations bad been con- 
cluded by June 9 - more rapidly titan hi 
previous years. In the same period last 
year 35.7 per cent had been coaduded. 

The new government s wooped on labour 
policy shortly after coming into power. 
The prompt was economic rather than 
social: increasing international competi- 
tion and a slack domestic economy were 
eroding profit margins and highlighting 
gross inefficiencies within the workplace. 
Productivity growth was Mflny to keep 
pace with spiralling wage to dre as es. 

But the hanger strikers' notion shows 
that Korea still has much work to do on 
the labour front. As Mr Lee Hahn-koo, 
president of the Research Institute, says: 
"I don’t think we are safe from distur- 
bances. There’s still some unrest The 
workers are not so rational in Korea." 

Louise Lucas 


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MUM Wfc^JL. :- 

vvy 


S ooth Korea Is on the 
hunt for foreign invest- 
ment and technology. 
The rapid rise in wages since 
1388 means it r«n no longer 
compete as a low-cost msaufac- 
tnrin g centre. Compared with 
the Philippines, V ietnam and 
China, costs are high. Instead, 
South Korea most compete in 
high-technology areas. 

But although the country is 

now one Of the leading maim. 

facturers in the shipbuilding 
and automotive sectors, its 
technological base remains 
weak. Korean companies, on 
average, spend only 3 per cent 
of turnover on R&D, comp a red 
with about 7 per cent among - 
their wes t ern counterparts. 

The government is also anx- 
ious to attract investment from 
foreign companies, particularly 
Japanese component manufac- 
turers. South Korea runs a 
hefty trade deficit with Japan, 
mostly caused by imports of 
sophisticated machine tools 
and automotive components. 

But the hunt for foreign 
investment and technofogy is 
pro v ing an uphill battle. For- 
eign investment in South 
Korea has fallen in recent 
years. Investment by Japanese 
companies mi from a peak of 
9897m fn 1988 to only $155m1n 
1982, rising to 9286m last year. 
European investment peaked 
at 9824m in 1991 mid fdTto 
only 9307m last year. =n.--» 
The reason is that South 
Korea has a poor reputation &s 
a location for foreign ''invest- 
ment. A recent report by Pofitt- 
cal ft Economic Risk Consul- 
tancy, the Hong Kong-based 
group which canvassed opin- 
ions of 95 corporate managers 
and bankers, was dantaing of 
South Korea’s attractions. 




* - i .i::. 


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Paul Abrahams pn-the ^pufli’s bid to attract foreign companies 


investors 





The study suggested South 
Korea: 

• was the most nationalistic 
country in Asia; 

• was foe most bureaucratic 

yfia r China and 

• had an economy dominated'" 
by cartels and state-owned 

•^^CTiibinated -mare than 
n n y ! ri Hwr '’ for- 

^otectiadst 
nation ia'i^sifi; ^' T ■ • • 

• had the far 

laboinrunrest;: 

• and had a greater potential 

for ^sodal unrest even than 
China. • ' ' 

However, 'canpeafies operate 
fog ’ in - South. Korea behave 
there- are two matn ; obsfodes 
WMteing fiff qgh investment.— 
labour and ' fair : ’ 

'iiMagn fovtotois^&ve been 
concerned both by/ffie- fifth 
coat of tdkrar as -wdl’ as •'foa. 
number of fodtrstriaFfflspatss. 
Admitte*y;^the' ‘latter ’has 
fifflen ^y- pear^Offoe-quartars 
since tbe peak ^l988, buFthe 
legacy- 5 remains. *; ' ’ ■• ■; 

■ ‘ “Many Japaneae rompardto 
wereptooffTjyfoe bitter expe- 
risnee hf trsde dtsputes a few 
years s^o*/says Hr Yoahiaki 
Onuki, chafixmm of J -the Japa- 
nese . .Association in SeonL 
^jUfobbg h^ fo h number of ' dis- 
putes has fiaHmx. labour is still 
a popWam. 'Bay' is at a; very 
M^i level Japanese companies 
fo Seoul pay i tbrar w<aters,’ on 
leverage; Won3ii?a u monfb. : cofoi 

/-y^- r -iw * «■ I*'— ■»' • -r 


pared wjth -an -average of " 
Won900.000 .fo pon-Japanese 
’comparn^ ''Retirement costs 
are-donble'foose fo-onr Tokyo 
beaiiqaarter&f he -says. - . .: 
T he other Twain prfo>lem fac- ■ ' 

body /^working under tfie ’* 
financ^mnStxy,' has -focenffir $ 


mfotfraisiS S European andTJS 
cufofofoes' operating fo? South 


a^ been affected by an iniqui- 
tous tax regxme, says Mr Yoah- 
iaki Qnnki, director general of 
’foe Korean subsidiary -of ifflt- 
g ni Hia Japanese trading 
group. “Most of the : Japanese 
banks aUd tradiiig 1 bouses are 
.i^imng' mcmey in Sofofi Korea. 
-- But foe -fox authorities then 
impose tAXes on-- what they 
-H 1 jtfe-ougiit fo be making. 
You w»<r 1 wp 1 ~ wi aM^ig unex- 
pected losses *. -be says. 


;.; l ^Fbiieign 1i»ifflfitawtj(in Itori) 

s •%. • 

.■= f r •* j : » 

1967 

1968- 

I- 

[.I960! 

1 1991 

1992 

1996 

Japan 

487 , 

697 

-■’466 

1 238 

1 226' 

.156.' 

286 

US - ‘ 

•265 1 

284 

329 

4317 

l 296 

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341 

Etoopo - 

210 | 

243 

212 

207 

824 

282 

307 


101 1 

60 

83 

43 

50 

78 

110 


Korea. Huge fox bilfo/bave 
betf impored o&ltoinA foMfog 
to compU^odr that the' mfo- 
su res were retroactive - dating 

back tg) to five years -'and 
le ss than transparent. 

"The raximnmc^ coopacatam 
b u rea u at foe fjnahro n ati ghy 
is n saying ‘fov'est here;' aU is 
sweetness and ighf , but the 
tax authority is imposing five 
yem^ worth of retroactive 
taxes tog pftift r ^dfo wndiifli 

profits. 0*8 ludicrous/ says foe 
chief exe c uti ve of a. European 

T w n f t T n Mtihnfll AV ■‘■T 

I 1 ~ 


; •y.- t >aojcK IMMi- elPmen \ 

Qth£r <n^nA» the >r fth 

ebsti-of land. Mr Byong-Seok 
p rxdiiBntr rf Sony Elec- 

V>f ghwi* , ’ grp in f n g that 

lanfi^iear /Seeifl^ooste about 

ednfoifos wltl£$8S in Taiwan 
and |S5 ta^lfolaysia, • wfifib’ fo 


at 930 -a - yearl^S? at^fl5 fo 

• rfoteUectufov prefomty is 
foofoer cnocmfo-V^Soufo 
- Koreans ; areiTeputed 'fo* dieat 
& intefiactoW -prt^>erty.: Unit 




Mr Duck-Koo rrhtmg , direc- 
tor general of foe ' economic 
co-operation bureau at foe 
ftnynM ministry, insists +ht» 
intellectual p rop a ty problems 
have been resolved. Neverthe- 
less, western and Japanese 
grbnps are concerned ^ foat*by 
we t tin g up jotot vent ure s and 
nfy«w^wg s /w rTi-nn1h gy transfer, 
they' may'' give : cway*&foir 
crown Jeifefo 5 * '•’ f&W*\ 
Mr Onifi doubts tf foamy 

Ja p aT i ft y ii^ ivimjymflUf fofos 

wifi, invest “Much of foe tech- 
nology 'they ’pvtii = .was derVel- 
- oped with - the co-operatitm rf 
foe Japa nese car mamrEactur- 
ers. The’ latter wutfld take a 
dim view of handingVover that 
todmolpgy te foie Koreans.” 

However, ' Pr»ldent Kim 
Young-sam’s- government is 
anxious to the? c ount ry 
more -attractive for foreign 
tovastontTtris month its nder- 
agmey task force' for foreign 
0 investment wfll ahnmmeb a 
series of measures thldr cun- 
tinue foe derftuMkm inocess, 

t ' 'T ha '- maSSure s tuctude -feste- 
v approV^ off iforesfiment > pe'- 
nrfts;^mflere ra^ ' approvai of 
lsmd'pfirdfose^ jped4 ; hxvest- 
mwft - areas' for iuves- 

tor8;jHeasI« ac(fess t6 
'tfiMirt-fenh oTCrstos idsns; and 
a special tuvtnbimal?far. oyav 
s^gro^SL/Aiffor Idfotir rda- 
i f^tiring inmsts foe 
.^c ^jY^^iiut ati m rls based 

v disputes 'in 

> -x: . 


South Kraea Sam in Japan. 

The ' policy of attracting 
investment has paid some 
high-profile dividends. The 
most ^ g n i B w i iii have inducted 
the $2Jta deal condtadsd by 
GEC Alsthom, foe Franco-Btit- 
ish consortium, for Sooth 
Korea’s high-speed railway, 
and Samsung Heavy Indus- 
tries’ s contract with Nissan 
Motor of Japan to fajport car 
technology. j '•'.:•■ • 

Neverthdasa. not all compa- 
nies are convinced. “Many 
long-established residents just 
do not .^exedive a great deal 
has changed," says Mr Alan 
Twist, president uf tiue jfc. 
Chamber-of Ocanmace, 

‘They seam to: be 'trying? to 
rmnove d isj n ceaa tfya s; bnt toe. 
not pxovltopig amr tnc^rtitos^* 
coax^piatne^mxe 'European busj^ 
nessman. “A radical shlft^fe 
requ ire d bymto start eatehfog 
up with vwnto or Gfiina." 1 . 

Few Japanese companies 
seem set to leap back into 
Korea.' “They need Japanese 
technology and mahagement 
expertise, but 'unffl they sort 
out the'n^rproUeins.' I defot 

piinlr ihon^MP btf ytmch tnto*r - 

est,"'teyB ifrOmaa? r 

} Ever 5 if dom- 
t^TM 'are-addres^ed. there 
remafiT ctdtoral uroblMiWr- ^A 
rnm>h*!r ^-Japanese companies 
set up joint ventures^ but' 
there’s -a real^ditierence In 
management ‘ style 8 - 5 TOe 
Koreans take so many holi- 
days/ aad ti^ expect ^edai 
bonuses all r - the time," com- 
plalns Mr OnukL ‘ 

Ofoers Temafn cynical. One 
frurSpean 1 - chief executive 
bpp fliitg "They still Wtiut your 
technology. They stin want 
- your muney. 'Then they still 
' want you to get out" 1 


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KOREA 4 


Paul Abrahams on investment in the north 

Pyongyang must wait 


Though ft sounds unlikely. 
North Korea hopes to 
compete successfully with 
ther Asian countries in 
attracting foreign invest- 
ment. 

For the moment, the policy 
is on hold as the US attempts 

to co-ordinate UN sanctions 
because of the ref- usal of 
Pyongyang to allow 
inspectors access to Its nuc- 
lear facili ties. But in the long 
term, the government hopes 
foreign investment will save 
the economy and incidentally 
sustain North Korea’s polit- 
ical system. 

Pyongyang needs overseas 
investment 
because the 
North Korean 
economy has 
moved into 
sharp reverse. 

The collapse 
of the former 
Soviet Union 
has cot off the 
nation’s most 
important 
sources of 
foreign trade, 
previously 
representing 
half of all 
trade. 

The North Korean economy 
shrank in 1990, 1991 and 
1992, according to Dr 
Hongstack Chun, follow of 
the Korea Development 
Institute. Latest figures from 
the South Korean central 
bank suggest it fell -L3 per 
cent last year. Professor 
Aldan Foster-Carter of Leeds 
University estimates North 
Korea's GNP last year at only 
S20bn, the same as a single 
year’s GNP growth in South 
Korea. 

Faced with a growing econ- 
omic crisis, the Pyongyang 
government has been mes- 
merised by the success of 
reforms across the bonier 
in China. 

The North Koreans have 
already emulated Chinese 
legislation to create the right 


aimed at South Korean inv- 
estment, and another near 
the Chinese bolder . Tourist 
areas are also bang created 

tal the Kirnig im g mn rnifairwt 
near the demilitarised zone, 
and Paektu on the Chinese 
border. 

However, the most advan- 
ced project is the Tumen 
River Area Development 
Programme which has been 
co-ordinated by the United 
Nations Development Prog- 
ramme. This region is at the 
junction of the borders of 
North Korea, Russia and 
fThimi- The rationale Is that 
the North Korean coastal 


The principal sum amounted 
to {747m, although that has 
doubled because of interest 

fn addition, some loans to 
the former Soviet Union 
dating back to 1949 still 
ywwnhi unpaid 

Another reason for the 
inter national r mnTnnn tt y's 

reluctance is the failure of 


North Korea: economic Indicators 



1969 

1990 

1991 

1992 

1993 

Real GNP growth 
Rice production 

2XJ% 

-3.7% 

-&2% 

-&0% 

n/a 

fO 00 tons) 

6.400 

5,900 


n/a 

1,300 

Population 

21 Stm 

21.4m 

21.8m 

22 J»m 

22JBm 

Exports 

$1.69bn 

$1j86bn 

$1-40bn 

$0J92bn 

n/a 

Imports 

$2L90bn 

$2J93bn 

$2J31bn 

$1.55bn 

n/a 

Trade deficit 

$1,21 9m 

Si ,073m 

$9Q2m 

$630m 

n/a 

Externa! debt 

n/a 

n/a 

$4.7bn 

n/a 

n/a 

Exchange rate* 

0-94 

0.94 

0.96 

Z16 

n/a 


joint ventures. Some North 
Korean business practices 
have also been questionable. 

Infrastructure, or rather 
lack of it, is another concern. 
“There are no container fac- 
ilities at the ports," explains 
Dr Chun. “More than 80 per 
cent of travel 
is by rail and 
the trains 
have an 
average speed 
of 40kpb_” 
North Korea 
does h a ve 
some advan- 
tages, how- 
ever. Mr 
BfieheH points 
out that 
labour is well- 
educated. 


Some EcoootniX k v Sg mx* UnB 


legal environment for invest- 
ment, according to Dr Chon. 

Special investment areas, 
similar to Chinese special 
regions, have also been 
created. These include a site 
at Nampo near Pyongyang 


zone would provide se&access 
to northern China, explains 
Mr Jacob Gu«t of tiie UNDP. 

However, progress has been 
slow and recently the Chinese 
and Russians have proved 
less than enthusiastic 
partners, he admits. 

Indeed, the North Koreans’ 
efforts have not proved part- 
icularly successful anywhere. 

So far, the only invest- 
ments have beat small-scale 
projects by Korean Japanese 
sympathetic to Pyongyang: 
“The North Koreans been 
really disappointed,” says 
Ur Anthony KGcbell of Hong 
Kong-based consultants 
Euro-Asian Business Consult- 
ancy . “However, it takes 
about two years between 
considering an investment 
and actually putting buOding 
the plant The programme 
only really started recently, 
so there’s still time." 

One reason for the absence 
of investment is the north’s 
continuing unwillingness to 
repay loans to the inter 
national Hanking community. 


disciplined 
and hi g hl y 
productive. The internal 
market represents about 22m 
potential con- sumers. hi 
addition, there are huge 
mineral and forestry 
resources. The north, a cheap 
m a nufa c turin g location at 
tile heart of one of the 
world's fastest-growing 
regions, would also provide 
access to nearby markets in 
Japan and China. 

In the long term, all agree 
the north and south will be 
united. North Korea would 
offer a cheap point of entry 
to a market of about 70m 
consumers, says Mr Micha el 
Breen of Merit, the Asian 
consultancy. 

“There would be no tariffs 
from the north to south - 
they’re the same country. 
There's bound to be invest- 
ment over tiie next six 
months, although ft depends 
on the Asian investment 
cyde. By 1996, North Korea 
could be on the cover of 
Newsweek as the new 
Vietnam,” enthuses Mr 
MicheQ. 


T he Korean War museum, 
opened earlier this 
month, commemorates 
the tragic conflict which con- 
vulsed the peninsula more 
than 40 years ago and left the 
country divided, one of the last 
legacies of the cold war. But 
next to the maps and d jinpmm 



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The defence market opens up 

Europe’s chance 


also a proud display of the 
nation’s contemporary arms 
industry, the fruits of Seoul’s 
Yulgok Project, a programme 
estimated to be worth more 
than $37bn that is aimed at 
establishing a technology- 
based domestic arms industry. 

Seoul's ambition to bmM up 
its weapons manufacturing 
capabilities Is unsettling the 
South Korean military equip- 
ment market, irritating the US, . 
which has been the over- 
whelmingly dominant supplier, 
and providing opportunities 
and risks for groups from 
Europe and elsewhere. 

At stake Is a great deal of 
money. South Korea’s defence 
budget is between $l2Abn and 
$L3bn a year, of which about 
Half js spent an equipment Of 
that procurement budget, on 
average between a quarter and 
a third is spent overseas - 
more than $3bn a year. 

Until the late 1980s, the US 
market share of the overseas 
procurement budget was as 
high as 95 per cent according 
to westan diplomats. That pro- 
portion has fallen to about 80 
per cent, although the figur e 
changes from year to year, 
varying when large contracts 
are awarded, and has been as 
low as 60 per cent 

Seoul's desire to build up its 
military manufacturing capa- 
bility is partly motivated by 
the reluctance of Washing ton 
to supply its most sophisti- 
cated hardware. “The 
Americans have a tendency to 
supply the Koreans with what 
suits the US, rather than with 
what the Koreans want,” 
ex plains one European diplo- 
mat. “Washington doesn’t 
want its technology exported 
to third parties, and doesn’t 
want the Koreans to be com- 
petitors in the arms bazaar in 
10 years’ time." 

The reluctance of the US to 
supply South Korea with 
sophisticated technology is 
accompanied by Seoul's desire 
to reduce its dependence on 
Washington. In the short term, 
the alliance between the US 
and South Korea remains firm. 
But in spite of American offi- 
cials’ denial of any desire to 
withdraw US forces from the 
p eninsula, European diplomats 
say the presence of US troops 


For institutions and professional investors only. 


in a united Korea would proba- 
bly be an anomaly. 

Washington's willingness to 
supply aims after such a with- 
drawal would be more equivo- 
cal titan at present, they claim. 
“If the US has to choose 
between supporting Korea or 
Japan, there’s no doubt who 
would lose out,” says one Euro- 
pean di plomat- 

As a result, Seoul is hunting 
for military technology wher- 
ever it can find it, a policy 
which offers significant oppor- 
tunities for non-US arms 
groups. European countries, 
less reluctant than the US to 
transfer technology, have 
already been able to snap up 
an increasing number of con- 
tracts. The market leaders are 
probably Germany and the UK, 
followed by France, Spain and 
Italy. 

The areas 

where Euro- 
pean manufac- 
turers can com- 
pete most 
effectively are 
mostly where 
the US Haw no equipment avail- 
able to meet Ko rean require- 
ments. The most obvious 
example was the contract for 
nine diesel submarines ctm- 
cluded by Howaldtswerke 
Deutsche Werft of Kiel, Ger- 
many. The US does not manu- 
facture such vessels. Similarly. 
American suppliers were 
unable to meet Seoul's require- 
ments for transport aircraft 
with short runway capabilities. 
The contract was eventually 
was given to Casa of Spain 
which will supply 12 CN-235s at 
a cost of about S2Q0BL 

On occasions the Europeans 
can win against US competi- 
tion, however. Matra of France 
won a contract for about 150 
Mistral man-portable surface to 
air missiles in a deal initially 
valued at $l80m, which could 
eventually be worth up to 
6720m. Although the cheaper 
Stinger missile offered by US 
company General Dynamics 
was preferred fay the South 
Korean army, the Pentagon 
was reluctant to release the 
technology. Matra ’s willing- 
ness to supply Lucky Goldstar 
with technology and allow it to 
participate in about a quarter 
of the project won the day with 
the South Korean government 

The Europeans’ efforts would 
perhaps be more successful if 
they worked together. At pres- 
ent, European suppliers, some- 
times from the same country, 
virtually slit each other’s 


throats in their efforts to win 
contracts. 

“It’s ridiculous that we have 
two European helicopter com- 
panies competing with each 
other," says one European dip- 
lomat “It’s difficult enough 
just competing with the US.” 
He gives the example of a con- 
sortium between British Aero- 
space and Sema of France 
which recently won a contract 
to supply the electronic combat 
system for Korean navy's 
destroyer programme against 
Atlas Elektronik, a German 
competitor, and Ferranti of the 
UK. Other diplomats agree that 
Europe’s lack of co-ordination 
hinders its efforts, but there 
remain few signs of greater 
cooperation. 

Meanwhile, US military 
authorities in South Korea 
argue that buying European 


European countries, less reluctant than the US 
to transf e r technology to Seoul, have snapped 
up an increasing number of contracts 


sy s tems could lead to problems 
of compatibility with US hard- 
ware stationed on the penin- 
sula. European suppliers say 
this fear has been exaggerated, 
pointing out that most Euro- 
pean weapons are configured 
to Nato standards anyway. 

A further dang er hig hli ghted 
by US officials is that non- 
American suppliers may prove 
unwilling to supply materials 
and spare parts during a con- 
flict The status of the 566m 
PC-9 trainer programme which 
was due to be supplied from 
Switzerland by PQatus remains 
in doubt because of Swiss con- 
cerns that the 20 aircraft could 
be converted to cany weapons- 
Seoul's inexperience in dealing 
with non-US contracts has led 
to expensive bills for spare 
parts, according to (me diplo- 
mat 

Most European diplomats 
concede it will be Impossible 
for the Europeans to compete 
with the US for contracts feff 
major platforms, such as jet 
fighters or tanks. Washington's 
political clout, and the domi- 
nance of US military thinking 
on the peninsula, put such 
huge deals out of bounds. 

However, Europeans could 
supply components or the 
entire programme for projects 
such as: 

"Electronics equipment for 
about eight reconnaissance air- 
craft, smaller than the Ameri- 
can Awacs, but capable of 


offering airborne early warn- 
ing capabilities. The South 
Koreans are almost completely 
dependent on the US for infor- 
mation about movements in 
North Korea. 

•Trainer aircraft. After the 
failure of Daewoo Heavy Indus- 
tries' indigenous KTX-I trainer. 
Lockheed of the US is offering 
help for early development for 
the KTX-U programme in a 
deal worth about 5700m. The 
next stage of development 
could be worth up to 52bn. The 
UK wanted to supply a cheaper 
redesigned version of the 
BAe's Hawk. 

* Frigates: South Korea’s admi- 
rals have aspirations to a blue 
water navy, capable of operat- 
ing beyond coastal waters. 
European diplomats say the US 
is offering reconditioned s h ips, 
bat the South Korean navy 
wants new ves- 
sels of possibly 
up to 8,000 
tonnes. 

* Deep water 
submarines. 
— — The UK is 
understood to have offered 
four second-hand Upholder 
class vessels, but the South 
Korean navy is not particu- 
larly interested. 

* Naval helicopters. 

* Mine-hunters. 

* Ground-based electronics, 
particularly in the field of com- 
mand, control communica- 
tions. This might include mili- 
tary satellite communications. 

* Land-based helicopters. 

* An upgrade of the Kl tank. 
Most of the equipment would 
probably be provided domesti- 
cally or by the US, but Euro- 
pean suppliers could ship some 
components. 

The extent to which the 
Europeans can capture market 
share remains uxudear. This is 
partly because in recent 
months few deals have been 
concluded. A purge of the 
armed forces arid an anti-cor- 
ruption campaign instigated hy 
President Kim Young-sam has 
led to a virtual paralysis in 
military procurement During 
1993, only 20 per cent of the 
overseas procurement budget 
was actually spent 

“Nobody wanted to make a 
decision," explains one diplo- 
mat The disincentives to take 
action received a further boost 
last year after a ?6.G7m fraud 
involving a French-Korean, 
counterfeit bills of lading and a 
non-existent cargo of artillery 
shells. The affair cost Mr Lee 
Kyong Jae his job as defence 


minister. However, diplomats 
say the decision-making pro- 
cess is now loosening up. 

Although South Korea repre- 
sents on opportunity for Euro- 
pean companies, diplomats 
admit there are risks. In the 
Orst place, the contracts may 
not be particularly profitable. 
Some non-US suppliers have 
succeeded by offering low 
prices or even throwing In free 
samples- In addition, nearly nil 
deals over $5m include a man- 
datory offset of 30 per cent. 

Another problem is that by 
winning a contract through 
technology transfer, the Euro- 
pea os could create a future 
competitor. “The main advan- 
tage the European makers 
have is their wiilingncas to 
offer technology, but they 
mustn't offer too much,” says 
one European diplomat. 

However, most European 
observers discount such dan- 
gers. “What the Koreans have 
done in the automotive indus- 
try is extraordinary says a 
European diplomat. "But 
there's a big difference 
between assembling a subma- 
rine or a trainer aircraft, and 
developing one for yourself 

Another explains: "The 
clever stuff is really beyond 
them. On a submarine, the 
sonars, weapons and controls 
to propel and direct the boot 

are all too sophisticated, It's 
worse in aerospace." 

Indeed, the track record of 
the Korean Agency for Defence 
Development (ADD), responsi- 
ble for acquiring technology 
and then developing indige- 
nous weapons systems, is par- 
ticularly patchy in that sector. 

The most disastrous example 
is Korea's KTX-1 trainer air- 
craft. developed by the ADD. 
The aircraft was underpowered 
and overweight, making the 
trainer difficult to manoeuvre, 
and there were problems with 
the landing gear. 

The ADD Is continuing to 
persevere, however. After the 
failure of the KTX-L it is coor- 
dinating development of the 
KTX-U. Samsung, Lockheed of 
the US, :tnd Casa of Spain are 
collaborating to develop a twin 
jet-engined trainer. 

“The Koreans will keep 
pushing for technology." says 
one diplomat. "The Europeans 
will give it to them. But it's 
more likely to be the older gen- 
eration kit - say the mark VI 
rather than the mark Y12. The 
question is whether the 
Koreans, using all those PhDs 
to vacuum up technology from 
whatever source, wilt eventu- 
ally be able to catch up on 
their own. In the short term, 
the answer is no. In the lunger 
term, the question is rather 
more difficult to answer.” 

Paul Abrahams 


John Burton looks at the south's foreign policy 

US is blamed for crisis 


The most criticised aspect of 
President Bom Yonng-sam’s 
administration has been its 
inconsistent policy on the 
North Korean nuclear issue. 

Mr Kim has shifted back and 
forth between accommodation 
and tough rhetoric during his 
16 months in office. This 
reflects deep divisions, largely 
based on generational differ- 
ences, among the South Kor- 
ean public and his own cabinet 
on how to handle North Korea. 

But North Korea's apparent 
final refusal to allow interna- 
tional inspections of its 
nuclear farillttas has ended the 
months of wavering in SeouL 
The government now appears 
united in sapparting stiff sanc- 
tions against tha north. 

This does not mean, how- 
ever, that public debate on the 
issue has abated. There are 
predictions that South Korea 
could soon witness some of its 
biggest demonstrations since 
1987, when the military govern- 
ment was overthrown, as stu- 
dents protest that the govern- 
ment’s hard-line policy could 
eventually lead to war. 

The nuclear dispute has 
served as a catalyst on Korea's 
future role in north-east Asia 
and Seoul’s relations with the 
US. its closest ally. 

Whatever the outcome of the 
crisis. South Korea, is likely to 
adopt a more independent and 
assertive foreign policy in the 
future that could weaken its 
ties with the US and might 
even Lead to acquiring its own 
nm-loar capability . 

Conservatives have criticised 
the government for allowing 
the US to dominate policy on 
North Korea at the expense of 
South Korea's nati o nal inter- 
ests. They were angered by 
Washington’s willingness to 
establish direct contacts and 
possible diplomatic relations 
with North Korea, a develop- 
ment they feared would 
weaken South Korea and 
strengthen the north. 

As South Korea tried to 
undermine support for the 
north by wooing its Chinese 
and Russian allies, so North 
Korea was believed to be doing 
the same by using the nuelpar 
inspection issue to gain US dip- 
lomatic recognition. 

The collapse of Washington's 
conciliatory approach to North 
Korea in response to Pyong- 
yang’s continued refusal to 


make concessions on nuclear 
inspections has vindicated the 
conservative faction and 
strengthened its influence. 

But- there are doubts in the 
two opposition parties - and 
among the- 64 per cent of the 
population bom after the Kor- 
ean war ended in 1953 - that 
confrontation with North 
Korea is desirable. 

University students believe 
that the US and Japan, not 
North Korea, represent the big- 
gest potential threats to South 
Korea, according to a recent 
survey. They claim that the 
nuclear dispute has been pro- 
voked by the US to reverse 
Washington's dwindling influ- 
ence cm the Korean peninsula. 

Anti-American feeling is 
widespread because of past US 
support for the country’s mili - 
tary rulers. This view is not 


nuclear dispute may be grow- 
ing public acceptance for 
South Korea to possess its own 
nuclear arsenaL 

“Many people wonder if 
South Korea should try to 
inherit the North Korean bomb 
once reunification occurs or 
try to develop our own since it 
would improve our security 
and status,” said one Korean 
journalist “We would no lon- 
ger be the Korean shrimp 
among the whales of Japan, 
China and Russia." 

South Korea tried to develop 
a nuclear bomb in the 1970s 
under Us former military presi- 
dent, Mr Park Chung hee, to 
counter the north’s military 
strength. It was forced to aban- 
don the programme under US 
pressure. 

In contrast it is the left that 
is now leading the call for 


If the south had its own nuclear bomb, “we would 
no longer be the Korean shrimp 
among the whales of Japan, China and Russia” 


limited to students. “The US 
military and CIA are causing 
this crisis because they need a 
new enemy to replace the 
Soviet Union and thus malty 
tain their huge budgets. That 
enemy is North Korea," says a 
South Korean businessman. 

Public distrust Is even 
greater concerning Japan, 
Korea’s traditional foe. One 
sign of widespread suspicion 
toward Japan is the plot of 
South Korea's current best-sell- 
ing novel, a thriller called The 
Rose Of Sharon Has Blossomed, 
the title referring to Korea’s 
national flower. 

It is the late 1990s and Japan 
has launched a limited military 
attack against South Korea as 
a result of a dispute between 
the two countries over raw 
materials from Russia. 

South Korea suddenly 
reveals that it has been - 
secretly co-operating with 
North Korea on a nuclear 
bomb. The two Korea* explode 
the device on a deserted island 
near Tokyo as a warning and 
Japan surrenders. Korea has 
obtained just revenge for 
Japan's harsh colonial rule of 
the Korean peninsula in the 
early 20th century. 

The popularity of the novel 
suggests that one unexpected 
result of the North Korean 


South Korea to acquire nuclear 
capability to counter what is 
perceived to be a potential Jap- 
anese atomic threat 
There is concern in South 
Korea about Japan’s growing 
stockpile of plutonium, the key 
ujgredient in manufacturing a 
nuclear weapon. Japan is also 
building a plutonium process- 
ing plant and recently began 
operating an experimental fast 
breeder reactor that can pro- 
duce additional plutonium 
North Korea has tried to 
exploit the south's fears by 
suggesting that its suspected 
nuclear programme is meant to 
contain Japan, which it 
accuses of racing "headlong 
toward nuclear a rmamen t" 
Moderate South Korean poli- 
ticians are also beginning to 
argue that their country 
should acquire the potential 
capability to enter the nuclear 
club in response to possible 
®. t0 “? ( L threats from either 
North Korea or Japan. 

Mr Park Chan-jong, an appo- 
rtion MP who is one of South 
Korea's most popular politi- 
dans, recently proposed that 
the country should acquire 
enrichment and reprocessing 
facilities that could extract plu- 
tonium from the nuclear waste 
generated by its 20 current and 
p lanned commercial reactors 


The reprocessing farilitie 
would enable South Korea t 
obtain plutonium for possibl 
nuclear weapons in the ever 
of an national emergency. 

Although Mr Park support 
strict international inspects 
procedures for the South Ko; 
ean reprocessing facilitlei 
their existence “would serve a 
a check against North Korea 
tactics. 

“We can talk on equal term 
with other nations which hav 
$ similar nuclear facilities," h 
said. “Though Japan is exert 
plary in terms of its nudea 
transparency, no one can den 
its potential for nuclear weap 
ons capability." 

South Korean nuclear Indus 
try officials favour reprocess 
ing facilities on practica 
grounds since the country ii 
having difficulty finding site 
to store nuclear waste. 

But one obstacle is that thi 
US has barred South Kore; 
from reprocessing spen 
nuclear fuel since the i970s a 
part of its policy of stopping 
Seoul from developin g nucleai 
weapons. 

"South Korean nuclear one 
missile sovereignty should fc 
restored." says Mr Park. “Oui 
sovereign rights over flu 
peaceful use of nuclear energy 
and missile development have 
been unjustifiably suppresses 
by the US. Consequently, thb 
nation now has no alternate 
but to depend on the US for its 
security whenever threaten/* 
by the North Korean strategy 
capability." 

The government has 
strongly condemned any sug 
Option that it is considertOf 
building nuclear reprocessiiW 
facilities, explaining it would 
increase tensions in the region 
It would also violate the 1991 
North-South Korean denuclear- 
isation treaty, which bans plu- 
tonium-separation facilities. 

The proposal to acquire 
reprocessing capabilities is an 
irresponsible Idea being pro- 
moted by the opposition," says 
one aide to President Kim 

Young-sam. 

But that may not be true 
much longer if the government 
oocides to nullity the intcr-Kor- 
ean denuclearisation treaty 
Because of North Korea’s con- 
struction of a suspected 
nuclear reprocessing facility 
and Us refusal to allow interna- 
tional nuclear inspections. 






-i&.'iSF 





ii^^i±™KTHURSDAY 


JUNE 23 1994 


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FINANCIAL TIMES THURSDAY 


JUNE 23 1994 


S ooth Korea is xenopho- 
bic. Suspicion of foreign- 
ers and foreign goods is 
instilled at primary schools, 
propa gated by the T Pf*ff n 
practised by bureaucrats and 
businesspeople. There are, of 
course, individual exceptions. 
But South Korea is probably 
one of the most xenophobic 
countries in the world. 

The cause of this extraordi- 
nary collective dislike of things 
and people foreign is not hard 
to fathom. Korea has been 
invaded, ravaged, and economi- 
cally exploited by foreign pow- 
ers throughout its history. 
Forces from the country's 
three powerful neighbours, 
Japan, China and Russia, have 
all battled over the country, 
while even before the Korean 
War, troops from the US, 
France and the UK each made 
incursions of various gravity. 

Although Korea has endured 
onslaughts from an directions. 
South Korea's xenophobia is 
targeted at one country in par- 
ticular - Japan. A visit to the 
Independence Han of Korea, 
near Chonan. a shrine to 
nationalism visited daily by 
of children, g* p1ain« 

why. 

The most popular exhibit - 
in the Japanese Aggression 
Hall - is a waxwork display 
illustrating Japanese soldiers 
during the occupation between 
1910 and 1945. They are shown 
in the process of torturing Kor- 
ean women, burying Kor- 
ean men up to their necks 
before beheading them. 

The hall explains to the chil- 
dren how the enmity between 
the two countries dates back to 
the first Japanese invasion of 
1592 when Shogun Toyotomi 
EEdeyoshi's forces ransacked 
the country. They can read 


T he growing number of 
new Korean cars appear- 
ing in western cities 
from London to Los Angeles is 
a sight that enrages E urop e an 
and US motor companies. 

While western carmakers 
worry that South Korea may 
repeat the success of Japan in 
posing a serious challenge in 
their home markets, they are 
virtually shut out of Korea, 
which is the second biggest 
car market in Asia alter 
Japan. 

Korea last year imported 
only 1,984 passenger cars, 
which is almost the same as 
tiie number of cars sold in a 
single day in the co un try. In 
contrast, Korea exported a 
record 639,000 vehicles last 
year, with one third being 
shipped to western Europe and 
the US. 

Korea's restrictions against 
car Imports are cited as one 
example of bow the cou ntr y 
has used trade barriers to fos- 
ter the growth of its main 
industries by pro tec tin g them 
against foreign competition. 
The complete domination of 
the domestic market by 
Korea’s Mg three carmake r s - 
Hyundai, B3a and Daewoo - 
has helped transform the 
country into the world's sixth 
largest vehicle producer. 

Korean car manufacturers 
are now launching an aggres- 
sive export offensive in Europe 
and the US from their secure 
home market 

Hyundai Motors, South 
Korea’s largest car manufac- 
turer and biggest vehicle 


Paul Abrahams considers the affinity - and also the antipathy - towards the Japanese 

So close - and yet so far apart 


citations of merit awarded dar- 
ing the conflict Which granted 
a stipend to Koreans who 
beheaded more than one Japa- 
nese soldier. On view is a rep- 
lica of one of the “turtle ships" 
that Admiral Yi Sun-Shin used 
to destroy the Japanese fleet 
And in case the message has 
not sunk in during the visit, 
the children buy comic 
books retelling the sagas of 
Korean heroes and heroines 
fi ghting against the Japanese. 

Admittedly, the museum 
does offer a few details of other 
foreign incursions. The Man- 
churian invasion of the early 
17th cent ur y, which was proba- 
bly as destructive as the earlier 
Japanese attack, is given a Tit- 
tle space. One of the hundreds 
of monuments erected in the 
1870s by Regent Hungsun Tae- 
w on-gun after the French and 
US tending s is also on show. It 
reads: "Western barbarians 
Invade our land. If we do not 
fight, we mast then appease 
thorn To urge appeasement is 
to betray the nation." 

But the main emphasis of 
the museum is directed against 
the Japanese. Such sentiment 
is propagated throughout 
South Korea. Take Korea’s sub- 
marine construction pro- 
gramme. The first vessel was 
called Changbogo-Ham, after 
the 1st century Korean admiral 
who fought the Japanese. The 
second was the Lee Chun-ham. 
named after another admiral 
who straggled against the Jap- 


anese. The third, the Choemu- 
gon-Ham, was named after the 
14th century admiral who 
destroyed about 500 Japanese 
pirate ships using gunpowder 
and guns. Fourth was the 
Park- Wl-ham, after the admiral 
who attacked Tsushima Island 
in Japan and crushed 300 Japa- 
nese vessels in 1389. Even 


Trade deficit with 

Japan deteriorates 


■■ Year . 

$fan 

.1989 

3.99 

- 1990 

5J33 

1991 • 

8.76 

• 1992 ■ • 

7.86 

1993 

8.45 

Soor»: Mkistry of Rnanc» 


South Korea’s armaments pro- 
gramme, the Yttlgnk project, is 
named after a 16th century 
court adviser whose warnings 
about the possibility of a Japa- 
nese invasion were ignored. 

The Japanese Aggression 
Hail focuses not only on the 
atrocities during the colonial 
period, but also on the cultural 
imperialism imposed by Japan. 
In the later stages of its colo- 
nial occupation, Japan 
attempted to force complete 
nninn by obliging Koreans to 
adopt Japanese style names 
enforcing use of Japanese 


in state schools. Inability to 
speak Japanese meant Koreans 
were denied ration cards. The 
Japanese also tried to stop the 
Koreans wearing their tradi- 
tional white clothes. Pictures 
in the hail also show Koreans 
being forced to worship at 

Shintn shrines 

Few nations continue to 
poke at the sores cd the second 
world war with as much fer- 
vour as Korea. This compares 
with a Japan, where many con- 
tinue to deny Japanese Marne 
for the outbreak of hostilities 
during the Manchurian inci- 
dent in the 1930s and refuse to 
admit that the Japanese army 
committed atrocities during 
the subsequent war. 

Earlier this year, Mr SMgeto 
Nagano was forced to resign as 
Japan’s justice minister just 10 
days after taking office. The 
reason was that he h»a voiced 
the view, commonly-held 
among alder Japanese, that the 
massacre of 150,000 people in 
the farm er riifiwwt ea jij t a l of 

Nanking in 1937 never hap- 
pened. He also claimed that toe 
occupation of Cfcma had not 
been an act of aggression. 

Many Japanese also still 
refuse to admit the role of the 
Japanese imperial army in set- 
ting up brothels during the 
Pacific War using other Asian 
nationals , including Koreans, 
known as co mfort women. The 
Japanese government only last 
year acknowledged and apolo- 
gised for coercing such women. 


At least 100,000 of them were 
Koreans. 

As for Japanese attitudes to 
the colonial period, diplomats 
in TCkyo privat ely regret that 
Koreans do not recognise the 
beneficial side of colonialism. 
During 37 years of occupation. 
Korea's economy was trans- 
formed, they say. Feudalism 
was abolished, the political and 
judicial systems updated, the 
economy advanced from an 
agrarian to a semi-industrial 
state. Agricultural production 
increased, railways were built 
and mining and forestry 
operations vastly expanded. 
Such patronising attitudes 
jufti r j fl fo* fh» Koreans. 

Given the history of Korea 
and Japan, 1st- .... 
eral relations To genet 
between the - 

two countries . 

are understand- Japan 

ably not as 
good as they might be. How- 
ever, both governments are 
trying to create a rapproche- 
ment between the countries, 
ewdrng centuries of enmity. 
The Koreans want to reduce 
massive and worsening 
$&45bn trade deficit with one 
of their iii qmi i a nt trading 

partners by attracting Japa- 
nese technology and invest- 
ment, particularly in the realm 
of automotive MmpnnMite and 
machine tool technology. The 
Japanese, for their part, view 
the possible nuclear build-up 
in North Korea as a direct 


threat to their security, and so 
are anxious to support SeouL 
However, to attract addi- 


more cordial relations with 
Japan wfll require a massive 
change in attitudes among 
Koreans, who will have to 
exorcise the Japanese ghost 
from their national psyche. It 
will also need a complete redi- 
rection of Korean nationalism. 

Admittedly, the Korean 
attitude to Japan is ambiv- 
alent. There Is the facrinatinn 
of the Japanese economic 
znodeL Protectionism, large 
conglomerates and state- 
directed investment have all 
been borrowed from Japan in 
an effort to emulate that 


To generate more cordial relations with Japan, 
the Koreans wfll have to exorcise the 
Japanese ghost from their national psyche 


country’s miracle. 

Similarly, urban Korean 
youths are obsessed by Japa- 
nese culture. Women openly 
look at banned Japanese fash- 
ion wopwnflu, although many 
cannot understand Japanese. 
Adolescent boys read Japanese 
comics and listen to Japanese 
music. The ambivalence of 
Korean youths is shown in the 
results of a recent survey 
which recorded that the coun- 
try they most admire is Japan. 
But they also view Japan as 
potentially the most danger- 
ous. 


John Burton looks at the secure home base of the country's car manufacturers 

Trade barriers foster overseas growth 


exporter, already has a strong 
presence in the US and 
Europe, which accounts for 63 
per cent of the company's 
overseas sales. Its marketing 
strength reflects Hyundai’s 
status as the only Korean car 
co mp any that Wnw bCCD a % to 
sell vehicles under its own 
badge abroad through, an inde- 
pendent dealer network. 

Kia Motors and Daewoo 


They are launching an 
export offensive from a 
secure home market 


Motors, Korea's second and 
third largest car companies, 
have also been shipping 
vehicles to the industrialised 
world by supplying them on 

331 ori ginal ij pniAn t wiofip- 

factoring (OEM) basis to their 
respective partners. Ford and 
General Motors. 

They are now starting to 
establish an independent pres- 
ence in Europe and the US. Kia 
started marketing in western 
Europe last autumn and 
recently announced that it 
would start producing its pop- 
ular Sportage four-wheel 
sports utility vehicle in Ger- 
many early next year in a 
joint v e ntur e with Karmann, 


an automotive engineering 
group. Kia also plans to 
expand its US distribution net- 
work to 330 dealers by 1996. 

Daewoo will enter western 
Europe next year and the US 
in 1996 following the recent 
collapse of its joint venture 
with GM, which had imposed 
export restrictions on the Kor- 
ean motor company. 

The prospect of increased 
Korean vehicle exports is pro- 
voking European and US car 
companies to demand that 
Korea open its market to for- 
eign competition or face retali- 
ation. 

European motor companies 
are calling on the EU to 
revoke the generalised system 
of preferences (GSP) that low- 
ms tariffs on Korean cars. 

The US is asking that Korea 
cut its import tariff cm passen- 
ger cars fro m 10 per emit to 
per cent and revise vehicle 
taxes that discriminate 
against foreign models. 
Restrictions on the number of 
distribution outlets available 
to importers and a complex 
certification system are 
regarded as the main non-tar- 
iff barriers to foreign cars. 

Korea has already m«dp a 
few concessions on the issue. 
The government says it has 
abandoned tax audits of for- 


eign car custo m ers, a practice 
that importers claim was 
meant to di s c ou rage their pur- 
chase as part of an official 
crackdown on conspicuous 
consumption. 

Seoul is considering some of 
the other demands made by 
Washington. US officials 
expect that the lu x u ry tax an 
executive cars will be cut and 
limits on TV advertising will 
he eased. 

The prom ise of lower barri- 
ers is already prompting mere 
western car nmirihctarers to 
open sho w rooms in SeouL But 
most analysts believe that the 
increased presence of Euro- 
pean and US cars will not seri- 
ously threaten Korean car 
companies. “European car- 
makers will only have a atini- 
mal impact on the market,” 
says Mr Gilles Anoufl, head of 
the EU office in SeouL 

The American Chamber of 
Commerce in Korea estimates 
that if car imports increase 
from their current market 
share of 0.14 per cent to 4 J9 
per cent, the same level as in 
Japan, it would represent 
70,000 vehicles with annual 
sales of Slbn. 

A greater pot enti al threat to 
the Korean motor industry 
would be opening the market 
to Japanese car imports, winch 


are now virtually banned. 
“Korean car companies at 
their current stage of develop- 
ment cannot compete against 
the Japanese,” says Mr Kim 
Moo, a vice president at Sam- 
sung Heavy Industries, which 
is rearming to enter the pas- 
senger car industry. 

For a start, Japanese cars 
have a quality advantage over 
their Korean competitors. 
They might even be pricecom- 
petxtive despite the high yea 
due to better productivity in 
Japanese car factories and low 
transport costs from Japan. 

Ih e g o ve r nm ent is c onrider - 
ing dropping the import ban 
on Japanese cars is 1997, a 
measure that could disrupt 
Korea’s ambitious programme 


to become one of the world’s 
five largest carmakers. 

In spite of trade protection, 
Korean car companies suffer 
from low profitability. Hyun- 
dai and Kia reported 1993 
earnings of Won58bn and 
Wonl8bn respectively, while 
Daewoo lost Won69bn. 
Although all had improved 
earnings performance last 
year, analysts believe profits 
could have been much higher 
given the 20 per cart rise in 
total sales. Increased market- 
ing costs and heavy debt bur- 
dens have cut into profits. 

C ompetit ion in the domestic 
market is already expected to 
Increase with toe entry of 
Ssangyong into the passenger 
car industry in 1996, followed 


Any rapprochement with 
Japan is likely also to require a 
reassessment of Korea's own 
role during the Pacific war. 
Although the Independence 
Hall of Korea stresses the hor- 
rific treatment by the Japanese 
of Korean "comfort women , 
t here is no m e n tion of the tens 
of of Koreans who 

fought for the Japanese during 
the P acific War, many of them 
volunteers. The behaviour of 
Korean prison guards, many of 
whom bad a worse reputation 
for cruelty among Allied pris- 
oners or war than the Japa- 
nese, is also glossed over. 

Nor does the museum 
ovpiftin that Korean collabora- 
tion reached the highest 

echelons of 

h Japan, subsequent 

n governments. 

tfte For example, 

ssyche former Presi- 

■— dent Park 
Chung-Hee saw active service 
in the Japanese Imperial Army 
in China during the final 
stages of the conflict. Many 
members of the government 
after the 1961 coup also bad 
Japanese military experience. 

How successful are the two 
governments likely to he in 
their efforts to reduce animos- 
ity? Certainly, toe countries 
have a cultural affinity. The 
Koreans are proud that the 
Chinese irrfiiww*, so pervasive 
in Japanese life, was transmit- 
ted through Korea. They share 
nnnftirfanism, both support a 


possibly by Samsung a year 
lata:. Although Korea remains 
one of toe world’s fastest 
growing vehicle markets, 
there are doubts whether a 
nation of 42m can support five 
car companies. 

Growing pressure in toe 
home market Is toe main 
came for the Korean motor 
industry’s rapid expansion 
overseas. Besides western 
Europe and the US, Korea is 
focusing on China as a new 
market. Car ow ne r s hip in 

The focus is on China, . 
where car ownership may 
triple in the next decade 

China is expected to triple to 
3m in the next decade. •'Kor- 
ean vehicle makers view China 
as toe source of their fixture 
salvation,” . says Mr Brian 
Gold, of Euro-Asian Business 
Consultancy in SeouL 
Western car convanfes, frns- 


slmilar form of capftabsm. and 
they are also among toe few 
democratic governments in 
Asia, Economies^ they could 
form a pow erfattortfoMtock. 

But although may may be 
physically close, tin..Q«mtries 
remain mentally apart The 
long-term relattoufeip will 
depend on how Korea views Its 
strategic interests in a post- 
unification future. Without a 
threat from the north, Korea' 
will be bereft of an external 
threat Zs Korea sufficiently 
mature to feel comfortable 
without an enemy? . 

South Korean policy makers 
ara unsure whether Korea and 
Japan, the region’s two eco- 
nomic powerhouses, are set cm 
an inevitable col listen course, 
leading to an arms race that 
wouM shatter the strategic bal- 
ance in north-east Asia. The 
ambition of the Japanese self 
defence forces to acquire air- 
craft carriers is viewed with 
alarm by the Koreans who 
believe such vessels can in no 
way be construed as defensive 
weapons. 

The alternative policy, 
viewed as desirable by some 
bureaucrats in the Blue House, 
the president’s residence, is the 
creation of huge trading bloc 
between Japan. Korea and 
Taiwan, which would offer a 
combined market almost, aa 
large as the US. 

If they are to be successful In 
h aling this braised relation- 
ship, the Japanese must 
become more sensitive to Kor- 
ean concerns. Hie Koreans, for 
their part, must develop a 
more mature form of na tional- 
ism. based less on a xenopho- 
bic past and more on the needs 
of the fixture. The alternative is 
an arms race that will serve 
neither countries' interests. 


trated about entering Korea, 
can at least take comfort from 
toe fact that their Korean 
rivals are having similar prob- 
lems In breaking open the Chi- 
nese market 

In what one Seoul-based 
western motor analyst calls 
“toe height of audacity given 
Korea's own record,” Seoul 
recently asked Bering to drop 
barriers against Korean car 
imports. 

Korea is also seeking to 
establish car factories In 
Qtina as a means to penetrate 
the market. But Bering is 
ifamunwUm that toe Koreans 
establish joint venture auto- 
motive component plants as a 
first step, while postponing 
a pp ro val for toe cm 1 f ac tories. 

Scone Korean car companies 
are restating' the request, 
believing that the supply of 
components could give toe 
Chinese the technical capabil- 
ity to create an independent 
motor Industry that might 
eventually challenge Korea. 


The impact of Gatt on a key industrial group 

Samsung in the global village 


SAMSUNG CORPORATION 

Notice to the holders of Samsung Corporation Global Depositary Shares. 

NOTICE IS HEREBY GIVEN TO THE HOLDERS OF THE ABOVE MENTIONED 
GDSs THAT: the Board of Directors Meeting of the Company, held on April 20, 1994, 
resolved to issue NEW SHARES under the following terms and conditions. 

1. Form of shares: common shares in registered form. 

2. Number of shares to be issued: 1,976,000 shares of common stock. 

3. Issue Price: 26.400 Korean Won per share, tentatively. 

4. Allocation of New Shares: 

1) 20% of Rights issue shall be allocated for subscription by employees of the 
company according to the Law on Fostering the Capital Market in Korea. 

2) Remaining 809b of Rights Issue shall be allocated for subscription by shareholders 
registered on June 1. 1994 in the proportion of 0.09338319 share per one share 

(2 GDSs). 

Both the holders of common shares and the holders of non voting preferred shares are 
entitled to subscribe for new common shares in proportion to their respective 
shareholdings. 

5. Record date: June l, 1994. 

6. Subscription period: July 11, 1994 - July 12. 1994. 

7. Payment date: July 14, 1994. 

8. Others 

1) Fraction of shares and unsubscribed shares shall be disposed of according to the 
Resolution of the Board of Directors Meeting. 

2) The actual issue price will be determined at a later date pursuant to the regulations 
of the Korean Securities and Exchange Commission. Such price will in no event be 
greater than the tentative issue price mentioned above. 

3) GDS holders should contact the Depositary (Citibank, N.A.) for further 
information. 


Anna 


CORPORATION 


The Uruguay Round of Gatt 
has sharply divided South 
Korea, provoking a clash 
between tradition and moder- 
nity. 

Farmers demonstrate in the 
streets of Seoul and other dries 
to protest at the opening of the 
rice market, which they warn 
could destroy the agriculture 
industry and with it the source 
of tiie country’s rich culture. 

In contrast, the Sam sung 
industrial group tolls its work- 
ers in a corporate video that “if 
we MI to open our door to 
foreigners, both Korea and 
Samsung will perish". 

Parliamentary approval of 
the new Gatt agreement, which 
is expected this summer at the 
earliest, would represent the 
meet significant sign yet of the 
government's commitment to 
accept a more open economy. 

If farmers are the biggest los- 
ers from the Gatt treaty, 
Korea’s big conglomerates, 
such as Samsung, believe they 
will be the main beneficiaries 
because the accord promises 
increased business. 

“Industrial groups such as 
Rama^ ng are the best-prepared 
sector of the economy to take 
advantage of the Uruguay 
round because we have been 
exposed to foreign competition 
for 30 years, while the service 
and agricultural sectors are 
vulnerable because they have 
been protected,” says Mr Urn 
Dong-sung, president of the 
Samsung Economic Research 

In s t i t ute . 

One obvious benefit is that 
exports of Korean manufac- 
tured goods will increase due 
to the reduction of tariffs. Sam- 
sung is the world's leading pro- 
ducer of semiconductor mem- 
ory chips and Korea’s largest 
consumer electronics company. 
Its other main businesses 
Include ships, machinery and 
petrochemicals. 

Although Samsung, the 
country's second largest con- 
glomerate. is expected to face 
stifier competition at home due 
to increased imports, particu- 
larly in the petrochemical and 
machinery sectors, it believes 
that growing exports wfll out- 

DBiffh t-h# namHin ofToz-f nf 


other sectors that could suffer 
under increased imports from 
(thhm and south-east Asia as 
tariff barriers are dismantled. 

Nonetheless, Mr Lee Kun- 
the jtawiwimg chairman, 
remains deeply concerned that 
the group. which his father 
founded in 1938, remains psy- 
chologically ill-prepared to 
compete in toe global market 

“Despite the &.,* 

enormous 

chang es in the iBWkBt foFil 
siudt has ye^to 

sung nas yet to : »■ 

comprehend 'i" /• 
how far behind .W-3 


we are in these v - » f 
rapidly chang- '-Tv - - . V: 
ing and com- .*» • ' ‘ ' 

petttive times,” 

Mr Lee wrote ♦. 
in a group ■ i 1 " M 
pamphlet that •' ' .'-wjB 

has become 
mandatory ’slfl 
reading far Its , ."'-**** 
employees. • v - ' • ' ' yf 

“We are still 
caught up in 
the notion that Samsung is the 
best in Korea. We cannot be 
satisfied with that notion 
because it has no meaning in 
tois global village,” he adds. 

Mr Lee last year introduced 
management reforms that 
emphasise individual initiative 
in a group that was known for 
its rigid hierarchical structure. 

The reforms were widely 
publicised in Korea after Presi- 


»uld suffer tom between its traditional 
iports from commitment to growth and Mr 
ast Asia as Lee’s goal of promoting quality 
ismantfed. at the expense of quantity, 
Lee Kun- even if means toe loss of mar- 
chairman, ket share, 
earned that Officials at Samsung Elec- 
his father tronics, for example, speak of 
miring psy- making the con cern one of the 
epared to world's five biggest electronics 
ai market companies by 2000, up from its 
. ... t • current ninth 

apdto . * wraton i In ■ |j oai place ranking, 
***** * even as they 

J-i xMX&Ssvtt ¥' m . •* , : •. acknowledge 
:r ; the need for 

' ■ /», improvements 

^ / • ' r v issue has taken 

■ l i Sff tP agreement is 

t *’-- *** lt M 

?* Diace increased 


s’W'w/ •*« place increased 
pressure on 
Korea to end its import ban on 
important Japanese products, 
such as electronics and cars. 

“We are stfll lagging b ehind 
the Japanese in terms of qual- 
ity and productivity, aitonng h 
we are confident we can dose 
toe gap before 1997, when the 
import ban is expected to be 
eased,” says Mr Moon Byung- 
dae, a senior managing direc- 
tor of Samsung Electronics. 


One benefit from the Gatt agreement is 
that it could force the government to 
accelerate its financial liberalisation 
programme, leading to lower capital costs 


Samsung has also recently 
reduced its operations In tex- 
tiles and food processing, two 


dent Kim Toong-sam recom- 
mended that government offi- 
cials should study Samsung’s 
new management practices. 

But there has been growing 
resistanc e among employees to 
the changes, which are consid- 
ered “too radical”, according to 
one Samsung executive. An 
internal survey revealed that a 
majority of workers disliked 

Kamciv T\n*G note wwwlnnir kMiro 


introduced to improve effi- 

ra^.ncy . 

Moreover, the group seems 


The entry of Japanese cars 
into the domestic market could 
also hurt Samsung’s plans to 
begin passenger car production 
In late 1997, although Samsung 
believes that its recent agree- 
ment to buy advanced technol- 
ogy from Nissan of Japan will 
make it competitive. 

One benefit from the Gatt 
agreement is that it could force 

ftmntfll i rum f t/v fl/viAlaw.!. 


pro^ 

gramme, which would Improve 
opportunities for Samsung to 
finance its corporate activities. 


Samsung and other Korean 
companies generally have to 
pay high interest rates on capi- 
tal raised at home because of 
the country's A ntiq ua ted 
inefficient financial system. 
Companies are also restricted 
by the government from rais- 
ing large amounts of cheaper 
funds abroad. 

The opening of financial ser- 
vices “will help the competi- 
tiveness of industry because It 
will promote increased effi- 
ciency in the domestic finan- 
cial sector and lead to lower 
capital costs,” says Mr Lim 
Lower capital costs are cru- 
cial for Samsung as it under- 
takes a restructuring of its 
operations. Samsung plans to 
expand its high-tech activities, 
including costly research on 
developing a next generation of 
256-megabit memory chips. It 
will also spend at least $6bn on 
its car project by 2000. 

But financial liberalisation 
will also have a negative 
I mpa c t, at least temporarily, on 
the finan c ial service business 
that Samsung is developing. It 
already owns leading insur- 
ance and credit card compa- 
nies and bought a securities 
firm in 1992. 

“These financial comp anies 
will suffer a bit initially 
because the financial sector in 
general Is vulnerable to foreign 
competition, but in the long 
term we don’t expect our posi- 
tion will be harmed,” says Mr 

TJrm 

Indeed, analysts believe that 
Sam su ng and other conglomer- 
ates that operate financial ser- 
vices wifi benefit in the long 
term from financial liberalisa- 
tion. The government is expec- 
ted to break down barriers 
among various financial sec- 
tors and allow the creation of 
comprehensive Korean finan- 
cial houses as one means to 
improve their competitiveness 
ag ains t foreign rivals. 

“financial liberalisation wifi 
provide an opportunity for 
Samsung and other conglomer- 
ates to edge out weaker com- 
petitors and expand their 
financial services, outside of 
packing, as the financial 


y»j.gmr.E 


• — -»««* Wadle, an 

analyst for BZW in SeouL 

John Burton 


• • 4 



FINANCIAL TIMES THURSDAY JUNE 23 1994 


Ssangyong: Reliability 

in a variety of business circles. 



A corporation’s survival depends on its reputation for 
reliability. 

Ssangyong has a 55-year history of reliability. 

Partners in more than 120 countries depend on 
Ssangyong and we’re doing our best to meet their needs. 


Our capital and technical cooperation with 
Mercedes-Benz, the capital venture with Saudi 
Arabia’s Aramco and the construction of over 7,000 
deluxe hotel guest rooms in the Pacific Rim are just a 
few examples of our successful partnerships. 


Ssangyong’s reputation in the fields of international 
trade, engineering and construction, automobiles, 
cement, oil refining, investment and securities, heavy 
industries and machinery, paper, insurance, shipping 
and information systems has resulted in total sales of 
US$14.5 billion in 1993. 


These days, when reliable business partners are hard 
to find, you need a corporation that builds reliability 
in a variety of business circles. 

We’re looking forward to talking business with you. 



SsangYong 


International Trade, Engineering & Construction, Automobiles, Cement, Oil Refining, Investment & Securities, Heavy Industries & Machinery, Paper, Insurance, Computers 
•C.P.O. Box 409. Seoul, Korea • Phone: (822) 270-8155 - 8, 270-81 30 • Fax: (822) 273-0981 , 273-8297, 274-2896 • Telex: TWINDRA K24270, K28215, K28442 





FINANCIAL TIMES THURSDAY JUNE 23 1994 


Trrrmr 


T he beautiful volcanic island 
province of Cheju provides a good 
example of the challenges that 
Sooth Korea is confronting in opening its 
domestic market to foreign competition. 

Its half-million citizens are debating 
whether the benefits offered by wider 
international access will outweigh the 
disruptive changes caused by market 
libe ralisatio n 

Cheju, which lies 100 kilometres south of 
the Korean mainland, will be one of 
regions most affected by the relaxation of 
restrictions on agricultural imports under 
the recent Uruguay round of Gatt. 

The threatened decline of the 
agricultural industry, which has supported 
the island for centuries, is accelerating a 
shift toward international tourism as the 
province's new economic mainstay. 

This is also forcing a change in attitudes 

When Korea was a monarchy, 
political exiles were 
banished to the island 

on the island, which has traditionally 
displayed a fierce independence to the 
outside world. 

Cheju’s tragic history has been marked 
by frequent revolts against the central 
government in Seoul. Its formers were 
mostly freeholders, rather than tenants as 
in the rest of Korea, which contributed to 
a resentment against the heavy hand of 
the central government 
The rebellious nature of the island was 
reinforced by its role as a place of banish’ 
ment for political exiles until the expira- 


John Burton looks at the impact that market liberalis a tion may have on Cheju 

Island’s charm is under threat 


turn, of the Korean monarchy in 1910. 

The island suffered a mini-civil war in 
194849, which was a harbinger of the 
Korean War of the 195053, whai the Seoul 
government adopted a tough policy in 
reasserting its authority over the island 
following Korea’s liberation from Japanese 
colonial rule. 

An estimated 30,000 persons, about 12 
per emit of the island’s population at the 
time, were killed during tile insurrection. 

The Island’s bloody history has created 
ambivalent attitudes toward the vast 
rhang o c being im posed on Cheju from the 
outside. 

The most significant development will 
be the decline of agriculture, which still 
accounts for 36 per emit of the island's 
economy. 

Cheju’s agricultural industry is largely 
based an tangerines, which are grown, on 
small, fnrfnrfpwt and heavily stale-subsi- 
dised forms on the southern half of the 
island The ftifl opening of the Korean 
market to tangerine imports by 2004 is 
likely to lead to a consolidation of local 
farms. 

The government, however, hopes to take 
advantage of the lower trade barriers 
promised by the Uruguay round to 
j p/rmagg tangerine and other agricultural 
exports to Japan, which are expected to 
triple within the next five years to $100m. 


Cheju is seeking to create a sales 
network for agricultural products in Japan 
and p«ttahiish direct shipping routes there 
for the quick delivery of produce. 

But t b^Kp measures are only re can t to 
preserve some of island’s agricultural 


industry and wUI do little to sustain 
Cheju’s economic growth. Instead, the 
government is concentrating on inter- 
national tourism as the key instrument to 
revive the island's fortunes. 

The natural beauty of the island IS 



Cheju: the Wand depends on to u rism and tangerines 


well-suited to attract visitors. Its 
landscape bears more similarities to 
Europe than to Asia, combining the 
volcanoes of Iceland with the mooes of 
Ireland and the coast of northern Italy. . 
The push for tourism began is the 1970b, 
when Chqju was developed as a honey- 
moon resort for Korean couples. It eqjoyed' 
a captive market since overseas tengtf&g 
by Koreans was severely restricted by the 
government until toe late Mete. Tbrotos 
in the past few years has become *fie 
island’s biggest industry, accounting for 48 
per cent of the economy. 

But the recent muting of travel 
restrictions has meant that Korean 
newly-weds are now visiting Guam, 
Saipan and Hawaii instead. Cheju has 
switched Its tourism strategy to attr a c ti ng 
more foreign visitors, particularly from 
Japan and Taiwan. . 

A total of Won7,S90bn wfll befotfestriftn 
Cheju by 2801 to build a series of resort 
complexes in an attempt to increase, 
tourism by 50 per cent to 54m visitors 
amrtcaBy. The emphasis will no tager-fier 
on tit ass tourism, but on . attracting 
prospero u s individual travellers. 

“We would like to build more hotels, 
sports facilities, aquariums, amusement 
parks, yacht marinas and casinoes^i th*- 
hope of making Cheju toe Ins Vegas of ’ 
Asia,” says Mr Chi Youn-tai, president of 


toe Korean Nritaai Corporation, 

the KMtC ha* established cm 
resort wreptox at Cfrudguaui Beach and 
. wil l participate in toe construction two 
other s. Th® Hm£n conglomerate, which 
owns toe country 1 * main carrier Korean 
Air. is also pfenning to build a resort 
fecUfty. • ■ 

The government estimates that 
. increased tourism by high-spending 
visitors will quintuple the size of the 
taboo's economy to WoxftSOObn by 2001. 
..But the islanders have expressed 
resentment at the development plans. 
"Chqju people are very independent- 
minded and don’t like to be interfered with 
-.by outsiders,” admits Mr Chi. "These 
. people sometimes feel that the outsiders 
■are reaping all the advantages of the 
dewatopgrept and they are left with little." 

But the conclusion of the Uruguay 
Round and its impact on the Island's 

Cheju enjoyed a captive market 
since the government severely 
restricted o vorsoas travefltog 

agricultural sector are changing people’s 
attitudes. “ T h e y, now realise that they 
have a beautiful, pfoce for tourism, which 
wiB mean their pojrvtvw They are 
:'hagixurix^to.imdeEftSP& that .tourism is 
Wry frnporttttT^Mr. Ght-gxpWnwi. Public 
1 opposition to ffi*buactthg dr el second-golf 
comae cm CWu, for ttampOv'fe receding. 

But the threat-remains that extensive 
developmeet-wnl spott toe 'folstt&’s con- 
•j&ferabte natural charm «srf destroy the 
appeal that first attracted visitors to 

am* .. 


T his season’s T-shirts to 
Seoul feature the cute 
kids of the Visit Korea 
Year logo, banal grins dis- 
torted in fear and chubby legs 
in flight as a Scud missile 
approaches from the armpit 
zone. The legend runs: “You’d 
better visit Korea in 
1994 ...because it might not 
be here in 1995”. 

North Korea’s unclear ambi- 
tions have undoubtedly made 
something of a mockery of the 
republic’s drive to woo tour- 
ists in 1994; but hoteliers and 
other industry figures com- 
plain the drive has been as 01- 
conceived as it has been 01- 
timed. Marketing has been 
thin and poorly targeted, 
incentive schemes have gone 
unflagged. The tourist office in 
Seoul shows an exotic promot- 
ional video containing war 
clips among shots of cherry 
blossom and snow-dad moun- 
tains. 

The Korean National Tour- 
ism Corporation will spend 
some |8m on the campaign, 
promo tin g Korea as a tourist 
destination through TV adver- 
tisements on Star TV and 
CNN, publicity tour s for travel 


agents and school teachers, 
poster ads on buses from Lon- 
don to Hong Kong, and - 
intriguingty - through send- 
ing some 50 Miss Korea con- 
testants to entice Americans 
in New York, Los Angeles and 
Washington to sample the 
delights of Korea. That could 
well be the winning stratagem 
in KNTCs armoury. 

KNTC, which has master- 
minded the Visit Korea Year 
in commemoration of Seoul’s 
sixth centennial, claims suc- 
cess: tourist arrivals in the 

50 Miss Korea contestants 
will visit the US to entice 
Americans to sample the 
delights of Korea 

first five months of the year 
are np 18 per cent year-on-year 
and it expect 4m visitors for 
tin whole of 1994, a 20 per 
cent increase on last year’s 
34m but still below the 4J5m 
forecast in its own promot- 
ional slide presentation. The 
average visitor spends four 
days and five wi ghts, during 
which he will spend 31 , 100 . 


Louise Lucas reports on efforts to boost tourism 

Overseas publicity criticised 


Ambassador Chi Yonng-tai, 
KNTCs president, says the fig- 
ures are encouraging and 
blames any shortfall in visi- 
tors on- the nuclear issue. 
"Sometimes relations are 
stormy between North and 
South Korea and unfortu- 
nately this is a voy stormy 
period, but Tm sure the doud 
wifi pass over. 

“If you look around Ws busi- 
ness as usual - the stock mar- 
ket is rising and traffic jams 
are as bad as ever - so it’s 
only the news media that see 
things differentiy.” 

KNTC’s efforts in pushing 
tourism are impressive: the 
tourist office, complete with 
theatre *wd raised map mod- 
els, must rate as one of the 
most comprehensive «wd user- 
friendly in the world and staff 
display GDJZam memories and 
impeccable English. The trou- 
ble is that they are to an 


pre aching to the con- 
verted rather than broadcast- 
ing the message further afield. 

That, at any rate. Is the 
lament of the hoteliers. The 
1,508-room Lotte, one of 
SeouTs leading tourist hotels, 
reports no noticeable improve- 
ment in sales year - 
because of the nuclear scare, 
the recession in Japan which 
provides 70 per cent of its cus- 
tomers (although this is offset 
to some extent by the strength 
of the yen) and the govern- 
ment’s failure to spread the 
Visit Korea Year message 
abroad. 

According to a hotel execu- 
tive. “Malaysia had a very 
good Visit Malaysia Year, but 
we have not been so successful 
in promoting sales in Visit 
Korea Year. That is mainly 
because the KNTC is to charge 
of sales promotion. I guess the 
promotion planning Is a little 


strange and out of date. 

"Ihey do not have enough 
experience in promoting 
abroad, nor have they made 
sufficient preparations In 
tone. That - and the fact the 
budget is foenffirtowt - is why 
they have fafied,” be explains. 

MS Seung Eun Chung, sales 
manager (Europe) for The 
Westin Chosen, one of Seoul’s 
10 de luxe hotels, cites the 
case of a Canadian travel 
agent who was unaware of one 
of the g ov ernm ent's key incen- 
tives - scrappin g the 10 per 
cent tax which is normally 
added to room rates for non- 
resident guests and travel 
agencies. 

Having been told, the agent 
tiled to contact the Korean 
government r ep resen tatives in 
Toronto for further informa- 
tion - but drew blanks all 
round. Many guests staying in 
the Westin Chosen and bene- 


fiting from the 10 per emit 
reduction were also unaware 
of the government* bounty. 

“My feeling is that the gov- 
ernment has failed to promote 
Visit Korea 1994 abroad. They 
have also failed to activate 
demand internally,” says Ms 

riimy . 

Much of the push has been 
concentrated on Japan, which 
yields some 45 per emit of 
Korea’s tourists. The tireless 
KNTC has supported this 
Internally by provldliig Japa- 
nese as well as Rigfish book- 
lets and cassettes far taxi driv- 
ers. although Ambassador Chi 
admits to limited success here 
“They don’t realise how 
important their role is to pro- 
moting tourism. Sometimes 
they are very rode, especially 
because of language prob- 
lems." 

Broadcasting the need to 
learn English - “to interna- 


tionalise" - has been an 
important spoke of toe tour- 
ism campaign, and staff at 
hotels and shops are well- 
versed in the (Americanised) 
niceties, bidding guests have a 
nice day and sweet dreams 
depending on the time of day. 
A limited number of road and 
subway signs now bear 
English translations and taxi 
drivers generally have at least 
enough Bngfiah to ascertain if 
their passengers are Ameri- 
can. 

Other steps ' taken to 
enhance Korea’s reputation as 

Sometimes taxi driversare 

very rude - because of 
language problems . 

a tourist de st i nation include 
streamlining Che fmwjfia ti n n 
and customs procedure and' 
government plans to invest 
frmds to Im pr ovin g the coun- . 
try’s infrastructure. . Sports 
facilities are rise bring 
upgraded and developed, as 
these are an important port of 
Korea's tourism massage. 

Kona ttadf has a amrindag 


massage far tourists. Depend- 
ing upon tim season, Hvfltes 
siring an d mountain fctMwg to 
national parks; sightseeing 
round old Buddhist temples 
and palaces; sc ub a (firing, golf 
aad hunting; cbltiry blossom 
in springtime and a senfi-tropi- 
cri climate to 'Che southern 
island of ChqgmTtti no longer 
particularly Cheap (except, 
perhaps, to those wielding 
yen), a problem KNTC has 
paid Bp service to by prodoo 
ing a book of moueyoff cou- 


Thls year Korea will host 
808 international meetings to 
toe capital city, to addition to 
sports and leisure events - 
such as the underwater photo- 
graphic championship and 
tateraattansl wfodsurfing con- 
test - s eros a the country. 

For the Mg hotels, the real 
money spinner is business 
tncsaBetm who tee starting to 
return after a two-year reces- 
stontodtfeed stock potodL This 
year .toe Westin Chosun 
expects to 00 some 80 per cent 
of its rooms over the year. The 
arerogp ream rate Is as. much 
as W 118 , 000 , except for the 
five mouths’ tow season; — 



Even if you enjoy the company of others, your own privacy is indeed 
import am, especially on long haul flights ! That’s why we have reduced 
the number of seats on Korean Air Prestige Class. For your peace of mind. 

KOREAN AIR 

THE ROUTE TO SERENITY