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Eurobe's Si 


iciness Newspaper 


TUESDAY JUNE 28 i994 


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DtOUI 




White House chief German chancellor vows to find EU consensus on successor to Delors 

of staff replaced in , , . . . ¥ ^ f 

cnnton .hake-up Kohl set to abandon Dehaene 

President Bin Clinton announced he was replacing tkJ > * * 

bis White House chief of staff Thomas McLarty . ^ . '•'* ' .. } * 

Management and Budget cfirector By David Qarttoer'fai Bruaaete, — ■ - ' Christian Democrats, or Vfecc 

Leon Panetta. Mctarty. a boyhood jMpnd of Clinton. Quentin Poei In Bom? and- . . . -Ar.p SB* ^ * • j . r_ . Etienne Davigmtm. a former 

was due to remain in the White Hoaseas the Robert Oraham hi Rome - • The EU 8 imseemty tanHyS^; , \/| omr’o T 7 <=»+/^ un.no rv\ ror Tawoo =~> — - 

senior adviser to the president. 7 
. McLartF has come under fire for tha Inna* nrgmni. 
sation of WMte House «taf£ Critics have comr 
plained he - was not tongh- gnang h with his staff 
or with Clinton’s opponents. 


The EU*s -unsee mly fenT llyffi|?t 

German o^»ryriTnr He lmut ynhr Germans may take qulet-^ 
yest exday committed himself to"; approach - — '— -------- • ' 

^idtng a; cmtfkhite to head&ie joe Rogaty Rage tfe 

European, Commission whp " •, r ^ 

wonld be araeptable to .all 32 

somber states, as it becrifeefear July is to resolve the disp 
1 that' European • Union leaders The deadline for Liny efforts 
were' starting from scratch in he midday on Friday July IV 
their search for a successor to Mr Kohl said. He added : that it . 
Jacques Delors.' - .<:■ essential to • reach agreen 

.“We win 'talk to everyone before the first sesskmof the 
involved, and yri,ijd!l,y*ark out a European . parliament. ' wi 
proposal, ” ttf /S&jfl; 9 rid. “I am; opens on July & when, the : 
not bhnd. I want to come up with; presidential Candidate is 
a , result-” ' nmTinHtmte - pibw ' 'Sdd Wff ff jwswtfrTrly 
taken in Brusselsfos a^gnaL tipit ; ; A series t^pkemraiiged fort 
Germany was pt^arihg tomcat ^ministers’ vfottshavB placed 1 
' don its preferzedr canffidate.yMr : in the rote' as . 1 ^potential bn 
‘ JeaurLnc Dehaene. fKn Belgian-' to b wwk .Ur x 

premier. 1 3 : Khikei, the German foreign i 


f Major’s veto wins over Tories 


Kazaldis hit at Mos c ow over oifc Kazakhstan 
accused Russia ctf cutting off most of the repubhe’s 
oil exports, all but paralysing its most lucrative 
industry. Page IS 

Bmll coffee crop frost pushes up prfcwsa 


fttrther price rises 
in the autumn if the 
surge in the ooffee 





cent so ter this year, . 
continued, manufactory 


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in their, attempt to agree ,on.g hew govemr 
mentPaged ! / 

Social , 
lead the next government in east. Geafoany’s 
Sawmy-Anh^-aftef the CDU won 67 seats and' ; 
the SPD 36 to. a state etectfoa ' < . 

Page 18 h 

Font invests $50m In China: Ford Motor 
Company of the US is to spoid mere than $5fttn 
on its first motor components manufac turing 
investment in China. Page 5 

Leo3dKra^SlcaS^^SnenHidsterLS| 11 ’: 

Kuchma will face each-other in a run-off leadership 
dectiondueon July 10 after they led the inconclu- 
mve first round of voting. Page 8 

Nigeria democracy wow: Nigerian head of .... . 
state General Sani Abacha pledged to end military 
rule once his regime had found the structure 
for lasting democracy. Page 8 ..... 

South Africa's financial rand, the country's 
investment currency, is not likely to be abobshed 
“for some time”, finance minister Derek Keys 
said. Page 8 v 

Abidjan aftr crash: Up to 17 people, including 
three French citizens, died when an Airlvoire 
Fokker F27 crashed on approach to Ivory Coast’s 
capital Abidjan. 

S African white ‘killed by Me own bomb*: 

A white South African was killed by a homemade 
bomb in a park near Johannesburg. Police suspect 
he may have intended to use it in an attack cm 
a tori rank used by blacks. 

Mbit bnok’lK Thieves broke into the Moscow 
Mint and stole 443 commemorative gold coins 
worth 47m roubles ($23,700). 

UK?* first non-white bishop: Pakistanrbam 
Michael NOzir-Ali, 44, general secretary of the 
Church Missionary Society, has been chosen 
as Britain’s first non-white diocesan bishop. He 
is to be Bishop of Rochester. r “ 

Maori spoon fetch®* $49,000: A Mao ri 
wooden scoop used to feed tribesmen dmtogriroai 
mutilation ceremonies was sold for £32^00 ($49,000) 
at a Sotheby's auction in London. 


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July is to resolve the- dispute.- 
The deadline for my efforts 
be hddday on Friday July 15,” Mr 
gnhi «>m, He added : that it . was' 
essential to reach agreement 
before the first sesskm-of ihe hew 
European . parliament. whiA- 
opens an July 18, when the n# 


Mr John Major last night 
in the approval of Conservative 
MP* as 1iA Insisted there was no 
qnedion of Britain removing its 
veto im the appointment of Mr 
Jeanp-Iioc Dehaene. 

ib« s t a t em ent came amid clear 
signs that the Euroseeptic right 
gf the Tory party Is moving to 

Mr Kinkel Insisted that Mr 
Dehaene r emain ed in th ft run- 
nTn g- rwe do not rhang p candi- 
dates like we change our shirts. " 
But ^ the German chancellor 
woukhhot confirm he was still 
backing Ur Dehaene, indi cating 
that' the selection, process was 
starting with a de&n slate. 


takqn fo Brus^ls’-as a.^giud tiKit ; ' > A series ^ prearranged foredgn^ would' not confirm he was still 
Germany was p^iaring to^foanr -minister^ viits have placed Ita^ feackiig Ur Dehaene, huficating 
don 'its prefentrircanffidate.yUr : in the rote. as. '^potential hrokEt that' the selection, process was 
JeanrLuc Dehara& the to h wwfc tott ; acflfflock - Mp Klaus, starting. with a dean slate, 

premier. ".y 1 '} Khikd, the German foreign, mb* The Dutch premier, Mr Ruud 

Ur Dehaene wa^vetoed -by the isfer, is due inttRome today -fo^. Lubbffl^,j^p withdrew on Satur- 
UK at Ihe ElTs Corfu summit oh talks with Mr Anfonio Martino, day/ig tmfikdy to rejom'tiie race. 
Saturday* Germany, which takes his Italian opposite number. Mr, Atthdo^r the Dutch, would Bke 
oyer the EC’s rcrtafojg premdehcy Martino is due to visit Londcaj^ to fiell another candidate, the 

coUape^ of. talks in the Hague 
yestoday .on a new: Dutch coaft- 


capftaHse on the; reaction to the 
veto by tn«i«tfnE *iw» prime min- 
ister take a tougher Hne across a 
Tange of European issues. Other 
prominent Euro-ecepttes said Mr 
Major must be ready to use the 
veto again If another “federalist” 
candidate is proposed for the 
Conimtsgion presidency. 

tiQU maant Dutch nfHeifllB could 
not see any figure of calibre 
becoming available. 

The widely canvassed candi- 
dacy of Mr ZWter Sutherland, the 
Irish director-general -of the Gatt 
world trade organisation, is 
thought usdikely to prosper 
'because the continental Euro- 


Christian Democrats, or Viscount 
Etienne Davignon, a fonmer EU 
commissioner. 

Another theory circulating in 

Brussels yesterday was that Ur 
Gtuttano Amato - the socialist 
former Italian prims minister 
who is respected for his role in 
steering Italy through Us politi- 
cal upheaval - might come to be 
semi as an attr a ctiv e candidate. . - 

Another Italtap name being . 
mentioned is that; of Mr Renato 
Ruggiero, currently ~a candida te 
to head the new World Trade - 
Organisation, 

But the tmwntten rules the 12 
heads .of gdvmmmeiit had; set 
themsrives to the test selection 
round may have 'toiier tom bp. 
These werethatthesucceSSorto 
iSq Delors - a soddfat fituq a 
‘large country - should come 


Unilever 
facing 
fresh 
claims in 
soap war 

By Tony Jackson in London 


Unilever, the Anglo-Dutch 
detergent giant, faced potentially 
damagfng aBagatioos foam across 
Europe over its revolutionary 
new soap powder yesterday, as 
the soap war with US rival Proc- 
ter & Gamble appeared to tilt in 
Procter's favour. 

.' The Unilever powder, known as 
Terafl Power and Omo Power, 
has.beqp attacked by procter as 
harmfog.qlothes. 

' In separate devdopments yes- 


Tho Dutch premier, Mr Ruud pean percepticm is ib^ he is too ■ pirate their own rente, from. a. 


dose to the UK. 


mn^n nipwiwr stateandfoonx the 


Saturday, Germany, Which takes his Italian opposite number, 
dyer the EU’srotrizng premdexicT Martino is due to visit Lm 
.from Greece on Friday; has called: . tomorrow - to be followed 
1 a special summit in Br ussel s on -C Thursday by Mr afjnvpi 


Belgium Is to put ft£- . centre-ri^it. One EU fflbiomat 


ward another caisdicaCej - possibly 
Mr, Wllfrled j^arteus, the former 
prime minister, or minis- 
ter Mr Phillipe Maystadt, both 


said yesteiday that if aR three 
&$aria were tojwesfflde.to -fdfil, 
“tibiey^ will try to give it one of the 
smaller countries". ? ' 


new postwar 
low of Y99.50 


By Phfflp Coggan and 

: - ■ | 

The doBar fofl again yesterday, 
#,ppg« ;;jj 

repeat of Friday’s concerted cen- | 
tr^ bank intervention, to support . 
the^JS currency. .• . f , 

hi' Tokyo, - where the. dollar 
riumpedtoanew.pestwar.3ow of \ 
V99.60, analystsvesttinate the 1 
Bank of Japan spent betwMn i 
9750m and film supporting the J 
US currency. One factor behind- . 1 
the dollar’s weakness was the \ 
collapse of Japan’s Hata adnunis- 
tratfon, wiritai raisedJears that a' i 
deal in the ltft&rtpming US- : 
Japan trade talks was now less \ 
hkdy. ! 

hi European tradfog, there was i 
an atmosphere of "phoney war” i 
as markets waited, for central 1 
bank intervention that never 1 
came. ' 3 

However, fours of a dollar col- < 
lapse were averted and the US 
currency managed to rally above 
7100 during the European mom- i 
tag session. By the Lcmdon close, 
the dollar was back down to < 
Y99 MS. Against the D-Mark it 
finished at DM1.5758, nearly 2 
pfennigs below the level where 
Friday’s intervention com- 
menced. 

The doJlar'B weakne® tn Tokyo 




set to defemi ; 


Currencies t.. M ...^. r ...Page 36 
tf^dstock 



■ " ■" : ■w:-''*: *:-f f.* ' 

caused most European stock and 
bond markets to npen low^. bnt 
they rafoed as' the US ctnency 
held fairly steady. Analyst? said 
the' markets were pausing for 
breath after Friday's battering. 

The' FT-SE 100 fndex opened. 
3L9 points tower at 2344.7 MB 
steady rallied to dose -at 2£93i9, 
up 235. Gilts were , particulaijy. 
strong, with .the September todg 
gilt fotnw rising: IK: points -bn', 
rumours of a US. hedge fund- 
buyer and on hopes that tlte 
Treasury would today UnrarSai. 
forecast for the 1994-95 pul^ic! 
sector borrowing requirement ... . 

German bond ” rallied in after- 
noon trading to dose with grins 
of around 0.4 of a point, amt fo 
Frankfort the DAX index, having 
closed 18.71 points lower,, at 
13)88.60. rebounded in' after-hours 
trading to 2,000.48. » V v ' 

By honchtime in New York, the 
Dow Jones Industrial Average 
was up 15.86 prints' at 3165280 
and the key 3feyear long bond 


• iUmlew- reAued to comment 
on allegations la the Dutch week- 
end prate that Unilever manage- 
ment had ignored advice from its 
own researchers that the product 
should oriy be usejd at tow tem- 
peratures. 

• Hehkel, tha German deter- 
gents giant, whkh owns the Per- 
sR brand name ip Europe outside 
the UK and 'Francs, said its tests 
hfflcqnfizmed Procter's claims of 
damage to 

• 'The TJK Consumers Associa- 
tion attacked Unilever for 
-foimehtog a mnrtiftofl version of 
the powder this week, which is 
bring sold alongside the original 
version without distinguishing 
between the two. 

Unilever said it had <4 no reac- 
tion” to an article in Saturday’s 
edition of the Dutch daily 
newspaper NRC Handelsblad, 
daimtng that the row over the 
new powder resulted from a 
“Lack of communication” 
between Unilever’s research and 
marketing departments. How- 
ever, ,anj|dyiser‘ to Unilever 
dfsmissefL the allegation as 
untrue. “This is uninformed gos- 
sip from junior research people,” 
he said. 

The Austrian subsidiary of 
Henkel claimed yesterday that 
tests carried out by itself and an 
independent research institute 
had confirmed that-Omo Power 
damaged cotton textiles after 12 
washes, with particular damage 
after 25 washes. 

Henkel has been at pains to 
point out that Its powder has no 
connection with the Unilever ver- 
sion. 

In the UK, assistant director of 
the Consumers Association, Mr 


per cent er 465.79 points to 
20,300.96, whole in Bbkg Kong, 
the Hang, Seng'indepf dropped 
23&S2 prints .to 8,647-48. In Aus- 
tralia, thet Sydney stock market 
suffered itk ^Mggest on&day fan 
for nearly three-years. 

There are mixed views ta the 
market as to -whether central 
banks will intervene to support 


Reed Elsevier chief quits 


over 


By Andrew Bolger and 
Raymond Snoddy in London 

Mir Peter Davis/, one" of the 
IsadiDg executives tnfhajntemar 
tionai pnblUhing industry, 


S 1JBBB 

t-1451) London: 

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£ Index 7U7 (80Jfl 


as coriudnoaiLcf Reed Elsevier. . - ignation , becaus& ^tifes new 
The Anglo-Dxrtdb information aUocatMm 'roC resptosSbilitles 
group said Mr Davis, who had-- ''-would notenride Msg^la^tiay an 
been a key figure in , merging • effective' rolfe man- 

Reed fotesnational of the UK and - agement style”. 

Elsevier of the Netherlands m The CStytoiak’^a^ei^^.riew of 
January 1993 had resigned in a . ..Mr: pav^s^depSrihfe' miaiiily 
dispute over the group’s future "l>ecaxi8e.e£Jteto*^ 
mana^ment structure. = grab's interim resSttf Si due 'in 


-. consumer nm g^Trnp s 
■pagpers to burinaqs ri 

pabBicationsi' . - ' * 
The ^company 
-although '-‘there was 
mart witinn the bol 
egy, Mr Davis had aft 
ignation , because 
allocatwn ' oC resp 
would net -enable hte 
effective tote sritefo 
agement style”. 
./.The CStytoMtorireE 


id that 
B agree - 
on strat- 
ffhisres- 

Utilities 

Mfdayan 

mk-man- 


The executive committee y ^August ; 7 ^VOTesapl:jMriget and 
which runs the merged campany; . ^vrould bK'^sefuIij^^^af last 
- Re^d and Easeviar keep sqja- ; ; ' : • 

rate listings on the ‘.ITK^aBfl^^^MJfippJsttt&wfMsS^eSutair 

Nether lands stock hnaritats - but 

decided that in future 1 the cb-. ytocaSVeroagtp 
chainheri should, be re^onsade -9p- day.^ I&'fepijterdain, 

for strategy, numagemeht devrir ‘;I3s™ib:fobaree : .-cfe^%l'k8 
opment and corporate commxgii- lower at^vISOJ^' haVta^. ripped 
nations. Two of the ‘.other mem- —to K-!l4^arhne stages^ : - 
bers of the committee-' . will be : . . , Mr Iforis " said yeste^day^ -“I 
responsible far the 'Operating : have .gwmMi tot to tted so the 
bustn^ses, -which, range from ■■ dedsitox ywaa not takrir>, light- 


ly. . . The business has done well 
and is doing well.” He ia expected 
to receivejconsiderably tore com- 
prnisatton.- under Elm -than his 
three-ye ar co ntract might i mply. 

A leading investment, institu- 
tion said- af-MT Davis: THe was an 
essential .part of Redd's reposi- 
tioning. But perhaps he was used 
to doing everything* himself . If 
that is the case. Us departure 
may -be a good thing?* 

As a resulf tf the resignation, 
Mr Ian Irvine, bow deputy chair- 
man tof . B«ed 1 International,, 
becomes a co-chairman of Reed' 
Else\[iert. V , . . 

Mr hwine emphasised that it 
was. bustaess as -normal at -the 
company and .work would soon 
begin looking at two large poten- 
tial acquisitions, the database 
interests of theftfeul Corporation 
and ..-Ziff Communications, 
although Reed Elsevier would 
not toy to buy both. • 

Mask sftps on ‘perfect merger’, 
Page 19; Lex, Page 18 


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— " S^V:jV..C' •• tv;. 1 ' . * . - 


















gPtANGLfrJL TIMES TUESDAY JU>JE2g_1994^ 


NEWS: THE DELORS SUCCESSION 


The EU’s unseemly family 

Lionel Barber tracks the rivalry and division that ended in failure to decide on a successor to Deters as the new Mr Europe 




O n the evening of 
December 9 1991 
the leaders of 
western Europe 
gathered in the 
Dutch harder town of Maas- 
tricht for final negotiations on 
a new treaty on European 
political and monetary union. 

Over dinner in Maastricht 
City Hall, the conversation 
turned to the future of Jacques 
Delors, the visionary, volatile 
Frenchman who had contrib- 
uted as much as anyone 
around the table to the cause 
of European integration. 
Delors’ second term as presi- 
dent of the European Commis- 
sion was due to expire at the 
end of 1992. It was time to 
think about a successor. 

“It must be one of us," 
declared Felipe Gonzdlez, 
Spain’s prime minister, to gen- 
eral approval. 

From his first month in 
office, in 1985, Delors had 
steadily accumulated power. 
The 1992 Single Market pro- 
gramme, the European Eco- 
nomic Area, the grand design 
for political and monetary 
union - all bore his indelible 
mark. Delors had turned into 
Mr Europe. Next time, 
Europe's leaders wanted the 
Commission president to come 
from their own ranks. 

The president is chosen by 
unanimous decision of the 12 
beads of government of the 
European Union, meeting in 
secret session known as the 
European Council The Maas- 
tricht dinner conversation 
appeared to seal the chances of 
one member of this exclusive 
club - past or present - taking 
over the top job in Brussels. 

But that solemn pledge of 
solidarity degenerated over the 
next two and a half yean into 
a family feud thar culminated 
in the debacle in Corfu at the 
weekend when the UK vetoed 
the choice of Jean- Luc 
Dehaene, the Belgian premier. 
It has also cast the entire pro- 
cess of selecting the president 
of the European Commission 
into question. 

The story of the Delors suc- 
cession offers a rare insight 
Into the manner in which 
Europe's leaders conduct busi- 
ness. It is a tale of rivalry 
between small and larger 
states, fear about the prepon- 
derance of German power, and 
the predicament of the UK 
inside the European Union - a 
fact underlined by British 
prime minister John Major's 
calculation in the early hours 
of last Saturday morning that 
isolation among his European 
partners was preferable to los- 
ing the support of Conserva- 
tive Euro-sceptics at Westmin- 
ster. 

It is also a story about the 
mental contortions and hesita- 
tions of one man: Ruud Lub- 
bers, the youngest and longest- 
serving Dutch prime minister 
ever, whose hopes of a new 
career on the European stage 


foundered on Chancellor Hel- 
mut Kohl’s resentment over 
his attitude -to German unifica- - 
tton. 

At least two leaders present 
at that Maas tricht summit had 
their ambitions fixed on suc- 
ceeding Delors. The first was 
Lubbers, a millionaire who 
came from a line of Rotterdam 
industrialists. The Jesuit-edu- 
cated Lubbers' weak point was 
a stubborn streak and a self-ap- 
pointed mission to “stand im to 
the Germans”, says a senior 
EU diplomat 

The second was WUfried 
Martens, a long-serving Bel- 
gian prime minister whose 
enthusiasm for European polit- 
ical integration infuriated Mar- 
garet Thatcher, the UK prime 
minister, in the 1980s. A 
thoughtful man from Handers, 
his chief disadvantage was that 
he had alienated President 
Franpois Mitterrand, resisting 
the French leader’s campaign 
to move the European Parlia- 
ment full-time from Brussels to 
Strasbourg. 

In the spring of 1992 Chancel- 
lor Rnhi, still riding high after 
the unification of Germany, 
informed Martens that he was 
the best cand i da t e to bead the 
Commission. Kohl had sent a 
similar message to Gonzfilez 
the previous year. But Martens 
guessed, correctly, that Gonz- 
alez would be unable to leave 
Madrid without bringing down 
his Socialist government. 

But the summer of 1992 
changed everybody’s calcula- 
tions. Danish voters rejected 
the Maastricht treaty in a ref- 
erendum, plunging the Union 
into crisis. Suddenly, Delors 
did not look so dispensable. 
Despite mutterings from Major. 
Delors was re-appointed for a 
third term, albeit for a cur- 
tailed two-year stint ending oh 
January 5 1995. 

A t that point, EU 
club rules 
suggested that 
the successor to 
Delors - a 
French socialist - should be a 
conservative from a small 
member state. As president of 
the European People's Party, 
the umbrella for the Christian 
Democrats. Martens looked 
well-placed. He had the right 
background (the Low Coun- 
tries). and he could count on 
the support of Lubbers, his 
most obvious rival. 

"Mr Lubbers always 
defended my candidature,” 
recalls Martens, “He said: I am 
not a candidate if you are a 
candidate." 

Meanwhile, Sir Leon Brittan, 
chief EU trade negotiator, had 
been thinking of making a run 
for the post for some months 
and was formally asked to 
enter the race during a meet- 
ing with Major in Downing 
Street in the spring of 1993. 
The Brittan candidacy, though 
clearly a long-shot, appeared to 
offer the UK a bargaining chip 


in the coming negotiations. 

. .By.. .the autumn of 1993, it 
was clear that Martens’ 
chances of succeeding Delors 
were ebbing away. He had 
resigned as premier a year ear- 
lier, his energy sapped after 
more than n years in office 
juggling the Flemish and 
French factions in a stream of 
coalition governments. His suc- 
cessor was his former chief of 
staff, a little-known Flemish 
politician, by the name of Jean- 
Luc Dehaene. 

Dehaene's political career 
advanced under the trade 
union wing of the Christian 
Democrats. He was known as 
“the fixer”, “the plumber” or 
“the carthorse”. Despite his 
vulgar language,- scruffy don- 
key jackets, and greasy hair, 
Dehaene was widely recog- 
nised as the power behind the 
premiership in the late 1980s.' 

On July 1 1983 Belgium took 
over the rotating EU presi- 
dency from Denmark. The 
prospects were poor: the Maas- 
tricht treaty was stm unratif- 
ied in the UK, and the German 
Constitutional Court bad still 
to pronounce its verdict on it 
Divisions inside the Union 
were emerging over world 
trade talks under the General 
Agreement on Tariffs and 
Trade. On August 2 the Euro- 
pean exchange rate mechanism 
collapsed under a wave at spec- 
ulation against weaker curren- 
cies, forcing members to create 
a de facto floating exchange 
rate system. 

For Dehaene, the Idea of a 
run for the Commission presi- 
dency could not have been 
more remote. His coalition gov- 
ernment remained shaky. 
Labour unrest threatened. 
There were calls to abandon 
the policy of shadowing the 
D-Mark, a move which would 
have jeopardised Belgium’s 
anti-inflation policy. 

The “plumber” pulled out his 
tool-box and produced plans 
for a “social pact” - an agree- 
ment between government, 
employers and trade unions 
which amounted to Belgium’s 
most ambitious austerity pro- 
gramme since the second 
world war. 

Watching events in Belgium 
with interest was Chancellor 
KohL His favoured candidate. 
Martens, had failed to win the 
support of the Belgian govern- 
ment and Lubbers was anath- 
ema to Mm The only candi- 
date on offer was Sir Leon, 
whose free trade views and 
British nationality were unac- 
ceptable to France, Germany’s 
main partner. 

A senior German official 
says that Kohl was soon 
impressed with Dehaene’s 
down-to-earth manner, his 
energy and pis political jflrflis. 
"The Belgians are the artists of 
compromise because of the pre- 
carious nature of their coun- 
try. 

That Is very attractive for 
Kohl who is also a wheeler 


dealer by nature,” recalls the 
official. 

‘ A special jt 
called in Brussels to dedde the 
location of more than a dozen 
new Euro-institutions provided 
tire occasion for their relation- 
ship to 'develop. 

Kohl was desperate to secure 
the the European Monetary 
Institute, forerunner of a 
future European central bank, 
for FrankfiirL Putting the EMI 
in the same city as tire Bundes- 
bank was viewed as “the abso- 
lute minimum" needed to 
appease the German public's 
-fears about giving up the 
D-Mark in exchange far a sin- 
gle European currency. But the 
British were holding out for 
London, and Lubbers was cam- 
paigning for Amsterdam. 

One week before the Bros- 


ceed Delors. The Belgian pre- 
mier was shinned. A friend 
recalls that be could not imag- 
ine that he was in the same 
league as Delors. His initial 
response was to employ, his 
favourite weapon; silence. 

The German approach was 
the result of prim consultation 
with the French. President fcfit- 
terrand had already agreed 
with Chancellor Kohl that, 
after Delors, it was a Christian 
Democrat's turn to head the 
Commission. Edouard Balla- 
dur, tiie French prime minis- 
ter, later told French journal- 
ists that he had come up with 
the name of Dehaene. 

Around this time. Lubbers 
talked to KohL “He asked me If 
I was interested in the job. I 
did not exclude the possibil- 
ity,” recalls the Dutch premier. 
“Be asked me if I was support- 
ing Mr Martens. We agreed to 
try to seek a (joint) Christian 
Democrat candidate.” 

The conversation ended with 
a promise to talk things aver 
again in the spring Lubbers 
did nothing to encourage the 
impression he wanted the job; 
but Kohl may have deliber- 
ately introduced Martens’ 
name to signal to Lubbers he 
could not expect German sup- 



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sels summit. Lubbers delivered 
a provocative speech in the 
German town of Minister. He 
suggested that Germany was 
exaggerating its rede as “pay- 
master of Europe”. He said it 
was unwise to neglect the 
interests of smaller member 
states in a political union. He 
added that the Dutch guilder 
was just as sound an “anchor” 
currency as the German mark. 

Kohl was furious. He 
thought Lubbers was underes- 
timating the shift in German 
public opinion against Maas- 
tricht and the European 
currency - a shift which 
threatened to undermine his 
own historic mission to bind a 
newly-unite d Germany into an 
integrated Europe. 

Hie summit. In Brussels on 
October 29 1993 opened wztii a 
torrent of special pleading, 
with the Spanish and British at 
their most aggressive. 
“Dehaene was a model of 
setf-control/ 1 recalls a partici- 
pant. “He sat perfectly still and 
let the others run out of steam 
until they realised there was 
no other answer (to Frankfurt). 
That takes a lot of nerve.” 

Kohl was so impressed that 
he asked Dehaene why he had 
not thought of putting himself 
forward as a candidate to sue- 


port. 

The exchange points to the 
fnrmpltar relationship between 
the two men. Kohl has never 
much liked Lubbers, and Lub- 
bers has never much cared for 
KohL Some blame Dutch, 
uneasiness about their big Ger- 
man neighbour and the memo- 
ries of Nazi occupation. 

A senior EU diplomat says 
Kohl cannot abide his manner 
and his independent streak. All 
agree .the relationship soured 
irretrievably during German 
unification. Later, in a private 
moment of exasperation. Kohl 
declared he was against Lub- 
bers because he was “egotisti- 
cal, anti-German and an 
accountant”. 

Lubbers was not alone in 
harbouring doubts about the 
speed with which Kohl sought 
to unify East and West Ger- 
many in 1989-90. Mitterrand 
and Thatcher shared his con- 
cerns. Bid it was the Dutch 
leader who spoke out most 
forcefully over a dinner at the 
European summit at Stras- 
bourg In December 1988. 

Lubbers began by saying 
there were dangers in talking 
about self-determination and 
“cue - German people”. It was 
impossible to unite all the Ger- 
mans in Europe. He urged 


Kohl to be clear about the 
Oder-Neisse line - which 
marked Germany's border with 
Boland - so as not to “give 
expectations” to Poland’s 
minority German population. 

Ko hl sa id Germany bad paid 
for the last war by losing one 
third of its territory. He 
intended to be “100 per cent” 
clear an the Oder-Nrisse line, 
but the timing of bis statement 
on it would be his ownrespan- 
sfblity. As the dinner brake up. 
one participant recalls Kohl; 
thundering at Lubbers: “You 
have not Wrnt the lessons of 
history." 

On January 10 1994, the date 
of the Nato summit in Brus- 
sels, Lubbers was again asked 
whether he wanted the Com- 
mission job. This time, it was 
Gonzalez who foiled to receive 
a dear answer. Fearing that 
Kohl would renew pressure on 
him to run, Gouz&ez issued a 
statement saying he had no 
intention of leaving Madrid 
and that Us first choice was 
Lubbers. 

The next approach came 
from the French. Again, Lub- 
bers declined to give a firm 
commitment, citing uncer- 
tainty about the upcoming gen- 
eral election in the Nether- 
lands. 

- Lubbers admits in retrospect 
that he may have played into 
the hands of Bonn and Paris by 
giving tiie im press i o n that he 
was not Interested in the job. 
What is more, by this time Sir 
Leon, exploiting his role in 
reaching an agreement in the 
Gatt world trade talks, was 
touring Europe’s capitals in 
the first-ever public campaign 
for the top Brussels job. 

On February 9, Martens vis- 
ited Dehaene who hinted for 
the first time that he was 
thinking about the Commis- 
sion presidency. 

The truth dawned on Mar- 
tens two weeks later when he 
visited Hamburg to a t ten d tiie 
Christian Democrat congress. 
Chancellor Kohl indicated he 
might be interested in backing 
Martens to be head of the 
Christian Democrat grouping 
In the European Parliament, 
after the death of Bernard. Sael- 
zer, Kohl’s protege. Than the 
Chancellor added: “I don’t 
understand why Dehaene is 
not a candidate (for Commis- 
sion president], he handled the 
presidency [of the Union] so 
wdL” 

The following day, February 
23, Delors paid a visit to Mad- 
rid to see GonzSlez. He asked 
the Spanish premier if he was 
running: The answer was No. 
“In that case. It will be 
Dehaene,” said Delors, to Gonz- 
alez’s surprise 

Soon afterwards, word of the 
Franco-German push for 
Dehaene was leaked to the 
Guardian newspaper, ft looked 
Hke a trial balloon to test reac- 
tion among the other member 
states. The Belgian premier 
remained silent, though by 
some accounts he had not been 

forewarned. 

By April, Lubbers was 
becoming desperate. He 
remained committed to Mar- 
tens, but was pressing his own 
candidacy privately in Euro- 
pean capitals. Yet his public 
position was that he would 
declare his Intentions only 
after the Dutch general elec- 
tion on May 3 l 

Lubbers’ position locked all 


the more vulnerable when 
Peter Sutherland, the Irish 
head of Gatt and a former EU 
Competition commissioner, 
announced that he would leave 
his post at the end of the year. 
He then hinted he might be 
interested in the Commissian 
job - only to be disowned by 
the Irish government 

Minutes after the result of 
tiie general election result in 
the Netherlands, Lubbers 
ordered a fox to be sent out 
formally; announcing his candi- 
dacy. Belatedly, he sought to 
cuny favour with KohL fit a 
speech in Aachen, he paid trib- 
ute to Kohl as a statesman 
with vision, and declared that 
he had not opposed German. 

rnitfir-ntinn 

Privately, Lubbers turned 
bitter about Ins prospects of 
winning support foam EU lead- 
ers, now that be was ready to 
step down as prime minister. 
“They are throwing me away 
Hke an old sock,” he said. 

By this time, France and 
Germany were increasingly 
confident of Dehaene’s pros- 
pects. It seemed only natural 
for Kohl and Mitterrand 
(accompanied by BaDadur) to 
agree on the Belgian premier 
as a common candi d ate when 
they met in Mulhoose to coor- 
dinate positions before the 
European Council in Corfu. 

Their desire was to select a 
candidate who would not ran 
the Commission as his own 
power base as Deloralhad occa- 
sionally appeared to be doing. 

In retrospect, it is dear that 
the French and Germans over- 
played their hand. Though 
there was nothing out of tire 
ordinary about Paris and Bonn 
reaching a common position, ft 
looked like a diktat to the rest 
of the Union. This impression 
gained force when officials 
l e ak e d the parn e of Dehaene 
even though the Belgian pre- 
mier bad still not publicly 
announced his candidacy. 

For the Greek presidency, 
things were running out of 
controL The one chance of 
avoiding an unseemly row was 
a “package”, whereby the Com- 
mission job could be traded as 
one of a number of top jobs in 
Europe. These included those 
of secretary general erf Nato 
and of the Organisation for 
Economic Co-operation and 
Development, director general 
of the World Trade Organisa- 
tion. and the top civil servant 
post of tiie European CounciL 

But this required diplomatic 
skill (not least because the 
Nato, OECD and WTO jobs 
were not within the EU’s 
exclusive preserve), and politi- 
cal leadership. With Andreas 
Papandreou, the ailing 75-year- 
old Greek premier, unable to 
travel, the job of sounding oat 
EU partners foil to Theodores 
Pangalos, the unpredictable 
European affairs ministers. 
Several leaden, torfudfrig Kohi 
and Mitterrand, deemed Mm 
too junior to talk to before 
Corfu. 

I t was only fitting that 
the battle for the Deters 
succession should reach 
a cliiaax. over a dinne r 
of the 12 heads of gov- 
ernment, just as it had begem 
two and a half years earlier - 
this time accompanied by the 
leaders of Austria, Finland, 
Sweden and Norway, the four 
countries planning to ester the 


Union next year. 

The setting this time was the 
Achillean, a gaudy 19th cen- 
tury palace built for the 
Empress Elisabeth of Austria. 

At a given moment, Dehaene 
and Lubbers were invited to 
leave. They were replaced by 
their deputies - Willy Claes, 
Belgian foreign minister, and 
Wim Knk, Dutch finance minis- 
ter. 

Major opened with a presen- 
tation an behalf of Sir Lean 
Brittan. JKok spoke for Rub- 
bers, and Claes for 1- Dehaene. g) 
Papandreou, viably weak, then 
surprised everyone by calling 
for an immediate secret ballot 
- only the second time in the 
EC's history that a formal vote 
has taken place rather than 
the customary practice of 
using a general discussion to 
reach a consensus. 

Eight countries led by 
France and Germany expressed 
a preference for Dehaene: Bel- 
gium. Denmark, Greece, 
Ireland, Luxembourg, Portugal 
Three voted for Lubbers: the 
Netherlands, Spain and Italy. 

Sir Leon received the solitary 
vote of the UK. 

Just before midnight, Papan- 
dreou retired to bed. The meet- 
ing broke up. But within a 
quarter of an hour, it was 
reconvened under the chair- 
manship of Pangalos, 

Major sat at the end of tbs 
table, well clear of Kohl and 
Mitterrand. “This is not going 
to be sorted out tonight,” be 
warned, *T won’t agree to Ur 
Dehaene even if the vote is 11 
to ana” 

Other prime ministers 
sought to persuade Major to j 
come round, but be was irrec- 
oncilable. The job of the presi- 
dent of the European Commis- 
sion was “one of the most 
important in the world”, he 
said. “For the umpteenth time, 

I am not going to support Mr 
Dehaene.” Kok asked why 
Kohl was against Lubbers. T 
don’t have to explain this,” 
said the German Chancellor. 

Kok threatened to walk out 

President Mtteriand, a vet- 
eran <rf more than 20 European 
Councils, said it was dear that 
a solution could not be reached 
quickly. lEohi . who had dote so 
much to promote his protegft 
Dehaene. looked across -the 
table. "We need new candi- 
dates,” he sighed. 


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TUESDAY JUNE 28 1994 


NEWS: EUROPE 




0 "?T; 
\ 'S. ■ 


With looming elections on its mind, Bonn is expected to be diplomatic in presiding over EU wrangles 

Germans likely to take a quiet approach Dublin pressed 

to give backing 
for Sutherland 


By Quentin Peel In Bonn 


The German presidency or the 
European Union has still not 
begun, and yet already accusa- 
tions of German high-handed- 
ness are being heard in such 
capitals as London and The 
Hague. 

The unseemly wrangle at the 
Corfu summit over a future 
president of the European 
Commission was precisely the 
sort of start that German offi- 
cials and diplomats were hop- 
ing to avoid. 

Whether justified or not, the 
charges about the way Chan- 
cellor Helmut Kohl sought to 
promote the candidacy of Mr 
Jean-Luc Dehaene, the Belgian 
premier, against Mr Ruud Lub- 
bers of the Netherlands, were 
what senior Bonn diplomats 
had feared would happen. 


When they take the reins of 
the EU council of ministers on 
July 1 for the rotating six* 
month presidency. Bonn's offi- 
cials anH ministers will be 
bending over backwards to be 
effective and persuasive, but 
certainly not pushy. 

“We are very conscious of 
the sensitivity of some of our 
fellow member states, so we 
see a particular need to be 
sober and restrained," a senior 
diplomat said last week. 

Add to that the coincidence 
of Germany's marathon elec- 
tion year, with five state polls 
and a general election in Sep- 
tember-Octoher, and the 
chances of an aggressive and 
high-handed German presi- 
dency are extremely slim. 

Mr Klaus Kintal . the foreign 
minister, and Mr Gfinter 
Rexrodt, the economics minis- 


ter - the two most important 
minis ters involved - are fight- 
ing a desperate rearguard 
action to keep their minority 
Free Democratic Party in par- 
liament at all Mr Kohl and Mr 
Theo WaigeL his finance minis- 
ter, will be delighted to wel- 
come all opportunities for a 
televised high international 
profile. But their priorities are 
all domestic until October 16, 
the general election day. 

“It is one reason Germany 
has been keen to coordinate 
its presidency with France 
next year, and then Spain,” 
ftrMTfjrrifT to wy forei gn diplo- 
mat “They are worried that 
they win gk very little started 
this year." 

Another argument against 
expecting too many fireworks 
from the next six months is 
that Germany is anxious not to 


alienate electors in Finland, 
Norway and Sweden, the three 
future member states that still 
have to hold referendum.*} to 
ratify their accession treaties. 
Thus any talk of sweeping 
institutional reforms at the 
forthcoming 1996 conference Is 
being firmly discouraged. 

In spite of that, the minis- 
tries have been working hard 
to draw up a clear programme 
of EU priorities, which Mr Kin- 
kel will spell out to the Ger- 
man Bundestag tomorrow. 

The first is simply trying to 
make the Maastricht treaty 
work. That means, in particu- 
lar, putting the reforged rela- 
tionship between the newly 
elected European parliament 
ynd t he rywimri} of ministers on 
a good working basis. Ger- 
many is determined to take the 
parliament seriously. 


That is one important reason 
why Mr Kohl wants to agree 
on a candidate for the Euro- 
pean Commission before July 
18 - when that person is sup- 
posed to address the parlia- 
ment In Strasbourg for the first 
time. It Is also why he pushed 
hard in Corfu to have parlia- 
mentary representatives fully 
involved in the working group 
preparing for the 1996 confer- 
ence. 

Another aspect of making 
Maastricht work will be a big 
effort to promote ever closer 
co-operation on both foreign 
policy and internal security 
between the member states. 

Thus the whole area of open- 
ing up the EU to central and 
eastern Europe, in areas of 
political co-operation as much 
as market opening, is a dear 
German priority. But Mr Kohl 


and Mr Kinkel will be making 
every effort to ensure that EU 
policy is pushed as much by 
other member states as by 
themselves. 

The German government has 
always been keen to promote 
CO-operatian on crime-fighting, 
anti-drugs operations, and 
common immigration policies. 

As for economic policy, the 
theme will be deregulation, 
and the emphasis will clearly 
be on firm cost control. It is 
the one area where there could 
be tension between Germany's 
national interests and its presi- 
dential priorities. For there are 
election pressures to keep Ger- 
man payments to Brussels 

more strictly under control. 

Mr Waigel has already prom- 
ised to be a hard financ ial task 
master in fixing next year’s EU 
budget 


Plans for telecoms infrastructure gather pace 


By Emma Tucker In Brussels 
and Andrew Adonis in London 

A rapid acceleration of plans 
to liberalise the supply of tele- 
communications Infrastruc- 
ture across tbe European 
Union Is likely following the 
Corfu summit 

A consultative document 
could be published as soon as 
this August setting a firm 
timetable for liberalisation, 
despite continued opposition 
from national telecoms opera- 
tors fighting tbe loss of their 
monopolies. 

At Corfu the heads of gov- 
ernment gave broad support to 
the recommendations of tbe 
Bangemann group of industry 
leaders, which called for 
speedy liberalisation of EU 
telecoms infrastructures and 
services. 

Mobile, satellite and other 
business-related services are 
already open to competition. 
Union governments agreed 
last year to set a target date of 
1998 for the opening to compe- 
tition of basic “voice" services, 
which account for mast of tbe 
revenne of tbe telecoms opera- 
tors. 

However, tbe question of 
competing infrastructure, as 
permitted 3 !*! the UK, was left 
for decision in 1995 with no 
prior commitment to liberalis- 
ation. The Bangemann group's 
objectives - to bring forward 
the decision and secure a com- 
mitment to infrastructure 
competition - were endorsed 


by the heads of government. 

A senior commission official 
said: “To follow up the recom- 
mendations of the BangMMi m 
group, there is a need for 
something shorter and pun- 
chier in addition to the green 
paper. We need a target date 
for infrastructure liberalisa- 
tion.” 

The most favoured date 
appears to be 1998, to coincide 
with tiie liberalisation of tele- 
coms services. However, senior 
nfMaU in the Commission's 
telecoms directorate want to 
see immediate competition for 
infrastructure to supply ser- 
vices - such as private corpo- 
rate net w orks - already open 
to competition. 

Given the pr o x imity of Janu- 
ary 1998, they believe that 
such a move would encourage 
new operators to bnfid Infra- 
structure immediately capable 
of extension or adaptation as 
competition is extended to 
public “voice” services. 

They are attracted to the 
competitive potential of radio 
and microwave technology and 
existing cable television net- 
works. The extent of cable net- 
works varies widely across the 
EU. but the conversion of 
cable systems could bring 
early nationwide competition 
in Germany, Ireland and the 
Benelux states. 

National operators in 
France. Italy and Germany 
believe the process towards 
liberalisation is moving too 
fast Consultations on the 


Kravchuk faces 
run-off poll 
against Kuchma 


By Chrystia Freeland in Kiev 

Mr Leonid Kravchuk, the 
Ukrainian president, and Mr 
Leonid Kuchina, the former 
prime minister, will face each 
other in a run-off election 
scheduled for July 10 to select 
the country's next leader, offi- 
cials said yesterday. 

Preliminary returns from 
across Ukraine suggest that 
the two men are clearly ahead 
of the five other presidential 
candidates, but neither 
obtained the outright majority 
required for victory in the first 
round. 



Leonid Kravchuk: fighting to 
stay on as president 

Sunday's vote underscored 
deepening regional divisions. 
Mr Kuchma, who was a direc- 
tor of the former Soviet 
Union's largest missile factory 
and who promised to bring law 
and order to Ukraine, improve 
links with Russia and boost 
economic performance, won a 
landslide in the mainly Rus- 
sian speaking eastern Ukraine 
and the separatist 
peninsula, taking up to 80 per 
cent of the vote. 

Mr Kravchuk, who sought to 
position himself os the only 
candidate able to preserve sta- 
bility and national unity, won 
more than 90 per cent of the 
vote in the less populist, but 
fiercely nationalist, west of the 

country. „ 

Results are more sparse from 
the Ukrainian heartland, dui 


the Interfax news agency 
reported that, in Kiev, 42 per 
cent of tbe vote went to Mr 
Kravchuk and only 19 per cent 
to Mr Kuchma. 

In contrast with neighbour- 
ing Belarus, where an outsider 
won a plurality of the votes in 
the first round of presiden ti a l 
elections last week, the five 
other candidates were for 
behind the two leaders. Mr 
Oleksandr Moroz, the hard-line 
socialist who leads the domi- 
nant bloc in parliament, was 
placed a poor third. 

While Mr Kravchuk and Mr 
Kuchma will return to the 
campaign trail to continue tbe 
fight over the two main issues 
in Ukraine - national, sover- 
eignty and the economy - 
important changes are expec- 
ted in the government 

In a move criticised by Mr 
Kuchma, the president and 
parliament approved a new 
prime minister, Mr Vi tali 
Masol, before the election. 

Mr Masol. like Mr Kravchuk, 
was a Communist party func- 
tionary and was expected to 
continue the Ukrainian govern- 
ment's lacklustre economic 
performance. But same west- 
ern diplomats and Ukrainian 
cabinet ministers now say that 
Mr Masol has undergone a con- 
version to the market and is 
following the path of Russia’s 
unlikely reformist, Mr Victor 
Chernomyrdin. 

Mr Roman Shpek, Ukraine’s 
reformist minister for the econ- 
omy. said the prime minister 
had asked him to stay on. 
Senior Ukrainian officials pre- 
dict that when Mr Masol asks 
parliament to approve a new 
cabinet later this week, other 
reformists will be appointed 
and opponents of change will 
be sacked. 

In what some observers view 
as an llth-hour effort to bur- 
nish Mr Kravchuk's economic 
track record, Ukrainian offi- 
cials say that the government 
will ask parliament this week 
to approve a number of pro- 
gressive laws, including price 
liberalisation and the abolition 
of the country’s fixed e x ch ang e 
rate system. 


mobile telecoms green paper 
in Brussels earlier this month 
attracted opposition from 
France Telecom, Deutsche 
Telekom and Stet, the Kalian 
state company, to the pace of 
planned liberalisation. 

The companies asked the 


Commission to wait nntU it 
published plans for Infrastruc- 
ture liberalisation across the 
industry. “Their objections 
just amount to more prevari- 
cating,” said the Commission 
official. 

Backing Brussels' move to 


push forward decisively with 
liberalisation. EU heads of 
government agreed that mem- 
ber states should create a new 
ministerial post to coordinate 
all aspects of telecoms devel- 
opment: political, financial 
and regulatory. 


The summit also agreed that 
that tbe Commission should 
establish a regulatory frame- 
work, concerned with access to 
markets, compatibility 
between networks, intellectual 
property rights, data protec- 
tion and copyright 


By Tim Coona in DubOn 

The Irish government is 
coming under growing 
opposition pressure at home to 
give its backing to Mr Peter 
Sutherland, outgoing 
director-general of the General 
Agreement on Tariffs and 
Trade, as a compromise 
candidate to succeed Mr 
Jacques Defers as president of 
the European Commission. 

Mr John Bruton, leader of 
the opposition Fine Gael party, 
is to table an emergency 
motion in parliament today in 
an effort to force the 
government's hand on the 
issue. 

“There has to be a way of 
re-engaging Britain with 
Europe.” Mr Bruton said 
yesterday. “This is Europe's 
biggest problem now. If Britain 
moves further away from 
Europe, Ireland stands to lose 
the most because of our trade 
dependence. Peter Sutherland 
is someone who can bridge 
that gap. 


“He is a committed 
European but one who can 
speak to the British in terms 
which does not provoke their 
prejudices." 

Mr Sutherland was a former 
attorney -general in a Fine 
Gael -led government in the 
1980s, and a former EU 
competition commissioner. He 
would have to be a 
commissioner to be eligible for 
tbe presidency post and the 
present Fianna Fail-Labour 
coalition government has 
insisted that it has no 
intention of replacing Mr 
Padraig Flynn. Ireland's 
commissioner, who holds the 
Social Affairs portfolio in 
Brussels. 

Ms Mary Harney, leader of 
the opposition Progressive 
Democrats party, which is also 
backing Mr Sutherland, said 
yesterday: “There is no 
country blocking Mr 
Sutherland except his own. 
There is nobody against him 
except the Irish government 
which is a crazy situation." 


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- TfivfBS TUESDAY JUNE-28 1994 


NEWS: EUROPE 


Protest grows over 
Lisbon bridge toll 


By Pater Wise In Lisbon end 
Jimmy Bums In London 

Portugal’s centre-right 
government is fating a grow- 
ing cnmp ai g n of civil disobedi- 
ence in protest against a 50 per 
cent rise in the toll for crossing 
the April 25 suspension bridge 
over the Tagus river in Lisbon. 

The protests, which contin- 
ued for the eighth consecutive 
day yesterday, are fuelling con- 
troversy over the award of a 
Escl80bn (£707m) contract to 
build a second bridge in Lisbon 
to a consortium led by Trafal- 
gar House of the UK- 

Riot police intervened on Fri- 
day to lift an 11 -hour blockade 
mounted by angry lorry driv- 
ers across the only bridge Unk- 
ing Lisbon with southern For- 
tugal. Many commuters 
continued the revolt yesterday 
by refusing to pay the toll, 
honking their horns and pay- 
ing in large notes or with bags 
Of small coins. 

The opposition Socialist 
Party CPS) called on Mr Joa- 
quim Ferreira do Amaral, pub- 


lic works minister, to answer 
questions in parliament on the 
ton increase and the award of 
the contract for the new 
bridge. 

Mr Jorge Sampaio, socialist 
mayor of Lisbon, yesterday 
urged the government to sus- 
pend the increase in the ton. 
The bridge is crossed by mote 
than 110,000 vehicles a day. 

The government said the rise 
in the toll for a two-way cross- 
ing to EsclSO for cars and 
Esc720 for lorries was needed 
to help finance the building of 
the second bridge and a 
EscL12bn railway crossing 
pnrtey the existing bridge. 

The dvil disobedience cam- 
paign against the government 
has refuelled a public row 
between Trafalgar House and 
the French company Bouygues 
whose consortium lost a bid to 
build the second bridge. 

Bouygues claimed yesterday 
that its offer involved a lower 
toll price for fee second bridge. 
“We proposed the cheapest toll 
possible because we realised it 
could be a very political issue,” 


a senior Bougoes manager said 
yesterday. The company is stiU 
hoping that the government 
will rescind its decision. 

Air Ferreira do Amaral lias 
told Bouygues that the deci- 
sion to award the contract to 
Trafalgar House group was 
based entirely on the recom- 
mendations of independent 
experts who studied the two 
groups’ proposals for six 

m ont hs. A Portuguese govern- 
ment official said the deadline 
for Bouygues to take judicial 
action over the decision had 
passed. 

Mr Joao Morals Leitfio. a 
Portuguese lawyer represent- 
ing the Trafalgar House con- 
sortium, said: “The fact that 
the Bouygues group has. 
decided not to present a claim 
against the award in my mind 
dearly shows that they do not 
ha ve grounds for nmWng such, 
a claim.” 

He said negotiations on the 
technical aspects of the new 
bridge were the first to be com- 
pleted and were closed by both 
bidders in January. 



Hundreds of vehicles block the south approach to the bridge In a 
toll-rise protest last Friday 


SPD ready to join Kohl 
on postal privatisation 


By Michael Unde m ann in Bonn 

Germany’s opposition Social 
Democrat party said yesterday 
it was likely to support a cru- 
cial vote to change the consti- 
tution and clear the way for 
the sale of the postal and tele- 
communications service, the 
country's largest privatisation. 

Air Hans Gottfried Bemrath, 
the SPD telecommunications 
spokesman, said the party lead- 
ership was due to endorse the 
privatisation plans at a meet- 
ing last night, overriding objec- 
tions from the German Postal 
Union (DPG). 

Chancellor Helmut Kohl’s 
government needs a two-thirds 
majority in the Bundestag, or 
lower house of parliament, 
tomorrow - days before the 
summer recess - so that the 
constitution can be changed 
and the privatisation can go 
ahead. 


If the change is approved, 
the state-owned postal and 
telecommunications service 
which employs 910,000 people 
will be turned into three joint 
stock companies on January 1, 
1995: Deutsche Telekom, Post- 
dtomt and postbank, the post 
office’s banking arm. 

Telekom, the first of the 
three likely to be frilly priva- 
tised, wants to offer 30 per cent 
of its capital to the stock mar- 
ket in 1996. The SPD has said it 
will back privatisation if 
money can be found to guaran- 
tee future pensions payments 
and other rights. 

These safeguards have been 
mostly agreed but Mr Peter 
Patema, the SPD deputy who 
chaired the parliamentary 
postal committee which over- 
saw the legislation, said the 
package before parliament was 
a “disaster". 

An independent study fore- 


casts that the three enrnpmu'^ 
would have to find about 
DM35bn (£l42bn) to cover pen- 
sions and other iHVimnftTTMmfa , 
making it difficult for them to 
keep up with their interna- 
tional competitors, Mr Patema 

will 

He accused the finance min- 
istry of being short-sighted for 
fafffri g to maim more money 
available. 

Burdened with, extra liabili- 
ties, the share Issue price for 
the companies is now likely to 
be much lower and the short- 
fall will have to be financed by 
the fmanrft ministry anyway, 
Mr Patema said. 

Meanwhile a series of warn- 
ing strikes and demonstrations 
which have interrupted the 
postal service during the past 
three weeks were set to con- 
tinue as talks between manage- 
ment and the DPG remained 
deadlocked. 


Serbs mark fateful anniversary 

Moslems press 
Bosnia offensive 


By Laura Sfltar in Belgrade 
and Bruce Clark in London 

The Serbs will today mark (me 
of the most fateful anniversa- 
ries in their region's history, 
anrid ominous signs that its 
f uture is again being decided 
on fiw battlefield and not 
around the negotiating table. 

The forces of Bosnia's Mos- 
lem-led go v e rn ment, who have 
gained ground in recentflght- 
ing, were engaged yesterday in 
fierce artillery duds with Serb 
fighters In the north of the 
republic. 

A British soldier was killed 
in an exchange of fire with 
Serb troops on Sunday night 
near the Moslem enclave of 
Gorazde in eastern Bosnia, the. 
United Nation* said y e s terday.^ 

He was the sixth Briton to 



die in the on-going 

The contact group of US, 
Russian and west European 
negotiators is expected to 
announce a high-level meeting 
by next week at which the 
warring parties in Bosnia will 
be g r ease d to accept a parti- 
tion formula. 

Both sides have In recast 
days pledged to fight an, in 
spite of the ceasefire which 
mbm tote farce mi June 10 and 
initially held quite wefl. 

Mr Radovan Karadzic, the 
Bosnian Serb leader, said the 
new peace efforts were doomed 
because “Serb soldiers are the 
only ones who draw maps on 
Bosnian ter r itor y ” . 

Hb remarks may have been 
directed at a' domestic audi- 
ence an the eve of today's twin 
anniversary of the bottle of 
Kosovo, when the Serbs woe 
subdued by the Turks in 1389, 
and tiie 1914 assassination In 
Sarajevo which triggered the 
first world war. 

Is recent Interviews, Gen- 
eral Rasim Dehc, commander 
of the Bosnian army, has said 
Us arm y is entering the "lib- 
eration phase of the armed 
struggle*. 

Commander Eric Ch a pero n , 
a UN spokesman, yesterday 
reported artillery duels of up 
to 15 zounds a minute, sug- 
gesting that the fighting was 
unusually intense. 

According to unconfirmed 
local media reports, some 
0,000 Serb villagers have fled 
their stronghold in the Mount 
Oxren area. Croatian radio 
said 12 Serb settlements had 
ii*<m captured. 

The latest fighting Is to the 
south of the Serb land corridor 
in the Sava River valley, a 
strip of land fliat is seen by Ml 

sides as erudal to the outcome 
of tile war. The Serbs have 
vowed to defend the route 
because it links Belgrade to 
Serbbeld parts of Bosnia and 
Croatia. Bosnian Moslem lead- 
ers believe they can capture 
several towns in the north 
which were mostly Moslem 
before the war. 

Croatia, too, hopes that by 
severing the corridor they 
would gain the upper hand 
against Serb forces who have 
carved out their own state cov- 
ering a third of Croatian terri- 
tory. 

Lord David Owen, the Euro- 
pean Union mediator, said yes- 
terday be was anxious to see 
talks rest a rted soon between 
the Croatian government and 
the Croatian Serbs. 


Moscow 

WOOS 

foreign 

investors 

By John Lloyd hi Moscow 

Russia’s prime "minister 
yesterday made his strongest 
bid yet for foreign investment 
— promising tax holidays 
an and to restrictions’ on capi- 
tal movements and land own- 
ership. 

Speaking to leaders of for- 
eign companies with substan- 
tial investment in Russia, Mr 
Victor Chernomyr di n claimed 
his package of draft laws - 

which mnqf sHU pass through 

parliament - would improve 
the meagre investment record 
by the end of the year. 

“Fear any normal economy it 
is a sign of improvement whoa 
It moves towards a realistic 
investment policy - and Russia 
Ms made the first steps in that 
direction. “Never since the 
start of 1992 [when economic 
r eform began] have we had a 
political atmosphere so favour- 
able for a normal course of 
reforms,” he told the business 
group, which Is advising 

Moscow on investment. 

Government figures show 
that foreign investment is 
weaker than had been thought 
Mr Jakov Yurinsan, the first 
deputy economics minister, 
told the gathering that foreign 
investment had totalled only 
$2.7bn OELSbb) over the past 
five years - and would be no 
more th an gihn tn 1994. 

The government also said 
yesterday there were signs of 
economic im p r ow i p<m t Infla- 
tion wonld be brought down to 
below 7 per cent a month by 
the end of the year - and 
would fall further to 5 per cent 
by the nJMh of year and 
to S per cent by its end, Mr 
Sergei Dubynin, the acting 

frnnnrp minister, said 
The lengths to which Mr 
Chernomyrdin was prepared to 
go appears to signal a realisa- 
tion that Russia’s maze -of reg- 
ulations and iatMi and the 
growing power of organised 
crime gangs are a powerful dis- 
incentive to international capi- 
tal with other, more stable, 
developing markets from 
which to choosa Mr Boris Yelt- 
■*to v the president, this week 
introduced a decreetocrack • 
down on organised crime, 
although parliament argues 
the decree fa maoopstitntionaL 
The measures promised by 
Mr Chernomyrdin are: 

• A five-year income tax hol- 
iday tor foreign companies; 

• An end to restrictions on 
foe movement of capital in and 
out of tiie country; 

• The right to retain all hard 
currency-, earnings from 
exports; 

• No import tax payable on 
materials used for production; 

• A three-year exemption 
from any changes in tax legis- 
lation - seven years if the for- 
eign holding is above £100,000. 

Farther drafts shown by Mr 
Chernomyrdin to business 
leaders yesterday were plans 
for the establishment of free 
economic zones and a new law 
an for eign investment. 

The group is chaired by Mr 
Mtofrapj Htom to g, chairman of 
thn consulting flp topp n y Km s t- 
and Young, and fmjndiw hgfld* 
of such companies as ABB 
Brown Boveri, Coca Cola and 
United Technologies. The gov- 
ernment is also bring pressed, 
according to one western bust 
nessman at yesterday's meet- 
ing, to create either a new min- 
istry to deal with foreign 
in ves t ment ora series of com- 
mittees with the power to push 
through legislation and 
improve tiie etimafa 
Mr Chernomy rdi h laid out a 
long and tempting list of pro- 
jects in which he wanted for- 
eign participation - such as 
toll highways, bridges, tunnels 
and cargo terminals. He said 
that the government attached 
particular importance to the 
development of small and 
medium-sized business with 
the aid of foreign partners. 


Dutch parties 
fail to agree 

An historic attempt to form a Dutch government without the 
Christian Democrats fafled y^tenfaycrMt^a 
outgoing prime minister Ruud Lubbers to to power 

despite ids party's heavy losses m the May general el ect ion . 
Talks lasting six weeks among the other three main political 

naities were called off after the parties failed to agree on cuts 

to the Netherlands’ social security system. The right-wing 

liberals warded heavy spending cuts, which were opposed by 
r^Knm- and left-of-centre D6& The C h ri stia n De mocrats and 
their forerunner parties have belonged to every Dutch coah- 
tion since the flret world war and have never. been pushed into 
opposition. Ronald Van deSrvl, The Hogue 

West German inflation at 2.9% 

West German consumer prices rose by 0J. per cent in June 
from May, taking annual inflation to a provisional 2A per cent, 
the German Federal Statistics Office announced in Wiesbaden 
yesterday. It is the first time since April 1991 that the headline 
normal rate of inflation has been below 3 per cent, assuming 
there Is no upward revision. The June figure is the same as 
tfr nt for May, althou gh last month the final figure was revised 
nj a mi fa to 3 pear c e n t- The preliminary inflation figure is 
based an data from foe states of Badert-W&rttemberg, Hessen, 
Norfh-Rhine Westphaha and Bavaria. Price pressure an rents 
and services subsided but food prices rose, reflecting seasonal 
factors. David Waller, Fnmkftat 

Swedish coalition narrows gap 

Sweden's right-centre g ov e rnment has narrowed the lead held 
by the opposition Social Democratic party in the race for the 
gpnwy pt piw^Tfm cm September 18, but stni trails by almost 10 
p e rce n t a g e prints, according to two new opinion, polls. They 
gave Mr Cart wft, foe prime minister, sane encouragement 
that a return to economic growth this year would win voters 
harJc to his mariret re fo rm policies despite record Unemploy- 
ment- A poll In the newspaper Sveuska Dagbladet showed 
support for the four coalition parties tiring to 40B per cant 
ftom 303 compared to a similar poll in May. Both pofls showed 
MrBfldfs conserv a tive Moderate party was now more popular 
than at foe 1991 general election. However, the Social Demo- 
crats, under Mr Ingvar Carisscm, remain (dear favourites to 
form the next gnv p mnumt. Although foe party slipped by L2 
percentage points to 49.5 per cent in one poll, in the business 
daily Dagena Indnstn, it held steady at 50.4 per cent in the 
Sveaska Dagbladet polL Much hangs an which small parties 
overcome the 4 per cent barrier required to get Into parlia- 
ment The Christian Democrats, coalition members, are hover- 
ing around 4 per cent Hugh Carnegy, Stockholm . 

Local polls blow for Berlusconi 

Italy’s prime mink ter Sfivio Berlusconi suffered his first elec- 
toral setback when opposition candidates won several regional 
polls, results showed yesterday. His opponents won weekend 
runoff votes for mayors, provincial presidents and a regional 
coundL The results of ejections In 137 smaller cities were 
issued as the Smate president warned that new national 
elections could become necessary if the apposition used its 
«Hght majority in the upper house to block legislation. How- 
ever, political analysts said the significance of foe polls was 
muted became of the low turnout, with only about half of the 
6m eligible voters casting ballots. Rader, Rome 

Robert Mauthner 

Robert Mauthner, (fodomaHr editor of the Financial Times, 
who died last month, has been named a chevalier in the 
French. Ordre National dn Mfirite by President Francois Mitter- 
rand. A service of thanksgiving for the life of Robert Mauthner 
will he held at noon, tomorrow in St Bride’s Church, Fleet 
Street, London. 

ECONOMIC WATCH 


Danish wholesale prices jump 





Wholesale prices In Denmark 
' jumped 0B per cent in May 
from April, and commodity 
prices rose 0.8 per cent. 
Wholesale prices had pasted 
an OJt per cent monthly rise 
in April. Economists in 
Copenhagen said the 
i nc r eases were higher than 
expected but were unlikely to 
push consumer prices over 
forecast levels. Danish con- 
sumer prices for May released 
an June 20 showed an 0.4 per 
cent monthly and IB per cent 
year-on-year rise, slightly 
- lower than average market 

Sftv expectations. The Danish gov- 

• '.w 'rl W?W. t -s-,.vi.' .'\~ y eminent has forecast con- 
sumer prices will rise 2J0 per cent tins year and Z 2 per cent hi 
1995. 

F ren c h economic growth in the second quarter was 
healthy, according to Mr Jean-Claude Trichet, Ban k of France 
govern or. He was responding to a question on the bank’s 
latest monthly survey of 12,000 companies. Mr Trichet said the 
economy had “all tiie ingredients” for the growth to be “dura- 
ble and provide sound employment”. Inflation would be “2 per 
cent or less this year and in the years to come”. - 
■ Mr Edu a r do Catroga, Portuguese finance minister, said 
unemployment would not improve until Portugal’s recession- 
hit econom y resumed an animal growth rate of at least 2 per 
cent. The government does not expect this to hu pp m until 
1995. 

Rattan wage In fl a ti o n stood at an a’nwrai 25 par ren * in 
Ma y, the same level as in. April. The May figure compares with 
an annual growth of 4JL per cent in consumer prices the same 
month. Industrial producer prices rose 3 per cent in the year 
to ApriL 


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} 





FINANCIAL TIMES TUESDAY JUNE 2S 1994 


NEWS: WORLD TRADE 


5 



X 

I 

1 - j 





> 


US giant signs joint ventures 
with two components makers 

Ford plans 
$50m China 
investment 


By Tony Walker in Baling 

Ford Motor Company is to 
spend more than asftm ( gam) 
on its first motor components 
manufacturing Investment in 

C hina 

It said yesterday it hart 
signed joint venture agree- 
ments with two Chinese com- 
ponents makers. In what tt 
intends to be the first substan- 
tive step towards assembling 
vehicles in China. 

The company, which has 
been relatively slow in compar- 
ison with its western rivals in 
establishing a presence in 
Ch i na , signed agreements with 
Shanghai companies engaged 
in producing plastic automo- 
tive items such as instrument 
panels and in making safety 
glass. 

Ford’s partners are the 
s hanghai Automotive Indust ry 
Corporation (SAIC) and the 
Tao Hua Glass Works. Both 
ventures are expected to get 
under way this year. 

C hina has told international 

automotive makers that before 
they become involved in 
vehicle assembly in chtna they 
must show their commitment 
by investing in the components 
sector. 

Beijing has placed a freeze 
on new entrants to vehicle 
manufacture and assembly 


until 1996. 

Mr James Paulsen, president 
of Ford China Operations, said 
the new partnerships “repre- 
sent the beginning of our man- 
ufacturing presence in this 
important new market anfl the 
chance to show our strengths 
and commitment”. 

Ford is negotiating other 
de als with components makers. 
General Motors and the big 
Japanese car makers are simul- 
taneously engaged in a similar 
exercise. 

Ten Feng is the largest sup- 
plier of automotive trim com- 
ponents in China, while Tao 
Hua is said to have the highest 
quality glass fabrication tine in 
China. 

Ford, which is in the process 
of a global reorganisation 
aimed partly at establishing a 
much greater manufacturing 
presence throughout Asia, is 
also investigating electronics, 
engine management, cooling 
and air conditioning systems 
as other potential areas for col- 
laboration with Chinese enter 
prises. 

Ford officials declined to 
give a breakdown of the $50m 
investment between the two 
ventures. Both agreements are 
subject to final approval by the 
Chinese government. Ford is 
taking a 51 per cent stake in 
both ventures. 


Brown in 
Brazil to 
boost US 


New gas 

turbine 

‘most 


business 


efficient’ 


By Nancy Dunne fn SSo Paulo 


Mr Ron Brown, the US 
commerce secretary, yesterday 
opened a $2m (£1.3m) Ameri- 
can commerce centre in S&o 
Paulo, Brazil, and sought sup- 
port for a $700m air traffic con- 
tract which is being contested 
by Thompson-Alcatel of 
France. 

Raytheon of the US is vying 
for the contract, designed to 
protect the Amazon through a 
combination of anti-drug and 
air traffic control network sys- 
tems together with environ- 
mental monitoring systems. 

Mr Brown is on a high-pro- 
file trade mission accompanied 
by 22 executives from US com- 
panies, several of which are 
chasing lucrative contracts in 
the region. 

Mr Brown spoke of the “vital 
and growing” importance to 
the US of trade with Latin 
America, which, if current 
trends continue, will one day 
overtake Europe as the US’s 
main trading partners. 

Foreign investors, notably 
US companies, have been eying 
Brazil's vast consumer markets 
and undeveloped infrastruc- 
ture. “There are as many con- 
sumers in (the city of) SSo 
Paulo alone as in the whole of 
Argentina," said a representa- 
tive or a US telecommunica- 
tions company. 

Mr Brown yesterday extolled 
the virtues of his department's 
emerging markets programme, 
under which the US is focusing 
on resources and attention on 
a variety of projects in Brazil, 
Mexico. China and several 
other countries. 

Emphasising an often stated 
commitment to raise living 
standards in these countries, 
Mr Brown visited a a commu- 
nity sports centre sponsored by 
Xerox Corp in a Rio slum. 

Mr Arthur PiZzer, the 
vice-president for business 
development, who is accompa- 
nying Mr Brown, earlier 
announced that the Export-Im- 
port Bank of the US (Exim- 
bank) is ready to lend money 
to Brazilian state-owned com- 


iv Brazil as a market 
lo a lot of business in 
few years.” said Mr 
io is accompanying 
on the trade mission 
Argentina and Chile, 
mhank has not lent 
its state-owned com- 
ney for at least eight 
ut has extended 
50m and S50m to Bra- 
;ate companies, pri- 
iks. over the last two 
the country has 
lormalise its interna- 


, state-owned com- 
be contingent on 
r back to the Paris 
tying all of its res- 
bL“ Mr Pilzer said- 
ms not yet resched- 
in loans, originally 
Transbrasil, a pn- 
sd airline. 


Westinghouse Electric of the 
US has raised the temperature 
in the highly-competitlve 
power station market by 
launching a new gas turbine 
claimed to he the world’s larg- 
est and most efficient, writes 
Andrew Baxter in London. 

The 230MW turbine creates 
a challenge for rivals in the 
power generating equipment 
industry. Customers are 
looking for larger gas turbines 
and can save millions of dol- 
lars of fuel costs through 
greater thermal efficiency. The 
US group's new turbine, the 
501G, is designed to serve mar- 
kets which require electricity 
at 60 hertz (cycles) - North 
America and parts of Asia. 
With a steam turbine added to 
create a combined-cycle sys- 
tem, the turbine is expected to 
provide a net efficiency of 58 
per cent 

The Westinghouse turbine 
was developed in collaboration 
with its technology partners 
Mitsubishi Heavy Industries of 
Japan and FiatAvio of Italy. 
Westinghouse and Mitsubishi 
wifi both make the 501G, with 
the US company using its 
North American manufactur- 
ing network and MHI its Tak- 
asago works. Both expect to 
ship the first machines in 
1996. 

Belgians in 
Oman deal 

Tractebel, the Belgium energy 
and industrial holding com- 
pany, and a consortium of 
Omani companies have 
received a $21 3m contract to 
build and operate a 90-mega- 
watt power station in Oman, 
AP-D J reports from Oman. 

Tractebel and the Omani 
companies will provide 60 per 
cent of the capital for the proj- 
ect, a gas-fired power station 
190km south of Muscat, the 
Oman capitaL 

Oman intends to raise the 
remaining capital by floating 
shares in the company to 
Omani nationals and Gulf 
Co-operation Council partners, 
Saudi Arabia. Kuwait, the 
United Arab Emirates, Bah- 
rain, Oman and Qatar. 

Argentine gas 
pipe contract 

Tenneco Gas international and 
the US Overseas Private 
Investment Corporation have 
signed a protocol agreement 
providing for f i na n cing and 
political risk insurance by 
OPIC for a proposed 600km 
pipeline linking Argentine gas 
reserves to Chile, AP-DJ 
reports from New York. 

Tenneco Gas has a 2 5 per 
cent interest in a consortium 
that has been selected to 
design, construct, own and 
operate a transmission line 
running from the Nenqnen gas 
fields in Argentina to Sant- 
iago, Chile. 


Beijing optimistic over new 
talks on rejoining Gatt 


Guy de Jonquieres and Tony 
Walker on doubts whether 
China can be re-admitted in 
time to help found the WTO 


China trade 

Exports 

Annual % change' 


70 
60 
50 - 
40 - 


M China 
□ World 


h- 


Imports 

Annual % change - 


70 


.... * 

50 


N egotiators from 
China and mem- 
bers of the General 
Agreement on Tar- 
iffs and Trade meet in Geneva 
today for what promises to 
mark the start of a critical 
stage in the seven-year-old 
talks on Beijing’s application 
to rejoin the organisation. 

The four-day meeting is the 
first since US President Bill 
Clinton ended uncertainty 
about China's position in the 
world trade system this month 
by renewing Most Favoured 
Nation treatment of its exports 
to the US and “de-linking" 
trade and human rights. 

Mr Clinton's decision has 
lifted a cloud over the Geneva 
talks. Mr Long Tongtu, China's 
Gatt negotiator, who has vis- 
ited Washington and Brussels 
in advance of this week's meet- 
ing, said he was satisfied with 
his meetings in both places. 

He said contacts with US 
negotiators were “the most 
positive and fruitful" for two 
years - an assessment shared 
by US officials. They 
applauded China for its recent 
commitment to preparing itself 
for membership of Gatt, from 
which it withdrew in 1950. 

The hope now Is that the 
way has been cleared for faster 
progress in resolving outstand- 
ing issues. “There is movement 
and a will on all sides to press 
ahead with serious work," said 
one official in Geneva. 

But Hireig h all Hw main Gatt 
countries say they want to 
admit China, some question 
whether it will be possible this 
year, in time to meet Beijing’s 


goal of becoming a founder 
member of the World Trade 
Organisation, which is doe to 
succeed Gatt. 

That would require broad 
agreement by late autumn on 
formal accession terms. How- 
ever, officials closely Involved 
in the talks stress that formi- 
dable obstacles have still to be 
overcome. “I think it Is going 
to be very difficult tor the Chi- 
nese to maftp it in time,*' said a 
European official. 

There are also differences 
between Washington and Brus- 
sels over how far Gatt should 
go to accommodate China's dif- 
ficulties in meeting Us rules 
immediately. 

The US wants Beijing to 
accept all Gatt obligations on 
entry, and to eliminate in par- 
ticular about 400 specified non- 
tariff barriers. The European 
Union is taking a more flexible 
line, though It has reserved the 
right to impose selective safe- 
guards on certain imports until 


China is fully integrated into 
the Gatt system. 

Mr Long said his govern- 
ment was seeking a “package 
deal" In the negotiations and 
indicated it would press for 
transitional arrangements 
which would allow it to con- 
form with Gatt rules over time. 

He acknowledged that a gap 
remained on the transition 
issue. “This is something we 
have to work on.” he said. 
“Without agreement on transi- 
tional arrangements China 
may not get into Gatt for 5-10 
years, and we assume this is 
not the wish of the US. 

“The bulk of American and 
European d emand s are in Hm> 
with China's economic 
reforms. There is no basic dis- 
agreement on China becoming 
a fun-fledged market economy. 
The question is how quickly 
China should do it 

“China’s economic reforms 
were a gradual process, and we 
can't for the sake of getting 


30 



Saunc Gad/BU 


into Gatt disrupt that gradual 
process. 1 don't think this 
would be in the interests of 
western countries he said. 

Mr Long called “ridiculous" 
US arguments that if China 
were granted a transition 
period, it would have no incen- 
tive to assume its obligations 
after it entered Gatt. “China is 
not adopting its reforms simply 
for the sake of joining Gatt," 
he said. 

In an effort to clarify the out- 
standing issues. Mr Pierre- 
Louis Girard, the Swiss econ- 
omy minis ter who is chairing 
the Geneva meeting, has circu- 
lated a "non-paper" which 
aims to bring together the 


40 



- Momma! £ terns 


views of all the main partici- 
pants, including the US, the 
EU and Japan. 

In a covering letter. Mr Gir- 
ard says the document - which 
is not in Leaded as a draft proto- 
col for C hina 's eventual acces- 
sion - is not prescriptive, but 
should be regained as the basis 
for discussion. 

However, some officials close 
to the talks described Mr Gir- 
ard's approach as “maximalist" 
and said it appeared to set 
tougher conditions for China's 
accession than some Gatt 
members considered appropri- 
ate. 

As well as the removal of 
non-tariff barriers, negotiators 


In Geneva say the most obsti- 
nate questions still to be 
resolved are: 

• Lack of transparency in 
China's trade regulations and 
“hidden" quotas on various 
categories of imports. 

• Dismantling of China’s tar- 
iffs. for which a timetable must 
be negotiated and set out 
alongside the planned acces- 
sion protocol. 

• The uniform application of 
Gatt obligations, in a country 
where regulations and the 
speed of liberalisation vary 
widely between regions. 

• Extension of national treat- 
ment to foreign companies 
and, in particular, access to 
China’s market for foreign pro- 
viders of services such as 
banking and insurance. 

• Intellectual property rights, 
an issue on which China has 
been criticised because of wide- 
spread piracy of western enter- 
tainment software. 

• A safeguards clause against 
sudden surges of Chinese 
exports, especially textiles. 

Negotiators in Geneva were 
cautious yesterday about the 
prospects for breakthroughs on 
these issues this week, while 
Chinese officials have acknowl- 
edged that there will have to 
be tough bargaining against a 
tight timetable. 

Beijing is preparing for 
another session in late July 
and will send a large team 
back to Geneva to negotiate 
through September, if neces- 
sary. "As tong as the partici- 
pants have the political will, 
we can finish the negotiations 
in time," said Mr Long. 


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6 





. . TUESDAY JUNE 28 199* 


THE AMERICAS 


Senate works on latest draft that would cover 95% of population by 2000 

Fresh US healthcare compromise 


By George Graham 
fa Washington 

The US Senate finance 
committee yesterday began 
work on a possible compromise 
bin on healthcare reform, as 
arguments swirled over what 
level of coverage would meet 
President Bill Clinton’s 
demand for a universal health 
system. 

Mr Clinton has already dis- 
missed as inadequate proposals 
that would have covered only 
91 per cent of the population, 
but the White House yesterday 
withheld Its fire from a new 
draft prepared by Senator Dan- 
iel Patrick Moynihan, chair- 
man of the Senate finance com- 
mittee, that would set a target 
of fairing care of 96 per cent of 
the population by the year 
2000. 

Mr Moynihan was due to 
present his draft to the com- 
mittee in a closed session yes- 
terday afternoon, amid a 



Moynihan: doe to present draft 


mounting sense of alarm in 
Washington that time is run- 
ning out for completing a bill 
before Congress breaks up. 

Like proposals floated by 
some moderate Republicans 
and conservative Democrats, 
the Moynihan plan would elim- 
inate one of the most impor- 


tant but also most controver- 
sial components of Mr Clin- 
ton’s comprehensive reform: 
the requirement that employ- 
ers provide health insurance to 
all of their workers and pay for 
80 per cent of its cost 

This employer mandate is 
flatly rejected by almost all 
Republicans, making it virtu- 
ally impossible to pass, at least 
in the Senate, where proce- 
dural rules allow a minority to 
block any action. 

The alternative of obliging 
individuals to buy health 
insurance, just as- they must 
buy car insurance, . arouses lit- 
tle en thusiasm among Republi- 
cans; many can already imag- 
ine the slogans in this 
autumn’s election campaign: 
"We wanted to make your 
employer provide you with 
health insurance, but the 
Republicans wanted you to pay 
instead.” 

Mr Mioynihan’s draft would 
avoid both employer and indi- 


vidual mandates, and instead 
rely on incentives to compa- 
nies which do provide insur- 
ance to their workers. Low 
wage businesses that pay 80 
per cent of their employees’ 
health costs would receive 
cash subsidies from the gov- 
ernment, while small compa- 
nies paying at least 50 per cent 
of their employees’ costs would 
be eligible to enrol In the Fed- 
eral Employee Health Benefits 
Program, a flexible and gener- 
ally well-regarded scheme 
which currently covers most 
government workers. 

This programme offers fed- 
eral employees a menu of dif- 
ferent private sector health 
{dans, with an “open season” 
a year In which they can 
switch from one plan to 
another. 

[n order to finesse Mr Clin- 
ton’s demand for universal cov- 
erage, Bib- Moynihan would 
establish a National Health 
Care Commission if 95 per cent 


of the population does not have 
insurance by the year 2000. 
Congress would be required to 
act by a specified deadline on 
the commission's recommenda- 
tions, which would take effect 
automatically if Congress did 
nothing'. 

Mr Moynthan’s scheme is 
gimflar in many respects to a 
plan drafted by a group of cen- 
trist Republicans and Demo- 
crats on the commit- 

tee, and tt was welcomed by 
Senator John Chafes, one of 
the authors of that plan and 
one of the principal Republican 
spokesmen on healthcare. 

White House officials yester- 
day welcomed the Moynihan 
proposals as a sign of progress, 
and pointedly refrained from 
criticising its goal of 95 per 
cent coverage. 

"We didn’t put a number an 
It Universal is a plan that cov- 
ers everybody.” said Ms Dee 
Dee Myers, the White House 
press secretary. 


White House irritates 
advocates for Africa 


By George Grdttfn 
In Washington 

Americans Interested la 
sub-Saharan Africa are a small 

and beleaguered band, who 
generally welcome any atten- 
tion from the administration 
with desperate gratitude. 

Yet a twedaj White House 
conference addressed by Presi- 
dent BQl Clinton, Vice-Presi- 
dent A1 Gore and President 
Nelson Mandela of South 
Africa, not to mention secre- 
tary of state Warren Christo- 
pher and national security 
adviser Anthony Lake, has 
accomplished the remarkable 
feat of Irritati ng even Africa’s 
most devoted advocates. 

Several experts who had 
been told they would be asked 
did not receive invitations, 
and most members of .the con- 
gressional Mack caucus stayed 
away, partly to tautest at the 
administration’s policy 
towards Haiti, and partly 


because they felt they had 
been asked as an afterthought* 
The conference, due to be 


Clinton, was billed by the 
White House as an attempt to 
refocus attention on issues 
such os sustainable develop- 
ment, responses to Internal 
conflicts, support f or de moc- 
racy and human rights, and 
enhancing bilateral trade and 
investment ties. 

But the idea of an occasional 
gathering of the great and the 
good has drawn criticism as 
being no substitute to r contin- 
uous attention to the conti- 
nent’s problems, "tt Is the typ- 
ical Ctintou method: yon get 
150 of the brightest minds you 
«>n null into the same room, 
and come up with the lowest 
common denominator,” sniffed 
one Washington diplomat. 

And while Mr Mandela, in a 
videotaped message, called on 
the US to become "the leafing 
partner to the most novel and 


rf.aitenginy project since tin 
Marshall Plan”, Mr Lake 
warned the US’s willingness to 
get involved was constrained 
by lack of budget resources 
and by the US public’s doubts 
about overseas intervention. 

Although Mr Lake acknowl- 
edged that genocide had taken 
place in Rwanda - a question 
on which the State Depart- 
ment has equivocated, to the 
outrage of human rights 
groups - be offered Utile pros- 
pect of future US action. 

With the end of tits odd war 
and South Africa's transition 
to democracy, as wefl as the 
imha ppy exnerience of human- 
itarian intervention fa Soma- 
lia, the US has been pulling 
back from Africa. 

The Central Intelligence 
Agency, for example, plans to 
close IS stations in Africa, 
which it says existed not to 
gather Information about Afri- 
ca but to monitor and recruit 
eastern bloc officials. 


WORLD CUP 


Jack’s armies mass for battle 

Ireland plan to add another chapter to their soccer legend, writes Peter Berlin 



manager of the 
Irish World Cup 
team, commands two armies in the 
US. The first comprises 23 fit, com- 
petitive young men and a carefully 
organised support team of physio 
therapists, shirt washers, press offi- 
cers and so on. His other army is a 
huge, good-humoured rabble. 

Jack's two armies join forcss 
again today, when Ireland play Nor- 
way at Giants Stadium, New Jersey, 
to the last of their first-round Group 
E matches. With Group E almost 
exactly evenly poised, it is makeor- 
break day for Ireland, as well as for 
Norway and for Italy and Mexico, 
who clash in. the other Group E 
game, in Washington. 

In New Jersey 10 days ago. Jacks 
players overpowered Italy white his 
fans outnumbered and outsang the 
i foiian fans. In Orlando last Friday, 
Jack's men seemed stunned by the 
heat and humidity. The players 
were caught by the pace of Mexico 
and the supporters surprised by the 
number and voice of the Mexican 
fans. 

Regardless of what happens to the 
team, the Irish fans win go home 
with a tall tale or two to telL The 
supposedly unsophisticated Irish 
have already outplayed tile aristo- 
crats of Italy. 

And a lot of the Cans who say 
they don't care if Jack’s team wins 
or loses know by heart an the possi- 
ble permutations of quarter-final 
and semi-final matches in which 
Ireland might play. But first (hey 
have to win or draw today. 

Anyway, the secret is out After 
the opening win against Italy, it 
dawned on a lot of people that this 
Irish team was something more 
than the collection of over-achiev- 
ing scoffers who had clawed their 
way to the quarter-finals in Italy 
four years ago. 

Charlton has been able to add the 
mid-field power of Roy Keane and 
the defensive pace of Phil Babb to 
his team. Another youngster, Jason 
McAtcer, has made two impressive 
appearances as substitute. If there 
are weaknesses, they are at centre- 
forward and goalkeeper: the two 
most important positions on any 
team. 

Charlton only brought four 
attackers along and has only played 
one at a time, preferring to field a 
filth good mid-fielder rather than a 
second mediocre striker. This 
allows him to stick to his strategy 
of defence in depth and attack on 
the break. But he has also brought 
In John Sheridan to orchestrate a 
more measured passing game. 

Ireland's chief weapon used to be 
the long high ball aimed at the head 
of Nlall Quinn or Tony Cascarmo or 


John Aldridge. Cascarino and Ald- 
ridge remain, but now Ireland’s 
spearhead is speed down the wings, 
particularly from full backs Terry 
Phelan and Denis Irwin. 

Both are suspended for today’s 
game. This gives Charlton a prob- 
lem, but also an opportunity. He 
can give McAteer a start and also 
pick the most exciting youngster in 
his squad: Gary Kelly of Leeds. 
Kelly lacks experience, but where 
Irwin is fast and Phelan faster, 
Kelly is fastest 

A lot of Irish fans wish Chariton 
would pick another Kelly: Alan, the 
Sheffield United ’keeper. Many 
thought that Pat Bonner, having 
broken an Irish record for caps in 
warm-up games, would be relegated 
to the substitutes bench. 

Bonner is dependable. He domi- 
nates in the air and neither makes 
basic errors nor indulges in the 
unnecessary flp*hfae«t with which. 
Jorge Campos of Mexico dealt with 
even quite straight-forward Irish 
shots last Friday. 

The problem is the perennial one 
when assessing goalkeepers. 
Mexico’s Luis Garda beat Bonner 
with two band, and accurate shots. 
Might another man have reacted 
quicker, dived Easter, reached fur- 
ther, and perhaps saved a goal? It is 
impossible to telL The nagging sus- 
picion remains that Bonne: will not 
reach shots bat other goalkeepers 
in this tournament might save. 


Nevertheless, the Irish hold a 
slight edge today. A draw means 
they would finish above Norway 
and at least third in the group. 

The temperature has been in the 
90°Fs in New Jersey in the last few 
days, but it is still cooler than in 
Orlando. The Norwegians are no 
more accustomed to heat than 
Ireland and must do the attacking. 
The setting is perfect far Ireland to 
add chapter to their myth. 

Charlton, meanwhile, has been 
« tiding to his. He began a running 
battle with Fite during the weeks 
before the World Cup, complaining 
ceaselessly about the heat and the 
rules which effectively forbade giv- 
ing players drinks during play. 

D uring the first two games he 
would not sit obediently in 
his seat He stood on the 
bench, strayed from the painted box 
around it, berated Fife officials, 
linesmen and referees, coached 
players (which is against the rules) 
and found countless ways to give j 
his players water. 

After the Mexican match he again 
criticised Fife for forcing his team 
to play at noon in Florida and 
reftised to answer questions be did 
not like. 

Now he has been suspended from 
the touchline for “misbehaviour." 
This need not be a handicap. It 
might even help. 

Players like the way Chariton 


stands up for them, and the fans 
love Mm for trying to outwit Fite’s 
pompous officials. 

But the fens will not allow Charl- 
ton and bis team all the ton. They 
are part of tbs story, too. Already 
there are tales to match the myths 
of Irish bravado which came back 
from Italy four years ago. 

On a flight from Florida last Fri- 
day, an Ireland ten told me a tale 

The night before the Ireland- 
Mejdco game, he said, a group of 
fans fa Orlando bad found a bar 
which advertised that it was open 
all night Better than -a hotel, they 
thought and went In. fa the early 
hours the manag er said that he was 
locking up and going home. The 
fans saw him to the door, locked it 
and put a glass on the bar to collect 
money for the drinks. 

The manager caned the police. 
Hearing that European soccer hooli- 
gans had captured a bar, the police 
sent 16 squad cars. They encircled 
the budding. When all the police 
were armed and to places an officer 
was sent to. knock on the door. It 
opened. 

An Irish fan put his head out 
surveyed the scene, and started 
singing Dcomy Boy. One by one the 
fans - trooped out glasses in hand, 
sin g in g along. Nobody, said the 
man who told me the tale, was 
charged. 

For Jack and his lads it has all, so 
Ear, been too good to he true. 


* 

«? 

' - • • -'CO- 


/ : Y~ . ; 

t * f •• 




f 




# 

- • r 

\4Ts ■. 


Goalkeeper Pat Bonner hopes his dejection in the Mexico game will be forgotten as Ireland advance 


Italy reshuffle for decisive 
Group E clash with Mexico 


Injury-weakened Italy face a 
most-win test against Mexico 
today while Ireland battle Norway 
to unlock Group E, the World 
Cup’s most closely contested 
first-round group (see story left). 

“It will be a game of life or 
death,” says veteran Mexican 
striker Hugo Sanchez, who 
describes the Italians as a 

powerful team with “a beautiful 
soccer history.” 

The Italians have reshuffled 
their tram after Injuries to 
defenders Paolo Mddtad and team 
captain Franco Barest. In 

addition, goalkeeper Gtanluca 
Pagtiuca was suspended for two 
games after being ejected from 
last Thursday’s game against 
Norway. 

Bares! may be out for the rest 
of the tournament after 
arthroscopic su rgery to remove 
cartilage from his right kneecap. 
Alessandro Costacorta will replace 
him as sweeper and Loigi Apolloni 
will play center-half. 

Maktini, nursing a sprained 
right ankle, is doubtful for the - 
game. If he doesn’t start, Roberto 1 
Baggio will captain Italy. Baggio, 

considered Italy's most 

Imaginative player and the key 
to tile side’s attack, was 
substituted in the game against 
Norway and felled to impress 
against Ireland. 

Mexico’s Luis Alberto Alves 
Isn’t worried that Mexico has 
never beaten Italy to World Cup 
play. “History is for museums," 
be said. 

Unfancied Saudis 
still confident 

Holland, a team fall of stars, were 
mightily tended. Saudi Arabia, 
contesting their first WotM Cup 
finals, were not. 

Yet with two Group F matches 
re mainin g - Morocco vs Holland 
and Belgium vs the Saudis, both 
tomorrow - Sarafi Arabia may 
have a fractionally better chance 
than Holland of making the 
second round. 

Belgium leads the group with 
six points. Holland and the Saadis 
have three each, and the same 
goal difference. But the Saudis 
lead Holland on goals scored by 
three to two. 

Saudi nddfUMer Fuad Amfa 
predicts that bis team win beat 
the Belgians. “We’re going to 
win," said Amin, who scored the 
winner in Saturday’s 2-1 victory 
over Morocco and, the team's only 
goal In their 2-1 defeat by Holland. 

“We represent Saudi soccer and 
tbe whole Arab world. God 
willing, the next game wffl be 
a great victory-” 

A draw against the Saudis 


would clinch first place in Group 
F for Belgium, but their coach, 
Paul Van Efimst, said the team 
would be playing to win. 

Romanian star out 
for second round 

Romanian striker Florin 
Radncfofa, who scored two goals 
to hts team’s victory over 
Colombia, will ntiss the second 
round after picking up Us second 

yellow card in the match against 

the US on Sunday. 

Hadndohz was penalised for 
challenging US defender Marcelo 
Balboa. Romania beat the US to 
win Group A- Their second-round 
match next Sunday will be against 
tto third-place team from Group 
C, D or E. 

Bucharest is agog. Many 
celebrants in the Romanian 
capital said that the win against 
the US was a tonic for a country 
plagued by problems as it makes 
the transfannatiou to a market 
economy. • 

“This is a joy for the Romanian ! 
people,” said unemployed 
technician Barbu Comanicaru, 

47. “I don’t even care that 1 don’t 
have a job.” 

Cameroon seek 
face-saving win 

Cameroon and Russia, both 
stricken by player rebelHans, need 
face-saving Group B wins today. 
Unfortunately, they are playing 
each other. 

Cameroon- only one potnt so 
far in a group that also includes 
Brazil and Sweden - have a 
chance of qualifying for the 
second round tt fliey beat Russia 
to San Francisco. 

Russia - without a point - have 
only a theoretical chance of 
advancing but want a win to 
restore their battered dignity. 

“ft will be very bard against 
the Russians." said Cameroon 
coach Henri MlcheL “But if we 
set our own troubles aside, I think 
we can win,” he said, referring 
to a continuing squabble between 


CROUP A 


P 

W 

D 

L 

Pts 

Romania 

3 

2 

0 

i 

0 

Swttmtmd 

3 

1 

1 

i 

4 

USA 

3 

1 

1 

i 

4 

Cotomtfa 

3 

1 

0 

2 

3 

QROUPS 

P 

W 

0 

L 

Pi* 

Brad 

2 

2 

0. 

a 

0 

Sweden 

2 

1 

1 

a 

4 

Cameroon 

2 

0 

1 

i 

1 

Russia 

2 

0 

0 

2 

D 

GROUP C 


P 

w 

D 

L 

P to 

Germany 

2 

1 

1 

0 

4 

Sprfn 

2 

a 

2 

0 

2 

SJftma 

2 

o 

2 

a 

2 

BoMa 

2 

0 

1 

1 

1 

GROUP D 

P 

w 

D 

L 

Pta 

Argentina 

2 

2 

a 

0 

B 

Bktigsria 

2 

1 

a 

1 

3 

Nigeria 

2 

1 

a 

1 

3 

Greece 

2 

0 

a 

2 

0 

GROUP E 

P 

w 

D 

L 

Pts 

Mexico 

2 

1 

0 

1 

3 

Ireland 

2 

1 

0 - 

1 

3 

My 

2 

1 

0 

1 

3 

Norway 

2 

1 

0 

1 

3 

GROUP F 

P 

w 

0 

L 

Pis 

Belgium 

2 

2 

0 

0 

0 

Saudi Arabia 

2 

1 

0 

1 

3 

Hotisnd 

2 

1 

0 

1 

3 

Morocco 

2 

0 

0 

2 

0 


Cameroon players and their 
soecerfederation over unpaid 
wages. Cameroon’s goalkeeper, 
JosepteAntotne Bell, the reported 
leader of the players’ rebellion, 
has said he to quitting. 

Greek fans 
uncompromising 

Greece has been stunned by its 
team’s second consecutive World. 
Cup loss, suffered when Bulgaria 
trounced the Greek side 4-0 fa 
Group D. 

“Greek national team shame 
on you," the Athens afternoon 
daily To Nea said in a hanner 
headline, accompanied by a 
half-page picture showing fens 
at an Athens coffee shop making 
obscene gestures at a television 
set 

Other papers, television and 
radio were much more harsh to 
their criticism of the team and 
its coach, Alketas Panagoulias. 
“The people are enraged,” the 


daily Elsflheros Typos said. 

■ Remaining first-round sch e d u le 


Date 

droop Verna 

Ttare* 

Match 

Today 

E 

Now Joreay 

SOOpm 

Intend vn Norway 


E 

wawwigron 

030pm 

Italy vs Mexico 


B . 

San Fmnctxo 

aoopm 

Russia vs Cameroon 


B 

Detroit 

9.00pm 

Bred ws Sweden 

Tomorrow 

F 

Orlando 

5130pm 

Morocco YsHoSand 


F 

Washington 

530pm 

Baigum us S. Arabia 

mure sore 

D 

Boatan 

12J30em 

Greece v* Nigeria 


D 

Dates 

1230am 

Argentina vs Bulgwta 


-British Sumner Tine 

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stags. Jiiy 2-a Tha quartar-firate wfl be played on the mutond of July 9-10, hi Boston, Dotes, 
Nsw Jersey and San Fkandacoe the sente cm Wednesday, July 13 (Now Jenny and Loa 
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an 




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For farther information caB BiO Wright on (443 81 754 431 A 


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FINANCIAL TIMES TUESDAY JUNE 28 1994 


life's* 


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House may force agency to abandon $30bn project 

Nasa space station at risk 


NEWS: THE AMERICAS 


By Jeremy Kahn 
in Washington . 

The Bouse of Representatives 
wild this week move to fierce 
toe National Aeronautics and 
Space Administration to aban- 
don its 9301 hi C£lS-3hn) space 
station project. 

'The project last year sur- 
rivedby a stogie vote to the 
House. The Clinton administra- 
tion is predicting a more com- 
fortable margin tM» year, but 
congressional opponents rinim 
they have the votes to kill the 
project outright. . . 

The House appropriations 
sub-committee Has proposed 
cute of $240m toNasa’s budget 
for fiscal 1995, hut has left the 
spdce station budget frrfan-t at 
around S2.ibn. Nasa -has 
requested a total budget of 
$143bn- for 1995. 

The sub-committee is inst e ad 
proposing cote of ja27in to the 
space shuttle programme, 
Nasa 'a .manned space Sight 
project. The shuttle will fly 
eight .missions next year 
instead of the scheduled nine, 
and has postponed or aban- 
doned plans to upgrade same 
its hardware. 

However, in the House vote, 
which, could take place as early, 
as today. Opponents to the sta- 
tion are likely to introduce an 
amendment to kill the planned 
space station completely. 

The amended bDl would then 
go to the Senate, where within 
the next two weeks, the Senate 
subcommittee, in its parallel 
consideration, is likely to rec- 
ommend cute of up to $600m in 
Nasa’s budget 
Mr Daniel Goldin, Nasa 
administrator, whose agency 
has taken a 30 per cent budget 
cut over the past two years, 
this month pleaded with sena- 
tors not to slash the Nasa bud- 
get again. 

But because the quirky Con- 
gressional appropriations pro- 
cess forces Nasa to compete for 
funds with the Department of 
Veterans’ Affairs and the 
Department of Housing and 
Urban Development, both of 
which have large budgetary 
mandates, Nasa will probably 
. have to bear a heavy burden. 

Any reconciliation of the 
amendment to abandon the 
station from the House and the 
proposed cute of 9600m from 
the Senate would be likely to 

thpqnrf of the xpam pta- 

tion. 

“I don’t knew how to logi- 
cally cut and mamtam the bal- 
ance, 1 ’ Mr Goldin said, when 
pressed by the senators on. how 
Nasa would deal with a worst- 
case scenario budget of - 



Offer to quit boosts 
Carpizo’s standing 

Mexican minister is back, stronger than ever, 
writes Damian Fraser. But who was he criticising? 





Nuafeara space ahuftlM such as tiita may alM be Masted away 


913.7bxL Tf we have to go 
below [$14bn], we could lose 
either a space station or we 
could lose a major science mis- 
sion." 

Many on Capitol fflU think 
losing the space -station is 
exactly what Nasa needs. 

A report issued in March by 
the Congressional Budget 
Office - Congress’s indepen- 
dent budget authority - eon-., 
eluded that Nasa would be 
unahlft to keep tiie space sta- 
tion within budget, and 
another one issued last year by- 
the General Accounting Office, 
the government audit agency, 
reported that Nasa had under 


estimated costs on 25 of its 29 
large projects. 

There is also an “anti-big sci- 
ence” atmosphere in Congress, 
where many believe the appli- 
cations from projects such as 
the space station are too far 
removed from everyday reality 
“This space station wflLcost 
far more than, its sticker price 
and will continue to <Hsplace 
, . more cost-effective spp.ee . 

research,” said K^xesentative 
Dick Zimmer, a New Jersey 
Republican who will lead the 
charge against the statical 
along with Representative Tim- 
. otby Roomer, an Indiana Dem- 
ocrat “It’s a case of too much 


money for not enough sci- 
ence.” 

The station will study the 
effect pf gravity on humans, to 
. enable further space explora- 
tion, and will undertake a 
- number of microbiological and 
medical experiments, with the 
aim of producing new vacc 
toes. 

The station has so far cost 
, around JlObn-^nd legislators 
report Nasa’s public relations 
machine is in high gear as the 
agency attempts to save the 
space station from being 
blasted away before it ever 
gets a chance to blast 

nffl 


I Mr Jorge Car- 

pizo, Mexico's 
interior minis- 
ter, conld 
hardly have 
predicted the 
outcome. But 
in deciding to 
resign from Us 
post on Friday, 
and .. then 
changing his 
mind under 

MEXICAN pressure on 

ELECTIONS Sunday, he 

appears to have 

bolstered bis position in the 
government 

He came back to the Job after 
most of the political parties 
and scores of non-partisan 
groups pleaded with him to 
stay. President Carlos Safinas 
spent two days in talks with 
him in a finally successful 
effort to make him withdraw 
his resignation. 

The wide show of support 
has given Mr Carpizo, 
respected for fate independence 
and integrity, more authority 
than other members of the gov- 
ernment Hardline factions' In 
both the governing and the 
opposition parties may find it 
more difficult to challenge 
him, or the Electoral Institute 
♦hat he presides over, in com- 
ing rnmirtw 

Still, tiie alarm that greeted 
Mr Carpizo’s initial resignation ! 
has underlined the fragile 1 
political situation in Mexico, 

amj tiin tpwiparamantai natu re 

of the man who will play the 
key role in overseeing the elec- 
tions. That so much seemed to 
depend an Mr Carpizo and his 
willingness to stay reflects how 
much further the government 
has to go in bufldtog credibil- 
ity for the electoral institu- 
tions. 

The attempted resignation 
has further called attention to 
the division to the ruling party 
between the reformists and 
hardliners, which may yet sur- 
face again before or after the 
election. 

While Mr Carpizo was ambig- 
uous in giving reasons for his 
resignation, there seems tittle 
•doubt that frustration with ele- 
{uzusnfeqf tbegovexning Jngxtu- 
ttonal Revolutionary party 
(PRD played a part . 

Mr Carpizo was appointed 
interior mmigtw to January, 10 
days after the Zapatista revolt 
in the state of Chiapas, replac- 
ing the harditoe Mr Jose Patro- 


cinio Gonzalez Garrido. A for- 
mer rector of the National Uni- 
versity, head of the National 
Human Rights Commission 
and attorney-general, he 
revealed earlier this year that 
he is not even a member of the 
ruling party. 

Within weeks of his appoint- 
ment Mr Carpizo helped per- 
suade all H»« main political 
parties to accept far-reaching 
democratic reforms, ending the 
ruling party's control of the 
electoral apparatus and placing 
stricter limits on campaign 
spending. The agreement 
raised hopes that the election 
would be relatively free of 
fraud and that the result would 
be endorsed by the opposition 
parties. 

Foreign investment to Mexico 
reached $6.45bn to the first 
five months oT the year, an 
increase of 42.7 per cent over 
the same period a year earlier, 
accenting to the Trade Minis- 
try, Reuter reports from 
MCxico City. 

The figure took total invest- 
ment during the administra- 
tion of President Carlos Sali- 
nas de Gortari, who took office 
to December 1988, to |4S.19bn 
- or twice the target fa: the 
six-year term of $24bn - the 
ministry said to its monthly 
report 

But when resigning on Fri-‘ 
day, Mr Carpizo denounced 
. those who were obstructing his 
efforts to implement these 
democratic reforms. 

The uproar that followed his 
resignation reflected fears that 
the progress made since Janu- 
ary would unravel, and Mexico 
would face a turbulent and vio- 
lent presidential election like 
the one experienced in 1968, 
when the opposition took to 
the streets after reports of 
widespread fraud. 

to his resignation letter Mr 
Carpizo said he had found 
“numerous people of the most 
^diverse sectors" of Mexican 
politics “who were only fight- 
ing lor their interests or of 
their group without consider- 
ing what is good for Mexico". 
He said: “I have urged society 
. and- the go v e rnment that we all 
work together exclusively for 
the truth; the only response 
has been more lies, more cat 
wmniiw and more hypocrisy.” 

The minister reserved his 
most bitter comments for one 
political party which he did 


not name. “In my job 1 prom- 
ised to be impartial in my rela- 
tion all the political parties” he 


*T am beginning not to be 
respected by one of the parties, 
given that I am not and cannot 
be to agreement with multiple 
acts of some of the sectors of 
this party.” 

The government has insisted 
that Mr Carpizo was referring 
to the leftist opposition Party 
of Democratic Revolution, 
which has criticised demo- 
cratic reforms as insufficient, 
and with which Mr Carpizo has 
been fighting. The PRD has 
demanded another audit of 
electoral rolls, a n d a reduced 
role for Mr Carpizo to the elec- 
tions. 

But leftist politicians and 
many analysts believe Mr Car- 
pfa y> was all uding to the gov- 
erning PRI, arguing that Mr 
Carpizo would not resign 
because of a difference with 
the opposition, since be has no 
obligation to be In agreement 
with it 

Mr Carpizo’s struggle with 
certain sectors of the PRI is no 
secret The Interim 1 minister 
has reportedly threatened to 
resign three times this year 
because of opposition within 
the PRI to implementation of 
democratic reforms. Since the 
assassination of Mr Lute Don- 
aldo Colosio, former presiden- 
tial candidate of the PRI, the 
influence of the hardline fac- 
tion in the PRI has risen, possi- 
bly exacerbating tarodfma with 
Mr Carpizo. 

The conservative faction 
appear to enjoy the backing of 
Mr Ernesto Zedillo, the PRTs 
new presidential candidate. Mr 
Zedillo has allied himself with 
many of the party's old-style 
politicians such as Mr Cazios 
Hank Gonzalez, the powerful 
agriculture minister, in an 
effort to shore up his support 
In the party. 

Recently, Mr Carpizo has 
become more isolated in the 
government Last month Mr 
Diego ValadAs, the reform- 
minded attorney-general close 
to Mr Carpizo, was replaced by 
a little-known politician with 
ties to Mr Hank Gonzalez. Ten 
days ago Mr Manuel Camacho, 
the conciliatory peace commis- 
sioner in Chiapas, resigned, cit- 
ing differences with Mr Zedillo. 

Now, however, Mr Carpizo is 
in the driving seat. It remains 
to be seen what he can do with 
his power. 


Arrest of bank executives renews Ecuador drugs fears 


By Raymond CoSttki Quito 

Ecuador has been the one Andean 
country to enjoy relative immunity 
from the attention of drugs traffick- 
ers. But the arrest last week erf top 
executives of the Banco de loe Andes 
on money laundering charges has 
renewed concern that the country Is 
becoming a centre for drag traffick- 
ers seeking to legitimise profits. 

Police assert that the -bank's gen- 
eral manager, retired rear admiral 
Guillermo Buefias, as well as other 
executives, wofe involved in laun- 
dering money from the i nfamo us 
Ecuadorean drug traffickers, Reyes 


Magas. Four executives have been 
arrested and arrest warrants have 
hem issued for IT others. 

Funds were allegedly laundered in 
the Banco delos Andes - a medtran- 
ri2ed retail bank — and its offshore 
operations in the Caribbean, as well 
as to the .military-owned Banco 

Rumlfiahui. 

The allegations are the second 
stage of a case first imeoverad in 
December 1992, which has already 
led to the dismissal of the general 
manager of Banco Rmndfiahlli and 
the subsequent capture of gang 
leader Jorge Hugo Reyes. 

As a former military official. 


Duefias is likely to face trial before 
the country’s supreme court, to their 
defence, bank officials said the alle- 
gations covered no cash, but ably 
cheques and money transfers from, 
renowned international banks 
Including Swiss Bank Corporation, 
Dresdner Bank New York, Deutsche 
Ra yiir, citibank International, Bayer- 
iscfae Vereinsbank, and Brown 
Brothers Harriman. 

Despite continuing uncertainty * 
about the extent of the scandal, 
investors and traders in the finan- 
cial markets have remained calm. 
The superintendent . of banks, 
Ricardo Mufioz, assured the 170,000 


*• 

customers of the Banco de Us Afides 
that the bank’s liquidity was hot 
affected by the arrests. 1 

Accounts to Ecuador, the US 'and 
Europe allegedly containing drfcgs 
funds, and the personal assets of me 
accused bank officials have been fro- 
zen tor some time. A recent agree- 
ment between the. US and Ecuador 
allows confiscated assets to !be 
redistributed between the two coun- 
tries. 

Yet the latest scandal raises ques- 
tions about controls within Ecua- 
dor’s financial system. Situated 
between Latin America’s largest 
drug-producing and exporting coun- 


tries, Peru and Colombia respec- 
tively, international observers fear 
Ecuador could turn into a money- 
laundering haven for drug dealers. 

Government officials Insist that 
the existing legal framework is suffi- 
cient to control money4aundering. 
Mr Joed Rurralde Arteaga, an official 
at the Superintendency of Banks, 
says “The problem is not that we 
draft- have adequate laws and regu- 
lations, rather itls a Jack of enforce- 
ment that permits money-laundering 
to tife country.” 

r He adds that the recently 
approved financial sector law grants 
the police authority to search sus- 


pect financial institutions and con- 
fiscate confidential documents. Yet 
critics say drug money enters the 
country unchecked through any 
number of illegal channels. Offshore 
banking operations, artisan gold 
trade, and falsified export/import 
invoicing are some of the most com- 
mon ways to launder money, besides 
cash purchases. 

• Mr Alberto Acosta, an economic 
analyst, estimates the amount of 
money laundered in Ecuador to be 
around f400m annually. "Only the 
flow of narco-dollars can explain the 
great consumption of luxury goods 
to a country in recession,” he says. 


California 
insurers 
meet over 
quakes 

By Richard Water* 

In Now York 

Governor Pete Wilson of 
California was yesterday due 
to meet representatives from 
some of the country's biggest 
insurers to discuss the gather- 
ing crisis over earthquake 
Insurance in the state. 

The meeting was prompted 
In part by a decision two 
weeks ago by Farmers, the Los 
Angeles-based insurer owned 
by the UK’s BAT, to stop writ- 
ing new homeowners’ insur- 
ance policies in the state. 

Under Californian insurance 
rules, earthquake cover has to 
be made available on all home- 
owners* policies. Farmers, 
which puts Its losses from the 
I January earthquake at more 
than $lbn (£65 8m), said it 
1 wasted to reduce Its exposure 
to such catastrophes. 

Twentieth Century, another 
of the state's biggest insurers, 
has also stopped offering cover 
since the January earthquake, 
which Is estimated to have 
east the insurance industry 
f6.6bn. Its move was part of a 
plan agreed with Mr John 
Garamendi, the state's insur- 
ance commissioner, to return 
It to financial health. 

The meeting with insurers 
follows a move by Mr Gara- 
mendl last week to extend the 
so-called Flair Plan - an insur- 
ance scheme adopted after 
brush fires in Southern Calif- 
ornia rendered many homes 
uninsurable - to homes 
exposed to earthquake risk. 

Under the Fair Plan arrange- 
ment, uninsured risks would 
be pooled, and spread between 
the insurers according to their 
. market share in the state. 

Venezuela 
may help 
insurers 

By Joseph Mann in Caracas 

The Venezuelan government 
may have to in ter vene to help 
local insurance companies hit 
by. the country's banking cri- 
sis, according to Mr Konrad 
Fbrgau, the Venezuelan super- 
intendent of insurance. 

Mr Firgan said yesterday 
that some of the frozen depos- 
its held in seven commercial 
banks, closed by the govern- 
ment on June 14, held the 
technical reserves oftosarance 
companies. As a result he said, 
at least two insurance compa- 
nies could face state interval- - 
tion. 

Insurance companies are 
obliged by law to maintain 40 
per cent of their premiums as 
“technical reserves”. 

The banks closed down by 
the government were Ama- 
zonas, Bancor, Bartons, Con- 
struedoa, La Guafrs, Mara- 
caibo and Metropo H tano, all of 
which were controlled by pri- 
vate investors. 

Some of them were the cen- 
tral organisations in itimm-te i 
groups which Includ ed insur- 
ance companies. The govern- 
ment also shut down an indus- 
trial finance company, Ffveca. 


Brazil expected 
to limit issue 
of new currency 


By Angus Foster in SSo Paulo 

Brazil's central bank is likely 
to be limited to issuing $9bn 
(£5Abn) of the country's new 
currency, the real, between its 
launch on Friday and April 
next year. , ^ 

The limit is one of the key 
mechanisms the government 
hopes will prevent inflation 
creeping Into the new cur- 
rency. . 

In the past, governments 
have relied on printing 
increasing amounts of cur- 
rency to pay debts, leading to 

infiationary spirals. 

The government Is still fin- 
alising the details of the cur- 
rency launch, wWch It wffl 
announce later this week. 

However, it has already said 
S^Vai be linked at par- 
ity to the US dollar for an 

-indetenninate^time. 

It fa also experted that fte 

$9bn limit, as well as interim 

three-monthly targ ets, ^ 

set in law and monitored &y a 
strengthened National Mone- 
^O^kahodyofjeuter 

Ministry of Finance and cen- 
tral bank officials, 
crai — * monetary base 


which .has semi the value .of 
notes and coins decline 
steadily in dollar terms. 

However, if inflation 
when the new currency Is 
introduced, as is widely expec- 
ted, the dollar value of the 
notes and coins to circulation 
is likely to be far-greater than 
at present. 

“The limits are difficult 
because they cant be -too tight 
nor too lax, otherwise you run 
into credibility problems, 
according to Mr Pedro Malan, 
central bank president 

To allow for short-term 
problems, the law is fikely to 
let the bank relax issue limits 
for one-month periods. How 
ever, any breach of the limits 
would have to be corrected 
later. 

The law creating the new 
currency is also likely to con- 
tain a reference to gradually 
inc reasing the autonomy of 
the central bank, a move it has 
been seeking for some 
months. 

However, it Is unclear how 
substantial these reforms 
be, especially since the often 
populist President Xtamar 
Franco Is suspidfa 8 of the 



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NEWS: INTERNATIONAL 

Early end to financial rand unlikely > 

S Africa’s finance minister talks to Tony Hawkins and Mark Suzman 

, i — im i - mi . • — — — *&■ accepted that's 


Constitutional conference opens 

Abacha vows to end 
Nigerian military rule 


By Paul Adams In Abuja 

General Sard Abacha, Nigeria's 
bead of state, opened the coun- 
try’s constitutional conference 
yesterday with, a pledge to end 
military rale once his regime 
bad found the structure for 
lasting democracy. He refused, 
however, to set a date for quit- 
ting office until after the four* 
m^nth conference. 

Doubts remain whether the 
360 delegates at the conference 
have the power to shape 
Nigeria’s political future. Gen 
■Aharfia described his govern* 
meat's role In the conference 
as “fadHtatars". 

Mr Adolphus Kabiri-Whyte, 
the chairman of the delegates, 
took a more optimistic view of 
their powers at the opening 
session whoa he thanked Gen 
Abacha for giving them a free 

hand. . 

The outcome of the confer- 
ence will be summarised in 
November in a report by a gov- 
ernment-appointed. commission 

which win be the basis of 


next year’s political pro* 
gramme. 

Previous constitutional con- 
ferences in Nigeria have been 
the springboard for political 
parties and careers. 

The list of delegates of whom 
SO, including the conference 
chairman, are nominated by 
the government, contains 
many prominent figures from 
previous regimes. They include 
Mr Shehu Yar’Adua, a leading 
candidate for ’the presidency 
two years ago, former 
vice-president Mr Ales 
Ekwueme, and former leader of 
the rebel Biafran state, Mr 
Rmaka Qjukwu. 

The most surprising come- 
back is by Mr Umaru Dflcko, 
who returned from exile in 
Britain on Sunday. Mr Dikko is 
a former minister of transport, 
whom a past military regime 
tried to abduct from Britain for 
trial. 

Although he would not give 
a timetable. Gen Abacha was 
specific about ending military 
rule. 


“We are aware that it is nei- 
ther in our personal interest 
nor that of the nation to per- 
petuate ourselves in power. 
Nothing could be further from 
our plans." 

It should be dear even to bis 
detractors, said Gen Abacha. 
that “once political parties 
begin to emerge from the first 
quarter of 1995, the next logical 
process- would be activities 
leading to elections into the 
various tiers of governance 
which t he . constitutional con- 
ference will recommend". 

Gen Abacha’s speech seemed 
to rule out significant changes 
to the federal structure of 
Nigeria and made no reference 
to renewed protests ova: the 
annulment of the presidential 
election which was won by 
Mr Moshood Abiola last 
June. 

Mr Abiola has been in deten- 
tion at an unknown location 
since last week following his 
demands that the military 
make way for him to became 
president 


Taiwan pledges to ease 
curbs on foreign banks 


By Lain Tyson in Taipei 

Taiwan has promised to relax 
controls on foreign banks’ 
operations on the island to a 
bid to join the fixture World 
Trade Organisation and 
become a regional financial 
centre, but bankers cautioned 
it was unlikely efemg as 
would precipitate an tofinx of 
foreign, ban Ire 

A Finance Ministry official 
yesterday said, that regulations 
would be revised to eliminate 
the limit on the number of for- 
eign banka allowed to set up 
branches. At present, a maxi- 
mum of three hank* may open 
a first branch each year. 

Restrictions on the number 
of branches foreign banka may 
establish to each city will also 
be lifted, said Mr Sean nhm, 


deputy director of the Finance 
Ministry’s monetary affair s 
bureau. 

Taipei-based foreign bankers 
greeted the announcement 
with guarded optimism, 
describing the moves as an 
effort to make Taiwan more 
“user-friendly”. 

They cautioned, however, 
that the aiithnrftiaa had boon 
minting out mnfliriiTig si gnals 
in recent weeks, promising to 
relax some regulations while 
simultaneously hinting at 
tightening others. For 
instance, it is widely believed 
that the minimum capi tal 
requirement for foreign h anks 
to set up a branch will soon be 
tripled to $9m (£5Bm). 

The head of a US bank dis- 
missed the planned relaxation 
measures as “form over sub- 


stance” “They're twitching lit- 
tle buttons here and there, but 
thi«i isn’t going to make setting 
up a branch in Taiwan cue- 
tenth as easy aa it is m Hong 
Kong," he said 
In any case, many bankers 
view the local market as over- 
banked. Sixteen new privately- 
owned banks opened in 1992 
and, as a result competition 
for business has become fero- 
cious. “There are a lot of crazy 
bankers in this town,” «»i d the 
head of a North American 
bank’s Taipei branch. 

Few foreign banks are expec- 
ted to seek mul ti ple brandies 
across the island, as none 
apart from Citibank seriously 
targets the consumer market 
At present 37 foreign bank 
have branches and 22 have rep- 
resentative offices to Taiwan. 


I n the clearest signal of 
exchange control policy 
since the inception of 
South Africa’s government of 
national unity, the country's 

Wnani-p mirrigfpr has arid that 

tine financial rand, the coun- 
try’s investment currency, is 
not likely to be abolished “for 
some time". 

There has been widespread 
speculation that the financial 
rand might be discontinued 
later this year. This would be a 
significant step towards the 
abolition of exchange controls; 
their existence is cited by 
potential foreign investors as 
one of their main copcmus 
In an interview with the 
Financial Times, Mr Derek 
Keys, reappointed as finance 
minis ter last wnnth by Presi- 
dent Nelson ManHaia, acknowl- 
edged the pressure for change: 
“I don’t want to defend the 
existing situation. I think it’s 
awful." 

But, at the same time, beset 
out three preconditions which 
seem to rule out the move dim- 
ing 1994. Interviewed shortly 
after last week’s budget, Mr 
Keys said it would need a dear 
international and domestic 
vote of confidence In tbe new 
government of national unity , 
an understanding with the 
trade imwma an the need for 
wage restr aint and hi g her for- 
eign exchange reserves, which 
at present anvwmt-. to around 
about six weeks' import cover. 

Ur Keys was confident about 
South Africa's eoonmili* pros- 
pects, forecasting 3 per cent 
g r o w t h in gross domestic prod- 
uct this year and inflation at 
no more than 7J5 per cent. 

Responding to questions 
about the financial rand, how- 


Keys: “I don’t want to defend the existing foreign exdhange] situation. I think it*sawtaL’ , A^*iM«» 


ever, Mr Keys was remarkably 
frank. “If you had told me 
when I took the job of minister 
of niwirfi Bmt two and g quar- 
ter years later I would be sit- 
ting with exactly the same pol- 
icy on foreign oM T i ar ip fKajt i 
inherited, I would have been 
disgusted. I have not just not 
made progress. I have actually 


An ideal scenario would be 
that the reserves build up at 
the same rate as the specula- 
tion increases about the end of 
h» Ftorand, loading to a point 
at which both of than have 
developed sufficient momen- 
tum that one can do something 
for which the markets have 
really prepared themselves. 
But if it doesn’t happen and we 


have speculation increasing 
while the reserves don't go up. 
then this could possibly create 
a nriiKw crisis. 

“But-even, that could be. bet- 
ter than what we’ve got We’ve 
bad this s yste m now for a very 
long time. People are abso- 
lutely fed up with it” 

One of tbe most critical fac- 
tors was confidence in South 
Africa, said Mr Keys: “But we 
don’t have an rnitcbmiting vote 
of confidence at present Not 
just as for as tbe outside world 
is. concerned - but as for as 
South Africans themselves are 
concerned, building up their 
assets to this country and feel- 
ing secure about it Thai in my 
opinion, the [level of] reserves 
wouldn’t be critical, because 


you take the i3*an«> that the 
act of doing away with it was 
itself a confidence-creating act, 
«nH you get great benefit from 
that. Bat I just haven’t 
received that message yet” 

Mr Keys ruled out negotia- 
ting an International Monetary 
Fund loan to advance of abol- 
ishing the financial rand, and 
which could be held ready to 
boost reserves if necessary. 
“No IMF loan is going to save 
you if you get confidence read- 
ing wrong," said the minister. 

Some understanding on wage 
restraint would also be neces- 
sary, be said. 1 think a com- 
pact as such is not on the 
cards, but 1 think a tacit never- 
expressed understanding is 
possible.” 


Mr Keys accepted that sev. 
eral other African countries 
had been able to liberalise 
exchange controls: - South 
Africa's circumstances, he 
argued, were very different - 

For about 50 years, said the 
minister. South African resi- 
dents had been unable to diver- 
sify their assets. "Yon have 
wealthy residents bore in com- 
viand of large pools of savings. 
You have institutions whose 
entire management cadre has 
longed for this opportunity to 
diversify worldwide. 

“So for reasons totally other 
«i«n those of panic or usual 
capital flight, you have a large 
pool of capital that longs to 
enter the world. 

“Now that’s One. All sorts of 
good results would flow from 
that, including that we would 
then have plenty of shares 
available for the investors who 
wanted to come in, because 
they complain because they 
can’t get decent amounts of SA 

shares.” 

But there was a “bridging 
problem,” said tbe minister: “A 
lot will go before a lot come in. 
And my advisers tall me that 
in that first phase interest 
rates here could go to 30 per 
cent I wouldn't like to see this 
government feeing tbe conse- 
quences of interest rates going 
to 30 per cent. I have a duty to 
prevent that" 

Mr Keys continued: "This is 
a government of national 
unity, operating on a basis of 
consensus. We’ve marked out 
enough consensus areas. To 
try flpd farfndft taking « funda - 
mentafiy new approach to the 
foreign exchange situation is 
not impossible, but its going to 
take some time." 


ILO move on part-timers and mine safety 


By David Goodiart, 

Labour Ef&tor 

The 75th an ni v e rs ar y congress of the 
International Labour Organisation in 
Geneva ended at the weekend having 
passed two new labour conven- 
tions -on psrttime work and health 
ami safety to mines — ana established a 
working party on the co n te n tious issue 
of a world social clause. 

The working party, set up by Mr 
MmImI Hsmenne, the ILO general sec- 
retary, will report by November and 


hand its finding to the World Trade 
Organisation, the successor to the Gen- 
eral Agreement on Tariffs and Trade, 
which Is due to discuss the link 
between trade and social standards 
next year. The wor k i n g party will also 
produce a report an the subject for 
next year's United Nations social sum- 
mit in Copenhagen. 

Against the wishes of representatives 
of ILO employers and some govern- 
ments, to<*toifrrtg Britain, the organisa- 
tion passed a convention for 

equal rights for part-time workers. 


The convention also calls for pro rata 
equal pay for parttimers. “Measures 
appropriate to national law and prac- 
tice shall be taken to ensure that 
part-time workers do not, solely 
because they work part-time, receive a 
basic wage which, calculated propor- 
tionately on an hourly, performance-re- 
lated, or piece-rate bads, is lower than 
the basic wage of comparable fulltime 
workers", it states. 

The congress took one small de-regn- 
latory step by revising the convention 
on private employment agencies. 


The convention on health and safety 
to urines calls on employers to ensure 
that all mines are designed and 
equipped to secure safety. 

Where workers are exposed to physi- 
cal, chemical or bio logical h azards, 
they should be frilly informed of the 
hazards and the employer most provide 
suitable p rot e cti v e dotting. 

Every employer is also called upon to 
prepare an emergency response plan, 
specific to each mine, “for reasonably 
foreseeable industrial and natural 
disasters”. 


hr.m 

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buy the FT on Thursday, June 30. 

In It you'll find the Financial Times Survey of Executive Cars - an -essential 
guide to the latest marques. 

It will look at the plans of the leading manufacturers as markets emerge from 
recession, at company car policies and at the impact of changes In the tax regime. 

So, if you’re looking to buy a vehicle, it wifi put you firmly in the driving seat. 

FT Survey of Executive Cars. 


End to Hong Kong talks delayed 


By Sbnon Hoberton 
kt Hong Kong 

British and Chinese diplomats 
negotiating the future of mili- 
tary land in Hong Kong have 
for the second time postponed 
conclusion of their talks in an 
attempt to reach an agreement. 

Mr Guo Fangmin, China’s 
chief representative to the 
Joint Liaison Group (JLG), a 
bilateral group which deals 
with Hong Kang's reversion to 
China to 1997, said the 29th 


plenary of the JLG .would 
reconvene on Thursday. 

Tomorrow Hong Kong's Leg- 
islative Council votes on Gov- 
ernor Chris Patten’s democ- 
racy legislation. Miss Emily 
Lau, an activist for greater 
denocracy in Hong Kang, said 
China had delayed ma k i ng ’ a 
dpri <rfnn to tatter to intimidate 
legislators ahead of tomorrow's 
vote - expected to be dose ran. 

Last Thursday the JLG meet-, 
ing was suspe n d e d until yester- 
day in the hope of an agree- 


ment being produced. Both 
teams worked until early yes- 
terday morning on the terms of 
a deal which is exported to 
result in the Hong Kong gov- 
ernment b onding tire Chinese 
navy a new base, and refitting 
an unknown number of exist- 
ing British military bases for 
use by the People’s Liberation 
Army. . 

Mr Hugh Davies, his British 
counterpart, said: “There were 
still some issues in the defence 
lands portfolio which need to 


be sorted out.” It is understood 
that the two sides reached 
agreement yesterday and that 
it is being referred to Beijing 
for ratification. 

A sticking point was a Chi- 
nese demand that the UK gov- 
ernment guarantee completion 
of tiie naval base and refitting 
ctf military sites. It is under- 
stood a form of words which 
satisfies tiie Chinese but which 
does not commit tiie UK Trea- 
sury to pay for the work has 
been agreed. 


INTERNATIONAL ECONOMIC INDICATORS: MONEY AND FINANCE 


TOe table shows growth rates far 8» most vrideiy talwmd i 
nmkot yield. AM figures arm percentages. 


> of mow and brood money. « representative abort- and tano-tam Interest nH serin and an average aqrty 


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FINANCIAL. TIMER TUESDAY JUNE .28 1994 


NEWS: INTERNATIONAL 


Thai 

court 

acquits 

speculator 

By WWtom Barms in Bangkok 

Thailand’s Securities and 
Exchange Commission, the 
two-year-old stock market 
watchdog, received a setback 
yesterday when a local amt 
acquitted an influential 
speculator and 11 associates of 
ra m ping the share price of the 
Ba ng k o k Bank of Commerce in 
1992. 

The court ruled that the 
c o mm i ssion, in its first ever 
prosecution, had insufficient 
evidence to show that Mr s>yn g 
Watcharasrirong — known as 
Sia (tycoon) Song -and the 

other 11 acted in. conceit when 
they made an estimated Bt2hn 
(£52m) profit out of the 
spectacular rise in the {nice of 
Che troubled h ank ’s shares. 

Mr Rapee SucharttaknL SEC 
spokesman, said the 
commission would appeal 
against the verdict "all the 
way to the Supreme Court”. 

The SEC showed that most 
of the 12 investors worked 
from the same room, the s a m e 
telephone numbers, 
transferred large sums of 
money between themselves 
and bought blocks of shares in 
the Bangkok Bank of 
Commerce at or near the »wm 
time. On November 24, 1992 - 
six days after the SEC had filed 
c riminal charges against Mr 
Song and his 11 associates 

- the Bank, of Thailand said 
that the 12 people named in the 
charges had a combined 
investment portfolio worth 

The Thai judiciary - which 
survived a vigorously 
attempted revamp during the 
caretaker premiership of Mr 
Anand Panyarachim two years 
ago - has rarely found against 
well-connected members of the 

ftatahliahnwit 

Nevertheless, observers give 
the commission credit for 
getting such as case as far as it 
did; one of the 11 was the 
daughter of a forma leader of 
the Democrat party which 
leads the ruling coalition 
government 

Mr Mark Greenwood, 
managing <Hn«tnr of brokers 
Asia Equity, said: *11 shows 
they are willing to drag 
sof$e<35~'tofo court "Anyone 
engaged in questionable 
trading has to- consider that 
OK, maybe you’ll get off but 
maybe you wont" 

Mr Song is also named in all 
four of the SEC'S outstanding 
cases against speculators who 
allegedly cheated fee public by 
manipulating share prices in 
1992 and early 1992. 

The public prosecutor is 
preparing prosecutions in 
connection with the sharp 
movements in the shares of 
property company Krisda 
Mahanafcom and the Siam City 
Bank; the remaining two cases 

- involving the First City 
Investment and Rattana Real 
Estate -are stQl in the hands 
of fee police. 

Although the Thai stock 
market fell heavily yesterday 
because of concerns over the 
falling dollar, Mr Srlyan 
Fietersz, Smith New Court’s 
country representative, said: 
"Many retail investors will 
give a sigh of relief because it 
means tha t they are probably a 
little bit beyond the reach of 
fee SEC.” 



Tokyo set to pursue policy on defending $ 


Hfcno: signs of upturn 


By Gerard Baker fn Tokyo 

It could prove to be an 
expensive week for fee Bank of 
Japan. In its attempts to shore 
UP fee dollar, it has thrown an 
estimated $3bn worth of yen at 
the currency markets. 

So far the efforts have been 
fn vain fhg ffnanrfgf mar- 
kets increasingly expect a 
change of strategy to co- 
ordinated interest rate mea- 
sures by fee Group of Seven 
leading industrial countries, 
including a cat in Japanese 
interest rates. But Japan's 
monetary authorities are anx- 
ious to avoid a cut in borrow- 
ing costs and. for fee time 
bring at least, semi prepared 


to continue spending yen in 
the dollar's deftoce. 

The crisis came out of a dear 
sky last week just as the cen- 
tral bank, which implements 
policy under the watchful tute- 
lage of flu* Ministry of Finance,' 
was congratulating itself on 
steeling the economy out of 
recession. 

Since the last cut in the offi- 
cial discoant rate in September 
- to 175 per cent, its lowest 
ever - the bank’s governor, Mr 
Yasoshi Mleno, been under 
pressure for a further cut as 
the economy continued to stag- 
nate. But fee bank resisted the 
pressure, arguing that policy 
was sufficiently accommodat- 
ing to engineer a recovery. 


In the last month. - Mr 
Mieno's policy appeared to be 
vindicated by distinct signs of 
an upturn. Gross domestic 
product figures for the first 
quarter suggested the economy 
was at last recovering. A sus- 
tained rise in fee Nikkei aver- 
age pushed up asset prices and 
there were signs of a slight rise 
in consumption. Market senti- 
ment moved firmly in fo lfag 
wife the bank’s - there would 
be no cut in interest rates. 

But last week unwelcome 
foreign intervention blew the 
policy off coarse. The currency 
crisis puts three main pres- 
sures on Mr Mieno for a relax- 
ation of policy: 

• The high yen is hurting the 


real economy by making 
exports uncompetitive. Few 
economists believe fee mom- 
ent recovery could survive a 
yen/dollar rate above Y10Q for 
long, and companies are clam- 
ouring for relief 

• The bank's heavy selling of 
the yen has pumped liquidity 
into Japan's money markets, 
forcing down overnight call 
rates to around 2 per cent - 
just a quarter print above the 
official discount rate. In the 
past feat gap has been nearer 
half a paint, and the narrower 
spread an nfljHai rote 
cut more likely. 

• If intervention fails, Japan 
will be expected to participate 
in co-ordinated G7 monetary 


measures - a rise in US rates 
and cuts in Japanese and Ger- 
man borrowing costs. 

The bank’s reluctance to cut 
interest rates is based on more 
than just the usual central 
banker's fear of inflation. The 
lessons of monetary history 
suggest feat an interest rate 
cut too for, brought on by 
short-term pressures, can be 
costly. 

Apd thou gh inflation is vir- 
tually non-existent, the bank is 

acutely aware of fee dangers of 
taking its eye off fee bah: "The 
BoJ is anxious not to repeat 
the US experience.” says Mr 
Dick Beasan, senior economist 
at Janies Capri Pacific, "where 
a loose monetary policy for too 


long was partly responsible for 
the current global financial 
turbulence." 

So, for now at least, heavy 
central bank selling erf fee yen 
seems set to continue. The 
hank is outwardly confident 
feat fee crisis will pass, believ- 
ing that the economic funda- 
mentals, particularly a trade 
deficit that has begun to 
shrink, will push fee yen back 
wril beyond the YlOO level to 
the dollar. 

But if the markets’ desire to 
dump dollars becomes compul- 
sive, there will be a limit to the 
profligacy and the unpalatable 
choice between a strong yen 
and an interest rate cut will 
become unavoidable. 



By WDam Dawkins In Tokyo 

Japan’s two main opposition groups 
were floundering in their attempt to 
agree on a new gov er n m ent yester- 
day, so raising the -pcesEMUty feat 
the coatttton of Mr Tsntonm Hate 
could return to power. 

The imptieatioos of the interven- 
ing political chaos on Japan’s 
e f fort s to curb its massive trade sur- 
plus c ontrib u t ed to a fresh surge of 
fee yen to a record post-war trading 
high of Y99JS against the dollar in; 
Tokyo. It eased slightly, after heavy 
Bank of Japan intervention, to dose 


at Y99-S3. Share prices plunged, 
leaving the Nikkei index down 
465.79 pbhtfe, or ZM per cent; at 
20,300.96. 

*Tf the yen's steep rise is not 
. checked- r not . only - export- 
reJatedfirms but fee whole, of our 
country's industry will be forced to 
a standstill,” warned Mr Takeshi 
Nagano, presid ent of the Jfikfceben 
employers’ federation. 

•Mr State has -kept a low profile 
..ever since he announced on Satur- 
day that would resign rather than 
risk iftrfiig - votepro- 

-posed by the liberal. Democratic 


in bid to form government 


NZ bank 
warns on 
inflation 


By Terry Hafl in WoIHngton 

^ < ■' " A- * * 

The New -Zealand 1 Reserve 
Bank teoesan im port an t test 
of its anti-tnyiatipnary powers 
as it seeks to manage the econ- 
omy through a period of 
robust growth and' higher 
inflatio n over the next 12 
months, Mr Don Brash, the 
governor, said yesterday. 

BaUmhy fee bank’s mone- 
tary policy agenda for the next 
six months, he hinted that fee 
bank would be comfortable 
with some additional, modest, 
firming in monetary policy. 

New Etwland financial. mar- 
kets treat the central bank's 
monetary policy statements in 
fee. same light as the budget, 
because of its Ttde in setting, 
foreign exchange and interest 
rate policy. 

Mr Brash said that over the 
coming year fee country faced 
growth, wage and other cost 
pressures of a sort fee bank 
bad not encountered since the 
Reserve Bank Act was passed 
in 1989. 

While he did not see infla- 
tion taking off, pressures 
would push the rate from the 
c ur re n t 1 per cert to between 
1.7 and ;L8 per cent by late 
next year. TTris would, be just 
below the 2 pa* emit maximum 
target allowed by the Reserve 
Bank Act. 

“Inflation at these level s 
would provide little room for 
error, and wife the economy 
continuing to grow strongly, 
New Zealand is more likely to 
encounter greater, not less, 
inflation pressu r e s,” he said. 

He said the hank was com- 
fortable wife the latest rises in 
domestic rates,, which have 
increased by about 1 per cent 
since February. 


Bid to outface market pressures 

Keating spurns 
interest rate rise 


By NBdd Tait in Sydney 

Mr Paul Keating, Australia’s 
prime minister, yesterday 
insisted the federal govern- 
ment would not be pushed into 
lifting official interest rates, 
despite the con tinuin g drop in 
bond prices. 

Mr Keating’s comments 
helped to send the nation's cur- 
rency, already unnerved by the 
tumbling US dollar, to a six- 
week low, but foiled to prevent 
bond yields reaching their 
highest levels for over two 
years. The general mayhem 
spilled over into the share mar- 
Kt, where fee All-Ordinaries 
Index fril by about 3 per cent, 

^°“Tbe government won’t be 

responding to pressurffi ta fee 
bond markets which are 
Induced from other nmrkets. 
the prime minister told pmtia- 
ment, shortly beforelwvtog 
for a fereoday visit to Imkm- 
esia. “The key point is official 
rates have not risen and they 

***,£fi 2 £SSS 

irmly Strident in their e fforts to 
driS Triseta official 
rates. The government argues 


inflationary pressures are neg- 
ligible in Australia, where 
unemployment remains high, 
and that business confidence 
and investment needs to be 
encouraged. This viewpoint 
was given scene weight yester- 
day wife publication of fee lat- 
est quarterly survey from the 
Australian Institute of Com- 
pany Directors and KPMG Peat 

The survey,-, conducted, 
shortly after the government's 
A3&6bn (£3.1bn) jobs package 
and budget , plans..: .were 
announced list ...month, 
suggested that ogtimtan about 
the Australian economy hak 
ebbed in recent memthi About. 

63 per cent of company direc- 
tors, drawn from a wide? range 
of businesses in both private 

and public sectors, expected 
the economy to improve over 
the next six months, for exam- 
ple. compared with 71 per cent | 
in fee March quarter. 

However, the government's 
repeated assertions it will hpf> 
he rushed into raising interest *, 
rates have not..stopped finan-jk' 
rial markets betting a rise fc}| 
inevitable. A number o£ J baniSfT 
have already edged up Jiome^ 
loan rates and, by yesterday,? 
evening, 10-year bond yields, 
had risen to 9$n per cant from 
&6D per cent at Friday’s 


party, with Social Democratic party 
support ■ 

Political observers believe he 
plans to* let opposition parties’ 
attempteote form a pact reach 
impasse before reopening negotia- 
tions wife potential partners for a 
new g o v e rnment. “He is krinp qtfite 
dever.” asM Mr Takashi Xnognchi, 
professor Utf polities at Tokyo Uni- 
versity. (-•?. 

Talks yesterday between Mr Tomi- 

ichl Murayama* chairman of the 
left-wingrSDP, and Mr Yohei Kano, 
preridenfi?pf the conservative LDP, 
were inconclusive. A day earlier, 


fee SDP and LDP said they were 
considering an alliance, but in the 
event they merely agreed on the 
need to form a new government by 
fee end of today, without specifying 
how. 

Separately, the SDP and New Har- 
binger party, a former LDP splinter 
group, agreed on joint policy guide- 
lines, colling for maintenance of 
Japan’s pacifist constitution. 

A coalition of fee SOP, NHP and 
LDP is possible, but lew Hkriy than 
the SDP*sretnnt to Mr Hate's coali- 
tion, said political analysis. A three- 
way affiance would be even tew sta- 



ble than fee Mr Hate’s two-month 
minority atehifattiiton, 

LDP and SDP, long-time enemies, 
are far apart on most important pol- 
icies. 

'the pressure on the SDP to rtgohi 
Mr Bata's camp Increased yesterday 
when its most influential backer, 
the Rengo trade radon federation, 
called for fee establishment of a 
gover n ment modelled cm the recent 
coalition of former prime 
ltdirirtw Mr Morfldro Hosokawa, in 
which the SDP was the largest 
party. 

Normally, the SDP takes Seagirt 


software you need. 


advice, bat the party may hesitate 
this time because it is split, A fac- 
tion loyal to the SOP'S Mr Mnray- 
ama is inclined to Join hands wife 
the LDP, and call a snap general 
election - anathema to Japan’s busi- 
ness community, which fears an 
election campaign could hamper 
economic recovery. 

Mr Watarn Kubo, SDP secretary 
general, prefers siding with the 
coalition and sup po r ts its plan for 
an election late this year under a 
new electoral system, which could 
pave the way for more stable gov- 
ernment 


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a UK 


Figures show improving picture in ecology and safety but recession cuts environmental expenditure to under £lbn 

Chemicals industry displays improved record 


Britain in brief 


By Paid Abrahams 

The UK’s chemicals industry 
yesterday attempted, to improve the 
sector’s environmental reputation by 
publishing figures demonstrating its 

improving ecological and safety 
record. 

The Chemical industry Associa- 
tion released data showing that dis- 
charges by its numbers of red list 
substances - materials that are par- 
ticularly toxic in water - had fallen 
every year for the last four years. 


The survey, of 340 chemical manu- 
facturing sites representing 76 per 
cent of sites owned by CIA. members, 
showed that red list substance dis- 
charges fell from 360 tonnes In 1990 
to 167 tonnes last year. The number 
of sites reporting no such discharges 
increased from 189 to 207. 

The CIA figures are part of the 
industry's Responsible Care cam- 
paign, aimed at improving environ- 
mental performance and then com- 
municating that to the public. A 
recent survey by Cefic, the European 


Chemical Industry Council, showed' 
that the UK population mistrusted 
the c fyaniflfl l industry more than in 
any other country. 

Mr John Holloway, chairman and 
managing director of Exxon Chemi- 
cal and chairman of the Chemical 
Industry Safety, Health & Environ- 
ment Council, said: "There Is no 
doubt that opinion about the chemi- 
cal industry in this country is poor. 
We are not liked. But we are work- 
ing bard to deal with that" 

Recent CIA research suggested 


only 29 per cent of population has 
positive feelings towards the chemi- 
cals. Industry. Mr John Cox, CIA 
director general, said he would not 
be satisfied until that figure had 
rises! to SO per cent a level achieved 
at the beginning of the 1980s. 

The CIA figures published yester- 
day were not all moving in the right 
direction. Environmental expendi- 
ture fell last year as the industry 
struggled with the recession. It 
dropped from £U)l3bn in. 1992 to 
£958m- 


Capftal spending an the environ- 
ment declined from £293m to £268m. 
This reflected a' drop in overall capi- 
tal spending which has fallen two 
years miming from £2JL9bn in 1391 
to £2.09bn in 1992, and £L915bn last 
year. The CIA pointed out that envi- 
ronmental capital spending had been 
maintained as a proportion of over- 
all capital investment 
Environmental operating costs 
also fan, down from £32Qm to £688m, 
reflecting a decline in manufactur- 
ing volumes. 


Mr Richard Robson, group envt 
nmment canuDooications manager 
at 1(2 said so dear, pattern could be 
observed in the. amount of special 


This increased from 299,000 tonnes 
In 1992 to 358,000 tonnes in 1983. This 
followed a fall from 316,000 tonnes m 

1991* Special wastes are substances 
that need to be disposed of with par- 
ticular care. However, Mr Robson 
sa id the figures could not be com- 
pared because of an. Increase in the 
pTTmhflr of sites reporting data. 


Finance plans 
for nuclear 
plant outlined 


By Michael Smith 
and Rotand Rudd 

Nuclear Electric, the 
state-owned electricity genera- 
tion company, has outlined a 
plan for financing a new power 
station at Sizewell, on the 
English east coast, which 
would require an initial gov- 
ernment subsidy of up to £Lbn. 

The company says the sub- 
sidy would enable it to offer 
rates of return which would 
attract private-sector Investors 
to fund the remainder of the 
£3£bn cost On 1993 prices) of 
building the station. 

The £lbn up-front payment 
is Just one of a series of options 
for building the 2,600MW sta- 
tion. the company has stressed 
in a series of briefings with 
politicians on the govern- 
ment's nuclear review. 

Other ways for the state to 
encourage the construction of 
Sizewell C with largely private- 
sector financ e could include 
continuing the nuclear levy on 
electricity consumers after its 
planned expiry in 1998. Accord- 
ing to the company the amount 
needed would be less than a 
fifth of the more than Elbn a 
year curently collected. 

Nudear Electric’s opponents 
will argue the company’s esti- 
mates are further evidence of 
nuclear power’s inability to 
--compete in the market 

The Treasury is firmly 
opposed to providing tire com- 
pany with more state fonds. ft 
is continuing to press strongly 
for the company's early priva- 
tisation even though Mr Tim 


Eggar, energy minister, has 
said a sell-off before the next 
election is highl y unlikely. 

Treasury ministers believe 
the government could sell both 
Nuclear Electric and Scottish 
Nuclear without new legisla- 
tion. by using privatisation 
measures approved by parlia- 
ment In the late 1980s. 

Nuclear Electric sees privati- 
sation as its priority in the 
review. It says that in present- 
ing options for funding Size- 
well C and other stations it is 
responding to the govern- 
ment's request for suggestions 
on building new plant 

"We are not asking for gov- 
ernment money to build Size- 
well C," said Mr Mike Kirwan, 
finance director. “We are 
merely explaining the possibili- 
ties for building it” 

Nuclear Electric said that if 
the government were to subsid- 
ise Sizewell C with an initial 
£lbn, it is possible that no 
more money would be needed 
from the state if market prices 
per unit of electricity were 2-7p 
or above when the station 
started to produce electricity. 

Anything below that might 
need an extra injection of fund- 
ing either from electricity con- 
sumers or the taxpayer. 

Prices in the wholesale mar- 
ket are likely to average 2.4p 
this year «pd the plant would 
not produce electricity until 
after 2000. 

But many electricity market 
analysts think that the prices 
may not rise much in the next 
decade or so because of the 
abundance of gas supplies. 


Defence cuts may be 
more than expected 


By Jamas Bfltz 
and David Owen 

Britain's Ministry of Defence 
will next month announce cuts 
in military expenditure that 
are well In excess of those 
required by the Treasury in 
the current financial year, 
according to defence sources. 

In recent weeks, MoD offi- 
cials analysing ways to contain 
deforce spending have discov- 
ered tirat there is more room 
for cuts in military support ser- 
vices than had been imn ginod 

The MoD is required to 
shave around £750m off their 
budget far the Bnanefai year 
1994-95, to meet the targets set 
out in the last budget. 

However, officials drawing 
together around 30 separate 
reports for the Defence Cost 
Studies project have discov- 
ered there is more room for 
cutbacks than had been expec- 
ted. The exact size of the sur- 
plus has not been revealed, but 


according to one official it is 
“not insubstantial." 

In the run up to the publica- 
tion of the Defence Cost 
Studies, Mod officials are argu- 
ing with the Treasury over 
whether the extra expenditure 
that has been saved will be 
retained by the department 

Mr Malcolm Rifktnd, the 
Defence Secretary, will want to 
announce several several 
“sweeteners" when the cuts in 
support services are 
announced, probably on Tfaurs- 
day, July 14. 

Backbench conservative MPs 
have publicly voiced their anx- 
iety about tiie projected cuts in 
military support services - 
such as hospitals and non-mili- 
tary transport. 

But Treasury officials believe 
that this year’s cutbacks will 
have to be followed by reduc- 
tions over the subsequent two 
years, and that the MoD is best 
advised to make good those 
reductions now. 



Security dogs were in operation at the north London K imitoi - m htai as RaUfrright Distribution, the British Bail subsidiary, launched 
its services through the Channel tunnel. Six Raflfreiglxt trains will use the tunnel each way rising to 27 by the md erf next year. 


Support on 
rail claim 


By Kevin Brown, 

PoMcal Correspondent 

Mr Frank Dobson, opposition 
transport spok e s m an, yester- 
day moved Labour close to 
outright public support for the 
series of one-day rail strikes 
being mounted by the BMT 
transport union. 

As millions of rail travellers 
prepared for a tirird day of dis- 
ruption on Wednesday, Mr 
Dobson told the BMT annual 
co nf erence that the signallers 
at the heart of the dispute 
" think they have beat swin- 
dled. They are right" 

He was careful not to 
express explicit support for 
the strikes, which have 
brought most of the rail net- 
work. to a standstill on two 
consecutive Wednesdays. His 
comments point to a stronger 
line by Labour which has 
sought to avoid bring Identi- 
fied with the strikes. 


Companies 
back new 
partnership 
networks 


By Oman Tati, 

Economics Staff 

Growing numbers of UK 
companies are developing 
friendly “partnership” rela- 
tions with their purchasers 
and suppliers, a new survey 
has found. 

Twenty per cent more busi- 
nesses than a year ago are 
using “partnership sourcing” 
- a practice In which purchas- 
ers and suppliers develop long 
term, collaborative relation- 
ships based on more than 
price. 

Nearly three quarters of pur- 
chasers and 61 per cent of sup- 
pliers use the practice, accord- 
ing to the survey, which was 
carried out by the Partnership 
Sourcing group, a body estab- 
lished by the Confederation of 
British Industry and the 
Department of Trade and 
Industry. This compares with 
56 per cent of purchasers and 
36 per cent of suppliers who 
used the system a year ago. 

In spite of tills growth in 
nmnbere companies had found 
that adopting partnership 
sourcing was more time con- 
suming and difficult than 
anticipated. 41 per cent of 
companies questioned said 
that “co-operation with the 
other party” was a key diffi- 
culty. 

The survey, which ques- 
tioned 300 companies across 
several sectors, found that 85 
per cent of companies said 
that partnership sourcing had 
enabled them to cut costs. 
Sixty seven per cent said they 
had been able to improve 
delivery times, and 81 per cent 
said they could improve ser- 
vice. 


Portillo rejects Euro ‘slow lane’ 


By Ptdfip Stephens, 

PoMoal Editor 

Mr Michael Portillo last night 
underlined his claim to the 
leadership of the Tory right 
with an abrupt dismissal of 
fears that Britain might be left 
in Europe's “slow lane” and a 
call for tighter curbs on the 
welfare state. 

In the latest of a series of 
speeches this year setting out 
Ms basic political philosophy, 
-the riiief -secretary of the Trea- 
sury accused advocates of . 
greater European integration 
of “bamboozling" the elector- 
ate. 

Be also warned ctf the dan- 
gers to individual freedom and 


to economic efficiency of the 
growth in the powers of Euro- 
pean governments. Underlin- 
ing his commitment to market 
forces, he said the role of gov- 
ernments was to create the 
conditions in which individual 
initiative was free to create 
prosperity. 

To Emphasis e that point, be 
added: “It has recently been 
argued that the free maitat is 
a jungle to be tamed by gov- 
ernments. It is at least as jdau- 
sfole to argue that govern- 
ments are a jungle to be tamed 
by the free market”. 

Mr Portillo told an audience 
in Barcelona during an official 
visit to Spain that arguments 
that Britain cotiM not afford to 


miss the European “bus” or 
must remain in the “fast lane", 
had rea ched the height of 
absurd ity . 

They suggested that “speed 
is more Important than direc- 
tion, that being in a crowd is 
maze important than fawdftig 
for the right place”. But: 
“What if the bus is the wrong 
one? What if the fost lane leads 
to the wrong destination?" 

Setting out his own agmda 
for the European Union, Mr 
Portillo said that the creation 
afthe single market should be 
the prelude to ever-increasing 
global free trade. There would 
be no point in the ben- 

efits of free trade hi Europe If 
tiie Union item saddled itself 


with higher prices and out- 
moded industries by putting up 
barriers to other countries. 

He added that as Europe 
mapped out its future It was 
vital that supporters erf limited 
government and of free trade 
made their their voices heard. 
They must ensure also that tiie 
regulations necessary to 
ensure a level playing- Held 
within the single market were 
kept to tiie rnmhnnm. 

Mfr Portillo, whose speeches 
have sometimes angered Mr. 
John Major, was careful to 
frame Ms remarks as entirely 
to time vrith three erf the prime 
minister. He twice quoted Mr 
Major's recent comments to 
reinforce that impression- 


Rank-and-file MPs back Major 


By Roland Rudd 

Far a party used to seeing its 
leader Isolated and under fire 
from his own back benches, 
yesterday’s statement by the 

prime ymnis l e r wag 

Mr John Major’s speech on 
the Corfu summit wan warm 
applause from Tory MPs on 
both wings of the party. For 
mice the prime minister gave 
Ms troops something to cheer 
about. Britain's veto of Mr 
Jean-Luc Debaene as European 
Commission president 
appeared to unite the party. 

Never mind that pro-Euro- 
pean backbenchers were pri- 
vately warning that the battle 
over the EC presidency may be 
only the first of many to come 
or that Britain may find itself 
bereft; of friends when it mosts 
need tfiwn- 

As far as the majority of 
Tory MPs were concerned "a 
victory is a victory”; nothing 
was going to spoil their relief 
and delight at having some- 
thing to applaud. 

Mr Kenneth Baker, a Euro- 


A victory is a victory 5 for the majority ofTories 


sceptic and former party chair- 
man, summed up by telling the 
prime minister: The decision 
you took was not only right, 
but courageous and popular - 
popular not Just to the Conser- 
vative party, but to the coun- 
try as a whole and to many 
electorates across Europe." 

The prime minister's recep- 
tion was probably better than 
it might have been but for the 
disappototing reply by Ma Mar- 
garet Beckett, acting leader of 
the Labour Party, to a speech 
which felled to inspire her own 
supporters she accused Mr 
Major af being “bmnfltatetr by 
being in a minority of one. The 
accusation only lead to greater 
chews from the Tory back- 
benches. 

Perhaps the most significant 
indication of Mr Major’s suc- 
cess to the Commons came 
from an intervention by Mr Ian 
Taylor, a member of the Posi- 
tive European group. To the 
surprise of some of bis col- 


leagues he said Britain was 
justified in using the veto. 

Privately members of the 
group said they were 
“appalled" by Mr Major's deci- 
sion to veto Mr Dehaane. Mr 
Robert Hicks, a member of the 
group, said on Sunday that he 
regretted tbe decision. But not 
one of their group decided to 
speak out against tiie use of 
Britain’s veto in yesterday's 
Commons debate 

It was left to Sir Edward 
Heath, the forma: prime minis- 
ter, to air their views when he 
«flfd the big ta sk lacing the 
g ov er n ment was to concentrate 
cm “how to resolve this crisis - 

for crisis it Is”. The prime min- 
ister said he shared Sir 
Edward’s regret that it was 
necessary to use the veto. He 
argued that it was A point of 
principal. 

Mr Major took obvious' 
dUhght from the few* that the 
only cheers that greeted Sir 
Edward's intervention were 


from the opposition benches. 

Even some Tory MPs who 
said they had no strong views 
about Mr Dehaene behoved the 
government was right to block 
Ms a ppointment. As they saw 
it France and Germany was 
trying to “railroad” their can- 
through Qmpnmpfty 
which aitaincoiildnotallow. 

The only question being 
asked by Tories MPS yesterday 
was not whether Mr Major’s 
le adership been strength- 
ened, but by how long the new 
mood would last - : 

Many Euro-sceptic? warned 
that his position could quickly 
weaken if be allowed another 
federalist to be 'appointed at 
the special European. summit 
called for July 15 to resolve the 


Sir George Gardiner, chair- 
man of the right-wing 92 
group, said: “The prime minis , 
ter is in a much stronger post- 
tlon now. But it would be terri- 
ble if he reneged on It” 


Dealers complain of merchant in sheep’s clothing 

Stewart Dalby finds an overseas buyer has plans to clip 10% of the total fleece sale in Scotland. Others may follow suit 


M r Aldan Walsh, an 
agricultural mer- 
chant from Naas, 
County Kildare, Ireland, is 
causing waves in the British 
wool market for the second 
successive year. 

Last year he bought 100,000 

kilos of dip wool - fleeces - 

directly from farmers. This 
year he intends to buy lm 
kilos, which is about 10 per 
cent of the total sale in Scot- 
land, where he buys most of 
his wool 

His actions seem certain to 
increase pressure for the aboli- 
tion or reform of the marketing 
arrangements for wool the last 
of the commodity markets in 
the UK to be regulated under 
laws which were introduced 
soon after the second world 
war to protect food supplies. 

UK-based dealers are still 
obliged to buy from the British 
Wool Marketing Board, and are 
forbidden to buy direct from 
formers. 

But tbe rules allow overseas 
buyers to work outside the reg- 
ulated framework. 


Buyers from outside the UK 
had always been exempt from 
the marketing board's monop- 
oly. There used to be no point 
in entering the market, how- 
ever, because the board con- 
trolled prices. 

But in May last year the Min- 
istry of Agriculture abolished 
the system of guaranteed 
prices for farmers. 

The board nevertheless 

charges 18p a kflo for sortin g, 
grading, and selling — a 
further 3.5p to collect fleeces 
from farms. The board’s costs 
have come down sharply since 
the ending of the guarantee, 
but they are still substantial. 

Moreover, the marketing 
board pays over two years. The 
former, if he drives his fleece 
to market, is offered a notional 
94p a kflo by tbe board. He 
pockets 47p immediately, but 
the second half of the payment 
depends on next year’s price. 

if the prices rise during the 
year he may get more than 47p 
fix' the second instalment If 
prices foil he may get less. 

Mr Walsh Is offering up to 



Aldan Walsh in his wool warehouse at Naas, County Kildare, near Dublin, Ireland. 


90p a kilo immediately with no 
risk to the former of getting 
less If the price falls while 
waiting a year for half the pay- 
ment. 

Earlier this year tiie board 
was offering cheviot, a top 
grade, for sale at 11 2p a kilo - 
this was the 94p phis its own 


Igp handling char ga. 

_ Last year Mr John King, of 
wool me rch a nt s J.&W. Grdg 
of Alex a ndria, Dunbartonshire, 
also tried to bay directly from 
farmers. 

In July the board won an 
interdict (injunction) to the 
Court of Session In Edinburgh 


preventing him buying 
directly. He is trying to get the 
interdict relaxed, so that Ms 
company can act for a Portu- 
guese a g pn ^- 

He said: “We are sitting here 
handcuffed and frustrated. Ton 
work it out I buy from the 
beard at ll2p a kilo. Mr Walsh 


buys directiy from fa r m er * at 
90p. Let’s say his transport 
costs to Ireland then back to 
Britain for sale to a carpet 
manufacturer in the Mdtands 
amount to lOp a kilo. He can 
bhii undercut me by I2p a Min 
- and that is before my costs. 

“There is notixing I can do as 
the law stands.” 

The ministry amt the ftrftkih 
Wool Marketing Board bdfera 
some form erf marketing struc- 
ture is necessary. Wool, they 
say, is a by-product of sheep- 
farming. for meat . TTnUkfl mtik 
or eggs, in which tiie markets 
have been or are befog liberal- 
ised ft is produced ohty uuoe a 
year, but is sold over 12 
months, during which time 
prices can move substantially. 

More than half the 93,000 
sheep forms to Britain are 
small and many are to remote 
areas. The average wool dip is 
500 kilos. Small formers do not 
have the fodfities to grade and 
sort small clips of mixed wooL 
Often, they cannot afford to 
transport, it. 

Mr lan Hartley, the manag- 


ing director of the board, has 
said that if it did not exist 
many formers would not 
bother to bring the wool to 
market. 

But in going for ft) pm cent 
of the Scottish market Mr 
Walsh has deariy raised tire 
stakes. They would be raised 
even further if other foreign 
merchants started buying 
directly in the south of 
England. 

Ma T xr. AwiKW rvf tKo mariwt. 

tug board said: “Obviously 
there is no room for compla- 
cency. But most of the formers 
and dealers are happy with the 



“We have been trying to edu- 
cate small formers about costs. 
They can go up over the year 
and ft ta not always wise to -sell 
the. entire fleece on day one. It 
is by no u«amg certain that Mr 
Walsh wflfbe able to buy as 
roach wool 'as ha wants or to 
sefrlt” 

The Ministry of Agriculture 
said there were no plans to 
change marketing arrange- 
ments. 


New German 
purchase in 
City property 

One of the City of London's 

best known office blocks. 


Baring Brothers, has been sold 
for £l06m in one of the btyest 
commercial property 
purchases by a German 
investment ins tit u ti on. 

The sale has tom concluded 
as the London Busbies* School 
has forecast a sharp rise to 
the value of commercial 
buildings over the next two ; 
years ^reversing a large part 
of the decline In property 
values between 199043. 

Tbe 145,000 sq ft bonding 
at 64 Blshopsgate has been 
sold by ElecWcity Supply r 
Nominees, toe electricity r 
industry pension fund to r 
Deutsche tounobfficn Foods 
(DIFA) one of the largest . 
German investment ftmds. 

It marks the latest In a. 
series irf property purchases- 
by German institutions. Other 
aequkdtiatift by DIFA have 
Included 12-15 Finsbury Orcus 
let to the Bank of Tokyo and 
St Andrew's House let to 
accou n tants Coopers & 
L ybran d. 

DTZ Debenham Thorpe, 
which advised DIFA, arid that 
the desire of German 
institutions to acqidre UK 
property had not been 
dtnrixddud hy rising bond 
yields wMcfa had effected the 
appetite of some UK 
institutions. 

Further rises to UK property 
values following last year’s 
gains expected according to 

Hw T wi Anw Bmrfniiai .WmiaI 

which expects capital values 
to increase by 18 per cent this 
year and by a Anther 7 per 
cent in 1995. 


Turnips 
all the rage 


Taxis, tourism and turnips 
have been among the 
beneficiaries of changes to 
consumer spending since the 
mid-1980s, while tea and spirits 
have lost out ' : . . ... . 

' Figures released by the _ . 
Central Statistical Office show 
that UK consumers spent 
£40&87bn in 1998, or around 

£7,000 per head. 

Guardians of toe nation’s 
health might rejoice at the 
news that spending an 
vegetables rose by a third 
between 1986 and 1993. The 
bad news is that Britans still 
spend more on confectionery 
than they do an their greens. 

John and Jane Bull are 
inc rea sing ly tending to wash 
down their carrots and 
chocolate with a bottle of 
Sancerre or Sanrignon than 
with Scotch. Spending on wine 
increased hy a fifth between 
1986 and J99fc While that an 
spirits fan by almost a tenth 

Over the same period, soft 
drink spending rose by over 
a quarter but spending an tea 
and coffee MI by-more than 
10 per cent ■' 

Britons are venturing farther 
afleM; spending an overseas 
tourism increased by 40 per 
cent between 1986 and 1993, 
while the money, spent by 
foreign tourists in Britain rose 
by over 10 per cent For 
domestic travel spending on 
taxis rose by over athircL 


# 


Bricks signal 
recovery 

Brick shortages have began 
to emerge hi Britain fin the 
first time hi six years as toe 
housing market continues its 
faltering recovery. 

Butteriey, one of the 


manufacturers of housing 
bricks, was yesterday quoting 
20 weeks delivery delay to 


works tn No ttimhamsMra . 

The Industry still has large 
stockpiles ofhigher 
specification bricks, used in 


construction of offices, shops 

and publte buildings such as 
hospitals and schools. 


Unit trusts 
hold up well 

Investors continued to pot 
money into unit trusts during 


conditions. Figures from the 
Association, of Unit Trusts and 
Investment Funds CAntii) show 
a net inflow of £72fan, most 
of which (87 per cent :} came 
from private investors. 

The figure Is down from last 
May’s inflow of £9ism, but still 
well above 1590-92 levels. 1993 
was a record year for the unit 
trust Industry, with net 
investment of £9flbn. 

Mr Philip Wariaad, director 
general of Autifl said the 
figures pointed to a healthy 







J *i! k'N 


FINANCIAL TIMES TUESDAY JUNE 28 1994 


TECHNOLOGY 


F ew aspects of modem life 
are so crucial and yet so 
taken for granted as words 
on the printed page. Since 
the early days of printing, the tech- 
notogy used to transfer ideas and 
images to paper has been funda- 
mental to advances in civilisation. 

From the development of wood- 
block printing by the Chinese and 
various forms of wooden and metal 
type by the Koreans and Japanese, 
to the movable type pioneered in 
Europe by Johannes Gutenberg a nd 
William Gaston, the printed word 
has stimulated culture, education 
and entertainment 
Today, in the multime dia age 
based on the enormous growth in 
computing power, the printing 
industry is undergoing an upheaval 
comparable with any of t he se 
epoch-making changes. Now that 
sound, text a n d pictures (from ffim 
or photchCD) can be handing dig*, 
tally, printing companies are hav- 
ing to make radical changes in the 
way they work. 

Not only is the equipment chang- 
ing rapidly, but the demands of cus- 
tomers have also become tougher. 

"1 think annrtior very dramatic 
structural change is about to 
occur," says Erwin Ktttrigs. Vad of 
Linotype-Hell, the German maker of 
equipment for the pre-press (text 
and picture preparation) stages of 
printing. 

With the price of printing con- 
tinning to fall - he says it has been 
cut by half in the past two or so 
years - and the tremendous pres- 
sure for work to be done faster, “the 
printing industry really has to 
rationalise". 

Kfinigs foresees the fall comput- 
erisation of pre-press activity from 
the creation of desig ns to the scan- 
ning of images, the manipulation of 
text and pictures before they are 
put on film, and the making of 
pages ready for printing. 

Those at the industry’s sharp end 
are feeling both the benefits and the 
pressures of this surge of electronic 
Innovation. "We're at the be ginning 
of a new dawn of on-demand colour 
printing,” believes Joe Brim, head 
of Laser Bureau, a London printing 
company packed with the latest 
electronic equipment "There's no 
mystique anymore.” 

Traditionally, much of the stilled 
work involved in turning designs 
into printed pages has been handed 
to specialists. This was, and still is 
to some extent especially true in 
the case of colour pictures and 
graphics. 

Today, however, advanced soft- 
ware enables sophisticated artwork 
to be carried out from desktop com- 
puters such as the Apple Macintosh. 

For really high-grade products 
such as glossy advertising bro- 
chures, a wide range of outside 
skills is still needed. But increas- 
ingly, superior quality products can 
be produced from a range of elec- 


: v hi 


Epoch-making changes are afoot 
in the pre-press stage of printing, 
explains Andrew Fisher 

Death of 
a craft 



i 




Timer Huufiiiea 

Joe Brin: ‘Warm at ths beginning of a now down of on-demand eoiotr printing 1 


tronic equipment - used to scan, 
process, store and display images - 
integrated by special software such 
as the PostScript system of Calif- 
ornia-based Adobe and available to 
those printing companies willing to 
invest 

This is what Brim means by "a 
new dawn". With the advent of new 
printing technology, products do 
not always have to be printed in 
large quantities to be economically 
worthwhile. Also, because the infor- 
mation is in digital form, each short 
print-run can he changed if neces- 


sary, or customised for individual 
readers such as those being tar- 
geted by markatfng «wnp»nlpg 

“The world is going to short-run, 
on-demand colour printing," says 
Brim. Customers can now order a 
few hundred copies of any item 
they want printed rngraad of having 
to take a thousand or more, as pre- 
viously. 

“These days,” says Tony Jarvis, 
head of Jarvis Field Press, “things 
happen so fast that it's frightening 
- with digital cameras, even more 
will chang e." This is because the 


images from these cameras, gradu- 
ally coming on to the market, will 
be able to so straight into the com- 
puterised network without. having 
to be scanned. 

Jarvis, also in London, has not 
gone so for down the digital road as 
LaserBureau. The company waited 
until last year, when prices had 
eased, before buying its electronic 
erawrring and image-setting equip- 
ment When finished, its investment 
will total around £500,000. 

For the makers of equipment - 
especially that used in the pre-press 
stages where Linotype, Agfa and 
Sdtex of Israel are prominent - the 
digital age has brought huge 
changes and opportunities. “The 
software is now driving the hard- 
ware,” says Alexander van Meeu- 
wen, business group director for 
graphic systems at tire UK office of 
Agfk, owned by Germany's Bayer. 
“The speed of change in the graphic 
arts industry is phenomenal.” 

As weD as providing huge oppor- 
tunities for printing companies, it 
also poses a considerable threat. As 
the latest computer-based equip- 
ment allows thorn to do more, or all, 
of the pre-press and printing work 
on their own sys tems — many cus- 
tomers now send in jobs by disk or 
along ISDN (integrated services dig- 
ital network) hues - fewer compa- 
nies will he needed. 

“It has been a craft-based indus- 
try," Says Minhap.1 Austin, gra phic. 
systems marketing director for Agfa 
in the UK. "Everyone was speci- 
alised in a very narrow field, so 
there are lots of very s nu ^ i busi- 
nesses.” Thus he foresees a concen- 
tration in the highly fragmented 
printing sector, with only those 
companies able to invest in new 
eq u ipment likely to survive. 

But while he expects pre-press 
stages to disappear eventually as 
computers control more of the 
Stages Up to the making of rrjatnl 
plates for final printing, *1 believe 
we have a long way to go before 
heavy-duty printing presses are 
replaced". 

KOnigs reckons the pre-press 
industry will go in five to 10 years. 
“The prerequisite is technology that 
offloads those pretty complicated 
steps of the human brain to the 
computer.” The brainpower has 
nojne from the specialists; the tech- 
nology is now advancing to a level 
where (heir colour preparation and 
layout skills will increasingly 
become redundant 

He quotes the example of a 
printer on the US west coast who 
has two groups of oper ato rs making 
up colour pages: those using tradi- 
tional reprographic skills earn 925 a 
hour, but a new employee doing 
everything by oraopnter earns |Z& 

Such “de-skffimg’’ is painful for 
those whose skill « are being 
replaced electronically but is an 
inevitable and already visible trend 
in a fiercely competitive industry. 


Smile, you’re being 
digitalised 

The prospects for cameras that need neither film nor 
developing are assessed by Victoria Griffith 


I magine ft is 3005 and yoa have 
just returned from a holiday 
in Hawaii Ton have taken 
aU your photos with no film; no 
developing is necessary. Yon 
simply hook np the camera to 
your computet and begin looking 
at the pictures on your screen. 

It was cloudy while yon were 
there, so you digitally add in some 
sun. Yon did not make it to the 
volcano, tart create a picture of 
yourself in front of one, just for 
show. Then you modem the 
pictures to your envious brother 
in Hong Kong. 

This is the world that digital 
camera manufacturers are frying 
to create. Professionals and 
businesses are already making 
use of the devices, which can be 
cheaper than traditional cameras 
to operate and produce 
photographs that can be 
manipulated easily. 

Digital cameras are moving 
rapidly into the mass market, 
too. In March, Apple C o mp ut er 
launched QuickTake 100, a digital 
Mwim aiwiwt at the consumer 
market, which retails for about 
9750. Two smaller 
California-based manufacturers, 
Dycam and Logitech, have 
lsnrnrheA dmfluti y prtowd 

products. Sony of Japan already 
sdis digital cameras, priced at 
about $2JM0 or more, to the 
professional and email b usiness 
market, and hopes to introduce 
a mass market version in the next 
few yeas. 

“Digital cameras will replace 
a large part of the traditional 
camera market over the next 
decade,” predicts Alexis Gerard, 
manag in g aflitor nffntaiw Tmag n 

newsletter, an imaging 
publication. "That’s because 
ultimately ft wfflte cheaper to 
use- no film or developing costs 
are involved - and cheaper to 
produce because the only moving 
part un the digital camera is the 
ssniuer. 

Digital cameras resolve certain 
storage problems as everything 
can be saved on computer. They 
also allow images to be sent by 
modem easily from one computer 
to another. "Whatever you 
digitalise something, it becomes 
more flexible," says Charles Lee, 


chief executive officer Of GTE, 
the telecommunications group. 
"You can store ft send it For that 
reason, digital cameras win 
eventually be an important part 
of the information superhighway.” 

Digital cameras do have 
drawbacks, however. The easy 
exchange of images through the 
information superhighway 
depends just as modi on the 
construction of that network as 
on wide acceptance of digital 
cameras. Moreover, as aH 
“ordinary" photographs can be 
digitalised, through the extra step 
of claiming the twag p , traditional 
cameras can be made part of the 
information superhighway. 

Cost is also a barrier. Although 
the absence of film and developing 
expense can the digital 
camera cheaper in the long ran, 
a hefty initial investment is still 
required. The lowest priced digital 
camera is about $750 -and that 

'Digital cameras wOl 
replace a large part 
of the traditional 
camera market over 
die next decade’ 

is before baying other hardware. 
Users must have access to a 
computer that can read the digital 
images, and to a sophisticated 
printer. 

Images also need to be Improved 
if digital devices are to pose a 
real threat to the traditional 
camera market. “One of the 
barriers to building tire market 
Is the quality of tire image," says 
Michael Baron, vice president 
of business systems for the digital 
camera division of Sony. “With 
smaller photos, most people can’t 
tell the difference between the 
[tra dition al] and the 

digital product But weaknesses 
are accented when you move to 
larger sizes.” 

Technology is moving rapidly 
to break down these hurdles. One 
of the most expensive inputs in 
a digital camera is the cost of the 
drips, dubbed “charge-coupled 
derices”, and their price is coming 
down fast. “We hope to bring the 


price of a digital camera for the 
consumer market down to about 
9350 within the nest few years," 
says Peter Zan, product manager 
for Apple’s QuickTake. 

Dycam says its next model, to 
be launched early next year, will 
offer features such as 
interchangeable lenses. 
Manufacturers are working to 
make the camera compatible with 
a larger number of computers, 
and special printers are being 
developed for the market 

The digital camera works in 
tire following way. By pressing 
tiie shutter, the user stores the 
picture in flash memory, and the 
image is compressed. The camera 
is then connected to a computer 
through a cable. The picture is 
decompressed and appears on the 
screen. 

Despite problems, digital 
cameras are making inroads into 
the small business market The 
camera is especially cost-effective 
for photographs being reproduced 
many times. Chemically developed 
images are expensive to 
reproduce, but thousands of 
digital images can be run off 
cheaply. Estate agents, for 
instance, could use the camera 
to provide photographs iff houses 
for macK mailing s ; and business 
cards with photographs can be 
made at low cost 

Digital cameras are certain to 
encounter resistance in their push 
to replace traditional versions. 
Consumers are used to the old 
film-based devices, and will 
probably be reluctant to change. 
Professional photographers, 
morever, have been trained in 
chemical processes and may have 
difficulties switching to a 
technique that requires 
completely different skills, 
including computer knowledge. 

“The main hurdle right now 
is user acceptance,” says Sony’s 
Baron. "It is very hard to change 
old habits, so we have to give 
people a very good reason to do 
it. The technology has either to 
offer a price advantage that win 
be hard to resist or produce 
something so superior that people 
wtil want to switch to it Those 
days may he here eventually, but 
they are not here yet" 





12 


FINANCIAL TIMES TUESDAY JUNE 28 1994 


MANAGEMENT: THE GROWING BUSINESS 


A Japanese businessman has found that a western approach to motivation 
has helped deliver spectacular results. Emiko Terazono reports 


* — * U- /'■ wvvtw.-' " r ' v . 


T 


etguo Mizuno has some 
advice for fellow business- 
men struggling to find 
ways to make their oompa- 
Dies more competitive. Don't follow 

conventional Japanese ways. 

Mizuno heads Square, a small 
video game software house In 
Tokyo that. In spite of the reces- 
sion, has seen phenomenal sales of 
its role-playing games for Nin- 
tendo's electronic game hardware. 

Three out of four games it 
released last year were hits, selling 
more than lm per game. The 
unprecedented craze for Square’s 
games prompted children and par- 
arts to line up outside toy shops, 
hours before the sixth in its best- 
selling series reached the shelves 
last April. The game sold out within 
hours, Square posted sales of 
Y25bn (£160. 7m) in a month - 
almost equal to what it achieved 
during the whole of last year. 

The company’s break from tradi- 
tional Japanese management of its 
employees appears to have been a 
factor in its ability to develop popu- 
lar computer games. Its unconven- 
tional luring policy is one of the 
underlying factors in its creative 
strength. 

While most leading companies 
may be losing out on talent by lim- 
iting themselves to hiring univer- 
sity graduates, especially from top 
class schools. Square hires anyone 
as long as they are Inventive and 
are competent Some 80 per cent of 


A role-play 

revolution 


Square's staff have held other jobs, 
winding teaching, playing in rock 
hernia and acting. 

Other striking differences are the 
flexible working hours and the 
extensive holiday allocation. “Our 
business is entertainment. How can 
people have fun playing games 
manta by workers who commute on 
a crowded train, wear blue subs 
and are constantly told what to do 
by their superiors," asks Mizuno. 

Employees must touch base once 
a day, but as long as they are pro- 
ductive, do not need to keep set 
office hours. 

Long holidays are rare in Japa- 
nese companies, which usually only 
allow employees to take one week 
off in the summer. Workers may be 
given a certain amnmit of paid 
annual holiday, but they are not 
really expected to take them. 

Employees at Square, however, 
get one month's summer holiday, 
and an additional 20 days of paid 
holiday a year. The company 
encourages employees to travel. 


especially abroad, and from the sec- 
ond year in the company they can 
apply for special overseas trips. 

Mizuno says he wants his employ- 
ees to enjoy life and to experience 
different cultures in other coun- 
tries. “Our games are based on 
adventures in castles, forests and 
caves. We want our staff to go and 
see what these places are really like 
with their own eyes.” he says. 

Square evaluates its employees by 
mixing the western merit approach 
and the Japanese lifetime employ- 
ment system. While those who help 
to create a popular game will be 
compensated, those that have not 
contributed see a pay rise equal to 
the cost of inflation. 

The salary difference between 
employees who entered the com- 
pany in sym* year c an amount 
to Y4m-Y5m. By providing incen- 
tives, the company attempts to 
increase productivity and morale. 
Says Mizuno: “You need to ask 
what people want to be doing in 
five years. How much they want to 


be earning, where they want to be 
living. If workers calculate back- 
wards from, such goals, it’s dear 
what they need to do." 

The company, which employs 250 
staff, started as a software division 
of Denyusha, an electrical eKjjiiiBer- 
ing company based in Tokushima in 
western Japan. However, the acute 
differences in management styles 
between the traditional Japanese 
engineering company and its almost 
radical computer * game division 
prompted the company to split in 
two, forming a separate company 
based in Tokyo. 

It Is uncertain whether Square 
can preserve such a flexible man- 
agement style once it grows into a 
bigger organisation. Mizuno doubts 
that it will become too big; because 
of the cost of games software. A 
computer game costs about 710,000 
and consumers seem willing to 
spend about Y40.000 to Y5OJJ0O a 
year on games. Hie says the chances 
of the company growing larger than 
400 people is slim. 

One problem that the company’s 
mmwp n npnt has yet to SOlVe is tHat 
its roleplaying games have failed to 
cross the cultural barriers, and 
have not seen good sales in Europe 
or the US. 

“I think we need more people who 
are muKflingnal, who know what's 
interesting for everyone all over the 
world. We need to start Risking 
games like Steven Spielberg films,” 
says Mizuno. 



Tetaua Mono: ’We want staff to as* what pieces are reaRy Oka wtti their own eyes? 


W anted: the wisdom of 
Solomon and the 
diplomatic silkiness of 
Talleyrand, allied to rigorous 
diagnostic skills and plenty of 


Tall order for small firm advisers 


running. The office will target 


qualities, all for between £18,000 
and £30,000 a year. 

The search for so-called personal 

business advisers to spearhead 
the UK government's latest drive 
to help small firms is starting in 
earnest now that the Business Link 
movement is spreading across the 
country. 

Business link is at the centre 
of efforts by Michael Hesettine, 
trade and Industry secretary , to 
overhaul governm e nt support 
services to small business. The 
idea is that local and national 
services to business - information, 
training, help with exports and 
marketing, financial aid, 
consultancy and so on - be polled 
together in one-stop-shops, branded 
with the name Business Link and 
subject to Department of Trade 
and Industry a p p roval. 

Training and enterprise councils 
have been trying to forge local 


alliances of councils, chambers 
of commerce and enterprise 
agencies to pool these services. 

But it can be difficult making the 
independent interdependent. “The 
partners are not automatically 
natural antes,” said Bichard Green, 
director of economic development 
at Birmingham Ci ty Council, at 
a conference earlier this month 
to assess progress. “There’s a lot 
of institutional ground-beating 
going on at the moment,” 
comments Brian Wright chief 
executive of the London E nte rprise 
Agency, on the subject of local 

turf wars. 

Heseltine has been trying to snuff 
out snch wars, recently telling the 
chambers of commerce to “join 
with your partners, get folly 
involved and don’t let sentiment 
and parochial feelings prevent you 
from doing what yon know to be 
right for our businesses." 

Bruce Harris, managing director 
of Rochdale Enterprises, admits 


Paul Cheeseright looks at the 
uneven progress of Business Link 


to fears among e nte rpr i se agencies 
of being submerged - but he has 
found there is Hfe after 
partnership. “As we began to 
operate, we found the threat really 
wasn’t there." 

The evidence so far suggests a 
greater readiness to bury 
“sentiment and parochial feelings” 
in the Midlands mid north of 
England than in the south. Of the 
30 Business Unk offices and 
sub-offices which have opened so 
far, only three are south of a line 
drawn from the Severn to the 
Wash, although six of the 11 offices 
opening next month are south of 
the line. 

A further 36 Business links have 
been approved by the DTI but of 
these only four are In the southern 
part of England. Six of the 19 


are in the south. 

There is no particular reason 
why the south Is tardier than the 
north. Officials surmise that in 
th e north 8 w»w > k a longer gaflug 
habit of co-operation among 
economic agencies because they 
have hem forced to come to terms 
with problems of decline less 
prevalent in the south. 

But where Business links have 
been set up, they have evoked a 
response. Birmingham has had 
12,000 telephone inquiries since 
it opened last October. Leicester 
is receiving 4£00 telephone calls 
and 1*500 personal visits a month. 

However, DTI officials and 
Business Link executives believe 
they can take the initiative in 
helping small companies work 


through management, sales, 
financial and prod»cticr> problems. 
Hence the search for personal 
business advisers. 

“The personal business adviser 
is crucial to success. Unless they 

«i y i nm ]rw ffl pwfiHMl r fln h -U mt lnn 

to business, BoMness lank wQl 
faff” warned Sarah Brown, head 
of the DTTa small Anns dtvtsron. 

Munfhwrtw U ndrawn TJnfc has 

found 500 small companies with 
growth potential, to which it wants 
to offer its services. “We want to 
learn from the successful. We’ve 
also Identified a group of triers 

- the next tranche on the list for 
business advisers. We see ourselves 
starting at the top of the pyramid 
and waiting down," said John 
Browne, managing director. 

“We’ve focused on the three 
sectors of the Walsall economy 

- automotive components, plastics 
and construction products,” 
reported Bob Baggott, woridng 

to get Walsall Business ffak 


... 11 

and~50 people. Already it has 
recruited three business advisers 
to go an the staff. 

Leicester's main business advice 
comes from 20 self-employed 


. contract “The average personal 
business adviser is the 55-yeanold 
executive who wants to put 
something back in the com- 
munity,” said Tuny Grice, chief 
executive erf Leicester Business 
Point 

Certainly the adviser, in 
Browne’s view, must “have been 
around the street,” run a business, 
have financial skills and two or 
three years’ consultancy 
experience. “Interper sonal skills 
are the most important because 
we are trying to open the minds 
of people,” declared Sue Cheshire, 
executive director of Hertfordshire 
TEC. 

These paragons, actual or 
aspiring, seem thick an the ground. 
Walsall put two advertisements 
in the regional press for its jobs 
and had uearty 400 applications. 


BICs 

make 

progress 

E urope's network of 

business and Innovation - 
centres (BICs) now totals 
more than 100, tacluffing offices 
recently established in the new 
democracies of central Europe. 


celebrated In Seville last week 
at a 10th anniversary congress 
of their Brussels-based umbrella 
organisation EBN*. 

Developed from a pilot project 
launched in 1384 by the 
Directorate-General for regional 
policies of the European 
Commission (DG XVl), the 
centres were primarily ; intended 
to help create or expand 


suffering from serious industrial 

r jf y cH'p p 

Financed 50 per cent from 
Commission funds during their 
start-up period, some BICs have 
struggled to attract adequate 
funds from the private sector, 
government and local 
authorities. But the success of 
their avowed selective approach 
to small business support has 
in many of the cases been 
impressive. 

A survey of 51 BICb relating 
to 1992 indicated that most of 
the “client" companies were in 
the information technology, 
electronics and applied 
engineering sectors, and that 
nearly 90 per cent had been in 
existence for five years (against 
a European average of 48 per 
cant for all types of company). 
Other features were a propensity 
to innovate, to invest, to export 
and to 6100107 qualified staff 

EBN claims that today's BICs 
- whose services range from 
project detection and training 
to marketing advice and shared 
logistical support - have 
between them been responsible 
for the creation or the 
development of 4,000 SMEs and 

20,000 jobs. 

Philip Effison, chief executive 
of Great®- Manchester Business 
Innovation Centre, one of nine 
in the UK, says the BIG 
Europe-wide network is also “a 
h riTHant one" fix' exporters, if 
used correctly. 

Tim Dickson 

*EBN, Avenue de Tervuren, 1S8A, 
Brussels USD, Belgium. Tel: 
332-7728000. Fax 7729574. 


f 


BUSINESS OPPORTUNITIES 

wgAOewsAHEH Cc ot n i ci g e oTOsgxAPPROPfaATepwoFEsamMALADvicgBepoBEBn LiMMQ wro c ot— mgiir B 



Accessories Acquisitions 

Dents is one of the world's most highly respected names to 
fine leather gloves. Tfre company in now seeking to btrild a 
complementary product portfolio by means of acquisitkm, and 
ia inwWng far companies with turnover between £lm - £Sm_ 

Preferred product areas are msnWleather accessories, 
although other similar product areas may be considered. 

Interested parties should writs tix- 

MR J ROBERTS 

DENTS, FAIR FIELD RO AD, WABMJNSTKB, 
WILTSHIRE BA12 SDL 
TEL: 0985 308891 FAX- 0985 818435 

a division of atnmuMsr aster pzc 


Selling your Business? 


We have (he skills and experience to achieve the best price tor you 
business end structure the deal to achieve maximum tax efficiency. 
If yon are considering a sale and your turnover exceeds £Lm, 
we would Uke to talk to you. 

Our charges are based largely on results, so you have little to lose. 
For a confidential discussion without commitment please contact 
Lance Blackstone or Gary Motley at: 


Blackstone l-.I.H 1 nM.hu I milk 1 . ( ll.lllviv.l V l.Hllil.Uit - 

Franks o’, ii '•n-i-i-i. i nu.i un i < i\ -mi 

1 l«»lltvs Id: 11 - J :su I .in.: i!” I 25*i 14 ‘C 


Fully furnished offices - 
Trafalgar Square 


'J Ob 



Secretarial services • Conference fa ci l ities 

Photocopier, Rut, WJ. • Flexible Lease Tens* 

Personal Telephone Answering • immediately Available 

Tel: 071 872 5959 

Your Partner in over 80 Inierna tta Bil Bnltcaa Loca ti on, 


banders 
broken 


Attmtoal 

COMMERCIAL ACCEPTANCES LTD 

Bridging Ftoaooc Specialist 


FAST NON-STATUS FINANCE 
|Kesi<frntiaI, Industrial and Commercial Properties 
\ DAY - 6 MONTH FACILITIES 


Tdtenwxsf 


COMMERCIAL muNCe VMun C**ri 
MUM tun E29O0OO upmnta. Senate 
Rates. SmhBM Fee*. Broker enquiries 
•Mieem. Angle Amarican Venturas LM. 
Tet fOKM} 301368, Fax (OKMJ 201377 


LOM ESTASUSHSO mans Mefty brand 
wflh outstanding name soM hi outtato 
throughout ma UK. SmaK tumovor. tut 
pmftdbla end nodM*, rwjSnw marfeRkg 
kimkiwtt. WB» b Ben B2MG. FknWM 
‘Tbnea One GmtfMmk Bkfca, London SE1 
SHL 


EXFOTEL HOTEL BOOKINGS 

We are a progress! w e hotel booking agency actively seeking expansion. 
If yon have a business which you consider compliments ours and 
wish to dispose of same or beheve a merger win be to everyone's 
advantage then please contact in writing Mr. Maurice E Segal, 
Kingsgate House, Kmgsgate Place, London NW6 4HG 
(no telephone calls). 



Would you She to aum 
your own train in g business? 

wt rata aaeefihMR, tUcotacd, 
vrattupatytat nangtant and sales 
dcwtapa rt montoalnoTu mtiay 

ftmtftlq T lmtfjph nf ytlifa j 

amatxavnMmtlc. OuraamtesuT 
nettle ta mnemuf kngmga. 
UtUhncnkM hi nMJriy. 
SocoesMappGasts mat be luUtfe far 
7-10 ihj* «Mng (CUagalDema) 
wttta tbc nest 4VdO dip. 

Aa esdtiqt afpoainky io a dpnmic 
growth tetany. Requires m tawnra 
(Sfiamwnjowuk, depart* on 
aMx^wttolndotoraioiogand 
Uwiif.ltouMahao d ap 
: 1 b an 


CBZ or te Mr. K. Erarne la the UA. 
Phone (303)267-8200 
Fax (303) 267-8207 


C 19B4. TIC CHEST GROUP. LTD. J 


STATIONERY/GIFTS 

Well eatabtidied imported - 
wholesaler with Wat drip 'own 
label* supply contacts and several 
valuable dtaufbuwcsfaips seeks 
| tMi j miihlr pa iln ertnagc /investor. 
Partial or outright sale also 
considered. Write to Box No. 
B2603. Financial Times, 

One Southwark Bridge, 
London SEl 9HL. 


Insurance Brokers 

Sock Invefloc/Bqnty Partner to fulfil 
BatinewPlan of acquiring quality 
Brokerages i& the UJL Present 
im— tally low purchase ratios and 
repetitive continual Income malces 
tbit Investment most attractive. 

Write to Box B2954, Financial 
Times. One Sonthwa* Bridge, 
London SEl 9HL 


CONFIRMABLE DRAFTS 
BACKED BY CASH 

* taaed ia Your Nane 

* Owflnnad by Major Inti Banka 
B Prove AnQabiHty of Ponds 

* Backed by Private tewstoa 

CAPITAL SUPPORT COUP 

us. cn*i7SJ-uno * a* (7i4) 757-1270 


aim 1 a 


■WAXES 

CATION 

Agents required in all European 
countries for superior portable water 
puriScaiioa products. 

These systnus are currently specified 
and used by military forces 
worldwide and for cMUan leisure 
2 nd travel markets. 

Only Prindpab should reply who can 
demonstrate marketing and 
disrftfioon ability. 
WdfceBmNsB2Pl4HaBacW-lImm 
OnoSoadirafcBddgaLoadeoSE). 9HL 



CdMwrtl swtereeer OF FartM UlMa 

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ntwnm hamsani 


DO YOU WANT 
TO FLOAT YOUR 
COMPANY? 

Specialist fund manager sacks 
to meat (fia management of 

businesses considering 
flotatlon; 

WeaHh Creator, 24 Sialic Street, 
London EC1Y OTB 

T«l: 071 251 9111 


O JL Sun Care Company 
with unique formnlarions based 
entirely oo natural plant extracts 
and mgredbentx offers distribution 
tkenees, amuxl Uw wwhL 
Wo»o io Box.B2968, PEnanrialThnes, 
One Soatfcwadc Bodge, Umdou SB1 
9HL« Foe 0932 868049 


CHANNEL ISLANDS 


and AdminisDatioii. Also Uberia. 
Panama & BVI etc Total of&hoio 
facilities and service*. 

For detail nd app oint — m write 
Otef Tmtlidn Briawat Hoan, 
2-6Bcb»M M St BeGcr.Jeocr. Ci 
Tek 0534 Txn*. Pn 0SJ4 3540 1 
Tlr 4192227 CO FORM C 


FOR SALE 

Banner D of E Storage 

Depot - Nonhum. 

Gray Access ML U40.AVM1 Link 
New Channel Rid Ibmlini 
2001100 sq. ft. hbgalfieent 
Geoqpan Bcfltfingi £7.100.000. 
Phone 0327 340 766 fin 0337 340808 


IMP O RTANT 

We would Bke to hear from 
companies who have a range 
of consumer products who feel 
they need new Ideas and 
financial Infection. If you've 
got the products, weNe got 
the knowhow. 

WHtB In strictest conscience to 
Bax S2976, Financial Times, One 
Southwark Bride*. London SET SHL 


NON-EXECUTIVE 

HEAVY 

Foods Chief Executive of mafor 
adtvJlisfajsagoicy offers grey fiaiir and 
wisdom, busineas devdapoeat akdb, 
creative rawnroes and wide 
mamgem en t and toiilftiog esp ei i enoa 
to companies needing weight without 
warhead. From a day a month. 
Write to Boot B2145, Rnandal Times, 
One Sootinrede Bridge, 

London SE1 SHL 


FINANCE 

DIRECTOR 

(F.CJVLA.) 

Inrerim executive with trade 
recond in busmess tura-aroonds 
available far new asslgnmenL 
Please tppty In eoatUaxx to 
Box B29S3, Pbandal Tones, One 
Southwark Bridge. London SE19HL 
or tetepbone 071. 485 7386 


FUNDS AVAILABLE 
TO PURCHASE 

• Letters of Credit 

• Bank Guarantees 

• Other Acceptable Collateral 
“ Backed by Private Investors 

tBKU MAJOR am. BANKS 
CAPITAL SUPPORT CORP. 
IS: <714)757-1070 -Rre (714)757-1230 


INVESTORS REQUIRED For Otari** 
HaktnyOntnPrzjiKt UmygoaSietumen 
capitri EquStfAaari aaKurtty. Tri 0403 - 


LEGAL 

NOTICES 


Naatsmtrim 


ifrTKKHgaioQgtr.Qf jiisiKE 

r DIVISION 


cmmcnxi 


OriBSMAZ7XR<7r 

I n teri * tawr mw He 


ormtumnor 
TBBCSOMMHnS ACT UHS 



CONTRACTS & TENDERS 


NATIONAL SAVINGS - GILTS BROKERAGE SERVICE 

Awarding authority: National Savings, 

Mythop Road, 

Blackpool. FY3 9YP 

National Savings currently operates the National Sayings Stock Register. The register 
contains all the gilt-edged securities held on the Bank of England Register. 

The service to be provided is a postal service for the buying and selling of gilt-edged 
securities. During the last financial year there were 80,366 transactions, 29,318 sales and 
51,048 Investments. This amounted to £242,528,488 being invested and £135,679,837 
being withdrawn during that period. 

Contractors will be required to tender for the complete package of work. Variants cannot 
be accepted. It Is envisaged that a minimum of 8 service providers wfll be invited to 
tender inducting the in-house team. 

Length of contract 5 years 

Please contact Carol Wellard at the above address for a list of pre-qualification 
req uirem ents. Tet 0253 793535 

Fax; 0253 793411 . 

Prospective tenderers must supply the pre-qualification information by 5 August 1994. 


BUSINESSES WANTED 


HIGH PROFILE SITES 
WANTED 

for rapidly expanding fast food company. 
All cities and towns considezedL 
Minimum of 3000 Sq Ft required 
5000 Sq Ft phis the preferred option. 
Secure leaseholds or may consider freeholds. 

Reply to-.. 

Fax Number 021-377 8221 


BUSINESS 

SERVICES 


Subscription- 
Based Periodicals 

- This hafaworiring successful 
publishing house specialises In 
niched journals targeted to 
academics and professionals. - 
We would race to talk to you 
about acquiring your title. 

It Is our preference to retain 
current editors where possible. 
WrttB to B« B39B2, Hnandaf Timas. 

0r» SouHmaift Mfes, London SE1 9H. 


AUCTIONS 


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International 
Phone Calls! 


USA only 24p per min 
Australia 40p p«r mki 
No VAT 

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to other countries. 


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NEXT AUCTIONS 

. of Ufa assurance policies tor 
hmatmenrwOl be held 
cm 30 Jane te! 
andMJhfrtel 
Tetepbcne: 

8- E. Foster* CrmufUtd 
071-5051941 forcatriogne 

irfPftfflW 


TRAFALGAR SQUARE 

- Your business address and 
dedicated telephone line In 
London, Parts, Berfin. Frankfurt. 
Madrid and eo other top locutions 

woridwide. - 

CBS/teflua on 071 872 5800. 


OFFICE EQUIPMENT 


URGENT 

REQUIREMENT 


Have soW a. successful service 
sector business. 

Up to eimavafiabteta purchase 
(min 50%) estobSshed company 
with prospects. London tased. 
Service, Pubfobrng, Licensing, 
Mwla. Rental 

Ftepiy hcnnMancflta B«B2Sa5. 
Bnsndal Unm, One Soutwak 
Bridge London SEf SHL 


OFFICE FURNITURE 


Wo have - direct from the manufacturer - new high quality 
executive and system ranges - conference and receptions. 
Large choice of veneers, melamine and/or laminate finishes 


with discount of up to 40% from R.R.P.! 


London Showroom for viewing: 

Ariel House, 76 Charlotte Street, London W1 
Tel: 0374 741439 
Full carocad and planning services. 


LiNEABURO LTD T el: 0992 5 03313 














13 





FINANCIAL times TUESDAY 



JUNE 28 1994 


- * 




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: im -,^2 

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* 






PEOPLE 


Daly grasps competitive nettle 


Alec Daly was a founding 
member of the Confederation 
of British Industry’s National 
Manufacturing Council so it is 
only fitting that he should now 
be asked to run it, Sallowing 
the departure, of Mark Rad- 
diffe. 

Daly, who is 58, will take 
over responsibility for the 
council in September on his 
appointment as the CBrs depu- 
ty-director general, 

A .main board director of 
GKN from 2986, his career at 
the sharp end of manufa dur- 
ing industry includes a spell 
with International Computers 
in the L96os and 14 years with 
Ford, where he ended up as 
head of truck manufacturing 
operations in the UK and on 



cultaral Products badness. 


the continent. : 

He joined GEN in 1978 as 
chairman of GKN Sankey and 
leaves as manag in g tffp x -tor of 
GEN’S Engineered and Agrl- 


bonred early reservations 
about the . 'value of a body 
farmed to help {hit some com- 
petitive bite Rritinh manu- 
facturing but says he has been 
enormously encouraged both 
by the enthusiasm of council 
members mid by the govern- 
ment’s new commitment to the 
competitiveness issue. 

‘The political climate is 
right and there is an absolute 
need for British companies to 
grasp the nettle and establish 
the highest standards so that 
they can compete with the 
world’s best. X hope to help 
assure the message is taken on 
board and turned into sac- 


Tom Scott 
jumps ship 

Swan Hunter's shipbuilding 
manager Tom Scott; the man 
Who has kept outfitting work 
on target on the company’s 
last three frigates despite 
receivership and man* redun- 
dancies, has left for a new job, 

Scott, 55, starts work next 
Monday at yarrow on the. 
Clyde, where he will be super- 
vising the outfitting of ano ther 
three Type 23 frigates, won 
against stiff competition from 
Swans a couple of years ago. 

He has spent more than 20 
years at Swan Hunter, but con- 
tinuing uncertainty over the 
company's future, and the offer 
of a plum job as Yarrow's divi- 
sional manager in charge of 
post launch work, tipped the 
balance and he quit the Tyne- 
side shipbuilder on Friday. 

Scott is modest about his 


achievement in motivating 
Swan’s workforce through 
such a difficult 12 months 
since receivership- "If ever a 
workforce deserved success it’s 
Swan's for what they’ve done.” 

The Ministry of Defence has 
yet to decide on which yard 
should refit the landing ship 
Bedivere; among the competi- 
tors for the refit, on which 
Swan’s future depends, is Yar- 
row. 

■ Edwin Marks, 68, a US 
investment banker, has 
resigned as a non-executive 
director of Smith New Court, 
the UK investment hanking 
group which recently reported 
more than doubled profits. 

Marks, president of CMCO 
(formerly Carl Marks & Co), 
Joined the board in March 1988 
when his firm merged its US 
securities .trading, clearing 
and custodial business with 
Smith New Court CMCO used 
to be the second biggest inves- 


tor in Smith New Court, after 
the Rothschild group. How- 
ever, over the past year it has 
rednced its stake from ft05 per 
cent to 4.15 per cent . . 

M eanwh ile, the . group has 
a p p oin ted five new -executive 
directors thereby increasing 
the size of toe board to 39, 
i ncluding six non-executives. 
Graham Meek, 47, a former 
partner in Wood Mackenzie 
who joined Smith New Court 
fat May 1991, has joined toe 
board along with Michael 
Davids, 40, deputy nwiiBghig 
director of UK agency; Jnn 
Miyazaki, 48. head . of 
operations in Tokyo; David 
Smith, 44, who joined the firm 
as a market maker in 1972; 
and Jeremy Tnlk-Hart, 47, who 
nms'Smith New Court’s syndi- 
cation desk . 

■ Peter Williams has been 
appointe d dire ctor of procure- 
ment at WFP, he moves from 
British Airways. * 


Rover Group’s launch pad 


Terry Morgan is leaving the 
driving seat he has occupied at 
Land Rover Vehicles for the 
past three years to become 
managing director of British 
Aerospace’s Royal Ordnance 
division. 

The 42-year-old Morgan, who 
has been with Land Hover in 
various roles since 1985, forged 
Ms first links with Royal Ord- 
nance during BAe’s ownership 
of Rover Group - not particu- 
larly surprising, since Land 
Rover is almost the definitive 
light militar y vehicle. 

He takes up the job on 
August 1 and- for the first time. 


. in his career will not be 
1 directly-; involved. in the motor 
industry. Before joining Land 
Rover as production director in 
1985 he was with Leyland Bus 
as wM iMifi n- ii ir i ng director. 
career began with an appren- 
ticeship in Lucas' Girling 
brakes division. . 

. ; Rep lacing him as managing 
-director, at Land Rover is 36- 
year-old Ian Robertson, who 
steps up from purchasing 
director. Robertson is a Rover 
group man through and 
through, joining what was 
then British Leyland’s pur- 
chasing- d ep a r tment from uni- 


versity in 1979 and subse- 
quently working his way 
through a variety of positions 
- from logistics to plant direc- 
tor - across the group. 

Meanwhile another Rover 
veteran - of 37 years - Fred 
Cotdtas is faiMng over as man- 
aging director of British Motor 
Industry Heritage Trust, which 
controls the new motor 
museum and heritage centre 
Rover has set up within its 
Gaydon, Warwickshire, 
research a nd development cen- 
tre. succeeds Peter Mitchell, 
who Is retiring after getting 
the centre up and running. 


Non-executive 

directors 

■ Hugh Meltor at GOVETT 
ORIENTAL INVESTMENT 
TRUST. 

■ David Sharpe has resigned 
from REFLEX GROUP. 

■ Doug Rogers, daninan of , 
N ewma n Tanks Group, at 
SUTER, following its 
acquisition of James Wilkes. 

■ Clive Stronger, chief 
e xecutiv e of APV.at POWELL 
DUFFRYN. 

■ Alan Jones, md of Chartwell 
Land, at UPTON & . 
SOUTHERN HOLDINGS. 

■ Ronnie Yearsfey, former 

rf |»irm»ti rtf gjg hfaHMti OB 
Systems, as chairman at 

RESOUR CE MANAGEMENT 
SYSTEMS. 

■ Bernard Bensley has retired 
from HUNTING. 

■ Robin Gouriay, a director 
of BP, at The RUGBY GROUP. 

■ Michael Kizzgsho&as deputy 
chairman at EMBASSY 
PROPERTY GROUP; 

■ Andrew Simon, former 
chatnnan and chief ■executive 
of Erode, at FHILZP HARRIS. 

■ Howard Phillips, chief 

executive of Perkins Toods, 
at TRANSPORT 
DEVELOPMENT GROUP. 

■ Iain Bell, chairman of 
Vymura, at FIFE RffiMAR- 

■ Cotin GaskaR, group md 
of The 600 Group, at 
telemetrix. 

■ Nl gri Anriar srtn, former 

joint md of Gallaher Tobacco, 
at the ENLIGHTENED 
TOBACCO COMPANY. 

■ Robert Hlnde, a former 
partner of Jones T-»wy 
Wootton, at FISCAL 
PROPERTIES. 

■ Peter O'Connor at 
ANGLO-EASTERN 
PLANTATIONS 

■ Tom Cusack and Frank 
Herringr have retired from 
SEDGWICK GROUP. 

■ Michael Boriengbi, 
chairman of British Fittings 
Group and Provend Services 
and a former director of GKN, 
at BROMS GRQVE 
INDUSTRIES. 

■ Jttehani Fortin at AD WEST. 


James White 


James White, chairman of 
Ashley (koup, and a nonexec- 
utive director of Bo water, 
Branson Electrical, Lucas 
Industries, Miller Insurance, 
Perry Group, Bedland Group 
and SmithKhne Beecfaam, has 
dfod at the age of 56. He was 
ifai i mian and chief executive 
of Bund from. 1988 to 1990. 


CONTRACTS a TENDERS 


FOR SALE 


SIERRA LEONE 

POWER SECTOR REHABILITATION 
PROJECT INVITATION “TO BID FOR 
DIESEL GENERATING UNIT 

The Government of Sierra Leone has obtained a credft equivalent 
to US$21 trillion Irani the International Development Association 
to help finance a Power Sector Rehabilitation Project The 
National Power Authority of Sierra Leone (NPA) intends to apply 

a portion of the proceeds of these funds to eSgfole payment under 
the contracts for which this Irrvfteiton to tender te issued. 

NPA now Invites sealed bids from eligible tenderers for the supply 
of a 5 MW diesel generating unit to be Installed at foe Kingdom 
power Station, Freetown. 

The contract will be a turnkey contract to Include all civil, 
mechanical and electrical work. The scope of work will Include 
design, manufacture, work's tasting, supply, dv» works, erection , 
training, site testing and commissioning of a 5 MW diesel 
generator and associated auxiliary equipment The diesel 
generator is to be instaBed Inside an existing txtikUng. 

Interested eligible, bidders may obtain further Information from 
and inspect the bidding documents at-the office of. NPA. A 
complete set of bidding documents may be obtained personally 
by prospective Tenderers, or by their authorised representatives, 
upon cash payment of a non-relundatte amount of US$500 at foe 
offices of the Engineer (address below). Alternatively documents 
will be forwarded to Tenderers on receipt, by post of a payment 
tor the above amount, ft Is anticipated the tsddng documents will 
be available from 1 July 1994 onwards. Ail bids must be 
accompanied by a bid security In the amount of not less than 2 
per cent of the bid amount and must be delivered to NPA 
(address below) on or before 12.00 hours (local time) 28 
September 1 994. Bids wffl be opened in public in the presence of 
bidders representatives who choose to attend at 1ft30 hours on 
foe same day at the same address. 

Each Tender must demonstrate the relevant experience and 
financial states of the respective Tenderer. 


The Purchaser: 

The General Manager 
NATIONAL POWER 

authority 
Electricity House 
36 Si aka Stevens Street 
FREETOWN 
Republic of Sierra Leone 


Tel: (232 22) 223456 
Fax: (232 22) 224 067 


The Engineer: 

The Project Manager 
Sierra Leone Power Station 
Rehabilitation Project 
MERZand 
McLELLAN LIMITED 
Amber Court 
VVftKam Armstrong Drive 
Newcastle Business Park 

NEWCASTLE UPON TYNE 
NE4 7YQ England 

Tet (091) 226 1889 
Fax: (p91)2261104 


FOR SALE 

TREFLOYNE GOLF COURSE 

TENBY, PEMBROKESHIRE 

An unusual opportunity to acquire a recently 
constructed 18 hole Golf Coarse with a 
delightful stone built Farmhouse and 
Gate Lodge. Situated in a busy holiday and 
retirement area within 2 mOes of the coast. 
Ready for immediate opening. 

For more htfontoriott coHtoeti- 

J M Osborne 8c Co v 

15/15 Sourham Road Banbury Oxon OX16 7ED 
Tel: (0295) 277197 Fax: (0295) 268651 


Sports Equipment Manufacturer 
and Distributor . 

A Superb opportunity costs to acquire a specialist sports equipment 
prannftwiUiWcfistribtttor- 

Based in rite north of England rite company supplies a rapidly 
expanding European leisure market and is recognised in the UK as a 
leader in its field A strong asset base las enabled the owuet/operaroa 
to maintain earnings throughout the recession such that the company 
is now well placed to sig nifi cantl y increase turnover and profits. 

Principals or retained agenzs oniy should apply in tke first instance to 
BatB2964, Financial Tines, OneScu knwrk 


V 


Timbek/Kjtchen Distributor 

Well established Scottish business. 

Principal cnatomeis natfonal/locallioqsebtiiMetaK 
T/O >£3.0M; PBT £420K. 

Significant growth potentiaL 
Sale part of retirement planning. - 

Write » Bov B283S. Rn*BQ*t Ttae*. One SaEtfereafk Bridge, London SE3.9HL 


LEGAL NOTICES 


LEGAL NOTICES 


urn* n o”-* 

(ftrv. s-th reMou*— (Ute u* 



Node* of AppotaMott or 
AdmlntaalrM Rare*** 

KtNGSCUERg 

. FUBUOURONS UMtttD . 
(hyMwMm tow EffrinTrirffi? 
Registered amber*. 1721963. Nataw of 
tauioc** PuttiisUa*. Tadt Ctwrifleiitar ia 
Date of appolnweat of tdrelnistfatlw 
receivers: id Inc 199 «. Xante at pew»' 
appelating ike tdmioatrMivei receivers: 
Barclays Bank pie. AppftttcK S P,IMp« 
U d J W t red ale. Joint AdoW&nwhra* 
Receiver*. (Office bolder -Km 7991 amt 
210 *) 

Mkax Owpeo* Ljibt»n4 QaefUia Read, 
Rcndfcg, Seriates R*1 UO. 


NodceeC AppeiaMea of _ 

Aduilnhtiiri'i u Receiver - 

BKXDgS or BRITAIN 
-MAfiA29N>$i4MCro 
lid A i wJ al ltfrtn Soditrtaatf) 
Registered amber: '2214049. Nmri of 
buiMK P a bUsbnig . T“de Os nifi crt to u 
tO. Base of appofaicit of adnri altiail rc 
Itcchm: 16 Tana 1994. Name at peon 
appntwrm U< adaiostrariee w e riwn : 
Bardsy* Brnkpieippomicca. S f Hotptt: J 
if IiePalc. Job* Ai fculafanari ie hw b a s 
(Office bolds Noe 17991, unUKK) 
Address: Coopers. A Lybnnd, Orcjrhtus 
RneA Bea^ BcAskte ROl lXt 


Norioc pfAppnlwwtnrof 
Adnrifljjtndro Receiver 


,Aaj aotomet* of nay ot (heiaaseta 
Lloyds Bgd Gnep.wiu tfpt 
have tattered lanes as a rctnJt of 
arithdixaral of endk tacgtica betmeea 
1587 sod 1989 are famtod lb fAmc 
Loadoo^- .ri 081-789-9221 or 
Bnc Ogl-TW 7978 ' ( refea oa c JF) 


' COKrRACTPOBUSBINGUKnXO 
(Ia 4 rtre la l^nrirr ■mbo dld 
Registered aomben 2217239. Natare of 
fteriarer . ‘Bade CTmOTrm a n- 1ft 

Date or appointment of admiaiatianrc 
ncdwiK 16 Am 1994. Name ef penoa 
appointing the admiaistrative receivers: 
Bardaya Baafc ptc. AppeJatera: S V Bo%rie 
and I If Iredaln, Joint AdmlaJatsatfre 
Reeafvere. (Office bolder Noa: -7991 and 
2104) 

AddcareOoapaaJk Intend, Oraybbs Brad, 
BeadbR, BedoUte Rgl UO. 


BUSINESSES FOR SALE 


Appear in Via Haodallltaas 
enlteMays. ftMsy* end Stfudsjm. 
fiar fijrftor Womefioo 
v to advMflae bi iMa ssctkm 
ptaoss contact 

K«1 Loynson on 071 873 4780 
or Lssloy Sumner on 077 8733906 


. \ 


BUSINESSES FOR SALE 



On stftfuctiore of the Recehm 
OAKCROFT NURSERY 
Chichester, West Sussex 
Productive Nursery with 
3 bed roomed house, - 
2 acres of gbsshousing 
in 7.17 acres. 

Offers in the Region, of 
£260,000 

Tel: 0243 533633 



ED B USffl N G 

Asset* of niche publishing 
company, supplying hjgb quality 
tides to m^or bouses in UK, 
USA and Btuope. 14 oonnetod 
tides in progrea end feather 
10 at advanced stage of 
negotiation. Additional potential 
for co-edHuxn, TV right* etc. 
Large database. 

Wrkt to Box 02966, Fl*m*d*l 
TIhmb, On* Somtktmk Bridge, 
LoattonSBl 9HL 


FOR SALE 

Hone fitting and BSP adaptor 
manufacturer mainly export 
Asset sale considered. 
Circa £750/000. 

Write to Box B2967, Financial 
Time*, One Soirt to etfc Bridge, 
London SE1 9HL 


The Joint Administrative Receivers, F. K. A Sflcodcand R. T. Summetfidd, 
offer for sale the business and assets of this long establiihcd Norfolk based 
motor trader. 

■ Saab dealership opening from modem leasehold premises in 
Kings Lynn: 

- annual turnover of £5.5 mtilioa; - used car sales; 

- annual new car sales of 1 00 units; - 10 employee*; 

- after sales service. - 

■ . Independent motor trade badness operating from two freehold sites 
in Snettidam, Norfolk: 


- annual turnover of JL3 million-, 

- osedcarSales; 

- daadc car saksc 

- after sales service; 


- bodyshop; 

- petrol forecourt and shop; 

- development hnd; 

- 13 employees. 


Ibudn 
Ross 
i i 


■ fTTCchcid investment properties in Snettiaham and Hunstanton, Norfolk. 
Offers arc invited for the whole or para of the asset* and business. 

For further infonnadon plcaac contact Karen SUoodc or Sandy Brown 
acToadie Ross & Co., Led* Home, Station Road, Cambridge C8t 2RN. 
TeL- 0223 460222. Fax; 0223 31+261 or 350839. 






-‘-i i—* ii - -ij -- 


MOOTA COUNTRY MOTEL 
NR COCKERMOUTH. CUMBRU 
Fufly licensed high volume hotel & 
function business, superb A road 
. site. 33 en subs bechuoms, 
“ b ni r oo r n, bar, restaurant etc. 
Urge site.- dev. potential. • Mfh 
net T/O £232,295 (unemtited). 

£460.000 FREEHOLD 
ROBERT BARRY & CO/- 
HARROGATE (0*23) 586362 


f JMpomaoC 

REAM to WEAR 
teW Maateai 
■fciUrioi— iWhUIn >Wa« 
Mcaaboaqatey rreSm-tfcaaMVpl 
OskbS^i te*onte|AadredUag 
mtesl— iwpeiesV 
fbm aamtcUrSaUiDk^e 
SZBMADEXXLTO.cn. 
iTxmtManiaam 
l /tSTANBOl. TURKEY 

tTetnmt 


TOR SALE 
Well established Tbol 
Hire Company PLC 
6 Outlets, 

South Hast England. 

Bos Mo. 82980, IhiiMThn, 
Oatgo m— S 1 irmn tm T*W 


BUSINESS OrrOBTOfilTY LOG 
OI3i man caoplOB tad ap torioadeuli ok 
“ fcateUtetlplStei 
fatmbk 


-Bo^xaaes For Sric 
Fredncc* by ctpcricafiod | 

scrioai bnsiaeas people bmted 
of Qua, aa tmu vw la 
Tet 0273 S91070 Fac 0273 890740 



Prestigious Caravan Manufacturer 

The Joint Administrative Receivers offer for sale, as a going concern, foe 
business and assets of Vanroyce Limited, manufacturers 05 high quality 
touring caravans based in foe North West 
Principal features irtdude.'- 

■ Prestigious product and name 

■ Finished stock and work In progress 

■ Plant and machinery 

■ Lease hold /freehold premises 

■ Turnover 1993 £2-8 million 

For further information please contact foe Joint Administrative Receivers, 
Myles Halley and John Eggleston, KPMG Peat Marwick, Peat House, 

1 Waterloo Way, Leicester LEI 6LP. TeL- 0633 471122. Fax: 0633 54762ft 


kWffcJ Corporate Recovery 


CooDers 

&Lybrand 


INDEPENDENT LIFT CONTROL SYSTEM 
MANUFACTURER 


Newsletter 
For Sale 

Spedatot niched toe generating 
E50K subscription revenues. 

Write to Sox 92981 , Financial 
Times. One Southwarit Bridge, 
London SEi 9HL 



SHIPS UQUPATIO.NS 


PINK PAGES a Mu mtkly flMi tn wwy 
fcactwH comm. U* mart c umnti w ri iw 
auUe miltMtl a t pnna wares M 
Mn tor mm uartho ta th* treotoncy 
auriatpacs. Ftiftr todaud md iwantnd 
pink PAGES olm direct contact «Ui 
Lteddatm & Hscshtn, tiKyoev Oaojacy 
, ActMQr md Location, aod afire Ha imU 
b^nrire lor im eonpm. IooUob lor a 
k Can yoo attert act to totw ebon 
■'krtatvener opportuoty EVERY w»A?j 


1.00* uve BUSINESSES FOR SALE 
miorew aroaosw taMgfateon am 1184 
- Ffcc 071 706 3404 


Ttw JoW AdmHritotw Rsoatwre otiw tor safe tw budnon and ante* of On above company, which k 
ono od tbs ioQost tetepondanf manufochna In tw country. 

i of tbs hesteeso tec letis : 


• a complete range o( BB conkot syitans 

• UP monDoring and communtadoi B sytewra 

> moMBnonco and sereidno of arising curtxmr bam 

• turnover lor 1993 In nnras of £7m 

• modsm mrostocfuiing and oOcs premises ta CiwydL North WOIsb 

> 8SS750 Part 2 AceradMkxi. 


For farther dMafo, pteose ooitioct Wchaitl A Smut or Kmln N K WBmoll ol Goopn ft Ijteond. 
Cftarcftft H0US8, Chuitofll Way, CrettifCR 4X0. Tsiapbarw: (0222) 237000. Fax: 0222) 34562ft 

Coapcn A Lytnat It arebarisod by ihe toKkrec of Chartered j 


h Piliret snd Wb id creiy a» 


Robinsons of 
Winchester Limited 

itaMnwisteliwRec^ 

•XS& ol Rohnsom oi ittncbester iJitekoneollheUKs 
; geotfiouseand garden caitre manufactures. 

range of carmenSaland domestic greenhouses and 
*anjeralate 

jeMsMteade in garden cenbe deagt aid construction 
« Tbrnover 19» fftl mBon and 6 nxwfiB to 30 Apil 1994 
£l5nnflnn 

• totem freehdd property on 5 acre sto ajacent to M3 
-MftiniqratMac&ettBr 

•100enpk))ee . "J 

F^fm1herirAKroatton<x>ntectttKjakrtadmarBSbtiMereoE!teer 

PSPadmureFCRat 
Pries HatehouMCIho Qmy. 30 
SoutimptmSOUdOG. 

TriatteoK (0703)330077 fine (0703) 238262.- 41 ; .V* '> 

Price HiOerhouse • 

Pria«stetnuse is aUhorsed oytte hattutedOwtreed 
Acawnbrts tn Engtood and Wads to cany an iwmtmnt (mams, 

■ ' 

...t vjiiSyA- 

aaaaa-aaaaaaaaaaaaaaaaaaaaaaaaaaaaa'aaaa'aaaaa 

BUILDING CONTRACTOR (South East) 

9 Exc8fent record of a wido range of projocts 

• Wei estabfohed with a blue chp customer base 

• Experienced and successful management team 

• Tumovvrinaxc0ssof£1OmiI)on;prDfitaM 

• Hj^i level of current orders with growth potential 
Potential purchasers, please write to: Henry Bartram 




Leavers Lace Machine 
Manufacturer 

(Sole World-\Slde) 
Nottingham 

lireys&'WyerLtd (In ^ s . 
incorporated in 1919, 

ww m u fv n ri «r nf ' ^ -re 

If 1 

& 

cyL, 


U't is the sole world-wide manufacturer of 
q <• Leavers lace machines, and provides 

^ unioue support to an international lace 
® market. The business is now offered 
A for sale as a going concern. 

\ ■ Business established for over 130 
years 

Annual turnover £1.4 million 
Freehold premises 22,800 sqJFt 
International customer base 


<5 


<n 




Livingstone Ffeher pic 

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

AMsmberof FMBRA 

TtTTVTfTyVVfVVVntTffVfmVVUVWfWVVTt 



On-going contracts 

■ Skilled workforce 
| . 

v ■. Unique expertise 
. ■ Experienced in all Leavers lace 

• machines 

■ Specialist plant and machinery 

\ ^ For further details contact the 

/< Joint Administrator Roy Welsby, 
o Grant Thornton, 30 Houndsgate, 

^ - Nottmg^iam, NG1 7DH. 

g S TeL 0602483483 Fax: 0602476791 

^ 4 Grant Thornton* 

-rhcl ^ nm^ Fgro.jrf XkynTbmm hwn«iwi *L 
E^ttJtadWile* to canyon iir»e*onmtbB«nKj£ 


^3 


rl 

fr-t 

kA 


All Advcitisannt boatiqp aeaooepced subject to oar concnt 
T^nnsaitilCoiiAkn^ oopfcs of ^ wbidtareavaDablc by wx&iog to 
TheArivati3a»eioPro<lQca»^^ 

The p<»reAl Tliiii^nMS>Mteri:M^B. h i ii d M SK19ffl. 
TeL 071 873 3000 Fee 071 873 3064 











14 


BUSINESS AND THE LAW 


FINANCIAL TIMES TUESDAY JUNE 2S 1994 


Trade mark rules 
accord with treaty 


National trade 
| A maiic rules which 

fffl allowed imports to 

*i!rr3^ banned because 
they might be con- 
L fused with domes- 

— — ZJE& V 8 L 

Rome treaty' provi- 


COURT 


sions on the free movement of 
goods, the European Court of Jus- 
tice said, last week. 

The case concerned the importa- 
tion of beating installations into 
Germany from France. The goods, 
which were made In France, were 
sold under the trade mark “Ideal 
Standard”. 

Until 1984, an American com- 
pany held the rights to “Ideal 
Standard" and marketed sanitary 
equipment and heating installa- 
tions under that name through 
subsidiaries In Germany- and 
France. But in 1984 the French 
subsidiary was forced, due to eco- 
nomic circumstances, to sell its 
heating installation business, 
together with the trade mark, to 
an outside company with no link 
to the Ideal -Standard group. The 
trade mark rights were later sold 
on to another company, also inde- 
pendent of the original grouping. 

It was the German subsidiary of 
this last company which found 
itself before the German courts for 
trade mark infringement, having 
imported heating installations 
into Germany from Fiance with 
the Tia-mo “Ideal Standard". 

The plaintiff company still held 
the right to the trade mark “Ideal 
Standard" for both sanitary equip- 
ment and heating installat ions but 
it had stopped producing and mar- 
keting heating installations in 
1978. 

The Dusseldcrrf court found in 
favour of the plaintiff. It said the 
French imports risked confusing 
consumers. It also found that the 
relevant SC law was clear and 
thus refrained from seeking a pre- 
liminary ruling from the ECJ. 

The German importer appealed. 
The Dusseldorf Appeal Court 
referred the case to the ECJ, ask- 
ing whether there Was an unlaw- 
ful restriction on the free move- 
ment of goods under the EC 
treaty. At the time there were no 
harmonised Community rules on 
trade Hiavks,. 

The ECJ said it was common 
ground that the restriction on the 
German importer was a measure 
of equivalent effect to a quantita- 


tive restriction within the mean- 
ing of the treaty. The question 
was whether It could be justified. 

The Court bad already ruled in 
the Bog U case that such restric- 
tions could be justified, but in that 
case, not only was the name of the 
trade mark identical but also the 
products concerned were identical. 

In the present case, although 
the trade mark name was identi- 
cal. the German holder of the 
trade mark no longer sold the 
products being imported. 

The Court said that, where a 
risk of confusion existed for con- 
sumers between two products, it 
did not matter whether the goods 
were identical or sufficiently simi- 
lar. In the present case, the 
national court had decided on the 
facts before It that a risk of confu- 
sion. existed. The Court could not 
substitute its own findings on the 
facts; thus, given that a risk of 
confusion existed, the position 
was as if fixe goods in question 
had been identical 
.The question that remained was 
whether the Court’s findings in 
Bog U could apply not only to the 
facts of that case - where the 
trade mark rights were forceably 
removed from the holders by 
sequestration - but also to the 
present case where there had been 
a voluntary transfer of trade mark 
rights. 

The Court said they could. The 
determining factor in Bog H had 
been the absence of consent by the 
trade mark holder in the country 
of importation to the sAilfag in the 
exporting countr y of similar prod- 
ucts sold by the trade mark holder 
in that country. In such circum- 
stances, the free movement of 
goods would jeopardise the essen- 
tial function of the trade mark; 
consumers would not be able to 
identify with, certainty the origin 
of the marked goods and the 
holder of the trade mark could be 
held responsible for the poor qual- 
ity of goods for which he was not 
responsible. . 

The Court found this reasoning 
would not have been altered if the 
transfer of trade mark rights had 
been made voluntarily rather t h a n 
b; sequestration. Therefore its 
finding s in Bog II applied. 

C-9J93: HIT Internationale Hsxz- 
technik GmbH v Ideal Standard 
GmbH, ECJ FC June 22 1994. 

BRICK COURT CHAMBERS. 

BRUSSELS 


A recent decision by 
England's Law Lords may 
have undermined London’s 
attraction to- the interna- 
tional business community as a 
venue for international arbitration. 

Concern about unwarranted inter- 
ference by the English courts in 
arbitration proceedings will inevita- 
bly many English »nd foreign 
lawyers think my careflilly before 
choosing London as the place of 
arbitration in disputes arising out . 
of international contracts. 

English law has long been a sfc 
n lficant export from the UK. Inter- 
national contracts of all kinds 
involving parties from different 
countries are often subjected to 

English law. 

Particularly in the emerging mar- 
kets of the Far East, English law is 
chosen to regulate construction, 

ag grrw -y and rfi«t rihntif )T l. foteDCCtnal 

proper ty , joint venture, investment 
and finance contracts. 

English law Is chosen because the 
parties feel it is intrinsically the 
most appropriate sys t em for their 
particular problem. This may be 
because the parties cannot agree to 
use either of their national legal 
systems but accept English law as a 
neutral body of law. 

They choose English law not 
because it is that much better than, 
many other national laws, but 
because it is a commercial well- 
developed, tried and trusted system; 
bya ufift the En glish language is the 
international trading lan- 
guage; and because there is a large 
reservoir of experienced and able 
Rngusii lawyers. 

French law, Swiss law and New 
York law, however, are equally 
highly regarded around the world. 
arid are often considered suit- 
able for regulating- international 
contracts. 

Due to Britain’s trading p-min«n«> 
last century and early this century, 
London became, and remains, a cen- 
tre for many forms of arbitration, 
particularly those involving mari- 
time and commodity issues. 

One of the factors that made 
England a popular arbitration 
venue was the fact that English law 
and the courts supported arbitra- 
tion proceedings to a greater degree 
than in many other countries. 

But whether due to arrogance or 
conservativeness, EngHsh law fell ‘ 
behind the times and more and 
more international arbitrations 
went to other countries, notably to 
Switzerland. France and the US. 

The movement of arbitration 
away from Ra gland in the 1970s was 
a direct result of the interference of 
the English courts which allowed 
the parties to abuse the case-stated 
procedure, giving the courts an 
opportunity to review decisions of 
arbitrators. 

After a clamour from lawyers and 
some business circles, the 1979 Arbi- 


A question 
of costs 

Julian Lew says a Lords’ decision could 
mean fewer arbitrations in England 



tration Act was passed. This only 
partially redressed the situation. 
The power of the English courts to 
review decisions of arbitrators was 
greatly curtailed and limited to 
important questions of law, having 
wider application than for any one 
particular case. 

Moreover, in international mat- 
ters, except in traditional London 
maritime, commodity and insurance 
arbitrations, the parties were per- 
mitted to agree in the arbitration, 
agreement to exclude judicial 
review of the award. 

Nevertheless, English law is now 
out of step with most other arbitra- 
tion systems. 

There is one underly in g intention 
behind every arbitration agreement: 
to exclude the jurisdiction of 
national courts in favour of an arbi- 
tral tribunaL While speed and low 
expenses do not always result from 
a resort to arbitration, the ability to 
have an arbitrator with knowledge 
and expe rie nce of a particular com- 
mercial sector, and a degree of pri- 
vacy and ernifirinntifliity of the dis- 
pute and the procedure, are the 
main reasons why parties favour 
arbitration. 

But arbitration cannot occur in a 
vacuum: the agreement of the par- 
ties to submit to arbitration, sup- 
port fen- the procedure, and enforce- 


ment of the award will always be 
needed from national courts. 

The question is the extent to 
which ngt jnn^ 7 courts gfronfri. prac- 
tically, supervise and control arbi- 
tration proceedings. 

In many countries, this dividing 
line has often become blurred. It is 
difficult to tell a national court 
judge that he h a s thmiW exer- 
cise no jurisdiction over an arbitra- 
tion amd expect him to accept that 

Hence, when a cogent argument 
is made that justice necessitates the 
intervention of the court (even 
though the real aim is to avoid or 
frustrate arbitration proceedings), 
the court will be reluctant not to 
attempt to provide the justice 
sought. When this occurs, it is done 
with a parochialism which reflects 
national law and procedure, and 
ignores that feet that the parties 
come from different systems. 

This problem was wen illustrated 
by the recent House of Lords deci- 
sion in the Ken-Ren case* This was 
a typical international arbitration, 
between a Kenyan claimant and 
defendants from Belgium and Aus- 
tria. 

The claimant was insolvent but 
the arbitration was befog funded by 
the Kenyan government A tactic , to - 
avoid litigation in England has 
always been to seek security for 


costs from the foreigner. This Is to 
tie in with the general rule in 
En gland that the loser pays the 
winner’s costs - a rule which does 
not exist in most other countries. In 
International arbitration it is a 
power that is sometimes, but not 
invariably, exercised by arbitrators. 

Rn gtish law gives the courts the 
power to order security for costs in 
arbitration; arbitrators only have 
that power if expressly agreed by 
the parties. The. House of Lords 
decided, by a majority of £2, that in 
certain circumstances, and very 
exceptionally, the E w g 1 * g h courts 
could intervene in an international 
- arbitration and require a claimant 
to put up fhnds as security for costs 
merely because that arbitration is 

fairing place in En gl and . 

T his decision was based, pri- 
marily, on a belief that, if 
arbitration occurs in 
England. It must be subject 
not only to the supervision and con- 
trol of English courts, but ulti- 
mately also to English procedural 
rules. 

The particular characteristics of 
the Ken-Ren case are of secondary 
importance. What is crucial is the 
fact that by their approach the Law 
Lords have placed a disincentive to 
parties to come to arbitration in 
England. 

Why should parties who come to 
England due to its neutrality, geo- 
graphic convenience, and local legal 
expertise be subject to the inconve- 
nience, and sometimes idiosyncra- 
cies, of certain English, procedures. 

if arbitration is directed away 
from London, Britain’s invisible 
earnings will suffer and the influ- 
ence of En gfiah law on commercial 
transactions generally in other cor- 
ners of the world may be affected. 

If security for costs Is to be 
allowed at aQ fend there are diver- 
gent views) it is the arbitrator 
rather than the court that should 
decide the issue. 

- This issue will feature promi- 
nently over the owning months In 
the debate over the development of 
a new arbitration law in the UK. 
The intamatirmai arbitration com- 
munity will watch with interest. 
For the moment it Is probable that 
the effect of the recent House of 
Lords* decision will be to persuade 
foreign lawyers and parties to 
locate their arbitrations elsewhere. 

The author is a partner of Coudert 
Brothers, the international taw firm, 
and Head of School of International 
Arbitrations at the Centre for Com- 
mercial Law Studies, Queen -Mary 
and Westfield College, University of 
London. 

*Copp6e-Laoalm SA: and Voest-AL 
pine Aktiengesselschaft v Ken-Ben 
Chemicals and EertBtfxrs (in Uqtdr 
datum in Kenya). ' ' 


LEGAL BRIEFS 



Officials sued 
over diversion to 
reduce deficit 

C alifornia state officials are 
befog sued for the return 
of $700m allegedly taken 
illegally from the state’s 700 . 
“special funds” to pay off a deficit 
in the state's “general fond”. 

The action bis been brought by 
foe California State-Electronics 
Association and others which have 
contributed to the special funds 
over the years. Money in the 
special ftinds comes from licensing 
fees and is earmarked by California 
law to be used only to regulate 


provide consumer protection; The 
action claims the state legislature 
illegally authorised the state 
government to transfer money from 
the special funds to the general 
fund between 1991 and 1994. ; - 
Mr Richard Fine, attorney for 
the plaintiffs, said that, as a result, 
the reserves of the special funds 
had dropped by more than 9720 m 
from 91.561m on June 301991' to 
9848m on June so 1994. “Tins 46 
per cent redaction will deny. 
Californians the level of consumer 
protection they have a right to,” 
he added. 

Legal losses 

H undreds of UK law firms 

could go bust over the next 
three years according to 
a survey of law firm performance 
by Coopers & Lybrand. The 
accountants' animal survey of Law 
Finn Financial Management Shows 
a general Improvement in the 
performance of most firms - almost 
60 per cent increased profits per 
partner last year. But 25-30 per 
cent of firms conthmed to report 
a farther fall in profits coming 
on top ef poor performances to 
1901-02 and 1992-93. Coopers says 
these firms have become locked 
into a cycle of reduced profits, 
lower i nv estme n t and an inability 
to recruit and retain quality staff 
Many of them would rat survive 
tits next few years. 


FINANCIAL TIMES 


FT EXPORTER 



FT EXPORTER: Summer Issue - July 7 th 


The next Issue of Europe's premier export review, the 
FT Exporter will appear with the Financial Times 
throughout foe UK and Europe on toe 7th July 1994. 
Written by Financial Times joumaDsta based in leading 
business centres across Europe, the FT Exporter will 
show, through case histories, how orders me being won 
and what practical problems are befog overcome. 

The Summer Issue wffl Indude a discussion of how free 
World Trade Is alter GATT, at a glance Risk Proffles for 

Derek van Tlenon [display] 

Tel: 44 (0) 71 873 4882 Fax: 44 (0)71 8733195 


major non-European trading countries, a comprehensive 
guide to short term export credit insurers and a look at 
good deals, bad deals and who's doing them. 

Detals of the new FT Bqxxter WoridTravefer FQncard, 
in association wWi Sprint vA also be included In 

the Summer Issue. 


Janet Kellock [classified] 

Tel: 44 CO) 71 873 3503 Fax: 44 [0)71 8733098 


I.-*.,-. 







Jack Nicklavs pictured at a recent visit to LGC 


From tea to green 
everything at LGC is perfect 


When Jade Nicklaus visited The London Golf Clob recently, 
he commented on the magnificent state of the greens on 
the Heritage". But then he is a little biased - he designed 
the course. 

At The London Golf Chib every detail is important. From the 
magnificent Club House, with its views around the two par 72 
courses, to the fairways, always in peak condition thanks to 
die state-of-the-art drainage system. 

And then there's the food. The splendid formal restaurant -.the 
Teppanyaki Bar.jnd the Spike Bar. where meals and snacks 
are available from dawn to dusk. 



•hjyia^ 


Tea itself is an impressive affair. Finger sandwiches. 
Scones and cream. And a range of fine leaf teas 
includingjapanese green. 


LONDON 

GOLF CLUB 


Simply Enrope's Best 


The London Golf Club - 
recently judged the best 
new golf club in the UK 

- is just a short drive 
(and 3 iron!) from the DT #eM>n *n» 

Come and see LGC for yourself 0474 *73*5^" 0,1 

- it’s sure to be just your cup of tea! 


For further information on membership and to arrange a visit to 
the Club, just ’phone 0474 854466 or fax 0474 854798. 


Alternatively pop your business card in an envelope and 
Post it to The Membership Secretary (FT2). The London 
Coif dub. South Ask Manor Estate , Siansted lone. Ash, 
Nr. Sevenoahs, Kent TN1S 7EN. 


% 


X 

■lS 


Honotay Chib Captain: Jack .fficfcbus 

Honorary Members: Sean Connery*. Tbc Rt. Hon. Lart Deecfcs MC Sr Puit Guabmi: The St Hon. lord FWon Sr DenbTha&her Be The Rl Hon. Lord Yoons otGraffliam. 










FINANCIAL TIMES TUESDAY JUNE 28 1994 


ARTS 




An exalted ‘Tristan’ 


I n what are still difficult times, 
it is extraordinary that the 
two premier festivals of Great 
Britain, Glynde bourne and 
Edinburgh, should have real- 
feed their matching, long-standing 
dreams only weeks apart - and not 
just successfully, but triumphantly. 
A month ago Glyndebourne 
reopened in its superb new house, 
with half again as many seats and a 
real acoustic at last On Saturday 
the new Edinburgh Festival Theatre, 
half again larger than that, had its 
op eratic inauguration with Wagner's 
Tristan and Isolde: a stem test for 
any house, but passed here with 
reso undi n g credit and a truly memo- 
rable performance to boot 
The gods must have smiled up on 
the project, for few new opera 
houses since Bayreuth can have had 
gala openings of this exalted musical 
standard. Not all the gods, as it hap- 
pened: that afternoon, a large parade 
in favour of Jesus disrupted traffic 
so severely that many Tristan 
patrons - at £175 a head - arrived 
only in time to view Act l on the 
cafe-bar monitor. But there was no 
further divine intervention; to 
the unlucky latecomers I can say 
that nothing in Act 1, admirable 
though it was, rose to the wrenching 
splendours of the later acts. 

The EFT is not exactly “new", for 
it has retained and refurbished the 
entirely satisfactory auditorium of 
the Old Empire (1928, riftBignnrt by 
the MUburn brothers of Sunderland 
after the previous Frank Matehnm 
theatre burned down) - broad and 
unshowily handsome, excellent 
sight-lines, no seat much further 
than 30 yards from the lofty stage. 
The latter is quite new, like all the 
backstage facilities too; it is now the 
largest in Europe. EquaBy the flashy 
front of-house. which displays the 
expansive new foyers an all three 
levels through a gigantic glass wall 
to the world outside. 

Nor. despite its name, is the EFT a 
creature of the Edinburgh Festival: 
it is a self-christened “lyric theatre” 


which win have to sell itself all year 
round, not only as the second home 
of Scottish Opera and the Scottish 
Ballet, but as a showcase for practi- 
cally anything that will draw a suffi- 
cient audience. For the Festi- 
val, nonetheless, it will be a boon, a 
huge asset and a blessed rescue. 

It is no secret - indeed, it is a kind 
of scandal — that Edinburgh’s lack of 
an adequate opera-venue has been 
an unstauncbed Tristan- or AmfOT- 
tas-wound in the flesh of the Festival 
these many years, with repeated 
pr omis es regularly scotched by civic 
parsimony and argy-bargy. Very late 
tn the day. dogged thrift bad its 
unexpected reward when the Moss 

David Murray hails 
the operatic inaugu- 
ration performance 
in the new Edinburgh 
Festival Theatre 


organisation decided to give up the 
Empire, run as a bingo-hall since 
1962, for a bargain price. For a mere 
fig-i m more, much of that private and 
corporate money, Edinburgh has 
made itself an opera-house that 
should transform the Festival sod 
the yearly season over a Long time to 
come. 

This Scottish Opera Tristan, 
staged by Yannis Eokkos, is a co- 
production with Welsh National 
Opera. First seen at Cardiff 16 
months ago and roundly acclaimed, 
it has been partly rocast (for the 
better, by all accounts), and Richard 
Armstrong now finds himself con- 
ducting an orchestra which must be 
every bit as musically attentive as 
its Welsh counterpart He took most 
of Act 1, and especially the great 
Prelude, at tempi so intensely slow 
as to tempt fate, but the players sus- 
tained them bravely. The effect was 
imposing, if measurably self-con- 


scious: even the young-middle-aged 
Armstrong, devoted as he is, cannot 
just slip into the clothes of old Fur- 

twSngier or GoodaU. 

Tristan’s stately declamations 
exposed the heavy beat in Jeffrey 
Lawton's warm, dignified tenor, and 
Isolde's simmering fury is not a nat- 
ural vein for Anne Evans. With the 
descent of Romantic rapture, how- 
ever, the earth moved. In Act 2 Arm- 
strong paced Isolde's impatient long- 
ings and the subsequent love-duet 
marvellously, with a wealth of fresh, 
tingling orchestral detail With his 
speaking ptantssimt no leas than bis 
urgent explosions, the EFT acoustic 
seemed to accommodate voices and 
orchestra alike, with perfect trans- 
parency and ha? a my 

Lawton rose to a throaty. Jon 
Vlckers-ish intimacy that tore at 
one's heart, and Evans was lumi- 
nous with elevated passion. As Bran- 
gaerte, Kathryn Harries issued her 
a-mriirnK warnings in haunting depth. 
Isolde's husband King Marke. the 
Norwegian bass Carsten Stabell, 
capped it all with a reproachful 
monologue of sterling moral weight, 
enough to re-cast all the erotic 
action in a new light - as it should 
do, bat rarely does. As for Act 3, I 
hardly know whether to praise Law- 
ton’s desolate agonies more, or Arm- 
strong's knife-edge quickness In cap- 
taring every turn of his epic 
self-searchings. 

We were gripped and scathed. 
Kokkos’s spare direction, as plain 
and economical as his nearahstract 
sets, let every moment stab cleanly 
home. James Johnson's tine Kur- 
wenal came into his own, wracked 
by loyal desperation. Iain Faton rep- 
resented the Shepherd in uncommon 
sympathetic depth (abetted by a fine 
cor anglais), like John Harris's 
angry Melot Miss Evans was vision- 
ary and nobly persuasive in the 
Uebestod - but it was a mistake to 
let the lights Fade slowly on her stat- 
uesque pose after the music had 
stopped: Tristan must mid with its 
soft, absolutely final note. 







The gods smiled and we were 
the Yannis Kokkos’s Scottish 


ped: Anne Evans and Jeffrey Lawton in the title roles of 
Welsh co-prodaction, conducted by Richard Armstrong 



Pioneer of public taste 


William Packer admires Samuel Courtauld’s impressionist 
collection, now hung in the Great Gallery of Somerset House 


A t their former home in 
Woburn Square, col- 
lections in the Cour- 
tauld Institute's gal- 
leries were a close kept secret 
Thar move in 1989 to Somerset 
House, William Chambers' 
classical masterpiece at the far 
end of the Strand, was expec- 
ted to change all that But 
there are still problems. 

The Strand is no longer the 
fashionable thoroughfare it 
was and, at the Aldwych end, 
has long been a forbidding 
one-way maelstrom. Sign-post- 
ing is, to say the least, discreet 
and the entrance facade of 
Somerset House itself is hardly 
welcoming, with its barriers 
and car-park overseers. That 
the courtyard beyond, poten- 
tially one of the great public 
spaces not just of London but 
of Europe should be the pri- 
vate car-park of Her Majesty's 
Revenue Mien, is a scandal 
Inside, however, thing s are 
looking up. The problems of 
heating and air-conditioning 
appear to have been resolved, 
albeit in somewhat ad hoc 
fashion in the short term, and 
much of the permanent hang 
has been rehung, to advantage. 
But the most significant 
change is the recent decision of 
the new director, John Mur- 
doch, to return the Great Gal- 
lery on the top floor to its 
proper purpose as a prime 
exhibition space. 




‘La Loge’ by Renoir, which in 1925 cost £24,200 



There, at the top of the ver- 
tiginous staircase, where Row- 
landson's rakes and beauties 
once heaved together at the 
Royal Academy's private view, 
we now have as our first taste 
of the new policy an exhibition 
given over to the eponymous 
Samuel, collector of French 
impressionism and pioneer of 
public taste. Samuel Cour- 
tauld, an industrialist who had 
made a great fortune out of the 
manufacture of rayon, became 
interested in impressionism on 
seeing the Lane Bequest at the 
National Gallery in 1917. He 
began to collect on Ms own 
account and by the end of the 
1920s bad acquired representa- 
tive works by all the major 
impressionists and post-im- 
pressionists, and was espe- 
cially strong on C&anne and 
Seurat He also endowed a pur- 
chase fund at the National Gal- 
lery, by which such things as 
Cezanne’s self-portrait, Degas' 
“Young Spartans” and "Miss 
La La", Van Gogh’s "Chair" 
and "Sunflowers”, and Seurat’s 
huge "Bathers at As uteres" 
came into public hands. 

Tins exhibition presents not 
just the cream of the paintings 
and drawings that comprise 
the Courtauld Bequest itself, 
but also brings together some 
of the works he gave away or 
left to friends and family on 
his death in 1947. There are 
three besides, all masterpieces, 


to represent the National Gal- 
lery's good fortune - Monet's 
“Gare St Lazare”, Renoir's 
"Boating on the Seine” and 
Picasso’s “Child with Dove". 

It is astonishing to stand 
thus surrounded by great 
paintings, and not a little envi- 
ous at what one man was able 
to get for himself to enjoy - a 
pique barely assuaged by his 
conspicuous philanthropy in 
passing it all on to os. I have 
nothing against great art being 
held in private hands: I would 
only like to get my hands on 
some of it myself. The serious 
point is that true art, I am con- 
vinced, is charged up in a curi- 
ous way, by being privily held 
and loved for a period before it 
moves into public limbo. 


H ow familiar so 
many of these 
things, which in the 
1920s were a matter 
still of some controversy, have 
become to us. It was Courtauld 
who bought the Van Gogh 
“Self-Portrait with a Bandaged 
Ear” for £10,000 in 1928, and 
not the National Gallery. He 
also bought Cezanne’s "Man 
with Pipe" for £7,500 in 1927, 
and "Gravelmes” by Seurat in 
1326 for £3,100. The price oT the 
ravishing Modigliani seated, 
nude, bought around 1931. is 
unfortunately not known. 
These were difficult pictures 
still, at serious prices no doubt, 


but by no means exorbitant, 
even then. 

Renoir no doubt was safer 
(the exquisite “La Loge", of the 
girl in black and white in her 
theatre box, got for £24^200 in 

1925) , and Manet too (his “Bar 
at the Folies-Bergbre” the prize 
of the collection, at £24,100 in 

1926) . But even so. these were 
capital works, manifestly 
museum paintings in prospect, 
and so many of them still 
available. All the prices known 
are given, which gives a fasci- 
nating gloss to the show. 

With the smaller works and 
drawings, this knowledge is 
even more piquant - £700 or so 
for a Seurat study of the river- 
bank; £282 for an ink-and-wash 
drawing by Guys of two fash- 
ionable women; £750 for Seu- 
rat’s monumental chiaroscuro 
nude - but 1 cannot bear to go 
on. The drawings in their way 
are as well-judged as the paint- 
ings - Forain, Lautrec, Daum- 
ier, Cfezanne. The dark pastel 
by Degas, of a seated woman 
seen from behind as she fixes 
her hair, is one of the best 
drawings that greatest of 
drau ghtsme n ever did. 

Impressionism far England: the 

Samuel Courtauld Collection; 
Courtauld Institute Galleries, 
Somerset House, the Strand 
WC2, until September 25. 
Sponsor: Cantor Fitzgerald. 


Theatre 

‘Rage’ 
saved 
by the 
acting 


T here is not much rage 
in the new play at 
the Bush, despite its 
title. No heavy bombs 
either, despite the fact that 
H is set In Slough. Here is 
suburban, middlebrow drama, 
heavily influenced by 
television. The toast to the 
Bush is that they do it so well. 

Richard Zajdlic, the author, 
is currently contributing to 
the TV soap. EasiEnders. Rage 
may seem an odd play Tor the 
Bush to pick up, but at least 
the choice shows the theatre’s 
versatility. The director is 
Mike Bradwcll who has 
worked at the Bush, on and 
off. for years and knows the 
place inside-out. He can stage 
a success even with a text that 
belongs to another medium. 

Nothing in Rage is 
particularly surprising. It is 
the tale of a two parent, two 
children family an the verge 
of a 20th wedding anniversary 
of a marriage that has nothing 
much to celebrate except 
survival. The husband is a GP 
long out of love with bfe wife, 
bnt not much enamoured of 
anyone else. The wife still 
clings to him. Daughter Kate 
is doing A levels. Son Nicky 
Is a bit of a drop-out. Kate is 
on the conventional pill, 
prescribed by another doctor. 
Nicky Is on anti-depressants, 
prescribed by his father. 

By the end of the 
celebration, Nicky has 
committed suicide, possibly 
having stabbed a police 
woman in the course of an 
unexplained crime. The rest 
is essentially an inquest into 
bow the family got into such 
a position in the first place, 
plus a vignette of a local 
reverend coming to show 
sympathy and a sub-plot about 
the woman police officer and 
her detective boy friend. 

If it were the play alone, 
there would be nothing to 
write home about Rage is 
redeemed by remarkable 
acting. Sue Johnston as the 
wife has few memorable tines, 
hut she succeeds by her 
presence and her voice in 
putting feeling into cliches. 
Nicky Henson as the doctor 
has a slow start, mainly 
coming home tired to reach 
antomatically for the whisky 
and soda. Yet as he stands on 
the stage, shoulders hunched, 
you can see that he might once 
have been a medical 
researcher In America rather 
than a GP in Slough and does 
not wholly regret the decision 
to stay with the hum-drum, 
including his wife. 

None of the other parts quite 
match these two. The 
portrayal of the visiting cleric 
at a time of grief is a mixture 
of the cheap and the insulting. 
The sub-plot of the affair 
between the police officers 
is plainly indebted to David 
Hare's Murmuring Judges and 
remains pointlessly obscure. 
Nevertheless, Bradwell's 
production demonstrates that 
it is just about possible to 
make a silk purse out of a 
sow's ear: mediocre play, 
wonderital playing. 

Malcolm Rutherford 


Bosh Theatre, London W 12. 
(081)743 3388 


Interna tional 

Arts 

[guipe| 

■ AMSTERDAM 

Muziektheater Tonight, tomorrow, 
Thurs: Merce Cunningham Dance 
Company in Ocean, a project based 
on an idea by Cunningham and 
John Cage. Next Mon: Christoph 
Rousset conducts first of tour 
performances of Pierre Audi's 
production of Monteverdi s 
L'iricoronazlone dt Poppea (020-625 
5^1 55) 

Concertgebouw Sat Yoel Levi 
conducts Orchestras and Choruses 
of the Hague and Amsterdam 
Conservatories in Mahler's Second 
Symphony, vtfh.sotoralsRc^. 
Alexander and Jard van Nes. Sim. 
Gilnther Hertiig conducts Hague 
Phaharmonfc Orchestra and Choros 
in Brahms’ German Requiem, vwth 
soloists Annegeer StompWusand 
John BrOcheler. Next Mon andWed. 
Claus Peter Ror conducts Royal 

Concertgebouw Orchestra in 

Stravinsky snd Brahms (ticket 
reflations 020-671 8345) 

■ BARCELONA 

Edita Gruberova and Alfredo Kraus 


head the cast In Lucia di 
Lammermoor tonight. Sat, next Wed 
and Sun at the Palau Sant* Jordi 
sports palace (seating capacity 
16,000), conducted by Richard 
Bonynge (318 9122) 

■ CHICAGO 

THEATRE 

• A Uttle Night Music: Michael 
Maggfo directs tote Sondheim 
classic, hailed as the perfect 
romantic musical comedy (Goodman 
312-443 3800) 

• Guys and Doffs: Jerry Zaks' 
award-winning revival of the timeless 
musical fable of Times Square 
gangsters, gamblers and good-time 
girts Is in its final week in Chicago 
before continuing on a national tour 
(Shubert 312-902 1500) 

• Breaking the Code: Hugh 

Wh item ore's 1986 play about loyalty, 
national expediency and 
homosexuality. In repertory with 
Anthony Clarvoe's The Living, a 
new play about toe London Plague 
of 1600 (Interplay 312-654 1055) 
RAVINIA FESTIVAL 
In tonight's concert, Christoph 
Eschenbach Is conductor and 

pianist in an all -Mozart programme 
with Ravinia Festival Wind Sokxsta. 
Tomorrow, Thurs and Fri, 
Eschenbach conducts toe Chicago 
Symphony Orchestra, Tomorrow’s 
programme consists of works by 
Mozart and Johann Strauss, with 
Instrumental soloists Pamela and 
Claude Frank. ThurtK Dvorak, Reger, 
Liadov and Tchaikovsky, with piano 
soloist Peter Serkin. Fit Francsco 
Araiza and Thomas Hampson sing 
Mahler’s Das Ued von dar Erde. 

Sat Marvin Hamltech and the 
Ravinia Festival Orchestra in a night 


of popular songs and tunes. Next 
week's concerts feature Ptacido 
Domingo, Lynn Harral and David 
Sanborn. The festival runs tfll August 
28. Ravinia Is situated in Highland 
Park, within easy reach of downtown 
Chicago by train, bus or car. To 
order tickets by phone, call 
312-ravinka. Outside the metropofflan 
Chicago area, calf 1-800-433-8819. 
Tickets can be ordered by fax 24 
hours a day: 708-433 4582. 

■ COPENHAGEN 

Tivofl Tonight Yuri Bashmst directs 
the Moscow Soloists In works by 
Mozart, Stravinsky and Brahms. 
Thurs: Prazak Quartet of Prague 
plays string quartets by Haydn, 
Janacekand Dvorak. Sat Walter 
WeUer conducts concert 
performance of Salome, starring 
HUdegard Behrens (3315 1012) 

■ FLORENCE 

Lorin Maazel conducts the 
Pittsburgh Symphony Orchestra 
tonight at Teatro Communale In 
works by Rakhmanlnov and RaveL 
The Maggio Musicale ends on Thurs 
and Fri with Beethoven’s Ninth 
Symphony conducted by Semyon 
Bychkov. The concert on Thurs Is 
at Teatro Communale, while toe 
final performance on Fri Is a free 
open-air event at Piazza della 
Slgnoria (055-277 9236) 

■ GENEVA 

Grand Thdfitre The season ends 
on Thurs with the final performance 
of Lohengrin, staged by Robert 
Careen and conducted by Christian 
Thielemann, with a cast headed 


by Thomas Moser and Eva 
Johansson (022-311 2311) 

■ ROME 

The Romaeuropa Festival opens 
on Sun with an open-air concert 
at Piazza Navona featuring the 
Rome opera and radio orchestras, 
jazz ensembles, choirs and 
numerous soloists. Ohad Naharin's 
Batshsva Dance Company gives 
performances next Mon, Tubs and 
Wed at Gfardino del Museo. The 
festival, which runs tfll July 25, also 
features S ffl T. Jones/Amie Zana 
Dance Company, Groupe Emile 
Dubois, Angefin PreJjocaj and the 
Prague Opera Ballet two evenings 
of music by None and four concerts 
buflt around the music of Iannis 
Xenakis pickets 06-361 2682/06-372 
0216/06-291 0335 information 
06-4890 4029) 

■ STUTTGART 

LUDWIGSBURG FESTIVAL 
There are four concerts to choose 
from on Sat - by the Johann Strauss 
Chamber Orchestra. Rosamunds 
Quartet, Vienna Zither Quartet and 
an open-air performance of Brahms' 
Ltebesfederwalzer followed by 
fireworks. John Slot Gardiner 
conducts Don Giovanni on July 8 
and 10. Jessye Norman gives a 
recital on July 28 (07141 -939610) 

■ TURIN 

A three-week dance festival opens 
next Tues at Teatro Regio with toe 
first of three performances by Lyon 
Opera Ballet, featuring Maguy 
Marin's production of Coppella. 
Other guest ensembles include toe 


Frankfurt Ballet, Ballet National de 
Nancy at de Lorraine and Compania 
Vicente Saez (tickets 011-881 5241 
information 011-881 5383) 

■ VIENNA 

Staatsoper Riccardo MutJ conducts 
tonight's performance of Le nozze 
di Figaro, with Bryn Terfel as Figaro. 
Neil Shicoff and James Morris head 
the cast in Los Contes cf Hoffmann 
tomorrow. The season ends on 
Thurs with Tosca starring Raina 
Kabaivanska, Luciano Pavarotti and 
Sharif) MJInes. The Staatsoper will 
then dose for extensive renovation 
work, with the re-opening scheduled 
for December 13 (51444 2969) 
Musilcverein Peter Keuschnig 
conducts Vienna Symphony 
Orchestra on Thurs in works by 
Mendelssohn and Weber. On Sun 
morning, Alfred EschwA conducts 
Beethoven's Sixth Symphony and 
Rimsky- Korsakov's Scheherazade 
(505 8190) 

SchSnbrurm The Roman min in 
the park of the former residence 
of the Hapaburgs provides an 
attractive venue for toe Vienna 
Kammeroper’s summer 
performances of Le nozze di Figaro 
in Jiriy (starting next Mon) and Don 
Giovanni (Aug 9-2 7). On Sat, 
Schonbrunn is hosting a baroque 
fair, with music and culinary 
specialities from toe baroque era 
(513 0851) 

■ WASHINGTON 

• The man summer show at the 
Kennedy Center is Miss Saigon, 
the musical love story set during 
the Vietnam War. Dafty except Mon 
(202-487 4600) 


• David Lockington conducts 
the Baltimore Symphony Orchestra 
in Fourth of July holiday weekend 
concerts in the open-air at Oregon 
Ridge on Sun and Mon. The 
programme Includes Tchaikovsky's 
1812 Overture (410-783 8000) 

• Art Garfiinkef and Ario Guthrie 
give a concert at Wolf Trap on Sun, 
followed by Earth Wind and Fire 
next Tues (I 024 Trap Road, Vienna, 
Virginia, 703*255 I860) 

• Shenandoah Shakespeare 
Express presents Much Ado About 
Nothing, Othello and The Taming 
of the Shrew this week at Folger 
Shakespeare Library. Each play 
runs for two hours without Interval 
(202-675 0342) 

• The Trip to Bountiful, Horton 
Foote’s play about an eklerty 
woman’s search for peace in the 
midst of family struggle, runs till 
Sun at Oiney Theater (301-924 3400) 

• krianthe, the Gilbert and Sullivan 
operetta, opens on Thurs for a 

mo nth-tong run at the Lansburgh 
Theater (703-760 9863) 

■ ZURICH 

Opemhaus Tonight, Fri Sun: Franz 
Wetoer-M6st conducts Erwin PipWs' 
new production of Rusaika. 
Tomorrow: Don Carlo wffh Vincenzo 
La Seda, Nicolai Ghiaurov and Mara 
Zampieri. Thurs: Die ZfluberflSte, 

Sat Fedora with Battsa and 
Carreras. Sun morning: Vladimir 
Fedosseyev conducts orchestral 
works by Tchaikovsky, Bruch and 
Skryabin. End of season (01-262 
0909) 

TonhaHe Thurs: Gary Bartini 
conducts Tonhalle Orchestra in 
works by Webern, Mozart and 
Schoenberg (01-261 1600) 


ARTS GUIDE 

Monday: Performing arts 
guide city by city. 

Tuesday: Performing arts 
guide dty by dly. 

Wednesday: Festivals guide. 
Ttwsday: Festivals guide. 
Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 

(Central European Time) 
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/Supar Channel; FT 
Reports 1230 

Sky News: FT Reports 0230, 
2030 

SUNDAY 

NBC/Supar Channel; FT 
Reports 2230 

Sky News: FT Reports 0430. 
1730; 





, » — ■« 


• '• r -- >?vm tea Wit»i.i> b^~- — — • 


16 


FINANCIAL TIMES TUESDAY JUNE 28 1994, 


EtRETmV 

WOODS 


The twin 

Bretton Woods 
institutions 
(the World 

Bank and the 
international 
Monetary 
Fund) were 
conceived 
when world 
capital market had been virtu- 
ally extinguished by the tribu- 
lations of the inter-war period. 
Plaudits on their 50th birthday 
are justified for their role in 
creating a new liberal interna- 
tional economic order, under- 
pinned by an Increasingly inte- 
grated world capital market 
But this very success poses 
questions about their future. 
Once the universal move to 
market economics Is com- 
pleted, will there be any need 
for the short- and long-term 
lending of these institutions? 

The answer is bleaker for the 
IMF, which has no ostensible 
role with the collapse of the 
Bretton Woods system 
As far as the World Bank 
group is concerned, it has 
moved seemingly effortlessly 
from providing long-run capi- 
tal to the war-devastated econ- 
omies of Europe and Japan, to 
supporting developing coun- 
tries shut out from the 
long-term bond market since 
their widespread default in the 
1930s, and most recently to the 
capital-constrained ex-commu- 
nist “economies In transition". 
It has also evolved many roles 
- a® a financial Intermediary, 
an aid institution, a provider or 
technical assistance, a credit 
rating agency for sovereign 
risk, and a major development 
research institute. 

Financial intermediation 
through the International 
Bank for Reconstruction and 
Development remains the 
group's major business. It dif- 
fers from commer cial banks In 
three ways: first the assurance 
provided to Its bond holders by 
the capital that is callable from 
member governments: second, 
the “gift” represented by Its 
paid-in capital, on which it 
does not have to pay a divi- 
dend to its shareholders; and, 
third, Its preferred creditor sta- 
tus with its borrowers, which 
Leads to few arrears on its 
loans. These features have 
given its bonds trlple-A rating. 

Before the opening of the 
global capital markets to the 
developing countries in the 
1970s, these IBRD loans at near 
commercial interest rates 
would have been justified on 
grounds of global efficiency. 
But with more countries able 
to gain access to world capital 
markets, is there a financial 
intermediation role left for the 
Bank, whose loans, though 



Fund in search of a rote: delegates at the Bretton Woods conference, at which tbe IMF was founded 


Mission statement 
for a liberal order 


cheaper than from private 
sources, come with “condition- 
ality*’? This cost could encour- 
age borrowers with alterna- 
tives to reduce their de ma n d 
for IBRD loans, leaving it 
mainly with “lemons". 

The debt crisis demonstrated 
that it is the willingness, 
rather ability, of borrow- 
ers to pay which determines 
sovereign risk. The positive net 
cash flow historically associ- 
ated with Bank lending has 
reinforced the willingness of 
borrowing governments to 
meet their debt service obliga- 
tions to tbe Bank. This growth 
in net lending can only occur 
with a continued growth to the 
Bank’s capital. If it were to 
cease growing - a political 
decision - its intermediation 
operations might be shown 
to have been a vast Ponzt 
scheme. 

With a deterioration of bor- 
rowers’ expectations of future 
lending, arrears could, accumu- 
late. This might worsen the 
rating of Bank bonds, leading 
to a rise in the interest rate on 
its loans, making them even 
less attractive for the good bor- 
rowers. The only way to avoid 
this is to keep good borrowers 
by giving up conditionality. 
The bank would then be a true 
merchant bank, which, 
because of its unique advan- 
tages and reputation, can raise 
money more cheaply for its 
borrowing governments than 
they couldlt would also have 
to be concerned like any other 
bank by the quality of its bor- 
rowers. Its advantage over 
commercial rivals would be the 
implicit subsidy and insurance 
elements provided by its inter- 
governmental owners. 

The Bank’s role as a finan- 
cial intermediary has been 
clouded over the years by Us 


Deepak Lai 
continues the 
series on the 
anniversary of 
Bretton Woods 

role as a foreign aid agency 
through its soft loan window 
(International Development 
Association). Foreign aid 
remains a contentious and 
highly politicised Issue. It is 
debateahte whether the Bank 
has been wise (since Robert 
McNamara's tenure) to identify 
its mission so closely with the 
business of aid, rather than 
with the less contentious and 
more viable business of inter- 
national financial intermedia- 
tion. A radical departure in 
this area is required. 

The Bank's objectives in pro- 
viding foreign aid have 
changed over the years; the 
most recent is to alleviate pov- 
erty and the public financing 
of the merit goods (education 
and health). These social policy 
concerns are necessarily more 
contentious than the technical 
engineering and economic 
issues that have been the 
Bank’s bread-and-butter to the 
past Moreover, whereas more 
general principles govern tbe 
latter, the design of effective 
social policy is determined 
much more by local circum- 
stances, culture and politics. A 
multilateral bureaucracy is 
unlikely to have a comparative 
advantage in their design or 
implementation. 

Private charities (national or 
international) with grass roots 
organisations can. both identify 
potential beneficiaries, and tar- 
get and monitor benefits to 
them much better than govern- 


ments. FOr the heterogeneity of 
these beneficiaries makes It 
difficult to lay down simple 
bureaucratic guidelines for the 
targeted benefits that are 
required. The alternative of a 
uxdversalisatton of benefits (as 
in western welfare states) is 
fiscally ruinous and less effkat- 
clous, because the middle clas- 
ses always benefit most from 
universalised benefits. 

A radical solution would be 
for the Bank to consider trans- 
ferring its IDA funding to 
audited national and interna- 
tional charities. As a spur to 
private charity, such IDA 
transfers to these charities 
could be made on a matching 
basis. 

As regards the role of the 
Bank in providing technical 
assistance, credit ratings, and 
development research: since 
tbe last two are public goods, 
their subsidisation through. 
Bank profits would be justified. 
Technical assistance provided 
could be charged for, as by pri- 
vate consultants, with Bank 
profits being paid as explicit 
subsidies to poorer countries, 
to purchase Bank consultancy 
services in competition with 
their commercial rivals. 

This package of reforms 
could provide the Bank with a 
more clear cut and depotiti- 
dsed mission in the liberal eco- 
nomic world order it has 
helped to recreate. 

The author is James Coleman 
professor of international devel- 
opment studies at the Utnoer- 
sity of CaMfomia, Los Angeles, 
and professor emeritus of politi- 
cal economy, Onwersity College, 
London. Between 1984 and 1987 
he inis research administrator 
at the World Bank. 

The first article in this series 
was published an June 21 


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generation after generation 
it has been worn, loved and 
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the best. For the day that 
you take delivery of your 
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acquired the best. Your watch 
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A watch that was made to 
be treasured. 



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GENEVE 

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Joe Rogaly 


No, no, no, no way out 


t il is too easy to 
deride Mr John 
Major for his 
performance a i 
Corfu. The 
British prime 
minister found 
himself in a 
minority of one 
out of 12 members of the Euro- 
pean Union, just like his prede- 
cessor at earlier summits. He 
handbagged the appointment 

of Mr Jean-Luc Dehaene to the 

presidency of the European 
Commission, precisely as she 
might have done. It is said, 
with disdain, that Mr Major's 
motives were self-serving. Sure 
they were. Worse, it is claimed 
that he sought approving head- 
fines in the ever-cheaper Con- 
servative newspapers pub- 
lished by Mr Conrad Black and 
Mr Rupert Murdoch. Anyone in 
his position would be tempted 
to do that, although not all 
would succumb. It is asserted 
that bis principal aim was the 
preservation of his leadership 
of an increasingly Euroscepti- 
cal Conservative party. Of 
course it was. 

Yet the prime minister had a 
defensible diplomatic objective 
As we all know, Mr Dehaene 
was the candidate thrust upon 
Europe by Mr Helmut Kohl 
and Mr Francois Mitterrand. 
The German chancellor and 
the French president appear to 
have believed the rest of the 
EU would come round to their 
wav of thinkhur. as indeed all 
but Britain did. If this be so, 
the veto is not wholly regretta- 
ble. Europe is not France and 
Germany alone. Bonn and 
Paris lead the continent, but 
they should not faiira their pre- 
dominance for granted. 

When Mr Major told the 
House of Commons yesterday 
that rejection of Mr Dehaene 
was a matter of principle he 
did not mention Mr Kohl or Mr 
Mitterrand, but we knew what 
he meant. He had no need to 
name names. He was telling 
the world his weakness among 


Ms own voters should hot lead 
others to take Britain’s compU- 
ance.for granted. He is not a 
popular prime minister, but he 
would be nothing at all if he 
did not get that message, 
across. He seemed to have his 
party’s support 
Sir Edward Heath was wrong 
to call, the outcome of the 
Corfu meeting a crisis for 
Europe. It was not even a 
disaster, merely a little drama. 
Mr Dehaene wfil survive in pol- 
itics. He still has his job. 
Europe will move on. Another 
candidate for the presidency of 
tbe Commission will be found. 
The Individual who succeeds 
will almost certainly not be 
wedded to the British Conser- 
vative party's views on Europe. 

Take, for exam- 

pie, the Dutch 
prime minister, 

Mr Ruud Lub- 
bers. He was 
highly praised 
by Mr Major 
yesterday, and 
not for the first 
time. It is rea- 
sonable to 
assume that 
Britain would 
support him if 
others did. a 

This is not explicable to sim- 
ple pro- or anti-Europe terms. 
It was Mr Lubbers’ govern- 
ment that nearly botched the 
negotiations leading to the 
Maastricht treaty. The infa- 
mous Dutch draft of early 
a utumn 1991 was shamelessly 
Euro-expanslonary In tone. 
The Commission's powers 
would have been enhanced 
even more than they eventu- 
ally were. The draft had to be 
scrapped for progress to be 
made. The Dutch prime minis- 
ter's thinking has since 
evolved, but that is another 
matter. Mr Major’s veto of Mr 
Dehaene cannot be said to 
have been cast on anti-federal 
or anti-Brussels grounds while 
there is a possibility of British 
support for Mr Lubbers. 


Sir Edward was more persua- 
sive when he Intimated that a 
Eurosoeptical Britain would be 
less able to influence the 
course of events on the conti- 
nent Probably, bnt Mr Major 
alone is not to blame for this. 
He Is a puppet of history. As 
soon as he became prime min- 
ister he said that Ids purpose 
was to place Britain at the 
heart of Europe. He was highly 
praised for that noble aspira- 
tion. He adopted a distinctly 
different tone from the then 
just-fallen Mrs Thatcher. The 
proximate cause of her ejection 
from office was a persistently 
anti-Brussels screech. Mr 
Major, we all thought, would 
do better. The Tories were tbe 
party of Europe; That is where 

he would make 

a positive con- 
tribution. 

He never had 
a chance. For 
half a century 


The chances are 
that Major, 
pulled ever 

sceptic-wards, will ®*gjjj hna *J^ 
find himsfllf 8 sm 

always 

accentuating the 
negative 


has 

tugged Britain 
backwards 
when its conti- 
nental partners 
have sought to 
move their 
mmmmmmmm ever-closer 
union forwards. This streak of 
scepticism runs through all 
parties, although it is at pres- 
ent in the ascendancy among 
Conservatives. The prime min- 
ister is weak because he has a 
small majority in the Com- 
mons. He might have tried to 
tough it out, taking a stand on 
one side or the other, but he 
has preferred the strategy of 
the whip he once was. This has 
given the sceptics their lever- 
age. In consequence there Is 
how a distinct possibility that 
the issue of how pro- or anti- 
European the opposing parties 
are will be deployed by Mr 
Major to the next British gen- 
eral fl»»rmring be is 

still there to do the deploying. 

We saw this during the elec- 
tions to the European Parlia- 


ment a few weeks ago. The 
Conservative manifesto, “a 
strong Britain in a strong 
Europe" was meant to unite 
the party. Each wing coaid 
read what it chose into the 
small print The tone of the 
campaign was intermittently 
anti-European. Yet the govern- 
ment tells anyone who will lis- 
ten it has found a formula to 
placate all but the extreme 
Burophobes or Europtolas 
among the Tories. This was set 
out in Mr Major's speech about 
a multi-speed Europe. 

The notion was first given 
public prominence by -Mr 
Douglas Hurd at the Sqjm to 
Warsaw on May 6. "The 
Europe of Monet and Schuman 
was right for its time.” the for- 
eign secretary said, adding 
that what was now taking 
shape was “a multi-speed, 
multi-track, even multi-faceted 
Europe”. This could mean 
Britain asking for a stronger 
arrangement on defence and, 
as indicated by Mr Major yes- 
terday, anti-drugs policing, but 
opt-outs elsewhere. "Multi- 
speed” should play better than 
“two-speed”. That would imply 
that Britain is in tbe slow lane. 

The multi-speed Europe of 
Mr Hurd is not in itself nega- 
tive, or. sot sold as such. It 
reflects current reality. It 
allows new members to take 
part at their own pace. The 
trouble with the formula is 
that it is deficient in positive 
proposals, lacking in enthusi- 
asm for whatever is happening 
on the /w ifi ™ # 1 *- Britain can- 
not get its own candidate into 
the Commission presidency, ft 
merely vetoes others. The 
chances are that Mr Major, pul- 
led ever sceptic-wards, will 
find himself always accentuat- 
ing the negative - no to Mr 
Dehaene, no to rejoining the 
exchange rata mechanism, no 
to the stogie currency, no to 
the social chapter; “no”, as his 
predecessor famously said, "no, 
no, no. no.” We know what 
happened to her. 


LETTERS TO THE EDITOR 


Number One Southwark Brii 

Fax 071 873 5938. Letters transmitted should be dearly typed 


;e, London SE1 9HL 

not hand written. Please set fox for finest resolution 


Case for abolishing banks' floating charge 


From Sir Michael QryUs MP 

Sir, It Is encouraging to read 
(Letters June 22) that a leading 
banker - Mr Derek Sach, of the 
Royal Hank of Scotland - has 
called for the abolition of the 
floating charge in the UK. At 
the time when the Department 
of Trade and Industry is 
reviewing existing insolvency 
legislation. It is important to 
look at the power which a 
bank derives from the floating 
charge and determine if that 
power is healthy in a modem 
highly competitive industrial 
economy. 

Not only do the powers of an 
administrative receiver under 
a floating charge cause con- 
cern and uncertainty to the 


borrower, but such charges 
create serious disadvantage for 
unsecured trade creditors 
which supply an apparently 
sound company, while 
unaware of the current extant, 
of its borrowings and without 
the level of information about 
its liquidity which is available 
to tbe bank. 

It is the floating charge 
which underpins the capital 
gearing approach of the tanks 
to small and medium enter- 
prise (SME) lending to the UK, 
highlighted in the Confedera- 
tion of British Industry August 
1993 report, Finance for 
Growth. Reliance Is placed on 
security rather than informa- 
tion and the income stream 


Indicated by . fixture prospects 
of tbe enterprise - an incame- 
gearing approach. This encour- 
ages the provision of 
shortterm finance. Without 
the afi-embradng safety net of 
the floating charge for banks, 
lending proposals would inevi- 
tably be more critically 
assessed to the benefit of the 
hpnlqs and the . businesses con- 
cerned. The timi ng flop of the 
floating charge and the 
removal of the preference it 
gives to one creditor whose 
prime concern is not tbe con- 
tinuing viability of the busi- 
ness and the jobs at stake, 
would create a more robust 
lending environment in the 
UK. 


There is no reason to believe 
that UK bankers, given, time, 
would not match the perfor- 
mance of bankers in other 
industrialised countries, 
including Germany, Japan and 
the US, where floating charges 
are unlawful, to their lending 
to the unquoted sector. This 
would surely be to the benefit 
of Britain's SMEs in the 
medium to longer term. It 
would also help redirect the 
traditional thrust of our corpo- 
rate Insolvency process, mov- 
ing away from retribution for 
the debtor and towards his 
rehabilitation. 

Michael Grylls, 

Bouse o f Com mons, 

London SWIA OAA 


Citizenship 
in Latvia 

From Jards Lusis. 

Sir, The article “Held up on 
the western Line" (June 23) 
dearly points out many of Lat- 
via’s concerns regarding the 
critical demographic situation 
to Latvia. However, it incor- 
rectly gives the impression 
that "almost one half of the 
population" Is presently 
excluded from Latvian citizen- 
ship. In feet, 70 per cent of the 
residents of Latvia - of many 
ethnic origins - are presently 1 
citizens. 

An area of prime contention 
concerns the fete of a group of 
about 410,000 persons, of whom 
an estimated 160,000 are 
retired Soviet military and 
KGB personnel and their fami- 
lies. This latter group, by the 
internationally accepted 
Geneva Convention an Occu- 
pied Territory, should not be 
“forced upon” Latvia as poten- 
tial citizens. 

The second important aspect 
concerns the present demo- 
graphic situation to Latvia (52 
per pent ethnic Latvians) and 
the potential effects of rapid 
naturalisation of persons who 
may not be assimilated into 
tbe Latvian culture prior to the 
impending parliamentary elec- 
tions of October 1995 and Octo- 
ber 1998. While tbe recommen- 
dations of the Council of 
Europe and Conference on 
Security and Co-operation in 
Europe have been seriously 
considered by tbe government 
of Latvia, and many were 
incorporated Into the law, the 
critical demographic situation 
to Latvia precludes a rapid 
naturalisation, process. 

One may ask, would any 
European country allow such a 
demographic shift in its citi- 
zenry to occur in such a short 
period of time? 

Janis Lusis, 
ambassador. 

Embassy of Latvia, 

72 Queensbonmgh Terrace, 
London WS8SP 


Graduate market forces already working 


From Dr Geraldine Kaye. 

Sr, ft is well known that all 
published statistics are well 
out of date. A further example 
is evident by your article, 
“First fell for five years in 
graduate unemployment" 
(June 20), which states that 
unemployment rates were 
worst for mathematicians (13.4 
per cent to 1992-93). 

GAAPS is an international 
search and selection consul- 
tancy specialising to actuaries 
and therefore not to the gradu- 
ate reendfanent market 

Despite this, we have been 
contacted by a number of 


insurance companies, which 
axe our clients, ashing us as a 
special favour to find good 
science graduates who wish 
to rater tire actuarial profes- 
sion. 

We were at first surprised 
that they had not been able to 
fill their vacancies themselves 
on the “milk round”. On con- 
tacting professors we know (I 
have an academic back- 
ground), we found that most of 
this year’s graduates have 
been found “homes”. 

Mr William Waldegrave, the 
public services minister; is 
wanted that employers are not 


sending the right signals to the 
jobs market I am also worried. 
My concern is that these out of 
date statistics will put into 
force government policy that 
wifi result in a huge increase 
in the number of science grad- 


Market forces are already to 
motion and therefore, instead 
of creating equOihrium. a sur- 
plus may be created. 

Geraldine Kaye, 
managing director, 

GAAPS, 

Grafton House, 

2-3 Golden Square, - 
London W1R SAD 


Structural aid should have right goals 


From Mr Terence Bendhson. 
Sir. Perhaps EU structural aid 
should be granted only when it 
promises to create local jobs 
ami focal industrial tovastoant 
(“Poverty trap with an exit", 
June 21). 

This might help prevent it 
being used to create markets 
lor high-tech products from 
richer EU countries and have 
other benefits too. 

Athens, for Instana* , did not 
have to build a high-tech 
Metro. On transport policy 
grounds, as was set out in an 
OECD urban division study to 
which I contributed, there was 
a case for mid-technology 
tramways and trams. 


Compared with a Metro, the 
effects of trams would have 
been significantly different As 
for as jobs and investment go 
there are grounds for behaving 
that the track and the cars, but 
not perhaps the drive units or 
the signalling, could have been 
made to Greece - under 
Horace if necessary. 

Furthermore, for any given 
budget, a more extensive tran- 
sit network could have been 
created more quickly - to the 
considerable benefit of Athe- 
nians. And since the trams 
would have run down tire mid- 
dle of existing streets on 
slightly raised paving, or 
through pedestrianised streets. 


they could have provided a 
reliable, congestion-free service 
and reduced tbe area of road 
available to care. 

This might indeed have 
helped “turn the traffic-clogged 
and polluted Greek capital tote 
a modem city". If, as your cor- 
respondent suggests, a metro Is 
capable of doing this for 
Athens, it has to be asked why 
it has not already done if for 
Milan - or Paris or London. 
Perhaps structural aid should 
have more dearly defined envi- 
ronmental as well as employ- 
ment goals? 

Terence Bendixson, 

39 Elm Park Gardens, 

London SW10 SQF 


George Michael case highlights age old tension 


From Mr Nigel Miller 

Sir, The George Michael case 
highlights an age old tension 
in English law (Lex, June 22). 
On the one famd, the courts 
must respect and enforce con- 
tracts freely entered into. On 
the other hand, certain con- 
tracts ' in unreasonable 
restraint of trade are regarded 
as contrary to public policy 
and unenforceable. 

Generally, Rn gflah law does 


not require that contracts be 
“fair” or ‘reasonable". The 
main exceptions relate to cer- 
tain categories of exclusion 
clause and restrictive (or non- 
compete) covenants. 

This is about to change in a 
significant way. From January 
1 199b the UK must have imple- 
mented an EC Directive on 
unfair contract terms in con- 
sumer contracts. This may not 
help artists in Mr Michael’s 


predicament. However, busi- 
nesses Issuing terms of busi- 
ness to consumers will have to 
review these carefully to 
ensure that they are worth 
more than the paper on which 
they are often so microscopi- 
cally printed. 

Nigel Miller, 

Fox Williams (Solicitors). 

City Gate House, 

39-45 Finsbury Square, 

London EC2A 1UU. 



FINANCIAL TIMES TUESDAY JUNE 28 1994 


FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Teh 071-873 3000 Telex: 922186 Fax: 071-407 5700 

Tuesday June 28 1994 


Beyond the 
Corfu thunder 


The weekend thunder and 
on Corfu cast European 
Union decision-making in a malev- 
olent light. Yet the storm over- the 
choice of the next European Com- 
mission president could not totally 
obscure the progress Tnade at the 
EU summit in other areas. Hie 
responsibility for resolving the 
impasse over the succession to Mr 
Jacques Delors now passes to Ger- 
many, which takes over the EU 
presidency from July l Time to 
reach accord before die leaders re- 
convene in Brussels on July 15 is 
short, but if the Tbmn government 
can find the skill to rally support 
from all 12 capitals behind an 
appropriate candidate, the EU 
could even emerge strengthened 
fmm its midsuguner 

For all the chaos over the presi- 
dential selection, the EU showed 
at the weekend .that it can main- 
tain momentum on important 
issues. The sum mit took a signifi- 
cant step forward on liberalising 
telecommunications, now widely 
seen as a key to EU competitive-, 
ness in the emerging ‘information 
society". Overriding opposition 
from the ETTs telecozmmmkntions 
monopolies, the meeting opened 
the way to eariy competition in 
the supply of i nfr a struc ture as 
well as services, allowing new 
operators to bmld their own net- 
works. An Anglo-German initia- 
tive to try to weed out obstacles to 
competitiveness was approved. 

The s ummit also agreed to give 
priority to 11 trans-European 
transport projects, overcoming dif- 
ferences cm financing. The Ger- 
man-sponsored agreement tut 
involving the European parlia- 
ment in the preparations for the 
1996 Maastricht review conference 
was also welcome. On enlarge- 
ment, the EU now has the airtimes 
of a route map - although nothing 
resembling a driving schedule - 
for widening the Union to the 
north a nd east 


r.lrnr.hing agreement 

This record of accomplishment 
will, however, weigh lightly unless 
the EU finds a suitable personality 
to lead it through the challenges 
of the rest of the 1990s. Despite the: 
pressures of the timetable, there 
are three reasons why the EU can 
be reasonably confident of clinch- 
ing agreement an a successor to 
Mr Delors during the next 2% 

weeks. 

First, the German government 


wQl channel much more, diplo- 
matic energy into engineering a 
deal than that employed by the 
current holder of .the EU presi- 
dency. Greece, under its ailing 
primp minister. Hie Bwm g over n- 
ment is a long way from admitting 
that it- was mistaken in trying to 
push through with France the can- 
didacy of Mr Jean-jLuc Dehaene. 
But Chancellor Helmut Kohl yes- 
terday gave a welcome signal cf 
flexibility by he would 

now drop support for the Belgian 
premier. 

UK self-restraint 

Second, the British government, 
having had its way an a point of 
principle and substance, can now 
show a modicum of self-restraint 
There most be no question of Mr 
John Major employing a second 
veto. The tree test of Mr Major’s 
mettle will be his readiness to 
engage in a constructive search 
for a solution - even at the risk of 
Eurosceptic hostility from his own 
party - to achieve an agreement 
on July 16. 

- Third, even. after excluding the 
candidates.- courting support at 
Cmfto there is no shortage of suit- 
able contenders. Mr Renato Rnggi- 
erDj the former Tfaifam trari« minis- 
ter, arid Mr UBe Eflexnam frJ ensco, 
the former; foreign minis- 
ter, would both command, wide 
support The ap parent AWmhiai inn 
of two serving heads of govern- 
ment, Mr Tiahawm and Mr I hmd 

Lubbers erf the Netherlands, is far 
from an ill . omen. It is worth 
remembering that of the European 
HnmmissUm ’n eight presidents so 
far only Qno j fhe wnBiwaMftil Mr 
Gaston Thor" from Luxembourg, 
was an ex-prime minister. 

At a time of recession and post- 
cold war upheaval, the ElTs fail- 
ure to reach agreement on its 
leadership is regrettable, but it is 
neither a disaster mar even a sur- 
prise. If the weekend confusion 
increases EU governments’ readi- 
ness to correct the shortcomings 
of the present selection proce- 
dures, flwn the debacle may even 
turn out to have positive conse- 
quences. Equally, when they, were 
not squabbling over Mr Delors’ 
succession, EU leaders showed at 
Corfu they have an agenda to 
make Europe stronger, more effi- 
cient and more cohesfarei The next 
president erf the European Com- 
mission- should make sure they 
stick to it 


The fog still 
shrouding Japan 


[f proof were needed that the 
realignment of Japan's political 
system has only just begun, it has 
been abundantly available in 
recent days. A popular and capa- 
ble prime minister has resigned 
Cor lack of support in a fractious 
parliament. Politicians widely 
reviled for their remoteness from 
the concerns of ordinary voters 
inspire tn smoke-filled rooms. 
Fhe country is left leaderless as 
the yen rises to levels that 
hreaten a sputtering economic 
recovery. 

More embarrassing still, it looks 
is if this sorry picture will again 
ie on international display in 10 
lays’ time, when Japan fields a 
lame-duck prime minister at a 
jioup of Seven summit tor the 
second year in a row. What are 
rokyo’s international partners to 
make erf aH this? 

At one level, the latest twist in 
Japanese politics should not be of 
enormous consequence to the 
world at large. Japan’s western 
rading partners have long been 
ised to dealing with a c h ang in g 
■accession of political leaders, 
while recognising that the real 
power lies elsewhere in the "iron 
xiangle” of government, bureau- 
cracy and business. Even the US 
idmintstration, with its d emand s 
br deregulation and market open- 
ng, appears to have realised that 
here is little it can do to advance 
ts agenda while a vacuum per- 
sists in Tokyo. In the m ea ntim e, 
he markets maintain their own 
brm of pressure by bidding up the 
ten against the weakenin g dollar 
. itself in part an acknowledgo- 
nmt that no gover n ment under 
rurrent conditions is likely to be 
ible to do much about Japan’s 
rade and current account sur- 
duses. 


is a place for concern, 
at the current impasse - 
'is in Japan itself. For the 
I4r Tsutomu Hata. whose 
lent fell last Saturday 
t 69 days in office, under- 
t how unstable and taca- 
action the entire political 
has become. The order 
emed Japan for decades 
rid war two - dominated 
iberal Democratic party - 
used, but a new order is 


signt. inswau, guuui 
[iStingtrishable political 


fragments from the old LDP and 
the traditional opposition, the 
Social Democrats, manoeuvre 
ceaselessly before an increasingly 
disenchanted public, sometimes 
splitting, sometimes fusing to 
foam short-lived coaBtlnns. It Is a 
process that, left to itself, could 
(wiHtwwi for months or evenyears 
before finally coming to rest in the 
form of a stable two- or three- 
party system. 

The problem is that Japan can- 
not afford to continue an political 
autopilot for titda long. There are 
too many pressing <«hm that, in 
Japan's own interests, require 
speedy, effective and co n siste nt 
government action. 

Stymied 

Tax reform, is one area whore 
action has been frequently prom- 
ised but stymied by government 
divisions -in recent months. 
Another is the much-touted and 
badly-needed plan to deregulate 
the economy, which would have 
the added advantage of answering 
one of the US's current concerns. 
Yet a third is the slow-fose crisis 
over North Korea's unclear weap- 
ons programme. This is a matter 
crucial to Japan’s security. Yet 
right up to last Saturday .Mr Hata 
was mired in discussions with the 
Social Democratic party, which 
was demanding that he water 
down plans for sanctions against 
Pyongyang in return for joining 
his coalition. 

The most regrett ab le feature of 
the current situation is that it is 
seriously out of kilter with what 
the voters themselves seem to 
want A year ago, they voted out. 
the LDP in favour of a ooaK tio n 
committed to creating a new, 
more representative electoral sys- 
tem. This the government of Mr 
Morihiro Hosokawa eventually 
produced: a system that should 
enable poli t i c ians to be chosen 
more on their policies than on 
their ability to pass favours to 
constituents. 

What Japan needs Is elections 
under that system - which should 
be possible once new consti t uency 
boundaries are in place thl& 
autumn. When they come, the 
clear-out of the old guard on all 
riites may well accelerate. In the 
meantime , Japan will probably 
have to settle for another fragile 
caretaker government and more 
muddling through- 



razfl’s football stars get 
.the glory,- but the 
nation's housewives are 
the real. heroes. As well 
as coping with, an infla- 
tion rate of almost 50 per cant a 
month, on Friday they face the 
introduction of Brazil’s fifth new 
currency since 1986, the Real 
Supermarket shdves are covered in 
a ranftis in g array of old and new 
pr fry* h atpiia signs atmnnngbtg that 
certain products have been with- 
drawn by (he stares because suppli- 
ers have tried to force up prices 
ahoad of tile CUCGDCy. SWZtCh. 

The Seal. is the final step in a 
programme the government 
launched last December in an 
attempt to catch up with other 
Latin American countries which 
have successfully tackled high infla- 
tion. The programme was originally 
welcomed by economists since it 
addressed the. perceived causes of 
Brazil's Inflation - most impor- 
tantly, it set balancing the govern- 
ment's budget as a high priority. 

- The planfe weakness is poiBtical. 
In October, Brazil holds presidential 
and wwpniarinnal f-tertfong , encour- 
aging politicians to push for more 
spending: rather than a balanced 
budget .Moreover, its main helms- 
man. Mr Fernando Henrique Car- 
doso, resigned as flmimw minister 
in idardx to run far president That 
has left the initiatives open to ertti- 
. i#" they are designed to engi- 
neer a steep, but temporary, fall in 
Inflation before the electtonsL 

Mr Cardoso's advisers admit he 
Tmg little dhanre of catching 
front former, the left-winger Mr 
laifa TnArfn x«Ta da Sites, unless 
inflation fans sharply. Althoug h 
most observers thfoit faftati/m will 
drop, there are doubts about how 
. long it will stay low - and also 
about Mr Cardoso's chances of clos- 
ing the gap with his rival. “There 
may not he enough faw jofi- for 
people to. realise the Real’s advan- 
tages that their increased pur- 
chasing power [caused by lower 
inflation] will last," nwwn tiyg to Mr 
Alexandre Banos, a political con- 
sultant. 

Mr Cardoso and the g ov ernm ent 
hope two features of the new cur- 
rency will help curb Inflation. First, 
it will be set at parity to the US 

dnUar for an “ miifafanrihiaH" Him, 

probably until the elections. The 
Beal’s value will be HufandaH Hiring 
Brazil’s accumulated reserves of 
nea rly $40bn. Second, the central 
bank will set tough limits an money 
supply until the end of Match 1996. 
In the past, the government has 
resorted to pri n ting money to pay 
its debts, thereby fuelling inflation. 

"The nvnhimg n rata anchor brings 
Inflation down fag* , and then the 
monetary anchor starts operatin g 
through strict rules on expanding 
the monetary base,” according to 
-Mr Winston Fritsch, Brazil’s eco- 
nomic policy secretary. 

The government has also recalcu- 
lated public, sector wages and most 


A Real test of 
commitment 

Will political imperatives overcome economic reality in 
Brazil’s fight against inflation, asks Angus Foster 


contracts into the new currency 
before its introduction, so any infla- 
tionary impact should be absorbed 
before the Real comes into areola- 
tion. This should farther reduce 
price pressures, and most econo- 
mists Mjw* Hrflutinn to drop to 3-4 
pear cent a month by August 

Brazil 1 a ‘ anti-inflation pro- 
grammes have led to sharp fafla in 
inflation before. But each tim«, 
prices ; have started to accelerate 
because erf flaws in the plans or 
through political pressures. This 
trmfl ;the matn worry is that the 
government, lacking support in 
Congress ahead of the elections, has 
had to co mpromis e parts of the pro- 
gramme to make its fanplameata- 
Him more feasible. 

ft has adopted a temporary fink 
with the dollar, fayE****^ of a perma- 
nent tie as used in Argentina’s suc- 
cessful price stabilisation Initiative 
in 199L Nor has the government 
removed mmbtmg a rwitmla to allow 
full convertfbflity of the Real. “Con- 
vertibility Is not an attribute you 
can impose an a weak economy. We 
would Bke to move more carefully, " 
says Mk Pedro president of 

the cpntral hank. 

One reason why the government 
may have decided to retain 
exchange controls is that it tears 
the cfa ii - t wri n g popularity of Mr da 
Silva, may persuade many Brazil- 
ians, who are worried about bis rad- 
ical pnlfwaa in areas such as land 
reform, to switch their Beals into 
dollars, thus TmdwrmrmTig the UBW 
c urren cy. 

Another area in which the gov- 
ernment risks compromising its 

antUhiflatiim png rammp is in tts 

control of the money supply. There 
is growing pressure for increases in 
the minimnm Wage and mTHtar y 
pay, which would threaten this 
year's forecast balanced budget. 
Further ahead, observers believe 
inflation will not be beaten without 
constitutional changes to reduce 
the gover n ment’s spending obliga- 
tions, particularly on. w elfar e- An 
attempt to make the nec essar y con- 
stitutional amendments failed in 
Congress eariiar this year. 

The chief poBtica l warty, is that 
the plan’s fortunes are too closely 
finked to those of Mr Cardoso. Mr 
Fritsch talk* of a "virtuous circle": 
if the Real works, it lifts Mr Car- 
doso’s chances of becoming presi- 
dent. and imrin fa ining the anti-rwfla- 



tion fight next year, along with 
other economic reforms such as pri- 
vatisation. "But if the programme is 
not seen as a success, that affects 
inflation and the opinian polls. In 
that scenario, we hope we can mud- 
dle through,” he says. 

Opinion polls suggest Mr Cardoso 
has the support of about 20 per cent 
of voters compared with 40 per cent 
for Mr da Silva. This Ug difference 
is afighfiy misleading'. Under Brazil- 
ian election rules, imiiws one candi- 
date wins more votes than all the 
others combined, the presidential 
contest will go into a second round 
in November, between the two can- 
didates with the highest number of 
votes. At tins stage, Mr da Siva 


looks unlikely to win nnWg ht in 
the first round. 

In a mwwH contest, Mr Cardoso 
could provide a strong challenge, 
especially since voters will have 
had longer to benefit from the Real, 
ft inflation stays low, those Brazil- 
ians who are not protected against 

tnflatiryn — mainly the pOQT - COUld 

see a considerable tir ^ ir mi aman* in 
their living standards. Salaries, cur- 
rently undermined by a dally infla- 
tion rate of 1.9 per cent, would 
retain their purchasing power 
through the month. 

Possibly Mr Cardoso’s greatest 
dfffimHy in his presidential cam- 
paign is cynicism amcmg voters, 
who have seen many previous anti- 


inflation attempts fail. "It's very 
hard to deal with this legacy of 
failed attempts. It's like the eighth 
marriage of Liz Taylor - if the oth- 
ers have foundered, why should this 
one succeed?” asks Mr Malan. 

An opinion poll earlier this month 
found that more than half those 
questioned would not change their 
voting intentions if inflation fell 
sharply following the Real’s intro- 
duction. The findings worried Mr 
Cardoso’s advisers, who suspect 
that some poorly educated voters 
will not realise the part he has 
played in introductog the new cur- 
rency. 

But it is more likely that Brazil’s 
electorate, with memories of the 

downfall of the now disgraced for- 
mer president Mr Fernando Collor 
amid corruption charges. Is no lon- 
ger as easily fooled by campaign 
promises. Opinion palls suggest Mr 
da Silva, who narrowly lost to Mr 
Collor in 1989, is gaining support 
because he is a prominent national 
figure. In contrast, Mr Cardoso, a 
former academic, is not well known 
outside political circles and may 
appear as yet another newcomer 
making breakable promises. 

Mr da Siva’s position on the Rea] 
is ambiguous. When the programme 
was announced, he and his Workers 
Party (PT) were critical, pointing 
out that inflation had nearly dou- 
bled during Mr Cardoso’s 11 months 
in office to almost 35 per cent a 
month. Recently, the PT has 
stopped its attacks and is waiting to 
see how well the new currency 
works. 

But as the elections approach, Mr 
da Sflva will have to decide whether 
to support the anti-inflation fight 
and the new currency, even though 
it is the main plank of his oppo- 
nent’s platform. 

I f he decides against backing 
the programme, Mr da Silva 
could perhaps announce that 
his incoming government will 
scrap parity with the US dol- 
lar or pledge to raise the minimum 
wage. Assuming Mr da Silva retains 
his opinion poll lead, such an 
announcement would put pressure 

Cm mrrbawgB anil teteniwft rates, 8S 

markets reacted to the prospect of 
higher government borrowing. 

Mr Eduardo Gianetti da Fonseca, 
a Sao Paulo-based economist, sus- 
pects Mr da Silva will remain on a 
moderate path. Tf he continues to 
show a commitment to compromise 
there won't be panirMng nn a grand 
scale. But if he radicalises, then 
anything is possible," he says. 

Given the political uncertainty 
few believe an end to inflation is yet 
in sight in Brazil. The Real’s 
achievements may lie in keeping 
the economy free of hyper-inflation 
until the elections - possibly allow- 
ing for a fresh price control offen- 
sive by the next government Bra- 
zil’s housewives might be learning 
to use flwnthpj currency by the time 
the ng*t World Cup comes around. 


The future is an each-way bet at east Germany's largest race track, says Judy Dempsey 

Dark days at the races 


I 


f only the Marx Brothers had 
immortalised Hoppegarten, 
east Germany's largest race 
course, its fame might have 
guaranteed its future. Instead, the 
legacy of Karl Marx Is causing 
headaches for the managers of ttk 
old-fashioned site, redolent of a 
grander age and less than a 30-mht- 
ute train ride east of Berlin. 

The race course, which boasts a 
hurdles, flat and steeplechase 
track, as well as stables for 450 
horses spread ova- 1400 acres is 
trying to find a new lease of life in 
a untiled Germany. As it shakes off 
its communist past, it is also trying 
to regain the glory it enjoyed when 
it was set up fat 1866. 

Like most former state-owned 
properties, Hoppegarten was placed 
under the Trenhand, the agency 
charged with privatising east Ger- 
many's factories and shops, land, 
forests and sports fa cu lti es, after 
unifi cation in 1990. Mr Artur 
Boehlke, Hoppegarten’s 50-year-old 
manager, is determined that the 
agency will not sell the race track 
for industrial development 
. “We have lost much time tinea 
the course was placed under com- 


munist control back in the early 
1950s,” be said, sitting in an office 
decked with photographs of horses, 
race meetings and celebrities. “The 
managers and Trenhand are now 
trying to revive the course’s pre- 
war reputation." 

Until the second world war, Hqp- 
pegaxten and its race horses had 
been honoured by visits from 
Crown Prince Wflhelm of Prussia, 
the Aga Khan and others. The 
meetings were Important social 
events backed by money from the 
Union Chib, a select group of aris- 
tocrats which owned vast tracts of 
land stretching across Prussia, and 
which bought the coarse in 1874. 
This state of affairs persisted until 
the east German communists were 
installed in power in 1949. 

“Racing was no longer exciting 
under communists," said Mr 
Boehlke. There was no chance for 
private stables or trainers. The 
state ran everything, including 
Hoppegarten. 

“ I well remember those days," he 


add e d. “Of course, the races contin- 
ued to be held. Bat the interna- 
tional meetings, such as they were, 
only involved the other socialist 
countries. There was one interna- 
tional meeting a year. The Rus- 
sians usually won. Somehow, their 
horses were faster than ours . . 

There was Httle scope for betting. 
“Yon chose a horse, handed in a 
ticket and waited ages to get your 
money tf you happened to win," Mr 
Boehlke said. 

Alter German unification in 1990, 
east and west Berliners started 
returning to Hoppegarten to attend 
its 18 aimnal meetings. By late that 
year, the course had been placed 
under the Trenhand, which is still 
looking for an owner. The agency 
has subsidised the course by about 
DM1 -2m (£480,000) a year since 
than, but the trade still has annual 
losses of DM500,000 to DMlm. 

The Union. Club has tried unsuc- 
cessfully to get its property back 
from the government As the for- 
mer owner of land expropriated by 


the Soviet authorities, which gov- 
erned east Germany between 1945 
and 1949 , It has no legal right 
either to restitution or co mpcnsa. - 
tion. 

The dob, which has about 200 
members, consists of bankers and 
prominent sportsmen as well as 
landowners. Many members believe 
that even if they cannot buy the 
race coarse outright from the Treu- 
hand. they will be able to obtain a 
long lease on it 

Mr Evert Yon Ungern zu Stem- 
bog, 72, a prominent member of 
file Union Club, reckons it will be 
successful. “If we cannot reclaim 
the Hoppegarten, we told the Treu- 
band that we are prepared to lease 
tt, to invest DMSfan over the next 
10 years, and build another 450 sta- 
bles." 

Mr Von Ungern zu Sternberg, 
who was bam in Estonia, fought on 
Germany’s side during the second 
world war, moved to south America 
after 1945, and settled hack in Ger- 
many after 1972, says the race 


course could be an instrument 
through which the elnb could 
regain its once-elevated status in a 
united Germany. 

The future of the course could be 
decided this week when the Treu- 
hand meets representatives from 
the state of Brandenburg, where 
Hoppegarten is located. They could 
set up a Stiftang, or foundation, 
which could become the new owner 
of the coarse. The Stiftang would 
then lease the course to the Union 
Club. “This solution means that the 
Hoppegarten will remain as a race 
course. But the Trenhand is insist- 
ing that the Union Chib must make 
those investments, and find ways 
to get back into the black,” said Mr 
Wolfgang Horstmann, the Treu- 
hand’s director responsible for pri- 
vatising land in east Germany. 

Mr Boehlke is looking forward to 
the time when the Hoppegartan’s 
future will be more secure. “Once 
we really get off the ground, well 
put file other race courses In west 
Germany to shame, and we’ll be 
great once again. A day at the races 
will really mean something.’' Now 
that is a finale the Marx Brothers 
would have really enjoyed. . . . 


Another Bath 
for Patten? 

■ The spectre of another election 
defeat has returned to harm* Chris 
Patten, Hong Kong's gervemorwho,' 
as Tory party chairman, ov e rs aw , 
thp Cre a mvait lTOS 1 fourth gwimil 
election victory in 1992 only to lose 
his own seat, Bath, in the process. 

Tomorrow, Patten’s plans for 
the development of democracy in 
Hong Kong come before tile 
colony's Legislative Councfi. There 
he faces conceited opposition, from 
the Liberal party, a grouping of 
mainly appointed conservative . . 4 
potttiefcHis. whnwantfo water. *£• 
down his jflans.tn a waytheybope- 
Qriaa wfll hke. A special adviser 

is helping them with, electlaheeriiig 
techniques and onflow to nr pmjaei 
themselves as a “campaigning 
organisation”. ■ 

But what -Patten doesn't know 
is that that adviser la -none -other 
than MarianHadm, « farmar Pharr 
or western counties’ Liberal 
Democrats. In flue run-up to the 
1992 election, she was intimately . 
finvolved hr devising the campaig n 
wflkhfumed^Patte&’s chancssof 
takiiifchigher office in the UR. 


Wrong track 

a Whatever baethinfcs about the 
wisdom of Raflttack’s dispute wifli 
tfae^amritry’g gj gnahnpn . H*> 
p r oflrailatfo n of its -case has been 


pretty abysmaL What has been 
an offer seems to have been 
chopped and changed at short 
notice and Rafttrack's explanation 
of its position has been 

mfnA hn g g li ii g ly rmtiptor. 

If s all the more surprising 
febecanae Rafltrack chairman Bob 
[jBDrtmcanbeaprettyforce&il 
^communicator hinwdf and had 
even, hired a former Labour party 
spin-doctor, Lesley Smi t h, to be 
bin h«ifi of government and public 
affairs. If anyone knew how to 
deftase the opposition, it should 
have been a professional like Smith. 
Indeed, one wonders whether her 
heart is really in the job. 


{Right scheduling 

■ How times change- There was 
a time when Britain’s company 
chairmen and politicians timed 
■their fact-finding missions to Sooth 
Africa to escape Britain's winter. 
However, Board of Trade president 
j ffl i ftmri now Htiitt baa rhiwn to 
forego fhe delights of Britain’s 
summer season and spend the week 
after nest in South Africa. 

. Westminster-watehere believe 
that tins could mean one of two 
filings. Either the langrttmoured 
cabinet reshuffle won’t take place 
during that week or the Preaa has 

persuaded his boss not to make 

him take over Sir Norman. Fowler’s 
glorified prjob as Conservative 
party chairman. 

TTmy could be right an. both 
scares. After John Major’s strong 


Observer 


- 1 — r -*coO- 




Tm pre pared to haggle* 

showing yesterday. Observer’s bet 
ts that the reshuffle wffl be delayed 
until just be for e the House of 
Commons breaks up for its summer 
hda 


Foot in it 

■ One World Cup spinoff sales 
promotion which is unlikely to be 
repeated is Hetneken’s competition 
to collect bottle tops of its Amstfil 
beer. 

The idea was that beer drinkers 
who collected bottle-tops carrying 
the flg gg of all 24 football 
participants wen a book on the 
World Cup. Unfortunately, one of 
the contestants was that well 


known country of teetotallers - 
Saudi Arabia. 

Pepping the Saudi flag on top 
of a bottle of beer might not damage 
Hmneken's Middh* Kastpm beer 
sales but it caused such a 
dipl oma tic stir that Heinek e n was 
summoned to the Saudi embassy 
in The Hague, and forced to take 
out ads in two Dutch newspapers, 
apologising for the insult Indeed, 
it seemed at one stage that the 
company might even have to recall 
several milli on bottles of the 
offending ale. 


Votes for women 

■ First Znlsna, now Sasana; this 
new wave of democracy in Latin 
America has dearly taken firm 
brilfl flnlpma Mwiem, whose 
estrangement from husband Carlos 
- Argentina’s president - has 
gripped Buenos Aires’ media for 
years, might be advised to join 
forces with Peru’s first lady. Susaoa 
IfiguchL 

La EBguchi has criticised her 
husband, president Alberto 
Fifiimnri, for having an 
anfii o ri t ari an manner mid 
neglecting Peru's poor. She gives 
Mm high marks for tackling two 
bogprobkans - terrorism and 
inflation - but says he a cc en tu at es 
the positive, while she sees “mflflons 
of people living in absolute misery”. 

Bo& Menem and Fujimori are 
likely to stand for re-election in 
1995. Never mind trade agreements 
-Zulema and Susana should be 


getting on the phone to Hillary 
Clinton to evolve a co-ordinated 
pan-American plan to lay siege 
to various presid e ncies. 


Military tactics 

■ Star of the show at Nigeria's 
constitutional conference just 
opened to Abuja was former 
transport minister Umaru Dfkko 
on his return from eadle. The last 
time he made such a splash was 
a decade ago when the Nigerians 
attempted to smuggle Mm back 
from Britain after Nigeria’s ruling 
generals had accused him of 
stealing public money. 

Ha had been kidnapped and was 
en route to his country of origin 
when British Customs uncovered 
the plot *T want to thank the 
government and people of Britain 
for everything they did for me,” 
Dikko said yesterday. Not 
surprising, really; they saved him 
from a crate worse than death. 


Grave turn 

■ As the Republic of Ireland 
prepares itself for tonight’s big 
match against Norway, Observer 
hears that the pre-match 
celebrations have extended to 
Glasnevin - the country’s largest 
graveyard. Irish flags and bunting 
have started to appear on the 
gravestones. One hesitates to think 
what mig ht emerge if Ireland gets 
through to the final 












i i v. a I.Tiu xoi.; 

&WKBS I l-R 


oumiRru suxveroi is 

k COMMC.ROM. pnoraivrv agents 

Expertise In Every Area 




Kazakhs accuse Moscow 
of stopping oil exports 


By Steve LaVbie in Tashkent 

Kazakhstan accused Russia 
yesterday of cutting off most of 
the republic's oil exports, all but 
paralysing its most lucrative 
industry. 

Kazakhstan's leaders have 
recently been subjected to strong 
political and economic pressure 
from Russia, which has 
demanded an equity share in 
Kazakhstan's giant Karacha- 
ganak natural gas field and is 
also said to be seeking a stake to 
the rich Tengiz oilfield in west- 
ern Kazakhstan. 

The country exports some 17m 
tonnes of oil a year, of which 
around 6m tonnes go to countries 
outside the Commonwealth of 
Independent States. The two 
export pipelines to the Black Sea 
both cross Russian territory and 
are under Russia's control. 

Any cut-off could be part of the 
pressure by which Moscow has 
been gradually choking off Kaz- 
akhstan’s natural gas and oil 
flow. 

Mr Ravil Shardabayev, Kazakh- 
stan’s oil minister, said, in a tele- 
phone interview that Russia had 
severed the republic’s oil exports 
although Chevron of the US, 
which possesses rights to develop 
ttn» Tengiz oilfield, “is continuing 
to export its oil in a limited 
amount". 

Russia's energy ministry in 
Moscow yesterday would not con- 
firm Kazakh claims that th» flow 
of oil through the larger of the 

Fresh soap 
war claims 

Continued from Page 1 

Derek Prentice, criticised Uni- 
lever’s failure to distinguish 
between its new “rebalanced" 
version of the powder and the 
original version. Unilever said 
there was no reason to make a 
distinction as it stood by the orig- 
inal product 

In Switzerland, the new version 
carries a recommendation that it 
should not be used on dark col- 
ours or lightly soiled clothes. 
According to Procter, it also con- 
tains only 10 per cent as much of 
the allegedly damaging manga- 
nese catalyst, though Unilever 
yesterday denied the redaction 
was so large. 

Mr Prentice said: “We are told 
that the modification coming into 
this country is identical to the 
Swiss formulation. It is not sepa- 
rately identified. Consumers have 
an absolute right to be shown the 
difference, so that they can make 
the choice." 

Unilever executives in London 
reaffirmed their commitment to 
the new powder, which they said 
had enabled them to overtake 
Procter in the UK detergents 
market in the space of six weeks 
from launch. 

Mr Andrew Seth, chief execu- 
tive of UK detergents, said the 
new catalyst would be introduced 
into other Unilever detergent 
brands, such as Surf and Radiou, 
in a matter of weeks. 


I \ P 


Mrtfetw 


«***'.'■ 


■ ■ -so 


j BghprtPgg 
1 Pmpnaad pfrwfcw 


Soura Hereto* j 
MaritmOgarifeatani 


-owomtes ' . . ./■' V 

-7 '• '• • 7 V V 


two pipelines had been halted, 
but Russia has long complained 
that it could export more of its 
own oil through the pipelines if 
they were not carrying the prod- 
ucts of others. 

In an interview published this 
month in the Petroleum Argus 
newsletter, Mr Yuri Shafrannik, 
Russian energy minister, said 
Russia was losing 3300m a year 
by tr ansp orting oil from Kazakh- 
stan and other central Asian and 
Caucasian republics. 

He added: “These are joint ven- 
tures on the territory of Russia 
with western partners which 
have surrendered the right to 
transport oil because we are act- 
ing for Kazakhstan's western 
partners.” 

Mr Shardabayev said yesterday 
that Russia had begun cutting 
supplies at the beginning of last 


month. Mr Bulat Yeleymanov, 
director of Kazakhstan's state oil 
company, told the local newspa- 
per Panorama: “There is oil, but 
no possibility to sell it" The 
republic’s own internal refinery 
system has ground to a halt 

Recent actions by Moscow have 
brought into question the ability 
of western energy companies to 
negotiate legitimate contracts 
with the Caspian Sea region’s 
republics, particularly Azerbaijan 

and Vawlrtwtan 

Moscow this year issued a dip- 
lomatic letter to Britain in which 
it demanded veto rights over any 
resource development project on 
the Caspian, claiming that with- 
out its approval any deal was 


The demand appeared to jeop- 
ardise western oil deals both in 
TTagairhgfem and Azerbaijan. 


Close result in 
German state poll 


By Judy Dempsey in Berfin and 
Quentin Peel in Bonn 

Both Chancellor Helmut Kohl’s 
Christian Democrats and the 
opposition Social Democrats 
claimed a moral victory yester- 
day in the state elections in east 
Germany's Saxony-Anhalt, and 
demanded the right to lead the 
next government 

Only one seat separated the 
two leading parties, with 37 seats 
for the CDU and 36 seats for the 
SPD, after the final results were 
announced. 

In the event, they may be con- 
demned to govern together, 
thanks to the ZL seats gained by 
the Party of Democratic Social- 
ism, the reformed former Com- 
munist party, with which neither 
will countenance any form of 
coalition. 

Mr Kohl said the results were a 
good omen for his party and his 
ruling coalition in the general 
elections mi October IS. 

The biggest losers in the state 
elections, the latest in Germany’s 
19-poU election marathon this 
year, were the minority Free 
Democrats, the junior partner in 
coalition with the CDU in both 
Bonn and Magdeburg, the state 
capital. They received only 3.6 
per cent, 9.9 points less than 
in 1990, and therefore fell 
below the 5 per cent threshold 


needed to eater the parliament 

Final results, with a turnout of 
549 per cent, gave the CDU 344 
per cent ctf the vote, 45 points 
less than the 1990 state elections, 
while the SPD gained 34 per cent 
up 8 points. 

Mr Christoph Bergner, the CDU 
prime minister of Saxony-Anhalt 
declared himself in favour of a 
grand coalition, claiming the 
right to lead it as the head of the 
largest group. 

However, Mr GOnther Verheu- 
gen, secretary-general of the SPD, 
said the result was a dear defeat 
for the ruling coalition, and his 
party would consider forming a 
minority government The Bfind- 
nis 90/Greens party, with five 
seats, or 5.1 per cent of the vote, 
down 0.2 points from 1990, said it 
would do “everything possible” 
to support Mr Rdnhard HOppner, 
the SPD’b leading candidate, in 
forming the next government 

A minority SPD/Green govern- 
ment, having a total of 41 of the 
99 seats, would have to depend 
on either the CDU or the PDS. 

The embarrassment for both 
Mr Kohl and the SPD is the con- 
tinuing strong showing of the 
PDS. If the party wins seats in 
the Bonn parliament In October, 
it could force them into a grand 
coalition at national level, as well 
as in state parliaments such as 
Saxony-Anhalt 


FT WEATHER GUIDE 


Europe today 


Many areas of Europe wQ| have tropical 
conditions. Exceptional^ high temperatures, 
approaching 35C. are expected over central 
Europe. 

The Low Countries and the British Isles wfll be 
warm, tumid, and doudy, and Scotland wiB 
have overcast skies. Spain will be hot and 
sunny. Thunders to rms win form over the Alps, 
northern Italy, and the Balkan states, especially 
In the artemoon and evening. Southern Italy will 
be mostly sunny and dry. Norway will be damp 
with plenty of cloud and outbreaks of rein. 

Sweden and Finland wffl have sunry periods 
with occasional showers. Afternoon 
temperatures win top 2QC In the southern 
regions. 

Five-day forecast 

Europe wHJ remain warm to hot in the coming 
days. On Wednesday, cooler air from the 
Atlantic will flow east, causing thunder storms 
over the continent Some of these may be 
heavy. Rain wffl progress into northern Europe 
from the west Norway win have the most 
rainfall, while Sweden and Finland will have 
temperatures of more than 20C. 



TODAY’S' 


AbuEXttM 

Accra 

A lgiers 

Amsterdam 

Athens 

Atlanta 

B, Aires 

BJiam 

Bangkok 

Barcelona 


SHuoSonat 12 GMT. Tmnpen^ums maximum for dtf. fixtscasts toy Mateo Comm* c* tfw Atetfrartwii 


Mnkman 
Celsius 
«un 40 
fair 31 
Sun 29 
Mr 29 
Sun 33 
ihtnd 33 
fair 15 
lair 26 
Mr 34 
sun 27 


Belgrade 

Berfln 

Bermuda 

Bogota 


Budapest 

CJUgen 

Cairo 

Cape Town 


33 Caracas 

21 Cardtff 

34 Casabtanra 

30 Chicago 

31 Cologne 
20 Dakar 
31 Date 

30 d«m 

34 Dubai 
24 DuMn 
38 Dubrovnik 
15 Edinburgh 


Our service starts long before takeoff. 

Lufthansa 

German Airlines 


28 Faro 

23 Frankfurt 
27 Geneva 
27 Gfcnytar 
33 Glasgow 

29 Harrbwg 
39 HataWd 
33 HongXong 
41 HonoMu 

20 tefcrtxil 

29 Jakarta 
19 Jenny 
Karachi 
Kuweit 
L Angelas 
Las Palmas 
Lima 
Lisbon 
London 
Liocbourg 
Lyon 
Madeira 


30 Madrid 
34 Majorca 

29 Malta 

28 Manchester 

21 Manta 

27 MaBxume 

22 MeodcoOty 

30 M ami 

31 Mflan 

28 MontaM 

32 Moscow 
22 Munich 

33 NataU 
43 Naples 

31 Nassau 
25 New York 
17 MW 

29 Nicosia 
28 Oslo 

32 Paris 
31 Perth 
24 Prague 


28 ReyKjavk 
30 Rta 
24 Rome 

32 S-Frsco 

13 Seoul 
18 Singapore 
34 Stocfchofrn 
28 Strasbourg 

23 Sydney 
21 Tangtar 

33 Tel Aviv 
« Tokyo 

30 Toronto 

33 Vancouver 
28 Varies 

27 Vienna 

34 Warsaw 

24 Washington 

31 W aBn gto n 
18 Wlnripag 
33 Zurich 


shower 30 
doudy 14 

fair 20 
fefr 29 
Mr 28 
. Mr 29 
Shounr 30 
fair 25 
thund 33 
Mr 17 
sun 32 
sun 31 
doudy 25 
Shower 23 
fair 21 
shower 30 
fair 33 
aun 30 
fair 31 
Mr 12 
Mr 22 


Networking? 

NetWare 4 
of course. 


I Price of 
coffee 
soars 40% 
as frost 
hits Brazil 

By Afison MaRfand In London 

Coffee futures prices soared by 
nearly 40 per cent to a 7%-year 
high In London yesterday fbDow- 
tog reports that frost and cold 
winds had damaged about a 
quarter of the coffee trees In 
Brazil, the world's largest pro- 
ducer. 

Manufacturers warned that 
consumers faced farther price 
rises in the antnmn if the surge 
in the coffee market, up 140 per 
cent so far this year, continued. 

“This current situation of 
prices going up and up and up 
cannot prevail for ever without 
ns having to consider when we 
pass that on to the consumer," 
said Mr Mick Casey, a spokes- 
man for Nestl&. 

The price of Nescafe, which 
ha6 40 per cent of the UK instant 
coffee market, rose 12% per cent 
in January, its first increase in 
foor years, but consumption was 
not affected, Mr Casey saM. “The 
price oT green beans takes four 
to five months to filter through 
to supermarket prices," he 
added. 

The weekend frost datwagg fas 
Brazil, coupled with forecasts of 
more to come, sent London 
robusta futures prices into one of 
their biggest single-day rises. 
The contract for coffee for deliv- 
ery in September rose to a peak 
of $3,150 a tonne, dp 39.7 per 
cent on Friday’s close. 

Hie cold snap, which comas at 
the start of a six-week period 
when Brazilian crops are vulner- 
able to frost, gave fresh impetus 
to a bullish market Prices have 
been lifted from last year’s low 
of about $800 a tonne by a pro- 
ducers’ agreement to withhold 
exports, which has coincided 
with a shortage of world coffee 
supplies and falling consumer 
stocks. 

Yesterday’s gains were 
trimmed by profit-taking, but 
the contract still ended $593 
higher at $2,848 a tonne. The 
surge was mirrored in aralnca 
coffee futures in New York, 
where the September contract 
was iv 344 cents a pound at 
162JX) cents a pound in after- 
noon trading. 

“If the reports of damage are 
as people are saying; this Is only 
the start of it,” said Ms Judith 
Genes, soft commodities analyst 
with Merrill Lynch In New York. 
"It looks as if we are in for 
another period of record high 
coffee prices, based on the initial 
reports.” 

Most of the frost damage was 
in Brazil’s southern state of Par- 
ana, where up to 70 per emit of 
coffee trees were affected. But 
the frost may also have affected 
80 per cent of the trees in the 
south of Minas Gerais, the main 
coffee-producing state. 

Next year’s crop will be worst 
affected but the quality of this 
year’s harvest could also suffer. 

C hilling memories. Page 26 


THE LEX COLUMN 


Reshuffle at Reed 


It was perhaps a backhanded 
compliment to ftp transformation 
Mr Peter Davis has wrought at Heed 
Internat i ona] over the past eight years 
that the market reacted with such 
equanimity to his departure. Had Mr 
Davis quit in sforfiar circumstances 
while Reed was still a sprawling con- 
glomerate, then the company’s shares 
would have been devastated. But such 
is the presumed soBdity of the merged 
Reed Elsevier publishing empire, 
which Mr Davis was so instrumental 
in creating; that thd market barely 
blinked. As the initial shock wore off, 
Reed’s shares recovered sharply. 

Reassurances that there was noth- 
ing awry at the trading level dearly 
helped. Besides , the mwipany is in a 
strong ii nan rial position. Share h o lders 
can draw comfort from the collective 
leadership which is in place at Reed 
Elsevier. There Is little reason to 
believe that the board will go wild, on 
the acquisition front as it sizes up 233 
and Mead. 

That said, the loss of Mr Davis is 
undoubtedly a blow. It had seemed 
that Reed Elsevier was doing well in 
avoiding the political pitfalls that have 
bedevilled so many international 
mergers. The differences at Reed may 
Indeed have been personal rather than 
cultoraL Mr Davis was certainly not 

famfirt for gttfingr nn big hanric Rot it 

Is a pity that Reed’s complement of 
heavyweight non-executive directors 
could not have helped defuse such ten- 
skms- Shareholders may yet regret the 
departure of an executive with strate- 
gic virion given the speed of change in 
the media world and the need for bold 
thinking. 

Wall Street 

The US equity market started the 
new week in much better mood than it 
finished the old. Yesterday's rally 
must still be taken with a pinch of 
salt, though. The prospect of strong 
earnings growth and continued 
inflows from mutual funds - albeit at 
a markedly slower rate than last year 
- have lent the market support this 
year despite tighter money at the Fed- 
eral Reserve. The dollar's weakness 
could yet undermine both props, leav- 
ing Wall Street prey to the kind of 
liquidity crunch which has affected 
other markets since February. 

While some of the heat was off 
tim currency yesterday, it is vulnera- 
ble to speculative attack as long as 
intervention, is not backed np by 
moves hi interest rates. The snag is 
that higher rates could slow the recov- 


FT-SE Index: 2899.9 (+23.3) 


tonlfa i tem a tf c ma l V - ■; 

• ■ ■ . - • . # r- ■. **+ ^ 

■ Sham \ •• ‘ 

AQ. t tutor ufraJit wiryiiWiVij.|.»F i u «'«' « i ul y.iji u ■ 

■ • sifttr ■ 

SQlJ^ ' * V/’ . J. 

ery to the point where earnings 
growth is threatened. A trailing multi- 
ple of around 30 times leaves little 
room for disappointment cm that score 
- witness the sharp reaction to the 
recent crop of profits warnings, partic- 
ularly in the technology sector. Equi- 
ties could see some sharp falls if 
mutual fond investors then actually 
started selling. 

The more difficult question is how 
far other equity markets are at risk. A 
slide cm Wall Street could prove the 
catalyst for serious selling elsewhere. 
But other equity mark et s have mostly 
been reacting to movements in bonds. 
The chances are that a rise In short 
term US rates large enough to stabi- 
lise the dollar would prove a tonic for 
the bond market because it would also 
railm Inflation fears. Even after last 
week's slide, the Dow Jones Industrial 
Average has fallen by a tittle under 
3 per cent this year, significantly 
less than the main European equity 
markets. It has some catching up to 
do. 

UK electricity 

AH the regional electricity compa- 
nies now have a clear idea of what Mr 
Stephen TJtHpnhiiri . the industry regu- 
lator, has in mini! for the forthcoming 
review of distribution prices. It is 
therefore difficult to interpret Nor- 
web’s continued assertion that it can 
deliver 6-8 per cent real dividend 
growth through to the end of the 
decade. The obvious conclusion is that 
tiie regulatory line has. softened since 
the spring, when most profits fore- 
casts woe scaled back. 

It would be rash to push this argu- 
ment too for. By promising that one- 


fifth of its earnings will come from 
unregulated business by the end of the 
decade, Norweb has shown touching 
faith in its ability to make money in 

areas such as retailing. Neither has 
the company said how fast dividend 
cover wifi be run down to keep the 
pay-out raring ahead. Seeboard was 
notably less gung-ho about the pros- 
pects yesterday. 

Even allowing for healthy scepti- 
cism about the prospects outride the 
regulated business, though, most Rees 
look well placed to cope with tougher 
price controls. Seeboard has promised 
to cut 250 jobs a year for the next 
three years, even though it Is among 
the most efficient in the sector. The 
scope for cost savings at the least effi- 
cient companies can only he guessed 
at A one-off 20 per coot cut in distri- 
bution prices of the type mooted in 
April would still hurt. But having 
underperformed a falling stock market 
by almost 10 per cent since then, the 
bad news may now be in the price, j 

! 

Airtours 

It would be t e m p tin g to argue that 
Airtours deserves a premium rating. 
The tour operator boasts an impres- 
sive trading history, with its chair- 
man, Mr David Crossland, showing a 
commendable obsession with deliver- 
ing ctn seemingly extravagant prom- 
ises. There still seems plenty of 
growth to go for in the travel business, 
with Airtours’ latest expansion into 
Scandinavia holding out promise.. 
Moreover, Airtours nas been among 
the best-performing stocks of recent 
times; its market value has leapt 
from £i8m to £555m in less than four 
years. 

Yet, by themselves, Airtours’ 
interim results do little to bolster the 
case for such a rerating. The inherent 
seasonality of the travel business and 
the finny erf recent acquisitions com- 
plicate the task of making any mean- 
ingful assessment of the company’s 
frnanriai health at the halfway stage. 

Everything must be fafcwn on trust 
Even then, it must always be doubted 
whether file earnings stream produced 
by a tour operator should be rated as 
highly as those on offer elsewhere. 
Airtours may have done a good job in 
countering the inherent volatility of 
the holiday business. It is also persua- 
sive in. suggesting that the perennial 
fears of price wars are much overtone. 
But that cannot be guaranteed with 
Owners Abroad remaining an industry 
wild card. The last resort of a strug- 
gling holiday company is price. 


If you want to know 


At Gardner Merchant, our commitment to our customers is a 


why we’re the world’s 


direct result of our commitment to our people. 1000 of our 


no. 1 , ask our 6000 


middle and senior managers worldwide are motivated to 


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the USA. 




GARDNER MERCHANT 

World Service 











lr $4 

V 


Specified 

Worldwide 

L8.PlaslicstJm 

■ Tel: 0773 852311 


FINANCIAL TIMES 


c\/ TRUCK A 
FiSSUfOF THE year’ 


©THE FINANCIAL TIMES LIMITED 1994 


Tuesday June 28 1994 


’ *4 " ff k_ 

1 . Vl/w V 


|V*“" 

" . T« 

'*si 
- "■ 
...... . ■i.'W 


now 


world's 


the 


IN BRIEF 


Italian merger 
moves ahead 

Shareholders at Fiat subsidiary Cogefer-Jnqjreart 
approved the first stage at a. planned' three-way 
merger that will create Italy’s largest «mq <T iM»tinn 
group. And the company has been pronounced 
clean' of Italy’s bribes scandal hy H» r -ha iraw m 
and chief executive, both of whom are to stand 

down. Page 20 

Gable A Wntas plans US axpansJon 

Cabl e & W ireless is looking to boost its US subside- 
Lary. CWI, and i3 in talks with US telecoms compa- 
nies with a view to an alliance. The group is target- 
ing small and medium-sized trans-national 
com p a n i e s, according to its chairman Lord Young: 
Page 20 

Mexican offerings test muktt 

Three Mexican companies will test investors’ 
receptiveness ta their country, when they .offer 
a total of more than 9600m in equity on interna- 
tional markets this week. The issues wififee 
watched closely by other Mexican companies - v 
anxious to raise money. Page 21 J . . 

Bridge Ofl stakes raised 'f V 

Stakes in the battle for fridge OH have been 
raised again, with Parker & Paisley now offering 
90 cents a share - valuing Bridge Oil at A$378m \ -> 
- and hnidfng almost ane-fiftfaof its target's shares. 
Page 22 . r 

Japanese banks face raflonsdlaatlon 

A merger between three northern Jhpan&te banks 
has collapsed, despite, pressure from the ministry 
of finanra - which wants to see a radicalconsoHda- 
tion of regional banks. But rationahsatlap is an 7 
the cards as tha country, heads towards fell flnan- 
dal deregulation, and further mergers are likely. 
Page 22 . 

Seeboard posts 17% rise 

Seeboard kicked off the UK electricity reporting 
season by posting 17 per cent rise in profit despite 
flat turnover. Cost-cutting, frinimfiiig the loss 
of 900 jobs, was the reason far the growth, and 
further cost reductions are on the way. Page 
24 • _ 

Norweb turns to unregulated business . 

Norweb, the UK regional electricity distributor, 
announced profits of £173m (2262m) and said 
it expects a fifth of profit to come from unregulated 
business by 1296. Page 24 

Business travel boosts Hogg RoMmon 

An increase in business travel helped Hogg Robin- 
son, the UK travel agency, take profits to £2L4fim 
(S32. 52m), up from £13^1m, with the sale rf the 
group's holiday-business to Airtours adding JETm. 
Page 25 . 


jt The impending flotation of UK money-braker 
Exco is highlighting an Industry which largely 
remains hidden but can provide vast cash flows 
for companies. It has also seen jgQSts eaplode - 
- despite the recession. Page 25 

Companies ha this issue 


Amoco 

Andaman Resources 

Aras-Sarono 

Atlas Gold 

Axa 

BHP 

B1CC 

Banpate 

Bond HeScoptara 
Bridge OK 
British Syphon Inch 
Business Post 
Busways 
Cable & Wheless 
Caledonia Invs 
Cte Girard 
ChinaTek 
Christie Group 
Clca 

Oayhithe 

Cogefer-tanpraslt 

Codecs Inti 

Daimler Benz 

East Lancs Paper 

Snap 

Exco 

Ferranti hrtl 
Rat 

Fleming (Robert) 

Fondigest 

Ford 

GAN 

Gantry Acquisition 
Group DESC 

Market Statistics 


21 Grupo SMek 
25 Guardian Media 

22 HeUoopasr Sendee 

21 Hewetson 

20 Hogg Robftnon 

22 Imperial Oil 
Kalian Renaissance 

IT John Labatt 
?! KWO Babel 
20 Kemper 

22 Lister 
25 MAI 
25 Mayor 

24 Monarch Resources ‘ 
20 Motorola 

25 Norweb 

25 Paricar & Parsley 
^ Portugal Tetecom 
fL Reed Baavtar 
77 Rover Group 
25 Seeboard 
25 Sleepy Kids 
20 smith NewCowt 

24 Soundtracs 

19 Stagecoach 

25 Swan Hunter 
94 Tatra 

25 Thai Air 

24 Thomson CSF 
Trade indemnity 

77 Trans World Comma 
Trident Television 

25 UnBever 
5 Vokw 

20 wavariey Mining Ftn 
22 ztfglerCoal 

21 Zeneca 


^Annual reports aarto 30-31 

Benchmark Govt bonds 23 

Bond futures and options 23 

flomf prices and yfiiWs 23 

CommotHes prices 26 

Dividends announced. IK 24 

EMS currency rates 38 

Eurobond pdas 

Rxed interest ericas 23 

FT- A World Indices Be* Page 
FT Gold Mines hdax OacKR ag 
FMSMA inti bond arc ® 

FT-SE Actuariea Indfces 29 


Foreign eahange 38 

Gfits prices 23 

Lina equity opttons Back Page 
London stars savios 30-37 

London uadi opUcra Back Papa 
Mutaqed funds aantca 32-38 

Money markets 38 

New kti bond Issues 23 

Recent issues, UK 29 

Short-term bit rates 38 

US Interest rates 23 

World Stock Markets 37 


Chief price changes yesterday 


FRANKFURT (DM} 


AEG 178 - 

DNmtar Ban 7M - 

Dagima 458 - 

LeOwa «l - 

WAN 387 - 

new vork (9) 

IUbub 

CHarpHv 1QZH + 

ST t 

Ford 0W4 ♦ 

Gen Morn S3* ♦ 

Lotus Dev sw * 

Orocie 37« + 

W PMUS tm} 


Haw York price* At l2JOpm- 




os 

+ 

17 

20 

cm pm 

m 

+ 

30 

4£ 

145 

CCF 

Mb 

zi&2 

* 

102 

1SL5 

Enter 

era 


20 

24 

IIS 

Rtduadn 

TOKYO (TM* 

HN* 

400 


28 

1 vs 
IK 

MppenRoad 

Mb 

1150 


90 

IK 

1 

M 

MGS OOP 

470 

- 

10 

RteoGW 

988 

- 

21 

f» 

R*oKw 

2210 

- 

120 


Notarial BK 

705 

- 

35 

228 

MpSano 

541 

" 

20 


LONDON (P«Ma) 


BAT teds 
» 

KSM 

Mart 

Tskpopn 

TMdgsr Kss 

UntodNwe 

Nile 

Answs 

COM 9M 

Dttons 

Enwonsd 


30 + 17 

788 + 1« 

104 * f 

316 ♦ « 

360 + 2® 


MnMnAMo 

850 

- 

18 

HHemn 

» 

- 


HwtwAraten 

163 

- 

8 

HuMNanW®f 

280 

- 


Jotmtni Pm 

808 



Lttsr 

-47 

- 


M&etaqi 

009 

-* 


swwn* 

«8 

- 


Tejwel Ofewi 

111 

- 


Usatadamv 

83 

- 


lAMflir 

177 

” 

17 


Japanese banks return to aircraft leasing market 


By PaUI Betts, ' 

A ero s p a ce Correspondent 

Japanese banks are returning to 
the aircraft leasing market after 
a two-year pb gf>f p f, * > amid signs of 
a financial improve ment I n the 

mtnnwHorm l alriina industry. 

Japanese institutions domi- 
nated the aircraft leasing busi- 
ness fat the five years to 1991, 
accounting for more than 50 per 

of «n npf w afrra mft flimnnirig . 
Their share collapsed to less than 
10 per cent as Japanese -banks, 


hit by a credit squeeze, abandon- 
ned the troubled airline market. 
Their return has led to a drop In 
.financing costs for sj r Wpgi 
- Swissair is believed to have 
'secured a spread of between 50 
and 65 basis points above prevaft- 
mg 'Six-month interest rates on a 
SEffltn lease for a new McDonnell 
Douglas MDll widebody aircraft, 
arranged by Sanwa Bank of 
Japan. It would have probably 
faced a spread of 60-70 basis 
.points 18 mouths ago; according 
to Mr Ian Hosier, head of Sanwa’s 


- London transport ftnanra hranrh 

This reflects Iztcxeased competi- 
tion among banks for arranging 
aircraft tax leases - with tax con- 
cessions for Investors - for qual- 
ity airlines, although the spreads 
Thave yet to reach the lows of 
j’ghtnmd 25 ’basis points com- 
zpanded by top airlines three or 
Vftotir years ago. 

:^*nie Swissair deal, to be signed 
'3|iext week, is- also significant in 
-3&bat the Swiss carrier has tradi- 
^drmaDy turned to the US aircraft 
■ '^ax lease market but decided to 


switch to Japan because of th e 
more competitive terms offered 
by the Japanese bank. 

Japanese and US institutions 
have also been battling over a 
*220m leasing deal involving two 

MDll aircraft for KIM Royal 

Dutch Airlines. The US banks are 
understood to have clinched the 
deal but only after being forced 

to make fl/frirHrma! fyifwvyrifvnn to 

improve on a rival Japanese bid. 

Other riftflia include the 5550m 
financing by British Airways 
between February and April of 


six Boeing aircraft through the 
Japanese ’ lease market on 
spreads of 5055 basis points. 

B ritish Aerospace Is also back 
In the Japanese aircraft leasing 
market for the first time since 
1992. BAe’s new aircraft leasing 
asset management organisation 
has just completed three leasing 
transactions with Japanese insti- 
tutions and is&belleved to be 
negotiating np to more. 

These arrangeme n ts cover a 10- 
year period, reflecting renewed 
confidence in BAe’s finances on 


the part or the International 
banking community. Soma 18 
months ago banks were not pre- 
pared to take more than five-year 
credit exposure on BAe aircraft. 
After cutting aircraft lending 
sharply, Mr Hosier said many 
banks were finding themselves 
"underlent" when the airline 
industry was picking up and had 
overcome the traumas of bank- 
ruptcies, widespread cancella- 
tions and deferrals of new air- 
craft orders, and the troubles of 
GPA, the Irish leasing company. 


Raymond Snoddy on the upheaval in the Reed Elsevier marriage 

Mask slios on 


W hen two world class 
publishing groups, 
Reed International of 
the UK’ and Elsevier of the 
Netherlands, merged last year it 
looked as if every eventuality 
had been considered. 

Both sides had been looking for 
The; right partner to aid expan- 
sion in the increasingly interna- 
tional world of publishing. And 
everyone said that EpgWHh and 
Dotch company law and organi- 
sations were so very similar, cit- 
ing such historic Anglo-Dutch 
collaborations as Unilever and 
Royal Dutch Shell. 

- The two top men - Mr Peter 
Davis, chairman of Reed Interna- 
tional, and Mr Pierre Vinkan, 
chairman of Elsevier - could not 
have been more different: Mr 
Davis, the polished public per- 
former, who left school at 17 and 
became a marketing specialist 
and senior executive at the UK 
retailer J.' SainsbtHy; Mr Vinken, 
-the retiring, almost, introverted; 
bufc'^vmy dever heurosurgeohr 

jiimai piifyHcTmr v 

It looked as though the tricky 
problem of succession - and 
whether 4he British' ^or tine Dutch 
would sit on the top of the moun- 
tain - would solve itself. Mr 
Davis was then 61 and Mr Vinken 
65. The Reed executive would be 
chief executive and Mr Vinken 
would be chairman, and Mr 
Davis would inherit the chair- 
.manshtp Mien Mr Vinken retired 
two years later. 

Yesterday the mask dropped 
from the face of the perfect 
Anglo-Dutch merger as Mr Davis 
resigned. There' was no talk of 
him leaving to spend more time 
with his family or to pursue 
other interests. The Reed Elsev- 
ier statement gives a true, if 
rather lifeless, version of the 
drama. The board had agreed 
that if Reed and Elsevier were 
really going to move as one com- 
pany, there had to be a different 
structure and a different alloca- 
tion of responsibilities. 

The co-chairmen would in 
future be responsible for strat- 
egy, management development 


merger 

and corporate co mmunica tions. ’ 
while two other members of the 
executive committee.' would be 
responsible for the operating 
businesses. According to yester- 
day’s statement, Mr Davis 
decided that' the proposed alloca- 
tion of responsibilities “did not 
ffwahte him to play an effective 
role suited to his management 
style". 

The initial Intention had been 
to persuade Mr Davis to stay. But 
by the rimn an aijhnight meeting 
ended at 4.30am on Saturday, 
terms had been agreed tor his 
departure.. 

The dispute over the structure 
partly reflects a between 

the Anglo-Saxon model of run- 
ning a company, with a strong 
chief executive, and the more col- 
legfete Dutch style. The dispute 
was intensified because Mr Davis 
was very mnrih a hands-on man- 
ager* and because he lost the 
right to become chairma n 

^ Jryme, who rejdaces-Mr 
Davis' as co-chafriftarfi empha- 
sised yesterday that to take the 
merger forward it was vital “that 
everyone is using the same hymn 
sheet i*nd all frin g in g the' same 
songs”. 

Mr Irvine suggested that the 
Davis management style - 
although he was not happy he 
had found the right words - was 
less collaborative, or less colle- 
giate or perhaps less consensual 
than the other directors’. 

Mr Davis said yesterday: "Hie 
last thing I wanted to do was 
damage the company or myself 
and I was in danger of doing 
both. I hope my leaving will 
unblock some blockages and that 
the business can go forward.” 

The disputes over structure go 
back to September when the 
Dutch pushed for and got an 
important change. Mr Davis 
joined Mr Vinken as co-chairman 
and four joint chief executives 
replaced Mr Davis as sole chief 
executive. The British executive 
considered resigning then, but 
was persuaded not to. 

The Dutch also pressed for the 
currant structural chan ge, which 



Conseco set to 
buy Kemper in 
1980s style 


A -f tlOr- jt - Travor^idnviirlM 

Ian^vhm: vital 'that everyone Is using the name hymn sheet* 


caused some internal contro- 
versy. Mr Nigel Stapleton, chief 
financial officer who now takes 
on the additional role of deputy 
chairman of Reed International, 
was initially sceptical. Mr Irvine 
and Sir Christopher Lewiston, of 
ihe engineering group Tl, were 
convinced of the need for the 
change to protect the long-term 
interests of the merged group. 

One external observer points to 
at least one strategic issue divid- 
ing the cochairmen. Mr Vinken, 
who could not be reached yester- 
day for comment, is believed to 
be more sceptical than Mr Davis 
about the speed at which devel- 
opments in electronics will trans- 
form publishing. 

Another issue was Mr Vlnken’s 
apparent reluctance to retire 
according to the original plan. It 
has, however, been agreed that 
Mr Vinken win retire as cocbair- 
man of Reed Elsevier in April 
1995, to be succeeded by Mr Her- 
man Bruggink who will also take 
over as chairman of the execu- 
tive board of Elsevier. Mr Vinken 


is expected to become chairman 
of the supervisory board of Elsev- 
ier and a non-executive director 
of Reed Elsevier. 

Unions at Reed Elsevier believe 
tire elevation of Mr Irvine and the 
arrival of Mr John Mellon, chief 
executive of Reed Publishing 
Europe, on the executive commit- 
tee is a victory for “the hawks” 
in Industrial relations. 

ft was stressed yesterday that 
Reed Elsevier, which has sales in 
excess of £2.7bn ($4.1bn) and 
25,700 employees, was trading 
well and that interim results due 
an August 11 would show “a per- 
formance in line with budget and 
usefully ahead of last year”. 

Lex, Page 18 


By Rfofcanl Waters In New York 

Kemper, the US insurance and 
mutual funds group, has 
accepted a t67-a-ahare bid from 
smaHar rival Conseco, in one of 
the biggest leveraged acquisi- 
tions of a US financial company. 

Kemper's decision bad been 
expected after GE Capital last 
week dropped its $60-a-share bid. 
The Conseco offer values Kemper 
at $2.7bn on a fully dfluted basis, 
though the company puts the 
total value at ffl-gfihn , including 
Kemper’s preference stock. 

The bid from Conseco, a fast 
g r o w in g insurance holding com- 
pany based in flannel, Indiana, 
marks a return to financing tech- 
niques rarely seen since the late 
1980s. The offer, $&2hn of which 
is In cash, is backed by junk 
'band financing, |L2bn of bank 
debt and a private buy-out fond 
run by Conseco. 

In a step not used in a large 
transaction in the 1990s, Morgan 
Stanley, Canseco's adviser, has 
issued a -letter stating ft . is 
“highly confident” it can raise 
$750m of bond finance. Such 
letters were the hallmark of Mr 
Michael Milken, who pioneered 
the use of sub-investment grade 
paper in acquisitions at Drexel 
Burnham Lambert. 

AH the main rating fcgencies 
are reviewing Conseco's debt 
with a view to downgrading it as 
a result of the leveraged deal, a 
move likely to put it firmly in the 
non-investment grade category. 

Mr Jim Parrish, in charge of 
sub-investment grade ratings at 
Moody’s, said the Conseco deal 
marked a return of junk bands to 
back acquisitions. Until now, the 
re-emergence of junk bonds in 
the 1990s had been based on refi- 
nancings of 1980s deals or to raise 
money for companies which pre- 




Schrempp to be named as 
chairman of Daimler-Benz 


, ■ ■ *- 

!*** •' ' • 1 

. .'£ve 

"7 . . - ^-> 

1 v' 


By David Water to ftankftrt 

Months of speculation over the 
top job in German industry is set 
to end tomorrow with the nam- 
ing of Mr Jttrgen Schrempp as 
the next chairman of the manage- 
ment board of Daimler-Benz, the 
German vehicle, aerospace and 
technology group. 

Daimler refused to comment 
yesterday 1 ahead of tomorrow's 
meeting of the company’s super- 
visory board, but it is understood, 
that Mr Schrempp, 49, the chief , 
executive of Deutsche Aerospace, 
Daimler's looHnaktog aerospace 
aim,' ^wijl be appointed to -succeed 
Mr Edzand Reuter from May. 

Mr Renter, 66, architect of an 
ambitions strategy to expand 
Dainder.into a global technology 
group," will step down before his 


contract rims out at the end of 
next year. He is expected to be 
appointed to the Daimlefstowxvi- 
sory board althoug h It has not 
been decided whether Ito should 
succeed Mr fflhnar Kopper, chief 
executive of Deutsche Bank, as 
Chairman of that body. : 

Mr Schrempp, an engineer who 
has spent a large part -of his 
career. wife Datuder working in 
the US and Scndh Africa, fs seen 
in Germany " as Mr Eteuter's 
favoured candidate for tbe'suo- 

fwarimv and is thmig ht ■ nnWIraly 
to to^k radically with the'strat- 
- egyestaWished % his mentor. 

The other ' main contendgr for 
tiie job was Mr Hehmrt. Witter, 
57, chief executive, of Mercedes 
Benz, the taxqry car <»m£any 
whkdi accounted for 70 pe^hent 
of Daimler’s DM97.7bn Mis®) ' 


turnover last year and tradition- 
ally accounts for the bulk of the 
group’s profits. 

The appointment of Mr 
Schrempp is doe to take effect 
from the group’s shareholder 
meeting next May, allowing Mr 
Reuter to take credit for the 
expected recovery in Daimler's 
profits this year. Last year the 
group made a loss of DMLAbn. 

The Daimler supervisory board 
is likely to discuss the question 
of Mr Reuter’s appointment to 
the fhairwrawahlp of that body in 
November. Should Mr Kopper 
step down from this position, it 
would be a break with the past as 
a representative of the Deutsche . 
Bank - Daimler’s biggest share- " 
holder with a 24.4 per pent stake 
- has occupied the position since 1 
the 1920s. 



- ■ * » ] 


I . -fi+r?. *■ .^*5^ | 

' • ■ 

, v • rn-v ’ ■ 


. ■- 7 * .... 


UK brokers’ pay pses 67% 


By Norma Cohan, earned over £500,000 in total 

Investments Correspondent : remuneration last year. A further 

• 14 directors earned between 

Payments 

UK-based stockbrokers |gmjai* 


Marks had earlier said that a por- 
tion of the bonuses would be paid 
in the form of Smith New Court 


■ ,.,>r - 


New Court 
two-thirds in ^h&7 yc4%efipft$ J 
April 1894 to 

from £Mm the year-^morS^®^- ^ 
. The firm had, eariiet 
pretax profits^i^e^toFM^ 
than doifoled 

£38.7m to 1998. - 4 v ‘ :5 *i3 

Overall the kito. of 
expanded to ifom 29, ir ,md r a^ 
fifth of those - seven directors' - 




t*-* ' ■' :• 1 


« 1 


mmm 


a8ia^uampd;ah Qfejtomual 

Hc^?f73O ( O0O '^was' a ■ pSfMv 
mfo<ap|ted. botou., life chatr- 
am^SJr Michael 1 Hich aw femi; 

more modest £141,000,. 
rsame sum as last year and, as 
earned no proAt-rdiated 
tyOTSeEsfam ccaa t ribatioas. 


Chief executive Mr Michael 


■*& T^fe report does not disclose 
Just how much of the bonus Is in 
ctiiB'Lfonn of shares gitbnrig h ft 
dbe^ltiow that slmre options to 
soihje directors have increased 
sharply over the preceding year, 
Mr Marks, for instance, is now 
the-' holder of 657,390 "folly paid" 
share options, while a year ago, 
he held 73434 share options but 
was granted additional options 
following a rights issue last May. 




| 


viously would have turned to 
bank finance. 

The $l^bn commitment of 
hank finanpfl from CUtlbank fe» thft 
latest large-scale bank deal for an 
acquisition. The takeover battles 
for Northrop and Paramount 
both involved committed credit 
lines from individual banks top- 
ping more than (lbn. 

In another echo of the 1980s, 
the hid to Kemper turns on a 
buy-out fond run by Conseco. 
Known as Conseco Capital Part- 
ners ZZ, this fund, with equity 
capital of 8824m, will take over 
Kemper’s insurance and property 
activities, leaving Conseco with 
the less capital-intensive, fee-gen- 
erating activities. 

US buy-out flmds were largely 
left an the sidelines lest year as 
high stock market prices enabled 
quoted tvwnpaniw to use their 
paper to make acquisitions. 
Lower share prices have seen the 
funds returning. 

Forstmann Little, a buy-out 
specialist that has not mounted a 
deal since 1992, Is involved In a 
battle for control of Western 
Union, a money transfer busi- 
ness. Unusually, Its 8850m offer 
would be backed entirely by the 
funds it runs, signalling the large 
resources available to the US 
buy-out industry. 

Although the Conseco bid is 
remarkable for its size, there 
have been other highly-geared 
takeovers of financial companies 
during the 1990s. American Re, 
the US’s third largest reinsurance 
company, was bought from Aetna 
for 8l^bn in 1992 in a deal led by 
buy-out specialists KKR. With 
only $300m of equity behind the 
deal, American Re was relegated 
to junk-bond status by the rating 
agencies. However, It has since 
returned to investment grade 
after being taken public. 


Corporate Finance 


BZW b tiw In^taient bating inn of tba fcrdiyt Group. 


I 


J 







FINANCIAL. TIMES TUESDAY JUNE 28 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Fiat construction 
subsidiary wins 
merger go-ahead 


GAN poised 
to replace 
chief ahe ad 
of sell-off 


Portugal to place telecoms on the line 

Part of the newly-restructured industry will be sold off next year, reports Peter Wise 


T he restructuring of Por- 
tugal’s telecommunica- 
tions industry has 
started at a brisk rate. Tim pro- 
cess began an Thursday when 
three state-owned utilities 
were brought together in the 
country’s biggest merger to 
create Portugal Telecom (PIT, 
the largest Portuguese com- 
pany by number of employees. 

Part of PT is to be sold next 
year in one of Portugal's big- 
gest privatisations. It will 
become one of the largest com- 
panies quoted on the Lisbon 
stock exchange. Along the 
way, important services may 
be spun off through the win# 
ambitious buy-out attempted 
by Portuguese managers. 

Critics say the process could 
also prove «nn of the centre- 
right government’s biggest 

Tni gtnkpg 

“Creating a company of this 
size will inevitably lead to 
enormous inefficiencies and a 
loss of control over costs,” says 
Mr Joio Oliveira Martins, a 
former telecommunications 
minister. "Merging three com- 
panies with such different cut 


By Andre w HM In Milan 


Cogefar-Impresit, the Fiat 
construction subsidiary, yes- 
terday took another step 
towards the creation, of Italy’s 
largest construction group, 
when shareholders, approved 
the first phase of a planned 
merger with two other building 
companies. 

At the same shareholder 
meeting, the chairman and 
chief executive of Cogefer said 
they would stand down, having 
completed the cleaning-up of 

the company. 

A number of former Cogefar 
executives were allegedly 
involved in Italy's bribes scan- 
dal, but Mr Marcello Franco, 
who became rhairman in May 
1993, said yesterday that be 
and Mr Paolo Rued, outgoing 
chief executive, had “carried 
out the job of regularising and 
systematising the accounts”. 


Flat annnrmcpH in December 
that it planned to cut its expo- 
sure to the building sector 
with a complicated three-way 
merger between Cogefar- 
Impresit, Lodigiani (Italy’s sec- 
ond largest private construc- 
tion group) and Girola (a 
wnaTtw construction group). 

Cogefar shareholders yester- 
day approved the merger with 
Impregilo, a joint venture 
between the three companies 
which is the vehicle for the 
deal Impregilo should take 
over Lodigiani and Girola’s 
construction activities before 
the end of the year. 

Mr Franco and Mr Rued will 
remain on the Cogefar hoard, 
which will be enlarged to 
fririnde Mr Francesco Carraro, 
Impregfla’s I'hajjman. 

Over the last two years, the 
corruption scandal has frozen 
public-sector contracts, Coge- 
far’s speciality. 


By John Rldfflng In Paris 


US executives to face 
music at Tatra meeting 


By Vincent Boland In Prague 


A boardroom battle at Tatra, 
the Czech truck maker, could 
come to a head today at a 
shareholders* meeting at which 
three US executives are expec- 
ted to came under fire. 

The executives, who were 
offered IS per cent in the truck 
maker last year in return for 
help in bringing Tatra back to 
profit, face criticism about 
their management style and 
mmmitmrmt to rh«» company. 

Mr Gerald Green wald. a for- 
mer vice-president of Chrysler, 
the US carmaker, and two for- 
mer executives of International 
Harvester, Mr David Shelby 
and Mr Jack Rutherford, were 
hired to implement a rescue 
package at the company, 
which has seen its workforce 
cut from 16,000 to 12,000. 

Criticism emerged after it 
was suggested earlier this year 
that Mr Greenwald might 
become chairman of United 
Airlines, the US carrier. Some 
of the Czech management 
expressed doubts about his 


commitment to Tatra, and 
accused the three executives of 
absenteeism and "management 
by fax", a charge they reject. 

Analysts in Prague said the 
men were likely to get the 
backing of shareholders and 
that the company had little 
option but to continue restruct- 
uring. A source dose to the 
company board said that while 
Critical Of their munagwumt 
style, the Czech directors did 
not want the US team to leave. 

Since their arrival in May 
last year stocks have been cut 
and Tatra has been able to 
raise short term ca pital after 
restructuring its debt, esti- 
mated at Kcs3.7bn ($l32m). 

Sales of its main TSL5 truck 
have failed to recover, how- 
ever. Tatra sold 15,000 trucks 
in 1989 but only 4,000 last year. 
First-quarter sales this year 
are understood to be below 
break-even point. 

Tatra lost Kcs439m in 1992 
and a further KcsM7m in the 
first nine months last year, 
compared with a profit of 
Kcs729m in 199L 


Hr Francois Heilbronner, 
chairman of GAN, tin state- 
owned French insurance 
group. Is set to be replaced by 
Hr Jean-Jacques Bonnaud, 
head of tiie company’s interna- 
tional operations, according to 
government officials. 

Hr Bonnand, whose appotat- 
; meat is expected to be coo- 
| firmed within the next few 
days, win be faced with the 
task of preparing GAN for pri- 
vatisation. The company is me 
of 21 public-sector groups 
slated for sale, although its 
privatisation Is unlikely fids 
year and most await the sale 
of Assurances Generates de 
France, a rival state-owned 
insurer. 

The change at the top of 
GAN is prompted by the 
expiry of Hr Heilbronner’s 
mandate. But it also follows 
the relatively poor perfor- 
mance of the group, which has 
seen profits decline sharply 
over the past few years. 

From net profits of 
FFr2.32bn (2424m) in 1991. 
results at GAN fell to FFr402m 
in 1992 and remained flat at 
FFr414.8m last year. The 
decline in profits partly 
reflects GAN’S exposure to 
France’s troubled p rop e rty geo- 
tor, which forced it to restruc- 
ture its banking operations 
and transfer FFrl8-4bn of non- 
performing property loans 
from its balance sheet earlier 
this year. 

Following the restructuring 
measures, Mr HeOhronxmr said 
that the company was on 
course for "very strong” 
growth and should be ready 
for privatisation later this 
year. 

Mr Bonnaud’ s appointment 
has been strongly supported 
by Hr Edmond Alphanddry, 
the economy minister. Accord- 
ing to nfflrinl*, Mr Atpbandfiry 
is in favour of an internal 
appointment to head the 
group, as opposed to the series 
of external appointments 
which have taken place at 
other public sector companies. 

Mr Bounand, 59, joined GAN 
in 1979 and has been manag- 
ing director responsible for 
fritornatimmi operations since 
1986. 


tures will drastically reduce 
com p e titiv e n ess." 

Portugal’s restructuring Sts 
a pattern in Europe, where 
greangf countries are rational- 
ising, iftipwifamg awl privatis- 
ing state telecom mnnicationB 
operations. Objectives tochute 
cash for modernisation, 
market-oriented management 
and a place to one of the inter- 
national -alliances fallring 
shape. 

FT wiR bring together Portu- 
gal’s domestic and European 
telecommunications services, 
as well as television signal 

broadcasting, mobile «*w«nrmi. 

cations, cable television and 
data transmission, under the 
management of a single state 
monopoly. 

total conti nental aervicas run 
by Radio Marconi will be 
brought into the group later 
this year, when the govern- 
ment buys or exchanges shares 
held by private investors who 
own 49 per cent The govern- 
ment is considering a proposal 
for a TTBiTTflg P mpTrfr buy-out of 
Marconi’s 40 overseas subsid- 
iaries and noncare services. 


But Mr Eurico Cabral de 
Fonseca, president of Comuni- 
cagdes Nationals, the holding 
company for state-owned tele- 
communications companies, 
says the loss of Marconi’s 
internat i onal expertise would 
be a fatal blow to FT. 

The fimn wntnai^ rteforwlq the 
PT merger as an essential 
reshaping of an- irrationally 
divided sector. Mr Cabral de 
Fonseca says Portugal could 
not hope to join an Intemar 
tional alliance if it left telecom- 
munications services divided 
between separate companies. 

Analysts say the merger wfll 
also help Portugal rebalance 
low local-call tariffs with high 

wwj i iihwnaHrtnal 

call prices. 


European Union countries - 
set by Brussels. 

Hairing funds for investment 
through privatisation is a pri- 
ority for Portugal. Although 
the country has made stgmfl- 


B ut critics fear the new- 
utility runs the risk of 
becoming an inefficient 
colossus that could lose market 
share to fr*r aign companies. It 
is widriy accepted that market 
riwmawd wfll force the liberalis- 
ation of voice services In Por- 
tugal before the 2003 deadline 
- five years after most other 


number of telephone lines for 
every 100 inhabitants from 20 
to 34 over the past decade, that 
is stfU the lowest level to the 
EU. Tbe government has set a 
target of 45 for the year 2000. 

Expansion at that rate will 
cost an estimated EslSOba 
(2787m) a year. The. govern- 
ment believes PT would be 
able to generate sufficient cash 
for the i nv estment without an 
injection, of fresh capital But 
the company is burdened at 
the outset by a pension fond 
for its 20,000 employees that is 
undercapitalised by EslSObn. 

Officials say the privatisa- 
tion cf 25 to 30 per cent of FT 
In the first half of 1995 will be 
primarily aimed at creating a 
sound base for growth. Initial 
estimates value PT at more 
than Esi jJOObn. But privatisa- 
tion will be too big for the Por- 
tuguese market to swallow 


Norwegians to acquire Bond Helicopters 


By Karen FoasH hi Oslo 


Helikopter Service, the 
Norwegian helicopter group, 
yesterday announce d plans to 
acquire Aberdeen-based Bond 
Helicopters in a cash-plus- 
shares deal which values Bond 
at NKrSOOm ($I15m). 

The deal will create the 
world's largest helicopter 
group with a fleet of 169 air- 
craft and nrmnal turnover Of 

NKrk5bn. Following four years 


of co-operation between the 
group s . HS yesterday acq uire? 
49 per cent of Bond and will 
taWp over tiie remaining 51 per 
cent in the next three years. 

The owners of Bond will 
acquire up to 12J2 per cent of 
the shares of HS during the 
amalgamation period malting 
Hww| the biggest gmgi» share- 
holder; 31 the UK venture capi- 
tal company, Is disposing of its 
30 per cent stake to Bond. 

Mr Christian Biinch, manag- 


ing director of HS, said the 
oont paniaa would retain their 
identities daring the next three 
years and that there would be 
no formal to manage- 

ment Mr Brinch wjQl become 
the managing director of the 
new entity. 

The merged group, with 1300 
employees, 156 helicopters and 

13 aircraft, will command 42 
per cent of the North Sea mar- 
ket which Mr Brinch said 
would give tire new entity a 


solid, competitive position 
whan the North Sea market is 
opened to free competition 
from 1997. 

The two companies also have 
operations in Australia and the 
Far East and see the greatest 
growth potential for the new 
entity in south-east Asia. 

The NKrSOOm valuation of 
Bond was negotiated with its 
owners while HS had a market 
value of NKr2bn at the end of 
3993. 


Axa plans to 
invest $200m 
in Japan 


By John Ridding 


Cable & Wireless seeking partner in US 


By Andrew Adonis 
in London 


Cable A Wireless, the UK 
telecommunications group, is 
in talks with US telecoms com- 
panies about an affiance. 

Lord Young, CAW chairman, 
said a "further interest to the 
US” was essential to the 
grotto's strategy of standing 
apart from international alli- 
ances between large operators. 

C&Ws US negotiations are 


aimed at boosting its US sub- 
sidiary, CWI, which supplies 
long- distance services to small 
and madtnm^ ng ed companies. 

CWTs turnover of £383m 
($582m) last year made it one 
of Hw larger “second division" 
longdistance US carriers after 
AT&T, MCI, and Sprint 
Lard Young said the seven 
local Bell telecoms companies 
were particularly attractive to 
CAW. The Bell companies are 
seeking partners to break into 


the VS long-distance market 
when regulations are chang ed 
to allow this. 

“They are the sort of people 
who have direct access to com- 
panies," Lord Young said, but 
he did not rule out arq uigitinns 
of smaller operators. CAW has 
link* with Bell operators in its 

non-US businesses - notably 
with US West, the regional Bell 
operator covering 14 mid-west- 
ern states, in One-2-One, a UK 
ceflular mobile network.' 


Lord Young said the compa- 
ny’s strategy remained "totally 
viable" even if Hongkong Trie- 
corn, CAW’S largest concern, 
joins AT&T’s Woridsource ven- 
ture which aims to supply one- 
stop services to multinationals. 
It emerged last week that 
Hongkong Telecom was in 
talks with AT&T. 

Lord Young confirmed CAW 
was in talks about consortia to 
launch second operators to the 
national monopolies in Europe. 


The company, which claims 
to be the first French group to 
have received such authorisa- 
tion to set up a life insurance 
subsidiary in Japan, said that 
it aims to achieve FFrlhn of 
premiums within five years 
and more than FFrftm within 
a decade. - - 


All of these securities having been arid, this announcement appears as a matter of record only. 


June 1994 


4,025,000 Shares 


CYGNE DESIGNS, INC. 


Common Stock 


700,000 Shares 


fiameY^bber International 


Furman Selz Incorporated 

Smith Barney Inc. 


This tranche was offered outside the United States and fjinaita 


3325,000 Shares 


PaineWebber Incorporated 

Furman Selz Incorporated 

Smith Barney Inc. 


CS First Boston Dean Witter Reynolds Inc. Donaldson, Lufikin&Jenrette 

^ ^ 

xcunoacorporaDm 

Gold m a n, Sachs & Co. Merrill lynch & Co. Montgomery Securities 


Dean Witter Reynolds Inc. 


SLG.Y^ccfoiirg&CC. Inc. 
’William Blair & Company 


The Bucking ham Re search Group 

I iKV M|H )I Akd 



Gnmtal & Co, Incorporated 


Ladenbing, Thalmann A Co. Inc. Sutno St Co. Incorporated lUcfaer Anth ony 

Tnroq iotaicd 


For farther information about electronic securities issuance links via 1 P Morgan to 
Eurodear, , Cede! SA^ Deutscher Fasseru/eran in Frankfurt, or the Depository Trust 
Company in Neur York, please call Jofui flood, Vice President, JR Morgan, London, 
(071)3255722 


S 


alone. '‘Even the biggest Portu- 
guese corporate groups lack 
the finan cial capacity to 
acquire more than 5 per cent of 
FT," flays one analyst 


r« * -a 

y' 


B ecause of these hunter 
tarns, tbe first sate afPT 
shares is doe to be made 
simultaneously on several 
fotw-n fltiraal stock exchanges. 
The government will Emit the 
holding any single investor 
may acquire to 5 per cent of 
the total capitaL 
The second stage should 
involve an alliance with a 
international telecoms partner. 
But it is unlikely that this 
politically sensitive issue will 
be resolved before Portugal's 
next election in October 1996. 

Mr Cabral de Fonseca sees 
only three possible candidates: 
British Telecommunications; 
the alliance between France 
Telecom and Deutsche Tele- 
kom; and Unisource, the Swed- 
ish, Swiss and Dutch national 
feipco ms joint venture - each 
of which are forming affiances 
with important US and other 
operators. 


1 


Axa, the French insurance 
group, said yesterday that it 
plans to invest about $200m 
within the next five to seven 
years to expand its presence in 
the Japanese market, following 
provisional approval to set up 
a life assurance s ubsidiar y in 
the country. 

Axa said that it hoped to 
receive definitive approval to 
sri up the subsidiary at the 
beginning of next year and 
plans to start marketing its 
products from next April It 
said it hopes to set up 12 
regional offices after its initial 
entry into the Japanese mar- 




Brean Murray Foster Securities Inc. Doft & Co., Inc. HistEquigrtoporatioii 

Hrst Manhattan Co. Pennsylvania Merchant Group Ltd 


This tranche wss offered in the Uni wd States. 


NoticaisFw 

December 


CITICORP O —_ 

Jua, 2005 


tt XSy a 1 
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London SVnxoHL 
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FINANCIAL TIMES TUESDAY JUNE 28 1994 


21 


INTERNATIONAL COMPANIES AND FINANCE 


Mexican offerings aim 
to raise total of $ 600 m 


Gold producers to form new group 


By Ted Barefacke 
in Mexico City 

Three MwiiBm companies plan 
to offer a total of more than 
JfiOOm in equity on interna- 
tional markets this week. 

The offerings will test the 
receptiveness of investors to 
Mexican paper in light of 
recent political instability and 
less than two months before 
presidential elections. 

Grupo DESC, a large indus- 
trial conglomerate, will float 
105 per cent of its capital via 
an American depositary shares 
(ADS) offering, being co- 
ordinated; by Goldman Sachs, 
and a domestic offering under- 
written by Inver Mexico. 

The company hopes to raise 
between $200m and S235m, 
with proceeds to be used 
primarily for new investments 
in car components, property 
and food. 

“Analysts have been tafflng 
us that they are looking at 


By Laurie Morse In Chicago 

Zeigier Coal, the fourth largest 
US coal company, has applied 
to the the Securities and 
Exchange Commission to sell 
10.6m shares in an initial pub- 
lic offering. 

The company said it planned 
to sell the shares for between 
$15 and $17. The riming of the 
offering was not disclosed. 

The company plans to use 
the proceeds to reduce debt 
and increase its ability to 
acquire new coal properties 
and develop new mines on 
existing reserves. 

HUnois-based Zeigier pro- 
duces about 40m tons of coal 


Amoco, the US oil group, has 
received about $44Qm, includ- 
ing interest, from a settlement 
with the Internal Revenue Ser- 
vice, which will result in a sec- 
ond-quarter after-tax gain of 
about $27 0m, Reuter reports 
from Chicago. 

The company said the pay- 
ment was the final settl emen t 
of a dispute involving “wind- 


Mexico as a whole and more at 
company particulars,” said one 
adviser to the offering. 

“We hope that is the case 
here because we believe our 
risk is lower than that of 
Mexico in general," he added. 

Banpais. a medium-sized 
bank that recently bought 
Asemes, the country's largest 
insurance company, from the 
Mexican government, plans to 
sell around 20 per cent of Its 
capital for about 3270m. 

The ADS offering, account- 
ing for 85 per cent of the 
shares being offered, is under- 
written by S. G. Warburg. 

Proceeds will go first to 
repay a mandatary convertible 
sub-debt the bank holds with a 
group of private in v estors, and 
then towards increasing the 
institution's loan portfolio. 

Grupo Sdek. a constructor 
specialising in tourist develop- 
ments and hotel operations, 
also expects to raise $20Qm this 
week with its own ADS offer- 


annually, with mining 
operations in fflinois, TnrHtma , 
Ohio, Kentucky, West Virginia 
an d Wyoming. 

The company ex panded 
rapidly since 1990, acquiring 
the coal assets of BP America 
in 1390, and of Shell Oil Com- 
pany in 1992. Analysts estimate 
the value of the Shed acquisi- 
tion at between $750m and 
$S50m. 

Zeigier said it recorded first- 
quarter net frimmft of $6.3m an 
sales of $220.1m. 

Analysts said the Zeigier 
shares will offer a rare “pure 
coal" opportunity for investors. 
The leading US coal companies 
are held by conglomerates and 


feff profit taxes" in the 1980s. 

The settlement stems from 
seven cases filed by Amoco 
Production and its subsidiaries 
that contested notices of defi- 
ciency issued by the IRS. 
Those notices alleged Amoco 
had underpaid its windfall 
profit tax liability from 1980 to 
1986. 

The refund will be recog- 


ing being co-ordinated by 
James CapeL 

The money raised will be 
used for construction projects, 
including a new luxury hotel 
In Mexico City as part of a 
joint venture with the Manda- 
rin hotel chain of Japan, and a 
move into the booming low- 
cost housing market. 

Sidek originally considered a 
Eurobond issue instead of a 
share offering, but felt that the 
bond market was treating 
Mexican companies too “gener- 
icafly”. 

“A share offering makes 
invest o rs pay more attention to 
the company. Bonds are only 
better when a country is hot," 
one analyst noted. 

The success of these Issues is 
being watched closely by a 
number of other Mexican com- 
panies which are anxious to 
raise money via equity offer 
mgs but unsure of how to time 
them effectively in view of the 
August 21 election. 


their shares are not traded 
independently of their parent 
companies. 

US coal companies have not 
shared in the strong perfor- 
mance of other commodities- 
based businesses this year. 

Labour unrest anA clean air 
regulations have battered the 
industry, leaving only the 
strongest companies - with 
long-term sales contracts with 
large utilities - in profitable 
positions. 

“There is a big differential in 
projections for growth and 
demand between west-coast 
[low sulphur] and east-coast 
coal," said Ms Lindsey Fal- 
coner of brokers Ord Mhmett ' 


nised in the company’s second 
quarter results. 

• Continental Corporation, 
the US insurer, is to eliminate 
about 900 jobs as part of a plan 
to reduce pre-tax annual 
expenses by $80m, AP-DJ 
reports from New York. 

There are currently about 
11,800 people in the company’s 
workforce. 


Labatt sees 
asset sales 
generating 
C$500m 

By Robert Gibbens in Montreal 

John Labatt, one of Canada’s 
two big brewing groups, has 

raised the possibility of selfing 
parts of its C$Ibn ($7 00m) 
en te rt ai nmen t businesses. 

These would include . the 
Toronto Bine Jays baseball 
dub, the Toronto Argonauts 
football club and broadcasting 
assets. 

The remaining Interests in 
these businesses would then 
be packaged together in a new 
company, 49 per emit of which 
might be sold to toe public, 
said Mr George Taylor, presi- 
dent of Labatt. . . . 

The toning of any such offer, 
however, would have to await 
improved stock, market condi- 
tions. 

Mr Taylor told analysts in 
Toronto that the proceeds 
from the asset sales, around 
C$500m, would be put in to 
brewing and other entertain- 
ment acquisitions. 

Labatt has for some time 
been unhappy with perfor- 
mance of its sports, broadcast- 
ing and entertainments busi- 
nesses and is seeking to 
expand its brewing businesses 
internationally. 

It is already trying to sell its 
US dairy products division. 

The company earned 
C$1 55m, or C$1.53 a share, in 
the year ended April 30, up 
from C$1 33m, or C3L32, in fis- 
cal 1993, from continuing 
operations. Sales rose 9 per 
emit to C$2J12bn. 

Brewing earnings were 
ahead by 19 per cent, while the 
broadcasting, sports and enter- 
tainment units contributed 
C$82m, against C$5Sm. 


Imperial Oil to 
shed 500 jobs 

hnparial Ofi of Canada is to 
cut about 500 full-time jobs at 
its resources division by tile 
end of 1995, AP-DJ reports 
from Calgary. 

It said the resources division 
would be undertaking cost- 
reduction measures to move 
the company’s operating per- 
formance into the top 25 per 
cent of Canadian upstream ofi 
and gas companies. 


By Kenneth Goodfog, 

Mining Correspondent 

International institutional 
Investors are being asked to 
provide $75m to facilitate a 
merger of four small gold com- 
panies into a widely-held, 
intermediate-sized North 
American gold producer. Atlas 
Gold Corporation, listed in 
New York and Toronto. 

Next year the new Atlas 
group was likely to be produc- 
ing at an annual rate of more 
than 300,000 troy ounces, said 
Mr Steve Manz, president and 
chief financial officer, yester- 
day. 

This would qualify the group 


By Chrystia Freeland 
hi Kiev 

Trident Television, a 
privately-owned UK company 
operating in Ukraine, is about 
to purchase a 25-year franchise 
fin: one of the two national tele- 
vision channels in Ukraine 
from the state television 
company. 

If the deal goes through, it 
will be one of the first of its 
kind in the former Soviet 
Union and give Trident a lead- 
tog position to Ukraine's grow- 
ing and largely untapped 
advertising market. 

Mr Andy Bain, managing 
director of Trident, expects the 


NEWS DIGEST 

DTB to revise 
product margins 

Deutsche Terminbfirse, the 
German futures and options 
exchange, plans to alter the 
.margin-parameters on certain 
Important derivative products 
because of continued high vol- 
atility, Renter reports from 

F rankfo rt. 

The additional-margin on the 
bund future will be raised to 
DM5,000 (200 ticks) from 
DM4,000 (160 ticks) per con- 
tract, and that for the Bobl 
future will be increased to 
DM2.500 (100 ticks) from 
DM2.000 (80 ticks), the DTB 
said. 

The margin calculation inter- 
val on some stock options 
would be changed, the 
exchange said. 


for inclusion in the new 
Financial Times Gold Mines 
Index. 

Mr Manz and two colleagues 
- Mr David Birkenshaw, now 
chairman, and Mr Michael 
Gross, chief operating officer - 
moved into Atlas last Septem- 
ber when the company was 
dose to bankruptcy. 

They had previously been 
officers of Royal Oak Mines, 
the Canadian group being 
quickly built into a significant 
gold producer under toe guid- 
ance of Ms Peggy Witte, its 
president. 

They now expect to raise 
$75m, about half from US 
investors and the rest split 


company's initial investment 
to be between Sl2m and $l5m. 
The Investment is to be made 
in the form of equipment 
improvements to the transmis- 
sion facilities of Derzhtelera- 
d ro , the Ukrainian state televi- 
sion company. 

"Certain assets in this coun- 
try are selling for pennies on 
the doDar and we are getting 
one of them," Mr Rain said. 

Trident, which is raising 
funds for the investment 
through a private offering, 
hopes to purchase the right to 
broadcast and sell advertising 
for 16.5 hours a day, seven 
days a week on Ukraine's 


The Interval on Allianz 
options would be raised to 7 
per cent from 6 per cent, toe 
DTB said: for BMW options it 
would be lowered to 6 per cent 
from 9 per cent for Dresdner 
Bank it would be raised to S 
per cent from 7 per cent and 
for VW tt would drop to 7 per 
cent from 8 per cent 

Chinese telephone 
deal for Motorola 

ChinaTek has signed a con- 
tract with Motorola, the US 
electronics company, to pro- 
vide cellular telephone services 
to eight cities in China, Reuter 
reports from New York. China- 
Tek is the US holding company 
of a group of businesses princi- 
pally engaged in the design, 
manufacture, marketing and 
distribution of state-of-the-art 
television sets. 


about equally between institu- 
tions in Canada and the UR. 
This will be used: 

• to buy 37.2 per cent of 
Granges, a Canadian precious 
metals producer, for C$50.7m 
(US$36. 4m) from MIM, the Aus- 
tralian resources group; 

• to acquire about 20 per cent 
of Dakota Mining, a Denver- 
based company formerly 
known as MinVen Gold, for 
between 315.3m and 318.4m. 

Atlas then hopes to use these 
stakes to acquire the rest of 
Granges and Dakota as wefi as 
the remaining half of Granges' 
50 per cent-owned Hycroft 
Resources before the end of 
1994. 


Under the contract. Derzhte- 
leradio will receive part of the 
advertising revenue as its lic- 
ensing fee and will retain own- 
ership of the transmission 
facilities. 

Derzhteleradio will continue 
to exercise full control over the 
news and political content of 
the channel. The state televi- 
sion company is subject to 
strong political control from 
the government 

Mr Bain believes that part of 
the reason Kiev is selling the 
channel so cheaply is to create 
a popular, Ukrainian language 
alternative to Ostankino, the 
Moscow-based channel that 
broadcasts throughout the 


Under the contract, which 
has been approved by the Chi- 
nese government, ChinaTek 
will install a cellular telephone 
network in eight cities to. Liao 
Ning province, a large indus- 
trial centre in north-east 

China, 

Installation of the facilities 
and the sale of cellular tele- 
phones are expected to begin 
in October, it said. 

Under the plan, the network 
should be operational by 
December of 1994, after which 
ChinaTek will run It for four 
years. Motorola has agreed to 
supply the network equipment 
and cellular telephones, which 
will be purchased by China- 
Tek. 

In return, ChinaTek will 
receive all revenues from sell- 
ing the cellular telephones as 
well as all service fees. China- 
Tek expects net revalues from 
the cellular phone programme 


At a presentation to institu- 
tions in London. Mr Manz said 
that the merged group would 
start out with $86m cash 
(mostly coming from the sale 
by Granges of its Trout Lake 
mine to Hudson Bay, the 
Mlnorco subsidiary) and other 
working capital of and 
long-term debt of about $2m. 
Exercise of outstanding Atlas 
and Dakota warrants would 
add another 318m cash. 

The merged group would 
have annual gold production 
between 200.000 and 300.000 
ounces a year at cash cost of 
between $260 and $270 an 
ounce (and total costs of $296) 
and reserves of 2.4m ounces. 


Ukrainian government offi- 
cials regularly accuse Ostan- 
kino of politically biased 
reporting, but Ukraine’s home- 
grown, provincial television 
channels are no match far the 
stick Russian station. 

Trident, which hopes to go 
on air next year, could change 
that, by offering in the Ukrai- 
nian language a mix of sit- 
coms, game shows, movies, 
and serials imported from the 
west and US-style program- 
ming produced to Ukraine. 

Mr Bain is confident that 
Ukraine's booming advertising 
market will allow Trident rap- 
idly to recoup its investment 


during the four years to be in 
the $23m to $25m range. 

Dell to lift demand 
for computers 

Dell Computer of the US is 
beginning to restimulate 
growth in computer demand 
with more competitive pricing. 
AP-DJ reports. 

But the company said that as 
a result the rate of improve- 
ment in its gross margin might 
moderate. However, Mr Joel 
Eocher, president of worldwide 
sales, marketing and service 
operations, said margins were 
such to allow this pricing com- 
petition. The gross margin was 
22J2 per cent in the first quar- 
ter ended May 1, against 18.6 
per cent to the fourth quarter. 

Dell also said it expected to 
introduce new portable com- 
puters this summer. 


Zeigier Coal plans public offer 


Amoco receives $440m in tax settlement 


Trident poised for Ukraine TV franchise 

former Soviet Union. 


Channel Three. 


announcement 


Credit Suisse 

Melbourne Branch 

Credit Suisse is pleased to announce the expansion of its global 
network by the opening of its Australian Branch in Melbourne. 

The former activities of Credit Suisse Bullion Pacific Limited have 
been assumed by the Branch. The expanded activities of the 
Branch include 

♦ Foreign Exchange 

♦ Money Markets 

♦ Bullion Banking 

♦ Commercial Banking 

serving the Bank's corporate and institutional customers in Australia 
and offshore. 

410 Collins Street Melbourne Victoria 3000 Australia 
Telephone: (613) 672 1300 Facsimile: (613) 670 9382 



SUN LIFE GLOBAL PORTFOLIO 

Soria* JlOT t rtt — irm » qtfM wM* 

Notice of Annual General Meeting 

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Society 


£150,000,000 
Floating rate notes 1997 

for the period 24 June 1994 to 
26 September 1994 the notes wiU 
bear interest 0/5-3375% per 
annum. Interest payable on the 

relevant interest payment da te 

26 September B&t will amount 
toW7.46perilO.000 note and 
Sl374.59per&I0Q, 000 note. 

Agent: Morgan Guaranty : 
Trust Company 

JPMorgan 


BARINGS B.V. 

HD* 


U. 5b $1504)00,000 
Guaranteed Hosting Rate 
Notes due 2001 


mto pwwwo* ptdpei m nm ter 

BARINGS pic 

BrmwaJMertsnSriSi hiM SIl MtW . 

reOMfMwMrSOuK) 

Far the monftfl Jtme 28, 1394 to 
September 28, 7994, the Motes m 
bear Interest at 5.0829% per annum. 
Tha Interest ptyabb on m relevant 
barest payment date, September 
Z8, taw wfllfM US. Stamper os. 
SUMO Nolo. U.S. $129.38 per U.S. 
JlftOOO Notoand US. $1,293.75 per 
U.S- $ 100,000 Note. 

ByilhlfcttlBUttMl.U- — 
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Jurw2aiS94 CHAee 



U.S. $120,000,000 

Subordinated Floating Rate Depositary 
Receipts due 2000 

issued by Bankers Trustee Company limited 
evidencing entitlement to payments of 
principal and interest on deposits 
made on 27th June, 1990 with the 
Frankfort Branch of 

Banco di Sicilia S.p.A. 

(Established in the Republic of Italy as a 
limited Liability Joint Stock Company) 



BANCO di 5IC1L1A 

For the six month period 27di June, J994 to 28th December, J994 the 
Receipts Will cany an interest rate of 5h% per annum with an 
interest amount ot U.S. $2,811.11 per U.S. $100,000 Receipt. The 
relevant Interest Payment Date will be 28th December, 1994- ■ 


n BankeraTrust 
Company, London 


Agent Bank 


Weekly Petroleum Argus 


— Petroleum Argus 


iiiiiiiiiiiiiiiiiiiimifiiiiiivKiiviiiiiiiiiKvimm 

Residential Property 
Securities No. 2 PLC 

£200,000,000 

Mortgage Backed Floating Rate Notes 2018 
Notice of Partial Redemption 

S.G,Warbtire; 5c Co. Ltd. announce that Norm for the nominal amount 
of £5,100,000 have been drawn for redemption on 29th Jidv, 1994, 
in accordance with Clause 5(h) of the Terms and Conditions 
of the Notes. 

The distinctive numbers of the Notes drawn, arc as fallows:- 

£72 688 705 723 740 756 773 791 808 825 

842 859 877 893 910 927 945 961 978 995 

1012 1029 1046 1067 10S5 1101 1118 1135 1152 1169 

1186 1203 1220 1237 1254 1271 1289 1305 1324 1341 

1826 1843 i860 1877 1896 1913 1930 1948 1964 1981 

1999 

On 29th July, 1994 there will become due and payable upon 
presentation of each Note drawn for redemption, the principal amount 
thereof, together with accrued wirresi to said date, at the office o/.- 

S.G. Warburg Sc Co. Ltd. 

2 Finsbury Avenue, London EC2M 2PA 
or one of (he other paying agent* named on the Notes. 

Interest will erase to accrue on the Notes called for redemption on and 
after 29th July, 2994 and Notes so presented for payment should 
hare attached all Coupons maturing after that date. 
£80,300,000 nominal amount of Notes will remain outstanding 
after 29th July, 1 994. 

2Slb June, 1994 

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-c TUESDAY JUNE 28 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Stakes raised 
again in Bridge 
Oil bidding war 


By Nikki Talt in Sydney 

The stakes were raised again 
yesterday In the hotly- 
contested bid for Bridge Oil, 
the Australian oil and gas com- 
pany, as Texas-based Parker & 
Parsley raised its terms to 90 
cents a share - valuing Bridge 
Oil at A$378m (USS277-9m) - 
and snared almost one-fifth of 
its target's shares. 

But Gantry Acquisition Cor- 
poration, the rival bidder 
which is offering 85 cents a 
share, quickly stressed that it 
was not out of the race, “We’re 
still very much in the game 
and considering our response,* 1 
said Mr Gene Humphrey, Gan- 
try's president 

Gantry is the bid vehicle for 
Joint Energy Development 
Investments, an investment 
partnership owned Jointly by 
Enron, the North American 
gas company, and the Calif- 
ornia Public Employees' 
Retirement System, one of the 
largest public-sector pension 
funds in the US. 

P&P, which opened the bid- 
ding with an offer of 70 cents a 
shar e in cash last month and 
had already raised that to 80 
cents, said it was adding a fur- 
ther 10 cents to its price as die 
markets opened. No sooner had 
these new terms been 
announced, than Pruden- 
tial-Bache Securities, acting for 
P&P, said it would buy in the 
market at the revised offer 
level. 

By the close of business, the 
bidder's interest had increased 
to 19.4 per cent of Bridge’s 


equity, compared with just 
over 4 per cent previously. Mr 
Herb Williamson, executive 
vice-president of Parker & 
Parsley, said he believed the 
new offer was “a compelling 
bid". 

News of the higher offer 
from the Texan oil indepen- 
dent prompted the Bridge Oil 
board to switch Its allegiance. 
Having previously recom- 
mended the 85 cents a share 
offer from Gantry, directors 
said they were now supporting 
the new bid from Parker - in 
the absence of any further 
higher offer. 

Aside from price, the two 
bids differ in that P&P has said 
it will retain Bridge's Austra- 
lian assets, whereas Gantry 
has suggested that it is inter- 
ested primarily in Bridge’s US 
operations and would expect to 
dispose of the Australian 
operations. 

• Grocery wholesaler Food- 
land Associated plans to refin- 
ance all banking facilities 
within the group by the end of 
October , Reuter reports. 

Foodland. the target of a 
A$50lm takeover offer by New 
Zealand's Rank Commercial 
and Coles Mirer of Australia, 
sa id the refinancing would be 
undertaken on the basis of a 
common borrowing and secu- 
rity structure. 

The company said it expec- 
ted to require core debt facili- 
ties of around A$250m. All cur- 
rent tenders would be offered 
an opportunity to participate 
in the refinancing, Foodland 
said. 


Court gives BHP time 
to defend A$4bn lawsuit 


By Nikki Tait 

The Victoria Supreme Court 
yesterday set aside an interloc- 
utory judgment for damages 
against Broken Hill Propri- 
etary, in respect of the A$4bn 
(US$2 _9bu) environmental law- 
suit brought against the large 
Australian resources company 
by villagers living around the 
Ok Tedi copper mine in west- 
ern Papua New Guinea. 

BHP had been found guilty 


by default earlier this month 
because it failed to lodge a 
defence to the writ within a 
30-day period - although law- 
yers quibbled over the precise 
deadline. 

The Australian company, 
which managM the mtiy», has 

since submitted its defence 
documents and said it will con- 
test the action. The biggest of 
Australia's natural resource 
groups. BHP is due to report 
its full-year results on Friday. 




CMP 

CHUGOKU MARINE PAINTS, LTD. 


Japanese 
‘ignoring’ 
laws on 
outsiders 


By Nonna Cohen, 

Investments Correspondent 

Japanese companies are 
largely Ignoring a new law 
requiring them to appoint at 
least one outsider to thetr 
hoards, according to the US- 
based Investor Responsibility 
Research Center. 

Last year, largely as the 
result of pressure from US 
trade negotiators. Japan 
passed, laws requiring all cor- 
porations to appoint at least 
one outsider to their boards of 
so-called statutory auditors, 
non-voting board members 
whose role is to ensure that 
Japanese companies are run in 
a legal manner. 

Normally, boards of direc- 
tors at Japanese companies 
are composed entirely of each 
company's top executives, 
according to earlier surveys by 
IRRC, a non-profit group 
winch monitors Issues affect- 
ing corporate governance. 

IRRC surveyed 911 candi- 
dates for the role at outside 
statutory auditor. 

Some 80 per cent of Japa- 
nese companies have sched- 
uled annual shareholder meet- 
ings for June 29, at which the 
individuals are set to be 
approved. 

According to Mr John 
Taylor, senior analyst 
specialising in east Asian 
companies at IRRC, Japanese 

corporations are exploiting a 

loophole in the law to allow 
them to classify as outsiders 
those who are actually 
employees. 

While employees are paid 
out of a company's p rofit and 
loss account, board directors 
are paid bonuses out of profits. 
Thus, a director who has not 
been on the payroll for the 
previous five years can be 
technically classified as an 
outsider. 

Mr Taylor said that out of 
the 911 individuals surveyed, 
some 17 per cent, or 156 candi- 
dates, tell into this category. 

"One out of six Of Japan’s 
500 biggest companies - 
Including international giants 
Sony and Mazda - appear fids 
month to be nominating indi- 
viduals to outsider slots who 
are really employees of the 
company,” Mr Taylor said. 


Hard road for Japan’s bank mergers 

Rationalisation plans may be at turning point, writes Emiko Terazono 

W hm Mr Takao Naka- rationalisation is inevitable. Iwate prefecture, where Kita 

nrura, a tending di- especially with many of the 
ent for Rtta-Ntopon smaller and weaker banks suf- 


W hen Mr Takao Naka- 
mura, a leading cli- 
ent for Kita-Nippon 
Bank, handed in a petition of 
30,000 signatures to the bank 
earlier tliia lwnrrfh opposing a 
merger with two regional coun- 
terparts, he was unsure if he 
was doing the right Hi)ng - 
In the event, the plan to put 
together Kita-Nippon Bank, 
Sbokusan Bank and Tokuyo 
City Bask - all based in 
Tohoku, northern Japan - was 
subsequently abandoned in 
spite of pressure for the deal 
from the powerful ministry of 

flnanra 

The ministry is at t e mp tin g a 
radical consolidation of 
Japan’s many regional banks. 
“We didn't want Kita-Nippon 
to turn into something else, 
but we didn’t want to jeopard- 
ise its position either,” says Mr 
Nakamura, who heads the 
bank’s client union. 

However, rationalisation and 
the expansion of inprifa* share 
through mergers hag become 
an increasingly urgent fact of 
life for Japan's financial insti- 
tutions as tho country hgpfte 
towards full financial Regu- 
lation. 

Japan’s banking sector con- 
tains a number of imbalances: 
45 per cent of the private-sector 
domestic loan market is h el d 
by the top 21 banks, the city, 
longterm and trust banks: the 
remaining 5,700 institutions 
fight over the other 55 per 
cent 

Under these circ umstanc es, 


rationalisation is inevitable, 
especially with many of the 
smaller and weaker hanks suf- 
fering from bad loans made 
during the asset “bubble” of 
the 1980s. Instead of letting 
small hank * A"l , the minis try 

of finance has encouraged 
mergers between the weaker 
and stronger banks with the 

arm of avoiding puhlic Wnflrwits 

and crises of confidence and 
helping local institutions to 
achieve economies of scale. 

Initially, the three-way 
merger, which would have cre- 
ated the fifth-largest of the 
second-tier regional hanks with 
deposits of Y2,190bu ($2L26bn) 
and 225 branches, was wel- 
comed by financial officials, 
r-hanti? anil employees. But the 

euphoria within Kita-Nippon 
soon gave way to apprehension 
over allegations that Tokuyo 
City had bad loans of more 
than YlOObn. . 

Tokuyo City, which made a 
pretax loss of Ylbn last year, 
down from a Y7.6bn loss in 
1992, refuses to confirm or 
deny its bad loan figure. 
Although the bank has a repu- 
tation for heavy lending to real 
fr ffri tf p «iT p pimifts l it says most 
of its loans were not “bubble” 
related, but were made before 
the real estate investment 
boom. 

“Every bank has non- 
performing loans," stresses Mr 
Yoiehi Oyama of Tokuyo City. 

Unions at Bhokosan and 
Kita-Nippon objected to the 
merger on the grounds that job 



Thai Air alters funding plans 


By Wlfiam Barnes 
in Bangkok 

Thai Inte rnational Airways has 
temporarily shelved plans 
to issue US$200m in Euro- 
convertible debentures because 
of a lack of demand in that 
market 

Instead, it will mobilise 
funds worth some $686m to 
purchase the Tmw aircr a ft it 
expects to take delivery over 
the next two years. 

Some Btllbn ($438.6m) will 
be raised with the Issue of 
Y40bn (9388.3m) of samurai 
bonds to refinance the pur- 
chase of four Airbus A300-600s 
and one Boeing 747-200; Y6bn 
in Eurecommercial paper will 


I sf ft* nul l and 


MtakUl 
mtiUH 
Pool Pod 


be issued to refinance out. 
standing cost of two Airbus 
A300-B4S. 

Mr Kasem Suwanagol, the 

airline’s rhairpian , said that 
the airline would pay “much 
lower interest rates of between 
2 and 6 per cent for the bond 
and the commercial paper." 

The finance ministry has 
also approved Thai Airways’ 
plan to issue debentures, 
with w ar r an ts attached, worth 
Bt5bn in the domestic 
market towards future 
purchases. 

The company is also investi- 
gating other debt instruments; 
a medium-term note worth 
9200m will be issued with the 
support of the finance minis- 


security would be thre ate ned 
by merging with a bank with 

potentially high levels of prob- 
lem assets. 

“We’ve had great doubts 
about the merits of the econo- 
mies of scale of the merger as 
well," says Mr Akira Yuki- 
noura, head of Kita-Nippon’s 
employee union. Since the 
three banks are based in differ- 
ent areas of northern Japan, 
there would be no cost-cutting 
benefits through closing 
branches, he says. In addition, 
the initial cost of setting up 
new computer networks would 
be too large. 

“The ministry of finance's 
plan ignores the feeling of us 
local clients, and the impor- 
tance of Kita-BBppan’s strong 
relationship with us,” says Mr 
Nakamura, who owns a food 
manufacturing ■ company in 


try, and a Japanese leverage 
lease will also cover USj286m 
in purchase costs. 

The airline intends to 
take delivery of five Airbus 
A330-300s and one Boeing 
747-400 this year and three 
more Airbus A330-300S next 


The refinancing will 

save around BtlOOm a year, 
Thai says. 

The airline is seeking a 
management consultant to 
help it improve its corporate 
image. - 

The company wants to refor- 
hish Its staff uniforms and inte- 
rior decoration, although the 
carrier will keep its colour 
-scheme and logo. 


Iwate prefecture, where Kita- 
Pfippon is based. , 

Clients were also concemea 
over rising speculation about 
the reason the merger was to 
take place on January 1 next 
year, in spite of the business 
year starting in April- “ft 
seemed like the financial 
authorities wanted to avoid 
having to reveal Tokuyo’s poor 
financial statement for the 
year qnflftig next March." be 
says. 

Banking analysis suggest the 

collapse of the three-way 
merger represents a turning 
point for the ministry of 
finance's bank plans to ration- 
alise the banking industry. 
“The ministry can still orches- 
trate these mergers but they 
need to make incentives 
clearer for the banks 
Involved,” says Ms Alicia 
Ogawa, banking analyst at 
gainmnm Brothers in Tokyo. 

Clients and employees of 
Kita-Nippon, which had the 
courage to reject the ministry’s 
guiding h a*™*, are aware that 
the hank may ftpp more pres- 
sure from the ministry and 
i ncreasing competition from 
other local banks. 

Mr Nakamura says that by 
forcing Kita-Nippon to drop its 
merger deal, the client group 
haa pushed the bank to choose 
a “road full of thorns" 

He stresses, however, that 
customers of Kita-Nippon 
acknowledge that they too 
must play thear part in making 
sure toe bank survives. 

Hydro-Quebec 
in US$700m 
bond offering 

Hydro-Quebec has completed 
most of its 1994 borrowing pro- 
gramme with a US$700m issue 
of 30-year &05 per cent bonds 
priced at par, writes Robert 
Gibbens from Montreal. The 
b onds cany a put option allow- 
ing holders to redeem at par in 
July 2006. 

Proceeds will be used to 
refinance a 12-year debt issue. 

CS First Boston, co-leader of 
the syndicate with Merrill 
Lynch, RBC D omini on Securi- 
ties and ScotiaMdeod, said 
toe “put” bonds saved 10 
hama points in yield compared 
with a straight 12-year debt 
issue. 


Ares-Serono 
optimistic 
on outlook 
for year 

By Ian Rodger In Geneva 

Ares-Serono, the biote ch- 
nology-based drugs group, k 

“quite optimistic” about its 
profit prospects for 1994. .: . 

Mr Ernesto BertorelH, dep- 
uty chief executive, said be 
thought the worst effects of 
drug price cuts in toe 
important Italian market had 
been felt in the * first 
quarter. 

Last year Ares-Serono prof- 
its fell by a third to gTSUm 
because of price cuts and cur- 
rency devaluations in some of 
its main markets. 

At tine group’s annual press 
conference. Hr Bertarem said 
overall profit margins were set 
to improve now that the weak 
over-the-counter drugs and 
H ingnttKrtrs divisions had been 
sold. 

However, Mr Christian Ray- 
mond, treasurer, acknowl- 
edged that a continuing weak 
or weaker US dollar would 
have a big impact <m profits 
this year. - 

Ms Kathryn Biberstetn, the 
group’s general council, said 
Ares-Serono was tmconceraed 
by lawsuits launched recently 
by dissident minority share- 
holders of Ares-Serono's 
Israeli subsidiary, InterPharm 
Laboratories. 

Two weeks ago,, the group 
closed a tender o f fer for toe 24 
per cent of InterPharm shares 
It did not already bold at >22 
per share. 

Dissidents representing 12. 
per cost of toe shares have 
held out for a higher price, 
and have won an injunction in 
Israel preventing Interphann 
from exporting itx beta Inter- 
feron technology to Ares- 
Serono, . . 

Ms Biberstein said the group 
expected to reach an agree- 
ment with Israel’s chief scien- 
tist In the next few weeks on 
tiie use of the technology. 

Ares-Serono was also in dis- 
cussion with the Nasdaq mar- 
ket, where InterPharm is 
listed, about delisting the 
shares. 

The company meanwhile 
confirmed that it would be 
paying a maintained dividend 
of SFr6 per bearer share 
and SFr2.40 per registered 
share. 



tis* 

r ' 


gEL— - 


MSrrtj 


FORTHCOMING EVENTS 


(btcorpreated urUh (mated und^thr [aim of Japan) 

U.S.$60, 000,000 

2 per cent. Convertible Bonds due 1998 

Issue Price 100 per cent 


IBJ International pic 


Nomura International 


Citibank International pic New Japan Securities Europe limited 

Yamaichi International (Europe) limited 


Asahi Finance (UJC.) Ltd. 

Mitsubishi Finance International pic 
Barclays de Zoete Wedd limited 
Dahva Europe limited 
Kleinwort Benson Securities 
Morgan Stanley & Co. 

hto ui i l o iu l 


Hiroshima Bank (Europe) N.V. 
Mitsubishi Trust International limited 
Cresvafe Limited 
Goldman Sadis International 
Merrill Lynch International limited 


Robert Fleming & Co. Limited 

Wako International (Europe) Limited 


Nikko Europe Pic 


UBS limited 


ALLIANCE "T LEICESTER 
AU*occ& UieenerBsMim So«it«r 
£200,000,000 
Flooring Rate Note* 
due 1998 

For the inretat period 2Jid 
June, 1*^4 to 23nl September, 
11*4. the Nutei will carry ante 
nf interest nt" 5’*% per annum 
widi interest amounts <rf£l 32. 3? 
per 110,000 and £1,321.29 per 
£100,000 Note, payable on 
2 3rd September. 1994. 
InitilinilelninhiinlK^k E*di>w 


THE STARS PROGRAMME 
STARS t PLC 

£475,000.000 Class A Floating Hate 
Mortgage Backed Securities 2029 

Notice ii hereby given that the Rate of Interest has been fixed at 
5,537 5% and mat the interest payable on the relevant Interest 
Paymmnl Date September 27, 1994 against Coupon No. 15 in 
respect of Cl 0,000 nominal of the Notes wj be £127.98. 

Ant 28, 1994, London Cfi7fl4MfO 

Byfflbaik, NA Qssur Stakes), Agent Bor* WUBAimm 



a BnkmTiw 
Canwr.lff 


Compuiy. Leaden Arm Banfc 


*,. 15 % 

off electricity 


021 423 3018 

Po werline 


aquvtalne uk limited 

£368,015,000 
Guana teed Unsecured 
Roaring Rate Notts 2003 
For che six months 24th June, 
1994 to 26* December, 1994, 
the Noms will cany an interest ] 
rate of 5.40% per annum with 
an Interest amount of £ 138.33 ' 
per £5,000 Note, payable on 
25th December, 1994. 

ffBMfcemXnw 
f Cflra^isnyjondon Agent Beak | 


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FINANCIAL TIMES TUESDAY JUNE 28 1994 


Vt 

optitt? 

^ % US Treasury prices hold steady in light activity 


INTERNATIONAL CAPITAL MARKETS 


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IS 


By R-ank McGurty in New Ywfc 
wid Graham Bowdeyh London 

US Treasury bonds held fitiriy 
steady in light activity yester- 
day in response to a slightly 
firmer dollar. 

By midday, the benchmark 
30-year gover nment band was 
i lower at MB, with the yield 
Inching to 7.523 per «mt At 
the short end, the two-year 
note was off A at 988, to yield 
6401 per cent ■ 

An air Of uncer taint y hung 
over the morning session as 
traders anxiously awaited 
fresh developments in the for- 
eign exchange markets. In 
overnight trading, the US cur- 
rency sank below YlOO bat 
later climbed back above the 
toe. 

Bonds reacted with a modest 
move lower, but traders had no 


appetite for a fresh sell-off 
after Friday’s rout Dealers 
ware buying government secu- 
rities on: weakness, helping to 
build a new ffocr for prices. 

The big question was 
whether the Federal Reserve 
would lead a second round of 

GOVERNMENT 

BONDS 

intaventbm on behalf of the 
dollar, in spits of the fidhne of 
last week's efforts. 

By early afternoon, the cen- 
tral banks had haM their fire 
in . the currency .markets, 
though there were reports of 
them buying Treasury bills, 
reinvesting dollars acquired in 
Friday's intervention. 

- Meanwhile, Fed - o fficials 
were sending' out signals Chat 


suggested the central bank 
would not hit rates again dur- 
ing its policy-making session 
next week, despite the weak- 
ness of Die dollar. 

Mr Alfred Broaddns, presi- 
dent of r the Federal Reserve 
Bmik of Richmond ami a mem- 
ber of the Fed's policy -making 
ramrwiffwn will h> WOUld ha VS 

to see June and July data 
, before making a decision. 

■ A large porchass of UK gilt 
futures, rumoured to be by a 
US hedge fond, pushed London 
higher yesterday, while other 
European bond' markets 
enjoyed a $ate rally following 
earlier folia. 

Trading activity in -foe coaxtt 
cental E ur opean markets was 
subdued, with 'most activity 
limited to the futures market 
They opened lower but recov- 


ered later in the day. led by 
Germany, after a relatively 
calm day for the dollar 
removed the immediate threat 
of an emergency rise In US 
interest rates to protect the US 
currency. 

Analysts said market senti- 
ment remains nervous ahead 

of f i ffrtMr devdopa nente in the 
currency markets and in US 
interest rates. -• 

'This is Just a short -squeeze 
upwards After a crash," said 
Ms Alison Cottrell^ interna- 
tional economist at Midland 
-Global Markets. 

"Markets are pausing for 
breath ahead of mote data and 
before the long weekend in the 
US, the [Federal Open Market 
Committee] meetm&4fae next 
B iinriwgtgmk meeting- and -the 
<3? summit hr Naples," she 
Mid. . & 


■ UK government bonds bene- 
fited from the government’s 
White Paper on pension indus- 
try reform, analysts said. But 

the single large purchase by a 

US hedge fond of gilt futures 
was the principal factor driv- 
ing gilts higher. 

The move upwards in the 
futures market fed through 
into the cash market The long 
gttt future was up lfi points in 
late trading at 1019. 

"People have had time to 
consider the implications of 
the paper and realise that in 
the longterm it is favourable 
for bonds, in that it could 
involve quite a substantial 
switch out of riskier assets him . 
equities into long-term gffls," 
said Mr David kfljes, semor-UK 
economist at Merrill lynch. . 

The Rank of England was 
reported to have supplied 


bonds to the market yesterday 
doe to increased demand. 

The UK Treasury’s latest 
forecast for the . UK economy 
wfH attract attention today, ft 
is expected to predict higher 
economic growth and lower 
inflation over the next two 
years than previously forecast 
.. ,0f particular importance for 
thftgfh ■market will he the pro- 
jection for the public sector 
borrowing requirement, which 
4a expected to be revised down- 
warts. 

S Data showing a fall in Ger- 
man ooraunnsr price inflation 
tq June helped lift market sen- 
timent but.) analysts remained 
^eptical shout the immediate 
psospect far German brads. 
^The. .September bund con- 
frapfc vpismp (L54 points at 92:40 
in -late t pwfiu g . 


ADS issue 
for Chinese 
power group 

By Antonia Sharpe 

Shandong Hunneng Power 
Development Company, the 
first Chinese powergenerating 
company to file a registration 
statement with the US Securi- 
ties and -Exchange Commis- 
sion, hopes to raise around 
6400m through a public offer- 
ing of 23.4m American deposi- 
tary shares (ADSs) next 

m/aith 

CS First Boston, the global 
coordinator of the issue, said 
the ADSs, each representing 50 
N shares, will be offered to 
investors in the US, Europe 
and Asia. 

N shares, a new category of 
security on the New York 
Stock Exchange, provide hold- 
ers with the same rights as 
Chinese B shares, winch can 
be ^bought by foreigners, but 
they will also meet SEC 
requirements. 


Yen’s strength against dollar brings flurry of deals 


By Antonia Sharpe 

The yen’s strength against foe 
dollar prompted a flurry of 
yen-denominated issuance in 
foe eurobond market yesterday 
and syndicate managers said 
this trend was likely to con- 
tinue as long as die outlook fin 
the. Japanese currency 
remained favourable. 


INTERNATIONAL 

BONDS- 


"ft there tent a trade accord 
soon between the US and 
’ Japan, there win be even more 
investor dmpand for yen-de- 
nominated assets,” said an offi- 
cial at MerriflLynch, which 
arranged two pf the three euro- 
yen' deals that emerged yester- 
day. 

Other syncBcate managers 
said foe recent spate of pubfio- 
ly-underwritten issues did not 
reflect fuDy the strength of 
demand for euroyen bonds 


from Japan and Europe, noting 
that they only represented 
. around one-quarter of foe vol- . 
ume being raised through pri- 
vate 

Yesterday's three euroyen 
deals were concentrated at the 
tinnier end of foe. yield curve, 
which showed that investors 
were «t£Q nervous of longer- 
dated 

Until LandesbankR h e telaa d- 
Pfefeand Sa£a,tha South Aus- 
tralia state treasurer, are 
believed to have swapped the 
proceeds of their deeds while 
Xerox Corp kept its funds in 
yen for its Fuji • Xerox 
operations. 

Merrill Lynch made further 
inroads into the eurosterling 
•sector yesterday when it won 
> the- mandate to inari-wrarrag n a 
£47m offering of 25-year euro- 
bonds for the European Coal & 
Steel Comm un ity. - ■ 

: -Last week, Merrill arranged 
a £200m offering of 10-year 
eurobonds for Austria, the 
bank’s first eurosterling man- 







• 

^NEW nrTERNATIONAL BOM) ISSUES 

Ponuarar 

Y» 

SA BAJA 
xerax.Onp» 

LB Rhabfenri-PtateO 

*/ 

.. « Arnett 

m. 

.-r 2Z5bn 

. 1 - aofan 

lOfan 

Okom 

1 % 

325 

446 

320 

Mca 

1000873R 
lOOLOOR 
■ 10050 

Maturity fea 
% 

Jan. 1887 0.187571 
Dao.1999 CL30R 
Fab.1997 intact. 

spread Book runner 
bp 

Mans Lynch Mamariorad 
Menfl Lynch baamaMonal 
,,, ,, n ■ - -« 
OwJIlMl UIUUKR1 mhl 

8 TBMJNQ 

BCBC 


45375 

99L883R 

JU2019 uregacL 

+38 -fBKM-17) ManB Lynch International 

tjBWniUflW DOLLARS 
CidriK Local da f+enoe 

& 100 

9526 

99596R 

AU02DOO 0l2SR 

+20 R fiMO Naahtt Thompaon 

RnN feme and non caBritfe wfera afeNd. The yWd spread (over relevant ggraramerd bm* at launcti la sMPpfed by toe lead 
manager, ft feed re-otter price: l era era ttvran attte ra-ofler leveL a) Short let oopon. ts Over brierpoUfed yield. 


date since becoming a market- 
maker in UK gilts earlier in foe 
year. 

The ECSC’s bonds,' which 
were priced to yield 38 basis 
points over foe 8% per cent UK 
gat due 2017, were bought by 
UK and foreign investors who 
have been starved of long- 
dated starting bonds. When foe 
bonds were freed to trade, the 
spread was unchanged. > 

An ECSC official said the 
deal renrasanted the last instal- 
ment of its £2O0m loan to the 


Channel Tunnel. He added that 
the European Community was 
likely to tap the Ecu sector of 
the market next month. 

Elsewhere, Federal Hume 
Loan Bank could steal Freddie 
Mac’s thunder next mont h - 
when the two US mortgage 
agwviwi launch their inaugu- 
ral gtobalTwnd offering* FHL, 
which set up a $5bn global 
medium-team note programme 
via Lehman Brothers and Mor- 
gan Stanley last week, plans to 
raise at least Him by nridJuly. 


• Moody’s has placed foe dou- 
ble- A3 long-term foreign cur- 
rency debt rating of Ireland 
under review for a possible 
upgrade. Last month, Standard 
& Poor’s revised its outlook on 
Ireland’s dduble-A ™»n» rat- 
ing to positive from stable. 

Moody’s also said it had 
downgraded the longterm rat- 
ing of the Spanfah yiitftfl nmn rre 
region of Catalonia by two 
notches to A1 from double-A2. 
Around |73feu of debt securi- 
ties are affected. 


Hutchison raises 
loan for UK unit 


By Sown HoRmton 
hi Hong Kong 

Wirtrhiann Whampra fhf. Hnng 
Kong conglomerate controlled 

by Mr U Ka-shlng, has raised 
a £700m loan for its tele- 
cmxmuuucatkms subsidiary in 
foe UK. 

Jteexe was strong demand for 
the loan, which has a term of 
threayaars and pays 55 basis 
paints above the London inter- 
bank .offered rate (Libor). 
HuttiritikL.'Origtaatty v ne to 
foemtifoeMpr £S00m. 

The :d&dl also marked an 
unnsua£ ifijpay of axveratipxi 
among foetus’s two leading 
clearing banks, Barclays and 
N^ional Westminster, which 
arranged th^.^an together 
with Hlon^mg and Shanghai 
Banking Corp. 

Mr Ashley WDktos, director 
of capital markets at NatWest 
Markets, said; To get foe two 


biggest UK banks in the mar- 
ket together means there's a 
lot of credibility behind the 
deal" 

Tim proceeds of tbs loan will 
be used by Hutchison Telecom- 
munications HrtliUwp e (UK) tO 
finance Hutchison’s invest- 
ment in the company. 

Hutchison has a 55 per cent 
interest while Barclays owns 5 
per cant and British Aerospace 
foe remaining 30 per cent 

The UK subsidiary recently 
launched a digital personal 
c om munications network In 
foe UK under foe name of 
“Orange". 

The loan was underwritten 
by a group of six arrangers; 
Barclays Bank, Chase Manhat- 
tan Asia, Commerabank 
AktiengesaUscfcaft, Hongkong 
and Shanghai Banking Corp, 
NatWest Markets, and West- 
dautsche Tjmrf#«h«nV CHiOBBnt- 
rale. 


Norsk Hydro rights in 
line with expectations 


By Antonia Sharpe. 

Norsk Hydro, the Norwegian 
energy, fertilisers fnrf 
group which is 51 per cent 
owned by the state, has raised 
NKrLTbn through its ane-for- 
nine rights offering, in line 
with expect ati ons. 

Merrill Lynch, global co-or- 
dinator of the SEC-rogistered 
offering, said the 28.6m new 
shares were priced at NKi20O 
each - a slight discount to the 
old shares, which traded at 
NKrtlS yesterday. 

Of tite total amount, SO per 
cent was taken up by US Inves- 
tors and the rest by European 
and domestic investors. The 
state subscribed in fall to its 
entitl ement . 

• Svedela, the mineral pro- 


cessing and transport com- 
pany, has raised SKr843.6m 
through the sale of 87 per cent 
of its shares in Kalmar, a sub- 
sidiary which manufacturers 
fink-lift trucks. Svedala plans 
to sell its remaining shares at 
a later date as part of its strat- 
egy of concentrating on Its 
core businesses and paying 
down debt. 

The lLlm shares were sold 
at SKrTB each, to give a histori- 
cal price-earnings ratio of 29. 
Merrill Lynch, foe global coor- 
dinator, said 7.2m shares were 
bought by European and Swed- 
ish investors and 3m by US 
investors. 

A further 9OQjO0O shares woe 
sold to Swedish retail inves- 
tors. The shares will be listed 
in Stockholm on July 1L 


[ WORLD BON'D PRICES j 

BENCHMARK QOWHW— 

Rad 

Coupon Oafti 

MT BONDS . 

- ■ .‘i Day'e Week Month 

> Price . chwge Wald ago ago 

Ifoty 

■ NOnONAL ITALIAN QOVT. BOND RTR RITURE8 
(LFPET Ura 200m 100d» oTIOON 

FT-ACTUARIBS FIXED INIEHESI INDICES 

Mca Indoaa Irion - Day-a Pri Accrued 

UK Qfea Jun 27 change 95 • Jm 24 - Mereet 

«dre& 

y« 

Jun 27 Jim 24 Yr. ago Jun 27 Jun 24 Yr. ago Jui 27 Jun 24 YT. ago 


Balgtan 

Canada* 


4000 

0004 

0X9100 

-2.160 

9L58 

482 

083 


Open 

Sett price Change 

Wflh 

Low 

BA vol 

Open tnL 

1 Up to 6 yearn (2*3 

121.18 

+022 

120M 

156 

X7T Syta 

026 

038 

008 

042 

059 

7.13 

852 

858 

751 

7-250 

0404 

9X2000 

-0050 

757 

8.10 

jja 


1025O 

10450 1.10 

10450 

10159 

37068 

50420 

2 6-15 yeere {22J 

1*050 

+1.12 

13003 

2.11 

842 16yra 

038 

056 

753 

052 

070 

001 

851 

098 

029 

6508 

oarar 

31-0000 

-0900 

950 


057 

Oao 


10256 1.10 



0 

100 

3 Over 16 yearn (95 

15854 

+149 • 

16032 

254 

541 20 y» 

855 

849 

856 

052 

070 

Oil 

086 

8.79 

033 

7.000 

12AM 

31.8700 ‘ 

-0300 

421 

048 

7J75 • 




- • .... 




A 1 1 47 

17046 

+084 

17031 

157 

758 feait 

058 

059 

020 







8.000 

: 06ffl8 

1042500 

+0820 

071 

7-03 

041 

• # 







8 Al atoefcs (B1) 

13025 

+059 

13754 

257 

658 










4500 

04AM 

87^500 

+1.080 

7-37 

758 

7.18 

■ ITALIAN OOYT. BOND PIP) FUTURES OFUDNS (UFFQ Lk*200m 1008a Q* lOOM 









— Math 

mBK— 


— 

'Htoik 

m 10% 





Hay 


asm ottx 


Japan . Mo no 4aao oem. 

Note*. 4.100 12*3. 

Nathartanda ■&* ■ 5.750 01/04 

VL. 

..t.\ ejgo ,-rttM" 

. 'flJJOO 10/08 
USTraaauy'- . " .7^50 0604 

' 0260 .0808; 
ECU (franch Qa* ftOOO 0404 
London dn«i*xVtw WafcMHt-dw v . 
t Ction htto a«*ii*8n0. « * V* P» 
PHcwrUa UKto3ax*ic(h**to 

US w r BRES T RATES 


>073000 -OJJQO lOSTf 11JJ0 9.70 

U&2040 -+OJ3QO 357 SJ>3 SJH 
JMMB3Q +0.130 424 4.48. 3.73 

408400: +0140. 7.10 _758 &97 

soaooo >-0260 long -toar ooe 

. m-te - 48002 S.1B 047 8.10 

. S8-17J +46/82 SA2 ,8J» 858 

: 104-4-1 +5U32 847 8.78 M8 

. 100-00 l rVR2 TJB X10 7.17 

• ^-1002 754 7 at jaz 

fiKkW'+O.ttp 758 829 753 


Imttni 



ilmiy BUtaandBoDd YMbU 

ar : 4A'~ Taoyrar 

4.17 Wmym 

4X9 . HMjnr 


S.47 


815 

848 

891 

729 

787 


BONO nffllMS AND 0PT1 OHS 

Franc* ■ 

■ NOTIONAL BENCH BONO RITURCS (MATIP] 


Open Sattpricn CtanQa 
Sap 11422 11828 +OJ82 

Dec 11838 11658 +082 

Mar 112.00 11454 +058 


Wgh Lour EaL VoL Open InL 
11830 114.18 214P14 127.727 

115.12 11138 • 1517 ULS20 

11250 11250 ' 2 190 


■ LONQ TB4M FRS4CH BOND OPTIONS (MATIFj 


si*# 

Price 

M 

CALLS 

Sep Dec 

JU 

— Purs 
Sap 

Dec 

1 t2 

455 

554 

008 

150 

- 

113 

358 

« 

059 

1.18 

158 

714 

240 

354 

0-23 

145 

9 . an 

118 

158 

257 

058 

• 1.77 

- 

116 

058 

258 258 

0.80 

5.14 

- 

Eat. voi. ineA cafe aejee 

Pula 84819 . nariora-iferta open hL ON» 380530 

FUaSBBAM. 


Oormany 

■ NOTIONAL OBBMAW BWP RUURB8 85=PQ* DM2B(LOOO 100tt» <9 ICON 

Open Settpdca Owga Ugh Low EN. vol teen W. 
Sep 9153 9226 +059 8246 8124 123298 148886 


9096 


9153 


+040 9155 9055 


221 


47S0 


N BUNO FUTUWB8 OPTlONa (UH=9 0M26O/»ti pdnta o< IQOIt 

Strike 
Price 


sw» 

CALLS — 
Oct 

Dec 

AUO 

Sep 

pure — 
Oct 

Dec 

158 

150 

159 

1.10 

151 

257 

258 

150 

150 

155 

154 

1.75 

238 

252 

158 

150 

143 

151 

251 

257 

200 


Aug 

9900 156 

9080 159 

9300 058 

6K. vot wft. Cefa Iowa Me ISIOT. Cn/e open K, CWtHM Pira H98- 

■ NOTIONAL MaMUM TQ4M QERHAH QOVT. BONO 

(BOeLKUH^ DM2SOJOOO lOOtfa O 100% 



- 






Prtca 

'Sep ^Oec 


Sap 


Dec 

10400 

%04SD 

254 3.10 


254 


4.15 

259. , ' 258 * 

■ • * 158 258' 


259 


443 

10800 


-255 


<73 

EC-veLfeH. OfeWPnta ISA, Prefera day* open tv, eras W9B Pife 22900 


Spain 






■ NOTIONAL 8PAM8H BOM} HJTUflEB (MEfT) 



, 


Open • Sett price Change 

Hoh 

Loir 

EaL vat 

<%>en ktt. 

■v . •: 

5855 ... ... 8048 -058 

8054 

8750 

64,102 

07^89 

- - - 8941 - 

. — 

* 


3 

UK 






■ NOTIONAL UK Oft.T HfTUHES (UR^* CS0.000 82nde of 100% 



'Open ' Salt price Change- 

«flh 

Low 

EaL vol 

Open ktt. 

Jun 

101-06 102-18 +148 

102-20 

101-06 

1741 

8973 

Sep 

99-14 101-09 +1-17 

101-24 

99-12 

70010 

120742 

Deo 

100-00 +1-17 

- 

- 

0 

411 

■ LONQ Q4.T FUTURES OPTIONS (JJFFQ E80500 Sttha o( 100% 


. _ 

. |n _ 






Sap Deo 


Sap 


Dee 

101 • 

2-28 3-07 


2-00 


3-53 

102 

1ST 2-43 


2-38 


4-25 

103 • 

1-29 2-10 


3-11 


S4J1 

feL w* «oM CNe 1083 Pule 3B7B. PMfera Oaf open ra. 

Daiwas 

Pu* 42030 

Ecu 






■ BCU BOND FUIURBB 0JATF) 






Open Seri price Change 

"W 

fov ■ 

6 tWL 

Open ktt. 

Sep 

4250 8400 +020 

84X0 

3260 

483 

3,770 

Dec 

- 8356 +050 

- 

: ' 

- 

- . 

US 

. 


\ t ’ . 



91 U8 T0EA8URY BOND FUTURES (CUT) 8100500 32nd» Of1 00% 



•Open Leteet Change 

High 

•i hem 

Btt. vet 

Open ktt. 

Sep . 

102 -1V 10208 -0-08 

108-17 

loom 

498521 

368099 

Dec 

101-21 101-15 -0-09 

10T/-25. 

1 tq-M 

1560 

40561 

Mar 

10028 lpO-25 -005 

101-02 


78 

2400 


_ , 

; 7T, 

•' &V-. 



Jftan 


. . 

•fet-' 



■ NOTIONAL LONQ TBIM JAPANESE QOVT. BONO FUTURES 


- . {UFFQ YlOOra lOOthe ol .100% 






Jun 27 Jur 24 Yr. ago 


JWi 27 Jun 24 Yr. ago 


6 Up to 5 years C9 

7 Over 5 yeen(11) 

8 AM stocks (13) 


18853 

17059 

171.72 


+0-15 

+050 

+029 


18828 1.19 

17057 '• 058 

17123 073 


253 Up to 6 yis 
256 Over 5 yrs 
253 


072 

352 


3.78 

354 


259 

354 


258 

3.73 


2.72 

3.76 


223 

358 


Qyera- y le W 18 year yWd 26 yew yie l d 

Jun 27 Jun 24 Vr. ego Jun 27. 24 Yr. ago Jm 27 Jun 24 Yr. ago 


9 DebeiLoamPB) 12929 


+058 


128.15 250 

Beedc law ON-7W4; 


S55 954 958 822 9b47 957 

Umaatc SN40«Ns HVc 11* endow. tW jWd. ltd Yew to de*. 


859 9U41 8.48 9.18 


FT FDOED HVmeST INDICES 

• June 27 Jww 24 Jm 23 Jaw 22 Jirae 21 Vr apo Lear 


GELT EDGED ACTIVITY INDICES 

. Jm 24 June 23 Juia 29 June 21 Jura 20 


QOM. Sues. (UK) 9240 .91.71 92.10 9155 9050 9720 10704 9059 01 Brined hwgafcn 785 BOA 934 

need Meraat 10824 109.15 10845 10753 107.70 11453 13357 10753 8-d at —rape 907 94.1 940 

* lor 1994 GuMOTmnt SeoutCw high Mice eompAdlan: 12740 091/9$, low 48.18 (W7*. ftad kdawt Mgn dm aaesriWoR H87 Bi/ulM) , kw 0X33 (Wra) . Baeb 10ft 
28 end Rwd tawwt 191. 8E edMy hriew r e h wsd W74 


FT/tSMA INTERNATIONAL BOND SERVICE 


925 

985 


987 
1005 
wi<y 


LWedmOwl 


bands ta «Neh Vwe le m 1 
Bd Olr ChB- 


M MrOo W 


05. DOLLAR STRMOftS 

fUOfN*Tlm*r/&l(a 1030 9f% 9|% 

MMana*a7% 99 1000 Wl% 101% 

towas^oo 400 «B 106% 

BmadWqoFam^ MO KB% KB 

1000 BP, 8S% 

flTCE7%97 ISO M2% 

BriQri)Gw021 1500 10% 10% 

Qndi99B ; MOO KM% «H% 

ChaaoKongHnStzBB 500 90 9^ 

CM* 9% 01 1000 87 


OoutdBnDa898_ 
CW*Rnew9%B- 
Damwk5%98, 


BatJNwe*wd%M. 

BCSC«,9B 

racism 



089% 87 . 


Bac deforce 9 98 — 

antra 9% 98 

EMnBsrt(5pan802 . 
Expat Dev Ozp 9% SB. 

HMtilW. 


,M) (ffi% MS% 
.300 108% 109% 
MOQ 86% 80% 

. 800 91% 91% 

_ 193 103% 103% 
.MO 103% W3% 
-260 US?* 102% 
1000 108% 107 


5 

-% 

-% 

-% 

-% 

-% 

-% 

5. 

-% 

-%• 

-% 

-% 


758 


779 

878 


UoMKhBdmTiaW. 
MA7te. 


FhDUiBp«9%« — 
For] Matx Qedl 8% 98 . 
Gtn0KCapferi9%9B _ 

awe 9% as 

HBkJwaaRl7%87. 

UsrAimrDev7%98 

«%8%23 


Open 


Sett price Ctanpe 
9752 0.18 


Ugh 


Law 


BA vol Open M 
0 '78 


Open 

Sep' ‘ i iiaio T 

1 USE oo^braN'eadri 'an APT^Af Opart 1 

\:X • 


Ctoee ^ Change Hgh 


11020 10078 


Esl vol Open tnL 
2889 0 


• \CV - t 


J^an De* Bk 8% 01 — 
KtttoBscParlOM — 
KdraBKPoav6%03. 
27CB A>887 . 




UK GJLTS PRICES 


Bsc 7% 07 _ 
7%pooCndat10%86. 
Ncn*wT%97. 
OtMd7%03 , 


-% 

! 

1 

.3600 81% 82% -% 

-600 104% XH% -% 
.360 106% WS% -% 
.1350 83% 86% -8% 

-200 »1% W2% -% 

, 1000 86% 97% 

ISO 108% KM 


728 Brad* 


663 


.200 106% «8% 
.100 104% «M% 
- 500 101% 102% 
.190 107% 106% 
3000 90% 99% 

.200 WS% ■ KM 
1900 98% 97% 

-300 106 106% 

-SO MB% W3% 
.20Q 101% 

.200 W2 10ft 


722 


Wodd Berk0 15 

_ 2000 

mridBW*8%00 

■BBS NMNC SIWUHR 
Arira Dev BMk8 10 

_ 12S0 

MO 














»0 


TOO 





Oabra HftoSOB 

— 100 

8NCF70* 

mridfettcni 

— 450 
150 



VasmMQHT8 

arifenSBB 

75000 


M2 

M2 

ft 

4*2 

AttttyrMItarauyaac — 

.1000 

92% 

92% 

ft 

B32 

aft 

aft 

ft 

741 

AfcrceLsfcs JT%97£ 100 

108% 

108% 

ft 

407 

20% 

2ft 

-% 

772 

MkhLrad ft 23 C 

-MO 

8ft 

88% 

ft 

1839 

91% 

91% 

ft 

7.18 

Darenkftne 

-800 

»ft 

aft 

ft 

840 

106% 

110% 

ft 

as* 

BB tOB7E 

-887 

KH% 

w% 

ft 

751 





WK10%97£ 

-MO 

Mft 

«a% 

ft 

70S 





Hmonlftwe 

-500 

105 

Mft 

ft 

855 

Mft 

101 


595 

HSBC Hakfegil 109 C9£ WS 

109% 

Mft 

ft 

938 

W 

aft 

-% 

M2 

fe%10%14£ 

400 

w% 

«ft 

ft 

952 

9ft 

100 

A 

432 

Japan Dev 0k 7 00 E 

200 

•ft 

92% 

ft 

883 

. 98 

aft 

ft 

513 

Land8ecaB%07C 

200 

98 

99% 

ft 

953 

ME 

106% 


409 

Oraato »% Of t 

100 

«B% 

Kft 

ft 

4» 

VB 

108 

-% 

837 


an 

97 

97% 

N 

938 

M 7 

109 


587 

Sevan Dart 11% ABE 

ISO 

MBS* 

lift 

ft 

90S 

M6 

107 


470 

Tc%e Braferar 11 Of £ 

« 

1*% 

MB 

ft 

A25 

Mft 

raft 

ft 

530 

Abbey National 0 98 NQ 

100 

9* 

85 


738 

103% 

104% 

ft 

571 

TCNZHift 02 NB 


MB 

MB 


837 

Mft 

102% 


588 

CSBXTU3CAL801RV 

7000 

»1% 

«% 


7A6 

01% 

92 

ft 

532 

Bee da ferae ft 22m 

3000 

105% 

Mft 

ft 

428 

10ft 

MB 


400 

SNcrftarm 

4000 

Mft 

10ft 

ft 

489 


98 99 

800 107% W7% 


758 SB 8% 00 

456 FHa«lB%96 

083 MttAmrOw7%00. 
7.15 k*3%cn. 



IWM S Had MUE+V- W» U* 


1hH.10pcl&1994tt— 1M£ 

EMU 12%»c 1894 IMf 

Vraa9pei8M8* ,«£ 

12PC19B5 1158 

Ex*3eee»W'« »9S 

KAipciBOS 851 

7taHl2%pctt£# — Itra 

ZSS lm= ss 

OraarriraWraaW— MB 
Cow 7ps 1987#— — 755 

Tmn3%pclW^ — 1170 

nenSVpe 1 ®^ **[ 

&d1 16pe1987 1 

M^e iera - -— 928 

7.44 

TrraiBloe H#5-98t$- 785 

14K 38-1 — 1LB1 

Fan 7 29c 1988 — 

T(ra»^el9B9tt M8 


nrateWheeWw 

M1*%8el9» 

TusWdgMJf ?2 

com«iiraio%iK 1998- W5 

- ■■■ — omO 

nSiapcsoo io« 

— a 

752 
529 

ape asst*. 



vgason. 


MO 1taMl1%pc«BI-4 

vxaMasiac»4 — 
101a CM— 1I11 ftpcSd*— 
Tl*eMd*2»m i 

•n* QraBhP canes 

T*e»12%*c 2003-8 ~ 
7%w»o8j*. 

11W Bpc20U-«». 


as* 

iaia 

478 


, aahriBy'tf%fl8. 

■*% aw% ifflB 8A810W. 


TUn 11 Vra 2tt»-7 — 


+-H IMi IBM 
+4 178% 163% 
+% 17ft MM 
♦% lift w% 



B— 1 840 «47'10£N ^*1% IIMl JWb Seal 

; 1048 MM iNfi +ft ISJ* 

: L 483 446 1M* +1H 124fl .. 101. .JES 


ia m 



«« llragc 2099- „ 

117% -heraeuNBana — - 

J3« CearSpclJiMim 

. 112ft T««flra20t2JT 

+% 1«A la » Tmmfr*VoS-m- 

PeraqpcSMtt— — 
7%w291»Stt 

Hrattpjjnw™ 
. E**12«T3-T7 

+« utt 1M% 
itt 121ft 108% 


■■28 

+% mu 
+fl 1DM 
+fl 101* 

UtR 


455 

751 

B& 

425 

MAX' 

9» 


MM 108 +1ft 127ft JPSfl M- U tt iH m 

488 1U9 +S.128B n0%- 2pcV6 — (87 A. 283 . 3J%»1 

748 73%N +ft K& 71 A -ft**V8»— jUBA' T ^Xn' 1 .XMZr 
ISM iaa +1ft 12Sft 103 2JSSV1 VMI- *» - *84.i; 

441 ; mi jtii'Wi S rr 7 ^ 

436 10EB Via 138V W- 1W4 ag^ 

888 ttlH +fft MV. IMft -9^ . W" i 

444 9ft +18 112fl NY: .■ 

484 88%-M%.an% Kt.SSReS 

SS.^JSfS ^ ’■«& ft9C%8_ L-JSS Jg ? 384, 

10 « +m I»a.. ioi; . is 

Praspeottra rod MmbMdi WfRMi 

"7-%- ; r_ * 1 and (Q VN. t^ OT cc « a a . fe pew nBi eee e Nhw RB beaa 

'•» -i. i .-.. MJndndnaSOetfiiarajAa-tolraQq^rrarabenadMNi 

. rafcd lebrafc^ dRPtto 1IP3i JrauewM87. Ccrawtton tadw 
SaNlNfcrOdBNrlMIttJleatOWItW. 

449 98% ♦« «5ft .93 - 

as «ia _ iMA^j8a 76ft Other 

442MSftN * •1%"-12BQ 101ft - ■= j 
842 ICOftXrift 127% Wlft .. - 
414 75% - 4lft -93% 72ft 
■838' -98% >%1% U7&) «ft s 



0tot8%« 

Hd*O0BfWNrd%O3 

^ 7dyolMfapto8%98 

^+sssassr« 

.. _ 105% . Wcrid ti*8%99 

bMandnioti MtatiBri4ti|97 
V beaa for ^ 
aftHdto 


MOO 101% ttrt% 
3000 90% 87% 

200 10ft M6% 
200 101% 101% 
1000 902 88% 

.ISO «7% 108% 

108 106% 
iso raft raft 

200' 108% W% 
150 MB 108% 
1600 86% 98% 

200 103% 108% 
MOP 99% 99% 

.700 KQ% 103% 
MOO 8ft Oft 
"200 103% «B% 

*8 
9J% 

.1600 106% M5% 

,1800 M8% 10ft 


:■ r ;ZL Zr > -1M 

H— I* HN.MceE+tt- H» t 

:ac- _ wft .11 

ag AWtr ii fTp/ tfcapa^- 427 —.-aft 10 


;*jptk8%2<- 

.Cra* fona»7% D3_ 

QanenMcftM. 

BapfcRaneeft 03 - 
QaAriie 9k Hn 7% <8 . 
■ffiCftOQ 

toft oo. 


.MOO 84 
.2000 flft 
.2000 tt 


84% 

08% 

9ft 

94 


Ht.*aP--?sE,'|2S £ ueflM^etottftOB — aw 90 «% 
■ . - MraraftM 1500 99% 9ft 


’ ■‘■■'■s *£ :>Tt36 , ; .- rt 1 d% '-+% r»% 19ft 
*' '• ^IfrbBfeetadlStcSm- «U8 W -1C*- .ME UH 
. ^ - I486 - 12ft _ WB% .125% 

- ~*%£ zS. S m •* * *"• * 5 - — S ; Si 

: ai mBBa.%8 z 

■ ■ ^ ,-25 JNWtoftdB. - 458 198% . W% 

- 23 ft 9ft SJ 4%eL2» - 488 124% W5% 123% 

- 9ft Z?S NWlWyn* 1X58 - 197% 158% OB 

-*V i • •L'--- • . • 

ittriratow amiheia h peuada ; - 



M8% 

V4 A Tara2%ra 


• •Up'enc*. 


Tcc-bae to nomraldraN eppiettbra E Button bed*- **• W4da«t caoWig 


3*nd7%00 

3000 

My 7% 91 — — . 
U®fladavfe*rtt8%08 

SOOO 

2250 

1500 


imi 

Star 7% 03 

WS3 907 

4000 

3900 


.1800 
.2000 Mft Mft 
.2900 88% 98% 

.1600 96% 97% 

3000 101% Wft 

5000 raft m% 


Oft 
. 91% 

9ft aft 

2600 Mft 104% 


i 

? 

1 

ft 

3 


5 


850 Jra*B Oar Hk 6 89 — . 
878 JapaeOraBiftm . 
758 NppenT«TW8% 80 . 

868 Nomw5%97 

928 SNCF8%Q0 

7.M .%a9i5%02 

753 Saedra 4% 98 

481 VMdBtt4cS%02 _ 
473 

401 OI>d 8T8M0KIB 
753 Ad*J7%B5Lft_ 


. 100000 111 % 112 % 
-50000 Mft 108% 
- 30000 118% lift 
.30000 98% 93% 


.100000 Mft 104% 
.120000 112% 'lift 
-89000 108% Mft 
106 M6% 


-30008 nft 112% 
.125000 107% MB 
.180000 103 103% 

.280000 Mft 106% 


-% 

ft 


ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 


S2B 

S68 


AM 

AM 

308 

428 

451 

400 

442 
256 
336 
425 
462 
871 

443 


ROAUMQ RATE NC7TB8 


Me CLqn 


WbwWflTMiyftOB MOO 

BKaeAaraeOOB 200 

Bri^um&WOM 


ORE -002 98 
EttartaatOflBe. 

Cudt-%99 

CCCE008 Ecu. 


.360 


.160 


Oettl^enalr 4»- 
DannadcftOO. 


-300 

MOO 


DMdwRnmAOOOM MOO 

Fmdri8tttai097 420 

FHndOW MD0 

360 

300 


i8S»V95£. 
hebndOOO 


,2000 


.800 


l Luc ft 89 LA MOO 107 

757 Natl Ba* SHl/r MOO 100 

7J3 BB*VbraMdQrat7%OBH_10QO 100% 


101 

108 

Ml 

Ml 


742 BrapeBrirarftBBH , 

498 «sbHod»»%Na. 
821 MCmdt1ft88C8 — 
7.M MriiCokinbieMSBCS _ 
728 BBIftOBCS. 


.300 100% Mft 
.500 m M2% 
- ISO 101% 102 

.600 101% 101% 
.130 Mft MS 
.275 98% 9ft 
-300 Mft 101% 
.400 Oft 100 
-200 100% 101% 
.MOO 88 8ft 

68S oraras HjOo 10% 90 CS 500 Mft 103% 

748 OMrfarManJr1ft99C8_«D 10ft 101% 

72 Qnriac fewlftSBCS 900 10ft 101% 

483 Bd£mft80&a 1230 Mft Mft 

OMStBaqwSOIBai 1100 101% 105 

CM* LyomfcSBB Ecu 125 ME% Mft 

751 BBM97BN 1W MB% 106% 

738 Fraadd SWM% SB Ecu 800 107 107% 


878 BRrit ferae ft 90 CS. 
833 Ora Bra Cftriri M 06 C8 . 

830 MNWfeMOICB 

750 IWpanTH11d10%8BC8. 
403 OftriDSOSa. 


8A WyKftOO Baj . 


.1000 m% 111% 

.1000 Mft 103% 


749 

723 

757 
738 
425 
417 

1Q22 

922 

929 

888 

949 

10J1 

nor 

1035 

era 

son 

1021 

854 

8.10 

742 

722 

728 

417 

758 
751 

953 


LKB Bedan-Wtwt fe -% 98 — 1000 
UaydiMfep80.10 — _ 800 
i A 06 BSD 


NwZNhnd-%99. 

0nwb099 

ReNOOB. 


.2000 


■ era ran 

!8aN4UE98CM.OOOO 

SWlBkVkklft 00899 125 

SaedraOSB MD0 

Unfed Kingdom -% 96 4000 

CQMSniBLE BONOS 


99.17 

9478 

10415 

9471 

9951 


0K3B 

0041 

0497 

10051 

9487 

9958 
go ip 
10032 
9840 
BUD 
940* 
M2S 
nooe 
993* 
9937 
9929 

9959 

mu 

9478 


9958 

M02B 

9954 

nun 

9920 

9412 

9408 

9951 

19057 

10415 

9496 

MOM 

9474. 

MQ4B 

9480 


9952 

943* 

9481 

9954 

W056 

995* 

10413 

9854 


48000 

85790 

55780 

47300 

43800 

45128 

80100 

80000 

47500 


4*750 

34141 

82500 


40000 

45805 

4.1000 

Men 

3B125 

45128 

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24 


FINANCIAL TIMES TUESDA Y JUNE 28 J994 


COMPANY NEWS: UK 


Cost reductions seen as main engine behind future profits growth 


Seeboard jumps 17% to £132m 


Stagecoach 
in £27.5m 
offer for 


By Dwfd Laacata 
Resources Editor 


A cost cutting drive helped 
Seeboard, the regional electric- 
ity company for the south-east 
of England, Uft pre-tax profits 
for the year to March 31 by 17 
per cent, from £U2L7m to 
E13L7m, on turnover steady at 
£UBbn. 

A proposed final of 8.45p 
raises the total dividend by 
17.5 per emit to ll.75p - the 
largest increase yet -seen in 
the electricity results season. 
Earnings per share were 37.8p 
<31P)- 

This strong showing, com- 
bined with a bullish statement 
from Sir Keith Stuart, chair- 
man, ami a share buy-back pro- 
posal. helped boost the share 
pries by lip to 316p. 

All areas of the business had 
advanced, said Sr Keith. 

The electricity distribution 
business produced a pre-tax 
profit of £101.lm (£91 .9m); 
profit from supply activities 
increased from £13 .3m to 
£lL5m; gas supply, retailing 
and contracting all contributed 
a small profit 

The result was helped by the 
cost-cutting drive launched 
last year. 

The company shed more 
than 900 people and expects to 
reduce numbers by between 
200 and 250 in each of the next 
three years. 

Cost reduction is seen as the 
main engine for profit growth 
in the near future. 

The dividend was “fust right 
for Seeboard” said Sir Keith, 



Sir Keith Stuart (left) and Jim Kilts: planning a share bay-back to use up cash 


and was not a signal that it 
was in a race with other elec- 
tricity companies. 

Despite the dividend 
increase, cover went up from 
3J. to 3.2. Sir Keith said this 
could come down, but the com- 
pany stood by its policy of giv- 
ing shareholders "attractive 
dividend growth”. 

“Anyone invested in See- 
board should assume that 
there are good prospects for 
the future," he said. 

Seeboard will be seeking 
shareholders' approval to buy 
back up to 10 per cent of its 
shares. 

Mr Jim Ellis, rihfaf executive, 
said this represented the best 
use of shareholders’ money. 


Although Seeboard was 
looking for expansion opportu- 
nities, it intended to take a 
cautious approach. 

The review of distribution 
prices now being undertaken 
by Prof Stephen Littlechfld, the 
industry regulator, would lead 
to tougher price controls, said 
Sr Keith. 

Seeboard had asked him to 
take account of the cost 
savings that electricity 
companies W already 
when setting their price 

fnrmntas 


Seeboard is beginning to reap 
the of the cost 

exercise it launched last year. 


Norweb rises to £178m and looks 
to expansion in non-core activities 


By MM— I Smith 


Norweb, the Manchester-based regional 
electricity company, said it expected a 
fifth of profits to come from unregulated 
businesses by 1996 as it reported 199344 
pre-tax profits of £l7&3m, again s t £l57.lm. 

The company increased the foil year div- 
idend by IS per cent and said its target of 
achieving real dividend growth of 6 to 8 
per cent annually until the end of the 
decade remained in place. 

Mr Ken Harvey, chairman , also said he 
expected dividend cover to go up from the 
13 times of Z9SS44. This is already among 
the highest for any of the recs. 

The 2&5 per cent profits increase in the 
year to March 31 was achieved on turn- 
over of £1.47hn (£L41bn). Provisions for 
restructuring were increased by about 
£4m. Job numbers foil fro m 7,586 to 7,727 
during the year. 

Earnings per share were 76p (64.6p) and 
the final proposed dividend of 16Jp makes 
23p (20p) for the year. 

Explaining the company’s non-core 


strategy Mr Harvey said the current 
review of distribution by the regulator 
meant that price controls were going to be 
tougher after next April. “We are not 
going to get the growth from distribution 
that we have had for the last four years." 

Mr Harvey expected the generation 
schemes at Gordons ville, in the US, 
Eeadhy and Boosecote to contribute more 
than £20m operating profits by the end of 
the dffraiki arid retailing to provide about 
£15m. 

He added that following a 1J3 per cent 
reduction in July 1993 and a further 6 per 
cent cut in April domestic customers now 
had the lowest prices in England and 
Wales. 

Mr Brian Wilson, finance director, said 
the company had net cash of £30m at the 
year gnri, after taking £LS3m of govern- 
ment debt into account 


Following East Midlands’ decision to wind 
down same of its post-priva ti sation acqui- 
sitions, Norweb has assumed the mantle of 


the most adventurous regional power com- 
pany. Through its Gordonsville acqutsttiou 
it is one of first to move abroad in a 
serious way, and the balance sheet pro- 
vides ample scope far more forays either 
overseas or into generation. The company 
is also Increasing its exposure to folly 
co mp et i tive markets by building a tele- 
communications bus ine ss and expan d ing 
in gas sales and appliance r etailing . The 
results showed that the stores business 
was moving ahtwd, increasing profits from 
£8m to £7 Jim - but with turnover up by 34 
per cent so it should be. Norweb has tradi- 
tionally been one of the beat retailers 
among the recs but competition with the 
likes of Dixons and Comet moans even 
they are finding the going tough. A solid 
performance in distrib uti on, where pro fi ts 
rose 8 per emit, and supply, up 19 per cent, 
has helped Norweb ’s shares to a &5 per 
cent prospective yield assuming £4 per 
cent dividend growth this year. That 
makes it one of the hi ghes t rated compa- 
nies - not bad for a company, with Nor- 
web’s ambitions. 


French group may take 
over Ferranti division 


Cortecs International 
shares to begin trading 


By Paul Taylor 


Thomson CSF, the French 
defen ce electronics group, has 
agreed in principal to acquire 
Ferranti's industrial systems 
division from the administra- 
tive receivers, Mr John Talbot 
and Mr Murdoch McKiUop of 
Arthur Andersen. 

Ferranti went Into receiver- 
ship in December after GEC 
withdrew a lp a share rescue 
offer for the company follow- 
ing its due diligence in qnirfoa 

Yesterday’s agreement, 
which Is subject to contract, 
covers price - which was not 
disclosed - and other “critical 
factors''. 

Negotiations to finalise the 
sale are expected to be com- 
pleted next month. 


Ferranti's industrial systems 
division, which manufactures 
process controls, has 
operations at Wythenshawe, 
Greater Manchester, and Dalk- 
eith and Aberdeen in Scotland. 

GEC acquired Ferranti's 
main UK defence businesses, 
which indude Ferranti defence 
systems integration and Fer- 
ranti simulation and training, 
from the administrative receiv- 
ers last month. 

Negotiations covering the 
sale of Ferranti’s remaining 
civil and communications busi- 
nesses are expected, to be com- 
pleted next month. 

After that the receivers will 
re-open negotiations covering 
Ferranti's components manu- 
facturing plant at Cairo Mill in 
Oldham. 


By David Wiflhton 


Cortecs International, the 
Australian registered biotech- 
nology company whose 
operations are based in the UK, 
will see its shares start trading 
in Lo ndon today after raising 
£ 10 .6m through an interna- 
tional share placing. 

The company announced 
plans for a placing with UK 
institutions in March, but was 
caught by the downturn in the 
new issues market It cut the 
offer pice by about 15 per cent 
and widened the net to include 
international investors, who 
have taken up some 70 per cent 
of the new shares. The placing 
was handled by West Merchant 
Bank and Henry Cooke Corpo- 
rate finance. 


Mr (Hen Travels, chairman, 
blamed the weak response on 
general market conditions 
rather than any problems with 
the biotechnology sector in 
particular. “We bad a good 
feedback from institutions, 
who Uked the fact that we had 
current products generating 
cashflow to help fund our 
research programme." - 

Last week Cortecs launched 
a cheep and fast-acting diag- 
nostic kit in the UK far the 
detection of Helicobacter 
pylori, the bacterium now 
acknowledged to be a common 
cause of peptic ulcers. 

Cortecs Incurred a loss of 
AHOftm (25m) in 1993 cm turn- 
over of AglL6m after research 
and development spending of 
A$7.02m. 


INTERMARKETFUND 

SocMU dTovestfasemeot d Capital Variable 
Sfige Social: Luxembourg, 2, boulevard Royal 
R.G. Luxembourg B-8622 

Messieurs les actionxudrcs sont priCs d’assistcr a 

1/ ASSEMBLES GENERALS ORDINAIRE 


S ui se tiendra ie 8 juilfet 1994 ft 12.00 beures en rWkel de la 
ianque Internationale ft Luxembourg, 69, mute cTEsch, 
Luxembourg pour d£Ubeirr sur kr suivauc 


ORDRE DU JOUR 


Rapports du Conscil d’ Administration et du RCviseur 

d’Entreoriscs- 


d’Entrepriscs; 

2) Approbation de I’dtat des actifs nets et <fe t'dtac des 
an 31 man 1994; affectation du rfeuttat; 

3) D&faargc ft donner aux Administrateurs; 

4) Nominations Statutaires; 

5) Divas. 


Aucun quorum u'est requis pour les points ft I’ordre du jour de 
1’asscmbhSe gdnCrale annueue et les decisions scront prises & la 
majonte des actions presences ou rcpnisentdes ft I’asscmbtfie. 

Four etre admis & I’asserofalfe, les proprietaries (Factious au 
nxteur son pnes de deposer leura actions ctnq jours francs avanc 
I asscmblfie aux ' guicnets dc la Banque Internationale & 
Luxembourg, 2, boulevard Royal, Luxembourg ou auprfes de la, 
Banque Arabc ct iiuetnaiionaie d’lnvestisseiueni. 12, Place 
VendOrac, 75001 Paris. 


Le Conseil <f Administration 


INTERMARKET MULTICXJRRJ3SCY FUND 
SodfM d’lnvestfasement i Capital Variable 
Sttge Social: Luxembourg, 2, boulevard Royal 
R.C. Luxembourg B-40487 

Messieurs les acdonnaiies sont prids d’assister ft 

L’ ASSEMBLES GENERATE ORDINAIRE 
qui se tiendra le 8 juiliet 1994 ft. 13.00 beures en 1’hOtel de la 


Luxembourg pour d6lib6rer sur le suivant 
ORDRE DU JOUR 

1) Rappotts du Conseil d’ Administration et du Rdviseur 


2) Approbation de l’Ctat des actifo nets et de l'6tat des 
operations au 3 1 mars 1993; affectation du idsuhaL 

3) Ddcbarge ft donner aux Admiit&mCoirs; 

4) Nominations Statutaires; 

5) Divers. 

Aucun quorum n’est requis pour lea points ft l'onlre du jour de 
J’assembtte g6o6ra to animelle et les dttisians seronr prises ft 
la majority des actions prfisentes ou reprftsenifes ft 1'assemblde. 

Four Stic adrois ft FassembKe, les pronridtaires d'actions au 
porteur soot prifis de dSposer lews actions cinq jours francs 
avant I’assemblfc aux guicbcis dc la Banque Internationale ft 
Luxembourg, 2, boulevard Royal. Luxembourg ou auprte de 
la Banque Arabe et Internationale d’lnvestissement, 12, Place 
Venddmc, 75001 Paris. 

Le Conseti d’ Administration 


ThMMMlri Bwl hiktntaalMlIW 


Market-Eye 


London 


Signal 


O iso*- actons sppfcaUro O 
Q 'RT DATA FROM S10 A 04Y O 
O Sisal SOFTWARE GUTOE O 
Cal tendons 44+ ft 71 231 36B« 
toryewgtida and Sfrel price Iil 


Robert Fleming ahead 
sharply to £209.9m 


Busways 


By Norm Cohan, . 
bi vestments Cotroapondant 


By Chris Tlghe 


and file share buy-back la one 
of the ideas it has for using the 
proceeds. But in the longer 
term, Seeboard will have to 
find more conventional ways of 
expanding the business If it 
does not want to end np bulg- 
ing with ftaah Thu distribution, 
price review will determine 

more precisely how much cash 

Seeboard will have, but the 
company is e n on g fr to 

handle a regulatory tightening. 
Meanwhile, the chairman’s 
statement that It will not rush 

tntn “nudem v enture d is reas- 

surtng. Assuming 16 per cent 
dividend growth this year, the 
Shares are on a yield of 5.4 per 
cent, which is one of the stron- 
gest in the sector. 


Stagecoach, the Perth-based 
bus group, has made a recom- 
mended share offer for Boa- 
ways, the main urban baa 
company in Tyne and Wear. 

The deal, which would he 
Stagecoach's biggest acquisi- 
tion since its flotation in April 
1998, values Bnswoys at 
£27 Jm, to be met by the issue 
of new Stagecoach shares with 
a cash alter na tive and a loan 
note election. 

Busways, bought from the 
Tyne and Wear Passenger 
Transport Authority by its 
management and employees tn 
1989 for £14.-&n, operates more 
than 600 bases and has a 
workforce of 1,730. 

In the year to March 81 it 
made a pre-tax profit of £&Am 
an turnover of £4L3m. 

Both companies described 
the proposed acquisition as a 
“win win” deeL Mr Brian Stou- 
ter, Stagecoach chairman, said 
he did not expect any referral 
to the Office of Fair Trading 
since fate group (fid not cur- 
rently have any presence in 
Tyne and Wear. 

If the acquisition of Bus- 
ways and of Weston Scottish, 
an n ounc ed earlier fids month, 
go through. Stagecoach wBl 
have a £28Sm animal turn- 
over, 5J00 buses and 16,000 
staff. 

It is offering 246 new Stage- 
coach shares for every 100 
Busways. Irrevocable under- 
takings have been received 
I from shareholders, including 
directors and management, in 
| respect of 51 per cent of Bos- 
. ways' share capital. 

I Busways* employees hold 
the remaining 49 per cent The 
; offer is conditional on valid 
accept an ces bring received in 
respect of not less than 75 par 
cent of Busways shares by 
July 21. 

Hpramo txf ttS the 
requires the backing of a 
Stagecoach EGM. Mr Souter 
expects approvaL 

Accepting Busways share- 
holders can opt for cash, at an 
aggreg a te of 18 & 4 > par share; 
employees’ pay-outs would be 
worth between £4,500 and 
£13^S00. Noble Grossart has 
conditionally, a g r eed to pur- 
chase or procure purchasers 
for the new shares in respect 
of which elections are made 
for the cash alternative. 

To fond the 24.51m loon 
note commitments already 
known and meet the expen se s 
of the offer, &36m Stagecoach 
shares are being placed at 
173p apiece. This placing, 
underwritten by Noble Gros- 
sart, will be issued whether or 
not the offer proceeds and will 
raise £&8m before expenses. 


Robert Fleming Holdings 
almost doubled pre-tax profits 
in the year anried March 31, 
from £106.4m to £209.9m. 

Administrative expenses also 
rose sharply to £259.6m 
(£19ft.ftn), “almost an of which 
refracts a rise tn performance- 
related bonuses to staff" said 
Mr John Manser, chief execu- 
tive. - ; . 

Mr Manser said that all parts 
of file group contributed to the 
profits rise, although east 
Asian tolling profits ttn| j com- 
missions were a significant 
part of that “A big factor was 
profits from securities, on. the 
equities side, particularly in 
the Far East," he explained. 

Overall, fee and commission 
income rose strongly to 
£273. lm (£224L3m), while net 
toiftiy hyvwnw nearly d o n fai^d 
from £40.4m to £77 Am. 

Mr Bm Harrison, chief exec- 
utive of the investment hank- 


ing division, said the group 
was beginning to see results 
from its efforts to achieve 
treater integration of banking, 
securities underwriting and 
distribution and research. 

It was the lead underwriter 
of Euro-convertible issues In 
the past year and -had won 
mandates on several key corpo- 
rate finance deals, including 

acting as adviser to Enterprise 
Oil in its bid for Lasmo, he 
added. 

In Fleming’s investment 
management activities, world- 
wide funds under management 
increased by about 50 per cent 
to £49£hn (£33.4bn). 

Some £7bn of the inc rease 
represents net new cash, with 
the remainder provided by 
investment returns from buoy- 
ant stock and bond markets 

worldwide. 

The company continued to 
lose clients In its traditional 
UK. pension fund business, 
although its international and 
retail client base grew 


strongly. “It is an area where 
we were one of the leaders and 
now clearly we are not” Mr 
Manser said. 

Fleming has recently 
recruited a new . head for its 
a sse t management activities in 
an effort to improve perfor- 
mance. 

Looking ahead, Mr Manser 
identified two key growth 
areas; the activities of J srdJne 
Fleming, its 50 per emit owned 
east Asian joint venture, and a 
further expansion of its conti- 
nental European investment 
Ha lilting activities. 

Also later this year, Fleming 
will open its first offices in 
L atin America and intends to 
Launch a broking service based 
in New York, which will sped- 
alise in the distribution of 
research on Latin American 
companies. 

Earnings per share jumped 
to 299 jp (l-l9.6p) and the group 
announced an increase in divi- 
dends for the year from 38p to 
50p - a rise of 32 per cent. 


Judicial review of Emap’s 
£71m bid for Trans World 


By Davkl Wlghton 


Emap's £7lm bid for Trans 
World C ommuni cations, the 
local radio group, is to be the 
subject of a judicial review 
after a successful application 
by Guardian Mwfiy 

Guardian Media, which owns 
20 per cent of Trans World, and 
the company's management 
have questioned the legality 
of a scheme devised by 
Emap to get. round the limits 
on the ownership of radio 
licences. 

The scheme, which involves 


Emap transferring two of its 
existing licences into a joint 
venture with Schroders, the 
merchant bank, has been 
ap p ro v ed by the Radio Author- 
ity- 

At a hearing yesterday Mr 
Justice Latham gave Guardian 
Media leave for a judicial 
review of fids approval. 

He ordered an urgent hear- 
ing as soon as possible after 
July 18 . it is thought a date at 
the end of the month is most 
likely. 

Emap must post offer 
documents to Trans World 


shareholders by July 20. 

Emap, which owns 29 per 
cent of Trans World, launched 
a full bid of l8lp a share last 
week after agreeing to buy the 
22 per cent stake held by Mr 
Owen Oyston. 

The Trans World hoard 
declined to recommend the 
offer on the grounds that Emap 
was offering an insufficient 
premium for the shares and 
that the legal standing of its 
ownership scheme was uncer- 
taln. 

Trans World shares fell 3p to 
170p. 


Budgie provides lift as Lower ™Jf rest 
Sleepy Kids hits £0.26m S“cut il 


By Caroline Southey 


Pretax profits at Sleepy Kids, 
the children's animation and 
merchandising company, 
soared from £3,000 to £263,000 
at fiie interim stage, on the 
back of cantone d detmrod for 
Budgie file little Helicopter. 

However, the share price fell 
12p to 69p yesterday after rnn- 
nfawqp ahead of figures. 

Turnover rose from £127,000 
to £ 621,000 in the half year to 
April 80. The company contin- 
ued Its mMfividend policy, in 
place since it- gained its USM 
quotation in 1990, although Mr 
Martin Powell, chairman, said 


Zeneca signs $100m 
Chinese venture deal 


By Tony Walker in B«pg 


Zeneca, the agrochemicals and 
pharmaceuticals group, is to 
invest $100m (£B5.7m) in 
China in the next five years 
after sign i n g two framework 
agreements with government 
orgaobationa 

These included a memoran- 
dum of understanding with 
the Chinese government cover- 
ing file company's involve- 
ment tn agrochemicals produc- 
tion and a Joint venture 
coasultency contract wtth Sin- 
o-Pbarm, the foreign trade cor- 
poration of the State Pharma- 
ceutical Corporation of China. 

Mr David Barnes, Zeneca’s 
chief executive, said in Beijing 


that the group was dose to 
finalising arrangements with a 
joint venture partner to build 
a S 80 m plant predating para- 
quat, the active ingredient in 
its Granmxone herbicide. 

The pUnt, in which Zeneca 
would have at least a 75 per 
cent stake, would be located in 
the Yangtze River Delta near 

Shanghai. 

Capacity would be 15m hires 
of paraquat annually. 

Zeneca, which was floated tn 
London and New York in June 
last year following its demer- 
ger from ICL plans to use its 
Yangtze Delta plant as a base 
for developing the market for 
its agrochemicals products 
throughout Cfcina. 


it would recommend a pay- 
ment once “a trading pattern 
becomes more firmly estab- 
lished”. 

Earnings per share rose to 
OSTp (O.Olp). 

The company, which owns 
the worldwide rights to ani- 
mate iwayliandis** Budgie, 
a character launched in four 
books written by the Duchess 
of York, has also won a farther 
17 merchandise licensing 
agreements bringing the total 
to 58 - 36 of which are held by 
UK companies. 

Mr Powell said a second ani- 
mation series based on the 
character had been commis- 
sioned by T TV Network Centre 
and was due to be- broadcast 
early next year. Cost of produc- 
tion would be in the region of 
Elm, of which Sleepy Kids 
would provide £780, 000. 

The first series was launched 
an ITV in early January and Is , 
due to he broadcast in Austra- 1 
lia, France and Sooth Africa 
later fins year. I 


By JyoU Jeetun 


Lister, a textile maker with 
interests In engineering and 
Insurance broking, sharply 
reduced pre-tax losses In the 
year to March 26, from £2£m 
to £851,000. 

The Improvement was 
helped by an absence of 
restructuring costs, compared 
with a charge of £L10m, and a 
redaction in interest charges 
to £491,000 (£894,000). Losses 
per share were 5JS6p (17.B9pk 
there is an unchanged divi- 
dend of O.lp. 

The group, which has been 
in tiie red for five successive 
years, said improved efficiency 
and pradnet repositioning 
helped It reduce operating 
losses to £480,000 011.16m). 
Textiles incurred a loss of 
£285,000 (£926,000), engineer- 
ing suffered from weak 
demand and lost £168,000 
(£242,000), while Insurance 
broking reported profits of 
£23,000 (£5,000). 


DIVIDENDS ANNOUNCED 


CtayMtM fin 

Ffemlns Inc/Cap —Jr* 
Ftotnfag (Robert) fin 


SoundteMs! 


Current 

payment 

Dote of 
payment 

Garres - 
ponding 
dividend 

Total 

ter 

year 

Total 

test 

1.1T 

July 28 

1 

. 

9 

2 JS 

July 25 

- 

a7 

- 

1.875 

Sept 5 

1.75 

2.625 

2 3 

1* 

Aug 1 . 

1 

- 

: 49 

35 

Jury 28 

28 

SO 

38 

0.75 

Oct 3 

0.75 

1-26 

125 

4.35 

Aug 12 

4 

. 7.1 

as 

0.1 

Oct 28 

0.1 

0.1 

ai 

iaa 

Oct 3 

14.1 

23 

20 

a45 

Aug 16 

7.15* 

11.75 

ur 

0.92 

Sept 23 

092 


24 


DMdands shown pence per sfta-o net except wfwre otherwteo stated, ton 
horesaed capttaL *Squlvalent after allowing far scrip issue. §USM static 
jfFor first quarter; 



. Sumtsho Lmm 
. Co., Lid. 
US88QJKXMXM 
Guaranteed Hosting Rata 


Nodce h hereby given that, bi 
accordance with the provisions 
o( the above menfioned Fkrating 
Rate Notes, the rate of interest 
lor the six months period (ram 
June 28. 1994 to December 28, 
1994 has been fixed at 530% 
per annum. 

The Interest payable an 
December 28, 1994 wU be 
US *3,47043 In respect of 
each US*5(XUX» Note. 

Agamtenk ™ 



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FINANCIAL TIMES TUESDAY JUNE 28 1994 


25 


COMPANY NEWS: UK 


Exceptional gain helps 
Hogg Robinson to £21m 


ty Michael Skapfaikar, Leisure 
Industries Correspondent 

Hogg Robinson, the travel, 
transport and financial ser- 
vices group; announced annual 
pre-tax profits tip from £]&3m 

of £2L5m, including a £7J25m 

net gain from the sale of the 
holiday business to Airtours 
last year. 

The group benefited from an 
upsurge in business travel, 
with operating profits for the 
year to March. 31 more than 
doubled to £4JS8m, compared 
with £LQ4m. 

Profits -from transport, how- 
ever, ware down fay 2 1 per rant 
from £6.Q4m to £4.76m. Mr 
Brian Perry,' chairman, said 
the - international trailer, 
haulage and logistics busi- 
nesses had done wan, despite 
the recession in Germany 
and other continental coun- 


economie6 0f scale, Mr Perry 
said. 

He hoped to move this part 
of file business out of loss but 
said it would never make large 
profits. New Tn»mg had 

' been installed. He added that 
although the business was not 
on the market; he would con- 
sider offers. 

The third part of the trans- 
port business, Qm stripping ser- 
vice to the Falkland Mauds, 


per cent to <L35p, bringing the 
total for the year to 7.1p, 
against 6J8p- 


It was insufficient, however, 

to offset weaknesses in HR 

Embassy, the UK-based general 
freight forwarding arm, which 
suffered from not being suffi- 
ciently large to benefit from 


in cargo movements to the 
south Atlantic. 

Financial services saw prof- 
its rise from £534m to £&65m. 
Mr Perry said this side of the 
business had strengthened in 
the second half of the year, as 
co mpanies reco v ering from the 
recession increasingly pur- 
chased advice on pensions and 
employee benefits. 

Group turnover was down at 
£15&8m (£172. 7m) including 
£9.48m (£30 An) from discontin- 
ued activities and £L4m from 
acquisitions. 

Earnings per share were 
2&4Bp (14p): The proposed final 
dividend is increased by 8.75 


Hogg Robinson is not helped 
by the widely-held perception 
that it is still a holiday com- 
pany. Tn. fact, this port of file 
b usine ss has since been 
renamed Going Places by its 
new owners, Airtours. Nor is it 
aided by its corporate perver- 
sity in managing- to TUB. & 

trans po rt business which does 
well in recession-hit Germany 
and badly tn the recovering 
UK. While file business of car- 
rying goods to the Falkland 
TaTatida is improving, it is diffi- 
cult to see Its prospects are 
particularly exciting. The 
profit increase hi financial ser- 
vices is less than impressive in 
a recovering US corporate sec- 
tor and the group will have to 
demonstrate tf u* th« improve- 
ment in tha S ftyirmfl half Jg nw . 

Thfl'anly unamhfgu- 
ons good news is in business 
travel, where the UK uptu rn 
fra * shown th r o ug h, in buoyant 
profit figures. 


Improved margins 
lift Business Post 


ByAfldmrBolgar 

Improved.' margins in the 
second half helped Business 
Post Group, the parcel and 
e xpr ess mail company which 
cameto.the market last Jnly, 
raise annnal pre-tax profits by 
28 per cant to £5-3m- 
Sales for the year to Mareh 
32 rose by 24 per cent to 
£€L8m white operating profits 
advanced 11 per cent to «An. 

The shares, which came to 
the market at 120p, - fell 
sharply after the group last 
November repor t ed a decline 
in first half margins. 

They dosed 2p higher yes- 
terday at 102p. 

Mr Peter Kane, chairman, 
said the group had continued - 
to win business from Us com- 
petitors and saw a 20 per edit 


increase in operating profits tn 
the second halt 
. “The 'improvement to mar- 
gins in the second half has 
continued into the first two 
mouths of the current year 
and 1 am confident that we 
shaft make farther progress as 
the business develops," he 
added. ■ 

The group bad suspended 
development of UK Mail, its 
door-to-door hand-delivery 
business, in recognition of the 
time !t would take for the gov- 
ernment to ftnaHse plans for 
privatisation of tie Post 
Office, 

.Raidings per share rose by 6 
per edit to 7J5p (7Jp). 

A proposed final dividend of 
2.7p makes a 3.7p (iflp) total 
for Jhfr:year, a rise of 28 per 


Trade Indemnity losses 
will not exceed £ 6 m 


By Richard tapper 

Trade Indemnity, the trade 
credit Insurance company, 
expects to report -net losses of 
no more than Efim, as a result 
of last week’s appeal court 
judgment which ruled victims 
of poor financial advice were 
entitled to more compensation. 

The court rated on Friday 
(hat the Investors Compensa- 
tion Scheme was wrong in 
using its discretion to limit 
compensation to investors in 
home income plans. 


TradOjIndemnity insured the 
^ scheme’s HaMUHan in this mat- 
-^■ter (m ajjoitey underwritten in 
April 1990. Qs “Special Under- 
writtngUnit", which wrote the 
policy, stopped writing new 
business in November 1992 and 
the policy expired at the end of 
March 1992. 

- Gross losses, taking Into 
account reinsurance recov- 
eries, are expected to amount 
to £20m. An additional provi- 
sion Of up to £6m will be 
charged to the 1991 profit and 
teas account. 


NEWS IN BRIEF 


ANGLO ST JAMES, 
commercial property devel- 
oper; pre-tax profit £21,000 
(£943,000 loss) for 1993. EaiUr 
togs per share O.Olp (5-8p 
losses). No dividend (same). 
BALDWIN lias completed the 
disposal of Leading Guides to 
the Ric bheU Group for £314,000 
ra sh Leading Guides publishes 
a range of hotel, restaurant 
and pub prides. 

BUtKBY has acquired the 
entire share capital of In 
Shops, iwtning a total of 21.8m. 
shares and increasing its 
shares in issue to 43.7m. 
BLAGDEN INDUSTRIES: 
Rights issue has been accepted 


tn respect of 2&2m shares or 
97.3 per cent of the offer. 
CELTIC GOLD, the mineral 
and exploration company, is 
offering I£l&fim (£L3-2m) for 
Coyle Hamilton Group, the 
hvmrannft broker, satisfied by 
pash and the hnlanne 
in shares which would give 
Coyte holders about 73 per cart 
af the enlarged cap tt aL 
EASLSTSCRSm the central 
London-based pathology labo- 
ratory company, has acquired 
Raveuscourt Laboratories, the 
west London wholly indepen- 
dent clinical trials specialist, 
from the Royal Masonic Hospi- 
tal ■ 


Monarch strong 
as La Camorra 
gold is poured 

By Kenneth Qoodkig, ‘ 

Mining Cofropundent 

Mr hfichael liriwb, dmi ni m n 
of Monarch Resources, told the 
annual meeting that the com- 
pany wag in a strong financial 
position to fUfil its five-year 
strategy following the start-up 
of file La Camorra urine and 
the raising of 828m (EL 6. 4m). 

The c omp a ny has gtrid min- 
ing and exploration operattens 
In Venezuela hot is Hated in 
London. Following the cash 
raising it Is also traded on the 
Toronto Stock Excha ng e. 

Mr Beckett repeated that the 
first gold was ponied at the I* 
Camorra mine in Venezuela on 
Friday following a two year 
|25m development pro- 
gramme. The mine, which has 
400,400 troy ounces of gold 
re s er ve s , is budgeted to pro- 
duce an annul 81,000 ounces 
at an average cash cost of less 

than pM an irtimra. 

The troublesome Revonln 
plant reported record prodoc- 
tten and profits in the first 
half. Its ability to continue 
fids depended on being able to 
Identify new sources of 
high-grade hairi-rock or sands. 


Taking a position in the market 

Unshackled from B&C, Exco is set to regain its listing, reports Simon Davies 


Chez Gerard 
completes 
Scotts buy 

By David fitackwafl 

Groupe Chez Girard, the 
restaurant company , yesterday 
completed its first acquisition 
since flotation last March, pay- 
ing £380,000 for Scotts Restau- 
rant in Mayfair. 

Scotts, which specialises in 
sheftfish and seafood, has Just 
undo- 200 coven across 7,500 
s q ft, mak ing it the biggest 
restaurant in the group. 

Mr NevIBe Abraham, chair- 
man, said the purchase was to 
Hue with fits group’s declared 
strategy of investing in restan- 
rants in central London. 

R would be funded from the 
£3m raised by the notation for 
acquisitions. Mr Abraham 
added that the group was 
looking for further expansion. 

The flotation at lUMp gave 
the group a market capttaHsar 
tion of £21m. ‘ 

The shares closed down 3p 
yesterday at 98p. 


M oneybroking is an 
industry , the profit- 
ability of which 
seems to ran in inverse propor- 
tion to its respectability. 

It is the business which 
bankrolled British A Common- 
wealth, tha fmawfffal . mwgtem- 
erate. on the ambitious path, 
that ended in receivership, and 
which has onderwri£tea Lard 
Haflick’s high profile-push totn 
tetevirioaL through, mm - 
Vet, moneybrokeys , have 
tended to be the hUdm source 
af vast cash 0ows,r«fifer than 
H yp public locus' of the'hrilding 
companies which erwnthem. 

Moueybrokers act,*aa inter- 
mertl arias - primari^Kbetweai 
t he iwnfai — in the of 

international and’ ..domestic 
deposits, derivative; products, 
and foreign exchange, the 
world's laziest traded /nazket 
The operators have also tended 
to build up fixed intrinst secu- 
rities businesses. ■ 'p. 

The brokers write bBBons of 
dollars of transactiong^aPy. in 
frantic trading nwnM - dwnimii 
with screens and nricrpphones, 
yet business risk is limited to 
chart default, or mismatches. 
The companies do not take 
bouse positions in themarkets. 

The industry's reputation 
can be explained ip pari; by the 
image of excess held . by the 
foreign exchange trader, and 
staff costs are certatoly high, 
Exco, which is -being floated 
this .week by the administra- 
tors of British & Common- 
wealth, paid £l09m in staff 
costs last year, or an average 
of £S5^M0 per head. 

In addition, listed money- 
broking businesses have bad a 
somewhat chequered history. 

However, the impending flo- 
tation of fam is undariiniDg 
the fact that the big players 
within the industry have not 
only survived the recession 
unscarred, but are seeing an 
explosion of profits. 

There are four large broadly- 
based global players in money- 
broking, MAI, Exco, Marshalls 
and Tnftett A Tokyo, and then 


Clayhithe 
recovers 
to £ 1 . 06 m 

Despite a £L2m provision to 
cover projected costs of 
restructuring, Clayhithe, the 
ffaMqyy and management pro- 
vider, returned to profits with 
£L06m pre-tax for the year 
ended Minch SL, against losses 

of £366,000. . 

The provision, far engineer- 
ing activities at Aylesbury, 
Bucks, compared with S500JOOO 
last time. Turnover eased 
sEgfrily to £355m (£3&9m) with 
continuing operations contrir 
bating £2&3m <£27Bm). 

- Lames per share woe O&p 
(4.4p) basic; folly dftnted, earn- 
ings improved from 0^p to 
1.6p. A final (flvidfiaid eg L875p 
lifts the total from 2L5p to 


At the year end there were ; 
net cash- balances of ' 

which have since increased to 


BUSINESS 


W oridwide. the market far over- the -counter 
drags it experiencing dramatic growth. In 
Europe akme, sales are predicted Lo increaae 'by 
more than 44% 1992 • 1997, to SIOJ btflkm. Even 
in the US - an established market - reriaO sales grew . 
by more than 8% in i 993. ' 

Profitable badness opportnnities are developing 
rapidly far pharmaceutical manufacturers, medical 
packagers, retail chemists, advertising, marketing 
and FR agmeim - attracting the in terest .of 
personal and institutional investors, analysts, 
government offices. lyw Wh iosozance conqwna,. 
CPs and professional org at risa firm s.. * - 


I \v.'iHi.i! .mU tinu'l> iEHL-lli'-itfiiCi.’ ><r. 
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Stay ahead of the co m petit i on with OTC] 

Newa and keep informed of key developments in 
this fast growing field - as (hey happen. With 
regular updates otc 

. New Product pmriopmeat . 

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•Company News 

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. The AdvatiBin&and.Markrlii^ChaDe^ 

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Knandal T^mes Newrieueo. 'Tif./.J 
PO Box 365L Londoq,SW12 8FKU s 
Td; +44 (0)81 €736666 
Fax: (0)81' 673 1335 * ; 4 ’ 


Soundtracs shows 
22% Interim rise 

i. . 

Encouraging ecpncanic activity 
in. toe UB helped Soundtracs, 
the USM^uoted maker of 
audio equipment, to increase 
first haffiafes.by 29 per cent to 
ftg.Mtm resuttme in. ore-tax 
profits upi22 per cent, from 
SSBUOOOto^mfiOO. 

• Mr Todri dwells, chairman, 
said that growth had been 
-sustained-, spite of flat 
sates in central Europe and 

^ \ 


an enfitmous number of com- 
pany's fnciislng on rrlrilm mini . 

kets. 

According to Mr Ron San- 
dler, chief executive of Expo: 
“The Mg are getting bigger, 
and tiie «nyn are either get- 
ting increasingly specialised, 
or just smaller.” 

The victims within the 
industry have generally 
involved of breadth, disas- 
trous diversification, or parent 
age problems. 

Probon Yamane was a core 
part of York Trust (renamed 
Babcock Prebon), which wort 
into receivership in 1991, 
although money broking was 
not the focus of its probletns. 

Exco and Mm-cTmUg tp fl fay, 
butent ownership histories, but 
they both remained pr nf i in Mp* 
The most recent addition to 
the listed sector, Trio, has not 
rewarded subscribers to its flo- 
tation, hut it te a wm«TW busi- 
ness, with a heavy concentre- 
tion an doUar/D-Mark foreign 
exchange trading. 

Mr Charles Cfregson, IfATs 
deputy group managing direc- 
tor, said: “In a niche business, 
it is possible to set up In a 
garret with a few telephones 
and deal successfully, but to 
broaden, the business requires 
a substantial- investment in 
information technology and 
people.” Both MAI and Exco 
spend some £8m a year on IT, 
which creates a considerable 
harrier to tvmipgHtian 
. For the global players, the 
market has been far steadier. 
“The historic record speaks for 
itself. With toe exception c£ a 
crash year in 1987, profits have 
grown every year in the last 
20,” said M r Gregsag, af MAPs 
T pqOT— ylirtVkliig business. 

The broader range of activi- 
ties ensures a larger customer 
base fin: toe global businesses, 
given the growing inter-depen- 
dence of money market prod- 
ucts. 

But ironing out the (Teles is 
a important inducement to 
going globaL For example, 
Exco's strung position in toe 


disappointing results in Japan. 

The result, for the six 
mraiths to April 90, inriuded a 
miridqn fall contribution from 
Spender loudspeakers. Earu- 
. mgs .per share .were up 23 per 
cent to 2.05p (1.67p) and an 
unchanged Interim dividend of 
QJ92p is declared. 

Hewetson improves 
In second hitf 

A recovery in the normally 
more difficult second half 
enabled Hewetson, the flooring 
and building materials com- 
pany, to limit toe fall in annual 
profits to 19 per cent 

The company added that the 
present year had started better 
with sales at higher levels and 
larger forward order books. 

On turnover up from £2&6m 
to £3L2m, including £L58m 
from an acquisition, pre-tax 
profits were £407,000 (£508,000). 
Earnings per share were OS8p 
(L36p), but . an unchanged ftna] 
dividend bf 0.75p is recom- 
mended for a maintained total 
of L25p. 

Hewetson" said the results 
reflected difficult trading con- 
ditions ‘during the early part of 
the year. It said a larger profit 
was mada hi. the second half 
than in the first and had been 
a “significant improvement” 
on the corresponding period. 

Volex targets 
Singapore subsidiary 

Voter Group, the restructured 
etectzfoMintercaoziectkmprod' 
nets and cable assemblies com- 
pany, proposes to increase its 



TtanrMiovMw 

Increa se d volumes have more than made up fin toe logs of market share to direct trading by banks 


Asian markets was affected by 
a slump in tb*» Japanese bank- 
. mg sector, but this has been 
more than replaced by surging 
securities trading in the US. 
Japan is now recovering, white 
the securities markets may suf- 
fer a downturn. 

T he build up of capital 
adequacy regulations 
weakened the market 
for wwii deposits, but rtifa has 
been countohalanced by activ- 
ity in off-balance sheet prod- 
ucts, such as forward rate 


• On the foreign exchange 
side, competition remains 
H g ht ) and brokers have hasp 
losing market share to direct 
trading between the hanks, 
and also, to a lesser extent, to 
the three automated trading 
systems. 

The last detailed survey by 
the Bank for International Set- 
tlements, published in Mwtji 
1993, showed that foreign 
exchange brokers' market 
share in the UK had fallen 
from 43 per cent in 1968 to 34 
per cart in 1992. 

However, increased volumes 


NEWS DIGEST 


stake in Mayor, its Singapore- 
based cable a^awmb ly mmwifao - 
taring subsidiary, from 60 per 
cart to 75 per cent 
Volex is to purchase the 
additional shares far S$7Am 
(£&2m) cash from Mr Jay Pok, 
managing dfro ftw of Mayor. 

£103m buy-out at 
East Lancs Paper 

East Lancashire Paper Mill has 
been acquired from British 
Syphon Industries and Scandi- 
navian Securities in a £10 An 
management buy-out backed 
by 3i and Midland Bank. The 
refinancing was arranged by 
Hamhrofl Bank. 

ELPM mr^te pre-tax profits of 
more than £lm on sales of 
£29m in the 1998 year. 

£808,000 turnaround 
at Christie 

Christie Group, the business 
services company, reported 
pre-tax profits far the year to 
March 31 of £196900, against 
losses of £602,000. Turnover 
was slightly hi ghw at 
compared with £15 Jm. 

Earnings per share came out 
at 0A5p (losses 2.75p). 

The company said there had 
been a strong result at Christie 
& Co, but J Finder and Ven- 
ners Computer Systems 
incurred losses. 

Andaman completes 
acquisitions 

Andaman Resources, the Bel- 
fast-based mineral exploration 


- more than SlOObn per day in 
London by 1992 - have more 
than made up fear toe loss of 
market share. 

In addition, derivatives, the 
third leg of the moneybroking 
business, has shown enormous 
growth. There is less competi- 
tion for bruiting new products, 

and fa tor profit marg hiH nan 

be achieved. 

The fixed interest securities 
aims have had a fantastic 18 
months, hut with the turning 
of the interest rate cycle, 
“same af the steam may have 
been taken out of the securities 
market for the time being”. 
awwwBng to Mr Sandler. 

Further competition could 
also came from the threatened 
entry of Liberty into toe UK 
gilts market However, govern- 
ments have had limited suc- 
cess in reducing their deficits, 
which should ensure that 
while volumes may fan to 
more sustafnatda levels, it will 
not be a dramatic decline. 

Longer tom growth for toe 
money brokers should come 
from the development of new 
products, such as FRA options 
and swap options, and the bro- 


company, has completed the 
proposed acquisition of 
Southern Roadmaritings and 
the 24J9 per cent holding in 
Fleet International. 

Andaman will now operate 
from two divisions - one focus- 
ing on mineral extraction 
exploration and the second 
concentrating an activities of 
an industrial or asset based 
nature. 

Unilever makes 
South American buy 

Unilever is broadening its food 
interests in Latin America 
with the agreed purchase, for 
an undisclosed sum, of Oca of 
Argentina, a privately-owned 
tomato-based products busi- 
ness. 

The acquisition will restore 
the ownership and manage- 
ment of Cica of Argentina to 
(Sea of Brazil, a Unilever sub- 
sidiary acquired in 1998. 

Waverley Mining in 
£l.I6m fund raising 

Waverley Mining Finance, the 
Edinburgh-based investment 
company, proposes to raise 
£L16m before expenses via the 
issue of 2m shares at 58p 
apiece. The shares closed 
unchanged at 5?p yesterday. 

The shares are to be sub- 
scribed by investment funds 
managed by GFM International 
Investors - a 99.5 per cent- 
owned affiliate of Metropolitan 
Life of New York- 

Following the subscription, 
Waverley win have 223m ordi- 
nary shares in issue. Funds 


kers are also beginning to 
focus on emerging markets, 
such as and 

The moneybroking busi- 
nesses of both MAX and Exco 
are expected to achieve double 
digit profits growth In the cur- 
rent financial year. Exco 
«iinwM Anther hwwfit from its 
release from the spectre of 
BAG, which is setting its 40 per 
rent Htaire m the flotation. 

Caledonia Investments, a 
highly respected investment 
company, has demonstrated 
commitment to the Industry by 
agreeing not only to retain Us 
27 per cent stake in Exco, but 
taking pre-flotation dividends 
in scrip form. 

Exco exceeded investors' 
highest hopes during its six 
years as a listed company in 
the early 1980s, and It will 
struggle to match that perfor- 
mance monnri time aro und. 

But Mr Gfregsan argues: “All 
the evidence suggests that 
there is still growth in these 
markets as the product range 
and the customer base 
increases, and new flnawrfal 
centres are established in 
developing countries.” 


managed by GFM hold more 
than 2m Waverley shares. 

First Italian 
investment trust 

Fondigest, the Italian mutual 
ftmfl manager, is to launch the 
Italian Rena issan ce Investment 
Trust, the UK’s first single- 
country investment trust spe- 
cialising In Italy. 

Fondigest said that economic 
conditions in Italy were ripe 
far recovery, and the election 
of the pro-free market right 
wing coatttion would also sup- 
port economic growth. 

The fund will have a Mas 
towards smaller and medium- 
sized companies, which it said 
were under-researched but 
would be helped by new tax 
incentives. 

A placing of the trust with 
institutions was under way; 
toe ptibUc offer will run from 
July S to July 22. 

Growth at BICC 
German ofEshoot 

KWO Kabd, a wholly owned 
subsidiary bf BICC, the cable 
company, increased turnover 
by 5 per cent last year despite 
fall ing domestic prices and 
confirming restructuring of its 
operations in Berlin. 

The former state owned com- 
pany, which BICC bought from 
the Treuhand privatisation 
agency in 1992 and which 
started full operations under 
BICC in early 1993, made oper- 
ating profits of DM6.5m 
(£2. 62m) on turnover of 
DM306m last year. 


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Post &Telesiyrelsen 

NATIONAL VOST AND TELECOM MSKNar 

Request for Ttotoer concer ning a 
TR wwRgnwAT FufswT Telephony System. TPTS. in Sweden 

The National Post and Telecom Agency in Sweden - Post - och teleatyxelscn, PTS - invites anyone who 
woold like to provide network services of a Terrestrial FHght Telephony System, in Sweden to apply for a 
TFTS ifawire The TFTS- tender is based on the Swedish Telecomm nmcatKms Act (SFS 1993397) and 
wiD proceed 20 stages aocunliqg to the jtgolalkm PTSFS 1994:4. 

At most two telecom licensees of^ TFTS will be granted and the licence period will be limited to ten years. 
Each a ppHranr must submit a written application, winch must be available to PTS not later than 22 July 1994. 
Bndhi r ffKfwrt most aim pay .an application fee (SGK 100,000) is the application is su bmitt ed according 
to PTSFS 1994:4. 

The regulation and a gnide to the TFTS-tender procedure arc essential and can be ordered from: 

Post- och t eleatyith en contact person: Brita SOdetstrOm 

Box 5398 telephone: +4680785528 

S- 102 49 Stockholm telefax: +4686785505 

SWEDEN 

Questions concerning the TVi'S tender may be directed to: 

Out Andotsson (general issues) ttfc +46 8 678 5510 

Kent Rone Sjdbolm (procedure) tel; +4686785519 

mob: +46102176591 
Mar gnr ertm Pnh*Mvn (legal issnes) tefc +46 8 6785527 



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FINANCIAL TIMES TU ESDAY JUNE 28 U»4 


COMMODITIES AND AGRICULTURE 


Coffee frost brings back chilling memories 


By Alison Maftiand h 
London and Patrick MeCuny 
in Sao Paulo 


Caffes 


Yesterday’s meteoric rise in 
International coffee futures 
triggered comparisons with 
previous Brazilian frost dra- 
mas - and aspirations towards 
previous market records. 

Ms Judith Ganes, softs ana- 
lyst at Merrill Lynch in New 
York, had her eye on the 
all-time highs of the late 1970s. 
“It's too early to pinpoint, but 
people should be aware that 
this market h** the potential 
to get there,” she said. 

u In the past we had a freeze 
and the trees were healthy. 
When you take a crop that 
hasn’t been fertilised for four 
years and was unhealthy to 
begin with because of a lack of 
care, the damage could be 
untold.” 

The excitement was height- 
ened by the fact that the crop 
rLurjagp has hit early, with a 
further six weeks to go when 
frost can occur hi Brazil. 

Ms Ganes was highlighting 
the lack of investment in world 
coffee production that has 
resulted from the five years of 
low prices that followed the 


Brad (New York. US cents per lb) 
400 — *r— 


•100 — 



1974 78777879 80 81 82 83 94 06888700899081 92 93 04* 


Source Otaaatnmn 


collapse of market intervention 
measures in 1988. 

The inability of coffee pro- 
ducers to respond rapidly to 
the current shortfall in world 
supply has fuelled the market's 
hull run this year. But prices 
s till have a long way to go. 
Second position robusta coffee 
futures in London peaked at 
over £4,000 - or more than 
$7,000 a tonne at the prevailing 
exchange rate - in March 1977. 
Yesterday’s surge took the sec- 
ond position to a day’s peak of 
$3,150 a tonne, the highest 
level since November 1986 


when it hit $3,700. 

That gap is also reflected in 
retail coffee prices. A lQOg jar 
of Nescafe in. the 'OK, for exam- 
ple, is still shoot 3p cheaper 
than in March 1986, even after 
a 12 V* per cent rise in Janaary, 
accenting to its manufacturer, 
Nestle. 

Whether prices continue 
upwards will depend partly on 
the extent of the frost damage 
at the weekend, which could 
only be guessed at yesterday. It 
was described by one Brazilian 
broker as the worst since the 
"very grave” frost of July 1975, 


which triggered the rise in 
prices to all-time Ingbs. 

Next year’s coffee harvest is 
expected to be substantially 
reduced but no clear figures 
are available yet, according to 
growers and brokers. Predic- 
tions yesterday ranged from a 
loss of fewer than lm bags, to 
as much as 5m bags. Produc- 
tion thla year in Brazil, which 
accounts far around a quarter 
of world output. Is expected to 
be about 24m bags. 

Coffee broker Mr Eduardo 
Carvalhdes Jnr said most of 
Brazil's important production 
areas in the states of Sao 

Paulo, Mlwaa GfiTaiS urn) Par- 

ana were hit. 

He said the 1995-96 and 
1996-97 harvests would be 
smaller and the quality of the 
1994-95 coffee crop could be 
affected. "It seems that some 
areas in Parana were 100 per 
cent hit while parts of Sao 
Paulo lost 20-25 per cent” 

Some of tiw sting has been 
taken out of Brazilian frost 
scares by the fact production 
has moved northwards since 
1975. Whereas Parana was once 
the main producer, it now 
accounts far 2m to 3m bags of 
annual output. Most produc- 


tion fa place in Mn^»« Ger- 
ais state, southern parts of 
which have apparently been 
badly hit by the latest frost 

Moreover, although Brazil is 
tiie world's biggest producer, 
its dominance is ranch less 

than a decade ago. 

None the less, the frost dam- 
age comes at a sensitive time 
for the world market The 
International Coffee Organisa- 
tion predicts a shortfall in 
world supplies of about 2m 
bags this year, compared with 
demand, and now says that 
“farther drops fin supplies] are 
likely next year”. 

Supply tightness has led to a 
rundown in consumer stocks. 
The ICO estimates these have 

fall on py about 2m hqg q thin 
year to some 15m bags. 

How far the frost drives 
prices will also depend on how 
producer countries’ stocks are 
released on to the world mar- 
ket said Mr Lawrence Eagles, 
analyst at GNL the London 
commodity brokers. The Bra- 
zilian gover n ment Is awting an 
a stockpile of 17m bags and 
further coffee is due to be 
released by other members of 
the Association of Coffee Prod- 
ucing Countries. 


British growers size 
up the competition 

TV . « VT Aft tVlA 


"jr a 

Deborah Hargreaves reports on the post-Gatt 
debate at Cereals’ 94, the premier UK gram e 


event 


Gold drops despite 
dollar’s weakness 


Copper price seen holding gains 


By Kenneth Qooding 


By Kenneth Gooding, 
Mining Correspondent 


Gold prices dropped sharply In 
London and New York yester- 
day. The precious metal closed 
in London at US$385.70 a troy 
ounce, down $6 from Friday’s 
close. 

Dealers suggested that US 
investment funds started gold's 
slide by selling on the New 
York Commodity Exchange 
because they were disap- 
pointed that it had not reacted 
to a weakening dollar in the 
expected way - by rising 
sharply. 

The ftmds began their latest 
foray into the gold markets on 
June 17 on Comer and their 
appearance in force lifted 
gold’s price that day - and sub- 


sequently in London on the fol- 
lowing Monday - to the high- 
est level in three-months. 

Mr Andy Smith, analyst at 
Union Bank of Switzerland. 
aaiH igst night that the fimds 
had bought gold a week ago, 
betting that the price would go 
higher, while at the same time 
some producers had started to 
sell in the belief that the price 
had peaked. 

It was also possible that the 
investment funds had been 
looking for second-quarter 
profits in the small and mallea- 
ble commodity markets to off- 
set first-quarter losses in bonds 
and currencies. 

"The gold market is dearly 
at a turning point,” said Mr 
Smith. “Only the small matter 
of its direction is unclear.” 


Copper’s price will on average 
be at least $1 a pound ($2,204 a 
tonne) for the next ten years, 
suggests Mr Burgess Winter, 
president of Magma Copper, 
third-largest of the US produc- 
ers. 

He dismisses suggestions 
that a huge upsurge in output 
from new mines from 1995 
onwards and the new low-cost 
solvent-extraction, electro- win- 
ning production process will 
drive down prices. 

Not all the scheduled capac- 
ity will arrive on time, he says, 
and inevitably there will be 
interruptions to gristing sup- 
ply. 

Magma expects copper 
demand to rise by an amniaJ 
average of 22 per cent - and 
that would require a new mine 
the size of Escondlda in Chile 
(400,000 tonnes last year) and a 


new smelter every second year, 
Mr Winter points out. 

Nevertheless. Magma has 
taken the precaution of initi- 
ating a price protection pro- 
gramme that guarantees a min- 
imum realised price of 84 cents 
a pound compared with $U0 
on the London Metal Erchang a 
yesterday. The programme 
consists mostly of "put” 
options which allows the com- 
pany to benefit from any rise 
above 84 cents. 

Mr Winter says Magma 
wants to guarantee a floor 
price for 1995 output - no mat- 
ter what happens to short-term 
copper prices - at a modest 
cost of one cent a lb because 
the company cab be sure of 
covering the cost of its $300m 
Robinson mine in Nevada, due 
in production early next year, 
without touching its $20Qm line 
of revolving bank credit. 

In spite of Mr Winter’s bull- 


ish price outlook, Magma has 
been driving down production 
costs so that by 1996 it expects 
to achieve cash costs of 50 
ppnk a. lb f ull pre-tax costs 
of 70 cents. In the first quarter 
of 1994 Magma's cash costs 
were 59 cents. 

Mr Winter’s views on future 
copper prices are not univer- 
sally supported. 

For example, Mr Lawrence 
Eagles, analyst at GNL argues 
that the copper industry is 
about to be transformed by sol- 
vent-extraction, electro-win- 
ning technology, which does 
away with the need for a 
smelter when an ore body 
ipnris itself to this treatment 
He suggests that ultimately, 
the price of copper will fall 
towards the marginal cost of 
current production: $1,350 a 
tonne (61 cents a pound) as 
high-cost concentrate/smelter 
output is displaced. 


T he question in most pro- 
ducers' minds as they 
heard a debate between 
rival suppliers at Cereals ’94, 
the premier UK grain event, 
this month, was summed up by 
Mr Alan States a US fanner. 
"What you all want to know,” 
he said, “is whether we’re 
going to out-compete you - hut 
we’re all in this together and 
the most efficient of us will 
survive.” 

Mr States who farms 4,000 
acres (1,600) hectares on his 
own in Kansas. Is one of the 
large US producers who will be 
competing head-to-head with 
his European counterparts on 
world markets as support 
prices are stripped away under 
tire new General Agreement on 
Tariffs and Trade setfiement- 
Be now makes (he equiva- 
lent of £22 an acre profit to 
cover his fixed costs after get- 
ting a market price of £75 a 
tonne for his wheat plus gov- 
ernment support of £18 a 
tonne. 

TBs income per tonne puts 
Mr States near the top of the 
aamfng a scale for the interna- 
tional farmers polled at the 
seminar. Mr Oliver Walston, 
the British producer whose 
farm was the venue for the 
cereals show, reckoned that 
British formers were getting 
£95 a tonne for their wheat 
with an added subsidy of £30 a 
tonne. 

That put British producers 
on a par with Mr Jeremy 
Talbot, who farms 451 hectares 
in New Zealand, producing 
1,000 tonnes of wheat He is 
being paid £120 a tonne by 
millers in his own country, 
where he receives no subsidies 
atalL 

Mr Talbot said he was trying 
to adapt to the new unsup- 
ported market by growing spe- 
cialist crops for Asia such as 
Chinese mustard and Chinese 

But both Mr Talbot and Mr 


COMMODITIES PRICES 


BASE METALS 


LONDON METAL EXCHANGE 

(Prices from Amalg am ated Metal Thrfnjfl 
■ Aua*eoUM,Bejtniimv t*p^»o«w| 


Precious Metals continued 

■ gold COMEX <100 Trey or; *taoy arj 


GRAINS AND OIL SEEDS 

■ WHEAT LCE (E par eoma) 


SOFTS 

m COCOA LCE<Ctomri 


MEAT AND LIVESTOCK 

m UVE CATTLE CME {AO.fXXMja; oantartj: 



Cash 

3 orths 

Ckne 

1448-9 

1477-8 

Previous 

1461X-2X 

1490-1 

Hgh/km 


1487/1479 

AM Official 

1454-5 

14B2X-3.0 

hob dosa 


1478-9 

Opon M. 

274X67 


Total dafly twnowr 

60X38 


■ ALUMMIUII ALLOY ($ per Kara) 


CtOH 

1446-52 

1463-7 

Previous 

1455-65 

1470-80 

Highifow 

1488 

1466 

AM Oflfctal 

1445-50 

1468-70 

Kerb dosa 


1485-70 

Open Irrt. 

2X52 


Total Italy tumoMT 

1,172 


■ LEAD (S per tome] 



Close 

532-3 

560-1 

Previous 

543-4 

560-1 

MgMow 

540 

558/550 

AM OlflcM 

540-1 

557.5-6.0 

K»ta dose 


549-51 

Open ml 

37,428 


Total rtsfly turnover 

13X33 


■ WCKH. ($ per tome) 


Close 

8165-70 

8260-85 

Previous 

6350-80 

6445-60 

HJgfl/tow 


8435/8256 

AM Official 

6220-30 

6320-30 

Kerb dose 


8250-60 

Opm M. 

67.446 


Total OaSy turnover 

16,888 


■ TIN (S pw tormal 



Oose 

6350-80 

544045 

Previous 

6480-70 

5541-6 

Mgh/taw 


S5SO/5425 

AM Official 

5455-65 

5535-40 

Karts dose 


5425-33 

Open In*. 

17X23 


Total <ta*y turnover 

7X57 


■ ZINC, special high 

grade (Spur tonne) 

dose 

880-7 

S85-6 

Previous 

983-4 

1007-6 

rtgMow 


1002/985 

AM Official 

972-3 

BS7X-8X 

Kerb dose 


965-6 

Open W. 

106/58 

29X29 

Total daRy turnover 



■ COPPER, grade A CS par tome) 


Oom 

2413-4 

Z4334L5 

Previous 

2448.5-95 

2467-8 

rtflhrtOW 

2438 

2470/2422 

AM Offidaf 

2435-6X 

2455-5JS 

Kero cJose 


24386 

Open Int 

227X53 


Total dairy turnover 

67.572 


■ LMB AM OMclal Cifl nrtK 1-6634 

LAS Ctoatag Vt Me 1X510 




sm 

Oafs 



Vpm 



Sett 

Daeta 


Osaa 



Sad 

Oaf* 


om 


sm 

0 W* 

0p« 



srica 

change 

MR 

taa 

M 

VoL 


Prtas cflaags a* 

Lire 

M 

tel 


prtca i 

Saga 

■» 

M 

1 

1 


pries tangs l|p tae 

tat 

W 

■tan 

384,7 

-64 

3862 

384X 

645 

439 

sw 

10225 

. 

. 

457 

. 

ft 

955 

+7 

975 

955 11.197 2X31 ’ 

ta 

82275 

-0875 82750 81758 34299 

4X06 

Jri 

385.1 

SA 

- 

- 

. 

- 

man 

10329 

+030 103X0 

10290 

2,180 

59 

las 

978 

+10 

997 

965 19X23 3X88 

Oct 

86550 

-0375 66950 06150 16105 

2X06 

tag 

386.4 

-83 

391.9 

3838 87X38 36989 

Jaa 

105X5 

+025 10600 

105X0 

1,388 

20 

Dae 

993 

*10 

1011 

992 26414 1X14 

Die 

87X50 

-0X50 86600 67X50 10770 

8B0 

Oct 

3884 

-65 

385.1 

3878 

5818 

155 

War 

10645 

+010 10650 

10635 

419 

50 

Hw 

1013 

+10 

1030 

1011 28X99 377 

M 

68800 

-0750 66250 66200 

8X85 

648 

Dae 

3928 

-65 

3962 

3903 26401 

1X24 

■V 

10615 

+010 10630 

10605 

400 

25 

Wto 

1024 

+8 

1039 

1023 10X58 144 

4W 

86700 

-0X00 76450 60X00 

3.72B 

99 

M 

3982 

65 

3958 

3958 

7X75 

112 

Tata 




4X90 

15* 

Jol 

1034 

♦7 

10(2 

1042 6454 20 

Jw 

66600 

5 

a 

1 

783 

w 

Ttaal 




182X30 36758 

■ WHEAT CBT (5,000txj min: cents/SOb bushel) 

TOM 




10689 7X9 

TsM 



76X72 

8X81 


W PLATINUM NYMEX (50 Tray at; S/troy ok) 


Jri WS -£2 405LQ 396X 5,113 1968 

Oct 401.1 -6-6 4016 3915 16298 4,185 

Jm 4Q3J8 -&6 4084) 4010 1,337 210 

Apr 4Q10 • -66 «1X 405J3 1,245 73 

Tot* 22*93 1436 

■ PALLADIUM NYMEX (100 Troy or; SAroy or) 


130.15 +020 15 4 

738.15 +820 139-50 13850 3,752 218 

13135 +020 13925 13875 077 63 

13035 +020 1 


Jri 313/2 -Iff 314/B SOON 54,125 24,740 

Sep 322/2 -On 323ft 317/6 71855 28550 

DCC 334/0 -0/2 334/4 329/2111305 21970 

Mar 337ft -Off 338/0 333/0 20X85 X460 

Key 330/0 - 331/0 3200 336 5 

Jri 321/0 -«J 322/4 SIM 1,995 790 

Total mjBO 82JH5 

rn MAKE C8T (5,000 bu irin; cerrts/SSb bushel) 


■ COCOA CSCE (10 tomn; S/tanrm) 


■ LIVE HOGS CME ftO.OOObs; conta/bri 


■ SEVER COMSC (100 Troy oz.- Carrts/Jroy at) 

Jit 


JDD 520 -15.4 3360 53(L0 

Jut 5243 -15 £ 54041 5234) 31300 27,442 

tag SUA -155 - 57484 14,731 

Sep 5292 .157 548.0 S274) 11913 1.298 

Dec 536,4 -15S 5525 5310 32 

Jm 538-1 -152 - - 6760 34 

Total 130709 44715 


Jri 2*8/4 -7/D 2550 2460278,715 765S5 

Sm 243/D -7/4 249/2 2408)244^90 44,140 

D« - 237/6 -7/2 243/8 234/4 573*45 116825 

MPT 245/2 -7/6 251ft 242ft 8*83) 6940 

M W 250® -7ft 258ft 248ft 12.485 1.990 

JM 252ft -7ft 258ft 250ft 18,710 3020 

Total iai8H2S3jn 

■ BARLEY LCE (E per tome) 

Sep 99X5 -035 - - 200 - 

Nov 10005 +040 10050 10025 361 17 

Jm 101.75 28 

■tar 10300 ... 95 . 

(by 104m 1 

Tetri tS 17 

M SOYABEANS OtT ftOOObu nta: caate/BOta ttufleQ 


JM 1247 -24 1340 1242 355 314 

Sap 1276 -24 1355 1282 36567 0187 

DM 1319 -22 1393 130T 12£49 795 

Her 1350 -31 1422 1342 0019 855 

Mar 1374 -27 1445 1425 0987 63 

JM 1398 -27 1400 1400 2X47 1 

Total ‘ 88^9410771 

■ COCOA (KXO) (SDR’a/toma) 


40750 -0300 47.100 4&S5D 4398 2083 

45230 -079 40100 4509 8.412 2JM9 

4099 -0325 4359 4079 4J00 59 

4309 -089 43825 4089 3.448 242 

4299 -0575 43S9 40850 848 46 

41X9 -059 4059 41X9 513 5 

24,798 4X81 


■ PORK BBJJES CAff (40X0QEbs; cantafoe) 


Jans 24 


Pries 

Prat dg 

100118 

M 

tap 

36950 

36150 

-1X75 40700 36525 
-1/450 39X25 37X00 

2797 

4X00 

717 

1.183 



M/A 

HA 

Fta 

46700 

44725 

-2X00 47X00 45.700 
-2X00 44725 447Z5 

095 

41 

275 

4 

■ COFFS LCE prtonnaj 



47X00 

-2X00 46100 47X00 

31 

7 

M 2808 

top 2848 

+658 

+583 

3030 

3190 

2500 6105 2X58 
2830 20,14812X34 

M 



Txn 

2,178 


ENERGY 

■ CRUDE OH. NYMEX (4QOOQ US pate. S/banrt) 


5MCI 559 3 m8«1X482 B eanx1X489 9 tnttElX457 

M HIOH QRaPE C OPPER (COMEX) 

DqrV <*W 


110.10 -170 11040 19X0 19 42 

11035 -L40 111X0 109X0 1M® 3X9 

110A5 -1X0 11050 1109 89 18 

11133 -19 1119 1089 31,006 7,388 

1109 -09 - 29 16 

11055 -0X0 - - 213 4 

aOStf 10X9 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
(Prices suppled by N M Rothschld) 


Grid {Troy ez.) 
One 
C*w*i9 
Momhg fix 
Afternoon fix 
Oay'a High 
Day’s law 
Previous Mow 
Lwe Wn Moan 

1 month 

2 months 

3 month* - 

SSvar Fix 
Spot 

3 month* 

6 months 
l year 
QoMCUia 
Kiugenstt 
Maple Leaf 
New Sovereign 


S price 

385.50- 38600 
300X0-380-60 

390X5 

389X5 

390X0090.70 

384.50- 385.00 

391.50- 391.90 
Qold Landtag Ra*aa 

4,02 6 months 

41.11 12 months 

—4X1 


USetsaquN. 

538X0 

544X0 

55090 

667X6 


* price C aqrSV. 
365-388 264-267 

396.15-3SS.66 

92-95 59-62 



Latata 

Of* 


taw 



pries 

taanga 

Mgh 

Lost tet 

M 

tag 

19X3 

+0.01 

1954 

1925 91.712 30XB1 

top 

1680 

•0X2 

19X2 

1678 61X28 12068 

Oct 

18X0 

. 

1671 

18X8 33208 

1943 

ire 

1642 

-OOI 

1644 

1640 29/RB 

1,471 

Die 

iax2 

•0X2 

1846 

1629 32X25 

1X78 

Jm 

1628 

-001 

1625 

1625 18X58 

704 

Tata 




382X91 

52X60 

■ CRUDE ON. PE B/barraQ 




ton 

nafa 


Op* 



pries 

dongs 

Ota 

law M 

W 

tao 

1TJ5 

•003 

1758 

17X1 70X48 12622 

tog 

17.18 

. 

17X8 

17.13 31427 

5X12 

Del 

17X0 

•OOI 

*17X1 

17X8 9X04 

623 

Mot 

17.07 

+002 

17.14 

T7X0 6488 

472 

DSC 

T7X9 

+009 

1TM 

17JB 1 0942 

233 

Jan 

- 

- 

- 

- 2888 

1B1 

Total 




136X00 

16192 

■ HEATING Ofl. NUEX (42X00 USgata; BUS gta^ 


Utaat 

Daft 


Op- 



pries 

tota 

Mgh 

Laa tat 

*at 

M 

5030 

-0X9 

5090 

5615 26779 

7X47 

Aag 

sa 60 

-Oil 

51-3D 

5040 30X70 

7X47 

Sm 

SMS 

■006 

51X0 

5120 15X18 

890 

oa 

52X5 

■006 

5270 

5220 11271 

276 

■as 

53X0 

+004 

5340 

5320 7X91 

485 

use 

54XD 

+004 

5425 

53X0 15.791 

378 

Total 




mm 18429 

■ (Mi 

boh, re 

Pftsewl 

1 




Latest 

Oaf's 


Open 



Sriea 

ctanga 

Mta 

Lew tel 

VM 

Jri 

155X5 

•050 157X0 155X0 28414 

6569 

tag 

157.75 

-050 

19925 

1S7.75 16827 

4.123 

sm 

15975 

■025 161X0 

15975 8X59 

1789 

Oct 

18ZX0 

■025 

16150 

16250 7X90 

339 

Nov 

164X0 

-029 165X0 164X0 8X92 

587 

Ok 

16600 

-050 

167X0 

165X0 14342 

377 

Total 




91X80 12X83 

■ NATURAL QA8 RfUGC p 0.000 nstakL: SSamSfai) 


latest 

tart 


Dpaa 



plea 

tartg. 

«* 

Lora tet 

M 

tag 

2.160 +0026 

2.180 

2140 18481 

8X87 

top 

Z170 +0X22 

2.185 

2160 11X02 

1X82 

Oct 

2.185 +OOIB 

2195 

2175 16856 

756 

HM 

2255 +0X15 

2250 

2255 16986 

377 

DK 

2352 +0X20 

2X57 

2X80 14J47 

854 

JM 

1352 +0012 

2X55 

2X50 10XS1 

124 

Total 




1121W 124M 

■ UNLOADS GASOLINE 



NW 

EX(42XK 

lUSgtt 


tag 



Latest 

Dart 


tan 



pries cbvge 

■go 

tsar tet 

W 

M 

53.45 

052 

54.15 

53X5 24X11 

12939 

Aft 

53X0 

034 

54X0 

5170 36X10 12503 

top 

in«t 

024 

54.40 

6173 13X05 

3XS7 

Ota 

5240 

009 

5270 

as an 4333 

963 

(to* 

51X0 

012 

SL50 

51X8 4,730 

500 

dk 

5530 

022 

55X0 

55X9 3,187 

37 

Ttaft 




60.102 30X52 


M 889/2 SB 887ft 8580118X9 4X79 

Aug 654/2 -6ft 683ft 651ft 117,175 27X9 

Sep 640/2 4ft 060ft 837ft 82.480 8X10 

■a* 628ft -11/2 840/0 825*382.173110X00 

Jm 633/2 -lift B48ft 832ft 31X20 6706 

•tar 641ft -lift 852/0 638ft 16525 1X65 


■ SOYABEAN 06, C8T £0,0008*: cgrrta/lb) ~ 


Nav 2838 +685 309 289 7X52 397 

JM 2825 +683 3030 259 65*0 3X14 

War 2)9 +663 2985 259 2X9 331 

ttaf 289 +692 - 227 

TOW 4392*1X9 

■ CO*Tg<7C8Ce^X00t»;cantaAtM) 

JM 19875 +69 1809 1539 881 354 

Sep IBIS} +39 1709 1639 29,468 7.405 

Dae 1359 +69 1359 1359 12X84 3X47 

l/tar 13510 +69 18510 13510 7X16 875 

Itay 136X0 +69 1359 1389 1,19 50 

JM 1359 +69 • .29 46 

TstM 81X8411X78 

■ COffBE (ICO) (US canta/pouneQ 


LONDON TRADED OPTIONS 

Stifles pile* $ form — Orite Puts-— 


ft 

2638 

-045 

2887 

2632 11X02 

1439 

Nft 

28X8 

-645 

2587 

2633 16772 

4X57 

top 

28X8 

■642 

2888 

28X0 12X18 

1X46 

Ota 

2BJ5 

■637 

2652 

2605 6734 

566 

Oao 

25XB 

■632 

2632 

2685 3A970 

3X98 

Jan 

2682 

-627 

23X6 

2685 2X28 

75 

TDM 




BtXM 14,1*1 

■ SOYABEAN MEAL CBT (100 tons: S/ton) 


Jri 

1923 

-IX 

1517 

1968 13X71 

3X84 

*«ft 

1828 

■17 

1948 

1908 10X91 

3X08 

top 

1918 

-20 

1915 

1960 14,739 

1,138 

Oct 

1888 

-29 

1907 

187.1 6675 

S55 

DSC 

tars 

-Iff 

raw 

ra&ff 1*273 

5X9S 

Jaa 

1878 

62 

1898 

18SX 1X38 

18 

Total 




79X40 16222 

■ PO 

FATOES 

XEfO 




Np> 

900 



_ 

_ 

Mar 

10S8 

- 

. 

ft 

- 

Air 

1S3X 

-65 

1700 

1638 879 

243 

MW 

1818 

- 

- 

- 

- 

Jm 

1073 

- 

- 

• • 

- 

1PM 




979 

M3 

■ FRSQHT OFFEX LCE {$104ndax poH) 


Jon 

1320 

-3 

1325 

1320 420 

17 

Jri 

1296 

+2 

1310 

1300 812 

18 

tag 

1295 

+7 

1290 

1295 43Z 

23 

Oct 

1358 

+7 

- 

- 4*5 

- 

jam 

1375 

+6 

1375 

1375 232 

4 

tar 

1305 

+5 

- 

- 109 

- 

Tetri 

□ess 

tor 


6689 

82 

BH 

1325 

M21 





Jew 34 

cemp.*fir 

15 day mra 
■ Ko7PR 


1209 1947 

1219 121X3 

I HAW8UQAH LCetcanta/fcM 


. 

- - - 

6391 

- 

- 

- 

1,101 

- 

12X0 

- 1270 1270 

00 

to 



4X52 

10 

E SUGAR LCE (SAonnel 



34axo 

- 35780 24280 11X09 1X82 

317X0 

- 3Z8X0 311X0 

6143 1782 

31180 

- 31 LOO 30600 

809 

- 

307.10 

- 317X0 303X0 

2X83 

197 

30600 

- 308X0 30340 

197 

- 

305X0 

- 307X0 30340 

328 



(B0.78QLME 

1460 

1475 

1600 — 

■ COPPER 
OmdsAilME 

2400 

2450 

2900 

■ COFFEE LCE 

2260 

2300 

2350 

■ COCOA ICE 

075 

1000 

1050 


Aug 

Now 

Aug 

Nov 

S3 

95 

33 

53 

40 

81 

45 

64 

20 

70 

SB 

2400 

Aug 

Ho* 

Atrg 

Nov 

84 

120 

47 

103 

68 

07 

' 71 

120 

38 

78 

1(71 

1S9 

Sap 

Nov 

Sep+ 

Nov 

720 

782 

122 

174 

888 

730 

188 

182 

063 

099 

158 

211 

Sap 

Nov 

Sap 

Nov 

62 

88 

‘ 51 

70 

41 

78 

65 

83 

26 

67 

100 

114 

Aug 

Sap 

A«ft 

Sap 

97 

- 

- 

m 

- 

60 

8 

52 

25 

45 

23 

- 


LONDON SPOT MARKETS 

■ CRUDE oaLRBfcsrbmainuri +or 


■ 8UQAR 11* C3CE (1 12X00faa; canta/fca) 


Jri 11X7 -057 129 119 1QX910X9 

Ota 1147 -09 1215 119 73,77012X33 

Ita- 11X3 -0X0 1.1X3 11X3 28.1*2 1730 

nay 11X2 -09 1179 11X2 4X14 104 

M 11X1 -09 1X» 1 


Dubai $16X4-6.13q -004 

Brent Staid (ctamd) $17X3-7X8 +0.02 

Brant Blend (Aug) $17X8-7X0 +0X3 

W.TJ. (1pm OSS) - $19X1-0X3 -0X36 

■ 06. PRODUCTS NWEprotrptMvmyCF pome) 


ft 11X7 -09 1X» 1 

Oct 11X1 -030 11X7 11X6 8/5 1 

Tecs iiat»aHX77 

■ COTTON NYCE (SOXOCtw; cama/tafi 


Jri 

71X8 

-1x0 

74X5 

71X0 

2,127 1,146 

Oct 

7147 

-1X7 

7615 

7144 

6168 1X13 

DSC 

73.14 

-2X0 

7670 

73. M 26680 <459 

Mr 

74X7 

-2X0 

7650 

74X7 

4X91 

280 

■M 

74X2 

-1X3 

77X0 

7475 

2X37 

61 

Jri 

7687 

-1X3 

77X0 

7600 

976 

10 

Total 





47, MB 7X01 

■ ORANGE JUICE NYCE (tEXOOfer. oartsfori 

Jri 

87X5 

+120 

8870 

87X0 

4X64 

387 

Sep 

92X6 

4225 

9325 

9050 12,159 

440 

Nre 

9425 

+125 

0660 

8100 

2X09 

115 

Jm 

9675 

+175 

9620 

96X0 

3X10 

20 

Mr 

sooo 

+2X0 100X0 

Mm 

1,441 

12 

Ml 

102x0 

+2X0 10200 

102X0 

108 

60 

7otri 





MX09 1J940 


Premium Ooaafna 
Gas 01 
Heavy Fuel OS 
Naphtha 
JstFtaef 

ftWe w/pe&*« 
■ OTHER 


The Taa Broker's e sao dH on reports. Strong 
and general demand. Bright East African* aid 
pood medhsns gained 3 4a 8 pence whfie 
plainer madtane wera Mly firm. Central African 
lan proved a strong ftaie ■vl often gsinsd 
S to 10 pence. 1 Caytana attractad Rnflad sup- 
port with prices tangUtar and generafiy easier. 
Afifeend mef good demand at fimt ft) de a er 
ratea. Caytone cane to a o ata rtv a anqufiy. 
mostly at lower leeMa ratiara sold. Quotations 
beat avslalito 280p *g non, good l75pAg. 
good median 1550*0. meeftan l2SpO^, Jour 
medura 92prt«. The Ngheef price rafieed tWs 
week erne 336p for a Rw an da pd. 


VOLUME DATA 

Open infe s t and VoSume data ahown tar 
c ontra ca traded on COMEX. NYMEX, CUT, 
NYCE. CME. CSCE and IPE Crude Oi art m 
day in man. 


INDICES 

■ RBJTEFBC (Base la^SI^IOOj 

Jun 27 Jim 24 mordh ego yparpgo 

1993.7 1993X - 16G5X 

■ CRBRrtaaapasrftBftB-IQOI 

Jut 2* Jem 23 month ago year ago 

220X8 230X1 - 205.89 


Gold £per trpy ojJ$ 
SRver foer troy obN 
Ptaflnum (per my cej 
Patadtan (pat troy ozj 
Capper (US prod) 

Lead (US prod) 

Tta (KuMa Lumpu) 

Tin (New Ycxfo 
Zinc (US Prime W) 
Cattle give we lghft t 
Shoop f*vs weipWJt* 
Plga ()iw weigh!) 

Lon. day auger (raw) 
Lon. dqraigaH4 
Tote & Lyte export 

Btalay Cog. feed) 
MMzb (US No3 YeNm} 
Whed (US Dei* North) 
Rubber (Augif 
Rubber (Sep)* 
RubbartKLBSSNdlJu? 
Cooenut 01 (Rfl)§ 
Pehn 01 (Mafey-lS 
Ojpta(PN9S 
Soyabeans (US) 

Cotton Outsooic A Index 
WooRopa (B4e Sifta) 


$185-187 

$164-165 

$82-84 

$164-168 

$166-168 

+1X 

-IX 

+2X 

$385.70 

-6X 

53&60C 

-12X 

$40075 

, -625 

$138X0 

♦025 

117.0c 


35.75c 


14X0m 

-0X2 

248X0c 

-7X 

Onq. 


12279P 

-2X8* 

07X7p 

-8X0* 

80L83p 

+043* 

S306X 

♦IX 

$3805 

-ox ■ 

2311.0 


El CXLSt 


$143X 


twao 


7&2Sp 

+1X 

70Z5P 

♦IX 

2805071 

+SX 

SBOOLOZ 

-60 

$465.0(4 

-yin 

$307 

■8 

£l77Av 

+1X 

8655c 


446p 

+4 


E per tonne u4a» othenMee atated. p pencoAtg. « 
cwta/b. r ringgafoj. at MMaysten oants/kg. q Aaa 
t JuVAug z JmUdL w JuL f UaWon PtysksL 9 
CF Rottardem. $ Bdfai market dose. + Sbew> 
(LVe welgtn prtceM. " Change on wedc, provisional 
prices. 


Feter Barclay, a wheat farmer 
from Nakuxu in Kenya, had to 
fight hard against the dumping 
of subsidised grain from the 
European Union and US. 
"Wheat is pouring into 
Mombasa at $90 and $100 a 
-toarne - we can’t compete with 


*We don’t care If the 
French, want to 
Increase their subsi- 
dies to fanners is 
long as they don’t 
have to plant a crop 
to get if 


those prices,” said Mr Barclay. 

Mr States called for govern- 
ment aid to farmers to be com- 
pletely decoupled from produc- 
tion - a direction in which 
both tiie US and EU are mov- 
ing - as a way of getting rid of 
surplus output. "We don't care 
if the French want to increase 
their subsidies to farmers as 
long as they don’t have to 
plant a crop to get it,” he said. 


M r Esteran Artica, an 
Argentine wheat 
fanner, plans, how- 
ever, to increase his output in 
rawing years to -take advan- 
tage ot the new, more stable 
climate in the country now 
that inflation is under control. 
Mr Artica receives the equiva- 
lent of £90 a tonne for bis grain 
without government support 
He said he wanted to push 
Argentina as an organic farm- 
ing area as many farmers 
could not afford artificial fertil- 
isers. 

One of Mr Artica’s main 
expenses is the cost of sending 
his wheat to the nearest port 
as there are no trains near his 
4,300 hectare holding. Simi- 
larly, Mr Roy Levee, a Cana- 
dian prairie former with 4000 
acres, 35 miles (56km) north of 


CROSSWORD 

No. 8,491 Set by QUARK 



ACROSS 

1 Coins and notes, or Just coins? 
(4,0 

5 Western Australia: politi- 
cian’s hesitation to produce X . 
across? (6) 

9 It’s great where 7 down is per- 
formed with something 
absurd (B) 

10 Not a proper bow-tie? There’s 
impudent talk in study (6) 

11 unbecoming way in swirling 

nrist (8) 

12 SA rodent: silver deficien t one 
(B> 

14 Things of value making 
appropri ate neckwear (10) 

18 Be my name: OK to be used 
for one getting cash? (10) 

22 Hamid and oppres siv e. left to 
rusty tips (6) 

23 Call to gather age returns in 
distribution (53) 

24 Officer’s standard (6) 

25 Poet's' game taking place, 
they say (8) 

28 Man has year for selling 
church beusits (6) 

27 Exceptional eastern spies 
ground with nearly every- 
thing® 


DOWN 

1 It includes meal served in 
Scotla n d (6; 

2 Emigre changes the social 
system (6) 

3 Country lady undo: overhead 
covering? Not half (6) 

4 Bit of rabbit in fielders' side? 
Follow closely behind (10) 

6 Symbolic story is grey all 
round but different (8) 

7 Dad’s notes recorded on a big 
scale? &5) 

8 Insect (South America) as 
part of log 0) 

13 After dinner entertainer is 
unlikely to be this (10) 

15 Very attractive people likely 
to break up? (8) 

18 US citizens relatively personi- 
fied (5,3) 

17 The first element to annoy 
Henry with dog (8) 

19 Cower at sound of bell in 
church. (6) 

20 Oban is unsuited for. small 
trees (8) 

21 Part of seat on a finer is not 

conforming to mode <G) 


Solution to Saturday's prize pole on Saturday July 9 
Sedation to yesterday's prize puzzle on Monday July li. 


Of broking end jobbing the Peiikon'sfcmd, 

See how sweetly he puts your word onto bond, 

SMlhan 0 






the US border, finds transpor- 
tation costs eating into bis 
income. 

Mr Levee’s form .is 1,000 
miles from the nearest port at 
either Vancouver or Thunder- 
bay on the Great Lakes and 
transport for wheat costs are 
$28 a tonne. The government 
funds $15 of the cost but pays 
this directly to the railroad, 
which Mr Levee believes -sub- 
sidises inefficiencies of the rail 
operator. 

The transport subsidy Is the 
only government support 
received by Canadian farmers 
like Mr Levee, who Is getting a 
payment of around £80 a tonne 
from his . local grain elevator. 
This comes in the form of £45 a 
tpmip outright with the rest to 
follow at the end of the season. 

Mr Levee’s short growing 
season with only ISO frost-free 
days a year and extreme heat 
in summer means he has a 
yield of three-quarters of a 
tonne per acre compared with 
Mr States’ 1.1 tonnes per acre 
In Kansas and closer to 3 
tonnes tn the UK. 

Mr Oliver Walston said he 

hart oimpfiflert hfa production 

methods as much as he could 
to compete with low-cost pro- 
ducers overseas. He sold off a 
third of his 3,00(tacre farm 6 
years ago so that lm could pay 
off debts. “It’s very difficult to 
do that because every farmer 
wants to farm more acres,” he 
said. "But I’ve seen so many 
producers all over the world in 
terrible trouble because they’re 
too highly geared.” 

Mr Walston’s fixed costs are 
now £120 per acre - £80 lower 
than 5 years ago - and he 
makes a profit of £150.000 a 
year. 

“Everything will get much 
more competitive; you either 
compete by becoming large 
and extensive or intensify pro- 
duction in same sectors. There 
will be no place for a small 
farmer growing wheat” 


. fcsa,- 

tii:... 




JOTTER PAD 



I 

x 






IOSSWOR 







93 


1 1 * -- ; • .• V-;'- • , . 

\ i' - - tV I 


Kyseraer &£ 

Kvxmer is an haemirfinn il group based m Norway. Hie group's main ban- 
sen ness ire mechanical apMcri nfc qQ A g— w ^thrihii^ pa^pind 
piper technology, AjyimWiiiiig «wi dii ^ ji j Opnfiag icvbhs in 1993 
totalled NOK24 j6 HBob. 

Cbnsafidated pre-tax profit wasNDK 1 319 nriQkm. 

Kvstnerbas 23, 420 employees. 

gywraar t* tiwerf nn fee Odn S«nrfc ran- h. r y ', rim T nivli«i «ar.f» TT ^r- hing r 

and the Stockholm 



AEGON INSURANCE GROUP 

November 30. 1993, marked the 10 yda tariveamy of AEOONb foandiog. 
Over he ten ycaaMsoty the ABGONluaiance Group ha ipomiio become 
OBeoftboiradiftlcwfiqgintWnaiioiial inminncegxoajK, with assets totaling 
more than NLG IfflbfflBon. Net income hawed to over NLG 1 j 0 biffioo. 
S h tith ofcfafr oc m i tywra farther stre n gthen ed to NLG 8.7 biUt».ABOONfr 
core b o»ia p»gHfein« ii t iii co and rehted pe ns io n , fiamdil rod invCTttncDi 
products . AdditioDihr, AEGON is active is health and FAC insmte. 



when these sectors offerj jrospccti t fot Jon] 
en the poaitioo at is iBUi.ajmion network*. / 
am in The Netfcerianch, USA sod Europe. 


•ofitabflity and a 
imoAnaponaa 



,V^ L 








PEARSON 

IVi ri m >t TnMtto« i«tnlw nnjnr lulMiw iii ml pni riAr rf ■m^qi fwrtri* 

tramped for efi rtim* ivB products thaT deliver i nform ati on, whir a t ion sad 
entertainment m vsys that people wist tfioci* 

FINANCIAL TIMES -PENGUIN -LONGMAN 
ADDISON- WESLEY • WESTMINSTER PRESS 
TUSSAUDS GROUP - THE SOFTWARE TOOLWORKS 
THAMES TELEVISION 


DAF Tracks N.V. 

DAP ‘Docks NLV. c fbm on the developm en t , production, i» —i 

iftn- alw i ■rTvity nf nmtinm unrf hwny umim ar h l wKirVn In tV. ftmi. 

ail year 1993 (2 Much to 31 December) the compmjy made a net profit of 
NLG 10-8 mSBon on a tenwveiafjn« over NLG L3MBon.Wkh a nsk cap- 
ital erf NLG 463 nrillkm and total men of NLG L067.7 million, DAF 
Dncta KV. has a a u fvoncy ratio of 43 A*. 

The 1993 ml report of DAF1hicksN.V. is available in Dotc^ Eight. 
German and Preach. 


C nntinMiI al Aktipng cralkchaft • 

Tbe Continental Corporation ranks among the leadiiginieziiadonalmanu- 
facanos of fins nd industrial products made from rubber and plastics: For 
tins, 1st in Germany, 2nd in Europe, 4th worldwide. Despite severe 
recession, lower exchange rates, and steep drops fa automotive sales in 
1993, Co ntin e nta l recorded net income of DM 65.1 minion on sales of DM 
9-37 billion. A dividend erf DM 4 is planned. Extensive measures to 
streamline resources, art costs, and deliver new systems and products 
Bfcatanth By Wilffw* fV.iT M^Hu tV pnlmtlf l frr IBM amt lwymri 


■■ ;-v. 0 





W&& : : 

z'-r'-'-lv. 


■ • m 





. V Keramik Holding AG Lanfen 

Kcntmik Holding AG Lanfen Is nSwafa bokting co mpany of a group of 
i mMiw i n m l companies m tfao fioldrrfceramicpexJucts^'nieprodnct range 
<4 riw —rf d w t i gn^-faihi — H and flog 

tiles, sanitaryware, baths and roof toes to tableware. Operating companiK 
are aajvtfaBgrope, North arto Sarah Ame rica an d ftrEartConaoBdated 
gtowp sales increa sed in 1993 by lt#Tjo CBF 812 milHon. He gnnqi 
profit in 1993 was CHF 35A nrinkaLTSramik Holding AGfc dBvidod in 
1993 was again 28% and n a d utiwi Uni aplkbty and competitiveness of a 
company active in the cb«atrectkraTitaj j 8 <jy. . 3 



As it lr today. Banco Totta A Acme is Ibe result afjzKqpsraaodacqointiciw 
of several banks and finance booses over flic yean, dating bade to 1843. 
AOgrlSOyemBmcoTottt A Azores beca me a leader to commerce bvok- 
ing in Boriqgal, bat more than Just a bank. TOTTA is now the in* caqpreadon 
atapowmfal financial groopL 


Atlantic Golf Communities 

i 

Atlantic Golf Co uini uni ties (NASDAQ; AQLF) is a real estate develop- 
ment and raa n q pnnrnt co mp any with total assets of approxiin a tri y $350 
milKnm One of the largest Florida-based real estate developers, it owns 
ap pr oximate ly 73,000 sots in Florida and Tennessee. Atlantic Golf began 
its first intcmatkwal project atflaagg ha master devriaptnatt expertise to 
design, develop and market approximately 3^00 acres within dm City of 
Nanjing, China through a 51K50 joint ventnre with a quad-governmental 
Chinese partner. 




Is 



Electrowatt 

Hectowatt Ltd ia a Swiss holding company of a group qftatecaatiaaal 
ftwMpnWa active in six fields of activity; cfeoric urifitfcn, etoctiic power 

year. Cash Flow grew by 24% to S£r. 701 .milfion and 
n«(didated rwt income haanaen by 28% to Sfr. 212 ndDkad. Ketnm an 
canity amonnta to 108%. 62% of sales an generated outside Swtedaad, 
p imiarfl y in tfa&BU. ~ ~ . .. . 


are generated outside Swfcxedaod, 


VICORP Restaurants, Inc.^ 

VKORP Eeatamants , be, hea dq uar teradm Denver, Co lora do, op e rate s 

ra fianch i ac«approgiiii atriy<20ralfteiaiif%M^fr<ype iBalraraats nndcrthe 
»m—«| hlM SiyM»wi«IV ]{||gr >««, frinripilly » rtui Bnfty llumtnll 

agion.iqyCT Mi dw ca t . Florida, ArizooaMd Odttrni a. The Company bteat- 
ing a new concept, 'AngeT* Diner A Bakery”, aad baaednpon to imtfail 
— mJ ^i t i t M iii nI W gsiaw wwft, Beveanesfbr 

fiscal 1993 were SC28.1 million. • 






The Financial Tones Anmuil Report Service is appearingon 28, 29,30June & ljvty 1994 - 


Please send me these Annual Reports: Tide boxes 

1 The British Petroleum Oo pk: 5O SkaBd i afasuranceCotld 9 C 

2 Cl Mefluna Corporation ftO Pearson 10 C 

3 □ Kvaemera.s 7 O DAF Tracks N.V. 11 C 

4 O Aegon fasnrance Group 80.a»tnieiitrfAk^^ 12' C 

Please indicate whether these reports are for business or personal use: 

Q For business use □ Forpexsonalnse (“jBofli - 

Which one of these best describes your job tMe or posltioi^? 

O Company Wrectw/Owiiei/FartiiCT O 


.v'v - This sendee is fret to readers vf the Financial Tones 

9 O KenmUc Hrtdrog AO Lanfen 13 ^ Elcctrowatt 

10 O Banco Totta&Aeores 14 ^ Vicocp Restaurants, Inc. 

11 □ CSba-Gqgy limited 15 O VaanenM Group 

12 Ariaatic Gtrlf Go numnrifies 16 O AGA 


AGA 

AGA bone of the wodtfs largest gas compani e s with gales in 32 coamries 
in Europe, the US and Latin America. 

HdlgamixiliiBthBiwridkndcrhithefeecaii^atorageBndmBpwaniie-con- 
trolled tzanspon of food. 

Ibeasaoeiaw cuuymy G nlhp i ii g n KiafiiaoneofliinlargBBpowerpnxtoxra 
in Sweden. 


PLEASE ATTACH YOUR BUSINESS CARD OR WRITE. YOUR NAME AND 
ADDRESS IN THIS SPACE. PLEASE USE BLOCK CAPITALS. 


AL 


Please dot kere ifyoa do not vrisk to receive farther mtah 

Acco un t an t □ Academic/Research □ Consultant O Other please specify. 

30 th Si 

















Financial Times Annual Report Service 




Stena Line AS 


PoiyGram N. V. 

PoiyGram N-V. the global entertainment group - is Europe's leading rccurt- 
ed musk company, and one oftbe wodtfs top three, 
la 1993. PoiyGram achieved record net sales of NLG 7.4 billion (+12*% 
income from operations of NLG 932 million (+18%) and net income of 
NIG 614 million (+21 %). 

Daring the year, over 30 of PfcdyGramfc albums sold more titan 1 triton nuts 
each, and key events included the acquisition of the lcgendaiy black mnstc 
tabdj Motown. 

PoiyGram is listed on the Amsterdam and New York stock exchangee - 
ticker symbol PLG. 


Stena line 

The Stena Line Group, the woddk largest testy co mp a n y, is an interna- 
tional travel and transport service company. Scandinavia, the European 
co ntinent , the United Kingdom and Ireland are aQ linked together by 15 
strategically shnatcd European fcny routes. 

Passenger volume was just over 14J million in 1993, whilst freight vot- 
nme comprised 841X000 lorries, traders and containers, together wkh nun: 
Hwn 2,4 witlinn private QQL 

Group turnover amounted bo SEK 9.041 milE on during 1993 and the prof- 
it, after net financial runs, increased to SEK 273 nrilHon. 






MoD: 


mmiMW S 



w& 

as-:' adrift 











tir.&’V. ■' -y 


Fortis/AG Group/N.V. AMEV 

Fortis is an international insurance and banking group, formed at the end of 
1990 when AG and AMEV/VSB combined tbdr operational activkos. Forts' 
parent companies are AG Group from Belgium and N.V. AMEV from the 
Netherlands. Fortis operations are well diversified, both geogr ap hically and 
in terms of product range. 

Fanis companies are active in Western Europe, the United States and Australia. 
The Fortis annual report as well as the amnal reports of AG Group and N.V. 
AMEV give comprehensive information. 


Union Bank of Switzerland (UBS) 

UBS is the largest tank in Switzerland and one of the world's leading fan- 
service banks. With an equity base of SFkr. 21 biOioa it is one af the best 
capitalised and one of the few remaining AAA-tanks wodtlwide. UBS is 
well diversified in terms of financial products and services as well as by 
geographic business activities. The bank follows a long-term strategy to 
grow its earning power and to continuously increase its shareholder raise. 
Its main expansion plans are focused an Europe, North America and East 
Asa. 

UBS showed a balance sheet total of SFr. 311 bOHoa (+16.7%) at the end of 
1993 and a net profit of SFr. 23 billion (+ 68.9%). 


MoDo 

MoDo is an international forest products company whose activities com- 
prise the production and'sale of the following products: fine paper, 
WOOd-OOnMning printing papers, napalifttnL pulp, sawn timber products, 
[Hv- kng i ng pT* r , »”i paper and plastic sacks. 

The avenge mmiber of enmfoyees in 1993 was 1M14- In 1993, 85 percent 
of foe Group's total sales cf 17,083 nrillian kronor wait to countries outride 
Sweden. The result after net financial items improved by jnsr over one bil- 
lion kronor to a loss of 449 milli on kronor. 

Given the c urren t outlook, the profit for 1994 is expected to exceed one bfl- 
lion kronor. 


with C&daberg being two of the rooatwick-^r brands on 

a global scale. The Group comprises furthermore about 100 s ub sidiaries 

and it—ftrialiM en mpaaiea, moat rignffjcntrt Royal Copenhagen, dealing 

with china and ghaaware, and Geotg Jensen SBversmims. 

The ownership atrecture of the Group k unique. Carisbog A/S is anab- 
bdy-quoted company on the Copenhagen Slock Exchange with some 1LOOO 
rendered shareholders. The latest shq$Ie sharehoUer by fin is the Oukbag 
Foundation, winch is renmed by its charter to hold a mbrinmm of 51 per cent 
of the share capital in Cadsbeig A/S. 






Norsk Hydro 

Norsk Hydro, founded in 1905, Is an energy based i ndustri al gr o up with 
the main products mineral fertilizers, industrial chemicals, ofl and gas, ain- 
minhun, magnesium and petrochemicals. With annual ales of NOK 62 
billion and 32.000 employees world-wide. Hydro is one of the leading 
S candinav ian m mpnwix Hydm tnvi a j*|wng growth in its oper ating income 
in 1993, mainly due to reduced costs and increased oil production. The 
company's shares are traded on the main stock exchanges in Europe and 
New York. 

An extensive Environmental Report constitutes this year an integrated part 
of the Annual Report. 


Con west Exploration Company Limited 

Conwest Exploration Company Limited ia a Canadian energy and minerals 
company listed oa foe TSE (CEX) and Nudaq (CEXCT). Conwest is focused 
an exploring for natural gas. During the past five years, natural gas reserves 
and prodoctinn have grown at a comp o un d rate of 30%. Oil and gas reserves 
total 88 milliaa tarrek of oD equivalent. Conwest ako owns the Nankivik 
zinc mh» jn Canada's high Arctic, a small hydro business and a portfolio of 
mining and oil and gas securities. 


Telephone and Data Systems, Inc. 

Telephone and Data Systems, Inc. CTOS') is a div er sifi ed tcdecommuri- 
cations company which, at December 31. 1993, provided high-quality 
tdconmntaaiiatfcvwseivkesto 1,078,000 comoiidited telephone, ceflniar 
telephone and radio paging enstomera in 37 states and the District of 
CotumbsiL TDSfe buainem development strategy is to expand its existing 
operations through internal growth and acquisitions and to explore and 
develop other i«iw ™ iniiiiiiMii n<i« businesses lhai manu^pniwi t believes 
ntflireTDS^eaqiemsetacostonKr^basedtdcc mTniin i catiii macrvicc. 


BMW 

At BMW, i a e a si ro we re successfully mtrodpeed. ahead of dtedownlnin, to 
coneofidala the Company ' s market puaiiiuu and ako tooeaac productivity. 
Tims BMW was tbs only German car mmufaauiw to avoid short-time 
working and even to make a profit m 1993. With about 535.000 cars sold, 
BMW «gsin was the wodtfs most successful marque in the top maritet seg- 
ment In the motorcycle business, a record level was readied. BMW 
Rolls-Royce created the economic basis for safeguarding the tong-texm 
development of business. With the purchase, of Rover, at me beginning of 
1994, BMW b exp e ctin g the joint volume of business to increase and the 
earnings power to broaden m the rarrihwn 




Sandoz 

Sander is a global group of companies with corporate tipmiqmwtere in 
Switzerland. The business sector Life Sciences (Pharmaceuticals, Nutriti o n, 
Seeds) accounts for two thirds of sales; Cherniak & Environment 
(Chemicals. Agro. Construction & Envi r o n ment) for one third. 

Sendees Pharma, one of the world's largest phar mace uti c a l is a 

leader in immunology and endocrinology. Consistent high investments in 
R&D arc n key to its outstanding performance. 

Sandoz consolidated sales in 1993 were np 5% to Sfr. 15.1 bittum. Net 
income increased by 14% to Sfr. 1.706 billion. 


ENTRUM JUSTITIA 

Intram Jiatitia is the largest debt collection co mp a n y in Europe, offering a 
range of fnfcnsso and credit management services. The group k listed ou 
the London Stock Exchange and has subskfiarlea in 14 European countries 
complemented by a network of 120 agents worldwide. In 1993, pre-tax 
profits were £13.9 mill ion, cm turnover of £83-6 million. At the year end. 
Intram Justitia bad over 45,000 clients and a stock of ZS million coOectioo 
cases, wrath over £1 A Wflion. 


Norfolk Southern Corporation 

Nkafolk Southern Corponnioa. "The Tborougbbied of T rampona tiop*. i« a 
Vir^nk-baMd bolding company that owns aQ the common stock of and 
controls affright railroad, Norfolk Southern Rmbrny Company, and a motor 
carrier; North American Van Lines, Inc. The corporation's 1993 net income 
ex c ee d ed S594 mflfioxL 




. . 'O ' . . . ' Tv- 


STORA 

glpR A is Emope^ lar gest fo restpro dnas company and one of the woritfr 

lead in g t nan aCniii wag of pulp, prinimg papus, raffagin» paper, board and 
fine papers. The Group is also the largest prodncerofdoois and kitchen 
fomtatings in the Nortik region. About 90 percent of STORA* tots! sales 
are accounted for by the European market. 

The Group's raw ma t e ri ak derive from Sweden's natural water and forest 
resources . In 1993, S TORA had invoked sales of SEK 50,435 mUK™ np to 
6 Descent from 1992. Income after net financial items improved to SEK529 
nnffioo (loss: M2Z). Tie Group had an average number at employees in 1993 
of 33,629. 




The Financial Times Annual Report Service is appearing on 28, 29, 30 June & 1 July 1994 


■Please send me these Annual Reports: Tick boxes UJ this service, is free to readers of die Financial Times 

17 □ PoiyGram N.V. 21 □ Fortis/AG Group/N.V-AMEV 25 □ Norsk Hydro 29 □ Sandoz 

IS d Stena Line 22 ^3 Union R ank of Switzerland 26 ^3 Conwest Exploration Co. Ltd. 30 ^3 Intram Justitia 


PLEASE ATTACH YOUR BUSINESS CARD OR WRITE YOUR NAME AND 
ADDRESS IN THIS SPACE. PLEASE USE BLOCK CAPITALS. 


19 □ Reebok International Ltd. 23 □ MoDo 27 □ Telephone and Data Systems 31 O Norfolk Southern Corporation 

20 □ Allied Group 24 □ The Carlsberg Group 2$ □ BMW 32 □ Stora 

Please indicate whether these reports are for business or personal use: 

0 For business use □ For personal use 0 Both 

Which one of these best describes your job title or position ? Pka& tick here If you do not y^toreadve furtha-mmlhi^ from the ramndalTi^ 0 

□ Company Director/Owner/Partner □ Fund Investment Manager /Analyst O Head of Department/Manaser O Accountant O Ajcacfcmic/Research O Consultant O Other please sperify... w ...... w .... 

Mail to: FT Annual Report Service, Dept 200, P.O. Box 384, Sutton, Surrey, SMI 4XE United Kingdom to reach us no later than 30th September 1994. 


27 □ Telephone and Data Systems 31 O Norfolk Southern Corporation 

28 □ BMW 32 □ Stora 


- ^ 


t. 











LONDON STOCK EXCHANGE 


.? -% ^ 

:* ,>ss 

• 




*• •’ •'* > V. C 


’ Vj-r • 

* •» i. 


f * 4 a 


MARKET REPORT 


FT-SE-A AU-Share bwtex 


Equity market rallies behind firmer gilts 


By Stove Thompson 

Worries that continued turbulence 
in international currency markets 
would trigger another wholesale 
retreat by the London stock market 
were proved wrong yesterday. The 
market shrugged off an Initial boot 
of selling and moved ahead strongly 
in the wake of a firm gilt-edged 
market and a good opening perfor- 
mance by Wall Street 

The FT-SE 100 Index WwiRiifai 
another tense trading session a net 
23^3 higher at 2£S8. having pene- 
trated the 2,900 level in mid-after- 
noon. At the outset, the index 
looked set to threaten the 2,800 
mark as investors fretted about the 
current crisis in foreign BvrJiawgp^ 
where the US dollar baa come nnrfar 
heavy selling pressure. 

The market rally was generally 


confined to the front-line stocks; 
second tier issues nama under con- 
tinued pressure withe the FT-SE 
Mid 250 index down 10.8 lower at 
8,363AShare prices began the day 
under pressure wt£h jnafketmakexs 
reacting to the big late sell-off of 
stocks and bonds on Wall Street 
late on Friday, chopping their open- 
ing prices for the leading FT-SE 100 
and Mid Cap stocks. Sentiment was 
also hit by tha big sli d 1 * in Japanese 
share prices on Monday after the 
shock resignation of the Japanese 
Prime Minister. 

Taking its cue from the gilts mar- 
ket, where longdated stocks were 
down more than a half-point in very 
early trading the FT-SE 100 index 
was down almost 32 points at 28,44.7 
within 30 miwntwg of the opening of 
business, as the dollar moved to its 
lowest levels against the Japanese 


Ao t wnt n < — Bug Dates 


currency since the Second World 
War. The rally in gilts was attri- 
buted to a more confident fafiHng in 
currencies as well as buying ahead 
of tomorrow's auction of £2bn of 
floating rate gQts. 

But with no signs of any institu- 
tional selling pressure evident in 
the equity market and with pita 
beginning to rally in the wake of a 
shift in sentiment in the foreign 
exchange markets, share prices 


gradually dewed their way back as 
the session wore on. 

The FT-SE 100 reached positive 
ground just after midday and there- 
after moved ahead fairly comfort- 
ably, reaching the day's high po int 
of 29022, up 25.6 before slipping off 
its best level just before the dose. 

While acknowledging the UK 
stockmarket’s better tone yester- 
day, senior marketmakers remained 
extremely nervous about the mar- 
ket's potential for Anther big losses. 
“Then? were big movements in 
share prices both ways and the mar- 
ket is looking increasingly dis- 
jointed. This market could still fall 
to 2*800 in the very short term,” 
said a maiketmaker at one of the 
top UK integrated securities houses. 

Be added that European bourses 
and far eastern markets had per- 
formed badly bwH the lack of con- 


sistency in international markets 
remained one of the biggest worries 
to traders. 

Activity in UK equities remained 
very poor with turnover totalling 
only 4612m shares, raising the pos- 
sibility that the big investment 
institutions may not return to 
active trading in the market until 
the third quarter of the year. Non- 
FT-SE volume accounted for over 58 
per cent of the total 

The value of customer business m 
the market last Friday dipped below 
the £lbn ma r k for the third ti 1 ™* hi 
a week, totalling only fiflauten. 

Newspaper shares were again the 
centre of attention as the market 
responded to comments from Mr 
Conrad Black, proprietor of the 
Telegraph that the cost of the price 
cutting war could be less than been 
feared. 



Equity Share* Traded 

TunvMr by vobne pnMcn}. Ebeduc&ig: 
In he + rokd burtora and ouerara tumewtar 

1,000 ■ — : — : — r — ■ 


' H* MW 

Snanwfr&jphaa- 1994 

■ Key Mcator* 

Iwtote and ratio* 

FT-SE 100 28994 

FT-SE MU 250 3363.4 

FT-QE-A350 14594 

FT-SfrA Aft-Shard 145208 
FT-SE-A Aft-Star* yield 447 

Beet performing — c t ore 

1 Tobacco 

2 insurance - — 

3 Electricity , 

4 Diversified tnda 

5 Extractive (nds 



FT Ordinary Index 2255.6 +14.9 

FT-SE-A Non Firw p/e 1844 (18.46) 

FT-SE 1 00 Fut Sep 2911.0 +47.0 

lOyrGttyteM &57 <8.7$ 

Long gttt/equity yld ratio: 213 (2.15) 

Worat performing ewctoce 

1 Oft Exploration A Prod -1.4 

2 FT-SE SmalCap „ 1.0 

3 FT-SE SmalCap «c IT .-1.0 

4 Health Cara . .... n,a 

5 Otatribotara -0.9 


Changes 
at top hit 
Reed 


A shock announcement that 
Mr Peter Davis, the chair man 
of Reed International, had 
resigned following what is 
widely seen as a power strug- 
gle within the group saw 
the shares slide 41p in early 
trading. 

The official company state- 
ment pointed to a clash of 
management styles and follows 
a shift nine months ago when 


Mr Davis was appointed co- 
chairman. with the executive 
role taVpn by the management 
committee. 

City analysts saw the stock’s 
performance as a tribute to Mr 
Davis’s management skills. 
One commented: "If a compa- 
ny’s share price is doing badly 
it is easy to blame the manage- 
ment, and when it is doing 
well it has to be worrying that 
the principal player leaves.” 
Over the past 12 months the 
company has outperformed the 
FT-A All-Share Index by about 
12£ percentage points. In late 
trading, Reed rallied with the 
market but stfll ended a net g 
off. at 741p, with turnover 
unusually Ugh at 3.8m. Elsev- 


ier shares were also marked 
down sharply in Amsterdam. 

Newspapers up 

The Telegraph rebounded as 
it fought to wiirriwrisa the effect 
of the recent price cut which 
last week poured fuel on the 
smouldering newspaper price 
war. 

Chairman Mr Conrad Black 
was reported to be considering 
taking the newspaper back 

frrfn private h artrifl iff ha shares 

fell further. More controver- 
sially, he daiwipd that Ha drop 
in profits from the price reduc- 
tion would be limited to no 
mare than tsm to £10m a year. 
Elsewhere, there was wide- 


EQUITY FUTURES AND OPTIONS TRADING 


A strong rally In international 
bond markets reversed an 
initial poor performance by 
Index futures yesterday, writes 
Stave Thompson. 


The September contract on 
the FT-SE 100 Index began 
the session under intense 
pressure around the 2,859 
level, wftfi marketmakers 


■ FT-SE 100 tNOSC FUTURES (UTFE) E2S per fdl Index point (APT) 

Opm Sett price Chmga Ugh Low EsLvd Open H. 
Sep 20520 201 1C +47.0 20170 2852.0 16878 62096 

Doe - 28200 +470 ... 0 962 

■ FT-SE Mtt> 260 PtDEX FUTURES flJFFE) CIO prM Index poh* 

Sep 3344X0 33500 -100 3350.0 33400 209 4009 


■ FT-SE t*D 250 MDBC FUTURES (OMUQ £10 per (K Index port 

Sep - 33480 ... 

M opon hcaregf Ogiraa an tor pnntous day. f Oast warn shorn 


■ FT-SE 100 ItOBC OPTION (LFFQ f2900) E10 per fid tndax point 

2750 2600 2660 2900 2060 2000 2060 3100 

CPCPCPCPC PCPCPCP 
JhI 166% 14 13&iZ\h 88*2 33 5T 52>a 32*2 73^ 174 116^ 9 ISVz 4>z 204*2 

Aug 1« 34 136 48*2-122 64*2 84*2 85 to - 111 « 140*2 34 175b » 213*2 

Sep 213 54*2 179^86*2 *44 Bfli IS 106 BBh 129 67*a 156b « 188 * 234% 

Od 23027012 19th Kb Wh 102 134 122 M*h 147 to 178*2 71 207*2 Si 244*2 
Diet 212h 94*2 194135b W 189*2 72 253b 

0*4261 Pub 7247 

■ HfflO STYLE FT-SE 100 WOeXOPnOHQJFFE) ClO pflr K2 Index port 

2725 2778 2025 2075 2925 2975 3025 3078 

JM H5*a 9b 142b 17 103b 2fib »b 41b 41b 84b Hb 93b 11 132b Sb 178b 
Aug 207b 25 188b 38b 1» H 184b 71 78b 94 BBb 122 » 154 28b 1»b 

Sep 227 43 (57 72 « TT3 to 187b 

Dec Z7Q 79b 2B2blOBb 143b 148 84b 197 

Uarf 2*b 94 235 1Z7 179167b 132b 217 

0*6,761 p* SOD ■ UMefttag Wm rate frara* dm* n berad on aatflwaad ariosi 
t Lmg tend mphy nwAa. 


FT - SE Actuaries Share indices 


already positioned to see the 
cash market fall to 2,800 and 
reacting to an early sett-off 
in the gilt- 

But with no fresh crisis 
developing In currencies, 
where the doHar bounced from 
Ns lowest level against the 
Japanese currency since the 
Second World War, a firmer 
trend in bonds produced a 
similar performance in the 
futures. 

After reaching a session 
low-point of 2,852, September 
reified to the day’s high point 
of 2,917, before ending the 
session at 2,9.12. 

Turnover in the FT-SE future 
was an unremarkable 16,681 
contracts. 

in a fiwfy pedestrian traded 
options sector one of the 
London market’s biggest 
agency brokers bought 3,500 
September 2,825 cals kt the 
FT-SE 100 option. Bsewhere, 
activity was relatively light with 
Land Securities the most 
active stock option with 1,354 
contracts traded, followed by 
SmfthKfine Beecham "A”, with 
1,174 tots dealt and Lacforoke 
where turnover reached 1,000 
contracts. 

Total volume at the dose 
was 31,818 tots. 


! he UK Series 


Day's Year Kv. Eon. PIE Xd «*. Total 

criQoK An 24 Jut 23 Jon 22 ago yfadX ytafctH ratio ytd Rohan 


FT-SE 100 2680, 

FT-SE AM 250 3363 

FT-SE MM 250 ex her Tiuate 3362 

FT-SE-A 360 1*» 

FT-SE SmaVCap 1704J 

FT-SE SmalCap m taw Tteata . 17630 
FT-SE-A ALL-SHARE 1452X 

■ FT-SE Actuaries AH -Share 


29904) -rfXB 28738 2042.4 2990A 2897.0 4JZ7 742 

33634 -OX 33744 34364 34614 3223.0 371 540 

3362.4 -OS 33738 3437.1 S46&2 3237.5 307 348 

14533 +05 1461X 14631 14835 14443 4.14 394 

1784X8 -IX 1803X8 1823^4 1824.63 164395 315 322 

176303 -IX 178306 1804X3 1008X2135307 330 4X2 

1452X6 -»0.4 1445X5 147338 14S5X5 1430.17 4X7 374 


Day^ Yaar Dlv. Earn 

Jun 27 crigaM Jui 24 Junto Junto ago y W% yMdH 


10 HHNERAJL EXmACmOWflS 

12 ExtacSw indusolaaffl 

15 OB, mwomtedtS) 

16 01 Bg»lP *°rim A Prod fll) _ 

20 QEN BMIWFACTUBHlSgwa 

21 BuUta 3 ConstrucflonPg 

22 Butdno Mate & Mardwpt) 

23 Ctwidcaispi) 

24 (Dvaraifled IndustrialsflQ 

25 Bectrorfc & Elart EquW3fl 

26 Enal«Wfln0(71) 

27 En^Ksrtng. Vawaaa{12) 

20 Printing, Paper & PcfcgpB) 

29 Tmaflea S AppweKag 

30 CONSUMER GOOOSpW) 

31 BrawMriao{17) 

32 SpMa. Winn & CJctoreflO) 

33 Food ManufactureraPSD 

34 HouMhofd Soodafia} 

36 Health Care(2Q 

37 PhermaceuttcalsOS) 

30 TobaecoQl . 

40 senwcesszzaj 

41 DWributoraPI} 

42 Leisure & Hotals{24) 

43 MacBapO) 

44 HrtaOera. Rood(17) 

45 Ratatera. GenaralW 

48 Support Sarwtea*(40) 

49 TransportflQ _ 

51 Other Saivtoe* & Bi* ****^ 

go imunssps) 

62 SectridtjipT} 

04 Gas Dbtributantt 
60 Talaotii i un ur ri caMonatfl 


70 HttANCtALSHOfl 

71 Ban^lC? 

73 Iteuratuxtl T) 222312 

74 Ufa Asaurancam 

75 Marchart Bar*at5> 

77 othar RnandaUM 

to PmnattvKII _ 

an twgSTMENT TBUSTSflZ^ a16 ^ - 

89 FT-SE-A AUL-SHARE?8e2) 1462X8 

■ Hourly rnovemonts 

Open 8X0 

sbs'sss » 
143S - 7 im0 1<4 “ 


+02 2680X1 2840532837.752237X0 
+1.1 3685,12 3752X7 3774X0 313350 
+31 2543X4 2504X9 2S84X2 2163X0 
-1,4 191344 1851 <41 186340107360 
^OB 1888X5 1002X5 101300 1797X0, 
-OX 1145.18 1162X3 118073 1061^0 
+081796X7 1024X1 1830X0 184360 
+02 2289X4 2326X6 2332X6 2181X0 
+12 1862X8 1007X6 1917X9 137370 
+07186327 1910X4 1830X22084X0 
+01 173096 177300 178007 1681^0 
-02 211371 2182.49 2187.75 1751X0 
+082668X1 271078 2747X1 2351X0 
-04 1688X0 1682X0 1701X2 102620 
+1X 2494X4 2S3310 2661X2 287360 
+1.0 2071X7 2114X2 2139X3 202220 
+07 283348 2702X0 2751X4 2812X0 

200928 2123.18 212068 226370 

-02 234338 2387X1 2384X6 2157.60 
-09 1608X0 1629X3 1842X3 1705X0 
+1.1 270078 273310 2782X7 2000X0 
+4.B 312074 319624 3276X4 3793-70 
-02 1857X7 189342 191326 1822X0 
-OX 2851.63 2697X1 270348 3687.70 

204248 2084A4 2094X7 1860X0 

-0.1 287330 274143 2854.70 239040 
-04 181520 184303 185020 1943X0 
-02 162075 1061.12 106249 1621.70 
-03 1484.69 1520X3 162019 1554X0 
+04 2184X9 221222 2223X8 2D72J30 
-08 1181 XI 1187X5 1181.71 T248X0 
+07 2100X2 2149X8 2151X2 2145X0 
+12 2024.12 2070X7 2081.70 1787.10 
+0X 168420 173748 1757.06 187340 
+0X1883101023X41012.78202420 

158373 161351 1833X1 163020, 

+04 1582.69 T 594X4 1804X5 1S4394 
+0X 203424 2088X82101X4 204420 
+06 2626.12 2688X9 272041 252&40 
+1X T 153X2 1196X7 1200X1 136300 
+OX2214X4 2268X6228106 2644XO 
+04 264241 2704.74 2704X0 264320 
-07 1770X3 1000X0 1801X4 151300 
-PS 1480X0 140084 1480.76 134330 
-042628 33 2673X1 2606X82374X0 
+04 1445X5 147335 1405X6 1430.17 


11X0 12X0 13X0 . 14X0 

29752 2875X 26600 28902 

3360X 3349X 33830 33544 

14434 14433 14504 1464X 


1339 62X1 1084X8 
2017 5377 1241X9 
1378 65X7 1237X2 
17.13 26X4 1116X4 
3018 2248 1372X5 
2308 83X1 1362X7 
17.70 25X0 113038 

P/E Xdaft. Total 
ratio ytd • Return 

27.78 ■37.83 103075 
2314 43X9 1017X1 
2372 4043 1033X5 

aooor lax? iQgajg 

2542 30X5 944X1 
2301 15X2 883X2 
30X9 3333 644.12 
3080 43X7 1007X1 
2384 40X0 947X7 
17X0 1442 89374 
24X6 23X1 965.14 
56X7 33X2 101143 
2241 37X3 104369 
2022 30X0 934X0 

14X2 5229 657X2 
15X2 38X1 -030X3 
.15X3 6878 88442 
1376 4304 67038 
15X1 41X0 634X3 
66X0 2SX8 918X3 
1441 47X0 854X0 
1QX4 103X5 72366 
18X7 2383 90372 
17X2 37X4 001X7 
24X6 1042 99350 
21.16 37X1 02346 
12X6 32X0 967X4 
1319 25X1 85078 
1357 1578 80314 
20X7 31X6 846X8 
80007 11X0 697.14 

13X4 31X9 80302 
1018 3007 834X1 
t 5343 77378 
14X8 6X0 79340 
748 5241 792X4 


8X9 1279 4317 80242 

8X0 12X3 59X7 782X4 

12X7 011 29X0 784X8 

318 15X2 88X8. 84309 

1271 922 55X8 78393. 

321 MXS 31X8 , 931X0 - 
4,13 3023 2322 826X8 
1X8 51X3 29X4 B74X0 

374 17.70 25X0 1130X5 


15X0 1310 HtfWBW Lnq/riay 

2881.7 29001 2902.2 28447 

3352X -3381.1 03834 33333 

1461X 1469X 1459X 14387 


* FT “* E Act ^°* r 'poQ 1 *^*** 1^*» 13J ” 14X0 W .toito Cion Prestaua Chanaa 

■ i i Ima to 4im a amt 4 4noA4 .i/ion o imm a n 


M 1072-fl 1072X 107X5 1072X 1072X 1074X 10008 -10808 1084X +3X 

Bidg & Crwtrcn tana ^2 WgB wng 2675X 26801 2J5X W«M 26747 +S1X 

SSSSafssssss » « - ss a 

UnteO. 0 " *?£ZZ2 ^Snue from R0RKT *_»*! SEJ ub. the FT-SE MMSBO FW* Aooato 380 ondflre FT-tKAnaariM Mon, 

<****. « »" S«oac 6«»»loe.en<l_T1» rinwaM Tirao»1Jnitad.Th*Fr-ae Agw<M8hn 


Spread relief that middle mar- 
ket newspapers Daily Mall and 
Daily Express had resisted the 
pressure to cut their cover 
prices and had taken the less 
expensive promotional path. 
Daily Mali Trust “A" shares 
bounced 23 to 893p and Express 
parent United Newspapers 
recovered IS to 496p. 

Rolls-Royce sold 

Aero engine manufacturer 
BollfirBoyce fell 6 to I68p, after 
volume of 4.7m, as several bro- 
ker’s advised in v esto rs to sell 
the stock. The list of sellers 
was said to have included SG 
Warburg and Strauss Turnbull, 
both believed to hava advised 


TRADING VOLUME 


ASOA&CUpt 

asrEr* 

*0“ .. 


BAAt 

BATMkt 


Hit 

BTJMfaie 

BIRt 

BN* tVaooKwtt 
BWt 

BteCMat 

BocMr 

Sit 

BrtL AMDSp«C*t 


BWM 

BumWi CMotf 
Burton 

CobtoAWWt 
Cadbunr SctoMppact 

CNorOMi 

COriKMi donnoct 
OUtVhtkr 
Comm. Unlonf 
Cmtaon 
COuMUst 

Dhom 

BMMniBtcL 

GtoiMcSandQocL 

BsCHmOm 

FW 


371b +8 

VOh +6 

368 +8 

102^2 ^ 


370 -4 

284b +1*2 

383 -4 

133 *2 

148 +8 

854 +8 

57b 

*10 -a>i 

415 +a>2 

an -a 

29+ +2 


237 +1 

474 




«2™ t^Z 
574 *1 


374 -8 

170 +1 


OhlAccHM 

CtamlBKt 

Otoot 

Sit 




LadbnMt 
Land annlwt 
Upon* 

Lagtf * Oanacatt 

IBP 

LonctooSact 


IM s&Spmort 

IHmbBML 

UoRtaon(Mno 

wet 

>1-+ M L 4- 

wnonai rwuT 
Naxt 

Nonh Waal UMa*t 
NRMnBict 
Northem Fooddt 
' MnwBb. 


B8$ +4 h 

ITS +11 

-2 

443 +e 

-4 
-2 

236 +2b 

-8 
-a 
-a 
4 

788 +H>1 
-3 





7400 124 -ill 

1X00 188 -« 

28 137 -ab 

■ 73 840 +3 

3400 304 +1 

335 SB rf 

422 128 

1J00 180 « 

3.100 447 +3 

2X00 *18 +11 

2.600 2)41 -9 

881 4S7 

♦1 


+10 
+11 
188 +1*2 
488 +7 

+2 
-a 
+10 
217 -8 


+41 

7*1 -8" 

213 *8 

-8 
-a 

4tt -I 

292 +ttft| 
388 

IMS 18 

817 +19 

+8 
343 

113 -li 



anndnrd Ctartlt 
Sl M tB B W . 

Stn AKaaeat 

: 

HOnqrr 


TMaSUto 

TmteyfeMww 


IhonBXt 
IMMt 
Tmlaloar Hqum 


473 -8 

248 48 

-4 
+2 
213 

383 +3 

404 « 

TO 4* 


WMuio(3Wt 


438 +3b 

1032 +18 

-2 
+8 

315 42 

• +13 

473 -8 

+5 

808 4* 

4 

-• 


T o du mHW r 833 

Zmmat i^oo 

Bawd on teteg wtaa far ■ nbctfanol «*»■ 
Mcarlta Min# Ite 9640 ayMn 

piai f Ml 4JCp*»L TTadM nf ona aWon or 
nmn lOudad Hum. ftataWaiFHt 
100 Uac coradMnt 



investors to switch into British 
Aerospace. 

Rolls had, until recently, 
been one of the best perform- 
ing stocks in the market *hia 
year. However, a feeling that 
the shares had Tan too far 
ahoari emerged in recent ses- 
sions. 

A lacklustre presentation to 
analysts last .week brought a 
Anther retreat with research- 
ers concerned about the rating 
of the stock, and poor order 
flows particularly for spares. 
BAe put on 5 to 450p, after 
trade of lm shares. 

Tobacco to insurance con- 
glomerate BAT Industries rose 
17 to 399p on speculation that 
the company might p rill out of 
a flbn deal to buy the cigarette 
arm of American Brands. The 
company denied the specula- 
tion and a number of experi- 
enced market professionals 
were scepticaL 

However, hopes that the 
company might have an escape 
route away from an environ- 
ment of increasingly tight leg- 
islation against the tobacco 
industry gave comfort to the 

mar ket 

Chemicals group ICI lifted 
14% to 765p as the company 
arranged trading update meet- 
ings with analysts following its 
successful presentation last 
week. 

Composite insurers recov- 
ered sharply with the help of a 
certain amount of institutional 
buying. The stocks also 
responded to a bounce in gilts; 
most of them ho(d more than 
SO per cent of their invest- 
ments in the government bond 
markets. 


NEW HIGHS AND 
LOWS FOR 1994 

NEW HHH9 n. 

CtMKMnWnpMHlWL 
BLECTfWC A OlBCT BBUP M nurnc. TO 
oo. ixPLOfMnaN a moo m a*** u. 
SPIRITS, WNES a 0008 (1 ) MmWM 
-OtanftM. SUPPORT 8CRVS nHwrtMWMinB, 
Sandmen Baa. TfWKSPORT n P 5 0 3 V 
2pa. Rd Nan-Cun Ptd, 

MOM LOWS IM3L 

0818 B) BANKS H AN£ MM EapMa 

emu. H8SC HK. HSBC. LtoyeM. NM. M* 
188. B fafaW O, WWW (HI te—. 
BoRfcB te Fotowu ftm* , On— Ittiq 
Union Thatnodon, Unmount. Scaefeh A 
NMBMte UK MMbmd. MJUM03 
CMTTRH (tU BLDO MAILS* MCHTS (U) 
CMMCAL8 n M3A 4B. OtWl Vta. DaUn. 
Laportl, MtatH 8amvi, DKTT88UTDR8 1*4} 

dmmm mux (ui ucnwc a, suscr 

OOUP {14 DWMB9HIB (80 OKM, MMCtXK 
81 DBA Bo 8«<>c Pit Bmaon, QoMw-Baaz, 
nafcm. Uwo*. Do PXd 8wta . 
■XTTUCtm IMD* (U| FOOD MMNUF (11) 

Mbort nahor. Aooa Brit, Cadbuy aetaMpsu. 
C—n Hta OFttny. Do«ro fa*. IBU.iv 
Wcwhm teste. PwWMLteM.U H im.OA8 
iimumwi m new, mnnw onm (ig 
HOU8MOU3 BOOM N M Hno Dm; 
RocMn 8 Cokim Do BUpo Cv. 8MUWWCE 
{■4iwwBTi4amTmiari*(22B| i» iy i!a iMB«r 

cow— cm t«uw » noma m 

Apte top—.— ravWfld AMteteo 
Dnr, Rnt Um. RVndy Hfe, Qmm dm 
Omrd, Kfagnote. Quarimt R** Onjm Mp 
Rri, Lire M8URANCS « Bnomlo, Wd 
AM) B, MBXA Ctaj OttWCMAMT WM R 
OIL EXPLORATKM A PHOO CB Enwgy Equky. 
VBan. OR. WTBHWB) PI Ctamn Cpn- 
Exmn. OIHM FMWCUL HE OTKBI SOWS 
3 BU8N3 (E Cwa Roaga. OmM Mohn Unta, 

PHAMUCflUHCAUI 01 CalMcb. HwdnQdon 

M, Pntn kM, PRnWl P8PTO * PACKS m 
PROPiRTV p* RETkLBtB, FOOD (!) A8CVL 
Budum OM lootand. M 8 W. tegkw. 
RC1WLB«, OBBHL (M) aPBOTS, WMB8 3 
CBOB n Bifawm a«nd MR, suppanr 
88IW Ctf) TflXCOtMUMCAnONS n 
7EX78XS 8 XPMfMLn TOBACCO (9 
HoOmmim kifl. U*. TRANSPORT (I!) WUto 
B) Norih VM, NortMUrim SmnTmt, 
Soudnm. Woomk. MmCAMB tU| 
CAMA0UHS{«|. 

General Accident lifted 16 to 
552p and Royal Insurance rose 
10K to 252p. 

Cadbury Schweppes which 
has underperformed the mar- 
ket by about 11 per cent in the , 


last month, was held back to a 
rise of only ZVt to 415p as Nat- 
West Securities reiterated Its 
caution on the stock. The 
house said: ‘"Whilst Cadbury is 
keen to reassure the market 
that profit expectations are 
still Justified there do seem to 
be a number of drinks In the 
armour which Justify further 
caution on the stock," 

A UK analysts visit to some 
of Grand Metropolitan's US 
food operations helped the 
shares harden 5 to 380p, as 
45m shares were dealL 

House builder Higgs & BUI 
fell 4 to loop after announcing 
that its £22.fcn rights issue was 
only a third takAn up by share- 
holders. It said in May it 
planned to raise the money to 
buy house-building IrtiH on, 13 
sites. Higgs & £011 shares have 
fallen nearly 25 per cent since 
the rights announcement, 
partly reflecting the recent 
weakness in the sector. In 
April, housebuilder Redrew 
Group (off 5 at 108p) scaled 
back flotation plans in the 

li ght of the Hlank itamflnri. 

Leading chemicals group ICI 
tiffed 14% to 765p as the com- 
pany arranged trading update 
meetings with analysts follow- 
ing Its successful presentation 
last week. 

High street retailer Dixons 
gave up 7% to I79p. with Gold- 
man Sachs said to be negative 
an the stock. 'Die group reports 
figures a week tomorrow. Ner- 
vous trading in Vendome 
ahead of figures an Friday, left 
(he shares 5 lighter at 449p. 

Associated British Foods fell 
5 to at 501p after investment 
bank BZW pointed out that the 


recent decline in UK gilts may 
soon force broker's to revise 
profit expectations if there is 
no recovery. The group has 
substantial investments in 
gilts. 

Tate & Lyle improved 2 to 
404p after reassuring the mar- 
ket that Its recent purchase of 
a 61.3 per cent holding in 
Orsan which received approval 
from the French, Belgian and 
German authorities, will not 
dilute earnings per share. 
Hazlewood shrugged off recent 
weakness, rising 2 to 18lp, 

Vickers advanced 4 to 175p, 
ahead of an analysts* visit to 
its Challenger 2 tank factory in 
Leeds. 

Motor dealer Lex Service 
relinquished 8 to 4I6p, with 
James Capel said to be nega- 
tive on the stock. 

Profit-taking after the recent 
strong run in Airtonre 
together with worries of over 
capacity in the package holi- 
day market left the group’s 
shares trailing 15 to 473p. Air- 
tours reported losses of £L7.6m, 
in line with market expecta- 
tions, but analysts upgraded 
profit forecasts for the full 
year. 

Advertising group WPP fell 3 
to 99p on Sunday newspaper 
reports that it had shelved a 
planned $400m flotation. 

An oil find in China by the 
Exploration Company of 
Louisiana saw the company's 
shares lift 16 to I05p. 

MARKET REPORTERS! 

Pater John, 

Joel Kbazo. 

■ Other statistics. Pag* 23 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


— cm aw — 

option jg Oct Jw JlA Od Ji 

AM-Lyon 540 a 41 - 8 19 - 

r553J 589 4W18U - 41 47)4 - 

*W* 230 IBM a 

(*232 ) 240 5 18 19)4 14H.1SM 24 

ASM SO H SK 7 2h 6K IM 

fSO J 60 1 2M SB ItM 13 13H 


”4 Brit AOrmf* 360 T9 32H 38 7K 16 23 


ran) ago sb it a a a a 

MIMBA 390 17% a S10M23H 30 
ftoS) 420 8 16 »29B40B47B 

Bade 500 28K43HMI4 6 15 23 
(*5191 550 4H 1ft I7 34B 4Z4B4 

BP 390 16 27 35B 9 18B 24H 

[-38* ) 420 4B M22H S36H41B 

OdMSuf 130 SB 12B 15B 5 SB 1114 

(133) 140 3 9 11B11B 15 17 

BMI 460 41HMV4813H 9 22)4 

(*492 ) 500 1S3M37BUM 27 43 

Otel 1*7 390 2SK 46 59B B13H20B 
(*410 ) 425 SB — - 23B — — 

COHlRMl 460 Mm 41 8 17 25H 

(*473 ) 500 SB 18ft 28ft 31 36M 47B 

OwUMn 460 47 - - 2 - - 

(*407 ) 500 18 2BB34B ISM 31 35H 

a 750 * 47 MB 13 33B41B 
(-7M) 800 8 M to 43 6SBHH 

ntgttd 480 31 43 56B 617K24K 
(*481 ) GOO 11 Z2H33B25B3BB4SB 

UM Saw 550 48 81 « 26* 13* 

fSBZ ) 600 11 a» 37 18B 25H 32 

Daria IS 390 13*29*33* 7M 15 19* 
(*384 ) 420 3 1329* 28* 32* » 

NMUt 420 to 42*81* 4H 15 18 
r*47 ) 460 11 21*30*21* 35 38* 

Mranuy 890 IB » 37* 10* 20* Z7* 
(*395 ) 420 4* 17 24*30* 37 45 

SHIM. 650 43*04*81* 3* 18 24* 
["686 ) 700 8H24H33M22M 38 43* 

Gkntam 200 12 ISM BK 5 9* 13* 
(-209 1 220 3 9 M 17* 22 25 


88 B* - - 

97 2* - - 

osoa* sb a 
ion b a 47 

700 21 37* H 
780 4 17 21* 

A— te» ftata 

380 a 38* 48* 
390 11 MSI* 
140 »* 28* 29* 
160 8*14*18* 
I 300 a 82* 38* 
330 8 17*34* 

aw mm 

120 1720* a 
130 11* t# 17* 


8 — — 
11 * - - 
14* 27* 36* 
45* 55 62* 
15* 35 42 
B 87* 72* 
fug Mar fata 

815*22* 
24* 32 36* 
2* 7 8 

9* 14*17* 

5 14 17 
21 30* 33* 

Sep PBC Mar 

6 11 13 
11 15 18 


Opto A— taw Hta Ann to ftta 

UMn 480 18* 40 B 30 49 57* 

(*449 ) 500 8 29* a 00 75* 83 

BAT Ml 300 « 48 83* 0 14 16* 

(-388 ) 380 IT a M 20*28* 31 

BIS 330 30* 37* 43 3* 10*13* 

(*368 ) 380 10* IBB 29* 15 24*27* 

MTdican aeon* a a* n 17 m 

ran j s» 4* nmm 38 42* 

ddwyfao an 34* 44 a 6* 12 14* 
(>414) 420 14* 28* S3* 15* 28 2S* 

UMBK 550 »* 44 88* 19 31* 40 
(•572) BOO 9 a a S3 62 69 
8tom 4to 31 41* BUM 5* 12* 18* 
(*442 ) 480 9* U . a 23* 32* 38* 

SEC 280 7*18*19* 13 17* 21 
1*282} 300 m 8 12 30 32 34 


(Mb ft* 

ojto mg mw he Am Ww Fa 

Kansan 220 21*25*26* 2 6* 9 

[-238 ) MO 8* 14 17 8* 15 18 

Lama 134 W 17* - 5 9* - 

[*141 } 154 3* 10 - IBM a - 

Lucas tads 140 a 28* a 2 S 8 

(160 ) m 8 1418* 8 15*17* 

PSD 800 38* 45* 57* 18* 3741* 

CDOe ) 650 BM to 35* 48* 88* 72 

mtagHn 180 12* 17* 21 5 11 14 

(-184) in 4 8* 12* 19 a a 

PMSdU 280 21 27 a 6 14 18* 

(-232 ) 300 •* 18* 22 15 25 2S* 

KTZ 900 48* BBH 8B 13*32* 39 

(*82B) 850 21 44* a 37* 58* 84* 

Rsdsnd 480 a 54 80 718*23* 

f«8) 500 T1 32 40 24* 30 44* 

ftyd tax 240 19* 27* S3 5* 15 16 
(-261 ) 260 8* 17 » 15* a 28* 

Tosco 2a 14 IM 25* 8 13 18 
C223) 340 8 IM 1818* a 27* 

Addons 460 a 47 84* 12*23*31* 
(*473 ) 500 10* 27* » 35 46 54 

vatams 325 18 2M - 6* 14* - 
(*336 ) 354 5* 14* - 23 31 - 

Otto Jd Od Jw Jd Od Jw 

BAA 050 83 74* St B It 29 

ran ) ao ib 44* a a 38* 48 

ItHSMSWr 420 a a 42 4* 13 a 
(*438 ) 480 8 17* 21 Z7 33* 42* 

OpBon ap Bsc Mir Sep Use to 

Abbai NbB 3n 24*31*37*17*22* 30 
raes) 420 12 18 24*36* 40 47* 

Anstrad 25 4 <* M 3 4 4* 

(*28 ) 30 2 3 3* 6 7 7* 

Banto 500 41*48* » 16 22* 30 

(*524 ) S50 W a 38* 44* 50 57 

Bke Otis 280 a* 27 32* IM 21 23 
[*282 ) 300 12 IS M a 33 34* 

Mfabta 240 24* 2M 38* SB 11* 13 
(*2S4 ) 280 12 15* 20 15 21 23* 

Owns 160 23* Z7 30 6 8* 12 

(179 ) 180 n* 17 a 16 19 21* 

Mtadmn mo ISM* 2* 4* a 7 

(151 ) 160 7* 41 14 14* 18* 18 

Lmta T20 12 18*16* 8(1*14* 

(124 ) IM IM « « M 17 8 

IM Power 300 43 80* 57* 8 15 19 

(-417 ) 420 24*32*48* 22 20 32* 

Scd Power 330 28*30* a 16* 22 24* 

(*34Z | 380 12 17 22 34 37*41* 

Seats 110 11 13* 18* 4 8 7* 

nu ) 120 5* 8 18* 9B 12 13B 

Arts 220 20*23*21* 9* 14* 17 

(*220 ) 240 11 14* 19 21B a 28* 

Trass 140 17 18* 22* 10* 13 15* 

(*144 ) 100 8* TT* 14* 22* 2fl 28 

UMH EH KM) 80* 84 87* 45 80* 73* 
H031) 1050 35* BM 73* 74 89 1(Q 

ia an to* 2i a* ii i2* is 

(*205 ) 2a 7 t2 15* 24 20 28* 

Toe*** 200 22 29*29* 6* 9* 13 

f718) 220 11 IM H 17 204 23* 

totems Bn 41* SHi 8M 30* 50* 58* 

[*602 ) 00028* 3748* 00 51*06* 

Option Jd Od Jsb Jd Od Jaa 

fikur 300 SI 04 71 025* 32 

(*S41 ) 500 19 IB* 48 a 53* 59 

HCtipMi 650 40 71 88* 18 48*58* 
(*670 ) 700 19 47 65 45* 72 ffi 

fan 4250 18 a -13*25* - 

can <376 a a - 21 si* - 

Opto Ant de» ft* Aflfl to Feta 

M sHfacs in 14 a* a 4 9* 12* 
nai in 4* 11* m* ie a a 

* Undefatno mcuKV priee. Pnaduns ahewi are 
tmsd go dodng sdsr prieee. 

Jm B. ira eewn OiJSSO on I8XS1 
PutEli^n 


RISES AND FALLS YESTERDAY 

R 

British Fonda 

Other Fbwd misrest 

Mlnerri Extrncaor 

Gorwrai Manufaetum 

Consumer Goode 

Sendee® — — 

UtHUas — ; 

Hrwncus 

Investment Duets .... ■■■ 

Otfiera - — 

Toted ! 

Dsfa based on moss on n e H rtw fated an die London torn Son**. 


Waee 

FaRe 

Seme 

58 

a 

a 

2 

0 

13 

16 

121 

62 

80 

309 

271 

28 

86 

09 

38 

253 

213 

19 

14 

12 

S3 

196 

125 

24 

201 

164 

6 

102 

23 

321 

1388 

063 


TRADmOHAL OPTIONS 

FtatDeaftngs Arne 

UdDoabwa Ana 


June 13 Lm DedaraUom 
June 24 Forawtement 


Calx Aminex, Btrae, Ctoae Brae, Era Dianey, UTV, Johnston Frees, Kama Sye, 
Lleyde Bk, Nswwi Roe, Race Otap, WethoRn frttq. Pute: AmtaieK, Cloee Brae, Jataatan 
Prase. Wettiepn (JO), Warburg (80). Puts & CaflK Abbey Nat. Mora Focue. 

LONDON RECENT ISSUES; EQUITIES 


C417) 
Sod Power 
("342 | . 


taw Amt 
price pak) 

P «P 

WO 

«P 

Sm) 

1994 

High Low Stock 


Ooao 

priee 

P 

W- 

Nd 

t*v. 

DtV. 

cow. 

On 

Vtd 

HE 

nd 

§120 

FJ*. 

68X 

123 116*2 Aero. HamUo 


119 

-a 

W074 

2jG 

ax 

11X 

161 

FJ». 

46.1 

166 

160 Array 


106 

-1 

LN1X8 

08 

04 

20U 

295 

FX. 

13819 

267 

2S3 Asgera 


263 

-8 

- 

- 

- 

- 

100 

FJ>. 

31X 

104 

99*2 Bfafa OW S 

Vi C 

100 -J2 

- 

- 

- 

- 

105 

FJ>. 

044 

110 

105 Btoomebuy P 

i 

110 


WN2X4 

07 

ax 

112 

§160 

FJ*. 

200 

154 

136 Brarin Ooipfa 


1» 

-4 

IXX 

23 

sx 

10.0 

- 

FP. 

213JB 

81 

67 CAMAS 


70 

-a 

1*0.75 

0.7 

07 

332 

- 

FJ». 

104JB 

m 

hw as 


108 


- 

— 

- 

- 

150 

F.P. 

17 A 

100 

156 CPU Aromra 


180 


uox 

24 

ax 

15X 

1143 

FP. 

12JQ 

170 

143 Canal 


163 


W3X 

- 

ax 

109 

100 

FP. 

50.1 

104 

96 Chesterton H 


SB 

-i 

RM3X 

IX 

42 

13X 


FP. 

103 

36 

34 CNmeOorttm! 

. 

34*j 


ra 

- 

- 

- 

130 

FP. 

45X 

143 

133 Denby 


137 

-i 

W3.1 

zx 

ax 

132 


FP. 

700 

93 

00 Ffantnp Iruflon 


901a 

-*j 

- 

- 

- 

■ 

— 

FP. 

7X8 

50 

42 Do Wanente 


46 


- 

- 

- 

- 

225 

FP. 

1003 

233 

22S Intewrwdde 


232 


LN09 

21 

5J 

01 


07 94 J’eon Fry Euro 

77 63 JP FI Japan Wrt 

3V 3 John kfarnfletd 


200 

FP. 

1592 

233 

200 ^London CU 

• 

226 

-1 

W11X2 

IX 

00 

11X 

120 

FP. 

342 

130 126*2 Noraar 


127 


W4X8 

20 

45 

10X 


F.P. 

236.7 

131 

106 Ratew 


106 

-5 

WN27 

2X 

21 

127 


FP. 

444 

92 

88*2 3cuddar Udn 


88*j 

-*2 

- 

- 

- 

“ 


FP. 

6X2 

44 

42 Do Will 


43 


- 

- 

“ 

- 

100 

FP. 

24X 

99 

98 SHfasHYSoi 

rC 

99 


“ 

“ 

- 

- 

*S96 

FP. 

132 

na 

108 Spenjo Cana 


111 


L1X 

IX 

IX 

43X 

150 

FP. 

54 JO 

150 

130 VO 


139 


WN5.5 

IX 

40 

124 


RIGHTS OFFERS 

leaue Amount Latest 


price 

P 

paid 

up 

Renun. 

toe 

1! 

Ht0h 

so 

NS 

sn 

6pm 

240 

M 

29/7 

130pm 

— 

N» 

17® 

236pm 

286 

M 

14/7 

65pm 

42S 

Ni • 

5/7 

Stem 

426 

Nl 

1® 

BOpm 

100 

M 

25/7 

11pm 

0 

M 

3® 

Arpm 

130 

W 

14/7 

26pm 

5 

M 

21/7 

6pm 

ISO 

m 

27/7 

38pm 

73 

Ni 

S® 

tern 


Britton 

Bdoa 

Bm-Otray 
Sretumai 
Evans IfaMlw 
Hdtar Prsat 
N3U 

Paramount 
PtewtJo 
StandoRl Plat 
Ufa— I 

Wdse CHy or Lon 


Closing +or- 
price 

P 

4bpm -h 
100pm 
40pm -18 
10pm 
5pm 

B3pm -3 
2 1 2pm 
lipm 
Sipra 

Bpm <2 
23pm <8 


FT GOLD MINES INDEX 


Joa Haig 
24 as day 

[(36) 197181 -18 


1201*81 1787X2 


Gmai At 

82 wade 

i*te* 

M* Law 

288 

2387X8 1322X8 

444 

344080 100223 

202 

aotaxeiMiu 

0X4 

203265 130100 


FINANCIAL THUS EQUITY INDICES 

Jmo 27 Jure 24 June 23 June 22 Jra 21 VTago *mgh low 

OMnery dhera 22SSJS 22406 22MX 3311.6 2205X 226&S 2713M 22*06 
Ord. <fiv. yield 4^43 4.46 4X7 4X4 4X7 4.09 4*8 048 

Earn, yld. W Ml 5X0 5X6 5X2 3.78 8X1 4X4 5X6 3X2 

P/E rate net 18X4 17X9 18X8 18X1 18X7 86.46 33X8 17X9 

fVE rate nV 18.73 1&61 18X1 19.15 19.05 24X0 90X0 16X1 

fa 19B4. Ordtoy Stwra Index decs earapfato: high 27138 2/82194; lew 4BA 28MM0 
FT ORtory ten irate bow dda 1/7/35. 

Onfawey Share hourly ch an ft*8 

Open BXO 10X0 11X0 12X0 13X0 14X0 18X0 16X0 Htflh Law 
2218.5 2233.0 2240.1 2239.1 2241 X 2248X 2242X 2255.0 22566 221 7 J 

' June 27 June 24 June 23 Juw 22 June 21 Yrago 

8EA0 bargains 24231 21X04 21X72 20249 21,724 28,432 


Nog Ante* (12) 1613X1 -t A ibuoxi iorsi ibiuu me* jaraiBaiwiH 

CoomUii The Ftendd nraa Unto 1084. 

trantaHa M* ranter al tanrato Dratai UB EWfara. Bra tow* 100000 3ita«L 
PMeewnr Odd Utora md«c June 27: 2222; dm/a dwng* -103 potnta; Tear S0K 2057 1 Pertd 
Lira pdeea wn wwwfafcle fce *fa addon. 


8EA0 bargains 24X31 

Equity turnover Bntf 
Equity bagalnst 
Sana traded W7 
T BateAng hteiaariat b udnra* end 


20249 21,724 28,432 

1288X 8204 93 IX 

22X78 23X27 32.106 

478X 391X 4907 


i. 








30 




























































FINANCIAL TIMES TUESDAY JUNE 28 1994 


LONDON SHARE SERVICE 



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34 












































































































































































36 


CURRENCIES AMP MONEY 


F INANCIAL TIMES TUE SDAY JUNE 28 1994 

MONEY MARKET FUNDS 


MARKETS REPORT 


POUND SPOT FORWARD AG, 


Central banks hold fire 


Jim *7 


Ctoaing Change Bdfcflsr 
njd-poW on day agreed 


TW»MH 

Wflh tow 


One monfli HmnmAi On year Bank of 
Me ftPA ROM ftPA ' Ms HPA Ena. Mn 


Foreign exchange markets 
were caught in a stalemate yes- 
terday as participants waited 
for a repeat of Friday's central 
bank support of the dollar 
which foiled to materialise, 
writes Philip Gawith. 

The dollar remained very 
weak and closed in London at 
YS&865 against Urn yen, from 
YlOO.9 on Friday. Earlier the 
US currency had touched a 
post-war low of Y99.50 during 
Japanese trading. 

Against the D-Mark the (fol- 
iar finished at DM1J5758, more 
than two pfennigs down on Fri- 
day's dose of DMZ.5972. 

. Despite the dollar’s weak- 
ness, it avoided going Into free 
fill as some had feared and 
this tent support to bond and 
equity markets. 

Many observers had expec- 
ted central banks to continue 
Friday's intervention, but oth- 
ers said that the failure of their 
earlier efforts had forced them 
to pause and reassess their 
objectives. 

In Europe, meanwhile, the 
D-Mark fell victim to profit-tak- 
ing as investors cashed In on 
the currency's recent bout of 
strength on the back of the 
weak dollar. 

The Belgian franc, Spanish 
peseta and Portuguese escudo 
all finished firmer against the 
D-Mark, but it was stronger 
against the French franc and 
the Italian lira. 

■ Traders reported that the 
only central bank intervention 
in support of the dollar came 
from the Bank of Japan during 
Japanese trading. Market esti- 
mates were that the BOJ spent 
$750m-$lbn supporting the cur- 
rency, but to little avail. 

The dollar's woes were 
aggravated over the weekend 
by the resignation of Mr Tsu- 
tomu Hata's eight-week-old 
minority coalition. The depar- 
ture of the prime minister 
raised doubts about whether 
the US and Japan would be 
able to reach an accord over 
trade issues at neat week's G-7 
summit in Naples. 

Mr Steve flfannah, director of 
research at IBJ International 
in London, said intervention 
was probably a "waste of time" 
given the skittish state of mar- 
ket sentiment where signals 
were likely to be misinter- 
preted. “The market is going 


JMjlar . 

jtgjfcst 1f» Ytarff pwS) 


106 



99 — — 

Jun»109f 

Source: Duttatowi " ' 

ft Pound hi — W v<»* 

-Aw. dam- 
14625 
14518 
14606 
14*50 


Jaa 27 
E*pot 14473 

l<n«i 14468 

3 nun 14438 

1 V 14413 


through quite a frantic period 
and reassessing its views about 
the doUar," said Mr Hannah. 

He pointed out that failed 
intervention, such as on Fri- 
day, was worse than inactivity 
because sentiment was 
adversely affected by a filled 
attempt to arrest the dollar’s 
dedine. 

The IBJ analyst said the cen- 
tral banks would probably let 
the market turmoil run its 
course for a while before act- 
ing again. He predicted that 
they might wait until late July 
or August before acting. 

But Mr Avinash Persaud, 
head of currency research at 
JP Morgan in Europe, said cen- 
tral hflwtrg might act thin week 
“to restore their battered credi- 
bility after Friday's debacle." 
Hie predicted that they would 
foil ™ 1 <WM such a move name 
in tandem with a strong signal 
on interest rates. 

The danger, said Mr Persaud, 
was that central banks would 
see intervention as a substi- 
tute, rather than a comple- 
ment, for higher rates. 

Most observers agree that 
central bank concern is rooted 
not in dollar weakness in itself, 
but In the ramifications that 
this mi ght, have for fwipwrinT 
markets and the world econ- 
omy in general 

Mr Hannah disputes the 
view held by some in the mar- 
ket that US and German 
authorities are unconcerned 
about dollar weakness. He said 
there was a danger of a “free 


fill" scenario whereby a sharp 
foil in the dollar translated 
into higher US inflation, 
higher US Interest rates and a 
general brake on world eco- 
nomic recovery. 

In this case Germany, in par- 
ticular, would have a lot to 
lose since its recovery la still in' 
an early stage. Mr Helmut 
Kohl the German chancellor, 
will also be mindful of the pos- 
sible political dflmgg p he could 
suffer in October's national 
elections, should the economic 
recovery filter. 

■ Prices in the interest rate 
futures market were volatile, 
while volume was fairly sub- 
dued. Sentiment in short ster- 
ling was buoyed by the posi- 
tive showing in gilts, and the 
back-month contracts were 
particularly well hid. The 
December future traded nearly 
18,000 lots to finish at 98.73, 
two basis points up on Friday’s 
close, but ten basis points 
above the low for the day of 
93.63. The December 1995 con- 
tract dosed at 91.52, 18 basis 
points above where it started 
fhp day. 

The December euromark 
contract traded nearly 18,000 
lots to dose four bads points 
firmer at 94JB. 

In the German money mar 
kets, money traded slightly 
higher at 490/5 per cent, from 
495/495 on Friday, as banks 
sought funds ahead of end of 
month reserve requirements 
and pension payments. 

In the UK money markets 
the Bank of England provided 
£67lm assistance compared to 
a forecast shortage of £65Qm. 
Overnight money traded 
between 4 and 5 per cent 

■ Sterling finished at 
DM2.4498, more than a pfennig 
and a half weaker against the 
D-Mark. Against the dollar, it 
finished hi gher at $19547 from 
$19422. The market ignored 
newspaper reports that the 
chancellor will today raise his 
growth forecast for the econ- 
omy. 


EiaOpe 

Austria 

Bdglunr 

Denmark 


Franca 

Germany 

Grate* 

Ireland 

wy 

Lummbourg 

Naftertund* 


Portugal 

Spain 

Sweden 

Switzerland 

UK 

Era 

SOftf 


(Sen) 174820 
DOT) 60,4532 
84262 
8,1322 

anses 

2.4498 
(Or) 370.962 
OQ mi 30 
W 2*1846 
ELh) 604632 
(H) 27487 

WCr) 104753 
(ED 251.97V 
(Pta) 202068 
tSKr) 11.7801 
(3Fr) 20531 

m 

- 10706 

- 0084318 


(DKi) 

m 

m 

9m 


-0.1307 543 
-00144 '324 
-00618 188 
-00452 223 
-00394 948 
-0.0132 486 
-1085 545 
-00034 120 
-031 694 
-03144 324 
-00144 472' 
-00478 710 
-0784 797 
-0016 907 
-OOS98 802 
-05111 821 

-00066 786-! 


31S 

420 


708 179778 

738 906880 

08741 

82850 
022 8,4358 

811 04892 

358 372.746 
139 1.0188 

090 2431.06 

739 606SSO 

602 1781V 

7M 108798 
180 254538 
179 200685 
979 11.9MB 
640 2.0618 


179312 

604324 

9.6188 

6.0700 

83846 

04481 

370046 

1.0099 

241654 

504324 

2.7437 

108221 

251.741 

201.997 

11.7869 

24488 


Argentina 


Faao) 15622 +05138 517 - S28 15568 15482 

(Or) 409024 +10039 512 - 730 404000 3BS3.00 

Canada [CS} 2.1578 +00181 586 - 586 2.1660 2.1534 

Mental (New Pwo) 62097 <00441 844 - 74S 82T84 22530 

USA ($> 1-8647 400125 543 • 651 16370 1JM 

a~>_ , jii, iMHiI.b- Cwai/AUww 

ww/ i mii— cMffMncfl 

AuetrMa (AS) 2.1608 40038 648-689 2.1667 2.1392 

Hang Kong 00(3} 110185 40098 128-203 100426 112916 

India fte) 407871 403917 606 - 838 408780 408710 

Japan (V) 160261 -0342 186 - 3S5 156290 154,880 

Matayaia (MS) 4 j0348 +00404 328 - 384 4,0378 4J0178 

New Zeatsid (NZ1) 08387 400178 348-384 2.6523 2.6337 

Phtopptaes fPaad) 415770 *03389 682 - 987 422887 41.8530 

S«u(U AnMa (SR) 6.6307 +00474 2B9 - 324 S2439 52188 

Singapore (SS) 22683 +02145 088 - 707 22746 22653 

S Africa (Corn} (HJ 52180 +00253. 1S4 - 188 52481 52888 

S Africa (Fkv) (R) 72724 +02872 648-896 72888 72548 

South Kona (Won} 12S3.71 +021 277.-488 1238.17 125120 

Taiwan (19 412456 +02231 293-617 412144 41.7842 

ItwAand [Bq 38.8886 +02216 730 - 242 392040 382500 

tSDH ib» tar Jun 33. BUMtar apnaada to an Found Spot tdXa «haw orty rte to* •» 
but am knpfed by cant Want rataa. ewdngkidw caicrieM by tee Bank of 6 
toe Qatar (Spot Mm darfMd ken THE VWnEUTSt3 CLOSH3 SPOT HATES. 


172588 

05 

175S32 

02 

- 

- 

. 1145 

504432 

02 

50X902 

-OX 

505182 

-0.1 

1185 

62329 

-15 

06467 

-08 

95608 

-04 

1185 

- 

- 

- 

- 

’ - 

- 

815 

8X018 

-06 

8X073 

-OX 

8X030 

-0.1 

1095 

2X487 

0.1 

2X488 

02 

2X287 

05 

1265 

12134 

-04 

16142 

-05 

16154 

-02 

1046 

242550 

-85 

243066 

-65 

248951 

-26 

786 

50X432 

02 

50X982 

-04 

505182 

-0.1 

1185 

2.7487 

OO 

2.7478 

02' 

2.7263 

06 

120.1 

102897 

OB 

105802 

-08 

106734 

OO 

882 

232264 

-48 

254589 

-46 

- 

- 

— 

202546 

-22 

203518 

-25 

208588 

-22 

886 

11-8121 

-25 

115471 

-26 

116451 

-15 

785 

2JH17 

aa 

2-0484 

05 

2-0237 

tx 

121.1 

- 

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. 

- 

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- 

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12804 

-05 

12788 

05 

15826 

-02 

- 



" 


‘ 

' 

** 

2.1698 

-12 

2.1073 

-15 

22017 

-26 

865 

1564 

05 

U83 

05 

15482 

OX 

832 

2.1649 

OX 

2.1633 

04 

2.1624 

02 

_ 

1241084 

08 

126045 

OX 

126318 

-0.1 

•- 

154586 

25 

164666 

3.1 

148.751 

35 

1885 

2588 

05 

25398 

-04 

25461 

-ax 

- 

- 

- 

- 

- 

- 

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• - 


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■- 


(ferine team. Forward mm an net 
, Ban mage 1980 - 10UUL OOtr aid 
w b n are rounttaf by «• FT. 


harhamadM 
to bod> Uria and 


DOLLAR SPOT 


INST THE DO 


Jin 27 


CloMng Chong* 
mid-point on day 


BkVoffer 

***** 


Day*» mid 
Ugh low 


Bata HPA Rate HPA 


Ona year JP Morgen 
Rato HPA Index 


Europe 


Austria 

(Sch) 

11.1035 

-ai79 

010-060 

11.1388 11.0780 

11.108 

-05 

11.118 

-06 

115633 

05 

103.9 

Batghen 

(Bfi) 

32X620 

-axes 

470 - 870 

325100 32X400 

32X748 

-05 

32522 

-05 

32582 

-OX 

1065 

Donmarh 

(DKr) 

6.1910 

-0084 

08S -936 

62232 

6.1082 

65 

-1.7 

0519 

-15 

62835 

-15 

1045 

Finland 

(FM) 

52307 

-06719 

267 - 367 

65096 

65241 

55330 

-07 

65487 

-15 

65132 

-15 

762 

Franca 

(H=r) 

5X020 

-00896 

010-030 

5X280 

5.3030 

6.4069 

-1.1 

SX149 

-1.0 

55778 

OX 

1055 

Qermany 

TO 

15758 

-06214 

753 - 762 

15838 

15725 

157B7 

-05 

15771 

-03 

15704 

05 

1062 

Qraeca 

TO) 

238.600 

-265 

400 - 000 

239.100 238X00 

239.96 

-85 

2408 

-07 

2401 

-15 

eoa 

Mend 

m 

15348 

+06175 

338 - 368 

15418 

15232 

15336 

1.1 

15308 

1.1 

15223 

05 

- 

Paly 

CD 

195660 

• -16.75 

500 - 680 

156450 155350 

156055 

-35 

157036 

-07 

16075 

-03 

775 

LuMamtMug 

8J=H 

32X520 

-0X68 

470 - 670 

aZlSIOO 3ZA400 

32X745 

-05 

32522 

-as 

32582 

-04 

1055 

Nsthertands 

TO 

1.7680 

-00237 

876-686 

1.7786 

1.7622 

1.7688 

-05 

1.7606 

-04 

1.7828 

05 

1062 

Norway 

(NKr) 

85868 

-00867 

665 - 875 

85830 

55644 

6571 

-08 

856S5 

-1.1 

&78SS 

15 

985 

Portugal 

m 

182676 

-0129 

000-150 

163.450 162500 

16373 

-125 

166-15 

-iai 

170X28 

-02 

93X 

Spam 

IPtai 

129665 

-2565 

960 - 010 

131500 129500 

13036 

-3X 

131-086 

-04 

133595 

-25 

808 

Sweden 

(90) 

75829 

-06675 

791 - 888 

75686 

75804 

7.6009 

-25 

75339 

-2.7 

7.7819 

-25 

608 

a,, i| .hHmX 

jMuunana 

PR) 

15208 

-00170 

am . am 

152BS 

15170 

15203 

02 

15193 

04 

15084 

09 

1004 

UK 


15547 

+00126 

543-551 

15670 

15506 

1564 

05 

1593 

05 

15482 

OX 

804 

Ecu 


12161 

+00169 

148 - 158 

15180 

15104 

15137 

IX 

15114 

15 

1-2224 

-06 

- 

SORT 

- 

1X4483 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 


Argentina 
Brazil 

Canada (CJ} 

Mexico (Now Peee) 

USA ffi 

nwnlte.i in * ■*- — — a — 
rfl CfliCimOOW UBOMlCa 


(Peeo) 02984 +00007 083-984 02984 08982 

(Cl) 2598.16 +48.11 610-820 259620 2596.1 Q 

12878 -00008 978 - 990 
+0201 870-020 


32895 


12929 12888 12880 -T2 12968 -ZZ 1X221 -22 
32920 32830 32905 -0.4 32823 -02 32997 -02 


82.1 

872 


Jna 27 


MM 

Ante 

UAL 


£ I 

167,853 - 167JBSS W1X» - IOIjCN 
27D1JD - 27MJOO 1748JN - 175000 
04506 - 04095 02960 - 829S6 

340005 -348789 222654-222910 
307288 - 307599 187500 - 197850 
50077 - 55092 30716 - 38735 


Austnte 

(A*) 

15886 

+05138 

860 - 870 

15818 15788 

15888 

-05 

15889 

-0.1 

15906 

-05 

86.4 

Hong Kong 

1HKS} 

7.7291 

+05008 

286 - 296 

7.7300 7.7200 

7.7288 

0.1 

7.7311 

-0.1 

7.7463 

-02 

- 

tala 

m 

315875 

-00013 

660 - 700 

315700 315850 

31X476 

-3.1 

31 5935 

-25 

- 

o 

- 

Japtoi 

PO 

9B5650 

-1536 

300 - 000 

100280 995000 

99.87 

25 

9931 

25 

96.725 

3.1 

1400 

Matayaia 

m 

• 25661 

+05061 

946-956 

259S2 25866 

25878 

35 

25841 

1.7 

25161 

-05 

— 

Now Zealand 

90* 

1.6969 

-05023 

952 - 906 

1.7053 1.0B52 

15077 

-15 

1.7023 

-15 

1.724 

-1.7 

- 

PHteptan 

(Paaoi 

27.0000 

- 

000-000 

27-2000 26.8000 

. 

- 

- 

. 

- 

- 

- 

Saudi Arabia 

PR 

3.7504 

+05002 

602- 506 

3.7906 17502 

3J51 

-05 

3.733 

-05 

3.7897 

-04 

- 

Singapore 

fSS) 

15243 

-0003 

240 -245 

15280 1-5236 

15235 

05 

15232 

05 

15253 

-0.1 

- 

SAMcafComl 

i TO 

35123 

-0013 

115-130 

a«200 3.5880 

35278 

-5.1 

35961 

-45 

3.7328 

-aa 

- 

S Africa (Hn) 

TO 

4.7420 

+0006 

320 - 520 

4.7520 4.7320 

4.7757 

-85 

45345 

-75 

- 

- 

- 

Sorih Korea 

(Won) 

808X00 

-05 

000 - 800 

807.400 808.000 

800.4 

-45 

8125 

-35 

831 X 

-3.1 

- 

Tahwen 

(T5) 

209156 

-00096 

120 - 100 

285200 285025 

265358 

-05 

265765 

-05 

- 

. 

- 

Thotiand 

QBI) 

255200 

-056 

100 - 300 

255400 295100 

26 59a 

-35 

2522 

-52 

25.7 

-27 

- 


18DR rata tar Jun 23. Bklfelfer ifxaiik to the Oolar Spot fteito ataw ariy toe lest toraa derimri ptacaa. Rommel rataa are not dkacoy quoted to toe 
but we impitad by currant, tarerwt rataa, UK. briand 8 ECU at quoted ta Us cunmcy. JP. Margin norahranmlow Jua 23. Baaa average 1990-100 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

Jun 27 Bfr DKr Ffir DM 


NKr 


Pta 


SKr 


sa- 


cs 


B el giu m 


(BR) TOO 1920 16.05 4259 2.008 4795 5X49 21.17 4992 4002 2327 4299 1282 4278 9282 9072 2537 


Dana nek 

TOO) 

62.42 

10 

6.726 

2549 

1552 

2513 

2558 

11.10 

2015 

2105 

1256 

1133 

1539 

2542 

1516 

161.4 

1530 

Htharianda 

119672 

2.16597 

-0.00011 

-158 

477 

Rime* 

(FFi) 

6007 

11X8 

10 

2517 

1508 

2680 

3573 

12.72 

3000 

2405 

1454 

2X44 

1.191 

2569 

15S1 

1845 

1524 

Ireland 

0508628 

0794788 

40001563 

-471 . 

452 

Germany 

PM) 

2056 

3529 

3.428 

1 

0413 

9875 

1.122 

4 <^9 

102.9 

82X9 

4512 

0538 

0 MB 

0691 

0535 

6359 

0522 

BatyUR 

402123 

395029 

-00314 

-154 

4X4 

Ireland 

CQ 

4080 

8501 

8591 

2X19 

1 

2388 

2.714 

1064 

2485 

1895 

1154 

25Z7 

0987 

1130 

1536 

1535 

1584 

Qannany 

154864 

152234 ' 

-0501 62 

-4X0 

458 

Maly 

u 

2566 

0508 

0547 

0101 

0542 

100. 

0114 

0X42 

1042 

8556 

0X87 

0586 

0541 

0589 

0064 

6X20 

0056 

Franca 

653883 

056780 

-00018' 

074 

257 

WoBterlamla 

TO 

1855 

3501 

3565 

0991 

0368 

8800 

1 

3585 

9157 

7352 

4589 

0747 

0584 

0786 

0568 

56X9 

0466 

Dammar* 

7X3879 

754837 

-050627 

150 

151 

Norway 

(NKr) 

4754 

9.012 

7584 

2594 

0949 

2265 

2574 

10 . 

2365 

1885 

1154 

1522 

0538 

2521 

1X68 

14SX 

1.198 

Pwtugal 

192564 

190006 

XX 834 

257 

015 

Portugal 

m 

2002 

0819 

3533 

0972 

0402 

9609 

1591 

4538 

100. 

6020 

*579 

0516 

0397 

0568 

0517 

8153 

0509 

Spate 

164250 

158.613 

-0507 

253 

000 

Spain 

(Ptri 

24.96 

4*782 

4.168 

1512 

0501 

1197 

1580 

6586 

124.7 

100. 

6534 

1516 

0X85 

1568 

0709 

7854 

0533 







Paretian 

TOO) 

42.78 

0184 

7.124 

2578 

0069 

2062 

2532 

9589 

213*7 

171.4 

10 

1.741 

0548 

1530 

1519 

1315 

I486 

NON JERM MEMBERS 





Saattarland 

(SR) 

2457 

4586 

4.091 

1.193 

0X93 

1178 

1539 

6502 

122.7 

88X4 

6*743 

1 

0487 

1561 

0757 

7556 

0623 

Qraaoa 

284*513 

290X60 

-028 

951 

-036 

UK 

n 

8045 

0625 

6599 

2X50 

1513 

2419 

2.749 

1088 

2525 

202.1 

11.79 

2563 

1 

1168 

1556 

1555 

1580 

My 

1793.19 

188856 

+3.01 

650 

-290 

Canada 

<C8 

2358 

4.400 

3582 

1.135 

0469 

1121 

1574 

4548 

1185 

93.85 

6X63 

0561 

0463 

1 

0721 

7158 

0583 

(IK 

0788749 

0782842 

+0003184 

-090 

354 


US 


Ecu 

Van par 1800 


A 32.44 
(V) 3242 
98X1 


6.190 5X01 

6128 5426 

7220 0562 


1276 

18.78 

1214 


0.651 

8223 

0791 


1556 

15578 

1890 


1.788 

17.70 

2.148 


0868 

88.77 

0344 


182.1 

1823 

1909 


1902 

1301 

1572 


ttonbti Khmr, Fran* Rena rkxwnalan tamer. and SwedMi Knmor par 10 ; Briglan nan, Eacudo. Lha and PMta par 
HJIim— QMM) PM 126,000 per DM 


7282 
7522 
9211 
ioa 


1220 

1322 

1204 


0243 

8X38 

0.781 


1288 

1320 

1288 


1 

1021 

1215 


0027 

iooa 

1212 


0, 633 

8242 

1 


flMMP Yen 1Z5 par yen 100 



□pan 

Latest 

Change 

H(F 

Low 

Eat vol 

Qpan kit 


Opan 

Latest 

Change 

High 

Low 

Est wol 

Opta-int 

Sri 

06328 

06330 

+00023 

06357 

06310 

67,705 

83513 

Sap 

15037 

. 1.0084 

+05048 

15113 

15021 

87,708 

62,752 

Doc 

05345 

05337 

+00027 

05346 

06322 

602 

2587 

Dec 

15130 

1.0144 

+0.0060 

15147 

15116 

349 

3537 

Mar 

- 

06322 

- 

- 

- 

4 

710 

Mar 

1.0200 

15210 

+05031 

1.0210 

15200 

.114 

548 


EMS EUROPEAN CURRENCY UMTT RATES 

Jun 27 Ecu can. Rate Change H+/-fnam % spread Ov. 

rates agafotEcu on day can. rate v weakest Jnd. 


12 

11 

-2 

-10 

-18 

-20 


Bcu canted rataa — by Bra Cu opaa n Cum ntori n n. Ciaundea am In d a a eindtrB uteha aaangiti. 
FarcerlBga changan ua tor Ecu; a podilw ctTga danoew a wUr cunaniy. Dt wi rgnnce jl xrw lha 
rteotemaan wo apraadr au p w ca ma g a rtearu «» b«t » u « Bra actual wariut and Ecu eaUte rataa 
farawancy, and aumatinwi p u ntead peterwUga dmtte on <X bw cannctft maim rata tem da 
Ecu coxral na 

(tfWM) Saaribig nd telui Ua aurpandad from BM. Arfuaimanl catateMd by lha FtancW Tknaa 
Mt/XWllOIIB £31260 (cento per potaic0 


Money Market 
Trust Funds 

Dm h ST MB 

aawsiSs: =1 als? 

DofDdkaarlZBtogai *M 

IteCOEGmaD^toBJ 


CbBOa&tt 
a Want UntalC* MS 


W CM HC 

en-i Bm 


rjwtedteteiateafwjw . wvwaHm 

mi miiiiauai urw-l UW -l - -1 



- 1 *» 


+10000+ aaa ™ MJB 

SSon+Tyw 7. 

gSntMiHrHctela 


awl 


wr* 


Cat* M. af Rn. at Ctomdi te BWnatt 

SfbnSMUtaMKZrSM ,07'-“ 

14.90 


-1 ueia 


Mam ante KRSMB 
Ixn in I mo I 

.. b=ls& dsl al 

OoaffO+lteuHaMMN aa naaa 


Money Market 
Bank Accounts 



















staHrmwta.atatata* - aasnono 
sown* J tM , Mai Ml at 

gn-atazasi 

881 i£l- £ 


ninMnataT . on-zvtgaa 
rucA0Z2xw — IsjnuNtohsMaT o*, 



a8tA n taa » uar«,6anam»gB3FP , nissattss 
wen i<" isrra I -l«w« 



unamaaMam .tn-teiiR 
ntaUn ate <mT m 

selis 

SS £ 

I zn JOB I us OK 

lua un sje « 

lua i.u I 1 X 1 an 

ton ihtea imto i l rte ten 

w-tetMwlHjkuMiwair .amtanoi 

nsrs, 

rm*v a«nu 1 441 -I 4Nl in 

2&amMn C j£taa.Bi«i 



(08744110 

Or 


te a uw atom w aab b nu toi 
tanrtatm 

CHatoadteiBatenaato 

teSt MOM nK*.«MW 

DOteQ-taftOM 13J0 

— . 1 ste 
s_! ai 


raizM. .tMHMaivo 

ua I ate or 

OLWHuai | an ui in oar 

noSsM-naatea^.1 1» mi u w 


Tlw Ca-oparaltoa Bank 

POBn»». SMana^^l. 

tanHMH-9aa«riMaite«wa 

wnta- — l aw AM ] Mxls-Mb 

fawKiUH 4M ui usia-an 

enunMMffl. I *M ua 43Mlo-an 

0900-091 — I aoo us I anlt-aa* 

191 j anlo-an 

£J0jm»-M99W A2S 394 I 19 Ml 

B90Q-«9W — I us ual zjnla-m 


Tri^iir’irtr.rra . 
nite w 

trsoo-miMM 


3989 UH 3ffl, _ 
; 3. no ut3 1 un at 

ItototUBtoWi I 3970 *«« I 3932 Or 

Tymnets* - lum. -I Marl or 

U1M1WM 

lOtetQntetadFLLMtolUlHZM. .an-anOOM 
873 990 | aJU|3-l«l 

*■ is I Hss} 


031-447 309 

«. 

479 U 9 I 484 ) Mr 

tCalfil _ 

m+Km 

UB «72 | 3971 an 

4373 ZBI 1 3 JU> MU 

MmlMiagiMnitCtep tee 

itoiMMiM'te.nmwpu ise aruniMi 

nuoa*.. ■) 4J« ual 4Ml oar 

«Ste 9 -C 49 M 4 JB 339 1 *38 tor 

mo-Mjw I *as ms I *»l a* 



; C W« M tat jr MWWM88M4 «at 


478 MS *3B ua 

300 US 392 Ml 

273 £98 £77 B-toh 

Ui Ml 29 4-taJ 


tote rate at — n a ia ii X jtaaa tnnata. 

SbMa d teaMt aantto tear dtatafte daMM « 

Ha ta* talM ta wta teto ana m iteal w 

Ma aa w t or u a m ai i Bto af-ktate *aM Martote 

TMCa 4 fK. IMHiMiiiiWhKWOimJ 

SMaaMkoHu ■ ■■ am* ■ 


ana dwrnum aitewi w wi-ctssm 


■ toWteto W4AWC WIWW (IMM) Sft 1 125200 per 3ft 


■ tilBUtol HirtlH— £62200 par £ 


Sap 

0.7660 

0.7558 

Doc 

0.7570 

17550 

Mar 

- 

07574 


+05023 

0.7599 

0*7640 

36,774 

49596 

Sap 

15534 

15630 

+05020 

15660 

15496 

19.170 

38511 

+05029 

07584 

a7560 

178 

840 

One 

15518 

15518 

+05020 

15630 

15490 

266- 

390 

- 

- 

- 

2 

7 

Mb- 

- 

15510 

- 

15610 


1 

17 


Stria 

Price 

Jri • 

- CALLS - 
Aug 

Sap 

JU 

- PUTS - 
Aug 

S4P 

1X78 

758 

751 

852 

- 

019 

053 

1500 

656 ' 

559 

0.12 

059 

050 

058 

1526 

350 

350 

4*39 ' 

042 

1.10 

1.78 

1580 

156 

254 

258 

153 

258 

178 

1578 

050 

150 

152 

171 

3X8 

4.18 

1500 

117 

058 

. 1.16 

• 477 . 

551 

558 


WORLD INTEREST RATES 


MONEY RATES 

June 27 Over 

right 

One 

month 

Three 

mtha 

Ste 

mtha 

Ona 

year 

Lomb. 

Mar. 

Ob. 

rata 

Repo 

rate 

Belgium 

s» 

54 

TO 

88 

TO 

7X0 

*50 

_ 

weak ago 

6H 

54 

6ft 

5ft 

64 

7X0 

*50 

— 

Ranee 

5H 

Sft 

6H 

Bft 

8ft 

650 


8.75 

weak ago 

5tt 

6ft 

5ft 

0fi 

TO 

650 

_ 

8.78 

Oar many 

*06 

45S 

455 

455 

6.13 

850 

*50 

555 

weak ago 

550 

*95 

8.00 

5.00 

6.15 

850 

*50 

5.05 

Ireland 

6A 

64 

54 

5ft 

TO 

- 


&2S 

weak ago 

TO 

54 

TO 

TO 

TO 

— 

— 

615 

Italy 

6 

84 

BM 

8ft 

Bft 

- 

750 

7.95 

week ago 

84 

TO 

TO 

TO 

Oft 


7.00 

7.80 

Netherlands 

4.94 

*88 

*99 

656 

355 

_ 

MS 


week ago 

5*03 

458 

552 

557 

554 

_ 

655 

_ 

Switzerland 

3ft 

4K 

<4 

4ft 

4ft 

6.625 

3.50 

- 

week ago 

4ft 

*ft 

4ft 

44 

4ft 

6528 

3*50 


US 

4ft 

*4 

48 

5 

TO 

- 

350 

- 

week ego 

TO 

44 

4ft 

4fl 

64 

— 

350 


Japan 

24 

24 

2ft 

24 

21 

- 

1.75 

- 

week ago 

24 

24 

2A 

24 

2ft 

- 

1.75 

- 

■ tUBOR FT London 








Interbank Mag 

- 

4 ft 

4ft 

94 

5ft 

- 

_ 


week ago 

- 

4ft 

TO 

4ft 

5ft 

- 

- 

- 

US Dollar CD* 

- 

450 

*54 

*89 

551 


_ 


week ago 

— 

*20 

*40 

*70 

550 

_ 

— 


SDR UnM Da 

- 

3» 

TO 

3ft 

4 

_ 

_ 


weak ago 

- 

3ft 

34 

3ft 

4 

- 

- 

- 


teliureiu (UfTEr DMIm pofcrtBoMOOH 


Open Sett price Change rtgh Low Eat vd Open kit 


raU aaa i iMk SIM 
MM are offered ntaa tor Siam quoted 
M TIM MMoi are: Baton hum. B< 
MU rate* an Moan Sr 9w dunsaSa 


IntoSg: 
to On meife 


e name 5ft i yar Ay 1 UBOH 

at by tour rafaram banka at llan 
B«k or Item. Bataan ■>* Nttenal W a ito M r. 


US I CD* aid 80R Lkted Dapoan 

EURO CURRENCY INT ERES T RATES 

JiM27 Short 7 days One Three Stx 

rtoUca 


One 

month 


Ona 


B«OteJ Franc 

Bl|-8 

5%-S 

S&-5& 

TO -TO 

5U-TO 

DaM Krone 

su-s 

Mr - 5*2 

6 - TO 

b*. - a* 

TO -a 

D-Mark 

5-4% 

5-4^ 

5-4* 

5-TO 

6-4^ 

Dutch Qdklar 

S-4H 

S-4B 

TO -5 


TO -5 

Frsnch Ranc 


5*2-81. 

TO -TO 

»l-5^ 

TO - TO 

Partuguaea Esc. 

15 - 14l| 

15(a - 14*1 ISL - 14*2 

14 - 13^4 

13V - 12V 

Sportsh Petals 

7<2-7 j I 

7\- IS 

7* -71* 

a- 7U 

TO-7V 

SMng 

3-4% 

9 ■ TO 

TO -411 

TO - 5*1 

TO-TO 

Dwtaa Franc 

41«-3% 

4*S-TO 

TO -TO 

TO - TO 

4V-TO 

Can. Orinr 

53* - 6>g 

5H-W 

TO -TO 

TO-TO 

7V-7V 

US Dctfsr 

4,1 -TO 

TO -41, 

4>2-TO 

TO -4% 

TO -43 

Natan Ura 

9-7*2 

8*4-8 

TO-TO 

TO-W* 

TO -TO 

Yen 

2b - 2,V 

2J.-24 

2>« - 2i> 

2 S -Si 

2V-2A 

Aston JSlng 

■a^-a5 

3% -TO 

TO -TO 

TO -TO 

TO - TO 


24a-« 

Sk-6ft 

ek-sg, 

8»a-« 
i2«a - 11 I 2 

8*a -s& 

64a -««* 
^ -4*a 
eA-Bf. 

nh-ss, 

0*1-9 

2i-2J« 

5H-5U 


Sap 

95.04 

9S59 

+0.04 

95.11 

9553 

15375 

190650 

Dec 

9*33 

9*89 

+0.04 

0*91 

94*83 

17894 

207307 

Mar 

9*53 

94J80 

+054 

9452 

9*63 

13193 

184369 

•km 

94.15 

9*22 

+054 

9*25 

9*14 

8255 

102588 

■ THR 

V MONTH toUnOUMA ton-JUTto HIVIMto LlOCOm prints of 100% 


Open 

Settprios 

Change 

HWi 

Low 

BA. vai 

Open Ink 

Sap 

9173 

9138 

+053 

81.40 

91.19 

4608 

41282 

Doc 

9090 

9158 

+003 

91.10 

9050 

28S1 

4TO8B 

Mar 

9053 

90.68 

+004 

90.72 

90X9 

1228 

12244 

Jun 

9058 

80.10 

+006 

9019 

9056 

285 

8684 

■ TNRtote toMOni totno SWTOHI nunc nirilMg (UFFE) SFrlm points of 100ft 


Open 

Sett price 

Change 

High 

Low 

Eat. uoi 

Open Int 

Sap 

95.63 

96.70 

+007 

9570 

96*62 

2392 

296S2 

On 

98X1 

95X8 

+005 

96X6 

96X1 

1317 

10136 

Mar 

96.18 

95.18 

+007 

96.16 

9S.11 

113 

9632 

Jun 

9*70 

9470 

- 

9*70 

' 9*70 

6 

1299 

■ THR 

m MONTH «cu nniRS (UH=Q enrlm potnw ot ioo« 



Open 

Sett price 

Change 

High 

Lew 

Est vol 

Open fr*. 

Sap 

9359 

9454 

+004 

9455 

9358 

1381 

12109 

Dec 

33.73 

93.79 

+003 

93.79 

9373 

683 

aoao 

Mar 

93X3 

93X8 

+053 

93X8 

83X1 

370 

3822 

Jun 

0353 

9359 

+052 

93.09 

S353 

268 

398 

* UFFE ftouree tratod on APT 






■ THto 

H MONTH toUSSODOLUIH OMM) 

Sim petetse# 100ft 




Open 

Lateat 

Change 

Hgh 

LflW 

Eat vot 

Open biL 

Sep 

9*75 

9*72 

-a 07 

9*75 

9458 

89549 

448592 

Dec 

9456 

9*01 

-0.07 

9*06 

9358 

18*881 

412546 

Mar 

93.73 

9X73 

■007 

93.76 

93.72 

97.703 

296588 

■ nTnuanvRLnnunim 

Sim per 100 ft 



Sgp 

9H0 

9820 

-056 

95*1 

96.19 

2*84 

21399 

Dec 

0*52 

9*62 

-058 

94.82 

9*61 

528 

6,770 

Mar 

- 

9*33 

- 

- 

9*33 

289 

896 

Open keener age. 

tor jntoui day 





■ mHKMUIK OPnOMS (MFFQ Dbllm prinb oMOOH 




Sheri tent aa era cto tor tha US Dote and Yen, odvaix two dan' notes. 

■ TttaMto teOifT M FlBOtt WJIVIWtl (MATIF) Parle kmatoik offend rate 

Ste 
Ok 
M ar 
Jui 

M THWC8 MOWTH toUHOPOCLAII ttm polrito qf 100H 


Moo 

0800 


9550 

Esb«oL 


CALLS 


PUTS 


Jul 

Aug 

Sep 

Dae 

Jri 

Aug 

Sap 

Deo 

0.12 

0.15 

0.19 

050 

053 

056 

0.10 

051 

052 

006 

057 

0.11 

•0.18 

051 

023 

0X7 

051 

052 

052 

058 

0.42 

0X3 

0X3 

057 


totiA Crib 1+88 IMs 481. AariM days span k*. Cate 210871 Cote 140094 
“*~ 8WIW W8AMC O PT I OI M (UFpg Sfi* 1m pdkWa of 10094 


Open 

Sait price 

Change 

Mgh 

Low 

Est vd 

Open (nt 

Strike 


- CALLS - 



— PUTS - 


9*28 

9450 

-003 

9452 

9*24 

11550 

54.149 

Price 

Sap 

Dec 

Mar 

Sap 

Dae 

Mar 

9*00 

94.04 

-053 

9458 

9354 

9568 

41238 

9660 

030 

025 

024 

• 010 

030 

050 

9356 

33.76 

- 

9950 

93.63 

9590 

31509 

9678 

0.18 

014 

016 

020 

0X4 

076 

93X6 

9354 

-052 

8356 

93X1 

S584 

2*861 

9800 

058 

057 

059 

038 

052 

054 


Ete wt total, Cate 0 Pute ft. Pravtoua dqto ep« in, Ctea 288 Pute 1023 



Open 

Sea price 

Change 

High 

Low 

Eat vol 

Open w. 

Sap 

9*73 

9*72 

-009 

9*73 

9*73 

106 

2502 

Dec 

- 

9*01 

-0.10 

- 

. 

0 

1086 

Mar 

93.73 

93.72 

-012 

93.73 

93.73 

6 

1064 

Jut 

S3.4S 

93X3 

-012 

83X5 

9144 

100 

337 


tvanteKtoyto not. Caaa 19202 Puli 1149611 Pm dtortogpi to*, Qtoa 88*878 Wi 431218 


UK INTEREST RATES 


LONDON 

Jun 27 


RATES 

Over- 7 daya 
ntf« rtotioe 


Ona 


Una ate 

months months 


Ona 


tt-'fl 5A-4H Sd-fiA 5*l-0» 0V-8 1 * 

5A-4B 51,-Bi S»a -6i tm-6 
4S-4S 4?i-4fl 
4»-4% 6-4» 5rl-6V 

5% 4H-.4& 6-4H 5^-S& 6h-S A 6i-sa 


bitortMnk SMtoig 6 
StaritogCOa 
Dwtoiy BWs 
Bank Btoa 

Loot authority daps, sir . _ 

Oaoount MteM dtps 4% - 4 *8 - 4^ 

UK (tearing bank beta Isndng ttes Sk par cant from Fshnwy 8. 1894 

Up to 1 t-3 32 8-9 9-12 

mordha months amdhs 


1h 


Cert* of Tax dap. (EHXUnct 
Carrs of Hot dap. uniter CiOtyDOO to 1 
Am. tendar rate o( ten* 49l«Mpc. 

.-NB* tenmditaa tor patodJta 3B, VmnMSS. 
period Apr 34 18MW May in. H9* 9ohamm W£V 
JUM1.19M 


4 3^ 

■tedaaantorcaahlipa. 


3«4 


3>2 


■ ma 

H teMfTVH tonnuMn MnMM (LfFQ 2600500 pohte of lOQft 



apnn 

Sea price 

Change 

»gh 

Low 

fist vol 

Open tot 

Sap- ■ 

9*29 

0*34 

+051 

9*35 

9*29 

6478 

107151 

Dec 

8856 

9373 

+052 

03.75 

9353 

17920 

146321 

Mar 

9196 

8306 

+0-04 

9357 

9254 

8170 

84613 

Jun 

9131 

92X2 

+058. 

92X3 

9131 

2025 

49628 


Tiadad on APT. M C torn tatoma flg* ora for pmtauo tey- 


OrflQ9M(LlFFQE6(KLn00poitrto0t 10QH 


Strike 

Price 

Sep 

- CALLS - 
Doc 

MV 

Sep 

— pure — 

Dec 

Mar 

9*25 

9460 

9478 

021 
058 ' 

■ oust 

014 

008 

004 

aio 

058 

054 

012 

024 

0*3 

068 

Q«t 

158 

150 

151 
174 

Eat vcLMHL 

cate mm Pin 2378. Pwwfcx day* qpan tat. Cm 189842 Pm 178S04 



BASE lending rates 


AdtanA Company — 528 

Alod Trute Bank 528 

MB Blank S2S 

BHorvyAMkwdwr 825 

Baric olBtooda *25 

Banco Btono Vbeaya_52S 

Bo* of Cyprus 526 

BankoTbaiand 525 

BKofMa *25 


Banket Scotland. 
Brateva Boric. 


.525 

.525 


BritBkoNIdeaat— . 526 
•BmmShfefcy&GoLkimS 
CL Baric Nadariend^. 6L2S 
CMartoNA — _~»&25 

Ctyctoadatoteto *25 

ThsCoepacrim Bank. 326 

CexteSCO-^. 529 

OvAi^mria £29 


* 

Duncan Laurie 528 

Briar Bonk LMtod_ £25 
' Rna n etet 4 Gen Bank _ B 
•unit Raring 8 Oo _ 528 

QMbarfc 523 

totUmaaa Mahon =528 

HaHbBarfcM3ZWch.52Q 

H amtooi B arit 52S 

HarSaUa £ Gan tor at ASS 

•MSamuof 523 

CLKoara&Go 623 


HstWongl Shanghai 525 
JiAan Hodge Brit — 625 
«LaapoUJtMtei8S0ito625 

Lloyds Bar* -&2S 

Iteglnl B«* Ltd .526 

HdandBto* ...526 


MomIBartdng B 

M ri W O tetaar £25 

Cypv*PapriarBto*_ 52 S riteBralham 525 


l ’Rmbuty|ha( 
OorporiknLMadiaiu - 
longer outoartaedaa 

abariig Inafcfal. 8 

IBkofSooland-. 525 
lAVMmanSacs. 52* 

TS8»- 525 

ShJntedBkof KowaS— 525 
Ur*y7hriBankPto_ 52S 

YtetamTruflt^-, .526 

WHhteriiy I Writer —625 
VtoilaNm Baric E25 

to Membort of SiBfah 
Merchant Banking &' 
fiaourtttoa . Houses - 
A rwo dafan 



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Fulleri.loney - the Global Strategy Newsletter 


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Objcjtive anolysis f or profojsionol investors 

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Jun 24. Jui 17 
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2918 2957 


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2931 2542 


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adMMO* 
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I 


FWANCIAL TIMES TUESDAY JUNE 28 1994 


l£E 3 3 ElS 53 -~»!<*jTTT 


28*804 5ft 57 


<nft is$ 
tfn 13% 
■A 96% 


12 142 A 03% A 

29 1221 *5% 44% 4ft -1* 

171ZD0S 28% 2^2 29% r 3 

8 30 11$ 11% 11% 4 

IB 21% 20% 21% +s 

34 64 13% 13 13 4 

4 120 2E 34% 24% 

2B3 11% 11 11 

118 9% 9% 8% 

408 A <*% 5% 

*25 B$ 9$ 8$ 

298 9% 9% 9% 


809 £ 
! 12 434 1C 
3 101 3 

i4 a a 


a k 

S w* 
10% 10% 
7$ ft 
28% 28% 
A 8% 



101 603 13% 13% 13% -% 

381 17% 17% 17% ft 

111 M 51% 5« *1% 

“sua s’k-'i 

188 10 10 16 A 

11 33 S2% 52 82% +% 

8 2329 57 S8 65$ ft 

141816 33% 32% 33% 

13 1862 18% 18 19 

1 2D 2 2 2 

23 3717 42% 41% 42% +% 

20 1039 35 33% 34% A 

45 906 20% 25% 25% -% 

i 12 IS 16% 15% IB -% 
177B7 25% 23% 24% ft 
3 104 104 104 

8 2179 15% 14% 16 -% 

32 216 19 18% 19 A 

1777 16% 16% 16% 4* 

14 297 20% 20% 20% +% 
14 28 19% 19% 19% +% 

4808 28% 27% 28% A 
4283 22% 22% 22% +% 
2787 87% 58% 57% •% 

4 427 29 24% 24% -% 

29 3125 16% 15% 16% -% 

I 17 758 19% 18% 18% -% 
10 4778 20% dZft 2 0% -% 
l 14 248 17% T7 17% -% 

I 14 412 22% 21% 22% A 
6 144 1% «% 1% -% 

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39 


FINANCIAL TIMES TUESDAY JUNE 28 1994 


4 pm dose Jux 27 


NYSE COMPOSITE PRICES 


NASDAQ NATIONAL MARKET 


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A subscription hand delivery wavaflabteinthewlwIeofibeGiBndDiidorofJ^eiri^n^ ^ 

We will deliver your daily copy offte inTtoyoarhoox t^ to yoar<tfto«n6 «ftid cfi^^-loyba. ' -r . . 
If you would like more infonnation about snbscriWng please caD PMUppedeNcmup.’ ' 

on tel: (322) 513.28.16 or yom-riquiramem ^ 511.04.72, v 




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ACCOM 072 59 93 W <73 7ft ft 
AcdataC 20TH73 15$ 14% 15$ +1% 
AcawHH 0 75 23% 22% 0 

AotaCp X 0 21% 2ft 21% ft 

Atoprt) 15 8986 1ft 15% 15% ft 

ACC Tela 3Z15M 3ft 88% 3ft +ft 
AddtapDQ 72 X 1ft 15% 1ft 
ArtaSarr 018 21 0 34% 34% 34% ft 
AdobaSp 00 21 8838 0 2ft 25$ ft 
ArtoneaC 7 2X 10% 8% B$ ft 

Arti Logic 8 187 5% 4% ft ft 

teteu 7 m ft «$ ft 

AEhTOOb 0 204 tt 12% 13 ft 

Atom 00 T7 787 94% 9% 3ft ft 

ATtyte B 52 13% 12% 13% ft 

Agency Ba X31II1 12 11% TlH ft 

Agptate 010131 140 12% 11% 11$ - ft 
Alter OX W STD 22i 21$ 21% ft 

AkBADR Z0 19 100 H 33% 53% ft 

AkkmCp - - X 1687 25$ 33 25$ +H 

AfifiU 088 T7 47 25% 2ft 25% 
JlrtM IS 306 8 7$ 7$ ft 

MtoOff 052 14 17 86% 36% 36% -1 
AtolPh 51627 9% 9% 8% 

ABdCrt* L09 12 0 14% 13% 13% 

W Cap* 0X12 T75‘ 14 13% 14 
AtDrtC 09 18 18 2% 9% 2% 

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Ate Co 0 8117 26$d24% 26$ 0% 

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An Hang 0 380 23$ 23% 23$ 

AtoIMB . 12 868 8% <7$ 8$ ft 

An Sdto* 032 15 SZ 5 4$ 4$ ft 

AotRWfe X 1235 21% 30% 21% ft 
Ante OS 17 2560 29$ 29% 26$ 

MUP 1 221 1 dtt 1 . 

Aatoto 20 7 S04 47% 47 47% ft 

AaPfeCam 321383 6 17% 1ft 17 0$ 
An Dor 10 0 13% 13% 13% ft 

Angaries 1610804 43$ 42 43% +1% 

ArtchCp 09182787 13 12 13 ft 

AnAi 4 334 9% 9 9% ft 

tntotfr 15 214 17 16% 16% 

Anafert 00 13 IS 15% 15% 15% 

Amogrta LOO WMOO iftdift w% ft 
AtawrCp 0 859 35% 34% 35% ft 
AMm An 9 1286 1ft 16% 16 ft 

Apogee Bi UO 0 230 14% 13% 13% -% 
APPBto 6 IX 6% 5$ 5$ ft 

AppUMU 06066 42 36% 41^ +1ft 
ApptaC 00 23280 28%<M$ 2ft *JK 
Apptooa OX S a» 12% 11% 12% 
AttoDr 024 42 916 1616%100-tX 

ARM 000 75 XT’ 26% 0 ft 

Argenm* LIB 7 17 27% 71 S 

Armor N 0X 0 106 20$ 20% 20% -% 

Anrtb 0017 tt 19% 19% 18% 

AfiKBp S 6813$ 12 13$ ft 

ArtUTU 0 971 25% 24$ 25% +1% 

tocOta 275 20 0 0% 24% ft 

ASTBmb 9 6885 14% 12% 14t1% 

ASdnaoe 17 0 10% 10% 10% ft 

MSENr 00 18X15 0%d21% 22% -$ 
Atotot 00 19110 49% 46% 48% ft 
Art** 12 10 3$ 3$ 3% ft 

AMBttoB OJK 16 a 7$ 7$ 7$ ft 


BEIB 09 91 11 6% <5% 5% 

B tort a 270 70% 10 10% 

BrtrlfW 43 & 4tk & 

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BkMoLB 00 3 MOO 14% 14% 14% 
Bntoc 14 197 19%<16% 19% ft 

BUSnMl 044 T1 1378 1617% 18 ft 

MtonCp 00 9 77 17% 17$ 17% ft 
Mil 0*1 0X 12 57 0% 20% 21$ ft 
Bate Gao OS 151546 32%<31% 0 ft 
BrnatF OX 15 0 26% 26% 28% ft 
terVtar 0X14 557 23% 24 23% ft 
BfeMo 10 13 463 80% 56% 56% ft 
BBfl-Ri IX S 40 30$ 30$ 30$ ft 

■EAam 0 417 9 8% 6% ft 

BuoXtaJCOast 301 1ft 13% 13% -A 
Bantlany 17 2X 17% 16% 17$ ft 
BMdapRlOX 1411X 36% 36% 38$ ft 
BHAtop 01214 IX 9$ 6% 6$ -$ 

ate 96 312 5% 4% 4% 

BgB on 15 232 t1$ 11 11A +& 

JrtteW 0*13 172 12 U$ .12 ft 

mom S2 48M 30% 26% 30%-»1% 

Hoirt 17X19 1D% 6$ 10% ft 
EbckDig* 1* 11 41 30% X 30% ft 
BHCSUto 14 IBM 45% 42% 45$ -tt$ 
BotouS 10 102712 S% 30% 31$ ft 
Bob Earn 0Z7 19 252 21$ « 0$ ft 
to* 8 8 14 200 0% 27% 27% 

toted 3906 10$ 8% 9U 

BoaneBk 076 5 438 33% 32% 32! J -fl 
BMDnTc 02782 8% 57$ 7$ ft 
BrtdjtoA 0X18 2 <8% «ft 46% 

tones* 00 27 W 12% 11$ tt ft 
BnuiS 0015 409 7$ <7% 7$ -A 
BSE BKp 078 8 41 27% 26% 28% 
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MX 0320 17% 16% 17$ ft 
BrtMT 0 0 14 13$ 13% ft 

Bor Bran 0 115 8 7$ 7ft -A 

Brtmfl 57 107 . 31 26% 30% ft 

total* 8 32 25 24% 25 


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■ 1162134 7$dB% 7ft 

20 7 4004 12$ 10% tt ft 
0 718 22% 72 22% ft 
.1100 1$ 1% Id 

10 3 2% 2% 

3 10 1$ 1$ 1$ 
0X118 0 85% 85% 85% -1% 

2 MX 3$ 3$ 3$ 

012 0 144 48% 48% 46% 

081 0 118 25% 24% 24$ ft 
OX 19 18 . 20% 20% 20% 
an 15 518 11$ 10$ 10$ ft 

4 323 0$ 6$ 6% ft 

6 334 19% 18$ 19% 

19 0 12 12 ttft 

5 5412 11$ 10% 11$ +$ 

1.1211 378 32 30% 31% ft 

' 0 X 11$ 11% 11$ ft 

6 0 4% 4d 4ft +A 

OX 7 431 21% 21 21 ft 

0X13129 9% 9% 9$ ft 

42 47 M% 8A 8% 

IS MOO 10$ 10$ 10$ 

1 280 % ft % 
r 12 10 3% <9% 3% 

7 580 ft .3% 3$ -i 
0409 57% 55% 57% 4-1$ 

10 12 STB 51% 00 SD% ft 
017 X 513 31% 30% 31% ft 
31 909 29% 26% 29$ *1$ 
10 30 2% (Bd - 2% ft 
7278049 9% 0$ 28$ +1 
IX 15 79 25% 27% 27% 

0 182 8% 7% 8 

36 ID 12$ T1% 11% 

81015 4$ 4$ 4% ft 
LOO 17 127 2B% 27% 25% ft 
125 578 5& •$ 6% ft 

9 WS 10$ 10% 104 -4 
a era 14 13% 14 
• IO «4 11$ 10% 11$ *& 
15 74 13 12% 12$ ft 

000 118 18 <17 17% ft 

10 13 SO 21 0 20% ft 

OX I 10 23% 23% 23% -1 

034 131327 19% 16% 16 ft 

OX 18 917 17$ 17 T7$ ft 
'009 42 7286 17% 15% 17% ft 
■09 11 54 31% 30% 30% ft 
070. 94 407 18 17 19 

337 818 10$ 10$ 10% ft 
■ . 53 147 12% 11% 11$ ft 
« 39 3$ 3fi 3R -4 
■L0 0 IX 41% 40% 41% ft 
' .7 372 8% 5$ 6 

L44 18500011$ 10$ 11 

» 232 16% 15% 15% ft 
14 203 6% 9% 9$ 

150 78 268 tt$ 18$ 16$ ft 
- 91023 9% 5$ 9& +4 

' 173368 40% 39% 0ft 
0 304 16% 16% 15$ ft 
002 27160 9 2 0 4-1 

. 02381 1$ U 14 -A 
X 96 5$ 5% 5% ft 
. . 32073 4$ 4$ 4$ ft 


-D- 

DSCQn 12MS 19% 18$ ttft 
totami M3 0 6 76% 574 74 

DtoSlAti 12 115 2% 24 2% ft 

DttaflBX 32 114 7% 7% 7% 

tort IS 374 18% 15% 15% ft 

DtotoOpXK 11 108 0% 0 25$+1X 


H to 
to E Wfc 


Mfeap 

MaOBMi 

MR 

fe» fiy 

Deacon 

DHTrt 

UB 

DUM 

OgiBcro 

Hi Bond 

tete 1 

Dknxqp 

DUeYra 

DMA TM 

Dotoa 

DortbHbx 

Dncatev 

tomtom 

toy GO* 

tog tope 


00 0 40 6% 
032 23 MOO 15 
0X0 181 30$ 
04411 IS 0% 
261309 0$ 
018 18 S3 15% 
32 529 37% 

ix fl a » 

00 3 2100 7% 
15 2 19% 

OB 8 43 17% 
12 305 13% 
51739 9% 
61346 14 

6 16 4 

15 131 33% 

02000 28} 6% 
2 560 S3 
O0 24 2*09 24% 
09 WMOO tt 
11 32 7% 

111203 10$ 
0240 288 9% 
on 52 436 i% 
IX 17 87 31% 
042 O 121 17% 
0X24 81133$ 

7 74 21% 


6$ 6% ft 
13 W ft 
29% 30% 4®i 
22 22% ft 

26% 254 +14 

15 15 
36% 36% 

29% 29% ft 
7% 7% 
tt% n% ft 
16% w% ft 
12% 12% ft 
6% 9% ft 
1% 14 ft 

3$ 4 

933% ft 
« 8% 

3$ 3$ ft 
0 « ft 
13 tt 
7% A 
10 % 10 % -ft 
99% ft 
5$ 5% ft 
30% 31 

16% 17% ft 
32% 32% 

20% 0% ft 


KSfeMZ 0X11 05 
IHuafe QM S 187 
tedcnCpxMOIS 2 
Kate* 71132 

Myto 072 23 507 

Mate*? OTITI TO 
KtataBx 054 tt 72 
Ktadmar 191856 

HAM 46 8520 

taoa*xa 3 615 

Ifll A 02365 

Kotete 172350 
MdrnS B 704 


21 % <21 21 -% 
9% 9 9$ 

20$ a a 
7$ A 74 ft 

26% 27% 9ft 
«$ 5$ 6$ ft 
2X0% 0% *% 
B6% 6 9-42% 

37% 34% 37% t2% 

7% ® 74 ft 

A ft 4 ft 

19 16 19 ft 

13$ 12$ 12$ ft 


5 MOO 
2 10 
3 8 

018 21 -Her 
245 858 
12332 
tt 282 
0X47 13 
1518578 
9 301 
27 1442 

44 75 
*7 2 

21302 
MOW 32 
001X6864 
110 
67 44 
19 2$a 
9 5 

15 161 
OWU 102 
0 112 


4% 4% 
4$ 3% 

74 74 

17 15% 
A 7% 
2% X 
10% 9$ 
47% 47% 
1ft <12% 
A A 
6% 0 
12$ tt$ 
A A 
A <2$ 
A A 

50% 48% 
5.71 dft 
14$tf14% 
14% 14% 

8% A 
20 % 0 
17% 18% 
13 12% 


74 -4 

ift ft 


10$ ft 
<7% ft 
«% ft 

a 

12 $ -a 
A 

A -% 
A 

50$ ft 

54 ft 
M$ ft 

14% ft 

8% ft 
20% ft 

1 ft -1 


Ffe&rA 

RtiFti 

MM 

MM 

Ur HO 

Rdfeotel 

Ram 

RnradWH 


- F - 
11 73 5% 
024 11 10 4$ 

004 53T20B Sft 
153882 24% 
3 174 ft 
124 16 1880 54 

5 147 A 
024 0 S54 10$ 
0 6179 tt% 
1X121852 35% 
QB4 8 853 31$ 
LOO 11 9 0% 

0X0 in 23% 

IX 11 20 26% 
1X10 392 43% 
OX 7 2(0 9 

052 B 258 25$ 
156 11 100 47% 
44 235 A 
- 01485 20% 
17 08 A 
0X163441 A 
0X625 424 A 
IX 10 X 31% 
11 57 12 

37 3 A 

1X12 X X 
00 8 83 tt% 
L16 II 32 27% 
ax 9 603 37% 
0X11 MU22% 

axil 131 14% 

an A 


4% 4% 

4$ 4% 

32% 33$ +1$ 
23% 23% ft 
A 3 
53% 54 ft 

A A ft 
1A 10% 
lA tt$+2% 
36% 35% 

81$ 31% -% 
24% 25% -$ 

0% 2$% ft 

0 0$ ft 
«% 43 -% 

A A ft 
22% 23 -$ 
47$ 47% ft 
7 7% ft 
20% 20% 

6 A 

A A ft 
A A -$ 

31 X$ 

11% tt 

A A -% 

29% 29% ft 
14% 15% ft 
27 27% ft 
36% 36% 

0% 0% ft 

14% 14$ ft 
4 A 


007 21 291 
0 17 

10 a 

016(57 a 
0017 235 
17 147 
34700 
400 42 137 
116 494 
62 954 
00 9 767 
012 1216781 
0X16 11 

11 6 
14 312 

0X18 30 
33 IX 
OXn Z77 
024 11 2 

01867 
0 398 
662 10 
7 156 
5 596 


tommto 

WOSCdx 


Hone Ofca 
Hob kadi 


55 3« 
OM 7 2 

0X13 845 

015 9580 
173101 

0X21 54 

8 42 
11 MX 

016 02090 

62 

8 200 
072 14159 
015 24 10X 
X 181 
00 8 34 
072 25 251 
04419 43 
16 454 
00300 202 
OX 16 462 
0X10 836 
on 0 0 
374803 
16 n 


0 12 

1 2S18ZB1 

81165 
X 57 
1 31021 

00 X in 

1.1819 231 
0X199 31 

17 960 
17800 
0X14 208 
29MMI 
21 299 
7 86 
024 112*332 
71380 
032 03218 
21 472 
0X 15 868 
. 3 348 

71873 
4 852 
12 aw 
14 96 
006 9 ED 
2432118 

001 tt 08 

1 88 

» a 

L17 38 in 


3$ A A 

14% 14 14% ft 

A A A ft 
AAA 
A A 5& ft 
17% t A 1 A -% 

4M 4$ 4$ ft 

10% 10 tt% ft 
25% 24% »% ft 
3$ A A ft 

26% 25% 26% ft 
16$<1A tt% ft 
Zl%tf1S% 1ft -5 
Iftdift 1ft -1 
5 6 5 

12 11% 11% 
2ft2AX% ft 
2% 2 2 ft 

20% <18% 18$ ft 
iA 1A iA ft 
A H. a -A 
A A A ft 

1 A ift ift 
lA ift 1 A ft 
A A 9ft 


A 6 
iA«A 
15 14% 
2ft 0% 

ift IA 
ift *ift 
6dft 

7 7 
14% IA 
10 % 10 
14% 1ft 
21 % 0 

8 A 
11 $ 11 
20A 2ft 

01 0 
0% 0% 
1ft 14% 

A 3 

IA 17% 

2A 0 
2A 2$ 
22% 0 
5 4$ 


UQCB 005 M22BB3 
MS Cot 19 347 

tan ox x 10 

toms 10 14 5 

tagaater 12 187 
Mrt>te) 078 tt 112 
MM Bex 12 10 
Hanoi Cp X 773 
Urine Or 162505 
MrtriCp 9 0 
Hague* 0 5 

Itartcta 19 9 
MaMfinMOM 10 25 
taM 0X10280 

Hrtnta 01062 
MrivCp 0 1714 
Mfc&rtlR 0012 7 

UeCBndc*Q0 17270 
UcCanC 474841 
Madtaag 0 0 
UidKkc 016 IS 542 
■MdctatS 00 13 507 
liltekq OX 7 X 
Motor Cp 016 0 X 
HoH 0X03802 
MacaeUsoniO 204 
tamy 6 070 8 X 
tatta 1X11250 
MOW B 4168 

Medioda A 096 16 581 
MdulF Q014 175 
MAWS 29030 219 
Mcntto 10 36 
Htanaga 141544 
M uBC em 5 69 
Marth 16 35 
Mcrpeta 2 857 
MoB 152320 

tad AS U 44 770 
Htartfc 00113365 
Mdriktti 0X0 71 
MUM 052 172221 
Mtam 663 

Itantaft 15 87 
MoktaTH 422427 
Uottan CD OX 18 MU 
UodkMMf OS 18 57 
Hdnx OM 78 
MtockcxOOia 255 
Moacmx OM 6 664 
MoUnaaP 036 22 HOC 
MrCOtaa 18 351 
MISto 056 11 54 
•total 13 8tt 
tart 4 144 


22% 21$ 
2ft 0% 
12$ 12$ 
3ft 32% 
28% <28 
ift lA 
6 <7% 
Ift W 
6 A 
39% 39 
1$ 1$ 
A A 
ift 10% 

0 19% 

A ft 

53 51 
4$ 4$ 
ift ift 
21% 20% 
51% 50% 

A A 

n%<ii% 
0% 22% 
A A 

14% 1ft 
ift ift 
lA 19% 
2A 28% 
31 3ft 

A A 

17% 1ft 
tt$ ift 
7ft 71$ 
4$ 4 

1B%<17% 

ft 5$ 
A 6% 
A A 

52% 4ft 
51% 4ft 
2ft 27$ 
US 34% 
24$ 24 
0% 0 
11% 11% 
17% 1ft 
7% 7% 
2A 2ft 
35% 34% 
X3S$ 

A ft 
30% 3ft 
15 1ft 
2ft 9 
2ft 2ft 
11% lA 


A 7% 
A A 
A oft 
A Oft 
ft A 

17% lA 
39% 38% 
1ft <14 
14% 1ft 
15614% 
Iftdift 
24% 23% 

A A 
2$ 2% 
sft n 

a m 

15%dl5% 

ft A 
n$<n$ 
ft A 
6 A 
10 6% 
A ft 
17% 1ft 
3jk 3 

5 A 
27M 2A 
2$ A 
17% IA 
20620ft 


- J - 

JUSnack IB 209 13% 13 
Jam kre 0014 X ID ft 
XBM OJO 9 277 3ft 30$ 
JoferamW 57 3 23 9 

Jonaak* 9 315 ift TZ,’, 

JntaMri OW 15 844 lAdlft 
joUynCp 1x11 x 0 0 

JSBRn 09415 380 0 24$ 

ialB 00 181013 1 A IB 
Jtatax 016 6 20 12$ 12 


(A A 
tt$ 


10$ ft 
14% ft 


11 -$ 
20% 

2A 

27% ft 
1ft ft 
8 J* 


2& *i* 
22% +1 


A ■$ 

A -k43 

A ft 
A ft 

4% 

17 

3A ft 

14 

14 -% 
1ft ft 
IA ft 
2A -% 


5A+1$ 
2 ft 
15* -A 
9$ ft 


lA ft 
3 -A 
A -$ 
27 -$ 
2$ 

17% ft 
207 -#2$ 


3ft -% 
9 

12$ -$ 
1 7 . 

0 ■% 
8ft ft 
iBA -A 
12 


IMG Rax 016 12 39 9% 
Nfeftftob 072 11 34 17% 
NrtPtna 12 9 A 

tatcmpl 036 71 375 11$ 
WISH 00 0 41 1 A 
Mtejncr 11 4 17% 

ICC 00104 2 60$ 

Malar 16 967 2ft 
taktaGM 03386 16 

Mtatt 62 642 A 
Nwogm 0 3 A 
Nigra 027 0 20 1 A 
NmEBui ax 21 66 lA 
taakuga 8 -464 10 

MrigHta 242110 32$ 

ItonprtCpxOM 12 19 6 

to* Hi 24 2064 A 
Norton 000 454 5ft 
Udtam 0002954 4ft 

Mattel 13 314 17% 
NStaOn 4 X A 
tottnftt an 13 100 4i$ 
MWta 13 932 Ift 

Note 78243101 ift 

Notes 303825 33% 

NBC Cm 7 7 3 


27% 28$ tl 
7ft 7 A ft 
<5 50 +.0 
10$ 11$ 4$ 

13 13$ 

17% 17% 

80$ 80$ ft 

25% 2ft ft 
14$ 16 +1% 

ft ft -i 
A A 

19 1ft ft 
1ft 19 -% 
9$ A 
30$ 3ft +2$ 
A 6 
7$ 7% 

53% 54% ft 
<3$ 43$ ft 
IA 17$ +1$ 
5$ 5$ ft 
4ft 41 
1ft 1ft ft 
1ft 15% ft 
2ft 33% +2% 
3 3 -$ 


OQtetyt 
Deal Com 

OtatnLg 

ORtagN 
DNoCa 10 
OUtant 1.16 
CMNrt OK 
OntaaapMX 
OoaPhct 
QptaHR 
OmdtrS 
to Sana 
OrtxMdi 099 
tbarttam 
Ongntoi 031 

Mop 

OrtMA 041 
OOdortlT 090 
OttaTrt 172 


0 138016% U 

14 4243 16 1ft 

14 32 T3% 13$ 

8 10 24% 24% 

6 488 30$ X 
TO 274 33$ 33% 
16 19 36$ <0 

7 70S 3ft 2ft 
tt 851 15$<14$ 
21 1089UZft 0 
038634 9ft 35$ 
02957 1ft 17% 
21 40 7$ <7% 

8 tt Ift 1ft 

11 294 6 5$ 

5 107 ft 0 
45 400 14 1ft 

11100 1ft 10$ 
14 17 32$ 31$ 


18 ft 
18 -ft 
ift 
24% 

30$ ft 
33$ 

36% ft 
X ft 
15$ 

22% ft 
37% +1$ 

18 A 
7$ 


tornado 
noted x 

tomato 

MM 


IX tt 441 
082 11 151 
132 14 2S0 
21 750 
27730 
OX X 120 
21 MW 
030 43 18 
- 8 45 
1X0 15 
03215 667 

14 19 
020 24 X 
02413 298 
1.12 17 84 

25 3B4 
01214 
(UB 4 37 
0 886 
41 10 
0X0 490 
0X04274 
11414 565 
■5 110 
16 0 
OX 3 50 
100 60 
21729 

4CZ2B3 

15 X 
OX 24 255 


4ft 0 
12$<lft 
22 % 21 $ 
51% 49$ 
24% 2A 
30% 29$ 

A A 
10 ft 
14% 14 
33 31$ 
35$ 34% 
A dS% 
21 $ 21 % 
1ft 13 
31$ 31$ 
A ft 
A A 
IA ift 
tt$ 11% 
16 16 
38 0% 
32%<31% 
25% 0 
■$ 8$ 
B 6 
7 A 
2ft 9 
lA 13$ 
5$ 5$ 
UB% 9 
2ft 0$ 


47 A 
12% ft 
22% ft 
51 ft 

2A A 

30$ +H 


5$ ft 
0% ft 
13$ ft 
31$ +1% 
ft 

A ft 
ift 
12 

16 ft 
37% ft 
9 ft 
25% 

ft ft 
B ft 
7 A 

0$ A 
ift A 
ft ft 
9 ft 
26$ A 


Ik* to £ HU NX lav urn (teg 
RrttaB 112 71005 0% 1ft X A 
Pjrtrtd 91292 ft 05% 8 A 

DuatoUfl fl B2 A 5$ 5.74 *24 

OrtHOm OK 71 23 16% T7% 17% 

Qua) Food 0X17 7B6 73 0 2ft A 
Qawtan 579864 13 12$ 12% A 

arietta* 17 822 12£ 12$ 12$ A 

MCliiMe 02141 33$ 32% 33% A 


- L - 

trt flaa 10 381899 8$ <6 8$ +ft 

imltoh 301872 27% 28% 27$ +% 
tractate 0X21 219 0 47 0ft 

tract Inc 1X171313 1?%<1A 17 ft 

tratatept. 37 893 29$ 28% 0 A 

iraopflea 6 68 7% <7 7 

Ijnacpa 54 30 5% dA A ft 

irate S 1800 18$ 17% 16% 

Laraanftx(MB17 UK 23% 23 23 

LOSS 27W6M 1ft 1ft 1ft A 

UMCp OW 1 133 4 A 9$ A 

Udfett IB IS 1ft Ift 1ft A 

Logoi Cp 183100 27 23% 26% .A 

Urtto 07815 178 X 30% 3086 +S0 
IMTtdJlC 0 X 13 72 (7% 16% 17* +& 
liata 23 4 A ft A A 

LXUM OX 13 IX 14$ 14 1 A A 
Lta» 97 17X11 All AllA ft 

Ita&MTji OS 15 118 18 15$ lA A 

UndaryW n 803 31% <29-36$ -tt 
UneaTae OX X 200 48$ 4* <5$ +1$ 

UpdBKx 0*0 17 2 X <34 34 +£ 

Iraq tattCB Z7 13ffl 2ft Z2$ 33 A 

traaSkr 0 83 7$ A 7$ A 

IteO H847B 3ft 34% 35% *1 

LTXQp 2 233 A 2% ft A 

UMH* 073 4X17 31$ 30$ 31$ A 


0$ 

0% ft 

«$ A 

32% 

a 

19$ A 

A 

10$ A 

6 

aft ft 
1$ ft 
A A 
10% 
a A 
b A 

0 42 

A 

1ft 

21$ 4JB1 
81 +& 
& 

11% A 
0$ 

* ft 

13% 

10$ 

19$ 

2ft ft 


ift A 

71$ ft 

A A 
1ft A 
8$ A 
A A 
A 

51$ 4ft 

50% 


»% A 
2A A 
11% ft 

17 A 
7% ft 
0 

35% A 
3A A 
A ft 
3A ft 
(A ft 
0 ft 
2»$ A 
10% ft 


11 484 
6 116 
3 341 
25 423 
27 437 
W IX 
21473 
s ao 
a 4ii 
2X 144442 
1 179 
0X10 7 

IX 21130 
11212 111 
058 4X18 
015 3 2864 
020 11 1198 

1 a ao 

on 801274 
OS 19 472 
00 13 127 
131580 


Stoat IX 81542 
StBrtim 0X13 ill 
SddMgtA 030 19 62 
Set Had L 71283 
SQSyrtn 122581 
Scte 8 788 

SetaxCp IS 8 IEOH 
Soon Bra a 574 
Seriatd 1X45 182 
sm 911413 

S8Cp 118 X 2272 
Start B OX 1 216 
SlilGtai LG M 183 
Sartrt 661235 
So** X Ml 

SanrTidi 12 X 
SenRaa X 8 
Sinraai) 17 82 
SkMrix QM 17 883 
SH.Syetm 2 355 
Smmd ai239 
Shota* P fl M 
Stem On 13X13 
StenTta 2 110 

sgta 03s man 
Sgnta 1 566 
sune ana 164 

8toNto 343869 

stram onx 205 

SMMt 351106 

Sneaito 586191 


14012% 

A A 
A 4% 
tt% 16% 

90% a 

ift <14% 
4 <3$ 

A ft 

7% <7$ 
4ft 39% 
8 A 
35% Sft 
BA B 
A«$ 
ift » 
17 16$ 

1ft IA 
lA 17$ 
19% U$ 
17% W$ 
23 22% 
7$ 7% 


ft A 
A A 
4ft ti% 
a A 
sft A 
BA ft 
A A 
tt% ft 
1 A -A 
13$ A 

iA A 
19% A 
17% 

»$ ft 

7% 


Sans 158 IS 1951 
Sooted OX ID 878 
SpMQHA 0X3822B3 
9JUMM 040 121667 
SPtriBc OX 10 694 
SfeyRI 1 09 

8h|*S 414934 

SttoSir* OX 1B2D32 
Stdtacra 63114 

Sid Art 0X14 49 
8M lac MB 19 418 
SUdjUSA 0X37 290 
BUM 10 15 
SteMafl 1.1012 91 
SluJOy 01856 
Sb)lw 00212880 
SJttwC 21 0 
SomtomnB ABO 0 15 
SomteK OB4 13 268 
Strata Tb 381551 
Sim Spot 13 X 
SunUe 108844 

swift Ta a 468 
Sykoakic 5S1Z723 
Q rara te 02763 
Syntaoy .0X17 94 
Syiwom 67 10 
taiMxn 21094 
Spade 59 405 
Synopdca 137969 
SyrtmSoR 11215 254 
Syatamfla 01BU 
Syakmad 25 563 


57 56% 5A ft 
iA 17 ift A 
2ft 2ft 26% 

26% 23% 26% ft 

1ft 1ft U$ *-1$ 
ft 3U ft A 

17$ lA 17$ +$ 
7% 7 7%+$ 

37$ 37 37% A 
x$ 1 A 20% A 
18% IA 18% +$ 
iH 1$ lA ft 

25 X% 24% -$ 

14 13$ 14 A 

A <5% A A 

ft <7% 8% ft 
4 A A A 
1ft 17$ 1ft +% 
23% 0$ 25% +$ 

A ft ft 
me 17$ 17$ +% 
11 IA 10$ ft 

18%A5% ia A 

A ft ft 

40% 38% 40 ft 

8 7% 7$ -$ 
IA TO ift A 
11$ 11$ 11$ A 
18$ » 16 ft 

0 24% 26% A 

21 $<20$ 21$ A 
AAA 
21% 20% 20% 

20$ 20 20$ A 
16 17% 17$ A 
26$ 02ft A 
21$ 21$ 21\ A 
7% mil 2ft 
V 2ft 28$ +1$ 
39% 38% 38% *£ 
i4$rnft 14 A 
21% 21 21 
17% 17% 17% ft 
10% A 10% A 
16 17$ 17$ ft 
20%<1ft2A ft 

A ft ft A 

27$ X% Z7 *2 
1 A 7ft (4% ft 
23$ 23$ 2ft 
0$ 0 0$ A 
2ft 25% 2B$ +2$ 
A A A A 
1B$dlB% lA +1 
32$ 32 32% -$ 

48$ 45% 48% +2% 

10$ ift 10$ A 

1 A 17 17$ A 

ft ft ft 
ft A A A 

14% 14 14% 

IA 14 ia A 
13$ ift iA A 
u$<i3$ iA A 
A 5$ A A 


T-CtaSc 6 40 

1mm PTS U2 178780 
TBCCp 15 055 

IDA Carte 1M27 0 
TaeUMa 10410 
TirniwHi OX 13 12 
THtaac 2 18 
THCoSye 8 304 
TtoComte 3091502 
Tata* 8 734 

Ttataa 09464 

rumen mn 823 
Tatra Tec 71 10 
TavafMin OXX UB 
DnaCen S1185Z 
TJUx 00 0 402 
THuMad 2 509 
Tbkyort 032 37 194 
Ton Brawn 78 442 
TegpaOn Q2B3J0 948 
TPiBder 31195 

TnrawM 10 M 
Trantadc 1X11 292 
Ttlean 8 43 

TdBrt 50 79 

DMUMCIXIt 0 
Torn Left OX IS 577 
TJtatt 10182373 


A «o$ 

2ft 27$ 
IA 11$ 
2ft 0$ 
15$ 1ft 
50% 48 

b a 
n$ 11$ 

0% 19$ 

A A 

30% 0 
15$ 14$ 
8$ A 
2ft 2ft 

47$ 4ft 
1ft 18$ 
4$ 4 

Bft 61$ 
15 lA 
7$ 6$ 
ft 0$ 
11 $ 10 $ 
41 36$ 

A A 
9$ A 
0% 0$ 
7$ 8$ 
2ft 22$ 


USTtt 

UtaedStx 

IMeg 


168 141 0832 41 Sft 
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IX 13 12 18 15$ 

200 11 46 5SU 5ft 

140 8140 1ft dft 
1X0 15307$ 20$ 
IX 0 371 40% 39$ 
0X101458 0$ 0 
SO 80 ft A 
1.12 B 115 13$ IA 
11 34 7 dft 

10 2 46$ 48$ 

18 79 A(H$ 


A A 

28% A 

11 a A 

23 A 

ift A 

49 +1 

ft A 
11% A 
0 %+ 1 $ 
A A 

30% -tt 
15$ A 

A A 

24 A 
47$ +A 
19% A 

4% A 
61 $ - 1 $ 
15 A 
7 

A A 
11 A 
4ft A 
A A 
A A 
0 $ A 
A 

2ft A 


38$ -1$ 
e A 
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sou ■& 
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40% A 
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A A 

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fetaortx 030 0 58 15 1ft 14% A 

YtapdCal tt 591 35 34% 35 A 

Vtrtara 161151 Iftdift 14$ A 

Hear X 1202 19% 1ft ift A 

VlaipfM 8 156 14$ 14 14 A 

Wataetfc 01527 16 Tft 15$ A 

VLSI Tech 312272 14 13 14 +U 

Vri»B OM 16 00 8ft 67$ 8ft A 


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WemarEa 110 0 751 0 2ft 

tormkch 69 406 4% 4& 
WMttttBQJH 72371 0 2ft 

HUMMSL 180 9 547 0$ 0$ 
WtftrixM 00 9 20 2ft 2ft 
HkMJ PM 1G24 14 02 23$U22$ 
WtMO 2X 15 141 39$ 88$ 
Write 0 Z» 4ft 

Wirt Onex 172 Tl 3817 2ft 2ft 
WMPri B 625 11$ 11$ 
DMpSM 1 3U 13d12% 
WrtSteA 12 42 ft A 
Mate 0*233855 *8$ *5% 
Wwn Sercm 844363 0 0 

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WFP Srcop US 18 447 Sft 3 
WjfnwftkOX 4 10. ft S$ 


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Km Cap 1120 A A A A 
Mew 194 01741 ift ift ift A 
YntRsdi 10 m 4$ ft A A 
ZtataHi 112 9 870 41 X 40 A 




4v ..*»B3F r 


WORLD STOCK MARKETS 


FINANCIAL 


Tuesday June 2 8 1994 


AMERICA 


EUROPE 


Dow bounces 
back in spite 
of weak dollar 


Wall Street 

Blue chips showed surprising 
resilience yesterday morning, 
as share prices bounced back 
from a weak opening even 
though the dollar had dipped 
below key support levels, 
writes Frank McGurty in New 
York. 

By l pra. the Dow Jones 
Industrial Average was 15.86 
higher at 3.652.80. But the 
broadly based Standard & 
Poor's 500 was up l.5l at 44-1.31. 
suggesting the advance's nar- 
row base. On the NYSE, declin- 
ing issues outnumbered 
advances 1.133 to SG8 in moder- 
ate volume of 147m shares. 

In the secondary markets, 
the American SE composite 
was down 1.78 at 424-52, but 
the Nasdaq composite was 3.28 
better at 897.UT. 

Investors defied expectations 
of a strong a/ter-shock on the 
heels ol Friday's 62-point 
sell-off. The news from the for- 
eign exchange markets was 
hardly supportive, with the US 
currency slipping helow the 
Y100 mark in overnight trad- 
ing and flirting with that level 
throughout the morning. 

But the relative stability of 
the dollar, without any further 
intervention by the world's 
central banks, seemed to be 
enough to shore up the bond 
market. Treasuries started out 
with moderate losses, but 
worked back to just below 
their opening values by mid- 
raoming. 

The blue chips fared even 
better, gaining a strong foot- 
hold on positive ground after 
an early drop. Two stocks, Cat- 
erpillar and Disney, led the 
advance. 

Shares in the world's biggest 
maker of earth-moving equip- 
ment improved SI Vi to $102% 
even though a strike by 14,000 
production workers dragged 
into its second week. Bargain- 
hunters appeared to be taking 
advantage of a stock which 
was well off its 52-week high of 
$ 121 %. 


MARKETS IN PERSPECTIVE 


% dung* In local currency f 

chongq 

stoSng* 

% Ounce 

klU&Sf 


1 Woofc 

+ Wwu 

« 1h 

Start M 

WM J 

Start ol 
1994 

Start ol 
1894 

Austria 

-3.08 

-0.09 

+•15.79 

-9.55 1 

-6.24 

-2.25 

Belgium 

-2.45 

-6.12 

+8.37 

-7.14, 

-2.18 

+1.97 

Denmark 

-1.12 

-0.69 

+15.74 

-4.15 

-0.43 

+3.79 

Finland 

-1.02 

-6.32 

+53.93 

+5.81 

+10.86 

+15.56 

France 

-1.76 

-7.37 

+1.14 

-14.87 

-11.88 

-8.13 

Germany 

-1.77 

-5.67 

+16.80 

-11.69 1 

-7.90 

-3.99 

Ireland 

-2.94 

-2.49 

♦9.77 

-8.141 

-5.13 

-1.10 

Italy 

+0.43 

-4.32 

+27.81 

+ 12.70| 

+17.78 

+22.77 

Netherlands 

-2-82 

-3.66 

+ 11.92 

-6.79 

-5.15 

-1.13 

Norway 

-0.34 

-9.52 

+18.48 

-4.67 1 

-109 

+3.11 

Spain 

-3.26 

-9.97 

+9.16 

-9.98, 

-6.75 

-2.79 

Sweden 

-3.07 

-9.47 

+24.01 

-2.86| 

+1.26 

+5.56 

Switzerland 

-2.00 

-4.95 

+11.88 

-10.95 

-5-22 

-1.20 

UK 

-4.71 

-3.32 

-0.11 

-1527 1 

-15.27 

-11.68 

EUROPE 

-2-95 

-4-96 

+7.57 

•1137 1 

-&97 

-5.11 

Australia 

-1.41 

-3.78 

+18.56 

-a.i8 

-3.43 

♦0.66 

Hong Kong ... — 

-2.34 

-6.50 

+26.13 

-25.95 

-28.97 

-25.96 

Japan 

-1.92 

-0.24 

+6.43 

+1520 

+22.22 

+27.41 

Malayan 

-2.66 

+0.99 

+52.95 

-22.39 

-22.56 

-19-27 

Now Zealand 

-3.34 

-4.94 

♦24.76 

-6.67 

-5 76 

-1.77 

Singapore 

-1.30 

-4.65 

+30.07 

-12.96 

-12.04 

-8.31 

Canada 

-4.73 

-7.76 

♦0.12 

-6.89 

-14.84 

■1123 

USA 

-3.40 

-3.21 

-1.07 

-4.93 

-8.30 

-4.93 

Mexico 

-4 23 

-8.43 

+37 62 

-13.53 

-23.96 

-20.74 

South Africa 

-J.5I 

+4 .80 

+42.24 

+14.09 

-0.88 

+3.32 

WORLD INDEX 

-2.78 

-2.82 

+5.05 

-2.nl 

1 -1.67 

+5L51 


f Bawd On A*™ J40i 1994. Copyright TTio financial Umoa limited, GafcMun. Socta I. Co, and 
Natural VeurWai Limited. 

Weakness in the dollar last week gave most global equity 
markets a bad time, and Tokyo equities had one of their 
worst days this year yesterday after the resignation of 
yet another Japanese prime minister. 

However, the dollar crisis also pointed up the singular 
strength of Japanese equities this year, up 15.2 per 
cent by last Friday in local currency terms, and by 
27.4 per cent in terms of the wilting dollar. For US 
equities, unfortunately, the pattern was reversed: a fall of 
-1.9 per cent on a local currency measure, compared with 
one of 2.1 per cent for the FT-Actuaries World Index, 
stretching to 14 per cent in terms of the Japanese yen. 


Bourses show resilience after morning setback 


J 


Disney, meanwhile, climbed 
$1'4 to M2%. The company's 
new film. The Lion King, 
became the third biggest Holly- 
wood release of all time, selling 
$4lm worth of tickets in its 
first weekend. 

The Big Three US car mak- 
ers were back in favour, with 
Ford gaining Sl'-i to $38%, Gen- 
eral Motors up $1 at $51% and 
Chrysler adding S% to $47%. 

Technology stocks were gen- 
erally higher as well, although 
IBM slipped $'• to $59%. A 
heavy 2.1m shares were 
exchanged on news that pro- 
duction delays were forcing 
Big Blue to scale back the 
launch of its much-vaunted 
PowerPC line of personal com- 
puters. However. Storage Tech- 
nology was $1% higher at $34%. 

A rebound by computer-re- 
lated stocks helped the Nasdaq 
climb off its weakest close in a 
year on Friday. Lotus Develop- 
ment was up $iVi at $35%. Ora- 
cle added $1% to $37% and 
VVeJi/leet appreciated SI to $23. 

Canada 

Toronto stocks recouped some 
of their earlier losses by mid- 
day. but remained in negative 
territory owing to weakness in 
the bullion price, which saw its 
lowest level in almost two 
weeks. 

The TSE 300 composite index 
fell 11.12 to 3,948.73 in modest 
turnover of C$274.6m. 

Texaco Canada Petroleum 
rose 42 cents to C$1.32 after 
Texaco Inc offered to buy the 
remainder of the company that 
it did not already hold for 
C$1.32 per share. 

Mexico 

Equities reversed Friday's 
losses on news that Mr Jorge 
Carpizo. the interior minister, 
had agreed to withdraw his 
resignation. 

In early trading the IPC 
index was up 10212 at 2,197.49. 
as it also benefited from the 
improvement on Wall Street. 

Volume was 8.8m shares. 


After Friday afternoon's slide 
in New York, more pressure on 
the dollar and the fail of 
another Japanese government, 
bourses were ready for another 
setback yesterday, writes Our 
Markets Staff, but some of 
them were surprised by their 
own resilience. 

FRANKFURT, initially, fell 
with the rest and the Dax 
index closed 16.71 lower at 
1,988.60 after a session's low of 
1,968.61. However, the Septem- 
ber bund future recovered 
from a low of 91.33 to a high of 
92.42, and seemed to be holding 
the 92 level at the end of the 
equity post-bourse, when the 
Ibis indicated Dax showed a 
further recovery at 2,000.48. 

Behind this, and reflecting 
the swing in the market's 
mood, was the performance of 
Deutsche Bank. During the ses- 
sion Bayernverein and Dresd- 
ner offered some relief from 
this year's consistent weakness 
In the sector, rising DM7.5Q to 
DM433. and DM6.50 to 
DM364.50 respectively. 

But Deutsche was measuring 
Friday's downgrade by Merrill 
Lynch in New York against a 
reaffirmed buy recommenda- 
tion yesterday from Morgan 
Stanley in London, the latter 

ASIA PACIFIC 


backed up by B Metzler in 
Frankfurt. German's biggest 
bank hit a new 1994 low of 
DM659 before closing the ses- 
sion down DM3-80 at DM668. 
and recovering to DM673.40 at 
the end of the day. 

Turnover eased from DM7bn 
to DM6.9bn. Outside the bank- 
ing sector, there was a buyer 
for Volkswagen which saw the 
shares up DM2.80 to DM467.80 
on the session, and after a rise 
in five-month car deliveries. 
VW rose another DM5.20 to 
DM473 after hours. 

PARIS remained volatile, the 
CAC-40 index moving in a 
range between 1,870 and 1,920 
before closing the day slightly 
higher, up 4.58 at 1,911.60. 

Turnover was firm at 
FFr3.7bn. The tumround in 
performance was directly 
related to the stronger than 
expected opening on Wall 
Street as well as firmness in 
the bond market 

Beyond the current turmoil 
in the financial markets, there 
was good news on the horizon 
as an association of French 
analysts said that they had 
produced a further upward 
revision of their outlook for 
company results this year. 

Rhdne- Poulenc saw heavy 


trading and the shares dropped 
to a session low of FFr113,80, 
before closing off FFr3.80 or 3.2 
per cent at FFr114.70 in further 
reaction to disappointing earn- 
ings news last week from its 

DS subsidiary, Rhfine-Poulenc 

Rorer. The US company, subse- 
quently. was the object of a 
number of brokers' down- 
grades. 

Suez dipped FFrl.40 to 
FFr266.50 as the group noted 
that it might Increase its stake 
In Lyonnaise-Dumez, up FFr15 
to FFr515, to 20 per cent. 

AMSTERDAM was lifted off 
its session lows by the 
improvement late in the ses- 
sion on Wall Street, the AEX 
Index closing off 4.3 or l.l per 
cent at 377.10, having tested 
the 374 level earlier In the day. 

Aside from outside influ- 
ences the market was also 
affected, by the failure of talks 
aimed at securing a workable 
coalition government following 
the inconclusive general elec- 
tion result on May 3. 

Reed Elsevier suffered at the 
opening from the unexpected 
resignation of the co-chairman 
of the UK/Dutch group, the 
shares easing to FI 145 before 
picking up later to close down 
FI L80 at FI 150.20. 


; FT^^^^ijsrros'Sft2rer.lndices : - 


Jun 27 THE EUROPEAN S8VES 

Hwrtf changes Open 1030 HOP 12JB 1100 HOP <500 Qua 

FT-SEforatrach 100 1307.29 1304*1 1306.15 130073 130&64 131107 1*8.78 <313.43 

FT-SEIaniHc* 200 133464 133285 1334,16 1335.71 IMS 13*0-78 1337.74 13*2.95 

Jw 24 Jm 23 An 22 Jin at Jimai 

FT-SE Eundrack 100 132&34 133498 1323X0 1303.48 130S.43 

FT-SE Enrons* 200 1364.1S 138052 1357.37 1345J3 135UW 

But 1000 otnenck H mm ioo • laiiat m ■ inun immt ioo - im« an ■ ikb. iz 


MILAN was again lower in 
thin volume as foreign inves- 
tors continued selectively to 
take profits and domestic 
hinds remained inactive. The 
Comit index fell 4.91 to 694.01, 
with some analysts predicting 
that the market would fan to 
the 650-660 level before it 
rebounded. 

Industrial blue chips were 
mostly lower, in line with the 
market, but Fiat was L60 or 0.9 
per cent down at L6.345. 

The insurance sector was 
harder hit, led by a L1J215 or 
22) per cent fall to L4Q.866 by 
Generali. One dealer noted that 
the slide came in the wake of 
weekend details that premium 
income rose more slowly than 
expected in the first five 
months of the year. 

He added that the sector was 
also being hurt by worries that 


the companies' portfolios 
would be badly hit by losses in 
the bond markets. RAS fell 
L790 to L25.5 00 and SA1 was 
L482 down at L20.648. 

Fondiaria dropped L545 or 4.1 
per cent to L12.S05 as it warned 
that It might have to launch a 
capital increase if it was to buy 
back the 20 per cent stake held 
by Groupama, and which the 
French group has said it 
planned to selL 

ZURICH picked up from its 
lows as Wall Street opened 
firmer after a day in which 
futures related trading made 
for volatile conditions. The 
SMI index finished 15.8 easier 
at 2^61.4, after a day's low of 
2^25.5. in thin turnover. 

UBS bearers picked up SFrl2 
to SFr 1.145 amid futures 
related buying, but renewed 
demand emerged for some 


insurers. Zurich rose SFrLO to 
SFrl.300 and Winterthur 
gained SFr 16 to SFt705. 

Chemicals were out of favour 
with Ciba losing SFr35 or -U 
per cent to SFT770 and Roche 
certificates down SFr65 to 
SFr6^45. 

MADRID'S general index 
eased 0.97 to 298.17 after a 
day's, and year's low of 295.50. 
Turnover was thin at 
Pta22.29bn. 

In one of the worst perfor- 
mances of the day. Union y 
Fenix fell PtaJ20. or 7 per cent 
to Pta 1.520 on shareholder 
approval of the reverse take- 
over of the insurer by the 
French company, AGF. Among 
the better performers, Anipw 
rose Pta 12 to Pta7?0 after 
Pta79S following Friday's sale 
of a lossmaking electronics 
subsidiary. 

WARSAW rebounded from 
the year's lows in thin volume 
as investors, encouraged by 
revived demand (luring the 
previous session, held back 
from making further sates. The 
Wig index rose 463.1 or 6.4 per 
cent to 7.678.3. 

Written and edited by William 
Cochrane, John PHI and Mtahasl 
Morgan 


Nikkei’s 2.2 per cent decline provides lead for region 


Tokyo 

Share prices dropped as the 
yen set a new high against the 
dollar, sending the Nikkei 225 
average down 2.2 per cent, 
(antes Emiko Terazono in 
Tokyo. 

The index declined 465.79 to 
20.300.96 in low volumes as 
most investors remained 
absent due to the turmoil on 
the currency markets. The 
Topix index fell 23.29. or 1.4 per 
cent, to 1,649.78. 

Traders said the political sit- 
uation had little impact on 
investor confidence. One com- 
mented that the resignation of 
Mr Tsutomu Hata, the prime 
minister, at the weekend actu- 
ally had a favourable effect 
since it meant that a general 
election would be avoided. 

The Nikkei 225 opened at the 
session's high of 20.649.53, but 
soon fell on arbitrage selling to 
hit the day’s low of 20,16853 in 
the afternoon, before recouping 
some of the loss on buying by 
financial institutions. 

Volume was 363m shares, 
against 355m. The Nikkei 300 
weakened 3.76, or 1J2 per cent, 
to 300.23 and first section 
declines overwhelmed rises by 
1,006 to 39. with 95 issues 
unchanged. In London the BE/ 
Nikkei 50 index eased 0.71 to 
l.m75. 

High-technology shares suf- 
fered a sell-off due to the high 
yen: Toshiba fell Y27 to Y798 
and Fujitsu lost Y30 at Yl.080. 
Consumer electronics makers 
were also lower, with Sony 
down Y14Q to Y5.980 and Mat- 
sushita Electric Industrial off 
Y30 at Y1.730. 

Steels were sold, with Sumi- 
tomo Metal, the day's most 
active issue, falling YB to Y292. 
Automobiles were also lower. 


with Honda Motor down Y30 to 
Y1.840 and Nissan Motor fall- 
ing Y24 to Y850. 

Sharp, however, reversed its 
morning decline to close Y10 
up at Y1.800, while buying 
orders from public funds lifted 
Nippon Telegraph and Tele- 
phone Y3.000 to Y837.000. 

Electric power companies, 
which are large Importers of 
fueL were the least affected by 
the bout of selling, and Tokyo 
Electric Power advanced Y3Q 
to Y3.130. 

In Osaka, the OSE average 
ended 467.82 down at 22.774.56 
in volume of 12.9m shares. 

Roundup 

The region's markets took 
their lead from activity in 
currencies. 

HONG KONG was led partly 
by a volatile futures market, 
which took a late slide. The 
Hang Seng index closed 233.52 
lower at 8,647.48. 

Properties were hardest hit, 
with Investors worried that 
developers* earnings might be 
affected by recent government 
measures to cool prices. Sun 
Hung Kai fell HK$i.75 to 
HKJ45.5Q, New World Develop- 
ment by 80 cents to HK321-50 
and Henderson Land by 
HK$1.50 to HK$35.50. 

There was said to be little 
impact on equities from the 
latest delay In Sino-British 
talks on Hong Kong's future. 

SYDNEY saw its biggest one- 
day decline since August 1991, 
which left the All Ordinaries 
index down 60.5 at 1,957.4. 
Turnover came to A$502.1m. 

The takeover target Bridge 
Oil was the most heavily 
traded stock, with 56.49m 
shares exchanged after Parker 
and Parsley lifted its bid to 90 
cents a share from 80 cents. 


Johannesburg falls 2.5 per cent 


South African equities ended 
2.5 per cent lower as world 
market weakness kept buyers 
away. Gold's inability to hold 
or make ground in spite of the 
dollar's weakness also put 
pressure on related stocks. 

The overall index finished 
139 weaker at 5,453 after the 
96-point retreat on Friday. 
Industrials shed ISO to 6,287 
and golds dipped 91 to 2,090. 

De Beers lost 75 cents at 


R109.25 after bouncing off a 
day's low of R106. Anglos 
declined R6 to R230 and JCI 
R5 to R100. 

Gencor closed unchanged at 
Rll, after an early R10.50, and 
SAB fell R2 to R86. Banks had 
Stanbic and Firstbank each 
down R3 at R113 and R98 
respectively. Among golds, 
Kloof receded R3.75 to R52.50, 
Vaal Reefs Rl3 to R412 and 
Loraine Rl to R16.75. 




J\nnllv conUJiV-d b* Thu RrvwdJl TirrKVj Lid . 

NATIONAL AND 

REGIONAL MARKETS 


iSoMumh. & Co jj» 3 Nanvem Sccunttea Lhj. in ooniunetton wuh the hwaiuls of Acnortw and the FacURy of Actuates 


FRIDAY JUNE 2A IMd ■ 


THURSDAY JUNE 23 1994 . 


■ DOLLAR INDEX- 



EUROMt t ."Of Wit -1? 154 62 102.63 13361 :J*i30 -1.5 319 162.05 156.91 VM.12 135.76 14058 178.58 141.58 141.58 

Hon**. I1H»U 201 U5 0 3 W.fl4 l23.pl Itj'-tJ liTiiS. -O t 151 200.95 19362 12140 167S2 107.97 220.60 155.82 155.02 

Pjcrt* e.\vn |7Wl £»? -0 3 16631 ItC.U HJ.40 115.06 -OS 104 173.22 16600 110.75 144.J0 115.01 173.75 134.79 14751 

fcna-Fiote it+TOi 167.61 -07 161.12 lOn.90 <39.10 <2806 -0.9 191 168.73 162.58 107.68 140.66 129^3 170.70 143JJ8 U497 

t k*ih Amonca ic?S| . . . 17603 -1.6 16799 113 78 '468 3 17650 -16 296 179.64 173. OS 11488 149.75 179.27 191*73 175.67 17B.28 

GmqN* E* UK iS1 r i) 14 0 21 -1)7 140 55 93.25 13141 128.91 -11 J.SJ 147.29 141.92 94.18 122.79 13040 157.47 12237 12237 

P.TC.rwE*. JjdjiCTU .. .2J2S9 0 6 233.20 l54.~2 30144 -0.4 3 92 244.13 236.23 156.10 203.53 219.06 29021 18238 102.30 

V.ttiKJ E\. US i <6531 .168.32 -07 <6180 W 35 139.76 131.17 -0.5 1.92 16955 1633? 108.41 141.34 t32^«3 17251 145.58 145.81 

VVoddE* UK OWi 170.12 -0.9 16362 128.60 141.51 14200 -10 2.00 17198 165 71 109.96 143.37 145.31 175 58 155.62 155.62 

WwUEl So. Ai pi)31 . . 170.74 -1.0 164.J4 103.90 54170 145.06 -i I ZJS 172.46 18&J7 1)0.27 143.77 14734 16130 158.97 158.97 

WdrtdE*. Japan i1TU3i..„. 176.74 -14 169.91 112 73 146 76 160.56 -14 3 01 179.17 172.64 114.56 149.37 172.08 195.20 165.93 165.93 


Tlv Wahl tadmi? 1721 17139 -1.0 164 75 109.3: 142.21 146.09 -11 220 173.13 166.82 110.70 14*33 148.40 171S.S7 157.13 157.13 


C-dykjh- Th« FuuncLd Tjr».r: limited. GoMiron. 5<Kta And Co. ard MjT.Vral Sccurisoa urraftsl '•XT 
l.ura (Hire >w> UL>.ltj£4> to 911 rtAKa cktt&i Si.', 6.JJ- FrUnS ana 


THE DAYS CHANGES 

06 Change 

Wellington — -3.8 

Sydney — -3.0 

Bangkok . -2.9 

Hong Kong-. -2.6 

Singapore — - 1.7 

Manila. -1.4 

Kuala Lumpur -1.1 

SeouL. ....................... — ... + 1 J2 


Bridge moved ahead 4 cents to 
90 cents. 

The Insurance sector regis- 
tered the biggest fall in per- 
centage terms, losing 4.6 per 
cent on the day, as GIO fell 11 
cents to A$2.29. 

SINGAPORE was sharply 
lower, with losers swamping 
gainers by 319 to 13 in a ner- 
vous market 

The Straits Times Industrial 
index fell 37.11 to 2,208.71. 

KUALA LUMPUR rebounded 


from a day's low of 996.90 to 
close 11.51 off on balance at 

I, 003.52. However, expectation 
of forced selling if the market 
weakens further took its toQ of 
second-line stocks; Idris fell 16 
cents to M$4.68 in volume of 
9.8m shares. 

SEOUL, one exception to the 
downtrend, saw a technical 
rally after a five-day decline, 
with healthy institutional sup- 
port noted for banking shares 
- viewed as undervalued, 
given improving business per- 
formance. 

The composite index added 

II. 08 at 931.04. Both Cho Hung 
Bank and Korea First Bank 
went limit up, each gaining 
WonSOO to Wonl0.800 and 
Wonl2£00 respectively. 

Trading and construction 
companies also gained momen- 
tum in anticipation of prepara- 
tory talks at the border vil- 
lage of Panmunjom today for a 


first-ever summit between 
presidents of the two Koreas. 

BOMBAY finished lower but 
after staging a mild recovery 
from the day^s worst level. The 
market was not expected to 
encounter fresh Impetus until 
Thursday, when the two-week 
account in specified shares 
ends. The BSE 30-share index 
lost 38.61 at 4,174.40. 

MANILA declined steadily 
throughout the day and the 
composite index ended off 39.69 
at 2,749.45. Declines exceeded 
advances by 61 to 7, with 31 
issues unchanged. 

Turnover shrank to 565m 
pesos from Friday's l.34bn 
pesos. 

Manila Electric “8” shares 
dipped 5 per cent, or 17.50 
pesos, to 327.50 pesos and Phil- 
ippine Long Distance Tele- 
phone lost 1.5 per cent, or 25 
pesos, to 1,655 pesos. 

BANGKOK fell steeply. 


although It ended off the ses- 
sion's low point. The SET 
index dipped 37.73 to 1.254.81, 
having seen a downside of 
1.248.56. Turnover was Bt5.9bn. 
One broker said there was sup- 
port for the Index at 1,250. 

Finance and bank stocks 
were the hardest hit - Bang- 
kok Bank retreated Bt5 to 
Btl76 and Thai Farmers Bank 
Bt4 to B1115. 

WELLINGTON ended at its 
lowest level this year in below 
average turnover, with most of 
the selling coming from retail 
customers. The NZSE-40 capi- 
tal Index shed 77.47 to 1,961.30 
in turnover of NZ$29. 13m. 

COLOMBO was supported by 
strong interest from domestic 
investors and renewed foreign 
demand, which lifted the all- 
share index 40.84 to 993.28. 
Turnover, however, contracted 
to SLRsl49.9m from Friday's 
SLRs22im. 



mm U.S.A. 

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AS China Plumbing 
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US$25,000,000 

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and Investment Corporation Limited 

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3 . 




COMPUTER NETWORKING 



The financia l sector is among the biggest investors in computer hardware and software for networking. Above, 
traders throng LBTE, the London International Financial Futures and Options Exchange. Retire. Trevor Hwnptmea 


Networked d fatrib ution: in the US, preservation apectafists at Yale 
University Livery use a digital 'Documents on Demand' system from 
Rank Xerox to store books and other works, and print when required 
- the system thus greatly improves access to coBecttona. 


Tracking the connections: this engineer checks a large groop of diverse workstafions wBb&i a network fo the 
US, using SpectnmVMaestro Vision software, de veloped by Cahtotroo and Calypso Software Systems. 


C omputer networking, at 
one time a narrowly 
focused, technical sub- 
ject for electronics specialists, 
has become synonymous with 
a raft of profound changes 
which are expected to reshape 
business in the late 1990s. Busi- 
ness leaders ignore its implica- 
tions at their peril. 

Among the expected changes 
are the growth of electronic 
channels to the customer: 
home shopping, for example, 
through video catalogues will 
profoundly influence retailing. 
Hie potential of the automated 
teller machine, widely 
deployed by banks and other 
financial institutions, has yet 
to be fully explored and could 
provide an electronic market 
stall for a broad range of goods 
and services. 

The ability of computer net- 
works to overcome barriers of 
time and space will increas- 
ingly threaten the position of 
intermediates in a wide range 
of industries, starting with 


A challenge which cannot be ignored 


financial services. The growth 
of desk-top videoconferencing, 
now being pioneered by tele- 
communications companies 
including AT&T and British 
Telecom as well as computer 
manufacturers like Interna- 
tional Business Machines and 
Olivetti, seems certain to have 
an impact on the travel busi- 
ness. 

All of this implies drastically 
more flexible and higher capac- 
ity networks than those avail- 
able at present The chief tech- 
nical change is expected to be 
be the emergence of an enter- 
prise-wide. high speed network 
capable of carrying all an 
organisation's electronic traf- 
fic. This implies a single net- 
work capable of supporting 
data, voice, facsimile and 
video. Such a network could 
carry services ranging from 


Computer networking opens up new opportunities for business, 
ranging from simple electronic mail to a plethora of multimedia 
services, as Alan Cane explains here 


simple electronic mail to a 
plethora of multimedia ser- 
vices. Multimedia services 
involve text, graphics, video 
and sound converted into com- 
puter language and delivered 
through a single interactive 
c hann el 

Networks or this kind should 
prove more cost effective and 
efficient than the multiplicity 
of parallel networks which 
characterise voice and data 
communications in large 
organisations today, but they 
will also make possible new 
ways of doing business and 
facilitate new commercial rela- 
tionships. 


Forrester Research, for 
example, a US-based consul- 
tancy, anticipates the emer- 
gence of “social computing”: 
“It will consist of a new gener- 
ation of telephones, televisions, 
and personal computers that 
access on-line services through 
a variety of networks. We 
assert that large firms will use 
social computing to build new 
connections to customers. 
Companies that do not address 
the emergence of this powerful 
new communications channel 
will suffer in the marketplace". 

The message seems to have 
struck home. Mr James Cos- 
grove. bead of AT&T’s data- 


comm unicat ions services 
group, says customer demand 
for the new services is almost 
outstripping the company’s 
ability to provide them: “Their 
argument is: Tf I do not keep 
up with this, I will be at a 
competitive disadvantage/” he 
says. 

Mr Cosgrove identifies at 
least three trends driving 
change. First, the co n vergence 
or computers and communica- 
tions In the move from main- 
frame based data processing to 
client-server, or networked, 
systems: “Routers and local 
area networks have changed 
the way people think about 


computing. Today, people 
think about networking” he 
says. 

The growth of local and wide 
area networks has led to the 
emergence of a lively group of 
companies which provide the 
hardware and software which 
make them work. Novell, for 
pyample. the market leader in 
networking software, earlier 
this year formed a networking 
alliance with AT&T. Hubs, the 
control and maTiflp»mpnt cen- 
tres at the heart of local areas 
networks, and routers which 
interconnect networks are pro- 
vided by Cisco, 3Com,. Chip- 
corn, Cabletron and Synoptics 


among others. The rates of 
growth of these companies 
illustrates the health of the 
sector. Chipcom turned over 
$4&n in 1991, $87m in 1992 and 
$15Qm last year. 

Second, the emergence of 
highly mobile emolovees: thev 
are more effective because they 
are able to spend mote time 
with their customers. Mobile 
employees have to. be sup- 
ported with file elements of a 
“virtual office” - portable com- 
puting and telephony, cellular 
raitifl Utika for voice and data 

Third, a growth in in tercom- 
pany as opposed to intra-com- 
pany networking. Companies 
generally established data net- 
works on a proprietary basis to 
disseminate . information 
through their own or ganisa - 
tions. 

Today, the aim is to share 


mfjfwrnaHon on a much broader 
hagia The influence of Lotus 
Notes, software which enables 
groups of people to share and 
work on the same information, 
Mr Cosgrove says, could be 
compared to a new industrial 
revolution. 

The keys to many of the new 
possibilities are information 
carried in digital form so it can 
be stored and manipulated by 
computers, high bandwidth 
fibre optic cabling providing 

Continued on next page 

ON OTHER PAGES 
Networking trends page 2 

Buzzwords hi brief Page 2 

Network Security issues Page 3 
CUeotaerw systems ~.Page 3 
Growth of the Internet . Page 3 
New operating systems .Pfcge 4 

Managers’ d is coveries ...Paged 
Groupwa re expansion ..'.Pages 
Getting the message Page 6 
Open systems Page 6 

Mobile data services Page 7 
Stsmdards dilemma ™_Fag»8 


si A'- 

■■“ 1 , — - “ 

















II 


COMPUTER NETWORKING 2 


FINANCIAL TIMES TUESDAY JUNE 28 1994 


Key role in a company’s performance 



1 ■ NETWORKING EXPENDITURE TRENDS 1 

j European networking expenditure trends ‘ 

-hardware. 

software and services - by vertical market; 1983-82, fn . 

percentage terms.* 





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• 


D Information commurricatton technology ffCT): forecasts tor 
market value in mfaftons of ECUs in Erfarope for selected areas 
of equipment and services tijfe year (and 1995 in brackets)^ 


.9 9DM »31« 


... sustAcrnass 

Data network services — 

.16,185 (17,279) 

ICT maintenance, support service's 

Customer premises equipment — ; — 

,51,628 (53^66) 
.11,101 (11,290) 


Computer hardware 
fal len i uaU on technology hardware , 
Voice network services 


. 39,625 ( 40 ^ 57 ) 


. 52 ^ 80 ( 53 , 403 * 


T otaf European JT market — 
Total European ICT market . 


, 101,973 ( 110 ^ 477 ) 
* 125,120 ( 130 ^ 70 ) 
. 275,070 ( 289 , 820 ) 


in the European Union and European Ftee Tmde Association 
(Efta). Source: European Information Technology O bservatory, 
1994; Lyoner Strasse 18. 080528, FrsnkturtfMein, Germany 


Continued from previous page 

adequate conduits for the vol- 
ume of information carried, a 
new generation of powerful 
microprocessors and, most 
important, an enabling tech- 
nology called asynchronous 
transfer mode (ATM) which 
looks like revolutionising the 
way computer networks are 
built. It provides high speed 
transmission and is suitable 
for many kinds of traffic 
iHpi nding voice, data, facsim- 
ile, real-time video, CD-quality 
audio and imaging. 

In the US. carriers including 
AT&T and US Sprint are 
already offering their custom- 
ers services based on ATM 
technology. 

In Europe, a committee led 
by Mr Martin Baogemann. 
industry commissioner, 
warned that Europe could not 
afford to be left behind. 

“One important development 
is the integrated services digi- 
tal network. ISDN. This offers 
the opportunity to send not 
only voice but also data and 
even moving images through 
telephone lines." a committee 
report said. 

"ISDN is only the first step. 
New multimedia services. Tor 
instance, high quality video 
communications, require even 
more performance. ISDN is 
showing the way and the next 
technological wave aims Tor 
the multimedia world. This is 
integrated broadband commu- 
nications providing an oppor- 
tunity to combine all media in 
a flexible way. The lead tech- 
nology to implement this is 
ATM.” 

ATM is the latest step in a 
technological progression 


which began with packet 
switching in the 1970s. As the 
technology has unproved, 
speed and capacity has risen 
Inexorably. 

Packet switching involves 
the movement of labelled pack- 
ets of data each of which takes 
the best route through a net- 
work. It works well, but it is 
slow. Frame relay, the current 
favourite, is Easter. ATM gets 
its speed from technological 
improvements which mean 
that each packet needs only 
minimal addressing and mini- 
mal error correction. 

Most managers are aware, 
however, that information 
technology properly imple- 
mented has the potential to 
boost business efficiency while 
poorly designed and poorly 
implemented, it is more likely 
to damage a company's perfor- 
mance, absorbing money, 
creating inflexibility and tak- 
ing up senior management 
time. 

This double-edged property 
of IT is amply demonstrated in 
the current growth of com- 
puter networking. On the one 
hand, through networking, 
managers have the opportunity 
to change the shape of their 
organisations for the better by 
the timely dissemination of 
information through and 
between companies. 

On the other, it not easy to 
accomplish. Senior managers 
may see parallels between the 
stage networking has reached 
today and the early days of 
data processing. 

The complexity and novelty 
of the changes involved 
requires technical skills which 
are In short supply. Substan- 
tial cultural barriers may have 
to be negotiated - and most 


companies today are not pre- 
pared for the structural 
changes which follow on from 
advanced computer communi- 
cations. Some organisations 
have already decided they are 
not in the business of network 
management and have out- 
sourced their network services 


to companies like AT&T, BT, 
Cable & Wireless and GETS. 

If the 1970s and 1980s was the 
heyday of the data processing 
manager, it seems clear that 
over the next few years the 
network manager will take a 
leading role in setting a compa- 
ny's IT strategy. 



Insecure? 
Friendless? Alone? 


Not with Sun. Not in the decade of open, distributed computing. 

But maybe, after two decades of proprietary propaganda, the 
message still isn't getting through. 

if not. In us spell it out for you. 

Every resuuax added to a network adds up to a more powerful 
computer. Or as we would say, “the network is the computer." 

It doesn't marrer whether your system is a desktop PC or a 
proprietary mainframe, today's challenge is planning the future 
through the network. An open systems framework keeps it all 
together, keeps dam secure, and keeps the network manageable. 

Interoperable. (Not just interconnected.) 

Distributed information. (Not just access to data.) 

Above all, focussed on the possibilities of the future, rather chan 
un maintaining the pusr. 

Let no one tell you this is easy. But don't believe it's an 
impossible dream. 

For example, all of our SPARCserver systems support all of the 
industry’s leading networking protocols. We have products chat will 
help you manage complex networks effectively. We understand the 
need to work with existing desktop systems. We have software 
which a/lows you to run PC applications native on your UNIX 
system. Finally, we luve applications like Lotus Nores which bring 
ream players together. 

Choose- Sun. and vnull never work jlone. 


-X— 


(■'■if rrxxr infornutKVi ,vi Sun'M^nL. .Jcintwift]. icmpjrmg nJuiAOGS. Jfxl hra they imcjjrait: widl ousting lyycms, 
pUu- ■.unipkir ai*l mum iha voiip n in Sun Nkimnsow Cumpo'cr CMpjrjuuu. Biphut Mmur. Green Ian*. Bugsbot. 
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Aikliru . 


"Wrphune , 


Rnriude , 
Fa 



BOOK REVIEW: ENCYCLOPEDIA OF NETWORKING 

Guide to the networking revolution 


I f you don't know your huh* 
from your router**, the 
LAN Times Encyclopedia 
of Networking could be the 
book for you. Managers who 
have struggled to come to 
grips with the language of 

computing are now faced with 

a whole new set of acronyms 
and expressions as the 
networking revolution 
gathers pace, unites Alan 
Cane. 

Because computing and 
telecommunications are 

culturally and historically 
quite distinct disciplines, 
much of networking can seem 
a black art even to data 
processing specialists. 

Asynchronous Transfer 
Mode (ATM), for example. 


without doubt the most 
important new buzzword in 
networking, faxes even 
experienced software 
specialists. Vue Encyclopedia 
takes eleven pages to explain 
ATM in depth, sta r ting with 
the proposition that tins data 
transmission technology has 
the potential to revolutionise 
the way computer networks 
are built 

It uses tiie analogy of 
vehicles crossing a bridge. 

If all the vehicles are the 
same length and driven at 
the same speed, it is easy to 
predict when a vehicle 
reaches the far side of the 
bridge. 

ATM involves chopping 
digital information into 


packets or cells of similar site 
travelling on the network at 
sfnular speeds- 

This provides a speed and 
efficiency denied earlier 
technologies where packets 
vary in size and therefore 
cause delays at switching 
poinfa — “using same-size 
cells provides a way of 
predicting and guaranteeing 
bandwidth for applications 
that need it,” the 
Encyclopedia says. 

Written by Tom Sheldon, 

It fafces an appropriately 
broad view of the networking 
world, including topics such 
as Arpanet, the experimental 
computer network which 
eventually gave rise to the 
Internet; client-server 


computing, the new model 
for data processing In the 
1990s; and Lotus Notes, the 
emerging standard for group 
working. 

The Encyclopedia is 

intended as a reference work 
rather than a guide to 
networking, hut any manager 
anxious to make sense of 
networking should be able 
to translate trade paper and 
journal articles with its help. 


*A central location f ar the 
attachment of wires from 
workstations. 

** Intelligent links between 
networks. 

LAN Times Encyclopedia of 
Networking. McGrow Hill, pp 
1006: $39.95. 


From Ace and ATM to Lans, Mans and Vans 


Buzzwords in brief 


Although networking has 
vital implications for the 
business world, the 
technology is often 
obscured by technical 
jargon and buzzwords. 
Here, for the 
non-technical reader, 
MICHAEL WILTSHIRE 
offers some simplified 
definitions 


A ccess control method: 

the main distinguishing 

feature between differ- 
ent local area network (Lan) 
technologies. 

ACE: advanced computing 
environment - a standard 
sponsored by a consortium of 
22 vendors, including DEC, 
Microsoft and Compaq. 

ASCII: American Standard 
Code for Information Inter- 
change. ASCII is the standard 
method of identifying charac- 
ters. numerals and punctua- 
tion mar ks. 

ATM technology: asynchro- 
nous transfer mode, developed 
in France in the mid-1980s, is a 
breakthrough in communica- 
tion technology with the poten- 
tial to support transmission of 
combined data, voice and video 
at up to 45 megabits a second. 

AIM opens the door to many 
new network applications. 

Band: a measure of signal 
changes per second in a device 
such as a modem. 

Backbone: generic term for a 
Lan or Wan connections 
”1311111:” between sub-networks 
across an enterprise. Subne- 
tworks are connected to the 
backbone via bridges and/or 
routers. 

Bandwidth: the range of sig- 
nal frequencies that can be car- 
ried on a communications 

c hanne l. 

Bit a binary unit of informa- 
tion that can have two values, 
0 or 1. The word ‘bit’ is a con- 
traction of binary digit 
Block: a collection of trans- 
mitted data. 

Broadband: a term with a 
number of meanings - it was 
coined originally to describe a 
channel with more bandwidth 
than a standard voice grade 
channel, usually a 48kHz Hnk, 
equal to 12 voice-grade chan- 
nels. Such channels are gradu- 
ally being superseded by digi- 
tal circuits. 

Broadcast: when a user 
sends a message from one ter- 
minal to others on the net- 
work. 

CCITT: an international 
body, made up of telephone 
companies and other IT play- 
ers, responsible for setting 
global communication stan- 
dards. 

Client-server technology: the 
most widespread example of 
network computing: moves 
information processing to 
where it is most economical, 
fast and useful; divides com- 
puter systems into front-end 
'client' workstations and back- 
end ‘server 1 processes. 

CTI: computer-telephony 


integration - also known as 
computer-supported telephony. 

Data compression: a key 
topic for network managers as 
multimedia, video, document 
Imaging and other technologies 
emerge. 

Domains: a Microsoft 
inspired network structure 
which separates large net- 
works into smaller, more man- 
ageble segments. A domain can 
be made up of multiples serv- 
ers and thousands of workstat- 
ions. 

DBMS; database manage- 
ment system - a software sys- 
tem to manage data. 

DCE: data communications 
equipment the hardware that 
provides connection to the net- 
work: DTE stands for data ter- 
minal equipment on a network, 
e.g. computers, printers and 
plotters. 

Digital signature: an encryp- 
tion method to validate an 
electronic message. 

Distributed database: data 
located at multiple sites. 

Digital signal: thin bag only 
two values, normally 0 and 1. 
during transmission, as 
opposed to analogue signals 
whose values vary all the time. 

Dynamic routing: a way of 
sending messages across a net- 
work - if a line fails or is over- 
loaded, the system win auto- 
matically re-route the message. 
Packet switching operates on 
this principle, with the system 
always poised to react to ever- 
changing conditions. 

EDI: electronic data inter- 
change for business data such 
as purchase orders and 
invoices between companies. 

Electronic mail: sending and 
receiving messages and text- 
based information between 
computers; the most common 
application on networks. 

Ethernet: one of the oldest 
Lan technologies, developed by 
Xerox, Intel and DEC to run 
over coaxial cable; highly suc- 
cessful and still popular. 

File server: a computer 
attached to a Lan. usually run- 
ning on a network operating 
system (Nos). 

Frames: a segment of data 
sent over a network medium 
using a cable or laser. The 
frame size is dependent on the 
protocols and services used. 

Frame relay: a data commu- 
nication method for wide area 
networks, slowly replacing 
X.25 - an X series standard, 
specifying the interface 
between computers and packet 
switched networks. 

Groupware: network soft- 
ware that defines applications I 
used by a group of people. See 
page five. 

GUI: a graphical user inter- 
face to enable computer users 
to easily select a ‘menu item' 
by using a mouse' to click on 
to a graphic icon. 

Hub: the centre of a star 
topology network or cabling 
system. 

Interoperability: the ability 
of applications on two com- 
puter systems to exchange 
information so that they can 
understand each other. 

ISDN: the slow-to-emerge 
integrated services digital net- 
work covering a range of voice, 


data and image services. 

Internet: the most expansive 
network of computer networks 
in the world, with 25m users - 
see (article on facing page. 

ISO: International Standards 
Organisation, based in Geneva; 
responsible for many data com- 
munication standards, the 
best-known being the seven- 
layer Open Systems Intercon- 
nection (OSI) model 

Lan: a local area network - 
in its simplest form, a cabling 
system. Installing a private 
cabling system (to which com- 
puters can be connected) and 
by using agreed proceedings 
(protocols), communications 
between all stations is possible. 

Man: metropolitan area net- 
work; usually high speed fibre- 
optic systems. 

Modems: short for modula- 
tors/demodulators; devices for 
connecting computers to public 
switched telephone networks 
(PSTN). 

Multimedia: brings voice, 
video and graphics to the net- 
work in the form of large files, 
requiring high disc storage 
space; plus large amounts of 


bandwidth during transmis- 
sion. 

NetWare: Lan networking 
products including an operat- 
ing system developed by Nov- 
ell that holds a large market 
share of the Lan server sector. 
Novell claims to have 40m cli- 
ents on its networks. 

Network audit trail: a con- 
tinuous record of a network's 
activity. 

Network management: H A 
term used to cover a multitude 
of sins,” says David Palmer- 
Stevens, author of the Guide to 
Local Area Networking.* “As 
yet, there are few complete 
solutions available - a patch- 
work of network management 
systems cover a variety of 
areas . . . basically, vendors' 
systems foil into one of two 
camps, concerned with either 
physical (hardware) elements 
or the logical side of the net- 
work - the control and man- 
agement of inter-process com- 
munication.” 

OME: an open messaging 
environment 


Continued on next page 



e t w o r k s 




Networking people 


READER BENEFIT 


THE FINANCIAL TIMES IS 
PUBLISHING THIS SURVEY 
TO COINCIDE WITH THE 
NETWORKS '94 EXHIBITION 
AT THE NEC IN 
BIRMINGHAM ON 
28TH JUNE - 30TH JUNE. 


AS AN ADDITIONAL 
BENEFIT TO READERS OF 
THIS SURVEY ANYONE 
ATTENDING THE 
EXHIBITION MAY ENTER 
FREE OF CHARGE SIMPLY 
BY ARRIVING AT THE 
ENTRANCE WITH A COPY 
OF THIS SURVEY. 


For further information on Financial 
Times technology related surveys 
please fax Gavin Bishop on 
071^373 3062, or write to him at One 
Southwark Bridge, London SE1 9HL. 


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FINANCIAL TIMES TUESDAY JUNE 28 1994 


' ev S 


COMPUTER NETWORKING 


Rush to join the global Internet 

Link for 25m users 


U se of the Internet, an 
global network of com- 
puter networks, is 
expanding rapidly as individ- 
ual personal computer users 
and companies recognise its 
value for communications, 
research and 

The Internet is the most 
expansive network of computer 
networks in the world, Hnirtng 
an estimated 22m computers 
and over 25m users in 137 
countries. Use of the Internet 
is growing’ at a rate, of about 
ten pa- cent per month. 

"The Net," as ttis commonly 
called, is an outgrowth of a US 
government funded research 
progra m ttofl began in the late 
1960s to electronically link 
researchers at US universities 
and government laboratories. 
Throughout the 1380s, the 
Internet grew in popularity 
among computer hobbyists - U 
provides rfwap electronic man, 
conferencing and network 
searching capabilities for per- 
sonal computer junkies. ‘Vir- 
tual communities' with ccan- 
mon interests are linked on the 
Internet exchanging messaaes 
from all over the world. 

One of the Internet's attrac- 
tions is that it allows users to 
explore computer data bases 
all over the would. H is possi- 
ble, for example, to pour 
through the catalogue of the 
Library of Congress, access 
info r m ation about NASA 
shots, or log on to computers 
in Australia - all for the cost 
of a local phone call, pirn 
whatever im«w* charges are 
imposed by the ‘across pro- 
vider/ 

The growing popularity of 
the Internet has spawned doz- 
ens of these 'access providers’; 
companies and organisations 
that provide individual -and? 
corporate computer users wfih 
'dial up’ Hnlra to the fiiterim*. 

Some, such as the Web in 
Northern California, encourage 

yyfefl intepflptinri nn-lfna awj 

off, among their users. This 
gives them a distinct ‘net cut 
tore’ reflecting the views and 
interests of their subscribers. 
Others act simply as a connec- 
tion service, much Eke a phone 
company provides links to its 
voice network. 

Until very recently, however, 
use of the Internet has been 
tim he d to those with a rela- 
tively high level of computer 
expertise. Most computers on 
the Internet riQi..tfm UNIX 
opei^i^?s^st^^^jildc6F® fl 3 
tmfamitiar to the majority of 
PC users. The Internet there- 
fore lacked the *user friendly’ 
features such as graphical User 
interfaces that have made PCs 
inoeasingty easy to use; . 


Now several interface pro- 
grams are making the TfeT 
more accessible to computer 
novices, hi particular, a pro- 
gram called Mosaic, developed 
by the National Center for 
Supercomputing Applications 
(NCSA) at the Universit y of IU- 
inoifl at Urbana-Cfcampaign, is 
gaining popularity as an easy 
to use paint and rWrfr Twterfaffl * 
far searching portions of the. 
Internet 

Mfflions of new Internet 
users are also beginning to 
gain access to the worldwide . 
network via commercial 
on-line information services 
such as CompuServe and 

fkiTtria' 

Business use of 'the Tnfm-rmt 
is also an the rise , with thou- 
sands of hooking 

their internal networks on to 

The incr e aa i ngiy popular 

Internet now has users 
fin 137 countries 


*ihe Net/ In the US, the num- 
ber of business ‘host’ comput- 
ers directly linked to the Inter- 
net increased 63 per cant to 
567,686 over the 12 months end- 
ing in January, almost equal- 
ing the number of Internet 
Bmiw to US 'wTipg wt and nut 
varsities. Eadh ’host’ computer ' 
can support numerous in^vtd- 
ual personal computer users. 

Use of tiie Internet inthe UK 
■jumped 94 per cent over the 
same period, with 118^30 host 
computers hocked up by the 
end of January. Much of the 
UK growth, is also believed to 

fnmp f ro m the ffranriiorrinl sec- 

tor. Companies are rushing to 
*ak» advantage of the Internet 
as a low-cost route for intemar 
tkmal Mechanic ,maiL Tti gttyi 
Eounsnent the US rawnw n i ft r 
company, is one of the heaviest 
users of the Internet, with over 
31,000 ccanpaters linked to the 
system.- The company 
wgrfwng ea an average of 1.7m 
e-mail messages with people 
outside " the company per 

mointh 

The open nature qf the Inter- 
net with its mflHona <rf users 
and the lack of any central 
control has , however, created 
security problems. Corporate 
users of the Internet therefore 
typically try to Isolate their 
Intemal^co^pater^ networks 
fttrarthe •jptaocns):\to avoid. 
intetek^l^feo m ^ c urious or 

‘ "SecuHty has became a bar- 
rier to ihe commercial growth 
of tiie Internet. Many clients 
want to connect, but won't do 
it became afthe security prob- 
lems,* says 'Jim Bogan, idee 


president of global communica- 
tion yurt tnfhrrrmttrm process- 
ing services at Digital Equip- 
ment Hie company has "at 
least one or two (computer) 
break-in attempts per week,* 
he acknowledges. “Over the 
past ten years, we’ve developed 
methods of securing our own 
network that, as far as. we 
know, have never been pene- 
trated." 

Digital recently announced 
an Internet security service 
baaed <m the technology and 
expertise that it has developed 
to protect ite awn networks. ■■ 
.. Digital's system incorporates 
two ‘gateways/ one’that is 
linked to the In t ran et and a 
B ocravi is iriddenfrom 
outside world. In effect, the 
system builds ‘firewalls' 
around internal networks, pro- 
tecting them from unwanted 
intruders. Encryption. user 
imtiuBtUfflitin n systems could 
bring greater security to the 
Internet, experts say. However, 
the introduction of such 
systems is not welcomed by 
many Internet enthusiasts who 
fear that thijy will detract from 
the open cdfflmnnlcatioos wwt 
have long been a ceutral fecet 
of tort cultnre/ 

O’Reilly and Associates, a US 
publishing group, has created 
the Global Network Navigator, 
a frte Internet-based tofotma- 
tkmcenter that inrindes news, 

flyi fifilfai) Tnagyginf^ ail 

tive catalogue and a global 
marketplace ccintefnmg adver- 
tiser-sponsored hifopnatAdh an 
a wide range of products and 
services,. 

In CaHtocria’s snkwm Valley, 
a of and 

organisations is establishing 
CommerceNet, an electronic 
m iirtrigjaM fj M R technol- 
ogy 'companies. . 

Mecklermedia , a US technol- 
ogy pnbiishtng group, "recently 
launched ‘MecklarWeb/. an 
electronic co mm miicttioiDS 
marketing - system aimed at 
onmpMrtiw that want to have a 
‘corporate presence' on the 
fetemet- 

Such business uses of the 
Internet win secure its figure 
as a critical part of the ‘infor- 
mation supohighway/ cfcraw- 
ing resources, to the devtfop- 
inent of hew software far usej; 
on the Internet and encourag- 
ingits expansion; 

The Internet cf the future is , 
however, Hkeiy to be very dif- 
ferent from ttte, research tal- 
ented hetweak. that,ttstereiators. 
originaBy envisaged, and from 
the computer hobbyists* play- 
ground that tin hitemet . has , 
been for- the past decade. 

1- Louise Kehoe 


Networking allows an easier 
spread of information across 
an organisation - 
unfortunately, the same 
principle applies to computer 
viruses, reports 
MICHAEL DEMPSEY 


C ompote hackers have a powerful 
disguise. Forget the image of the 
amateur hacker who has the 
habit cd gating into a screen, probfog 
password combinations, long after 
sane people have gone to bed. 

Technical ability Is nothing beside 
the rather comic image of the socially 
Inadequate teenager whose world 
revolves around intruding into com- 
puter networks. AM 'once the hacker 
Is perceived aBanrineffectual individ- 
ual, it follows -ttsKUs activities are 


Worries over network saboteurs 

Viruses are no joke 


isbnient. -- 

Tins failure teapot a reel threat has 
allowed backers, and the authors of 
computer viruses,-- a remarkable free- 
dom of movranent A recent BIT spon- 
sored survey on XT security found that 
I viruses were responsible for 27 per 
cent of security breaches in PC net- 
works. The figareTfor standalone PCs, 
wdafort fmm any network, is much, 
higher. But Am potential for d am ag e 
once a virus is loose in a network is 
enormous. 

One of the most expensive virus out- 
breaks infected three large networks 
and over 200 personal computers. 
Immediate costs to the com p a ny con- 
craned ran to £10(^060. This is not petty 
vandalism. Bat like their creators, 
computer viruses still retain the air of 
a practical joke. ~ r 

The warkTs largest computer com- 
pany IBM uses a huge number of inter- 
nal networks. Mike Coffins, UK man- 
ager for IBM local^area network (Lan) 
software, reports that the virus threat 
is taken vary srafodtiy - “a virus on a 
Lan can wreak hatyoc. It can lie dor- 
mant wrrffl triggerod 7 OU a Mi tintn rtflfw 
when it corrupts every file. It’s possi- 
ble to- lose a whole database or the 


contents of every hard disk." 

- Mr Collins concedes thatsome light- 
weight hackers are just out to poke fun 

- “these anorak-types are usually quite 
visible, but people who infiltrate a 
destr uctive vims are perpetrating wan- 
ton vandalism when translated on to a 
computer screen," 

The tacky glory of Las 'Vegas will 
witness just how far the network sabo- 
teurs can go when the gambling resort 
hosts a three-day co nfe rence from July 
22. The title is “Def 
Con H," a sarcastic 
jibe at military 
systems and their 
escalating scale of 
what are termed 
“defence condi- 
turns* or *def cobs" 
for short - which 
are stated of alert 
“DefCon IT invites 
hackers and virus 
writers from across 
the globe to swop 
ideas and lines of 
code. Among its Dr Davtd Autorny-Jooes, technical 
highlights’ will be of RetacnNriMVVto beet the* 
an award to the 
winner of the Second International 
Virus Writing Contest The conference 
is legal under US law. 

Faced with worries over serious 
backers and virus writers, bow can a 
company secure its networks against a 
determined, and apparently organised, 
enemy? 

Dr Nigel Bramfe spent 11 years with 
Nato headquarters in The Hague. A 
nuclear physicist by training, he was 
responsible for secure systems In a 
hi ghly sensitive environment These 
days he has -kit the world of military 
counter-measures to take up a posit as 
director at the n etw or kin g specialists. 

Intelligent Networks. 

Characterising his area of expertise 
as “wizardry," tWmftw «w pitrtw«i that he 


"a ni ta stands thing s fawn forirte mrt" — 
thfa often ™ftgng spuming the technol- 
ogy-intensive approach for “common 
sense tactics . . ■ viruses are totally 
defoataMe. purely by procedures. One 
of the best devices at your disposal is 
fmrifeanAwiflrtHimM of employment" 

Viruses are frequently transmitted 
via computer games, be explains. 
Hence a growing number of companies 
regard game-playing as a sackable 
offence. It sounds a draconian solution. 

But a sales person 
retu rn ing from the 
Odd with a porta- 
ble personal com- 
puter has to down- 
loadisalfes data. If 
bis or ftir 

contains" an unau- 
thorised program, 

it can thfcct an 
entire company 
with a destructive 
virus in a matter of 
seconds. Best prac- 
tice means keeping 
i, technical director a strict eye on 
beet the sabotoin which programs 
are naming and 
where they appear. The whole point of 
n et w orkin g is that it allows taforma- 
tian to spread across an organisation - 
unfortunately, the same principle 
applies to viruses. 

*Tve seen FSsfiu Stimulator naming 
on a £10,000 graphics workstation,'* 
Bermfie recalls. “If that copy had been 
purchased by the company for staff to 
play with, fine. If an employee brought 
it from home it constitutes a danger.” 

In an ideal world, ««wr«wtw» would 

recognise tim overpowe rin g te m pta tio n 

to indulge hr high-tech f pmwr a stan- 
dalone PC, isolated from the network 
and dedicated:* to premrei so ftwa re is 
one answer. Bat staff need to be teDy 
aware that canying a disk across from 
thh boa to their pro ft wstonsl g yfa ww is 


risky. The threat of severe disciplinary 
action is certainly one way to reinforce 
this message. 

Reflex Magnetics expanded into the 
business of virus protection after a 
virus attack threatened its original line 
of duplicating computer data. Reflex 
sells Distort, a program that resides 
on a network and interrogates floppy 
disks to ensure they have already been 
scanned for virus infection. ! 

In the absence of a positive response. 
Distort prevents the suspect disk from 
accessing the computer's hard dick. 
and hence passing a virus on. 

D istort costs £5,000 to implement 
across a 100-user network. Reflex 
sales director Andy Campbell has 
become Increasingly concerned about 
the virus threat to networks. Fites are 
‘compressed’ in order to be flashed 
over a network - “these present a 
problem, it’s harder to identify a 
virus,” he says. 

Distort spots those files on a disk 
that have been compressed, expands 
them to their original format, and 
hands over to an additional tool whose 
name should impress “codeword 
crazy" virus authors: the toed is Thun- 
derbyte, developed by the Dutch 
systems house, Esass. it scans for the 
presence of a virus. 

Thunderbyte apart. Reflex technical 
director Dr David Aubrey-Jon.es knows 
it takes more than a macho name-tag 
an a scanner to halt the flow of viruses 
christe ne d with names like ‘Pathogen’ 
or Ttipper/ 

UK authorities are applying a firm 
policy to help avert the virus threat 
Scotland Yard’s computer crime unit 
has hit hack, too, dosing down elec- 
tronic bulletin boards that have been 
used to pass an details of destructive 
viruses. 

But the culture represented by the 
“Def Can D8 event is still activB. Dr 
Aubrey-Jones repeats that a particular 
CD-rom disk, containing masses of 
camputra- date, is headed for Europe 
from the US. 

On sale for $100, the disk contains a 
large catalogue of viruses for the cor- 
porate saboteur to savour. 

Thunderbyte should be busy. 


Technical terms explained 


Continued from previous page 

Object-oriented technology; 
reusable software program- 
ming that simplifies devetop- 
ment of applicatkms. 

08/2: cornerstone of IBM’s 
cHent-server strategy for desk- 
top computer systems. 

OSI model: a seven-layer 
model developed by the Inter- 
national Standards Organisa- 
tion. ISO, specifying bow com- 
puters should communicate 
over a network. 

PowerPC: microprocessor 
architecture developed by 
Motorola, in conjunction with 
IBM and Apple Computers. 

FDNS: pablic date networks. 

Packet: a group of bytes, 
sent over a link. 

Packet switching: a method 
of switching data in a network 
where individual packets of set 
size and format are accepted 
by the network and. delivered 


to their destinations. With var- 
ious companies sharing a net- 
work. the packet option can be 
a cost-SErsfeg method of com- 
municating data. 

TCP/IP: suite of protocols 
developed by the US Dqpiurt- 
ment of Defense, since edited 
as an international standard, 
particularly for networks of 
interconnected Ethernet Lans. 

SNA: Systems Network 
Architecture, introduced by 
IBM, the world’s first neterork 
architecture. 

Token ring network: the 
standard of the. Institute of 
Electrical and Electronic Engi- 
neers. 

Unbc a multiuser operating 
system that supports network- 
ing and distributed file 


Vans: value added network 
services - a network that pro- 
vides specialised' facilities 
beyond tte normal carrier ser- 
vice by adding cbmputer-can- 


troiand communications. 

Wan: a wide area network, 
covering' a larger area than a 
local' area network, and inctod- 
ing telecom links. Examples 
include packet switched net- 
works, PDNs and Vans. - 

X series; re comm endations 
specified by CC3TF governing 
the attachment of terminals 
and computers to a data net- 
work. 

□ Quids to Local Area Net- 
working by David Pahner-Ste- 
vens for Cabletron Systems, 
Newbury, Berks, (tel 0685 
5S0.00H fox 0635 44578). 

□ local Area Networks: mak- 
ing the right dunces: by BhWg 
Hunter, Addison-Wesley, Wok- 
ingham; pp 323. 

□ Also recent FT surveys - 
The Computer Industry : Battle 
for the Desktop, published Tues- 
day May 31, 33H also: Tele- 
communications in Business; 
June 15. 1394. 


Larger cpmpanie^see 
‘downsizing’ as a'toay 
to cut computer ■ 
hardware costs, 
explains 

PHILIP MANCHESTER 


T he fruits Of the coQ&non 
between ctanputers and 
telecommunications 
^dverihe last 20 years have seil- 
' .dom. lived up to their promise. 

" Persistent predictions about 
the imminence of mass tele- 
-wmking and the global village 
have always proved premat 
' t ore. *, v •• : V"' , T 

The fondamental problem, is. 
that getting computers and 

lAlftrtwimmn’rfltinng to work 

together at all is a tough task. 
Firstly, the two industries 
‘ are culturally poles apart - 
telecommunications is slow- 
moving, heavily regulated and 
capital intensive, white com-' 
puting is fast-moving, unregu- 
lated aBd-gkfllfrhifenftive. 

Secondly, rival suppliers in 
both industries must be 
coerced into agreeing to baric 
technical standards - while 
leaving them enough room to 
innovate : and differentiate 
themselves in ti^maricet And 
standardS' take years of negoti- 
ation, are usually out-of-date 
or irrelevant by the time they 
are published and are difficult 
and expensive to enforce. 

That it is possible to connect 
two different computers to a 
telephone Hne «wrt get them to 
swap, messages Is a modern 
wonder of the world, against 
such a background. 

Even assuming' that it is 
possible to get two different 
- computer environments to 
. talk tq-bach. other, the prbb- - 
i«p»^ qf distribntiag computer 
power across a network have 
only jost begim. ft is neot just a 
rase of , distributing power by 
putting ^workBtatioiis on desk- 
tops ftnottargB local ‘saver’ 


CLIENT-SERVER TECHNOLOGY 


Big benefits ahead 


Kl'.t. ,-aJ 


computers in offices. Modem 
distributed systems need ways 
to ffiriifoPtefrmrtfemiHty, too. 

Thfa is not simple. Decisions 
must. be made about this 
distributing applications and 
the difficulties. of achieving 
this are a s i gnifi c an t barrier to 
the. spread of client-server 

technology. 

The so-called 
client-jservex 
architecture is 
now wlRely 
seen as - the 
way to solve 
the problem of 
distributing 
functionality. 

It splits infor- 
mation tech- 
nology (IT) 
systems into 
‘client’ pro- 
cesses and 
‘server’ pro- 
cesses. Typi- 


organisations which see it a 
way to reduce hardware costs 
and give them the fieodhflity 
to bring their bM applications 
into the 1990s. : 

According to a survey of UK 
users conducted by client- 
server database company 
C&pta. earHdr this year, 75 per 








. mu. 


\ .V'ffluui:. j'X 




nology (IT) 
systems into 
‘client’ pro- 
cesses and 
‘server’ pro- 
cesses. Typi- 
cally, a desk- ... 
top workstat- 
ion incorporating local pro- 
cessing power wIQ be the 'ch- 
enf and a high-speed laser 
printer or large data storage 
device will provide the ser- 
vices throngh the network. 

This design approach has 
been very successful for 
installing PC-based networks 
where the design issues are 
relatively ample - connecting 
workstation PCs to each other 
and to printer and data stor- 
age resources. 

But the scope of client- 
server is now befog extended 
to embrace - and. even emu- 
late - traditional central ter- 
. minal/host applications based 
o n matoft-amra Thin phenom- 
enon is usually called ‘down-. 
airing * and ft has eftng ht the 

Imagination of large user 


-• 


Homor 
pterminoto 
instaM LANs 


tf : S 


cent of companies see clirait- 
server technology as central to 
their future IT strategy. 

Using client-server design 
principles for ‘legacy’ applica- 
tions m^mg t bgfc they can be 
equipped with better front 
end’ user interlaces on the 
desktop. Software environ- 
ments such as Microsoft's 
Windows or Apple's Macin- 
tosh wmhit> old applications to 
be presented with a new 
graphics-based ’front aid’ and 
make life easier for users. 

Bat genuine client-server 
systems must go much further 
than this. Decisions about 
where to the put the “logic' of 
the application — rather on the 
dfiratt or tha server — are diffi- 
cult to make. Many companies 
are ID-equipped for this task. 


; “One of the main lessons we 
have learned from large-scale 
client-server projects is that 
development people need re- 
educating and thrir skills need 
to change,” says Mr Lawrence 
Hunt, director of software 
company ACT’S distributed 
systems group. 

, “To get the 
real benefits 
from client- 
Sgrver technol- 
ogy yon need a 
different atti- 
tude to 
systems design 
and develop- 
ment- You 
need to relate 
more closely to 
the business 
needs and get 
application 
designers to 
think about 
them rather 
than concen- 
trating solely 
an the technology,” he adds. 

Than are, of course, tech- 
nology issues involved and 
application designers face 
ever gr owin g complexity when 
trying to integrate client- 
server systems - “to the past 
it was the hardware compa- 
nies that took on the integra- 
tion role - but now it is soft- 
ware companies and tool 
builders, ” says Mr Michael 
Miner, chief executive of Blyth 
Software, a development tool 
and database software special- 
ist. 

“The problem is that a lot (tf 
people have been trained in 
1970s technology - much of 
which is no longer relevant in 
client-server systems,” adds 
Mr Miner. 

like Mr Hunt of ACT, Mr 


Miner sees the answer in 
improving the skllli of devel- 
opment staff and placing 
Increased emphasis on busi- 
ness needs. 

“Typically, you need a team 
of people who are skilled with 
various technologies, but with 
a focus an the business prob- 
lem. They need to create new 
business roles and use tnnhs 
which make application devel- 
opment easier” 

A key aspect of this Is to 
choose tools which can to sort 
out the dividing hue between 
the wnrt the server — in 
other words, whether to place 
the application logic on every 
desktop or to place it solely on 
the server. . _ 

“We see tbe ftrtnre of client- 
server in what we call second 
generation tools,” w pi«ra« Mr 
Eetan Karia, director of mar- 
keting at software tools 
builder Cognos. “Our Axient 
tool allows developers to build 
the application code once and 
then deploy it across different 
platforms *- across databases, 
operating systems and differ- 
ent approaches to client- 
server. 

“This means that the client 
can be a Tati client with lots 
of application logic built in or 
a ‘thin’ client which relies on 
logic in the server,” he contin- 
ues. 

This approach is likely to 
become the norm for tool- 
buildiexs and will help applica- 
tion bnfldera with the difficult 
problem (tf dividing client «nd 
server components- Even with 
this particular problem solved, 
however, cHentserver systems 
are likely to be as complex - 
or, perhaps, even more com- 
plex than their predecessors. 

This will Inevitably mean 
that any savings to hardware 
costs will be matched by 
Increased software develop- 
ment and system integration 
costs. The benefits - more 
responsive and more flexible 
systems - should be worth it, 
however. 




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IV 


COMPUTER NETWORKING 4 


FINANCIAL, TIMES TUESDAY JUNE 28 1994 


The emerging mid-range 
systems market has now 
become the main 
battleground for the new 
strand of operating system 
development, reports 
PHILIP MANCHESTER 


pe rating systems software 
occupies a pivotal position 
in modem computer 
systems. Not only does the choice of 
operating system define the com- 
puter hardware - it also defines the 
application. 

The choice of operating systems 
platform has, in effect, replaced the 
choice of hardware for users. 

While in the past, there was 
always a danger that computer 
users could become dependent upon 
their hardware supplier, over the 
last decade the emphasis has 
shifted to the operating system plat- 
form suppUer. This has become 
increasingly confusing for users 
and software developers who are 
looking for a stable platform on 
which to build applications. 

The result has been a bitter pub- 
lic conflict among operating system 
suppliers, each hoping to gain dom- 
inance in the market. 

This conflict dates back to the 
mid-lSSCs when the virtues of com- 
mon operating environments were 
first recognised. 

The success of IBM’s Personal 
Computer (PCI along with Micro- 
soft's MS/Dos created a large, homo- 
geneous software product market 
for the first time. 

Previously, every computer came 
with its own operating environment 



- making it impossible to move 
application software from one 
machine to another without signifi- 
cant changes. 

The MS/Dos PC changed this and 
allowed a new breed of mass market 
software developers such as Lotus, 
Novell and Microsoft to dominate 
personal computer software. 

Towards the end of the 1980s, 
these and other software producers 
saw that the same approach could 
be taken to build software for larger 
systems - either in the form of PC 
networks or client-server systems. 

The need emerged, therefore, for 
an operating environment which 
could deliver the same advantages 
as a PC operating system, while 
coping with the greater complexity 
of multi-user systems. 

I t is this emerging mid-range 
systems market which has 
become the main battleground 
for the new strand of operating sys- 
tem development. There is no short- 
age of contenders. Microsoft is in 
pole position with the extended ver- 
sion of its successful Windows -MS/ 
Dos operating system for the PC. 

Known as Windows NT. it is 
claimed to be the natural migration 
path for single PC users who want 
to move into multi-user networked 
systems. 

Microsoft aimed to sell a million 
copies by the end of its first year 
and. while this target has proved to 
be ambitious. Microsoft has man- 
aged to get close to it Afore signifi- 
cantly, sales of the original Win- 
dows are now about 50m worldwide 
and growing quickly. Microsoft's 
main rival comes from a combina- 
tion of Novell and other Microsoft 
competitors who back various fla- 
vours of the Unix operating system 



Just as loofl 89 it works: business computer user* shwid not have to worry about operating systems software, therefore cramy 
devetopam tan (atom the view that ttta technology is frrefevant to the average end-user and are wotting to ■hkti’ it 


Race to supply new operating systems software 


The battle intensifies 


originated by AT&T’s Bell laborato- 
ries in the 1970s. Unix has the 
advantage of a long history of sup- 
porting multiple users and wide 
backing across the industry. 

Most hardware manufacturers 
offer a Unix platform - although 
they are not as consistent as they 
should be in conforming to the stan- 
dards. Unix has manag pd to gain 
some success in the mid-range 


systems market and a good portfo- 
lio of applications software now 
exists for it. 

The other main rival to Windows 
NT is OS/2 - an operating system 
developed originally by both Micro- 
soft and IBM. When it was 
announced in 1987, it was designed 
to replace MS/Dos. But after slow 
Initial success. IBM and Microsoft 
went their separate ways - leaving 


IBM to continue OS/2 development 
on its own. OS/2 has attracted a 
solid core of established large IBM 
customers because it fits in well 
with, their existing systems. 

The OS/2 operating systems has 
an estimated four million users 
worldwide - but has had little suc- 
cess outside the IBM market 

These three - Windows NT, Unix 
and OS/2 - are the main contenders 


in the operating systems conflict 
and ftarh faction has embarked on a 
campaign to attract firstly, applica- 
tion software developers and, 
secondly, end-user companies. 

The rnriflirt is further confused, 
however, by the emergence of a new 
strain of object-oriented operating 
systems. Apple's Macintosh, for 
example, has attracted attention - 
although it is limited by its ties to 
Apple's hardware. 

Apple founder Steve Jobs left to 
form Next Computer in the late 
1980s, creating yet another potential 
rival operating environment. Next 
has built a version of its Nextstep 
object-oriented system for the PC 
and. again, has scored some success 
in niche markets. 

Another object-oriented environ- 
ment has grown out of a joint ven- 
ture between Apple and IBM under 
the Taligent name. Taligent prom- 
ises to improve development pro- 
ductivity with Us operating system 
- although it will be some time 
before it its ready for the market. 

The primary task of aD of the 
contenders in the operating system 
battle is to woo software package 
developers. MS/Dos was successful 
because Microsoft was able to per- 
suade a large number of application 
builders to base their packages on 
it 

Software developers are sanguine 
about operating systems, however, 
and many have accepted that 
unlike the MS/Dos market they will 
have to back several different 
options. 

“We have taken the view that the 
operating system is irrelevant to 
the end-user and are working to 
bide it," explains Mr Ketan Karia, 
director of marketing at application 
software tool specialist Cognos UK. 


u We a»m to make our tools work 
across a range of operating systems 
but we are concentrating on Unix 
and Windows NT at the moment." 
Mr Derek Masters, managing direc- 
tor of Sterling Software UK comes 
at the problem from a different 
angle. As a veteran software sup- 
plier to the IBM mainframe market, 
Mr Masters says his company has 
been driven by customers moving 
from mainframe-based systems to 
networked systems. 

"Three years ago our customers 
were entirely mainframe based. 
Now they have lots of Unix, Win- 
dows and OS/2 systems which they 
want attached to their mainframes. 
We have bad to change our prod- 
ucts to cover the whole range." 

S terling's products Involve 
managing communications 
and data storage across an 
enterprise and must, therefore, be 
capable of coping with any operat- 
ing environment which might be 
connected to the network. 

“Microsoft is in a strong position 
with Windows NT - although we 
find our traditional customers 
favour OS/2 because of its IBM 
background. Then again we see 
Unix creeping in - especially in 
applications which use electronic 
data interchange (EDI).” Mr Mas- 
ters adds. 

In theory, users should not have 
to worry about operating systems 
and, in the long term, it seems 
likely that much of burden caused 
different environments will be 
shouldered by tool builders. 

Meanwhile, software developers 
and users will have to accept that 
they must keep an eye on all of the 
main contenders - and maybe some 
of the 'also-rans.' 


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But when the networking system is “not working,” 
through poor initial design, inadequate support or 
whatever, the results can be catastrophic. 

So what’s the solution? 


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New technologies are linking 
local and wide area networks 


Managers are 
discovering 


new 

Many observers see 
ATM technology as the 
key to high-speed 
networking, both for 
wide-area and national 
networks, reports 
JOIA SH1LUNGFORD 


Lans 

pliers like Cisco and Wellfleet. 
The Yankee Group says router 
sales are doubling every year. 

If two or more Lans are to be 
connected, a router most be 
put on each and the two rout- 
ers linked by a cable. If the two 
Lans are within the same 
bidfafiug or at the same site 
they become a bigger Lan. 


N etwork managers do not 
install new local area 
networks (Lans) - 
“managers discover them," 
says Sean Phelan of the Yan- 
kee Group Europe. “It's not 
unknown for a Lan to be pur- 
chased out of the furniture 
budget, and only to came to 
light when the finance director 
queries a maintenance 
on furniture." 

Low prices are turning Lans 
into a commodity, with a com- 
pound sales growth of 70 per 
cent a year, according to the 
consultancy. Ovum. But 
increasingly, the challenge 
companies face is not bow to 
connect personal computers 
into Lans. but how to Integrate 
all the T-ans within a building 
- and beyond that, around tbe 
company. 

Many Lans are installed to 
meet a specific need (such as 
the need for a group of workers 
to share information); others 
are set up on an ad hoc hasis. 
The latter tend to be intro- 
duced to share a printer, after 
which a file server (a computer 
which stores files), and basic 
electronic mail (e-mail) follow. 

The drivers for Lan integra- 
tion are somewhat different. 
They include: 

□ Globalisation: 

As companies increasingly 
compete on a global basis, they 
want quick access to market 
intelligence from around the 
world and better int ernal com- 
munications. This can be 
achieved using Lan e-mafl. 

□ Legacy systems: 

If aging, mainframe-based 
legacy' applications are made 
available via company Lans, 
some of their complexity can 
be disguised by graphical user 
interfeces. 

□ Cost-savings: 

Companies can cut costs by 
moving applications off the 
mainframe and on to smaller 
systems, such as local-area net- 
works of PCs, where hardware 
and development costs are 
lower. Lans are also an impor- 
tant component of client-server 
computing (where processing 
is shared between 'client' PCs 
and more powerful 'server' 
systems). 

□ Delayering: 

As company remove layers 
of management, the informa- 
tion and tools for dispersed 
decision-making need to be 
made available to users 
throughout the organisation. 

Laos can be interconnected 
using a number of devices 
including bridges, routers and 
gateways. Routers have 
become the most popular for 
large-scale Lan integration. 

They are socalled because as 
well as connecting two net- 
works they also have the abil- 
ity to select routes through a 
network. The drive towards 
Lan integration is boosting 
sales of routers, benefiting sup- 


Expandrng the network 
If two or more Lans at differ- 
ent sites are connected, they 
become a wide-area network, 
or Wan. (Any public or private 
network which connects com- 
puters over distance, such as a 
public 3L25 network, can also 
be described as a Wan.) The 
main difference between a Wan 
and a lan, says Phelan, is that 
"you have to pay other people 
for bandwidth." 

Tbe situation is analogous to 
the telephone. If you phone a 
colleague in the same building, 
the call is free, but if you 
phone someone in Manchester, 

ATM was designed for 
fibre-optic networks and 
multi-megabit speeds 

the chances are that your com- 
pany is paying BT or Mercury 
for tile call, or at the very least 
renting leased lines from them. 

A number of technologies 
are available - or becoming 
available - for linking Ijmg 
into Wans. They include: 
leased lines, X.25 packet 
switching, frame relay, and 
ATM (or asynchronous trans- 
fer mode). Each has their pros 
and cons. 

Leased lines (point-to-point 
telecoms links) are fast, offer- 
ing data-transmission speeds of 
64 Kbits or higher, but they are 
really expensive. 

X.25, a form of packet 
switching, once seemed like a 
good compromise. It can be 
used over a public data net- 
work (provided by BT, Mercury 
or others). Because users share 
the network, sending their 
data in ‘packets,* costs are 
lower than for leased lines The 
drawback is that 2C25 is slow, 
offering typical speeds of 9,600 
bits per second. 

Today, frame relay provides 
a better solution for connect- 
ing Lans. Peter Cook, market- 
ing director Europe at AT&T 
IsteL, describes frame relay as 
‘Tike JL25 on speed" because, 
though similar, it is five to 10 
times faster. It starts where 
XJ25 finishes at 64 kilobits. But 
a lot of error-correction codes - 
not needed on modern tele- 
coms lines - have been 
stripped out. 

Frame relay is also cheaper 
because companies only pay 
for the bandwidth they actu- 
ally use. It is ideal for the “bur- 
sty traffic typical of Lan 
where data (such as a 
me) is only sent from time to 
time. 

Frame relay networks are 
Ofiing rolled out by a number 

raws- includin « & “ d 

at&t. These cover larger 

1 th * UK md a Bowing 
number in other countries. 
Interest from users is high. 

Continued on facing page 




FINANCIAL TIMES TUESDAY JUNE 28 1994 




11 

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I n a business world connected by net- 
works, communication has become a 
vital part of competition. 

It Is almost as ioqMstant .to nndMnsta&d 
the basics of how t ftjngs c^ n^ ert, Hwri the 
vital flow of processes, as It is to do the job 
itself. Speed of response is now a vital 
element of business: If not, then «nmg 
rival organisation wiQ move in first and 
win. the business. 

the fashion for 'business process re-ea- 
gineering' (BPR) has brought another chal- 
lenge to human aptitude: how to adapt 
working practices and akflia to a more 
efficient working of the entire organisa- 
tion. 

The shift ftt thinking is not unHina the 
impact on mansfactmlng of ‘Just-in-time’ 
techniques, hot the target of most busi- 
ness process re-engineering is not the 
inventory of goods, but of people Cutting 
costs, doing a better Job, providing a better 
service with fewer staff, is the focus of 
many BPR projects. 

As a mere 'enabling* technology, net- 
working is the method, under -pinning 


COMPUTER NETWORKING S 

GROUPWARE 


United, we stand a better chance 


Good communications and the ability to share data helps make organisations efficient writes Claire 
Gooding. Networked applications keep the work flowing, whether in finance, retail or manufacturing 


yet unproven on a very large scale - 
except in one remarkable application for 
toe main tefecomman factions authority hi 
New Zealand - it shares out unused PC 
power across the network to speed up 
intensive processes such as calculation 
and compilation. 

In financial and trading applications, 
more conventional solutions incl ude the 
high-volume servers from Auspex 


system used by British Airways to process 
customer complaints, can now use the net- 
work to access other departments, sending 
and receiving information vital in solving 
a customer's problem. 

The more recent availability of high- 
quality ISDN lines for data transmission 
adds another possfoxhty to workflow appli- 
cations: the sending of images as well as 


naug ht on to the potential of e-mail ato n e : 
the sales of Lotus DeveLopmentis LAN- 
based cc nra fl and Lotus Notes products 
have doubled over the last few years, with 
an estimated 5m usersworLdwida. 

The next wave is ‘workflow,’ groupware 
and so-called ‘xnteffigent’ document man- 
agement systems, (EDMS) often front- 
ended by document image processing (Dip) 
which is used to scan in images of paper 
documents. 

Early document management systems 
tended to be ‘departmental.’ They worked 
in a dosed loop, relying on scanning in of 
paper (Dip), and beginning miH siting the 
process in under one roof. That changed 
with the arrival of wide area T wt-«m rin» 
using heterogeneous hardware, and with 
the fact that much tnfaa-nai information 
actually originates in electronic form. 

A workflow s ys t em , such as the Caress 


Ur Rory Staunton, senior analyst at 
Gartner Group UK, is responsible for the 
Intelligent Docrnnent Management Service 
in Europe. He notes two intertwined 
themes: workflow teds, which he says 
nrlgtrmny amva* tut a way t if differentiating 

Large financial applications with 
complex computations often . 
stow down networks 

document •hnag fa g products; *"4 a 
of emerging technologies including EDI, 
electronic data Interchange,- intelligent 
workflow and G1S (Geographical Infonoa- 
tion Systems). 

“Wbrkflow has extended, well beyond 

rHw l l- nm Hrt g hnay n liwii nk h nninaw pro- 
cess modelling tools,” he says. “In Europe, 
such products a s ICL ’s Process Wise, IBM’s 
Ftowmark and Staffware from SGUC are 
now being used to model business pro- 
cesses. They are enabled by modem 
high-speed LAN communications, but 
what is Interest in g is the emergence of 


high-speed networks in Europe such as 
SDN. This has suddenly enabled tradi- 
tional back-office operations to be brought 
nearer to customers so that they can add 
value.” 

As an example, he says that Phrasqa of 
' Paris, in the media business, is 
distributing quality colour images from its 

picture library, sending a high quality 
image down the line in IS seconds - “that 
hasrevohitianisedthejob of picture -selec- 
tion. The effect is to enable companies to 
reramsider the structure of their company 
document repositories, so tbaf.dbey can 
mwfntflm the integrity and security, af-cen- 
ted archives whilst still dshverh^ftiie lat- 
est information wheat it’s needed: i where 
it’s needed - in other words ..moving 
towards just-in-time documents. which 
don’t go out of date ppMhB their paper 
counterparts.’' 

Another option, for infrequently con- 
nected users, Is to replicate the document 
repositories, a feature that c h arac te rises 
the market leader, Lotus Notes, which 
works by copying the database and send- 
ing it elsewhere. . 

Mr Staunton puts the other ’enabling’ 
technologies into order of importance: 
imaging, followed by Edi, then' applied 
intelligence systems, and fourthly,' GES. 

“Although those are key technologies 
for re-engineering, IT departments still 
talk about TCF-IP, chent-server, and object 
’ oriented databases: The rr community still 
has to grasp -the cballenge of 'becoming 


■enablers* of re-engineering rather than 
technology pushers.” 

Tn Hw ff rt fflpo tl w industry, which pio- 
neered so much co-operative development 
in Edi, document management is provid- 
ing toe nod step. Ford is using Intmgraph 
software, an EDMS system with roots In 
tariwriwil authoring desktop publish- 
ing; to create, publish, translate dis- 
tribute documentation , workshop man- 
uals and training m aterial for its first 
“world car,’ the Mondeo. 

Ford’s partner in developing an all-pur- 
pose vehicle, Volkswagen, uses the same 
system, which will help cut down the tight 
timescale in which such documentation 
has to he produced. The new vehicle is 
being built In Portugal: the documentation; 
can in theory, be done anywhere. 

Office automation. Hip most visible fli yi 
obvious of targets for streamlining, still 
poses IT problems, not least of infrastruc- 
ture. The London Borough of Tower Ham- 
lets recently rebuilt its entire IT 
operations, using five different but inter- 
connected local area networks. 

The restructuring, helped by networking 
specialist Flbronks, had to be done within 
days, so essential was the network to the 
service Tower Hamlets provides. Eddie 
Best, business coordinator at Tower Ham- 
lets, already notes a riwng w in culture — 
“with the new network there is a greater 
amount of shared data, which means more 
people are better tnfamwd. We are also 
a change in culture towards 


Or Bfuca Ha ta on, ctitol fchnotogbt at AuapMC 
Syrtwnt? ‘Coat lavla an cnicM* 

communication by electronic means. 
E-mail la quickly becoming indispensable.” 

Processing power In office automation 
applications, such as at Tower Ham- 
lete.uses only a fraction of the computing 
power available. 

Financial applications, especially those 
Involving complex computations, slow 
down networks much as heavy leads used 
to slow down the processing on main- 
frames. Nor are networks as adaptable to 
uneven processing loads. 

tine solution is JetNet, a PC system that 
works on the timesharing principle. As 


Auspex specialises In high-speed file 
servers for applications like fixed income, 
and foreign exchange trading: anything 
involving fast processing for a great mint 
her of mere. 

fit mathematically intensive a ppHr-aHnna 
such as CoUaterised Mortgage Obligation 
(CMO) calculations, the volume of process- 
ing can pot a strain on networks. An 
increasing amount of 'Intelligent’ analysis, 
based on predetermined rules, increases 
the workload further. 

“Networks have lowered the costs of 
analytical applications dramatically, com- 
bined with Unix and inexpensive Ethernet 
high-speed networking,'' explains Dr Bruce 
Nelson, chief technologist at Auspex. 

“Large groups such as Amex can now 
use networks of low-cost Unix computers 
for intensive processing. Everyone Is 
looking to keep costs at rock-bottom. 

“IT planners in a lot of financial Institu- 
tions probably think o! putting 50-100 
users of Ethernet and token ring networks 
for such applications as word processing. 
But for advanced trading applications, 
such as foreign exchange options and 
CMO, the computational power needed is 
so high that as few as 10 workstations can 
bum up an Ethernet" 

It is this trend that has driven compa- 
nies like Auspex to supply server products 
that can support 24 simultaneous Ether- 
nets with four simultaneous FDDIs (fibre 
distributed data interfeces), and hundreds 
of gigabytes of online disc storage, he 


$3.2bn landmark ‘outsourcing’ deal 



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VI 



COMPUTER NETWORKING 6 


Claire Gooding on electronic data interchange and electronic mail 

New dimensions in messaging 


E lectronic data interchange (EDI) and 
electronic mail (e-mail) have become 
embedded in the way that many com- 
panies work. They are the basic compo- 
nents of a more potent group of applica- 
tions, sometimes known as document 
interchange and groupware. These provide 
the ability to interconnect groups of peo- 
ple who may work in different locations or 
even time-zones, but nevertheless need to 
work as a team. 

These methods have become almost a 
'lifestyle' for their users, so much that it 
becomes difficult to separate out the tech- 
nologies from the applications which use 
them. Nor should one want to: the whole 

point about the benefits of using document 
Interchange or e-mail is that they should 
be to integral to operations, just as water 
pipes distribute the benefits of central 
heating. 

The great Increase of 'IT-aware' PC 
users has brought a new dimension into 
the use of messaging. Initially, PC net- 
works started as a way of sharing expen- 
sive resources among several users - typi- 
cally printers or other peripherals. 

The potential of connecting people so 
that they could share documents, and par- 
ticipate in special interest groups and 
'electronic diaries’ really began to dawn 
with widespread adoption of PC products 
such as Lotus Notes. 

For many years, the mainframe bad pro- 
vided a proportion of these facilities. A 
remote 'dumb' terminal (with no local pro- 
cessing power, such as a PC or workstat- 
ion provides) could be situated almost any- 
where with a dedicated phone line. 


allowing many pioneering Teleworkers' to 
do their programming from home. 

Some m ainframes also provided a mess- 
aging system, fairly rudimentary and lim- 
ited. inevitably, to the IT efite (already 
removed from the common herd) who 
were likely to have a terminal in the first 
place. 

But now, 'client-server' systems have 
begun to displace - or at least work along- 
side - mainfr ames, and are used by people 

at every level of an organisation. Using a 
far more complex structure, these systems 
provide a great deal of local processing 

Pioneer businesses in developing 
EDI were banks, retailers and 
automotive companies 

power, connected to a ‘file server/ often 
remote . which delivers the data across the 
network, from a master repository that 
can be located anywhere on it. E-mail 
often becomes the ‘gJoe’ in some organisa- 
tions who support heterogeneous net- 
works. 

There are three phases in the develop- 
ment of document interchange, according 
to Steve Sheppard, European marketing 
manager of GE Information Services, one 


of the largest providers of electronic trad- 
ing services globally - In terms of the 
benefits organisations can realise out of 
electronic trading, they need both the doc- 
ument and the data exchange - that's 
structured information, representing busi- 
ness processes, such as invoices - and the 
interpersonal communication as well," he 
says. 

“In practice, if an organisation 
exchanges a purchase order, that’s struc- 
tured. but thane might be a dozen Interper- 
sonal messages to support that transac- 
tion. 

“So, by using interpersonal services, 
such as electronic mail, we can make that 
exchange of information more efficient" 

Some of the pioneer industries in devel- 
oping EDI were banks, retailers, and airto- 
moative companies. GE Information Ser- 
vices owns International Network 
Services, INS, set up jointly with ICL to 
service the burgeoning electronic trading 
market 

Mr Sheppard uses examples from experi- 
ence to Illustrate his ‘Three phases:” 

First comes exchange between parts of 
an organisation - “one pharmaceutical 
customer originally set up e-mail in sub- 
sidiaries, different offices in remote loca- 
tions to allow people within the organisa- 


tion tO exchange info rmation In phase 
two, users exchange data with organisa- 
tions outside their own company. That 
was typically structured information, such 
as usually meant by EDI: invoices, pay- 
ment, and so on,” he adds. 

“It’s important to note the distinction: it 
was an automation of existing processes of 
organisation and trading with partners. 
That can bring big benefits tn cost-cut- 
ting." 

Mr Sheppard gives an example Of the 
cost of processing an invoice, reduced for 
one customer from £15-£20 per invoice to 
between £5 and £10 - "a significant saving 
if you are processing tens of thousands." 

Nevertheless, it’s in the third phase that 
the benefits come home, he says. The 
external value chain may start with struc- 
tured me s saging, but many interpersonal 
messages begin to take place to support 
the business processes. These can be in 
the form of structured and unstructured: 
e -mail, intelligent ‘decision-making' appli- 
cations, anything to support the business 
t ransactio ns. 

"It’s easy to connect e-mail systems even 
where there are different hardware hosts. 
That’s where the value-added service pro- 
viders come in, to connect the different 
services. The role of the network is in the 



Stove Sheppard of GE Information systems: 
making data exchanges more efficient 


integration of management, security, and 
tying together various systems to enable 
better information exchange." 

E -mail has a respectable history of 
‘empowering* applications, especially 
where It has been used to package ready- 
formatted information. For example, for 
some years, Whitbread Beefeater restau- 
rants have used simple p re-determined 
forms to file weekly reports, using the 
mainframe Verimation Memo system. 

The system can also used for urgent 
needs, if, for example, one branch run 
short of beefburgers and need a consign- 
ment freon another. But its most imagina- 
tive growth has been its use for ad hoc 


questionnaires, research on competitive 
menus locally, and proposed price rises. 

Just as typical of e-mail use are highly 
complex applications built by third par- 
ties, which use electronic mail and docu- 
ment interchange as part of an applica- 
tion. For Royal Mall, the recent 
re-organisation from W districts and four 
national territories into nine geographical 
divisions triggered a re-think about com- 
munication. 

What Royal Mail wanted was an open 
fiow of information among its divisions, 
and the ability to allow remote groups of 
people to work together as It they were in 
the same office. Elect route mall had 
already proved itself by the mid-1980s, in 
an initial experiment with SCom’s local 
area network and 3+ Mail. 

Assisted by the consultants KPMC, 
Royal Mail implemented a system based 
on Lotus Development Carp’s Lotus Notes 
in 1992. Called InfoRMac, (Information and 
Communications system for the Royal 
Mail), it connects Royal Mail's divisional 
general managers and directors so that 
they can communicate with local manag- 
ers. and coordinate their activities with 
one another. All work with the same 
up-to-date information. 

Royal Mail's system is based on a net- 
work or IBM AS/400s computers, one in 
each of its 64 areas, running Office Vision. 

The InfoRMac project now pulls together 
all the Royal Mail locations in to one XJ25 
wide area network. Four hundred of the 
organisation's managers are users, and as 
par t of a three-year rollout. Royal Mail has 
bought 15.000 copies of Lotus Notes. 


OPEN SYSTEMS 

Solutions more affordable 


Open systems often owe more 
to theory than reality, reports 
MICHAEL DEMPSEY 


B ill Bowmar is divisional manager of 
information technology (IT) at the 
construction arm of Trafalgar 
House. His company is one of the largest 
building concerns in the UK, with projects 
as diverse as the Humber Bridge and Mal- 
aysia's Pergau Dam to boast about 
This working environment is not ideally 
suited to computer systems. Nobody lays 
out a motorway expansion site to please 
the IT department. Yet two-thirds of 
Trafalgar House Construction's 3.000 staff 
have a computer terminal. 

These machines are spread over 70 loca- 
tions with links to projects as far afield as 
Hong Kong. The £4m inventory of com- 
puter systems embraces a raft of suppliers 
and software packages. The division has 
an annual IT budget, including staff and 
vehicles, or £5m. 

However, Mr Bowmar 's colleagues con- 
centrate on engineering projects. They are 
happy to make do with whatever IT equip- 
ment they've inherited, as long as it works 
- “a construction company often grows by 
acquisition,'* he says. “We pick up com- 
puter systems as new businesses come on 
board. And we don't throw away anything 
on the IT side!" 

This attitude towards hardware and 
systems might sound economical but it 



Richard Crisp of McDormeB Douglas 
Information Systems: pragmatic view 


offers a real challenge to the network man- 
ager. He faces linking up local area net- 
work (Lan) elements in a coherent wide 
area network (Wan). Five years ago, that 
was Bill Bowmar’s job. 

On the surface there was an obvious 
answer to this networking dilemma. Open 
Systems have long been touted as the pan- 
acea for networking. The term is self-ex- 
planatory, denoting mutual standards 
between different suppliers. This should 
allow users to mix and match equipment 
without worrying about compatibility. 

But Mr Bowmar quickly discovered that 


open systems owe more to theory than 
reality. In theory, an EC-endorsed interna- 
tional communications protocol known as 
Open Systems Interconnection (OSD is the 
route to networking computers. In prac- 
tice, there is stiH an annoying amount of 
adaptation involved in creating a trouble- 
free Wan. 

“Computing and netwo rking should he 
like Japanese hi-fi.” says Mr Bowmar. 
“You should take the system out of the 
box, plug it In - and play." 

Unfortunately. OS1 faffed to meet this 
simple test - “we found OSI is not like 
that; it’s very difficult to get kit from two 
suppliers to interconnect over the net- 
work. 

"Our philosophy is that anything ghnutH 
speak to anything else, wherever the site 
is located.” 

Mr Bowmar's experience lead him to 
endorse a formidable mouthful of techni- 
cal terms: Transport Control Protocol/In- 
temet Protocol (TCP/IP). This communica- 
tions standard grew out of the US defence 
community. 

TCP/IP conquered the US’s vast aca- 
demic computer base as a convenient stan- 
dard embedded in the depths of the com- 


puter but allowing marfihies to communi- 
cate across networks. 

TCP/IP is regarded as cheaper and easier 
to implement than the notorious layers of 
regulations that constitute the OSI modeL 

To keep data flowing between the Lana 
and the Wan, Mr Bowmar called in 3Com, 
a networking hardware supplier. He 
wanted a sole outside contractor to deliver 
thg routing mm management computers 
that direct network traffic. 

This equipment cost £500,000, and estab- 
lished Bill Bowmar’s definition of a rap- 
port between supplier and customer - “it's 
a good relationship, but we drive them 
hard," he says. 

Sticking to one source simplified the 
question, of protocols: in effect, Mr Bow- 
mar defined Ms own s tandar ds. 

Despite initiatives from central govern- 
ment and inte rnational bodies, USOTS Still 
insist on giving OSI the cold shoulder. 
Richard Crisp, a communications special- 
ist at McDonnell Douglas Information 
Systems (MDIS), is not surprised - “TCP/ 
IP is very much a de facto standard. It's 
extremely well-developed, it gives a fair fit 
in terms of connectivity.’’ 

Mr Crisp is pragmatic about the com- 


puter industry's habit of trumpeting the 
joys of open systems. 

He c onfirms the gap between the official 
term and the practice of stringing different 
systems together in a network - “there 
are degrees of openness. It is certainly 
getting better." 

Away from the bewildering world of 
communications protocol's and acronyms, 
open systems have produced one great 

In practice, there is still plenty 

of adaptation needed to create 
a trouble-free wide area network 


benefit S tandardisation has made it diffi- 
cult for networking specialists to differen- 
tiate between their products. 

Mr Crisp's colleague De nnis Lindsey 
highlights the consequences - “open 
systems have driven prices down," he 
says. 

“Solutions are much more affordable. If I 
was buying a Wan eight years ago rd have 
spent between £250.000 and £500,000. 
Tbday, you could get up to 12 remote sites 
on a Wan for £60,000 to £70,000." 

The key to networking is to find an 


infrastructure that will support the cus- 
tomer's needs. St Paul Insurance speci- 
alises in high-risk operations, from hang- 
glider pilots to supertankers. 

Its premiums do not come cheap, and St 
Paul relies on constant exchanges of infor- 
mation between six UK sites to keep 
highly specialist knowledge flowing. 

St Paul uses computers from IBM, ICL 
and Olivetti, and expects to be able to pool 
data from these disparate sources without 
any problem. 

"Just 18 months ago we had a series of 
Lans. but no infrastructure to connect 
them," says Luke Bazzard. technical ser- 
vices manager. Rather than rationalise dif- 
ferent systems that individual offices were 
comfortable with, Mr Bazzard opted for 
the black box approach. 

For £190,000, Californian Network Equip- 
ment Technologies (Net) provided Mr Baz- 
zard with six network management pro- 
cessors. These dedicated computers took 
over the intricate labour of introducing 
traffic from one lan to another. 

Luke Bazzard characterises his system 
as a *908131 service* with with TCP/IP and 
an industrywide protocol from Lan giant, 
Novell acting as envelopes that contain 
data. Net’s contribution is to act as a post 
office. 

Mr Bazzard's communications budget is 
still £lm a year, on top of a £6m IT budget. 
But with that kind of money in play, the 
Net system is a small investment in return 
for maximising market intelligence spread 
across a 450-strong operation. 


i 



SIEMENS 

NIXDORF 


Dear Madame and Monsieur Curie, 
Just imagine, the idea of our 
strategic partnership, working with 
your creative partnership 



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With their groundbreaking achievements in the 
field of natural science, the Curies showed 
what creative cooperation can accomplish. The 
strategic partnerships of Siemens Nixdorf work 
on the same principle of cooperation- our own 
strengths are combined with the strong points 
of the most favourable partners, to provide the 
best solutions for our clients. For example, work- 
ing with SAP, we are constantly improving our 
UNIX* R/3 business management software pack- 
age. Our partnership with Fujitsu has permitted 
our clients access to a BS2000 performance range 
up to foe highest level of performance excel- 
lence. With Oracle, large-scale unified databases 
are provided for modem client-server links with 
BS2000 general purpose computers, UNIX ser- 
vers and PCs. Not to mention the renowned 
consultancy services and mid-sized software com- 
panies that help to implement solutions creatively. 
For foe most important partner of alk the client 


The European opportunity 

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COMPUTER NETWORKING 7 


MOBILE DATA SERVICES 


Making painful progress 


technical and marketing 
issues have constrained 
the market for mobile 
data services, reports 
MARK NEWMAN 


I started writing this article 
fn longhand - surprisingly, 
perhaps - when I was over 
in, Francs for the fiftieth anni- 
versary of D-Day. It would 
have been easier V I had taken 
a laptop computer with me. 
Things would have been easier 
still if I could have checked out 
various bits of iriforutation for 
my article by accessing, over 
my laptop, the Financial < nmes 
Profile information database. 

Once completed, I could have 
sent my article down the tele- 
phone wire to the Financial 
Times at Southwark Bridge in 
London. 

Die technology and the ser- 
vice providers already exist to 
send and receive messages 
over computers using radio sig- 
nals. In the UK, for mrampl?., 
there are three mobile data 
network operators. But the 

rwmmre rial ■ tm plpmon fca Krm gf 

mbbfle data has been painftilly 
al?w, particularly compared to 
mribOfi telephones. 

'There arp 23m cellular tele- 
phone users, fax the UK today - 
equal to four per cent of the 
population. Mobile data opera- 
tors, oh tha othe? band , have 
only WOO subscribers. A vari- 
ety of technical and marketing 
issues have constrained the 


market for mobile date since. 
IT and telecommunications 
co mp anies developed the first 
technologies in the early early 
1880s. A report, Mobile Data : 
Market Strategies, by Ovum, 
the London htfanwatten tech- 
nology and telecoms consnt 
tancy. lists six reasons why 
mobile data h sm not Bred up to 
expectations. They are: 

□ Lack of confidence in 
technology. 

□ Availability of networks. 

□ Lack of satiable teratosis. 

□ Solutions and. applica- 
tions. 

□ The weakness of syste ms 
integration. 

□ Market education. 

On the technology side, a 

For Ihe longer term, ■ 

- analysts predict the 
market wtfl grew sbrongty 

laA of g rritahl ft limhhw k an if 

inadequate software systems 
has been a problem. Mobile 
data terminals come in two 
generic forms: specialist termi- 
nals; and general terminals 
with separate mobile data 
modems to allow them to ccni- 
m a a ksate over the mobile data; 
network. 

-‘ One of the main reasons for 

Hn pl am twHng a winiMlw data - 

system is to 'extend corporate" 
tiet work fokdlraes to new 
groupB.cf nataSiandfo particu- 
lar, moMfevfield forces. Dura 
have found that .specialist ter- 
minals -do 'not have fixe game 


software capaMBtaa as corpo- 
rate systems- Those terminals 
which do have software pack- 
ages that match corpora te net- 
works tend to be expensive 
Price is also an Issue for 
users who are considering buy- 
ing radio mndwiw for their lap- 
top PCs. 

Ba£o modems are larger and 
more expensive than their 
fixed network counterparts. 
They are built as separate 
pieces of hardware rather than 
incorporated into terminals. 
Portable -motions are about the 
same juice as portable PCs. 

■ Martin Garner, a telecoms 

wmmlfamt and mobile data 

specialist at Ovum^ believes 
the faflnre to attract wide- 
spread support from systems 
: fafa g ratars and software devel- 
opers has been^an i mp ortant 
: reason for mobfie' data's slow 
growth. 

The Ovnm report notes that 
‘The leadmg^usera in mobile 
. data tend u£be very large 
organisations because of the 
difficulty and costs associate d 
with engineering a mobile data 
system.” .- 

Large organisations have 
their own sophisticated 
systems fotegrattonexpertlse 
_ in hoijse^and havaksogstand- 

•^ing rdafioaiships' with «*ri«na 1 
' -systems, fa te g r a te m* - ' 

fiiiiiftwiim over fire of 
.network also' affect the market: 
hrifhe ni^ for wMiiph dure 
are too many networks - users 
are^iiot dear about the best 
choice of networks and ser- 
vices, and therefore delay buy- 


ing-dedsions until clear win- 
ners emerge. 

The Depanneut of Trade and 
Industry awarded five mobile 
data network licences in 1890. 
But two of the licensees 
j myHfpd back their and 

a third built a network and 
then shut it down because it 
lad no subscribers. This leaves 
two mobile data operators, 
Oogntto and Bam Mobile Data. 
A third mobile operator, 

Faknet, was awarded a licence 
fax 3882. 

But fixe f-rtnfri*ton (foeS not 
end there. Cellular operators 
CeUnei • Vodafone offer 
mobile data services over their 
Tacs400 analogue ce&uiar net- 
works. They will soon begin 
offering improved data services 
over their GSM digital cellular 
networks. ' 

Ihe UK’s two other cellular 
oper ato rs^ Mercury c Dne-2-One 
and Orange are alap. pfenning 
to "Ww mnhflft ctata-eervices. In : 
addition. National Band Three, 
the national public access 

mrhUft radio operatpr, a 
T^nrnper of re gional y™* oper- 
ates, also offer date Services. 

As a general rule,' 
cellular networks pie less 
gntt*>d to mobile services 

*b?m di gital rrftrilxr tt el ve n rk a 

Data is timtsftarea^ firing dr- 
cuit-switched traxfemiMnon, 
which is less efficient than 
packet-switched transmission 
over .GSM networks. On the 
othtir hand, GSM is still rda- 
tively new - the first services 
were not launched ffintil 1992 
and tbe various data 


mi 






NIGHT AND DAY ACCESS: this 
buNnsaa eager la able to access Ida 
computer.— wfeB and eandfaxg 
e l e ctr onic . mamfli, and ghring • 
instructions for information to be sent 
e feo wtiere, when the office Is closed 


and ha Is nritas away ton the road.’ 
The commuter is using 
now Telephone Access.* 

. - codenamed TatemaB. Tbei 
teduo for rnlannn tearthtoi. _ 
a toudtfone telephone, TAS-imi* i 
- • 





send electronic messages. Baton to 
and update their calendars, accept 
or datable appo i ntments nr teaks, at 
anytime - Turning even a moble 
phone Into their own 24-hour global 
office,” says a WordPerfect spokesman. 




sion capabilities within the 
standard have not yet been, 
implemented. 

Analogue cellular networks 
tend to be suited to long data 
transmissions such as fox and 
file transfer. One of the first 
data services over GSM will be 
short messaging, which is the 
same principle as rad topaging. 

The UK’s three dedicated 
mobile data networks all use 
different system. Cognito uses 
a packet-switched data proto- 
col and has positioned Itself as 
a provider qf relatively uncosn- 
pbcated data services such as 
two-way m essag i ng . 

Paknet runs a standard BL25 
packet switched data service: ft 
is used mainly for fixed appli- 
cations such as electronic 
funds transfer at the point of 
sale (Eftpos) and does not han- 


dle tnnWW^y f »^U» T»q rnrii as 
han&off between celfe. 

Ram Mobile Data uses a pro- 
prietary system, developed by 
Nokia of Sweden, called Mote- 
tex. This Is also a packet- 
switched data system. Its main 
advantage is ft** the network 
can be used by users of fixed or 
jsobfis terminals, and by both 
open and dosed groups of 
users. 

In other European countries, 
however, there have not been 
enough networks - same coun- 
tries have only licensed their 
first mobile data operators 
within the last year. •, 

Meanwhile, Mdbjtex is rap- . 
idly emerging as the p re fer red 
sy s te m for mobile data opera- 
tors across Europe. Mobile data, 
operators in eight cou n t ri e s -, 
Finland, Sweden, Norway, the 


Belgium. the'. UK^have now 
adopted this system. JTfaey are 
planning to tatrodoca •roam- 
ing’ between networks, allow- 
ing subscribers In one country 
to use networks in other coun- 
tries. 

The only potential chal- 
lenger to Motater Is Motorola’s 
RD-LAP systems, which is 
used by Deutsche Telekom in 
Germany. It is also used by 
Hutchison, the UK mobile data 
operator which shut down its 
network last year. Motorola is 
now considering buying the 
network from Hutchison, to 
operate it as a Joint venture 
with Cognito. 

In spite of tbe problems that 
mobflo data has faced, opera- 
tors and manufacturers remain 
confident that tbe market win 


grow rapidly. Ovum predicts 
that the number of mobile data 
subscribers In Europe and 
North America wQl multiply 25 

times between 199i and 2000 to 
reach just over 18m. 

The early adapters of mobile 
data have been vertical mar- 
kets such as police forces and 
airlines. British Airways, for 
example, uses mobile data to 
check in passengers. But over 
the last year, Microsoft, Novell 
and other software companies 
have brought out products 
which will fuel growth in hori- 
zontal mark et s 

Laptop computers with 
built-in radio modems could be 
standard items for Journalists 
by the the rnm - hmidradth 
anniversary of D-day is com- 
memorated on the Normandy 

hanrhftff 


m 


to & 
r '*'• &liht E 

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orks 





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SUPPLIER PROFILE 


V 


Intuition has been rewarded 


Rofawt Madge, flntraprsoMr. now one the UKk tWwsti 


ALAN CANE charts Ihe 
progress of an . 
expanding and unusual 
networking company; 
Madge Networks 


C isco, SynOptics, 3Com 
and Cehl etw c; the mm- 
mrminrtianB revtthttion. 

has thrown up a raft of fest- 
' g rowing anmitioos p( 
listed on America’s Nasdaq 

stock market. Among ftwnn is 
Madge Networks, perhaps the 
' most unusual networking com- 
pany to have emerged in 
recent years. .• .. 

Founded in 1986 tiy Bobcat 
Madge, a British architectural 
journalist and entrepreneur . 


with no background 

but a sharp appreciation' Of the 
potential of computer network- 
ing, it is now regtetered as a 
Dutch com p any with research 
and development in the UK 
imd subs tantial marketing 
offices in San Jose, Cafifonda. 
and Tokya . 

The company was listed , on 
Nasdaq, fixe world’s largest 
over-the-counter market, last 
August through an iwW»i pub- 
Rc ntfprtng wfakh raised 930m 
in cash net of wg aniiM Ifedge- 
says the aim of the foo was not 
to raise money but to raise tbe 
status of the company — “we 
didn’t have a need fin cash; it 
was more a natural progres- 
sion." 

There was also the problem 
that the company was becom- 


ing uncomfortably bny and tf 
the offer, bad been left 
longer, ft could have been a 
difficult proposition for Nas- 
daq, . which specialises in 
startup companies, to digest 
Why Nasdaq, rather than 
London? Madge says it was a 
matter of conforming to the 
norms of the indus- 

try - “no specialist networking 
co mp any Is fisted o uts Ms the 
US. It was the natural place to 
be. started with a disadvan- 


tage because we missed out an 
tbe two or three-year period 
during which the US venture 
capital community promotes 
new issues, so we had more 
talking to do. Now Madge Net- 
works is reasonably well 
understood by investors. US 
investors are very knowledge- 
able in this area.” 

Ami thp t ransfotmaflon min 
/ a' Dutch company? Conve- 
nience; bgtmg as a UK com- 
pany would have thrown up 


tax «tWI share comptoritfrg. 

Mmlp t specialises in token- 
ring networking, tbe technol- 
ogy championed by Interna- 
tional Business M anhinas for 
local area networking. It devel- 
ops and markets a range of 
hardware including network 
adapters, hub and router 
adapters and FDDI adapters. 
Token wing and j M immt are 
the two bey LAN technologies. 
Ethernet depends an a collision 
detection nmrfMmimrn to ensure 


transmissions pass securely 
through the network; on a 
token network, the right to 
transmit depends on posses- 
sion of a software Token. ' 

Token ring technology, 
Madge says, is well suited to 
large organisations with 
widely dispersed groups of 
users - “it was anew business 
area in 1966,” Madge says. "We 
built a position as a second 
source to IBM in token ring. 
We believed the technology 
would give us opportunities 
that others were avoiding, 
afraid of tbe power of IBM.'' 

Bis intuition was rewarded. 
Revenues of $10m in 1990 grew 
to $145m by 1893; in the first 

Continued cm next page 




■ V l4 »- 


Networkin g ? NetWare A . okcoticse..^ 




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INOVE 


LL The Fast, Present and Future of tQ^i^or^c^o'niputing 


No. we're not seriously suggesting you 
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As you can see, U makes a bit of a 
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With an Elonex SFT III system, if 
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The cost of an unstoppable network from 
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pentlum 


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FINANCIAL TIMES TUESDAY JUNE 23^ 1994 


COMPUTER NETWORKING 8 




Network for nuclear alerts 


Cable being laid, above, with the help of 
a helicopter for a new development within 
the UK government's Radioactive Incident 
Monitoring Network, Rfmnet. 

Key networking and electronic messaging 
elements are provided by BTs Global 
Network Services (GNS) for the £12m nuclear 
emergency response facility, writes Michael 
Wiltshire. Rim net gathers data on gamma 
radioactivity levels at 92 Met Office locations 


throughout the UK to give an overall *pieture' 
of levels In the event of a nuclear accident, 
such as the Chernobyl disaster. Every hour, 
the main central database facility in London 
monitors levels around the country, passing 
on data for processing by the Department 
of the Environment GNS is a leader bi the 
managed data network service® market, 
with connections to over ISO networks 
in more than 100 countries. 


Madge steps up research plans 


Continued from previous page: 

quarter of the current year rev- 
enues were $45m, up from 
$29.7m in the same period the 
previous year. The company 
was capitalised earlier this 
year at over $400m and Madge 
has become one of the UK’s 
richest men. 

The challenge for successful 
young companies, especially 
those in the high technology 
arena, is to maintain growth 
and profitability and keep on 
top of technological develop- 
ments. Madge points to heavy 
investment in research and 
development amounting to 


almost $llm in 1993 and a close 
relationship with customers - 
"we realised that customers 
needed more than technology 
so we have been developing 
customer service; we take an 
interest in solving their prob- 
lems. 

"It is not the kind of consul- 
tancy for which we charge. 
Virtually all our revenues 
come from product sales 
together with licensing fees 
from other vendors. We don't 
have to sell consultancy; we 
are able to command premium 
prices because of the quality of 
our technology." 

In 1989, for example, Madge 


was one of the first companies 
to add intelligence to its adapt- 
ers which enabled them, for 
example, to handle the process- 
ing necessary to communicate 
between different kinds of 
equipment - “we created this 
concept and it has become the 
biggest sector of our business” 
Madge says. Although the com- 
pany remains wedded to token 
ring technology, it is now 
looking beyond it to the tech- 
nologies of choice for the 
future. It is putting resources 
Into Asynchrononous Transfer 
Mode, a telecommunications 
technique which both telecom- 
munications companies and 


Network managers have 
been hoping for a 
standard method of 
controlling their 
distributed systems, but 
no single standard has 
yet emerged, writes 
GEORGE BUCK 


M any network manag- 
ers will he forced to 
choose a product in 
the near future without 
waiting to see if a clear stan- 
dard becomes apparent 
Wide area and local area net- 
works of computers combining 
a variety different makes of 
hardware and software have 
been spreading at an extremely 
rapid rate, many of them out- 
side the authority of network 
managers. 

Network management rose 
to the top of the list of con- 
cerns or European computer 
systems and network users for 
the first time Last year, accord- 
ing to a study by Yankee 
Group Europe. 

There are plenty of software 
tools for tackling various 
aspects of the task, but there is 
still no standard approach to it 
as a whole. 

Network managers want 
more than just the ability to 
monitor their system devices - 
such as hubs, bridges and rout- 
ers. They want to be able to 
control the performance of dis- 
tributed applications, deliver a 
high level of service to users 
and ensure that information is 
kept secure. All this has to be 
done while keeping costs 
down, which in many cases 
will be achieved by charging 
users for the network service. 


computer companies are 
exploiting with a view to pro- 
viding multimedia services. 

“ATM will be the core tech- 
nology in a few years time,” 
according to Mr Madge. “We 
know some things about the 
direction in which the technol- 
ogy is evolving and we know 
what we can do with that tech- 
nology. Our customers can tell 
us what they think they are 
going to want to do about tech- 
nology. We can arrange the 
marriage of the two when the 
products are available.” 

How does the company want 
to be assessed by the business 
world? “We measure ourselves 
not only in financial success 
but in terms of our reputation. 
We want people to think 
highly of us,” Madge says. 


STANDARDS DILEMMA 

Difficult choices 


Many system management 
functions which were carried 
out efficiently in the old IBM 
mainframe environment have 
yet to be worked out in the 
new world of distributed or cli- 
ent/server systems. 

Any standard method of net- 
work management for these 
new systems must be able to 
support two key communica- 
tions protocols, the Internet's 
Simple Network Management 
Protocol (SIP) and the Com- 
mon Management Information 
Protocol iCMIP). the Open 
Systems Interconnection stan- 
dard promoted by the Interna- 
tional Standards Organisation. 

SIP is generally preferred for 


applications based on the 
UNIX operating system, which 
is used by most mid-range 
computers of the current gen- 
eration. CMIP is favoured by 
users in the telecommunica- 
tions Industry. 

There have been several can- 
didates for a network manage- 
ment standard, but none has 
gained sufficient support to 
attain that status. As yet, all 
the offerings provide only 
parts of the required solution. 

The two clear front-runners 
are Hewlett-Packard's Open- 
View and IBM's NetView/6000, 
which is also being marketed 
by Digital. 

The OSF’s communications 




manager for Europe, Mr Mark 
Laureys says that they still 
need an Industry definition of 
a piece of code called an object 
request broker before the DME 
can be completed. 

In the local area network 
sector, Microsoft is certain to 
be counted among the most 
important players. Its Systems 
Management Server (formerly 
code-named ‘Hermes’), was pre- 
viewed in May and is due to be 
available in late summer. 

Based on Microsoft’s Win- 
dows NT operating system, it 
will offer some essential func- 
tions of a network manage- 
ment system, including soft- 
ware distribution, network 


auditing and remote support 
for applications users. 

These were all high on the 
list of requirements of network 
managers in a preliminary 
study conducted by Microsoft, 
according to its UK business 
systems group marketing man- 
ager, Ms Julie Cox. 

She foresees that SMS will 
compete to some extent with 
NetView and Openview. But 
industry analysts expect that 
although Microsoft's product 
will be commonly adopted on 
local area networks it will not 
be generally seen as an enter- 
prise-wide solution. 

Thus IBM. Hewlett-Packard 
and Microsoft Look likely to be 
the strongest forces in network 
management for at least the 
next couple of years. In that 
time, network management 
may replace the operating sys- 
tem as the primary battle- 
ground for leadership of the 
industry. 



.f To ^ 

■ Mm 





mmmm 


Around 23,000 visitors are expected 
at Networks 94, claimed to be the UK's 
largest business- to- business IT event 
The show at the National Exhibition 
Centre, near Birmingham, from today, 
June 28 to Thursday, June 30, features 
products from 400 companies. The 
event has a four-track educational 
focus, plus management briefing 


sessions; it also features MessageNet, 
“the largest showcase of electronic 
mail in one location.” 

FT readers have free admission to 
Networks 94: please see announcement 
on Page Two of this survey. 

■ RAIL SERVICES: with another 
threatened raB strike in the UK on 
Wednesday, Networks 94 organisers 


have announced that “if viators have 
already booked a rail ticket for 
Wednesday, the ticket can now be 
used for either Tuesday or Thursday, 
according to Intercity." 

By road, the NEC is directly 
accessible via the Ml/MQ or M40/M42 
routes. The exhibition complex also 
has 15,000 free parking spaces. 


The first complete PC and Server range with Pentium® processor. 
From Olivetti, the pillars of power for every need. 



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For further information, phones 

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•Spurn (900) 371 07! \ * Swimrlmd (. 1) S3P1 565 
•Turkey (212) 275G8IO* UK. (SOO) 4477SM 


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Olivetti