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Taking a gamble 
on growth / 



Boardroom skills 

What it takes to be 

a good director . 



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FINANCIAL TIMES 





Europe ~s Bus i rtgss ,hlewspap^ 


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The Middle East peace 
process could collapse 
if Israel does not begin 
its withdrawal from 
Gaza and Jericho in 
April as originally 
planned, a senior mem- 
ber ol the Palestine 
Liberation Organisation 
warned. The assessment 
came as Israel began 
freeing 500 Palestinian 
prisoners in an attempt 
to win bach the PLO to peace talks after Friday's 
Hebron mosque massacre. PLO leaders said that 
c hairman Yassir Arafat (above) would have to 
stay away from direct peace talks with Israel 
for at least a fortnight to assuage Palestinian 
outrage at the killings. Page 16; Editorial 
Comment, Page 15 

Japan's slide may be ending: Japan could 
be near the bottom of its protracted recession, 
the central bank said. Business confidence has 
ceased to weaken and the bank expected the di- 
mate to improve. Page 16 

Brussels positive on Groupe Bull plan: 

European competition commissioner Karel Van 
MlerL said he was “impressed” by an outline 
restructuring and privatisation plan for Groupe 
Bull the lossmaking French computer group. 

Page 17 

Setback for Canadian separatists: Canadian 
separatist Parti Qu£b6cois suffered its first by-elec- 
tion loss in five years, losing the largely French- 
speaking Shefford constituency near Montreal 
to the ruling Liberal party. Pages 

Russian accused of spying for UK: Russia 
arrested an armaments official it accused of supply- 
ing military and economic information to the 
UK. Page 3 

Protection for EU film industry wged: 

European cultural commissioner Jodo de Deus 
Pinheiro called for greater protection of the Euro- 
pean film industry to counter the power of big 
Hollywood studios. Page 6 

Clinton accused over afrcraft sales: French 
aerospace leaders accused US president Bill Clinton 
of intervening unfairly to sell $6bn worth of US 
civil aircraft to Saudia Arabia. Page 6 

Wfanpey sets up Kazakhstan office: Wimpey 
says it is the first UK construction group to estab- 
lish a permanent office in Kazakhstan, the oil-rich 
former Soviet republic. Page 6 

Profits up 25% at Abbey: UK banking group 
Abbey National announced a 25 per cent increase 
in pre-tax profits for 1993 to £704m (JL03bn) and 
the board recommended an increase in the full-year 
dividend of 22 per cent to 14p per share. Page 18; 
Lex, Page 16 

General Accident, highly-rated composite 
insurer, bolstered recovery in the UK general 
insurance market by posting annual pretax profits 
of £294 Jm ($430. 6m) compared with a loss of £29.3m 
in 1992. Page 18; Lex, Page 16 

Telecoms push Nokia into profit: Fixmish 
telecommunications group Nokia reported annual 
pretax profits of FML15bn ($209m), compared 
with a FM158m loss in 1992, due to high growth 
in its mobile and fixed telephone divisions. 

Page 17 

Westland dismisses GKN bid: Westland, 
Britain's sole helicopter manufacturer, dismissed 
GKN"s £496m ($724m) hostile takeover bid, accusing 
the engineering and industrial services group 
of making an “absurdly low offer". Page 17; Lex. 
Page 16 

UK car production reaches 20-yea 1 high: 

British car production reached its highest level 
since 1974 last year, with Rover overtaking Ford 
as the UK’s hugest carmaker for the first time 
in more than a decade. Page 8 

Minister scorns claims over aid: Allegations 
that Britain’s overseas aid programme was linked 
to arms deals with several countries were dismissed 
as “absolute nonsense" by foreign office minister 
of state Alastair Goodlad. Page 8 

UK civil service reform s attacked: A report 
on Britain's civil service, commissioned by public 
services minister William Wal degrave, says the 
creation of agencies to deliver government services 
has led to fragmentation and accuses Whitehall 
departments of interfering excessively 
in the day-today management of agencies. 

Page 7 

■ STOCK MjUnCETWDftCgS ■ STgUMQ 

FT-SE 100: 3*2706 (-57.5) New York hncMme: 

Yield 3457 S 14875 


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SAP Compose 46353 {-361) 

■ US LUHCHTMB BATES 

Federal FUnds: 3%% 

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Long Band 93% 

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Brent 15-day (W —£13525 (1155} 

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FFr 55152 (5^034) 

SFr 1437 (1.4282) 

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WEDNESDAY MARCH 2 1994 


PLO sees collapse 
of talks if Israeli 
withdrawal delayed 


Unexpected increase in economic expansion marred by sharp price rises 

US inflation scare hits markets 


By Jurek Martin In Wa shin gton, 
Patrick Harverson in New York 
and John Pitt and Terry Byiand 
hi London 

International bond and stock 
markets fell heavily yesterday 
after a closely watched US eco- 
nomic index showed sharp price 
increases at the manufacturing 
level. 

At the same time, the US gov- 
ernment reported that gross 
domestic product in the final 
quarter of last year rose at a 
revised real annual rate of 7.5 per 
cent. Ear above the 5.9 per cent 
preliminary estimate and the 
largest quarterly expansion since 
the first three months of 1984. 

The bond market, however, 
was Ear more influence d by the 
price data from the National 
Association of Purchasing Man- 
agers monthly survey. Although 
its composite index fell only 
slightly to 56-6 per cent from 57.7 
per cent in January, indicating 
continued healthy expansion, the 
association’s price index surged 
to 67 per cent from 583 per cent 
the previous month. 

Renewed inflation fears left the 
US benchmark 30-year band 
down more than a full point by 
early afternoon, with the yield 
rising to 6.75 per cent European 
band markets fell sharply on the 
back of the US sell-off. 

New York traders said Inves- 
tors were selling bonds because 
they believed any sign of resur- 
gent inflation would increase the 


Some don*ft like K hot: strong OS growtfr and inftation fears Mi . 0 ^ ma ri o ets 


US real GDP 

AnrxjaBsed quarterly % change 
1696 


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1980 8f 82 83 84 85 W 87 68 89. 90 -91 -82 


Source.' DaCMmanCT GreoNto 

likelihood of another monetary 
policy tightening by the Federal 
Reserve. The US central bank 
last tightened policy by poshing 
up short-term Interest rates on 
February 4. 

The selling in the bond market 
spread to the stock market, 
where investors were equally per- 
turbed by the prospect of another 
Fed rate rise. At one stage the 
Dow Jones Industrial Average 
was down more than 40 points, 
but by 1pm it had recovered 
some ground, and was down 36.02 
at 3,796.00. 

The setback in bond markets 
drove share prices lower in Lon- 
don in an effective rerun of 
Thursday's rout. The FT-SE 
Index closed at the lowest point 
of the day, down 57.5 at 3^70.6. 




■ Lex Page 16 

■ Government bonds Page 21 

■ London stock market Page 27 

■ World stock markets Page 38 


Trading volume in the stock 
market remained Eairiy moderate, 
however, and the pressure again 
focused on stock index futures. 

Continental equity markets 
were also heavily marked down 
after the US data was released, 
with the CAC-40 index in Paris 
retreating more than 2 per cent 
and the German Dax index of 
leading shares sliding 1 per cent 
during official hours and 
another 2 per cent in after-hours 

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The revised US GDP figures 
brought real annual growth to 3 
per cent in 1993, the best since 
the 3J per cent of 1988. More 
than half of the upward revision 
was accounted for by exports, 
which grew at a 20.5 per cent 
ammai rate in. the quarter and 
outstripped the recalculated 
16.2 per cent expansion in 
imports. 

The overall thrust of the Pur- 
chasing Managers survey was 
also bullish. The report noted in 
particular ihni “the stren g th in 
new orders strongly suggests 
future continued growth, but 
very likely at a lower, more sus- 
tainable level.” Increases in 
prices, it said, were “primarily in 
products whose prices were 
severely depressed,” such as alu- 


minium, brass, copper, nickel 

and Thin 

Of the component parts of the 
index, both new orders and the 
backlog in orders grew in Febru- 
ary, tat at a lower rate than in 
January. New export orders rose 
to the highest Level in 4V4 years, 
while import orders also grew, 
but at a lower rate than in the 
previous month. Supplier deliv- 
eries were at the highest level 
since June, 1988, indicating 
strun g dwmand from manufactur- 
ers. 

The government's GDP report 
fear (he final quarter also showed 
broad-based strength, with low 

rrrflatrmi (3 JJ per nwnt smrmal 

rate growth in the implicit price 
deflator). 


Norway and Austria hold out despite German pressure to reach a compromise 

Sweden, Finland agree terms to join EU 


By David Gardner In Brussels 
and Hugh Camegy in Stockholm 

Sweden and Finland yesterday 
agreed terms to join the Euro- 
pean Union after five days and 
three nights of arduous talks, 
raising hopes that Austria would 
also settle its membership negoti- 
ations last night 

In the wake of this break- 
through, there were even hopes 
that Norway could last night 
make enough headway to enable 
a final decision by Oslo when EU 
foreign ministers meet in Brus- 
sels an Monday. 

Sweden started the bandwagon 
rolling following the near-col- 
lapse of the talks as dawn broke. 
By lunchtime, under strong Ger- 


man pressure bn its partners to 
get an enlargement deal done, 
the Swedes had settled. 

Sweden's membership terms 
were welcomed by all the main 
government and opposition par- 
ties and business organisations. 

“On all points the EU has 
taken into account our interests,” 
declared Mr Carl Bildt, prime 
minister. “In most areas we have 
reached a good or a very good 
result," said Mr Ingvar Carlsson, 
leader of the opposition Social 
Democratic party. 

But opponents of Swedish 
membership, who are currently 
ahead of the Yes camp in the 
opinion polls, served notice that 
they would campaign hard 
against joining the EU in a refer- 


Wellcome’s patents 
on Aids drug face 
challenge in Europe 


By Peter Wise hi Lisbon, 

Bernard Simon in Toronto 
and Daniel Green in London 

Weilcome’s patents on its second 
best-selling drug, the Aids treat- 
ment AZT, are likely to face a 
direct challenge in Europe next 
month when a Portuguese com- 
pany launches a Canad ian-made 
version. 

Farma APS Productos Farma- 
ceuticos has been authorised by 
the Portuguese government to 
market Apo-Zidovudine, a form 
of AZT manufactured by Apotex, 
Canada's biggest generic drug 
maker. 

It would be priced 15 to 20 per 
cent lower than Wellcome's prod- 
uct and would be an the market 
by April, said Mr Angusto Paiva 
dos Santos, Farma APS director- 
gene raL The move could set a 
precedent as Wellcome fights to 
defend patents on Retrovir, its 
version of AZT, in several coun- 
tries. 

The UK company has been in a 
series of patent disputes with 
companies, including Apotex. 
over the right to sell AZT. So far. 
Wellcome has been victorious in 
the US, and has actions outstand- 
ing in Canada and France. 

Apotex said yesterday that 
“we're moving aggressively all 
over the world". Portugal is the 


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first European country to register 
Apo-Zidovudine, but the product 
is already on sale in some Cana- 
dian provinces, as well as in. Sen- 
egal. South Africa and Brazil 
among other countries. 

Retrovir sales were worth 
£248m in 1993, and Mr Paiva dos 
Santos said Portuguese sales last 
year were more than Es500m 
(S2.9m). His company plans to 
compete with Retrovir to supply 
AZT to Portuguese hospitals. 

Wellcome's main patents on 
Retrovir run out in 2005 but the 
company may be vulnerable in 
Portugal because of its patent 
laws. Wellcome has a local patent 
on the manufacturing process, 
but had not been able to patent 
the material itself. This implies 
that to prove its patent had been 
infringed it would have to show 
that Apotex's product was manu- 
factured by a patented process, 
which could be more complicated 
than simply showing that the **nd 
product was chemically identical. 

Farma APS said it migh t 
export the drug to other Euro- 
pean Union countries and did not 
foresee any legal difficulties. 

Wellcome said yesterday: “We 
will challenge breaches of our 
patent and hope that Portugal, as 
a member of the European 
Union, will respect intellectual j 
properly rights." I 


CONTENTS 


endum due -later Uns-yera:- The- 
accession agreement ‘'means we 
cannot preserve our neutrality 
and that we accept the EU's eco- 
nomic policy.” said Mr Hans 
Lindquik, leader of the No to 
Europe organisation. 

Mr Esko Aho, Finnish prime 
minister, was more restrained 
than Mr Bildt He said the deal 
“is of course not such a one that 
we aimed at. . . but if the details 
of the agreement prove to be 
such as we assume I do not find 
it impossible to live with this 
agreement”. 

The breakthrough came after 
the EU agreed to phase in Swed- 
ish contributions to the Brussels 
budget The Union raised the 
value of the sweeteners it offered 


Croats and 
Moslems 
edge closer 
to alliance 


By George Graham 
hi Washington, Layla Boulton 
fai Moscow and Laura Saber 
in Belgrade 

Washington and Moscow 
yesterday pushed forward the 
Bosnian peace process after 
Groats and Moslems in the repub- 
lic edged closer towards creating 
a new alliance, and Bosnian 
Serbs agreed to open Turia air- 
port for relief flights. 

After four days of talks in 
Washington, Bosnian Croats and 
Moslems reached preliminary 
agreement on establishing a con- 
federation in western Bosnia. 

In Moscow Mr Andrei Kozyrev, 
the Russian foreign minister, 
managed to persuade Mr Rado- 
van Karadzic, leader of the Bos- 
nian Serbs, to allow Tuzla airport 
to be placed under United 
Nations supervision, making it 
easier to transport aid. 

Discussions in Washington 
between Mr Mate Granic, the 
Croatian foreign minister. Mr 
Haris- Silajdzic. the Bosnian 
prime minister, and Mr Kresixnir 
Zubak, leader of the Bosnian 
Croats, have centred on a US pro- 

continued on Page 16 
"New primitives' drive Serb 
professionals abroad. Page 2 


-all four applicants from-6cu2Bbn 
to Ecu3.6bn ($3.96bn) over four 
years, mostly to cushion the 
impart of the immediate cut in 
applicant countries’ farm prices 
to EU levels. There was strong 
resistance to this deal for the rich 
newcomers, who will not now 
make significant net contribu- 
tions to the EU budget until the 
end of this transition period. 

The prospect of at least a 15- 
member Union depends not only 
on referendums to take place in 
all four applicant countries, but 
on the current 12 member states' 
ability to resolve an internal row 
over how to adjust voting rules 
to accommodate the newcomers. 

Senior EU oflcials said last 
night that telephone contacts 


■ were taking-place b et w een Chan- 
cellor Helmut Kohl of Germany, 
President Francois Mitterrand of 
France and Mr Felipe Gonzalez, 
Spanish prime minister, in an 
effort to resolve this dispute, 
which could hold up the newcom- 
ers’ planned entry twgt January. 

In the shorter term, Austria 
last night needed Union blessing 
to continue restricting pollntion- 
generating EU trucks using its 
Alpine passes until 2004. 

Norway was still refusing to 
concede Spain’s demands for 
some access to its fish, or accept 
French-led demands for restric- 
tions an its fish products enter- 
ing the single market 

Gash carries the day. Page 2 


ANC and 
Inkatha 
agree on 
elections 

By PaU Wakbneir in Durban 

South Africa’s two black 
political rivals last night stepped 
back from the brink of violent 
conflict when Mr Nelson Mand- 
ela, African National Congress 
leader, persuaded Znln Chief 
Mang usuUm Buthelezi to regis- 
ter Mb ' inkatha party for the first 
all-race elections in ApriL 

Speaking after more than eight 
hours of talks with the ANC 
leader at a Durban hotel. Chief 
Bntheleri stressed that bis par- 
ty’s decision to register did not 
guarantee its participation in the 
April 27 elections. 

inlratba would register only 
"provisionally” - a final decision 
on participation would depend 
on the outcome of international 
mediation of South Africa's con- 
stitutional itiapntp 

The ANC last night agreed to 
such mediation in principle, 
though no details were agreed 
about the identity of the mediat- 
ing parties or whether mediation 
would be Wn^ng. 

Asked whether Inkatha was 
closer to participating in the 
election after the meeting than 
before ft. Chief Bnthelezi replied: 
"Not at alL* But he stressed that 
Inkatha would participate if its 
constitutional demands were 
met. Bis decision to allow 
Inkatha’s name to be printed on 
ballot papers is also likely to 
have a psychological effect on 
polling. 

The intervention of Mr Mand- 
ela, who has not previously been 
involved in face-to-face constitu- 
tional talks with inkatha lead- 
ers, appeared to have made it 
possible to avert an immediate 
start tn a violent boycott aim , 
pafgn by Inkatha. 

After weeks of public acri- 
mony, the accord holds out at 
least the hope (hat a constitu- 
tional settlement will include 
Inkatha, a party , with a strong 
following among the Zulus, who 
□amber 9m out of the country’s 
38m population. 

The two men made a show of 
friendship. Emerging from 45 
mmntes of private talks before 
the general session began, they 
held hands and posed smiling for 
the cameras. After the day-long 
session, they addressed a Joint 
press conference and deferred to 
one another politely in answer- 

Gontinued on Page 16 


-IB flits Guide 13 Conrnod U aa 26 Monayttartas 34 

Q«-od 26 FT Actuates w M 

■15 FT Wortd Actuaries 3 a 

-14 Cum p an lee Fon*xi Firtnyn n Shaw rtBm a flon 2&29 

.10 UK 22 - 2 S Gold Marine-. 26 Taftaeri Opftm_38 

.15 WLCapfcMs 21 EquHyOpOcrn 38 

.12 M. Convenes Ift-ap H. Bond Sards 21 U»*JnSE 27 

.13 mckete Managed Funds 35-34 waStfBousas 20-39 


© THE FINANCIAL TIMES LIMITED 1994 No 32,306 Week No 9 


LONDON ■ PARIS - FRANKFURT - NEW YORK * TOKYO 



u-* 






NEWS: EUROPE 


EU sees 
price for 
aligning 
policies 

By Lionel Baiter In Brussels 


European Union member 
states could achieve nominal 
convergence in inflation and 
interest rates by 1996, and in 
budget deficits by 1998, accord- 
ing to a “scenario" published 
yesterday by the European 
Commission. 

Its report an the European 
economy in the year 2000 gives 
a variety’ of possible outcomes 
based on different policy 
assumptions. 

However, the Commission 
warns that even a gradual path 
to “convergence” would 
require moderate wage 
increases, tough budget poli- 
cies, and a recognition that 
unemployment would only 
start falling in 1996. The lob- 
less rate would still be 7.5 per 
cent in the year 2000. 

A more radical approach to 
labour market flexibility - 
including a reduction in 
employers' social security con- 
tributions for low- wage earners 
- could cut unemployment fas- 
ter, according to the Commis- 
sion. 

Thus the average growth of 
employment could be 2 per 
cent, associated with GDP 
growth of &5 per cent. Assum- 
ing that real wage costs per 
head remained one point below 
productivity, at about 0.5 per 
cent per year, the unemploy- 
ment rate could fail to 4.5 per 
cent by the end of the decade. 

“This favourable scenario, 
appealing as it might be, 
implies very stringent require- 
ments for public policies and 
private behaviour, together 
with the need for strong co-or- 
dination at the Community 
level.” the paper says. 

If member states pursue a 
“do nothing policy" and drop 
efforts to achieve convergence, 
they risk social tensions and a 
return to “beggar-thy-neigh- 
bour" policies. The EU would 
be “plunged into the deeply 
divergent conditions that pre- 
vailed 20 years ago" after the 
first oil crisis shock, “but with 
a worse social situation”. 

• Mr Gordon Brown. UK 
shadow chancellor of the 
exchequer, called yesterday for 
a new European recovery fund 
to finance job-creation projects, 
investment and training. With- 
out putting a price tag on the 
new fund, Mr Brown said it 
would bolster EU-wide efforts 
to tackle the next recession. 

Mr Jacques Delors, president 
of the European Commission, 
was sympathetic to the idea. 


David Gardner reports from Brussels on how extra EU money broke the logjam 

Cash carries the day in enlargement talks 


The European Union showed 
endearing consistency yester- 
day in the way it broke the 
logjam after five days of gruel- 
ling talks on entry terms for 
Sweden. Finland, Austria and 
Norway. 

True to past form, when 
faced with a choice between 
the four candidates' problems 
about money and their difficul- 
ties over principle, the EU 
headed straight for the money. 

At midday yesterday, follow- 
ing the near collapse of the 
telle* around dawn, the Swedes 
settled for a substantial extra 
financial consideration which 
gives them, and to a lesser 
extent the other applicants, a 
rebate on their EU budgetary 
contributions in the first three 
years of membership. 

All told, the rich newcomers 
will get Ecu3.6bn (£2.7bn) in 
1995-98 to cushion the instant 


alignment of their higher farm 
prices with EU levels, which 
the Union insisted on. Not 
until the end of this period, 
therefore, will they contribute 
the net Ecul.7bn to the EU 
budget foreseen before this last 
round of talks - a figure itself 
less than half original esti- 
mates. 

The Swedes, in fact, face no 
wrenching adjustment of their 
agriculture regime, since their 
farm prices are similar to the 
EU*s. What they won was a 
budget rebate disguised as a 
farm adjustment payment 
(worth up to Ecu2bn in the 
first three years) and in the 
tradition of the contentious UK 
rebate won 10 years ago by Mrs 
Margaret Thatcher. 

“Sometimes it pays to be 
stubborn." remarked a Swed- 
ish negotiator with quiet satis- 
faction. The Swedes had been 


accused of being boneheadedly 
stubborn over their budget 
contributions, not only by the 
EU but by their Nordic neigh- 
bours. But they clearly knew 
whom they were dealing with. 

By settling with the Swedes 
on money, the Union hopes it 
has “front-loaded a band- 
wagon”, as one EU negotiator 
put it, on which the other 
three applicants were yester- 
day trying to clamber. 

By early yesterday evening 
Finland settled too, for a deal 
that looked as though it 
declared the entire country an 
Arctic region eligible for spe- 
cial agriculture support. Dur- 
ing the night the Union had all 
but conceded, but carefully 
camouflaged this in a way 
politically and culturally unac- 
ceptable to the very straight- 
forward Finns. “There is a lit- 
tle btt of mist in tt and they 


don't HTce that.” acknowledged 
Mr Piet Dankert, the Dutch 
European affairs minister. 

Austria was due next, on the 
brink of a formula conceding 
its demand for restrictions on 
EU trucks transiting its Alpine 


The bandwagon effect was 
such that even Norway, the 
most obdurate candidate, 
whose ministers left the talks 
at dawn expecting to try again 
with EU foreign ministers next 
Monday, returned to the nego- 
tiations. 

Not every EU member state 
was delighted by the fiscally- 
induced breakthrough. The 
Spanish, French and Dutch 
thought the applicants were 
being alowed to get away with 
highway robbery. They and 
others criticised the current 
Greek president of the EU 
Council, Mir Theodoras Panga- 


los. for running a bazaar, 
Germany for behaving more 
like the applicants' lawyer 
than an EU member. 

But as the chaotic talks 
headed for the rocks early this 
morning, Mr Pangalos refused 
to admit defeat, Mr Jacques 
Delors. European Commission 
president, appeared Eke a dots 
ex maefrina with an extra 
Ecu750m to provide more 
Incentives for the applicants, 
and Mr Klaus Kiwfcgi , German 
foreign minister, seized control 
of the negotiations. 

“Germany played a very cru- 
cial role,” a senior Swedish 
negotiator acknowledged. For 
instance, the Germans worked 
hard to satisfy the Finns by 
ridding their agriculture text 
of the normal Euro-ambiguities 
which so appal the literal- 
minded Nordics, while keeping 
it - just - within Euro-rules. 


In a rather bolder move, Ger- 
many locked up Norwegian 
and Spanish negotiators to 
argue about fish, presumably 
hoping to endorse the views of 
whoever came out alive. Spain 
wants 14,000 tonnes of cod or 
equivalent from Norway's 
richly endowed and carefully 
husband ed waters. Oslo, as one 
Spanish negotiator put it, is 
sticking to its “NASF [not a 
single fish] formula. They 
won't give an inch.” 

There was, last night, unden- 
iable momentum at last behind 
the ED'S 'drive to embrace the 
Nordic and Alpine candidates 
and begin the drive for a 
“wider Europe". 

The risk re maine d, however, 
that Austria and Norway in 
particular would continue to 
play hard-to-get in view of the 
EU’s obvious eagerness to 
bring them in. 



Swedish and Finnish PMs set 
for battles on the home front 


Sweden's finance minister Anne Wibble and European affairs 
minister Ulf Dinkelspiel in Brussels yesterday ap 


By Hugh Camogy 
in Stockholm 

Comparing Sweden's accession 
agreement to its nail-biting 
capture of the Olympic ice 
hockey gold medal on Sunday 
may have been stretching a 
point for most hockey-mad 
Swedes. Bat Mr Carl Bildt, 
prime minister, was 
unabashed in celebrating the 
country's “most important 
international agreement of the 
century". 

The 44-year-old leader of the 
conservative Moderate party 
has made getting traditionally 
neutral, aloof Sweden into the 
EC a central platform of his 
right-centre coalition since it 
came to power in 1991, along- 


side his aim Of Kh walfaing the 
huge state sector economy. 

Agreement on membership 
terms is also an important 
political victory for Mr Esko 
Aha, 39-year-old Finnish prime 
minister from the Centre party 
and leader of a similarly-com- 
prised coalition. 

But both men know there 
remains a long way to go to 
secure approval in referen- 
dums promised in both coun- 
tries that will decide if they 
can Join the EU on January 1 
next year as scheduled. 

First the young prime minis- 
ters will be hoping their Nor- 
dic follow applicant, Norway, 
will also come on hoard, as a 
Norwegian decision to stay out 
would undoubtedly stiffen the 


already strong Swedish and 
Finnish anti-EU camps. 

Then, both Mr Bildt and Mr 
Aho have to decide when to 
schedule referendums. Mr 
Aho, whose own rurally-based 
party is split on the issue, 
favours the autumn to give 
time to win over doubters. 

Like Mr Aho, Mr Bildt has 
vital support from the opposi- 
tion Social Democratic party, 
winch originally lodged Swe- 
den's EU application. But he 
and Mr Ingvar Carlsson, the 
SD leader, are set to tangle 
over the referendum date. 

With the latest Swedish 
opinion polls showing previ- 
ously strong No support 
shrinking to 42 per cent and 
the Yes vote rising sharply to 


35 per cent Mr Bildt is keen to 
hold the vote in June or on 
general election day in Sep- 
tember. The Social Democrats, 
however, want to wait until 
the autumn believing they 
need more time to win over 
strong opposition to member- 
ship from within party ranks. 

This poses a real dilemma 
for Mr Bildt Conventional 
wisdom dictates that a Yes 
majority is impossible without 
a powerful SD Yes campaign. 
The best conditions for a Yes 
vote may come if the Social 
Democrats, currently leading 
in the polls, win power in Sep- 
tember and hold the referen- 
dum in October or November. 
But that is hardly an appeal- 
ing scenario for Mr BQdt 


‘New primitives’ drive Serb professionals 

Kerin Hope on those who cannot abide the profiteers and extremists 


F rom ballerinas and bas- 
ketball players to elec- 
tronics experts and sur- 
geons, the rump Yugoslavia's 
professional class is being deci- 
mated by emigration. 

While no official figures are 
available, more than 100,000 
Serbs are believed to have left 
the country since the collapse 
of the Yugoslav federation, 
many of them young men 
avoiding ^ascription. 

“What’s most disturbing is 
that those leaving are middle 


class people whose skills and 
ideas will be crucial to rebuild- 
ing the country once UN sanc- 
tions are lifted," says Mr Rato- 
mir Tame of the Civil Alliance, 
a democratic opposition party. 

South Africa and Zimbabwe, 
where immigration regulations 
are comparatively relaxed, 
have attracted the largest num- 
bers of Serbian emigrants. Get- 
ting to Canada and the US, 


where there are well-estab- 
lished expatriate communities 
from tiie former Yugoslavia, is 
more difficult except for stu- 
dents, say would-be migrants. 

Most young migrants are 
university students, but some 
Serbian parents are spending 
their hard currency savings to 
send teenaged children abroad 
to finish their secondary edu- 
cation under exchange pro- 


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grammes which have not been 
affected by the UN embargo. 

"School in Belgrade is get- 
ting impossible. You can't get 
there because the buses aren't 
running; kids mess around in 
class because they don’t see 
any future in studying and the 
teachers can't handle it I want 
to get out" says Ms Ljubica 
Petrovic, 16, who hopes to fin- 
ish high school in Canada. 

Yet just before Yugoslavia 
broke apart prospects for pro- 
fessionals had rarely looked 
brighter, under a short-lived 
reformist government that 
tried to promote private busi- 
ness, fiscal modernisation and 
the restructuring of the bank- 
ing system. 

However, the impact of UN 
sanctions has been almost as 
devastating for the fledgling 
private sector as for large state 
enterprises, where managers’ 
responsibilities have virtually 
disappeared as exports halted 
and workers were sent home 
on “technical leave”. 

Hyper-inflation in Serbia anil 
Montenegro eroded savings 
and forced families to sell their 


assets to finance their chil- 
dren’s studies abroad, at the 
same time removing any incen- 
tive for private investment 

The government’s new eco- 
nomic programme, which 
imposes much higher taxes on 
private businesses, is expected 
to drive more people away. 

“I don’t think there’s any 
understanding of what small 
entrepreneurs have been try- 
ing to do to keep things run- 
ning despite sanctions," says 
Mrs Mirjana Blagojevic, a 
travel agent who used to work 
for JAT, the farmer Yugoslav 
national carrier. "The new 
taxes will wipe out practically 
all my profit margin and may 
send me into retirement 
abroad." 

The I ncreasing influence of 
what Belgrade's professional 
class calls the “new primi- 
tives”, the profiteers making 
money out of sanctions-break- 
ing and the war In Bosnia ami 
the self-avowed nationalists 
who have taken senior jobs in 
the public adminis tration, haw 
also speeded up the exodus. 

“Whether it's the universi- 


abroad 


ties, the medical system or the 
media, there's no pretence of 
jobs on merit any more. They 
mostly go to people close to the 
socialists [of President Slobo- 
dan Milosevic],” Mr Tame says. 
“In business, we're moving 
towards a Latin American situ- 
ation of powerful criminal 
groups effectively controlling 
the economy." 

The rump Yugoslavia's isola- 
tion has already affected the 
quality of medical services, for 
example, although drugs and 
medical supplies are exempt 
from sanctions. 

The Child Heart Foundation, 
set up in Belgrade two years 
ago to carry out open-heart 
surgery, is struggling to sur- 
vive. Its founder, Dr Vladimir 
Hrujak, says two members of 
his team have found jobs 
abroad, while funding has been 
cut 

“It’s a battle to keep going, 
professionally. In this branch 
of medicine you need to keep 
in close touch with what's hap- 
pening abroad and I can’t do 
that any longer. I might be 
able to get a medical job some- 
where abroad, but I wouldn't 
be doing heart operations any 
longer," Dr Hrujak says. 


Czechs and Slovaks win 
praise for their progress 


By Patrick Blum in Vienna 

Sixty years ago Czechoslovakia 
was among Europe's leading 
industrial nations. Today the 
Czech Republic, as the more 
developed of the two parts of 
the fontner Czechoslovak feder- 
ation. ranks about equal with 
the European Union's two 
poorest members in terms of 
gross domestic product per 
capita, according to a report on 
the Chech and Slovak republics 
by the Organisation for Eco- 
nomic Co-operation and Devel- 
opment. 

There is perhaps no more 
telling statistic for four and 
half decades of communist 
manag ement, and debilitating 
waves of migration that began 
before the Second World War 
and ended only with the “vel- 
vet revolution” of 1989. The 
split of the federation on Janu- 
ary 1. 1993. further reduced the 
economic and political stature 
of its constituent republics. 

The whole was greater than 
the sum of its parts, and both 
have had to adjust to living 
separately. 

The OECD report shows both 
countries suffered from the 
split, though adjustment costs 
have been far heavier for Slo- 
vakia than for the Czechs. 

The Czech Republic, with its 
more diversified industrial 
base and economy, and close 
proximity to western markets, 
adapted more easily, though it 
has yet to pull oat af recession. 
Slovakia, with its dependence 


on heavy industry and arma- 
ments aimed at eastern mar- 
kets, was doubly hit by the col- 
lapse of its trading partners in 
the former Comecon trade 
bloc, and the loss of financial 
transfers from the federation. 
It has also had to build an 
administration almost from 
scratch. 

Nevertheless, both have 
made considerable progress in 
their transition to market 
economies, the OECD says. 

The report praises the Czech 
Republic for its reforms. Mac- 
roeconomic stability has been 
maintained with underlying 
inflation at around 10 per cent 
and “lower than in any other 
post-communist economy in 
transition"', the state budget is 
practically balanced and the 
current account is in surplus. 

Output has continued to 
stagnate, but the economy 
appears "set to start on a path 
of slow expansion in 1994, that 
may accelerate in 1995”. 
Growth is forecast at 2 per cent 
this year and 5 per cent in 
1995, with exports rising 10 per 
cent But, it warns, “the transi- 
tion is far from complete, and 
much potentially disruptive 
restructuring remains to be 
done". The reintroduction of 
wage controls in July was a 
step backwards. Unemploy- 
ment may double to 8 per cent 
this year. 

The OECD is more cautious 
about Slovakia, though it 
argues that the economy is 
already showing a number of 


positive features. The private 
sector accounts for 35-10 per 
cent of economic activity, and 
government debt is low com- 
pared with that in other east- 
ern European and some OECD 
countries. 

But immediate prospects are 
poor. A decline in aggregate 
output of 5 per cent last year is 
likely to he followed by stagna- 
tion this year, with growth of 2 
per cent only resuming in 1995. 
Unemployment is set to rise to 
18 per cent of the workforce 
this year, and inflation will faff 
only slowly from 25 per cent in 
1993 to 20 per cent this year. 

The budget deficit is likely to 
remain at around 5 per cent of 
GDP, and limited domestic 
financial resources make 
reducing the deficit more 
urgent 

Expenditure on arms produc- 
tion and defence should be 
reduced. 

Political uncertainty has 
deterred foreign investment, 
says the report, which urges 
the government to develop a 
coherent set of policies for sta- 
bilisation and structural 
reform. Some of the report’s 
statistics compiled before the 
end of 1993 are already out of 
date but the main trends 
remain in place, and as the 
first comprehensive study oE 
the two countries since they 
went their separate ways the 
OECD has usefully begun the 
job of clearing the air about 
the real state of the two econo- 
mies. 


Spielberg 

soothes 

German 

angst 

By Christopher Parkes 
in Frankfort 


If Steven Spielberg had 
directed Schindler's List when 
he bought the rights to 
Thomas Keneally’s book in 
1982, two weeks after the US 
opening of ET. it would have 
been a movie not a film, he 
said yesterday. 

As things turned out, it 
became a document “rich in 
incident and information”, or 
even “a Holocaust Museum at 
24 frames a second”. And if it 
is a success by his personal 
reckoning, and educates people 
fa financial bonanza goes with- 
out saying) “then this picture 
is a public service". 

Speaking hours before last 
night’s German premiere, he 
could not but be aware that it 
was already having such an 
effect. The face of the main 
character, the un-saintly Oskar 
Schindler, had two weeks ear- 
lier appeared on the front 
cover of the mass-circulation 
news magazine Der Spiegel, 
with the cover-line, “The Good 
German”. 

It ramp as a mild relief to a 
country recently confronted 
with vile images of neo-Nazis 
burning out and killing refu- 
gees, defacing Jewish ceme- 
teries, and reviving notions 
worldwide that “the ugly Ger- 
man" was the sole and true 
representative of the nation. 

Awareness has since spread 
that the Jewish-American box- 
office king , with a history as a 
specialist in the ludicrously 
sentimental, had presented a 
work, harsh, true and uncom- 
promising. but free of carica- 
ture and cliche. 

Speaking in the home town 
of Oskar Schindler, the liber- 
tine National Socialist party 
member and industrialist who 
saved more than 1.000 Jews 
from death in wartime German 
extermination camps. Mr Spiel- 
berg reminded his audience of 
mainly German and central 
European journalists that last 
year 60 per cent of US school 
children had not heard the 
word “holocaust". 

The same cannot be said of 
German youth, but it won him 
warm applause from journal- 
ists who have already taken up 
the public service cause with a 
vengeance. A front page edito- 
rial in the influential Frank- 
furter Allgemeine Zeitung said 
yesterday the “profoundly uni- 
deological” work had a chance 
to reach an audience far wider 
than the “selected public" usu- 
ally reached by “often very 
important documentaries". 

Mr Spielberg, who watched it 
again last night in the pres- 
ence of President Richard von 
Weizsdcker, was himself 
inspired to start work by film 
and videotape images transmit- 
ted relentlessly out of Bosnia. 

He was still putting the fin- 
ishing touches to another 
blockbuster movie, Jurassic 
Park. "But when I first heard 
the words 'ethnic cleansing 1 , it 
shattered me and f decided to 
rush into production.” he said. 

He braced himself for the 
realities of filming in Ausch- 
witz, arriving with “a chip on 
my shoulder” and spent four 
months at work in "a ceme- 
tery”. His children learnt how 
to speak Polish and eat her- 
ring. He himself eventually 
learnt to speak civilly to young 
German actors in Nazi uni- 
forms, and he heard from them 
that the work in progress was 
“the best thing that, could hap- 
pen to their generation”. 

He could not say if Germany 
was ready to face the past, as 
he was asked by a young jour- 
nalist last night He could not 
say why more Jews did not 
resist being driven to the 
“asphyxiation rooms”. Perhaps 
these were subjects for future 
films. “This is about education, 
awareness and conscious- 
ness — and I hope it is not the 
end of motion pictures about 
the Shoah.” he said. 


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FINANCIAL TIMES TVHPNESDAY MARCH 2 1994 


NEWS: EUROPE 


3 


EUROPEAN NEWS DIGEST 

Russian accused 
of giving defence 
secrets to UK 


Russia yesterday announced it had arrested a Russian 
armaments official lor passing on defence secrets to Britain, 
writes Leyla Boulton from Moscow. 

The Itar-Tass news agency said an unnamed Russian rtttgwi 
had on assignment of British intelligence for monetary reward 
. . . collected and handed over information of a secret military and 
economic nature”. 


It said he had been supplied with in visible writing materials 
and means of secretly supplying information to intelligence 
agents at the British embassy in Moscow. 

A Russian security official later identified the arrested man as 
the manager of a state-owned company called Special Marhtnp 
Building and Metallurgy, which specialises in military armour 
and artillery. Itar-Tass said the man was arrested on January 15 
and charged on January 25. with “high treason in the form of 
espionage”. 

• Only two days after promising western finamrtai institutions 
that it rema ine d wedded to financial austerity, the Russian gov- 
ernment was yesterday arguing over whether to pump trillions of 
roubles into ailing coal mines as a panacea for probl ems which its 
radical predecessors had vowed to tackle by freeing coal prices 
and restructuring the industry. Mr Victor Chernomyrdin, the 
prime minister, also ordered new subsidies for young children 
and single mothers and spending increases on Busman nffirteic 
and new consulates in former Soviet republics. 


Action by German public workers 

German public sector workers yesterday stepped up a nationwide 
campaign of disruption, while the IG Metall engineering union 
said it was confident of securing har.frfng for a full strike next 
week, Reuter reports from Frankfurt. In both sectors workers 
have been angered by management rails for a wage freeze and 
benefit cuts against a backdrop of recession. The public employee 
protests have hit transport systems, hospitals, kindergartens and 
waste collection in large cities across Germany. Meanwhile, Mr 
Jttrgen Peters, head of the IG Metall »ninn in the north German 
state of Lower Saxony, said he was confident 100,000 engineering 
workers voting this week would decide overwhelmingly in favour 
of a strike. The first vote showed an SO per cent turnout rate, IG 
Metall said, with a 75 per cent majority of votes needed for a 
strike. Government officials have talks set with the OTV public 
sector union for next week, but no talks are in prospect between 
the two sides in the engineering dispute. 


Turkish lira continues to fall 

Turkey's currency crisis deepened yesterday, with the lira losing 
a further 7.8 per cent, following the official 12 per cent devalua- 
tion in January, writes John Murray Brown from Ankara. The 
central bank dollar rate of TL21.550, compared with a devaluation 
rate of TL17.250, is putting the economy under increased strain. A 
sharp increase in overnight interest rates, up to 200 per cent an 
Monday, has not slowed the depreciation and with reserves down 
25 per cent since the start of the year, there is tittle room 
available for bank intervention. On February 18 reserves stood at 
$4.6bn (£3.l5bn) compared with $7.7bn on December 80. The crisis 
was sparked by the growing public deficit and the announcement 
that Turkey's international credit rating had been downgraded by 
two agencies. .... 

French politicians questioned 

French police yesterday rounded up some 30 local politicians and 
possible underworld associates for questioning about last Friday's 
murder of Mrs Yann Fiat, a conservative UDF deputy who bad 
crusaded for a clean-up of her Var constituency on the Riviera, 
writes David Buchan from Paris. Among those questioned were 
the UDF vice-president of the Var departmental council and the 
mayor of Hyeres whose post Mrs Plat was planning to contest in 
this month's municipal elections. Earlier this, week Mr Charles 
Pasqua, the interior minister, said he was determined to dean up 
the Riviera region which was last year identified in a parliamen- 
tary report as an area of growing Mafia influence. 


Local elections in Netherlands 

The Dutch go to the polls today in local government elections 
ahead of national elections on May 3, writes Ronald van de Krol 
from Amsterdam. Opinion polls suggest the two parties in the 
governing coalition - the Christian Democrats, led by the 
country’s veteran prime minister Mr Ruud Lubbers, and the 
Labour party - would lose their majority if general elections were 
held this week, with the opposition Liberals and 
D66 registering sharp gains. A poll by the Nipo polling company 
suggests the Christian Democrat’s support would fall to just 35 
seats in parliament, from 54 in the 1989 elections, and Labour to 
31 seats, down from 49. 


Dutch reconsider phone tax 

The Dutch government yesterday said it would reconsider its 
plans to levy a special tax on the profits of companies operating 
mobile phone networks, writes Ronald van de KroL The move 
came after a majority of parties in pa r l i ame n t expressed their 
opposition to the planned 7.5 per cent tax. The special mobile 
telephone tax, which would have been the world's first, had been 
attacked as a threat to the development of modern mobile com- 
munications in the Netherlands. 

Romanian ruling party seeks pact 

Romania’s ruling party was yesterday in talks with the pro-re- 
form Democrat party, after failing to meet a deadline to form a 
new governing coalition with the Romanian National Unity 
party, a hardline nationalist organisation, and other extremist 
parties, writes Virginia Harsh from Bucharest The P SDR rul ed 
out sharing power with the DP and other proreform opposition 
parties but said the talks were aimed at concluding a political 
pact with them. Meanwhile, more than 700.000 workers, mainly in 
heavy industry and mining, yesterday continued their general 
strike for a second day, the Alfa Cartel union said. 


ECONOMIC WATCH 

German inflation eases 


stem Gorman inflation 

ual 96 change In CPI 



JJ 


92 93 94 


West Germany's inflation rate 
fell to 3.3 per cent in February 
from 3.5 per cent the month 
before, helped by Ming goods 
prices and lower real wages, 
though hopes of a M below 3 
per cent this year still depend cm 
developments in rents, import 
prices and public and private 
sector services. Prices for goods 
rose only 2.3 per cent in 1993. 
Gross pay for west German 
industrial workers fell by a real 
1.6 per cent - the first fall since 
1983 - while white collar pay 
stagnated. The government 
warned, however, that west Ger- 
man basic hourly pay was still 
growing too quickly. Between 


1990 91 

OalBSlrBant giunm^ — — -» - — . 

and 1992 German wages rose a real 20.6 per cen t^ eompartia 
“ per rant in Japan and 5-6 per cent in France, Italy and the 
JriSds Rates in the US had Men by 8 per w*. 

Min’s industrial production rose 6.2 per » 

.. war oTriier hut declined 7.6 per cent from November 1993, 
i mduSS pr^uction for the year down 16 per eent on 

52T£w car registrations rose by IS 

preliminary 10.714 units, from 9 - 549 u ^/f^ r J e ?S I1 L J 
Lions in January and February, were up 20 per cent, to 

1 from 17,568 the same two months in 1993. 


Longuet sees alliances as industry’s hope 

John Ridding and David Buchan talk to a French minister with a difficult brief 


A s minister for industry, trade, 
posts and telecommunica- 
tions. Mr Gdrazd Longuet has 
one of the broadest and trickiest 
brie& in the French government. His 
in-tray bristles with delicate dossiers, 
from the restructuring of public sec- 
tor companies selected for privatisa- 
tion to the reform of France Telecom 
and the promotion of trade and 
investment links in international 
markets. 

Yesterday, for example, Mr Longuet 
was faced with the task of persuading 
Mr Karel Van Miert, the European 
competition commissioner, to allow a 
capital injection of FFr7bn (£81 2m) for 
Groupe Bull, the loss-making state- 
owned computer group. Brussels’ 
decision on the capital increase will 
help determine the fate of one of the 
country's biggest technology-based 
companies. 

Bull is just one of the problems 
inherited by Mr Longuet when he 
took bis post in Mhrch last year. With 
a budget deficit target of FFrtOOtm 
this year, the state cannot afford to 
fond loss-making groups and has 
embarked on a programme of privati- 
sation to support the public coffers. 

However, to achieve this several 
companies from Bull to Pechiney, the 
alurnTtmim group, Usinor Saeilor, 
the loss-making steel group, need to 
be prepared for sale. 

For Mr Longuet, a self-declared lib- 
eral, hut also a pragmatist, the solu- 
tion is often to he found in industrial 
alliances. 


“An important factor for Bull's pri- 
vatisation is an increased relationship 
with its present partners, such as 
NEC” says Mr Longuet, who believes 
the state’s holding in Bull could be 
reduced to less than 50 per cent by 
the end of the year. 

He dismisses the political sensitivi- 
ties which could arise from the sale of 
a substantial part of Bull's capital to a 
Japanese company. 

“Mr [Jean-Marie] Descarpentries 
[Bull’s chairman] has been given 
carte blanche,” he says. He expresses 
concern, however, about the sale of 
Rover to BMW, which angered Honda, 
the British company's partner. “It is a 
precedent which is not favourable for 
relations of trust with the Japanese." 

The industry minister's enthusiasm 
for alliances spreads beyond the reso- 
lution of public sector problems. In 
many cases, he views partnerships as 
the best means to strengthen the posi- 
tion of French companies on the inter- 
national stage. 

“Why do I want to privatise Ren- 
ault?” asks Mr Longuet “It Is to give 
it the opportunity to find partnerships 
with other companies. If the cards in 
the industry are reshuffled, there is 
no reason why Renault should not be 
involved." 

Since the failed deal at Volvo, Ren- 
ault has largely disentangled itself 
from the cross-shareholdings and 
industrial aitianpg-g that bo und the 
prospective partners. Mr Longuet now 
hopes to privatise the French motor 
group this year, depending on the 


state of the financial markets. 

The most striking example of an 
alliance In Mr Longuet's domain, 
however, is to be found in the court- 
ship between France Telecom and 
Deutsche Telekom, its German coun- 
terpart The agreement last December 
between the second and third largest 
international telecommunications 
Operators to create a joint venture to 
supply data and other services to cli- 
ents is the first step towards a deeper 
industrial alliance which is expected 
to include (he exchange of equity. 

For this to happen the French tele- 
coms group requires a change in its 
legal status to transform it from a 
state agency to a public sector com- 
pany with its own capital. The threat 
of union opposition, however, has 
forced Mr Longuet to delay such a 
change. Negotiations, he says, are 
being held in an attempt to win the 
support of France Telecom's employ- 
ees, many of whom fear that reform is 
a prelude to privatisation. 

Mr Longuet says privatisation is 
not on the cards. But he is determined 
to allow the group to open its capital 
to forge alliances with international 
partners. France Telecom's defeat by 
British Telecom last year in the fight 
for the hand of MCI of the US is a 
precedent which Mr Longuet does not 
want to see repeated. 

The manoeuvrings of the French 
and German telecoms groups reflect 
the close trade and industrial Hnire 
between the two countries. But 
according to Mr Longuet there is 



Longuet tricky brief 


room for improvement in the' commer- 
cial relationship. 

“Germany has to accept the idea 
that there are other industrial coun- 
tries in Europe," Mr Longuet says 
bluntly. He rites the vehicle, trans- 
port and energy sectors as areas 
where co-operation should be 
increased with Germany to 
strengthen the competitiveness of 
European companies against Japa- 
nese and US rivals. One example is in 
high-speed railways, where the TGV 
produced by GEC-Alsthom is engaged 


in fierce competition with the German 
ICE consortium. 

Despite his emphasis on partner- 
ships and alliances, Mr Longuet is 
confident about the strength of 
French industry. "For a European 
country, that is to say n country with 
a certain level of social protection and 
salaries, France is very competitive." 
In support of this he points to export 
figures, which rose in the final 
months of last year, despite depressed 
demand in markets such as Germany. 

But if France is to maintain its 
industrial strength, broader reforms 
are needed. “The big challenge for a 
liberal government in France over the 
coining years is to reinforce our capi- 
tal investment. Wc have to create the 
right conditions for domestic and for- 
eign long-term investment," he says, 
ruling out “artificial” industrial poli- 
cies that provide incentives for spe- 
cific activities. 

The first step, he believes, is under 
way. Mr Edmond Alphancfery, the 
economy minister, has said he will 
Introduce reform of France's pension 
system which should encourage 
long-term savings and, through pri- 
vate funds, create vehicles for 
long-term stock market investment. 

Fears of extinguishing France's 
fragile consumer recovery appear to 
have pushed back the reform from 
spring to the autumn, but Mr Longuet 
is certain the reforms will take place. 
At least that is one problem in some- 
one rise’s in-tray, 

Clinton accused. Page 6 


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Japanese 

jobs 

market 

improves 


Angola cuts 
exchange rate 


Angola devalued Its official 
exchange rate by nearly 30 per 
cent yesterday, the third deval- 
uation in the past two weeks. 
Renter reports from Luanda. 

The National Rank of Angola 
said the official rate of the 
kwanza was now 24370 to the 
dollar, compared to 17,838 in 
force since February 21 and 
12,740 from February 14 when 
it was cut from 6300. 

The devaluation was part of 
adjusting the official exchange 
rate to “a point of macro-eco- 
nomic equilibrium", the bank 
said. 


Walvis Bay free 
trade zone opened 


Namibian President Sam 
Nujoma opened a free trade 
zone in Walvis Bay yesterday, 
calling the newly-incorporated 
port a strategic gate to markets 
in Africa and Latin America. 
Renter reports from Walvis 
Bay, Namibia. 

South Africa and Namibia 
signed a treaty on Monday 
transferring ownership of Wal- 
vis Bay. ending what President 
Nujoma called the final chap- 
ter of apartheid colonialism. 


Algeria reduces 
oil revenue hopes 


Algeria has revised down the 
revenue it expects from its 
petroleum exports this year to 
$8bn from $9bn, a spokesman 
Gar the state-owned Sonatrach. 
agency said yesterday, Reuter 
reports from Rabat 

The estimate is '‘based on an 
average price of $15 a barrel for 
Algerian crude. Our forecast of 
oil revenues for ISM wvli be 
around S8bu, ,p the apokeauan 
for Sona track’s communica- 
tions department said. 

Income from petroleum 
exports, which represents more 
than mj per cent of foreign 
exchange earnings, was esti- 
mated at about $9bu last year 
but since then oil prices have 
fallen. 

Mr Abdelhak Boubafs. Sona- 
trach s managing director, said 
in an interview published by 
tbe Algiers daily Liberie last 
month “a decline of $4 a barrel 
means a kiss of £!hu". Servic- 
ing Algeria's foreign debt of 
525. 7bn cost $s.3bn last 
year. 


FINANCIAL TIMES WEDNESDAY MARCH 2 1994 


NEWS: INTERNATIONAL 


Settlements forced to top of peace agenda Hopes 

David Horovitz on the issue Rabin was desperate to keep for later in Mideast talks over jjj[ 

M r Yitzhak Rabin. f .1,11111 f ■ - i: - - y. r East Jerusalem in 1967, plus a an the negotiating agenda. And 

J* - S ’"‘Stfulr line of settlement, protecting by the time It ca ne to eaam> 

ter. has tied the e— — — — — — — awH another row asfcuz settlers to leave, at the ir|IMI I 


Japan's ailing jobs market 
perked up slightly in January, 
to the markets’ surprise, but 
the underlying unem ployment 
rate continues to rise, William 
Dawkins in Tokyo reports. 

Unemployment inched down 
to 2.7 per cent in January, from 
a revised 2.8 per cent in the 
previous month, the first fall 
for nearly two years. At the 
same time the number of jobs 
available rose slightly to 67 for 
every 100 people looking for 
work, from 65 in the previous 
month. 

However, the January job- 
less rate still stands at a six- 
year high and the number of 
companies announcing early 
retirements and freezes on 
recruitment continues to rise. 

The total out of work rose by 
21 per cent from the same 
month last year, to 134m, the 
government's managemen t and 
cu-urdination agency reported 
New job offers continue to Call 
sharply in manufacturing, 
down by 32 per cent over the 
year to January, though the 
boom in low cost housing has 1 
created a 4.4 per cent rise in 
construction jobs over the 
same period. 


Sri Lankans vote 


Sri Lankans voted for the first 
time for ll years in the war- 
torn north and also in the east 
yesterday amid reports of 
intimidation by ruling party 
supporters and police. Renter 
reports from Colombo. 

Residents and an opposition 
politician reported attacks or 
threats to polling officers and 
voters by United National 
party supporters, helped by 
police. 


M r Yitzhak Rabin. 
Israel's prime minis- 
ter, has tied the 
future of his government and 
bis country to the peace pro- 
cess. If that process collapses, 
it is likely his government’s 
chances of winning reflection 
will collapse with it And, more 
important perhaps, the 
chances of a stable Middle East 
emerging in the foreseeable 
future are likely to disappear 
too. 

Yet this week, after the mas- 
sacre in Hebron's Cave of the 
Patriarchs and with the Pales- 
tine Liberation Organisation 
demanding a crackdown on 
extremist settlers as a condi- 
tion for resuming negotiations 
on Palestinian self-rule in the 
occupied territories, the prime 
minister has held hank 
Mr Rabin and some of his 
more loyal ministers have been 
portraying a new series of mea- 
sures introduced to curb the 
wildest settler excesses as 
harsh beyond precedent But 
placing half-a-dozen of the 
most unsavoury ideologues 
into three-month terms of 
administrative detention, and 
disarming or restricting the 
movements of about a hundred 
more, has been insufficient to 
reassure the Palestinians or to 
woo them back to the negotia- 
ting table. 

Baruch Goldstein, the Brook- 
lyn-bom doctor whose 111 bul- 
lets last Friday have done such 
damage to the fragile Israeli- 
Palestinian reconciliation, 
would not have been on the 



tiWost Bank and Gaza Strip 1 

popuMtoir 


Arabs (t992) 

1,788,300 

Jaws (1993) 

115,000 

; Total 

1^300 






army’s top-six list of dangerous 
settlers, possibly not even in. 
the top 50. The expressions of 
support for his actions from 
sections of the settlement 
movement suggest that there 
may be more Baruch Gold- 
steins out there waiting. 

While few in the Israeli 
mainstream advocate disarm- 
ing all 115,000 settlers, as the 
PLO has demanded, there are 
many, including several cabi- 


net ministers, who believe the 
time has come to evacuate the 
mo6t provocative settlements, 
such as the Beit Hadassah 
enclave in the heart of the 
Palestinian population in 
Hebron. 

It is not Mr Rabin is 
fundamentally opposed to the 
concept of uprooting settle- 
ments, as will be sought even- 
tually by the PLO. Far from it 
While he is publicly reticent on 


the subject, his aides have 
always indicated that the 
prime minister regards barely 
a third of the 149plus settle- 
ments dotted throughout the 
West Bank and Gaza Strip as 
serving a vital security pur- 
pose. 

Hia ultimate vision, those 
aides believe, would be to 
retain the new Jewish Jerusa- 
lem suburbs that have sprung 
up «fnry the capture of Arab 


East Jerusalem in 1967, plus a 
ring of settlements protecting 
Jerusalem, and another row 
along tiie eastern edge of the 
West Bank, on the border with 
Jordan. The residents of most 
other settlements should be 
offered compensation to move 
bade into Twagt , or face the 
prospect af bring under Pales- 
tinian rule. 

The problem with that vision 
is that it is not shared by a 
substantial proportion, of the 
Israeli electorate. Many, maybe 
even most, Israelis are still 
reluctant to see settlements 
evacuated in a land-far-peace 
deal with the Palestinians. 
Even in the immediate after- 
math of Friday’s massacre, a 
newspaper poll showed that 
while 46 per cent of Israelis 
wanted the Beit Hadassah 
enclave evacuated. 50 per cent 
believed the settlers should be 
allowed to remain. 

Mr Rabin's intention, as 
reflected in the provisions of 
the framework autonomy 
accords signed at the White 
Bouse last September, was to 
win over public support gradu- 
ally. This would be achieved 
by first granting the Palestin- 
ians self-rule in Gaza and Jeri- 
cho. A would then be extended 
throughout much of the West 
Bank. Over the next two years 
this should allow the level of 
Israeli-Palestinian violence to 
ebb and the first seeds of 
mutual respect to sprout 

Only in 1996, according to 
the framework accords, were 
settlements intended to feature 


by the time It came to encour- 
aging settlers to leave, at the 
end of the interim period in 
1996/1999, Mr Ratofo was bet 
ting that a substantial majority 
of Israeli would be prepared to 
sacrifice settlements in the 
cause <rf a peaceful co-existence 
they were already enjoying. - 
Baruch Goldstein has badly 
ttentad that scenario- Palestin- 
ian negotiators are asking if 
there is much paint in discuss- 
ing tbe minut e details of the 
plflTififjri transfer of authority, 
when Goldstein's admirers are 
free to roam through Arab pop- 
ninHrai centres, machine-guns 
at the ready, able to open fire 
at whim and a mockery 
of efforts to bring a new era of 
calm to the occupied territo- 


airport 

talks 


BySknonHoltierton 
In Hong Kong 


nes. 

Some Palestinian leaders 
have been saying since Friday 
that, unless the settlement 
issue is placed on the negotiat- 
ing a genda now, there can. be 
no resumption of talks. Others 
have stopped short of such a 
precondition. And Mr Yassir 
Arafat, the PLO chairman, has 
been characteristically vague. 

Doubtless, in their frequent 
co mmu nications over the past 
few days, Mr Rabin has been 
explaining to Mr Arafat exactly 
why he feds he cannot con- 
front the settlement issue just 
yet. The future of the Gaza- 
and-Jericho-first autonomy 
plan, so close to realisation 
before last Friday, may well 
now hinge on whether Mr Ara- 
fat accepts that explanation. 


Massacre 
takes joy 
from freed 
prisoners 


Freedom lacked its zest now 
they had to live with the mem- 
ory of last Friday’s mosque 
massacre, released Palestinian 
prisoners returning to Hebron 
said yesterday, Reuter reports 
from Hebron. 

Israel had said it would 
release about 500 Palestinian 
prisoners yesterday, and 300 
more by the end of the week in 
a gesture to calm rage after a 
Jewish settler gunned down 43 
Arabs praying in a mosque at 
Hebron’s Cave of tbe Patri- 
archs. 

A group of about a dozen 
just-freed young men looked 
dazed as they walked down a 
Hebron street carrying their 
belongings in shoulder bags. 

Hebron was still under strict 
curfew and there was none of 
tbe public rejoicing that 
greeted two prisoner releases 
after September's PLO-Israel 
peace deal. 

“Of course Fm happy to be 
out I have not been free for 
seven years,” said Mr 
Mohammed Ghaleb GheKh, 29. 

“But this is not enough, 
because of the massacre that 
happened. I only had five 
mouths left to serve anyway.” 

Friday's massacre and the 
ensuing clashes were the 
worst day of bloodshed in 
Israel’s 27-year occupation of 
tbe West Bank and Gaza Strip 
and led to a suspension of Mid- 
dle East peace talks. 

The forlorn little group of 
men had been driven from 
Ketzlot prison camp in Israel’s 
Negev Desert to Hebron in a 
busload of about 30 prisoners. 

They were dropped at Israeli 








V ' 


Add Nanus, one of 500 Palest inians released from Israeli army Jails, being welcomed home by relatives in Bethlehem yesterday 


occupation headquarters in 
town and left to find their own 
way alone. 

“I don’t even know how Fm 
going to get home,” said Mr 
Gfaeith. 

Most of tbe men had been in 
prison for some years and 
were first told they would be 
freed early yesterday. 

The group included Mr 
Amin Abu Argonb, 21, who 


had saved 48 months of a 50- 
month sentence, and Mr 
Mohammed Abu Kbash, 26, 
who had served four years and 
seven mouths of a five-year 
sentence. 

They said all those released 
were known to the Israeli 
authorities as supporters of 
PLO Chairman Yassir Arafat’s 
Fatah faction, although some 
had become Islamists in 


prison. 

Huy declined to tell what 
they had been sentenced for, 
saying only they were 
involved in “intifada [Palestin- 
ian uprising] activities”. 

An army communique on 
the prisoner release said the 
freed men had not "shed 
blood” or been Involved in 
“terrorist” attacks since the 
IsraaLPLO peace deal. 


Mr Abu Argonb said he was 
glad to be out of brad’s noto- 
rious Ketriot prison “Condi- 
tions were bad and getting 
worse. We were about 25 to a 
tent and there were a lot of HI 
prisoners and not enough med- 
icines.” 

While they talked on the 
street, an Israeli army patrol 
st opped and checked their 
identity papers^ 


Mr Aha Kbesh said he had 
been happy when he heard in 
prison last year of the IMo 
self-rule agreement between 
the PLO and Bfrael.'But he 
said the only goal worth ach- 
ieving was a Palestinian state. 


Australia budget priorities set out Price-protest miners 

By Nfldd Tart in Sydney initiatives this year”. ment for a couple of months, prejudicing the deficit reduo- YOl P TO 51 V 011 I 

The treasurer's comments as haggling over specific mea- turn programme,” A said. v ^ 


Australia’s budget priorities in 
May would be “to improve the 
prospects for tbe long-term 
unemployed, to pr o mote indus- 
try and regional development 
and to implement the Native 
Title legislation," Mr Ralph 
Willis, Australian Treasurer, 
said yesterday. 

These measures, coupled 
with the government’s commit- 
ment to reduce the budget defi- 
cit to about I per omit of gross 
domestic product by 1996-97, 
meant there would be “little 
scope for further substantial 


initiati ves thin year”. 

The treasurer's comments 
came as he unveiled the Aus- 
tralian government’s initial 
budget platform, which is con- 
tained in a document called 
the “fiscal framework”. Publi- 
cation of the background state- 
ment is the starting point for 
negotiations an budget details 
with the Labor party caucus, 
and with the minor parties 
holding the balance of power 
in the Australian senate. 

The government is anxious 
to avoid a repeat of last year’s 
fiasco when its finance pack- 
age became stalled in parlia- 


ment for a couple of months, 
as haggling over specific mea- 
sures continued. Accordingly, 
a defined period for negotia- 
tions had been set up this year, 
and the budget date Itself 
moved forward from late sum- 
mer to May. 

The fiscal framework pro- 
vided few new projections 

about the economy. But it did 

play down tbe likelihood of a 
“jobs levy” to fond the mem. 
ployment measures. “The 
introduction of a jobs levy._has 
been suggested as a mwnm of 
accommodating the increased 
expenditure' pressure without 


prejudicing the deficit reduc- 
tion programme, “ A said. 

“ While the government has 
not rejected the suggestion, it 
would prefer to meet its objec- 
tives without having to intro- 
duce such a measure.” 

• Australia saw a seasonally 
adjusted current account defi- 
cit of A$L26hn (US$903m) in 
January, in line with analysts' 
predictions, end a considerable 
improvement on the unexpect- 
edly large deficit recorded in 
the previous month. The 
December current account defi- 
cit has now been revised to 

AgLftm. 


Australian coalminers, on 
strike since Sunday to protest 
at lower coal export prices, 
bare voted to stay out until 
Friday, Reuter reports from 
Sydney. Those attending a 
rally in Canberra demanded an 
inquiry into negotiations 
between Australian coal com- 
panies and Japanese buyers. 

A deal covering Australian 
coking coal reached in January 
resulted in mice cuts of 845 
per emit for the year starting 
April i. The miners, who say 


the cuts will lead to fewer jobs 
and mine closures, repeated 
their demand for a national 
coal-marketing authority to 
negotiate prices with Japanese 
buyers. Companies say that 
would be tantamount to 

TiaHnroitiMtl nn 

The miners vowed to strike 
indefinitely if employers took 
disciplinary action. Mr John 
Maitland, miners' union presi- 
dent, wQl meet Prime Mn-ristw 
Paul Keating today .to fUscn*? 
the miners’ case. 


Vietnam’s jobless problem comes out into the open 

A s the sun rises over — — some of the customers win Unemployment is one of the unemployed are many former from the countryside were not I came here so that I can foe 

Hanot, hundreds of tv in tn ^ abour , wefl 38 Hugest problems now feeing soldiers demobilised after the allowed to travel to cities such my family," one of the me] 

young men gather on rVUdUO UIlV and wmont If thev are luckv. the Hfrvernment in Vietnam Viat-ne*nac0 armv nulled Ito M Uanrvi- ana ftarruT 1W __ 


A s the sun rises over 
Hanoi, hundreds of 
young men gather on 
the dust)’ verge in the middle 
of Giant; Vo street. Some sit in 
groups.- others lie on blankets 
trying to sleep. Most of the 
men are peasant farmers. All 
are looking for work. 

Clang Vn street ts one of six 
or more main roads leading 
into the Vietnamese capital 
which have become informal 
job centres. Foremen looking 
for labour on one of the dozens 
of construction sites around 


Roads into 
Hanoi are now 
informal job 
centres, writes 

Iain Simpson 


Hanoi come to hire workers by 
the day, the week or tbe hour. 

Giang Vo is lined with shops 
selling building materials, arid 
the men waiting for work hope 


some of the customers will 
need labour as wen as bricks 
and cement If they are lucky, 
they will earn up to S3 (£2) a 
day and return at night to the 
cheap, crowded hostels where 
they stay while they are work- 
ing in Hanoi 

Some men com* every day 
from the countryside around 
Hanoi to look for work; others 
have trekked several hundred 
miles from the provinces of 
central Vietnam, where, when 
the rice is planted, there is lit- 
tle else to do. 


Unemployment is one of the 
biggest problems now feeing 
tbe government in Vietnam. 
Since pro-market economic 
reforms were introduced in 
1986, the level of joblessness 
has increased rapidly. 

Official figures show more 
than 2m people unemployed 
out of a workforce of 32m. 
There are also 5m-€m people 
who are under-employed. 

Tens of thousands of work- 
ms have also been laid off by 
bankrupt state factories and 
are looking for new jobs. Also 


unemployed are many former 
soldiers demobilised after the 
Vietnamese army pulled its 
troops out of Cambodia in 
1989. 

Most of tbe underemployed 
are peasant farmers, who work 
In the fields for four to six 
months of the year. For the 
rest of the time there is no 
work in their home villages, so 
they go to towns and cities In 
search of other work. 

Until recently, the problem 
of rural under-employment 
was disguised because people 


from the countryside were not 
allowed to travel to cities such 
as Hanoi; any found looking 
for a lob were rounded up and 
sent borne. Since 1992, as inter- 
nal travel restrictions have 
eased, the under-employed 
have appeared on the streets of 
the capital 

One group of men waiting 
for work on Giang Vo street 
had arrived in Hanoi a week 
earlier from the central prov- 
ince of Quang Tri, one of the 
poorest in Vietnam. “Living in 
the countryside, I have no job. 


I came here so that I can feed 
my family," one of the men 
said. But be would sot move 
his family to Hanoi because he 
could not make ennn gh mosey 
for them all to Hva. 

The government hopes that 
growing foreign investment 
and the domestic economic 
boom wiH create work for 
many of the people now job- 
less. But western economists 
in Hanoi believe unemploy- 
ment will continue to be a seri- 
ous problem in Vietnam for 
many years to come. 


Britain and China will hold 
their first formal talks tomor- 
row on financing Hang Bong’s 
multi-billion-dollar airport 
since last August, raising 
hopes that Beijing may be 
moving closer to an agree me n t 
The meeting, at China's 
request, will discuss the Hong 
Kong government's fourth 

ffrvanHnl plan fOT tfrfi afrport 

and its connecting railway. 

It follows- the collapse of 
Anglo-Chinese cooperation on 
Hang Kong's political develop- 
ment last week and has - 
prompted speculation among 
British diplomats that China 
might be moving towards a 
separation of economic from 
political issues. 

China bum oansfate a t ly grttir. 
feed the Hong Kong govern- 
ments financial plans for the 
project It has said the govern- 
ment wants to raise too much 
debt to -finance the project: 
debt which the post-1997 gov- 
ernment win have to shoulder. 

The govenmuoafs first finan- 
cial plan, which found favour 
with international bankers, 
provided for HK$i6.3bn 
(US$2.1 bn) of equity and 
HK$66.6bn of debt 
Earlier this year, the govern- 
ment offered, in its fourth 
revised plan, to increase its 
equity contribution to airport 
and railway to HKJflObn, from 
HK$45bn previously, and to cut 
the amount of debt needed to 
finance the project to HKSZSbn 
from HK$38bn. 

It is unclear how Chirm will 
react to this latest plan, in 
spite of Us much-reduced bor- 
rowing requirement. . Last 
weekend, after a meeting in 
Beijing of the Preliminary 
Working Committee (PWC), 
some PWC members com- 
plained the government had 
not gone far enough. 

It would be surprising if 
China ware to agree to the 
Hong Kong government’s lat- 
est plan without extracting fur- 
ther .concessions. As today’s 
budget will show, the govem- 
xOdftE'S revenues are buoyant 
and it could afford to pump 
more equity Into the project 
• Hong Kong’s property 
developers shrugged off inter- 
est-rate and political worries 
yesterday to bid record prices 
for three plots Of residential 
fend at a government auction, 
Reuter reports from Hong 
Kang: 

“The prices were way above 
expectations. This is obviously 
a huge vote of confidence in 
tiie colony,” government land 
auctioneer Nigel Burley said 
after the auction. 

Mr Burley said the developed 
properties, units of which will 
be sold to the public before 
completion, will come on to tbe 
market around 1996 to 1997. 
Hong Kong reverts to China tn 
July, 1997. 

Analysts said they were sur- 
prised at the high prices -the 
two more expensive plots at 
over HK$2bn (£173-5m) each 
surpassed exp ectations by 
more than HK$500m apiece. 

Hut Hong Kong’s stock mar- 
ket reacted negatively to the 
auction. 


“Ihe Israeli steps, including 
our release, are not even l per 
cent, of what Is necessary,” be 
declared. 


China may 
enter Gatt 
‘this year’ 


Sir Leon Brittan, European 
trade commissioner,, said be 
believed China could enter 
Gatt this year and trade and 
human rights should be dealt 
with separately, Reuter reports 
from Befifag: 

Sir Leon was speaking after 
two days of talks with Chinese 
officials on Sino-EU economic 
relations. - 

There would be complex 
negotiations to agree the 
nature of the commitments 
more precisely and the sched- 
ule of timing acceptable to the 
EU, he added. 

The EU is seeking cuts in 
tariffs, greater transpa rency , 
improved access for Its compa- 
nies into sectors such as distri- 
bution, banks and -iruairaTifte 
companies, and a safeguard 
clause against surges in Chi- 
nese exports. 

Sr Leon gave Chinese affi- 
cfalss a protocol on Gatt entry 
with a list of requirements- 
China was afoUDder member 
of Gatt but left after the Com- 
munist takeover in 1949. It 
applied to rejoin in 1966. 

Sir Leon also raised the issue 
of what he called serious viola- 
tions of intellectual property 
rights. The capacity of China's 
compact disc industry was 
enormous but in the absence «f 
a gre e ments with foreign com- 
panies it created an incentive 
for piracy, be declared. 


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FIMANOAL TIMES WEDMpsr>AV MARCH 2 1994 


NEWS: THE AMERICAS 


US and UK affirm 
unity on policies 


By PhiFip Stephens 
In New York 

President Bill Clinton and 
British Prime Minister John 
Major put aside past differ* 
slices over Bosnia yesterday 
and announced broad agree- 
ment on a range of foreign pol- 
icy issues as the US leader 
reaffirmed the “breadth and 
depth" of the transatlantic 
relationship. 

After talks in Pittsburgh and 
Washington they agreed to bol- 
ster support for Russian Presi- 
dent Boris Yeltsin and to 
launch an initiative to speed 
implementation of last year's 
Gatt world trade agreement. 
Mr Clinton offered strong sup- 
port for British policy in Hong 
Kong and carefully sidestepped 
questions over the visit to the 
US last month of Mr Gerry 
Adams, the Sinn F§in leader. 

To underline the rapproche- 
ment over Bosnia, the two 
leaders announced they would 
be sending a joint civil engi- 
neering team to Sarajevo to 
hasten efforts to restore nor- 
mality to the city. The two gov- 
ernments will approach inter- 
national financial institutions 
and seek resources to restore 
water, power and health ser- 
vices in the Bosnian capital 

After their discussions Mr 


Clinton said London and Wash- 
ington had agreed also on the 
need to bolster Mr Yeltsin's 
pursuit of reform in Russia, 
boost Russian ties with the 
west, and strengthen Nato’s 
Partnership for Peace pro- 
gramme with the former Com- 
munist bloc. 

Speaking on the White 
House lawn after what both 


‘Special 
relationship 5 
still strong, 
leaders say 

sides were at pains to empha- 
sise had been harmonious 
meetings, Mr Clinton once 
again affirmed the strength of 
the “special relationship". He 
said that by focusing on occa- 
sional problems, such as Bos- 
nia and Ireland, observers had 
underestimated “the incredible 
breadth and depth of our 
shared interests". 

Mr Major responded by say- 
ing that the Anglo-American 
alliance was underpinned by 
“shared interests and shared 
instincts” on virtually all the 
big issues facing the west. 


To reinforce the point, Mr 
Clinton offered support for 
Britain in its dispute with 
China over democratic reform 
in Hong Kong. He expressed 
admiration for Governor Chris 
Patten's efforts towards "a gen- 
uine long-term strategy for eco- 
nomic and political success" in 
the colony. 

Mr Major signalled his hope 
that agreement with Mr Clin- 
ton on the joint approach to 
Bosnia would defuse the most 
explosive issue in often diffi- 
cult relations between London 
and Washington over the past 
year. He told journalists that 
active US involvement in the 
search for an overall political 
settlement between Bosnia's 
warring parties meant that 
“our policy is heading erectly 
in the same direction". 

Mr Clinton indicated that the 
US remained determined not to 
send US troops to Bosnia until 
there was a comprehensive 
political settlement, but said 
Nato's success in relieving 
Sarajevo had created “a terrific 
opportunity to build on”. 

Tire two leaders will seek to 
bring forward to January 1995 
implementation of the accords 
reached in the Uruguay Round. 
Under present plans these 
would not come into force until 
the middle of next year. 



Chilean 

fears 

stilled 

B> David Pfffing in Santiago 

tulQicb irauiug lbssea 
totalling $206ni {£14 lm) at 
Codeico, Chile's state copper 
company, will not affect the 
country's 1994 budget, accord- 
ing to Mr Alejandro Foxley, 
the outgoing finance minister. 

Mr Foxley, testifying before 
a parliamentary commission 
investigating the losses, which 
amount to nearly 0.5 per cent 
of GDP, said the deficit would 
be met through a combination 
of last year's budget surplus 
and extra revenues from 
Codeico. 

Codeico would be able to 
provide the Treasury with an 
extra $6lm because of higher 
production and lower costs 
than envisaged in the 1993 
budget, Mr Foxley said. The 
remaining SI 45m would come 
from the budget surplus of 
S790m. 

The losses had been particu- 
larly painful, Mr Foxley said, 
as he had devoted the past 
four years to saving money to 
improve the country's fiscal 
position. As a member of 
Codelco's board Mr Foxley has 
been the target of opposition 
attack over the scandal. He 
Said he had not known Codeico 
was speculating: 


Bentsen firm 
on banking 
rules reform 


By George Graham 
in Washlngto. 

Mr Lloyd Bentsen, US 
Treasury secretary, yesterday 
refused to back down in the 
face of Federal Reserve Board 
criticism and insisted that the 
four overlapping federal bank 
regulatory' agencies must be 
consolidated. 

Mr Bentser. offered to let the 
Fed - which currently super- 
vises bank holding companies, 
foreign banks, and state-char- 
tered banks which are mem- 
bers of the Federal Reserve 
payments system - conduct 
joint examinations of a cross- 
section of big banks in partner- 
ship with his proposed new 
Federal Banking Commission. 

This commission would have 
three members appointed for 
staggered six-year terms, as 
well as the Preasury secretary 
and a Fed governor. 

He resisted, however, the 
Fed's desire ro remain a sepa- 
rate regulatory agency. 

“The federal government is 
not Noah's ark. We don't have, 
or need, two Securities and 
Exchange Commissions. Or 


iv.'u Food and Drug Adminis- 
trations. Or two central banks. 
We don't need two sets of rules 
and interpreters, or two set* of 
examinations." he told the Sen- 
ate banking committee. 

Mr Bentsen offered to allow 
the Fed to conduct joint exami- 
nations with the Federal Bank- 
ing Commission of 10 of the 20 
largest US tanks, as well as of 
a cross-section of smaller 
banks. "But there will be just 
one exam per institution. Just 
one,” Mr Bentsen said. 

This concession on joint 
examinations falls short, how- 
ever. of meeting the Fed's 
demands, which are expected 
to be laid out at another hear- 
ing of the Senate banking com- 
mittee today. 

The Fed's principal argu- 
ment so far has been that it 
neeus to be closely involved in 
bank regulation in order to 
stay in touch with market con- 
ditions that could affect the 
whole US financial system 
Critics point out that the Ger- 
man Bundesbank, generally 
held out as a model central 
bank, has no such rcsiwiisibili- 
tie s. 


Caracas 
acts to 
curb rise 
in prices 

By Joseph Mann in Caracas 


Quebec 

separatist 

election 

defeat 

By Robert Ofebern in Montreal 
and Bernard Simon in Toronto 



customer is 


The Venezuelan government 
has extended the freeze on the 
retail price of medicines in 
place since the start of January 
for 90 days, and set maximum 
limits on price rises for some 
food items. 

The minis ter of economic 
development, Mr Luis Carlos 
Palacios, said that from yester- 
day prices for a list of mass- 
consumption food items frozen 
since January could be raised 
by a maximum of 2^ per cent a 
month, just below the govern- 
ment's 1994 inflation target of 
35 per cent. These items 
Include bread, sugar, vegetable 
oil, rice, powdered milk, flour, 
spaghetti and tinned sardines. 

There are no controls on the 
prices of most other goods and 
services, although items such 
as electric power rates, public 
transport fares and domestic 
fuel prices are still regulated or 
set by the government. 

The government announce- 
ment cams as a price control 
decree issued by the last 
administration was due to 
expire. Mr Palacios said busi- 
ness had agreed to exercise 
voluntary restraint on price 
increases as part of efforts to 
tame infla tion, which reached 
46 per cent last year. 

If prices rose too quickly, he 
said the government could use 
the special economic powers it 
assumed last weekend to order 
strict price controls. 

In a second stage of the 
administration's inflation con- 
trol plan, officials will try to 
convince businesses from pro- 
ducer to retail level to restrain 
price increases voluntarily for 
other goods and services not 
included in the mass consump- 
tion list 


The separatist Parti Qu6tacois 
has suffered a surprise setback 
with its first by-election loss 
in five years in Canada. The 
victory by Quebec’s ruling Lib- 
eral party in the largely 
French-speaking Stafford con- 
stituency, east of Montreal, 
gives an unexpected fillip to 
Mr Daniel Johnson, the pro- 
vincial premier, ahead of pro- 
vincial elections this year. 

Mr Johnson, who took over 
from Mr Robert Bonrassa last 
January, is strongly commit- 
ted to retaining - if not 
strengthening - Quebec’s ties 
to the rest of Canada. 

Until a few weeks ago a PQ 
victory in the forthcoming 
election seemed all but 
assured. The separatist party 
has promised to hold an inde- 
pendence referendum within 
12 months of taking office. 

An opinion pall published 
yesterday also suggested sup- 
port for the separatists might 
be waning. According to the 
poll, conducted by the Angus 
Reid group, backing for the 
PQ's federal counterparts, the 
Bloc Qn&taris, has dropped to 
38 per cent of decided voters, 
compared to 49 per cent at last 
October’s general election. 

However, the mood remains 
volatile. Last week the Liber- 
als lost a by-election in a con- 
stituency they had held for 37 
years. Opinion polls suggest 
almost a third of Qufitacois 
remain undecided. 

This week’s victory gives 
backbone to Mr Johnson's 
efforts to bring aggressive 
leadership to the Quebec Lib- 
erals after two years of indeci- 
sion caused by the illness of 
Mr Bonrassa. 


Brazilian unions 
threaten strikes 


By Angus Foster in SSo Paulo 

Union leaders in Brazil's 
biggest industrial state. SSo 
Paulo, are threatening one-day 
strikes in protest against eco- 
nomic measures announced on 
Monday by Mr Fernando Hen- 
rique Cardoso, the finance min- 
ister. 

Unions claim the measures, 
designed to pave the way for 
adoption of a new currency, 
will reduce workers' spending 

power. _ . 

Metalworkers in Sdo Paulo 
are due to strike today and 
union leaders are expected to 
meet next week to consider 
further action. 

They are worried that under 
Mr Cardoso's plan salaries are 
being compulsorily switched 
into a new accounting unit, the 
URV ireal unit or value), while 
prices remain free to increase 
in the local currency, the cru- 
zeiro real. 

Business leaders say the 
strikes are unlikely to be wide- 
spread, especially once work- 
ers realise the new unit 
lead to stable salaries. 

“There is no atmosphere for 
a strike in the country at the 
moment.” according to Mr Wil- 
son Bruiner. president of Aces- 


ita, a specialist steel company. 

Reaction to Mr Cardoso's 
anno uncement was generally 
positive, although several ana- 
lysts foresee considerable polit- 
ical pressure to increase spend- 
ing ahead of October's 
elections. 

Inflation is not expected to 
fall significantly before the 
package’s next stage, the foil 
adoption of a new currency, 
Likely in May. 

Mr Pierre- Alain de Smedt, 
president of Autolatina. the 
holding company for Volkswa- 
gen and Ford's combined 
operations, said it remained 
too early to assess the plan in 
detail. 

"But what is very positive is 
that the government has been 
extremely consistent and 
transparent in putting it for- 
ward," he said. 

Autolatina plans to start pri- 
cing its cars in URVs. The gov- 
ernment hopes the private sec- 
tor will ail switch to the new 
unit. 

It is partly designed to 
replace a number of different 
indices already in use which 
measure price rises, thus 
fuelling Inflationary expecta- 
tions. 


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NEWS: WORLD TRADE 


Brussels challenges 
Hollywood moguls 

Protection of EU film industry urged 




By Lionel Barber to Brussels 

Mr Jodo de Deus Pinheiro, the 
European cultural commis- 
sioner, yesterday called Tor 
greater protection of the Euro- 
pean fflwi industry to counter 
the power of big Hollywood 
studios. 

Mr Pinheiro said the Euro- 
pean Commission was consid- 
ering possible changes later 
this year to the "television 
without frontiers" directive 
which sets quotas on foreign 
broadcasting material and 
films. He also called for "posi- 
tive measures" to promote 
European programming and 
films. 

The Portuguese commis- 
sioner suggested that these 
measures would create a 
breathing space for European 
industry as it struggles against 
US competition, and could be 
dropped "once Europe has a 
healthy film and TV produc- 
tion sector again.". 

His comments are certain to 
fuel controversy about the 
future of European broadcast- 
ing policy and increase ten- 
sions with the CJS. Only last 
week, Mr Pinheiro caused a 
stir by calling for an end to the 
system which has allowed the 
Hollywood studios to pool their 


resources to distribute films in 
Europe without falling foul of 
EU competition rules. 

The Commission wOl shortly 
produce a green paper on a 
strategy for the audio-visual 
industry based on two central 
figures: that SO per cent of pro- 
grammes on European chan- 
nels are of US origin, and that 
US films now account for at 
least 80 per cent of box-office 
revenue in every EU country, 
except France, where it is 
around 60 per cent 


US films 
account for 
80 % of box 
office revenue 


hi his speech to US film pro- 
ducers yesterday, Mr Pinheiro 
said it was time to redress the 
"serious imbalance” which 
g Ttefwri in the European film 
market 

"Given that admissions in 
movie theatres in Europe on 
the average stagnate, would it 
not be in the interests of us 
all. . . to develop policies 
developing this market? I 


believe the answer is Yes.” 

Hollywood, which has strong 
support within the Clinton 
administration, is likely to be 
wary of calls for market- 
sharing dressed up as coopera- 
tion. 

Speaking in Vienna last 
Monday, Mr Stuart Eizenstat, 
US ambassador to the EU, said 
that European quotas on US 
films were "repugnant” and 
infringed the principle of free- 
dom of speech. 

Mr Pinheiro is vying with 
French politicians for the title 
of champion of European cul- 
ture. In his speech, he attri- 
buted the US movie industry's 
success to the existence of a 
sound domestic market 

"American films deal with 
standard stories for a linguistic 
and culturally unified public,” 
he claimed. 

The commissioner, a former 
Portuguese foreign minister, 
suggested it was time to create 
a similar broad European mar- 
ket “The mistake to avoid 
could be the creation of 'cultur- 
ally confused' productions.” 

Last year, Mr John Birt, 
director general of the BBC, 
warned the European Union 
against attempting to create a 
"synthetic Euroculture with a 
harmonised media industry”. 



European Commissioner for Culture Pinheiro: now te the time to 
redress the 'serious imbalance 1 which exists in the film market 


French attack Clinton on aircraft sales 


By Davkl Buchan in Paris 

French aerospace leaders 
yesterday accused President 
Bill Clinton of intervening 
unfairly to sell $6bn (&Ubn) 
worth of US civil aircraft to 
Saudia Arabia, while announc- 
ing sharp falls in their own 
turnover and exports last year. 

Mr Louis Gallois, president 
of Aerospatiale, the French 
partner in Europe’s Airbus 
consortium, said the US gov- 
ernment appeared to have 
entered into "real state- to-state 
negotiations” to secure the 
deal with Saudia, the Saudi 
Arabian carrier. This was 
unprecedented in civil, as dis- 
tinct from military, contracts, 
he said, adding: "If this 
becomes a permanent Ameri- 
can attitude, we must prepare 
ourselves in Europe for this 
type of trade." 

In an interview Mr G6rard 
Longuet, France's trade and 
industry minister, said the US 



Gallois (left) and Clinton: "unprecedented Inte rv e ntion" 


civil aircraft sale appeared to 
be "linked to rescheduling of 
Saudi Arabia’s military debt”, 
referring to reports that 
Riyadh is to delay payment of 
$6bn of the $9bu it owes US 
military Jet makers over the 


next two years. Mr Serge Das- 
sault, president of Dassault 
Aviation and of GIF AS, the 
French aerospace industry 
a ss ociation , said it was symp- 
tomatic of Washington’s 
involvement that, contrary to 


traditional practice, the sag dia 
deal was announced by Mr 
Clinton himself, "the supplier 
rather than the client”. 

Annminrfng that thair c oll ec- 
tive turnover had fallen by &S 
per cent and exports by 129 
per cent last year, leaders of 
the French aerospace industry 
- Europe’s largest - urged 
Europe to stand up to the US 
in the flatt negotiations to con- 
trol aircraft subsidies. 

But, Mr Gallois said, while 
"Europe should continue to 
defend its system of direct sub- 
sidies or reimbursable 
advances [which Airbus 
receives], it is also worth 
reflecting whether and how we 
could adopt the US system of 
indirect aid, so that perhaps 
we could have two irons in the 
fire”. 

An executive of Snecma, the 
French aero-engine maker, 
warned, however, that failure 
to rearii any agreement with 
the US would leave the aircraft 


industry without any special 
treatment on subsidies. French 
aeroengine exports alone fell 
26.6 per cent last year. 

The level of new orders - 
which determine future turn- 
over and exports - fell last 
year by 20 per cent to FFr88bn 
(£10.1bn) from FFrllObn in 
1992. The contract to sell 60 
Mirage 20005 jets and a large 
number of missiles to Taiwan 
was Included in the 1992 order 
book, though deliveries will 
only begin in a couple of years. 

Waiting for such arms export 
orders to work through, the 
French aerospace industiy is 
also hoping that the govern- 
ment will unveil an ambitious 
1995-2000 military procurement 
programme this year and that 
the civil aircraft sector will 
soon revive. But the interim Is 
proving lean. Dassault, the 
maker of Mirage jets, saw its 
turnover drop 20 per cent last 
year, though it claims to have 
improved profitability. 


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Kazakh 
office for 
Wimpey 

By Andrew Taylor, 

Construction Correspondent 

Wimpey says it has become 
the first UK construction 
group to establish a perma- 
nent office in Ka«Hi |rtan i the 
oil-rich former Soviet republic. 

Because of its large mineral 
wealth, Kazakhstan offers 
some of tiie most attractive 
development and business 
opportunities in the former 
Soviet bloc. The country is sec- 
ond only to Russia among the 
15 ex-USSR republics in 
attracting foreign investment 

Wimpey has identified op to 
$lbn (£885m) of construction 
and engineering work which it 
says the country Is likely to let 
this year to Internationa] con- 
tractors, with next year’s fig- 
ure likely to be twice as big. 

By 1996, as it modernises 
and improves its infrastruc- 
ture. the country could be 
offering work worth up to 
$4bn a year to international 
construction companies. 

Investment by multination- 
als in Kara lfhstan should pro- 
vide a further impetus for con- 
struction work, says Wimpey. 
Mercedes-Benz, Fiat, and Dae- 
woo have all established sales 
offices in the country. Philip 
Morris is investing 1800m for 
an 88 per cent share In a ciga- 
rette factory and some tobacco 

farms, and Grand Metropoli- 
tan, the UK drinks group, last 
month announced a joint ven- 
ture to market Smirnoff vodka 
in the country. 

Wimpey has established an 
office in the capital, Alma-Ata. 
The country has substantial 
deposits of gas, gold, silver, 
lead, zinc and copper. After 
Russia it is the second biggest 
former Soviet oil producer, 
with an annual output of 
about 22m tonnes and reserves 
estimated to be as high as 
35bn barrels. 

Other potential contracts 
include substantial road refur- 
bishment, upgrading the capi- 
tal’s subway system and mass 
transit systems generally. 
Wimpey is already thought to 
be dose to winning contracts 
to build several hotels. 


EU and 



close on 
vehicle 
import 
numbers 


By Kevin Done, Motor Industiy 
Correspondent to Brussels 

The European Commission 
and the Japanese government 
are dose to agreeing a forecast 
for new vehicle sales in toe 
European Union, which would 
leave the level of Japanese 
vehicle exports to the EU vir- 
tually unchanged from last 
year. 

The Commission Is optimis- 
tic that last year’s prolonged 
conflict over the level of Japa- 
nese vehicle exports to the EU 
can be avoided. 

Hie latest round of talks, 
which ended in Tokyo at toe 
weekend, had shown for the 
first time that tittle divided 
the forecasts of toe two sides, 
Mr M a r ti n Bangwwmn, Euro- 
pean Industry commissioner, 
said yesterday. 

The EU expected new vehide 
demand in west Europe to 
remain virtually unchanged at 
last year’s very depressed 
level, said Mr Bangemann, 
while tiie Japanese Ministry 
of International Trade 
and Industry, was foreca stin g 
modest growth of up to 3 per 
cent 

The EU market for cars and 
tight commercial vehicles fell 
by 16.9 per cent to 11.738m 
last year, the steepest decline 
of the post-war period. 

fit its original estimates last 
year Tokyo had refused to 
accept gloomy European fore- 
casts of a steep foil in sales 
and was then forced to curtail 
exports drastically last 
autumn to bring shipments In 
Une with toe 1991 EU/Japan 
accord on Japanese vehicle 
sales in the Union. 

Direct Japanese vehicle 
exports to the EU fell last year 
by 18.4 per cent to 980,000 
units. The Commission expects 
a second round of talks with 
Tokyo to be held in mid- 
March. 

Addressing a European car 
industry forum organised by 
the Commission the Euro- 
pean Parliament, Mr Bange- 
mann gave hlS Clear harking - 
yesterday for a continuation of 
the current controversial 
"block exemption” for the 
motor industry, which allows 
carmakers to use a selective 
distribution system with 
exclusive deaims in breach of 
European competition law. 

The 19-year block exemption 
is dne to expire in mid-1995, 
and toe Commission is stQl 
divided over whether to accept 
the motor industry’s demand 
for the selective distribution 
system to con tinue . 

Mr Bangemann said that the 
system played an important 
role in the monitoring of Japa- 
nese vehicle sales tn the EU. 
“On no account should this be 
endangered,” he said. 

He also dismissed arguments 
from European consumer 
organisations that the system 
was responsible for high car 
prices in the EU. 

"I do not believe that getting 
rid of the selective and exclu- 
sive distribution system would 
lead to more choice and lower 
prices - but just the reverse,” 
he said. 


NEWS IN BRIEF 


Brazil engine 
deal for R-R 

Rolls-Royce yestertay was selected to supply Us heavy thrust 

KTSto power taa BjnggJ 

engine airliners for Transbrasol, Paul Betts, Aerospace Corre- 

its tt^ta^rivals, Gen^lElBCt^andPrart& Whftwy 
The new Rolls-Royce-powered 777s, to 

Brazilian government approvaf are due to entw airline service in 
1996-97 on routes between Brazil and the US. 

Transbrasfl’s 777 Older, worth about $M0m (S274m) for the 
aircraft and engines, is the first from a Latin AnicBto; ft 
is also the first Latin American order for the Trmt BOO engine. 

Sir Ralph Robins, RoDs-Royce chairman, said the deal would 
renew the UK aeroenginemaker’s links with TTansbrasil after 
about 20 years. The Brazilian carrier flew an all Rolls-Royce 
engined fleet in the early 1970s, operating Dart-powered Handley 
Page Heralds and Spey-powered BAG One-Elevens. 

Indonesia contract loan 

The US Export-Import Bank has announced an offer of a $3A3m 
subsidised loan to a US company seeking a contract from Indon- 
esia's stateowned dredging company, P.T. Rukindo, Naney Dmme 
reports from Washington. 

If the US wins the contract, it will be the first subsidised loan 
begun under the Clinton administration, which is formulatoig a 
more aggressive export finance strategy. The fi n an ci ng backs a 
bid by EULcott Machine of Baltimore to sell dredging equipment 
Mr Kenneth Brody, Rrimhanic chairman, yesterday said the 
bank was pushing support for s mall companies such as Ellicott. It 
will match, in this case, the offer by a competing Norwegian 
company, whose name Eximbank could not disclose, of long-term 
inang at low interest rates. Iu this way the bank hopes to 
convince other countries to limit or end subsidised lending. 

New light on sinkings 

New light Is riied on the reasons for a series of sinkings among 
dry bulk carriers during the late-1980s and early-1990e, in a 
report* published recently, Charles Batchelor, Transport Corre- 
spondent, writes from London. 

A total of 64 dry hulk carriers and ore/bulk/oil carriers (OBOs) 
were lost in the three years from 1991-1993, prompting concerns 
about the way dry bulk vessels, which typically cany Iron ore or 
coal were built and the advanced age of the fleet 
But many of the losses were of OBOs, which can cany either 
dry bulk or oil as cargo, while navigational error was a more 
important reason for loss than structural or engineering prob- 
lems, according to a new study by Ihtercaigo, the tateraatkmal 
Association of Dry Cargo Shipowners. 

OBOs are often much larger than dry bulk carriers and are 
subdivided into separate tanks for aO, which makes them more 
diffic ult to sink. But they are more vulnerable to explosions, 
difficult to maintain mnrp prrm« tn mrrnginn. fn IQQftfhft kws 
of nine OBOs (fisgufeed a sharp fall in dry bulk losses to 20 from 
28 the previous year. 

'Analysis of total loss and fatality statistics 1991-1993; hitercarga, 
17 Bell Court House, 11-12 Blomfield Street, London EC2M ZAY; 
five. 

Venezuela iron move 

Sivensa, Venezuela's largest publicly traded steelmaker, plans to 
invest approximately $90m to raise production capacity of hot 
briquetted Iron at its Venprecar subsidiary in Guayana, the 
country’s mining and heavy industry centre, Joseph Mann 
reports from Caracas. 

The new capacity will be aimed at export markets. 

Sivensa bolds a majority of equity In Venprecar, which began 
producing HBI in 1990. 

Trade barriers for Israel 

Israel is about to introduce a new series of protectionist mea- 
sures, giving preference to local suppliers over foreign suppliers 
competing for pubfic sector contracts, David Barovttz writes 
from Jerusalem. 

The new regulations, drawn up by a team headed by Mr Han 
Plato, Prime Minister Yitzhak Rabin's economic adviser, require 
that local suppliers be awarded contracts even if their bids are up 
to 15 per cent higher than those of foreign competitors. Mr Rabin 
said: “It’s about time the world got toe idea that we’re not 
suckers.” 

The new regulations require foreign companies fulfilling gov- 
ernment contracts to pledge reciprocal purchases in Israel to at 
least 35 per cent of the value of their contracts. 

Jamaican garments plea 

Jamaica has asked tiie surveillance arm of the Multi-Fibre 
Arrangement to resolve a trade dispute with Canad a over gar- 
ments shipped from the foiand to the US Which th»n enter 
Canada, Canute James writes from Kingston. 

Canada has limited the quantity of Jamaican assembled wom- 
en’s underwear which can enter that country after being shipped 
from the Island under a trade treaty with the US, according to 
Jamaican nfficfflig 


FO 


CRA NS-MONTAN A 


z 
o 

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FINANCIAL TIMES WEDNPRn a v MARCH 2 1994 


ir. Gloom over 
j progress in 
Ulster talks 



!'n». 




By David Owen, Phiip 
Stephens and Michael Cassell 

The British government has 
virtually given up hope of mak- 
ing further significant head- 
way in forging a lasting politi- 
cal settlement in Northern 
Ireland before the European 
elections in June. 

This follows Monday's 
announcement by the Ulster 
Unionists, the province’s larg- 
est political party, that it 
would not return to round-ta- 
ble talks with Dublin and other 
constitutional parties. 

Mr James Molyneaux, the 
UUP leader, urged the govern- 
ment to concentrate instead an 
setting up an internal Ulster 
assembly - a proposal likely to 
be vetoed by Mr John Home’s 
mainly Catholic Social Demo- 
cratic and Labour party. 

London’s pessimism over the 
immediate prospects for fur- 
ther progress emerged last 
night as Mr John Major voiced 
his determination to press 
ahead with the search for a 
comprehensive settlement 

Mr Major's reaffirmation of 
the so-called three-stranded 
approach came after President 
Bill Clinton carefully avoided 
questions on whether his 
administration would again 
allow Mr Gerry Adams, the 
Sinn FSin leader, to visit the 
US. 

However, speaking at the 
White House after tatirs with 
Mr Major, Mr Clinton again 
offered public support for last 
December’s Anglo-Irish decla- 
ration as the framework for 


eventual peace in Northern 
Ireland. Senior British officials 
interpreted this as a clear sig- 
nal that Mr Adams would in 
future be barred hum the US 
unless and until Sinn Fein 
renounced IRA violence. 

Ministers have Interpreted 
the XJUP’s annmmrpmwit as in 
effect the start of a three- 
month period of political man- 
oeuvring in the run-up to the 
European elections. 

The UUP is anxious to pro- 
tect its flanfc a gafogt Rev lan 
Paisley’s har dlin e Democratic 
Unionist party, which is boy- 
cotting bilateral talks with 
London co-ordinated by Mr 
Michael Ancram, the Northern 
Ireland minister. The DUP usu- 
ally tops the polls in the prov- 
ince's European, elections. 

Mr Major refused to accept 
that the imp’s disavowal of an 
Anglo-Irish dimension to a 
political settlement meant that 
the process was doomed. 

Dublin will also expect its 
broadly based dialogue with 
Britain on the political fixtur e 
of the province to continue. 

The Anglo-Irish ' Haisnn com- 
mittee which exchanges ideas 
between London and Dublin on 
the shape of future political 
progress in Ulster has already 
held one meeting since Ur 
Major and Mr Albert Reynolds, 
Irish prime minister, agreed 
last month to put renewed 
emphasis cm joint 

Expectations are still high 
that further moves towards a 
select committee for Northern 
Ireland wffl. take place before 
the end of twy month 


NEWS: UK 


HK company to build £36m plant in Ulster 


By Michael Cassefl 

Three hundred jobs are to be created in 
Northern Ireland with the decision by. 


Mr Smith said the factory should be 
in production by August, IT is planned 
for an l&acre site and each month will 
produce 20m compact disc containers to 
be sold in Europe and the US. 

Mr John McGuckfan, chairman of 
Northern Ireland's Industrial Develop- 


qjmpanies — Carmen and Daesung - 


Benelux, a Hong Konghased company, 
to build a plastics container fac- 

tory at Umavady. county Londonderry. 

The decision to site the new plant in. 
an area of the province which has 
already attracted significant foreign 
investment was announced yesterday 
by Mr Tim Smith, Northern Ireland 
economy minister. 


mant Board, said the investment repre- 
sented another success in the prov- 
ince's efforts to attract to the province 
Asian Pacific companies deciding to 
start operations In Europe. 

In the last 14 months, two Korean 


have announced they are to invest in 
Ulster. Carmen makes car stereos and 
Daesung manufactures printed circuit 
boards In aririftinry Texmaco, an Indo- 
nesian-based man-made fabrics special- 


makes microcassettes, floppy discs and 
containers for audio and video cas- 
settes. Benelux already employs 4,000 


people in Hong Kong. China and Indon- 
esia and sells its products to customers 
such as Sony. Olympus and Philips. 

Mr Gary Chow, Benelux chairman, 
said the company had looked at other 
European sites and had chosen Ulster 
primarily because of the availability of 


incentives, he added, had also been an 
important factor. The province offered 
“an excellent bridgehead” for European 
and US markets. 


ist, has also announced it is to set up a 
plant . “easily trained people" and 24-hour con- 

The Benelux factory will be the first . tinuous working practices. Financial 
in Europe for the company, which 


The best kind of business battleground 


Michael Cassell on Belfast’s expatriate executives 


T om Johnson, who three 
years ago moved his 
family from sleepy Shel- 
byville, Indiana, to the uncer- 
tain streets of Belfast, flwug ht 
he was heading for “some 
place like Beirut”. 

“My preconceptions turned 
out to he a million miles away 
from reality,” insists the man- 
aging director of Ryobi Alu- 
minium Casting, a Japanese- 
owned automotive castings 

He is one of the growing 
number of expatriate business- 
men sent to Northern Ireland 
to manage companies. He will 
shortly return to the US, where 
he will stoutly defend the repu- 
tation oT a place he says is 
damaged by distorted reporting 
and often viewed through a 
prism of ignorance. 

His company had been 
drawn to the province by the 
prospect of lucrative contracts 
to supply Ford of Germany and 
by a range of incentives as 
attractive as any in Europe. 

Yesterday's announcement 
by Benelux adds another name 
to the register of companies 
who have already riflritted that 
Ulster’s reputation as a war- 


tom trouble-spot is outweighed 
by its commercial advantages. 
Estimates suggest that about 
55,000 Ulster people are 
directly employed by overseas 
companies. In the past year 
alone inward investors have 
created more than 1,600 jobs 
and, since last s ummer , foreign 
companies have announced 
new investments worth well 
over £L00m. 

Mare are in the pipeline. A 
Taiwanese floppy-disk manu- 
facturer is poised to invest 
£13m in a new west Belfast fac- 
tory while a Taiwanese textile 
group wants to build a £160m 
plant which will involve the 
bigg e s t inward investment in 
the UK for five years. The UK 
is seeking Brussels approval 
for the Am), which could m*& n 
employment fin- 2,000 people. 

The jobs are badly needed in 
a part of the UK with higher- 
than-average unemployment 
and ghettos where the jobless 
outnumber those in work. 
When Ryobi advertised for its 
first nine skilled operators, 
more than 150 qualified people 
applied. 

Some US companies are 
investing in the province - 


particularly in and around 
Londonderry - bat many 
remain wary about patting 
money into what they see as a 
higlHisk ^nwiTnewial climate 

The present pace is being set 
by Far East companies, which 
do not appear to be so easily 
troubled by the province’s 
international image. 

For Ryobi. the province beat 
several other European loca- 
tions because of the availabil- 
ity of highly skilled workers 
and a range of grants which 
totalled about 25 per emit of 
start-up costs. The highly auto- 
mated plant in Carrickfergus 
employs 44 people and, given 
an improvement in the Euro- 
pean automotive market, could 
eventually give work to 250. 

Ryobi, like other foreign 
investors, has not been 
touched by the Troubles and 
stays out of politics. As for Mr 
Johnson’s own thoughts as he 
prepares to leave: “I would not 
dare suggest I know the 
answer and won’t preach pessi- 
mism or o ptim ism 1 am sure it 
will take some while to sort 
out but there are so many good 
people here, one day it must be 
solved." 



Tom Johnson’s Ryobi plant near Belfast could eventually 
provide 250 badly-needed jobs puu« p»mk)r pnu 


Cabinet Office report criticises civil service reforms 


By John WiBman, 

PuMbPoBcy Editor 

Mr William Waldegrave, Britain's 
public services minister, was yester- 
day required to dig deep into the 
lexicon of Whitehall-speak as he 
published a critical report on the 
government’s civil service reforms. 

The report, commissioned by Mr 
Waldegrave, -says the creation of 


agencies to deliver gover n ment ser- 
vices has led to fragmentation of the 
civil service. And it accuses White- 
hall departments of interfering 
excessively in the day-to-day man- 
agement of a genqipa 
Mr Waldegrave described the 
report as “useful and challenging” — 
code among the mandarins for 
“embarrassing and very inconve- 
nient". 


The author of the report was Ms 
Sylvie Trosa, a senior French civil 
servant seconded to the Cabinet 
Office to evaluate the reforms. Previ- 
ously, Ms Trosa worked in the 
Frexufa government’s office responsi- 
ble for public service reform. 

This Halite critic found much that 
was unsatisfactory about the 
Anglo-Saxon style of administrative 
reform. 


She appears to have endorsed the 
central policy in the reforms, the 
creation of more than 80 executive 
agencies to deliver services such as 
the payment of benefits and vehicle 
licensing. “No on e argued for a step 
backwards,” she found. 

But she found rnntrnning cOHfU- 
sion in the relationship between 
agencies and their parent depart- 
ments. Agency chiefs continue to 


complain of interference by civil ser- 
vants in Whitehall . 

“There is a whole bureaucracy set 
up to m onito r us," o n** agency chief 
executive told Ms Trosa. 

Civil servants in central depart- 
ments are also critical of the agen- 
cies, she found. They see the agen- 
cies as increasingly drifting away 
from them in values and culture. 
Attempts to ensure that staff move 


between agencies and departments 
are “minimal”, according to Ms 
Trosa. 

Minis ters need to do much more to 
encourage cohesion in the civil ser- 
vice, she added. 

The report is based on extensive 
interviews with senior civil servants 
including the chief executives of 26 
agencies, half of whom came from 
outside the civil service. 


7 


Legal row 
on public 
sector 
tendering 

By Robert Rice 
and John Authors 

The European Commission 
seems unlikely to relieve the 
British government’s problems 
over compulsory competitive 
tendering in the public sector 
by narrowing the scope of the 
Acquired Rights directive. 

-The Transfer or Undertak- 
ings (Protection of Employ- 
ment) regulations, known as 
Tape, which enact the direc- 
tive, have been held by the 
courts to apply in some cases 
to contracting oat of public 
sector services. 

When Tape applies, private 
contractors most take on the 
existing workforce on 
unchanged pay and conditions. 
This makes it difficult for pri- 
vate contractors to undercut 
public sector costs, as they 
usually achieve savings by 
reducing the workforce. 

The UK government has told 
contractors that it is cam- 
paigning for the commission 
to narrow the scope of the 
directive so that it does not 
include public sector tender- 
ing. 

Bnt a commission discussion 
paper, leaked to the contrac- 
tors’ lobby group Clause 26. 
suggests Brussels has no 
intention of reducing its scope 
by excluding Its application to 
contracting out 

It says: “The subcontracting 
of only an activity of an under- 
taking . . does not in itself con- 
stitute a transfer of an under- 
taking within the meaning of 
Che directive.” 

Ms Melanie Tether, a part- 
ner of City solicitors Norton 
Rose says the reference to sub- 
contracting is merely designed 
to indicate that the contract- 
ing out of an activity will not 
necessarily involve the trans- 
fer of an undertaking. 

The discussion paper makes 
it clear however that there 
win nevertheless be a transfer 
If criteria laid down by the 
European Court of Justice are 
met 

The discussion paper goes 
on to say the revision of the 
directive “should take account 
of the Court's case law” and 
“complete its findings.” 



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FINANCIAL TIMES WEDNESDAY MARCH 2 1994 


8 

NEWS: UK 


UK car production reaches 20-year peak 


By John Griffiths 

British car production reached its 
highest level since 1974 last year, with 
Rover overtaking Ford as the UK's 
largest carmaker for the first time in 
more than a decade. 

Rover Croup, whose sale to BMW of 
Germany is expected to be approved 
by British Aerospace shareholders on 
March 15, emerged as the biggest pro- 
ducer even when output of Ford 's 
Transit van and other commercial 
vehicle operation s are included. Only 
when production or Jaguar, bought by 
Ford in the late 1930s, is taken into 


account did the US multinational 
overtake Rover - and then by only 
around 2,000 units. 

Figures from the Society of Motor 
Manufacturers and Traders show that 
the UK's total car output last year 
reached 158m. nearly 7 per cent 
higher than in 1992 and the highest 
since the 153m units reached in 1974. 
As the figures emerged. Ford 
announced that short-time working 
has ended at its Transit van manufac- 
turing plant at Southampton, and 
that output of Escorts from Its Hale- 
wood plant on Merseyside is being 
increased as a result of continuing 


recovery in the UK vehicle market 

Rover's output of cars last year 
totalled 406504, compared with Ford’s 
271,723. 

This year Ford should once more 
start closing the gap on Rover, whose 
output of cars and leisure/utility four- 
wheel-drive vehicles - classed as cars 
in the SMMT statistics - rose 759 per 
cent last year to 406504 Gram 378,797 
in 1992. 

Although Rover's production of 
vehicles classified as light commercial 
is confined to some Land Rover mod- 
els and a few Maestro vans, the 19540 
It produced last year lifted its output 


to 426,744. This lifted it well clear of 
the 398568 cars and vans produced by 
Ford itself although Jaguar output 
added another 29587 units to Ford’s 
tally. 

While Rover has led Ford in actual 
car output for some time, untQ last , 
year Ford's traditionally high output 
of commercial vehicles in the UK has 
kept It ahead of Rover. 

Thus in 1992 Ford's own 302,145 car 
output trailed well behind Rover's 
378,797. But the 151516 Transits and 
other vans it produced took its total 
output, even excluding Jaguar, to 
453.461 and ahead of Rover. 


Ust year, however, the UK’s com- 
mercial vehicle Industry suffered Its 
worst year for production since 1918 
and Ford's van output plunged by 
nearly 25500 units to 127,065. 

Total car output last year continued 
on its rising trend, up 6.47 per cent to 

1575524 units, the highest since 1974 

- in spite of lower output at Vauxhall 
and Peugeot 

The main factor in the increase, 
apart from Rover, was higher output 
hum Nissan’s Sunderland plant and 
production at the Toyota and Honda 
plants. The three producers made 
nearly 310,000 cars last year. 


Major upbeat 
on prospects 
for recovery 


Old ghost returns to haunt Clarke 

Philip Coggan on responses to the spectre of a resurgence in inflation 


The long decline comes to an end •- 


Percentage change over previous 12 months 



By Philip Stephens 
in item Yort 

Mr John Major last night 
sought to talk up the prospects 
for sustained economic recov- 
ery and pledged to hold down 
Britain's inflation rate. 

Speaking to businessmen at 
the British-American Cham- 
bers of Commerce In New 
York, Mr Major said that the 
government had set in place 
"solid foundations for sus- 
tained growth throughout the 
'90s." 

Seeking to dispel any impres- 
sion among American busi- 
nessmen that the economic 
recovery might be in doubt, he 
said that the end of the reces- 
sion had left Britain in a much 
stronger competitive position. 

Manufacturing productivity 
was rising by over 5% a year, 
labour costs hod fallen and the 
employment market was 
strengthening. Britan was 
again expecting the fastest 
growth rate among the main 
European countries in 1994. 

Mr Major said that there had 
been a fundamental change in 
working practices which had 
given Britain its lowest under- 
lying inflation rate for a gener- 
ation: "the inflation psycho- 
logy is - at last - in retreat. 
And I intend to keep it that 
way" 

He added that low inflation 
was creating its own dynamic 
for investment and growth. 


But the government was deter- 
mined to move further in 
sharpening Britain's competi- 
tive edge. Emphasising that 
education re mains at the top of 
his domestic political agenda, 
the prime ministpr said that 
longterm competitiveness 
would depend “above all on the 
quality, the ability, the skills of 
our workforce. 

Borrowing some of the 
recent political rhetoric of the 
Labour party, he went on: 
"What we are working for is 
nothing less than the reskilling 
of Britain for the 21 st century.” 

Stressing Britain's commit- 
ment to free and open trade, 
Mr Major said that the indus- 
trialised nations could not 
insulate old industries and old 
habits from global competition. 
And in a sideswipe against the 
Japanese, he said that Britain 
and America should work 
together to open up Japan’s 
markets to European and US 
competition. 

• Britain's public sector pay 
bill rose more than 10 per cent 
in 1992-1993, according to the 
newly published statistical 
supplement to the Budget, 
helping to explain the current 
squeeze on public pay. 

The supplement shows that 
public sector pay rose from 
£685bn in 1991-1992 to £765bn 
in 1992-1983, meaning an aver- 
age pay rise of 7 per cent (after 
accounting for inflation.) in the 
middle of a recession. 


T he age-old British prob- 
lem of inflation will 
once again face Mr Ken- 
neth Clarke, chancellor of the 
exchequer and Mr Eddie 
George, governor of the Bank 
of England, when they hold 
their monthly monetary meet- 
ing today. 

When they met last month, 
they agreed a quarter of a per- 
centage point cut in base rates, 
timed to coincide with the pub- 
lication of the Bank of 
England's quarterly inflation 
report 

But when that report fore- 
cast that underlying inflation 
would end 1995 at over 3 per 
cent, in the top half of the gov- 
ernment's 1-4 per cent target 
range, and warned of an 
"asymmetric” risk that infla- 
tion might be even higher than 
that, analysts started to ques- 
tion the authorities' anti-infla- 
tionary credibility. 

Since then, falls in bond mar- 
kets round the world have indi- 
cated that investors are con- 
cerned about the resurgence of 
inflation. But analysts are 
sharply divided on the pros- 
pects for price rises, with some 
arguing that growth Is too 
weak to prompt inflation, espe- 
cially with the impact of 
April's tax rises yet to be felt. 

The headline rate of infla- 
tion, the annual rise in the 
retail prices index, rose 
sharply in January to 25 per 
cent, from 1.9 per cent in 
December. But this was a sta- 
tistical quirk. When calculat- 
ing an annual rate, the 
monthly increase that drops 
out of the annual comparison 
is as important as the new flg- 


SguqkCSO 

ure which enters it. In this 
case, January 1993, when a 
round of mortgage cuts caused 
the RPI to drop by 05 per cent, 
fell out 

So even though the RPI fell 
0.4 per cent in January 1994, 
the net effect was a rise in the 
annual rate. But the index has 
actually fallen in three of the 
past four months and is only 
0.1 per cent higher than its 
level in May 1993. Further- 
more, this overall figure dis- 
guises remarkable price falls In 
some sectors, such as clothing 
and household goods. 

The underlying rata of infla- 
tion, excluding mortgage 
movements, rose only slightly 
from 2.7 per cent in December 
to 2.8 per cent in January, 
mainly due to the effect of the 
Budget on excise duties. It now 
looks set to stay much closer 
to the headline rate, because of 
the disappearance of the effects 
of the large mortgage rate cuts 
after Black Wednesday. 

However, the Bank of 


Rngiand is not looking at the 
past but trying to monitor 
price pressures two years 
ahead. Which factors will 
determine future inflation 
depends, in part, on which eco- 
nomic school one believes. But 

the main indicato rs are: 

• Money supply. M0 (mainly 
notes and coins) has been 
growing well outside its 04 per 
cent monitoring range but the 
government points to low 
interest rates, which reduce 
the cost of holding cash, as the 
main reason. Growth in M4 
(broad money) is still at the 
low end of Its 3-9 per cent mon- 
itor! ng range. 

• Producer prices. Manufac- 
turers’ costs are still falling. 
Input prices dropped 25 per 
cent in the 12 months to Febru- 
ary. but output prices rose 3.7 
per cent over the same period, 
showing that manufacturers 
have been widening margins. 

• Wage rises. The rate of 
growth in wages is much 
slower than when Britain last 


emerged from recession in the 
early 1980s. Average earnings 
grew at only 3 per cent in the 
year to December. 

• Commodities. The resur- 
gence of enthusiasm for gold (s 
died by some, induriing the 
US Federal Reserve, as an indi- 
cator of Inflationary expecta- 
tions. But the price of oil 
remains subdued at around 
$1350 a barrel. It is hard to see 
much inflationary pressure 
from this area. 

• World conditions. Inflation 
is subdued in most of the 
developed world. Even in the 
US, where the Federal Reserve 
has began to raise rates, the 
annual rate is little higher 
than that in the UK. The 
effects of the devaluation of 
sterling in September 1992 
seem to have worked through 
the system. 

The Immediate future for the 
headline rate of inflation Is 
quite promising. The months 
about to drop OUt Of the annual 
comparison - February and 
March 1993 - saw the RPI rise 
by 0.7 and 0.4 per cent respec- 
tively. 

So the Governor and the 
chancellor have a mixed pic- 
ture to discuss. The balance of 
inflationary indicators is prob- 
ably positive but the reaction 
to last month’s base rate cut 
might persuade them that cau- 
tion Is needed. 

In its February report, the 
Rank died "inflationary expec- 
tations" as a crucial factor in 
future price movements: so the 
authorities may not want to 
risk being characterised as 
being soft on inflation by cut- 
ting rates too soon. 


Britain in brief 



Tories stand 
by attorney 
general Lyell 

Hr Michael Heseltine’s 
evidence to the Scott Inquiry 
came under fire from Conser- 
vative MPs last night as Sir 
Nicholas LyeU fought growing 
pressure on him to quit as 
attorney-ge neraL 

Tory backbenchers said Mr 
Heseltine. trade and industry 
secretary, had "gone over the 
top" in accusing Sir Nicholas 
of giving contradictory advice 
about his duty to sign public 
interest immunity certificates. 

But there was also wide- 
spread support for Mr 
Heseltine’s disclosure that he 
resisted pressure to sign certif- 
icates because of fears that 
vital evidence in the Matrix 
Churchill exports-to-Iraq trial 
would be suppressed. 

Mrs Margaret Beckett, 
Labour’s deputy leader, 
demanded Sir Nicholas’s resig- 
nation during rowdy Com- 
mons exchanges, but Hr Tony 
Newton, the leader of the Com- 
mons, said Mr Heseltine had 
been advised “quite properly” 
by Ore attorney general. 

Downing Street also offered 
strong support to Sir Nicholas. 
A senior official said he had 
the “fall confidence” of the 
prime minister. 

But friends of Sir Nicholas 
said he was convinced he 
would be cleared by Lord Jus- 
tice Scott, and was determined 
to resist resignation unless he 
is strongly criticised in the 
judge's final report. 


Minister scorns 
claims over aid 

Allegations that Britain’s over- 
seas aid programme was linked 
to arms deals with several 
countries were dismissed as 
“absolute nonsense" by Mr 
AJastair Goodlad, foreign office 
minister of state. last night 
He told the House of Com- 
mons that the foreign affairs 
select committee should be left 
todeal with claims that a con- 
tract to sell Elba of arms to 
Malaysia was won because the 


UK gave £234m aid for building 
the Pergau hydroelectric dam. 

Mr Douglas Hurd, foreign 
secretary, is due to give evi- 
dence to the committee later 
today. 

Mr Goodlad also condemned 
suggestions that British com- 
panies who contributed to Con- 
servative party funds had been 
the main beneficiaries of con- 
tracts arising from overseas 
aid and trade deals. 


Cable deal for 
cricket contest 

A consortium of cable televi- 
sion operators have acquired 
exclusive UK broadcasting 
rights to the 1996 Cricket 
World Cup. The 37 matches in 
India, Pakistan and Sri Lanka 
will be relayed to the UK by 
satellite. The deal is a sign 
that the UK cable operators 
are becoming confident 
ffl i o n g h to enter the market for 
major exclusive sports rights 
for the first time. 


Jump in UK 
receiverships 

The number of l/K companies 
entering receivership or 
administration jumped by 
more than 50 per cent to 248 
last month, according to fig- 
ures from the official London 
and Edinburgh Gazettes ana- 
lysed by accountants Touche 
Ross. 

The total for the first two 
months of the year was -Ul. 
compared with 772 for the 
same period last year. 


Big increase 
in moviegoing 

The success of Aims such as 
Jurassic Park helped to 
encourage dramatic increases 
in UK dnemagomg last year, 
according to the ilth annual 
survey of the industry. 

The research for the Cinema 
Advertising Association (Cav- 
iar), found that 69 per cent of 
those aged over 7 said they 
visited the cinema, the highest 
proportion in recent history 
and an increase of 4m on 1992. 

Hie number of people visit- 
ing the cinema regularly, 
defined as once a month or 
more, increased from II per 
cent of the population to 14 
per cent, accounting for a total 
of 7.139m visits test year, a 
rise of 28 per cent compared 
with the previous year. 


“When planning for 
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and that’s what York can 
give you. ” 


Richard France 

Erdman Lewis 


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Take the h-ain free and see for yourself. 


f Simply complete ihe coupon and we'll send you a free First Class 
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THE DISTINCT ADVANTAGE 


OHei of Irw fiNI ClMt r«um fail MJteti 
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WL 

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Foreign and Colonial Emerging 
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FINANCIAL TIMES WEDNESDAY MARCH 2 1994 


AN EUROPE 


Ideas people at 
back of the field 

Clive Cookson and 

techflologicaj ad van- Andrew Fisher explain 
how Europe is failing in 
the race to innovate 


E urope is being left 
behind in the race 
for scientific and 
technological advan- 
tage between the 
world's main industrialised 
countries. It takes only a tew 
Statistics to show how far 
Japan and the US have pulled 
ahead and how rapidly they 
are increasing their lead. 

While high technology prod- 
ucts account for nearly a third 
of US exports and more than a 
quarter of Japan's, they mafrp 
up less than a fifth of those 
from western Europe. Figures 
from the European Patent 
Office show that Europe is tell- 
ing behind the US and Japan 
in registering new inventions. 

Mr Paul Braendlt the EPO's 
president, finds it alarming 
that initial patent filings in 
Europe have not increased at 
all since 1987, while those in 
the US have risen by 30 per 
cent and in Japan by 8 per 
cent 

“That is already a good indi- 
cation that in Europe we are 
lazy in innovating or do not 
exploit our innovations," Mr 
Braendli says. “Something 
must be wrong.” 

Yet comparing national 
strengths in science and tech- 
nology is a hazardous exercise, 
bedevilled by incompatible def- 
initions. In principle, the 
inputs - resources devoted to 
research and development - 
are simple to assess. It is far 
harder to measure the quantity 
and quality of different coun- 
tries' scientific output 
Input data from the OECD in 
Paris show that Europe fell 
behind the US and Japan in 
overall R&D spending during 
the 1980s. The European per- 
formance was held back partic- 
ularly by the UK - the only 
industrialised country that 
devoted a smaller proportion of 
gross domestic product to R&D 
in 1991 than in 1981 - and Ger- 
many. where there was only a 
marginal increase. France and 
Italy pushed up spending more 
rapidly, from a lower base. 

In 1991, the 12 EU countries 
devoted L96 per cent at GDP to 
R&D, compared with 2.74 per 
cent in the US and 297 per 
cent in Japan. Only Germany 
(2.66 per cent) came dose to 
the American and Japanese 
levels. 

Stripping out the high levels 
of military R&D in the US and 
some European coon tries, 
Japan takes a clear global lead. 
It spends 2-8 per cent of GDP 
on civil science and technol- 
ogy. compared with 2.1 per 
cent in the US and 1.8 per cent 
in the EU. 

There are many possible 
ways of assessing the output of 


R&D. Its industrial impact can 
be measured indirectly by the 
export/import ratios of sdence- 
based industries. These show 
Europe's weakness in comput- 
ers and office machinery, with 
a ratio falling from 054 fa jggs 
to 0.39 in 1990 (compared to 
396 for Japan and 095 for the 
US) - and its strength in phar- 
maceuticals, where the ratio in 
1990 was 1.78 (compared to 092 
for Japan and L65 for the US). 

But success in manufactur- 
ing industries depends on 
many factors besides R&D, 
such as management and aaipa 
skills and quality control A 
more direct technique for 
assessing strength in science 
and technology is to measure 
the quantity and quality of 
patents and scientific papers 
produced by a company or 
country. 

Europe’s total share of US 
patents - seen as the most reli- 
able measure of competitive 
strength - has declined since 
I960, due to a dramatic expan- 
sion by Japan and more 
recently by the newly industri- 
alised Asian countries. But 
again, the decline is ter from 
even. “The figures clearly 
show European countries 
going down the tubes in elec- 
tronics but continuing to hold 
their own in areas where they 
have traditionally been strong, 
such as drugs, medicines and 
biotechnology, " says Dr Fran- 
cis Narin, president of CHI 
Research, a consultancy based 
in New Jersey, which tracks 
patents issued in the US. 

I n drugs and medicines, the 
combined share of US 
patents held by Germany, 
France and the UK slipped 
from 22.7 per cent in 1982 to 
1BJ. per cent in 1992. In electri- 
cal equipment, the correspond- 
ing European share fell from 16 
per cent in 1982 to 10.1 per cent 
in 1992. 

However, there are bright 
spots in Europe’s sdence-based 
industries - even in electron- 
ics. Siemens of Germany, the 
largest European electronics 
group, is investing DM2.4bn 
(£9 00m) in Dresden, eastern 
Germany, to develop and make 
powerful memory chips for the 
telecommunications and 
vehicle markets. And Philips, 
the second largest, is challeng- 
ing the Japanese dominance of 


liquid crystal displays for por- 
table com p ut er s, with a F1200m 
(£7Qm) plant next to its R&D 
centre in the Netherlands. 

In Sweden, Ericsson is 
investing 22 per cent of its 
turnover on developing 
advanced new telemmmiinirsi - 
tions products. It decided 
boldly in 1991 to spend 15 times 
as mucb on R&D as on divi- 
dends, although some inves- 
tors were horrified. Now Erics- 
son has 60 per cent of the 
world market for digital mobile 
phone systems and more than 
a third of its total orders are 
for products that did not exist 
two years ago. 

But on the whole Europeans 
are less willing to take risks 
with R&D than Americans - 
both at the corporate level and 
at the level of the individual 
researcher. The Japanese may 
be conformists as individuals 
but they move boldly as com- 
panies, as Sony showed when 
it created the Walkman mar- 
ket 

Reluctance to take risks is 
one of many factors - social, 
cultural, political, educational 
and fin ancial - blamed for 
Europe’s failure to translate 
basic research more effectively 
into faster economic growth. 
Although there is no consen- 
sus about the relative impor- 
tance of these reasons, few 
doubt that Europe's continuing 
fragmentation is an important 
handicap in the race with the 
relatively homogeneous US 
and Japan. 

In general, therefore, 
Europe’s strongest suit is pure 
science. The further away a 
field lies from potential com- 
mercial application, the more 
likely it is that Europe will be 
ahead. The latest example is 
high-energy physics: Cera, the 
particle physics laboratory 
near Geneva on which 19 Euro- 
pean countries spend £40Qm a 
year, will have an undisputed 
world lead for at least a gener- 
ation, following last year’s can- 
cellation of the US Supercon- 
ducting Supercollider (SCS). 

The next discoveries about 
the fundamental forces and 
particles that hold the Uni- 
verse together are hkely to be 
made in Europe - which may 
provide some intellectual con- 
solation to Europeans if the 
coming decades bring eco- 
nomic decline. 


Prospects lie in IT’s 
rapid rate of change 


Electronics 


By Alan Cane 

E urope's contribution to 
the evolution of informa- 
tion technology in the 
two decades following the 
invention of the microproces- 
sor has been strong in telecom- 
munications but weak in 
microelectronics and comput- 
ing. . 

One measure is commercial 
success. Of the world’s 12 lead - 
ing telecoms equipment com- 
panies in 1991, seven were 
European. Compare this with 
Europe's overall position in 
information technology: only 
12 of the world's top 100 IT 
companies in 1992 were Euro- 
pean-owned, according to Data' 
motion magazine. Europe’s top 
three. Siemens-Nixdorf, Oli- 
vetti and Groupe Bull, con- 
tinue to lose money heavily. 

Europe's strength in tele- 
coms is chiefly a consequence 
of protected markets. Most 
European telecoms authorities 
and their suppliers continue to 
enjoy the protection of regu- 
lated and monopolistic 
regimes. The European elec- 
tronics and computer compa- 
nies have never had similar 
protection but their relative 
failure involves complex frj 0- 
tors including recession, inade- 
quate finance and insular mar- 
kets which do not encourage 
economies of scale. 

Europe's weakness also has 
much to do with its consistent 
failure to contribute techni- 
cally to the IT revolution. 

It seems continually to be 
catching up rather than lead- 
ing. Meanwhile, the US is 


ploughing ahead with plans for 
a national information high- 
way, for example, while 
Europe is still debating the 
issue. 

There is an exception. 
France invented, developed 
and championed the ’‘smart” 
or computer card. It has now 
been adopted all over the 
world for applications ranging 
from an electronic key to an 
electronic wallet 

The world market for micro- 
processors. nevertheless, is 
owned by the US companies 
Intel and Motorola. Packaged 
software, both systems and 
applications, is dominated by 
US suppliers such as Microsoft 
and Lotus. The design of large 
computer systems has been 
increasingly relinquished to 
the US and Japan. 

How serious is the situation 
for Europe? Mr Pasquale Pis- 
torio. chief executive of SGS- 

Thomson Microelectronics. 

puts it bluntly: “No advanced 
industrial society can exist 
without controlled access loan 
advanced electronics industry, 
which in turn cannot exist 
without controlled access to an 
advanced semiconductor Indus- 
try." This sort of thinking has 
generated a raft of attempts to 
turn the tide, chiefly in the 
form of EU research pro- 
grammes encouraging pan-Eu- 
ropean collaboration In “pre- 
competitive" research. Last 
year EU ministers decided that 
information technology should 
have the lions' share (282 per 
cent or about £3bn) of the bud- 
get for the Framework 
Research programme radend- 
ing from 1994-98. 

It will be the fourth such 
programme. Has the money 


been wen spent? There have 
been some successes. EU 
funds, for example, went into 
the development of the ARM 
microprocessor, a small, fast 
chip designed for high- volume 
production and well suited to 
tiny computers and games 
machines, which has been 
adopted by Apple for its New- 
ton pocket computer. 

On the other hand ES2 - 
once hailed as the greatest suc- 
cess of the Eureka programme, 
a Europe-wide initiative sup- 
porting market-oriented 
research - has failed to live up 
to the highest expectations. 

The ES2 story is instructive. 
The company, based in France 
and owned by a consortium of 
European industrial groups, 
was founded to exploit what 
was thought to be a large 
emerging market for chips 
which could be quickly cus- 
tomised by electron beam for 
specific applications. At first it 
looked likely to fidfil its prom- 
ise, then the technology 
changed and chips which could 
be tailored more cheaply 
gained a hold on the market. 

ES2 remains profitable but it 
has not been a success on the 
scale envisaged. “The analysts 
got their forecasts wrong," 
soys Mr Robin Saxby, formerly 
at ES2 and now chief executive 
of chip-maker ARM. 

Europe's best hope for the 
future seems to lie in the phe- 
nomenon which damaged ESS'S 
prospects - the dramatic rate 
of change in the IT industries. 
No European chip maker could 
hope to capture a share of the 
personal computer micropro- 
cessor market - , but the trend is 
to gniaitor devices, opening a 
window for ARM. 


The great 
research 
divide 
widens 


Lagging in R&D 


By Clive Cookson 
and Andrew Fisher 


D r George Poste. 
research director of 
SmithEline Bee chain, 
the Anglo-American pharma- 
ceutical group, and Prof JQr- 
geu Drews, Ms counterpart at 
Roche of Switzerland, divide 
their time almost equally 
between the US and Europe - 
reflecting their companies' 
5030 split of R&D facilities on 
either side of the Atlantic. 
Both find the scientific infra- 
structure more hospitable in 
the US. 

The most important factor 
in determining where sdence- 
based companies invest in 
research is the availability of 
R&D personnel, Dr Paste says. 
“I don't think Europe has the 
same long-term potential as a 
source of skilled personnel as 
the US." 

Although European univer- 
sities are widely praised for 
the quality of their basic 
research, many industrial sci- 
entists say they lag behind 
their American counterparts 
in providing a useful service 
to industry, either as a source 
of well educated graduates or 
as a partner is collaborative 
research projects. 

An industrial research man- 
agers agree that a fundamen- 
tal handicap for Europe is its 
political, cultural and eco- 
nomic fragmentation. 

That makes it harder to 
mobilise technical resources 
for large-scale strategic pro- 
grammes. 

Dr Prank Carrubba, an 
American who moved from 
California to the Netherlands 
in 1991 to become chief techni- 
cal officer of Philips, says an 
Important example is the Clin- 
ton adminis fa natinn ’s ambitious 
programme to stimulate the 
construction of "information 
superhighways” - communica- 
tions networks that will even- 
tually enable every home and 
business to receive a wide 
variety of multimedia elec- 
tronic services. "The US is 
already ahead by 2% years, if 
not more, in many areas of 
multimedia and the informa- 
tion society.” 

Dr Carrubba says Europeans 
need to appreciate the extent 
to which the Clinton pro- 
gramme has galvanised the US 
electronics and Information 
industries into action. 
"There’s an incredible political 
drive behind it, with 
[Vice-President] A1 Gore going 
from school to school, town 
meeting to town meeting, tak- 
ing about information super- 
highways. 

The problem is that Europe 
is not putting tins high on the 
political agenda. There bave 
been some good individual 
projects here but very few 
focused efforts.” 

Europe has had success with 
focused efforts at high-techcol- 
laboration in the past One is 
the European Space Agency 
whose efforts to develop a reli- 
able satellite launcher have 
led to a commercial operation 
in the form of Arianespace, 
with more than half of the 
world market Arguably, Air- 
bus is another in the aerospace 
field. Research collaboration 
on a broader front has been 
gathering pace through the EU 
Framework progra m mes. The 
Fourth Framework Pro- 
gramme will direct 12bn ecu 
(ESbn) at a wide range of pro- 
jects over the next five years, 
from computing to the life sci- 
ences. 

But as Dr Poste sees it "the 
challenge is to move from a 
culturally fragmented commu- 
nity to a union that can har- 
ness its enormous scientific 
potential. 

It is still bedevilled by the 
need to make sure that every- 
thing is spread equally across 
the community, rather than 
being directed to where it 
would do the most good." 


Annual %gr 

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aforitfn % 

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fftw) 

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of sales 

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US 

Automotive 

3.91 

4.47 

Cfcfrnter'-aartz 

Germany 

Automotive 

3.80 

9145 

Stamens 

Germany 

Bectricata 

3.42 

10.68 

IBM 

US 

Computing 

3.38 

7ns 

Ford 

US 

Automotive 

2.86 

4.33 

Hitachi 

Japan 

Etectncats 

2.75 

6.69 

Toyota Motor 

Japan 

Automotive 

ZJST 

4.40 

Matsushita Electric 

Japan 

Soctricafs 

221 

SSI 

Fujitsu 

Japan 

Computing 

2.07 

11.39 

AT&T 

US • 

Telecoms 

1.92 

4.78 

Tashfca 

Japan 

Electricals 

1.68 

6.74 

NEC 

Japan 

Bectricals 

1.60 

8.78 

ABB 

Swtaa/Swmflsh Etoctrlcata 

1.58 

B.06 

Nippon Telegraph 

.Japan . 

Telecoms 

1.52 

4.48 

PtfHps 

Netherlands 

Electricals 

1.33 


Sony 

Japan 

Bectricals 

1 27 

8.30 

Nissan Motor _ 

Japan 

Automotive 

1.27 

3.74 

Bayer 

Germany 

Chemicals 

126 

792 

VW 

Germany 

Automotive 

1J22 

3.61 

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1.22 

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Bum Prospects: Pair 


Wisdom in hills above Nice 

H alf-buried on the hills m puter industry has led to 

outside Nice in the CASE STUDY: job losses at Digital (now dt 

south of France sits a SouHla AntiDOHs* e ~' "*“ m —* * 


H alf-buried on the bills 
outside Nice in the 
south of France sits a 
unique cluster of high-technol- 
ogy companies and research 
establishments. 

Off-duty scientists jog by 
low-slung buildings, housing 
pharmaceutical laboratories 
and computer centres that han- 
dle world-wide transactions for 
clients like Citibank or Air 
France. This is Sophia Anti- 
polls, set up at the end of the 
1960s to bring top-class brain- 
power to a landscape of Medi- 
terranean pines and solar-pow- 
ered street lights. 

The science park, named 
after the Greek word for “wis- 
dom” and the historical name 
for nearby Antibes, has grown 
into a small town. It provides 
jobs for 16,000 people of 40 
nationalities, as well as places 
for 2,000 students at an exten- 
sion of Nice university. 

Sophia AntipoUs - about to 
celebrate its 25th anniversary 
this summer - has come of 
age. However, it is still strug- 
gling to make an impact in 
overcoming the main problem 
faced by European science: 
leaping the hurdles between 
the laboratory and the market- 
place. 

Mr Philippe Boulanger, the 
youthful managing director of 
a five-year-old telecomm unica- 


CASE STUDY: 

Sophia Antipolis, 
science park 

On France’s sun-filled 
Mediterranean coast, scientists 
strive to commercraSse laboratory 
ideas. Not everyone, however, 
can find the winning formula 

David Marsh reports 



tions concern, Access Privi- 
lege, illustrates one way the 
obstacles can be overcome. 
After receiving a doctorate at 
Nice university, he established 
his company with three part- 
ners in a small office complex 
offering stunning views of the 
Alps. 

His company has just been 
bought by the Sagem tele- 
phones group, in a deal that 
will make him a millionaire. 
Mr Boulanger says his success 
has been based on specialising 
in a field (in his case, networks 
using Apple computers) where 
there was effectively no compe- 
tition. He admits, however, he 
knows only one other person 
in France who has had a simi- 
lar breakthrough. 

Another success story is 
FDM Pharma, based here since 
1981. This 200-strong company, 


which has hitherto doubled 
turnover every year, uses 
sophisticated computer tech- 
nology to record hospital drugs 
tests for US and European 
pharmaceutical companies. Mr 
Benoit Bouche, the 33-year-old 
chainnan, says he brought the 
company to the science park 
after a top US scientist he 
wanted to hire refused to move 
to its original headquarters in 
Lille in northern France. 

The official tally of corpora- 
tions - totalling 980 - high- 
lights the site’s attractiveness. 
Those present range from large 
concerns like Thomson, Digital 
Equipment. AT&T and Well- 
come to many small businesses 
employing less than 10 people. 

Companies in the computer 
field have, however, been fee- 
ing difficulties. The interna- 
tional downturn in the com- 


puter industry has led to 400 
job losses at Digital (now down 
to 600 staff) and similar cute at 
nearby research establish- 
ments of IBM and Texas 
Instruments. 

Mr Pierre Bernhard, director 
of the Sophia AntipoUs branch 
of the public sector computer 
research institute Inria, says 
the site's magnetic qualities 
affects even those who have 
lost their jobs. Many computer 
engineers who have recently 
been made redundant have 
stayed an to start new busi- 
nesses. 

Sophia Antipolis places a lot 
of hope on companies in the 
health care sector. Mr Jacques 
Le GuUIerm. managing direc- 
tor of the local offshoot of Cor- 
dis, the US medical group, says 
the science park has been 
saved by its multi-disciplinary 
structure. "If we had simply 
had information technology 
here, it would have been cata- 
strophic." Cordis research and 
production staff here has 
grown from 150 to 200 during 
the last 18 months. 

Mr Le Guillerm praises 
exchanges between pharmacol- 
ogical engineers and informa- 
tion technologists at Sophia 
Antipolis. "Synergy is now 
starting to take off." A long 
journey, however, stiU lies 
ahead. 


A much quieter beat to the bio rhythm 


Biotechnology 


By Clive Cookson 


C ompared to the entre- 
preneurial and scientific 
ferment of the US bio- 
technology industry, the Euro- 
pean scene seems sedate. 

Europe has nothing to match 
America’s estimated 1,300 bio- 
tech businesses - 240 of them 
public companies - nor the 
volume of hype about their 
research, achievements, gener- 


ated by a public relations 
machine keen to keep inves- 
tors happy. But the huge gap 
visible between the activity in 
the US and Europe does not 
reflect such a big difference in 
real achievements. 

“Don't be misled by the sight 
of a thousand biotech flowers 
blooming in the US." says Mr 
Brian Ager, director of Senior 
Advisory Group Biotechnology, 
a European industry body. “We 
don’t have a full-scale industry 
hut we have large European 
companies using biotechnology 


within their operations." Euro- 
pean pharmaceutical and 
chemical groups are plugging 
Into US biotechnology through 
a network of R&D alliances 
with independent American 
biotech companies. Roche of 
Switzerland led the way with 
its $2.1bn purchase of a major- 
ity stake in Genentech in 1990; 
the Swiss group also has 
minority stakes in Chiron and 
Protein Design Labs and col- 
laborative agreements with 
Amgen, Synergen and Hybri- 
don, among others- Glaxo of 


the OK is working with half a 
dozen US biotech companies. 

“Most large European com- 
panies have embraced biotech- 
nology, though it took years to 
convince some of them that 
hiotech was not a fed." says 
Prof Jurgen Drews, Roche’s 
head of international R&D. 

The weakness of European 
biotech, as Prof Drews sees it, 
is “that somehow the transla- 
tion of the science Into entre- 
preneurial activity doesn’t 
work welL This has something 
to do with 1 he legislation that 


has stigmatised biotechnology 
in some European countries.” 

Dr Peter Doyle, research 
director of Zeneca, the UK bio- 
sdence company, says biotech 
is the ana of sdence in which 
Europe has been handicapped 
by over-regulation. But he and 
other leaders of the European 
biotech Industry are express- 
ing more confidence that the 
political tide is turning. 

This is the fifth port of a 
10-pori series. Tomorrow: 
Environment. 


V: • 




10 


MANAGEMENT 


FINANCIAL TIMES WEDNESDAY MARCH 2 1994 


Malcolm Wheatley reports on a 
recent convert to vendor appraisal 

Score card for 
the suppliers 

against the company's “score 


IS 


hat it takes to be a successful director 


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Acheivorr.i.'nt motivation • • • 

Determination ■ 

Eusiriess sense • • 

Resilience • • 

Integrity , • • 


Qualities 
that count 

Lucy Kellaway studies a new list 
that attempts to set standards 
in Britain's boardrooms 


Y ou do not need to be a “total 
quality- management” 
fanatic to recognise that 
most companies would benefit 
considerably bom making regular 
and detailed assessments of the 
performance of their suppliers. 
Marks and Spencer, the UK 
retailer, has done so for decades. 
Yet, except in retailing; “vendor 
appraisal” - the American term 
for the approach - still seems 
stuck on the starting block. 

US computer company Sun 
Microsystems, a relatively recent 
convert, says that its experiences 
with the practice bear out two 
claims made for it that it raises 
suppliers' performance, and that 
they in turn benefit from, and 
appreciate receiving, performance 
tracking. 

Supplier effectiveness is crucial 
to the survival of the $4bu (£2.7bn) 
company, explains Mel Friedman, 
vice-president of corporate 
supplier management Sun has 
used its expertise with the “Sparc” 
chip behind Us range of 
high-powered minicomputers to 
create an impressive global 
customer base, but has fought 
shy of a heavy manufacturing 
involvement 

“Fifty five per cent of every 
revenue dollar goes to suppliers," 
says Friedman. It is unique among 
the group of companies with 
which it competes, he points out 
for operating without any chip 
fabrication facilities of its own. 

In part the strategy has paid 
off Sun’s steady revenue growth 
has outstripped the more 
vertically-integrated IBM, Digital 
Equipment and Hewlett-Packard 
by several orders of magnitude. 

But earnings per share have been 
more erratic, and four years ago 
prompted the company to seek 
an improved - and more 
consistent - performance fiom 
its suppliers. 

Given its high level of 
dependence on suppliers, the 
company was also determined 
to monitor their effectiveness over 
a broader spectrum than price, 
quality and delivery reliability. 

In order to assess the total cost 
of dealing with a supplier, 
suppliers’ on going technological 
development and back-up support 
mattered too. Friedman argues. 
Each supplier's performance 


card is reviewed quarterly with 
members of the supplier’s senior 
management The long-term 
objective is to dispense with 
periodic measurement and have 
the data online. 

Several thing * make the Sun 
scheme stand out One Is the way 
it has been extended beyond the 
core of suppliers who produce 
• parts to go inside computers; 
airlines and car rental companies 
have also been assessed. Another 
is striving to avoid fuzzy 
measurements, even in areas such 
as technical capability. 

The company looks at suppliers’ 
investment levels and what 
Friedman describes as their 
“technological road map" with 
precisely formulated expectations. 
With printed circuit boards, for 
example, particular levels of 
expertise are set as minimum 
standards. 

Targets are constantly made 
tougher; three years ago “on time 
delivery” meant delivery within 
a time >v»id stretching from three 
days early to one day late. Now 
it means two days early and zero 
days late. 

Moving the goalposts has 
disguised progress: although 
suppliers’ score card performance 
has only improved from L33 to 
1.23 (1 is a “perfect" score, 2 is 
failure) since the scheme's 
inception, this is mfalflflriing On- 
a constant measurement criteria 
basis, claim* Friedman, suppliers’ 
performance has shot from L33 
to 1.00 - In other words, to a level 
that Sun regarded as perfection 
three years ago. 

Suppliers’ attitudes have been 
very positive, says Friedman. “It's 
a symbiotic relationship,” he 
argues. “The attributes we 
measure help the supplier." 

Alastair Kelly, managing 
director of Design, to Distribution, 
the newly autonomous 
subcontract manufacturing 
operation of UK computer supplier 
IGL. agrees. 

The volume of Sun business 
which he undertakes has grown 
tenfold to $34m since 1990, and 
he has now imposed the Sun 
vendor assessment approach on 
his own suppliers. “It’s (he best 
bit of free benchmarking I get," 
he says. 


W hat does it take to 
make a good chief 
executive? And what 
to make a good chair- 
man, or a good executive director? 
What about non-executives? 

These seem pretty baste questions 
yet they are ones which companies 
rarefy ask themselves. While aca- 
demics write papers about “key 
competences”, there are few signs 
that boards of directors take any 
notice. 

Last week the UK’s Institute of 
Directors and the Henley Manage- 
ment College attempted to answer 
the questions in a way that they 
hope will be of practical use. 

With admirable precision, they 
have drawn up a list of no fewer 
than 29 qualities which are deemed 
- ess e nti al in boardrooms of compa- 
nies from the biggest to the small- 
est. They have considered, each dif- 
ferent role on the board and 
all o cated the qualities accordingly. 

. The chief executive turns out to 
need all hut four of these qualities, 
the chairman needs 18, the execu- 
tive directors need just 10, while 
son-executive directors need only 

fling, The iriwa is that ivirrrpanloa 

have a yardstick against which to 
hire new directors and to measure 
existing ones (sending them off on 
courses to acquire those qualities 
which they do not possess). 

The lists are part of an even more 
ambitious project to set general 
standards tor all aspects of board 
behaviour and performance. When 
IoD and Hailey set about writing 
such guidelines - at the govern- 
ment’s Invitation - it quickly 
became clear that there was little 
point in discussing the tasks of 
boards without reference to the 
quality of Its members. 

The fists are likely to be one of 
the most controversial parts of thair 
report*. The authors are asking for 
comments, but may not be prepared 
for what may be a lively debate, to 
put it politely. There will be 
screams of protest from those who 
reckon the wrong qualities have 
been selected, as well as from those 
who feel directors are so diverse 
than is little point in looking for 
ffimmnn characteristics 
Victor Dutewicz of Henley Man- 
agement College, co-author of the 
repeat, warns that it is still only in 
draft form, and that in any case the 
lists are mi*ant to be applied with 
flexibility. “We are not saying this 
is the list We are saying; use it as a 
starting point” 

% argues that the selection of 
British directors is dangerously 
amateurish. Companies use sophis- 
ticated tests when recruiting senior 
and middle managers - sending 
them to assessment centres and 
running psychometric tests, yet 
when it comes to choosing the most 
important people, most decisions 
are made on a seat-of-the-pants 
basis. “These fists are more system- 


atic than the methods some compa- 
nies are using,” he says. 

Even so, people are already argu- 
ing that the list is not complete, and 
is full of inconsistencies. For 
instance, it is not clear why chair- 
men need to be good talkers but 
chief executives do ‘not Nor why 
non-executive6 need to be good at 
criticising, but need not be so good 
at analysing problems. Worse, 
many people - Sir Adrian Cadbury 
among them - would say indepen- 
dence is the most important trait of 
the non-executfve. Yet this is 
nowhere an the list. 

Colin Coulson-lhomas. a cademic 
and consultant In boardroom prac- 
tice, agrees the list contains 


same alar ming omissinna . Directors, 

he says, must be self-aware. They 
must be constantly learning. They 
must also be robust as individuals. 
“Some people seem to be doing well, 
but they are skating on thin ice. 
lhe moment anything looks danger- 
ous they resign.” 

In response, Dulewicx points oat 
that the list was not something 
dreamed up by the authors, but 
reflects the distilled views of 340 
experienced directors. As such, it 
says much about the current preoc- 
cupations of boards. The only two 
qualities which are deemed essen- 
tial for all board memhpr* are integ- 
rity and a “change orientated" dis- 


feels obliged to pay at least lipeer- 
vice to integrity, while managing 
rhang i* is a concept so fashionable 
that it is heresy to question it 

More fundamental are the com- 
plaints that the very nature of the 
project is flawed. Headhunters who 
maim a living by selecting directors 
reckon that lists are unusable as a 
practical tool. “In theory it might he 
useful to have a checklist But you 
couldn't recruit using this," says 
Ian Butcher of Whitehead Mann. 

Coulson-Thomas argues that the 
m ain weakness of fists is that they 
cannot taim account of the relation- 
ship between board members. “Peo- 
ple can be excellent on one board 
and hopeless on another. It is to do 
with whether they complement the 
strengths of other board members. 
There is no ppm* to putting them 
through a test if they are going to 
prove incompatible," he says. 

He reckons that the skills you 
need as a manager are relatively 
easy to dwiina, and therefore lend 
themselves to formal assessment 
By contrast at board level an out- 
standing director might fail on 
many of the listed qualities, yet 
have two or three dazzling 
strengths that more than compen- 
sate for their weaknesses. “Those 
people tend to be lost when people 
use models of indentikit candi- 
dates," Coulson-Thomas says. 

Even those commentators who 
are friendly to the idea of a list of 
qualities are worried about the 
application. John Hunt of the Lon- 
don Business School refers to aca- 
demic research that has succeeded 
in HnMng certain qualities of direc- 
tors to company performance. Many 
of are stmliar to those on the 
IoD list. They include “interper- 
sonal skills”, strategic awareness, 
information processing and motiva- 
tional drive. 

However, he reckons the lists can 
still be dangerous in the hands of 
careless companies. “They are an 
improvement on the ’do you know 
Fred, he’s a good chap’ sort of 
recruitment,” says Hunt But there 
Is a risk that some organisations 
are assessing people on these char- 
acteristics bat are using dubious 
instruments. They might be looking 
for the right qualities, but they 
have no Appropriate mm of find- 
ing them 

While not everyone agrees with 
the report, most would argue that 
the present boardroom practice is 
for from ideaL Recent research in 
the UK has shown «h»t fewer than 
one in rfght companies makes any 
attempt to measure the effective- 
ness of its directors. Regardless of 
the value of the 29 qualities, any- 
thing that gets companies to ques- 
tion whether their directors are 
suited to their jobs is progress. 

*Good Practice for Boards of Direc- 
tors. IoD and Henley Management 


Europe's 

most 

admired 

S enior European company 
executives are being 
invited to “vote* for 
Europe’s Most Respected 
Companies in a new survey by 
the Financial Times In 
association with Price 
Waterhouse. 

Business leaders will be asked 
to nominate companies in their 
particular sector based on seven 
specific qualities. 

They wfll be asked to consider 
the standard of customer focus, 
customer loyalty and service, 
the quality of employees, 
products and services, and the 
company with the most 
outstanding business 
performance - for example, 
the company that has shown 
consistent growth and long- 
term profitability, is a 
low-cost producer or whose 
results are used as a benchmark 
by others. 

participants wifi also be asked 
which company to their 
industry demonstrates dear . 
leadership and management 
qualities. 

Other questions cover which 
companies have the most 
effective strategy, perhaps in 
terms of policy and objectives 

or response to opportunities 
in the emerging European 

market, and which companies 
care abort the environment 
Finally, respondents are 
invited to nominate the 

company which they admire 

overall. 

Almost 2,000 chairmen, chief 
executives and finance officers 
from 640 European companies 
are being invited to take part 
to the survey. The companies 
span 21 sectors and include the 
largest quoted, state-owned and 
private companies to 17 nations 
from Portugal to Turkey. 

The results of the confidential 
questionnaires are expected, to 
provide a fascinating insight 
into which companies command 
most respect from their peers, 
and why. 

The Financial Thues plans 
to publish the results of the 
survey, and the winners of the 
award for Europe’s Most 
Respected Companies, to the 
newspaper lata* this year. 

Paul Taylor 


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12 


FINANCIAL TIMES WEDNESDAY MAKCH 2 1994 


BUSINESS AND THE ENVIRONMENT 


Disposing of 
mounting piles of 
waste is one of the 
hardest environ- 
mental problems for 
governments to get 
right. Few have yet 
done so. The issue 
causes political pit- 
falls. in many industrialised coun- 
tries, recycling is one of the few 
"green" issues which reliably stirs 
up public passion even when reces- 
sion has muted other concerns 
about the environment. It gives 
economists headaches: are taxes or 
regulation the best tools, and how 
tough should they be? 

These debates also take place 
against a backdrop of scientific con- 
troversy about which disposal 
methods harm the environment 
least, a debate handicapped by a 
shortage of thorough research. 
"Much recycling does not make eco- 
nomic sense - and some of it uses 
more energy than it saves,” says 
Steve Webb, policy director of the 
UK’s National Association or Waste 
Disposal Contractors (NAWDC). 

Industrialised countries are now 
grappling with attempts to improve 
the control of solid waste from 
every part of their economies, from 
households and industry to agricul- 
ture and mining. 

The European Union is working 
on a new directive to insist that a 
majority of packaging is recycled. 
More than 70 countries worldwide - 
with the notable exception of Rus- 
sia - agreed last month to ban 
dumping of radioactive material at 
sea. North Atlantic countries have 
signed a similar, tighter, treaty 
restricting many kinds of industrial 
dumping at sea. 

Meanwhile, the US SuperfUnd leg- 
islation on cleaning up contami- 
nated land, one of the most ambi- 
tious pieces of environmental 
regulation yet passed, is soon due 
for re-authorisation. Superfund’s 
critics argue that full compliance 
could cost the private sector S500bn 
(£342bn) and the government’s 
defence and energy departments, 
and that overhaul of the rules is 
urgently needed. 

This legislative effort on solid 
waste tends to be greatest in devel- 
oped countries. For these parts of 
the world, air and water pollution 
can seem more pressing - a ranking 
of priorities acknowledged by the 
Chinese environment ministry, for 
example. 

Yet although much regulation 
has been in the pipeline for years, 
recession in industrialised countries 
has made industry more reluctant 
to pay. It has stimulated questions 
as to whether the rules will really 
protect the environment and 
whether the price being asked is too 
high. 

Putting numbers on the size of 
the world’s waste problem is diffi- 
cult. partly because defining waste 


Bronwen Maddox examines the debate surrounding 
waste disposal around the world, in the first of a series 

Politics ahead 
of science 


Landfll pricing (per tonne)* Composition of municipal waste 1990 (96) 


Country 

Range 

Franca 

£20-36 

Germany 

£40-60 

Italy 

£40-60 

Finland 

£14-29 

Naths 

£26-70 

UK 

£8-18 

Spain 

£2-10 

Sweden 

£10-43 

Australia 

£3.50-12 

New Zealand 

£12-18 

US 

£10-44 

Latin America 

£2-4 

SE Asia 

£1.50-5 



* Municipal solid waste 

is no trivial question. Proponents of 
waste-to-energy - incineration of 
rubbish to extract heat - argue that 
much household rubbish can be 
regarded as a raw material. What is 
waste at one time can be re-ex- 
ploited later - witness the growing 
practice of washing east European 
slag heaps to extract more coaL 

Occasionally problems of defini- 
tion lead to farce. Polish steel mak- 
ers have suffered shortages of steel 
scrap to melt down because Polish 
scrap has been exported to earn 
hard currency, but imports of scrap 
have been restricted because it was 
defined as waste, steel industry 
companies say. 

Nevertheless, OECD figures sug- 
gest that municipal waste grew at 
between 1-2 per cent a year during 
the 1980s, slightly behind growth in 
GDP. Recession slowed that growth, 
but European waste companies 
expect the rate soon to resume to 
that of the last decade. 

Figures also point to a second 
problem: the growing proportion of 
plastics, which contain complex 
chemicals, sometimes toxic, that 


maicp thorn hard to recycle. In the 
past 15 years, the proportion of 
municipal waste made up of plastics 
has risen by several per cent in 
most OECD countries to between 8 
per cent and 15 per cent, largely at 
the expense of glass. 

Countries are now weighing up a 
range of solutions for tackling these 
trends. One vocal lobby says that 

The enthusiasm for 
recycling shows how 
politicians’ impulses 
can lead to rules 
which are damaging 

waste disposal costs (and energy 
costs) should rise steeply to encour- 
age companies to use resources 
more efficiently. 

Companies acknowledge that this 
works: ICL the international chemi- 
cals group, says that its paints divi- 
sion has cut its waste by more than 
half in the past four years because 
of tighter regulation. 


Source; OeCOWxMfey wtmna 

But economists, such as Dieter 
Helm, director of Oxera, the Oxford- 
based forecasting group, argue that 
measures like these simply produce 
a one-off shift in behaviour, and 
avoid longer term questions of pick- 
ing the right waste strategy. 

The main options, once the waste 
exists, are recycling, incineration, 
burying it or dumping in rivers and 
the sea. The tendency of regulation 
in the past few years has been to 
encourage each country - some- 
times each company or town - to 
deal with its own waste. In particu- 
lar, that has cut down the opportu- 
nities for dumping at sea, one of the 
cheapest outlets. 

But many argue that these strate- 
gic decisions have not been taken 
on the basis of scientific evidence. 
The UK government, which last 
month si gned the London Conven- 
tion against damping radioactive 
waste at sea because of “the weight 
of international pressure”, argued 
that “scientific evidence shows that 
dumping at sea under controlled 
conditions causes no harm to the 
marine environment”. 


However, at home, its own enthu- 
siasm for recycling has come under 
similar attack. NAWDC argues that 
while recycling aluminium cans 
saves energy, recycling plastics 
does not - a conclusion which Dow 
Chemicals supports. 

According to Webb: “Politicians 
concentrate on household waste 
because people like to be tuld to 
recycle.” But household waste 
maVps up only 20m tonnpg - around 
a seventh - of the total, including 
industrial and commercial waste. 

The consequences of shaping 
complex regulation with too little 
regard to the underlying science are 
serious, however an extra burden 
on industrial costs that could harm 
competitiveness. 

True, the sharp differences in 
landfill costs between countries (see 
table) are pertly the result of local 
geography. In the Netherlands, 
fears of polluting the water table 
mean that landfills are scarce while 
in tiie UK. geology and extensive 
quarrying for building materials 
have left a large number of suitable 
holes to be filled in. and lanrifffl 
absorbs around 85 per cent of waste. 

But the disparities are also due to 
the strictness of regulation. Waste 
companies this week warned the 
UK government that its proposed 
waste management rules could add 
a third to Landfill costs, and propos- 
als for a EU landfill directive would 
have an even greater impact 

Perhaps the best example of the 
difficulty of jud g in g the impact of 
waste regulation is the German 
packaging recycling scheme. The 
mandatory recycling targets pushed 
Duales System Deutschland, the 
scheme operator, into near-bank- 
ruptcy and mounds of unwanted 
paper and plastics were sent across 
the German borders. 

Politicians have appeared tolerant 
of the environmental lobbies, which ' 
have gradually ruled out cheap 
ways of disposing or waste. But the 
enthusiasm for recycling in particu- 
lar shows how their im pulses nan 
too easily lead to rules which are 
expensive and even environmen- 
tally damag in g 

David Pearce, a leading environ- 
mental economist and former 
adviser to the UK government 
points out adeptly in his recent 
book. Blueprint 3 - measuring sus- 
tainable development, that waste 
disposal is an area where govern- 
ments have been particularly pom* 
in weighing up costs and benefits. 
The risk, he warns, is that their 
strategies lead to inefficiency and a 
waste of resources. 

Some of the legislation in the 
pipeline - in particular the EU 
packaging directive - offers a 
chance to remedy those flaws. But 
in general, waste maTMgpmpnt is a 
case of politics running too far 
ahead of economics and science. 

Next week' S article focuses on Japan. 


Buddhists clash 
with hoteliers 

Emiko Terazono on efforts to 
preserve Japan's ancient capital 


W alking through the dark 
wooden gates of Konryuli, 
Kyoto's oldest Buddhist 
temple* visitors are greeted by a 
sign politely refusing entry to those 
staying at the Kyoto Hotel. 

The temple is one of 1,000 in 
Japan's ancient capital embroiled 
in a longstanding row with the 
city's oldest luxury hoteL Hie 
Kyoto Is being rebuilt Into a 
high-rise structure doe to be 
completed this summer. 

For the past three years, the 
Kyoto Buddhist Association has 
been protesting that the height 
of the new hotel - 60m - could 
detract from the skyline of the 
ancient religions and cultural 
city. 

“Of course we can’t really check 
where people are staying, tat it’s 
onr way of standing our ground, 9 
says Chikou Kiyotaki, Kouryuji’s 
chief priest 

The Japanese are destroying with 
their own hands even what the 
Americans chose to presave, ” be 
says, referring to the decision by 
the US air force during the second 
world war not to bomb Kyoto’s 
numerous temples and gardens. 

In 1988, restrictions on the 
height of buildings in Kyoto were 
eased from 45m to 60m in an effort 
to boost development and 
investment But Akira Nakajima, 
a lawyer and leader of a group 
of residents against the urban 
development of Kyoto, says the 
height restriction had protected 
the view of the mountains 
surrounding the city. 

The Buddhist monks lost a 
lawsuit against the hotel in 1992, 
but have continued to apply 
pressure. They have been calling 
for the disclosure of the city’s 
approval procedures for buildings. 

Last year the city council 
announced new construction laws 
to protect certain areas around 
historic foundations. 

Meanwhile, the city’s efforts to 
revitalise the industrial area south 
of the city, including the 
reconstruction of Kyoto station, 
have met with controversy. 

Kyoto’s business community 
regards the new station as the 
main celebratory project of the 
city’s 1,200th anniversary this year. 
The city council and local 
businessmen asked seven leading 
architects, including the late Sir 
James Stirling and Peter Busmann, 
to submit designs for the station. 



u 


FT Asia- 
Telecoms 





Pacific 
Analyst 'w. 

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Company 


Country 

Telephone. 


PEOPLE 


Fisons finds FD in Hankinson 


Fisons has concluded the long 
search for a finance director by 
appointing David Hankinson. 
formerly of Ranks ETovis 
McDougaU and Lucas Indus- 
tries. 

Hankinson. 54, is a 
wen-known figure among the 
ranks of finance directors. He 
achieved some prominence a 
year ago when he left RHM on 
its takeover by industrial 
group Tomkins, only five 
months into a three year con- 
tract earning £160.000 a year. 
This came less than a year 
after he left Lucas Industries 
with a £352,000 handshake. 

From 1989 to 1992 he was 
finance director at Lucas 
Industries and. between 1986 
and 1989. finance director at 
Rover group holdings. He left 


Constructive 

careers 

Gerald Kaye, a former director 
of London & Edinburgh Trust, 
has been appointed develop- 
ment director of Helical Bar, 
which has development 
schemes planned in Cardiff, 
Edinburgh, Leeds. Manchester. 
Coventry, Guildford. Theaie, 
Camberley. Hayes and Bristol. 

Kaye. 35, is a chartered sur- 
veyor who started his career at 
Knight Frank & Rutley where 
he specialised In office develop- 
ment consultancy. In 1986 be 
joined London & Edinburgh 
Trust, the property developer 



when the government sold its 
stake in the company to Brit- 
ish Aerospace. 

Hankinson graduated In law 
from Cambridge and qualified 
as an accountant with Arthur 


that was later sold to SPP. the 
Swedish insurance group. 

He spent the past two years 
as chief executive of SPPJLET 
Europe, and was responsible 
for a £250m European invest- 
ment portfolio in Austria, 
France, Germany, the Nether- 
lands, Italy, Portugal and 
Spain. 

The most recent develop- 
ments he has been involved 
with are the 100,000 sq ft 
Almack House in London’s St 
James, which was forward sold 
to the Dutch fund PGGM and 
the 85,000 sq ft development of 
Agriculture House in Knights- 
bridge, forward sold to Credit 
Foncier de France. 

Helical Bar is increasing its 


Andersen. After 11 years there, 
he joined Midland bank as a 
financial controller and moved 
on. via George Wimpey, to 
Guthrie Corporation, his first 
finance director post in 1979. 
He worked at Wilkinsons 
Sword and Chloride before Sir 
Graham Day headhunted him 
to be group finance director at 
Rover. 

Fisons has been hunting for 
a finance director since the 
early retirement of Roy 
Thomas in December 1993. It is 
still seeking a chief executive - 
Cedric Scroggs was ousted in 
December 1993 when the com- 
pany issued a profits warning. 
“A number of candidates” have 
been seen and the search is 
continuing. Fisons said yester- 
day. (See Observer) 


development activity with the 
aim of creating profits for rein- 
vestment in high yield retail 
and industrial portfolios. 

■ Terry Roydon has been 
appointed deputy chairman 
and chief executive of 
PROWTZNG; he is succeeded as 
group md by David Brill, 
chairman of Galliford Homes. 
David Brill, md of Galliford 
Homes, has been appointed a 
director of Prowling following 
its acquisition of Galliford. 
Tony Betney. md of Galliford 
(UK), has been appointed to 
the main Galliford board. 

■ Tony Davies and Ian 
Franklin have been appointed 
directors of EBC GROUP. 


Chikou Kiyotaki: standing Ms ground 

A 400m- wide by 60m-hJgta glass 
and concrete avant garde structure 
designed by a Japanese architect 
was chosen. 

Norihisa Taniguchi, managing 
director of the station planning 
company, says the building, which 
will be completed In 1996, will 
become the new symbol of the city 
- the “Eiffel Tower of Kyoto". 

The group in support of 
development in central Kyoto 
claims residents have the right 
to a normal rity life. "People don't 
want to live in old wooden houses 
and become victims of construction 
restrictions,” says Takeshi Tanaka, 
managing director of the Kyoto 
Hotel. 

He c laims the city is experiencing 
a population drain, especially with 
university campuses moving out 
due to building height Limits, 
taking the students with them. 
Nakajima argues, however, that 
development in the city is driving 
people away, adding that it should 
"not be just about building 
high-rise buildings”. He says tfae 
city planners of Kyoto lack a 
comprehensive vision of what the 
city should look like. 

Although temples around the 
foot of the mountains surrounding 
the city have remained unscathed, 
many in central Kyoto have not. 
The wave of urban development 
daring the economic “babble" in 
late 1980s enabled developers to 
construct office buildings and 
condominiums aro und the small 
temples and shrines in the centre 
of the rity. 

Kiyotaki offers the 
pro-development camp a few words 
for contemplation: “If Kyoto ceases 
to become Kyoto, who will want 
to visit?" 


Non-executive 

directors 


Charter acquires directors - only 


FINANCIAL TIMES 

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□ FT Conferences on the subject of international telecommunications. 

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shortly. 


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1 


Charter, the industrial group, 
has named three new non-exec- 
utive directors - but denied 
that their identities gave any 
clue to the group’s well-flagged 

intention of making a substan- 
tial acquisition. 

Charter was left with about 
£150m in cash after unwinding 
its links last year with Anglo 
American Corporation, the 
South African mining group. 

Sir Chips Keswick, joint dep- 
uty chairman of the merchant 
bank Hambros. is retiring after 
six years as a non-executive 
director. Jeff Herbert, Char- 
ter’s chief executive, says Sir 
Chips had been appointed to 
the board to represent the 
South Africans, but had agreed 
to stay on until the restructur- 
ing process was completed. 

Sir Chips's role as City 
heavyweight will be filled by 


Peter Alien, who will join the 
board as a non-executive when 
he retires from Coopers & 
Lybrand at the end of AprIL 
Allen. 55, has worked for the 
accountancy firm since 1963. 
He became managing partner 
In 1985 and was appointed dep- 
uty chairman in 1990. 

The two non-executives 
appointed with imm ediate 
effect are John Neill and Neil 
Johnson. Neill. 46. is chief 
executive of Unipart Group 
and has considerable experi- 
ence in the automotive supply 
industry. Johnson. 44. has 
spent most of his career in 
engineering: He was formerly 
director-general of the Engi- 
neering Employers’ Federation, 
following a period with British 
Aerospace. He is general secre- 
tary of the RAC. 

Herbert says the background 


of neither man gives a lead on 
his plans to add an extra leg to 
Charter’s businesses, which 
supply equipment to the min- 
ing and rati industries, and 
building products, including 
quarrying. He says: “Both have 
considerable experience in 
industry - that is the impor- 
tant thing. They are also 
slightly younger - which 
should give them more 
energy." 

Charter believes most quoted 
UK companies look overvalued 
and is more likely to buy a 
division from a multinational 
or consider countries where 
companies are on a lower rat- 
ing. Herbert says: “We have 
been casting our net a bit 
wider. There are several inter- 
esting things we are lo okin g at 
right now - but we've been 
doing that for some time." 


■ Sir John Banham became 
chairman of TARMAC 
yesterday and Sir Eric 
Fountain retired. 

■ Sid Taylor as deputy 
chairman at BENSONS 
CRISPS. 

■ John Rawlings, formerly 
deputy chairman of Morgan 
Grenfell & Co. at HENRY 
ANSBACHER. 

■ Nigel Wray as chairman 
at CARLISLE GROUP. 

■ Robert Phillippe Hoegen 
at CALOR GROUP; Folkert 
Schukken has resigned. 

■ Ian Stewart, former duel 
executive of British Ever 
Ready, at FINE LIST, 
automotive parts distributor 
about to be listed. 

■ Stuart Macdoaald, the 
former chief executive who 
became non-executive last 
September has resigned from 
The SCOTTISH HERITABLE 
TRUST. 

■ Anthony Fay, chairman of 
ERA Group and Reynolds 
Medical Group, at BSS GROUP- 

■ Richard Wesicott, a former 
director of Warburg Securities, 
at HERRING BAKER HARRIS 
GROUP. 

■ Paul Seymour, former chief 
executive of Laurentian 
Financial Group, at 
MARLBOROUGH STIRLING 
GROUP. 

■ Peter Bishop has retired 
from API GROUP. 

■ Gareth Davies, chairman 
of Glynwed International, and 
Frances Elliott public affairs 
director at Tesco, at MIDLAND 
INDEPENDENT 
NEWSPAPERS. 

■ Tony Mite hard, chief 
executive of Avon Rubber, at 
SLATEBOND. 

■ Ronald Armstrong, chief 
executive of Pena 
International, Peter Williams, 
chief executive of David S 
Smith (Holdings), and Brian 
Williamson (below left), 
chairman of Gerrard & 

National Holdings and a 
member of the SIB, at 
ELECTRA INVESTMENT 
TRUST. 

■ Kate Atchley (below right), 
chairman and chief executive 
of Kato Communications, at 
PORTFOLIO FUND 
MANAGEMENT. 












FINANCIAL TIMES WEDNESDAY 


MARCH 2 1994 


13 


ARTS 


'j 


Theatre 

The 3 Lives 
of Lucie 
Cabrol 

W atching the perform- 
ers in Theatre de Com- 
plicite’s current pro- 
duction, The 3 Lives of 
iMcie Cabrol, yon can see what 
extraordinary performers all seven 
of them are. The show reveals afcr> 
bow well the company creates thea- 
tre in umpteen different ways - by 
using movement, speech, music, 
lighting. Props, scenery. But what 
is best is how all this virtuosity 
and variety are directed simply 
into telling the story. And. though 
the story is modern (written by 
John Berger), yon follow this Com 
pUrite version as intensely as yon 
read a Grimms’ fairytale. 

Lucie Cabrol. the story's heroine, 
is a tough, tizzy, gnarled daughter 
of the soil — and an embodiment of 
whatever is indomitable about the 
European peasant spirit. Born fa 
1900, she lives through both world 
wars, working the land, and living 
off it. Same village men depart for 
war, for Paris, for the Americas, 
and of them a few are killed and 
fainred. Other men stay and work 
the land, including two of Lucie’s 
brothers, who betray her and 
final];, when she is in her 40s, turn 
her out So ends Lade's first life. 

The Complicate production tells 
this narrative with wonderful 
seamlessness. We hear of wartime 
deaths; we see the labourers at 
work on the land with their 
scythes; and, of course, the double 
meaning of “scythes" strikes borne. 
Lucie herself, is as sharp and 
strange and aggressive as a figure , 
from myth - Rumpelstiltskin, or 
Puck. 

L ucie's second life is as a I 
loner, living outside the vil- 
lage, selling m ns hr oo ms 
and berries, smuggling cig- 
arettes at a profit hoarding her 
profits vindictively. (The way we 
see her pluck unseen berries, from 
boman “branches", and store 
unseen mushrooms fa her skirts, is 
one of the show's brightest details.) 
Jean, the man who got away with- 
out marrying her, returns, and she 
tells him of her life. She Is so tough 
- and so determined even now to 
marry him - that we think she will 
live forever; but no. The third life 
of Lode Cabrol is as a ghost, claim- 
ing Jean from bey mid the grave 
like some bizarre old goblin Cathy 
haunting some old minor-league 
Heathcliff. 

The 3 Lives of Lucie Cabrol is not 
a perfect show. A few elements of 
the story are unclear and the scen- 
ery for the finale sets up a stronger 
parallel to the Crucifixion than the 
story can sustain. The taped (very 
cinematic) sound accompaniment 
by Christopher Shutt is sometimes 
too intrusive and too crude. 

Even so, this is one of the mast 
riveting pieces of theatre to be seen 
in Britain today. Lilo Boor's imper- 
sonation of Lncie has a terrific 
force (if played occasionally too 
much for effect); and. as Jean, 
Simon McBnrney gives the most 
remarkable performance amid a 
remarkable ensemble. (No wonder, 
for he, with Mark Wheatley, 
adapted the story; and he has 
directed the whole staging.) Some- 
how he manages to be aged before 
his time, perplexed, sensitive, and 
hnggable, all at the same time. 
While Lurie, at the climax of her 
stormy narration, poors out, on her 
knees beneath the Madonna, her 
angry frustrations, the most affect- 
ing thing of all is bow way BlcBur- 
ney, sitting and watching her awk- 
wardly. simply shifts his weight 
He becomes the heart of the story 
and the production. 

Alastair Macaulay 


At Riverside Studios, W6, 
081-748-3354. until April 9. 



Opposite ends of the spectrum: Norman Tebbit and Austin MitcheU on Sky News' political discussion programme Target; and Omar Sharif In made-for-TV series ‘Red Eagle’, Sky 1 

Television /Christopher Dunkley 


What you see when the Sky’s the limit 


I t is 10.30 on Saturday morn- 
ing and on screen a black 
woman is shouting "Git yo' 
arse up boy!” Zap to the next 
channel and you find a stag- 
ing cowboy: “Theer's a hanky tank 
cm ther edge 'o town," he moans. 
Zap on again and you find yourself 
looking at a big close-up of a jew- 
elled ring. “It’s a convenient ring to 
wear at any time." says a woman 
with an estuary accent Which ring 
isn't, you wonder, as you note the 
price; £114 plus £380 p&p. Flick for- 
wards once more and you see three 
teenagers sitting at a table. "The 
Revenoo Act of 1797 was inner- 
dooced ter replace the Stamp Act," 
says one. His friend who is d rinking 
milk through a straw laughs and 
the milk shoots out of his earn. 

This is satellite television. The 
black woman is on the pop video 
channel MTV. The cowboy appears 
to be on the Discovery channel 
which specialises in old American 
documentaries, but their transpon- 
der is being shared by CMT (Coun- 
try Music Television). The conve- 
nient ring is on QVC, a shopping 
Channel which, ast onishing ly, you 
cannot watch without paying a sub- 
scription. even though its output 


consists solely of sales pitches from 
a twam of cloned presenters. The ear 
trick occurs on the Americas chil- 
dren's nhanwri Nickelodeon. 

If your satellite dish, like most, 
points at the Astra satellite you can 
now receive 48 diannrfg fa addition 
to BBC1, BBC2, ITV and C4. 
Depending upon the time of day, 
anything between 20 and 30 of these 
will be in foreign languages, nearly 
all German, though Galavision is 
Spanish, JSTV Japanese, and TV 
Asia, which piggybacks on the tran- 
sponders of Nickelodeon and Sky 
Movies Gold, is fa various Asian 
languages. On most days, at times 
when most people are free to view, 
there are now 17 satellite channels 
delivering programmes in En glish. 
Eleven cf these are entirely or pre- 
dominantly American: Bravo (old 
movies). Children's (many * car- 
toons), CNN (news). Discovery & 
Chirr, Movie Channel, MTV, Nickel- 
odeon, Sky Movies. Sky Movies 
Gold and Sky L The services which 
can reasonably be called British are 
the shopping channel QVC, Sky 
News, Sky Sport. UK Gold (showing 
old British TV series) and the wom- 
en’s channel. UK Living. Eurosport 
is international. 


About 3.5 million people in 
Britain live in homes which have 
paid to get access to these extra 
services, mostly via dishes, though 
a minority are served by cable. The 
mafn channel provider is, of course, 
Rupert Murdoch’s News Interna- 
tional via its television out- 

fit, Sky, in which Pearson (owner of 
the FT) has a significant stake. 
Since Sky scrambled most of its 
channels last summer and began 
charging subscriptions varying 
from £7 to £20 a month for different 
“packages", more and more people 
have been paying a monthly fee for 
this form of extra television. The 
smallest package costs £83.88 a year 
which is more than the BBC licence 
fee. If yon take the whole Sky pack- 
age the annual fee is £23988. 

Y et the remarkable fact is 
that the people who pay 
these prices still spend 
much the larger part of 
their viewing fcimp watching the old 
terrestrial channels. Using the 
BARB figures jointly issued by the 
BBC and iwimna-riiii television for 
the week ending February 13, the 
most recent available, it is possible 
to construct the following “Top 10 


Channels" list based on audience 
share inside satellite and cable 
equipped homes; 

1. ITV; 29.9 per cent 

2. BBCL 26.0 per cent 

3. C4: 7.7 per cent 

4. BBC2: 58 per cent 
4. Sky 1: 58 per cent 

6. Sky Movies: 38 per cent 

7. Movie Channel; 3.6 per cent 

8. Sky Sports: 23 per cent 

9. UK Gold: 28 per cent 

10. TNT/Cartoon: 2.1 per cent 
This accounts for 808 per cent of 

viewing. The other 10.1 per cent is 
split between the other satellite 
channels with Sky News, for 
inufamne, taking LI per emit and the 
Family Channel 0.4 per cent. Thus 
even in homes where the satellite is 
available, the four old terrestrial 
channels take a 69.4 per cent share 
while the d pMiy t of s atellite chan- 
nels all put together achieve only Si 
per cent Why? The fashion now 
among the satellite people is to 
argue that we should not see their 
channels as alternatives but merely 
as adjuncts. There is some strength 
fa this where the specialised chan- 
nels are concerned; viewers can be 
expected to dip fa and out of Sky 
Sport or The Movie Channel and 


not watch them as they might 
watch, say, BBC1. The same hardly 
applies to Sky 1. however, which set 
out to be a general entertainment 
channel capable of challenging sim- 
ilar channels. Yet it only manages 
to match BBC2's share. 

The satellite does offer items 
unavailable elsewhere. Once you 
have the service fa the house. Sky 
News and CNN quickly become 
your first reference points for 
breaking news: you do not have to 
wait for the fixed bulletins at 7.00 
pm or 980. In the past week I have 
seen, on UK Gold, the final episode 
of The Hitch Hiker's Guide To The 
Galaxy which I missed twice on the 
BBC. On Sunday night the Movie 
Channel screened The Lover, a film 
which some would regard as soft 
pom but others might say was a 
non-violent Ai No Corrida. It cer- 
tainly has enough ex plicit eroti cism 
to ensure that the strait-laced ter- 
restrial channels will not show it 
For those who can take the tedium, 
the German channels regularly 
offer a teutonic type of Cary On 
movie featuring much Iederhosen 
and bonking; since the dialogue is 
irrelevant it is no disadvantage to 
speak no German. And the Sky 


News political discussion. Target, 
with Norman Tebbit aud Austin 
Mitchell interrogating somebody, is 
nearly always good value. 

Is that enough to justify the extra 
outlay? Almost certainly not in 
most ordinary homes. It is not an 
inspiring experience to switch to 
the satellite, zap through 20 or 30 
channels, and find that virtually all 
of them are showing old American 
material featuring, naturally 
enough, American accents and 
American values, from guns to god. 

B etween 7.00 this evening 
and 180 tomorrow morn- 
ing Sky l offers nine 
series, aE bought second- 
hand from tiie US, and nothing else. 
I had hoped to be able to add that 
the first major drama to be commis- 
sioned by Sky 1, an adaptation of 
the Ken Foliett thriller Red Eagle, 
screened in two-hour chunks on 
Sunday and Monday, proved that 
matters were Improving. Unfortu- 
nately, although the locations and 
credits said “Money!”, this was a 
distressingly poor piece of work, 
badly directed, brimful of cliches, 
and badly acted. 

Matters can only improve, surely. 


A Greek tragedy in Moscow 

Arkady Ostrovsky reviews ‘The Oresteia' 


T he German theatre director 
Peter Stein could hardly 
have found a better venue 
for the ancient Greek trag- 
edy, Aeschylus's Oresteia, when be 
arrived in Moscow; the stage of the 
“Central Theatre of The Soviet 
Army”. 

Just as in Aeschylus's times when 
the audience would spend the whole 
day in theatre, Stem’s production of 
The Oresteia lasts 9% hours. The 
theatre works as an ideal set it 
seems only natural when the great 
warrior Agamemnon appears on 
this stage decorated by military 
symbols. On stage is a high black 
wall with a big door in the middle. 
Every entrance or exit through the 
door brings tragic news or death to 
the city of Argos, represented by a 
chorus of 12 men dressed in black 
coats. 

All the leading parts are played 
by the same actors who make up 


the chorus. Each actor fa turn steps 
out of the crowd fa order to play his 
part The black wall sets off the 
appearance of Clytemnestra (Eka- 
terina Vasilyeva). She is the only 
one who never steps back into the 
chorus - she stands out not only as 
a character, hut as an actress as 
welL 

The kflifag of Agamemnon and 
Cassandra is one of the best scenes 
in the whole production. According 
to the rules of Greek dra m a the 
killing takes place behind the black 
wall, inside the house. We see only 
the result. Soiled with blood, 
Clytemnestra appears on the mov- 
ing platform. The dead bodies of 
Agamemnon and Cassandra lie at 


her feet Blood slowly streams from 
the platform onto the floor, dytem- 
nestra’s monologue is accompanied 
by the monotonous sound of drip- 
ping blood; by the end of her speech 
it makes a big puddle. 

Vasilyeva's Clytemnestra is a 
mixture of goddess and barbarian. 
She stands, with feet wide apart fa 
black stockings, with a tucked up 
skirt; her white shirt Is tied fa a 
knot. Clytemnestra has been 
waiting for this moment for ten 
long years, since Agamemnon killed 
their daughter, Iphigenia. S he bolds 
a sword and smiles, probably exper- 
iencing the same feeling of satisfac- 
tion as Agamemnon did when Troy 
fefl. 


For her, the killing of Agamem- 
non is justified and lair. After her 
monologue, it seems fair to the 
audience also. In fact, every murder 
in this tragedy is justified: but the 
pool of blood threatens to engulf 
them 

Unfortunately, however, the trag- 
edy ends when the actress disap- 
pears from the stage. All that hap- 
pens after this resembles a 
Christmas pantomime. Athena Dies 
like a fairy across the stage in a 
silver dress: Apollo appears in a lau- 
rel wreath, with a lyre fa his hands; 
the badly made-up Furies run up 
and down the stage as if trying to 
frighten bad boys and girls who fail 
to listen to their parents. 


All this seems totally divorced 
from the previous two parts. Apollo 
here is a trivial joker, who would 
hardly be capable of sending Ores- 
tes off to kill Gytemnestra since he 
is too busy making cheap comments 
about the jury and flirting with 
Athena. Members of the jury 
behave like the Russian parliament 
and the whole trial scene turns into 
a rather primitive skit on Russian 
political life. 

Stefa, in apparently deciding to 
“update" this great tragedy, made a 
mistake: Russian audiences no lon- 
ger appreciate superficial political 
hints fa the direction of the gov- 
ernment. Paradoxically, the high 
tone of Ekaterina Vasilyeva's acting 
reveals much more about the prob- 
lems of the modem world than any 
of the Apollo's cheap jokes. 


In Moscow, then goes on tour fa 
Germany 


Welsh head quits 

M atthew Epstein, general 
director of Welsh National 
Opera, resigned yesterday. 
St David's Day. writes Antony 
Thorn croft 

He gave as his reason the parlous 
financial state of the WNO. “This 
year's funding decision, and those 
intimated for the future, are simply 
not acceptable in the face of the 
WNO’s record of international artis- 
tic success and acclaim.” 

Epstein, an American, led the 
WNO for just under three years. He 
recently announced redundancies 
and cancelled productions brought 
about by a deteriorating financial 
situation. 

Taken with the threats of Simon 
Rattle to quit the CBSO for similar 
reasons it will put pressure of Peter 
Brooke, Heritage Secretary, to raise 
arts funding. 


1 International | 

1 A _ 1 

AB 

LTS 

GU 

ID 

E| 


■ BONN 

Oper Tonight Dennis Russell Davies 
conducts Gian Carlo del Monaco’s 
production of Les Contes 
d'Hotfmann. Mon: Eva Lind song 
recital. March 13: first night of new 

ballets by John Butler and Youri 
Vamos, music by Carl Orff. Davies 
takes Orchestra of the 
BeethovenhaHe on tour to the US 
from March 5 to 23 (0228-773667) 


■ COLOGNE 

Philharmonic Tonight Antoni Wit 
conducts Polish Radio Symphony 
Orchestra in works by Wojciech 
Kllar, Chopin and Brahms, with 
piano soloist Babette Hierhoizer. 

Fri Labeque Sisters piano recital. 
Sat I Muaci di Roma plays baroque 
concertos. Sun morning, Mon and 
Tues evenings: John Fiore conducts 
GOrzenteh Orchestra in Brahms. 
Prokofiev and Strauss, with piano 
Soloist Hae Jung Kim. Sun 
afternoon: Borodin Quartet. Sun 
evening: Gidon Kramer and friends. 
March 1 1: London Philharmonic. 
March 12. Maazel conducts 


Bavarian Radio Symphony 
Orchestra. March 13: Harnoncourt 
conducts Chamber Orchestra of 
Europe. March 16: SawaHisch 
conducts Vienna Symphony 
Orchestra. March 20: Andras Schrff. 
March 23: Alfred Brand el 
(0221-2801) 

Opemhaus This month’s repertory 
includes Rigoletto with Leontina 
Vaduva as Gilda, Fidel to with Ben 
Heppner and Lis beta Bate lev. 
Jochen Ulrich’s choreography of 
Peer Gynt and Harry Kupferis 
production of Shostakovich's The 
Nose (0221-221 6400) 
SchauspfeUiaus A new production 
of Camus' Caligula, directed by 
Werner Schroeter, opens on FrL 
Repertory also Includes 
Shakespeare’s As You Like It and 
GOnter Kramer’s radical version 
of Fiddler on the Roof (0221-221 
8400) 


■ DRESDEN 

Semperoper A new production of 
Handel’s Belshazzar opens on Sun, 
conducted by Jdrg-Peter Welgle 
and staged by Harry Kupfer. with 
a cast including Iris Vermillion and 
jochen Kowalski. Repertory includes 
Sektra, La boheme,' Der fliegende 
Hollander and Prokofiev’s ballet 
Romeo and Juliet (0351-484 2323) 


■ DUSSELDORF 

Deutsche Oper am Rhem A new 
production of Parsifal opens on Sun. 
conducted by Raff Weiksrt and 
staged by Kurt Hones, with a cast 
headed by Wolfgang Schmidt and 
Kurt Moll. Repertory also Includes 
La boheme and Swan Lake 
(0211-890 B21V 


Schauspteffiaus A new production 
of KJeist’s Amphitryon, directed by 
David Mouchtar-Samorm, opens 
on Sat in the Kleines Haus. 
Repertory includes Shakespeare's 
Romeo and Juliet Lorca’s The 
House of Bemarda Alba and 
Brecht’s Mr Puntila (0211-369911) 


m FRANKFURT 

Alts Oper Tonight Christian Tetzlaff, 
accompanied by Leif Ove An dsn os, 
plays violin sonatas by Mozart 
Ravel, Janacek and Grieg. 

Tomorrow and next Wed: Borodin 
Quartet plays Shostakovich. Fri: 
ivo PogoroJich piano recital (069-134 
0400) 

JahrhunderthaHe Hoechst 
Tomorrow: Antoni Wit conducts . 
Polish Radio Symphony Orchestra 
In works by Wojciech Kilar, Chopin 
and Brahms, with piano soloist 
Babette Hierhoizer (069-360 1 240) 
Oper This month's repertory 
consists of Simon Boccanegra with 
jos6 ran Dam in titfe role, Peter 
Mussbach’s production of From 
the House of the Dead and Herbert 
Wernicke's new staging of Duke 
Bluebeard's Castle, opening on 
March 13. All are conducted by 
Sytvatn Csmbreling (069-236061) 


■ HAMBURG 

Staatsoper This month's repertory 
includes a new production of 
Henze's Die Bassariden, conducted 
by Markus Stenz and staged by 
Christine MieJrtz, and a Ring cycle 
with caste heeded by Gabriele 
Schnaut, Simon Estes and Siegfried 
Jerusalem- Anna Tomowa-Srntow 
sings the titfe role In Ariadne auf 
Naxos on Fri. and Dmitri 


Hvorostovsky gives a song recital 
on March 21 (040-351721) 


■ LEIPZIG 

Opemhaus Tonight, Tues: 
Stravinsky ballet programme 
choreographed by Uwe Schofz. 
Tomorrow: II barbiere di Siviglsa. 

Fri: two Schotz ballets. Sat Don 
Giovanni (0341-291036) 
Qewanctaaus Tomorrow, Fri: Kurt 
Masur conducts Gewandhaus 
Orchestra in works by Tchaikovsky 
and Schubert, with violin soloist 
Sarah Chang. Sat an evening with 
Peter Ustinov. Sat (Kleiner Saal): 
Olaf B8r song recital. Sun: Phflippe 
Entnamont is conductor and piano 
soloist with MDR Chamber 
Philharmonic in works by Schubert, 
Mozart and Haydn. More Masur 
conducts opening concert of 1994 
Leipzig Trade Fair. Tues: Karl 
Qsterrelcher conducts MDR 
Symphony Orchestra in works by 
Richard Strauss and Franz Schmidt 
(0341-713 2280) 


■ LYON 
Op6ra Robert Careen's 
widely-acclaimed Aix production 
of Britten’s A Midsummer Night’s 
Dream can be seen on Fri, Sun and 
next Tues. Nevflle Marriner gives 
concerts with the Academy of St 
Martin in the Reids on Sat and Mon, 
and conducts Mozart's It re pastore 
on March 16, 18 and 20. James 
Bowman gives a recital on March 
15 (tel 7200 4545 fax 7200 4546) 


■ MONTE CARLO 

SaDe Gamier Fri, Sun afternoon, 
next Tues: new production of 


Stravinsky’s Oedipus Rex and The 
Nightingale, staged by Petrika 
Ionesco aid conducted by 
Lawrence Foster, with casts 
Including Lucia Valentlnt-Terrani, 
Vinson Cote and Renato Bruson 
(9216 2299) 


■ MUNICH 

Staatsoper This month's repertory 
Includes Lady Macbeth of Mtseosk 
with Marilyn Schmlege as Katerina. 
Madama Butterfly with Miriam Gaud 
and Peter Dvorsky, Der fliegende 
H oBSnder with Robert Hale and Julia 
Varady, John Cranko’s ballet Onegin 
and Peter Wright's production of 
Giselle. Richard Jones' new 
production of Giulia Cesare opens 
on March 21 (089-221316) 

Gsstefg Tonight Ivo Pogoreflch 
piano recitaL Tomorrow, Fri: Lorin 
Maazel conducts Bavarian Radio 
Symphony Orchestra in works by 
Dallapiccola, Bach and Strauss. 

Sat Georgian Chamber Orchestra 
plays Haydn, Mozart and 
Saint-Saens. Sun: Sinfonia Varsovia 
plays Brahms and Mozart (089-4809 
8614) 


OSLO 

Konserthus Tomorrow, Fri: Hiroshi 
Wakasugi conducts Oslo 
PhiBiarmonic Orchestra and Chorus 
in Grieg’s complete music for Peer 
Gynt March 16, 18: concert 
performances of Bellini's Norma. 
March 17: Academy of St Martin 
in the Fields (2283 3200) 


■ STOCKHOLM 

Royal Opera The main event this 
week is the premiere tomorrow of 


a new production of La Bayadere, 
choreographed by Natalia Makarova 
(repeated March 4, 5. 9, 10, 11, 

24. 25. 26. 29, 30). Repertory also 
includes La boheme and Glen 
Tetley’s ballet The Tempest 
(08-243240) 

Berwaldhaken Niki as Widen 
conducts Swedish Radio Symphony 
Orchestra in two programmes this 
week - works by Sddenman, 
Stenhammar and Atfven tomorrow 
and Fri; Brahms. Hummel and Atfven 
on Sat afternoon, with trumpet 
soloist Hakan Hardenberger (08-784 
1800) 


■ STRASBOURG 

• Nederiands Dans Theater 
presents choreogaphies by Jiri 
Kyllan tonight and tomorrow at 
Theatre Municipal. Andreas Schmidt 
sings Schubert’s Schwanengesang 
on Sat (8875 4823) 

• Theodor Guschlbauer conducts 
a concert performance of Tristan 
ixid Isolde on Sun afternoon at 
Palais da la Musique, with Gabriele 
Schnaut as Isolde (8852 1845) 


■ STUTTGART 

Stiaatstheater Tonight, next Thurs 
and Sun: Maurice BSjart’s 
choreographic version of Die 
ZauberflOte. Tomorrow: Don 
Giovanni. Fri, Sun, next Tues: revival 
of Achlm Frey Sr's production of 
Der FreischOtz. Sat Mon: Marcia 
Haydde's version of Glazunov’s 
ballet Raymonda (0711-221735) 


ARTS GUIDE 

Monday. Berlin, New York and 
Paris. 

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

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

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 

{Central European Time) 
MONDAY TO FRIDAY 
NBC/Super Channel: FT Busi- 
ness Today 1330; FT Business 
Tonight 1730, 2230 

MONDAY 

NBC/Super Channel: FT 
Reports 1230. 

TUESDAY 

Euronews: FT Reports 0745. 
1315, 1545, 1815, 2345 

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY 

NBC/Super Channel: FT 
Reports 1230 

Sky News: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News: FT Reports 0430. 
1730; 







Ian Davidson 


Mr Douglas 
Hurd, UK for- 
eign secre- 
tary, some- 
times claims 
that Britain 
is “winning 
the argument” 
with its Euro- 
pean partners over the future 
shape of the European Union. 
It is not entirely clear how he 

reaches this conclusion. What 
is clear is that most of the 
other broadly based Conserva- 
tive parties in Europe have 
signed up to a manifesto for 
this year's elections to the 
European Parliament which is 
at odds with the beliefs of the 
UK Conservative government 
Europe’s Christian Demo- 
crats have issued a manifesto 
explicitly calling for a federal 
Europe, including a stogie cur- 
rency and a European constitu- 
tion. But even before it was 
published, Mr Hurd was busy 
assuring UK Conservatives 
that their manifesto would be 
totally different, totally British 
and totally non-federaL 
This beautifully British man- 
ifesto is slow to appear. Not 
merely do the UK Conserva- 
tives not agree with those who 
ought to be their natural part- 
ners across the Channel, they 
do not agree with each other, it 
is not easy to draft a text 
which straddles the deep gulf 
between the Europhobes and 
the relative Eunophiles. Inside 
sources say the compromise 
version wfll be virtually devoid 
of content, because the party 
cannot agree a positive policy 
position on Europe. 

One can see the Conserva- 
tives’ problem. They were 
bruised by the Interminable 
struggle over the ratification of 
the Maastricht treaty, and they 
are in no hurry to grapple in 
public with those controversial 
issues once more. And since 
they cannot fight the European 
Parliament election campaign 
on an enthusiastically pro-Eu- 
ropean platform, they will try 
to fight it on an enthusiasti- 
cally anti-Socialist platform. 

H We must avoid a debate 
about ‘Europe - right or 
wrong’," says a party intellec- 
tual. “Therefore, we must engi- 
neer a debate about ‘Europe - 
right or left'.” 

This will be a difficult trick 
to turn; the campaign is more 
likely to turn on the unpopu- 
larity of the government at 
home than on any European 
issues. But even if it succeeds, 
it might not be to the advan- 
tage of the Conservatives. 

The paradox is that Europe’s 


Heads 
in the 
sand 


The UK’s 
Conservatives 
should be 


concentrating 
on Europe 


Socialist parties once fiercely 
combated European integra- 
tion as a big business ramp. 
But they have come round to 
thinking it may have some- 
thing for them after all, in the 
form of quasi-Socfalist pallia- 
tives, such as the Social Chap- 
ter of the Maastricht treaty, or 
a strengthening of democracy 
at the European level. 

Most British Conservatives, 
by contrast, seem to have a 
deep aversion to the Europe 
that is emerging, and are con- 
sequently unable to come up 
with a creative approach to the 


They will soon 
have to face all die 
Maastricht Issues 
again, and stakes 
will be higher 


opportunities it offers. This is a 
great pity. Not because any 
great European issues will be 
decided by this year’s election 
campaign to the European Par- 
liament but because history is 
thundering down an us, and 
the Conservatives will not be 
able to deal with it by averting 
their eyes. 

They want to forget all about 
the Maastricht treaty, and pull 
the bedclothes over their ears. 
But in the 1996 review confer- 
ence, which is less than two 
years away, they win have to 
face all the Maastricht issues 
once more, and by then the 
stakes will be much, higher. 

Take the plan for economic 
and monetary union. Mr John 
Major, UK prime minister, says 
it is as Elusory as a rain dan«%- 
But by the 1996 review confer- 
ence, it wifi be clear that a 
large central core of the Union 
is still determined to go for a 
single currency; and it will not 
be deterred by the reluctance 


of the also-rans. What wffi the 
Conservatives say then? They 
do not know; they merely hope 
It cannot happen; but that's 
not a policy. 

Or consider the Maastricht 
project for a common foreign 
and security policy for Europe. 
The UK’s Conservatives want 
to put brakes on it, in the 
belief that they can hang on to 
the old familiar ingredients of 
British foreign policy: national 
independence, the alliance 
with the US, and the integrated 
Nato organisation. Unfortu- 
nately, the world Is not like 
that any longer. 

In the US this week, Mr 
Major has been trying to resur- 
rect the “special relatio n ship", 
And President Bill Clinton has 
humoured him with some 
friendly TV exposure and an 
overnight stay in the White 
House. But recent events beUe 
these flattering gestures. 

When the US president gave 
a temporary visa to Mr Gerry 
Adams, president of Sinn Fein, 
ft was not to advance the peace 
process in Northern Ireland; it 
was to advance domestic sup- 
port fin 1 his healthcare pro- 
gramme in the US. Mr Clinton 
does not care about a 400-year- 
old colonial conflict in Ireland; 
why should he? 

Or take Bosnia. After the 
mortar attack; on the Sarajevo 
market, the US president virtu- 
ally th reatened a diminu tion of 
US support for Europe’s 
deforce if Britain did not agree 
to the new policy of bombing 
the Serbs. Since the US has 
hitherto done its best to keep 
well away from any engage- 
ment in the Bosnia conflict, 
and shows no sign of being pre- 
pared to get more deeply 
engaged in the future, his 
warning can only be taken as a 
disturbing Indicator of the 
depth of his administration's 
commitment to Europe. ! 

This might not matter if we 
could look ahead to a long era 1 
of peace and sunlit security. In 
fact, events in Russia and some 
of its neighbours make it much 
more likely that we are facing 
a period of profound Instabil- 
ity, and possibly danger. If 
President Clinton prefers to 
lead the western affiance from 
behind, in the case of a local- 
ised civil war in Bosnia, what 
will be his attitude in the event 
of bigger disturbances further 
east? We may not know the 
answer to that question. But a 
prudent politician would 
surely be looking for an insur- 
ance strategy in Europe, not 
begging for reassurance in a 
fmimg “special relationship”. 


L ast week, US super- 
markets received the 
first deliveries of mnir 
produced by cows 
which had undergone a new 
form of hormone treatment 
that greatly stimulates milk 
production. 

The hormone, known as 
bovine soma to trap bin (BST) 
and developed by Monsanto 
and other chemical companies 
at a cost approachlng flbn. is a 
manufactured version of a nat- 
urally occurring hormone. 
Marketed under the name Post 
lac, It has been hailed as an 
im piM+ant advance in bio-engi- 
neering. According to the US 
Food and Drug Administration, 
milk and meat from cows who 
have been treated with it are 
safe and virtually indistin- 
guishable from the normal 
product 

But these benefits have not 
prevented BST being swept up 
in a storm of controversy in 
the US as well as the European 
Union, where a ban on its use 
must be reviewed later this 
year. Fears about the hormone 
centre not just on the possible 
health effects, but also an the 
damage that a sudden surge in 
milk production could do to 
the subsidy-laden agricultural 
economies of Europe and 
North America. 

Use of the hormone in the 
US was finally approved last 
November after decades of 
study and debate. At the same 
time the White House ordered 
a study of the potential impact 
on a market already struggling 
with milk surpluses. This 
showed that BST could boost 
US milk production by l per 
cent a year over the next six 
years. Unless BST triggered a 
big chang 8 in mflh consump- 
tion patterns, the US govern- 
ment would be obliged by its 
dairy support programme to 
buy up almost all of the addi- 
tional production at a cost over 
five years of more than $50Qm, 
an increase of 40 per cent in its 
annnai dairy outlays. 

Although farmers who are 
quickest to use the drug would 
enjoy a short-term profit boost, 
the study suggests that, as a 
result of larger and fewer dairy 
farms and increasing rural 
depopulation, the net economic 
effect ova- five years would be 
to reduce farm income by l per 
cent and shrink dairy hards by 
up to 30 per cent Nor would 
the consumer benefit, because 
the subsidy payments would 
ensure that the retail price did 
not fall noticeably. 

Resistance to BST has been 
building up Air soma time. 
Consumer and farm groups, 
led by Washington-based activ- 
ist Jeremy ftiflnn who heads 
the Pure Food Campaign, have 


ADVERTISEMENT 


Privatization in Hungary 1993 


Thto article to authorised by the State Propert y Agency 


When last year ladles and gentlemen of a mature age rushed the Budapest Stock Exchange with 
compensation notes in hand, many had thought that it was merely the successful action of an old 
illustrious company, Zalakerdmia. At the. as yet, almost insolvent market the demand for shares was 
raised by selling them against compensation, notes. On the other hand, the unexpected Zakdcer&mia 
boom was attributed to Ihe favourable price. The boom, however, continued uninterrupted, and reached 
Its peak last December, when during Just a couple of days die shares of Prtmagdz, the first gas service 
company launched on the Stock Exchange were subscribed. Pick was sold out, and also the Globus 
shares were speedily bought up against compensation notes. Within two or three weeks practically the 
complete package changed owners at a multiple price and the shares of Pick Salami Factory yielded an 
eightfold profit 


1993 was the year of success for privatization - stated 
Tlbor Pongrtcz. Secretary of State. President of the State 
Property Agency, and the Board of Directors of SPA. Against 
foreign currency worth twenty five billion Forints, about 250 
million us Dollars, foreigners bought shops, business shares 
ami shares of the Hungarian companies offered for sale. At 
(he some tune tills was the first year, when local investors 
had become increasingly Important, having purchased 15 
billion Furlnls. I.e. 150 million US Dollars worth of state 
assets, and Just somewhat less. 13 billion Forints- Lc. 130 
million US Dollars were given in the form of compensation 
notes for proprietory rights. Hungarians borrowed 210 million 
Dollars worth of various credit lines, and in total 779 million 
US Dollars worth of state property was sold. 


property (n one form or another. Almost three hundred 
thousand people claimed land, more than one hundred 
thousand new shareholders watch news of stock exchange 
quotations. They axe the people who bought shares In 23 
state-owned companies against compensation notes, and 
exchanged about 6 billion Forints worth of compensation 
notes for shares. People were allowed to win - brokers say- 
but this year's prices are mainly dependent on what kind of 
firms are being offered In exchange for compensation notes. 


U had been a year oT success - the brokers also agreed, 
who realise u never before credited turnover In compensation 
notes transactions, believed to be worthless for a long period. 
Tlte news of the bullish market In December so far restored 
confidence In compensation notes, that long queues can be 
seen Ui (rant of Hungarian post offices. Everybody able to do 
so. tries (u utilise the opportunity made available again on 
February istli and submits their claims for compensation, in 
order to buy state assets Tor the compensation notes 
obtained. Compensation for harm suffered In the past can be 
claimed for one more month. It seems, however, that the 
present profit Is mote Important than past injuries. It is worth 
exploiting (he opportunity, as there will be a supply to buy 
against the compensation notes. In the opinion of stock 
exchange experts, the privatization appearing at the bourse 
aroused from Its winter dream the stock exchange struggling 
under the excess weight of state bonds. It also showed the 
small Investors the road leading there; they had previously 
deposited their money at the banks looking at the Interest 
only. Now. today, the concept of exchange gain - of yield is not 
unknown to them either. 


Last year the Hungarian phone company, Mat&v, 
enjoying a monopolistic position, was sold for a record price. 
This year, however, the Hungarian major banka will follow. 
There are few who dispute that the Hungarian financial sector 
can do with foreign capital Injection. 


And the client and loan consolidation schemes have 
made Hungarian financial institutions desirable targets this 
year. 


The biggest expectations are focussed on the small 
Investor share purchase programme (KRP) to be launched in 
March. Under this programme Hungarian citizens can get a 
loan If not free, under extremely favourable terms and 
conditions worth about 100.000 Forints. le 1000 USD. which 
sum is repayable later, tn order that they can buy shares of 
selected companies. The aim of the government Is to assist' 
those left out of everything else to become owners. Those who 
do not have money and are not entitled to co m pensation, and 
thus were watching Hungarian privatization from outside. 
About 10 bmion Flortnts. Le. 100 mHUon Dollars are allocated 
for this purpose, and according to preliminary information 
shares offered would include not only bank shares, shares of 
the Sopron Brewery, but also of the Hungarian oil monopoly. 
MOL Rt. . 


FINANCIAL TIMES WEDNESDAYMARCH2J221 


jU 


Still, the brokers are not happy, because in their view 
the market Is too volatile at present and also the Institutional 
investors ore absent. The bulk of the turnover Is made by 
foreign investors, who from the West and East equally use 
their money at the Hungarian Stock Exchange in the hope of 
high exchange gains. 


Last year the Hungarian privatization policy primarily 
aimed at mobilising the local market players, avoiding at the 
same time discouraging foreigners. The supply matched these 
objectives, as the foreign, financially strong Investors were 
essentially interested tn the companies oF the 
iL'lccoinniunlcution, oil and food Industry, while the 
Hungarians slowly bought companies and factory portions In 
ilit* small and medium category. 


Last year 404 companies passed from state ownership to 
the private sector and a smaller or larger portion of a further 
185 companies was sold. Privatization affected state assets 
worth about 280 billion Forints, that is cc 2.8 billion US 
Dollars. In companies where SPA is sha re holder, the share of 
foreign investors somewhat exceeds ten per cent. Hungarian 
investors own 17-3 per cent, local governments have a stake 
of 5.75 per cent and the rest is still a part of the SPA portfolio. 


A milk-boosting hormone is causing controversy, 
write Laurie Morse and Alison Maitland 


Transatlantic row 


The future (ale of privatization Is largely dependent on 
how much the depredation of state assets, the bankruptcy of 
companies can be prevented. Last year about 67 billion 
Forints, le 670 million US Dollars were spent on improving 
the operating conditions of state-owned companies. 


The ownership conditions changed radically in past 
yearn, and more than one million people have acquired 


State Property Agency 
Budapest 
Pozsonyl id.56 
H-l 133 HUNGARY 


over a sacred cow 



am ount to tally Wm a year. 
"But it’s an issue of principle,'’ 
said a US official In any ease, 
the US win have greater access 
to the European market for its 
dairy goods under the Gatt 
agreement 

The Gatt view is that an 
import ban would be difficult 
to justify, because products 
may in future only be chal- 
lenged on strictly scientific cri- 
teria as opposed to social or 

ethical considerations. 

However, the matter , does 
not stop at an Import ban. The 
White House report suggests 
that the US might cfaafie&ge 
any of the EU mora- 

torium. "For countries to ban 
BST use, after the hormone 
has been scientifically found to 
be safe, would undermine 
efforts to eliminate unfair 
trade barriers to US exports,” 
it says. 


A t the end of the year, 
farm ministers must 
decide the future of 
BST in Europe. Last 
December, the Commission 
lest its battle to keep the mora- 
torium an BST in place until 
2000. The ministers agreed only 
to extend it until the end of 
this year, saying they wanted 
to monitor Its impact in the 
US, the trade imptfoatfons and 
the effect an European compet- 
itiveness. 

To strengthen its hand, the 
C ommission has assembled a 
kmg Ust of arguments against 
BST. It says that using the 
drug is not compatible with 
Common Agricultural Policy 
reforms designed- to reduce 
milk output, and is likely to 
accelerate the trend towards 
bigger and fewer dairy farms 
and to lead to more cows bong 
slaughtered and more beef cat- 
tle raised instead, adding to 
the beet mountain. 

US officials counter that, if 
fewer cows are needed to pro- 
duce a given amount of milk, 
BST helps the environment by 
cutting manure and methane 
production and the amount of 
water, tond and chemicals 
' used. They say a small well- 
managed farm could benefit as 
much or more from BST use as 
a big, poorly managed one. - 
However, the Commission is 
polishing up a new weapon In 
-its armoury to keep the mora- 
torium going. It argues that 
guaranteeing its dairy products 
free at BST could give the EU a 
competitive advantage ova- US 
exports - and even a chance to 
charge a premium - in world 
markets where BST is other 
not need or not appreciated 
such as In Japan. 

"We didn't think of that,” 
admitted a senior US agricul- 
ture official ruefully. 


staged protests and milk dump- 
ings throughout the US. Ms 
Robin Douthitt, professor of 
consumer science at the Uni- 
versity of Wisconsin, says that, 
while other bio-tech projects 
aim to produce a better tomato 
or a tastier potato, BST-treated 
milk brings no benefit to con- 
sumers; and because BST- 
treated milk is perceived as 

Unnatural , it fa seen as adding 
risk to a product generally con- 
sidered as pure. 

Fearing a consumer back- 
lash, nearly 200 US food com- 
panies, including large grocery 
and convenience store chains 
and 14 dairy cooperatives, 
have asked their suppliers not 
to deliver hormone-enhanced 
ffliTk for three mnntha to give 
them a riiawffw to assess the 
market impact hi the two top 
dairy states, Wisconsin and 
California, six school districts 
have asked that milk delivered 
to their cafeterias come from 
untreated cows. 

. However, consumers have 
few ways of ensuring that the 
milk they receive fa from BST- 
free herds, and the US govern- 
ment, keen to support biotech- 
nology, fa making it difficult 
for processors to label their 
milk free of ar tificial hormone 
treatments by requiring them 
to prove their claims with 
detailed documentation- Mon- 


santo la also suing two small 
dairy processors for using a 
BST-free label and has sent 
wanting tetters to others. 

The launch of BST in the US 
raises doubts about whether 
the European Commission can 
continue to resist its use in 
Europe, where it is the subject 
of a four-year-old moratorium. 
Its use ctmld also erupt into a 
transatlantic trade dispute, 
highlighting the potential 
dash between the ethics of 


BST has been 
swept up in a 
storm of 

controversy in the 
US and the EU 


food production and the pres- 
sure for unrestricted commerce 
under the new General Agree- 
ment on Tariffs and Trade. 

"The. European Union 
emphasises quality, wholesome 
products rather than quan- 
tity," said a Commission offi- 
cial. “We’re stranger on that 
than the US. The US tends to 
be more geared to market 
forces, competitiveness, econo- 
mies of scale and technological 
innovation." 

Brussels has no quarrel with 
the safety of BST for human 


consumption, but it is con- 
cerned about its use on envi- 
ronmental and economic 
grounds. B believes that con- 
sumers would see dairy prod- 
ucts from cows injected with 
BST as adulterated and would 
respond by cutting down on all 
mnV products. A German sur- 
vey showed that dairy con- 
sumption would drop by U per 
cent if BST were introduced. 

Mr Stove Emmett of BST 
Concern, a UK campaign repre- 
senting farmers, environmen- 
talists and animal welfare 
groups, says: ‘This is the first 
flagship of the biotechnology 
industry coming to the market 
But we don’t think BST is a 
useful way of using the tech- 
1 nology... It’s a product no one 
wants or needs apart from the 
manufacturers. We don't need 
surplus milk. And we don’t 
need milk with genetically 
Hi ri n ppm i hormones. 1 *- 

Until recently, Mr Renfe Stei- 
chen, the agriculture commis- 
sioner, Indicated, that BST-pro- 
duced daisy goods would not 
be allowed into the European 
Union while the moratorium 
remained in fence. But US offi- 
cials say any such ban is likely 
to be challenged, just as the US 
fought the KU’s 1989 ban on 
imports- of US meat produced 
with growth hormones. US 
dairy exports to the EU 


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Competition forces radical 
restructuring at British Gas 


Exec options 
that reward 


From CJL Brown 

Sir, Tour article (Lex, Febru- 
ary 25) misses one fundamen- 
tal point. British Gas has now 
lost 78 per cent of the firm con- 
tract market and. since August 
1992, 33 per cent of the market 
between 2,500 and 25,000 
therms. 

In total this now represents a 
loss of 41 per cent of the mar- 
ket open for competition, com- 
pared with a Monopolies and 


Mergers Ctimmissioa target of 
45 per cent 

Furthermore, the company is 
prevented from defending its 
position because the playing 
field is artificially tilted 
against it Finally, from 1996 
onwards competition will be 
introduced to the rest of the 
market below 2£00 therms. 

The company taken firm 
management action by 
restructuring the business to 


enable It to compete effectively 
in these significantly changed 
circumstances. Clearly the 
market has changed dramatic- 
ally and British Gas has 
changed rapidly to adapt It fa 
disappointing that your article 
appears to treat a serious situa- 
tion so superficially. 

C-H- Brown, 

British Gas, 

BmermtQ House, 

London SWl 


Democratic 
right of Swiss 


PIA must tackle causes not 


From Dorian Seiz. 

Sir, As a Swiss citizen I felt 
rather uncomfortable reading 
your article, “EU up in arms 
over Alpine truck ban” (Febru- 
ary 22). The Swiss people 
decided in a democratic vote to 
ban trucks from travelling 
through the Swiss Alps. That 
the EU now threatens Switzer- 
land with retaliatory measures 
leaves me with the impression 
that the EU does not respect a 
result of a democratic decision. 

This position will not make 
it easier for the new can d ida t es 
(all rather small countries) to 
join the EU ainwi , under Hw 
Maastricht treaty, decisions 
such as that taken in Switzer- 
land would simply be over- 
ruled by an institution with 
weak democratic foundations. 

But different opinions are 
also held within the EU. The 
former environment minister. 
Carlo Ripa di Meana, said he 
hoped this was “not an Isolated 
case but a turn of the trend" in 
European transport policy. 
Dorian Selz, 

45E Jute Street, 

Aberdeen AB23EX 


symptoms of bad practice 


By Mr Ben Goh. 

Sir, It is inevitable that there 
will always be those who 
oppose change. Change can 
upset the status quo and 
threaten vested interests. The 
PtA’s birth pangs have hardly 
started yet Speaking as a com- 
pliance practitioner, the publi- 
cation of the PIA's prospectus 
and how it intends to act as a 
regulator marks a significant 
milestone in the PIA’s quest 
for recognition as the self-regu- 
latory organisation by the SIB. 

A major hurdle for the PIA 
to clear to gain credibility is 
how it proposes to tackle the 
causes rather than treat the 
symptoms of bad practice. One 

of the key issues is product 
bias, which a commission- 
based remuneration system 
produces, particularly since 
Lautro’s maximum commis- 
sion rules have been abolished. 
Product bias, if allowed to pro- 
liferate unchecked, threatens 
the core on which financial 
services regulation is founded 
- treating the clienfs interests 
as paramount even where 


there is a conflict of interest 
Given the choice, It will 
require a perfectly altruistic 
adviser or salesman to recom- 
mend a product that earns him 
less commission but is more 
suita b le for the needs of the 
client. I suspect that in prac- 
tice a “smart” advises: or sales- 
man is likely to choose the 
product that will earn the 
highest commission possible 
and proceed to make a con- 
vincing case for recommending 
the product to the client 
If the PIA truly marks a new 
dawn, it must waste no time in 
tackling the causes of bad 
practice that fa highly damag- 
ing to the reputation of the 
industry. If it can do this effi- 
ciently, then it should be able 
to face the future with equa- 
nimity and confidence. The 
pangs and upheaval caused by 
Us birth, would have been a 
price wrath paying. 

Ben Goh, 
partner. 

Compliance Matters & Co, 

No 1 Orman Lane, 

Milton Keynes MK12 6LG 


From Mr David Ogden. 

■Sir, I have been following 
your recent reports on execu- 
tive share options and believe 
a central point has been over- 
looked: the benffits to compa- 
nies of this type of plan. Exeat 
ttve options can attract, retain, 
reward and motivate key 
employees at no cost to the 
company’s profit- and loss 
raxxnmt and with no risk to the 
company or participant The 
cash flow benefits of options 
c an be particularly important 
la smaller, growing companies 
that need to reinvest cash. 
They can use options to attract 
high-calibre executives who 
are prepared to take a lower 
salary and the chance of share 
option gains. 

Much of the recent criticism 
has been directed at the 
excesses of some option plans, 
neglecting the suitability of 
well-designed plans with allo- 
cation policies that have been 
given sufficient thought 
Restricted shares may be 
appropriate in some cases but 
they have to be paid for out of 
profits and the gain fa linked to* 
the share price in the same 
way as an option gain. If the - 
Share price falls, the partici- 
pant wOl not lose money. With 
an option, on the other hand, 
theshare price has to rise for: 

Mm to gain 

If the company follows the 
guidelines of institutional 
investors, the dilation effect of 
Issuing new shares on. the exer- 
cise of options fa very small - 
only 5 per cent of the compa- 
ny’s share capital can be 
issued for executive options 
granted, over 10 years. 

David Ogden, 

Sedgwick Nobie Lowndes, 
Norfolk House, 

Croydon, Surrey CRB 3KB '■ 


Unitary authorities should not be forced on public 


From Ms Josie Farrington. 

Sir, John Anthers is right to 
point out "Lack of consensus 
plagues councils shake-up” (25 
February). I would like to clar- 
ify the Association of County 
Council's position. 

Where focal people prefer the 
present structure they should 
be allowed to do so, and all 
available opportunities should 
be taken to make that struc- 
ture work better. New unitary 
authorities should not, as the 


Local Government Commission 
has said, be forced upon a pub- 
lic which does not support 
them. When asked to make 
choices, more people have 
cited a positive preference for 
the status quo. The recent judi- 
cial review successes of Derby- 
shire and Lancashire County 
Councils mean that the status 
quo fa a firm option. 

Change should only be pro- 
posed for any area with the full 
agreement of local people fol- 


lowing* a thorough review and 
consideration of the options. 
Tour article assumes this case 
has . been made in more areas 
than it has. In our view the 
review of local government 
should be conducted on a flexi- 
ble and pragmatic basis. 

Where the case for change is 

made and locally agreed, the 
ACC believes that unitary 
authorities need to be large 
and powerful enough, to have 
effective strategic capacity; 


they should also be atrfe to 
avoid the unaccountable joint 
arrangements which would 
recreate a worse two-tier- sys- 
tem. Small unitary authorities 
without any other tier between 
themselves and national gov- 
ernment would iead to a frag; . 
mentation of local govammant 
and Its main services- • 

Josie Farrington,' 

Association of County Caundts, 
Eaton House, 

London SWIW9BB 




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FINANCIAL TIMES WEniMBSPAV MA 


FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Tel: 071-873 3000 Telex: 922186 Fax: 071-407 5700 

Wednesday March 2 1994 


Tackling the 
settler problem 


The Middle East has taken 
important strides towards greater 
stability tn the past three years 
and tt would be criminal foDy to 
permit the act of one extremist to 
undo much of what has been 
achieved. The peace negotiations 
between Israel, the Palestinians, 
Syria, Lebanon and Jordan must 
continue despite the massacre at a 
mosque in Hebron last Friday. 

But it would be politically naive 
to suppose that the Arabs, and 
particularly the Palestinians, can 
agree to a resumption of negotia- 
tions while passions in the Israeli- 
occupied territories are so 
inflamed. A measure of calm hag 


to be restored, and some confi- 
dence instilled that there will be 
less risk of similar acts of barba- 
rism in the future. 

The greatest part of that respon- 
sibility lies with the government 
of Israel Successive Israeli gov- 
ernments have permitted or vigor- 
ously encouraged Jewish, settlers 
to establish themselves in the 
West Bank, Gaza Strip and Golan 
Heights, against the terms of the 
Geneva Convention and despite 
the condemnation of the world 
community, including the US. All 
recent incumbents of the White 
House have emphasised that they 
consider the settlements to be an 
obstacle to peace. 

They become even more of an 
obstacle when provocatively 
placed in the heart of, or very 
close to, substantial Palestinian 
population centres. Baruch Gold- 
stein, who carried out the Hebron 
massacre, lived in such a settle- 
ment along with other fanatics 
whose declared aim is to sabotage 
the peace process. 

Too modest 

The measures announced by the 
government against a handful of 
settlers since the massacre seem 
for too modest to ensure a signifi- 
cant improvement in security fbr 
Palestinians. Less than 100 people 
have been banned from carrying 
weapons under new government 
restrictions. Otter armed settlers, 
many of whom are army reserv- 
ists, are still free to walk the 
streets of Hebron and other Pales-.. 
tinian towns. The risk of another 
Goldstein being among them can- 
not be ignored. 

The best way of reducing that 
danger is for the government 
immediately to order the closure 
of those few settlements sited in 


the most sensitive areas of Pales- 
tinian population, and to bar set 
tiers from carrying arms outside 
their own settlement areas. 
Responsibility for their security 
must rest with the Israeli army, 
just as it does for the Palestinian 
population. 

Mr Yitzhak Babin, the prime 
minister, has so for set his face 
against such measures, but they 
would not lack support among an 
important part of the electorate, 
and among some of his cabinet 
colleagues. Neither need the clo- 
sure of a few settlements prejudge 
negotiations on the wider settle- 
ment issue, which, under the 
Washington agreement signed 
with the Pales tinians an Septem- 
ber 13, are scheduled to begin two 
years after the introduction of lim- 
ited Palestinian self-rule in the 
West Bank and Gaza. 

Act decisively 

Mr Rabin, though cautious by 
nature, has shown in the past that 
he can act decisively when faced 
by security threats. At the end of 
1992 he expelled 415 Palestinians 
to south Lebanon, and in July he 
launched a week-long bombard- 
ment of southern Lebanon which 
cost an estimated 125 lives 
drove some 250,000 people from 
their homes. He might reflect that 
extremists from within his own 
community can now be seen as 
every bit as much a threat to the 
peace process as those from the 
Arab community. 

The Palestine liberation Organi- 
sation should equally be careful to 
maintain a balance in its own 
reaction to the tragedy. Mr Yassir 
Arafat, the PLO chairman, is 
justly concerned that security for 
Palestinians in the territories be 
improved, and the presence of UN 
observers, as agreed in the Wash- 
ington accords, would he a useful 
step. But any attempt at this stage 
to force a more fundamental reas- 
sessment of those agreements 
would almost certainly be counter- 
productive. 

The longer-term political sur- 
vival of both Mr Arafat and Mr 
Sabin is closely tfolrprf with their 
ability- to conclude a successful 
peace accord. In the short term 
that will be best served by Israel 
taking a tighter grip on its extrem- 
ists, and by the two sides complet- 
ing their negotiations on an Israeli 
troop withdrawal from much of 
Gaza and the West Bank. 


The Scott 
inquisition 


Britain's Conservatives are 
nervous. They rightly fear the out- 
come of Lord Justice Scott’s 
inquiry into the sale to Iraq of 
equipment that could make arma- 
ments. The affair has an uncom- 
fortable feel to it, bringing on fore- 
bodings of the disquieting effects 
of a long period in office. There 
are unhappy parallels. Italy's 
Christian Democrats were sus- 
pected of links with organised 
crime. Japan's Liberal Democrats 
fell into disrepute because, after a 
period in which they seemed des- 
tined to rule forever, they became 
complacent and corrupt 
Now the spotlight is on West- 
minster. The charges laid against 
certain ministers and officials are 
peculiarly British. None of them is 
accused of seeking financial 
advantage. Yet if the gathering 
storm does break it could be more 
damaging to Mr John Major's 
administration than other recent 
scandals and resignations. The 
reputations of leading Tories, not 
excluding the prime minister him- 
self. are at issue. Some have prom- 
ised to resign if found to have 
acted improperly. The essence of 
the indictment against t hem is 
that, in the absence of a written 
constitution, they have been 
guilty of the unthinking misuse of 
power. 

MinisteriaJ connivance 
The first charge relates to "pub- 
lic interest immunity" (PH) certifi- 
cates. which invite judges to 
excuse the presentation of named 
iocuments in court. Pfls were 
signed by five Conservative minis- 
ters to protect papers demanded at 
the Matrix Churchill trial. Execu- 
tives of the company were accused 
if evading restrictions on exports. 
k*et ministries, and the security 
services, were aware of what 
Matrix Churchill was doing, and 
connived at it. The trial judge did 
not accept the Pns. The defen- 
iants were released. Other judges 
night have acted otherwise. It 
ooks, despite protestations to the 
;ontrary, as if Whitehall might 
lave allowed the accused to be 
ailed in the interest of protecting 
rertain documents, although 
nany of them were not likely to 
iamage the public interest. They 
were merely embarrassing. 

Faced with this, ministerial wit- 
lesses have told different stories, 
[ho defence secretary said he was 


obliged to sign the PCs; the chan- 
cellor that he had a degree of dis- 
cretion; the social security secre- 
tary that he doubted that the 
defendants would be found guilty. 
On Monday the trade secretary, 
Mr Michael Heseltine, said that he 
at first declined to sign, but 
agreed after the wording was 
amended. He stated that the attor- 
ney general, Sir Nicholas LyelL 
had advised him that he must do 
so, but had given contradictory 
advice in a subsequent case. Sir 
Nicholas said afterwards that his 
advice had been consistent It is 
rare for two senior members of the 
same government to be in such 
open conflict 

Altered guidelines 

The second charge is that while 
Lady Thatcher was in office the 
government secretly altered the 
export guidelines in Iraq's favour, 
but hid this from parliament It 
was in relation to this accusation 
that Sir Robin Butler, Britain's 
most senior civil servant, made 
Ms celebrated remarks about the 
necessity for governments to 
divide the truth into fractions, 
only some of which need to be 
revealed. To outsiders, this 
seemed like Whitehall taking its 
omniscience more seriously than 
its competence might justify. 

The inquiry has now run for 
nine months. Many distinguished 
witnesses have given evidence, 
including Mr Major, Lady 
Thatcher, other colleagues, and 
many officials. All are well able to 
look after themselves. None 
require the protection of profes- 
sional advocacy as suggested by 
Lord Howe, a former foreign secre- 
tary and chancellor. Yet the view 
that heads must roll is gathering 
force. Sir Nicholas is the current 
favourite candidate for the tum- 
brils. Before deciding his future he 
will have his say at the inquiry. 
Unless he is unconvincing then, 
he should await Lord Justice 
Scott’s report 

The judge cannot design a con- 
stitution for Britain, but he can 
call for a clear statement of pub- 
lished rules, perhaps Involving 
some external form of appeal. 
Depending on his findings, a judg- 
ment will have to be made 
whether a change of rules, phis 
the possible sacrifice of one attor- 
ney general’s career. Is a sufficient 
response. 


I ndia this week altered course 
on the road to economic 
reform, abandoning the tough 
fiscal path it has tried to fol- 
low for the past three years, 
in favour of gradual structural 
change combined with acceptance 
of large fiscal deficits. 

While the aim of increasing 
growth through economic liberalisa- 
tion r emains the wm, Mr M anm n- 

han Singh, the scholarly finance 
minister, signalled in Monday’s 
budget that be and Mr PV Nara- 
sfmha Rao, the prime minis ter, pre- 
fer to bypass difficulties rather than 
confront them. They may get away 
with it for a while but they could be 
storing up problems for the future. 

The two have chosen to tolerate a 
higher level of public borrowing 
than they deemed acceptable even a 
year ago. They have tacitly admit- 
ted that the government, with its 
vast web of bureaucracy and state- 
owned industry, its coils of patron- 
age, its subsidies and corruption is 
too big an animal to be tamed 
quickly. 

They are gambling that the mea- 
sures already taken since they 
embarked on reform in mid- 1991 
will be enough to create space for 
domestic enterprise to grow and 
prosper. If they are right, then India 
will have shown the world how to 
restructure a socialist-style econ- 
omy with a minimum of dislo cation 
If they are wrong, they risk sending 
the country bade down a vicious 
circle of mounting debt, rising infla- 
tion and declining growth. 

It is possible for Mr Rao and Mr 
Singh to succeed: there is growing 
confidence in India among domestic 
and foreign businessmen; foreign 
exchange reserves are at record lev- 
els; and after six good harvests in 
succession, formers are content But 
the decision to take a relaxed atti- 
tude to public borrowing will make 
the country more vulnerable to 
external shocks such as a jump in 
world interest rates or oil prices, or 
a bad monsoon. Any of these could 
Spark a surge in inflation, which is 
already uncomfortably high, run- 
ning at per cent a year after a 
recent low of 7 per cent And no 
Indian government can tolerate 
high Inflation for long, given the 
devastating effects of rising prices 
on the poor. 

Mr Singh presented his budget as 
a calculated economic risk. The 
truth is that the calculat ion is as 
much political as economic. The 
ruling Congress (1) party faces sev- 
eral state elections over the next 
year, c ulminating in a general elec- 
tion which must be held by mid- 
1996 but could be held earlier if the 
prime minister wishes. A tough 
budget risked losing votes. As Mr 
Tapan Dasgupta, a leading eco- 
nomic commentator, says: "This 
budget is the political price for 
doing reform in a democracy.” 

Over the past year, there have 


Bigger burden for 


a stronger man 

India is taking a calculated gamble on growth to offset 
undemanding borrowing targets, says Stefan Wagstyl 


' Indian economy: no gain withoirt paSft ; . • 



been many indications that the gov- 
ernment was relaxing curbs on bor- 
rowing - the religious unrest which 
followed the sacking of the Ayod- 
hya mosque in December 1992 
brought unexpected policing bins; it 
also hit trade, reducing customs 
and indirect tax revenues. Never- 
theless, Monday's public borrowing 
figures came as a surprise. Mr 
Singh disclosed the fiscal deficit for 
the year ending March 1994 would 
reach 7.3 per cent of gross domestic 
product - compared with a target of 
4.7 per cent Moreover, the finance 
minister set an undemanding target 
of 6 per cent for the 1994r95 finan- 
cial year. 

The government is further distan- 
cing itself from the aim it espoused 
in 1991 of cutting public spending in 
order to free resources for private 
enterprise. These cuts were a condi- 
tion of the emergency loan India 
secured from the International Mon- 
etary Fund in aider to stave off 
default In a balance of payments 
crisis. In practice, the government 
reduced the fiscal deficit greatly 
only in the first year after getting 


the loan from 8.4 per cent to 5.9 per 
cent of GDP - and the deficit has 
been creeping up ever since. 

Mr Singh is now trying a different 
tack - he hopes that the economy 
will grow, so the size of public bor- 
rowing in proportion to the econ- 
omy will shrink, even if it does not 
foil in absolute terms. The stone 
will be as large as it was, but the 
man carrying it will be stronger. 

To help stimulate growth, Mr 
Singh has included in bis budget 
more measures designed to mobilise 
the resources of private enterprise - 
and to encourage businesses to 
become more competitive with for- 
eign companies. Deregulation 
remains a central feature of govern- 
ment policy. As in previous years, 
customs duties are being cut - from 
a peak rate of 85 per cent to 65 per 
cent Duties on capital goods and 
materials, including steel, are being 
reduced sharply to encourage indus- 
try to invest in world-class plants. 
Indirect taxes are being pruned to 
reduce their complexity and gener- 
ate more competition. Corporate tax 
rates are coming down - as is the 


income tax burden on consumers, 
to help boost demand. 

Industrialists hailed the budget 
for its emphasis on growth. "It's a 
great budget for industry,” said Mr 
Tarun Das, secretary-general of the 
Confederation of Indian Industry, 
the employers' body. 

Mr Singh has some good reasons 
for feeling positive about achieving 
his target of increasing growth from 
an estimated 4 per cent this year to 
5-6 per cent in 1994-95. After almost 
three years of slowdown induced by 
the 1991 financial crisis, industry is 
staging a belated revival. Industrial 
output rose only 1.6 per cent in the 
first half of 1993-94, weighed down 
by the weak performance of heavy 
engineering and other sectors 
dependent on government orders 
such as telecommunications. But 
consumer goods companies, includ- 
ing vehicle and electronics manu- 
facturers, are making significant 
advances in output Exports soared 
21 per cent in the 10 months to the 
end of January. 

Moreover, India is attracting 
record amounts of foreign capitaL 


15 

An estimated $3bn will flow into the 
country in the year to the end of 
March 1993 - up from $585 m in 
1992-93. The total includes direct 
investment, foreign portfolio invest- 
ment and overseas capital issues by 
Indian companies. These inflows 
have given India a good cushion 
against external shocks - $13bn in 
foreign exchange reserves, enough 
for more than six months of 
imports. 'Tt is these reserves which 
have allowed Mr Singh to present 
the budget that he has." says Mr 
S L Rao, director of the NCAER. an 
independent economics think-tank. 

However the government's hopes 
could still be dashed if it neglects 
either its own housekeeping or 
reform. The most immediate con- 
cern is that public borrowing could 
rise further. "Borrowing is out of 
controL" says Mr Dasgupta, “How 
can those who have let it go bring it 
back under control?" The pressures 
for wasteful spending - for subsi- 
dies and hand-outs - will increase 
the closer the government gets to a 
general election. 

A more radical approach 
would have been to step 
up and extend tlu> half- 
hearted privatisation 
programme. India has 
gone some way towards forcing a 
shake-up of its private sector by 
exposing it to foreign competition. 
But the government has baulked at 
a similar transformation of the pub- 
lic sector. The government is. at 
least, selling shares in profitable 
state-owned enterprises. Including 
the State Bank of India, the largest 
commercial bank, and the national 
oil corporations. But sales are 
expected to be a mere Rs25bn in 
1992-93 and perhaps Rs40bn next 
year. Mr Rao, of the NCAER, says 
the buoyant stock market could 
absorb Rs300bn a year. “So much 
more could be done with privatisa- 
tion. It might produce demonstra- 
tions in the streets. But so what? 
The government is too cautious.” 

Similarly, there is little indication 
in the budget that the government 
will tackle another sacred cow or 
pre-1991 India - a virtual ban on 
compulsory redundancy, which 
many potential foreign investors 
see as an obstacle. 

Mr Manmohan Singh and his col- 
leagues deny that they are going 
slow on reform. They point to the 
many useful measures in the bud- 
get and to other non-budget mea- 
sures ta the pipeline such as liberal- 
isation of the insurance industry 
mid of telecommunications. 

But it is difficult to avoid tbe 
impression that they are now mak- 
ing progress largely in directions 
which does not require much blood, 
sweat or team. As Mr Rao, of the 
NCAER says: “In restructuring, 
there's no gain without pain. This 
government seems to believe differ- 
ently." 


Why UK suffers from lack of investment 



As the UK economy 
embarks on its sec- 
ond year of "recov- 
ery”, a critical issue 
is how much poten- 
tial slack there is in 

PvitvnNAr 018 ay 51 ®™- GUes 
Keatll ig (Letters: 

v tb.w “No evidence of nar- 
rowing output gap", February 16) 
correctly paints out that the total 
rise in employment last year was 
more than accounted for by an 
increase in part-timers and self-em- 
ployed and, therefore, "the total 
number of hours of labour services 
used by the economy hasn’t risen 
much during the recovery and may 
well have continued to foil". 

In itself, "this is not evidence of a 
narrowing output gap", but a full 
answer to the question requires an 
appreciation of what is happening 
to the utilisation of plant and 
machinery, as well as labour. 

The CBI industrial trends survey 
suggests the overall position is hot- 
ting up in manufacturing. The pro- 
portion of companies reporting 
their present level of output as 
"below capacity” has fallen from 73 
per cent to 57 per cent over the last 


year. The CBI research shows that, 
when companies respond to this 
question, they take account of 
labour and plant capacity. If labour 
la not a problem, yet companies 
report an increase in capacity utilis- 
ation, the implication is that the 
position with respect to plant capac- 
ity is tighter than appears from the 
overall measure. 

This picture is confirmed by 
responses to another question in 
the survey: "What factors are likely 
to limit your output over the next 
four months?" Responses to the 
“skilled labour" and “other labour” 
categories have remained fiat at a 
very low level over the last year. 
Response to the "plant capacity” 
category has more than doubled 
and is back to its 1970s cyclical 
peak. 

The survey shows that, prior to 
the 1960s, a shortage of labour was 
the effective constraint on the econ- 
omy. Now the problem is available 
plant and machinery, at least at 
current investment rates. This pic- 
ture is for manufacturing alone, 
which accounts for only one-quarter 
of national output But if there are 
some fundamental, economy- wide 


reasons why manufacturing is 
"underinvesting” in this way, other 
areas of the economy may be simi- 
larly afflicted. 

An important explanation of why 
UK companies may be underinvest- 
ing was highlighted by Professor 
Dimson and Professor Marsh (Man- 
agement "Unhappy returns", Feb- 
ruary 9). They suggest companies 
have yet to adjust to the worldwide 

The biggest mistake 
the market has made 
has been to 
underestimate 
inflation 


foil in cost of debt and equity capi- 
taL As a result, managements are 
demanding an excessive return 
from new investment projects and 
"there is a real danger that these 
companies will underinvest”. 

Dimson and Marsh suggest that a 
company’s true overall cost of capi- 
tal Is now in the region of 11-12 per 
cent (after tax), compared with the 
more common assumption used by 


companies of about 20 per cent 

The critical issue is the appropri- 
ate risk premium to apply to the 
risk-free rate of return required by 
the market The risk-free rate can 
be approximated by the yield to 
maturity on government debt The 
conventional way of measuring the 
risk premium is simply to take the 
extent to which equities have out- 
performed government bonds over 
some historic period. On this basis, 
Dimson and Marsh produce 8 per 
emit for the risk premium, or 6-7 per 
cent adjusting for the fact that a 
company's shares are more risky 
than its underlying assets. How- 
ever, the historic outperformance of 
equities mil only be a good indica- 
tor of what the market requires 
from them if investors more or less 
correctly anticipated events. 

The biggest mistake the market 
has made in recent history has been 
to underestimate inflation. Hence, 
the total real return on long-dated 
gilts Issued in the 1960s was zero or 
less. Equities, on the other hand, 
provide more of a hedge against 
inflation through their ability to 
Increase dividends. Unanticipated 
inflation has generally pushed the 


outperformance of equities com- 
pared with gilts above that required 
or expected by the market 

hi this case, the actual equity risk 
premium demanded by the market 
is probably a lot less than the his- 
toric outperformance of equities 
and, therefore, conventional prac- 
tice will lead companies to assume 
too high a cost of capital. Indeed, 
the only way to make sense of cur- 
rent equity ratings is to assume a 
risk premium more like 2-1 per cent 
in which case the true cost of capi- 
tal Is more like 8-9 per cent, 
less than half the common assump- 
tion. 

The widespread overstatement of 
the cost of capital in business is 
reason enough to explain why the 
UK economy generally - not just in 
manufacturing - suffers from a lack 
of investment and is in grave dan- 
ger of being left with a high level of 
"capital-shortage” unemployment 

Mark Brown 


The author is head of strategy and 
economies at ffoare Govett Securities 


OBSERVER 


Jaffre in 
good Elf 

■ If Baroness Thatcher were to 
admit to having French business 
heroes, then Elf Aquitaine boss 
Philippe Jaffr6 might well top the 
list 

His stubbornness in attempting 
to reverse a sharp foil in profits 
evinces a powerful degree of 
Thatcherite brinkmanship. Nor 
is he chary of tough decisions, even 
if they precipitate a diplomatic 
incident 

A case in point has followed his 
latest act, that of reducing the 
newly privatised French, oil giant's 
stake in a showpiece refinery in 
eastern Germany. It’s provoked 
a protest letter from Chancellor 
Helmut Kohl to Edouard Bahadur, 
the French prime minister. 

But Jaffrfe is a shrewd negotiator, 
whose rigorous view of profitability 
was refined during a rapid rise 
through France's banking system, 
culminating in the chairmanship 
of Credit Agricole, the country's 
biggest bank. 

On job cuts, however, he takes 
a less Thatcherite line. Ja£fr6 
rejects what be describes as the 
11 Anglo-Saxon" method of drastic 
staff reductions, which have been 
employed at rival oil companies. 
Instead he talks of continual change 
and the need to maintain morale. 

If unemployment results from the 
eastern German move, it won't 
be Elf that loses out 


Charity begins at home; a 
Thatcherite virtue If ever there 
was one. 


Frozen out 

■ A bored Eurocrat was seen to 
be penning a little ditty during the 
now extended talks on extending 
the European Union. It’s called 
The Nordic Bride, and sums up 
the state of play. 

"When first we kissed, you said, 
my dear, that you were well 
endowed; 

Your GDP, it teas so dear, made 
you extremely proud. 

But years have passed, and now 
you say that you ore rich no more; 

Our union may incur delay if 
you appear so poor!" 


Nutty nukes 

■ Lord preserve us - how many 
more acronyms can the nuclear 
power industry come up with? 
Yesterday’s report by the advisory 
committee on the safety of nuclear 
installations - ACS NT - for the 
Health and Safety Commission - 
ESC - drew on the advice of the 
radioactive waste management 
advisory committee - RWMAC 
- q nd the n ur.tear installa ti o ns 
inspectorate - NIL Whoa - there’s 
more to coma The Atomic Energy 
Authority - AEA - now has a 
decommissioning and radioactive 
waste management operations 
directorate, known as DRAWMOPS- 



Td rather not talk about this or 
my involvement with Lloyd’s* 


All this should be certified by 
the nuclear unloading think-tank 
section; also known as NUTS. 


Union banker 

■ A hint of uncertainty hangs over 
the next clutch of appointments 
at the Bank of England. The Court 
of Governors has three vacancies, 
following the expiry of the terms 
of Warburg's Sir David Scholey, 

Sir Adrian Cadbury, ami Gavin 
Laird, general secretary of the 
A REIT engineering union. 

Sir Adrian says he’s had enough 
after 24 years; Sir David has just 
been made a governor of the BBC, 


so probably won't mind If he's not 
reappointed. But the trade union 
lobby is getting itself in a tizzy 
about who will replace Laird. 

Since the Bank was nationalised 
in 1946, it's been a convention to 
have a trade union leader as a 
non-executive director. Laird was 
appointed in 1986 by Margaret 
Thatcher, no less. Given the TUC's 
efforts to enter the modern world, 
surely the government will not 
refuse it a job for one of its boys? 


Round the bend 

■ A triumph for German 
unification. Forget the negative 
talk about soaring unemployment 
and chronic shortages of 
kindergarten places; disgruntled 
easterners who believe nothing 
has been preserved of their once 
prized communist state have 
something to boast about at last 

Germany’s reunited transport 
ministry has decided that motorists 
in the west will now be allowed 
to take advantage of a traffic 
regulation once found only across 
the border. All of Germany’s drivers 
will now be allowed to turn right 
at a red traffic light, provided the 
road is clear. 

“Experience in the new federal 
states (that is. east Germany) shows 
that the new regulation can 
contribute in certain circumstances 
to the alleviation of the traffic 
situation," a ministry circular 
intones. 

If that's all the poor Ossis feel 


is left of their old world, no wonder 
the shine has started to nib off 
the commemorative unification 
coins. 


Right chemistry? 

■ At last Fisons gets a new finance 
director. Tipped as a takeover play 
since a profits warning in December 

- coinciding with the early 
retirement of finance director Roy 
Thomas and red card for chief 
executive Cedric Scroggs - Fisons 
has nominated David Hankinson 
as finance chappie. 

He’s been around a bit - Fisons 
will be his seventh job in 15 years 

- and tends to end up at companies 
which have a record of attracting 
the predators. Having jumped ship 
at Lucas, he had hardly settled into 
his job at Ranks Ho vis McDougaU 
when it was taken over by Tomkins 
a year ago. Still, Fisons’ shares 
moved not a jot yesterday, so 
perhaps the waters have calmed 

a little. 


Minim cabs 

■ Hands up all who know 1994 
is the Year of the London Taxi? 
You did? Then presumably you 
will be off to the South Bank’s 
Purcell Room on April 25 to listen 
to the Licensed London Taxi 
Drivers’ Orchestra perform some 
Mozart and Bach. No comments 
please about metre, direction, dud 
notes or such like. 


16 



Israel told to start withdrawal 
by April 13 or risk peace talks 


By Mark Nicholson in Tunis and 
Julian Ozantte tn Jerusalem 

The Middle East peace process 
could collapse if Israel does not 
begin its withdrawal from Gaza 
and Jericho by April 13. the origi- 
nal date for completing the pul- 
lout, a senior member of the Pal- 
estine Liberation Organisation 
warned yesterday. 

But Mr Ahmad Quorieh, one of 
the chief Palestinian architects of 
the PLO-Israeli declaration of 
principles, said he believed the 
PLO could not resume negotia- 
tions on implementing the decla- 
ration unless Israel agreed to dis- 
cuss the future of Jewish 
settlements in the occupied terri- 
tories. 

The PLO also wanted further 
guarantees by Israel for the pro- 
tection of Palestinians in Gaza 
and the West Bank. 


The assessment of Mr Quorieh, 
a senior member of the PLO exec- 
utive committee, came as Israel 
began freeing 500 Palestinian 
prisoners yesterday in a further 
attempt to win back the PLO to 
peace talks after last Friday’s 
Hebron mosque massacre. The 
government also offered compen- 
sation to Palestinian victims and 
said ap to 100 Jewish settlers 
would be disarmed. 

PLO leaders in the occupied 
territories said the gestures were 
insuffici ent They added that Mr 
Yassir Arafat, PLO chairman, 
would have to stay away from 
direct peace talks with Israel for 
at least two to four weeks to 
assuage Palestinian outrage at 
the Hebron killings. 

The PLO demands for peace 
talks to resume include the dis- 
armament or all 120.000 settlers 
and the dismantling of some of 


the more extremist ideological 
settlements such as Kiryai Arba, 
the 6.000-strong Jewish commu- 
nity just outside Hebron where 
Dr Baruch Goldstein, who carried 
out last Friday's massacre of 43 
moslems, lived. 

Mr Shimon Peres, Israeli for- 
eign minister, Israel could 
meet demands such as /Harming 
extremist settlers and preventing 
their movement into some sensi- 
tive areas, allowing the deploy- 
ment of an unarmed interna- 
tional force in the West Bank and 
Gaza Strip for a short period and 
increasing the Palestinian police 
force for Gaza-Jericho from 8,000 
to 10,000. 

However, he said the govern- 
ment rejected PLO demands for 
disarming all settlers and dis- 
mantling some settlements. 

One or more PLO leaders are 
expected to fly to Washington 


within days to discuss with the 
US administration the PLO's 
demands. Hie PLO was, mean- 
while, hoping the United Nations 
Security Council would call on 
Israel to accept an “international 
presence" in the territories. 

As the release of Palestinian 
prisoners got underway, dashes 
erupted for a fourth day through- 
out the occupied territories. 

And in a possible sign of repri- 
sals spreading to the west, a man 
described as an Arab shot three 
ultra-orthodox Jewish youths in 
New York. Although he was 
heard to shout “Kill the Jews,” 
police said a tr affic dispute may 
have sparked the incident No 
fa tala ties were immediately con- 
firmed. 


Settlements forced to top of 
peace agenda. Page 4 
Editorial Comment Page 15 


Central bank expects gentle upturn as business confidence stops weakening 

Japan’s recession may be ‘near bottom’ 


By William Dawkins m Tokyo 

Japan could be near the bottom 
of its protracted recession, the 
country’s central bank said yes- 
terday in its latest quarterly sur- 
vey of business conditions. 

Business confidence has 
stopped weakening and the cli- 
mate is expected to improve, the 
Bank of Japan said in its Febru- 
ary survey of more than 10.000 
companies. 

The Tankan index of manufac- 
turers’ confidence stagnated at 
minus 56. the same as in the pre- 
vious survey in November, stay- 
ing at the lowest point in the 
downturn since May 1991. The 
index, which gives the percent- 
age balance between companies 
reporting favourable and poor 
conditions, is forecast to recover 
slightly to minus 50 by June. Ser- 
vice industries' confidence, mean- 
while, picked up a fraction 
slightly to minus 46 from Novem- 
ber's record low or minus 47. 

A “gentle” economic recovery 
is expected some time during the 
fiscal year starting next month. 


Japan: business conditions 

% difference between favourable and 
unfavourable concBtions 
(Principal enterprises) 

0 


‘10 


Manufacturing 


■w ‘ >.y. 


-30 ”• 

Forecast 



Source: Bank of Japan 


said Mr Kagehide Kaku. the 
bank's head of research and sta- 
tistics. The T ankan survey is the 
most authoritative gauge of the 
short-term business outlook and 
an important influence on mone- 
tary policy. 

But several private sector econ- 
omists feared the central bank 
was optimistic, and said a cut in 
official discount rates, widely 
expected, was still needed to 


stimulate spending and invest- 
ment 

If US president Bill Clinton suc- 
cumbs to pressure for trade sanc- 
tions against Japan, the conse- 
quent rise in the yen would delay 
recovery prospects, they warned. 
The yen stood at about Y109 to 
the dollar when the survey was 
taken, against YI04 in recent 
days. 

“Japan's economy is brain- 
dead. There is no pulse, but at 
least that is better than seeing 
the readings fall lower,” said Mr 
Kenneth Courtis, senior econo- 
mist at Deutsche Bank Capital 
Markets Asia. 

“It is at least as bad as the last 
survey and some of the indices 
axe even worse,” said Mr Robert 
Feldman, director of economic 
research at Salomon Brothers 
Asia. 

Conditions have worsened for 
small manufacturers - usually 
an early warning of changes in 
trend - where the index fell from 
minus 45 to minus 48. The bal- 
ance of manufacturers reporting 
excess capacity rose from 32 to 35 


while those with surplus staff 
rose from 26 to 28. 

Meanwhile, respondents said 
they were planning to cut capital 
investment by an estimated 92 
par cent in the current year to 
the end of this month, and again 
by 45 per cent next year, mark- 
ing three years of decline. 

There were some enconragmg 
signs in the survey, the Rank of 
Japan said, but not enough to 
amount to clear evidence of the 
recovery. Large manufacturers, 
outside the cal industry, expect 
pre-tax profits to fall 29.7 per cent 
in the current fiscal year, the 
fourth year of decline, but to 
recover by 1L4 per emit in 1994. 

Japan’s suspected credit 
squeeze may be easing, an the 
strength of an increase in the bal- 
ance of companies to report that 
hanks were being helpful in their 
credit stance. Other good signs 
include a two-point fall, to 30, in 
the proportion of large manufac- 
turing companies with excess 
stocks of unsold goods. This is 
most mar ked in the consumer 
electronics industry. 


Croats and Moslems closer to alliance 


Continued from Page 1 


posal for a union of the Croat and 
Moslem areas of Bosnia. It would 
be divided into Swiss-style can- 
tons. with some kind or economic 
confederation with neighbouring 
Croatia. 

While the plan does not 
address the Serb-held areas of 
Bosnia. US officials hope it may 
put furthur pressure on the Bos- 
nian Serbs to make peace. 

The US has offered both carrot 
and slick to Croatia as an induce- 
ment for ending the fighting 
between Croats and Moslems in 
central Bos nix 

While threatening economic 
sanctions on Croatia, officials 
have also held out the hope of 
loans from international finan- 
cial institutions. 


In Moscow, Mr Kozyrev hailed 
the agreement with Mr Karadzic 
as a “big step” in a Russian peace 
initiative launched when 
President Boris Yeltsin per- 
suaded the Serbs to heed the 
Nato ultimatum for pulling back 
its heavy artillery from around 
Sarajevo. 

In a statement issued after the 
accord, Russia said: “This posi- 
tion of the Bosnian Serbs is based 
on the fact that Russian observ- 
ers will take part in monitoring 
the non-military use of [Tuzla] 
airport." 

However, Mr Karadzic admit- 
ted the talks had been difficult. 
He said Russia could help the 
Bosnian Serbs save face, 
although It was “difficult to find 
good solutions and honourable 
peace for all sides”. 


The momentum for peace is 
being reflected on the ground, 
although with varying degrees of 
success. Yesterday the Interna- 
tional Red Cross secured the 
release of 400 prisoners in the 
western city of Mostar, which 
had been besieged by Croats for 
several months. The ceasefire, 
which began last Friday, was 
last night still generally hold- 
ing. 

The United Nations High Com- 
missioner for Refugees also 
resumed aid convoys and human- 
itarian flights into the Bosnian 
capital Sarajevo. 

However, Lieutenant Colonel 
Bill A I km an the UN spokesman 
in Sarajevo, said Bosnian govern- 
ment forces were digging new 
trenches and there were reports 
of sniper fire. 


South African 
election deal 

Continued from Page 1 


ing reporters' questions. 

“I came in high spirits and I 
leave in higher spirits. I Teel 
very warm inside,” said Mr 
Mandela. 

Chief Buthelezi implied that 
Inh a th a would seek an extension 
of the election period - possibly 
by delaying the poll in the Zulu 
heartland Natal while proceed- 
ing with the national election 
elsewhere on April 27 as 
planned. The ANC is unlikely to 
accept any delay. 

However genuine the commit- 
ment to seek a substantive deal, 
both sides were clearly keen to 
use yesterday's accord to avoid 
blame for future violence. 




’ FT WEATHER* GUIDE 


Europe today 

The boundary between wintry conditions in 
the north and mild weather in the south will 
continue to bring overcast skies and some 
■snow io Denmark and northern Poland. 
Scandinavia will be dry and sunny as high 
pressure moves east A frontal zone, 
associated with a complex low pressure 
system near Iceland, will give south-western 
Norway snow, rain and near gale force 
southern winds. The Benelux and western 
France will have cloud and rain. High pressure 
will keep the Mediterranean dry with sunny 
periods, especially in southern Portugal. Low 
pressure over the Balkans will produce cloud 
and showery., though temperatures will be 
quite high. 

Five-day forecast 

High pressure over Scandinavia will move 
further east, A westerly airflow will give 
unsettled but mild conditions with intermittent 
strong winds in western Europe and south- 
western Scandinavia. South-western and 
southern Europe will remain sunny and dry. 
Central Europe and, later this week, south- 
eastern Europe will have changeable weather 
with snow in the Alps and showers in the 
eastern Mediterranean. 

TODAY’S TEMPERATURES 



SUualronat 12 GMT. Temperatures iraxmim tor day. Forecasts by Meteo Consult ol the Netherlands 


Rome 

S.Frseo 



Maximum 

Belfast 

shower 

8 

Cardiff 

lair 

8 

Frankfurt 

doudy 

9 

Malta 

sun 

20 


CWa us 

Belgrade 

shower 

IB 

Cfxcago 

fair 

5 

Geneva 

cloudy 

11 

Manchester 

Bhower 

9 

Dhabi 

laa 

27 

Bortn 

doudy 

6 

Cologne 

cfoudy 

a 

GfcraKar 

fair 

18 

Manila 

lair 

31 

Accra 

fair 

33 

Bermuda 

rain 

23 

O' Safaom 

Shower 

30 

Glasgow 

shows 

7 

Metaxime 

sun 

21 


fair 

19 

Bogota 

doudy 

20 

Dakar 

sin 

25 

Hamburg 

doudy 

5 

Mexico City 

sun 

23 

Arn&mcjm 

inn 

7 

Bombay 

ha^ 

34 

Date 

3WI 

17 

Hetainlu 

sun 

-8 

Miami 

ram 

28 

Athens 

Sin 

21 

Brussels 

rain 

8 

Delhi 

sun 

29 

Hongkong 

doudy 

20 

Mdsn 

fair 

12 

B. AjIV3 

sun 

27 

Budapest 

doudy 

10 

Dubai 

far 

26 

Honolulu 

far 

26 

Montreal 

doudy 

-4 

Blum 

fan 1 

9 

CJugen 

doudy 

1 

DubKn 

cloudy 

a 

Isianbd 

sun 

16 

Moscow 

fair 

-1 

Bangkok 

far 

34 

Caro 

sun 

25 

DUffovnik 

doudy 

17 

Jersey 

doudy 

10 

Munich 

doudy 

8 

Esjicoiona 

faff 

16 

Cope Town 

far 

26 

Edinburgh 

cfoudy 

7 

Karachi 

sun 

30 

Nairobi 

shower 

29 

Boprvq 

sun 

7 

Caracas 

fair 

28 

Faro 

sun 

19 

Kuwait 

faff 

25 

Nagles 

fair 

19 


fair 30 
fair 34 


Lufthansa, Your Airline. 

© Lufthansa 

German Airlines 


L Angeles 

la* Palmas 

Lima 

Lisbon 

London 

LuxJnurg 

Lyon 

Madeira 

Madnd 

Majorca 


Sun 

far 

fair 

»i 

fair 

ntn 

doudy 

fas 

far 

fan- 


23 

20 New York 
28 Nice 
18 Nicosia 
IT Oslo 
8 Pals 
12 Perth 
18 Prague 

17 

18 Rey 


cloudy 

cloudy 

fair 

sui 

dowdy 

ran 

sun 

doudy 

sun 

snow 


Strasbourg 


28 Toronto 
5 Tunis 
17 Vancouver 
20 Venice 
-7 Vienna 
12 Warsaw 
32 Wellington 
8 Wefingtar 
35 Winnipeg 
2 Zrnch 


fair 

fair 

GUI 

doudy 

sun 

doudy 

shower 

fair 

sun 

sun 

fair 

far 

rain 

cloudy 

doudy 

eteet 

rain 


17 

16 

A 

31 

-6 

11 

22 

17 

21 

8 

-4 

20 

13 

12 

9 

1 

5 


far 23 
far 2 
cloudy 10 


THE LEX COLUMN 

Yielding to pressure 


The US Treasury bond market, which 
lias scaring itself with inflation- 
ary phantoms ever since the Federal 
Reserve tugged on the monetary reins 
last month, has spooked itself some 
more. Revised figures suggesting the 
US economy grew at an annualised 
rate of 7.5 per cent in the fourth quar- 
ter of 1993 were eye-catching but 
somewhat academic The hand of God, 
which has administered earthquakes 
and snowfalls, will have slowed that 
breakneck expansion this quarter. 
Bond traders were more alarmed by 
the latest purchasing managers’ price 
index, which showed a second consec- 
utive monthly rise. 

Such figures emphasise how quickly 
disinflationary press ure s are abating 
but they do not yet confirm that an 
inflationary trend has asserted itself 
in the real economy. The purchasing 
manag ers* index c?n be an unreliable 
predictor of consumer price mnatinn 
The rise in some commodity prices 
will be partly offset by the continued 
weakness of otL Consumer confidence 
and employment levels remain weak. 
The band market may therefore be 
over-reacting to inflation fears but 
may still be right to anticipate a fur- 
ther monetary H ghtpning , 

European bond markets are being 
buffeted by the US turbulence even 
though yesterday’s developments 
strengthen the argument for a 
decoupling. The output gap in many 
European wyiiwwiixi wifi widen this 
year, creating scope for farther inter- 
est rates falls But it would help if the 
Bundesbank had been bolder in cut- 
ting its money market repurchase rate 
by more thaw 3 hasis points. 

General Accident 

It is curious that General Accident’s 
shares should rise against the trend of 
a market led lower by US bonds. True, 
full year profits were at the higher end 
of market expectations. But with 
almost half its assets in North Amer- 
ica, GA is unusually geared to US trea- 
suries. Jitters in world bond markets 
have shaved 2 percentage points from 
the group’s solvency margin since the 
year end. With solvency comfortably 
over 50 per cent, GA is hardly starved 
of capital. Yet a dividend equivalent to 
5 per cent of shareholders’ funds and 
covered only 1.8 times by earning* is a 
heavy burden. Should the bear market 
in bonds taka hold , GA might find it 
difficult to increase the pay-out as fast 
as shareholders would like. 

That is all the more reason to hope 
that the earnings recovery continues. 


FT-SE Index: 3270.6 (-57.SJ 


General Accident 

Share pries relative to the 



There should be more to come in the 
UK as premium increases already 
announced flow through into profits. 
GA’s willingness to turn away motor- 
ists also suggests some sincerity about 
underwriting for profit at the expense 
of market share. Yet the bigger chal- 
lenge now lies in the US and Canada, 
where underwriting losses amounted 
to £288m last year. The US in particu- 
lar will be a tough nut to crack since 
GA lacks sufficient weight to influ- 
ence market rates. 

Without a rise in insurance rates 
across the US marke t, GA can only 
increase premiums unilaterally even if 
that re pane inning business. Whether 
that will be enough to bring about 
decent profits remains an open ques- 
tion. The 20 per cent premium to net 
asset value at which the shares now 
Stand demands no less. 

Abbey National 

Had Abbey National been deter- 
mined to stick to its previous target of 
three times for dividend cover, its pay- 
ment might not have Increased at all 
this year. As It is, the 22 per cent 
increase, which is broadly in line with 
earnings growth, is a welcome admis- 
sion that it has enough capital to he 
going an with and does not need to 
retain every last penny of earnings. 
The desire to avoid building up sur- 
plus capital is perhaps a signal that 
the bank is more interested in boost- 
ing return than in further expensive 
attempts at diversification for its own 
sake. That is also good news after its 
embarrassing excursions into estate 
agency and French commercial lend- 
ing. 

Yet Abbey’s dividend cover of just 


2.1 Hrees is at the bottom of its new 
target range of two to three times. 
That is in line with other banks that 
have also paid large dividend 
inr r«»»s. but it suggests something of 
a struggle to reach the top of the tar- 
get r ang e by the peak of the cycle. 

Special factors, including a lower 
tax rate, will boost earnings this year. 
Continental provisions should fall 
sharply and the cost of getting out of 
estate agency will not be repeated. 
Ties? certain are the prospects for oper- 
ating profit. Abbey expects the contri- 
bution from insurance to increase sub- 
stantially. But mortgage margins may 
narrow as interest rates stop falling, 
and treasury profits will grow more 
slowly. Abbey's dividend increase 
looks like a one-step jump, even 
though low inflation reduces the need 
for cover. 

GKN/Westland 

Westland’s defence document is 
notably short on pictures of burning 
bridges. Perhaps that is because GKN 
will hold 45 per cent of Westland's 
shares even if the bid fails completely. 
So whatever the outcome, the two 
companies will have to live together. 
Yet while Westland avoided rough and 
tumble, it did not cede much to GKN 
either. The gentlemanly nature of the 
camp ai g n may not be sustainable if 
both sides become entrenched. 

Westland’s defence rests firmly on 
prospects for EH101 orders and the 
possibility that the Apache will 1 
become the next British Army attack 
helicopter. Veterans of the 196546 cap- 
ital reconstruction will remember that 1 
large claims were made for the Black | 
Hawk, and the orders never material- 
ised. Still, while there are risks in rely- 
ing on projections to the year 2000, 
Westland's new management has a 
good track record. Loyal shareholders 
may wonder why. having waited so 
long, they should grab a bird in the 
hand now when there could be more 
than two in the bush. There is a case 
for supporting Westland, at least until 
it fails to meet its projections. 

GEN'S best point is that it could 
bolster Westland’s strong but small 
balance sheet. Customer stage pay- 
ments should cover Westland’s work- 
ing capital needs, but there is little 
margin for error. With Westland's 
shares 15 per cent above the offer, the 
market clearly thinks GKN is going to 
have to pay substantially more for vic- 
tory. Whether GKN is prepared to 
raise its offer and its gearing enough 
is another question. 


UP TO 
THE PACE 



Whittingdale are recognised as one of the leading 
UK specialist managers of gilt-edged securities, 
with over £ 1 ,700 million entrusted 
to our awaixl winning team. 


WHITTINGDALE 

GILT-EDGED EXPERTS 


Whuuigdiie Unit Trua Mawjement Limited * a Member of LAIJTRO and IMRO 
Whcrnglate L*tvt* 3 & a Member of IMHO 










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Wednesday March 2 1994 

Controllers, Electric Motors, 
Gearboxes 



Krupp-Hoesch to 
fight cartel office 


Krupp-Hoesch, the merged German steel and 
engineering group, plans to fight an order by 
the German federal cartel office to sell part of 
its vehicle spring manufacturing capacity. The 
company said it would challenge the niltiig by 
the competition authorities that it most sell its 
vehicle spring manufacturing division at Rrupp 
BrO ningha us because of its d ominant position 
in the market Page 18 

Abbey National Increases 25% to £704m 

Abbey National, the UK haniri^g group, yesterday 
announced a 25 per cent increase In pre-tax profits 
for 1993 to £704m (SlJbn). The board is recommend- 
ing an increase in the full-year dividend of 22 
per cent to 14.Qp per share. Page 18 

General Accident tnsuranc* recovery 

General Accident, the highly rated composite 
insurer, yesterday provided further evidence 
of the recovery in the UK general insurance market 
by posting its highest ever profit figures. Pre-tax 
profits last year amounted to £294iftn compared 
to a loss at £29 3m is 1992. The fm«7 dividend 
was increased by 4.4 per cent to 17.8p per share, 
making a total of 27 for the year (26.73 p). 

Page 18 

NEC-Samsung plan Joint memory chip 

NEC of Japan and Sams un g Electronics of South 
Korea, two of the world's largest memory chip 
manufacturers, plan a joint development of next- 
generation; memory chips, expanding their pgiating 
co-operation agreements, NEC said yesterday. 

Page 20 

World awaits the second Chinese wave 

The second batch of China state-run companies 
for overseas listings is likely to hit Hong ftrmg 
in July, about a year after Tsmgtao Brewery, 
producer of the only internationally known Chines e 
beer, made its trail- blazing debut Page 20 

Revival In UK fleet cars assists T Cowrie 

The revival of the UK fleet car market, coupled 
with lower interest costs, helped T Cowie, the 
car leasing, motor trading, bus and tractor group, 
post a 56 per cent increase in pre-tax profits last 
year to g«tn. The pre-tax profit increase, from 
£24^Jm in 1992, was ahead of market expectations. 
Cowrie's shares dosed at 33lp up 7p. Turnover 
grew by 32 per cent to £799 An (£605 5m) TnnhirHng 
£148m generated by the Keep Trust motor group 
of 18 dealerships acquired in May last year, turning 
Cowie into the fourth largest UK motor retailer. 
Page 22 

Sri Lankan planters thirst for p rivatisa tion 

Sri Lanka’s tea and rubber industries, two chid 
export sectors, have done remarkably well in 
the first year of partial privatisation and President 
D3. Wtjetunge is keen to move an to the next 
stage. AH there are political obstacles. Page 26 

Europe's Host Re cp oc to d Cerop a n l — 1 ' 

Senior European company executives are being 
invited to “vote” for Europe’s Most Respected 
Companies in a new survey by the Financial 
Times in association with Price Waterhouse. 
Business leaders will be asked to nominate compa- 
nies in thefr particular sector based on seven 
specific qualities. Page 10 


Companies In this Issue 


ASW 

25 

Abbey National 

18 

AbfflU-Price 

19 

Admiral 

25 

Amotts 

20 

BO 

18 

Bank Austria 

18 

Betisouth 

18 

Brent Wafter 

24 

Bute Resources 

24 

Bundaberg Sugar 

20 

CSR 

20 

Charter Group 

12 

Coal bws 

22 

Coca-Cola 

19 

Cowie (T) 

22 

Crossroads Oils 

25 

Dawson Inti 

24 

DomrricK Hunter 

22 

Hdefily Bro Values 

25 

Flsons 

12 

GA 

18 

GKN 

17 

GRE 

22 

Groups Bud 

17 

HeHcal Bar 

12 

O- 

24 

VMC Inds 

24 

tnvenask 

23 

Katon 

23 

Kmart 

19 

Krupp-Hoesch 

18 

Leeds & Hoi back 

23 


Market Statistics 


^Annual reports sarrica 28-29 
Benctmorfc Snt bands Zi 

Band Warm and options 21 
Band prices and ytetts 
Conwwdttea prices 28 

Dividends announced, IK 22 
BIS currency rates 34 

Eurobond pricas 21 

Brad interest rates 21 

FT-A World Wees Back Pose 
FT GoW Mines index Back Page 
FTASMA fandl band sve 21 

FT-SE Aewartw Wees 27 


Murray Income Tst 

25 

NEC 

20 

Newmarket Venture 

24 

Nokia 

17 

Ocean Group 

24 

Pebo-Canada 

19 

Radio Marconi 

19 

Rame 

24 

Repsol 

18 

Roto-Royce 

8 

Royal Bank of Canada 

19 

Satora Bank 

20 

Salomon Brothers 

17 

Samsung Becbonfcs 

20 

Sanderson Beet 

24 

Scottish Eastern fnv 

23 

Sembawang 

24 

SttentnSoht 

24 

Sinclair (WBtam) 

25 

Star TV 

20 

TI 

24 

"TR European Growth 

23 

Telefonica 

18 

Thames Water 

24 

Trtbasa 

24 

Vafencfcma Cementos 

19 

Valmet 

18 

Vox 

19 

Wainhomee 

22 

Wal-Mart 

19 

Westland 

17 

Wharf Cable 

20 

Wfanpey 

6 

YoricsMra Water 

22 


Foreign exchange 34 

Qlts prices 21 

tiffs equity opflntw Backpage 
London share service 28-28 

London trad options Back Pago 
Managed tab sendee 3M4 
Money martate 34 

Nm Hi bond testes ZT 

Recent teams. UK 27 

Short-term W rafts 34 

US internal rates 21 

World Sack Markets 35 


Chief price changes yesterday 


nUMKfWT |BMJ 


Berate 

890 

+ 

18 

MM 

AtimPrf 

690 

- 

40 

DakntarSdfli 

795 

- 

17 

Mutates HU 

788 

- 

18 

ME 

443 

- 

S 

Veda 

474 


7 

KW YORK ffl 
Mm 

0«BIE84> 

27 h 

+ 

1W 

Mon Men 

TOW 

+ 

JBS 

TaSranlU 

22H 

* 

1 

Fate 

CBKOip 

to* 

- 

W 

Kama Caff) 

130W 

"" 

3K 

iMaeflc 

SBVi 

” 

2H 




Essay H 

780 

+ 

12 

UofttaB 

Fate 

630 

+ 

18 

ASF 

612 

- 

18 

891 

90S 

- 

35 

Caret 

964 

- 

32 

SI Gob* 
TOKYO (Yen) 
Hm 

GE3 


21 

Dateline 

1800 

+ 

ISO 

HtaoMotm 

889 

+ 

65 

MWIIWtt 

1590 

+ 

MO 

MaiTr&Bk 

1330 

♦ 

90 

SUDftMlM TriUSt 

Ftete 

1520 

+ 

110 

CSX 

2630 


90 


Hmr York prices st 12^0pm. 


LONDON 


(Uses 

MraU 
BonMcks 
awe (i) 

tame* 

UcydsABbay 

KTZ 

Mb 

After Monti 
BAT Ml 

nu TV iy t 

Canaan Rcra 


SB 

S8H 

331 

230 

<20 

867 

4BB 

<64 

538 

199 


3 

31* 

7 

23 

14 

IB 

17 

22 

5 


Coonptids Ted 537 

Damon M 153 

ftwnifcl 540 

HS8C (7Sp ateO BBS 

Hartres 3 M 

UnFOrttitino 712 

Riine » 

Sfentttfi 355 

Standard CNU U9 


ir 

5 

15 

77 

IB 

<4 

4 

18 

56 


Growth in mobile and fixed telephone divisions restores Finnish group 

Nokia returns 


to profit and 
lifts payout 



•64oUa’s Gables and. Machinery 
operation 


By Hugh Camegy in Stockholm 

Nokia, the Finnish tele- 
communications group, yester- 
day reported a surge back to 
profit as high growth in its 
mobile and fixed telephone divi- 
sions produced a pre-tax profit in 
1993 of FML15bn (*209m), com- 
pared with a FMi58m loss in 
1992. 

It is increasing its dividend to 
FM230 a share from FM2.00. 

However, the group, the 
world’s second largest supplier of 
mobile telephones after Motorola 
of the US, announced it was with- 
drawing from Tyiqnnfa rf Tnfnp pic- 
ture tubes in a bid to stem losses 
in its troubled consumer elec- 
tronics business. 

It included a charge below the 
line of FML9bn mostly to cover 
the costs of the move, leaving a 
net loss of FMLISbn, compared 
with a net loss of FM723m in 
1992. 


Mr Jorma ODfla, chief execu- 
tive, said consumer electronics 
losses, at FM747m in 1993, 
required “very forceful actions'*. 

Efforts to find a partner or 
buyer for the picture tube mak- 
ing had so far fail**! The decision 
to close will mainly affect Nak- 
fa's Esslmgen plant in Germany 
which it modernised last year at 
a cost of FM20Qm. 

Nokia said it would continue to 
make televisions as these were 
important in developing interac- 
tive communications and multi- 
media products, but it would buy 
in picture tubes. 

The problems in consumer 
electronics contrasted with Nak- 
fa's fast growth in telecommuni- 
cations. Overall group sales were 
FM23.7bn, compared with 
FMi8.12bn, while research and 
development costs rose to 
EML47bn from FML13bn. Operat- 
ing profits jumped to FML46bn 
from FM288m. 


Most of Nokia's activities are 
outside Finland »nd fhp company 
is applying for a listing on the 
New York Stock Exchange, the 
first Finnish company to do so. 

Sales in the mobile telephone 
division surged 73 per cent to 
FM6.3bn from FM3.6bn. Nokia 
said of rii gH al cellular tele- 
plumes took off in 1993 and were 
expected to continue to grow rap- 


idly, but it said demand for the 
older technology analogue 
systems remained strong. Operat- 
ing profits for mobile telephones 
more than doubled to FM950m 
from FM437&L 

Sales in the fixed telecommu- 
nications division grew 43 per 
cent to FM4.6bn, while operating 
profit more than doubled to 
FM983m. Hie cables and machin- 



ery division reported slower sales 
growth, pushing up to FM49bn 
from FM4.6bn, but operating prof- 
its here again more than doubled 
to FM26lm. 

Nokia was confident of sustain- 
ing the rapid rate of sales growth 
for mobile telephones this year as 
it exploited growing markets, 
especially in Germany, the US 
and Japan. 


Westland attacks 
value of hostile 
bid from GKN 


Salomon Brothers 
to advise UK on 
debt disposals 


By Thu Burt hi London 

Westland, the UK's only 
helicopter manufacturer, yester- 
day dismissed a £496m ($724m) 
hostile bid from the engineering 
group GEN as "absurdly low”. 

The Yeovil-based company said 
the takeover bid, launched last 
month, undervalued its growth 
prospects and £L4hn order book. 

Launching Westland's formal 
defence document. Mr Alan 
Jones, chairman, said: “There is 
no logic in linking with an engi- 
neering conglomerate, focusing 
on the automotive and industrial 
services sectors. The way for- 
ward for us is through collabora- 
tion with other helicopter manu- 
facturers.” 

Nevertheless, GEN remains in 
a strong position, having raised 
its existing Westland stake to 45 
percent with the purchase of an 
18.7 pa- cent holding from United 
Technologies, the US parent of 
Sikorsky helicopters. 

The Midlands-based group. 


wbich justified its bid by claim- 
ing synergy between helicopters 
and its own armoured vehicles 
division, has offered Westland 
shareholders 290p cash pa share. 
The bid values the whole group 
at £49Gm. 

Mr Jones cimmed GEN’S after 
document suggested that 44p of 
the price related to a £38Sm pay- 
ment due to Westland from the 
Arab Organisation for Industrial- 
isation (AOI) for alleged breach 
of contract This meant that the 
GEN offer valued Westland’s 
underlying business at only 246p 
a share. 

“That is equivalent to 2L4 
times historic earnings, which 
undervalues the company. The 
average price earnings multiple 
far UK aerospace manufacturers 
is almost 60 pa cent higher at 
34," said Mr Junes. 

Sr David Lees. GEN chairman, 
said the earnings multiple figures 
were “meaningless" and warned 
there was no guarantee that the 
AOI would pay the damages. 



Alan Junes: *no logic in fink’ 


“There is nothing new in this 
defence. We expected something 
about firm orders. It’s a very thin 
document" 

He also questioned Westland's 
claim that the value of its beh- 
copter deliveries could rise from 
£10m this year to £360m by the 
year 2000. “They've admitted 
some of these potential orders 
may fall away entirely. There is 
only one firm order for this year 
and two for 1995." 

Westland's share price closed 
unchanged yesterday at 331p. 
Lex, Page 16 


By Tracy Corrigan in London 

The UK Treasury has appointed 
Salomon Brothers International 
to advise on disposals of its 
remaining holdings of debt in pri- 
vatised UK companies in the next 
financial year. 

IT is the first time that Salomon 
Brothers has been awarded a 
sema rote by the UK Treasury 
since it was ditched from the sec- 
ond tranche of the British Tele- 
communications privatisation, 
after being involved in a US Trea- 
sury auction wanriwl in 1991. 

A spokesman for the Treasury 
said it bad taken the unusual 
step of a pp ointin g a non-UK bank 
because Salomon “gave us the 
best presentation”. 

The Treasury sold £1.3bn 
($L8Sftm) of similar debt in 1992 
through a complex auction, 
arranged by Barings, in which 
13 privatised companies were 
Invited to bid to buy back their 
debt. Outside investors were 
allowed to compete for BT debt 


The government still holds a 
total of £2.86bn of the debt - 
£l.22bn of BT debt and £1.64bn of 
electricity debt - left on the com- 
panies’ bidance sheets at the time 
of privatisation. However, some 
of that debt is very short-dated 
and unlikely to he sold. 

Salomon will advise the Trea- 
sury cm which and how much 
debt to sell, and how to sell it 

In his November budget, Mr 
Kenneth Clarke, UK chancellor, 
said that the government aimed 
to raise £5.5bn in privatisation 
proceeds in the next financial 
year. The debt sale will allow the 
government greater leeway in 
the timing of further electricity 
privatisation offerings. 

However, one difficulty in sell- 
ing tiie debt is that, with coupons 
of more than 12 pa cent - much 
higher than current market 
yields - it would have to be 
priced at a premium of around 30 
pa cent to its notional value, 
which could make it unattractive 
to potential buyers. 


Brussels 
positive 
on Bull 
financing 

By John Ridding in Parte 

Mr Karel Van Miert, the 
European competition commis- 
sioner, yesterday gave a positive 
response to outlines of a 
restructuring and privatisation 
plan for Groape Ball, the 
loss-making French computer 
group. 

After a series of meetings with 
Mr Jean-Marie Descarpentrles. 
the Bull chairman, Mr Gerard 
Longuet, the industry minister, 
and Mr Edouard Ballad or. the 
French prime minister, Mr Van 
Miert said he had been 
“impressed by Mr Descarpen- 
tries* ideas and commitments”. 

During the meetings, the 
French government agreed to 
freeze a tranche of FFrS.sbn 
($43lm) of state aid for Groupe 
Bun pending the European Com- 
mission’s decision on the group’s 
recapitalisation. 

The FFr2.5bn is the final 
tranche of a FFrTbn capital 
increase announced last year by 
the Ftench government. 

Mr Van Miert is due to receive 
a final version of Bull’s restruct- 
uring 1 plan within the next few 
days. Be said a decision on the 
plan could he reached by the 
summer, and would not take 
more than six months. 

Brussels' decision Is regarded 
as crucial to the recovery of the 
group, which has lost more than 
FFrl5bn ova the past four years 
as a result of depressed markets, 
high costs, and inefficient man- 
agement. 

The French government has 
said the capital injection is a 
necessary final payment to allow 
the group to be privatised. 

Mr Descarpentrles aims to 
reduce the state’s 76 pa cent 
shareholding in Bull to below 50 
pa cent this year. 

He plans to achieve this 
through an increase in employee 
shareholdings and the participa- 
tion of industrial partners in the 
company's capital. NEC of Japan, 
which holds 4.4 pa cent of Bull’s 
shares, is seen as a potential can- 
didate for a larger stake in the 
group. 

Other measures aimed at 
returning the computer group to 
profit include cost-cutting and 
productivity measures. 

According to the plan, produc- 
tivity is to be increased through 
the establishment of separate 
profit centres and tighter report- 
ing procedures. Non-salary costs, 
such as rents, are to be reduced 
through the sale of most of the 
company's Paris sites. 

Industry’s hope. Page 3 


Barry Riley 

Currency: the risk that 
can appear benign 


leave all decisions to them, 
j yipindiiig currencies. But the cur- 


If Mr George Soros 
can get a currency 
exposure wrong to 
the tune of $60Qm, 
as he has admitted 
to have done on 
February 14, 
should the aver- 
age portfolio man- 
ager be getting Involved with the 
active management of foreign 
exchange positions? 

There is an odd contrast hoe 
between US and British pension 
funds. The Americans are 
inreoadngiy drawn to the sepa- 
rate management of foreign 
exchange exposures - on some 
estimates a quarter of US pension 
funds are already using socaHed 
currency overlays. British pen- 
sion funds, in contrast, are 
inclined to leave investments in 
foreign currency securities 
unhedged, except in unusual cir- 
cumstances. 

The feeling that dealing in 
securities counts as investment 
but trading in currencies is spec- 
ulation is deeply ingrained. It is 
reinforced in the UK by the risk 
that currency gains unrelated to 
holdings of securities might be 
taxed as profits from trading- 

There is a theoretical reason, 
too, why currency exposure is 
different Whereas Investment in, 
say, bonds carries a particular 
level of expected return (and an 
investment in equities brings the 
reward of a rather higher return, 
because of the risk premium) the 
expected return from holding 
currencies is zero. A currency 
index fund will give no return 
over extended periods. Although 
gome currencies have proved to 
be consistently strong and others 
consistently weak ova the long 
term, these shifts ha ve bee n off- 
set by interest rate differentials. 


This does not mean, of course, 
that currency trading can never 
be profitable. That may happen 
when central banks are interven- 
ing, as happened in summer 1992. 
But although Soros made big 
gains then, he has found it much 
trickier in freely floating condi- 
tions and, in the recent politi- 
cally volatile circumstances of 
the dollar and the yen. 

Over short periods, investment 

returns on securities have a sub- 
stantial currency element, as 
much as 40 pa cent of the annual 


The feeling that 
dealing in securities 
is investment bat 
trading in currencies 
is speculation is 
deeply ingrained 


returns in dollar terms. Therefore 
a hedging strategy will be attrac- 
tive if it reduces volatility. 

US pension funds are sensitive 
to short-term volatility because 
their corporate sponsors are 
more directly subject to market- 
related valuations. There Is also 
a particular problem with the 
dollar, a volatile currency which 
tends to move in a similar direc- 
tion against most other curren- 
cies at any particular time, 
whereas sterling often tracks a 
more moderate course between 
the dollar and other European 
currencies such as the D-Mark- 

A further structural factor is 
that US plan sponsors are used to 
layers of specialist managers. 
Currency managers can easfiy be 
added an. In the UK. however, 
hsiaTiBfid managers remain domi- 
nant. Trustees are inclined to 


rency decisions are not usually 
very well handled. Most British, 
fluid managers have been very 
bullish of tiie dollar throughout 
the past year, for instance, to no 
avail. 

British managers are focused 
on equities, where the assump- 
tion has been that local market 
returns are inversely related to 
the strength of the currency: 
devaluation, for instance, boosts 
share prices. Hedging is therefore 
less important, especially from 
the perspective of a sterling 
investor, who is accustomed to 
regular currency gains in bis 
portfolio returns. 

Things look different to a brad 
manager. Currency returns are 
more easily divorced from domes- 
tic bond returns and separate 
management of the currency and 
Interest rate risks is more natu- 
rally embraced. True, the returns 
tend to be positively correlated: 
weak currencies encourage fears 
of inflation and undermine 
d omes tic bond prices. But this fa 
not universally true: bond prices, 
for instance, soared in the deval- 
uing European countries after 
September 1992 because the dan- 
ger of soaring fiscal deficits was 
seen to be reduced. 

It is slightly strange that UK 
funds, which have an overseas 
exposure of some 30 pa cent, are 
less worried about currency risks 
than US funds, with an exposure 
which may be about 6 pa cent ra 
average at present (albeit rising). 

But the currency impact on UK 
funds, most notably in late 1992, 
has been perceived as benign. It 
will probably take a shock, in 
terms of large, avoidable cur- 
rency losses, to trigger UK pen- 
sion fund trustees into action. 



December, 1993 


International Business 
Machines Corporation 

through its wholly owned subsidiary 

IBM SEMEA Sp A 


has acquired a 

24 per cent interest in and has 
further options to acquire a majority of 


Information Services Group Ltd 

(a company listed cm the Johannesburg stodiexch/mge) 


The undersigned acted as financial advisors 
to IBM in this transaction 


Lehman Brothers 


ABSA 

Merchant Bank 


Rand 

Merchant Bank Limited 





IS 


INTERNATIONAL COMPANIES AND FINANCE 


FINANCIAL TIMES WEDNESDAY MARCH 3 1994 


Krupp-Hoesch to fight 
cartel office over unit sale 


Bank Austria bids for GiroCredit 


By Quentin Peel In Bonn 

Kropp-Hoesch. the merged 
German steel and engineering 
group, plans to fight an order 
by the German federal cartel 
office to sell part of its vehicle 
spring manufacturing capacity. 

The company said it would 
challenge the ruling by the 
competition authorities that It 
must sell its vehicle spring 
manufacturing division at 
Krupp Bnlninghaus because of 
its dominant position In the 
market. 

An agreement to dispose of 
the division was an important 
part of the deal negotiated by 
Krupp-Hoesch with the Cartel 
office in April, 1992, in order to 
get the go-ahead for the total 
merger of the two steel groups. 

However, just before the 
deadline to do so expired in 
December last year, the com- 
pany served notice of cancella- 
tion of the agreement, arguing 


that conditions in the market 
had changed. 

The cartel office in Berlin 
announced on Monday that it 
was not prepared to accept the 
unilateral cancellation, and 
ordered Krupp-Hoesch to sell 
the division, or it would 
appoint an independent trustee 
to do so on its behalf. 

The office said a merger of 
the vehicle spring manufactur- 
ing capacity of Krupp Brttnin- 
ghaus with Hoesch-Federn 
would raise the danger of the 
combined enterprise having a 
dominant market position. The 
two together would control 
more than 60 per cent of the 
market, with a turnover of 
between DM600m-DM700m 
($353m-t4l2rn). 

Krupp-Hoesch maintains 
that because of a slump in 
demand for its suspensions 
from the motor industry, the 
two vehicle spring divisions 
between them lost more than 


DMSOm in 1993- It said if one of 
the two divisions was sold, 
the other could no longer sur- 
vive. 

“The conditions of competi- 
tion in the automobile subcon- 
tracting industry have changed 
so much since the original 
agreement was reached that 
there is no longer any reason 
to fear the emergence of mar- 
ket domination.” according to 
Krupp-Hoesch. 

The cartel office argues that 
other companies are still sur- 
viving in the industry, many of 
them small or medium enter- 
prises with a much smaller 
turnover. 

It accepts that the motor 
industry has reduced its orders 
because of the current reces- 
sion. 

Krupp-Hoesch will now take 
the case to the superior court 
in Berlin, although a delay of 
several months is likely before 
any decision is taken. 


Abbey 
National 
rises 25% 
to £704m 

| By Alison Smith In London 

Abbey National, the UK 
banking group, yesterday 
announced a 25 per cent 
increase in pretax profits for 
1993 to £704m ($l.lbn), from 
£564m. 

The board is recommending 
an increase in the foil-year 
dividend of 22 per cent to 14p 
per share 

Lord Tugendhat, Abbey 
chairman, said that given the 
good results and the good 
prospects for the gronp, the 
board had moved away from 
its earlier aim of dividend 
cover of three times or more, 
and concluded that cover of 
between two and three 
times was appropriate. The 
recommended 1993 dividend 
is covered by earnings 2.1 
times. 

The greatest proportional 
profit rises came from the 
group's treasury and life 
assurance operations, while 
the core UK retail banking 
business rose 14 per cent to 
£618m. 

Pre-tax profit from the trea- 
sury operation rose to £145m, 
from £loom, while the profits 
from Scottish Mutual, the life 
assurance arm. and from 
Abbey National Life, which 
became operational only in 
February 1993, rose to £61m 
compared with £39m. 

The group’s continental 
European and ofrshore 
operations incurred a pre-tax 
loss of £105m, compared with 
a loss of £46m in 1992, largely 
because of the steep increase 
in provisions for commercial 
lending- in France. 

Provisions for the European 
businesses rose sharply to 
£99m from £47m, while provi- 
sions for UK operations fell to 
£119m from £227m. Hie sale to 
August of the Cornerstone 
estate agency featured as an 
exceptional loss of £30m. 

Net mortgage lending rose 
to £3.2bn to 1993, from £&5bn. 
However, Mr Peter Birch, chief 
executive, did not expect the 
group's 18J5 per cent share of 
the UK mortgage market in 
1993 to be repeated to the com- 
ing year, and said ft was likely 
to drop to Its previous 12 per 
cent to 14 per cent share. 

Lex, Page 16 


By Patrick Rum In Vienna 

Bank Austria, Austria's largest 
bank, is bidding For control of 
GiroCredit, the savings banks' 
clearing institution and a lead- 
ing commercial bank in its 
own right 

The object of the move - 
equivalent to an unfriendly 
takeover bid - is to force a 
restructuring of the savings 
bank sector. 

The bid is being made 
through Anteilsverwaltung 
Zeatralsparkasse. BA's biggest 
shareholder and bolding com- 
pany of the former Zentralspar- 
kasse, the Vienna city savings 
bank now merged Into BA, 
which is offering to boy Glro- 


By Tom Bums in Madrid 

BellSouth, the US tele- 
communications group, has 
added S pain to US ex panding 
European business by forming 
a local consortium to bid for a 
second cellular phone licence 
to be awarded later this year 
by the Madrid government 
The consortium, called Redi- 
tel allies the US group to Rep- 
sol. the Spanish state-con- 
trolled energy conglomerate, 
two construction companies 
and to eight savings banks. 

BellSouth will have a 25 per 
cent stake in the venture and 
Repsol is per cent 
Reditel is one of several alli- 
ances, mixing foreign opera- 


By John Sunkins in Milan 

The public offer in Banca 
Commerciale Italiana, one of 
Italy's leading banks, closed 
last night, three days ahead of 
schedule - confirming the suc- 
cess of the government’s priva- 
tisation programme. 

The shares went on sale on 
Monday at L5.400 each. There 
were indications last night that 
only about a quarter of the lm- 
plus people who had applied 
for shares were likely to 
receive any. 

In total, 260m shares were 
available to private investors. 
However, IRI, the state holding 
company which was disposing 
of its entire 54 per cent stake 
to the bank, placed a further 


Credit shares from savings 
banks across the country. 

It is offering a mixture of 
Sch370 cash per nominal 
SchlOO GiroCredit share and/or 
the equivalent of Sch400 per 
SchlOO nominal GiroCredit 
shares in BA bearer stock. 

The offer expires on IS 
March. 

Bank Austria owns just 
under 31 per cent in GiroCre- 
dit. It aims to buy at least 
another 20.4 per cent of Giro- 
Credit’s shares to raise its 
shareholding to above 50 per 
cent 

BA's announcement mma as 
a surprise, and it follows sev- 
eral earlier unsuccessful 
attempts to restructure Giro- 


tors with domestic companies, 
formed to the past year ahead 
of the liberalisation of Spain’s 
telecommunications industry. 
Rival consortia seeking a 
mobile phone licence Include 
GTE of the US and the UK’s 
Vodaphone. 

The government Is expected 
to publish the tender require- 
ments for operating digital ser- 
vice cellular teleplumes within 
the next two months. Two 
licences are to be awarded, one 
of which will be reserved for 
Telefonica, which is 32 per cent 
state owned and is the monop- 
oly telecommunications opera- 
tor in Spain. 

A mobile phone service that 
is already operated by Telefon- 


240m shares with institutions. 

On the Milan stock exchange 
last night, BCI closed slightly 
lower at L6.026 amid heavy 
turnover. 

Trading in the shares on sale 
to the public offer begins on 
March 17. 

The heavy subscription fol- 
lows similar strong demand for 
two earlier privatisation 
issues. 

IRI raised almost Ll,750bn 
(Slbn) by selling its stake in 
Credito Italiano to December 
and the government received 
almost L2,400ba from shares in 
Istituto Mobiliare Italiano, the 
financial services group. 

• Credito Italiano, the Italian 
bank privatised last December, 
repented a A9 per cent increase 


Credit and the savings banks 
sector. 

Leading savings banks from 
Salzburg. Linz and Graz 

responded cautiously to the 
bid, saying they would have to 
look at the offer in detail and 
compare it to an earlier plan 
put forward by BA for a 
restructuring of the savings 
banks. 

This entailed selling about 
two-thirds of BA’s holding in 
GiroCredit to a consortium 
comprising the Erste Oesterrei- 
chische Spar-Casse, the second 
largest savings bank, Austria 
Collegia li tat Versicherung, a 
leading insurance company, 
and the savings banks. 

Erste which already owned 


tea, using 450MHz and 900MHz 
cellular radio networks, is 
earning the Spanish group 
about Ptal2bn (885.7m) to oper- 
ating profit on a PtalQObn turn- 
over. 

Local analysts said Spain’s 
cellular system could have 
L8m subscribers by 1998, com- 
pared with 254,000 at present 

“Our emphasis is on the cel- 
lular business but we will be 
looking closely at other areas 
as they become available, H Mr 
George Von Open, Bellsouth’s 
chief executive in Spain said. 

The US group participates in 
mobile services in Denmark, 
France in Germany and is bid- 
ding. as part of a consortium, 
for an Italian licence. 


days early 

in net profits to L21&6bn for 
1993 as tax charges more than 
doubled to L640bn. 

During a year in which 

Han leu saw a shar p fall in inter- 
est rates, Credito’s gross oper- 
ating income rose 86 per cent 
to Ll,574bn. Interest income 
was up 11 per cent at L2j532bn 
while foe income more than 
doubled to Ll,351bn. 

• Banca Ambrosiana Veneto 
(Ambroveneto) yesterday 
reported gross operating 
income of over L790bn for last 
year, up 11 per cent on 1992. 

The Milan-based b ank, which 
will reveal net profits later this 
month, said the outcome 
reflected its strategy of devel- 
oping customer services, thus 
lifting non-interest income. 


about 21 per cent of GiroCredit 
was to buy a further 10 per 
cent. But this plan - which 
had a February deadline - was 
abandoned following disagree- 
ments over price. 

All the savings banks includ- 
ing the Erste Spar-Casse which 
refused the original plan, are 
due to meet today to discuss 
their response to the takeover 
bid from BA 

• Union Bank of Switzerland 
is making an agreed takeover 
bid for Regiobank Beider Basel 
(Hegio Bank), a northern Swiss 
regional bank, Renter reports 
from Zurich. 

Regio has a balance sheet of 
SFr2£bn i$l.7m) and about 200 
employees. 

Cost-cutting 
helps Valmet 
turnround 

By Hugh Camegy 

Valmet, the Finnish paper 
machinery and engineering 
group, said yesterday produc- 
tivity and cost-cutting gains 
had helped it return to profit 
to 1993. Profits after financial 
items were FMlOOm (818.07m) 
compared with a loss of 
FM298m in 1992. 

Unspecified extraordinary 
charges of FM154m, mainly 
write-offs associated with 
rationalisation moves, resulted 
In a pre-tax loss of FM54m, but 
this was a sharp improvement 
over the pre-tax loss of 
FM219m in the previous year. 

Valmet said It would show a 
net profit of FM85m when its 
annual report was published 
later this month, compared 
with a net loss in 1992 of 
FM120m, although details were 
not given. 

Group sales were up 11 per 
cent to FM10.7bn compared 
with FM9.6bn in 1992, thanks 
in part to the fall in value of 
the Finnish markka last year. 
More than 80 per cent of Vai- 
mefs sales were outside Fin- 
land, mainly in western 
Europe and North America. 

Operating profit Improved 
sharply to FM479m from 
FMlTlm. 

Valmet said its internal 
rationalisation programmes, 
coupled with the prospect of 
more stable markets in the for- 
estry industry, should produce 
a further improvement In 
1994. 


General Accident posts record 
profits and increases dividend 


By Richard Lap par in London 

General Accident, the highly 
rated composite insurer, yes- 
terday provided further evi- 
dence of the recovery in the 
UK general insurance market 
by posting its highest profit 
figures. 

Pre-tax profits last year 
amounted to £294.9m (8447m) 
compared with a loss of £29. 3m 
in 1992. The final dividend was 
increased by 4.4 per cent to 
I7.8p per share, making 27.5p 
for the year against 26.75p. 

Like Guardian Royal 
Exchange, Royal Insurance 
and Commercial Union, all of 
which reported large pre-tax 
profits last week. GA's turn- 
round hinged on an improve- 
ment in the UK, where under- 
writing profits of £59.7m for 
the year - and ragm for the 
fourth quarter - were reported 

“As anticipated, our early 
action on rates and operating 
costs has produced a very sig- 
nificant recovers' in operating 
performance.'’ said Mr Nelson 
Robertson, chief executive. 

Mr Robertson said a “deter- 
mination to underwrite for 


profit and not volume has had 
a very considerable impact on 
profitability across the whole 
portfolio." 

Underwriting profits in the 
motor sector amounted to 
EU.lm against a loss in 1992 of 
£46.8m and premium income 
increased by 4.8 per cent to 
£252.7m. However, the com- 
pany reduced its policies to 
660,000 from 750,000. Mr Bob 
Scott, general manager UK, 
said this reflected a planned 
reduction in exposures to non- 
comprehensive policies. 

Overall UK premium income 
increased to £1.38bn compared 
with £L25bn. 

Elsewhere, results in the US 
- where GA obtains 32 per cent 
of its premium income - 
improved with underwriting 
losses falling to £140.4m from 
£210.5m. However, Canada, 
where GA is the biggest player 
following an acquisition last 
year, produced higher under- 
writing losses, up to £44.1m 
against a loss of £18.7m. 

Mr Robertson said GA had 
benefited from a reduced level 
of catastrophe losses in the US. 
but had been hit by storm 


losses and the need to 

strengthen reserves in Hanaria. 
The company is keen to 
expand in the Pacific - where 
Lt has a market share of 
between 5 per cent and 7 per 
cent to Malaysia, Hong Kong 
and Singapore. 

Mr Robertson said the bal- 
ance of the group’s account 
could shift towards North 
America and the Pacific. 
“There is nothing in our plan 
which says the UK has to pro- 
vide us with a third of our 
total income." 

The company has some capi- 
tal which it could use for 
expansion, following a 
strengthening of its balance 
sheet Its solvency margin - 
net assets as a percentage of 
non-life premiums - ammmtpH 
to 57.4 per cent at the end of 
December 1993. compared to 
4L5 per cent a year earlier. 

Overall general premium 
income rose to £4.18bn from 
£3.83bn. Life business premi- 
ums amounted to £866. lm com- 
pared with £790.4m while 
investment income rose to 
£509. Lm from £504 .9m. 

Lex, Page 16 


BCI offer closes three 


BellSouth in Spanish venture 



'/vr/ /tort’ //'trer/orr ft/tr/w/fti/ A/ /oo/t 
rtf ft* <r ■ u/Z/o/tcc t/t . f ft: ireo : ' 


Or 4LL THE PLACES YOU COULD LOOK. THE 


BEST IS THE SERFIN Fl NANCIAL GROUP. THE 


FIRM WHOSE INVESTMENT BANKERS HANDLE 


MORE PRIVATIZATIONS, JOI NT VENTU RES AND 


MftA ASSIGNMENTS THAN ANYONE ELSE 


i m M exico. Which explai ns why so many 


DIFFER ENT COMPANIES MEET THEIR STRATEGIC 


GOALS BY FORMING AN ALLIANCE WITH US. 


DS.HT A ;QU T( UNDEP.V* 




SERFIN 

FINANCIAL GROUP 


WOOLWICH 
- Building Society - 

£33,000,000 

Subordinated floating rate 
notes due 2001 

Notice is hereby goen that the 
notes will bear interest at 
6J!S75% per annum from 
28 February 1394 to 3f August 
1994. Interest payable on 
31 August 1994 will amount to 
S3, 185. 34 per S 100.000 note. 

Agent; Morgan Guaranty 
Trust Company 


JPMoigan 


CREDIT LOCAL DE 
FRANCE - CAECL S A 

U5.S2.000, 000.000 
Euro-Medium Term Notes 
SERIES NO. 12 
FFC 725, 000,000 Inverse 
floating rate notes 1996 
TRANCHE NO.l 

Notice is hereby given that for 
the interest period I March 
1994 to I June 1994 the notes 
will bear interest at 21. 75% per 
annum. Interest payable on 
i June 1994 will amount to 
FF27.79I. 67 per FF500.000 
denomination. 

Agent: Morgan Guaranty 
Trust Company 


JPMorgan 


Mortgage Funding 
Corporation No 2 Pic 
SI 15,000,000 Class B-l 
SI 1,000,000 Class B-2 
Mortgage backed floating 
rate notes August 2023 
For the interest period 28 
February 1994 to 31 May 1994 
the Class B-l notes will beta 
interest at 5.5125 % per annum. 
Interest payable on 31 May 
1994 wiU amount to 51,383.45 
per St 00,000 note. The Class 
B-2 notes will bear interest at 
5.6875% per annum Interest 
payable on 31 May 1994 will 
amount to 81,433.56 per 
5100,000 note. 

Agent: Morgan Guaranty 
Trust Company 


JPMorgan 


PtACER DOME INC. 



Jay K. Taylor 
John Wilson, President 
and Chief Executive Of- 
ficer of Placer Dome Inc., 
announces the formation of 
Placer Dome Latin 
America Li railed (PDLA), 
based to Santiago, Chile, 
with Jay K. Taylor as Presi- 
dent and Chief Executive 
Officer. PDLA is responsi- 
ble for Placer Dome's 
acquisition, mine develop- 
ment and operating 
activities in Soothand Cen- 
tral America south of 
Mexico. Growth of PDLA 
is expected to come from 
an aggressive exploration 
programme under way 
throughout its jurisdiction, 
as well as from acquisition 
opportunities. Mr. Taylor 
was previously Executive 
Vice-President and Gen- 
eral Manager of Placer 
Dome Sud America,. the 
predecessor of PDLA Mr. 
Taylor is an engineering 
graduate of the University 
of British Columbia, 
Canada, and has been with 
the Placor Dome organiza- 
tion for 2 1 years in British 
Columbia and South 
America. Placer Dome Inc. 
of Vancouver, Canada, is 
an international mining 
company which operates 
17 mines, 13 of them gold 
mines, in six countries. 


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Residential Property 
Securities No. 1 PLC 

£ 200 , 000,000 

Mortgage Backed Floating Race Notes 2018 

The rate of interest for the three month period 28th February, 1994 to 
31st May, 1994 has been fixed at 5.5375 per cent, per annum. 
Coupon No. 24 will therefore be payable on 31 k May, 1994 at 
£1,395.75 per coupon. 

Aggregate interest charging balances of Mortgages redeemed during the 
previous Interest Period: £2^33,271.0 5 
Aggregate interest charging balance* of Mortgages redeemed as at 
28th February. 1994: £223,165,44535 
The aggregate principal amount of Notes outstanding as at 
28di February, 1994: £86,600,000 

S.G. Warburg & Co. Ltd. 

Agent Bank 

innmiiuiiHHHiniiimiiuimiimimuiim! 



IN6T9IS 


HI 

UfitiTir 


3i International B.V. 

(FonnrHj known as tmmton fit huhulrj Intrmational fl. V.) 

£125,000,000 

GUARANTEED 

FLOATING RATE NOTES 1994 

FOR THE THREE MONTH PERIOD 
28TH FEBRUARY, 1994 TO S1ST MAY, 1994 

In accordance with the provisions of the 
Notes, notice is hereby given that die rate of 
interest has been fixed at 5 */isper cent, 
per annum and that the interest payable on 
the relevant interest payment date, 

31st May, 1994 against Coupon No.Mv&lb( 
£133.90 From Notes of £10,000 nominal 
and £13-39 from Notes of £1,009 ootninaL 

S.G .WARBURG & CO. LTD. 


IIIllllllIlIHlIfllflllllllllllllHIIlIlIIIlIllllflllll 



New Zealand 

£200,000,000 

Floating Rate Notes 1997 

In accordance with the provisions of the Notes, notice is hereby given 
tha^ For the three month period 28th February, 1994 to 31st May, 1994 
the Notes will bear interest at the rate of S '/« per cent per annum. 
Coupon No. 35 will therefore be payable on 31st May, 1994 at £661.64 
per coupon from Notes of £50.000 nominal and £66.16 per coupon 
from Notes of £5,000 nominal. 

S.G. Warburg Sc Co. Ltd. 

Agent Bank 

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The mi-ntul nxil l.i lh< hiuo m«rKvi 

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London stock exchange 


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FINANCIAL TIMES WEDNESDAY MARCH 2 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Loan-loss fall 

helps lift top 
Canadian bank 


By Bernard Simon in Toronto 

Falling loan losses and strong 
investment banking 
helped Royal Bank of Canada 
to lift first-quarter earnings by 
18 per cent 

The bank, which is Canada’s 
biggest financial institution, 
predicted -that a continuing 
improvement in its loan portfo- 
lio, plus higher productivity, 
would provide a "solid level of 
profitability” this year. 

Net earnings rose to C$300m 
(US$222.2m). or 82 cents a 
share, for the three months to 
January 31, from C$254m, or 71 
cents a share, a year earlier. 
Return on equity improved to 
17.9 per cent from 14A per 
cent 

Assets climbed to C$168^bn 
from C$237bn, with more thaw 
half the increase due to last 
year's acquisition of Royal 
Trust, the ailing trust and loan 
company formerly controlled 
by Toronto's Bro nfman family. 

Return on assets slipped 
fractionally to 0.72 per cent 
from 0.73 per cent. 

KBC is emerging from a tur- 
bulent period, which included 
the Royal Trust acquisition as 
well as a heavy exposure to the 
troubled property and forestry 
industries. The bank has aisn 
been criticised for weak inter- 
nal management. 

Earnings have tumbled from 


a record C$965m In 1990 to 
C$2Q7m in 1992 and a C$420m 
fourth-quarter loss last year. 

The bank noted yesterday, 
however, that fiscal 1994 loan 
losses were expected to Call to 
CS820m from C*l.75bn last 
year. The first-quarter loan- 
loss provision was C$2Q5m, 
down from last year. 

Non-accrual loans totalled 
C$3.21bn on January 31, equal 
to 2L6 per cent of total loans 
and acceptances. This was 
slightly lower than three 
months earlier, but the dentine 
was slowed by a further C$46m 
increase in sour commercial 
property loans. 

A further cushion is pro- 
vided by the rising market 
value of the bank's Third 
World debt portfolio. 

The surplus has grown over 
the past quarter, from C$415m 
to C$550zn. Any of thfo surplus 
realised during 1994 will be 
transferred to general loan-loss 
provisions. 

• Bank of Nova Scotia 
reported a l£L5 per cent Jump 
in first-quarter earnings, to 
C$i97m, or 82 emits a share, 
from C$165m, or 70 cents a 
share. Return on equity rose to 
14.7 per cent from 13.9 per 
cent 

The improvement was attri- 
buted largely to higher interest 
income and stronger invest- 
ment-banking warning s 


Canada considers 
cutting oil holding 


By Bernard Simon 

Canada's Liberal government 
is considering a further cut in 
its 70 per cent stake in Petro- 
Canada, the integrated oil and 
gas producer set up in the mid- 
1970s to give Ottawa a window 
on the energy industry. 

Ms Anne McLellan, Natural 
Resources minister, said she 
and the secretary of state for 
finance were reviewing Petro- 
can’s ownership. 

"Everybody is saying that 
with share prices where they 
are, it may be time for the fed- 
eral government to take a look 
at what it wants to do," she 
said. Other, unspecified, 
options were also being consid- 
ered. 


The previous Progressive 
Conservative government 
began privatising Petrocan in 
mid-1991. when it sold 42m 
shares to the public at C$13 a 
share. The share price began 
sliding shortly afterwards, 
reaching a low of C$7.38 last 
year. 

However, it has recovered 
sharply in recent months. The 
shares were trading at C$13.50 
on the Toronto stock exchange 
yesterday. 

A sweeping reorganisation, 
including asset disposals, arid a 
jump in natural gas prices 
have contributed to a signifi- 
cant improvement in financial 
performance. Earnings totalled 
C$162m (US$120m) last year on 
sales of C$4. Ebn. 


Argentine banking 
opened still further 


By Stephen Fkfler, 

Latin America Editor 

Financial institutions from the 
US and Europe are exploring 
the possibility of starting 
operations in Argentina follow- 
ing a government decree last 
week which further opened the 
banking system to foreign com- 
petition. 

Mr Roque Fernandez, presi- 
dent of the central bank of 
Argentina, said those applying 
to open branches included the 
financing arm of General 
Motors, GMAC, and a Chilean 
group. Other applications were 
expected from US and Euro- 
pean banks. 

Mr Fernandez was in London 


for talks with the Bank of 
England. He hopes to persuade 
the Bank that his institution is 
capable of supervising Argen- 
tine banks’ internatio nal activ- 
ities - thereby paving the way 
for the opening of further 
Argentine bank offices in Lon- 
don. He is also talking to bank- 
ing authorities in Spain, the 
US and Japan. 

Last week’s decree brought 
protests from Argentine hanks. 
Mr Fernandez said the Argen- 
tine banking system was com- 
petitive - 200 financial institu- 
tions were now operating 
compared with 800 in 1980. 
However, there has been con- 
cern among businesses about 
high lending margins- 


N American 
groups 
study Vox 
stake deal 


By Christopher Parties 
In Frankfurt 

North American media 
companies are negotiating for 
a 49 per cent stake in Vox, a 
private German television sta- 
tion owned by a consortium 
headed by the Bertelsmann 
group. 

According to unconfirmed 
reports, the bidders are Time 
Warner of the US and CanWest 
Global Systems or Canada. 
Vox is one of nine German- 
based private broadcasters 
competing for viewers with 15 
publicly-owned channels. 

Their move is understood to 
have been initiated last month 
when the publisher of the Sud- 
deutsche Zertung newspaper, 
decided to dispose of its 20 per 
cent stake in the straggling 
broadcaster. 

Bertelsmann, Europe's big- 
gest media business with wide- 
spread international interests 
In print and electronic media, 
holds a 24.9 per cent stake. 
Other shareholders include the 
WMB holding company, of 
which 47 per cent is to the 
hands of the public sector 
bank, WestLB. 

Bertelsmann yesterday 
would confirm only that it was 
in talks which should lead to 
"stabilisation** of the share- 
holdings in Vox, which had a 
shaky laimch into the crowded 
German TV market Just over a 
year ago. 

The company said a group of 
American investors was seek- 
ing a 49 per cent stake, but 
that the current owners were 
not offering that amount It 
said that although Bertels- 
mann no plans to reduce 
its stake, an announcement 
could be made in the next few 
weeks. 

Originally conceived as an 
information dhaimri, much of 
Vox's output is now entertain- 
ment The Suddeutsche Zei- 
tung, winch supplies a maga- 
zine programme, S-Zett, and 
other services to Vox, is 
believed to want to pull out 
because of the format change, 
and the unexpectedly high 
start-up losses, exacerbated by 
recession. 


Low newsprint 
prices keep 
Abitibi in red 

Low paper prices drove 
Abitibi-Price, the world's big- 
gest newsprint producer, to its 
fourth consecutive year of 
losses in 1993, writes Bernard 
Simon. 

The Toronto-based company 
said newsprint prices in North 
America had shown no signs 
of recovery this year. 

However, it was counting on 
a combination of higher off- 
shore prices, a 7 per emit cut 
in North American discounts, 
and price rise to lift operating 
results during 1994. 

Net losses last year totalled 
C$121.7m (US$90. lm), or 
C$1.71 a share, a significant 
Improvement on 1992's 
C$220-9m deficit, equal to 
C$3.19 a share. The results 
include a narrowing in losses 
from discontinued operations, 
to C$13.4m from C$27.8m. 

Sales rose to C$l-87bn from 
C$1.60bn while operating 
losses fell to C$39.8m from 
CS 138.1m. 


Glory days gone for discount pioneer 

Kmart’s costly expansion and modernisation has tinned sour, writes Richard Tomkins 

K! 


mart, the US retailer 
gnri pioneer of the dis- 
count store concept in 
the early 1960s, was rewarded 
for its invention for one fleet- 
ing moment in the late-1980s, 
when it became the world’s 
biggest retailer. 

Now, in the 1990s, it is still 
near the top of the league in 
ter ms of annual sales - but in 
teams of last year's profits, tt 
looks like a company on the 
ropes. 

After five years of disap- 
pointing earnings, Kmart went 
from bad to appalling with the 
figures it reported on Monday. 

For the fourth quarter to 
January, it turned in net losses 
of $1.2bn, compared with net 
profits of $535m last time. For 
the year as a whole, it reported 
net losses of $974m, compared 
with net profits of $941m a 
year earlier. 

Admittedly, there were spe- 
cial factors at work. During the 
fourth quarter, it incurred 
costs of nearly $L9bn pre-tax 
for the disposal of some 
operations and the restructur- 
ing of others. 

However, even after strip- 
ping out all the unusual 
charges, and Ignoring the 
losses made by the discontin- 
ued operations, the group 
would only have shown net 
income for the year of $534m - 
clearly unsatisfactory for a 
group with sales of $3A2bn. 

hi contrast, Smart's bigger 
rival, Wal-Mart, reported net 
income of $JL3bn on turnover 
of $67 ^bn for the same period, 
even after acquiring Kmart’s 
loss-making Pace Membership 


Warehouse operations during 
the year. 

However It’s not only the 
financial performance of the 
two companies that separates 
them: they have also followed 
contrasting strategies. 

While Wal-Mart has stuck 
closely to general merchandis- 
ing, either through its discount 
stores or membership ware- 
houses, Kmart has bamboozled 
observers with its changes of 
direction. 

These started in the 1980s 
when, faced with growing coon- 
petition from Wal-Mart and 
other discount-stare operators, 
it started looking for new 
sources of profits growth. 

Following Woolworth’s 
example, it decided specialty 

retailing was the answer, and 
set about using the cashflow 
from its discount stores to gain 
a foothold in new sectors. 

It be nght or set up the Pay- 
Less Drug Stores chain, the 
Waldenbooks and Borders 
book stores, the Sports Author- 
ity sporting goods shops, the 
Builders Square home 
improvement stores, and the 
OfficeMax office supplies 
rhfliT) 

Confusingly, however, it also 
sought to expand in general 
merchandising by making for- 
ays into the hypermarket or 
membership warehouse busi- 
ness, first by taking a stake in 
the Makro hypermarket chain 
and then buying the Pace 
Membership Warehouse opera- 
tion. Both ventures proved 
nngnrfwarfni, ending in heavy 
writedowns. 

Next, the core of its strategy 


Share prices ($} 

35 



15 


1993 


Some: OatMtaara 


started to weaken when it dis- 
covered that the discount 
stores could not be relied upon 
to generate the cash required, 
because they needed heavy 
investment to survive the com- 
petition from Wal-Mart and 
other discount store groups. 

I n 1990, Kmart responded to 
the co m pe ti tive threat by 
launching a costly modern- 
isation programme for the dis- 
count stores. 

By 1992 it had reached its 
goal of refurbishing 450 stores 
a year. However, it abruptly 
scaled back the programme, 
saying it wanted to consider 
re-entering the hypermarket 
sector with a new Super Kmart 
format. 

In January, another 


1904 


about-turn came when Kmart 
announced that the results 
coming through from the refur- 
bished discount stores were so 
good the modernisation pro- 
gramme would resume, absorb- 
ing the larger part of a $l.3bn 
restructuring charge. 

Meanwhile, bade in re tailing , 
the PayLess Drug Store chain 
produced unimpressive results 
and was sold last year. Taken 
as a whole, the other specialty 
retailing operations have deliv- 
ered profits foiling short of tar- 
get and, in January, Kmart 
announced it planned to sell 
between 20 and 30 per cent erf 
their equity in a series of stock 


An optimistic view of 
Kmartis outlook for 1994 would 
be that all the bad news had 


been cleared away, and that 
the company was poised for 
growth. However, the state of 
the share price, hovering close 
to its 12-month low of $18’i. 
suggests that few in the mar- 
ket subscribe to that view. 

Kmart’s lack of a clear stra- 
tegic direction is only one rea- 
son for the pessimism. 

The other is that it is not up 
to the competition with Wal- 
Mart because the latter is sim- 
ply a better retailer. Last year, 
for example, the poor financial 
performance of Smart's dis- 
count stores was largely 
explained by the fact that it 
overstocked on goods that peo- 
ple did not want, and ran out 
of things they did want 

Analysts say this does not 
happen at Wal-Mart, because It 
is ahead in using technology to 
match what people want with 
what it stocks. 

“Wal-Mart has a much better 
read of what is selling in its 
stores, so it doesn't carry dead 
inventory." says Ms Maureen 
McGrath of Smith Barney 

Shearson, the Wall Street bro- 
kerage house. 

Kmart has also invested in 
technology, but it has not been 
enough to stop Wal-Mart's 
inexorable growth. Last year, 
Wal-Mart's sales - already 
twice the size of Kmart's - rose 
by more than 20 per cent, and 
analysts believe they will 
advance by another 20-25 per 
cent this year. 

Since the market itself is 
barely growing, something else 
will have to give. Seen in that 
context, Kmart’s troubles seem 
for from over. 


Coca-Cola looks to the Grape Beyond 


By Richard Tomkins - 
In New York 

It sounded more like a fringe 
meeting at a New Age rave 
than a product launch. Against 
a background of weird, throb- 
bing music, the man at the 
pmtinm tolkari of yin and yang, 
body and soul, life, the uni- 
verse, and everything. 

However, to nobody’s great 
surprise, it quickly emerged 
that Coca-Cola bad not decided 
to give up the business of mon- 
ey-making for a life of philan- 
thropy «nri consciousness-rais- 
ing- 

Rather, it was signalling 
plans to grab a slice of the 
market for so-called New Age 
beverages, the fastest-growing 
sector of the US soft-drinks 
market 


Coca-Cola’s weapon in the 
New Age drinks war is a prod- 
uct called Fruitopia. a vaguely 
psychedelic-looking range 'of 
bottled drinks that turns out to 
consist of nothing but water, 
sugar, fruit Juice and natural 
colouring. 

However, if the contents of 
the bottles are prosaic, the 
labels are not They carry pic- 
tures dotted with the words 
“mind", “body” and “spirit", 
and the drinks have namas like 
Raspberry Psychic Lemonade, 
Strawberry Passion Aware- 
ness, Total Fruit Integration 
and Citrus Consciousness. 

The bottles also carry mind- 
expanding epigrams. On the 
bottle of Grape Beyond, for 
example, the slogan says: 
“ Thing s that are still right in 
the cosmos: the perfection of a 


circle, Beethoven’s 9th. Grape 
Beyond.” 

The launch erf its Fruitopia is 
seen as a clear attempt by 
Coca-Cola to replicate the phe- 
nomenal success of a range of 
similar fruit drinks made by 

the New York-based Snapple 
Beverages, a stock-market flyer 
since it went public a year ago. 

By coincidence, Snapple yes- 
terday reported net profits 
snarin g to $67£m in tiie year to 
December, from a pro-forma 
$18.3m last time. Its shares, 
however, sank 91% to $27% as 
news of the Fruitopia launch 
emerged. 

The total market for New 
Age beverages - loosely 
defined as “natural" dr inks 
hke iced teas, fruit juices, bot- 
tled water and sports drinks - 
is estimated to be worth $Gbn, 


and Coca-Cola has only 8 per 
cent of it. The company 
expects the Fruitopia launch to 
take that share to 25 per cent 
initially, and to 30 per cent 
within three years. 

Mr Sergio Zyman, Coca- 
Cola’s senior vice-president 
and c htg f marketing officer, 
said the product would be 
available in US stores in four 
weeks, and in three or four 
other countries soon after. Its 
l«nw»h would be harked by a 
$30m marketing campaign. 

Snapple seemed unconcerned 
by the move. All that extra 
advertising would simply 
accelerate the market's 
growth, it said. And, asked 
why so many people were sud- 
denly buying New Age bever- 
ages, it suggested: “Maybe 
they’re sick of Coke.” 


Spanish cement group 
earnings up by 58% 


By David White ki Madrid 

Valendana de Cementos, the 
leading Spanish cement pro- 
ducer which is controlled by 
Cemex of Mexico, defied an 
overall decline in the c eme nt 
market last year and increased 
group after-tax profits by 58 
per cent to Pta5.61bn ($40.1m). 

Part of the increase came 
from the inclusion of the last 
three months’ figures from 
Sanson, another cement pro- 
ducer brought into Valendana 
last year. 

Both companies, formerly 
controlled by the Banco 
Espafiol de Crtdito (Banesto) 
banking group, were bought by 
Cemex in 1992. 


Net operating profit for the 
group rose more than fourfold 
to Pta7.69bn, mainly due to 
improved production processes 
and cost-cutting, as wall as 
price increases. 

The group’s sales, excluding 
those of Sanson, were 5.7 per 
cent down at Pta48.07bn but 
the decline was less than half 
the estimated overall decline in 
cement sales during the year. 
Including the Sanson figures, 
turnover was Pta50.94bn, 
which was per cent more 
than for 1992. 

Valendana, which repre- 
sents about a third of Cemex's 
business worldwide, said it 
expected a slight recovery in 
the market this year. 


Ipsco capacity rises 24% 


Ip6CO, western Canada’s only 
basic steelmaker, ran at full 
capatiiy last year with ship- 
ments peaking at lm tonnes, 
up 24 per cent from 1992. 

Demand was strong for 
sheet, ofl and gas well tubing 
and fabricated products, but 
large diameter pipe business 
was weaker. 


Fourth-quarter net profit was 
C$8m (US$Sm) or 39 cents a 
share, up from C$6.1m or 38 
cents on fewer shares out- 
standing a year earlier. Reve- 
nues were C$l68m. against 
C$140.Sm. 

For the full year earnings 
were C$28.7m or C$1.42, com- 
pared with C$15 -5m or 98 cents. 


Portuguese 
telecom 
climbs 14% 

By Peter Wise 
in Lisbon 

Radio Marconi, Portugal's 
international telecommunica- 
tions operator, yesterday 
announced a 14 per cent rise in 
consolidated net profits in 1993, 
to EsL2lbn ($24£m). Sales grew 
16 per cent, to Es46.5bn, and 
cashflow rose 17 per cent to 
Es9-2bn. 

The private shareholders of 
Marconi, which is 51 per cent 
state-owned, will decide this 
year on a government proposal 
to merge the company with 
Portugal's three other wholly 
state-owned telecommunica- 
tions operators. The new com- 
pany would be known as Por- 
tugal Telecom. 

The government plans to pri- 
vatise up to 49 per cent of Por- 
tugal Telecom, and will sell 
part of the equity to a strategic 
foreign partner. 

Mr Goncalo Sequeira Brega, 
president, said that despite 
recession in 1993, Marconi 
reduced total debt from 
Es25.4bn in 1992 to Esl9Jbn 
last year. 

Market capitalisation more 
than doubled. 


Hunting in Argentina’s bargain basement 

International companies are finding strong takeover targets, writes John Barham 


ergers and acquisi- 
tions in Argentina 
. once meant finding a 
npany to take over the 
; of a multinational 
he country's political 
lomic chaos. 

successfully-completed 
privatisation pro- 
!, rapid economic 
and pro-business gov- 
; policies have put 
a firmly back on the 
ional business map. 
there has been a rash 
rer announcements by 
companies and more 
cted. 

r and Gamble bought 
at Bunge y Born’s 78 
1 stake in Compafiia 
which makes deter- 
r J52.5m. 

tabisco signed a letter 
: with the owners of 
laker EM Terrabusi to 
their controlling stake 
ampany, which has a 
capitalisation of 

i CNTI bought SAIAR, 
as leading maker of 
Id water heaters, for 
(dosed amount. Chil- 
wtors have become 
-e buyers of Argentine 
?s. buying into indus- 
ging from ceramics to 
tfons of the privatised 
y sector. 

t cases, target compa- 


nies are too small or badly- 
managed to survive alone in 
Argentina's liberalised market 
Often they are family-owned 
businesses with succession dif- 
ficulties, or face insurmount- 
able financial or technological 
problems. 

Buyers are attracted by an 
economy expected to grow 5-6 
per cent a year to the raid of 
the decade. Furthermore, the 
performance of most local com- 
panies can be rapidly increased 
with strong management, capi- 
tal and technology. 

T he Exxel Group, a Bue- 
nos Aires-based buy-out 
company, has bought 
paper, soap and electricity 
companies and shows what 
strong management can 
achieve. Mr Juan Navarro, 
Exxel president, says that at 
one of his acquisitions, "we cut 
overheads by 3M0 per cent, 
increased output by more than 
60 per cent In six months and 
cut 10 per cent of the 
staff”. 

Multinationals usually look 
for branded mass consumption 
goods, with little debt, where 
they can add value rapidly. 
The food industry is a leading 
acquisition target Argentina's 
pampas, those vast grasslands 
and wheat prairies, make it a 
large-volume, low-cost agricul- 
tural producer. 


As well as RJR Nabisco, food 
groups such as Nestle and Cad- 
bury-Schweppes have been 
buying companies in Argen- 
tina recently. 

Results for the trailblazers 
have been impressive, hi 1991, 
when US tobacco and food 
giant Philip Morris acquired 
Swiss chocolate maker Such- 
ard, the Argentine s u bsidia ri es 
of both companies came 
together just as the economy 
began an unexpected recovery. 

Mr James Stewart, Philip 
Morris's local general man- 
ager, says: “We used the 
retained earnings from Such- 
ard to finance [later] acquisi- 
tion of an ice cream company 
and the Tang powdered drink 
company.” He says revenues 
from the food business have 
risen fivefold and income 8.5 
times since 1991. 

The US investors who 
bought a bankrupt Pepsi bot- 
tler in 1989 have been even 
more successful. The investors, 
led by Mr Charles Beach, paid 
a no minal sum for the bottler 
Baesa, but invested more than 
$200m to build it into a com- 
pany with listings in New York 
and Buenos Aires and 
a market capitalisation of 


Mr Beach had seen the 
potential of a market with ris- 
ing incomes and repressed con- 
sumption. Argentines drink 


fewer soft drinks than consum- 
ers in other developing coun- 
tries. Mr Rafael Farace, Baesa 's 
finance director, said “promo- 
tion, martruHng , efficient pro- 
duction, innovation and distri- 
bution were the keys of our 
success”. 

Sales grew to $268Am last 
year from $3L5m in 1990. Mar- 
gins rose by a third to 41 per 
cent. Pepsico has awarded 
Baesa franchises in Chile, Uru- 
guay, southern Brazil and 
southern Argentina, and 
helped finance the expansion 
by paying $35m for 26 per cent 
of Baesa. 

A s well as food, atten- 
tion has focused on the 
underdeveloped but 
hi g hl y p romising firornrial ser- 
vices Industry. The petrochem- 
icals industry, until recently 
given up for dead, is showing 
signs of recovery. Argentina 
has a large number of small 
car parts companies, many of 
whit* are in need of consolida- 
tion and radical reorganisa- 
tion. 

Inevitably, buyers arriving 
late at the party are having to 
pay higher prices for less 
attractive companies. Argen- 
tina has few companies that 
turn over more than $tiXkn a 
year, and most are owned by 
families that usually surrender 
control only as a last resort 


Putting a price on a com- 
pany is hard at the best of 
times, especially as accounting 
standards are lax. Further- 
more, rapid econ o mic change 
makes past performance a poor 
guide to a company’s value. 
Investment bankers say prices 
have more than doubled in 
three years to an average 10-15 
times earnings. 

However, analysts believe 
British food and beverage 
group Cadbuzy-Schweppes has 
paid too much for Staid, a local 
sweet company it bought last 
October. Mr Stephen Ward, 
Cadbury's managing director 
for the Americas, will not dis- 
close the price, but says Stani 
was a good buy: “Stani gets 
high marks for leadership, 
management, with strong 
brands and a good position in 
the marketplace.” 

Despite rapid growth, Argen- 
tina. with a population of only 
32.6m. is not a big market 
However, in termrthmal compa- 
nies striving for a global 
market presence cannot ignore 
it 

The growing pace of trade 
with Chile and economic inte- 
gration with Brazil through 
the Mercosur customs union 
make the regional dimension 
increasingly important. Mr 
Ward says Stani Is a “stepping 
stone” for Cadbury’s expansion 
in the region. 


rriniMoriy. 


FdMMyiW* 


@ 


Van Ommeren 


Koninklijke Van Ommeren NV 
US$ 150,000,000 

Multicurrency Credit Facility 


Chemical Bank 


Internationals Nederfandan Bank N.V. 
Crectit Lyonnais Bank Naderiand M.V. 
Banqua Parents 
Chemical Bank 

Commerzbank (Naderiand) N. V. 

De Nationals Investerlngsbank M.V. 

The Sakura Bank. Limited 

The YasudaTrust X Banking Company Ltd. 


Deutsche Bank de Bary N.V. 

Rabobank Nederland 
Bayerische Landesbank International S A 
Luxembourg 

DaWcW Kangyo Bank Nederland N.V. 
Kredetbonk (Nederland) N.V. 

The Sanwa Bank. Limited 


Banque NationaJe de Paris 
S imted a n Pnmch 


Verafcw- und Westbank AG 


Credit Communal da Belgique SA. / Gemeentakraitiat van Belgie N.V. 


Chemical Investment Bank Limited 


jgjf Chemical 



WEDNESDAY MARCH 2 1994 


INTERNATIONAL COMPANIES AND FINANCE 


NEC, Samsung 
to extend 


co-operation 


Star TV 
ends leg al 
battle with 
Wharf Cable 


World waits for the second Chinese wave 


Louise Lucas looks at the batch of companies set for overseas listings this s umme r 


By Our Financial Staff in 

London and AP-DJ in Tokyo 


NEC of Japan and Samsung' 
Electronics of South Korea, 
two of the world’s largest 
memory chip manufa cturers, 
plan a joint development of 
nest-generation memory chips, 
expanding their existing 
cooperation agreements, NEC 
said yesterday. . 

The two companies are aim- 
ing far an agreement by the 
middle of this month on a 
development of 256-megabit 
dynamic random access mem- 
ory (D-Ram) chips which could 
cost up to YlOObn (5960m). 

Japanese semiconductor 
makers, who have superior 
manufacturing technology, 
have previously teamed up 
with US chip manufacturers, 
hut are now increasingly turn- 
ing to South Korea as technol- 
ogy there advances. 

Japan’s leading semiconduc- 
tor makers have this year 
begun mass producing 16- 
megabit D-Ram chips, and are 
planning to start sample ship- 
ments of 64-megabit D-Ram 
chips. Analysts believe that 


samples of the 256-megabit 
chips are likely to be available 
in 1397 or 1998. 

Bat the more advanced the 
semiconductor, the more 
expensive it is to develop, the 
NEC spokesman gqiri He said 
the cost of developing the 256- 
megabit D-Ram chh» is seen “in 
the tens of billions of yen”. 

The NEC spokesman said the 
accord with Samsung would 
spread the risk, and allow 
mutual supply by unifying pro- 
duction specifications. 

NEC and Samsung have 
already agreed to exchange 
Information on t he 256-megabit 
D-Ram cell structure and Sam- 
sung has asked for NEC’s help 
in developing the logic inte- 
grated circuit, which relies 
heavily on process technology. 

Samsung is South Korea’s 
largest semiconductor maker 
and, based on sales, ranked 
seventh in the world last year, 
for the first time breaking into 
the top 10. 

NEC, the world's second- 
largest drip makes 1 behind Intel 
of the US, holds more than 50 
per cent of Japan's personal 
computer market 


% Louise Lucas 
In Hang Kang 


Arnotts posts 16% rise to 
A$44m at halfway stage 


By NUdd Taft in Sydney 


Arnotts, the Australian 
biscuits, snacks and confec- 
tionery company now majority- 
owned by Campbell Soup of 
the US. yesterday reported a 
16.6 per cent increase in after- 
tax profits before abnormal 
items, in the six months to the 
end of December, to A$4A2m 
(US$31. 5m), and said it was 
confident of meeting its full- 
year forecast of AjaOfan. 

There were no abnormal 
charges in the latest half-year, 
but the first half of 1992-93 
included a A$15.8m surplus, 
taking the group’s net operat- 
ing profits for that period to 
A$53.8in after abnormals. 

Yesterday, Ur Paul Bourke, 
Arnotts managing director, 
arimfwwi that underlying sales 
advances had been extremely 
difficult to achieve during the 


six months. Arnotts' total sales 
fell from A|344.8m to 
A$332£m, although Mr Bourke 
said that if asset disposals 
were excluded, there was a 
small L3 per cent Increase. The 
underlying increase in volumes 
was just 0.9 per cent 

Overall, sales for the core 
Australian biscuit division 
were similar to the correspond- 
ing period a year ago, hut 
Arnotts said that the contribu- 
tion for the newly-launched 
snack products range had been 
"Tower than anticipated”. Mr 
Bourke also conceded that 
lower media spending had 
helped the profits increase. 

He said Arnotts’ planned 
move in Asian markets was 
progressing, with discussions 
under way which could lead to 
biscuits being manufactured in 
southern China within a year 
to 18 months. 


Star TV, the Aslan 
broadcasting giant 63.6 per 
cent owned by Mr Rupert Mur- 
doch’s News C o rp orati on, has 
averted a legal dispate with 
Wharf Cable, the fledgling 
Hong Kong network, by 
announcing it wiD not enforce 
a nine-month old agreement to 
supply programming to the 
cable operator. 

The move ends months of 
wrangling, which culminated 
in January when Wharf took 
court action to scrap its Rerai- 
sing agreement, under which 
it is required to screen four 

(i mmlmn rfiamwlc arv| three 

existing Star rfiaiwirfa — MTV, 
the BBC World Service and 
Prime Sport 

Wharf started proceedings 
against Star after seven 
months spent “attempting to 
conclude an agreement with 
successive Star TV manage- 
ments”. 

Mr Gary Davey, the third 
chief exec utiv e of Star TV in 
six months, said: “Star TV has 
reluctantly come to the conclu- 
sion that a workable relation- 
ship with Wharf Cable is sim- 
ply not possible under the 
nresent flgr MHi Mit. 

“We are hopeful that by tak- 
ing this action the whole Issue 
will be looked at in a less con- 
tentious maimor nrnl help US 

move forward in finding a 
way to make these services 
available to Hong Kong view- 
ers.” 

Wharf Cable said It was 
sorry to see Star’s plans to 
launch new regi onal pay TV 
services will be further 
delayed and noted that in 
order to continue to expand 
viewers' choice it would 
endeavour to source quality 
efawniria from a wide range of 
other regional providers as 

welL 

• Shell Electric Manufactur- 
ing, a Hong Kong electric- 
appliance maker, reported net 
profits of HK9189.6m 
(US$18. lm) for the year to 
October 31 1993, up 73 per 
cent on the previous year. 

Revenues totalled HKfLSbn, 
against HK$L2fam, second- 
half dividend is raised to 1LS 
cents from 8 emits. 


T he se cond batch of 
nhiiw state-run -compBr 
nies slated far overseas 
listings is likely to hit Hong 
Ko n g - or. in some cases. New 
York - around July, roughly a 
year after Tsmgtao Brewery, 
producer of the only interna- 
tionally recognised Chinese 
beer, made its trail-blazing 
debut 

On that occasion the mood 
was euphoric: the stock rose 29 

per cent on its offer price, and 
up to 100 regulatory and indus- 
try dignitaries trooped into the 


lery far toasts of Tstngtao. But 
there were also plenty of teeth- 
ing problems, exacerbated by 
debates over the preferred 
route the global offering 
should fallow to ensure opti- 
mum .pricing and whether pri- 
mary Hgflwpc aTinnlri be Sought 
beyond the colony. 

Things are expected to be 

altngnttwr rtiffmrgnh this mm 

mer. While analysts reckon 
there is still sufficient 
long-term interest in China to 
outweigh the current raft of 
uncertainties over the way in 
which tax and currency 
reforms will affect companies, 
the fact remains that 
supply will mop up mum of the 
froth. 

Looking at the 22 state com- 
panies approved far overseas 
listings, prafessiocals report a 
far greater will and ability to 
streamline and adapt 
operations In order to woo the 
international Investors. The 
resistance encountered last 


NEWS DIGEST 


CSR steps np 
expansion 
Into Asia 


By NHdd Tatt 


CSR, file Australian building 
materials and sugar group, yes- 
terday stepped up its foray into 
Asia, acquiring a 50 per cent 
interest in Corinthian Indus- 
tries (Singapore) for A$35m 
(US$25m). 

The company makes wooden 
doors and door components in 
Malaysia, Singapore and 
Indonesia and has sales of 
around A$120m. The new 
joint venture will be head- 


NEW ISSUE These Bonds having bccnsold, this announcement appears as a matterof record only. MARCH 1994 


m 


Volkswagen International Finance N.V. 

(Amsterdam, The Netherlands ) 


DM 500,000,000 

5%% Deutsche Mark Bearer Bonds 1994/1999 


unconditionally and irrevocably guaranteed by 


Volkswagen Aktiengesellschaft 

(Wolfsburg, Federal Republic of Germany ) 


CSFB-Effectenbank 

Aktfeageseflschafl 


Deutsche Bank 

AJctiengeseflschaft 


Dresdner Bank 

Akticagodlsdaft 


GfcnQaniA 

Tougher trade: On* time the HK SE expects increased supply to mop VP some of the earlier froth 


year is, they say, already his- 
tory. 

Mr Meocre Li, managing 
partner of Arthur Andersen 
Hong Kong and China, cites 
the example of one of the early 
wwipmiiw which, his film vis- 
ited. The company msisted it 
did not want to undergo any 
restructuring: it wanted the 
world to see what a socialist- 
style company looked like. 
Ultimately, it had to forgo its 
ideals, but not before other 
accountants had passed 
through its doom and delivered 
the same verdict 

So far down the road have 
China bosses come - only 
recently, releasing commercial 
information to foreigners 
would have landed company 
directors in jail - that at least 
four of the 22 are aiming for 
Wall Street, where disclosure 
requirements are far greater 

Hum in Wrun g Unrig 


These include Shandong 
Huaneng Electricity Joint 
Stock Power Company and 
Huaneng International Joint 
Stock Company, both power 
supply companies, and peihaps 
China Southern Airlines and 
China Eastern Airways. 

The attraction of New York 
over Hong Kang is broadly 
threefold: price/earnings ratios 
are greater and so companies 
cah raise more cash; there are 
fewer China companies avail- 
able; and - not at all least 
i m port an t in fihtraw- eyes - 
New York is perceived as car- 
rying higher prestige. 

Some China companies 
already listed hi New York are 
trading on an average p/e of 
around 30 times whereas the 
first hatch of H shares (Chi- 
nese company shares listed in 

Fftmg Urmg ) ranw art linp fa 

the colony with p/e ratios of 
around 10 to 15. 


Sump analysts beUeve one or 
two companies may achieve a 
hating in London especially as 
the stock exchange there has 
been lobbying in China. 

Mr (Thflylqg Irf y rb air man of 
the Hong Kong stock exchange 
is undaunted by Hia competi- 
tion - pointing out that Hits is 
after all what the free port of 
Hiring Kong thrives on - and 
says the Beijing State Coun- 
cil’s decision to test the waters 
in New York is very much by 
way of a small pilot run. 


F eedback from New York 
and Tokyo, he says, 
shows that institutional 
investors tend to prefer shares 
having their primary listing in 
Hong Kong, because Hong 
gimg ram better understand - 
and more reahstkally price - 
the issues. ' 

He illustrates thfa with the 
MM of shang hai Petrochemi- 


cal, one of last year’s Hggest H 
share issuers. Only abwxt 30 
pur cent was offered in t he co l- 
ony with the remainder going 
abroad - mainly to the US. Yet 
trading over the past couple of 
weeks has shown that volumes 
fa Hong Kong are four times 
those in New York. 

It is inevitable that the bulk 
of the second hatch of compa- 
nies will wind up in Hong 
Kong: the colony's stock 
exchange last year signed a 
special Memorandum of 
Understanding with its coun- 
terpart In Beijing which 
smooths the way for m a in la n d 
enterprises to list, by promo- . 
ting cooperation between the 
two parties. 

H shares per se may no lon- 
ger be a novelty, hut the sec- . 
ond line-up offers investors 
their first bite at some of the 
hottest Chi™ sectors - - infra- 
structure and aviation, key 
beneficiaries of a develo ping 
ndddia class and government 
commitments to breathe Ufa 
into poor power and transport 
facilities. 

Ms Dora Hun& analyst with 
Goldman Sadis in Hong Kong, 
says: “People expect short-tram 
volatilities following changes 
fa China’s policy and the tax 
s tr u c tu re. No-one yet knows 
how the government will 
implement some- of these 
changes. It takes time for . 
things to run smoothly with 
new regulations coming into 
force, but for people investing 
fa Chinn they Vnn w they must 
look long term.” 


quartered in Kuala Lumpar. It 
is the latest in a spate of Asian 
investments by CSR, which 
have included a A$45m 
investment in a Tianjin-based 
quarrying and concrete busi- 
ness in northern China last 
week. 


tomers to Chicago-based 
Arthur Andersen, which has 
offices worldwide. 

Arthur Andersen’s strength 
fa consulting about China is a 
key reason far the deal, a Sak- 
ura official said. 


Bundaberg Sugar raises 
offer for crushing mills 


By NBdd Talt 


Sakura Bank links 
with US accountants 


Casio sees new 
products boost 


Sakura Bank, one of Japan’s 
biggest banks, is linking up 
with the US accounting firm 
Arthur Andersen to help meet 
the growing demand fa Japan 
for advice about investing 
abroad, AP-DJ reports from 
Tokyo. 

Under the agreement, Sak- 
ura will refer consulting 
requests from its Japanese cus- 


Caslo Computer, the leading 
Japanese digital watchmaker, 
said it expected its parent prof- 
its to jump between 20 and 25 
per cent to Y11.5bn (fl09m) in 
1994-95 as a result of planned 
new products, Reuter reports 
from Tokyo. 

A spokesman said parent 
sales were forecast to rise 
between 5 and 10 per cent to 
Y350bn. 


Bundaberg Sugar, the 
Australian sugar producer 
owned by Tate & Lyle of the 
UK, yesterday raised its A$87m 
(OS$62m) ted for two crushing 
mills fa northern Queens- 
land. 

Bundaberg, acquired by Tate 
& Lyle for A£325m three years 
ago, said it was increasing its 
offer for the 30,000 dares in 
the Tally Sugar mill from 
A3L600 a share to A$2,160 a 
share. Its offer for the 3.9m 
shares in South Johnstone 
goes UP Oram A$9.40 to A312.2S, 
Increasing the total value of 


the bids by around AS26m, to 
approxim ately ASllSm. 

Mr Geoff MBcheR, managing 
director of Bundaberg, said 
that the increased offer was an 
effort to address issues raised 
by shareholders, including 
“current profitability, retained 
earnings, grower control and 
prospects". Bundaberg, which 
«nnmm«»d its original offers in 
October, said that “the pro- 
posal to Invest in the north 
Queensland sugar industry 
now represents a total commit- 
ment at some A|12fen”. 

The mills said that the offers 
would be referred to their 
fhmnria) advisers. 


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FINANCIAL TIMES W EDNESDAY MARCH 2 1994 


21 


INTERNATIONAL CAPITAL MARKETS 


US Treasuries drop on fresh inflation fears 


8y Patrick Harverson 
in New York and Conner 
Itfiddefanann in London 

DS Treasury prices dropped 
sharply at the long end of the 
maturity range yesterday 
morning as investors took 
fright at news of an increase in 
the latest purchasing manag- 
ers' monthly price index. 

By midday, the benchmark 
3 &-year government bond was 
down 1 point at 93%, yie lding 
6.735 per cent. The two-year 
note was also lower at the half* 
way mark,- down & at 99*. 
yielding 4.758 per cent 

The National Association, of 
Purchasing Management's Feb- 
ruary report showed the index 
of nationwide manufacturing 
activity to have fallen from 
57.7 in January to 56.6, whit* 
would normally he good news 
fbr bonds. 

However, the decline was 
mostly explained away by ana- 
lysts as the result of the severe 


winter weather that struck 
large parts of the US in Febru- 
ary. 

Instead, investors focused on 
the sharp jump in associa- 
tion's price index, which 
climbed from 59.8 to 67.0. This, 
plus a big increase in the 
NAPRFs employment today , 
spooked the mgrlret, which is 
extremely sensitive to signs of 
inflation, particularly wage 
i nflatio n. The result was heavy 
selling of bonds throughout the 
morning. 

The day’s other news was an 
upward revision in the govern- 
ment’s estimate of fourth-quar- 
ter gross domestic product 
from growth of 55 per cent to 
7.5 per cent. 

This was clearly bearish for 
bonds - the original 53 per 
cent figure had unsettled 
investors in the first pTar*» t so 
the large upward revision was 
doubly worrying - but traders 
said it ultimately had little 
impact upon prices, primarily 


because it was regarded as old 
news and so had already been 
priced into the market 

■ European government bonds 
fell sharply on the back of 
weak US Treasuries and a 
smaller than expected mone- 
tary easing in the Bundes- 
bank's latest open market oper- 
ation. 

GOVERNMENT 

BONDS 

At the Bundesbank’s alloca- 
tion of two-week securities 
repurchase agreements, the 
minimum repo rate fell by 
three basis points to 537 per 
cent That was less than the 
five to 10-basis point faQ most 
traders had been calling for 
and was seen to indicate that 
the Bundesbank’s pace of eas- 
ing remains extremely cau- 
tious. 

to thp afternoon, gniiing - was 


fuelled by the sharp drop in US 
Treasuries triggered by the 
NAFM report “Ibis confirms 
my medium-term scenario that 
Europe can't decouple from the 
US," said Khtt Shah, interna- 
tional strategist at First Chi- 
cago. 

New supply in several Euro- 
pean markets put a further 
damper on prices. "With no 
buyers around, how are gov- 
ernments going to finance 
their deficits?” questioned one 
trader. 

■ Europe's high-yielding bond 
markets were especially hard- 
hit by yesterday’s sell-off. The 
Italian long bond future on 
liffe fell by 2.10 points to 111. 

Following the dismal recep- 
tion of Monday’s three and 
five-year auctions, the prospect 
of L7.50Q of new 10 and 30-year 
bonds triggered a sharp sell-off 
is the morning, in the event, 
the result of the long-dated 
auctions was better than 


feared, but traders said the 
paper would continue to weigh 
on the market. 

Spanish bonds did even 
worse, pounded tor heavy for- 
eign selling, the long bond 
future In Madrid falling by 230 
points to 99J5S. 

■ Trench bonds also slid by 
more than a point ox the back 
of the German repo and US 
Treasuries weakness. The 
Man* notional bond future’s 
breach of technical support at 
126-38 opened the floodgates for 
further selling, mostly by for- 
eign accounts, traders said. It 
fen by 132 points on the day to 
close at 125.74, but slipped fur- 
ther to 125.10 in after-hours 
trading. 

■ UK gOts fell by two points at 

the long under-performing 
core European markets. After 
falling in line with other b ond 
markets, talk of large oversea s 
selling knocked prices even 


lower. The March long gilt 
Mure fell by 2 % points to dose 
at 111%. 

"After outperforming on the 
upside over the last few days 
and getting lulled into a false 
sense of security, gilts outper- 
formed on the downside yester- 
day,” said Mr Simon Briscoe, 
UK economist at SG Warburg 
Securities. "The market fell 
two points on absolutely no 
news or fresh supply - that has 
to be a cause for concern," he 
added. 

■ German bonds also weak- 
ened on disappointment over 
the repo and the slide in US 
Treasuries, and were farther 
pressured by the sale of DM3bn 
of new 10 -year bonds for the 
Trenhandanstalt. Another 
tranche of the issue is due to 
be auctioned today, hi after- 
hours London trading, the 
March bund future was down 
1.06 points from Monday’s 
close at 9536. 


Lacklustre demand for African Development Bank 


By Tracy Corrigan 

and Sara Webb 

The African Development 
Bank took advantage of calmer 
market conditions at the start 
of this week to launch its 
$500m 10-year Eurobond, via 
Lehman Brothers and Salomon 
Brothers. But despite being 
reasonably priced, the deal met 
lacklustre demand, according 
to syndicate offi cials 

"Investors were relieved that 
the last 24 hours had been bet- 
ter, but they are not in buying 
mode,” said one syndicate 
manager. 

The African Development 
Bank deal suffered as inflation- 
ary fears prompted by the lat- 
est spate of US economic data 
prompted a further sen-off in 
US Treasuries. 

The deal was priced to yield 
28 basis points above the 10- 


year US Treasury. For inves- 
tors, this represents a yield 
pick-up of about 8 basis points 
over the Asian Development 
Bank’s recent 10-year dea l, cur- 
rently trading at 20 basis 
points over the Treasury. 

Dealers described the pricing 
as offering fair value, but said 

INTERNATIONAL 

BONDS 

that they had seen little buy- 
ing interest The spread wid- 
ened slightly to 29 points. 

The <to»i was issiiorj under 
the bank's $500m Euro medi- 
um-term note programme, 
which is now likely to be 
increased, according to its trea- 
surer, Mr Kofi Bucknor. The 
bank expects to borrow a fur- 
ther $500m this year. 

The proceeds were swapped 


into floating-rate dollars. Dol- 
lar swap spreads have widened 
slightly as the bond market 
has sold off, creating some bet- 
ter arbitrage opportunities. 

The market saw heavy new 
issuance in the equity-linked 
sector by Japanese borrowers, 
with Sl.lbn in US dollar-de- 
no minated issues and SFr270m 
of Swiss franc-denominated 
issues. 

In the face of such heavy 
supply, investor demand for 
the issues appeared fairly 
weak, aith/Mig h syndicate offi- 
cials said t he y to saH 

the Issues ova- the next few 
days. Buying was mainly from 
Europe, although some 
demand was reported from the 
Middle and Far East 

Investors were a mixture of 
arbitrageurs - who were buy- 
ing the warrants and shorting 
the stock - and traditional 


NEW INTERNATIONAL BOND ISSUES 


Amount 

Coupon 

Price 

Maturity 

Faaa 

Spread Book rumar 

Doffowtr 

U 8 DOLLARS 

m. 

% 


% 

bp 


AlHcan Development Baric 

500 

6 j 50 

0035 R 

Mar -2004 

OS 25 R 

*28 £5 9114 - 04 ) Lehman BtosJSrtamon Bros. 

Tobu RaBwny CoJa& 

Cosmo Oil C 03 W 

400 

1.125 

100.00 

Mar. 1998 

2.25 

- Yamalchl ln*L(Europe) 

300 

1.00 

IOOlOO 

Mar. 1898 

2£5 

- Nomura IntamtolonBl 

HRacri Zoaan Corp 4 a)$ 

200 

1.125 

100.00 

Mar .1888 

225 

- Nomura InlamNlonre 

Dnpmaa 3 KV%^§ 

136 

SDOfl 

100 JXI 

Mar^oO* 

2.50 

Baring Brothers 9 Co. 

Banoo National da Meodca* 

100 


1000 QR 

Mar . 1996 

OjIIM 

Nddw Peabody IntL 

RopuOlc of kmtuinifc 

47 

M 

BOOGR 

Mer .1990 

0 - 25 F 

Nonan IWamahonal 

SWISS FRANCS 

Toyo Shutter Co 37*4 

120 

0.125 

100.00 

Mar.iesa 


Oredk SMaae 

European Srareretgn tnw 4 ^w* 

60 

W 

100.40 

Jan. 1907 

re 

Cradt Suisse 

European Sovereign 

50 

0 ) 

100 . 4 Q 

Jen. 1997 

- 

Cradb Sutase 

Final terms and notvcaUMe unless statad. The ytatd spread (over reTevart government bond) at launch Is suppled by the toad 
manager. *Prtvate ptacament iCcnvertMa. ♦wuh sqUKy won arts. JftoaUng rata rare. tSareLonnuN coupon. R: toed re-offer price; 
fees are shown at the re-offer level, a) Rtong: B/S/9*. tit Fbdng: S/a‘ 94 . c) IrMwnaOonN tranche of S 435 m US demaale dent Corn into 
AOS'a at 833 : 15 . CaBabta tram 7 / 3/38 wflh 2 yre ol 130 K pvtxectJan. d) 6 -nilh Ubor + 1 H. ^ Ltaar +VS 94 . Q Rxtag: 7 / 3 / 94 . (3 

8 oc 2 red by Euopean Union Govt bonds. Short 1 st ctxpon. hj Tranche A: 494 bed to 771 TBS and 3 -rrrth Ubor Sat thereafter. 3 Tranche 

a 3-mOi Ubor flat 








equity-linked investors who 
want exposure to the stock. 

Dealers Mid the heavy sup- 
ply was purely coincidental 
rather than a reflection of suit- 


able market conditions. 

Tobu Railway la unched the 
biggest equity-linked deal of 
the day, a 6400m four-year 
bond issue with warrants. 


One dealer said several Japa- 
nese borrowers were expected 
to launch equity-linked deals 
ahead of the introduction of 
new accounting rules to ApriL 


World government 
bonds suffer heavy 
losses in February 


By Sara Webb 

World government bond 
markets suffered heavy losses 
last month, sparked by the 
combination of US inflation 
worries, concern about the 
slow pace of monetary easing 
in Europe, and heavy »lltog erf 
European bond futures by US 
hedge funds. 

The UK was the worst per- 
forming government bond mar- 
ket, with a loss of 3.47 per cent 
In February in local currency 
terms, according to figures 
compiled by JP Morgan Securi- 
ties. 

Spain was the next worst 
performing market, with a loss 
of 2.79 per cent, followed by 
Canada with a decline of 2.68 
per cent 

Japan was the top perform- 
ing government bond market, 
but still showed a loss of 0.71 
per cent in local currency 
terms. However, in US dollar 
terms, Japanese government 
bonds showed gains of 3JJ2 per 
cent, helped by the strengthen- 
ing of the yen against the US 
currency last month, and put- 
ting the JGB market well 
ahead of the other main gov- 
ernment bond markets. 

The event which triggered 
the fall to government bond 
prices was the decision by the 
US Federal Reserve on Febru- 
ary 4 to raise short-term inter- 
est rates to curb inflationary 
pressures. 

However, the move had the 
effect of heightening- concern 
to the markets about the pros- 
pect of rising US inflation and 
further tightening by the Fed. 

Despite small cuts in interest 
rates across Europe last month 
- including a 25 basis point cut 
in the UK base rate, a 50 basis 
point cut in Germany’s dis- 
count rate, and a 10 basis point 
reduction to the French inter- 


Bond market returns 


Principal 

return H 



- 4 - 3-2 
Source: JP Morgan 


-1 O 


ventlon rate - many investors 
were disappointed at the slow 
pace of easing. 

Heavy selling of European 
government bonds, particu- 
larly of the futures contracts, 
by US hedge fends during the 
last two weeks of February 
pushed the European markets 
down strongly. 

• France's economy minister, 
Mr Edmond Alphandery. is to 
loosen drastically issuing pro- 
cedures in the French domestic 
bond market to bring them 
into line with those In the 
Eurofranc market. Reuter 
reports from Paris. He said 
that issuers would, however, 
still be able to book a time spot 
for issuance if they wanted to 
have priority. He gave no fur- 
ther details. 

Mr Alphandery also said 
issuers and intermediaries 
would do away with a one-day 
delay between payment and 
making funds available and 
reduce the costs of financial 
services for new issues. 


1 WORLD BOND PRICES | 

BENCHMARK GOVERNMENT BONDS 

Rad Day's War* Month 

Coupon Data Price change Yield ago ago 

Italy 

■ NOTIONAL ITALIAN QOVT. BOND pfF) FUTURES 

QJFFBT Ura 200 m 1000 a of 100 % 

FT-ACTUARfES FIXED WfcKfcSI INDICES 

Price Ireflces Tue Da/s Mon Accntsd 

UK Q*ts Marl change % Fab 28 merest 

xda* 

ytd 

— Low engton yield— - Median comon yield - — HghcMpon yield — 
Mai Fab 28 Yr. ago Mai Feb 28 Yr. ago Mar 1 Fab 28 Yr. ago 


AuadsM 


0300 

QW04 

its. taw 

-at 90 

&S 4 

&69 

8 T 4 

Belgfcm 


7.250 

04 AJ 4 

1013000 

-0800 

706 

638 

851 

Canada ‘ 


fisnn 

06/04 

982000 

- 0-350 

7.03 

633 

838 

Denmark 


7.000 

12/04 

1025600 

- 0.400 

6.66 

848 

801 

France 

STAN 

aooo 

OS7B8 

108.4800 

-0090 

5.42 

SA2 

5.10 


OAT 

5.500 

04/04 

93.7600 

- 1.240 

605 

&05 

888 

Getmany 


6.000 

09/03 

984500 

-asoo 

621 

830 

870 

Italy 


8-500 

01/04 

94.1500 

- 5 J 280 

9 . 42 f 

873 

837 

Japan 

No 119 

4J00 

06/99 

106.1980 

- 0-240 

3.42 

3.15 

233 


No 157 

4500 

06/03 

104.8810 

-1380 

3.79 

848 

343 

Netheriands 


SJ7SO ' 

01/04 

983900 

- 0 - 870 - 

&18 

538 

536 

Spain 


10500 

10/03 

106.7000 

-8050 

909 

838 

7.76 

UK Gits 


8 JOOO 

06/98 

97-29 

- 21/32 

847 

818 

538 



8.760 

11/04 

97-12 

—48/32 

7.14 

878 

816 



B .000 

10/06 

115-00 

- 58/32 

731 

7.03 

851 

US Treasury 

* • 

5 JJ 7 S 

02/04 

97-30 

46/32 

818 

806 

533 



6260 

Da/23 

04—18 

48/32 

838 

631 

821 

ECU (French GovlJ 

S.OOO 

04 AM 

94-9000 

-1000 

871 

836 

896 



Open 

Sett price 

Change 

Hgh 

Low 

EsL ret 

Open H. 

Mar 

112.15 

111.12 

- 1.74 

11238 

11030 

108873 

61375 

Jun 

112-15 

11139 

- 1.80 

11230 

110.60 

35897 

861 7 B 

Gap 


111.05 

- 1.74 



0 

1 


■ rTAUAN oovr. BOND (BTP) FUTURES 0 PT 10 N 8 flJFFE) Ura 200 m IQOhi of 100 * 
SMce GALLS PUTS 


1 Up to 6 yeans £ 3 ) 

2 5-16 yam CM) 

3 Over 15 peers ( 8 ) 

4 Ir redeematotea ( 0 ) 

5 Al stocks ( 87 ) 


127.05 

15351 

174.15 

20703 

14034 


-816 

1 Z 73 S 

1.62 

2.07 5 yre 

845 

8 33 

635 

86 S 

854 

885 

878 

885 

7JOO 

-099 

15818 

130 

2.76 15 yre 

7.17 

701 

7.73 

738 

7.12 

8-22 

7.48 

734 

845 

- 1.46 

17873 

849 

333 20 yre 

735 

7.12 

802 

737 

7.12 

838 

7.49 

735 

853 

-132 

20932 

2-18 

137 bred* 

738 

730 

860 







-033 

15035 

132 

232 














Marion S% — 

— 

_ 

— Marion 10 *- 

— 






Marl Fab 28 Yr. ago 

Mar 1 Feb 28 Yr. ago 



Price 

Jun 

Sep 

Jun 

Sap 

11100 

234 

2.78 

245 

2.73 

11150 

232 

234 

2-73 

239 

11200 

209 

231 

300 

336 


B Up to 5 years ( 2 ) 

7 Over 5 years OIL 

B Al stocks p 3 ) ' ' 


London deaMg. Hew Ybrt ntt-day 


Yred£ Lccta natot atandaal. 


EH. vcL UA CMa 4441 Puts 0472 . Piarioua day*» open M. Cafla 48708 Pies 40535 


Spain 

■ NOIKJNAL SPANISH BOND FUTURES flJEFF) 


1873 B 

-819 

18735 

038 

131 

Up to 5 yis 

261 253 202 

1.71 

1.63 

1.17 

18233 

-035 

16266 

031 

878 

Over 6 yre 

338 336 337 

. 3.11 

338 

339 

18136 

-033 

18240 

879 

885 

5 year yield 

— 15 year yield — * 

_ _ 

-28 year yield 


Mar 1 Fab 28 Yr. ago Mar i Feb 28 Yr. ago Mar 1 Feb 28 Yr. ago 


9 DebeB Loans ( 73 ) 147.49 -050 14858 157 

Annga groaa r eda m pB ai ytafeta are rimt i taw Oregon Bend*: Low: 0 H- 7 MN; 


257 856 8.04 850 829 8.17 

IMUIE 094 -KWH: We 11 * ml om. t Rta yWd yad Yere to dtae. 


953 851 


853 


954 


Price* US UK to SSnda, afrws kt dactanl 

US INTEREST RATES 


SwftE AAQ MBratfomf 

Mar 

Open 

10132 

Sett price 
9931 

Change 

-220 

10132 

Low 

9259 

Eat. voL 
97294 

Open tot. 
128532 

UacMbne rates 



itaaswy BBS and Bond WdB 

. 4.77 

2 ai 

101.65 

9933 

-215 

101.85 

9845 

4366 

■48179 






. 514 









Bmkar bon ra(r 

5 

a 

ThetanrilL- 

29 


. 530 
821 
874 

inr 








Feakads a Manartftsu 

Oo»*v 

LOB 

Term 

■ NOTIONAL UK GB.T FUTURES (JJFFQ* B 6 O 30 O 32 ndS of 100 K 

• 



GILT EDGED ACTIVITY INDICES 

Fab 28 Fab 26 Fab 24 


Fab 23 Feb 22 


BOND FUTURES AND OPTIONS 
France 

■ NOTIONAL FRENCH BONO FUTURES OUATIri 


Open Sen price Change Htgh Low 
Mar 120.92 125-74 -152 12652 12558 

Jun 12648 12552 -150 126.48 12324 

Sep 126.74 12456 -150 125.74 12454 

N LONG TERM FRENCH BOND OPTIONS (MA71F) 


Open Settprtoe Chtmge Hflb Low Est vcl Open tot 
Mar 113 - 1 $ 111-29 - 1-19 113-17 111-41 82206 72889 

Jon 112-21 110-30 - 1-24 112-22 110-10 82849 113870 

Sep 110-02 - 1-24 0 0 

■ LONG OB.T FUTURES OPTIONS (UFFTE? 250000 64 fli» rri 10014 


FT HXED INTEREST BIDICES 

Marl Fab 28 Fab 25 Fab 24 Feb 23 Yropo H#T Low 

Qovt. Sacs. fUlq 101.11 10151 10156 10054 10254 9654 10750 9358 CHS Edged bargains 1895 162.0 1Z7.7 1035 1185 

Fixed Internal 12346 12257 123.79 12459 12S58 112.13 13357 106.67 5-day average 1405 126.1 1125 1095 1095 

* tv 18B3/94. Q areremrt Sasrttea Npi atocecoeptolon: 127.40 07109. tow 4&1B CW7Q. Rxad hSnM Npi Hnce cnreptaMcn : 13357 {21/t/W) . taw 5053 071/75) . Bah 100: O rerenwent SacuMaa IV 
1028 and Rod tareraM 1839. 3E tctMty ta&cm rebeaed 1874 


FT/tSMA INTERNATIONAL BOND SERVICE 


bread Od Otar Chg. Yield 


EaL vol 
336328 

OpanH. 

158907 

State 

Price 

Jun 

CALLS 

Sap 

Jun 

18228 

87368 

110 

2-28 

2-48 

1-32 

914 

10341 

111 

1 -S 8 

2-20 

1-62 

112 

1-29 

1-58 

2-33 


PUTS 


Sap 

2 - 45 

3 - 18 
3-64 


U& DOLLAR STRAIGHTS 


Eta. « 3 L tnbi. Cto 5086 Pies 6 KE. PnrAom dor's opal an. Qrikl 463 S 6 Pun 3 B 437 


Apr 

- CALLS - 
Jun 

Sep 

Apr 

— PUTS 
Jrn 

038 

875 

- 

- 

233 

816 

848 

- 

262 

3.04 

0.07 

037 

850 

- 

- 

0.03 

814 

- 

- 

- 

- 

808 

- 

- 

■ 


Site 

Price 

127 

128 

129 

130 

131 

Eat **. total. C Ms SJ6* Pure 585*1 . FVwtaus bat's i*tan tat. CtaM 267508 Pres 23350. 

Germany 

N NOTIONAL GERMAN BUND FU TURES (UFFE)* DM 250500 1008 m at 100 % 

Eat voi Open InL 
260081 143398 

65497 112683 

892 3316 


Ecu 

■ BCU BOND FUTURES (MATTE] 


AteWtorin 9 % 95 . 

Aalto 8% 00 

B**afT«*jo 8 % 96 - 

84 * 019*108 

8 FCE 7%97 

6*0 0*021 

CmNSflB 

OCC 60%95 


Open 

11758 


Sett pdee Change 
11758 -050 

91.48 -050 


11844 


Low 

11746 



Open 

Sett price 

Change 

Mgh 

tow 

Mo 

97.05 

9530 

+ 4.79 

97.05 

9537 

Jen 

0877 

9898 

+ 4.47 

8877 

8872 

Sra 

9855 

9535 

- 0.67 

9635 

85.95 


MV 

Jin 

US 

■ US TREASURY BONO FUTURES (CST) $100400 32 ncfaoM 00 % 


Est voL Open bit 
3571 14,488 

211 


■ BUND FUTURES OPTIONS tUFFQ DM 250500 poWa of 100 % 


straw 

Price 

Jun 

CALLS 

Sep 

Jun 

9560 

142 

1 . 6 Q 

894 

9600 

1.15 

138 

1.17 

0850 

882 

1.14 

144 


PUTS 



Open 

Latest 

Change 

High 

tow 

Eat voL 

Open int 

Mar 

112-14 

112-12 

- 0-01 

112-20 

112-04 

84.788 

2393*9 

Jun 

111-13 

111-09 

-002 

111-17 

111-02 

291336 

744388 

Sap 

tlO-15 

110-13 

-0-08 

110-15 

71009 

577 

34 , 03 S 


155 
151 
1 . 7 B 

Eat voL total CNfc 19720 Pub SKM. Prewoue day's open tat. Ctata 1787 ia Pi» 168*66 

■ NOTIONAL MEDIUM THIM GERMAN QOVT. BOND 
(BOBUflJFFE)' QM 2 S 0400 IQOtba of 100 * 

Open Sea price Change 
Mar 101.07 10050 -OM 

Jra TOT 52 T 00 .SC -057 


OaungKorg Fb 5%98 , 
Can* Enapa 8 99 — 

OKS Fond* 91 } SO 

Pent ft 95 ___ 

ECSC 8 % 98 

EEC 98 

SB 7 % 98 

BB 9%07 

Bee de Force 0 SB 

are*™ 9*4 98 

Be-tnEMtJd )0 9 O 2 - 
Boot DM Cap 9*2 98 - 

mend 7 % 97 

FtortahE»pat 0 %Q 5 — 
fed Motor Oecft ft 99 . 
Geo toe C**d 9496 - 
GHACftBB . 


High 

101.11 

10152 


Low 

100.79 

100.75 


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107 % 

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104 % 

104 % 

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104 % 

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111 % 

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111 % 

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108 % 

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106 % 

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106 % 

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104 % 

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106 % 

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111 % 

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110 % 

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112 % 

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M 5 % 

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*92 

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113 % 

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583 

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101 % 

101 % 

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410 

.200 

106 % 

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555 

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101 % 


*68 

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106 % 

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106 

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107 % 

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98 % 

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fi£B 

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111 % 

111 % 

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400 

1500 

100 % 

108 % 

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540 

2000 

95 

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490 

2000 

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103 % 

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474 

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1500 

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486 

2000 

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104 % 

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87 B 

3000 

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402 

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80 S 

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105 % 


630 

5000 

104 % 

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404 

1500 

101 

101 % 

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864 

1500 

95 % 

t*h 


478 

4000 

103 % 

103 % 

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474 

2500 

WB% 

1(9 

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860 


lilted Khpicri 7 % B 7 _ 
MRi 703 . 


Worn Bark D 15 

— 2000 



SM 9 S FRANC STRAIGHTS 




Card Brepe 4 % 06 

— 290 

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_ M 0 

mmd 7%89 

— 300 
















600 

YBI STRAJOHTS 




aBcdaR»ne» 6 % 60 ____ 

.20000 

9 QQ 0 Q 

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- 3 X 00 

Japan Qw Bk 5 90 

100000 

►ippan Tel TW 5 % BB 

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Seedm 6 % 05 

. 20000 

MWdBark 6%00 

- 50000 

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Ga*BOSliK 8 % 80 LR_ 

MtartrfBa*S 08 lft 

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— 150 

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GnBacCapUMSBCS 

— 275 



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— 200 

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102 


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102 


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102 

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101 % 

110 

103 % 

109 % 

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109% 

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115% 

115 % 

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116 % 

115% 

114% 

105 % 

114 

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110 % 

112 % 

120 

105 % 

114 

111 % 

110 % 

129 % 

MB 

111 % 

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107 % 

116% 


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106% -% 

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— 160 

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97% -2 

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5+96 

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— 6S7 

100% 

tetfi -% 

853 

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555 

MKlt^87C 

— too 

110% 

lift J 4 

855 



hteson 10% 07 E 

— 500 

110% 

lift -% 

806 



HSBC HMnga 1189 Q2E-. 

— 153 

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121% -1 

820 


ASS 

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122 

122% 

322 

4% 

411 

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100% 

101% -% 

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412 

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045 


507 

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118% 

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107% 

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118% 

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728 


485 

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118% 

120% ft 

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530 

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— 100 

106*2 

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548 

4% 

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859 


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105 ft 

811 


500 

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lift 

12ft -1% 

7.11 

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480 

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_ 4000 

109 

Mft ft 

890 


473 






♦% 

456 

FLOATMO RATE NOTES 








bread 

8U 

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CjQM 

JL. 

425 

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9072 

naa* 

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435 

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9087 

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0903 

10003 

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478 

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9970 

9875 

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9004 

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62500 

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413 

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MOOD 

10040 

50000 

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443 

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9957 

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— 300 

9973 

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10064 




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— 200 





886 

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- 1000 

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8*50 

8558 

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850 

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100.16 

10043 

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Ngltanvde(L0B86E 

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52363 


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— 250 

10000 

10012 

34590 

Jre 

582 

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9848 

9907 

33750 

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-6000 

9601 

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100.10 

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9908 

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BU 

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town. 

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+6306 

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250 

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42123 

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300 

41 62 

106 % 

100 % 

+ 4.40 

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65 

10554 

121 % 

123 

42839 

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500 

25875 

lift 

lift 

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400 

19.1 

134 % 

136 % 


Land Saca B% 02 £ 

84 

872 

10 ft 

109 % 

-346 

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® 

504 

82 % 

93 % 


WgdBs* 2 %a 3 

300 

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97 

99 

+«JB 

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— 100 

2283 

101 % 

102 % 

+1345 

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250 

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126 % 

12 ft 

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Ogden 6 a? 

85 

30077 

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07 

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500 

lift 

101 % 

102 % 


Sfitamo Ba* 3 % 04 — 

300 

36089 

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93 % 

+2642 

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30 

lift 

113 % 

+EUM 

Tasco Capital 6 05 C 

200 

221 

123 % 

124 % 

+3404 

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— m 

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105 

107 

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COMPANY NEWS: UK 


T Cowie beats 


City forecasts 



— - ■ — 

nancy mntooa 

Gordon Hodgson: fleet renewals were continuing to improve 


By Paul Taylor 

Sharply lower interest costs 
helped T Cowie. the car leas- 
ing, motor trading, bus and 
tractor group, achieve a 56 per 
cent Increase in pre-tax profits 
last year to £38m. 

The advance, from £2-L3m in 
1992, was ahead of market 
expectations and Cowie's 
shares closed up 7p at 33lp. 

Turnover grew to £79S.8m 
(£605. 9m) including £148m gen- 
erated by the Keep Trust 
motor group of 18 dealerships 
acquired for £28.6m last May. 

Eamings per share improved 
by 55 per cent to 20.8p ( 13-4p). 
A Dual dividend of &5p (<L25p) 
makes 7J35p. up 26 per cent 

Mr Gordon Hodgson, chief 
executive, said the results 
highlighted that “the company 
car market is returning to nor- 
mality,'' with fleet renewals 
continuing to improve. 

Operating profits, including 
a £2.54m contribution from 
Keep Trust, slipped to £58 .8m 
(£61.7m> mainly reflecting the 
impact of fallin g interest rates 
on the core finance division 
and lower margins in the 
acquired motor dealerships. 

Offsetting this, the group 
recorded a net £3&2m excep- 
tional gain mainly reflecting 
proceeds from share transac- 
tions compared with a net 
exceptional gain of £805.000 in 
1992. Pre-tax profits were 
boosted by a sharp decline in 


Domnick 
Hunter to 
raise £16m 

By Andrew Bolger 

The flotation of Domnick 
Hunter is expected to raise 
about £l6m in new money for 
the north-east of England- 
based engineering group 
which claims to be a world 
leader in filtration products. 

The flotation, by way of a 
placing, will give the group a 
market capitalisation of about 
£60m. It is expected that 
impact day will be March 16 
and that dealings will start on 
March 29. Of the net proceeds, 
about £9.9m will be used to 
redeem preference shares and 
£5.4m will be used to reduce 
group borrowings. 

The group has a dominant 
role in the UK compressed air 
filter market, and exports 
more than 60 per cent of sales 
to 40 countries. Last year it 
made operating profits of some 
£4.7m on turnover of £30.6m. 

A pathfinder prospectus was 
published yesterday. 


Smith & Nephew 

Smith & Nephew, the health- 
care group, is acquiring the 
remaining 50 per cent of the 
shares in BSN B Braun -Smith 
& Nephew, its joint venture 
with B Braun Melsungen of 
Germany. 

The performance-based con- 
sideration is capped at £1.9m 
and the transaction is subject 
to clearance by the German 
Cartel Office. 


interest costs and similar 
charges to £24.6m ff.3fi.2m). 

On a divisional basis, the 
finance division, which mainly 
comprises market-leader Cowie 
Interleasing, reported lower 
turnover of £230.3m (£245m), 
but a 43 per cent rise in pre-tax 
profits to £23.7m (£l6.6m). 

The motor division lifted Its 
contribution to £8.53m (£5.48m) 
on turnover of £5lS.5m 
f 2316.3m). partly reflecting the 
Keep Trust acquisition. 

Grey-Green, the group's Lon- 
don bus and coach operator, 
increased turnover to £14.4m 
(£135m) but profits declined to 
£1.6m (£i.8m) because of 
increased insurance costs. 

Hughes DAF, the national 
bus and coach distribution 
business, lifted turnover by 20 
per cent to £16. lm and profits 
by 29 per cent to £2.26m. 

Net borrowings of £288m at 
end-December were down from 
£308.7m a year earlier and rep- 
resented gearing of 212 per 
cent, down from 306 per cent. 

• COMMENT 

The acquisition of Keep Trust 
has boosted Cowie into the big 
league of UK motor retaileis. 
In the short term, however, it 
has eroded operating margins 
in the motor division - the 
new dealerships generated 
£1.763 of profits per employee 
in the final 9 months last year, 
still way behind the £4,891 per 
head generated in the estab- 


By Roland Adburgham, Wales 
and West Correspondent 

Markheath. the heavily 
indebted property company, 
is to acquire Thomas Bailey 
Investments in a reverse 
takeover by the privately 
owned Welsh property 
developer. 

The conditional deal will 
mean that Markheath, which 
has had a standstill agreement 
with its bankers since last 
March, will change its name to 
TBI and move its headquarters 
from London to Cardiff. 

It will have a portfolio of 
commercial and retail proper- 
ties and development sites in 
London, Stevenage and south 
Wales valued at £96. 3m. yield- 
ing about 10 per cent 

Of Markheath's bank borrow- 
ings of £6?.7m. about £25m will 
be written off by banks led by 
Midland and ANZ, £22m will be 
refinanced by a new term loan 
from Barclays and the balance 


fished Cowie dealerships. 
Squeezing more profits out of 
the new dealerships coupled 
with the growth of contract 
hire and stronger fleet market 
should boost pre-tax profits to 


satisfied with the majority of 
the proceeds from a £24m 
share placing and open offer. 

The share placing and offer - 
on an ll-for-17 basis of 79m 
new ordinary shares at 33p - is 
underwritten by Charterhouse. 

The new shares will repre- 
sent 64.7 per cent of the 
enlarged capital. Mr Stanley 
Thomas, a principal share- 
holder in Thomas Bailey, and 
Mrs SM Case, his sister, will 
subscribe for up to 22.7m of the 
shares. 

Mr Michael Rendle, non -exec- 
utive chairman of Markheath 
since 1991. will become nonex- 
ecutive chairman of TBI and 
three Thomas Bailey directors 
will join the board. Mr 111011185 
and Mr Paul Bailey will be dep- 
uty chairman and executive 
director and Mr Paul Guy chief 
executive. 

The three new directors will 
receive a 30.3 per cent stake in 
the enlarged capital for selling 
their company to Markheath. 


about £4&5m this year, produc- 
ing earning s of 23p. Despite the 
recent increase in the share 
price they are still only trading 
on a forward multiple of 14.4 
and could go higher. 


Dealings In Markheath 
shares have been suspended at 
6p pending shareholders* 
approval of the restructuring 
at an extraordinary meeting on 
March 24. Old shares will be 
consolidated on a 20-for-l basis. 

Markheath incurred a pre- 
tax loss of £237m in the six 
months to September 30 last 
year with net liabilities or 
£14-8m, including bank borrow- 
ings of £67.7m. 

It ran into trouble with the 
downturn in the commercial 
property market and also made 
losses totalling £3 7m on the 
sale of investments in Frog- 
more Estates and Camford 
Engineering. 

Its property portfolio has 
been written down by £75m 
over the past two years and 
staff have been reduced from 
150 to 10. 

Thomas Bailey made a pre- 
tax profit of £422,000 in the 
seven months to November 30 
with net assets of £6.7m. 


Direct 
selling 
expansion 
by GRE 

By Richard Lapper 

Guardian Royal Exchange, the 
fifth largest of the UK's com- 
posite insurers, has signalled a 
sharp Intensification of compe> 
tition in the £6bn-a-year motor 
insurance market with yester- 
day’s launch of Guardian 
Direct, its own direct tele- 
phone-based insurer. 

The group. Which annnnw«»d 
it was dropping Royal 
Exchange from its title on 
Monday, will invest heavily in 
the subsidiary, spending at 
least £I0m on advertising and 
marketing in Us first year of 
operation. 

It will compet e in a market 
headed by Direct Line, the 
Royal Bank of Scotland sub- 
sidiary which insures 1.4m of 
the UK's 18.5m motorists. 

“This is the first time a com- 
posite has made a heavy- 
weight decisive move into the 
market,** said Mr Ray Pierce, 
manag in g director. 

He claimed that the “sheer 
weight” of investment in 
advertising and marketing 
would create brand awareness, 
allowing the company to grow 
rapidly. 

The company Is expected to 
underwrite both home and 
motor insurance. 

Based in Colchester, Guard- 
ian Direct will initially employ 
160 people, of whom 80 will be 
telesales staff. “Volume is 
important,” said Mr Pierce. 

GRE has been slow to move 
into the direct market, par- 
tially because of Its depen- 
dence on business generated 
by brokers and building societ- 
ies. It bad also been reluctant 
to alienate the brokers with 
which it traditionally does 
motor business. 

General Accident, Eagle Star 
and Royal Insurance have all 
formed direct writing subsid- 
iaries, but their growth rate 
has been more modest than 
that of Direct Line and Chur- 
chill, a subsidiary at Winter- 
thur, the Swiss Insurer. 

Mr Pierce, who joined grk 
after spells as chief executive 
of Robson Rhodes, the accoun- 
tant, and the Mortgage Corpo- 
ration. said the company 
would be the “strategic late 
entrant" and could equip itself 
with technology superior to 
many competitors. 

“The systems of some of our 
competitors are already out of 
dale,** he said. 

Although Guardian Direct 
will he operated separately 
from GRE's existing motor 
business, it will be able to take 
advantage of facilities already 
set up by Its parent, such as a 
network of 500 approved 
repair centres for damaged 
cars. 

Guardian Direct aims to 
compete on both service and 
price. The company will han- 
dle claims over the telephone 
and settle bills direct Market- 
ing material suggests “policy- 
holders can save up to 30 per 
cent off conventional motor 
and household policies". 


Expansion at Yorkshire Water 


By Peggy HoHinger 

Yorkshire Water's strategy to increase its 
presence in the clinical waste sector gathered 
momentum yesterday with the purchase of 
Dyvell (Holdings) for £5.2m. 

Mr Jonson Cox, managing director of York- 
shire Environmental, said the addition of Dyvell 
would propel the clinical waste division into the 
“number one slot" with a market share of 
between 20 and 25 per cent 

Dyvell is, in effect, a start-up business with 
just one incinerator and several contracts to 
build further facilities to process clinical waste 


for health authorities and hospital trusts. 

The threat of increased environmental regula- 
tion from the EC and loss of crown immunity in 
the UK mean that trusts and authorities are 
seeking improved methods of disposal 
Some £30m is budgeted for investment in new 
incinerators for the enlarged division. This will 
mean that the clinical waste operation is 
unlikely to produce a profit for about two years. 

The group further strengthened its business 
with the £&lm purchase of a profitable environ- 
mental laboratory group in the Netherlands. 
Yorkshire will integrate this with ALcontrol, its 
existing laboratory business. 


Markheath in reverse takeover 


Coal Invs plans to raise 
£11. 5m for development 


By Mchsel Smith 

Coal Investments, formerly 
known as Geevor, plans to 
raise £11 .5m to develop two 
pits for which it has agreed 
terms with British Coal to 
mine for 15 years. 

It will raise £3£m through 
the issue of loan stock to 
shareholders and ram through 
new shares at 65p, half of 
which will be placed and half 
distributed through a l-for-8 
rights issue. 

The shares were suspended 
at 76p three weeks ago, pend- 
ing talks with British Coal and 
the finan cial arrangements 
announced yesterday. Dealings 
are expected to resume on 
March 28 following an extraor- 
dinary meeting. 

The two pits, Hem Heath, 
part of the Trentham mine, 
and Coventry, will be among 
the first to be licensed by Brit- 
ish CoaL 

Coal Investments is also the 
front runner for the lease to 

mhw MwrlrTiarn Main Colliery 

in South Yorkshire and may 
bid for two others. 


The company started mining 
coal yesterday at Cwingwili, 
south Wales, its only working 
pit It plans to produce 120,000 
tonnes a year and to make 
slightly more than cim in oper- 
ating profits on turnover of 
ffon at the mi no, ahead of pre- 
vious budgets. 

The arrangements 
announced yesterday will lead 
to the issue of 12m shares. In 
addition shareholders will 
receive warrants to buy one 
share at 85p for every four 
shares they take up in the 
rights. Shareholders will also 
be able to subscribe for zero 
coupon loan stock which will 
repay £1 for each 60p paid, 
equivalent to a gross yield oF 
13 per cent The stock will also 
have warrants attached. 

• COMMENT 

As former commercial director 
of British CoaL Mr Malcolm 
Edwards, the chairman, has a 
strong background in sales 
techniques, which has stood 
him in good stead at Coal 
Investments. His ability to sell 
the potential coal not to men- 


tion the story, of Coal Invest- 
ments has been crucial in the 
shares rising by more than 
four times in the first five 
months after its re-incarnation. 
He sounded convincing again 
yesterday as he spoke of how 
his company could rely on 
sales of at least 2m to 3m 
tonnes a year by concentrating 
on industrial and household 
markets: sales to electricity 
generators would be addi- 
tional We will have to wait to 
see if Uus is fulfilled. The com- 
pany does not expect to be 
Tnnirfng money until the year 
after next. Charles Stanley, Its 
broker, believes at least £2. 7m 
is likely for the year ending 
March 1996, putting the shares 
an a prospective p/e for that 
year of 11. These are early days 
yet and the uncertainty of a 
dec lining coal market means 
that the rights issue is not one 
for those with limited funds. 
But the company’s cash gener- 
ative potential and Its rela- 
tively small capitalisation may 
prove attractive for institu- 
tions which can bear some risk 
in their portfolios. 


Wainhomes to raise 


£32m from placing 


By Andrew Taylor, 

Construction Correspondent 

Wainhomes, the Chester-based 
housebuilder, plans to raise 
ream from a planing Mnrt offer 
for yde valuing the company 
at about £l0Qm. 

The company is the latest In 
a series of housebuilders to 
announce plans to come to the 
market 

Redraw, one of the UK’s larg- 
est private housebuilders, is 
exposed to announc e propos- 
als to float the company today 

Beazer Homes - the coun- 
try's fourth largest house- 
builder, presently owned by 
Harmon - last week published 
its pathfinder prospectus for 
an issue expected to raise 
£45Qm. 

Details of the Wainhomes 
issue, but not the price, were 
contained in a pathfinder pro- 
spectus published yesterday. 

Until recently Wainhomes 
only built homes mainly in 
north-west England. 

The company will use the 
proceeds to repay borrowings - 
currently £17m - and to buy 
land to take advantage of the 


recovery in the housing mar- 
ket in the UK 

Directors and their families 
now own 65 per cent of the 
shares. They will have their 
stake reduced to just under 50 
per cent following the issue. 

The company is forecasting 
pre-tax profits of £7.1m for the 
year to March 31. This com- 
pares with profits of £5 .3m in 
the previous year and a peak of 
£8.6m in the 12 months to 
March 31 1990. 

Mr Ron Smith, chief execu- 
tive, said the company had 
been remarkably resilient dur- 
ing recession. Operating mar- 
gins had remained above 10 
per cent, having reached a 
peak of 18 per cent in 1990. 

The company now has 
operations in Yorkshire, Hamp- 
shire, Dorset and the south- 
east Midlands. It expects to 
have sold about 950 homes by 
the end of March r 

This is expected to rise to 
between L200 and 1.500 next 
year, and then to L800. 

The cash raised by the issue 
will help the group increase 
the number of plots with plan- 
ning permission it owns from 
3,000 to 44)00. 


DIVIDENDS ANNOUNCED 




Current 

payment 

Date of 
payment 

Comas - 
ponding 
dividend 

Total 

ibr 

year 

Total 

last 

year 

Abbey National 

fin 

9.85 

May 18 

7.7 

14 

11.5 

Admiral 

fin 

4.3 

May 6 

3.7 

6.3 

5.4 

ASW 

fin 

3 

May 17 

3 

6 

6 

Cowie (1) 

fln 

5J5\ 

Apr 14 

4.25 

7.85 

&25 

Bent Morcontflo fin 

1.675 

May 3 

1.675 

6.7 

6.7 

Gen Accident _ 

■MMMwJin 

17.8 

July 1 

17.05 

27J5 

26.75 

tnveresk ■■ 

Jin 

3J> 

Apr 11 

- 

3-5 

- 

KMon 

—■——fin 

2.9 

May 2 

2J? 

AJt 

3.2 

Murray Income fin 

4J3 

- 

4.15 

11.3 

109 

Pnlne 

ht 

1 

Apr 22 

2 

- 

3 

Scottish Eastern . ...tin 

1.06 

May 10 

1.02 

1.58 

1.52 

Sinclair (Writ) — 

hit 

1.7 

Apr5 

1.7 

- 

7 


Dividends shown pence per share net except where otherwise stated. fOn 
increased capftaL 


Rolls-Royce 
Power sells 
Victor 

By Simon Davies 

Rolls-Royce Power Engin- 
eering is selling Victor Prod- 
ucts, its specialist lighting 
subsidiary, through a £10m 
management buy-in backed by 
3L the venture capital group. 

Mr Keith Jordan, a former 
divisional manag in g director 
at GEC, will take over as chief 
executive of the engineering 
company. 

Victor Products, which was 
a listed company until Febru- 
ary 1988, is raising £6m 
through equity finance and 
£6m through h ank debt, to 
cover the costs of the purchase 
and build up working capital 

The new management will 
own 20 per emit of the equity, 
and the remainder has been 
underwritten by 3i, which is 
likely to bring in two other 
venture capital groups. 

Victor Products Is based in 
north-east England and manu- 
factures hazardous area light- 
ing, primarily for the mi ning 
and oil and gas industries. 

Its reliance on the mining 
Industry has been heavily 
reduced since the 1980*s, 
although British Coal remains 
a sizeable customer. It has 
also developed subsidiaries in 
South Africa and the US. 

Mr Jordan plans to intro- 
duce new lighting products 
and expand the company's 
export markets, which cur- 
rently account for only 10 per 
cent of domestic production. 

Victor Products has had a 
turbulent recent history. It 
was bought out for £13£m by 
Northern Engineering Indus- 
tries in January 1988 and a 
year later, its parent company 
was taken over by 
Rolls-Royce. 


C 




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FINANCIAL TIMES \ 

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NOTICE OF REDEMPTION 
EASTMAN KODAK COMPANY 
LIQUID YIELD OPTION NOTES DUE 2011 
(ZERO COUPON-SUBORDINATED) 

CUSIP NUMBER 277461 BA 6 

NOTICE ES HEREBY GIVEN that, pursuant to the provisions of the Indenture dated as of October 1. 1991 between EASTMAN KODAK COMPANY rKodak") and THE BANK 
OF NEW YORK, as Ttustee (Trash**). KODAK has elected to redeem on April 1, 1994 (the "Redemption Date”) sD of its Lkphd Yield Option Notes Due 2011 (Zero Caqpoo- 
Sobanlinnied) (the ‘Notes'') at a Redemption Price of S3 12. 14 per 51.000 principal amount of a Note at maturity (the ‘Redemption Price*). The Redemption Price consists of, for 
each 51,000 principal amount of a Note at maturity, die Note bane Price of $263-08 and accrued Original Liaoe Discount of 54706. i tnUm Knrfvfc h. m. iriwg it» 

payment. Original Issue Discount on Notes called for r e d em p ti on ceases to accrue an ud after die Redemption Date. 

Registered Notes called for redemption must be surrendered wTbe Bank of New York, as Paying Agent, to collect the Redemption Price. Bearer Notea called ft* redemption mist 
be surrendered to a Paying Agent outside die United States lo collect the Redemption Price. 


The Notes are convertible into Common Stock of Kodak at die Converrion Rite of 6.944 stares of Common Stack for each SUM) principal of a Note it maturity. Notes 

called for redemption may be convened at any time before the dose of business on the Redemption Date. The dosing price of a share of Common Stock on the New York 
Exchange Composite Tape on February 25. 1994 was 542 3/8. 

Re gi stered Notes may be surrendered for payment of the Redem ption Price, or may be surrendered for conversion, at the [allowing addresses of the Bank of New York, as Paying 
and Conversion Agent: 


BfiPflMramAMRESSES 


Bv Mail: 

The Bank of New York 
P.O. Box 11249 
Church Street Station 
Bond Redemption Unit - 1 IE 
New York. NY 10286 


BvMalb 

The Bank of New York 
P.O. Box 11003 
Chorch Street Station 
Fiscal Agency - 7E 
New York, NY 10286 


CPIfYERSION ADDRESSES 


Bv Hand: 

The Bank of New Yotk 
Securities Window, Street Level 
Attn; Bond Redemption Unit - 1LE 
101 Barclay Street 
New York. NY 10286 


Bv Hand; 

The Bank of New Yotk 
Corporate Trust Window-Street Lewi 
Attn: Fiscal Agency - 7E 
101 Barclay Street 
New Yotk. NY 10286 


Bearer Notes may be surrendered for payment or foe Redemption Price, or nay be surrendered for convention, » the following D f Citibank. NA or atkmp 

(Luxembourg) SA. ss P a y in g and Conversion Agents: 


Citibank, NA 
Citibank House 
336 Strand 
London WC2RIHB 


Citicorp (Luxembourg) SA. 

16 Avenue Marie Th£rtse 
L-20 12 Luxembourg 


To convert a Note, a Holder must fl) complete end, in the case of a Registered Nate, manually sign the conversion notice on the bock of Ote Note for complete and mniraallv sited * 
hetimik of such notice) ind deliver such nock* to >Gm«nk» Agent. (2) turmderthe Note *« Conversion Agetr, (3) furnish appropriate endooementj and IranaTcr doori^ 
If required by a Gonvcraku Agent. Kodak or foe Trustee, and (4) pay any transfer or rimllar tax, if required. 

U ^ yedureawM, reaped foRcgjatcred Notes, ytm may dhea them to The Bank of New York addresroa as Indicated 
or all 1-800-524-4458. If yea have any questions about redemption or coovetaoa procedures wait respect to Bearer Notes, you ma, direct than m Citibank. N.A. rod dticWP 
( L u xemb ourg) SA. as mdicated abtwe. ^ 

DO NOT SEND NOTES TO KODAK 

All questions as to the validity and acceptance for redemption wenm-maon of any Note will be determmed by Kodak, wl 

March 2, 1994 

EASTMAN KODAK COMPANY 
By The Bank of New York, 
as Trustee 


f' K 












FINANCIAL TIMES WEDMP S n.v MARCH 2 1994 



COMPANY NEWS: UK 


Margins improved by focusing on higher value-added products 

Inveresk turns in 60% rise to £9.26m 


Acquisitions help Kalon 
increase to £ 18 . 8 m 


By James Buxton, 

Scottish Correspondent 

Inveresk, the Scottish speciality paper 
manufacturer which floated on the 
Stock Exchange last June, made pre-tax 
profits of £9 -26m in the 53 weeks to 
December 4 1993. 

The result was a 60 per cent improve- 
ment on the £5.79m recorded in 1992. In 
both years the company incurred a loss 
of about £900,000 on discontinued activi- 
ties. 

Turnover on continuing activities 
increased by 3 per cent to £90. 5m 
(£87.9ra). The company attributed part 
of its improved profits to the ending 
last year of unprofitable commodity 
papermaktng at its mill at Inverkeith- 
ing, Fife. 


By focusing on higher value-added 
products and turning round its 
fine paper business, operating 
margins have been increased to 
more than 10 per cent, according to 
Mr Stefan Kay, manag in g director. 

Mr Kay said that the recovery in the 
UK paper market was “nervous, patchy 
and uneasy.” 

Confidence in the German market has 
taken a serious knock during the year 
because of recession, though sales 
of Inveresk 's products held up 
welL 

Trading elsewhere in Europe was 
satisfactory. Sir Kay added, , while 
sales to east Asia and the Americas 
continued to be encouraging and 
with considerable scope for the 
future. 


Inveresk invested £7 An In plant 
improvements, paid for out of cash 
flow, and plans to invest a farther 
££.5m in 1994 

Earnings per share were 16Sp (11 jp) 
and a final dividend of Sip is recom- 
mended. There was no interim dividend 
and Inveresk said on flotation that the 
final dividend would be two thirds of a 
normal dividend. 

• COMMENT 

Inveresk is a solid company with expe- 
rienced maTi^g»pv»nt is a moderately 
profitable q£ the paper market, 
factors which helped push its shares up 
from last June's issue price of 150p to 
223p, before adding another 7p to 2$)p 
yesterday. Its stated aim is to become 
“Europe's leading speciality paper com- 


pany", and it hopes to find a suitable 
target for acquisition in Europe or the 
UK With £41m on its balance sheet and 
an unused borrowing facility ofsaOm.it 
should be well equipped to do so. Inver- 
esk may be able to profit from higher 
market prices and exploit its 20 per cent 
unused capacity, but could also suffer if 
wood pulp costs, now beginning to 
increase, go up further. Last year it 
enjoyed a tax charge of only 9 per cent 
because of allowances from past losses; 
this year, however, the tax charge will 
be 28 per cent, and analysts believe 
pre-tax profits up to only £L0m will be 
possible. That would mean reduced 
earnings per share of L3.7p, giving a 
multiple of 16.7 on yesterday’s closing 
price of 230p. On that basis the shares 
look fairly priced. 



CfOf 


TR Euro Growth launches issue 


By Betitan Hutton 

TR European Growth Trust, 
a specialist smaller com- 
panies Investment trust, is 
planning to raise new capital 
through a conversion share 
issue. 

The trust currently has 
assets of about £73m. The C 
share issue is understood to be 
likely to increase that by at 
least one third, but if demand 
is there, the trust's size could 
double. 


TR European Growth invests 
mainly in quoted companies 
capitalised at less than 2200m. 
though it also hag a small port- 
folio of unquoted companies, 
particularly ones which are 
likely to seek a listing in the 
future. 

The company said there were 
clear signs of recovery in 
smaller company share prices, 
a feeling which appeared to be 
shared by other fond manag- 
ers. 

The non-UK small or compa- 


nies investment trust area is 
highly active at the moment, 
with file launch of the Piper 
European Smaller Companies 
Trust and the Govett Global 
Smaller Companies Trust, and 
pnnthpr c share issue under 
way from Fleming European 
Fledgeling. 

“We feel very strongly 
that the European story is 
something that is going 
to go through over the met 
couple of years, and smaller 
companies are going to out- 


perform the bigger ones," 
wW Mr James de Sausmarez, 
managing director of Hen- 
derson Touche Remnant 
Investment Trust Manage- 
ment 

TR European Growth's net 
asset value grew by 31 per cent 
to I54£p (99.2p) per ordinary 
share over the half year to 
December 3L 

Earnings per share were up 
66 per cent to LOlp (0-Slp). The 
trust pays a single dividend at 
the year end. 


Leeds & Holbeck 
declines 13% 

Leeds and Holbeck Building 
Society saw pre-tax profits 
decline 13 per cent - from 
£834m to £7.72m - over the 12 
T pnnthg to December 31. 

The outcome, which masked 
a sharp improvement in the 
society’s second half, was 
struck after a marginally 
reduced loan loss provision of 
£19.4m (£19 An). 

Total assets improved to 
£2.45bn (£2.43bn). The costdn- 
come ratio rose from 393 per 
cent to 4L5 per cent. 


By Peter Pearse 

Bucking the general trend in 
the UK paints market, Kalon. 
the paints group, again 
achieved sharp profits growth 
and increased market share in 
1993 on turnover boosted 
largely fay acquisitions. 

Under FRS3, pre-tax profits 
jumped 77 per cent to £i8An 
(2103m), though stripping out 
1992‘s £2. 62m exceptional 
charges - 21.56m for the abor- 
tive bid for Ma nders, then a 
rival paints maker, and £1.06m 
on the disposal of the chemi- 
cals division - reduces the 
advance to 42 per cent from 
£lA2m. Of the £18. Sn profits. 
£4J82m wiwo from ar qiricitiong, 
mainly Novodec, the French 
private-label paints maker 
bought for £22m in February 
1993. 

Turnover grew by 34 per cent 
to £1 42.4m (£106 3m) including 
£34. lm from acquisitions. 
There was a tumround in 
interest - from £660.000 receiv- 
able to £150,000 payable. Mr 
Mike Hennessy, managing 
director, said this was because 
of the debt acquired with 
Novodec, higher financing 
charges and lower UK rates. 
Cash balances stood at £102m 
at the year-end, against £ 12 &xl 

In the decorative division, 
where sales were flat at £96. lm 
and profits up 6 per cent at 


£13.5m, retail paint sales 
slipped l per cent in both vol- 
ume and value terms, while 
the total market fell by 7 per 
cent Trade paint sales rose 15 
pm- cent in volume and ll in 
value as the market fell by 4 
per cent in value. Total market 
prices fell by 4 per cent as the 
DIY sheds engaged in aggres- 
sive pro m oti o nal activity. 

Kalon said there was evi- 
dence this bad abated and that 
prices were now more stable, 
though raw material prices 
were edging up. 

The opening of 12 more Ley- 
land trade centres is planned 
for 1994, to make 87 in all The 

aim is for a chain of 110. 

In the specialist products 
division, now called Variance 
since February’s acquisition of 
that company for £8 An, sales 
were £6.5m and profits 
£500.000. 

Mr Hennessy said that total 
sundry sales were £25m-£26m 
with £19m paint-related. The 
Vallance-enhanced division is 
expected to have sales of about 
£18m-£20m next year, with 
total sundries sales of up to 
£40m. 

With the French market - 
where Mr Hennessy said prices 
were crazy - up 10.5 per cent 
in volume, Novodec rose by 
19.5 per cent The Leyland 
brand was launched into 
France last week coinciding 


with the opening of the first 
trade centre in Lille. 

Earnings under FRS 3 
advanced 91 per cent to 9^8p 
(5.17p), or, otherwise, by 37 per 
cent from 7J2p. A final dividend 
of 2£p makes at 4 A? total, up 
31 per cent 

• COMMENT 

The Inexorable rise of Kalon 
continues. And there is noth- 
ing in the tea-leaves to suggest 
that this progress will falter. 
This is good news for Mr Hen- 
nessy’s now infamous and 
whopping triennial bonus 
scheme, now due. In private 
paints - a mature business, 
whicb Kalon had a big hand in 
developing - it has done well 
in difficult market conditions; 
witness ICI‘s dour comments 
last week. Trade paints - a 
developing business, especially 
in France - did even better. 
Expect both organic and acqui- 
sition-led growth in Europe to 
build on the French progress. 
In sundries - a newish market 
worth up to £500m - Kalon has 
a lot to play for. while other 
territories in Europe offer the 
group opportunities to repli- 
cate what it has achieved in 
the UK and increasingly In 
France. Forecast pre-tax profits 
for 1994 are between £2l.5m 
and £22.5m, giving a p/e of 
between 16.3 and 15£. which is 
cheap. 


Scottish Eastern boosts net 
asset value 33% to 105.4p 


The net asset value per share 
of Scottish Eastern Investment 
Trust rose by S3 per cent over 
the year to January 31, from 
79.2p to 105.4p. 

After a Elm fell in the tax 
charge to £3m, net revenue for 
the 12 months advanced to 


£10-5m compared with £L0J2m, 
producing earnings per share 
up from 1.59p to 1.65p per 
share. 

The proposed final dividend 
is lifted to l.Ofip (1.02p) 
for an Increased total of I-58p 
(L52p). 



BANCA 

COMMERCIALS 

ITALIANA 


A Jm-SM Ctmmf «A hptari Oft* h Uu. tajj - 6. Pico d* Bod ■ Htd I lb 2m ii te Me 
tf Cams no br » Com « me - cm San l ijaununn - sun? Dm l cusunun 

BmCairw*iaHGw ■ Mv 


AS Holders of Common Stock of Banca C omn w r c M e ftaHana 
(herein -after, the "Bank'1 are invited to attend the Ordinary and 
Extraordinary General Meeting at 10 a.m., on 12th March 
1994. In Milan, Piazza Beigioioso 1 and. if necessary, for a sec- 
ond meeting on 15th March 1994. at the same time and place, to 
consider and act upon the following 

Agenda 

Ordinary Part 

- Presentation of Balance Sheet at 31st December 1993, Board of 
Directors' management Report, Auditors’ Report and related re- 
solutions. 

- Any other business. 


Extraordinary Part 

- Proposal for merger of “ASTRA IMMOBUJARE 5rl - Milan' and 
‘CI.TRE Sri - Milan" with the Banca Co mm eroafe ftafiana SpA. 
Determination of merger conditions and formalities. Relevant 
resolutions and delegation of powers. 

Holders of Common Stock entitled to vote may attend the 
General Meeting provided that they have deposited their shares at 
any Branch of the Bank or at Monte TBofi SpA at least five days 
before the dale of the General Meeting, In accordance with the 
provision of Art. 4 of Law No. 1745 of 29th December 1962. 
This condition also concerns ail Shareholders who are already reg- 
istered at the Shareholders book. 

Shareholders may arrange to be represented at the Sharehol- 
ders' Meeting - In compliance with the provtrions of art. 2372 of 
the Civil Code - by means of an ordinary proxy statement with rig- 
nature authenticated by a Member of die Board, a Bank Director 
or Official, a Notary or a Consular Authority. 


L Ute Cheh man I 

of the Board of Directors J 


ill 






-Well. couldn't get the planning permission 
for unite the headquarters building we mnaagetC 

Should’ve 
talked to CNT 


Tx^Sbc0800; 
221177 ■ - .. 


Call 0800 
721721 

Land and premises with added value. 


NATIONAL BANK OF CANADA 

USS 150,000000 

Floating Rate Subor dinated Debentures due 2087 

In accordance with trie prowsionstf the 
hv oven that lor the six month interest period from FjMry2& 
T994ioAugusf 31. 199« the Debentures writer 
ol20(iS%- annum, adiusted <n accordance wrth a norce 

published m September 1992 

T*e <**■**> on Daw ' 

Ai«usi31. 1994 vviD amount to USS 1U& 4* nw/toterenee 

for Debentures of USS fo.000 

nominal and USS 1 .054.20 for fOTTflS KnxSetbOPk 
Debentures of USS 100.000 W&JLhl LuxambOU9 


mail. 


GA 



General Accident 


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Year 

to 31.12.93 
Unaudited 
£in 

Year 

to 3 1.12.92 
Audited 
£m 

General Premiums 

4 , 181.8 

3,831.5 

Net Investment Income 

493.2 

464.8 

Underwriting Loss 

(229.0) 

(510.1) 

Life Profits 

49.1 

34.8 

Profit/Loss before Taxation 

294.9 

(29.3) 

Profit/Loss attributable to Shareholders 

244.6 

(26.9) 

Earnings per Ordinary Share 

50.0p 

(7.0p) 

Dividend per Share 

27.50p 

26.75p 






? * :*!■ ■ ' 




•,CjL . “ 'T-. -' ’ft* 

! : v^Encouragmg m^rovement in the United States. 

• •^Results in Canada adversely affected by storm losses 
iap.dreserve strengthening.;,'" . 

w>v Good results fronv the Pacific. 

Strong performance from Life operations. 

Final dividend increased by 4.4% -to 17.80p per share 
making a total of 27.50p per share, covered 1.8 times. 


. 

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•I.’ 1 ’- 


* ; ^-jPb^tax ^6fit of £294.9m is after providing £8.9m for 
■. . ■ , r ;$Sff prpfifr sharing: . .. 

* ^’^.<¥.i.|k^®^u|S6^writytg-profit!of £59.7m -r an improvement 


Nelson Robertson, Group Chief Executive, commented: 
"We start 1994 in a strong position and look forward to the 
remainder of the year with confidence". 


General Accident pic 

General Accident pic. World Headquarters: Pitheavlis, Perth, Scotland PH2 0NH 




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I No of amoyMO □unetarSO O SO to ICO QonvlOO 
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Pool » FT PTOF*£. PO Be. 12. Sotuyot-TIvM. 

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To the holders of 

Mortgage Capital Trust I 
Collateralized Mortgage Obligations, Senes A 
Class A-l Bonds Due 1st June. 2017 

N« rice w hervbr given rhat the interest rate on rhe Class A- 1 Bond* tor 
the inrercM nm.'d Im March. I I'M chrouuh 1st June. 1944 ls 
4 3?“.' per annum. 

Bv: Bankers Trust Company, as Trustee. 


Signal 


O 130* software appfleaflons O 
O RT DATA FROM SI 0 A DAY O 
O Srgtul SOFTWARE GUIDE O 
Can London if? *4 . (0) 71 231 3556 
tor your guide and Signal price Hsl 


£140,000,000 

HMC MORTGAGE NOTES 6 PIC 

Class A 

Mortgage Bucked Hooting Rate 
Notes due September 2030 
Nosce s hereby given that there will 
be a principal payment of £2.350.00 
per Note on the interest payment 
date March 2l. 1994. The principal 
amount custandma per Note will he 
£97.65000. 

By: TM Cm Itan&attaa Sant, KJL 
Haim, Agent Baft 

March 1.1994 


COMPANY NEWS; UK 


UK housebuilding lifts 
Raine 24% to £3.4m 


Dawson to make 
£50m provision 

fnr T Tft chilkp-llfl 


By Andrew Taylor, 

Construction Correspondent 

Pre-tax profits of Raine, the 
housebuilder and contractor, 
increased by 24 per cant from 
£2. 76m to £3.44m over the six 
months to December 3L 

Tim company was helped by 
a strong performance from UK 
private sector housebuilding, 
which increased operating 
profits by 80 per cent. The 
Interest charge was also 
sharply reduced, from £2. 05m 
to £891000. 

The figures, however, were 
dented by a £1.4m tumround In 
th«» Californian housing opera- 
tion, which moved from a 
£819,000 profit to a £605,000 
loss. As a result, Raine’s oper- 
ating profits were only margin- 
ally higher at £4 61m (£455m). 

Earnings per share rose from 
0.88p to 1.06p but, as expected, 
the group halved its interim 
dividend to lp. 

Turnover was virtually 
unchanged at £207m (£205.lm). 


By Andrew Bolger 

Shares in Siierntnight Holdings 
fell 18p to 355p yesterday after 
Europe’s biggest manufacturer 
of beds warned that its profits 
for the year to January 31 
would be “slightly below aver- 
age market expectations”. 

Analysts had been forecast- 
ing pre-tax profits of about 
£13.5m. However, the Lanca- 
shire-based gravy) said that its 
annual results on May 3 would 
be only marginally ahead of 
last year’s figure of £12m. 

Silentnight said it intended 
to hold tha final divid end of 
5.25p, to give an unchanged 
total of 8p. 

The group said that in the 


Sanderson Electronics, the 
software supplier, has entered 
Into a joint venture with ICL, 
the information technology 
company, through the acquisi- 
tion of 80.1 per cent of ICL 
Commercial Systems for 
£400,500. 

The consideration will be 
satisfied by the issue of 121^364 
shares. 

In addition, Sanderson has 
issued 278,638 shares to ICL for 
cash at 330p each to raise 


Mr Peter Parkin, chairman, 
said the company had lost 
sales following the Los Angeles 
earthquake, which had not 
damaged any of tts housing 
developments, but business 
was picking up a gain 

Private sector honse sales in 
the UK rose by 23 per cent to 
803. The group bad increased 
margins by reducing sales 
incentives and the cost of part 
exchange deals had halved. 

Social housing profits fell in 
spite of a 21 per cent increase 
in sales, from 482 to 564 homes. 

Volumes should increase fur- 
ther in the second half with 
Raine benefiting from its 
recent contract with a consor- 
tium of Kent housing associa- 
tions to build more than L500 
homes over three years. 

Contracting awn commercial 
property profits, affected by 
low margins and lower interest 
on cash payments, dipped at 
the pre-tax level from £817,000 
to £715.000. 

The shar es Cell 4p to 99p. 


UK it hart maintaine d volume 
in its beds division and 
increased volume in cabinets, 
but margins had been under 
pressure. 

The previously lossmaking 
US business was continuing to 
recover, and the German sub- 
sidiary, Matthias Houben - 
bought in 1992 for £3-2m - was 
showing a very satisfactory 
return an investment 

The group said it had been 
conscious of the need to inform 
the market at the same time 
that trading had been disap- 
pointing. One factor in the 
decision had been the Stock 
Exchange's recent guidance on 
the disclosure of price-sensitive 
information. 


£919,500, which will be used to 
repay £569,500 of inter-com- 
pany debt to ICL and provide 
working capital for Commer- 
cial Systems. 

A farther consideration, of 
up to £1.95m, is profit rel- 
ated and may be paid in 
shares. 

Sanderson and ICL have 
agreed not to dispose of any 
Commercial Systems shares 
without the other’s consent 
until September 30 1996. 


• COMMENT 

Ralne’s Califo rnian problems, 
its exposure to recession-hit 
UK contracting and uncer- 
tainty over the dividend has 
distracted attention from a 
creditable performance by the 
UK housebuilding operations. 
Currently, operating margins 
on private house sales are 
about 12 per cent and still 
about 6 per cent for social 
housing. Increased sales 
should mean that social hous- 
ing profits for the year will be 
at least maintained. Pre-tax 
profits of £14m in 1993-94 would 
put the group on a prospective 
p/e of more than 20 - f ail ing to 
14 timpg mining * on £20m in 
1994-95. Over the past 12 
mouths the shares have under- 
performed the sector by 50 
per cent. For a pure UK 
housebuilder Raine might 
look cheap. The question is 
how quickly the Californian 
housebuilding and UK con- 
tracting businesses may 
recover. 


Three buys 
for IMC as 
profits fall 

IMC Industries, the USM- 
q noted soft drinks, video tapes 
and in-flight entertainments 
company, reported pre-tax 
p r o fits down from £202,000 to 
£165,000 in the six months to 
October 31. 

The company also 
announced the purchase of 
Eorotrade (UK), Creation 
Entertainments and 50 per 
emit of Wideworid Trading for 
£143,000 cash and 25 per cent 
of the enlarged share capital 
of IMC Video. All are involved 
in marketing videos. 

IMC has the option to 
acquire the 25 per cent at a 
profit-related price not exceed- 
ing £450,000. Eorotrade and 
Creation have net assets of 
about £22 .5m. Wideworid has 
only recently begun trading. 
All three companies are con- 
trolled by Mr Brian Phipps, a 
director of IMC. 

The company, of which the 
ultimate holding rampflny is 
Cursitor (Fifty Two), said 
demand for its two main prod- 
ucts, soft drinks and video 
tapes, had remained weak. 
Further rationalisation had 
taken place at Alpine Soft 
Drinks and new titles intro- 
duced by IMC Video. 

Turnover was £2. 73m 
(£2£7m). Earnings per share 
came out at 0.07p (0.09p). 


By David Blackwell 

Dawson International, the 
Edinburgh-based textile group. 

Is closing its fleece and jersey 
business in the US and taking 
a £50m exceptional provision 
for the year to March 26 1994. 

The rationalisation was 
announced yesterday following 
an independent review of Daw- 
son’s US businesses, which had 
sales of £214m in 1992-93, about 
half the group total. 

Last month the shares fell to 
134p after the group warned 
that, difficult US .trading condi- 
tions would lead to “a very 
substantial exceptional provi- 
sion this year." 

Yesterday they closed down 
5p at 153p. 

Dawson is also considering 
the sale of Dawson Home Fash- 
ions, which makes shower cur- 
tains and bath mats. 

Although It had 60 per cent 
of the US market last year, 
DHF has been hit badly by 
import penetration. Operating 
profits in the six months to 
September 25 amounted to just 
£300,000 on turnover of £30.4m. 

The fleece and jersey busi- 
ness lost £8.9m on sales of 
£29.1m in the same period. 
Known as JE Morgan Apparel 
it operates 12 plants and has 
2.000 employees. 

Sir Ronald Miller, executive 
chairman, said the three plants 
making fleece, which is used in 
joggin g suits, would be closed. 


By Andrew Baxter 

TI Group, the specialist 
engineering concern, said yes- 
terday it had reached agree- 
ment with the Sembawang 
Group, a leading Singapore- 
based industrial conglomerate, 
to develop business opportuni- 
ties in the Asia Pacific region. 

The aprapmant: is an Impor- 
tant step far TI. which Is keen 
to expand in Asia. 

The group and its associated 
companies already have sales 
of £100m in nine countries, 
including India and New Zea- 
land. 

The two companies were 
introduced by Singapore’s Eco- 
nomic Development Board and 
signed a memorandum of 
understanding last month, ini- 
tially they will focus on devel- 


Three of the remaining 
plants are dedicated to making 
jersey, which is used for 
T-shirts and underwear. 

These would be reorganised, 
along with the jersey-making 
operations of the mixed plants, 
with a view to a possible sale. 

Dawson went into the jersey 
and fleece business in 1989, and 
was a supplier to Kmart, the 
US retailing group. Sir Ronald 
said the business had been hit 
by excess capacity in the US, 
imports, lower sales in the 
recession and the battle 
between US retailers. He 
pointed out that Kmart lost 
Slbn (£600m) in the fourth 
quarter. 

Goodwill of £42m from the 
purchase of JE Morgan will 
need to be written off through 
the profit and loss account. 

A further £14m will need to 
be written off if the shower 
curtain business is sold. 

The group’s net debt at 
March 26 is expected to be 
about £70m. 

It also has £27 .9m of convert- 
ible preference shares. 

Dawson has two further 
businesses in the US, Morgan 
and Duofold, which make ther- 
mal underwear and other 
clothing. The group expects 
this year's results to be better 
than last year's. 

Sir Ronald said the rational- 
isation would enable the com- 
pany to concentrate on its prof- 
itable US operations. 


oping business opportunities in 
Singapore mill China. 

TI is also talking to Semba- 
wang to explore opportunities 
for the Dowty aerospace busi- 
ness in south-east Asia. 

The deal is the first such 
arrangement made by TI in 
Asia, although it does have a 
growing presence in the 
region. Its John Crane offshoot 
has had a Japanese joint ven- 
ture for 25 years, and in 1991 
bought a majority stake in 
Dover Japan, now called Japan 
Marine Technologies, to help it 
exploit the Asian market for 
marine seals. 

As part of its regionalisatian, 
the EDB has been encouraging 
local and international compa- 
nies to combine resources to 
tackle the expanding regional 
market. 


Silentnight shares 
lose 18p on warning 


Sanderson/ICL venture 


TI expands in Asia 
with Singapore deal 


Newmarket 
realises 
more assets 

Net asset value at Newmarket 
Venture Capital was 
unchanged at 82p over the 12 
months to December 31. 

The split between invest- 
ments and net current assets, 
however, was greatly different 
as the company continued Its 
programme of asset realisation 
begun in 1990. 

At the end of the period 
investments made up 63 per 
cent (86 per cent) of net assets 
with quoted shares and 
unquoted investments failing 
from £16£m to £lL6m. 

There was a pre and post-tax 
loss for 1993 Of £157,000 
<£L32m) giving losses per share 
of 0.43p (3.65p). 

Details or the company’s vol- 
untary liquidation and distri- 
bution of assets are expected to 
be sent to shareholders In May 
this year. 


NEWS DIGEST 


Refinancing of 
Wm Hill achieved 

Brent Walker has achieved a 
refinancing of the £325m loan 
due to lenders to its William 
mil hatting shop chain It has 
also secured the agreement of 
its term loan lenders for 
changes in conditions neces- 
sary because of the group’s 
deteriorating balance sheet. 

Last week holders of its vari- 
able rate convertible notes 
accepted changes in their 
terms, principally extending 
the period when interest will 
be paid in preference shares 
rather than rash. 

Bala Resources 
Russian moves 

Bula Resources, the Ireland- 
based oil and gas exploration 
company, is expected to 
announce an acquisition in the 
next two weeks which could 
result in a share issue and the 
nomination ctf board members 
from the former Soviet Union. 


The company has sought to 
quell speculation that it was 
withdrawing from negotiations 
in Russia by announcing that 
it was in advanced discussions 
with a number of parties. 

Bula raised I£2.3m (£2 .2m) 
through a placing earlier this 
year. 

Thames Water 
$500m deal 

Thames Water has clinched a 
3500m (£342m) deal to develop 
water and waste infrastructure 
in Mexico City as part of a con- 
sortium with two Mexican 
companies. 

Thames is expected to invest 
a total of about $50m in the 
joint venture, which has won a 
15 year concession for the 
municipality of Naucalpan. 
The first phase will require 
investment of about 215m. 

The UK water company will 
have a 45 per cent stake, along 
with Tribasa. a Mexican civil 
engineering group, while 
Epycsa, a specialist water con- 
tractor, will own 10 per cent 


Ocean sells liquid storage arm 


Ocean Group, the industrial 
and distribution services com- 
pany. has completed the sale of 
its bulk liquid storage opera- 
tion, Panocean Storage & 
Transport, for £7m. 

Tate & Lyle, through its 
United Molasses division, has 
bought Panocean Hull and 


Panocean's Birkenhead termi- 
nal for £3.7m. 

GATX Terminals has bought 
Panocean's Eastham terminal 
on Merseyside. 

The UK disposals follow 
the sale of Panocean's non-UK 
activities in March last 
year. 


| MONTHLY AVERAGES OF STOCK INDICES S 


February 

January 

December 

Nuvttftbfif 

■ FT-SE Actuaries Indices 

TOO lnd« 

339X4 

34315 

331X7 

3111.6 

Mkl 250 

404X2 

3982.7 

3662.1 

34565 

350 Stars 

17115 

1727.1 

10495 

1550.7 

Non-Fmandate 

1318.98 

181X87 

173X10 

164354 

Bnonoal Group 

280329 

2619.71 

130050 

1182.41 

AU-Share 

170359 

171050 

1628.88 

1535.11 

EutXrack 100 

1495.18 

148454 

142X55 

134X88 

Eurotnx* 300 

1553.11 

155953 

149650 

141450 

■ FTMcee 

Government Securitas 

10182 

10650 

10X56 

103.12 

Hxad Interest 

128.14 

132.32 

130.14 

12357 

Ordinary 

2 SI 4.4 

2620.1 

24925 

23575 

Gold Mines 

2054.76 

2270.36 

213X78 

202156 

SEAO Barmans 

37,205 

40538 

3X915 

29.057 


Ugheat Feb close 

Lowest Feb dose 


ft-se 100 

FT-SE Mid 250 
FT-SE A 350 
FT-SE -A AB-Slum 
Ordrary 


3520.3 (&nd) 
41524 (3rd) 

1778.3 (&id) 
1764.71 (Zntfl 
2713.8 end) 


3267.5 (Mtty 
391X0 (2504 
1657.8 (24th) 
165048 (24tfl) 
2528.1 (24UD 



54% of Chief Executives in Europe's largest companies 
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77io advertisement is issued in compliance with the requirements of The International Stock Exchange of the 
United Kingdom and the Republic of Ireland Limited ft he “London Stock Exchange’). It does not constitute an 
offer or imitation to the public to subscribe for or purchase any shares. Application has been made to 
the London Stock Exchange for all the Ordinary Shares of ISp each and Warrants of Foreign Sc Colonial Income 
Growth Investment Trust PLC issued and to be issued pursuant to the placing and the offer far subscription to be 
admitted to the Official List. It is expected that listing will became effective and dealings in the Ordinary Shares and 
Warrants (in Units of fnr* Ordinary Sham and one Warrant! wiil commence on Tuesday, 29th March, 1994. Separate 
dealings in the Ordinary Shares and Warrants will commence on Monday, 9th May, 1994. 

FOREIGN Sc COLONIAL INCOME GROWTH INVESTMENT TRUST PLC 

(Incorporated in England and Wales under the Companies Ad 1925 with registered number 2895991; 

Placing and Offer for Subscription of up to 50 million Units 
(each Unit consisting of 5 Ordinary Shares of 25p each and one Warrant) 
at a price of 500p per Unit payable in full on application 
sponsored by 

S.G.Warburg Securities Ltd. 


Forego & Colonial Income Growth Investment True PLC will moot almost entirely in the UK. FT5E 350 
Index of brgr and medium sized companies. Copies of die Listing Particulars relating to Foreign fc Colonial 
Income Crow* !n vestment Trust PLC and die placing and offer tor subscription will be evoiiabk during 
normal business bouts on any weekday (Saturdays and public holidays excepted) from the date of dm nonce 
up to and including 22nd March, 1994 from:— 


Foreign flC Colonial Management Limited 
Sih Floor, Exchange Home 
Primrose Street 
Loudon EC2A 3NY 


S.G. Warburg Securities Lid. 
1 Finsbury A venae 
London EC2M 2PA 


The Royal Bank of Scotland pic 
P.O. Box 452 
Owen House 

8 Bankhead Croww a y North 
Edinburgh EH 11 4TQ 


^ ^2^ frmn the 

Oft BwtbolMKW Lane, London EG t«m the date of .his none* up ,o and .ndudfr^ 


2nd March, 1994 


IlIIIIlHIlIIllIlIIlllHIIIIIIIIIIIIIIIlIlllllllllllllllflllll 















SI 



^ <s in .\\ji 
apuroi; 




ASW recovery under 
way with modest £0.1m 


By Andrew Baxter 

ASW Holdings, the steel and 
construction products group 
announced pre-tax profits of 
lust £100.000 for 1993, but said 
it would return to satisfactory 
profits when margins better 
reflected the industry’s costs. 

The outcome compared with 
a £10.8m loss in 1993, but is 
lower than the £im to £2m 
forecast by analysts in Novem- 
ber, when the company issued 
a profits warning because of 
rising scrap prices - its main 
raw material - and reduced 
selling prices an the Continent. 

Turnover rose from £387 Am 
to £428.503, and operating 
profit on continuing operations 
bounced from £ioo,ooo to 
£8.lm. But operating losses and 
provisions on discontinued 
operations - reinforcement 
engineering in steel and fabri- 
cation on the construction side 
- were £4.lm (£7.8m) and net 
interest payable rose by £lm to 
£3An. 

I^wses per share were 0.7p, 
down from lG.2p. The final div- 
idend is maintained at 3p, mak- 
ing an unchanged total of 6p. 

Operating profit in steel 
activities jumped to £0.4m from 
a loss of £600,000 in 1992. This 
reflected £ 10.4m of margin 
improvements - mainly in the 
second quarter but not main- 
tained subsequently - and 
£ 2 /i m from volume increases, 


.200 



■so *7* 1 ■ v . 

1988 

Source; FT Grepturu 


.] r 


94 


offset by £2 .5m of electricity 
price increases. 

Mr Alan Cox, chief execu- 
tive, said the company had sur- 
vived three years of “awful" 
prices in the steel industry. 
But Allied Steel & Wire had 
made further improvements in 
productivity Last year, with 
sales per employee rising from 
£135,600 to £155^00. 

He predicted further 
improvements in productivity 
and said there bad been some 
improvement in margins since 
the year-end. The issue of sub- 
sidies for lossmakmg competi- 
tors in Europe was coming 


under attack, he said, but 
added: "We object to people 
being subsidised to sell steel at 
below the cash costs of the 
lowest-cost producer”. 

The operating loss in con- 
struction systems deepened 
from £3 5m to £A2m, but Mr 
Edward Townsend, the new 
finance director, said continu- 
ing operations were making 
significant progress - espe- 
cially the new stressing, tie 
and anchor systems - and a 
return to profitability is expec- 
ted thin year. 

• COMMENT 

At 19Qp, ASW’s share price has 
recovered from the jolt caused 
by November’s profit warning, 
and the market is clearly bet- 
ting that profits will rise 
quickly when margins 
improve. There are some signs 
of margin improvement in 
Europe, but demand for scrap 
is increasing as continuous 
production shifts to electric arc 
furnaces, underpinning the 
price. Fortunately the com- 
pany remains on a roll when it 
comes to cost reduction, which 
in the short-term might pro- 
vide greater benefits than mar- 
gin improvement. Based on 
pre-tax profits of £45m to £5m 
this year, the prospective p/e is 
a heady 50. That may look 
over-optimistic, but the yield Is 
not out of line with the sector 
and looks secure. 


Crossroads Oil 
returns to black 
with £156,000 

Crossroads Oil Group, the 
USM -quoted oil and gas explo- 
ration company, swung back 
into the black with pre-tax 
profits of £156,000 for the six 
months to end-December. 

That compared with a deficit 
of £298,000 last time and came 
from turnover - boosted by a 
£536,000 contribution from the 
Crossroads-Melrose joint ven- 
ture - up from £234,000 to 
£645,000. 

There was a nil tax charge 
for both periods and earnings 
per share came out at 0.288p 
(0.694p losses). 

The company also 
announced that shareholders 
at yesterday's EGM had voted 
unanimously in favour of a 
capital reconstruction to offset 
the deficit on the profit and 
loss account 

Subject to completion of the 
reconstruction and sustained 
profitability, the board intends 
to declare a dividend in 1994. 


ASHTEAD GROUP has bought 
CSE Plant for £570,000 cash 
and a property in Maidstone, 
Kent, for £350,000 cash from 
Wilts hier. CSE reported a 1993 
pre-tax profit of £120,000 on 
turnover of £1.6m and at com- 
pletion book value of its assets 
was £720,000. 

CABLE & WIRELESS has sold 
Northern Ocean Services, its 
offshore marine subsidiary, to 
McDermott in a move to 
increase the focus on core 
activities. 

EFM INCOME Trust Net reve- 
nue for nine months to Janu- 
ary 31 rose to. £523,000 
(£470,000) for earnings of 35p 
(3.lp). 'Third interim dividend 
of lp makes 3p (3.6p) so far. 
ELECTROCOMPONENTS has 
purchased Radio Spares Com- 
ponents for NZ$4.2in (£1.6m) 
cash. The Auckland-based com- 
pany has been exclusive New 
Zealand distributor for Electro- 
components’ RS Components 


Wm Sinclair at £1.3m 
in unseasonal half 


By David Blackwell 

Both turnover and pre-tax 
profits eased in the first half at 
w illiam Sinclair Holdings, the 
supplier of products to the 
garden, leisure and pet mar- 
kets. 

The Lincoln-based group 
reported profits of £L35m on 
turnover of £165m for the six 
months to end-December, cam- 
pared with £L39m on £16.6m 
previously. 

Net interest receivable fell 
from £192,000 to £92,000, mainly 
reflecting lower interest rates. 

The horticultural division 
was again affected by the con- 
tinuing ■ trend of customers to 
defier taking delivery of stock. 

The pet, aquatic and house- 
hold division was also starting 
to find that an increasing 
amount of sales took place in 
the second half. 

However, horticultural deliv- 


NEWS IN BRIEF 


offshoot since 1987. It achieved 
operating profit of NZ$840,000 
in the year to end-August 1993, 
on turnover of NZ$3.9m. Net 
assets amounted to NZ$860,000, 
including cash of NZ$731,0QG. 
REGENT CORPORATION, the 
Surrey-based property devel- 
oper, is buying Grantmena, the 
Sussex-based housebuilder, for 
1.46m shares. 

RJB MINING said that of the 
4.11m new ordinary shares 
available in its open offer, 
259m were placed firm at 840p, 
and at the closing date for 
applications 4.09m shares (99.4 
per cent of the offer) had either 
been placed firm or taken up 
by shareholders. Dealings are 
expected to commence on 
March 3. 

SARACEN VALUE Trust has 
received applications for 37m 
ordinary shares with warrants 
attached in its placing and 
offer for subscription. Ail appli- 
cations will be met in full and 


erfes were now beginning to 
pick up in readiness for the 
gardening s es wm,, 

Mr Tom Sinclair, chairman, 
said yesterday that the results 
were encouraging, and had left 
the group in a good position to 
benefit In the second half. “The 
better the weather is. the bet- 
ter we will perform in the next 
six months.” 

In January the group 
acquired Zeneca's compost 
badness for £2.76m. Turnover 
for the business for the 1990 
year is estimated at £3-7m with 
profits before tax and interest 
of £436,000. 

Mr Sinclair said the acquisi- 
tion had doubled the group's 
peat resources and increased 
its share of the professional 
grower market 

Earnings per share dipped 
4.4p to 4.2p. The interim 
dividend Is maintained at 
L7p. 


dealings are expected to com- 
mence on March 7. 

SCOTTISH INVESTMENT 
Trust Net asset value up 9.2 
per cent to 305.8p per stock 
unit in the first quarter to Jan- 
uary 3L Total assets expanded 
£85- Bm to ESMn. 

SHIRES has announced terms 
of its offer for Barrhead, 
another Scottish bathroom 
group. The offer comprises an 
faitmi cash, element of BQp a 
share and a production-related 
payment up to a maximum of 
55p a share, valuing Barrhead's 
store c apital at up to £912,000. 
SUTER has enlarged its hair- 
care supplies business through 
the purchase of DAG Haselock 
for £2 5m, funded from cash 
deposits and bank borrowing. 
Combined business will have 
annual sales of £15m. 
WORTHINGTON GROUP 
rights issue of 652m shares 
has been accepted in respect of 
935 per cent 


FINANCIAL TIMES 


NKWSLKTTKRS 

A new newsletter from the Financial Times 


AUTOMOTIVE 

COMPONENTS 

ANALYST 


FT Newsletters will be launching a new newsletter in 1994, designed to 
contain only the sharpest news and statistics about the automotive 
components industry. It will probe beneath the surface of the industry and 
supply its subscribers with the practical intelligence they need to keep 
pace with the changing face 
of vehicle and component 


manufacture worldwide. 


M 

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tedMSnWft&X. Tat *44 (0)71 <11 foe *44 (B}71 8733935. 

YES irtHiniR'h^andwwim 

tod itooito* fan wd«M» K 


copy of AUTOMOTIVE 

COMPONENTS 
ANALYST and subscription 

J 

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^ details please clip your 


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advertisement or 

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L RrtJfr.t— *- 


Admiral ahead 
16% to £4.6m 


By Alan Cane 

Profits before tax at Admiral 
rose 16 per cent to LLfiim in 
1993 as the computing services 
company reaped the benefit of 
Its move into defence software 
and chent-server technology. 

Turnover was up 19 per cent 
at £86.6m (£305m) and operat- 
ing profit jumped 23 per cent at 
£4 .35m (£3-53m). 

in hand at the year-raid 
was £5.3m (£4.4m), but falling 
interest rates resulted in a 43 
per cent decline in net interest 
receivable, from £452,000 to 
£260,000. 

Admiral has maintained 
growth in sales, pre-tax profits 
and earnings pm- share since it 
went public in 1987. It 
recruited sew staff throughout 
the recession. Last year staff 
numbers rose 20 per cent to 662 
and now stand at 790. Mr Clay 
Brendish, rfmirmfrp , yes- 
terday that Admiral was a 
riwntnnnfr force in ie? client- 
server marketplace which he 


believed would grow strongly 
in. the future. 

Client-server systems replace 
centralised mam tramp comput- 
ing with combinations of net- 
work servers and intelligent 
workstations. 

The company is now active 
in the defence, finance, govern- 
ment and industrial sectors 
with a growing presence - 
accounting for 9 per cent of 
sales - in commerce. It pro- 
vides computing services, soft- 
ware products and training 
and has overseas operations in 
Australia and Singapore. 

Earnings per share were 
27-6p (24J2p) and a final divi- 
dend of 4ip makes a total for 
the year of 6L3p (5.4p). Dividend 
cover Is 4^ times. 

Mr Brendish said there was 
good evidence of recovery in 
the economy and be expected a 
Anther good year. Analysts are 
looking far growth of about 24 
per cent for the current year 
giving profits before tax of 
about 25.7m. 


Net assets up at 
Fidelity Euro 

Total net assets at Fidelity 
European Values stood at 
£69.6m at end-December, a 
62 per cent rise from the 
£43m reported at the previous 
year end; net asset value rose 
from 103. 54 p to l67.49p per 
share. 

Dividend income was ahead 
at £1.68m (£ 1.36m). but 
a cut In deposit interest 
earnings from £569,000 
to £115,000 meant revenue 
after tax was reduced from 
£203.000 to £133,000. reducing 
earnings per share to 0.32p 
(0.49p). 

No final dividend is recom- 
mended, leaving a total main- 
tained at 03p. 


Murray Income 
assets growth 

Net asset value per ordinary 
and B ordinary shares of Mur- 
ray Income Trust stood at 
367.8p at the six months ended 
December 31, up from 31&9p 
six months earlier and 283.5p a 
year ago. 

Net revenue rose to £4.47m, 
against £4.17m for the compa- 
rable period. 

Earnings emerged at 5.47p 
(5p) per ordinary share and 
5.42p (A95p) assuming conver- 
sion of the B ordinary sHawas- 

As forecast, the directors 
are recommending an increase 
in the final dividend from 
4.l5p to 4.3p, raising the 
total for 1994 to ll,3p 
(10Ap). 


25 


Pw i » manM | ■ 


raaMmtoiab, 


*w mt MHm r to ■ 

i hoor EMU Mm m to mmto i 




lBMIMmI 


Cheape 

electricity 

here! 

if '/our compury >•••, 13 CUV cr mere 
i.'irxend £ 1000 p-’r rm.-.rilf’;, •••.••> esn soil 
you ciiiJBijcr oioelnsily. 

Call 021 423 3013. 

Power line 


Standard ^Chartered 

Standard Chartered PLC 

flncorpoMod mi MWfl tutor to WwO 

£150 million Subordinated Floating 
Rate Notes due 1996 

In accordance with the provisions of (he Notes, 
notice is hereby given that for the three month 
period from 28th February 1994 to 31st May 1994 
the Notes will bear interest at the rate of 5.2875 
per cent per annum. 

Interest per £5.000 Note will amount to £66.64 and 
will be paid for value 31st May 1994 against 
surrender of Coupon No32 

West Merchant Bank Limited 

Agent Bank 


COMMERCIAL UNION PRIVILEGE PORTFOLIO SICAV 

Bighimd OIBh- 

4l, ovntac dc ta Gtoie, Center Mcrnuv 
Mi Soar 

L-I61I LUXEMBOURG 
X.C. Lmratmatu 832*40 

DIVIDEND ANNOUNCEMENT 

Comma dal Union Privilege Portfulki announce a dividend ilistribulHUi pajjldc aTlcr 
280i February 1994 for the following fomK: 

Deutschmark Reserve 0.28480 Coupon nut 

Yea Reserve 7.099 Coupon no J 

Sterling Reserve a022ft*W Coupon no 7 

US Dollar Reserve IMT73S9 Ctoupon no ft 

Rcwia Bond 7.8022 Coupon nu b 

Dividends are payable to holders of bearer shares agiiiui presentation of the 
respective coupon at the following tanks: 

to Luxembourg: Cl IASE MAN! IATTAN BANK Ijiscmbauig SjV 

J Rue Itaeib, 1.-2338 Lmeroboorj; 

In Belgium: BANK. VAN ttfU:l>A & Co Sxnxj 

Planlin nt Moreliudci, 29*. 112140 ANTWl itPUN 
The Board or Dtrectors 
Commercial Uaba Privilege Portfolio SICAV 


SmithKIine Beecham PLC 
Floating Rate Unsecured 
Loan Stock 
1990/2010 

interest Rate 4.8375% per annum 
Interest Parted 1 March 1994 to 
1 Junto 1884 

Midland Bank pic 
Agent Bank 


£65,900,000 
CARPS 111 Limited 

Secured Amortising Rooting 
Rate Notes due 1999 

For the throe month interest ponod 
February 28, 1894 10 May 31. 1994. 
the raid has boon determined at 
5 8875^». The Intwral payable an 
the ratevani buoreai payment dote 
May 31, 1994 wm be £919.57 per 
£67,717.81 principal runouni ot 
Notes. 

BylteOMMMuhUnltoiUlJL 
LoaMa. tent Bsrtl Q 

March 2, 1994 ixasc 


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26 




FINANCIAL TIMES WEDNESDAY MARCH 2 1994_ 


COMMODITIES AND AGRICULTURE 


EU reforms lift 
farmers’ incomes 


By Alison Maitland 

Reform of the common 
agricultural policy boosted 
farm incomes last year, the 
European Commission said 
yesterday. 

The commission published 
initial estimates based on 
accounts from 58,000 farms 
across the European Union 
which showed an overall 
decline in income of 1.2 per 
cent last year. But sectors sub- 
jected to the 1992 MacS harry 
reforms moved strongly 
against the trend. 

According to the Eurostat 
figures, incomes in the beef 
and cattle sector rose by as 
much as 25 per cent last year 
compared with 1992, while spe- 
cialised cereal farmers enjoyed 
an 11 per cent increase and 
dairy farmers saw a 7 per cent 
rise. 

Mr Ren6 Steichen, EU farm 
commissioner, said the com- 
mission's analysis of the fig- 
ures "clearly indicates that the 
production sectors subject to 
reform experienced a signifi- 
cant income increase in 1993". 

This runs counter to popular 
belief among farmers that the 
reforms, which cut price sup- 
ports to reduce production and 
introduced direct income pay- 
ments or livestock payments in 
compensation, would be finan- 
cially painflil 

Mr Steichen accepted that 


the reforms were not the only 
reason why Incomes had risen 
but added; "The figures none- 
theless confirm the positive 
benefits for farmers of improv- 
ing market balance, as well as 
the income stabilisation effect 
of direct payments’*. 

The agricultural sectors that 
suffered most last year receive 
only light support from the 
CAP or have not yet been 
reformed. Pig and poultry 
farmers took a 37 per cent 
knock to their incomes while 
horticulturalists were down 8 
per cent and wine-makers suf- 
fered a 14 per cent decline. 

Incomes varied enormously 
between member states, 
according the Eurostat figures, 
with a rise of over 15 per cent 
in the UK contrasting with a 
fall of nearly 15 per cent in 
Germany and 11.7 per cent in 
the Netherlands. The UK bene- 
fited from currency devalua- 
tion, which pushed up the 
value of Ecu-based payments, 
and is heavily dependent on 
sectors that underwent reform. 
Germany and the Netherlands 
produce a lot of pigmeat, wine 
and vegetables between them, 
the sectors that suffered last 
year. 

The commission qualified 
the overall income drop erf 1.2 
per cent, pointing out that 
farmers received only 86 per 
cent of the direct payments 
due to them daring 1993. 


MARKET REPORT 

Coffee and cocoa steady 


London Commodity Exchange 
COCOA and COFFEE futures 
showed steady gains yesterday 
after Monday’s sharp de clines , 
but traders described trading 
as “une nth usiastic " . May deliv- 
ery cocoa ended £7 up at 917 a 
tonne after dipping to £905 
early on. Most traders thought 
support at £900 was likely to 
hold, though some thought a 
slide to £870 possible unless 
fresh outright buying returned. 

The coffee market enjoyed 
light support from a further 
drop in US certified stocks and 


'COMMODITIES PRICES 


BASE METALS 

LONDON METAL EXCHANGE 

(Mom trom Amalgamated Metal Trncfing) 
ALUMINIUM, 98.7 PURITY (S pw Km) 


the May price closed at $1,223 a 
tonne, up $10. 

At the London Metal 
Exchange COPPER set a gener- 
ally lower tone. 


Compiled from Renter 


UK WARBIOUSE STOCKS 

(As at Monday's eftne) 
tomes 

AhanMum 

*3.700 

to 2.564825 

Akuntoftxn aloy 

+180 

ID 47.100 

Coppor 

-4A50 

to 554.500 

Lead 

-100 

to 330,675 

Nick* 

+1074 

to 134284 

One 

+4550 

ftj 1JJ49.400 

TV* 

-195 

to 24210 


Electricity 
costs may 
hit Eikem 
smelters 

By Karon Fossil hi Oslo 

Eikem, the Norwegian light 
metals producer, said yester- 
day that temporary lay-offs 
were possible at some of its 
smelters because domestic spot 
market prices for electricity 
had more than doubled to 
NKr0.48 a kW/hour in the past 
two days. 

An official said the company 
had been considering Increas- 
ing output at ferro-chrome and 
ferro-sUicon smelters. But it 
was now reviewing the plan 
and might have to reduce 
capacity even for aluminium. 

Eikem consumes about 8J5bn 
MW/hours of electricity annu- 
ally for light-metals production 
but cm an annual basis it buys 
just 10 per cent of its electric- 
ity needs in the spot market 
The remainder is supplied 
under long-term, fixed- rate 
contracts and from Its own 
generating plants. 

Norway's electricity market 
has been undergoing reform 
during the past couple of yean 
and is considered one of 
Europe's most liberal. Because 
of this the government has 
refused to intervene to stem 
rising prices. 

Energy analysts say prices 
have risen because of the 
unusually cold weather and 
speculation that electricity 
suppliers have not secured 
large enough trading agree- 
ments with neighbouring Swe- 
den and Denmark to cover a 
shortfall in domestic produc- 
tion. 

The government said that it 
would allow the ceilings for 
imports of electricity to be 
lifted so that suppliers could 
cover any shortfall in domestic 
production. It has also con- 
sulted Swedish and Danish 
authorities on the issue. 

Average prices for electricity 
so far thi s ye ar have been 
NKrO.18 a KWh, according to 
government figures, but have 
shot up in the past two days to 
around NKr0.48 during the day 
and NKrO.35.5 in the evening. 


UK set to take lead in North Sea oil stakes 


By Karan Fossli and Robert 
Corzfne 

Britain could overtake Norway 
this year as western Europe’s 
biggest producer of oil and nat- 
ural liquids a »d pi'gbt be 
able to maintain a forecast 
peak output of 2.5m barrels a 
day until 1998, according to 
Wood Mackenzie, the Edin- 
burgh-based energy consul- 
tancy. 

Norway's contribution to 
North Sea output would fall to 
49 per cent from 53 per cent in 
1993 while UK producticm was 
expected to rise by 30 per cent 
this year. 

The decline In Norway's 
share would occur despite an 
expected 9 per cent increase in 
output to a record 2£8m bar- 
rels a day, WoadMac said. 

It estimated that 327 field 
production days would be lost 
in Norway this year, up from 
160 in 1993, because of sched- 


uled maintenance. That 
included the shutdown Of the 
Ekofisk centre, the hub for oil 
and gas fields that feed into 
the Norpipe transportation sys- 
tem. 

"Scheduled maintenance is 
expected to result in the defer- 
ment of over bands of 
production in 1994 compared 
with 16m barrels in 1993," the 
co nsultancy «aiH Unscheduled 
stoppages in 1993 accounted for 
14 per cent of total lost produc- 
tion days, it added, resulting to 
the deferment of more than 2m 
barrels of oil and natural gas 
liquids. 

Four new Norwegian fields 
were expected to be brought on 
stream this year, contributing 
some 80,000 b/d a day. But the 
new supply would be staggered 
throughout the year and there- 
fore would not have a signifi- 
cant impact on Norway's pro- 
duction profile. 

On the UK side of the North 


Sea Woo dMac believed that the 
present buDd-up of production 
to a forecast average of JL5m h/ 
d thin year might be main- 
tained to 1998. The figure is the 
highest since 1987 and, if 
achieved, would represent a 
second peak in UK North Sea 
production. 

The forecasts coincided with 
the publication yesterday of 
official figures confirming the 
■ surge in UK petroleum produc- 
tion. In the three months to 
the end of January oil output 
was 30ra tonnes, a ZlA per cent 
rise from a year earlier, accord- 
ing to the Department, of Trade 
and Industry. Natural gas out- 
put rose by ISA per cent 

The optimistic outlook of the 
WoodMac study was based an 
the likelihood that a record 
number of new fields - 62 - 
would receive development 
approval In the next three 
years or so. Those included 
some with large potential 


reserves, such as the Fomavan 
and SddeballliQn fields, which 
British Petroleum and Its part- 
ners have found in deep water 
west of the Shetland Islands. 

The fields likely to be devel- 
oped contain at least 3.5bn bar- 
rels of oil and 13 trillion cubic 
feet of natural gas, equivalent 
to about 30 par cent of the UK’s 
remaining commercial 
reserves. 

Their importance in sustain- 
ing higher levels of UK output 
is such that by 2000 they could 
account for A0 per cent of total 
oil production. 

The WoodMac analysts con- 
ceded that the persistence of 
prices for the benchmark Brent 
Blend of under $15 a barrel 
would erode the confidence of 
rampant Bid; their research 
suggested that a relatively 
high level of development 
activity would continue on the 
UK w i ntlne n ta l 

The study estimated that 


investment of StlSbn. in real 
terms would be needed to 
develop the fields. Peak annual 
expenditure of £3tm would be 
in 1998, when it would ac coun t 
far to per cent of the industry's 
expected capital spending- 

Ms Kate Jackson, a Wood- 
Mac analyst, said the fields 
Ttnriar study showed a bias 
towards oil, whereas gas fig- 
ured more prominently in pre- 
vious years. The potential gas 
production of the fields of 
3,000m cubic feet a day by 2000 
was unlikely to be required, 
she said, even though indepen- 
dent marketing companies 
were Hnfrig up sources of sup- 
ply to compete with British 
ring when, the domestic market 
was opened up to competition 
beginning in 1996. 

The development timetables 
of some of the mainly gas 
firffte could slip, she said, until 
gas Awrmmi increased in the 
warty years of the next deca d e. 


Sri Lankan planters thirsty for privatisation 

Mervyn de Silva reports on conflicting interests in the world’s leading tea industry 


S ri Lanka's tea and rubber 
industries, two major 
export sectors, have done 
remarkably well in the first 
year of partial privatisation 
and President D3. Wijetunge 
is keen to move on to the next 
stage. But there are political 
obstacles. 

Tea production rose to 117m 
kg in the first six months of 
1993 and the estimate for full 
the year is 230m kg. The first 
half figure represents a 37 per 
cent rise over 1992, when a 
severe drought, the worst in 30 
years, cut production to 179m 
kg. Rubber production in the 
first six months was 62m kg, 
up 30 per cent on the same 
period in 1992. Coconut produc- 
tion did less well, dropping by 
14 per cent 

The first phase of privatisa- 
tion began in July 1992 when 
22 management companies 
signed profit-sharing contracts 
with the government, which 
retained ownership of the plan- 
tations imtinnaiiHuH by the cen- 
tre left coalition of prime min- 
ister Mrs Bandaranalke in 1972. 


Politics decided the issue 
then - Mrs Bandaranaike's 
minister of plantation indus- 
tries was a Marxist - and it 
was the decisive factor In Pres- 
ident Premadasa’s mm p m twis fl 
in 1992. 

Mr Premadasa’s dilemma 
was understood by the IMF 
and the World Bank, which 
had been pressing the govern- 
ment to dismantle the two 
state corporations that owned 
the plantations. The estates 
employ well over 500,000 work- 
ers, of which 80 per cent are 
members of the Ceylon Work- 
ers' Congress, which is also a 
political party with five mem- 
bers in parliament The CWC 
president, Mr S. Thondaman, 
the most successful trade 
union boss in the island’s his- 
tory, has been a cabinet minis- 
ter since Mr JJL Jayawardene 
led the conservative UNP to a 
sweeping victory in the 1977 
election. 

This UNP/CWC affiance not 
only guaranteed a block vote 
but trade union "peace" on the 
strategic plantations. If any- 


thing, President Premadasa, 
Mr Jayawardene's successor, 
was even friendlier, and Mr 
Thondaman stood by him in 
every crisis. 

M r Jayawardene and 
Mr Premadasa, Col- 
ombo-based "low- 
country” politicians, saw Mr 
Thondaman as an important 
ally in view of the danger that 
that the separatist Tamil 
"tigers" of the north might 
infiltrate the te« estates and 
open a new front. But Mr Wije- 
tunge, Mr Premadasa’s succes- 
sor, has been determined to 
limit the union boss's influ- 
ence. The new president is a 
hill country "Kandyan” 
(Kandy is the central province 
Capital) and thra VanHymn 
have no reason to like the tea 
pinchers. The British evicted 
them from their traditional 
homelands to jdant tea and set- 
tle cheap indentured. Indian 
Tamil labour. 

If he Is to press forward with 
privatisation, however, Mr 
Wijetunge will have to balance 


Precious Metals continued 

GOLD COMEX (100 Troy at; S/troy azj 


GRAINS AND OIL SEEDS 

■ WHEAT LCE (£ per tonne} 


SOFTS 

■ COCOA LCEOE/tnmwj 


MEAT AND LIVESTOCK 

■ UVE CATTLE CME (40.000be; amm/Kn) 



Cosh 

3 mths 

Close 

1282.5-45 

1308-7 

Previous 

1288.5-9.6 

1311-2 

Htgh/tow 


1311/1302 

AM Official 

1283-3.5 

1307.5-8.0 

Kerb ckwo 


1303-04 

Open tot. 

269.503 


Tote) daily turnover 

47,549 


■ ALUMINIUM ALLOT ($ per tame) 


Close 

1140-6 

1160-6 

Previous 

1142-5 

1162-5 

HgMora 



AM Official 

1145-9 

1185-9 

Kerb ctooe 


1T60-7U 

Open tot 

3,591 


Total daOy turnover 

289 


■ LEAD 8 per tonne) 



Close 

455 5-46 

470-1 

Previous 

471.6-45 

485-6 

HgMow 


479/468 

AM Official 

462.5-36 

477-7.5 

Kerb dose 


473-4 

Open int 

34.283 


Total <taiy turnover 

6,562 


■ NICKS. IS per tonne) 


Closa 

5805-15 

5855-65 

Previous 

5885-70 

5915-20 

High/low 

5840 

5900/5855 

AM Offidef 

5830-5 

5875-80 

Kerb ctoee 


6865-70 

Open tot 

51,759 


Total daily turnover 

7,514 


■ TIN (S per lome) 



Close 

5410-15 

5445-50 

Previous 

5445-50 

5480-5 

HtgMow 


5490/5420 

AM CffioN 

5465-70 

5490-5 

Kerb dose 


5440-S 

Open tot 

20.035 


Told daVy turnover 

4,843 


■ ZINC, special high grade (S per tonne) 

Close 

945-8 

963. 5-4.0 

Previous 

947-9 

965-7 

HgMow 


967/962 

AM Official 

947-8 

960-05 

Kerb dose 


965-6 

Open toL 

100.499 


Total daBy turnover 

18.142 


■ COPPER, grade A fS per tome) 


Ck»e 

184549 

1889-70 

Previous 

18BO-1 

18835-84 

rtghrtow 

1854.5/1854 

1881/1860 

AM Official 

1354-4.5 

1B775-7B 



Sell 

Dm* 


Opto 



Sett 

Day* 



Open 



SoU 

Day 1 * 


Open 



BOB 

nqr* op* 



Price 

ctaange 

Ugh 

low tad 

VoL 


jam 

change 

Hffil 

ItM 

tad 

YU 


rafee 1 

shags 

IV 

Um lot 

YU 


price 

cftMgo B0gb law tad 

1M 

Apr 

379.4 

-31 

3836 

3738 

3 

■far 

1D235 

-005 

10230 

101.75 

257 

22 

Mar 

897 

+0 

833 

882 4977 2358 


78375 

-0.725 76550 78350 37,028 

9320 

J<n 

381.4 

-11 

3855 

3HL7 73597 

18.707 

Bey 

10395 

-035 

104.70 

10350 

2.157 

324 

May 

917 

+7 

918 

90S 23146 431 B 

Jna 

74.800 

-0376 75500 74426 21,025 

2327 

Ng 

383.7 

-11 

3873 

3845 32362 

3377 

Jun 

104.15 

+315 10430 10350 

4Z7 

25 

JU 

029 

+7 

829 

018 14J534 

783 

*D 

73375 

-0530 73500 73.T73 15*301 

930 

Oct 

3861 

-11 

3883 

3809 5517 

111 

sw 

9155 

+055 

- 

- 

192 

- 

Sap 

942 

+8 

039 

930 11,192 

400 

Oct 

73325 

-0.100 7357S 73360 99 97 

OSS 

DM 

388.6 

-ll 

3923 

3873 4,160 

1 

Bn 

02.65 

+0.15 

9350 

0350 

960 

3a 

Dec 

936 

+8 

958 

944 17328 

503 

Dec 

74525 

-0525 74100 73590 2JJ17 

98 

Fab 

391.3 

-11 

mi 

mi 12544 

522 

Jan 

94.40 

+0.15 

9435 

9435 

384 

3 

Mar 

970 

+8 

970 

962 22.350 

288 

Mi 

73375 

-0.176 73.700 73375 811 

2 

TeM 




144904 22977 

ToM 





4y4W 

404 

Total 




110,744 8387 

ItaW 


OyCM 

■ PLATINUM NYMEX (50 Troy az.; S/trpy azj 

■ WHEAT CUT @.000bu mto; Cents/BOU* bushel) 

■ COCOA CSCE (10 tonnes; S/tonnea) 


■ UVE HOGS CME (430008m; canteAbs) 



Apr 

3005 

-42 

3965 

3805 

14534 

2,405 

JU 

3943 

-42 

3905 

3935 

3506 

656 

Oct 

3945 

-42 

3975 

3955 

1,072 

211 

Ja 

3949 

-42 

3975 

3955 

473 

18 

Apr 

3965 

■OB 

TOO 

3975 

437 

2D5 

Tatai 





19524 

3568 

■ PALLADIUM NYMEX {100 Troy az.; S/boy ol) 

Ur 

138.10 

. 

13550 

135.10 

3SB 

232 

Ja 

13B.10 

-030 

13750 

13800 

4238 

564 

Sap 

13550 

-1.15 

13550 

13550 

371 

50 

Da 

135.10 

-1.40 

13800 

13800 

161 

10 

TeM 





8527 

858 

■ SILVER COMEX (100 Trcycte; Genta/troy oz.) 

Ur 

5273 

-83 

5385 

5280 

8527 

5584 

Mar 



5425 

5305 86.721 

25.607 

JU 

534.3 

-8.4 

5465 

5340 18655 

892 

sa 

5383 

-83 

5485 

5415 

3,603 

37 

Dec 

5445 

-82 

5565 

5435 

8747 

183 

Ja 

5452 

-81 

- 

- 

28 

- 


109,782 32,072 


ENERGY 

■ CRUDE CM- NYMEX (42.000 US goto. S/boraQ 


Kerti ck»e 1672-3 

Open tot. 249£94 

Total dafly timover 50,213 

■ UK AM Official m rate: 1.4910 

LME Ctontog E/S rate: 1.4880 

Spat 1.4855 3 nfrxl.4804 S mlte.-1.4783 9 mOn 1.4739 

■ HIGH GRADE COPPER (COMEX) 



Cka 

PW» 

Bgta 

Opa 
tow U 

YU 

Ur 

8575 

-055 

8815 

8825 7.486 

1,764 

Apr 

8575 

-0.7D 

882S 

8570 876 

11 

May 

8550 

■075 

8850 

8550 rPlWi 

4527 

Ja 

8850 

-870 

6*nn 

8650 849 

12 

JU 

8655 

■870 

8885 

8875 7514 

654 

am 

8815 

-0.70 

- 

- 388 

T 

TUN 




6B564 

7.40* 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
(Mew gWjjjed by N M BoffiacWd) 


OoM (Troy oz.) 
Cktse 
Opening 
Morning ft* 
Afternoon (to 
Day’s Ugh 
Day's Low 
ftovfoue dose 
Loco USn Moan 

1 month 

2 months 

3 months 


£ equte 


256.909 

250509 


S Pfk» 

381.10- 381.60 
380 -50-380.90 

381.10 
381.30 

382.10- 38280 
39030-380.70 
381. 60-382.00 

GolO Landing Rotes (Vs USS) 

3.06 6 mo n ths 3^7 

3.09 iz mo n tha 3.44 

3.13 



Lataat 

O *rii 


Opn 



prim cfwnQH 

MBA 

Low tot 

W 

Apr 

1451 

+0.13 

1473 

1441118109 38509 

** 

1477 

+813 

1488 

1450 555BD 

15789 

Ja 

1497 

+813 

1555 

1483 B8325 

4928 

JU 

13.17 

+813 

1522 

1558 24,791 

2204 

tag 

1835 

+811 

15.42 

1524 14088 

571 

tap 

1558 

+814 

1558 

1552 1 85(77 

1,055 

TeM 




428347 88553 

■ CRUDE 00. IPE (S/barraQ 




Latrat 

Bay's 


Opa 



PriCS 

Mage 

ngb 

LOW U 

YU 

•pr 

1830 

+816 

1356 

1135 85175 

14872 

Uy 

1356 

♦817 

1170 

1145 31,078 

5256 

Jrai 

1352 

+817 

1087 

1358 14599 

1.418 

JN 

1453 

+832 

14113 

1187 5450 

477 

Abb 

1415 

+875 

1415 

1453 4747 

26 

Sap 

1432 

+809 

1432 

1420 2558 

- 

TUN 




WA 23,106 

■ HEATMG OH. HYWX {42500 US pU; C/US gUJ 


LolHt 

Day's 


Opa 



pries 

chage 

Mgh 

LOW M 

YU 

Apr 

4475 

■814 

4545 

44.40 48399 23^535 

Uy 

4150 

+838 

4185 

4355 41275 

7522 

Ja 

4350 

+851 

4350 

4100 28476 

2382 

JU 

4410 

+056 

4410 

4170 18598 

1340 

Aag 

4485 

+856 

4455 

44.75 5750 

553 

tap 

4550 

+856 

4590 

4590 5020 

523 

ToM 




T750B3 B2J87 

■ gab 08. n (Vtonoa) 




sut 

noys 


Opa 




ctaags 

MBA 

Low tot 

VN 

Ur 

14073 

+826 

14875 13525 28.141 

4518 

Apr 

13950 

-850 

13875 

13550 23580 

1179 

Uy 

13875 

•875 

13875 

13850 13.1B1 

1,774 

Ja 

13825 

-150 

13875 

13850 15501 

15M 

JU 

14150 

■875 

14130 

14050 15281 

315 

Aug 

143.50 

-155 

14375 

14125 5087 

70 

TUN 




115877 14,115 

■ NATURAL GAS NffrEX (18000 ramB&L,- StamBU) 


Latest 

DOTS 


Opa 



price 

«Mli 

HM> 

Low M 

YU 


8170 

-8038 

swn 

2180 15566 

10530 

«»y 

2140 

-8028 

2170 

2140 12317 

1308 

Ja 

2130 

8018 

2150 

2130 8370 

894 

JU 

2125 

8515 

2140 

2125 5488 

633 

Aag 

2130 

•81716 

2140 

2130 5172 

523 

tap 

2100 

-8010 

21B5 

2150 10337 

186 

TOM 




117310 153B1 


Ur 34WB -1/8 3400 340/0 15830 22370 

Hoy 344/0 -1/2 346/2 342/6 72346 <1300 

JU 333/4 -1/4 335AJ 332/2 85510 41.785 

Sep 335/2 -1/0 337/4 334/B 14,295 1300 

DM 34310 -1/4 346/0 342 K 19395 2180 

Ur 346/0 -1/4 - - 10 - 

ToM aM3BBM5ira 

■ MAIZE C8T (5,000 bu min; canta/56to bushel) 

Ur 

2B4/B 

-tw 

288/0 

283/4 77300 87500 

**•» 

293/8 

- 

294* 

282/2 840305187555 

JU 

296/8 

+OO 

2H7/B 

295/4517,720 85705 

Sa 

rum 

+0ffi 

2334) 

281/4 115,480 

5500 

Da 

268/B 

+-1M 

2006 

266/8 267,225 253S5 

Ur 

2730 

+1ffi 

275/4 

272/B 15455 

270 

TUN 




1 -BUM 353,120 

■ BARLEY LCE (E per tome) 



Mar 

10455 

+030 

10550 

10530 251 

S5 

uy 

10450 

-036 

- 

- 212 

- 

tap 

9250 

- 

- 

- 119 

- 

Ho* 

9450 

+050 

- 

58 

- 

Ja 

otra 

- 

- 

- 3 

- 

■w 

9755 

- 

- 

• 

- 

ToM 




843 

65 

■ SOYABEANS CBT (5500bn rato; cmh/B08i bashd) 

raw 

878/4 

+1/2 

681/2 

076/2 61.790 54,765 

Ihy 

884/4 

+0ffi 

B87/0 

6B2D 295570 127315 

JU 

687/2 

+0/4 

690/0 

665/0223,895 27335 

Aog 

873ft 

-0/2 

883/0 

B7BM 35515 

1390 

sa 

063/0 

- 

865/0 

682ft 15580 

820 

No* 

6406 

-1/0 

652*1 

64U) 124330 14370 


MW 

1138 

+18 

1145 

1135 

542 

32 

•w 

45979 

-0528 40328 45900 11989 

2318 

May 

1154 

+15 

1157 

1134 35120 4381 

Ja 

54300 

-0350 91950 94325 

5255 

918 

JU 

1176 

+11 

1180 

1160 18302 

STB 

JU 

51025 

-5225 51200 53300 

5155 

221 

tap 

1201 

+12 

1193 

1185 

7322 

48 

•m 

52500 

-0300 52700 52300 

2308 

154 

Da 

1232 

+13 

1235 

1221 

5438 

218 

Oct 

45500 

-0300 45650 48350 

1.474 

31 

nr 

1281 

*13 

1285 

1253 

9374 

37 

Da 

49350 

-0500 4BL45D 49300 

1348 

83 

naf 





85889 5332 

MM 



2f3<M 

2318 


■ COCOA QCCO) (SOR’a/tome) 


Tfts 28 
— 


10 day average ■ 90142 

■ COFFEE LCE (S/tonne) 


Pnw. day 

ton*. 

90024 


78468522*318 

■ SOYABEAN OB. CBT {6Q,0Q0toa: centa/tt)) 

Ha ZSS9 +0.14 2413 2480 14718 4X18 

Hey 2404 +412 2418 2480 34572 4551 

JU 2400 +0.10 2412 2478 24748 2S35 

Aug 2452 +406 2465 2435 4870 370 

Sep 27.99 +409 2405 27X0 8.75B 216 

Oct 27.12 +417 Z7.15 Z7JB 4473 253 

IMS 104346 17,048 

■ SOYABEAN MEAL C3T (100 tons: S/tan) 


Mar 

1213 

+20 

1215 

1199 

2370 

771 

May 

1221 

+B 

1226 

1212 15303 

1380 

JU 

1223 

+5 

1224 

1217 

5081 

1,172 

tap 

1224 

+6 

1225 

1220 

3374 

582 

■or 

1229 

+8 

1231 

1223 

3388 

B2D 

Ja 

1230 

+11 , 

1229 

1227 

4391 

500 

TOM 





35723 5209 

■ COFFBE ■C’ CSCE (37^0QBk; centsAb^ 


Ur 

7185 

+025 

7530 

7430 

1321 

335 

May 

7835 

+025 

7736 

7830 30365 5S83 

JU 

78-05 

+025 

7050 

7000 

7350 1,141 

tap 

7936 

+010 

7930 

7935 

5317 

238 

Da 

8065 

+015 

8130 

8065 

51 18 

93 

tw 

B155 

+005 

82.10 

9135 

1348 

23 


■ PORK BBLL95B CfcC (4fl.00t)t«; cantariba) 

to 54250 -4600 54750 55X00 882 440 

Uy 57.550 -0375 64076 54950 4-SM 1,585 

JU 57X75 -4600 64280 57250 2J15 252 

Am 81750 -4860 64900 54.750 453 27 

Fill 9L75D -0475 59900 69750 13 1 

tea 60900 - 84200 1 1 

ToM 4071 4390 


LONDON TRADED OPTIONS 

Strike price $ term — Cals — -—Rita ■ 


ToM 

■ COFFEE QCC) (US canta/pound) 

Mi 28 Mca 

Comp-dtfr 7117 

IS dqr o range 72X6 


4771314833 


Pm day 

7321 

7298 


■ No7 PREMIUM RAW SUGAR LCE fceras/lbe) 


Ur 

1913 

-12 

1933 

1913 

7,480 

5360 

■ay 

192.7 

-07 

1910 

1913 30762 

5738 

JU 

1914 

■08 

1943 

1922 23303 

3349 

Aag 

1923 

-03 

1816 

191.7 

6.926 

204 

tap 

191.1 

-04 

1923 

1903 

5.145 

397 

Oct 

1893 

-06 

1913 

1893 

2386 

01 

TetU 





05334 19308 

■ POTATOES LCE (G/tonne) 




Ifar 

1500 

. 

- 

- 

36 

. 

Apr 

1383 

+123 

1403 

1243 

1377 

407 

Uy 

1508 

*123 

1584) 

1433 

070 

278 

Ja 

1300 

- 

- 

- 

2 

ra 

KB* 

8QJ3 

- 

- 

- 

- 


Mar 

1053 

w 

- 

- 

- 

- 

TOM 





2,711 

737 

■ FREIGHT (BIFFEXJ LCE (SIQftndox pdf*) 


Mar 

1132 

-12 

1140 

1130 

344 

83 


1192 

-17 

1209 

1190 

1153 

143 

■ay 

1189 


1201 

1190 

- 

140 

JU 

1088 

-10 

1210 

1090 

588 

10 

Oct 

I2S0 

w 

- 

- 

243 

_ 

Ja 

1285 

+5 

- 

- 

74 

w 

TOM 

Ctaa 

Rm 



va 

388 

on 

1115 

11T7 






■ UNLEADED GASOLINE 

HYMEX (42,000 US pda.; c/US gds) 


Bar** qprat 

price Change Mgh Lon M M 


SOver Ha 

OAroy oz. 

US ctsequhr. 

Apr 

4530 

+0.15 

4560 

4170 

2.442 17,156 

Spot 

367.76 

632.75 

■ay 

4500 

+018 

4529 

4560 35098 15448 

3 months 

362.15 

537.40 

Ja 

4590 

+0.13 

4560 

4505 

35944 

ifise 

O months 

366.70 

S42.85 

JU 

48.75 

+520 

4575 

4530 

17379 

2.177 

1 year 

375.15 

553.80 

flog 

46.48 

+510 

46m 

4535 

1435 

424 

Cold Coins 

S price 

C equlv. 

tap 

4550 

+515 

4550 

4530 

1667 

123 

Krugerrand 

382-385 

257-260 

TUN 




105731 

35030 

Maple Leaf 

391.. 15-333.90 

- 








New Scwerefepi 

90-83 

80-63 









European bee market, from Melal BuOeUn, S 
per lb hi warehouse, unless otherwise sated 
(brat Hank's in br ack en, when Changed). Ann- 
many: 99.694 S per tome. 1.075-1 .730. Sb- 
BHdh: min. 89.9996. Mme low 225-2.45. 
Cadmium: mto. 945%, 460-484 Cobalt: MB 
free market. 938%. 22.00-2280 (21.00-22JXK 
99.3%, 16.50-17.00 (1420-1770) Mercury: 
min. 9989%. 5 per 78 to florae. 90-104 Molyb- 
denum: (tautened motytuSc oxide. 280-285. 
Setanium: min 945%. 3.90-4.75. Tungstm 
ot« standard min. 66%. 8 par tome unit 
(10kg) WO, erf, 27-38. VstukSutic min. 98%, 
df, 1.35-1.45. UmhjnK Nwxeo exchange 
value. 780. 


Mar 

1251 

+503 

1124 

1125 

804 

20 

May 

12.42 

+044 

1285 

1285 

1,477 

10 

JU 

11-89 

-050 

12.48 

1248 

2802 

5 

Oct 

11X7 

-506 

1187 

1187 

136 


TON 





4814 

X 

■ WHITE SUGAR LCS (S/toma) 



«W 

327 JO 

+080 

32880 

32160 

7839 

929 

Abb 

32130 

+180 32100 

32060 

3811 

581 

Od 

30220 

-540 30100 

30180 

3,181 

452 

Da 

mm 

-510 

- 

- 

ia 

- 

Hw 

29520 

+530 

29990 

29820 

346 

15 

May 

29520 

+510 

- 

■ 

1« 

- 

ToM 





15.791 

1867 

■ SUGAR 11’ CSCE C112jnobs; certs/lbs) 


■»t 

11.78 

-502 

1183 

1123 

2898 2861 

JU 

lim 

502 

12.11 

1123 82,189 5224 

Oct 

1138 

586 

1188 

1184 28265 2873 

Mv 

11-38 

5.11 

1182 

1126 22250 1887 

May 

1132 

-516 

1 1-48 

1140 

8869 

389 

JN 

1132 

-505 

1129 

1128 

9(3 

1 

TON 




122411 13.381 

■ COTTON NYCE SOOOOtoe; oents/IbU 


Ur 

7590 

510 

79.14 

7540 

9S3 

133 

May 

7598 

-528 

7920 

7880 21913 3,125 

JU 

7548 

524 

7980 

7510 

11831 

1834 

ou 

7189 

5.15 

75.15 

7180 

2838 

IBS 

Da 

7232 

+503 

7X95 

72.11 

10854 

487 

Ur 

7110 

+510 

7380 

7225 

349 

94 

TaM 





B22B3 5854 

■ ORANGE JUKE NYCE (ISDOOtacentsAbU 

Ur 

10560 

+220 

106.75 

10155 

2899 

37 

Ha 

10540 

+1JS 10980 

10780 

8.168 

1.117 

JN 

11505 

+129 

11220 

11080 

1278 

758 

tap 

11135 

+185 

11580 

11285 

1J04 

18 

■a 

11545 

+185 

11183 

11388 

1,135 

20 

Ja 

117JD 

+185 

11725 

116J75 

1,147 

70 


(89.7%) LfcC 

Apr 

JU 

Apr 

JU 

1276 

17 

78 

23 

38 

1300 

34 

66 

35 

60 

1326 

23 

53 

49 

63 

■ comm 





(Grade A) LME 

Apr 

JU 

Apr 

JU 

1850 

47 

02 

38 

54 

1900 

26 

68 

64 

79 

1950 

12 

39 

101 

in 

■ COH-LL LCE 

May 

JU 

May 

JU 

1200 

53 

78 

32 

S3 

1260 

30 

64 

90 

81 

1300- 

18 

38 

96 

116 

■ COCOA LCE 

May 

JU 

May 

JU 

900 

41 

66 

24 

37 

923 

30 

52 

38 

48 

990 

21 

42 

54 

63 

■ BRENT CRUDE 8>E 

Apr 

May 

Apr 

May 

1300 

- 

- 

13 

34 

1350 

32 

63 

30 

60 

1400 

10 

38 

- 

- 


LONDON SPOT MARKETS 

■ CRUDE on. FOB (per benaVApr) +or 


14MB 4820 


VOLUME DATA 

Open Interest and Volume data drawn for 
co nt racts traded on COMEX NYMEX. C8T. 
NYCE, CME. CSCE and IPE Quito 08 are one 
day In arrears. 


INDICES 

■ REUTERS (Base: 18AV31 =100) 

Marl PetoSB month ago yew ago 
1792.7 1792.7 173517 1787.3 

■ CRB Fubaea (Base: 4flM56=10C) 


Dubai 

S12.7D-286W 

+087 

Brant Bend (dated) 

*13ft2-a46 

-0.12 

Brert Blend (Apr) 

SI 381 -384 

-0025 

W.TJ. tlpm sal) 

31485-487 

-882 

■ OM- PRODUCTS NWE prompt drfrvgy OF (tarra) 

Premium Qasotns 

SI 64-166 


GW CM 

SI 48-147 

+05 

Heavy FuU 08 

*31-63 


Mi ■■ jiiiito 

wapnma 

$136-137 


Jet Fuel 

$160-162 

+18 

raotoumAga Mato 



■ OTHER 



Gold (per tray azj* 

5381.30 

-080 

S8ver (per troy azj$ 

5388c 

+4 

PkNtaun {par tray ecj 

$392.75 

-18 

PaUadkxn (par fray az.) 

$I35JS 

-08 

Coppsr MS prod) 

9280c 


Lead (US prat!) 

36.00c 


Hn (KuUa Lumpuri 

1486r 

-083 

Tin (New York) 

25380C 

-18 

2fcie (US Priraa WJ 

ura- 


Caffie 0fce wNghiJT 

123.1 9p 

+084* 

Sheep Ora 

11987P 

-081* 

Pigs pm weight) 

78.14p 

+4.78* 

Lon. dey sugar (raw) 

$2868 

+43 

Lon. dey auger (wta) 

*3318 

+2.9 

Tate & Lyto wport 

*3010 

+3.0 

Barley (Eng. toe4 

Unq 


MUzs (US No3 YaPan) 

£1298 


Wheat (US Dwrfc Uriffi 

£1438 


RUibar (AprJV 


+085 

tatajarONaiflf 

6888P 

+085 

AtibariKL RSS Nol Apr) 

24180m 

+08 

CeeBnut O* (Ph»)§ 

S5SSJtae 

-28 

Patafr Ol (Malay J5 

53678t 

-6 

Capra (PtNfi 

*3668 


Soyabeans (US) 

£1988 


Cotton OUkMk A tavtax 

8285C 

+085 

Wooltope (B4a Supra) 

373p 

■larad. p pencata 

, 0 omft. 


Feb 28 Feb 26 

ZZTJS6 227.45 


203.90 


r li g U ton . bi I W i n Sen aiMllb « 

Me. V London riij B L B. I car 
metre dose ♦ Snap (Urn ee| U* price*. 


iwimBBi^jd advantage against 
electoral cost Moving this 
hi g hl y regulated industry httn 
private ownership will entail a 
loss of economic protection for 
Mr Thondaman’s members and 
of many of their votes for the 
president. But planters are 
impatient for measures to 
reduce their cost disadvantage 
In the export market 

The basic daily wage for tea 
pluckers was raised from 
SLRs60 to SLRs70 last June 
and then to SLRs82, about 
US$1.70, in July. Wages 
amount to 60 to 70 per cent of 
the cost of tea production in 
Sri Lanka, compared with only 
about 40 per cent in India, 
Kenya and Indonesia. More 
recently devaluation of the 
Indian rupee has given Sri 
Lanka’s main rival a further 
advantage. 

The critical factors are cost 
of production and net sale 
average. India and Kenya help 
producers to limit production 
costs and Indonesia has 
assisted planters by reducing 
interest rates. And in all three 


countries lower wages are 
paid. 

“Mr Thondaman, who is a 
cabinet minister, has got us by 
the throat,” says a Sri Lankan 
planters’ association offidaL 

Spelling out Sri Lanka’s 
strategy, plantations industries 
minister Mr Rupa Eanmatil- 
leke stresses privatisation, 
removal of excessive export 
iftitiftg and exchange liberalisa- 
tion. "Aggressive marketing 

ahmiM gmphagiaft haalth BOW 

that there is Increasing con- 
sumer preference for natural 
products,” he argues. 

But the main problem, he 
admits, is that Sri Lanka’s pro- 
duction is almost 90 per cent 
orthodox tea. when 50 per cent 
erf world demand is for the CTC 
(cut, tear and curl) type. Sri 
Lanka has now decided to con- 
vert 20 per cent of its tea pro- 
duction to CTC over the next 
three years, and 25 CTC prod- 
ucts are in the pipeline. The 
cost of conversion will be 
about US$18m. "All matters 
are open to negotiation," Mr 
Thondaman says. 


CROSSWORD 


No.8,393 Set by PHSSTHPOK 



ACROSS 

1 Article packaged in counter- 
feit cover ($) 

4 Delicious starter with fruit 
and pepper (6) 

8 Letter written by faculty 
gives permit CO 

9 Lizards attacked us again (7) 

11 Sharp chance (10) 

12 Trial was previously in the 
morning (45 

13 It is known to me in a rage (5) 

14 Speech made by chorister 
lacks point (8) 

16 Study of church right to make 
musical composition (8) 

18 Utensil employed before on 
back operations (5) 

20 Shy person can look awfully 
modest at first (4) 

21 People who used to be ani- 
mals! (10) 

28 Town boor produced expres- 
sion of disgust (7) 

24 They petition to bankrupt 
leading stockbroker (7) 

25 Offer to finish text brfore first 
letter erased (6) 

26 Savage delayed without direc- 
tion is enraged (6) 


DOWN 

1 As joke is sarcastic, rm occa- 
sionally holding back (5) 

2 Metal part of pen contains 
nothing I follow with hesita- 
tion (7) 


3 He may claim to be young or 
old (9) . 

5 Cherub has a pointed stick (5) 

6 Spot and body odour treat- 
ment (7) 

7 Emergence of no animate 
movement (9) 

10 With tip of rapier, cut blade 
down the right side (9) 

13 Free when Umb is unshackled 


15 Alternative ways lead to this 
place and to another place (9) 

17 Cany cot with romper Is bro- 
ken without any hesitation 
(7) 

19 Bound to be thankful (7) 

21 One does not drink when on 
this (5) 

22 Nobleman first to yell "For- 
ward" © 

Solution 8392 



Of broking and jabbing the Peiikati's fond, 

See how sweetly he puts your toord onto bond. 

SfeUban® 


JOTTER PA» 


o 


L.'-re 


'■v 









FINANCIAL TIMES WEDNESDAY MARCH 2 1994 


,-i. 


27 


LONDON STOCK EXCHANGE 


MARKET REPORT 


f»d«w 


Equities hit hard by renewed setback in bonds 


Xaoov 


By Tony Byland, 

UK Stock Market Editor 

Another heavy sell-off in the bond 
markets yesterday wiped out the 
attempted recovery of confidence In 
UK equities. Late afternoon saw 
share prices tumbling on all sides 
as global bond markets reacted with 
heavy foils to a, sharp rise In the 
February price index compiled by 
the US National Purchasing Manag- 
ers Association tNPMA). 

The FT-SE 100 Index fell 57.5, or 
1.7 per cent, to 3,270.6, the day's 
low. Selling increased as the market 
fell away but trading volume 
remained fairly moderate. With the 
pressure largely focused on the blue 
chip leaders, the FT-SE Mid 250 
Index lost only 15.4 to 3,944.6. 

The NPMA report was the last 
straw for a stock market which has 


been firmly under the heel of the 
bond markets. An initial firming in 
equities was abruptly reversed by a 
downturn in European bonds on 
disappointment with the outcome of 
the variable repo tender in Ger- 
many. Then came the upward revi- 
sion of the fourth-quarter US GDP 
figure, which gave the first hint of 
renewed inflation concern. 

But the Footsie was down only 19 
points at that stage. It was the 
NPMA price index which turned the 
cold wind blowing through the mar- 
kets into a hurricane. As on Thurs- 
day, share prices were at the mercy 
of bonds and, with stock Index 
futures setting the pace, simply 
crumpled as both short and long- 
dated gilts plunged. Weakness in 
short-dated gilts implied negative 
views on base rate prospects, under- 
lining the reversal of sentiment 


Account Owdno Date* 

fMOMBnoK 

Fab 14 

Fab 28 

Mar 14 

Opaaon OaUwateoe. 
Fab a* 

Ur 10 

Mar 24 

ux Daefcrga. 

Fab 29 

Mar 11 

Mar 26 

A eenan D me 

Mar 7 

M> 21 

Aprs 

-Maw Una qaaltoBa 
Ihariiiaaa *ya aaihar. 

mmr taka 

place tram fare 


which lies beneath the market set- 
back. 

A sizeable trading programme, 
weighted towards the sell side, had 
appeared in the market before the 
collapse began and probably had lit- 
tle effect Share quotations were cut 
repeatedly by marketmakers strug- 
gling to avoid speculative sellers and 
fund managers trying to reduce 
exposure. 

At Klein wort Benson Securities, 


the London merchant ImtiIc and 
securities house, Mr Albert 
Edwards pointed out that the 
NAPM index is linked to commodity 
prices, making it a <rfgnifi«mt indi- 
cator of inflationary pressures 
ahead in the US. London traders 
saw yesterday's foil in US bonds as 
a sign that prospects of further 
tightaring in Federal Reserve poli- 
cies bad come several steps closer. 

The day's trading volume of 
720 .3m shares through the Seaq net- 
work compared with 705.2m on 
Monday, when retail business was 
worth n -38ho. While there has been 
no heavy selling of equities, it has 
been noted by the strategists that 
there has been no sign that cash 
taken out of gilts is seeking a home 
in the stock market 

Once again, the financial sectors 
suffered severely as investors reck- 


oned the possible damage to the 
securities trading divisions of the 
fresh round of losses In global bond 
markets. Hongkong and Shanghai 
Banking, down in the h om e market 
overnight, foil heavily in London as 
same analysts questioned the out- 
lot* at the Hang Seng Bank unit. 

There was little that equity strat- 
egists could say yesterday except to 
repeat the comments made last 
week. Many still see the setback as 
a buying opportunity, but warn that 
the market could be in for further 
ghnrfcc; in the near fawn 

The focus remains entirely on the 
bond markets, which are expected 
to remain nervous ahead of the Ger- 
man M3 money supply figures, due 
later this week, and, of course, to 
recurrent bouts of nervousness that 
the US Federal Reserve may be 
about to tighten credit policy again. 


*■ '*!'« } * -'r.l '■ 

\lyi juV-^tTm r* 

>*' ,4 - 

■; : 



■ ■ .. 

r" r. . ; 


. k *t*<*KkBL txgfrona wd ; 


Vtfso 

.:?.?**!■ .&/y 


SSI 

r- op= ■■ • <?■-. tat , • ■ ■ r. 

' Satan Pf&mtu* i- -■ 4 


■ Kqr Indicators 
tad kw and ratios 

FT-SE 100 3270.6 

FT-SE MM 250 3944.6 

FT-SE-A 350 16803 

FT-SE-A All-Share 1653.13 
FT-SE-A AS-Shae yield 3.48 


- 57.6 

-1S.4 

-209 

-2L38 

(043) 



FT Oninary Index 25364 
FT-SE-A Non Fins p/e 2248 
FT-SE 1 00 Fut Mar 3251.0 
lOyrGttt ytald 741 

Long sjflt/squlty yid ratio: 2.15 

Worst po rt m i n ing aectnim 


1 Enliadl i w Intis 


2 Engineering. Vehicles . 

3 Pharmaaautloata 

4 08 Exploration & Prod. 

5 Water 


+1J2 

+ 0.2 

+ 0.1 


+00 

.- 0.1 


2 Tobacco 

3 Breweries 

4 Insurance 

6 Merchant Barries 


..-4.9 

--05 

,.- 2.1 

-- 2-0 

.-14 


1 


Setback 
in HK 
stocks 

The London market’s heavily 
traded Hong Kong orientated 
stocks were given the roughest 
of rides in a generally uncom- 
fortable equity market yester- 
day as dealers responded to the 
2 JS per cent slide in Hang Kong 
share prices. 

Worst affected of the front 
line stocks was HSBC Hold- 
ings, which followed Monday's 
gradual post-results deteriora- 


tion in its share price in Lon- 
don with a substantial retreat 

Marketmakers said there 
was little support for HSBC 
shares throughout the day, 
with the stock price dropping 
to a law for the session of 868p 
at the close to leave a fall of 
77p, or 8.1 per cent after turn- 
over of 6.1m shares. The Hong 
Kong-registered stock settled 
80 off at 892p. 

NatWest Securities was one 
broking house to emphasise 
worries about quality of earn- 
ings at the bank which it said 
could hold the shares back in 
the short term. 

Upgrading its current-year 
numbers, NatWest said it 
expected a declining bad debts 


charge because of recovering 
economies In the UK and US, 
scope for growth in net 
income, and a high level of 
asset disposal profits. For 1994, 
the broker lifted Its forecast 
from £2.7bn to £2J8bm and. for 
1995 to £3.07bn. It also forecast 
a 13 per cent increase in the 
1994 dividend to 26 and is 
looking for a dividend total of 
29p for 1995. 

The fallout from HSBC 
impacted on other Hong Kong 
and Pacific Rim stocks such as 
Standard Chartered and Cable 
and Wireless. The former 
plunged 56, or 45 per cent, to 
1159p after turnover of 928,000 
shares, with one of the London 
market's biggest securities 


EQUITY FUTURES AND OPTIONS TRADING 


The return of heavy selling 
in globe! bond markets 
brought another slide in 
stock index futures, following 
the retease of US economic 


data, writes Joel tQbazo. 

Dealers reported a dull 
morning after the March 
contract on the FT-SE 100 
opened at 3,320. Light selling 


■ FT-SE 100 INDEX FUTURES (UFFE) £25 per Ml Index point 


(API) 



Open 

Sea pice 

Change 

wsh 

Low 

Est. vol 

Open to. 

Me 

3320.0 

3251 .0 

-68.0 

3322.0 

32400 

22102 

53873 

Jhi 

33275 

32640 

46.5 

3334.6 

3264.0 

1024 

14743 

Sap 

3349.0 

3285.0 

-68.0 

3349.0 

3349.0 

50 

440 

■ FT-SE MID 250 INDEX RHURES (UFFE) £10 per Ml Index point 



Mar 

aaeaq 

3S33JQ 

-31.0 

39840 

3332.0 

028 

370 


■ FT-SE MOD 250 INDEX njTUHES (OMLX) £10 par full Index point 


112 


2067 


Mar 38S5.0 3830.0 -25.D 39605 3933.0 

An - 3945.5 - 

AM opan MM Bgua are for prartna day. t Exact uoftana moan. 

■ FT-SE 100 MDEX OPTION OJFFE) (-327^ £10 per Mlndax point 

3100 3150 3200 3250 3300 3350 3400 3450 

CPCPCPCPCPCPCPCP 
Mar 178 10*z 12G 19 84 32 53*2 53*z 31 61*z 16*a 117 8 160*2 3*2 208 

Afr 181*2 31 14B*2 45*2 112*2 61*2 84 83*2 66 109*2 40 139*2 27 17B*J 18*2 216*2 

Hay 210 51*2 173 85 141*2 83 112>] 104 86*2128*2 88 157*2 48 ISO 34 228*2 

Jut 223 81 187*2 74*2 156*284*2127*2 114 102*21391:8112 168 82 199*248*2 235*2 

Dacf 297*2 US 238*215012 182 195 138 247*2 

QfeSJISI PM 4.514 

EURO STYLE FT-SE 100 INDEX OPTION (UFFE] CIO par fid Max point 



3075 

3125 

3175 322S 3275 

3325 

3375 3425 

Bar 

182*2 8 

139*2 IB 

99*2 24*2 68*2 41*2 41*2 63*2 

22 96*2 
50*2 122*a 

101 2 135*2 4*2 178*2 

to- 

293*2 27 184*2 36 129>2 52*2 98*> 71 72 94 

33*2155*2 21*2192*2 

May 


ISO 56 

128*2 91*2 

78 140 

40*2 203*2 

Jun 


203 65 

141*2101*2 

BZ'j 151*2 

57 214 

Sept 


246 89 

IE 125*2 

134 171*a 

93 228 


Cda 24 4 Pub • Umtay m Max Rmatana rimm an Daaari cn a a ten e t prices 
T Long dried expiry avaifee. 

■ EURO STYLE FT-SE MP 250 INDEX OPTION (OMLX) CIO par Ml index point 

3050 4000 4060 4100 4180 4300 4880 4300 

Mar 44 64 21*2 94 T3 132*2 0 176 3* 2 222 2 270 1 *2 

79 92 57 119*2 40*a 1» 28 190 18*2 4*2 

Cds 4 Pm 45 SMfema* prices nd ntaaa m Hen at 430/0. 


saw it drift gently lower 
before steadying over the 
lunchtime period. 

It was the early afternoon 
release of the US Purchasing 
Managers' price index that 
started the sell off in bond 
markets and prompted the 
sharp retreat in the futures. 
The fad in March pulled the 
underlying cash market 
lower, though the cont r a ct 
remained at a large discount 
to cash for most of the 
afternoon. Traders said there 
were few opportunities for 
arbitrage trading. 

March dosed at 3,251, 
down 69 on its previous 
dose and at a 13 point 
discount to its estimated fair 
value premium to cash of 
minus 8. Volume was 22,102 
lots. 

Turnover in the FT-SE 
MId-250 futures contract on 
Liffe was 628 lots as It 
finished at 3,264. The same 
contract on the OMLX traded 
117 contracts, with open 
interest recorded at around 
2,867. 

In traded options, volume 
was 32,799. Turnover in the 
FT-SE 100 was 13,936 lots 
and 3,637 in Abbey National, 
the most active stock option. 


K FT - SE Actuaries Share Indices : 


i he UK Series j 


Mart i 

Da/s Year 

croeK Fob 28 Feb 25 Feb 24 ago 

Dhr. Earn. 
(Win yWd% 

P/E 

rate 

Xd ad}. Total 
yld Return 

FT-SE 100 

327O.0 

-1.7 3328.1 3281 2 3267.5 2082.3 

3.67 

547 

2144 

10.46 

1202.48 

FT-SE MW 250 

3944.8 

-0,4 3960.0 3918£ 3923.0 3050.0 

3.12 

449 

2650 

11.43 

1435.07 

FT-SE MM 250 ex tor Trust* 

3959.5 

-OS 3972.9 3932.6 3937J 306a8 

351 

552 

2377 

1158 

1436.73 

FT-SE-A 360 

10809 

-1.4 1684.8 1662.6 1657.8 1421.1 

344 

5.41 

2243 

550 

1250.46 

FT-SE 6/rnBCap 

2038.78 

-03 204359 2039 2048.77 153^21 

2.70 

3.43 

37.18 

547 

1651.13 

FT-SE SmTOCap ex hnr Trouts 

2010. 53 

-02 2022.63 201885 2027^8 154158 

2. 84 

3.78 

34.85 

553 

163748 

FT-SE-A ALL-SHARE 

1853.13 

-15 1676.49 1654.67 105a46 1403.41 

3.48 

557 

2357 

5.13 

126059 

■ FT-SE Actuaries All-Share 

Mar 1 . 

Day's Year 

ehgeft Feb 28 Fab 25 Feb 24 ago 

Dtv. Earn 
yie«S yteklft 

P/E 

rate 

Xd adj 
»rid 

. Total 
Return 

10 MTOBRAL EXTRACTION'S) 

2589.48 

-0.7 2568-63 2551.13 2532-89 2102.40 

342 

4.85 

2542 

4.90 

1004.62 

12 ExnacJhm Indiiotrw3(4) 

3978.07 

+15 393051 3819.11 370452 314550 

ais 

440 

25.75 

0.00 

107042 

15 Ol, kitegmtadp) 

2477.24 

-15 2509^8 2481.78 2462.85 197750 

344 

5.01 

2447 

855 

98848 

16 OB Exploration & Predill} 

1881.81 

1880,71 1851.14 184552 203020 

3.17 

341 

3348 

040 

106648 

20 QEN MANUFACTUF£RS(264) 

2135.48 

-1.0 2158.73 213850 213454 171850 

a45 

3.79 

3451 

459 

1058.07 

21 BuKSng & Con3tnjctkm(31) 

1514.08 

-0.5 152151 160054 (507.66 90650 

234 

158 

80.00f 

310 

115948 

22 Buflitna Mate & Mercha(30) 

225752 

-06 227088 2248.19 2247.06 1510.B0 

3.12 

248 

5358 

1.14 

103457 

23 Ch0mical3(2O} 

2409.67 

-05 2422A7 2393.03 2391 51 214450 

344 

4.72 

28.68 

042 

1035.60 

24 Dlveralfted mdustrials(18) 

208231 

-1.8 2119.65 210025 208553 1875.10 

457 

458 

3054 

10.04 

1034.07 

25 Becawric 8 Bed Equ$(34} 

2104.03 

-15 213058 2112.75 2138.65 182050 

340 

5.78 

2145 

258 

1000.44 

28 Engjnsaringf7^ 

1951.48 

-05 1987.59 1051.87 1045.38 143950 

2.79 

2.87 

4745 

446 

100144 

27 Engineering. VeWctea(12J 

2397.40 

+05 239257 238851 240851 181250 

455 


4349 

059 

112741 

28 Prtnflng, Paper & Ft*«27) 

2088.78 

-0.7 SOiaSO 2995.42 298050 229450 

2.70 

4.12 

2947 

1.60 

1152.14 

29 Textles & ApparetCSI 

Hrvlvl 

-15 1958.42 1925.83 102159 1851.10 

349 

5.13 

2449 

152 

1062.86 

30 OOrfSUMB) 00003(83} 

2896.78 

-1 5 2931 58 290458 2878.1 1 2892.10 

346 

8.78 

1759 

1347 

96841 

31 BiwerieellT) 

224536 

-2-1 2293.03 2267.01 2228.61 2114.40 

445 

744 

16.09 

944 

98398 

32 Spirits. Wires & CMerefJO) 

3104.44 

-1.9 3184.15 311454 305050 280250 

3.41 

541 

19.78 

1943 

101755 

33 R»d Marmrfacnjraretzq 

240734 

-15 243757 240851 239057 247050 

3.90 

7.00 

16.93 

295 

980.13 

34 Household Goodsfl2) 

2885.78 

-0-1 2880.72 287033 287258 2410.40 

247 

846 

1851 

aoo 

1007.80 

38 Health Cara(20) 

1844^0 

-0-1 184853 183658 183758 180550 

2.92 

5.16 

2312 

1.46 

1045.09 

37 Phwmacauticata(10) 

3117.76 

+0.1 311458 3105.35 3084,77 327350 

4.12 

650 

17.47 

24.70 

96651 


389234 

-35 4035.15 400958 3978.43 398750 

5.17 

818 

1458 

0.00 

83850 

40 SEJRVICesenB) 

209134 

-1.1 21 13.57 208553 200058 1701 50 

248 

849 

2248 

4.12 

100442 

41 Dbartoutorapil 

309933 

-05 312354 3102.15 310450 254650 

2.74 

446 

2447 

1A0 

101744 

42 Leisure & Hotete(22) 


-4X9 231259 2300.84 226058 176750 

340 

447 

24.18 

11.69 

110948 

43 Mada(3Q 

3228^7 

-1.0 3262.53 3230.43 324054 2220.40 

144 

443 

2946 

446 

110044 

44 RetTOers, Food(17) 

1601-38 

-1.7 162954 158854 155353 208850 

3.86 

948 

12.44 

148 

929 88 

45 ReroHera. General(43} 

1755.26 

-15 1778.63 1747.77 1747.70 148550 

2.71 

558 

2378 

4.18 

91856 

48 Support Servfcoa(«9 

1759.17 

-0.8 1770.17 1757.90 178358 154150 

254 

6.4S 

1742 

1.18 

104018 

49 Trarraport(16j 

2830^0 

-0.7 2649.05 201058 2622.45 2074.40 

3.18 

344 

3388 

318 

100940 

51 Other Sennoas & BudnaseOZ) 

1319SG 

-05 132251 1320.47 1320.75 132450 

3.60 

358 

4306 

0L7Z 

111044 

go inurnEsoe; 

2519.48 

-0.7 253755 248158 2517.17 210650 

3.97 

642 

17.83 

5.80 

94259 

82 Bedridty(lU 

2425.38 

-05 2432.77 2386.42 2395.19 186050 

3.41 

1050 

1245 

1545 

97941 

84 Gas raaW9uttan(2) 

212084 

-U 2140.48 2116.38 218056 190050 

544 

t 

3 

040 

837.09 

66 Tetectx 1 amp auaUona(4) 

2216.03 

-1 .0 2238.46 219058 2209.38 1969.80 

346 

5.47 

2244 

0.09 

92146 

88 Waur(13} 

1940.46 

-0.1 1941.88 1928.10 194358 1753.40 

4.78 

1310 

846 

348 

833.63 

89 NON-re4ANClAJLSt83ai 

1774,13 

-1.0 179159 1789.62 178658 1641.45 

341 

540 

2258 

447 


70 FMANCIALS{10S) 

24194)5 

-35 2499.41 2464.12 2451.13 1856.10 

X61 

446 

2548 

1304 

931.49 

71 BanfcstlO) 

3087.85 

-4.9 3245.48 319CL34 318456 229150 

348 

442 

2654 

22.00 

90050 

73 km*anco(181 

1402.76 

-2.0 143253 1414.17 1383.48 131250 

4.55 

844 

2058 

944 

931.82 

74 Life AssuancafG) 

2602.29 

-0-7 2619562804.70 2584.99 2507.10 

4.48 * 

447 

2383 

040 

956.05 

75 Merchant BenfcrfQ 

3214. S9 

-15 3277.57 3271 .07 328888 222450 

242 

B.79 

1304 

10.07 

945.67 

77 Other Ftoncte(25} 

205350 

-1.4 2081 .86 2088.40 2081 51 1354.70 

3.15 

557 

2347 

1319 

1072.03 

7B Property^ 

1798.40 

-02 1802.08 1765 74 1754.70 112750 

3.42 

311 

4248 

2.80 

100341 

■-^X. 1 i'i -_Li *1 i J-it-. tiL 

2976^43 

-0 7 2997.75 287354 29S8J4 223750 

2.14 

1.72 

ESI 

Ed 

988.48 

89 FT-SE-A A1X-SHARE(8S4) 

1653,13 

-15 1675.49 1654.87 1650.48 1403.41 

3/18 

557 

2357 

5.13 

126649 

■ Hourly monuments 

Open 8-00 

104)0 

1150 1240 1340 1440 

1S40 

18.10 ftoiftbw Low/day 

FT-SE 100 3322J 3322.B 

3308.4 

3308.9 33005 32934 3293.7 

33085 

3278.1 33284 

3270.6 

FT-SE Mid 2SO 3964.4 39602 

39605 

39605 3955.6 3854.7 3B545 

3956.7 

3946.6 39874 

3Q^-1.6 

FT-SE-A 350 16832 18833 

1877^ 

1877.3 18735 16704 1870.9 

18754 

18835 16854 

16804 

Tkm Of FT-SE 100 Hoh 0»s«3 Lem 1830 

■ FT-SE Actuaries 960 Industry baskets 

ML10 CIom Fratrtcme Chanse 


Bta) a Cnstnan 


14502 1480 .B 1459.0 1459 J) 145&4 1460.1 1460.7 1460.1 14523 1451.7 14506 -49 

3090.1 30873 3078.1 30894 30954 3083.7 30701 3095.4 3064.3 3087.5 3084.2 +03 

184 X 2 19418 1942.1 1944 JB 1944.5 1849.5 19483 19505 1941 J 0 19308 193&0 -12 

3231.8 32373 32073 3202.4 3188.8 3172.0 3174.8 3195 J 3142.8 3125.8 3285.4 - 1 S &8 


MdBCtt womtfai (XI HW FT-SE Acltofee Stare Mom M pubMMd in 
iMMOna gnxhrah EMfcn, London SCI DHL. The FT-si Actuarial Sfa 
raUdnao llxw® tndoea. Is aaldria tom FMSTAT u th* xanM xriw 
TNi FTV Xr has bm wnan ^ W xx. The FT 3 E 100 , 

Ttain LMnri. ha*t *• con|naian «an Bo MMa o> . 
e ibshiiaae™* Sock Erehane* •» R*"*"***" 


i heues. U*s of oanauuenn m avatabto ftom Tha Ftomdri Time* 

i a ranpo of etoutiona ana papv-taaud (xoducti 

fT-3E AM 230, FT-SE AcUria* 350 and tha FT-SE ActuartM Maty 
and RspuPfcgl Ireland and On FT-SE AowlnAKhn Mw is 

Iha Facusty ol Actuate* undtr a atentfetfl ut at sound rUte*. 
Limited 19M. O Tbe Fin anc ia l TYnas Umoad 1004. AM right* MantL 
3* Eachangri and The RnteidM Tknas Umftad.Tha FT-SE Actuate* Shara 
not tenant, i VUun am negater*. 


houses said to have tried to 
unwind a big long position in 
the stock just before the dose 
of trading. C&W, the telecoms 
grou p, hel d up well compared 
with HSBC and Standard, fin- 
ishing only 13 down at 46Qp on 
turnover of 5.4m shares. 

Vodafone firm 

Vodafone, the UK's biggest 
cellular telephones group, was 
one of only a handful of FT-SE 
100 constituents to gain ground 
yesterday, responding to 
renewed US buying and news 
of further big increases in the 
group's subscriber base. 

The group said net new con- 
nections to its network during 


TRADING VOLUME 


■ Major Stocks y es terday 
vu. Oq*« Day 1 * 


ASCMOoi«rt 
NaOmit 
Albeit Rater 

Antfan W un aT 


Aigyi 

4*10 


Aaaoc. B4L Pats 
BAAf , 
BATlndxt 
BET 

BOCt 


Bac* of ScoMndf 
Badaswt 
Bast 
Oua Chdat 


BOMOWt 
Ul Aareapooat 
BHIbh Akwayst 

BrtUah Oast 
BdOah Land 

BrittdiSiarit 

Bund 

Bumah Caatnrif 

Bunod 

Cafala B Wlnaf 
CaJxjy Miwapp a st 
CsUa- SSrssfp 

Cndnf 

Cortni Conana-t 

Coats VhnKot 

Comm. UMnf 

COehafln 

Oourtoidrt 

Wgahr 

Da ua Run 

□dons 

Eastern BecL 

Ema IMand Bad. 

EnpCWnaCN* 

EntorprtaaOft 
Euronmnol Unlta 
FW 
Ftaomi 

r' v-i.jii a cm lt. 
Fkrtot 

Gan. Acddantt 
■triSactf 



i&ooa 

671, 

A 

9J00 


-IB 

461 

87 

-fl 

IflOO 

SIS 

-10 

1,4130 

332 

-a 

■■tr j 

363 

-l 


348 

-9 


2BJ 

-3 

“ j 

55G 

-1 


583 

-8 

i>«aj 

1016 

+3 

T.SOO 

404 

-17 

2.700 

139 

-3 

1500 

447 

+0 


707 

-4 

7JJ0Q 

350 

-6*7 

735 

341 

-3 

7400 

431 

-0*3 

2/SSS 

312*| 

-4 

3900 

360 

-7*7 

2500 

217 

-0 

8500 

53B 

-22 

3400 

518 

-IB 

zrn 

343 

-fi 

61 

431 


3000 

632 

-14 

2400 

EOS 

-7 

1400 

900 

-a 

A200 

441 

-12 

13400 

318*1 


1400 


t0 

13400 

138* 

-fi 

1400 

168 

-1 


B32 

-ei 

4400 

55 

-h 

&400 

480 

-15 

1400 

501 

-fi 


337 

+6- 

530 

404 

-8 

B38 

927 

-fin 

1-400 

261 

-7 

1400 

608 

-20 

2400 

Z80 

-7 

2400 

EDO 

IT 

zn 

473 

+3 

616 

954 

-fi 

1400 

215 

4*3 

2.400 

659 

1400 

845 

45 

1.100 

1.700 

495 

-7 

436 

+5 

106 

530 

-1 

1400 

ED* 

*3 

6-400 

127 


527 

291*1 

-eh 

6.700 

260 

-1 

4. 100 

CGI 

*4 

2.100 

313 

-7*7 

4400 

8S3 

44*7 

273 

380 


7400 

540 

-IS 

BJOQ 

468 

-15 

1400 

697 

-7 

1400 

212 

-4 

066 

537 

-3 

2400 

920 

-0 

S-400 

888 

-77 


4Z7 


3700 

273*2 

-ah 


«t , 

*U8DM* 

MaKSan 
LaAcxaf 
Land Sacunbaaf 
Laporta 

Lapal A. Qmnlt 
Uoyds AUanr 
Uoyds Baritf 
LASMO 

londcal Bed. 

lonlio 

liaaw 

KaEPCt 

MR 


MortaASpaneerf 

BacL 
IVW* U 


wet 

NsMMBMKf. 


Mortbam I 

Noftham Foodst 


P>Ot 


«xaart 3 > 5 t 

PrudenOdf 


ft i4t 

S3tt^ Oo*nant 

SSSlt 

nauinar 
wmniot ^ 
ftfi W souaindt 
ItojlM InawancoT 

irsst 

Scottish & Nav.t 
Scot Hfdre-Bsct 
SocmMi Rhaert 
Eaatf 

Severn Trentf 


Slebat 
ScxjohEsti 
SMailWMi A 
Smith l Maptewt 
SfflU Badchamt 
SmW C aac h am Utnt 
Smuna mdx. 
Southm Bactt ' 
Soutfi WWM Bsct 
Sourii West WUar 
Saudi WWL Beet. 
ScuthMiMMar 
SiandBd Chan&t 


Son ABancot 
TBN 

Tl Qmupf 

Termec 
Taa»&Lv *8 
Ta»lor Vmxxtmr 
Tescot 

Thomaa WMarf 
Thom B*T 
TomUmrt 


9B7 204 

4J00 311 

887 179 

GUI 347 

2.700 748 

1.000 342 
2B3 GOB 

3.700 SBB 

21 G90 

11JOOO 211*2 

2.100 718 

81 823 

1J00 402 

830 420 

3^00 388 

873 129 

88 840 

MOO 100 
033 223 

7BB 308 
G77 189*| 
92 740 

2JOO 423 
007 060 

5.000 115 
1,800 261 

3.100 485 

1.400 409 

1.200 221*3 

1.700 553 

3*3 602 

891 223 

1.000 t®9 

873 877 

IjOOO 080 
3-300 183 

821 370 
MOO 323 

343 935 

»3n Mt 
838 224 

822 1071 

1.000 898 

2A00 588 

no 900 

1.100 238 

1.100 1889 

7200 109 

uoo 45 a 
0Joo are 

2^00 380*j 

1* 1188 
1,300 554 

734 403 

847 416 

MOO 122 
1.600 194 

884 331 

BOS STB 

ajsoo 710 

1.200 808 

1J00 27S 

430 608 

5.700 147*2 

4.«W 307 

933 304 

1.700 488 
am sea 
MO 720 

153 802 

003 645 

174 383 

828 1158 

375 236 

!W00 342 

4.700 242 

289 412 

4400 243 

5500 198 

1.400 423 

1500 175 

8500 2ZB 
1AD 554 
592 1082 

2500 235 

5.100 107*2 

154 377 

1500 1191 

2. 700 34B 

025 801 


-18 

-3 

* 2*1 

-13 

43 

-a 

423 

-16 

-a 

48 

-o*a 

40 
-2 
-1 
<2 

- 0*2 

47 

♦1 

- 0*2 

-18 

-4 

-4*2 

41 

-7 


-5 

-2 

-7 

414 

-fi 

-SO 

•3 

-6 


-31 

-e 

-12 

-8 

-8*2 

-30 


-2 

-10 

43 

-11 



i daw Orautfiiha SEAQ nAm 


February were 36,551 and that 
it now served more than 1 . 12 m 
subscribers. Vodafone's 
arch-rival In the cellular tele- 
phones business in the UK, 
Celinet, owned 6040 by BT and 
the Secnricor group, also 
revealed highly encouraging 
new subscriber figures. Cefinet 
attracted 39,000 new customers 
to its service during February. 

Vodafone shares moved up 
IVt more to 609p in heavy turn- 
over of SL9m. BT shares, on the 
other hand, suffered from the 
general weakness across the 
market, with the "old” stock 
314 off at 431V&P mid the “new” 
4 down at 312ttp. 

An early upsurge in Abbey 
National, after the bank 
revealed better than expected 
profits and a top of the range 
increase to the dividend, failed 
to hold and the bank's shares 
retreated to close sharply 
lower on the session. 

But marketmakers were 
keen to point out that there 
had been very little selling 
pressure in the stock. "The 
numbers were excellent and 
the dividend was as good as we 
could have expected, but you 
cannot Ignore a foiling market; 
when the market pounces, so 
wffl. Abbey," was the wumwiput 
from one trader. 

Tbe shares ended a volatile- 
session 16 cheaper at 489p, hav- 
ing been as hi gh as 516p imme- 
diately after the figures were 
announced. Turnover reached 
9.7m shares. 

Dealers reported hefty sell- 
ing of the merchant banks late 
in the session amid continuing 
worries about their exposure to 
big losses in bond markets 


NEW HIGHS AND 
LOWS FOR 1993/94 


BANKS (1) Mtaubttl 7*. A Eft*. BREMSMEa 
(t] Ounanar m. BULOMB LCHEITNn 
AMEC, Bn Bm. Ttqr honws, BLOB HAILS ft 
MCHT 8 » Stew W, WMhW. nSIRBUTORS 
TO Aden 3 Harvey, Hudn, Hertyi, Looto ti . 
NartMto. PwTuon. Wh niw d i H^l. 
QltfBMHEO IHOLB (QUMmarB. 

ucjwurv to PomQn neenwe a 

HJKT BOUF n TDK Oopn, Tlnpo PM], 
ToxNba Oorpn. BKSWffiWB P) Bavnoa (CJ 
upo PL. Mttttax. Monii AMy. State, 
Tlmpylag, Waapnr Ttemyo v ili. Wxgon kxfl, 
EXTRACTIVE 9(08 TO CNMOOta WMno CBrp, 
bMmin Dm, ndMte Oetd Mnw. UmmUhrl 
NSM. MugU, PMrikig, FOOD MAMIF TO 
BonMck*, KakuL H0U8BI0ID Q0OD8 (11 
Mmv. BIVEBTMENr TRUSTS 88 DUMdh 
Japan bix, BW Jkmti WX. FULttu Ban. 
BWMNr. OwyWw Ufa HTR Jap a n ete Sm N Uft . 
WWBSIMETir C OM P Aim TO JF Ra^*a 
Japaq, LBSURE « HOTELS (Q SMgr tetaum. 
H» n Mri» U, Sunot 6 Vh» 
TWgm*. Ott, M1BBU1B ra NMkH|A^ 
OTHH1 HHAHQAL C8 CwmBb, Dea« tlao . 
OTHD1 8BWB A BUSN8 (2) GhM InTUUOa 
PRIM, MFER B PACKS (8 tonarart, liM A 
Bon*. PROFBtTY ft) An0o 9L Jmaa, 
RETAILHflC FOOD (f) Part! Pood, BURKTOT 
S8WS TO AOrM, CRT, Oon0x4ar Peopta, 


Tfateipan PamiaoHi. AI CT IC A I I8 TO Low^ 
But Ob. ha 
NEW LOWS p)- 

4M38 TO Tna BHpc 2004J3O 8N«K A, 
B WIMMHIH O H BalawU WMlfc FOOO 
MMWPTO Swart PM*, MBURMIOin 

Abiro* Uoyda, U8F & 0. TCXTUB & APPIARS. 
(1) MuHn InTL 

incurred by some of the big 
hedge funds. S.G. Warburg 
relinquished 7 to 888p, 
Hambros 19 to 385p and Schro- 
ders 15 to I153p. 

General Accident was one of 
the FT-SE 100’s star perform- 
ers, the shares managing to 
dose in positive territory and 4 
higher at 651p, after 661p, fol- 
lowing the excellent prelimi- 
nary figures. 

Lloyds Abbey Life was lifted 
by a James Capel recommenda- 
tion. Tbe stock went up 23 to 
420p. 


An upbeat trading statement 
from Grand Metropolitan pro- 
vided a temporary relief to the 
downward pressure in the 
drinks sector, but the shares 
soon succumbed to the market 
trend and fan further during 
the afternoon. Tbe stock fin- 
ished IS down at 468p after a 
hefty &2m traded. 

Among other big fall era, 
Bass tumbled 19 to 51% Wol- 
verhampton & Dudley 13 to 
506p and Whitbread U to 554p. 
Dealers said sentiment had 
been hit by repeats that UK 
consumers will be allowed to 
telephone drinks orders to 
France for direct delivery. 

Betting and hotel group Lad- 
broke gained 2V4 to 211 Vip on 
12m traded on expectations of 
good results tomorrow. Joint- 
broker Rn*Hh New Gomi was 
also said to be making positive 
noises. Although a cut in the 
dividend is forecast by some 
analysts, more visibility is also 
being anticipated in the first 
set of results «inre the group’s 
founder Mr Cyril Stein retired. 

Granada was hit by Anther 
selling hi the wake of its take- 
over of LWT and the shares fell 
15 to 540p on t ur nover of 6.9m. 
LWT sUd 17 to TQSp. 

Market fears on the outlook 
for interest rates led to weak- 
ness In intemaHnnai conglom- 
erate Hanson leaving the 
shares t railing 4 to 274p. 

Leading pharmaceutical 
stocks were generally firm on 
dollar considerations. Glaxo, 
with Panmure Gordon positive, 
gained 4% to 683p, Wellcome 
added 2 to 656p and Zeneca put 
on 7 to 776p. 

A- profit rise of 60 per cent 


from Znveresk saw shares in 
the speciality paper group 
pence jump to 7 to 230p. 

Dawson International 
slipped 5 to 153p after it 
announced it was pulling out 
of the loss-making US woolen 
business and would take a one- 
off ATPUpHnnal provision Of 
£50m for this year. 

Furniture group Sflentoight 
tumbled 38 after announcing 

that profit * to the year ended 
in January would be below 
market expectations. The 
shares later recovered to close 
at 355p, a foil of 18 an th e day. 
The company margin 

pressures for the warning. 

Boots was said to have been 
undone by a big US seller and 
the shares fell 14 to 532p. 
Yield buying lifted Dalgety by 
3 to 473p. 

Shares In British Steel fell 5 
to lSSV&p, with 12m shares 
traded, after steel group ASW 
reported full-year figures below 
market expectations and 
warned of continuing overca- 
pacity in the industry. ASW 
was unchanged at 190p. 

International mining group 
BTZ was among a handful of 
stocks that resisted the market 
slide and dosed 14 up at 867p, 

OU volume Of ■ ( sni | m airing it the 

best performing stock in the 
FT-SE 100. The shares were 
boosted fay a firm gold price 
and the- prospect of Increased 
demand for copper. 

MARKET REPORTERS: 

Chris top her Price, 

Joel Kbazo, 

Steve Thompson. 

■ Other statistics. Page 21 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


RISES AND FALLS YESTERDAY 


(teflon 


CM2_——p«a — 

Mfr M Ort Apr Jtfl Oct 


Onion 


oat- 


British Funds . 


MfcnHjWB «n 3514 «S »J 4 11 29 35 M 
(*B 19 ] 650 11 2 IM 3 ZM 38 SSH B 4 H 

WO IBM 28 ZS 8 H 18 M 21 M 

an m laasHamam sa 

50 1lt» H 1M 3 «H 
80 4 7 8 SH 7H 10 


Hv tag No* M*jf tag Ite* 


Aiufl 

rwa» 

ASIA 

rs») 


IftffAHxQa 420 M 44 MBZtf 8 20 2 SM 

C 442 ) 460 12 M 33 am 41 M 47 

MMA 390 29 » 47)5 13 H 25 H 32 M 

nan «ntiK a x n « « 

500 4 ZBH 9 BVI 5 M 16 22 
350 13 » 33)5 28 44 47 M 


260 21 S 9 5 9 12 K 

290 OH 141 SK 13 M 18 & 22 
120 T 7 23 27 8 13 17 

130 11 H 1714 23 13 ft 18 22 H 
220 14 * 2 » 27 12 H 17 * 23 H 
240 8 13 1 BH 25 29 D 35 M 


CZ 74 J 

IflMBD 

nan 

Una M 

rzs) 

no 

reao) 

FWnokHi 

nsaj 


Otfw Rxsd Maraat — 
Bfineral amedan ___ 
Usneraf Manutectums . 
Ooraurnsr Goods 


Swvfcss. 

UWttas. 


Bnh 
(*531 ) 

BP 380 15 M a 32 13 M 22 H 27 H 

(* 380 ) 390 513 M 1 M 34 40 A 45 H 

UfASU 130 13 18 22 3 K 6 11 

H 38 ) 140 7 » 13 16 V) 654 13 10 

6800 500 32 48 80 11 23 28 » 

(*618 J 550 9 2 SM 30 M 40 KB 1 M 57 

Mfc&fe 450 J 1 K 4 BW - 9 23 - 

T 484 ) 475 17 31 K - 2 DH 33 - 

CoxtaAS 500 26 H 39 43 14 26 H 33 

(■SB) 550 7 H I 7 U 23 H 46 60 63 H 

OonnUfln 600 23 » 47 BIM 15 H 25 33)4 
(•GOB) 650 Oft 2314 20 48 MH S 3 

IQ 700 54 80 74)1 10 J 4 23 H 34 

r ?40 ) 750 W 39 49 34 48 59 H 

KhgOsner 550 62 6115 70 822 H 30 H 

rS 86 ) 600 21 H 33 K 45 2947 HBH 

Land Saar 700 33 44 91 U 9 H 27 K 30 H 

(*719 J 750 9 M UM 27 37 57 M 59 » 

Mafts & S 420 18 27 34 11 21 *i» 
(MM J 460 4 1114 17 38 47 48 ft 

HUM 460 39 EB 6 IU 9 IB 24 

(*495 ) 500 IBM 34 42 27 H 38 D 43 H 


f 324 ) 

mz 

(W) 


rswj 
Ropfl Ian 

ran 

Ton 

rasj 


BSD 4 B 
700 33 
180 2 >K 
200 BM 
300 SB 
330 IBM 
850 40 
800 23 
90 51 
600 21 
200 2BH 
300 17 


07 7 BH 17 M 33 40 
43 M 54 49 60 M 76 M 
25 M 2 BM 5 H 10 M 12 H 
15 19 15 20)1 22)4 
34 38 M 6 12 16 
IB 24 22 28 32 
7 PM STM 20 42 5534 
47 M 6 ZM 56 68 82 
98 SOM 18 Z 7 M 38 
33 48 44)4 55 68 M 
3 B 4 ZM 10 H 14 M 19 M 
a 33 20 M 24 H a 


Hnondate 

(nvTO&nont Tn*t8 . 

Oman— 


Totafa 


478 


904 


1334 


Data tend on thaaa eunn *— hM <n ta Lmdon Son Sanriea. 


TRADITIONAL OPTIONS 

FMDartlngs Mtacti 4 Last Dadarattana 

Last DaaBngs Marcft 21 Fwwtttarnert 


JuiqZ 
June 13 


POO0J 

BfltanH 

f 3 B 1 ) 

OpOoa 


220 ISM 22 
240 6 ISM 

B 0 Q 41 M 61 
850 BOH M 
3 B 0 IBM » 
43 ) (Hi 14 
Apr M 


27 » 12 i 6 am 
ISM 25 28 H 32 
7 V 26)4 42)1 53 
Snl 55 H 7 TO 4 80 
32 1 B 28 M 31 M 
2 BM 41 45 50 
Dd Apr Juf Oct 


CTOs: A x — co, BM, BhcM l.al au re, Clayton Son, Cone MureMw\ P— ioproanl Sec, 
Euro DbMjr, Henson Wtx, HewOn, Lax Sendee, NSM, Ransoms & 29 p Prf, Rodkne, 
Sataf—y (J), Ta 4 »tB Tech, Victors. Puts: Euro Hmoy, NSM. Put* 4 CTOs A 9 DA, 
Axoon InB. CaxewMe, Da— lop—t Sec. Greycoat. Henson WIs. Kuntefc. Ma niihae- 
tar UkL Matthews (B), Mid-States. 

LONDON RECENT ISSUESr EQUITIES 


BAA 

(* 1015 ) 


Wr 


r55B| 

Ofiaoo 


1000 4 BM 8 SM 
1050 a 4 BM 
hum 

600 SH 12 


a IBM a 48 
■ 47 BSM 73 M 
40 14 M 32 H X 
a 46 68 « 
Sap llv Jon Sep 


AfeDay me 
r480 | 


360 21 Mr 31 38 M 30 » a 
0381 } 390 8 17 25 M 31 47 48 M 

Shut Trffl*. 700 a a 45 21 31 40 

C 709 ) 730 4 K 17 » 60 64 71 

Stantano 220 2214 2 B 33 M 3 K B 12 

(*236 ) 240 BM T 7 2 ZH 11 M IB 21 

IMMgW 106 BM 15H - BM 11 - 

HOT ) 115 BUM - 12 17 - 

Ufle— 1100 42Mr MM IBM 23 33M50M 
(1122) 1150 TO 37M S4M 55M S5M 77K 

Zanaca 750 STM 5BM nm 23M X 49M 
(V75 } 900 14 33H47HS4M64K77H 

0 TO» Mqr A— So* Mtr ATO Nor 


no J 
Bsdqa 
r538 ) 
BtM On* 
P«3} 
BrfBm Gm 
(*31B ) 
Dton 
(W 4 J 


480 B 5 H 3 BM 00 
500 7 18 SOM 

35 3 M SK 7 M 
40 1 M 3 H SM 
500 44 33 H 04 H 
550 11 »» 37 
330 21 31 43 
380 BM 172 BM 
300 22 27 32 M 
330 4 OH ISM 

200 Z0M a 33 
2 » 7 18 ZtH 


5 14M 22 
a 34M 42 

2 3 5 

5 BM 8 

5K 14 23M 
Z7H37H48M 
SM 16 24 
21H 34 41 
IN I 13 
15M 26 2SK 

3 7M 14 
11 16M 24 


Sand Met 
r«B> 


r»i » 
wo 

DM ) 
OpOon 


460 27 M » 49 17 24 a 
500 1114 21 31 40 H 47 S 2 M 
200 MM SM MM 11 ISM 23 
220 W» 18 M B 23 Z 3 34 M 
330 a 31 M 35 M 12 M 18 M 24 M 
300 9 182 ZH 32 M 37 42 

■v Jon Sep Mr Jon Sep 


Huns 120 lift f 7 H 24 4 H IBM 14 H 
(*127 1 IX M 13 19 9 ISM 2 DH 

Opto Mgy A— to May tog to 

Brit AeN 500 44 S 3 79 31 46 M SI 
(*900 } 550 20 42 58 71 79 M 8 BM 

BAT lads 480 24 31 H 38 M 2 SH 33 42 

(*484 } 500 BM 17 24 5511 ST 68 

SIR 360 18 24 29 M 19 H 25 32 

(*380 ) 390 SM 12 H 18 42 45 M 51 

HTdtxm 420 a 34 40 9 19 MM 

(*431 ) 460 TM 1 SH 21 ft 33 M 42 M 47 

CttwySO 483 IBM - - 19 - - 

(TOO ] 542 4 - - 57 - - 

Eastern Boc 050 3 EM 48 57 20 37 44 K 
rS 59 | 700 14 a 33 ft 60 68 74 M 

Gl — 1831 500 35 M 49 ft SIM ISM 31 37 

rS 21 } 550 12 2 BH U 3 T BM BSM 

SEC 300 a a a 6 M 13 17 

(* 314 } 330 8 13 18 22 M 30 M 33 H 


nw> 

lorin 

no) 

IHPbmr 
(*489 } 
Seal Power 
P 418 ) 
Sawa 
(121 J 
Rule 
f 2 S 9 > 
Tamac 
(196 > 

TTkvti 98 

no8i) 

758 
(*244 > 

TonMm 

ras) 


160 18 IBM 23 ft 1 M 7 9 K 
160 4 M 6 M 14 BM 18 M 21 
180 BMtTMKM 6 15 21 
180 2 M 10 10 ft 231 a 33 M 
480 33 M 4 EM 5 H 3 H 12 M 22 
500 * 8 2 ZM a 18 33 40 M 
390 MM 42 ft 80 3 10 X 
420 10 ft 25 ft 33 13 H 23 33 
120 9 ft Bft 12 3 M 7 ft BM 
130 2 5 7 W 10 ft 14 ft IS 

240 a 27 M 33 ft 2 M BM 14 
260 SH 18 S 3 H 8 IB 24 


IniM Amt 

MM. 



Cfesa 






price paid 

cap 

1903/94 

Pto 


Nat 

DM. 

on 

WE 

P 

up 

gmJ 

Hfejti 

Low Stock 

P 

_±_ 

dr. 

art. ytd 

rial 

140 

FP. 

253.0 

178 

183 Alpha Airports 

168 

-1 

RNCJO 

21 

an 

102 

190 

FP. 

101.3 

149 

148 GNmedenca 

149 


- 

- 

- 

- 

124 

F P. 

Z33 

IBB 

1« CWcd Computing 

168 

-4 


- 


248 

235 

FP- 

682 

268 

260 Coda 

280 

48 

WH2 JO 

4.5 

U) 

27.1 

§M 

FP. 

6-58 

173 

108 Oanf) Rn Sol 

140 


H* 

— 

« 

218 

N 

FP. 

1350 

50 

48 Ed&i New Ugor 

48*2- 

■1*2 

- 

- 

to 


60 

PP. 

10L4 

59 

65 Energy CapBd 

59 


- 

— 

to 

_ 

- 

— 

101 

28 

4 Do Waranta 

28 


- 


- 

_ 

130 

FP. 

322 

166 

130 Fkielbt 

148 

>2 

R3LS 

22 

23 

102 

- 

FP. 

2-50 

102 

100 Ftarrtog Japan C 

100 


- 

- 



— 

FP. 

810 

74 

88*4 Guangdong Mpt 

87* 


-4 

* 


_ 

- 

FP. 

4.72 

29*2 

18*2 Do Wanarte 

28 





_ 

100 

FP. 

85.0 

102 

94 Herald IwTjt 

100 

-2 

to 



_ 

— 

FP. 

624 

61 

45 Da Warrants 

46 

-2 


to 


_ 

so 

PP. 

4S7£ 

40 

40*i Klolmrort Eero Pvt 

41*a 

♦*2 


• 

to 

_ 

- 

FP. 

384) 

49 

37 Do Warrants 

38 


_ 



_ 

50 

FP. 

204 

82 

43 Mthras bar Tet 

51 


_ 

_ 

to 

__ 

— 

FP. 

2-00 

28 

ZS Do Warrants 

28 




_ 

_ 

110 

FP. 

3541 

128 

119 Paricsfcta Ml 

120 


F VOJD 

1.5 

ai 

23-8 

125 

FP. 

201 

133 

125 Radafene Tech 

131 


FEW 

2A 

23 

16 jB 

§120 

FP. 

112 

148 

122 Stem 

140 


R17 

2.5 

&3 

148 

1(» 

FP. 

405 

98 

89 Taiwan Inv 

90 

-1 





— 

FP. 

3.78 

59' 

41 Do Warrants 

42 



to 

_ 

_ 

200 

FP. 

MB 

216 

212 Trttoat 

212 


R SA 

21 

as 

17.5 

118 

FP. 

506 

140 

131 Tring Mt 

138 


RNU 

2.1 

3 A 

16L4 

t toodueflon. 9 PMdog orirn. FP. RjflrpaU security. For an 
B rite (Mb Id Hie London Share Sanica. 

mriarwten ol aflwr notm. ptaeae 

i refer 


n»> 


183 9 

200 8 
1050 46 ft 
1100 ISM 
240 12 H 
260 0 
240 2 BM 
260 Bft 
050 a 

700 Bft 


2 DM — 8 15 - 
IBM 22 10 ft 18 ft 24 
75 B 8 ft 1 ZH 23 ft S 3 
47 » » 53 78 
21 ft 30 Bft 12 ft 18 
12 ft » 18 24 29 ft 
27 H 33 H 2 M 8 M 13 
ISft 22 ft 9 16 22 ft 
03 72 T 17 ft 3 BM 93 ft 
3 IM 52 46 ft BBft 83 
Jot Oct Apr Jut Oct 


FIXED INTEREST STOCKS 

laeue Amoun Latest 
price paid Reran. 1903794 

8 up date ttgh Low Stock 


Ctadng +or- 
priee 
£ 


100 


F.p. TO 00 Budgets 6 pc Cw 2003 

Fi 3 . - 130 p note) Cariton Conan. 5 - 5 p Or. Pf. 

PJ>. 14/3 56 ppm 31 ppm OKU Unto Or Ln 14/91 

F P. - 101 Vp 984 p Sfwprtta 1%pe Prf 2009 

FJ>. 131 107 Wtan Ape Bda 


RIGHTS OFFERS 

leauc Amount LTOaet 
price paid Rerun. 1883794 
p t0i date Ugh Low Stoofc 


B4 

123%. -1*z 
3) ppm -1 

a ^ 


Ckttng +cr- 
pribe 
P 


Qaw 

roei } 

HOCTSpto 

(*878} 

Rautn 

nm 

Opto 


650 BBft 
700 2 BH 
on OEM 
900 3 ZM 
I 960 91 
2000 04ft 
•to 


m 9 ift 
E 665 M 

94 tie 

71 SSH 
If* 192 
121 187 


IS 31 ft 47 M 
37 58 72 
46 ft 40)1 96 
70 106 119 
06 97 123 
SIM 122 147 

tog to 


20 

Ml 

11/3 

92 

ra 

11/4 

12 

ra 

13/4 

120 

ra. 

21/3 


pm Rflce m ■ praaritan. 


SSpm 

12pm 

12*2fvn 

44pm 


3 * 2 pm Beeuftad 
11 pm Borfotd 
10 pm mh (GM) 

33 pm jfGnnvenor tna 


3 **pm - 2 lj 
12pn 

12pm 

44 pm t 4 


AtoAqca 

flB) 


160 

160 


20 H 24 H 
11 15M 


6 ft 11 16 M 
18 22 H 2 BK 


eecaty price. FtemUm Aeem m 


FINANCIAL TIMES EQUITY INDICES 

Marl Fiab 28 Fab 25 Fab 24 Fat) 23 Yraoo -Hnh i~. 

Cftdmry Shcro 2536.0 2584.1 2536.3 2528.1 2ST8A 2233J3 2713 US 21247 


Mm* 1 . TOM oowr tt* Z1J2 8 CaOK 1 CL 788 
Puac ii^ao 


Old. «r. yMd 
Earn. yfcl. % U! 
P/E raBo net 
P/E rate nS 


FT GOLD MINES INDEX 


067 

063 

067 

3^7 

059 

4^5 

4JOO 

484 

•490 

400 

088 

OIO 

22.14 

22.40 

22.15 

22.15 

3089 

2088 

m na 

23.36 

2009 

23.03 

30.28 

1048 


4 JS 2 


saao 


3^43 
a as 
1040 

iai4 



FTO 

28 

«TO| 

M M Mr 

25 24 apt 

Bmas dhr 

52 week 

MTO Lore 

Gdd MhMt ladm: pq 

amna 

rU 

197101 198785 113018 

UH 

218740 112827 

■ RfepsiTO ladfeaa 






M*»08 

Z73082 

+44 

281063 251948 131068 

498 

3(4080 124289 

AusflatagbTO 

246010 

*42 

2435.73 254410 115887 

147 

301389 115987 

Ham feeerica ( 11 ) 

175487 

+28 

171013 1707.87 107043 

054 

203985 107884 


^ 0 ^sS?S3i* a hSi l 3S vSSf ”**” ^ 

Ortfinary Sham heuriy cheng ee 

Open BJO 10J0 11X0 1200 13J0 14J0 IXQp ULOQ fttf, 

Z38&9 266B5 2558.7 2SE85 25512 284&S 25484 2S58il 2S3U 2570.1 2936.0 
Marl Fefa 26 Feb 25 Feb 24 Fm>23 Yr«oo 


CapyiM The nnaneW Ttowi uTOed 1084, 

Rguns in IniMa 4n« manbar oT c nm penlBi. Bate US Onto a. D— VMuok 10004)0 31/12/OSL 
nadacon Gold Mtma take Mb' : 2104 : daq/h change: «V4 poH« Year ager 89-1 1 Padri 
L a M a r prion warn ixweMCM lor MxeCMon. 


8EA0 bargaira 28,740 33.344 39^J56 

EqTOy turnover gOiff - 1382.1 187 Bj6 

Eqiity barpakat - 38jB1B 42,696 

Shame traded (ni}f 68CL9 S81^ 

T Mn+nartm U nar m MMt o wuuM lunmw. 


175&2 

37^75 

6442 


29^42 31.173 

17106 1009.4 

3a «*» 37.196 

7146 


1 

63 

10 


0 

10 

5 

• l 

84 

GO 

73 


94 

187 

381 

• ’ 

26 

80 

107 


73 

141 

307 

7 r 

16 

17 

13 


101 . 

132 

157 


27 

196 

240 

**, • 9 

64 

38 

31 

•t 


^. 4 * * m + \ .1 . 


» ■- j. i /. i .«& m s .* * -- r 




















































































FINANCIAL TIMES WEDNESDAY MARCH 2 1994 


























































































































































































































































































































































































































































































































34 


CURRENCIES AND MONEY 


FINAN CIAL TIMESWEDNESDA^^fl ARCI^M^^^^^ 

MONEY MARKET FUNDS 


MARKETS REPORT 


POUND . SPOT FORWARD AGAINST THE POUND 


« at M 


Dollar recovers ground 


Foreign exchange markets 
were dominated yesterday by 
the gyrations of the dollar 
which recovered from early 
weakness on the back of some 
strong economic data, unites 
Philip Gaioitfk 

After slipping to a low of 
DMi.8945 in. early European 
trade, the dollar later rose 
sharply to touch a high of 
DM1.7135 before closing in Lon- 
don at DM1.709. 

The catalyst for renewed dol- 
lar strength - a reversal of 
recent negative sentiment - 
was the release of fourth quar- 
ter GDP figures, and the Febru- 
ary purchasing managers’ 
index (NAPM). 

The GDP figure was revised 
to an annualised 7.5 per cent 
from an earlier 5.9 per cent 
estimate, while the price com- 
ponent of the NAPM surged to 
67, its highest since October 
1990. from 59.8 in January. 

These strong growth indica- 
tors renewed speculation that 
the US Federal Reserve may 
again raise interest rates. 

Elsewhere attention was 
focused on developments in the 
UK and German money mar- 
kets. In Germany the repo rate 
came down by three points to 
5.97 per cent, while tight condi- 
tions in the UK discount mar- 
ket saw overnight rates rise to 
20 per cent at one point 

■ The dollar started European 
trading at a new low for the 
year against the D-Mark, after 
comments from Fed governor 
Mr Lawrence Lindsey 
suggested interest rates were 
unlikely to rise in the short 
term. 

This compounded sentiment 
which was already bearish on 
account of the absence of dear 
investor demand for dollars 
and concern about the curren- 
cy's failure to advance recently 
despite a run of favourable 
data and events. There was 
also concern that hedge funds, 
rumoured to be cash-short, 
were selling dollars. 

These selling pressures 
gained further impetus when 
the Bundesbank announced 
that the repo rate was falling 
by only 3 basis points. The 
small increment of the fall was 
seen as lending support to the 
D-Mark. 

The lunchtime release of the 
GDP and NAPM figures 


Dollar 

Against the D-Mark (DM per 8) 

1.78 ’ — ■ - 



21 Jan 1094 
Source Oataatr ea m 


■ Pound bi Nm York 


Mar 1 — Latest — - Pm. don - 

tsoa 1.4859 1.4856 

IMh 1.4834 1.4834 

3 nth 1.4804 1.4803 

1 yr 1.4737 1.4727 

reversed the trend. The detail 
was seen as offering a strong 
indication that the next move 
in Fed rates would be up. 

As Mr Nick Parsons, chief 
economist at CISC, com- 
mented: “The two components 
that were strong in January, 
[commodity prices and employ- 
ment] and preceded a Fed 
tightening, were strong in Feb- 
ruary." 

Many observers played down 
the stronger dollar, saying it 
was more a correction within a 
range than a ehang p in senti- 
ment.” 

Mr Brian Hilliard, senior 
International economist at 
SGST, commented: "This is not 

the making of a lasting dollar 

rally.” He said market reaction 
to the NAPM was overdone as 
the price index did not offer 
any new information. 

Clearly the market remains 
extremely nervous about infla- 
tion pressures in the US. Yes- 
terday it chose to focus on the 
narrowly based price index of 
the NAPM. while ignoring the 
fart that the GDP deflator, the 
broadest available inflation 
indicator, was unrhangpri- 

The dollar was slightly 
firmer against the yen. closing 
at Y104.615 from Y104.150 on 
Monday. The Bank of Japan's 
Tankan report confirmed the 
weak state of the economy, but 
was no worse than expected. 

■ The D-Mark was stronger in 
Europe, with the small cut in 
the repo rate seen as indicating 


that the Bundesbank is likely 
to be cautious in relaxing pol- 
icy. The D-Mark closed in Lon- 
don at L989A against the Ital- 
ian lira, up from L988.2 on 
Monday and was also firmer 
against the French franc, clos- 
ing at FFr3.403 from FFi3J99. 

This cautious approach was 
not well received in the futures 
market. The price of the 
December 3-month Interest 
rate future on Liffe fell by 14 
basis points. 

Traders said the D-Mark also 
gained support from weakness 
in the Italian bond market 
which spread to other Euro- 
pean wiark fftat. Sellers of bonds, 
wanting to put their money in 
cash, were reported to have 
bought D-Marks, as German 
interest rates are quite favour- 
able. 

In Europe the Belgian 
national bank cut its key cen- 
tral rate to &25 per cent from 
6.40 per cent Belgium last cut 
rates on Friday. 

■ Yesterday was an excep- 
tional day in UK money mar- 
kets. After forecasting a short- 
age of £1.7bn, the Bank of 
England provided no assis- 
tance in its early round, »tm! 
only £22m at midday. This saw 
the overnight rate rise to 20 
per cent at 2 o'clock 

Only £338m assistance was 
provided during the afternoon 
round, with the bulk of funds - 

£995m - being offered through 
late assistance. 

The pattern of the day’s 
events suggested that most of 
the bills had been held by the 
large fl oating banks. “The dis- 
tribution of shortage around 
the market did not coincide 
with distribution of bills to 
relieve it," said one observer. 

By not offering bills in the 
early rounds, those who held 
the bills were able to drive up 
the cost of borrowing for those 
with a shortage of funds. 

Sterling finished slightly 
higher a gains t the D-Mark, at 
DM2.5395 from DM2.5366. It 
was barely changed against the 
dollar at SI-486. 


Mar 1 

Ckralng 

nUd-pomt 

Change 
on day 

Bktfbtter 

spread 

Europe 





Austria 

(Sc« 

17.6688 

-am 45 

881 - 088 

Belgium 

(BFf) 

522783 

+00567 

406 - 159 

Danmark 

(DKd 

9.0530 

+0.0212 

487 • 584 

■■ - ■ - - -* 

rffEBna 

(FM) 

w»» a* 

+0018 

283 - 487 

Franc* 

(FFD 

8.6414 

+0.017 

363 - 405 

Germany 

(DM) 

9 mas 

+0.0028 

383 - 407 

Qreeca 

(DO 

368.305 

+0569 

358- 6S2 

Ireland 

w 

1.0421 

+00023 

405 - 435 

Itaty 

W 

2513.57 

+059 

108 - 516 

Lueomboug 

OfiJ 

52-2783 

+00667 

400 - 1fi9 

Nettwrtando 

(H) 

2^523 

+0008 

610 - 536 

Norway 

(NKr) 

11-0284 

+O.Q244 

232 - 335 

Portugal 

tm 

259 307 

+1JB5 

071 - 543 

spam 

(Pta) 

207S68 

+0838 

524 - 813 

Sweden 

(SW 

114237 

+00582 

122 - 351 

Qwttzortand 

(SFri 

2.13S4 

+00129 

339 - 368 

UK 

ra 

- 

- 

- 

Ecu 

— 

1J102 

+00040 

162 - 172 

SOR 

- 

0.941022 

_ 

- 

Amnrtcns 

Argentina 

(Paso} 

1r4848 

-00011 

842- 853 

Brad 

fCr) 

991444 

+14-850 

505 - 182 

Canada 

fc« 

2.01 02 

+00006 

091 - 112 

Merico (New Peso) 

4.72a 

-0.0256 

136 - 315 

USA 

(ffl 

1ABB0 

-00001 

855 - 865 

PtedflcMdifa 

Airetrala 

East/ Africa 

LAS) 2.0783 

-00068 

770 - 798 

Hong Kong 

(HKS) 

11.4838 

+0X014 

792 - 884 

IncKa 

W 

484158 

+00043 

964 - 352 

Japen 

CO 

155.458 

+068 

354 -562 

Malaysia 

(MS) 

40)471 

-00066 

420 - 522 

New Zealand 

(NZS) 

25788 

-00033 

783 - 812 

noppirare 

(Peso) 

41.1623 

-00028 

998 - 247 

Saud Arabia 

(SR) 

5-5728 

-0X002 

708 - 751 

Sbigapara 

(SS) 

2-3518 

+0X02 

501 -531 

S Africa (Com.) 

F> 

5.1334 

-p 

354 - 433 

S Akkra (FfeL) 

P> 

00005 

-00228 

707 • 903 

South Korea 

(Won) 

120047 

-008 

999 - 094 

Taiwan 

(TS) 

39J7B0 

+00198 

509 -071 

Thaisnd 

(BQ 

37.0107 

-0X174 

832 - 382 


OS 17.8895 02 

-12 624383 -12 52.7333 -419 

-12 9X845 -12 1002 -0.7 

-IS 8.688 -1.1 8X83 -os 

-1 A 25483 -OS 25474 -03 


-07 1.0444 

-3.0 2532.17 
-12 52-4383 
-OS P JW CTff 
06 11.0353 

-4S 282227 
-32 209218 
-20 112802 
02 21296 


-02 1.0006 -06 
-OO 288122 -27 
-12 82.7633 -09 
-02 22478 02 

-03 112264 00 

-42 

-32 213.789 -22 
-12 121032 -IS 
1.1 2 1083 12 


- 172 13172 13101 13176 -12 132 -12 13281 -07 


46S320 462964 
156.120 155.170 
4.0826 42420 
25S25 25782 
412160 409898 

23598 23486 
5.1593 5.1335 
72001 62681 
120008 119092 
393400 
37.8030 372832 


2X079 

IX 

2X042 

IX 

1X909 

07 

001 

1X839 

1.7 

1.4808 

IX 

1X73 

OX 

68X 

2X788 

OX 

2.0745 

07 

2.0725 

OX 


11X708 

IX 

11X854 

06 

11X103 

06 

- 

155X03 

2J9 

154X43 

28 

160X73 

2X 

187X 

2X817 

-IX 


-1.1 

2X848 

-06 

- 

- 

- 

- 

- 

- 

- 



ISM ntt tor Fstx2& BdH 
but are kryJM by osient I 
th* Dofer Spot tetftas ttart 


r spreads m Be Pond Spot tatfe 
ism i^s. Srafeg Mac aafctedsc 

I tarn 1VC WMfflGUTERS CLOSB 


show crty ths lore three docks* ptecas. Rsreard isms are not dn 
I by tit Bsrfc ri EndtencL Bree reaps 1089 - lOOffld. Oflsr and 
+Q SPOT RATES, tons vteuea n rounded by Ore P.T. 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


Ctoctog 

mid-point 


Europe 

Austria 

Belgium 

Denmofc 

Rntand 

Franco 

Germany 

Graeco 

inland 

Italy 

luxamboug 


Portugal (Es) 

Spam (Pta) 

Sweden (SKr) 

Switzerland (SR) 
UK <Q 

Ecu 
SOR 

Am eri ca s 

Argentina (Peso) 

Brad! (Cr) 

Canada (CS) 

Moadco (Now Peso) 
USA (S) 


-nnram 425 
400405 670 
+0S147 972 
+00125 301 
+00118 137 
+00021 087 
+04 TOO 
-00031 248 
+425 100 
+00405 670 
+00022 102 
+00189 206 
+095 400 
+084 700 
+00383 190 
+00088 385 
-02001 855 
-00041 285 


■ 475 1224 75 

940 35.1940 : 
892 06982 

■491 62491 

187 521S7 

092 1.7002 

■ 000 240830 i 

278 12350 

■ 200 180220 

940 35.1040 i 
107 13107 

225 72460 

000 174200 
800 130200 
290 810290 

376 1.4375 

865 1.4930 

296 1.1382 


122837 -12 
352856 -22 
07137 -22 
52488 -12 
52311 -32 
1.7136 -3.1 
251.725 -182 
1.4231 22 

18972 -42 
an anus - an 

13227 -22 
7.43 -1.4 
175265 -63 
140345 -&1 
0048 -32 
1.4379 -02 
1.4839 1.7 

1.1264 22 


-12 12.1386 -03 
-2.7 35.8805 -13 
-22 62094 -1.7 
-12 52B41 -0.7 

-22 53029 -IS 

-22 1.7290 -12 

-172 28736 -1&1 
22 1.4006 13 

-*4 1754 -3.7 

-2.7 3S3505 -1.9 
-1.7 13366 -06 

-14 7.4765 -07 
-0.0 183.7 -62 

-62 14828 -33 

-3.4 82166 -2.4 

-05 1.4335 02 

1.4 1.473 03 

22 1.1108 1.6 


-00007 891 ■ 992 03992 03091 - - - 

+1004 280 - 280 847280 647250 - - - 

+00005 52S - 530 12544 12482 12531 -02 12537 -02 12668 -02 

-0017 730 - 830 3.1830 3.165Q 3.1798 -OS 3.1824 -OS 3.103 -OS 


MO I E S 

Hqq 153.749 - 153327 183500 - 103J5S0 
km 250030 - 200430 174830 - 175000 

Koran 04412 ■ 04422 02970 - 02975 

Pobnd 325705 - 325004 219313 - 219313 

RBStfa 232025 - 232125 158050 - 158730 

UAL 04481 - 04593 32715 • 32735 


Austntfa (AS) 

Hong Kong (HK$) 
md la (Ra) . 

Japan (Y) 

Mrisyda (MS) 
Mew Zealand (NZS) 
Phlppfnes Peso) ! 
SautS Arabia (SR) 
smgiprae <SS) 

S AUnca fCorru) (R) 

S Africa (Rn.) (R) 

South Korea (Won) I 
Tehran (IS) 1 

ThaflamJ (BQ i 

T30R rare Inr Fe(x2B. BkVa 
but are knptsd by curenr I 


982 - 990 1.4000 12047 12988 -03 

275 - 285 7.7200 7.72S3 7.7287 -0.1 

875-725 312725 512(710 31-435 -23 
580 - 850 105.100 104290 104S1 12 

210 - 200 2.7260 2.7225 2.7175 22 

343 - 364 1.7370 1.7340 1.737 -1.1 

000 - 000 272500 272600 
S00 - 505 3.7505 3.7500 S.7E27 -03 

820-830 12830 12800 1S82S 02 

570 - 800 34746 34480 3.4720 -52 

925 - 026 4.7100 4S800 4.7285 -7.9 

BOO - 900 809200 807200 81026 -42 
000 - 100 262100 28.4800 28S025 -42 
000 - 200 252200 252000 2528 -32 

■a Spat trite mow arty tra test ttsos dsdnri ptoses, 
md B ECU as quoted ki US curency. XP. Morgan I 


14025 -1.1 141 -02 

7.7327 -02 7.7516 -02 

3127 -2.8 

104235 IS 10229 12 

2.701 32 2.7736 -12 

1.7415 -14 1.7557 -12 


17571 -0.7 3.7758 -0-7 
1X825 02 1208 -IS 

32018 -62 3209 -4.1 

4.7925 -8.1 - 

81425 -32 83225 -3-1 
26.75 -32 - 

2522 -32 2S26 -14 

j i— d rates ao set ib s ul/ ranted id As mortar 
less mown tor FsbJO. Boss aarags 1990-100 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 


ERRS EUROPEAN CURRENCY UNIT RATES 


Mer.1 


BFr 

DKr 

FFr 

DM 

E 

L 

R 

NKr 

Ea 

Pta 

SKr 

Sfr 

£ 

CS 

5 

V 

Ecu 

Belgium 

iBFrJ 

100 

19X4 

18X3 

4,857 

1.993 

4607 

5.455 

21.10 

488X 

397X 

22X0 

4X84 

1X13 

3X45 

2642 

297X 

2X17 

Denmark 

(DKQ 

52X2 

10 

8.881 

2X51 

1X47 

2525 

2X85 

11X8 

260X 

208.7 

11X8 

2145 

1.005 

2019 

1.483 

156.1 

1X22 

FTanca 

(FFr) 

60X0 

11X2 

10 

2X36 

1X06 

2906 

3X01 

1276 

3001 

2404 

1179 

2471 

1.157 

2X26 

1.720 

179X 

1X23 

Germany 

(DM1 

2059 

3X20 

3.403 

1 

0410 

98BX 

1.123 

4X44 

1021 

81X0 

4X95 

0841 

0X94 

0792 

0X85 

81X1 

0X18 

Ireland 

TO 

5017 

9.553 

8X93 

ZX37 

1 

2412 

2737 

10X8 

248.8 

199X 

11.44 

2049 

0X60 

1X29 

1426 

149.1 

1X63 

Italy 

W 

2.080 

0396 

0344 

0101 

0041 

100. 

0113 

0439 

10X2 

8X85 

0474 

0085 

0X40 

0080 

0059 

6.184 

0XS2 

Nothnitanrb 

im 

10X3 

3.490 

3X30 

0690 

0366 

881.1 

1 

3X67 

9092 

7283 

4.180 

0749 

0X51 

0705 

0X21 

54.49 

0481 

Norway 

(NKr) 

47.40 

9X24 

7X34 

2302 

0945 

2278 

2X86 

10 

235.1 

188X 

1081 

1X36 

0907 

1.622 

1X47 

1409 

1.193 

Portugal 

(&) 

2016 

3X39 

3.332 

0979 

0402 

969.1 

1.100 

4X54 

100- 

80.10 

4X97 

0823 

0X86 

0.775 

0X73 

5BX3 

0L50B 

Spain 

(PUQ 

25.17 

4.792 

4.160 

1X22 

0X02 

1210 

1.373 

6X11 

124X 

100. 

6.739 

1.028 

0481 

0968 

0715 

74X2 

0634 

Sweden 

(SKr) 

43X6 

8X51 

7X49 

2130 

0X74 

2108 

2X93 

9XS3 

217X 

174X 

10 

1.791 

urea 

1.686 

1X47 

1304 

1.104 

Switzerland 

(SFd 

24.40 

4.602 

4.047 

1.T88 

0468 

1177 

1X36 

5.168 

121X 

97X8 

6X63 

1 

0468 

0941 

0696 

7279 

OB16 

UK 

(Q 

6228 

9954 

8.6*1 

2539 

1X42 

2513 

2.8S2 

11.03 

259X 

207.7 

11.92 

2135 

1 

2010 

1408 

155-4 

1X18 

Canada 

(PS) 

26X1 

4.9S2 

4.299 

1X63 

0518 

1250 

1.419 

5488 

129X 

103X 

5X30 

1X62 

0408 

1 

0739 

77X1 

0X65 

US 

(S) 

35.18 

6X69 

5.816 

1.709 

0701 

1691 

1.919 

7.423 

174X 

139.6 

n.n» 

1437 

0X73 

1X53 

.1 

10*8 

0X80 

Japan 

(71 

3304 

64.05 

55X0 

16X4 

0705 

16171 

18X5 

7098 

1669 

1337 

7071 

1X74 

8435 

12X3 

9X62 

1000. 

8.468 

Ecu 


39.73 

7.564 

6X86 

1X29 

0782 

1910 

2167 

6X81 

197X 

157X 

9X56 

1.622 

O7B0 

1X27 

1.129 

118.1 

1 


Marl 

Ecu oen. 

Raie 

Change 

K+Atgm 


rates 

agrinstEcu 

an day 

can. rate 

Ireland 

0X08628 

0793966 

+0X03125 

-1X1 


219672 

216044 

-000473 

-1X4 

Baighan 

40X123 

39.7783 

-00644 

-1X8 

Germany 

1X4884 

1X3185 

-000464 

-091 

Ranee 

6X3883 

6X7763 

-000383 

0X9 

Denmark 

7.43879 

7X8227 

-000182 

1X6 

Portugal 

192854 

197X23 

+0734 

242 

Spam 

154X50 

168X14 

+0638 

257 

NON EHM MEMBERS 




Greece 

26*513 

280079 

-0466 

5X8 

■triy 

1793.19 

1918X8 

+12X1 

6X6 

UK 

0786749 

0782898 

+0X03334 

-3X3 


446 12 

326 

329 8 

321 

128 -6 

020 -13 

0.15 -IB 

020 -18 


Era central isms sa by lbs ninpren CjrnmMon Cunsredss as ki dsscsndhg r 
Psrcsrsags changes os tor EocspoUtes change fe n otessweriasrencr- DM 


'<*1 par 1.000: Dafei Kronor. Frond, FM, rtowaglan Kir 
■ D-MARK nJTWtSS (IMM) DM 125200 per DM 


I Ife sd M i Krona par ■ 


I (IMM) Yen 122 per Yen 100 



Open 

Latest 

Change 

Mgh 

Low 

Eat. wri 

Open InL 


Open 

Latest 

Changa 

High 

Low 

EsL rat 

Open InL 

Mar 

05852 

0.5871 

+00007 

0.5888 

05853 

49X02 

119.795 

Mar 

09570 

0X571 

+0.0006 

0X509 

CL 9625 

22X68 

88.703 

Jun 

0 50*0 

0.56*3 

+0X009 

05658 

05834 

3X11 

13.740 

Jun 

09020 

09607 

’+00007 

0X024 

0X570 

1X39 

9X89 

Sep 

- 

0.5825 

• 

05834 

- 

38 

858 

Sap 

09650 

0.9650 

+0X002 

09650 

09650 

18 

932 


tor s euisney. end Sis (ratssi psnnftad porosrdsgs dirtebn d Sis orisNyl fi r+ e f rats ftsn IB 
Eoiaadim 

(17/B«0 Storing ari KriMi Lfes aapsndsd Asm ERM. eriaRM Iqr Sis Rnsodd Timas. 

■ PWLADBJHIA 8R t/S OWflO— E31.2S0 |cenli per pounfl 


■ SWISS FRANC niTUMS (IMM) SFr 125,000 per SFr 


I FUTURES (IMM) £82200 per t 


Mar 

0.7011 

0.6985 

-0.0027 

0.7011 

06976 

16X84 

44X74 

Mar 

1.4848 

1.4898 

+00042 

1.4916 

1.4630 

14X99 

37X67 

Jun 

0.7000 

06960 

-0.0029 

07007 

06976 

2231 

6.651 

•Jun 

1.4000 

1.4848 

-0.0040 

14870 

1.4800 

7X06 

6X31 

Sop 

0.7005 

06980 

-0.0009 

0.7005 

0.6960 

23 

71 

Sap 

- 

14600 

- 

1.4830 

- 

7 

440 









Dae 

- 

1.4780 

- 

1.4780 

- 

1 

12 


Strike 

Price 

Mar 

~ CALLS - 
Apr 

May 

Mar 

— PUTS — 
Apr 

May 

1400 

8.70 

083 

007 

0X2 

008 

027 

1425 

6X6 

6X8 

058 

003 

026 

0X1 

1450 

3X4 

4X2 

4X9 

006 

088 

1X0 

1478 

1.78 

2X2 

3.11 

040 

1.46 

2.10 

1X00 

045 

145 

1X7 

1X8 

2XB 

arm 

1X28 

0X5 

070 

1.15 

3X0 

*42 

5X1 




MONEY RATES 

Merch 1 Own One Three Six One Lon*. Ota Repo 

reghi month mths mtfw year Inter. rale rate 

Belgium - 6J 6J fla BN 7.40 5.00 

vwek Oi*> di 6ii 8H 7.40 525 

Franco CH 6*h 0”. 8’e 5 1 * 310 - 7.75 

•weV 6*o d’a 6C, 6i 5M 020 - 7.75 

Germany 6 13 6 05 5.85 5 65 5.42 6.75 525 6.00 

week ago 0.40 505 5.85 5.85 527 8.75 525 6.00 

Ireland 6,1 6u 6i 6d - - 6.75 

wb* ago 5S 6J 5*s 5(1 53 - - 8.75 

Italy 8v 8« 0H 8} - a 00 8.S2 

w«oh ago 8i 8- 04 84 84 - 800 822 

Motherlands 5.6? 5.40 5.30 520 S.08 - 525 

wot* ago 5 61 5.49 527 5.15 5.00 - 525 

Switzerland 4', 4>< 4's 44 4 8225 4 00 

wm* ago 4'-. 4'. +v, 4^ 3". 6.825 4.00 

US 3 J » 3'v 3*i 411 - 300 

»w+. ago i; y : 35 3*» J'.t - 3X» 


■ THRS8 WORTH I 


: nnwn ouffet OMim porno or 100% 



Open 

Sea price 

Change 

W0h 

Low 

EaL ml 

Oprei InL 

Mar 

9*21 

9*15 

+078 

94X1 

94.14 

33718 

175329 

Jun 

9*62 

94. S3 

+1X6 

6*64 

9*52 

67153 

227476 

Sep 

9406 

9*73 

-013 

9*86 

94.72 

44730 

109779 

Dec 

94X4 

9*83 

•0.11 

94.94 

94.80 

28393 

143859 


1 KTJUTC FUIUm (UFFE) LI 000m points of 100% 


a 00 

«<wh ago 85 84 84 84 84 - 800 

ffetheriands 5.6? 5.40 5.30 520 S.08 - 525 

wot* ago 5 61 5.49 527 5.15 5.00 - 525 

Switzerland 4', 4', 4% 44 4 8225 4 00 

wm* ago *'. 4'. +v, 44 3". 6.825 4.00 

US 3 J » 3'v 3*1 4(1 - 300 

M«<4, ago 35 V: 35 3* J'.t - 3 X>0 

Japan ?J 2'. 3'- 3's 2'« - 1.75 

ww* age 7Q ZN 3 1 , 34 34 - 1.7S 

■ S LIBOR FT London 

Ineartienk Fixing - 34 3g 3Q 4& 

«eeK ago 3 J 3 H 3 r + 44 - - 

US DoBar CDs - 3.45 357 3.85 421 - - 

weeh ago - 3.45 3.44 387 4.03 

SOR Lintied Da - 31. 3*s 3T+ 4 

wet* ego 3Ti 3?4 3H 3* 

ECU United Ds mid rates.- imrrffi.J rotta. flV 9 rmrw 0W: 1 v*or S3, t UBOR Wore 
rj-es an artorod ks Siam quored *o Ow mots bv lour istoranos bato or llanr sod 
dm TM lunki no. D«+m Trust. Bank at Tbfcyrv Badayr and Nabansl Wssankntsr. 

‘•■n nsa nro tnown tor mo aommsc Money Rams, us S CDi and SOR Unfed □epoaua I 

EURO CURRENCY INTEREST RATES 



Open 

Sri! pries 

Change 

Hgh 

Lew 

EgL vc 1 

Open Int 

Mar 

9150 

91.*9 

-017 

91X0 

91.44 

4989 

35566 

Jim 

9TX8 

91.75 

-0X0 

91X9 

91.66 

16739 

58691 

Sep 

92.10 

91X7 

-019 

92.10 

91X2 

2167 

23303 

Dec 

92.18 

92.09 

-017 

92.18 

92X2 

9672 

23909 


I (LIFFE) SFrim points Ol 100% 


“ 


Open 

Sett price 

Change 

Wgn 

Low 

ESL vtH 

Open InL 


Mar 

95.33 

95.9* 

•0.01 

95J94 

95X0 

3912 

25878 


Jim 

96.12 

96.09 

-002 

96.12 

96X7 

3102 

30700 


Sep 

96X0 

96.16 

-OX* 

9620 

96.15 

1126 

7404 

_ 

Dec 

96.16 

96.15 

-005 

96.16 

9012 

70 

3708 


I (LJFFg Eculm | 


Prsutous dteTs (OL Crib 829 PUs 14/tqT . Prm. chytepm bn.. COb 992^79 Itots S15.141 


INTEREST 


LONDON MOIKY RATES 

Marl Over- 7 days Oie Uwee Six One 

nlgM notice month months rrxmtfrs year 

Interim* Siartng 10-41, 5^-5 5d-5i - 5i 5d-5i SA • sd 

Staring CDs - 5A-5A 6i-Bi 64 - 6A 6»*-6i 5i-5la 

Tlaaaify Bfis 4fl-4% 4U-4^ 

Bank BHs - 49 - 4^ 4ti - 4% 4ti - A\ 

Local teittioriy daps. 5& - 5, T « 5* - 5d «» • flg 5^ - 6>a 6««-51 b 6&-6A 

Oteoount maKat daps. 13 - 4% 5A - 43 

UK clearing bank base toxfrig rata 6^t per cent irom Fetzuaiy 8, 1994 

Up to 1 1-3 3-6 8-9 9-12 

maitfi month menthe months 

Orts of Tax dep. (E10020Q lb 4 3% 34, ah 

Cons ol Tm asp. ranter C1QCL000 k 1*ipa Dsparite rrifirtawn tor esshtrpe. 

Aw terdsr rata at dtaeounl 4.7129po. ECOO Safe reisSdg. &pcwt Rranos. HaHa icidsy Fslnayaa. 
199*. Arsoad rats tor pntod Mar 28 1BMle4pr29. 1BB*. SSim, ft ■ OAOpc. Ifentfe t» 
pwtodFobi. 198* tsFsbaK 199*. 8etismss IV 8 V S29Spe. RnanM ttouss Base Rds 5>mc tem 
Mar 1, 199* 

■ Ttaani BKR4TH STPUJm FUTUTWB JJFFg E500XUQ potota of 100% 



Open 

Sett price 

Change 

Hgh 

Low 

Esl voi 

Open Ira. 

Ha 

93.75 

33.87 

•007 

93.78 

93X7 

598 

11982 

Jun 

94.15 

9*05 

-009 

9*15 

9*04 

1443 

11078 

Sep 

9*3S 

9*28 

-007 

9*35 

9*27 

227 

9640 

Dec 

9*46 

94X8 

-008 

94v46 

9*41 

566 

6577 


Open 

Sett price 

Change 

Htfi 

Low 

Esl VO l 

Open M. 

94X2 

9*81 

+2X6 

9*64 

94X1 

6247 

66147 

94X2 

9*87 

+2X4 

94X3 

9*86 

16985 

111861 

9*78 

94.74 

-005 

9*81 

8*73 

15466 

64384 

94.63 

9*67 

-007 

9*66 

94X3 

12868 

100890 


- UFFE tuera traded c 


■ THROB HOWTH RUmiPOLLAH (IMM) 61m points Ol 100% 


Traded on ART. Al Open Hstssl flgs. we tor p re rtous day. 

■ SHORT STURUMO ownows (LiFFS) £500200 points of 100% 


Belgian Franc 

Dmnh Kroon 
D-r-jrv 
Dutch G udder 
Fratcn frav 

itotiujueco Esc. 
Soarasn Poseti 
Slrting 
Smss Franc 
Can Doftjr 
US 

lUKirt 

Von 

Aj-an SSsig 
SiW+ rar#K .u 


Short 

term 

7 days 
rwOce 

Ono 

monte 

6*T 

6^ 

6ii 

«A 

6.1 - 

8,1 

6>« 

5'* 

61; 

- 6 

6>i 

- 6 

6ft 

•ts 

0|l 

6i'. 

8‘s 

- 0 


a*; 

5 is 

S,'s 

5*2 * 

5^ 

<i|'l 

6.1 

5*3 

6*4 

th- 

6^1 

10 

9J+ 

10 

9-’« 

io - 

91 

83 


8* 

0(4 

814 - 

0*t 

S>: 

s% 

5*+ 

sh 

SA - 

5,1 

4»j 

J*j 

4*2 

4*> 

4%. 

41 

3,’. 

3,« 

Hi 

V. 

3»i- 

3.1 

3ii 

J.\ 

•hi 

3,1 

3A - 

3,1 

9 ■ 

7l- 

8's 

r»+ 

8 >| . 

7^3 


111 

I"j 

Cm 

M- 


J 1 : 

■ r 1 ; 

3'2 

2*2 

3»2 - 

2>T 


Three Six 

months months 

6* - 61« ea - 6A 

SA - 0i‘« 6A - 5(2 
513 - S!1 54, - 5SB 
- 5.1 - Si 1 . 

6^-020 6»g - 6 

91.-0^ 9\ - 9>2 

8’s - 8ii 8»1 - 8A 
5A - 5i« 5A - 5*a 
Ji* - 4la - 313 
all -3li 4A-4 A 
3ii - 3.*. 3 J - 312 

6h - 77a Sh ■ 7^ 
2h - 2A 2*1 - 2.1 
4.3 4-3 

i ivre Atyt 1 "** 



Open 

Latest 

Change 

High 

Low 

Esl vcl 

Open tot 

Mar 

9622 

9624 

+002 

9625 

9622 

53.171 

316.749 

Jun 

95X4 

95X5 

+0.01 

95.87 

D5X3 

107.110 

434282 

Sep 

95X3 

95X4 

- 

95.56 

95.51 

7B.646 

362.773 

■ US TWUUUKT B*L FUTUOS (IMM) $1m per 10094 



Mar 

96X1 

86.60 

. 

96X1 

96X0 

2X64 

8X12 

Jun 

9626 

9626 

■ 

9626 

9624 

2,045 

25,157 

Sep 

- 

95X7 

- 

- 

95.96 

1X14 

5212 


Mar 

- CALLS - 
Jun 

Sop 

Mar 

— PUTS — 
Jun 

Sep 

009 

070 

022 

0X3 

006 

023 

0X1 

008 

012 

020 

021 


0 

QlQ2 

0X5 

044 

040 

0X6 


esl ud. m care mae pub am. Prswou. nays span hu am inzos Pua iao3B7 


AS Odmi Heron Bgo. M tor proMoa day 
■ NBOjMK OPTIOHS (UFFE) DMIlW potiB Of 100% 


BASE LENDING RATES 


Strife 

Price 

star 

- CALLS - 
Jun 

Sep 

Mar 

— puts 
J im 

9400 

017 

054 

077 

0X2 

0.01 

9426 

0X3 

0X2 

0.55 

0.13 

0.04 

9450 

0 

016 

037 

0X6 

013 


I —OMTH PMWB FUTUHB3 IMATtF) Pans briertMnfc otfcred rate 


&t ret Uri. Cote TO90 Rite 1092a IWo dV« op*" «. Cafe 28S246 Rite 130+86 
■ BUBO SWISS FRAHC OPTIOHB (UFFE) SFr 1m pcWg of 100% 


Open 

Set! price 

Change 

High 

Lew 

Esl vai 

Open M. 

SMes 


- CALLS - 



— PUTS - 


Mar 93 69 

93.86 

•0.03 

83.92 

9383 

29.110 

67.439 

Price 

Mar 

Jim 

Sop 

Mar 

Jim 

Sep 

Jun 34.33 

9*26 

-007 

94.37 

9*22 

32X20 

73.103 

9575 

020 

037 

0r48 

0X1 

003 

007 

Sep 9455 

94.48 

-0.07 

9*X8 

94.44 

22.009 

42X89 

9600 

0.04 

0.17 

030 

0.10 

0X8 

014 

Dec 94.06 

94.60 

■0X7 

94.69 

94.55 

19,362 

28.420 

9626 

001 

006 

016 

032 

022 

025 

■ THRU MONTH EURODOLLAR (UFFE)* 0|m ports ol 100% 



Eel vcl. total 

cofisa Res o 

Ambus oar's «p« mt. Cafe z2ib ria xa 


Opwl 

Sett price 

Change 

High 

Low 

EsL ni 

Open ktf. 








Mar 9625 

9619 

-005 

9625 

96.19 

774 

5665 








Jun 95.87 

95.77 

-0X8 

95.87 

95.81 

421 

4335 








Sep 95.55 

95.44 

-0.10 

96X8 

95X4 

91 

2230 








Dev 96.17 

35.0* 

-an 

95.17 

95.15 

S3 

1«76 









Adam 6 Corrpany — 525 

ABedTlustBa* 525 

AS Bart. 526 

•Hervy Anetachar 5ZS 

BteVrof Barada 62S 

Banco BfcaoVtaya- 625 

BankofCypna 525 

Batik of Want 525 
Barit ol tide 625 

aenkafBcofend _323 

BadayaBsik 52S 

&*BkofMdEaa — 025 

■BraanSMriay 525 

CLBankNadtetand.- 525 

C«»*NA -525 

□ydaadriaBartr 52 

Tha Cocper^va Bank. 526 

Coutt&Co 52S 

OndlLyomaii 525 

Cyprus AaprivBwfc -525 


Dunam Lands 525 

Enter Bank LMsd _ 625 
Hnandal A Gen B*k _ 6 
•Robert Barring & Co _ 525 

Orcbank 625 

•Gufenoas Mahon 625 

Hri*BankAG3afch.52a 

•tiantmsBank „.„523 

HeriBUo 8 Gen irw Sl 52S 

MSanuaL — 625 

CHoob&Cd S25 

Honj^png & Shanghat 525 

Aden Hedge Bank 5Z 

•UOprid JD9R#1 &Sn 525 

UOydaBa* 525 

MerfMBrtUd 525 

MriandBarii S2 

»MorrtBte**q 6 

HdWarimkiata 525 

•to Brctfieis 525 


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CapcMbn LMad Is no 
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aberimgknlMoa 8 
RoyriBkriScofend- 525 

•SmOi 6 VMfenm Sees . 525 
3teniferd Chartered _526 

T3B... 525 

•UlltadBkOfNaHt— 525 
un>y Tnai Bmk Pic - 62S 

Wmfeni lhar 525 

WWanwny LaMar ..-B25 
YaM te Barit -525 

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INDEXIA Chart Books 

FT-SE 100 A Traded Options Securities 

updated at Friday date, on fawr desk Meafer nsrebg 
Rrar Cfert. RSI r rfrr^ll. , DRV, 0++*^ i»M~ 

INDEXIA Research. 121 High Si. BafcboautBd. HF42DJ 
Tel f0442) 8780 IS Fax (04421876834 


^rrV V 

index! 






TVttete Lfem In apred brume - Frennmre and Spans. For , 
brorewesnd an oecauin appnoafoa ram uB 071 281 J*6T 
Acrauaa in noroafe opened •Aten 72 baun 
5cnour^*r^dMeprke»0nn letpnin Tctattn papnam 


Ask an Expert; 

We c&t In bet, wB&dBdtfeHraaads of experts Bhatthqy thought about 
our ferns* Whore did we find aD this eaportfce? Wo askod our enstoawn, 
becaose reheo it eoraes to nafautmg; bnWage service, nobody knowa 
aujreUfflnthgy del 

• TaintopressedMUitlienaelyofhaJpAiIsmfouUnd-WaUoekhasto 

offa to sraaO-Bcaktradcn, bong far and shore superior to otter broken)* 
fans I tore eaperiencad.’ 

• *i have beec wifi Und-WaUock fir three years now, and I am extremely 
happy with yonr rwerafl aenfee, especially jour tow connnissioflo and 
acelkotOb.’ 

• Tow servim a w^prafesnorad and cfltaent... The bdpglVHi in opening 
an jeamm and toot exneflent book monte placement, whfch guides yon 

thrnngh and gives confidence, is the best information a novice couki hare.' 

• 1 writ io ihe hanking mdnstiy. and Lind-Waldock provide* the serrice I 
expect — quick execottos of my orders.' 

• “I hare always famd the staff at lind-Wakioek v%ry hdpfol and ptaiaaiit 
to deal with. It b a cmfit to Ora company that ihey an BUe 10 ph* 
people who ham snob gomiiie rapport.' 

Wo Uwogitt yoa ndght appreciate a messagi that cosies directly from the 
smuce— fadepefldecl lUiuea tndeo, Ifite jranaett In 80% of onr 

cintonim who haw traded befiire rate our service aa hetl* or mach better 
than other breten’. And8&eXaiismRd*]na*w!iB]aakedifUuyTOdd 
leonnnnd Uod-BWdock to othen. 

AS the hdp jot need to trade fatnres on jour own — pins 50-70)1 cwtumaaian 

swings. Isn't ttttm you tooka ctoewkxA at Uad-Watdock? 


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FINANCIAL TIMES WEDNKSri AY MARCH 2 1994 


WORLD STOCK MARKETS 


EUROPE 

afiigAOferl/SGfy 


vamo an 

vum 7M 
VMM- 557 

MMg ssns 


+2029001930 ZA 
-WJ B59 OX 

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«* 211 IX 
701 380 24 
^ 600 440 i* 
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4.303 +3 0502405 44 

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KMMF 7.400 +100 796O3&30 JJ ~ 

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nrt« 17450 — 17450 12X60 0.1 „ 

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an ftwm iM 34 — 

5450 +140B48oSmO 34 Z 

Z7W +££ 0001.000 44 Z 

4027801.800 44 _ 

50164000400 44 _ 

™ 1.540 _ 1X001900 0.7 _ 

Stow 14,775 -751540010775 04 _ 

TfOW 11.175 —751 1400 7.750 34 „ 

24J7S +7KS40O3U23 24 _ 

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na n n UHan/KQ 

5S**A 716 -10 780 388 2.1 

B9kt*n 231 _ 281 107 24 _ 

CBrtA 31 4. <0 -340 333 Z38 14 _ 

CDJm 8400 -60 74003400 0.7 _ 

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MU 391 -4 427 236 3.1 __ 

EMM 170 +4 108 SO 6.1 _ 

FLSB 54S -fl 015 375 22 _ 

BMW 016 -10 060 25650 24 _ 

BSB 240 -1 270 102 _ _ 

WM M« -4 425 217 24 

UHJ* 1.K70 +50 14501.050 0l3 _ 

KIM 328 -4 353 1 05 3.1 _ 

m'SMB 700 —878341 524 OB _ 

RKtoB 0S0 -7 737XH20 04 „ 

WM 684 -1 616 400 04 _ 

3W** 8 382 -2 011 38E 04 _ 

&»A 488 -7 685 820 14 _ 

Heaton BOO -30 1472 045 14 _ 

IMM 268 +8 267 110 34 _ 


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7340-14077405050 — 
11070 -4M15.1QK4Q 34 
100 — 20140132a 24 

150.70 -50105.70 «0 14 

21JC -40 26&10 15 

10340 —100507140 44 

64. W *AD 5840 S? 5 !A 
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8740 — 206 178 34 

B04Q -.106*70 2080 74 
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8240 -340 94.705*40 34 
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48.70 +40 6423.10 2.1 

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08.70 -4018050 80 44 
SO*l« —4071 6.40 HUt 44 

-40 452U0 14 

-2 33B1HJB 2.7 

18140 —240260508740 25 

49.70 *M 53403140 34 
119 -.1013150 81 1.1 


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sss as 

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SMfl BOB 
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-9 775 *04 _ 
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-1 1325110 — 

-4 247 116 0.9 
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2S8 108 

_ 2009250 14 
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— 110 46 14 

+1 102 33 1.1 

— * 120 *3 o.e 

+2 289 130 14 
— . 3640 15 _ 

-40 21 *-20 _ 


ISMCE (Marl /Fra.) 




612 -IB 736 488 _ 

709 -1* 788 680 *4 

815 -27 BOB 502 24 

7H9 -i+ 013 ran 24 

1,472 -541448 897 24 

1435 _ 1487 926 1.1 

908 -351410 823 2* 

2B4 —620 289 280 _ 

636 -9 883 302 24 

34*0 -60 3J502490 ZJ 

719 -8 707 535 24 

1422 -181480 351 34 

004 -32 1490 BU ifl 

20B40 -2 237 138 54 

19940 -1402304017*30 _ 
4425 -105 *4802250 14 
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1406 -41 1438 060 a« 

373 -6 481 306 ZA 

270.40 -640 3063KB 24 
1JB5 -64 1485 030 «JI 
753 -6 866 458 ZB 

445.1 Q— 1270 501 320 — 


IBS 1.7 
_ 520 22 
-3 2*5 IBS 29 
— 1480 786 04 
+2 EBB 502 1 6 
-6 *52 25* 21 
121402 BSD 14 
-280 320229.10 34 
•14 14M 780 1 4 
+1 243 1*0 24 
—32*40 227 34 
250 21 
570 .. 
-6 630 47B 22 

row! 471 XO -UO 500 389 28 

134.70 +6013450 5 — 

1T3840 3S 3S 
£BS 14 
355 14 
BUD 14 
S 51B 304 22 

IBn 17250 -1S0192S0 97 — 

LlXIPI 18440 -SO 181 61 14 

-2 *28 201 24 

SO 348 218 25 

22S 14 
581 _ 

____ 3BHQ1 14 

HUB 19*40 +4.70 *3617541 4.1 
MuO**J 3470 —4.1002486 04 

PWA 228 — 2S7 146 _ 

FtlKtnm 524+164057140 495 27 

BOO +18 BOO 425 06 

474 +140483B033D.U 21 
443 -0 635 384 27 

351 -4 43* 303 3.4 

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RmnQI 32260 +240 355 230 28 
ntanPf 23360 +140 7S2 170 4.1 
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14*1 -111.1BS1BSB 14 

-5 417 287 23 

588 14 
485 1 4 
396 14 
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VMM 474 -J 532 369 24 

VIEW 350 +2 37021360 21 

_ «*Wtt 400 -60*1050 300 14 

„ Vtap 48740 +080 613 314 14 

_ VW *3460 -540 458 2X1 06 

VWH 356 -3 379 210 OS 

— 898 600 14 


OMR 4.160 

^ us 

ElKMlf 7650 
F tan 695 

OrftutF 611 
mean 4,795 

(Hit 

Kotpa _. — 

■Actfra 6480 
HIM 6400 
IWV 11.0*0 
■*— 4630 

174 
634 

u 729 

TMMCA *430 
TOM 14B0al 
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ItAll 1440 
(JraU 1.235 
VBn 2.765 
Hacfei 3435 


-90 04602660 20 
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-80 4.1002405 7.4 
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uv.n. 1X0 
Rnanfid 6X6 
Romm 675 
Sarto* 104 
todMto 679 
SpnGow 9X0 

3t*0 
2.10 
TatCpH 121 
Uttar 9S0 


INDICES 


US INDICES 


MV Ftt F«> 

1 28 25 


F* Ml 

28 SS 


Ftt FA 

28 25 


-.10 B 3X8 
-X* 11.12 7X5 
+.13 BSD 3SB 

-J 0 1£62 aso 

+13 £95 1X4 
-.14 £72 £95 

— «S0 £60 
_ £53 1SS 

-.tB 10X01X55 
+X7 3X8 £42 
+X4 4X2 £00 
+.04 1X8 0X8 
+X8 17JM11X0 
„ OSO (L44 

+X2 1.18 0X7 
5X3 3X5 
+J» 5.46 £82 
-X6 10X212X8 
- 05 3.15 2X2 
+X2 £36 1S8 
-X2 12X0 5.70 
+ 6.70 4.42 
-X* £75 3 

-JJ7 10X0 6S5 
J» 1.45 675 
+X2 0.72 0X3 
+X3 6X2 3X2 
+JM 1X1 1.10 
_ 1.40 0“ 

- 345 1 
+.12 298 £00 
-XI ISO 1.11 
+X2 £05 2XB 
-X2 3X0 £03 
+X1 1.78 083 
+4» 1.79 1.40 

— 2S5 £05 
+.10 2X2 0S8 
+XS 2SG 070 
+26 I ISO £70 
+.40 £BD 1S2 
+31 1O2013JB 

__ 340 2.45 
+.13 £19 1X1 
— XS 1004 016 
+X1 4X1 1X5 
+X2 1£1« 7X5 
+72 7X0 SSO 
-X6 12 BJ5 

+.12 6X8 2X3 
+4B 279 1.18 
_ 4.16 £06 
+X6 5X2 125 

— £16 085 
+.12 £43 0X5 
+.16 322 £10 
-X6 390 125 
+.13 926 £05 
+.10 £10 1.47 
-S3 0« £75 
-X2 1X1 1X6 

+ 626 £65 
+X5 7.70 £15 
+X9 492 £60 
+X9 7.10 5.06 
+X5 97* *.15 
+X5 3X0 £0* 
_ £70 2XB 
— X6 2X2 0X8 

— 121 1.83 
+.10 076 £50 


Sdcb canpOaltai 

■p Uar 


130020 AOBD 

TBS 

1*0*15 abubE 


ml 

K k>* i I 


19% +V 52019% 
17 V -VS17V1TV 
31 -<t3i% 30% 

satssasj 

48% -V 54848V 
33b -%*39V30b 
13b 1413b 

14% +%5T4% 14 
Bb tBb Ob 


$00183 BMAMS 
302235 embdrfi 
43565 BOMVBI 
1881210 Bmdtt 
22909 BncnA 
10300 Kncor 
71615 CAE 
&3Z2E0 CmsMB 
■ TOKYO -80 


20 % -% 

ISt-ttS 

17 % -vro. 17 % 

25% «5b 25 

8% +V88V 5 

79 -2 81 75 

' ACTIVE STOCKS: 


■*S ton Ad I 

pK> Ltamol 

■GOO LM& 
“72966 Laban I 
r**7M» ukmm 
■« n LOmtt 


“BOO liMiul 
178808 MbCMZ 
■ 7706 MWKHi 
(3375 UDSBI 


uuuo i—LOcn 

033161 

20361* IfecmH* 
■ 14405 llagulB 
b*565 MdEmI 
■0120 MarIH 




21 8750 IBM 
21707 MobtnAx 
03860 IMMUX 
107 MM* 
452+01 HxStC 
remo 
4400 Noma 


™0300 Honmtl 
137213 MmTrtl 
2643*0 Hoi 
117725 MDMCol 
■ *200 NxnacE 
1B800 OuwH 


68500 CHi 
34050 PocoP 
*0500 PamoAl 
I 1BB5 PXnCnP 
4*15* Ppaauil 


1 rooms 
PtMrCo 
POBTftl 
270 

1000 

1934 Rommn 

BSOQO RngOX 
TIG RboOSI 
24S383 RanEn 
70170 napoo 
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521 

841 _ _____ 

42233 ItoyOtt 
Tuesday. Mandi 1, 


60 +3 81 58 

20% COb 20% 
455 S m 4S9 

14% 514% 14% 

16% +% 51710b 
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39% -bsm3»b 
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32% — %33Z% 31% 

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AFRICA 

soum AFOGA (Mar 1 / Rand) 


ASM £26 
AEQ 20 

AM M 

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AnoAm ZD* 

AmoDtd SSM 
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Barrow 27.7 3 

Battik tS 
BUM «0 
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DeBCan 105 
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EfOD £2 
EundCi 2550 
(ngan 30.5Q 
FTHutm B7XO 
Fraoal GO 
Gmar 890 
OFSA 03 
Manno* 20 
Hratsl Z*xo 
KuMd IBS) 
cam 27o 
HUM STtf 
JO 86.75 
Kkna GO 
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330 —10 3*6 325 
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M -%i^ 

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21? 0^2^ 

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PiamBp 70X0 
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MP1 64 SO 
Sanaa 100 

Srnmec 10 
SABrew 83 
SUMn 38 
SIM 128 
T0M 54LGO 
Timlbd 32.05 
vnaen * 30 x 0 
WAram 30X0 
WDacp 193 
wrati duo 


+/- taut um n> am 

+ S6 10X0 7SO £3 — 
_. 2D 560 £9 . . 
_ 140 85 3.7 — 

— 124 TB XH _ 

+7 2399675 1.7 _ 
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-1 1157475 00 . 

-75 57-9 ZULU ... 

- J5 34X0 0.75 £5 

+ 50 SO 10 BA —■ 

- 05 32.75 325 ._ ... 

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_ 20 625 29 

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-76 BO 48 1 5 — 
•125 812*25 £0 ._ 

65 24 22 .- 

+.75 65 56 SO 16 .. 

-25 20.5012 25 
+25 26501605 22 - 

— 82 61 84 - 

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+ 25 63X0 || IB - 

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-150 49013040 32 ... 
+ 28 *2 1.(4] _ 

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BE ID PBOBLB* AT1BB0BK 5SIE I 
Bunts BUY K nfrOISE. 

FT FRffi ANNUAL REPORTS SERVICE 

ttttttl ttl 6 . Ma Dll 770 BTIDartoOtl 770 

3E£ «M FT tom. V nOvtoi (ttto IK. dH 

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Stocks 

dosing 

Chenge 


Stock. 

CiOtfnB 



Traded 

Pricn 

on day 


Traded 

ITHJM 

on dm/ 

Nippon Steel 

12.4m 

354 


Toshiba .. - 

7.3m 

780 

+7 

Sanyo Bee 

11.4m 

488 


Fuji Heavy ... „ 

63m 

385 

+22 

Hitachi 

10.7m 

957 

+7 

Bridgestone. . 

5.7m 

1X60 

+50 

Kawasaki Steel - 

102m 

385 

+5 

Nomura Sac — 

5.4m 

2.390 

+10 

Mitsubishi Hvy _ 

99m 

715 

48 

Mtsubishi Elec 

4.9m 

BOO 

+3 


Gowd (29/1277) 


21925.7 206872 254)048 160/94 121PSB 80/93 K ffto 1979) 


M 3685.44 ZSB829 2BBLT7 B0B4 1504.15 25®B3 


MU,,™, i4iksi 13TUB3 css iTOmeK a? 4S7X 43zo 4stat3tnm mnvtm 

JESKS” S S aSJSSSE ™ ****** mix 2837 aas re«» svmm ream rerem 

44S44 44*28 4465. 4W98 3062B N. 22793) 224435 221878 »U4 3®M »D0 22^ 

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Brno 

Bnnss (20/12/83) 

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MaatiMnf(ffl7Sr 
CtmiRdBf (1975) 
PonbtoS 14/1/83) 

CMa 

FGA Eai (3V12AQ 


,ro,s, ^x= — — SsWWUBI laws 1211.10 11980) ntlB BOM 88898 2771® 

151690 151590 1501.75 1542X5 9CA4 T12&4B V1S3 IW|(8u 

151690 WIMO ito MM 0*1* (2 7UB5) 275£G5 28B1S1 (0 838637 4/1/94 1270X8 4/1*3 

« 105360 100839 10631X00 23/2®4 Tt47 4/1/BQ 3140J 811ZB 31118 322U0 18094 188820 14/1/93 

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M 4S3B3 4534-1 4867SB 4/2/94 ZB12XB 10/S/9B J8EM. (2B/9/7B SBROy 58060 SB31X 5P21B 4094 438600 WUEI 


knntUs 383292 38S8JB 383990 397898 3241X5 397628 41X2 

(31/1/94 CO/11931 (31/1/94) 07/321 

Horn Bonds 103X3 103X8 10374 19977 10648 10877 54X9 

(18/1063) (11/1/93) avKwag (i/iani) 

Twain 176291 1782X8 178390 UB229 1463X4 198120 1292 

(2/294) (4/1/93) (2/2/94} (8/7/32) 

UBDM 21645 20641 20799 25648 20799 25645 1650 

(310/93) (24094) (31093) (9W3K 

DJ bid. OW high 7974X2 (3888X0 ) Low 3017X5 (881178 ) (ThaoittcUA) 

Dsyn Ntfi 3B5£2B PS5610 ) Low 3832X2 (3820X8 ) (AcnaM4 


SSinSWMB) 40073 40672 401X0 41679 2094 »X0 4/UB fc) 916X8 9/&7S SAUB 9091 MHO V3S3 

SM(28n»B0» 10566 18796 19700 W2D8 4®B4 84610 22rtfl3 SSiaWyi28re 332X8 33648 33633 3SU1 31/U94 2E90 4A«3 


46*26 <82X0 

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(21«B2) 

4158 4640 

36.89 

4640 

8X4 

ca»Ba 

(STUBS 

COWB3) 

(1/10/74) 

25775 28771 

23821 

28771 

4.46 

mm 

(B/UBS 

Bam 

(25W43 

485X8 487 JB 

3B6X4 

487X2 

29X1 

wm 

(BflXS) 

wm 

I9T2/72) 

77644 80147 

645X7 

2HL47 

54X7 

(31/1/94 (2B/4/93) 

(31/1J94 

(31/10/72) 


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SSnOUiaan 1510X8 ISIOIS 1484X1 K8S9D S2W m*.1* 2B/U» MwMn (IORB) 15225D 1636X0 163180 1003X0 3VV94 8H.10 2B/1/98 

CM 4O0V12B7) 2183.12 2238X8 2(96X2 23BXJ 2EW 177221 2W93 flMtort wf 

_ ^ ’ MBS Bkhd (31/1268) 131279 132600 13SU8 UB334 3VU94 8BU0 IlftB! 

^Z[n01/,2«9 79690 8019S 797X3 85SX7 4/V94 588S2 HU S8C General (1/4/87) 997X3 1007X1 1023X3 186U0 31/1*4 80B20 11/UB 

ssleo ram 2279 x 0 *sm *nm ib»uo 1 vm 

3B7.IB 208157 2074XZ 2287X8 3fl/9« 1X18X0 13rti93 «MtfdBlFtC»6fi8r S4S£44 54UX4 9HK58 BC4XZ BflW 30BM8 9W33 



Fob 25 

Fob 18 

Feb 11 

Year ago 

Daw janes IrvL Ov, Yield 

2X2 

2.59 

2X8 

3X2 


Fab 23 

Fab 18 

Fab S 

Year ago 

S & P bid. Dh. yMd 

298 

2X4 

2X5 

2.55 

S & P bid. PTE ratio 

2Bjjg 

28.18 

28J77 

20X1 


*wa snnam iobsxi 101&22 loesxo ima iaruw ara srasa 

Mng Sb3oV7/94) 1014896 1041093 1010095 12201 JB 4 MB* 5*BM 4 71/18 

S*S»W1979» 4147.7 4287X 423BS 42*7X8 9BMI 2MU7 23 MS 


Eknetok SET (30W73 1375.97 T37ZX3 « 17B33S MM 818X4 1fiS3 5^; 

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WOULD ^ 

1 C Opto K (1/1/70? B2SJT 5279 BZLO BtUO 1/294 488X0 T3/1/B3 Open totratt itoum am lor prevtoua day. 

raoss-BORtei 

&r*sc* TDOPWOTU 14S1.1B 1«643 14*601 154619 3V1/94 1088X2 13nffl3 B ^ rORX ACTWB STOCKS 


■ STAMPAKD Am POOBS 800 BtDKX FUTUBSB S500 tferaw tolax 

Open Lstesl CftangB Mgti Low EaLvoi. OponlnL 
Mar 48616 48605 -0.10 *6666 46680 84907 188.127 


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191357 1923J0 1921*6 29CJS 2Q/VW « m* £gKW 1*S SS SS SS S “ SS 

SaOtonUnBRS 6*994 QUO " “ “g* £S iJS* ■ GXC-40 STOCK IWP1X WITUBMSJMATF) 

I® General (4/1WI 183&0 «WX 1047X THUD 1BZW4 H4XB 1«MH _____ _____ _____ 

JaWB +0007 M1MBX 2714611 13/BB3 1807671 28/11/83 htao- 22409) 218SJJ -®J3 22*2J1 21860 32907 664(38 

WM 225 (1KM# 2S6D7 308X4 10/llffl 24854 29H1/B3 Apr 22500 21960 -860 22660 2197^1 266 15T« 

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jt- — . 


FUR Nrifen 

Pim> Morris 

K-Mst 

5|lAK 

ToMmco 

Men* 

zoxh 

6m Moton 

Rjitty pt or 

Fad Dipt Stra 


Stocks Ckaa Ctange • VAhno (ml 

traded pries « day 

5489900 B34i -M (fc» Tort 8E 

MB4500 65 -2 *« 

2X47X00 IBM +M H&5MQ 

2X26900 15H +M NYSE 

2,779500 87 -1H toms Ttadtt 

2,738^00 9M +H DM 


2565,100 13H 
2,170,000 SB* 
2X99X00 26b 

1X99.B00 23H 


+h rm 

— UKtanged 
+U Nto H0B 
-H Now Lon 


Eachdng iwttw i InduttW. ghra IMMss, rewnoU and T 
■nd tore an die ararasto oMh* Nghto and Hmm pdeas i 


pwriogadrafri- f » c*nau i 


Feb 28 F* 25 Fob 24 
266137 273918 341X15 
164*9 2739)8 189/4 


2902 2J46 2.773 

1,448 1.183 436 

731 S34 1X20 

572 891 517 

87 48 38 

43 75 131 


had during ibe ctoy tty aaefi 
itnu M hoax hm rauched 


“Carrenry rates are LaJ\ i-attd fnr the country in u-Ah /l the? are ifuolrd. Subu ripruvi Pnm arr i iurre, r ill nmt <rf 
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CompJP) 

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rtrr 

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/Vn nriwwxefsti ufihotf a Drnamre. 


Financial Timas. Europe’s Business Newspaper. 




36 


FINANCIAL TIMES WEDNESDAY MARCH£J 994 ^ 


4pmckjsaM0tfiI 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


mam 

ftp btaSka* 

10% 1l% AAR 
29% l£$ ALLfltBA 
67% 54% AMP 
72$ 55% AW 
5 l$AWt 
*%29$ASA 

13% 6%AM8KPT 
IBS 6% Acptaah 

38 25% ACELM 

12% 10$ ACM OR In i }J» 9J 

ioJ* MtACHOgQRii aao ao 
ioS b$aojg»isoi aa mo 
12% 10% ACM MSB « 1.09 102 
>2% 9% ACM Man » 1.08 Ofl 
9% fl% ACMIbsqdi 073 8.1 

12% 7%Aawav 044 4.7 T1 

11$ 6$ Acme Boa 3S 

27% 18$Aamki 080 22 13 

9% 6% Acted DOS 42 17 


DLK k 
Dk it E W IM to Onto 
048 30337 3*4 10% 15% 18% 
018 12 35 208 15% 15% 15% 
MB ZB 22 2583 63% 63% 03% 
S3 NOE 63 81 82 

15 345 
2.00 4.4 30 334 
070 2.7 10 8597 
OX 4.0 8 39 
22 09 

040 t.5 «1WB _ 

638 12% 11% 11% 
36 9$ 88% 8% 
783 9% 9% 8% 

888 11% 10% 10% 
148 11% 10% 

IX 8% 8% 

J8 9% 9% 

38 8% 8 

50 27% 27 

101 


B-B* 


*A 4S 

22 27 % 2 
12% 12% I 
12% 11% 12 

27% 28" 



8% 

27% 

. __ ... 8 % 8 % 8 % 

1fl10%Acu« 82 245 12% 11% 12 

21% 17% Adams Exjr 036 24) 0 666 17% 817% 17% 
66% 45% 48 Micro IDO BO 7Z 50% 50% 50% 


32% 16% AMttc 
8% 5% AMS Drp 
24% 14% AIM M 
58% 41% Aegon ADR 
88% 43% AstraL 
34 24% ML c 
22% 16% Ahmnsn 
7% 1$ Alnntac 
49% 37% Avne 
38% 1B% AHtngFn 
26 8£ Akgu he 
16% !0%Airtease 
>K% IOiAbPM.18 
18% 12% AlkdaAir 
13% 14% Atony M 
28% 20% ABCuS 
25% 17 ACuNT A 

28% £3$ Aim 
25 16% Alert 
58% 35% AIC09 
30% 19% Atrafruwn 
28% l7%Atert 
24% rtAfegtiLad 
28% £3%ftded> 

29% lJAJtenCon 
26% 20% A Bogan 
4% 2%Arvjn 
27% 16% A»K* Cap 
10% 8% Asnea U 
27% 16% AU ktt 
81% 57%Md9s 
32% 23 AU Op 1 

7% 3$ An aa a 
27% 17%Aunai( 

82 59Mcoa 
47% 19% Acs (DA 
12% 10% AnGmte 
B% 5$ Am Praca 
10% 6AmmGd 
25% 


3001X8 0 3339 21% 21% 21% 
018 24 10 72 6% 6% 6% 

did 05129 5585 19% 19% 18% 
1J3 24 71 16 52 51% 52 

278 46 11 3609 60% 60% 80% 

0.40 1 A 12 1886 2B% 29% 3% 

17% 17% 17% 

1% 1% 1% 

48 46% 47 

37% 37 37% 

21% 19% 30$ 

15% 15% 15% 

104 104 104 

17% 18% 16% 

19% 19% 19% 


088 SO 11 858 
1 10B 

092 20 25 2329 
030 08 22 619 
36 2240 
134 100 11 18 

816 70 3 

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048118 6934 43% 
20 8* 
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24 6548 18% 

15 10 12 

12 525 17 

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25 101 15% 


IM LW 0*1 

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6% 6% 

14 14 -* 

34 35 
22 * 22 * 

24 24% -% 

15 15 -% 
26* 27* +% 

7* 7* 

17 17* 

21 21 * +% 
18% 19* +% 
17 17* •* 
2 2% 

3% 3% +% 

35 35% +* 

9* 9* -% 
4* 4% -% 

26* 27 

16 16% +% 

ID* 10* +% 

12 12 % 

23% 23% +% 
5* 5% 

24% 34* 

26 26% ■*% 
33 * 32* 

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6* B* +* 
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24* 24* +* 
B* 8* -% 
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13% 14% *% 

49% 48% 

25% 25% •% 

B% B% 

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42% 42* -1* 
8* 6* 

17% 18% ■* 
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11% 12 -% 
18* 16* -% 
18% 18% -% 
15 15% 


pm. e wm Mm uw im am 


FMMp 

FarrCp 

Fasttnel 

Whfl 

Funa 

RffllTM 

ROyCffl 

FtggkA 

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FsABma 

FMAni 

FaScOMo 

FetOCk 

FatSedy 

Fat Tern 

FdWaabi 

Fsoadiac 

Ffeater 

FMmka 

Ham 

Flow an 

FoofflA 

FMxU 

Rrangar 

Fmctear 

FlonaBanc 

FodkA 

D8i Fin 

Fat Euan 

FdFH 

FstikWHtX 

FidkrHB 

FUtarfta 

FUron 


- F- 

12 103 5* 4% 
a» IS 76 8% 5* 
O0« 55 1000 35% 34* 
10 1202 28 * 27* 
1 304 4% 3% 
1JB 14 471 47* 46% 
10 108 5% 5% 
024 23 731 8* 8* 
34 4223 25 23 

120 10 2607 30% 30* 
084 7 641 31% 30% 
OM 10 179 24* 23% 

055 17 21 19* 19* 

IM 11 508 29 28% 

im 8 445 38* 38* 
038 6 33 7% 7% 
052 9 2007 22% 21* 
156 11 175 45% 45 

42 7 7* 7* 

24 981 20* 19* 
18 753 6* 6% 
009 15 6428 5% 5% 
0006003539 6% 5% 
tm It 50 34* 33* 
14 113 15* 15 

030 52 247 31% 30% 
44 200 4 3% 

IM 11 1044 28* 27* 
1.12522 77u2B% 25* 
040 B 119 15% 15 

1.18 10 208 27 26% 

056 23 201 38* 36* 
am 13 45 24* 23% 
024 22 139 17* 18* 


34* -* 
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4 +* 
47* 


24* +1* 
30% +% 
30% -% 
24 -* 
19* +% 
29 
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7% -% 
21% -% 
45% +% 
7* +% 
19* -* 


8 -% 
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15 -% 
30* -% 
4 +% 
28* -* 
28% +* 
15% 

27 +% 
36* 

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GIApp 
GMSanr 
Sartos 
Garnet Ik 

Gem CD 

Gendex 

Gad Bind 

Genlyta 

GernkPi 

Garter Cp 

taros he 

Gamps 

GenghtyM 

GBbuiBx 

addnpii 

GBxkIA 

GbhBkm 

Goad Goya 

G uikSP mp 

MadcoSp 

MaalB 

GraoiAP 

GrnwdiPh 

Musemana 

tad Wlr 

cm cnp 

BbWTSvg 


- G - 

8 224 4% 4% 
007 21 74 IS 14 

0 319 3% 3* 
20 21 4% 4% 

016148 18 6 5iS 

251101 37*d3*% 
040 16 24 15* 15 

14 21 3% 3% 
8 488 21 20* 

4m 42 1538 25% 25 

7 199 4% 4% 
161989 28* 27* 
» 4 10% 10* 

040 14 2758u23% 23 

0.12 19 997 25% 25 

080 20 45 18% 17% 
11 10 5% 5 

22 978 17* 17* 
OBO 23 1577 28% 28 

41 15 ZA 2% 
020 78 510 23* 22% 
024 12 45UZ0% 19% 

1 717 1% 1 

1 3519 4% 4% 

750 300 15 14* 

14 71 20* 19* 
4 295 7% 7% 


HakriTroy 

Herat 

Hogan Spa 

Hofoglc 

Hens tad 

Huts Mute 

Home Otoe 

HnsstyGd 

Honhbx 

Handsck 

HoraMas 

HUS JB 

HuaerGnv 

Hufflngfai 

Hugo Da 

KUUiTedi 

HycarOto 


- H - 

B4 3 9* 8* 
064 10 102 28* 25 

020 15 73 15% 18 
032 402021 47% 46% 
223392 24% 24 

006 17 531 11 10 

10 1375 7% 6% 
11 BS9 6% 5% 
018 21 3571013% 12% 

0 200 15% 14% 

072 14 922 21* 21% 
015 30 284 10 9% 

29 7H7 u7% 6* 
078 9 32 21* 21* 

S 424 5* 5% 
072 25 251 u21 20 

1 235 3A 3£ 
044 21 104100% 29* 

IB 942 15* 15 

044 22 135 5* S* 
020 255780 25 23* 

2 638 % A 

080 a 607 22% 22* 
an o io 3% 3% 
453 3030 38* 35* 
- 18 83 5% 4* 


5S -A 

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15* +% 
3% -% 
20% -% 
25% -% 
4% +* 
28* -* 
10* 

23% +% 
25 -% 
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17% -* 
26% +% 
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20% -% 


15 +* 
19* -* 
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9* 

25* -1* 
16* -* 
47% +* 
24% +* 
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12% -% 
14% -* 

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DB Contra 

DS Mel 

tamucor 

bnmusgoi 

bnpertBc 

IndBancp 

bid hi 

WFte3 

kdonidx 

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fategiOav 

MobSjb 

l a i uMfe t 

Mat 

Intel 


51 26 0% B* 8* -% 

52 2047 18% 17% 17* J 4 

17 485 19% 18% 18% -% 
38 97 7 fig 8% -% 

6 295 7 6* 7 +% 

LUO 27 140 14% 14* 14% -* 
1.1 B 18 3747 36% 35% 30 -% 

024 15 9 IS* 15* 15* 

32 1944 25% 25% X* +* 

28 6295 24 23* 23* +* 

086 18 494 12% 11% 11% -* 
328965 28% 25* 25% +% 
28 191 12 11* 11% -% 

33 316 5* 5% 5% -% 

020 12Z72S7 89 68* 08% -2 

9 2724 3% 3% 3% +* 
032 41 4828 24% 23* 24% -* 
23 549 10% 10% 10% -% 
OM 21 2278 15% 15% IS* -% 
3 3899 9% 0* 9* 

11 584 7% 7% 7% +% 
2571183 13 11% 12% +% 

22 7426 1 3* 11* 12% +1* 
14 382 17% 17 17* +% 

008 21 98 3% 3* 3* 
5311527 11 10% 10% -% 

tun 18 387 27% 27 C% +% 
2 807 2% d2% 2% 

1# 124 18 17% 18 -% 

130 42 S(C31 1 ^28*231% +3% 


ju snack 
jasmine ' 
JLGtad ' 
Jobnsnw 
Jones IK 
JossMed i 
JadynCpx 
JSBRb i 
JunoUg 
Justin 


- J - 

19 19% 
1B7u14* 
801 28* 
64 24% 
443 15 

310 13% 
12 24% 
625 23% 
461 19% 
791 14% 


18* 19% 

14 14* -% 
25% 27* +* 
24% 24% -% 
14% 14% -% 
13 13% +% 
23* 24% 

23 23% 

19% 19* +% 
13* 13* -* 


Kndnar 
SLA fast 
(ratertge 
KoOA 
tenaghc 

bdcKeS 


- K - 

OOB 12 288 23% 22% 
044 5 I3S JO 0% 
OOB 37 346 13% 13% 
040 15 512 24* 24 
875 833 9 8% 

OK 22 333 27 26 

044 1 T1B7 3* 3% 
011 12 5 7* 7* 

OM 17 59 30% 23* 
14 36 7% 7 

524M0u30* 38* 
81870 12* 12 

0 354 JJ % 
56 85241*25* 24% 
8 9*4 12% 12% 


23 -1 

»% -% 
13* -* 
24* +1* 
8* -% 
26* * 
3% 

7* 

30% 

7 -* 
39% -% 
12 * ** 
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25% *% 

12* ** 


- L - 

LsMFun 012 S3 856 10 9*2 10 

Lam Rail 403802 38% 35% 38 

Lancaster OS 19 121 45 44* 45 +% 

Lance he 098 21 148 21% 21* 21* +* 

LnmankSph 37 3681 39* 38* 38* -* 

Unoptta 16 77 12*011* 11* -* 

Laawcpe 85 117 5JJ 5% 5% -% 

LaWCfS 131387 15% 15 15% +* 

lawrn Pr 040 20 601 29 27% 27* -% 

LCDS 396 5059 3 26* 27* A 

UN Cp OK 9 S3 7* 6% 6% 

U&ltera 18 440 14* 14 14% +% 

Logpnt Cp 167S15 26* 25% 26% +1* 

LBnyfOSc 078 » 175 30 2#t 2 30 +% 

Ufa Tech 020 15 60 17% 15* 17% +% 

IMM 22 28 4* 4 4* 4J4 

UOftnOA a 40 23 9 35 24% 25 

Lr-Er 94 1861112*110*111% -% 

Lincoln T 052 19 505 20 18* 19* +* 

UndsayMt 14 59 32% 31* 33% 

UsarTec OM 38 1554 44% 43% 44% +% 

UqsBoi 040 19 4 37% 37% 37% 

Loots Go DOB 30 9E2 25* 25 25% +% 

Lons SOT 11 542 B% 7* 8 -% 

LntcO 58 8697 59* GB% G9% 

LTXCp 291299 4% 3% 4% 

1 LVMH 3.53 18 29 134 133133* -4 


MO Cm D05 2349GS4 37% 
MS Car's 22 137 26* 

I Mac ua OGO S3 61 17% 
MSuasndSxim 14 BO 31* 
MapnaPwr 14 1045 32 

1 Magra Grp 076 12 375 19% 


MadSn 
Uscam Cp 
ttmnoDr 
UaVUCo 
I Marcnes 
Uansta 


15 756 ID* 
35 468 12* 

14K47 5 * 

10 15 44 

0 22 3A 
17 112 8* 


MWSSB*A044 11 42 11% 

MaretsBx OS 11 2120 21% 
itedm hr 40 104 53* 
Maxtor Cp 04003 8* 

Ifc&adiR 040 12 11B U17 
Mctarnlc 048172552 21* 
McCanC 449541 S0> 2 
Med brag 0 2537 * 

uadexhc 018 24 57 18* 

bMcfwS OM 13 505 24* 
Iteteufett 024 6 36 6 

Mentor Cp 016 53 177 T8 
MenbG 024 19 2521 13% 
ItotantS OBB ID 228 18% 
Mercury G 070 8 145 29 

Merida im 101932 27% 
afertKi 21 2S10u21% 

IteUKXte A am 17 253 Ul 7* 
IHnelF 02038 382 10* 
Hell HUB 2002931009 85* 
MkroHHl 14 68 6% 

WaraBB 201240 27 

Microcan 3 765 5% 
HUgndK 17 T75 10 

bterptet 31171 5% 

Hcstl 2414919 B3* 

IUMM 31 496S 35* 
IMatee IJffl 11 2554 27* 
Wdwtah 050 25 81 30% 
IflerH OS 24 B78 33* 
MKcan 16 148 25% 
Iflmkcti 14 66 11* 
MDbikTal 422000 17% 
Modem Co 020 21 98 9 

MXfrW MT X046 20 132 28 

IMn 003 248 34 

| MSB Is 004 27 255 38 

Moscmi 004 16 983 idO 
MostoeeF 036 22 182 30* 
IkQdtte 17 0141 1*% 
MTSSys 056 13 4 32* 

Ifitroed 1313GB 31* 

Mycngen 4 6453 11 


tEC 

Nellcar 

Nate* Gen 

teats 

Nnicgan 

Npgra 

HewEBut 

NawtosQa 

Mrtgefia 

MertxiCp 

Mode Dn 

Nonbonx 


016 12 1212 
072 11 409 
15 384 

026 15 427 
020 221030 

112154 
046 93 90 
18 674 
a 4138 
124 703 
25 3 

027 20 520 
080 22 228 

103448 
4212020 
004 59 425 

a 1135 

058 28 145 
034 22 2082 
13 5 

4 38 
058 1 4 773 
2B035832 
38 1652 
10 131 


29% 29 

17*d1B* 
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13* 13* 
14* 14* 
21 19 

49% 40% 
29% 28* 
21 20% 
8* 8% 
7% 7% 
28* 19% 
20% 10* 
13% 12% 
57* 55* 
6 5% 
8% 7* 
57 58 
39 38% 
17* 17* 
5* 5% 
42* 41* 
25% 24% 
42% 41 
4% *V 


29% -* 
18* -% 
6% +% 
13* -* 
14* 

20 % -% 
49% -% 
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19% -* 
20 -% 
12% -% 
58% -* 
5% J* 


38* -* 
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5* 

42% 

25% -% 
42% +% 
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OChsteyt 

Octet tan 

0«nLg 

Ogtoteyk 

ON0C8X 

OUKeM 

OUNadBx 

On Prim 
coded R 
Bracks 
OR) Gents 

orooacti 
OrcMSrap 
OregonUer 
OOnp 
OsttSA 
: OstdcpshT 
otwTrt 


- O - 

23 230 14% 
22 2815 29 

15 219 14% 
OM snoo 25* 
£92 13 594 B3% 
1.16 9 658 30% 
092 18 33 38* 
100 7 200 31% 

16 129 22 

lB1357u21% 
4911346 33% 
43 1128 17 

099 32 91 11% 

10 89 15 

031 16 256 6% 
B 52 4* 
041 48 350 15% 
050 11 162 11 

1.72 14 93 31% 


14* 14% 

28 28* -* 
14% 14% 

25* 25% +% 
62* 63% -* 
30* 30* -% 
38* 36* 

30% 31 ■% 
21 * 21 % -% 
20* 29* +% 
32% 33% +% 
16* 17 +* 

11 11 * +% 
14% 14* -* 

5% B% 

4% 4% 

14* 15 +* 

10 * 10 * 

31 31* -* 


- P - Q - 

Paccar im 15 565 50% 57% 
PacDuntop 057 14 101 15% 15*4 
PTeton 132 16 87 26 25 

PacfBOd 21 380 52 50% 

taanstre 397331 33* 33 
PSyfflex OM « 157B 39* 38* 


58 -* 
15* -% 
25* -* 
50* -* 
33* +* 
39 
9* 

10% J 2 


Payee Am 24 5 9* 9* 9* 

Pastern am 44 15 10% 10% 10% -% 

PemTny fl 75 14% 13* 13* 

Perm vug x im » 7 38% 35* 36% -1 

Pemsytu. x 220 18 26 32 31% 32 

Petes 072 15 768 36% 35* 36* +% 

Padeail 16 Ml 9% 8 6* +% 

PBnweSL 020 25 24 22* 21% 22* -% 

Paoptac 136 15 5 49* 48* 49* -* 

Peqxette am 97 174 40% 40* 40% 

PeapbaH 101397 10* 10% 10% 

PetraBk i.i2lflzl00 34 34 34 +% 

ffsnMCy 19 8 8% 6% 8% ■% 

nsenxTdi 2S1183 5% 4% 5% +% 

j Pkxatm 048 5 50 14% 14% 14% 

fltene 30 1923 15 14% 14% -% 

Mtarioti 54 1629 22 20 21* +% 

PUeetGpxOAS 22 199 32 31* 32 +% 

PSOOBBtH 05G 24 4M3 37* 34* 35% -1% 

FkxsaSt 014 14 4B2u26% 28% +* 

FtsceFad 5 21 8% 8 6*-% 

Pnvrdt 19 158 7% B% 7% +% 

PreaLffe OOB 41234 7% 7% 7% +% 
Press** m 325 31* 30* 30* 
Pl/CBSL 299406 20 19% 19* -* 

Pride Pei 45 254 9 5* 5% 

pmrort 15 92 B* 8* 8% 


I 14% 

! M% -% 
1 21 * +% 
32 +% 
35% -1% 
26% +* 
I 6* -% 
i 7% +% 
7% +% 
30* 

I IB* -% 
5% 

6% 


Prod Ops 

Protean 

PirmnB 

Pyramid 

QuadraLog 

QtakflrQm 

DisIFoOd 

Ouereun 

OnUtslv 

OVCNemk 


dm. e ran Mpn 

024 26 S3 27* 
IM 14 481 50* 
012 15 254 19* 
20 2407 1 4 
9 780 8>2 
OS 90 5382 17* 
020 17 128 23% 
8239725u1B* 
20 282 14% 
303948 46 


27 * 27* +* 
49% 50»« 

19 19* .* 
13* 14 

d5% 5% -% 
16% 17* +% 
22 * Z3>i 
18* IB* t 1% 
13* 1« 4j 

44* 45 -1 


itUc A 
Hepooen 
Rep Wade 

nuicMM 

tanen 

fkmntoc 

Rhrar Fst 

rkodwS 

RBHgre 

RoenSuBk 

Rooewto 

Ram SO 

Uttfflkd 

flousa 

mifac. 

RGFta 

RyanFrnif 


19 455 
IS 208 
31481 
23 9 

27 431 
T8 23 

* 349 
5 IS 
19 156 
217 31 1952 
T 1724 
050 11 13 
1.M 23 1377 
012 IS 89 
058 31229 
IM 8 £45 
020 II 1241 

28 860 
OEB 78 2450 
052 21 531 

0d8 12 It 
14 4502 


- R - 

455 20% 19* 20% 
70S 10% 10% 10* 
1481 a 7% 7% 
9 17* 17 17* 

431 IS* 28 19 

23 19% 18* 19% 
349 6* 6* 6* 
IS 3% 3* 3% 
156 11% 10* 11% 
1952 90% 88% 88* 
1724 6% 5* 5* 
13 37* 38* 37* 
1377 71% 70% 70* 
89 7% d7 T* 
1229 18* 15* 15* 
£45 46 45 45% 

1241 14* 14% 14* 
860 22* 20* 21 
7450 18* IS IB* 
531 10% 10% 18% 
It 20 19* 19* 
4502 7% 7% 7% 


Zfi* 26% -% 
25* 25% -* 
17% 17% -% 
31* 31* +* 
31% 31% 

18% 19* -* 
09% 9% -% 
12 * 12 * -* 
5* 5% ■* 
43 44 

1 % 1 % +* 
7* 7% -% 
II 11 * -% 

21 21 % 

52* 52% -* 
5 % 6 * 

16* 18* 

21 * 21 * +* 
49% 49% -% 

% % -A 

18% IB* 

22* 23* 

5* 8 +* 

15% IB ♦% 
13* 13% +% 
18% 1B% +* 
28% 29 +* 
Z7% 27% +% 
20 % 21 * +% 
15% 16* -% 
10 % 10 % 

84 64% •% 
5* 5* -% 
2B 28% 

5 5 ■* 

0* fl% -* 
d4% 4% -* 
02* 83* +* 
34% 35% -% 
27* 27% -% 

30 30% 

32% 33* -% 
ZS* 25% 

10% 10% -1 

17 17% -% 

8% 8% 

27 27% +% 
33* 34 

35* 38 +% 

9% 9% +% 
30% 30% -% 
14 14% 

31 32* +* 

tQO 31 -* 

ID* 10* -* 


- s - 

Safeco im 8 1324 57* 56% 58* -% 

Sandereai 030 II 222 16 15 15 -1* 

Scramtgrt 036 35 724 34* 34 34* *% 

SdMedL 9 2480 36 34* 34% -% 

SO Synm 15 5217 19% 18% IB* -% 

Seas 0 405 8% 0% S% -* 

Serna Cp 052 12 703 M 25% IS ♦% 

Score Bnl 15 1673 14* 14 14% -% 

S&dMfl 120 46 29 38 37* 37* *% 

S' gate 1240677)126% 25 28% .1 

SQCp 012 32 53 25* 24* 25* +% 

GeUteaB 036 0 730 1,‘i 1% 1% 

Safadtos 1.12 77 30 37* 2S% 29* 

Seouein 55 2203 14% 14% 14% -% 

Sequela 40 414 8% 5% 6 

Serviced 14 313 io* 9* io ** 

SereFract 18 59 3% 3% 3% 

Sovensn 15 MOO 16* IE* 16* -l* 
Stalled 084 191005 26% 26% 26% * 

SHLSysnn 87 492 7% 6% 7 -% 

snorewood 27 363 17 18* 17 +% 

SIXMbbP 12 4083 13* 13 >3% -1% 

Sierra On 22 2884 29* 28* 28* -1* 

Semite 3 37 3% 3% 3* 

StgmAlx 033 24 1293 52* 50* 52* +1% 

SotraDas 2 3380 14* 13% 13% *% 

SltertVBc OM 47 320 9* 9% 9% +% 

SUeriVGp 331560 11* 11 11* +% 

Sbnpaon 058 27 33 22 21% 21% -% 

SaoTHId 29 405 21* 21 21* -* 

SnappfcBv 7114295 28* 26* 27% -1* 
SotaareP 21715 8% 8% 8% +* 
SoflwareT 538713 9% 9* 9% +% 
Sonoco 054 18 09B 25* 24 24* -% 

Sotdtiktx 063 91182 19% 1B% 19 +% 

SpkgelA 020 431238 21 19% 20% -% 

St JudeAtd 040 122968 20* 27* 2B -% 
SPaUBc 030 9 689 19 18* 18% -% 

Staples 466011 31 29% 30* -% 

Star Banc 1.18 10 347 38 35 35% -% 

SUaStr 058 151575 37* 38* 38% -% 
Sid Man 132163 19% 18% 19% 
SURetfS 008 15 402 22% 22 22* 

Steel Tac 006 22 484 20% 10* 1ft* -* 
SteMyUSA 020 2 431 7 * 7* 7% 

Stem 182 154 23* 22* 22* -% 

SteMxfl 1.10 14 27 22% 22 22 -% 

Steamy 31 S45 15% 14% 15 +% 

Snyta 028 281570 32* 31* 32% 
SuBbarf) 28 286 19*4 18% IB +% 
Sundkxre£ OM 74 517 21% n20 21 +% 
Sunn* BC OM 121344 20* 1»* 20% -% 
Sunni Te 108 B22 33* 32* 33 -* 
Sui Sport 17 184 7* 6% 7% +% 
Souffle 159414 27* 28% 27% +* 
Swift Tm 251543 26 24 24% -1% 

Sybantoc Si 5528 45* 44* 44% -% 
Symantec 27 6549 15 14* 14% +1 

Synffley 038 17 342 18 17* 17* -% 

Syiwcpm 57 306 3A 2* 2% 
Synergen 31193 12% 11% 11* -* 
%mUc 44 » ID* 10* 10* 

Synopdca 23 7004 25* 25 25* 

sysmtedl 012 18 3097 17 18 16% -* 

SyEtemSco 31 4M 1ft% 19 10% -* 
Systemad 171242 5 4* 4% -* 


T-CeISc 83155 5% 
TJUWtPr 052 19 923 31* 
TBCCp 18 SI 13% 

TCACatda 044 3Q 172 25% 
TacbDaa 25l390u39* 
Tacumfi OM 15 « 58* 
Tebetac 1 13 7* 

Tatar Sys 5 138 9% 
TatoCHimA 2BB24B76 23% 
TakHt 121741 11 

Tataba 38 1809 53% 

Tabor Cp OUT 14 340 14 

ream Toe B3 hj 7 7% 
TenPhADR 027 34 5654)134% 
Three Com 2714549 01 

Tin 022 40 B54 Z7* 
Totes Med 24716 3% 
Tokyo War 037 39 11 64* 
Ton Brown 83 6 12 

Tttppe CD 028375 3341 7% 
TPI Enter 4 mo 8% 
TonsaAd IS 26 13* 
Tramkk 088 ft 540 34* 
Tdcare 23 199 3% 

Trimble 53 382 10% 

TnctcoBKCrrlJX1 11 7 71* 

TflangLflD am (7 1790 UPt 
TysFdA 000 173915 22% 


d4% 4* Ja 
29* 30* -% 
13* 13% 

75% 25% +% 
37* 38* *1 
50 5B* -T% 
J7* 7* 

9* 9% +% 
22% 23% ■% 

10 % io* -% 

50* 52% -* 
13% 14 t% 

7* 7% 

33% 33% *% 
56% 50% •* 
26* 27 -* 

d3* 3% -* 
64% 64* +% 
11 % 12 +% 
7* 7% *% 
B% 8* -% 
13* 13* 

33% 34* i-l 

7% 2% -A 
9% 10% +% 
21 21 * 

dO* S% -% 
21% 22* v* 


- u- 

OM 22 5928 64 

2 315 5 

im 14 61 17* 
2X0 11 401 50* 
040 11 285 13* 
020 20 46u2S* 
140 22 204 41% 
088 102913 26* 
26 2* 4 

1.12 6 578 12% 
12 3B1 7* 

ft 38 42 

1ft 416 6% 


87 83* -* 
5* 5* 

18* 17* 

50 50* 

12 * 12 % -% 
25* 25* 

40* 40* -% 
25* 26 -% 

3% 4 

12 12 ■% 
7% 7% Js 
41% 42 

6* 8* -% 


- V - 

030 39 50 IB* 17* 17* -% 
52 539 31* 30% 31* ■»* 
201660 10* 18* 18* -% 
44 2417 1129 27* 28* ■*% 
12 m io* 19% 20* ** 
35 985 28* 28 28 
27 5422 13% 12* 12% -1 

IM 15 130 BI* M* 80* -2% 


Warner Eta 012 
Wamtacti 
WKMM58 0G4 
WaOfedSLQM 
WNUDdA OU 
WtamuPMOM 
MHO £00 
Wafa* 

WestOna 072 
WBPllb 
UfctSetiA 
mum 095 
WraSanoma 
\WotenLx028 
Mtnpt 036 
Wff Group 003 
Wynm-GteOAO 


- W - 

22 627 29* 

87 911 SA 

52413 22% 
9 333 22 

23 76 57% 

19 117 30 

18 23 43% 
451209 5% 
102517 27 

104714 17% 
44 314 4% 
28 3045 58 
874705 u30 
14 12 15% 
25 776 20 

23 41B 3% 

6 401 B% 


28% 28% J* 
5 5* -A 
21% 22% *% 
21 % 22 
56% 57* +* 
29* 30 +% 

043 43% 

7% 8* +* 
2B% 28% 

18 18* -1% 
3* 4 ** 

57 57* J« 
20 * »% 4 . 1 % 
15* 18% 

19% 10% -* 
3» 3K 
s* BA -A 


-X-Y-Z- 

Xl» 352GMUB* 54 54% e% 

XonaCorp 31991 <% <W% «% +% 
YeftM 094 431800 29* 28% 20 

YntRKb 51 332 4% B4% 4% 

ZtonriXsft 1.12 9 10 39 37* 39 *% 



38 


FINANCIAL TIMES 


Wednesday March 2 1994 


WORLD STOCK MARKETS 


AMERICA 

Inflation fears 
prompt sharp 
fall in Dow 


EUROPE 


Continental bourses affected by 


FT-SE ' Actuaries Sh; 


Marl 

Honrty ctaopM 


Opra 1030 11.00 12-00 


THE EUROPEAN SERIES 

iiM um ism chh 


FT-SE bnM TOO 1447.3* 144085 1447.81 14415* 143470 1*3183 143550 1431.10 

FT-SE ZM 15062* 150554 15065* 1501 .75 1*9654 1485L19 148001 1*0007 

RE 22 


ft* 28 


Fd) 25 


MM 


Fab 23 


FT-SE Emnefc too 1*66*3 1*4001 1*5074 148010 147&2B 

FT-SE EnrtOrt 200 1S12J* 10935 150851 1SST56 1520.12 

BaoB Mbs 10W (Wltnok HTMF ICO - 144MB: 2DC - 150*4* | U I—II |. WO - M3QA0 JDO - MBA 


news from US 


Wall Street 


US share prices fell across the 
board in heavy trading yester- 
day morning in the wake of a 
sharp decline in bond prices 
that was inspired by fears of 
rising inflation, writes Patrick 
Harverson in New York. 

By l pm, the Dow Jozies 
Industrial Average was down 
36.02 at 3,796.00, slightly off its 
lows for the day. The more 
broadly based Stan- 
dard & Poor's 500 index was 
also lower at the halfway 
mark, down 3.69 at 463.45, 
while the American Stock 
Exchange composite was off 
2.51 at 46&S3 and the Nasdaq 
composite down 7.18 at 785J32. 
Trading volume was 172m 
shares by 1 pm, and declines 
outpaced rises by 1432 to 545. 

The day's first big economic 
news - an upward revision of 
the fourth quarter gross 
domestic product from 5.9 per 
cent growth to 7.5 per cent 
growth - had little impact on 
prices. Although this was 
ostensibly good news for 
stocks, analysts warn that 
these rates of growth will not 
be sustained in coming quar- 
ters. Also, investors are ner- 
vous at any sign of excessive 
economic expansion because it 
might prompt the Federal 
Reserve into raising interest 
rates again 

Soon after 10am, however, 
prices turned decisively lower. 
The heavy selling was 
prompted by a sudden and 
sharp decline in bond prices. 
The sell-off in the bond market, 
which pushed the yield on the 
benchmark 30-year bond up to 
6.73 per cent, followed the pub- 
lication of the National Associ- 
ation of Purchasing Manage- 
ment's February report, and in 
particular, the announcement 
that the NAPM’s Index of 
prices rose sharply last month 
to its highest level since Octo- 
ber 1990. 

Like their counterparts in 
the equities market, bond 
investors are worried that the 
Fed will tighten monetary pol- 


icy again soon. Yesterday's 
prices data from the NAPM, 
said analysts, brought the like- 
lihood of _ another rate rise 
nearer. This thinking, plus the 
fact that the stock market 
rarely likes to see bond yields 
rising, was behind the declines 
In share prices. Additionally, 
traders said several computer- 
ised sell programs executed 
during the morning exagger- 
ated the market’s downward 
trend. 

Among individual stocks, 
interest rate-sensitive stocks 
were lower as a group. Among 
banks, Citicorp fell $% to $40%. 
Chase Manhattan gave up $% 
at $32, BankAmerica slipped 
$'/< to $42% and Wells Fargo fell 
$1% to $136%. Brokerage stocks 
were also weaker, with Morgan 
Stanley off $% at $65%, Merrill 
Lynch eased VA to $40% and 
Salomon fefl $% to $49%. Fed- 
eral National Mortgage Associ- 
ation, which has benefited 
greatly from falling interest 
rates, was another notable vic- 
tim. falling $l to $£}%. 

Digital Equipment bucked 
the wider trend, rising $1% to 
$30% in volume of 2m shares 
after broking house Salomon 
Brothers was reported to have 
upgraded its rating on the 
stock from “hold" to “buy”. 

On the Nasdaq market, 
Snapple fell $1% to $27% after 
Coca-Cola launched a new 
range of soft drinks under the 
label “Fruitopia" that is clearly 
aimed at competing with 
Snapple’s own hugely success- 
ful brands. 


Canada 


Toronto stocks extended ear- 
lier losses at midday as worries 
over higher interest rates fears 
continued to weigh on finan- 
cial markets. 

Canadian bonds remained 
weak along with US treasuries 
at noon following economic 
data which spurred inflation 
fears. The TSE 300 composite 
index fell 30.95 to 43KL89 on 
volume of 35.40m shares for a 
total value of C$432.09m. 


Late closing markets were 
affected by negative US data 

which suggested that inflation 
was rising, writes Our Markets 
Staff. 

FRANKFURT fell back after 
Monday's positive start to the 
week as equities were again 
battered by nervousness in the 
bund market 

The Dax index closed the 
official session down 2L52 or 
1 J2, per cent at 2,067.05, and 
extended that loss in the post- 
bourse falling a fur- 

ther 46.00 to 2,057.20, as disap- 
pointing US data began to 
make itself felt. 

The Bundesbank’s wnm g of 
the repo rate to under 6 per 
cent did little to excite enthusi- 
asm, coming within most 
expectations. 

Of greater concern to the 
equity market is unrest among 
public sector workers, with IG 
Metall engineering union mem- 
bers due to ballot on strike 
action. 

Among the day's heavy los- 
ers Daimler-Benz shed DM18 or 
2 per cent to DM795 and then 
to DM792J50 in the after mar- 


ASIA PACIFIC 


Tokyo 

The stable yen and hopes of a 
bottoming out erf the economy 
supported investor confidence, 
and the Nikkei 225 average 
closed above the 20,000 level 
for the first time since Febru- 
ary 8, writes Emibo Tomato m 
Tokyo. 

The index gained 219.42, or 
1.1 per cent, at 20.216.62 on 
active buying by foreign inves- 
tors. It opened at the day’s low 
of 20,052.61 and peaked at 
20,240.92 during the morning. 

Investors were encouraged 
by better than expected indus- 
trial output figures and labour 
statistics announced on Man- 
day. However, the tankan, the 
Rank of Japan’s quarterly sur- 
vey of business sent iment , 
announced yesterday had little 
impact on stock prices since it 
showed that sentiment among 
manufacturers was little 
changed from the previous 
report 

Large-lot profit-taking 


ket 

PARIS retreated sharply at 
the close as worries about the 
implications arising from the 
release of US data took hold. 
The CAC-40 index, which had 
fallen to a session low of 
2,17646, dosed off 5&94 or 2.4 
per cent at 2,183.12. 

Turnover was FTrbbn. 

Among the worst falters 
Euro Disney died FBTL30 or 
3.7 per cent to FFr3350, Thom- 
son-CSf FFrll.50 or 5^ per cent 
to EFrl86J» and L'Oreal FFr43 
or 3.3 per cent to FFr1,242. 

ZURICH, mixed early in the 
day, turned lower after the 
release erf the US GDP data, 
leaving the SMI index down 
408 at 2£47.4, taking the cumu- 
lative two day decline to 2J& 
per cent. 

UBS bearers, downgraded by 
a number of analysts a ft er last 
Friday’s results, fell SFr44 to 
SFrl.320, taking the cumula- 
tive three day decline to 9 per 
cent. 

CS Golding were steadier 
after Monday’s 53 per cent fell, 
losing SFr3 to SFr635. SBC 
added SFr4 to SFr4M: some 


around the 20,000 level by insti- 
tutional investors in the after- 
noon prevented the Nikkei 225 
from rising further, in spite of 
active overseas buying. The 
recent decline in the bond mar- 
ket also prompted a shift Into 
the stock market by foreign 
fund managers. 

Volume was 500m shares, 
against 467m. The Toplx index 
of all first section stocks 
advanced 13.77 to 1,645.48, 
while the Nikkei 300 added 2.02 
at 30L25. Rises led fells by 780 
to 269, with 140 issues 
unchanged. But in London the 
ISE/Nikkm 50 index eased 1.93 
to L365.73. 

Nippon Telegraph and Tele- 
phone rose Y3AQQ to Y979.000 
in spite of reports that it will 
not request a previously expec- 
ted rise in local call rates for 
the next fiscal year, but 
instead plans to raise its core 
service rate, which would have 
a gwiflflHT effect on profits. 

A strong rise in housing 
starts figures for January 
released on Monday supported 


analysts have recommended 
snitching into the stock. 

Bine chips were marked 
down on profit-taking by for- 
eigners. also taking the oppor- 
tunity to bank currency gains. 

Nestte shed SFH23 to SFTL2S0 
and Roche certificates fell 
SFrlOO to SFr6^0a 
MILAN was dragged lower 
by weakness in bonds and the 
lira and the Comit index shed 
8.96 to 649J24, with the market 
also inhibited by the political 
outlook in the run up to the 
elections on March 27-28. 

Trading was halted for 
almost three hours due to tech- 
nical problems, but volume 
was so low that the bourse 
hours were not extended. 


housing shares. Misawa Homes 
climbed Y40 to Yl,150 and 
Daiwa House Y4Q to YL700. 

Foreign investors bought 
steel issues. Nippon Steel, the 
most active issue of the day, 
gained Y2 at Y354. 

Stocks previously higher on 
the mul timedia theme, encoun- 
tered profit-taking. NEC 
receded Y10 to 71,040. Some 
banking issues were easier on 
corporate selling. 

In Osaka, the OSE average 
rose 185.08 to 22£2&96 in vol- 
ume of 160m shares, the ei ghth 
consecutive advance. 


Roundup 


The region was mi verf yester- 
day. Seoul was closed for a 
national holiday. 

HONG KONG fell 2.5 per 
cent, undermined by a slide in 
banking stocks and worries 
that prices fetched at a govern- 
ment land auction were too 
high. The Hang Seng index 
shed 26LS7 to 10.14K3& 

Heavy profit-taking from the 


BCI shed L34 to L6.026 amid 
expectations that the privatisa- 
tion would be completed. 

Foreign favourites were left 
lower on profit-taking. Fiat 
shed L59 to 1*4,692 and Pirelli 
Shed L88 to 2,061. Among the 

shed LI 01 to 14047 and Stef 
was L123 lower at L4438. 

AMSTERDAM was buffeted 
by worries elsewhere on the 
continent and overseas and the 
AEX index lost A81 or 1 per 
cent to 41554. 

There were steep falls among 
the heavily capitalised issues, 
with Unilever, for instance, Los- 
ing FI 2.00 to F1213JK). 

Pakhoed, the transport 
group, which annminrgri that 


opening in Hang Seng Bank 
and its parent HSBC Holdings 
pulled the index down, follow- 
ing the two groups' results 
on Monday. HSBC dropped 
HK$7 to HK$107 and Hang 
Seng Bank HK$8 to HK$6LS0. 

The market fell gathered 
momentum in late trade on 
news that a residential devel- 
opment site in the tourist dis- 
trict of Kowloon had sold for 
HK$2_2 fihn, far exceeding fore- 
casts of HK$L5bn to HKtLTbn. 

This prompted concern that 
Hong Kong’s high property 
prices, which are propping up 
the stock market, might lead 
developers to raise funds 
through the equity market 
with rights offers, which could 
eventually depress share 
prices. 

Blu e chip properties fell. 
SHK Properties aM HK$L50 to 
HKJ57.50 and Cheung Kong 75 
cents to HK$4&75. 

SINGAPORE was dragged 
down by the worries In Hang 
Kong and concern over the 
outlook for higher US interest 


it was to issue 2.6m new 
shares, fell 70 cents to FI 54-50. 

MADRID fell 2 per cent in 
line with weaker bond markets 
which were pushed lower by 

disappointment with the Bund- 
esbank's smaller than expected 
repo rate cut, the US data and 
sa fes by foreign investors. 

The general index shed 6.78 
or 2 per cent to 332.68 in ner- 
vous trading. 

Tfilfifomca tumbled Pta85 or 
4JJ per cent to Ptal«89Q in vol- 
ume of 6m shares after news 
that it was pa ying $2bn for 
Entat-Peru »nd CPT-Peru. 

BRUSSELS saw losses In the 
bank and insurance sector 
despite an interest rate cut by 
the central bank. 

The Bel-20 index dosed up 
L10 at L516J30 in turnover of 
BFrLSbn. 

Nonetheless, Arbed, the Lux- 
embourg steel manufacturer, 
went against the trend, rising 
BFrSOO or 7.3 per cent to 
BFrt.400, 

Among insurers Groupe AG 
lost BFr45 to BFr2y 880- 

COPENHAGSN’s KFX index 
retreated L27 to 112.04 with 


rates. The Straits Times Indus- 
trial index shed 29.04. or 1.2 per 
cent, to 2^13^8. 

MANILA dropped 3.7 per 
cent to its lowest point this 
year, closing below the 2JS50 
support level as Investors sold 
heavily in anticipation of a fur- 
ther decline- The composite 
index lost 105.96 at 2.755.65. 

The deeHne was also attri- 
buted to a shift to fixed-income 
instruments by most foreign 
Investors, following an 
increase in US interest rates. 

KUALA LUMPUR saw some 
bargain hunting which lifted 
shares off the day's lows after 
news that the central bank 
would not introduce fresh mea- 
sures to choke off local cur- 
rency speculation. 

Recent speculation about 
new liquidity-mopping mea- 
sures, tododing a rise in the 
s t atutory reserve requirement 
of financial institutions, had 
been affecting market senti- 
ment The composite index 
ended 1222 down at 1J1S.4L 

TAIWAN gained on a techni- 


banks affected by a steep fall 
in Den Dausfee Bank, off DKr4 
at DKI395. 

In contrast Unidanmark. the 
country's second largest bank, 
bucked the trend, climbing 
DKr3 to DKrtSS, helped by 
news that its new share issue 
of 6m A shares had been over- 
subscribed. 

STOCKHOLM'S Aff&rs- 
vftrlden index lost 16.4 to 
i sag.fi . 

ISTANBUL lost a further 2.67 
per cent despite a wave of 
selective buying in the session. 

The composite index ended 
down 40034 at 14,60325, bring- 
ing the losses over the week so 
far to 9-85 per cent 

The Turkish lira lost more 
than 6 per cent against the dol- 
lar, standing at TL2L500 in the 
afternoon. 

The most active shares were 
iron and steel group Eregli, 
down TL50 to TL3.550 and 
glassware producer Turkish 
Sise Cam Fabrikalari. down 
TL175 to TLl.775. 


cal rebound after four days of 
declines, but sentiment 
remained cautious. The 
weighted iwfe* improved 37.80 
to 5.452.44. 

AUSTRALIA clawed back 
futures-led losses but brokers 
arid sentime nt remaine d ner- 
VDUS. The All Ordinaries index 
finished L6 up at 2 JB1.7. 

On the Sydney futures mar- 
ket the March Index finished 
down 12 at 2,174.0. 

NEW ZEALAND put in 
another impressive perfor- 
mance as the NZSE-40 capital 
index rose 25£0 to 2J270.20. 

KARACHI broke the 2,500 
banter for the first time, the 
KSE-100 index moving ahead 
43-52 to 2^0524. 

After the close the central 
hank cut the discount rate to 
15 per cent from 17 per cent 
and the maximum fe nding rate 

to 19 per cent from 22 per cent 

BOMBAY eased in low vol- 
ume as investors digested the 
implications of Monday’s bud- 
get. The BSE index lost 136.05, 
or 3J per emit at 4.150.15. 


Written and exited by John PBt 

1 illnlinni ** * 

ana nvcnaot Morgan 


Economic hopes help Nikkei close above 20,000 level 


iCi 

r 


v i .- *- - 


rW 


',-t ■ 


•' ,-pn! "*• 

./‘r\ 


*. 


1 


Brazil sees a 5% rise at Johannesburg boosted as 
midsession, Mexico down Mandela meets Buthelezi 


Brazil 

Brazilian equities remained 5 
per cent ahead in midday trad- 
ing on continued optimism 
over the creation of a new sin- 
gle price index. 

The Bovespa index was up 
527 at 11,066 in Sao Paulo. 

Traders said that blue chips 
gained liquidity in late morn- 
ing trading after a few for- 
eign investors returned to the 
market 

Midday volume was Crl71bn. 

Telebras, the telecom group, 
was up 5.3 per cent at Cr31.70. 

Oil group Petrobras was 11.2 
per cent higher at Crll9. 

• Brazil's central bank will 
use the newly- created single 
price index. Real Value Unit, 
as a parameter for its interven- 
tions in the foreign exchange 
market. Reuter reports from 
Sao Paulo. 

The bank said it will sell US 
dollars in tlic commercial and 
the interbank domestic forex 
markets at the URV price of 
the day the deal takes place. 

The rate at which the central 
bank will buy dollars in the 
market will be set freely 
between market players and 
the monetary authority. The 
deals will be settled two days 


after the transaction takes 
place. 

The URV’s value will be set 
dally, based on the average of 
three inflation Indices which 
measure the depreciation of 
the cruzeiro real and expressed 
in dollars. 


Mexico 


Mexican stocks were down 
sharply at mid-morning, hit by 
fears of a rise in domestic 
interest rates and a steep fell 
on Wall Street. 

The EPC index was off 41.13, 
or L59 per cent, at 2.5443L A 
total of 23.8m shares were 
traded. 

The ADRs of Telmex in New 
York fell $1% to $65%. while in 
the local market the L shares 
slid 2.78 per cent 

In the broader market 49 
issues changed hands, with 
declines topping advances by 
30 to 4. 

• On Monday, stocks fell back 
as investors worried that 
domestic interest rates may- 
head back up at today's weekly 
auction. The IPC index 
retreated 10.95 to 2,585.44 in 
volume of 55.2m shares. The 
day's biggest decline was 
[nvex, which dropped 4.65 per 
cent. 


Johannesburg was given a 
boost during afternoon trading 
by the apparently congenial 
talks in Durban between Mr 
Nelson Mandela, the African 
National Congress president, 
and. Chief Mangosnthu Buthe- 
lezi, the Xnkatha Freedom 
Party leader. 

Chief Buthelezi said the 
talks had been "going well”, 
in spite of an earlier vow that 
his party’s boycott of the April 
election was not on the agenda 
for the meeting. 

The market was provided 
with a further boast as the 
gold price traded above $380 
an ounce. The golds index ral- 
lied from an initial fall to end 
9 off at 1,986, Industrials 
added 5 at 5.614 and the over- 
all index put on 34 at 4£80. 

Golds bad been depressed by 
the stronger commercial rand 
which was seen as dampening 
export earnings of the mines. 

Anglos proved the most 
buoyant issue in the wake of 
the rising political hopes, app- 
reciating R7 to R204. 

Among the goid shares, Vaal 
Reefs lost RL50 to R430J50 and 
Driefbntein was off 25 cents 
at R55.25. 

De Beers, the diamond giant, 
advanced R2 to R 105.00 ahead 
of the release of the group’s 


South Africa 


JS£ indices rebased 
ilO" -: 



Sown: Datattmem 


interim results, which are 
expected next week. 

SA Breweries was 
unchanged at R82.50, while 
Remgro put on 25 cents at 
R31-25 and Sasol, the oil-from- 
coaJ producer, was up 50 cents 
at B2&50 in response to its 17 
per cent increase in net 
income for the six months end- 
ing December. 

In industrial shares, Barlow 
Band was down 25 cents to 
R27.75. Iscor posted a strong 
10 per cent bounce to R2.70 In 
a resumption of Its recent 
upward trend and Gencor rose 
35 cents to R8J0. 


FT-ACTtlARIESiwbRLCV INDICES 


Jcunlty cornpipd by The Financial Omoa Ud.. Goldman. Sachs & Co and Ma t W nM Securities Ud. In conjunction with the tnattuta of Actuaries and the Faculty o ( Actuaries 
NATIONAL AND 

REGIONAL MARKETS MONDAY FEBRUARY 28 1994 FRIDAY FEBRUARY 33 199* DOLLAR INDEX 


Figures parentheses 

US 

Day's 

Pound 



Local 

Local 

Gross 

US 

Pound 



Local 



y v 

BhOM> rwmtMr of knea 

□attar 

Change 

Staring 

Yon 

DM 

Cunoncy 

% chg 

Dtv. 

Dotar 

Suw&ng 

Yen 

DM Cunency 1933/94 

1993/94 

«QO 

at snjch 

Index 

*> 

Index 

Mv 

Index 

Index 

on day 

YWd 

index 

Index 

Max 

Index 

Index 


Low 

(Nipnax) 

Austnuio (691 ................. 

. 17505 

05 

174.94 

115.44 

155.80 

16163 

1.6 

326 

17422 

17161 

115.53 

154.75 

161.09 

189.15 

13019 

131.13 

Ausinall?) — 

.. .187.95 

-0.4 

16750 

123.73 

160.78 

16738 

-0-1 

025 

188.70 

187.71 

ISASn 

16721 

T67J1 

195.41 

139.63 

14054 

St***" *«» - • - 

16&08 

0.9 

167.68 

110.65 

1*9.15 

145.65 

0.9 

325 

186.84 

165.7? 

11031 

147J6 

144J3 

1MUJB 

140.18? 

14099 

Caracaiion . 

.....135 

1.3 

135.38 

8955 

120.43 

132.89 

15 

224 

13324 

13324 

88.66 

11076 

13098 

14031 

119.10 

119.92 

OoBiuk on ........ 


as 

20a 70 

17752 

239.00 

244 JS3 

0.1 

025 

96821 

267 .51 

17001 

23043 

244.47 

275.79 

195 .66 

201.17 

FWjnd t?T1 

147.31 

0.3 

146.96 

98.98 

130.72 

171.02 

02 

0.65 

14620 

146.14 

9725 

1 30.25 

17051 

156.72 

70X12 

71 J31 

France ... 

179 06 

15 

170.63 

117.88 

158.80 

162.99 

1.S 

7.85 

17623 

173.41 

11073 

15035 

10054 

18537 

149.60 

157.45 

Gammy (591 

.....132.48 

0.6 

13Z.17 

B7.22 

117^6 

117 56 

0.6 

120 

131.75 

131.06 

8722 

11082 

11082 

14138 

107J59 

1 1178 

Hona hong i56) 

419.10 

12 

418.11 

are.si 

371.90 

415.73 

3.1 

225 

40625 

40393 

26080 

36004 

403.13 

50056 

53384 

25034 

Irelond fl*> 

190.80 

0.6 

190.35 

125.01 

10931 

188.11 

06 

3.10 

18923 

180.65 

125.53 

168.14 

18090 

20133 

135.70 

135.70 

Its* <691 • - 

73.96 

-0.4 

73.77 

48 08 


93.16 

0.1 

1.81 

7425 

7327 

40.15 

6524 

9109 

7093 

5SJ21 

6043 

Japan 1^69) 

1S7 33 

2.0 

158.96 

103.57 

139.61 

103^7 

1.4 

0.78 

15423 

153.43 

10110 

136.76 

102.10 

165.91 

107.97 

109^7 

hVUovfna 1691 . — 

535.12 

0.4 

533.86 

352.30 

474^6 

563.02 

0.4 

120 

53327 

53030 

35189 

47167 

K9.7B 

821.63 

274.40 

274.77 

Mcnco 08) . . 

... -231262 

0.4 

2307.14 

1522.60 

2052.14 

BO70.S5 

ai 

062 

2303.60 

2291.56 

1524.93 

204152 

807122 

264708 

141030 

141030 

Ftetrioriand <26’ 

201.72 

1.4 

201^4 

132.00 

179.00 

17K52 

1 A 

322 

198.99 

197.85 

131.73 

17044 

174.01 

207.43 

100.00 

16000 

Now Zejtmd ii*l 

n^o 

1.S 

71.03 

4087 

63.18 

65.69 

2.1 

324 

6924 

6957 

4036 

6101 

6426 

77^9 

44.75 

44.75 

Norway (TJ1 

206.42 

1.1 

205.83 

135.69 

183.17 

207.46 

1.1 

120 

20424 

203.18 

13520 

181:09 

20525 

20042 

13063 

13083 

5*tgaporo (45) 

3*4.53 

-1.0 

343.71 

226.82 

305.73 

251.01 

-1.1 

121 

34101 

34620 

23038 

m.s7 

253.79 

37192 

21157 

22229 

Souft AJnca (60) 

24053 

1.2 

239.66 

15015 

21X17 

247.44 

13 

134 

23757 

23823 

157.07 

21038 

24426 

260.28 

18078 

107.49 

SOim (421 

-. .148.08 

1.1 

147.73 

97.49 

131.40 

156.08 

1J0 

3.78 

148.42 

145-68 

9093 

12923 

154.46 

155.79 

11033 

12533 

Swedan (3ri) .. 

219.00 

-0.1 

219.17 

144.03 

194.35 

259.72 

-0.1 

128 

219.86 

218.72 

146.56 

104.95 

260.09 

230.02 

154.79 

15001 

Switonand (USA 

103.97 

-1.4 

163.58 

107.85 

145.50 

145.18 

-12 

123 

16029 

165.42 

11008 

147.44 

147.11 

17050 

11058 

11058 

Unusd Kingdom (215) .... 

202.71 

1.1 

202.23 

133.48 

179^9 

30223 

1 A 

3_SQ 

200.46 

199.46 

132.72 

177.76 

199,46 

214.86 

1B443 

184.43 

USA (518) 

190.05 

as 

18950 

12012 

168.65 

19a 05 

02 

177 

169.66 

16069 

12556 

168.16 

169.68 

19004 

17091 

1B1D8 

EUROPE {7451 

.170.72 

0.7 

17052 

112.39 

151.48 

163.64 

09 

178 

16921 

168.62 

11221 

15030 

16122 

17050 

137^6 

137.66 

NortSc (1 13) 

... .717-95 

0.1 

212.44 

140.18 

188.08 

219.07 

ai 

1.18 

21172 

211.61 

14082 

188.61 

218JJ1 

2P0.60 

14085 

147.78 

Pacific Bawi (722) 

1B7.4S 

1.9 

167.08 

110.25 

146.60 

114.98 

1.5 

1.0S 

16420 

163,45 

10077 

14069 

11029 

16080 

11035 

1 14S6 

E«o-Paafic (1467) 

.... >0866 

1.4 

168^8 

111.0* 

14066 

134.06 

12 

1.78 

16032 

165.45 

11010 

147.47 

13144 

17078 

124.03 

124X13 

North America (625) 

186.68 

0.2 

1WJ4 

122.90 

165.6S 

186.11 

02 

178 

16822 

18525 

12327 

165.11 

185.63 

19173 

173.70 

177.30 

Empo E*. UK (530) 

,. — 150.19 

o.s 

149.84 

86.68 

133^8 

14090 

06 

12S 

14048 

14070 

9095 

13154 

140.14 

155.73 

120.02 

120*9 

Pacific Ex. Japan C53) 

28559 

15 

26550 

175.12 

236.04 

244.11 

12 

148 

26114 

26076 

173.53 

232.44 

Z39J9D 

29021 

18444 

1GB .53 

World Ex. US (1652) 

109.05 

1.4 

108.45 

11102 

150.72 

13720 

12 

1.79 

16722 

166.65 

11090 

14054 

135^5 

17151 

125.12 

125.12 

Worn Ex. UK (1955) 

172 93 

oa 

172.52 

113.84 

153.45 

149.12 

02 

1.99 

17121 

17042 

11140 

1G1.89 

14755 

17158 

14070 

14097 

WoridEx So. Af (2110) . 

175.19 

1.0 

174.77 

115-33 

155.46 

153.01 

06 

114 

17323 

17163 

11427 

1 53-fi6 

151.73 

17056 

14196 

142^8 

World Ex- Japon (1701) .. 

187.2T 

0.5 

186.77 

12025 

16X13 

183.13 

02 

171 

18823 

18526 

12028 

165.12 

182-03 

19020 

1B2L22 

1CCL22 

The World Index (2170) .. 

17554 

1.0 

175.12 

115-57 

1S5.77 

153.78 

02 

114 

17327 

172.97 

115.10 

154.17 

15148 

17137 

14002 

14003 


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TENDER NOTICE 


UK GOVERNMENT 
ECU TREASURY BILLS 




For tender on 8 March 1994 


The Bank of England announces the issue by Her 
Majesty's Treasury of ECU 1,000 mllHon nominal of UK 
Government ECU Treasure Bills, for tender on a 
bid-yield bads on Tuesday, 8 March 1994. An additional 
ECU 50 milHon nominal of Bills will be allotted direetty to 
the Bank of England for the account of the Exchange 
Equalization Account 

2. The ECU 1,000 mBBon of Bifis to be issued t 
will be dated 10 March 1994 and wffl be In the 
maturities: 

ECU 200 mllfion for maturity on 14 April 1994 
ECU 500 mllfion for maturity on 16 June 1994 
ECU 300 mflllon for maturity on 15 September 1994 

3. All tenders must be made on the printed application 


tender 



Street, London not later than 10.30 axn., London time, 


on Tuesday, 8 March 1994. Payment for Bills allotted 
wffl be due on Thursday, 10 March 1994. 

4. Each tender at each yield tor each maturity must be 
made on a separate application form for a minimum of 
ECU 500,000 nominal. Tenders above this minimum 
must be in multiples of ECU 100,000 nominal. 

5. Tenders must be made on a yield basis (calculated 
on the basis of the actual number of days to maturity 
and a year of 360 days) rounded to two decimal places. 
Each application form must state the maturity date of the 
Bills lor which application te made, the yield bid and the 
amount tendered for. 

6 . Notification will be despatched on the day of the 
tender to applicants whose tenders have been accepted 
in whole or In part For applicants who have requested 
credit of BHts In global form to their account with ESO, 
Eurodear or CEDEL, Bills will be credited in the relevant 
systems against payment For applicants who have 
requested definitive Bills, Bills wiu be available for 
coflection at the Securities Office of the Bank of England 
after 1.30 p.m. on Thursday, 10 March 1994 provided 
cleared funds have been credited to the Bank of 
England’s ECU Treasury BBte Account No. 59005516 
with Lloyds Bank Pic, international Banking Division, PO 
Box 19, Hays Lane House, 1 Hays Lane, London SE1 
2HA. Definitive Bills will be available to amounts of 
ECU 10,000, ECU 50,000, ECU 100,000, ECU 500,000, 
ECU 1,000,000, ECU 5,000,000 and ECU 10,000,000 
nominal. 

7. Her Majesty’s Treasury reserve the right to reject any 
or part of any tender. 

§■ The arrangements for the tender are set out In more 
detail in the Information Memorandum on the UK 
Government ECU Treasury Bin programme Issued by 
“>° ®gFk of England on behalf of Her Majesty’s Treasury 
PH 28 March 1989. and in supplements to foe 
information Memorandum. AH tenders will be subiect to 
the provisions of that Information Memorandum (as 


9. The ECU 50 million of Bffis to be allotted directly to 
me Bank of England tor the account of the Exchange 
Equalization Account wifi be for maturity on 
15 September 1994. These Bills may be made available 
through sale and repurchase transactions to the market 
makers listed in the Information Memorandum (as 
supplemented) in order to facilitate settlement 



•» Treasury Btite Act 1877, the National Loans 
Act 1968 and the Treasury BHte Regulations 1968 as 
amended. 

Bank of England 
1 March 1994 






*■*•1 I 


"1. 


. 




V 


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V 

V