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FINANCIAL TIMES 




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Top Carter aide 
named as White 
House counsel 

President BIU Clinton reached into the upper 
echelons of the Washington establishment for 
assistance over the Whitewater affair by appointing 
Lloyd Cutler as his new White House legal counsel. 

Mr Cutler, 76. served in the same capacity in 
the troubled last year of the Carter administration. 
He is believed to have insisted he be regarded 
as counsel to the office of the president, rather 
than as Mr Clinton's personal attorney. 

Page 14; Profile, Page 5 

Do Beers, the South African company which 
dominates the world diamond trade, is lifting 
its total 1993 dollar dividend by 7 per coat The 
move confirms the stout turaround in the diamond 
business from the difficult conditions in 1992. 

Page 19; Commodities, Page 26 

job creation plea: The US government is 
calling for an international compromise on labour 
market reform to create Jobs, with the US investing 
more in education and training and European 
countries reforming inflexible labour policies 
and wage-setting restrictions. Page 14 

GM setback in Europe: General Motors’ 

Ope l- Vau shall car and light commercial vehicle 
operations in Europe suffered a 56 per emit fall 
in net profits to 1600m in 1993. Page 15 

Western fears mount over Baltic states 

The foreign ministers 
of the three former 
Soviet Baltic states 
will meet today in 
Bonn along with German 
foreign minister Klaus 
Kinkel (Left), amid 
growing concern In 
western capitals over 
Russian-Estonlan rela- 
tions as the dead Hng 
for the withdrawal 
of Russian troops from 
the territory approaches. Mr Kink el has called 
for Russia troops to be withdrawn from Estonia 
and Latvia on schedule, by August Page 2 

BCCI: The liquidators to the collapsed Bank 
of Credit and Commerce International provisionally 
approved a revised deal with the government 
of Abu Dhabi, the majority shareholder In the 
bank, which should pave the way for an increased 
payment to creditors. Page 14 

US peace drive: US special envoy Charles 
Redman met President Slobodan Milosevic of 
Serbia as Washington, anxious to run ahead of 
pressure from its Nato allies to send ground troops 
to Bosnia, is speeding up its search for a political 
settlement for former Yugoslavia. Page 2 

Slanging match on China bitonslfles: 

China and the US toughened their war of words 
on 

China's human rights record, souring the atmo- 
sphere for this week's visit to Beijing by US secre- 
tary of state Warren Christopher. Page 4 

Ex-minister’s office raided: Japanese 
prosecutors moved against a national politician 
for the first time in their year-long investigation 
into corruption in the construction industry and 
the political establishment when they raided 
the offices of former construction minister Kishiro 
Nakamura. Page 4 

Train crash kills mote than 60: At least 
63 people were killed and 370 injured when a 
packed South African commuter train was derailed 
near Durban. Picture, Page 4 

WPP, marketing services group, said It is likely 
to float part of its market research businesses 
this year, yielding up to $2Q0m, as part of an effort 
to reduce debt Page 15; Lex, Page 14 

Hopes fade over trade talks: US trade officials 
have begun to lose hope for any significant gains 
in the final drive to negotiate tariff cuts in the 
Uruguay Round beyond those agreed In December. 
The deal is set to be signed on April 15. Page 6 

Hoechst and BASF, two of Europe's biggest 
c hemicals concerns, announced reduced dividends 
and earnings for 1993. Page 15 

HQaeked aircraft stormed: Troops stormed 
a hijacked Saudi airliner at Nairobi airport, and 
shot one of the Ethiopian hijackers. 

Aztec Mi n i n gs The A$287m {US$206.5m) battle 
for the Sydney-based metals group came to an 
abrupt end when PosGold Investments, part of 
Robert Champion de Crespigny’s Normandy Posei- 
don group, snapped up more than three-quarters 
of its shares in a stock market raid. Page 19; 

Death of a golden chance. Page 19 


WEDNESDAY MARCH 9 1994 


D8523A 


■ STOCK MARKET MOKES 


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14875 


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Hopes rise 
for $2bn 
rescue at 
Euro Disney 

Rights issue planned with 
cut in bank interest charges 


By Alice Rawsthom in Paris 

Euro Disney, the leisure group, 
and Walt Disney, its US parent 
company, are understood to have 
mapped out the basic framework 
for a FFrl2bn ($ 2 bn) restructur- 
ing plan with Euro Disney's 
banks. They are optimistic that 
an outline rescue package can be 
agreed before the March 31 dead- 
line. 

The main components of the 
deal are expected to be a FPrGbn 
rights issue and a FFrtbn reduc- 
tion in Euro Disney's financial 
costs through a combination of 
the banks' reducing their interest 
charges on its debt and Disney’s 
waiving entitlement to fees and 
royalties. The remaining FFr2bn 
would come from a series of 
smaller measures such as asset 
transfers. 

Euro Disney is owned 49 per 
cent by Disney of the US. The 
r emaining 51 per cent is publicly 
quoted. 

There’s still some way to go 
and all the details have yet to be 
ironed out", said a senior banker 
involved with the negotiations. 
"Well probably see a few storms - 
before the calm but, at the 
moment, it looks as though we 
could have an outline deal within 
a fortnight". 

Once a preliminary deal has 
been agreed, it win take at least 
three months for the final pack- 
age to be completed. Disney is 
committed to bankrolling Euro 
Disney until March 31 but is 
understood to be willing to 
extend its support beyond that 


itearilimi if Ihn hanlcs haw agreed 
in principle to a deal. 

A team of senior Disney execu- 
tives, advised by Lazard Fr&res in 
New York, has moved to Paris 
and will stay until the deal has 
been agreed. It is holding regular 
negotiating sessions with the 
hank s’ steering committee, led by 
Banque Indosuez and Banque 
Nationale de Paris. 

Both sides have agreed that a 
rights issue wfll form the core of 
the restructuring plan. Disney 
will take up its full entitlement of 
the Issue, maintaining its stake, 
and some of the creditor banks 
may act as underwriters. 

The two camps are still argu- 
ing, however, over the precise 
terms of the proposed reduction 
in Euro Disney’s financial costs. 

At present, Disney is entitled 
to royalties on 10 per cant of 
Euro Disney's admissions and 5 
per cent of food and souvenir 
sales. The banks are pressing it 
to waive the royalties or reduce 
them to a token leveL Disney is 
arguing that its royalty entitle- 
ment should eventually be rein- 
troduced if Euro Disney meets, or 
beats, certain-targets. 

Similarly, the banks are asking 
Disney to extend indefinitely its 
waiver of a management fee 
worth 3 per cent on Euro Dis- 
ney’s turnover. The US group 
again hopes eventually to rein- 
state the fee. 

Once the fee and royalty issue 
has been settled, Disney will 
press the banks for reciprocal 
cuts in their interest rates on a 
large part of Euro Disney's debt 


Japan’s steelmakers 
forecast $l.lbn loss 
as recession bites 


By MJchlyo Nakamoto In Tokyo 

Japan's five biggest steelmakers 
expect to make a combined pre- 
tax loss of YIMira ($I.Um) for the 
year ending this month and, with 
the exception of Nippon Steel, 
will be passing their dividend. 

The severity of Japan’s pro- 
longed economic downturn cou- 
pled with the impact of a high 
yen would result in the loss, even 
after sales of a substantial 
amount of securities holdings, 
the steel companies announced 
yesterday. 

Sumitomo Metal Industries, the 
third largest integrated steelma- 
ker, is forecasting the largest loss 
among the five of Y34bn in spite 
of sales of stocks amounting to 
Y16bn. It made a Y5.3bn profit 
last year. 

Nippon Steel, the world's larg- 
est steelmaker, is planning to sell 
a total of about YG6bn of securi- 
ties holdings but nevertheless 
expects a loss of Y19bn, com- 
pared to profits of Y28.9bn in 
1992-93. 

For Japan's steel industry, this 
year’s results will be some of the 
worst since the economy suffered 
from the severe impact of the 
yen's rapid rise in 1966. 

The trading environment has 
become extremely difficult,” said 
Mr Shlgeru Omori, executive vice 
president of Nippon SteeL The 
consensus is that the situation is 
even worse than the immediate 
aftermath of the 1985 Plaza 
Accord when the yen's value shot 
up against the dollar. 

The steelmakers are accelerat- 
ing restructuring plans with 


JAPAN'S BIG FIVE 
STEEL GROUPS 

■ Forecast losses for 1993-04 (Ybn) 


Pre-tax 

Ion 

Net 

loss 

Nippon Steal 

19 

32 

NKK 

25 

30 

Kobe 

4 

1 

Sumitomo 

34 

35 

Kawasaki 

32 

39 


many announcing increased cuts 
In employees, reduced capital 
expenditure and stringent 
reviews of operations. However, 
personnel reductions will gener- 
ally be achieved through natural 
attrition and transfers to subsid- 
iaries. Some diversification plans, 
which were begun as an attempt 
to reduce dependence on steel 
products, are being scaled back 
or terminated. 

Sumitomo Metal, which is 
shedding 4^300 jobs over the next 
two years, plans to reduce 
general capital spending by half 
to Y120bn although it will go 
ahead with plans to invest Y90bn 
in advanced farihties at its Wak- 
ayama plant. Sumitomo also 
plans to reduce costs by 15 per 
cent, or Y150bn, by fiscal year 
1995. 

However, the decision to pass 
the dividend reflects the general 
gloom about the outlook for next 
year. The domestic situation is 
unlikely to recovery much and 
some steel groups expect a far- 
ther deterioration In results. 

Steel manufacturers suffer 
identity crisis. Page 4 

Borrowing rate raised. Page 4 



Firefighters damp down a petrol train that derailed and exploded in Zurich. The fuel entered sewers, setting fire to nearby houses Reuter 


German 
ban on 
UK beef 
‘would be 
illegal’ 

By GBHan Tett In Brussels 

The European Commission 
-warned yesterday that Germany 
would be breaking European law 
if it - banned Imports of ^British 
beef because of fears of ."mad 
cow” disease. 

Commission officials said any 
move by Germany, which has 
threatened a ban because of its 
concern over bovine spongiform 
encephalopathy (BSE), would 
almost certainly be met by legal 
action from the Commission. 
This would probably mean an 
injunction in the European Court 
of Justice aimed at forcing the 
ban to be lifted. 

Health ministry officials in 
Bonn said yesterday that Ger- 
many intended to seek a special 
session of EU health ministers 
later this month to discuss a 
ban. Bonn has yet to state 
dearly that it is still prepared to 
impose restrictions unilaterally 
if it foils to persuade its EU part- 
ners to impose a Union-wide ban. 
Health ministry officials said 
last week Germany was prepared 
to act unilaterally 

In Brussels the Commission 
said: “There is only one body 
that can take a decision to 
restrict exports in Europe and 
that is the Community.” It added 
that the Commission had repeat- 
edly told the Germans there was 
no scientific evidence to link 
British beef with another spongi- 
form infection, CrentzfeldWakob 
disease, which affects humans. 

The warning came as German 
and British veterinary and 
health experts met in Brussels to 
try to resolve the dispute, 
inflamed by recent comments 
from Mr Horst Seefaofer, German 
health minister, suggesting Gar- 
many would restrict beef 
imports If the UK did not Intro- 
duce tighter measures. 

Government spokesmen in 
Bonn and London said there 
were differences in the interpre- 
tation of scientific evidence. Mr 
Hartmnt Schlegel, at the German 
health ministry, said that this 
meant the Germans still wanted 
to press ahead with restrict- 
ions. 

Mr Ren6 Stetchen, EU agricul- 
tural commissioner, has indi- 
cated to Bonn that any restric- 
tions would be lllegaL 

The issue has provoked irrita- 
tion hi Brussels, because of Its 
implications for the Commis- 
sion’s powers and the operation 
of the single European market 

An EC official said Mr Stei- 
chen's attitude was “if the meat 
is safe enough for the UK con- 
sumer - and we are convinced it 
is - then it is safe enough for the 
German consumer too". 



CONTENTS 

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— 13 



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13 

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Money Markats 34 

Recent beoaa 38 

Shore Wormatton 3BJB 


Norway nears accord 
on terms for EU entry 


By David Gardner in Brussels 

Norway was close last night to 
agreeing entry terms to the Euro- 
pean Union, joining Sweden, Fin- 
land and Austria, which con- 
cluded membership negotiations 
last week. 

Bat the planned move from 12 
to 16 member states by January 
1995 was stalled because the UK 
and Spain - with lukewarm sup- 
' port 'continued tti' 

refuse to countenance any dilu- 
tion. of their voting rights in an 
expanded Union. 

At a closed meeting of foreign 
ministers in Brussels, the nine 
other current EU members 
warned London and Madrid that 
the enlargement could not go 
ahead if they remained obdurate. 
The Greek presidency of the EU 
and the European Commission 
held bilateral meetings with the 
British and Spanish foreign min- 
isters, who were urged to contact 
their prime ministers, senior EU 
diplomats said. 

The UK and Spain insist on 
retaining the existing formula of 
23 votes needed to prevent EU 
legislation - out of 76 votes dis- 


tributed among the 12 roughly 
according to their size. Their 
partners want to shift the “block- 
ing minority” -to 27 votes, to 
maintain the same percentage in 

a Europe of 16 sharing 90 votes. 

Mr Jacques Defers, Commis- 
sion president, proposed a com- 
promise of moving to 27, plus a 
committee of representatives of 
EU beads of government to study 
vote distribution before . the 
'Union’s constitutional review in' 
1996. The committee would be. 
mandated to consider British, 
Spanish, Italian, and German 
wishes to get a closer relation 
between national population and 
votes than now exists. 

A senior British official said: “I 
can. assure you there will be no 
settlement except on British 
terms.” 

Mr Klaus Kinkel. foreign minis- 
ter of Germany - which does 
worst in the new vote share-out 
it is advocating in order to get 
the four applicants into the 
Union - said: There is no sense 
in agreeing on 23 [votes] because 
this win be rejected by the [Euro- 
pean] parliament." 

Amid this test of negotiating 


nerve, the EU and Norway looked 
close to squaring . the other 
enlargement circle - Spanish 
insistence an recovering "historic 
rights” to 7,000 tonnes of Norwe- 
gian cod against Oslo’s refusal to 
concede a single extra fish. 

A Commission formula, which 
both Madrid ami Oslo were pre- 
pared to consider, in effect recy- 
cles Ssh quotas Norway conceded 
when it joined the. European Eco-_ 
notttic Area free trade zone, 
which started this year.. 

That allowed 7,250 tonnes of 
fish in -1994, rising to 11,000 
tonnes in 1997, for the ElTs four 
poorest countries, nearly half of 
it earmarked for Spain. 

Under the EEA, the Union also 
gets 2B per emit of the Norwe- 
gian waters cod quota - about 
40,000 tonne this year. Norway's 
much-vaunted fisheries manage- 
ment foresees rises in the quota, 
however, and therefore a higher 
tonnage for the Union. The Com- 
mission proposes that that incre- 
ment should go to satisfy Spanish 
demands. 

Czechs delay EU application. 
Page 3 


London SE 
MUSUBouses. 


.35-38 


© THE FINANCIAL TIMES LIMITED 1994 No 32,312 Week No 10 


LONDON - PARIS - FRANKFURT - NEW YORK - TOKYO 



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t. 





FINANCIAL TIMES WEDNESDAY MARCH 1994 


NEWS: EUROPE 



Trams ran in Sarajevo yesterday for the first time since war broke oat nearly two years ago, travelling along the city's ‘Sniper Alley 1 

US in Balkans peace drive 


Mr Charles Redman, 50, the US special envoy to the region 
appointed last August, and now the pivotal player in the peace 
process, spends his time commoting between Zagreb, Sarajevo, 
Serbia and Vienna, where Bosnian Croats and Moslems and 
Croatian officials are trying to pat flesh on a preliminary federal 
plan for Bosnia, writes Judy Dempsey. 

“When he first sat in on the Geneva talks, I think he was 
overwhelmed by the complexity of the issues," a senior UN 
official said. "He listened. He learned. Washington could get its 
fingers barnt just like the Europeans.” Mr Redman is trying to 
avoid this by making sore no lines are crossed. He Is on the 
phone constantly to Mr Vitaly Chorkin. Russia’s envoy to the 
former Yugoslavia, the German Foreign Ministry, and the UN. 

“Redman wants to capitalise on the momentum for peace. If it 
comes, he’ll have a hard time convincing Congress to send 
ground troops to keep that peace," a GS diplomat said. 

Sceptics believe Mr Redman, former ambassador to Sweden 
and state department spokesman, does not have enough political 
clout, but he leans on his contacts at the Intelligence department 
of the DS air force and at Nato, where he served in the 1970s and 
1980s respectively. 


Balladur declares 
war on Franglais 

A new law will lead the Gallic offensive against 
English and its bastard child, writes David Buchan 


Riihe 
rejects 
more cuts 
in defence 

By Michael Lindemann in Bonn 

Mr Volker Rflbe, the German 
defence minister, yesterday 
warned against further cats in 
defence spending following a 
report by the parliamentary 
ombudsman saying soldiers 
were demoralised and bewil- 
dered by equipment shortages 
and confusion about the role 
of the German army. 

Mr Alfred Biehle, the 
ombudsman who visited 
troops throughout Germany, 
said there was a “discrepancy” 
between objectives set out for 
the armed forces and means 
available to meet them. 

Soldiers on exercise were 
now shouting “bang, bang” to 
simulate the sound of rifle fire 
because bullets were too 
costly, the report said. 
Far-reaching cuts in defence 
spending have aggravated 
problems arising from the 
fusion of the Bundeswehr and 
the former East German 

Volksarmee. 

“Hie fact that budget com- 
mitments and structural deci- 
sions have been cancelled or 
changed in quick succession 
bas shattered tbe credibility 
and leadership ability of the 
political and military com- 
manders,” Mr Biehle wrote in 
his annual report 

“Soldiers expect with right 
that politicians clearly tell the 
German population why it 
needs a Bundeswehr in the 
future and what sort of an 
extended objective it will 
have.” 

Falling morale in the armed 
forces has meant more people 
were refusing national service 
and the number of conscien- 
tious objectors in 1993 shot up 
to 111,190, up from 60,269 
three years earlier. 

The Bundeswehr Associa- 
tion, to which more than 
250,000 soldiers belong, wel- 
comed Mr Biehle's report, say- 
ing it highlighted longstand- 
ing “anxieties and problems in 
file armed forces”. 

The growing number of pro- 
fessional soldiers who had 
been retired to meet savings 
targets meant the Bundeswehr 
had almost reached its reduced 
target of 370,000 men. 


By Judy Dempsey 

The US, anxious to run ahead 
of pressure from its Nato allies 
to send ground troops to Bos- 
nia, is speeding up its search 
for a political settlement for 
the former Yugoslavia. 

Mr Charles Redman, its spe- 
cial envoy, yesterday met Pres- 
ident Slobodan Milosevic of 
Serbia in an effort to draw the 
Bosnian Serbs into last week's 
federation agreement between 
Bosnian Croats and Moslems. 
He later met President Franjo 
Tudjman of Croatia in Zagreb. 

Tomorrow, Mr Cyrus Vance, 
the former United Nations 
peace mediator, will meet Mr 
Theodoras Pangalos, the Greek 
foreign minister, in Geneva to 
try to resolve Greece's dispute 
with neighbouring Macedonia. 

Mr Re dman ’s talks in Bel- 
grade reflect Washington's 
belief that participation of the 
Bosnian Serbs is crucial for 
securing stability in Bosnia 
and for putting together a 
broader agreement 

“We need to engage the Bos- 
nian Serbs in order to put 
something together that would 
represent an overall settle- 
ment," said Mr Redman. 


UN and US diplomats yester- 
day said the issue for the Bos- 
nian Serbs was the status they 
would have if they accepted 
the federal plan. The accord 
envisages a federation of Bos- 
nian Croats and Moslems 
linked with Croatia through a 
confederal structure. 

UN diplomats have warned 
Bosnian Serbs that if they 
reject the Washington agree- 
ment, then 70 per cent of the 


territory they hold would be 
“placed in limbo”. 

“It would not be recognised 
by tbe international commu- 
nity and we would not sanc- 
tion any union of Serbia with 
eastern Bosnia," a senior UN 
negotiator said. 

In an effort to bring the 
Serbs to the negotiating table, 
diplomats stressed that the 
Bosnian Croat/Moslem federa- 
tion neither was aimed at iso- 


lating the Serbs, nor provided 
an instrument to Launch a 
spring offensive against Serbs 
in eastern Bosnia. 

“The question is if the Serb 
leadership is prepared to con- 
cede, and if they judge this is 
the right time to negotiate. 
After all, Mr Milosevic wants 
sanctions lifted." a UN diplo- 
mat said. Any concessions by 
the Bosnian Serbs and Croatia 
would involve: 

• The Bosnian Serbs ceding 
territory in eastern Bosnia, 
and agreeing to lift the sieges 
of the Moslem-held enclaves of 
Gorazde, Zepa, and Srebrenica. 

• Mr Milosevic and Mr 
Tujdman agreeing on the sta- 
tus of Serb-held territories in 
Croatia. Nearly one third of the 
republic is covered by UN pro- 
tected areas, which are de 
facto under Serb control. 

• Croatia agreeing to grant 
extensive autonomy to Serbs in 
south-western and eastern 
Croatia in return for Zagreb 
regaining control over the 
republic. But it is far from cer- 
tain if Mr Milosevic could, or 
wants to persuade the Serb 
leadership in Croatia to accept 
this proposal since the war has 
radicalised them 


P rime Minister Edouard 
Balladur yesterday 
declared himself ready to 
do battle on behalf of French. 
Inaugurating a new term of 
office for the “Higher Council 
of the French Language", he 
told its 29 members that safe- 
guarding French was “a politi- 
cal priority” of his 
government 

It Is now quite clear that 
under Mr Balladur, a man 
whose love of subjunctives 
(used in expressions of hope or 
fear) perfectly expresses his 
nuance style of government 
Frirnce will soon have a new 
language law, alo og the lines 
of the draft already prepared 
by Mr Jacques Toubon, the cul- 
ture minister. 

Behind the government's 
Gallic counter-offensive, of 
course, lie both hope and fear. 
Its hope is to capitalise on its 
recent Gatt success in protect- 
ing France's system of sub- 
sidising and protecting its film 
industry, in a way that will 
prove politically popular in 
next year's presidential elec- 
tion. Mr Toubon happens to be 
the keenest supporter of Mr 
Jacques Chirac, Mr Balladur’s 
rival for the Elysee. 

The government's fear is 
that if it does not act soon to 
stem the rising tide of English 
or its bastard child, Franglais. 
it will be too late. The storm 
clouds are gathering from the 
north, with the imminent 
arrival of English-prone Scan- 
dinavians into the European 
Union threatening to tilt the 
linguistic balance in Brussels 
decisively in favour of Shake- 
speare's tongue and against 
that of Racine. 

Mr Toub on's aides are quick 
to point out that their new bill 
is not like Quebec's controver- 
sial language law which ban- 
ned the public use of any other 
language but French. Rather, 
they say, it is designed to 
ensure that French citizens, 
employees, and consumers get 
their information in French, 
though it may be accompanied 
by a foreign translation. 

The bill is aimed at beefing 
up the provisions of a 1975 lan- 


guage law, which has been 
widely flouted, say Mr Tou- 
bon's aides, partly because the 
penalties of FFr300 (£34) to 
FFr600 for breaking it are now 
only the equivalent of a Baris 
parking fine. Since 1975. some 
100-200 individuals and compa- 
nies a year have been fined, 
mainly for labelling products 
or advertising jobs in a lan- 
guage other than French. In 
addition to sharply raising the 


G allicisms struggle 
to enter popular 
usage; certainly the 
sports ministry's 
prescription of a 
‘comer kick’ in 
football as a ‘coup 
de pied du coin" has 
not caught on 

level of fines, the new bill 
would enable associations de 
difence de la longue francaise 
to take those who infringe the 
law directly to court. 

Mr Toubon 's ministry has 
two particular targets in its 
sights. One is what it believes, 
apparently from employees' 
letters oF complaints, is the 
growing tendency of French 
companies to issue instruc- 
tions to their French staff in 
France in other languages. An 
unscientific check with some 
of France's biggest companies, 
such as the Alcatel group 
which does less than 30 per 
cent of its business inside 
France, is that some respond in 
English, either to boost their 
international image or to make 
their frequent foreign clients 
feel more at home. 

But issuing internal instruc- 
tions in English to French 
staff - says Air Liquide, the 
industrial gas group, which is 
suspected by Mr Toubon's min- 
istry of doing just that - would 
be mad “because it makes good 
sense to communicate in a lan- 
guage that is understood". 

The second and more sub- 
stantive target of tbe Toubon 


bill is conferences, which 
would henceforth have to pro- 
vide translation into French. 
This may pose problems for 
the French scientific commu- 
nity which increasingly works 
in English, the international 
Knytia franca of exact science. 

France's Academy of Science 
came out formally in January 
against any attempt to legis- 
late in this field. 

But Mr Michei Crozon, a 
physicist who also serves as 
director of communications for 
the CNRS, the body which fun- 
nels state money into French 
science, says real damage to 
French scientists' ability to 
communicate with their breth- 
ren abroad would only occur if 
the former were forced to pub- 
lish in French. 

Paris's famous medical 
research body, the Institut Pas- 
teur, caused a domestic rum- 
pus in 1SS9 by switching the 
titles of its publications into 
English, in recognition of the 
feet that less than 10 per cent 
of the manuscripts it was 
receiving from abroad were in 
French. 

But it now also publishes a 
purely French journal as well 
as “encouraging” Anglophone 
authors to provide French pre- 
cis of their articles - as indeed 
does the Academy of Scienceas 
a matter of course in its publi- 
cations. 

Imposing French, of course, 
begs the question of what is 
French. That is a matter for 
the Academic Fran$aise, set up 
in 1635 to guard the language, 
and, more recently for "termi- 
nology committees” set up by 
each ministry. Both are having 
a struggle to keep up with the 
advance of other languages, 
chiefly English. 

The Academie Franchise has 
reached the letter "F” in revis- 
ing its dictionary, while the 
ministerial committees invent 
200-300 new approved Galli- 
cisms each year. 

But the new terms have an 
equal struggle entering popu- 
lar usage; certainly the sports 
ministry's prescription of a 
“comer" kick in football as a 
coup de pied du coin has not 


GLOBAL FUND MANAGEMENT 

Wh i ch Way a re the M a rk ets Mov i ng ? 

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MARCH 23 MARCH 24 


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West to push Moscow on withdrawal of ex-Soviet troops 

Bonn talks on Baltic tension 


By John Lloyd in Moscow 


The foreign ministers of the 
three former Soviet Baltic 
states will meet today in Bonn 
with Mr Klaus Kinkel, tbe Ger- 
man foreign minister, amid 
growing concern in western 
capitals over Russian-Estonian 
relations as the deadline for 
the withdrawal of Russian 
troops from the territory 
approaches. 

Mr Kinkel has called for Rus- 
sia troops to be withdrawn 
from Estonia and Latvia on 
schedule, by August of this 
year. 

The German minister said 
that the Russian ride must not 
link the retention of the mili- 
tary units to the provirion of 
civil or voting rights of the 
Russian population, as it has 
earlier threatened to do. 

S imilar raiia have come in 
the past few days from the US 
and Britain. A US state depart- 
ment spokesman said aver the 
weekend that the US govern- 
ment was “disturbed” by Rus- 
sian negotiators raising again 
issues already agreed in previ- 
ous talks with Estonian offi- 
cials. 

The issue of troop withdraw- 
als from the Baltics will be 
part of talks planned between 
Russian foreign minister And- 
rei Kozyrev and Mr Warren 
Christopher, the US secretary 
of state, in Vladivostok next 
Monday. 


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Russia and the International Monetary Fund resume crucial loan 
negotiations in Moscow today with both their reputations on tbe 
line, Reuter reports from Washington. Moscow wants IMF 
endorsement of its credentials as a pro-reform government, 
while the Fond is seeking to justify its position as lead manager 
in helping Russia remake its economy in die capitalist mould. 

Reaching agreement will not be easy. International monetary 
sources rate the chances of the two sides striking a deal on an 
economic reform programme that tbe IMF could back with a 
$l.5bn loan as no better than 5 (150. Moscow's commitment to 
reform has been questioned following the departure of hey 
ref o rmers from the government in January, and the IMF has 
found itself criticised by the US and others for not doing enough 
to encourage Russian reforms. The IMF has already lent Russia 
$225bn, but has held back further credits because of doubts about 
Moscow’s willingness to press ahead with economic reforms. 


A British government state- 
ment said that “according to 
the final act of the Conference 
of Security and Co-operation in 
Europe meeting in Helsinki in 
1992, Russia must withdraw its 
troops from Estonia quickly 
and in an orderly manner, 
completely, and must not tie 
withdrawal to other issues". 
The UK statement continued: 


“The international community 
has repeatedly underscored 
that the withdrawal must take 
place without any other condi- 
tions. Therefore, the Russian 
troops must be pulled out by 
August 31 this year, as 
announced." 

Mr Vitaly Churkin, the Rus- 
sian deputy foreign minister in 
charge of negotiations with the 


Baltic states, told the newly 
formed Chamber of Public 
Affairs, a presidential advisory 
body, that Russia did not link 
the rights or Russians to troop 
withdrawals. 

However, he said that eco- 
nomic and other agreements 
with Latvia and Lithuania 
would be affected by a contin- 
ued denial of rights. 

According to the Baltfax 
news agency. Mr Churkin 
promised that “a civilised and 
respectful attitude" towards 
Russian language speakers 
would meet with “understand- 
ing and a response” from Rus- 
sia. 

However, other speakers at 
the chamber denounced the 
treatment of Russians and 
demanded redress. 

Mr Mikhail Zadornov, a 
well-known actor, said that 
Russians were being denied 
access to education and medi- 
cal care and were being sacked 
from jobs. 


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. FINANCIAL TIMES WEDNESDAY MARCH 9 1994 

- ~ • . . .. . . ~ 7- .. ... NETOsJEUROPE 


EUROPEAN NEWS DIGEST 

German economy 
forecast to grow 
by 1.5% this year 


Germany's economy will grow by 15 per cent In 1991, awwdfaig 
to s report published today by one of Germany's five key eco- 
nomic institutes. It said strong' demand fin* exports and further 
investment would help lift the economy oat of its worst post-war 
recession, even though domestic orders Bright <*> » fiw n p to slide. 
Low w age deals should improve the prospects for economic 
growth, with lower interest rates helping to counteract their 
effect on consumer demawri Unemployment was likely to remain 
constant in 1994 and 1995, falling only in 1996, but a 
fall in the numbers on short-time working -was arpactari before 
then, the report said. Mr GQnter Rexrodt economics minister, 
said in January that the economy would grow by b et we e n Lfl and 
L5 per emit this year, but DIW, annOm- think-tank, said the 
economy would shrink by 0.5 per cent Michael Lmdemarm, Bam. 
Unemployment rises, see Economic Watch below. 

ILO warms to job agencies 

The Inte rnati on al Labour Organisation is set to abandon its 
longstanding opposition to private employment agenci e s follow- 
ing publication of a report recommending reform of ILO Conven- 
tion 96. Alter pressure from the European Commission, several 
European countries, in particular Germany and Spain, are aban- 
doning their tight controls on private agencies. However Italy 
and Greece continue to ban them completely, a may be several 
years before the ILO formally abandons Convention 96 - which, 
in 1949, recommended abolition of fee-charging employment agen- 
das. But the report, written by Mr Sergio Ricca, and endorsed by 
the ILO secretariat, is a significant step towards phasing out the 
convention. Traditionally, opposition to private agencies is based 
on hostility to the idea of private companies making money out of 
unemployment and on the fear that state agendas win be left 
with hard-to-place workers. David Goodhart, London. 


Hungary targets secret agents 

The Hungarian parhament yes- 
terday voted to force secret 
police agents and informers to 
retire from public life, with the 
threat of exposure if they do not. 
The movie is part erf a “justice" 
campaign by tiie right-wing gov- 
ernment, designed to focus atten- 
tion on the ' Socialists’ past 
wrongdoings, ahead of elections 
on May 8. Mr Gyula Horn (left) 
the Sodafist leader, has a com- 
manding personal lead over 
Prime Minister Peter Boross in 
the opinion polls. However, Mr 
Horn served inthe workers’ mili- 
tia that hdped Soviet troops put 
down the 1856 uprising against 
communist rule. The new legisla- 
tion targets members of 'this' organisation as weBas the secret 
police. The government has also begun arresting people accused 
of war crimes during the uprising and is to vet newspaper editors, 
believing the media to be ‘‘dominated" by former communists. 
Nicholas Denton, Budapest 



Information technology suffers 

Europe's information technology industry suffered its worst year 
in 1993, and ; Has drily limited prospects for growth next year, 
according to a report from tiie European Information Technology 

Observatory, the commission’s co-ordinating group for IT. 
Growth in the European IT market was 2 per cent in 1993, down 

from annual growth of 15 per cent ftve years agO- ETTO said fester 

deregulation and a harmonisation of standards were essential to 
allow European groups to compete cm equal terms with US 
companies. The US market grew by 7 per cent last year and now 
accounts for 37 per pent of the world market. Japan accounts for 
16 per cent, compared with the EU’s 29 per cent However, with 
new marke ts opening up in eastern Europe an d in technological 
fields straddling telecormnnnlcatinns and IT, EITO predicted that 
the Ecu2fi2bn (£198bn) European IT market could grow by around 
3.6 per cent in 1994. Gillian Tett, Brussels. 

Dutch drop mobile phone tax 

The Dutch government has dropped controversial plan s to t ax the 
profits of companies operating mobile phone networks. It is 
hw taad considering charging mo bile p hone operators for the use 
of radio frequencies. Koninkfijke PTT Nederland, the sta te-ow ned 
telecoms operator, plans to launch a European GSM standard 
mobile communications network in July, and. a second operator 
wifi, be cho sen by tender in late 1994. Mrs Hanja Maij-Weggen, 
public works minister, said consortia bidding for licences would 
be informed that Dutch policies on radio frequencies were under 
review and subject to change. However, legislation cm the use of 
frequencies 1s not expected in time, for the opening ctf bidding in 
the autumn, because of general electi on s on May 3. Several 
international consortia, grouped around the three main Dutch 
hanirs, ABN Amro, ING and Rabobank, are expected to compete 
for the second operator’s licence. Ronald van de End, Amsterdam. 

Czechs delay EU application 

President Vaclav Havel said yesterday the Czech Republic would 
delay its application to join the European Union, foregoing a joint 
approach with Poland and Hungary. The Czech Republic wanted 
to join the EU as soon as possible, he said, but needed more time. 
Meanwhile, Mr Andrzej Olechowski, the Pohah foreign minister, 
said it was not realistic for Poland to become a foil EU member, 
because of the costs of extending the CAP and regional aid to 
Poland’s huge agriculture sector, but it was vital for Pottos to foal 
inclu ded in areas where the EU was building new institutions, 
such as «vHwmon foreign policy. Hand Barber, Strasbourg. 

ECONOMIC WATCH 


German unemployment rises 





German unemployment rose 
slightly in February to a new 
post-war record of 404m, from 
the previous record of 408m. in 
January. The pan-German unem- 
ployment rate was 105 per cent 
of the workforce. Ip western Ger- 
many the rate rose to 85 per 
cent tn February, from 85 per 
... cent in January, white the east- 
ir am German rate rose to 17J per 
cent, from 17.0 per cent in Janu- 
ary. The increase in westem. Ger- 
many was below analysts’ expec- 
tations and represented a 
slowing in the rate of increase. 
Unusually poor weather in the 
tow at. to.. ea ..*♦ " second half of February may also 
uccbatati^m ' . . ; * have contributed to the rise, 

merer' revised figures for Germany’s fourth-quart er gr oss 
mestic product showed a fefl of 05 per cent from the previous 
arter and a drop of 05 per cent from a year earlier. 
Seas onall y adjusted unemployment rate in the European 
don was 105 per cent in January, up from a revised 105 per 
at in December and 10.0 per cent in January 1993. Among the 
da^25s, EU unemployment reached 2L1 per cent In January, 
from 195 per cent in January 1993. ■ 

Italy's private Isco economic research body forecast Italian 

)P growth of between 15 and 15 per cent in 1994 The govOTJr 

mt target is L6 per cent but Italy’s chief accountant said the 
» forecast was realistic. _ , . 

Swiss car imports rose by 165 per cent m February l»4 to 
521 cars, from 18512 in February 1993. Total car imports for the 
at two months of 1994 came to 42,179, up 95 per cent from 
631 in the fame period of 1993. 


From rich city to Germany’s poor-house 

David Waller visits Schweinfurt, symbol of a loss of manufacturing industry’s competitive edge 


W ithin two years the 
city of Schweinfurt 
in northern Bavaria 
has gone from being one of 

western Germany's most pros- 
perous cities to one of its poor- 
est. From having a surplus of 
jobs, it now has 17 per cent 
unemp loyment, the highest in 
Bavaria and far above the 85 
per cent for western Germany 
as a whole. 

‘•Germany's poor-house” and 
“dty of Angst” are just two of 
the labels which have stuck to 
the small city of 53,000 inhabit- 
ants since its troubles 
attracted the attention of the 
natiftTMi media. Schweinfurt, 
close to the border with the 
former East Germany, lias 
become a symbol of what can 
happen when western Ger- 
many’s manufacturing indus- 
try loses its competitive edge. 

“The crisis in tins city is 
worse than elsewhere in Gm > - 
many,” comments Mr Erwin 
Saal. bead of the works’ coun- 
cil at FAG Kugelfischer, the 
big ball-bearings manufacturer 
which has been the mainstay 
of employment in the city fin: 
more than a century. “But at 
die. same time it is symptom- 
atic of the hangover German 
industry has brought upon 
itself after more than 10 years 
of unbroken growth. 

“In that time wages rose rap- 
idly and the working week 



Gudrun Grteser: "The code awakening has yet to came* mow 


became the shortest in the 
world. As a result we have 
structural problems overtayed 
with deep ‘ recession - and 
nowhere in Germany is that 
more obvious than in Schwoin- 
fort" 

The city’s past prosperity, 
and its current problems, are a 
result of the local economy's 
dependence on three big 
emp loyers: Kugetfucher and 
SEF, two ball-bearings giants, 
and Ftchtel & Sadis, the manu- 
facturer of clutches, shock-ab- 
sorbers and other vehicle com- 


ponents and which Is part of 
the Mannesman n engineering 
conglomerate. 

In the years since the Second 
World War the three acted as a 
magnet for employment 
throughout the Franconia 
region of northern Bavaria. 
The city's tax revenues, drawn 
from the big three's profits, 
were the largest in the prosper- 
ous state of Bavaria after 
Munich and Ingolstadt. 

But more recently the big 
three bare suffered -in espe- 
cially acute form - the combi- 


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nation, of high wage costs and 
the intensified competition 
from foreign manufacturers 
that hag hit German industry 
so hard. 

While the city's tax revenues 
have vanished, the companies’ 
response to plunging order- 
books has been a wave of job- 
cuts on a scale never before 
seen in Schweinfurt. In the 
past two years about 7,000 peo- 
ple hare lost their jobs. 

The lay-offs at Kugelfischer 
have been especially trau- 
matic. Since it came to the 
brink of collapse in January 
last year, the family-controlled 
company has reduced Its total 
employees from 31,000 to 15,700 
anH sold off 13 subsidiaries, hi 
Schweinfurt the group cut its 


workforce by 43 per cent, from 
8J72 at the mid of 1992 to 4,671 
at the beginning of February 
thic year. 

“Nowhere in Germany has a 
company gone through so radi- 
cal a restructuring," says chief 
executive Mr Peter-JQrgen 
Kreher. (The plans for the 
rationalisation were drawn up 
by Mr Kajo Neukirchen, more 
recently called In to sort out 
MetallgeselLscbaft, the deeply 
troubled Frankfort conglomer- 
ate.) Kugelflscher's rote as a 
provider of life-time employ- 
ment from one generation of 
Schweinfurters to the next was 
smashed overnight 

“If someone had said two 
years ago that Kugelfischer 
would suffer this kind of fete, 
you would have been laughed 

out of court," reflects Mr Ernst 
Lang, head of the work’s coup - 
dl at the Swedish-owned SKF, 
where the workforce has 
shrunk by nearly a quarter to 
4460 in tiie past two years. “I 
still don’t think people here in 
Schweinfurt realise how seri- 
ous it is. They are hopeful that 
something will turn up.” 

Many at those laid off were 
sent into early retirement and 
even those who were made 
redundant received generous 
pay-offs - in some cases as 
much as DM150.000 (£58565). 
Mr Lang believes that many in 
Schweinfurt are suffering from 


an illusion of prosperity and 
that the real problems - and 
real poverty - will emerge in a 
few years when the pay-outs 
hare been exhausted. 

“The rude awakening has yet 
to come," agrees Mis Gudrun 
Grieser. a former English 
teacher who has been the city's 
mayor since 1992. “I have no 
illusions: the jobs we have lost 
by the thousand will only be 
replaced by the dozen." 

She warns about painting 
the picture too black, praising 
the skills of the city's well- 
trained workers and explaining 
how she has persuaded Bavar- 
ia's state government to com- 
mit DMlOOm to promote small 
business In the Schweinfurt 
region. “But the money can’t 
be used -there just aren’t 
enough worthwhile projects to 
invest in," she says. 

The problem for Schweinfurt 
is that the incentives it can 
offer to drew new businesses 
into the region are nowhere 
near as generous as those on 
offer in the former East Ger- 
many, just 30 miles away. 
“After reunification the Ossis 
[east Germans] used to drive 
over here in their Trabants 
looking for jobs," muses Mr 
Fritz Glombowski, deputy head 
of SKF*s works' council. “Soon 
it’ll be the other way round 
and well be commuting to 
Thuringia." 


If you think Airbus Industrie makes only one aircraft, maybe this will 
change your view. 

Airbus Industrie has achieved a 30 % share of the international civil aviation market because its long-term business strategy, based on a clear vision of the 
world's air transport needs, has created not just one aircraft but a family of seven: including the world's largest twin-aisle twin and the longest range jetliner in 
aviation history. Sales of all seven members of the Airbus family now total nearly 2000 aircraft worldwide. 





-• - V-'- '• 


iT-’iV 


4 




FINANCIAL TIMES WEDNESDAY MARCH 9 1994 


4 

NEWS: INTERNATIONAL 


Nakamura ready for battle 


Prosecutors 
raid Japan 
MP’s office 


Japanese prosecutors moved 
against a national politician 
yesterday for the first time in 
their year-long investigation 
into widespread corruption 
Involving the construction 
industry and the political 
establishment. Renter reports 
from Tokyo. 

The Tokyo District Prosecu- 
tor’s Office raided the offices of 
Mr Kishiro Nakamura, former 
construction minister, whom 
they allege may have taken 
rash in exchange for quashing 
an anti-trust investigation into 
bid rigging among big builders. 

Prosecutors set in motion a 
rarely-invoked constitutional 
procedure for stripping a law- 
maker of his immunity from 
arrest. It would be the first 
time in 27 years that a Japa- 
nese lawmaker was subject to 
such humiliation. 

But Mr Nakamura, from the 
conservative opposition Liberal 
Democratic party (LDP), said 
he was wiHing to be arrested 
and fight the charges. Earlier 
he had rejected repeated 
requests to show up at the 
prosecutor’s office for volun- 
tary questioning. 

But yesterday he issued a 
statement through his lawyers, 
saying he was ready for a court 
battle. ”1 dared to opt for being 
arrested. I am determined to 
reveal the truth of the matter 
in court," he said. 

“As for my arrest, I want the 
prosecutors to designate the 
time and date. I strongly hope 
to be arrested at the main 


entrance of the Diet [parlia- 
ment} building." 

Since the inquiry started in 
ivfrrch Iwtf year, more than so 
executives of Japan's six big- 
gest building companies have 
been arrested along with four 
local government leaders. 

So far, no national politician 
has been arrested. Lawmakers 
cannot he arrested while par- 
liament is in session. Normally 
anyone who comes under scan- 
dal allegations submits to vol- 
untary questioning to avoid 
public exposure. 

Justice Minister Akira Mika- 
zuki described Mr Nakamura's 
case as “historic” and voiced 
bis full support for the prose- 
cutors. “This is a historic scan- 
daL I believe it wOl turn the 
history of Japanese politics," 
Mr Mikazuki said. The LDP 
ruled Japan for 38 years but 
lost its majority in general 
elections last year, ceding 
power to a coalition headed by 
Premier Morihiro Hosokawa. 

"This is a very serious mat- 
ter for our party," the LDP par- 
liamentary business manager 
Mr Sadatoshi Ozato said. 

The LDP has launched a 
campaign against Mr Hoso- 
kawa, attacking him for bun- 
gling the economy, botching a 
US-Japan trade s ummi t meet- 
ing and failing to settle divi- 
sions within his coalition. Mr 
Nakamura’s status in the once- 
dnwiiMTit party might wplflln 
why prosecutors singled him 
out first among 12 national pol- 
iticians said to be on their list. 


Steel manufacturers suffer an identity crisis 


Michiyo Nakamoto reports 


F or Japan's steel compa- 
nies. which pride them- 
selves on being the pil- 
lar of the country’s industrial 
might, being forced to pass 
their dividend Is an embarrass- 
ment they have not had to suf- 
fer since just after the Second 
World War. 

“We must grit our teeth and 
do our best," Mr Matao Kojima, 
executive vice president of 
Sumitomo Metal Industries 
said yesterday after an 
announcement by the five big 
steelmakers that they all 
expected to incur losses in the 
year tO the end of this month 
The steel industry has found 
itself in these dire circum- 
stances just four years after 
production levels reached a 
peak of 110m tonnes. At the 
time, the strength of demand 
from Japan’s surging domestic 
economy was enough to halt 
fundamental restructuring pro- 
grammes the industry had 
embarked on to cut overcapa- 
city and prepare for leaner 
years ahead. 

With those reforms left 
incomplete, the industry has 
suffered a crippling slump in 
demand from its big customers 
in the domestic motor vehicle. 


Japan 

bon and sted production 1990 = UW 


105 



gO I — I i i i i l — i i u 

1985 87 88 91 93 

Souoa: D tfaa twn 


electronics and construction 
industries as Japan's economy 
has continued its relentless 
slowdown. 

The weakness of co nsumer 
demand and the yen’s sharp 
rise took their toll on the 
motor and electronics indus- 
tries which in turn depressed 
demand for the steelmakers' 
products. Meanwhile, in the 
construction sector, private 
activity, with the general 
exception of private housing, 
has been slack. 


on an industry embarrassed at having to omit dividends 


On the export front. Japa- 
nese steel maker s have faced 
pressure in the US as a result 
of anti-dumping action by 
American industry. Even 
before the US authorities made 
any official decision, fears of 
anti-dumping action had led to 
uncertainty about supplies. 
Baring Securities estimates 
exports to the US over the year 
will be down about 25 per cent 

Even a relatively bright spot 
-the surge in exports to Chi- 
na - will not have the uplifting 
impact on earnings might 
have been hoped for. While 
exports to China will be up 
about 100 per cent from a year 
ago, when Japanese exports to 
that country had reached a 
record hi g h , these have been 
low value-added products 
which served not so much to 
raise profits as to keep the 
facilities of Japanese mills on 
stream. 

Perhaps the most telling 
illustration of the severity of 
the steel makers business 
slump is the securities sales 
they are being forced to make 
to minimise their losses. The 
companies are having to turn 
their backs on their traditional 
ties, cemented by equity hold- 


ings. with financial institu- 
tions and business customers 
and to sell at a time when 
share prices are low. Nippon 
Steel will sell about Y66bn 
(£420m) worth of securities 
holdings and Kobe Steel some 

Y3ibn- 

To cope, the companies are 
reviewing ambitious diversifi- 
cation moves - into areas 
ranging from semiconductor 
production to liquor importing 
and flying instruction. Nippon 
Steel has pulled out of loss- 
making notebook computer 
sales while Kawasaki Steel is 
in negotiations to sell its sili- 
con wafer production venture. 
More c han ge s in non-core busi- 
ness plans are expected to fol- 
low. 

C osts are being attacked 
widely through signifi- 
cant cuts in jobs, capi- 
tal expenditure and distribu- 
tion. Kobe Steel intends to cut 
its labour force by about 3J100 
while Kawasaki Steel will 
reduce 30 per cent of its man- 
agers. 

While in large part, job 
reductions will be achieved 
through natural attrition and 
transfers to subsidiaries “there 


are no sacred territories in our 
bid to reduce costs", Sumi- 
tomo’s Mr Kojima said yester- 
day. . 

Japan’s steel companies have 
yet to address the structural 
problem of overcapacity which 
is at the root of their difficul- 
ties and is likely to maintain 
pressure on profits. While the 
Japanese steel industry has 
capacity of about 110m tonnes, 
even the steel companies them- 
selves admit that demand for 
their products is likely to 
range between 90m and 95m 
tonnes. 

“It’s always the most terrify- 
ing, the most expensive thing 
that is left to the very end," 
says Mr Stephen Wolfe, steel 
analyst at Baring Securities. 
The Japanese steel companies 
have concentrated their efforts 
on cutting people, or raising 
production efficiencies, but 
that does not address the fun- 
damental problem of collapsing 
prices. Mr Wolfe notes. For 
that, it is necessary to reduce 
capacity “and to make sure 
people are scrambling for 
steel." 

While any moves to cut 
capacity were virtually ruled 
out by Nippon Steel, which, as 


industry leader, has histori- 
cally set a model for the oth- 
ers. Mr Wolfe is not counting 
out the possibility that the four 
other companies may be con- 
sidering such a move. Their 
decision to pass their dividend 
in spite of Nippon Steel's deter- 
mination to pay one may bo an 
Indication that the mighty Nip- 
pon Steel Is losing its leader- 
ship. he believes. 

I f that is the case, and Japa- 
nese steel makers arc pre- 
paring to map out a more 
Independent course, each for 
their own survival, the indus- 
try could emerge from its pres- 
ent predicament in much bet- 
ter shape. 

While they face growing 
competition from South Kor- 
ean and other low cost produc- 
ers at the lower end of the mar- 
ket, their ability to produce 
high quality products, such os 
cold-rolled steel sheet used in 
the car industry, remains 
unchallenged. 

“The future of steel as a 
product is not over," says Mr 
Kojima. "In terms of technol- 
ogy Japan outdoes the rest As 
long as we are competitive we 
can survive" 


Bank puts up cost of long-term 


By Emiko Terazono and 
Wifltam Dawkfris in Tokyo 

The cost of long-term funds for 
Japan’s hard-pressed corporate bor- 
rowers Is to rise, despite the central 
bank’s policy of keeping official 
interest rates at a record low. 

The Industrial Bank of Japan, the 
leading long-term credit bank, yester- 
day announced it will raise its 
long-tom lending rate to its most 
credit-worthy corporate clients by 0.6 


percentage points to 4.4 per cent from 
tomorrow, the second increase in two 
months. 

Other commercial Hanks are expec- 
ted to follow suit and raise interest 
rates on long-term loans next month. 
IBJ*s long-term prime rate is 
regarded as a benchmark for the 
industry. Its 0.3 percentage point rise 
to 3.8 per cent in February ended an 
eight-month decline in long-term 
rates, arousing concern at the Bank 
of Japan. The central bank is under 


increasing pressure to cat its 1.75 per 
cent official discount rate to stimu- 
late flagging demand. 

Yesterday’s move will intensify 
fears that the Japanese economy's 
capacity to recover might become 
hampered by a lending squeeze. Even 
before the latest rise, companies told 
an IBJ survey that they planned to 
cut capital investment this year for 
the third year running, the 
longest decline since the second 
world war. 


corporate 

IBJ’s decision reflects a recent rise 
in the long-term bond yields, due to a 
foil in prices caused by an oversupply 
in the Japanese government bond 
market and the rise in US interest 
rates. Japan's bond market has faced 
a huge sell off recently, as investors 
locked in profits ahead of the March 
book closing. 

The turmoil on global bond mar- 
kets and fears of an Increase in bond 
supply to finance the economic pack- 
age and tax cuts announced Last 


borrowing 

month, has exacerbated the foil. 

The Bank of Japan has become 
increasingly wanted that the rise tn 
corporate lending rates win hurt cor- 
porate earnings, hampering economic 
recovery. 

To ease the downturn in the gov- 
ernment bond market, it has led 
short-term money market rates lower 
over the past few weeks and the yield 
spread between the discount rate and 
the overnight call rate Is currently at 
a historical low. 


Israelis in 
court over 
share 
scandal 

By Julian Ozame in Jerusalem 

Three Israeli bank officials 
appeared in a Tel Aviv magis- 
trates' court yesterday in con- 
nection with a share and bond 
price manipulation s candal on 
the Tel Aviv Stock Exchange. 

They are the latest in a line 
erf brokers and fond managers 
to be interrogated since a big 
Investigation of alleged insider 
trading and share manipula- 
tion was revealed last month 
by the Israel Securities Author- 
ity. Many more are said to be 
under investigation. 

The unfolding of what is 
potentially the biggest share 
manipulation scandal wince the 
1963 bank shares collapse has 
sent jitters across the stock 
market, which has plummeted 
this year. 

The worst affected stocks 
have been the smaller capital- 
ised companies quoted on the 
Karam index, which are more 
easily subject to manipulation. 
Since the middle of January 
the Karam index - which had a 
powerful bull run last year 
-has plunged about 27 per 
cent while the Mhhtanim two 
sided index of the 100 heavily 
capitalised companies has 
fallen about 1IL5 per cent 

Mr David Rosenberg, a mar- 
ket analyst at Pacific Mediter- 
ranean Investments, said yes- 
terday that in the short-term 
the investigation was having a 
marked downward effect on 
the market. 

However, he said the Investi- 
gation would have a long-term 
benefit because "it improves 
the credibility of the market 
The key thing in any securities 
market is that traders feel they 
are operating on a level 
playing field. Enforcement by 
the Securities Authority will 
be especially good for foreign 
investors.” 

• Israeli police said yester- 
day they had arrested four out 
of five leaders of anti-Arab 
groups wanted in a govern- 
ment crackdown on Jewish 
militants since the Hebron 
massacre, Reuter adds from 
Jerusalem. 

See World Stock Markets 


Protests hit 
S African 
black 
‘homeland’ 

By Patti WaMmetr in Johannesburg 

Riot police fired live ammunition on 
demonstrators in the nominally inde- 
pendent black “homeland” of Bophu- 
thatswana yesterday as strikes and 
anti-government protests swept the 
capital, increasing political pressure on 
President Lucas Mangope. 

In tiie capita], Mmbatho and its twin 
town of Mafikeng, security forces for a 
second day fired tear gas and rubber 
bullets to disperse demonstrators. Ear- 
lier in tire day, riot police stormed the 
broadcasting centre after the Bopbu- 
thatswana Broadcasting Corporation’s 
chairman — Eddie Mangope, son of the 
president- was locked In the building 
by striking workers. 

The occupation of broadcasting cen- 
tre and demonstrations were part of a 
growing series of protests against Hr 
Mangope, who is resisting South 
Africa’s transition to black majority 
rule and has refused to register for 
next month’s all-race elections. 

The protests began with a civil ser- 
vants’ strike, sparked by d e ma n ds that 
their pensions be paid out before the 
April elections, after which Bophuthat- 
swana will cease to exist as it will be 
reincorporated into South Africa. Civil 
servants feared the homeland would 
use their pension fond to pay govern- 
ment expenses if financial transfers 
from Pretoria - which account for 
about one-third of Bophuthatswana’s 
budget -were cut to put pressure on 
Mr Mangope to take part in elections. 

The Transitional Executive Council, 
the multi-party body which oversees 
South Africa's transition to democracy, 
believes it has the power to cut off 
funds to Bophuthatswana, though this 
has not yet been tested. 

Since then, the strike bas widened 
into generalised demonstrations 
against Mr Mangope, encouraged by 
the African National Congress which 
wants him to accept the elections, hav- 
ing failed to negotiate the regional 
powers which Bophuthatswana and 
other right wing groups wanted in 
exchange for poll participation. 

Mr Mangope has so far refused to 
allow campaigning in the homeland. 
ANC President Nelson Mandela said H 
was only a matter of time before action 
was taken against him. The ANC has 

urged President F.W. de Klerk’s gov- 
ernment to halt all financial aid and 
supplies to Bophuthatswana to force it 
to participate in the elections. 



Christopher attacks China over human rights 


By Tony WaBcar In Bering 

China and the US yesterday 
toughened their war of words on Chi- 
na’s human rights record, souring the 
atmosphere for this week’s visit to 
Beijing by Mr Warren Christopher, US 
secretary of state. 

Mr Christopher, using bis harshest 
language so far about China, 
expressed “strong distaste" over Bei- 
jing's recent harassment of dissidents 
and said the security sweep would 
have a “negative effect" on his visit 
and on the US review of C hina ’s 
favourable trade status. 

China lashed back at criticism from 


President Bill Clinton and earlier 
remarks by Mr Christopher about the 
arrests of three dissidents and the 
overnight interrogations of at least 12 
more, calling the US complaints “irre- 
sponsible”. Beijing police, only hours 
later, showed they were not deterred 
by US criticism by taking away Mr 
Wang Dan, a student leader of the 
1989 Tiananmen protests, for ques- 
tioning. He was later released. 

Asked to comment on Mr Clinton’s 
criticism of the recent detention of 
leading dissidents, a Chinese Foreign 
Ministry official said: “No foreign 
country, organisation or individual 
has the right to make irresponsible 


remarks or interfere". 

Mr Clinton said last week after Chi- 
na's leading dissident, Mr Wei Jing- 
sheng, was detained that “we strongly 
disapprove of what was done and it is 
obviously not helpful to our rela- 
tions". Mr Christopher, who Is visit- 
ing Australia, has said that Human 
rights issues will top the agenda of 
his talks In Beijing with China’s For- 
eign Minister Qian Qictaen. 

China last week provoked an inter- 
national outcry when it began round- 
ing up dissidents including Mr Wei 
who served more than 14 years in jail 
for his role in the “democracy wall" 
protests of the late 1970s. 


Mr Christopher's visit to C hina 
comes at a delicate moment in Sin- 
o-US relations; a decision is pending 
on renewal of China's Mast Favoured 
Nation (MFN) states in the US mar- 
ket Mr Clinton has demanded “prog- 
ress” on human rights before agree- 
ing to renew MFN. A decision is due 
by June on the lower tariff regime for 
an estimated 96 per cent of Chinese 
products entering the US. 

China has repeatedly denounced 
attempts to link trade and human 
rights, and this is certain to be Bei- 
jing’s prevailing message this week- 
end. “Human rights and MFN are 
completely separate issues. We 


strongly oppose linking them," Mr 
Qian said recently. 

The authorities seem to fear that 
dissidents will use the National Peo- 
ple’s Congress or Mr Christopher’s 
visit to bring their cause to interna- 
tional notice by circulating petitions 
calling for increased political freedom. 

The Public Security Bureau, In a 
rare public statement, denied it was 
intimidating dissidents. It said Mr 
Wei and Mr Wang Dan were not in 
detention. Only Mr Zhou Guogiang fa 
labour leader and lawyer), Mr Yuan 
Hongbing (a lawyer), and Mr Wang 
Jiaqi had been detained and were 
“being investigated". 


Nigeria currency 
allocation cut 


By Paul Adams in Lagos 

Nigeria's acute foreign 
exchange shortage forced the 
country’s central bank yester- 
day to cut its weekly allocation 
of hard currency, prompting 
fears that the government's 
foreign exchange policy will 
lead to declining production, 
profitability and investment 

The Central Bank of 
Nigeria's second allocation this 
year of foreign exchange to 
industry fell from J200m 
(£lllm) a fortnight ago to 
$100m. 

Foreign exchange has been 
in short supply since December 
1992; some manufacturers say 
stocks of raw materials and 
spare parts have been declin- 
ing and replacement or new 
plant is overdue. The 10-week 
gap between the last allocation 
in 1993 and the first in 1994 
worsened the problem. Bank- 
ers say the expected average of 
850m a week will remain well 
below demand. 

Bulk orders of spare 
parts or raw materials can 
be scaled down in proportion, 
but this is little use when 
importing costly capital goods. 
Importers can no longer maVa 
up the difference with export 
proceeds sold at market rates. 
Prospective foreign investors 
have been deterred by the 
new policy, which has 
ruled out agreement with offi- 


cial external creditors. 

This is a very serious situa- 
tion," a leading manufac turer 
warned yesterday. “We have 
had a disruption of almost 
three months, then a new sys- 
tem which is not working well 
enough. No reasonable stock 
cover can cope with continuing 
under-supply of foreign 
exchange. Businesses are 
already thinking of scaling 
down production by ApriL" 

In the first budget presented 
by Gen Sani Abacba. Nigeria's 
military leader, the govern- 
ment in January set out to 
ensure an adequate supply of 
currency to industry and con- 
trol inflation. 

Like last year's currency 
auctions, the allocation is pro 
rata according to demand, 
which encourages inflated 
applications. The 1994 budget 
pegged the exchange rate at 
N22 to the dollar, more than 
double the value of the black 
market naira, banned the open 
foreign prehawgp market and 
cut interest rates to 21 per 
cent, less than a quarter of the 
estimated tnflaHwn rate. 

Some manufacturers say the 
CBN is making the best of a 
difficult situation. It has fought 
off pressure for ministers or 
civil servants allocating aD 
forex direct to each end-user. 
This would have taken Nigeria 
back to the days of export lic- 
ensing in the 1980s. 


NEWS IN BRIEF 


Hussein hopes 
to meet Fahd 


King Hussein of Jordan led a delegation to Saudi Arabia 
yesterday, on his first visit to the kingdom since relations deterio- 
rated because of the 1990-1991 Gulf crisis, James Whittington 
writes from Amman. 

Jordan’s media reported the king had left for Saudi Arabia to 
perform the Ummra, a minor Moslem pilgrimage. But officials 
acknowledged he was seeking a meeting with King Fahd. One 
western diplomat in Amman described the trip as “significant". 

It demonstrated Jordan’s desire to achieve a rapprochement 
with the Saudis, still bitter over King Hussein’s refusal to 
the US-led effort to force Iraq out of Kuwait in early 1991, 

Kazakhstan poll condemned 

An official European observer team yesterday condemned Mon- 
day’s parliamentary elections in ex-Soviet Kazakhstan, saying the 
system of preventing abuses was flawed and government-spon- 
sored candidates enjoyed a built-in advantage, Steve LeVtne 
reports from Alma Ata. 

The team, representing the Council for Security and Coopera- 
tion in Europe, stopped short of calling the elections rigged. But 
it said election procedures allowed such abuses as ballot-box 
stuffing, and that the pre-election campaign handiwipnori inde- 
pendent candidates. 

The election was to fill a new 177-member parliament that will 
replace a larger legislative body dissolved in December. 


if Vkjvu w uuugci 

y’Skrtay Presented a «.7bn m 
budget heavy on defence spending but seen as a step tows 
economic reform, Reuter reports from Luanda. 

The 1994 economic plan presented to parliament by the Lua 
government, fighting renewed civil war with Unita rebels, sets 
s^ualu^bon target of 2K> per cent by December, do^n fl 
the LS40 per cent registered this previous December 1993. 
plan envisages 1L5 per cent GDP growth in 1994, 



FINANCIAL TIMES WEDNESDAY MARCH 9 1994 


5 


NEWS: THE AMERICAS 


Cool hand guides Whitewater raft 

Clinton hopes Cutler will let him ride political rapids, writes Jnrek Martin 


T wo Democrats, both lawyers, 
stand in a league of their own as 
heavyweight troubleshooters 
with enormous Washington reputa- 
tions. One is Ur Robert Strauss, now 75,' 
at various times national party chair- 
man, special trade representative and 
ambassador to Moscow under President 
George Bush. 

The other . is Lloyd Norton Cutler, 
whose clout and access to the upper 
reaches of government far exceed the 
governmental positions he has nomi- 
nally held dating nearly 90 years in 
Washington. 

Bom in New York and a Yale Law 
School graduate like the president and 
Mrs Hillary Rodham Clinton, this 
urbane, witty and charming wan is a 
fixture an the social circuit and in the 
political backrooms that used to be 
smoke-filled. 

His law firm, Wilmer, Cutler and 
Pickering, which he helped found in 
1902, is a star in the Washington legal 


firmament, its domestic and foreign cli- 
ents generally of the hhie chip variety, 


merit 

Mr Cutler's personal and political 
briefs have long been at the cutting 
edges of US domestic and foreign pol- 
icy. Hie was active in the civil rights 
movement and other liberal causes, a 
member of the 1968-70 Eisenhower com- 
mission on the prevention a nd ca uses of 
violence, the unpaid co-ordinator of 
President Jimmy Carter’s attempts to 
get the Salt Two treaty ratified and a 
frpq nprrt rrarrmflwfca tnr on wv n^fitoHrtnal 
and ethical issues. 

Earlier this year he was the ; 
lawyer in the case that sue 
overturn ed the Washington State law 
imposing form Smite on oW-ted repre- 
sentatives. 

- But, to combat political "gridlock," he 
has also advocated a constitutional 
amendment to co-ordinate the congres- 
sional and presidential election cycles 


by giving House members four-year 
terms, not two. and senators eight, 

rather tiym 

But there is an unpredictable streak, 
too. In 1887 he offended many liberal 
triends by coming to the defence of Mr 
Robert Bark, President Ronald Reagan's 
conservative Supreme Court nominee 
ultimately rejected by the Senate. In 
1992, along with another Democratic 
eminence grfae, Mr Paul Nxtze, he gave 
some advice to Mr Ross Perot prior 
to hJs independent presidential can- 
didacy. 

Sis appointment as White House 
counsel is reminiscent of the rirenm- 
stances of August 3979. The Carter 
^HijKtprtinn was already fix trouble 
even before the Iranian hostage crisis 
and its White House legal counsel. Mr 
Robert T i pai m t u under fire tor taking 
too narrow a legal view of his responsi- 
bilities. 

The same criticism is now levelled at 
the departing Mr Bernard Nussbaum, 


whose resignation was announced at 
the weekend, and at the general 
White House staff with its heavy 
component of old friends of the presi- 
dent. 

Last summer, when also under attack 
after a series of mishaps, Mr Clinton 
reached into the Washington establish- 
ment to appoint Mr David Gergen, deni- 
zen cf Republican White Houses, as a 
senior adviser. 

T3ie improvement in presidential fox- 
times owed not a little to this move, 
although Mr Gergen is now toss visible 
and is frequently reported to be think- 
ing of moving an. 

Mr Cutler's ■wwmH White House term 
may not be inn g either. R may not even 
last until Mr Robert Ffake, the indepen- 
dent counsel investigating the White- 
water affair, produces his report next 
year or tee year after. But if he gets the 
White House show back cm the road in 
the me anwhile, he will have earned Ms 
stripes yet again. 


Banco Latino ‘a victim 
for political reasons’ 


By Joseph Man n In Caracas 

The former president of 
Venezuela’s Banco Latino, 
taken over by the government 
in January, says the bank was 
victimised tor political reasons 
and was in no worse shape 
than other banks the govern- 
ment has chosen to save. 

Mr Gustavo Gomez Lopez 
said the decision to intervene 
at tee bank was made by tee 
country’s previous government 
under President Bawfin Velas- 
quez “mare tor political than 
technical reasons”. 

Latino, Venezuela's second 
biggest bank, was seen by Mr 

VaKapiM * inter im pwB mmwit 

as having aided the political 
and personal fortunes of ex- 
president Carlos Andtes Pfirez, 
be addpd- 

Mr Fdrez, forced to leave the 
presidency last year to face 


ca o nqrtloa charges, had a tong 
and . close association with 
important shareholders of 
bank. 

Mr Gomez, speaking by 
phone from an undisclosed 
location outside Venezuela, 
said: "The government inter- 
vened in my Katik arvl I am 
now seem as a criminal. Butin 
the case at other Venezuelan 

from ' liip ilflily 

problems, the government is 
providing them wito financial 
aid and is not prosecuting any- 
one. 

He admitted Banco T-aHnn 
was in trouble, bat "it was no 
more problematic than other 
Venezuelan banks. When 1 
took over Iraised capital and 
tried to change the bank from 
what it bad been.” 

Mr Gomez, 43, resigned as 
president of Banco Latino in 
December.aftm 18 years at the 


hank and 14 mnwtha as rhief 

executive. He left Venezuela 
soon -after, he said, because 
friends warned him he would 
he a target of persecution. "I 
didn’t want to be held in a 
police ***»tiar incommunicado, 
m return to Venezuela when, 
the (political] climate 


Last week, a criminal court 
judge m Caracas issued arrest 
warrants against Mr Gomez 
and 82 others suspected of 
being involved in tee downfall 
of the hfltiic Latino’s fai l ur e set 
off a crisis in Venezuela's 
financial system and triggered 
a wave of frantic dollar pur- 
chases in - far m ar y and Febru- 
ary. Mr Gomez, who said he is 
not guilty at any wrongdoing, 
is charged with illegal appro- 
priation, fraud, conspiracy and 
appro v ing false fi nanci a l state- 
ments. 


Pentagon bans smoking 


Qy George Graham 

After Britain’s Royal Navy 
abandoned the nzm ration, it 
was perhaps only a matter of 
time before tee US aimed ser- 
vices stopped smoking. 

That time came yesterday 
when the Pentagon announced 
a workplace smoking ban. 

The new policy will still 
allow soldiers and sailors to 
light up a cigarette in desig- 
nated areas of military bar- 
racks, clubs and restaurants, 
but will rule out Pentagon 
offices and hallways, as well as 
the inside of a tank or aircraft. 

Smoking below the decks of 
US Navy ships has already 
been vlrtiiaUy outlawed. 

The armed forces have tra- 
ditionally smoked much more 
than the population at large. 


and despite aggressive steps to 
curb smoking, the. rate of 
’ addiefibh r^m&Ins higbl' 

'Navy offioais said around 37 
per cent of Navy personnel 
were now smokos, compared 
with around 27 per cent in the 
general US pophtafiem. 

The move was therefore wel- 
comed by anti-smoking earn- 


ing for tougher curbs on 
smoking in the wake of the 
Environmental Protection 
Agency’s recent decision to 
classify passive smoking as an 

environmental hazard. 

Some shopping mails and 
restaurant chains, including 
McDonald’s, have banned 
anmiriTig on their premises, 
and legislation is being 
debated in Congress that 
would bar cigarettes from all 
public bafldiugs. 


Tobacco companies also face 
-jSfxutiny^mver reports teat they 
.aMiricbtme to.teefe products 
in order to main t a in addiction 
- a charge that has led the 
Food and Drug Administration 
to consider regulating ciga- 
rettes as a drug. 

justice D ep a r t m ent officials 
are also conducting a monop- 
oly investigation into allega- 
tions that tobacco companies 
agreed to keep a cigarette 
which presents less of a fire 
hazard off the market. 

The tobacco industry, faring 
a steep increase in cigarette 
taxes as part of US healthcare 
reforms, is not taking this 
lying down. Philip Morris, the 
tobacco conglomerate, shut 
down one of its largest plants 
yesterday to bus tis workers to 
Washington to demonstrate 

against the tax rise. 


Violence mars road to 
Colombia elections 

Santa Kendall on the congressional campaign trail 


'f more elections and more 
contenders are a sign of 
.greater democracy, then 
ntnhiw fa doing welL There 
928 slates of candidates reg- 
sred for congressional elec- 
os on Sunday, when the offi- 
1 Liberal party presidential 
wfidate will also be cho se n, 
lowever, at least 10 can gre s- 
nal candidates have been 
led, kidnapped or injured 
ring the campaign. One sod- 
gist calculates that elections 
more t han half Colombia's 
Doidpalities are affected by 
srriHa violence. 

Tie proliferation of congres- 
nal lists seems to be more a 
azure of the atomisation of 
! two main parties than of 
nocratic vigour. In the 
ith-westem department of 

Qe, for example, more than 
Liberal groups are cornpet- 
; for the 18 seats. . 

Tie power of the regional 
ieft has broken down and 
! new voting card makes it 
ire difficult to buy votes 
ca it was in the past Even a 
mg political party such as 
19, the former guerrilla 
ivement, is suffering from 
unity and presenting three 
testa Valle. . 
liven that so many camn- 
ies are unkno wn and have 
Ie more than a slogan for a 
igramme, the Liberal party 
current president Cesar 
viria is trying to capture 
lers with vague, feel-good 
aUcity. 

Abstention normally vanes 
tn about half to two thirds 
Colombian elections; this 
re the large number of inves- 
ations into congressmen 9 



and a widely held, 
assumption that drug money 
helps fund many campaigns 
have reinforced disillusion- 
ment with politics. However, 
the Liberal party holds, and 
will probably retain, a comfort- 
able majority in both houses. 

In the race tor the Liberal 
party presidential candidacy, 
the winner is virtually certain 

to he Mr Ernesto Samper, who- 
is far ahead of his . Liberal 
rivals in tee opinion polls. The 
first round of the presidential 
elections will take place 'on 
May 8, followed by a second 
round on May 29 if no candi- 
date wins an outright majority. 

Mr Samper has been ortthe 
campaig n trail since tee-mid- 
<fie of last year, but his Conser- 
vative party opponent, Mr 
res Pastrana, launched himself 

into the race only last month. 
Although some opinion polls 
give Mr Pastrana a clear 


advantage, others put Mr Sam- 
per slightly ahead. 

A Liberal presidential vic- 
tory is less likely to guarantee 
co n ti nui ty in economic policy 
than a Conservative one. While 
both candidates stress social 
spending to offset the effects of 
opening up the economy, Mr 
Pastrana leans further towards 
wanting to attract foreign capi- 
tal, privatisation and joining 
the North American Free 
TVade Agreement - 

Mr Samper is staking a lot 
on an ambitious employment 
program m e linked to e conom ic 
growth rates of more than 5 
per cent a year. Arguing that 
poverty and violence go with 
unemployment he hopes to 
create L5m jobs over the four- 
year term through, sectoral 
plans for agriculture, the mod- 
ernisation of Industry, exports 
and small businesses. 

Although they both say they 
would like to be remembered 
tor bringing peace to Cdtomtaa, 
neither Mr Samper nor Mr Pas- 
trana hag «wi« up with- a con- 
sidered strategy for reducing 
violence. Both agree that dia- 
logue is stm an option and the 
government is currently 
talking on three fronts - with 
qdtater groups from the main 

guerrilla armies, with drag 
traffickers and with urban 
militia organisations. 

However, the attempt to 
-bring the guerrillas into the 
democratic system will- be 
hampered by the experience of 
former Maoist guerrillas who 
chose tee democratic path and 
founded the Hope, Peace and 
Freedom party: 140 of them 
have been killed. 


Venezuelan taxes 
to be reformed 


By Joseph Mam hi 


The Venezuelan cabinet 
yesterday sent a series of tax 
bills to Congress aimed at cut- 
ting se cto r deficit, 

which last year reached 3UT per 
rffmfr of gT 068 rinmegtic product 

The bills cover several areas. 
A general sales tax, covering 
imports and other activities at 
the wholesale level, fa planned 
to replace a value added tax 
brought in in October 1993. 

The maxmnim rate for corpo- 
rate and personal income taxes 
is being raised from 30 per cant 
to 34 per cent At the same 

tirna tha Trnmhw nf fnpmwA farr 

deductions fa being reduced. 

Two new taxes are being pro- 


posed: a levy cm all debit trans- 
actions at famirg pm! a luxury 
tax of 10, 90 or 30 per cent, 
depending on riaagifi«ithm.<i to 
be issued by the government 

Venezuela’s motor industry 
is bracing itself for lower sales, 
expecting the luxury tax to 
raise prices considerably on its 
p r ^ i fi ta wu^ high-priced vehicles. 

The gov ern ment is proposing 
aimfl ffhang ws in wteHng tax 
laws, tor example towering 
high foes established last year 
for certain government ser- 
vices and Introducing stricter 
penalties far tax evasion. It 
plana to set up an independent 
agency to collect taxes and 
reduce tax evasion, put at 70 
per cent in recent years. 


Congress 
embarks 
on health 
bill draft 


By George Graham 
in Washmgton 

Congress yesterday took its 
first tentative step towards 
putting together a healthcare 
reform tall when a House of 
Representatives panel sat 
down to try to draft legislation. 

The aihrmmniHwj, a health- 
care panel of tee influential 
Ways and Means Comm i ttee , fa 
chaired by Congressman Pete 
Stark of California, whose own 
proposal for reform fa some- 
what to the left of the plan put 
forward by President BIEL Clin- 
ton's ftdpfab tnti o iii 

Mr Stark wants to add a new 
category to the government- 
run Medicare programme 
which now provides health 
Insurance for the elderly, to 
cover bote the poor and unem- 
ployed, including those now 
included in the parallel govern- 
ment Medicaid p ro g r a mm* . 

The new Medicare category 
would also be open to compa- 
nies with up to 100 employees, 
who would, if they chose this 
option, have to pay 80 per cent 
of the premium for their 
employees. 

Controversially, Mr Stark 
also proposed yesterday a 0.8 
per cent payroll tax to raise 
$24bn a year, on top of the 
tobacco tax increase advocated 
in rurihw plan to pay for 
same of the cost of g*iwnJfag 

health inanrance to COVET the 
entire IIS population. 

While Mr Stark’s proposal is 

gftpr) hy many nrnmfan i of fVm- 

gres8 as r wrifitent nf th e kmd of 
state-run medicine that pro- 
vokes goosebumps us 

doctors, patients and politi- 
cians aififft, its strength fa that 
it fa buSt an Medicare, which 




* v - 


•' V. 



y^y. 


Clinton; under pressure over Whitewater from all sides 


fa not only familiar but also 
generally popular among tee 
groups it serves. 

Although the proposal differs 
in many respects from Mr din- 
ton's ideas, which are based on 
health alliances to purchase 
insurance. White House offi- 
cials appeared happy teat the 
Ways and Means subcommittee 
was at least setting the legisla- 
tive ball in motion. 

Other subcommittees which 
have jurisdiction over parts of 
the healthcare reform package 
have deadlocked, and the 
entire issue of reforming the 


system has lost momentum. 

Further complicating the 
task fa tee current preoccupa- 
tion with the WhiteWater 
financial affair, which has not 
only absorbed all tee energies 
of a good portion of the senior 
White House staff in recent 
days, but also cast an unfa- 
vourable light on Mrs Hillary 
Clinton, who has been the 
administration's principal 
spokesperson on health reform. 

Mr Clinton yesterday 
expressed his optimism that a 
health care reform bill will, in 
the end, pass the Congress. 


"Of course Daddy will be here in time to 
tuck you in." He’s coming home on Swissair. 
So he’ll be relaxed, well-fed and happy to 
see his happy girl. That’s time well spent in the 
air and on the ground, 
swissair + 


• • • 


-V 

B 

I 



: *-• : 


s'ty : ' 


nfr 



FINANCIAL TIMES WEDNESDAY MARCH 0 J»>4 


NEWS: WORLD TRADE 


US losing hope as 
tariff rows continue 


By Nancy Dunne 
hi Washington and Frances 
WHItams m Geneva 

US trade officials are losing 
hope for any significant gains 
in the final drive to negotiate 
tariff cuts in the Uruguay 
Round beyond those agreed 
last December 15. 

Countries taking part in the 
Uruguay Round of trade-liber- 
alising telkg are still wrangling 
over the de tails of individual 
tariff schedules, three weeks 
after the negotiations should 
have finished. 

With the signing of the 
Round set for April 15 in 
Marrakesh, the negotiations 
have entered the “verification 
stage" on tariffs, which is sup- 
posed to address only technical 
changes. 

However, the US. Japan, EU 
and Canada - the so-called 
Quad countries - continue to 
wrangle over tariff cuts on 
wood, white spirits, copper, 
and aluminum. The only deal 
in sight is a cut in Japan's cop- 
per tariffs to the equivalent of 
5 per cent. 

Trade officials in Geneva 
said yesterday that talks, 
mostly bilateral, were continu- 
ing to try to sort out remaining 
differences. These mainly con- 
cern items where tariff conces- 
sions shown in the submitted 
schedules do not match what 
countries thought they had 
achieved in earlier negotia- 
tions. 

More than 60 schedules have 
been submitted, with 22 still 
outstanding. Least developed 
countries are not obliged to 
submit schedules at this 
stage. 

A US official said Japan and 
the EU had continued to block 
progress by refusing to cut 
their most sensitive tariffs. 


March 25. the date set by the 
Gatt secretariat as the deadline 
for submission of final tariff 
schedules, is now seen as the 
final deadline for the market 
access talks. 

Progress on wood, particu- 
larly. would be “a good thing” 
for US-Japan relations, the offi- 
cial said. A 50 per cent reduc- 
tion over five years has been 
agreed, but that will still leave 
Japanese wood tariffs at 6 per 
cent The US industry bas even 
joined the hay, buying adver- 
tisements in Japanese newspa- 
pers claiming that a tariff 
phase-out would bring the cost 
of housing down by 20 per 
cent 


Signatories still 
wrangling over 
Uruguay 
Round cuts 


At a meeting of negotiators 
yesterday in Geneva, convened 
to discuss the schedules, Japan 
repeated complaints that the 
US had withdrawn earlier 
offers on films, electronic prod- 
ucts and non-ferrous metals. 
EU officials on Monday 
expressed disappointment over 
US tariff reductions on copper 
and trucks. 

Japan is also unhappy about 
the HU’S offer on televisions 
and video cameras, while 
Indonesia and Malaysia have 
complained about the link 
between lower EU wood tariffs 
and a lifting of their 
restrictions on export of raw 
logs. 

Concern was voiced yester- 
day about a US "headnote" in 
the textiles and clothing sec- 


tion referring to Washington’s 
intention to pursue talks with 
some exporting nations, such 
as India and Pakistan, to 
reduce their import barriers. 
The US stressed this was not 
being made a condition for tar- 
iff reductions. 

However, it urged US negoti- 
ators to pursue “aggressively" 
further tariff cuts to enhance 
“significantly the economic 
benefits of the Uruguay 
Round”. 

The meagre results of these 
final talks are a severe blow to 
US industry. 

The influential Advisory 
Committee for Trade Policy 
and Negotiations, a business 
and labour panel appointed by 
the president, said further tar- 
iff cuts were vital 

The textile industry is even 
more insistent on progress. Mr 
Henry Truslow, president of 
the American Textile Manufac- 
turers' Institute, threatened 
last week to oppose the trade 
pact in Congress unless the US 
won “critically needed market 
access commitments from 
countries which today flood US 
markets with their clothing 
and textile products”. 

Although market opening 
offers have been received from 
Malaysia. Chile, the Czech 
Republic and Slovakia, no tar- 
iff cut offer has been received 
from Pakistan. India has 
offered small cuts, which US 
officials dismiss as inadequate. 

“Time is r unning out,” said 
Mr Truslow. “We see no prog- 
ress on making the major 
offenders agree to open their 
markets. 

“It is time for our govern- 
ment to take a stand and say 
the US will not phase out its 
Multifibre Arrangement quotas 
for countries which keep their 
markets closed." 


Central America’s ‘model’ accord 

Damian Fraser on an ‘advanced’ trade deal between Mexico and Costa Rica 


T he free trade agreement 
that Mexico and Costa 
Rica provisionally con- 
cluded last week has been 
described as the most 
advanced between two Latin 
American countries. 

It will eventually remove tar- 
iff and most non-tariff barriers 
to trade in goods and services 
between the two countries; 
offer national treatment to 
investors from each country; 
set rules on intellectual prop- 
erty rights; ease movement of 
workers between the two coun- 
tries; and provide for a panel 
that resolves disputes arising 
out of compliance with the 
accord. 

Both countries predicted that 
the agreement would signifi- 
cantly boost Mexican-Costa 
Rican trade, which stood at 
S215m (£ 147.2m) last year. 

However, by giving preferen- 
tial access to each other’s mar , 
kets, the agreements will hurt 
the two countries’ existing 
trade partners, especially other 
central American states. 

The negotiations were for- 
mally wrapped up last Thurs- 
day night, and the text is being 
written up by lawyers. 
Mexico's Trade Ministry 
expects the agreement to be 
ready in four to six weeks and 
to be signed by the respective 
presidents soon after. 

The treaty will take effect 
from January 1 next year. 
Mexico's Trade Ministry said 
Mexican exports of goods that 
Costa Rica did not produce 
would be able to enter Costa 
Rica duty-free from next year. 
This covers about 80 per cent 
of Mexican exports, currently 
at tariffs of about 20 per cent. 

Tariffs on the remainder of 
Mexican exports wilt be 
reduced over five, 10 and - for 
the most sensitive products - 
15 years. Mexico in turn will 
allow a majority of Costa Rican 



Mexico 

Trade with Costa Rica 



ExDOrtafrom 


t 

"■ 

1* 

Imports . 
to 

— 

— 


60 


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40 


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£ 




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1 


I 



Well Done, Norway 



Like the rest of the world, our eyes have 
been glued to our TV sets as the XXIFI 
Winter Olympics took place. With the 
extraordinary performance of countless 
athletes, the overriding purpose of the 
Olympics stood out, as did the superb 
organizational skills and hospitality of 
the host country, Norway. 


We have a special interest in the games, 
because of our founder's Norwegian 
roots. The firm that bears his name is 
still based on a simple principle that he 
learned growing up in Oslo: Tenk klart, 
tal klart (Think Straight, Talk Straight). 


Alle Revisions Firm Aer Er Ikke Like 
(All Accounting Firms Are Not Alike r “) 


Arthur 

Andersen 

.Arthur Andersen &Ga SC 


Nicar ag ua 

Costa Rica 

• Panama 
. : Vv - N 

--- *■ . \ 


Vonozuela 


Pacific Ocean 


Colombia 



exports to enter duty-free in 
five years or less. 

Mr Jaime Serra Puche, 
Mexico's trade minister, said 
the agreement was “. . . with- 
out a doubt, one of the most 
advanced trade agreements 
between any Latin American 
countries". 

He said the pact established 
“a strong rule of origin that 
requires goods to be made with 
inputs of the region; that is to 
say from Costa Rica or Mexico, 
and that this is an important 
opportunity for Mexican sup- 
pliers of inputs and primary' 
materials, since Costa Rica's 
supply industry is not well 
advanced”. 

Mr Roberto Rojas. Costa 
Rica's trade minister, described 


the pact as the first step 
toward Costa Rica's accession 
to the North American Free 
Trade Agreement between the 
US, Mexico and Canada. 

An official from Mexico's 
Trade Ministry said products 
would have to contain 50 per 
cent regional content to be 
considered Costa Rican or Mex- 
ican and free or tariffs. As Mr 
Serra Puchp made clear, such a 
rule of origin would encourage 
Costa Rican companies that 
export to Mexico to source 
from Mexico rather than neigh- 
bouring countries. 

“What this accord is promo- 
ting is alliances and not com- 
petition between Mexico and 
Costa Rica." said the official. 
"What we are looking for is 


Serra Puche: opportunity 


that Costa Rican and Mexican 
businessmen work together.” 

This is the latest of a series 
of trade agreements in Latin 
America. Trade experts from 
the region meeting in Santiago 
last week were warned in 3 
report from the UN Economic 
Commission for Latin America 
that there were risks in such 
agreements, in particular bilat- 
eral ones. 

It said the benefits of such 
deals “were fewer when inte- 
gration agreements involve 
countries that are only minor 
trading partners”. It argued 
there was a “possibility that 
bilateral (or even broader) inte- 
gration agreements signed 
within the region might have 
restrictive effects'". 


With low tariffs sucb as 
those that prevail in Latin 
America, the benefits of such 
trade agreements were fewer, 
it said, and the accords could 
Include other aspects - such as 
rules of origin - that might 
discourage trade rather than 
promote it 

It Anther suggested that the 
emergence of certain “hub” 
countries, with which most 
bilateral agreements wore 
concluded, “can also create 
incentives for the polarisation 
of investment in these coun- 
tries". 

Mr Serra Puche hoped the 
agreement with Costa Rica 
would provide a model for 
similar accords between 
Mexico ami remaining central 
American countries, over 
which negotiations were con- 
tinuing. 

Mexico’s trade minister 
expects to meet this month 
with counterparts from Colom- 
bia and Venezuela to discuss 
their free trade agreement. The 
three countries had hoped to 
sign the treaty In January 
before President Rafael Cal- 
dera of Venezuela took office. 
Although Mexico claimed in 
December that negotiations 
hod concluded, last-minute dif- 
ferences over rules or origin 
for chemicals and textiles 
made signing impossible, how- 
ever. 

The new Venezuelan govern- 
ment. less keen on free trade 
than its predecessor, is said to 
have insisted on a re-negotia- 
tion of the treaty. The Mexican 
government is willing to meet 
the Venezuelans and listen to 
their concerns, but the Trade 
Ministry official said the 
agreement could not be re- 
opened. 

Additional reporting by Step- 
hen Fidler in London and 
David Scanlon in Son JosA 


Mercedes 
in Indian 
venture 


By Christopher Parkes 
in Frankfurt 

Mercedes-Benz is to start 
assembling E-Class executive 
cars and manufacturing 
vehicle engines in India in a 
new Joint venture with its 
long-standing partner, Tata 
Engineering and Locomotive 
(Telco) of Bombay. 

The partners will invest 
DM250m (£97.2m) in equipping 
a factory in Poona with capac- 
ity for 20,000 cars and 50,000 
petrol and diesel engines a 
year. 

Car assembly will start this 
year, while engine outpnt is 
scheduled to begin in 1995, 
Daimler-Benz, the Mercedes 
parent, said yesterday. 

Mercedes will hold a 51 per 
cent stake in a new operating 
company, Mercedes-Benz 
India, which will further 
tighten ties with Telco, in 
which Daimler has a 10 per 
cent stake. 

The two groups have co-op- 
erated since 1954, when Telco 
was awarded its first licences 
to manufacture Mercedes com- 
mercial vehicles under licence. 


Caribbean apparel 
sales to US soar 


By Canute James in Kingston 

Caribbean Basin countries 
increased the volume and 
value of apparel exported to 
the US by a quarter last year, 
as a result of special agree- 
ments for access and increased 
quotas. The region accounted 
for almost 14 per cent of the US 
market. 

The Caribbean's apparel 
exports to the US in 1993 
totalled I2.3bn square metres, 
24 per cent more than in the 
previous year and well ahead 
of the 6 per cent increase in 
worldwide apparel exports to 
the US last year. 

Earnings by Caribbean Basin 
countries from the US 
increased 23 per cent last year 
to S3.9bn (£2.67bn). 

“The Caribbean Basin coun- 
tries' share of the US apparel 
market grew to 13.74 per cent 
last year, compared to 14.9 per 
cent held by South East Asia’s 
Asean group, 4.15 per cent by 
the European Union, 2.24 per 
cent by Larin America and 1.68 
per cent by Africa,” said Mr 
Peter King, chairman of the 
Caribbean's Textile and 
Apparel Institute. 


“Some of the major product 
lines were knitted and woven 
shirts, trousers and shorts, 
T-shirts, hosier}’, underwear 
and foundation garments:'' '• 

Most of the region's apparel 
exports to the US are produced 
under the 807 offshore assem- 
bly programme which allows 
garments to be assembled in 
the region from fabric made 
and cut in the US and reex- 
ported to the US with duty 
paid on the value added In 
assembly. 

The main regional exporter 
to the US last year was the 
Dominican Republic whose 
shipments increased by 18 per 
cent to earn $L.4bn. Costa 
Rica's exports increased by 12 
per cent to $650m, followed by 
Guatemala, up 2 per cent to 
$544m, Honduras up 43 per 
cent to 8500m and Jamaica up 
31 per cent to $3Slm. 

Mr King is forecasting 
another 25 per cent increase in 
volume and value of regional 
apparel exports to the US this 
year, despite fears the Mexican 
industry, using the North 
American Free Trade Agree- 
ment, could eat into Caribbean 
markets. 



CRANS-MONTANA 

FORUM IN BUCHAREST 

21-24 APRIL 1994 

Under the auspices of the Government of Romania 


ROMANIA 



For the businessmen... 





W^’,- r-ri-'-’Tfirap 

.. A, *** r; Cl 1* • 



sue can penetrate new markets 
condition of having established 
at the highest levels. This Is what 
crea singly realize each year at the Crans- 
Montana Forum . 

Jean-Paut Cartsron 
Prestoert of flie Crana-Moniana Forum 


The Bucharest Conference v.'iii bring 
together in particular the countries of 
Centra! and tasiern Europe. 

Central Asia. 

the Arab countries 

and those q - the southern 

Mediterranean area. 

which offer particularly interesting 

and often underrated markets. 


FOR INFORMATION AN0- REGISTRATION 
CRANS-MONTANA 
FORUM IN BUCHAREST 

rCSKiu’iCr./Ju Forcn J"i:v;rSu'.0 
. Cda:s-de-Rivo - I2C- Geneva (Switzerland 

Te:.-:i -22-310.93.95 
Fax 4 5 -22-31 0.93.05 - 
Ti; A*/.25 C52 FQND-CH 


Guests from political circles 

Heads of Stale. Prime Ministers. Ministers ol Economy. 
Ministers. Presidents of Central Banks, high ranking officials 
and experts. Over 50 countries and numerous international 
organisations will be represented at Bucharest 

Participants from economic circles 

Decision makers, presidents, CEOs and western businessmen - 
Delegations comprising businessmen Irom I he invited states. 

An original concept 

Conviviality and a limited number of participants make It 
possible to establish personal contacts among businessmen 
and between the latter and politicians, up to the highest teveL 
Many small committee meetings, workshops and round tables 
are being organised to facilitate contacts. 

The main objective 

The establishment ol personal and direct relations between the 
participants from the economic and polldcal circles, leading up 
lo the definite conclusion of commercial. Industrial, financial 
and i«nt venture agreements 




7 


.ySgANgALTlMES WEDNESDAY MARCH 9 1994 


NEWS: UK 


Output surge bolsters hopes for recovery 


By PfiSp Coggan, 

Economics Correspondent 

Fears that tide UK wy^Hunfft recover y 
might be faltering were assuaged yes- 
terday by news of faster than expec- 
ted growth .in manufacturing output 
and industrial production in January 

The Central Statistical Office said 
January's monthly, rise in, manufac- 
turing output was _ LI per cent, while 

industrial production, which nwjn flpi; 
energy, rose by WJ per cent However, 
the January increases are from a 
lower base as the CSO reduced its 
estimates of output and manufactur- 
ing production in 1993. 

The output statistics depressed sen-. 


timent on the London stock market as 
traders felt it maffe an iwirnwWtrfp cut 
in base rates less likely. Shares were 
also hit by fells in braid *nm-irpfai in 
Germany and the UK. The FT-SE 100 
index fell 41.5 points to close at 

3,2614. 

Weak wwnmwfff published 

last month had cast doubt on the 
strength of the UK recovery. Manufac- 
turing output had been e stimated to 
fall by 0.5 per cent in December, 

although that has now been revised to 

a (12 per cent faH 

Many of the figures appear to have 
been distorted, however, by the effect 
of the Christmas period wv! Hw CSO 
prefers to look at quarterly trends. 


Manufacturing output was 0.6 per 
cent hi gher in the three months to 
January than m the previous th rpe 
Industrial production was 05 per cent 
higher. 

“The figures confirm that the 
December data were erratic and that 
people are still too downbeat about 
the prospects for economic r ecovery 
in the UK" said Mr Kevin Gardiner, 
UK economist at Morgan Stanley, 
who last week increased his forecast 
of this year's UK economic growth 
from 25 to 2B per cent The govern- 
ment is forecasting a 25- per cent 
growth in UK gross domestic product 
in ISM. 

Some observers, however, believe 


tha t tax TTwrpflRpg talcing e ffec t next 
month win slow the pace of economic 
growth. Ur Peter Wartnirton of Rob- 
ert Fleming tbinira a combination of 
higher taxes and a weak labour mar- 
ket wiQ Emit GDP growth to L8 per 
cent this year. 

Yesterday’s figures prompted the 
CSO to increase its estimates of the 
trend in manufacturing output 
growth from 1 per emit to 2 per cent 
per year, and for the trend in produc- 
tion from 25 per . cent to 3 per cent 
animal growth 

The main source for January’s man- 
ufacturing output rise was the engi- 
neering sector, notably pteffrl cal and 
optical equipment. Production was 


bolstered by the continuing strength 
of oil and gas extraction, which 
reached record levels in Jaruiary. 

The main reason for the dow n w ar d 
revision in estimated 1998 growth in 
manufacturing output and iwAi^ i 
production was higher than expected 
export prices. The CSO uses the infla- 
tion rate to “deflate" output cash 
totals and reach volume estimates. 

As a result manufacturing output 
was L8 per cent higher in 1993 than in 
1992 down from the previous 15 per 
cent estimate, whereas 1993 industrial 
production was 25 per cent op on 
1992. 


Lex, Page 14 


Hurd’s Pergau claim challenged 


By James BHtz 

Britain's former high 
commissioner to Malaysia yes- 
terday contradicted claims 
made by Mr Douglas Hurd, the 
foreign secretary, that an offer 
of aid for Malaysia's Pergau 
dam had been “disentangled** 
from sates of defence equip- 
ment 

Sir Nicholas Spreckley told 
the House of Commons Foreign 
Affairs Committee that a com- 
plex mathematical formula 
Unking the aid and defence 
deals in a Protocol signed in 
March 1988 had not been dis- 
carded by the UK government 
when comdudiug final negotia- 
tions over aid for Malaysia. 

Instead, he told MPa that the 
formula - insisted on by 
Malaysian negotiators when 
drawing up a protocol on 
defence sales in March 1988 - 
had determined the UK’s deci- 
sion to offer about £200m to 
Malaysia later that year. 

Sir Nicholas’s testimony con- 
tradicted claims made by Mr 
Hurd and by Lord Younger, 
the former defence secretary - 
who also gave evidence yester- 
day - that there was no 
long-term linkage between aid 
and defence contracts signed 
with the Malaysians in 1988. 

The committee is investiga- 
ting Britain’s decision to give 
Malaysia £234m to help buDd 
the Pergau dam, a decision 
that members of the Overseas 
Development Administration 
have described as “a very bad 
buy”. It is also examining 
whether ministers broke 
Whitehall .and iqtonmeify«ti 
guidelines' by linking aid 
money to defence contracts. 

Last week, Mr Hurd told the 
committee that there had been 
“a brief entanglement” 
between aid and trade in a pro- 
tocol signed by Lord Younger, 
in Marrli 1988. 



Former High Crammsskmer Sir Nicholas Spreddey gives evidence yesterday 


But the foreign secretary 
strongiyargued that ministers 
sought to “disentangle” the 
contracts later that year, pur- 
suing them as two distinct pro- 
jects to avoid breaking guide- 
lines that prohibit Hnkag w of 
aidand-brade- .... 

air Nichola s admitted yester- 
day that, after Lord Youngs' 
had returned from Kuala Lum- 
pur, ministers wanted to 
remove a clanse in the protocol’ 
which offered Malaysia up to 
20 per c«nt of the tite sale of 
defence equipment in the form 


of aid money. Sir Nicholas said 
he advised ministers that if 
that danse were withdrawn, 
“something had to be put in its 
place, something that would 
bear comparison.” 

He told the committee a 
promise .of up -to £20Qm. jfor 
development projects in 
a letter of June 28 1988 to the 
Malaysian government was a 
technical restatement of the 
original protocoTs formula. 

Lord Younger admit ted he 
alone bad agreed to file facia- 

sinn of the aid formula ju Hie 


arms contract In contrast to 
Mr Hard, he said the protocol 
did not imk arms and aid at 
all, because the document bad 
no “ e xe cutive rote". 

He also claimed that Lord 
Howe, foreign secretary at the 
time, had agreed that the pro- 
tocol did not make a firm cam- 
mttment of aid. 

Mr John Major confirmed 
yesterday that he had been 
privy to cabinet discussions In 
1988 about the references to 
civil aid arms «*!« in the 
Malaysian protocol. 


Heseltine rejects 
talk of party 
chairmanship 


By PWP Stephens, 

Political Edttor 

UK Trade and Industry 
secretary Mr Michael 
has dismissed suggestions 
from prominent Tory MPs that 
he should take over as party 
chairman after dafaatg the gov- 
ernment is expected to suffer 
in local and European elections 
this summer. 

Mr Heseltine’s determination 
to stay at Us department 
emerged as Mr Kenneth 
Clarke, the chancellor, foiled to 
dispel speculati on that he «™i 
Mr Heseltine are preparing for 
a leadership contest fin« year. 

Mr Clarke insisted yesterday 
that he expected Mr John 
Major to lead the Conserva- 
tives into the general election 
due by 1997. That echoed Mr 
Major’s public reaffirmation 
earlier tUs week of his deter 
urination to h o ld on to tiw pre- 
miership. 

But the chancellor, who Mid 
he was fed up with being con- 
stantly quizzed about the lead- 
ership, once «p>m admitted his 
long-term ambitions to become 
prime minister. 

That and a couple of verbal 
slips suggesting that Mr 
Major's position was not 
entirely secure was seen at 
Westminster as evidence that 
Mr Chute is a w riti ng to keep 
open big options in tim event of 
an early leadership crisis. 

Mr Heseltine has told dose 
friends that he wants to 
remain In his present post 
when Mr Major unveils his 
expected cabinet reshuffle after 
th v summer ejections. He Hm 
not received any indication 


from 10 Downing Street that 
the prime minister will to 
move Mm. 

The speculation that Mr 
Major mi ght ask Mr Hwa>Ww> 
to lead the Conservativ es ' cam- 
paign for the next general elec- 
tion has been formed by 
intense suspicion on the right 
of the Tray party that he is 
positioning Mrnself for a lead- 
ership bid. 

Prominent rightwing Tory 
MPs have been openly canvass- 
ing the i dea that by woWng 
him party chairman Mr Major 
could ensure Mr Heseltine’s 
loyalty in the event that bad 
results in the local »wd Euro- 
pean polls trigger a leadership 
crisis. 

Sir Norman Fowler, the pres- 
ent chub-man, ha» already Indi- 
cated his plan to stand down 
and the MPs have suggested 
that the trade and industry 
secretary would find it impos- 
sible to turn down the job 
without appearing cfisloyaL 

But friends of Mr HbhpMup 
have dismissed as nonsense 
any suggestion that be would 
poee a threat to the prime min. 
tster if he remained at the DTL 

TTie trade and industry secre- 
tary had also made it dear that 
he has always regarded his 
task in reshaping the govern- 
ment’s approach to industry as 
(ttip that would tike at least 
three years and probably lon- 
ger. 

Mr Heseltine’s unwillingness 
to countenance a move leaves 
employment secretary Mr 
David Hunt, who supported Mr 
Heseltine for the party leader- 
ship in 1990, as dear favourite 
for fin* chair manship. 


British 
holiday 
share hits 
record low 


By Mchael SkapWmr, Latauro 
WmM— C o rrespondent 

The British went on a record 
56m holidays last year but the 
proportion taken in the UK 
fell to the lowest level ever, 
tiie British Tourist Authority 
said yesterday. 

British residents took ZZJSm 
holidays of four nights or 
more in the UK last year, L6 
per cent up an 1992 But the 
number of foreign holidays 
increased by 8 per cent to 
23.5m. The share of holidays 
token hi the . UK was 58 per 
cent, rompared with 60 per 
cent in 1992. 

The number of domestic hol- 
idays tokwi rose from 31.5m in 
1960 to more than 40m in the 
mid-1970s, before foiling to 
28Jim In 1987. 

Over the same period, how- 
ever, there has been a dra- 
matic increase in the rtnniha- 
of holiday s taken abroad. In 
I960, only &5m Britons took 
their holidays abroad. By 
I960, this had. readied 12m. 

While Britons have taken 
more abroad, a record number 
of foreign tourists have visited 
the UK. The Central Statistical 
Office said last week that the 
number of overseas visits to 
the UK rose 4 per cent to 
Uk&n in 1993. However, the 
increase in the number of Brit- 
ans going abroad resulted in a 
rise in the travel account defi- 
cit of the tiitinw* of payments 
to £3.7tm last year, compared 
with £3.4bn in 1992. 

Ms Adele Biss, BTA chair- 
man, yesterday said: “Our 
tour ism industry cannot sur- 
vive on growth from overseas 
visitors alone. Nor c an w e 
expect art-throat competition 
from package holidays to dis- 
appear." 

She added that the UKtour 
ist industry needed “more 
focus on quality standards, 
value for money, more ener- 
getic promotion and better 
marketing. This is not by any 
mww« an impossible ta sk. B ut 
we need greater commitment 
from government and the 

industry, working P*™ 01 " 
drip, to arrest this decline- 


Spy chief seeks ‘in camera’ deal on Scott 


By Jknmy Brans 

Mr David Spedding, Britain's new spy 
chief, is prepared to give evidence to 
the Scott arms-for-lraq inquiry but only 
cm the understanding that all members 
of the intelligence services will con- 
tinue to testify In camera. 

Mr Spedding, who was named as the 
next MI6 head last week, owes Ms pro- 
motion largely to his involvement in 
gathering information an Iraq’s nuclear 
prog ramme . 

He is thus well placed to shed lig ht 
on an area which has b een investigated 
by Lord Justice Scott and which 
includes the work done for UK intelli- 


gence by former executives of Matrix 

fflmrrhiTl 

A Scott inquiry spokesman said last 
night that the judge was not prepared 
to comment on toteiligance witnesses to 
h« inquiry. • • 

The judge has already taken written 
and oral evidence in private from sev- 
eral members of the intelligence ser- 
vices, including some members of Mr 
Spedding’s section specialising in the 
MMdle East, and tibe outgoing head of 
MI6, Sir Colin McCoIL 

After consulting Whitehall officials. 
Lord Justice Scott reached the view 
early in. his inquiry flmt the public 
interest in hearing in public evidence 


from an intelligence officer was out- 
weighed by the public interest in pro- 
tecting his Identity and some of the 
information provided by him. Accord- 
ing to intelligence sources Mr Spedding 
is under instructions freon the govern- 
ment, “Bfee any other member of White- 
hall Vto cooperate folly with the Scott 
inquiry. 

TUs co-operation would include giv- 
ing evidence in public if “requested to 
do so by Lord Justice Scott". Mr Sped- 
ding believes, however, that evidence in 
camera best serves a balance between a 
higher public profile for the service and 
the continuing itomand far secrecy in 
its operations. 


The role of the intelfigence services is 
expected to come under renewed focus 
today when Mr Peter Wiltshire, a Cus- 
toms officer involved in the Matrix 
Churchill investigation, gives evidence 
to tiie inquiry 

The intelligence services believe tiie 
final report wiH largely exonerate those 
involved in intelligence reporting, 
instea d criticising a breakdown to dis- 
semination of information by non-intel- 
ligence officials and ministers. 

The judge has seen numerous intelli- 
gence reports wanting Whitehall that 
Iraq was using British exports to build 
up Iraqi conventional and nuclear capa- 
bility from the mid-1980s. 


Britain in brief 



Battle for 
power sales 
under way 

More than 7,000 large 
consumers of electricity are to 
buy from a supplier other than 
their regional power company 

for the first time next month 
as they take advantage of the 
opening up of their market to 
competition. 

Many more among the 
45,000 power users able to 
shop around for supplies from 
April 1 have signed deals with 
their local distributor that will 
give them significant price 
reductions. 

The 45,000 consumers that 
qualify to shop around from 
next month include industrial 
concerns, supermarkets, huge 
schools and hospitals. 

Some distributors - includ- 
ing Manweb, in the north-west 
of England and in north 
Wales, and Midlands Electric- 
ity - say they have been able 
to offer some consumers out- 
side their regions price cuts of 
up to 20 per cent 

Most redactions fell within 4 
per cent and 10 par cent How- 
ever, some consumers enjoy- 
ing relatively low tariffs have 
received no Immediate finan- 
cial benefit 

The reductions are the result 
of the second stage of tiie lib- 
eralisation of the electricity 
market, which will allow users 
of between lOOkW and 1MW at 
their period of peak consump- 
tion to pick from any licensed 
supplier. 

Uhtil April 1 they have had 
to buy from their regional dis- 
tributor. Only consumers of 
more than 1MW had a choice 
of supplier. By 1998. all con- 
sumers, including household- 
ers, will be able to select their 
snpptter. 


Employers face 
maternity bill 

Employers will have to foot the 
£55m bBl for improved mater- 
nity payments, announced by 
the government yesterday, 
which will benefit around 
285900 working women. 

The new arrangements fol- 
low a government consultation 
exercise which gave options for 
adapting UK maternity benefit 
schemes to the requirements of 


the EC Directive on tiie protec- 
tion of pregnant women in 
frill-time work. Employers will 
be asked to pay the difference 
between the cost of existing 
maternity arrangements and 
the new system which must be 
in place by October 16. 


trucks sector - over 15 tonnes 
- rising by 3L9 per cent in 
February compared with the 
same mouth a year ago. 

Statistics from the Society of 
Motor Manufacturers and 
Traders show that sales of 
light vans - mainly those 
derived from cars - rose by 5J 
per emit, to &334 from 5,037, 
reversing a long declining 
trend. 

Sales of larger "panel" vans 
fike the Ford Transit rose last 
month by 14JS pa* cent com- 
pared with the same period a 
year ago, to 7,040 from 6,133. 

Pakistan gas 
pipeline hints 

Pakistani press reports suggest 
that British Gas and Novacorp 
of Canada are the leading can- 
didates to take a 20 per cent 
stake In the partially-priva- 
tised Sul Northern Gas Pipe- 
line company, the monopoly 
gas distributor in northern 
Pakistan, which Is currently 60 
per cent state-owned. 

The reports, quoting petro- 
leum ministry officials, said 
the government has decided to 
offer a 20 per cent stake to a 
foreign company by the middle 

Of thitt month 

British Gas yesterday con- 
firmed that it was negotiating 
with the Pakistanis and that 
there had been some discus- 
sions on a possible price. But it 
said that any decision on 
whether to go ahead depended 

on the Islamabad government 
publishing a proposed regula- 
tory regime for the pipeline 
company. 

Jump in 
Scots exports 

Exports of manufactured 
goods from Scotland rose by 
more than 30 per cent in value 
last year, says a new index of 
Scottish exports compiled by 
the Scottish Council Develop- 
ment and Industry. The index, 
based cm figures from 26 com- 
panies which account for 60 
per cent of all Scottish 
exports, rose from its base of 
100 In the first quarter to 
130.1 for the fourth quarter, 
suggesting exports worth 
£10.9hn in tiie whole of 1993. 

Although all industrial sec- 
tors showed growth, the stran- 
gest export sector was compot- 
ers. The Index showed a 15 per 
cent jump in the fourth quar- 
ter over the preceding one. 
International Business 
Machines, which has a plant 
mnirmp- personal computers at 
Greenock, Strathclyde, 
accounts for about one-fifth of 
all Scotland's exports and has 
been experiencing a boom In 


Upturn in 
light vehicles 

Sales of light vans made their 
long-awaited upturn last 
month, broadening the UK 
commercial vehicle market 
recovery to every sector except 
buses, coaches and utility 
four-wbeeMrive vehicles. 

In some areas erf tiie market 
the sales upsurge last month 
reached spectacular levels, 
with the important heavy 


Barclays makes 
440 redundant 

More than 400 employees of 
Barclays Bank arrived for 
work yesterday to be handed 
letters informing them they 
had been made redundant 

The 440 administrative staff 
at branches in London and the 
south-east were selected on the 
basis of attendance and perfor- 
mance records. 

Barclays, which has already 
died 16,000 jobs since 1990, has 
also announced plans to cut 
another 5,000 by the end of 
next year. 

The move conies just two 
days before the bank publishes 
its annual results. 


BT faces greater 
regulation in 
competition move 


By Andrew Adonis 

British Telecommunications 
feces a sharp increase in regu- 
lation as Oftel, the tetecommn- 
nications watchdog, fries to 
open the UK market to greater 
competition. 

A new supervisory regime 
announced yesterday by Oftel 
will provide for the regulator 
to set and publish the price of 
more than 70 charges levied by 
BT on competitors needing to 
use its network to carry their 
calls. 

It wifi also force BT to pub- 
lish separate accounts fra: Its 
network and retail business, to 
reduce the advantage BT grins 
as a retailer from owning the 
country's largest telecoms net 
wart 

Payments to BT, which con- 
trols about 90 per cent of the 

UK teiacnma market, represent 
about half of the total costs of 
rival operators. The largest 
rival is Mercury, but dozens of 
new operators have gained 
licences in the last two years, 
including cable companies 
building combined television 
and telephone' networks in 
urban areas. 

Mr Don Cnricksbank. Gftd 
director-general, said the 
changes were essential to pro- 
mote a transparent, competi- 
tive telecoms market He said: 
”1 hope BT will increasingly 


see other operators as custom- 
ers as well as competitors.™ 
However, BT views new 
operators solely as a threat, 
and is anxious to avoid becom- 
ing little more than a whole- 
saler of network capacity to 
other service providers. 

At present BT sets charges 
fra competitors using its net- 
work by negotiation, with a 
right of appeal to Oftel -exer- 
dsed twice by Merctay. The 
prices have been confidential 
and vary between operators. 

fir future, competitors will 
pay for key interconnection 
services ait standard, published 
tariffs set by OfteL 
BT condemned Offers 
“costly Increase in regulation’’. 
But Mr Michael Hepher, BT 
manag in g ifinjntnr, has assured 
Oftel of BTs co-operation in 
the introduction of accounting 
separation, which win apply 
from fth fiTMMfai year.*- . 

* Mr Craicksbank said the 
level of detailed regulation pro- 
posed was “absolutely essen- 
tial” to develop competition.* 
Offers standard interconnec- 
tion charges wQl initially be 
based on its determination last 
year of the long-running dis- 
pute between BT and Hercmy 
over network payments. 

Mercury is contesting the 
determination in the High 
Court in an attempt to secure a 
more favourable settlement. 




— - -- ■_ - -Wfc- 



Cable-laying work under way recently on the first Hbreway towpath route installation from Qasgow to Edinburgh 

Canals to host fibre-optic network 


Competition ' for long-distance 
teTeomnwinnirarfimM traffic was stepped up 
yesterday by the launch of a company 
using Britain's canal towpafhs to build a 
fibre-optic network, Andrew Adonis 
writes. 

The company, Fibreway, claims to be 
the first solely engaged in the wholesaling 
of capacity to other operators. It wfil cfler 
no services directly to end-users, but sell 
capacity to tiie growing array of new 
entra n t* to tim UK market 

The three wHsting long-distance net- 
works are owned by companies which also 
provide telecoms services to consumers. 


They are British Telecommunications, 
Mercury, and Rnergis. a new operator 
launching a service next month. 

Ffineway’s largest shareholder Is GPT, 
the triBoamnrarications equipment joint 
venture between GEC and Siemens, the 
German group. It is acting in partnership 
with British Waterways. 

Mr Gerry Boofhroyd, Kbreways direc- 
tor, said that initial investment will be in 
the “tens of millions”, with network can- 
struction dete rmined by demand. 

Cable companies building local net- 
works in urban areas are keen to see a 
diversity of long-distance operators. Mr 


Eugene Connell, head of UK operations for 
Nynex, tiie US group mating significant 
UK cable investments, expressed “serious 
interest” in the new operator as a means 
of finking Nynex’s franchises in Hiffrrwnt 
parts of the country. 

The Idea Of using canal tow-paths for a 
telecoms network has been in the air for 
several years, but appeared to founder two 

years ago when Sprint, the US 
long-distance carrier, dropped plans to 
build its own UK network. 

Construction is under way of a link 
between Edinburgh and Glasgow, with 
others plnwnnd m th» MirnanriR 


Cellular 
system set 
for launch 


Hutchison Micro tel confirmed 
yesterday its intention to 
launch a new cellular mobile 
network next month and 
announced its name - 
“Orange", Andrew Adonis 
writes. 

The network will be the 
UK’s fourth, competing 
against Vodafone, Cefinet and 
Mercury One-2-One, which 
launched in the south-east of 
England last September. 

Micro tel has chosen the 
name in an effort to conjure 
up the image of cellular com- 
munications as “fresh, attrac- 
tive, and not impossibly com- 
plicated to use." Orange is 
related to neither Apple, the 
world's second largest per- 
sonal computer manufacturer, 
nor Apricot, the workstation 
maker now owned by Mitsubi- 
shi of Japan. 

Micro tel, whose largest 
shareholder is Hutchison 
Whampoa, the Hong Kong con- 
glomerate, refused to disclose 
the Orange tariffs yesterday, 
but said they would be “highly 
competitive" with those of 
existing netwarks- 

The Orange network will 
cover more than half of the 
UK’s population, extending to 
90 per cent by nrid-1995. 

It win be digital, as is that 
of Oue-2-One. The handsets 
may be more expensive than 
the analogue networks run by 
Vodafone and Cellnet, but 
Orange is Dkriy to compensate 
with cheaper charges. 




8 


FINANCIAL TIMES WEDNESDAY MARCH 9 IfrM 



AN EUROPE 




Balance of economic 
power begins to shift 


David Marsh sees 
opportunities in Europe's 
lagging performance 


E uropeans are no 
strangers to periods 
of lagging economic 
performance. The 
fortunes of ancient 
Egypt waxed and waned over 
2,000 years, while most of 
Europe was a barbaric wilder- 
ness populated by goatherds. 

The cycles of world history 
have since accelerated and 
become interconnected, to a 
degree barely conceivable even 
a generation ago. As it tackles 
the problem of fading dyna- 
mism. Europe must weather a 
phase of unsettling political 
and economic transition. 

“Europe can be under no 
illusion that it faces very 
strong competition from the 
US and Asia,” says Mr Ernst- 
Antoine Selliere. vice-president 
in charge of economic affair s 
at the French. Patronat employ- 
ers’ organisation. “But, pro- 
vided we loosen constraints on 
our competitiveness, this can 
be an opportunity." 

The European nations that 
launched the manufacturing 
revolutions of the 18th and 
19th centuries ceded industrial 
leadership to the US after the 
first world war. Now, as a 
result of global upheavals in 
technology and communica- 
tions. another shift in the bal- 
ance of economic power may 
be imminent - this time, 
towards the rapidly expanding 
economies of the Pacific Rim. 

Using World Bank data and 
its own assumptions about 
future growth. Union Bank of 
Switzerland (UBS) projects 
that, in the first decade of next 
century, purchasing power 
income per head in Singapore 
and Korea will exceed that of 
the US. Incomes in Singapore 
are already dose to the west 
European average. 

According to similarly 
derived projections by UK 
accountants Coopers and 
Lybrand, the share of world 
GDP taken by Asian develop- 
ing countries (including both 
China and India) could rise to 
28 per cent in 2010 from 18 per 
cent in 1990. Western Europe’s 
share would fall to 17 per cent 
from 22 per cent, while the 
US’s would fall to 18 per cent 
from 23 per cent 
This projection assumes 
annual growth in both western 


Europe and the US of 2J5 per 
cent against 6 per cent in Asia. 
Even if the growth differential 
is less, Europe will drop down 
the economic rankings. But 
Europe’s likely decline needs 
to be put into perspective. 

First it is natural that less 
well-off countries move doser 
to wealthy ones. Over the past 
20 years, the gulf between 
many rich and poor countries 
has widened. Where gaps have 
narrowed, they normally 
remain large. According to 
World Bank figures (based on 
constant dollar exchange rates 
rather than purchasing power 
parities), by 2000 the ratio 
between average GDP per cap- 
ita in western Europe and east 
Asia will be an 18 to 1. com- 
pared with 48 to 1 in 1970. 

Second, as living standards 
rise in less developed coun- 
tries, wealth should flow back 
to Europe through increased 
trade and investment. Provided 
European companies match 
international advances in man- 
agement and technology. 
Europe can maintain a strong 
competitive advantage in 
goods and services the rest of 
the world wants. This requires 
that borders remain open and 
protectionist pressure is 
resisted. 

Professor Richard Portes, 
director of the London-based 
Centre for Economic Policy 
Research, believes a narrowing 
of the wealth gap between 
Europe and the rest of the 
world need not be disastrous. 
Tm very sceptical about the 
views of the doomsayers." 

Differences in real wages 
between western Europe and 
other manufacturing regions 
will narrow, he says, in the 
same way that US wages, rela- 
tive to those in Europe, have 
fallen since the 1950s. This 
need not stop European living 
standards rising. 

According to UBS’s projec- 
tions, western Europe’s growth 
rate will pick up early in the 
21st century, as the continent 


benefits from the “catch up” 
phenomenon, under which 
countries that lag adopt inno- 
vations from the leaders. 

A striking example of “catch 
up” has been US success in the 
1980s in reacting to the compet- 
itive threat from Japan by 
importing “just-in-time” Japa- 
nese production technology, 
says Mr Bill Gasser, DBS's 
senior international economist. 

But, as it tries to adapt, 
Europe has one big disadvan- 
tage. The fast-increasing share 
of GDP taken by government 
spending in the past decade - a 
rise well under way before the 
onset of the European reces- 
sion in 1992-93 - has imposed a 
growing burden on business. 

Social spending is the big- 
gest single portion of these out- 
lays. The OECD says social 
security transfers in the £U 
will account for 21.5 per cent of 
GDP in 1994, up from 16.4 per 
cent in 1989 - double the per- 
centage rise in the last down- 
turn in 1979-1982. In relation to 
GDP, EU social transfers 
exceed US and Japanese levels 
by 50 per cent and 78 per cent 

A s a community of 
nation states, west- 
ern Europe faces 
greater difficulties 
than the US did a 
decade ago in adopting com- 
mon policies to recover dyna- 
mism. But Europe's diversity is 
also a trump card. Different 
parts of the continent can draw 
upon varying strengths and 
specialisations. 

There is little disagreement 
on the diagnosis of Europe's 
core problems. The task is to 
implement corrective mea- 
sures: 

• Growth of public spending 
on welfare is placing intolera- 
ble strains on budget deficits - 
one reason for high taxes and 
interest rates. Beyond simply 
cutting benefits, governments 
need a new balance between 
public and private sector social 
security provision. 


• The number of old people in 
Europe could outstrip 
resources to care for them. 
Imaginative solutions will be 
required, returning the elderly 
to family environments and 
using technological advances 
to moderate medical costs. 

• More flexible labour mar- 
kets are needed, including 
unproved possibilities for 
part-time work and less rigid 
wage-bargaining mechanisms. 
The collapse in demand for 
unskilled labour creates the 
potential for an integrated tax 
and welfare system allowing 
low-paid workers to be paid 
partly by employers and partly 
by tax credits. 

• Europe must overcome its 
technological lag. Companies 
at the forefront of scientific 
advance must improve Knts 
both to the markets they serve 
and the education establish- 
ments on which they draw. 

• Europe needs a better bal- 
ance between the costs and 
benefits of environmental regu- 
lation. Environmental rules 
have not yet been a significant 
spur to innovation or competi- 
tive advantage. 

• Plans for further integra- 
tion. including widening (early 
next century) to central and 
eastern Europe, need to be 
based on liberal, open-market 
principles. 

Governments know Europe 
can prosper only if companies 
think globally. This can lead to 
some sharp modifications. 
Pointing to the large number 
of German companies shifting 
production abroad to escape 
high domestic costs, Mr Ludolf 
von Wartenberg, general man- 
ager of the Federation of Ger- 
man Industry, says companies 
are moving away from a “Made 
in Germany” towards a 
“Designed in Germany" con- 
cept. German industry will 
regain competitiveness, he 
says. But he admits doubts on 
how German society wIQ cope 
with the strain. 

This type of corporate reac- 
tion can be painful, but the 
absence of adjustment would 
have still more disturbing con- 
sequences. If European enter- 
prises and employees can mus- 
ter the flexibility to manage 
change and the flair to master 
it, salvation is assured- 



.while OS and Europe face shrinking share of world GDP 


Global GDP shares 
Purchasing power parity exchange rates 



Asian 

developing Other 

countries 18% OECD 2% 


Asian 
developing 
countries 28 % 


Western 
Europe 22% 


US 18% 



Other OECD 2% 


Distribution of world GDP 
Region sizes hi proportion to GDP 
Figures In $100«» 

(Constant 1987 £ levels) 


Latin AmericafCarfba 



Mddto Sast/N-AJricv 



Europe/Central Asia 


jPn-J® 


us 

6,100 



LaMn America/ 
Caribean 


Middle East/North Africa 


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# * 



Rivalries to the rescue in the search for lost creativity 


Diversity 


By Guy de Jonquieres 


"In Italy for 30 years under the 
Borgias they had warfare, terror, 
murder, bloodshed - they produced 
Michelangelo, Leonardo da Vinci 
and the Renaissance. In Switzerland 
they had brotherly love, 500 years of 
democracy and peace, and what did 
that produce? The cuckoo dock . " ■ 
Orson Welles m The Third Man. 

The historical detail is flawed. The 
Swiss have fought two civil wars 
since the 16th century and did not 
invent the cuckoo clock. But 


Welles' monologue, ad-libbed amid 
the ruins of 1940s Vienna, contains 
a poetic truth. Conflict is a powerful 
spur to creativity. And diversity is 
the mother of conflict 

If Europe has a genius, a single 
defining characteristic, it is diver- 
sity. In no other region is such 
intense intellectual, cultural and 
linguistic variety packed into so 
small an area. Nowhere has the des- 
tiny of so many nations been more 
powerfully shaped by continuous 
rivalry between them. 

In some eyes, this is a debilitating 
heritage. It has. after all, exacted a 
cruel price over the centuries in 
recurrent wars. Now that national 
advantage is furthered more by eco- 


nomic than military means, it is 
fashionable to decry Europe's heter- 
ogeneous structure as a handicap in 
the face of the relative homogeneity 
of Japan and the US. 

Has not Japan's economic success 
been based heavily on management 
by consensus and a widely shared 
sense of national purpose? Has Hol- 
lywood not conquered the world 
because of the scale economies 
available from its large and inte- 
grated home market? Surely, logic 
requires European industry to 
respond by closing ranks and pres- 
enting a united front to the world? 

Such analyses, however, miss the 
point At a time when technology 
and liberalisation are forcing open 


markets worldwide, the toughest 
corporate challenge is not to 
achieve global production scale, but 
to differentiate products and ser- 
vices and tailor them precisely to 
widely varying local demand. 

In theory, these trends should 
work in Europe's favour. First, 
because restricted home markets 
have long compelled ambitious pro- 
ducers to look beyond their own 
borders. For many, learning to 
adapt to unfamiliar conditions, and 
incorporating the lessons into their 
own operations, has been a prereq- 
uisite of expansion. 

Secondly, because many of 
Europe's enduring industrial suc- 
cesses have been built on intensive 


specialisation and continuous striv- 
ing to create and enhance distinc- 
tive competitive capabilities. This is 
the story of German capital goods, 
Swiss precision engineering, Italian 
luxury products, French fashion 
and British pharmaceuticals. 

The point was well understood by 
the authors of the single market 
programme. Their intention was 
never to create a uniformly level 
playing field dominated by equally 
matched industrial monoliths. 
Rather, by unleashing fiercer cross- 
border competition, they aimed to 
promote specialisation by freeing 
resources to flow to where they 
were most efficiently employed. 

But the vision is still far from 


realisation. European countries con- 
tinue to cling to the notion that 
sovereignty requires a presence in a 
broad swathe of industries, almost 
regardless of the cost. 

For all the talk of EU integration, 
governments obstinately defend the 
right of national steel producers to 
continue losing money and of 
sleepy telecommunications monopo- 
lies and flagship airlines to charge 
high prices for mediocre service. 

Nor is such nationalism limited to 
bigger countries. It was clearly at 
work in the decision last year by 
Swedish shareholders to torpedo the 
Renault-Volvo marriage and in the 
collapse of Alcazar, the planned 
merger of Austrian, Dutch, Swiss 


and Scandinavian airlines. 

The result is not simply dimin- 
ished efficiency, but the duplication 
across Europe of largely undifferen- 
tiated structures in many indus- 
tries. Instead of breeding healthy 
diversity and creativity, national 
rivalry has perversely produced 
sameness and common weaknesses. 

In these circumstances, preserv- 
ing existing structures wholesale is 
not evidence of an ability to com- 
pete, but of a refusal to do so. The 
real test will be how effectively 
European economies enhance com- 
parative advantage by abandoning 
poor performers and concentrating 
resources on those activities which 
they do best. 






-v 

■«!*■ v. 








f— 



Looking ahead to 2000: How can Europe escape the doldrums? 


* i 


- lift 



TRAINING 

Denis MacSftane, director of 
comirujniGations, Internationa] 

Metalworkers Federation: 

"Measures to provide workers 
with constant staffing and 
restating should not just be 

supported. They should be 
demanded as a right. People 
should get involved in 
consultations and information 
exchanges within their 
companies. We should loam from 
the Japanese system where you 
are thought of as a member of a 
company, not just as an 
employee - this helps ttmit 
unemployment (favour 
reductions in working time, which 
is out of (titter with what is 
needed to produce goods and 
services in Euro pa Employees 
should support pofldes aimed at 
producing new products. In 10 or 

15 yeas, ordinary people as they 
grow older wBI have several 
thousand pounds worth of health 
diagnostic equipment at home." 



SINGLE MARKET 

Zygmunt Tyszkiewicz - secretary 
general, llnice (European 
employers federation): 

If you project today’s trends in 
Europe to 2000, the result is 
dismal. It can’t be allowed to 
happen. We have been divided 
up Into little national states, each 
one protecting what he does, 
each one with its own airline, 
steel industry and soon. We have 
missed out on the economies 
of scale. 

We have the seeds of recovery 
in the single market, but ft's not 
properly working yet 

"We need to tackle the problem 
of rising social security budgets, 
by binging in funded pensions. 
Our education systems need to 
produce people who can adapt to 
high technology. The world 
recession woni last for ever. 
When the upturn comes, it won’t 

solve unemployment problems, 
but it win give us the confidence 
to make difficult decisions." 



OPERATING GLOBALLY 

S r Anthony Cleaver, chairman of 

IBM UK, head of an inquiry on 

competitiveness by Britain's 
Royal Sodey for the 
encouragement of Arts, 
Manufactures and Commerce: 

"During the next 10 years, it is 
inevitable that Europe's share of 
world income wfll drop. It ought 
not to mean actual standards of 
living will decline. However, we 
wiD have to reorganise social 
security. Just as, inside 
companies, people look to their 
own careers and plan for 
themselves, we are going to have 
to develop an increasing number 
of instruments to alow individuals 
to take responsibUty for their 
future welfare. 

"For businesses to prosper, 
there is no substitute for bright 
people with an undersfancSng of 
the industries they work in. tn any 
high-tech area, you have to keep 
abreast of what is happening and 
where advances are being made," 



EUROPE’S PLACE 
M THE WORLD 

Prof. Michael Stfirmer, director, 
Stiftung Wissenschaft und Pofitfli 
(German government foreign 
policy think-tank): 

“We shouldn't be so afraid of 

south east Asia. In the long run, 
these countries could get into 
deep trouble. The streams of 
weapons flowing there wiB sooner 
or later explode. Their passage is 
by no means assured. They have 
to deal with North Korea, and 
they may get into deep water with 
China. 

"Europe Is sffll one of the best 
places In the world to five In. We 
will recover. Our recession in 
Europe is a matter of the test 21/2 
years. We should not extrapolate 
to 2005. Our problem is the 
excessive welfare state. But, 
throughout history, Europeans 
have shown enormous resilience. 
And, unfflca alter the second 
world war, we are starting out 
from a very high level." 



SCIENCE 

Dr Bob Whelan, chief executive of 
the UK Centre for Exploitation of 

Science and Technology: 

‘Because it is inadequately 
prepared for change, Europe too 
often follows rather than sets the 
world agenda for new products. 
The European workforce must 
become more flexible and 
adaptable. If you never stop 
learning, you can team new tricks. 

"Europe must recognise the 
need for world class performance 
in AIL aspects of industries that 
force that pace of technology - 
information, pharmaceuticals, 
automotive, energy and so on. 

There Is too much introvert ed 
concern that the BJ Is the market 
Companies should show more 
interest in global markets, looking 
for new opportunities - and 
teaming from high quality 
customers elsewhere in the world. 
Companies must hixtt in packs. 
There is still great scope for new 
collaboration.’ 



Padraig Flynn, European 
Commissioner for employment 

“If the EU can get down to a 5 
per cent unemployment rate by 
the end of the century - half the 
present level - we could five with 

that, Governments must avoid 
simply standing stll and waiting 
for a cyclical upturn to solve our 
difficulties. Even if we increase our 
competitiveness, that wW not 

automatically lead to more fobs. 
We need to Increase Hie 
employment intensity of growth. 

“Cutting wages is not the 
answer, although we need 
moderate wage rises not 
exceeding increases in 
productivity. We must lower 
burdens on employers caused by 
high non-wage costs. 

“We need to look at new types 
of work: part-time work and 
lower-paid jobs, at a fair wage 
and with reasonable social 
protection Low-paid work can be 
a source of a hat of comfort 





Peter KraJjic, managing director. 
McKinsey management 
consultants, Paris: 

"Cutting costs alone is not 
enough - if companies simply 
restructure downwards, Europe 
Win just run into ever higher 
unemployment Companies have 
to be redesigned for growth. 
Manufacturing techniques and 
the location of manufacturing are 
less important than people's 
attitudes and state of mind. 

"For 40 years we have had 
growth In Bnpa Now we are like 

the US at the start of the 1960s.” 

“Europe has to exploit its 
strengths. We have a large 
market, and an incredible mix of 
nations with incredible talents. If 
we have the win to be Number 
One, at an individual, corporate 
and national level, w* can do it 
But we cannot expect a miracle 

overnight It will require cohwent 
action and a lot of leadership." 



WIDENING EUROPE 

Bela Kadar, minister for intemat- 
tonal economic aflare, Hungary: 

“Hungarian membership of the 
EU by 2000 is realistic. We wffl 

bring a dowry - not just the 
Hungarian market but flows of 

trade and technology with the rest 
of eastern Europe. If they invest In 
Hungary, western companies can 
•Hcraase their competitiveness. If 
Qbst actes to our exports fade. 
Hungarian and foreign investors 
can produce notjuat for 10.5m 
Hungarians, but for 400m 

European consumers.” 


This far the final part Of a ; 
10-part series 

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FINANCIAL TIMES WEDNESDAY MARCH 9 1994 


MANAGEMENT 



£ 


uiv: 


•> ■» 




Santa Raymond and Roger Cunliffe explain how telecommunications 
companies have used technology to transform tfaeir workplaces 

At home in the office 


T eleccomntinicatians and infor - 
mation technology companies 

have long argued that tech- 
nology is an important tool in ■work- 
place design. What is less well 
known is that, many of than, prac- 
tise what they preach. 

Companies such as IBM. Digital 
Equipment, British Telecomnmnica- 
ticrns ami Mercury understand . Sue 
full potential of modern technology, 
and apply it in their workplaces In 
a way that offers lessons for others. 

IBM has a trad i tion of 
offices, bat its Smart (space, morale' 
and remote technology) programme 
takes an innovative leap forward. 
At Bedfoht Lakes on the outskirts . 
of London, IBM has divided individ- 
ual workspaces into Hour types; 
managers’ offices, permanent work- 
stations for administrative staff, 
grouped and shared "hot desks” for 
mobile consultants, and “touch- 
down desks” for other staff visiting 
the office for brief periods. 

Consultants are encouraged to be 
where the work is: at the chans’ 
premises. When back at base (con- 
ventionally less than 40 per cent of 
the working year), their “hot dash- 
ing” more than doubles the utilisa- 
tion of desk space. This cuts the 
amount of space needed, even when 
offset by an increase in meeting 
rooms and rooms set aside for cus- 
tomers to work in. 

The other main space saver is 
IBM’s policy of grouping all filing, 
both team and personal. Files are 
taken to desks in portable trays, 
personal filing is minimised and 
desks are kept dear. The results of 
these and other measures, says proj- 
ect manager Harvey Young, are 
more effective operations and a 25 
per cent saving in space. 

At Mercury Telecommunications 
the Challenge is growth and rtumga 
with “awesome velocity”, in the 
words of Chris Ridgewefl. of its Flex- 
ible Working Applications Group, 
which advises customers on IT 
packages for workplaces. When 
architects Ans tin-Smith Lord 
designed the interior of Mercury’s 
London headquarters, stress was 
put cm flexibility; in particular, the 
IT installa tion has a floor outlet 
point every 4 sq m. more than twice 
the usual density. Yet with an 
organisation growing at 100 people 
a month, technological flexibility 
and the acquisition of space are not 

Enoug h . 

The answer is “virtual teams": 
people oollabdratlhg clbsety, hut in 


*>■:* 





mmrn 



Cosy comer plants and a ‘cottage* backdrop feature at Dtgttaf Equipment 


a range of locations. They may 
work from heme, in the car. at a 
customer’s office, at “third-party 
sites”, in a branch office at Mer- 
cury, -or at head office - yet they 
work as a lmtflart team. They are 
united by a strong sense (^-“mis- 
sion”, highly sophisticated IT, 
skilled foam co-ordinators - and a 
base office which provides the right 
environment for anything bom a 
“touch-down" visit to a full team 
brainstorming. 

What sort of a physical environ- 
ment makes a base office attractive, 
welcoming and stimulating? At Dig- 
ital Equipment’s Stockholm office, a 
virtual team was asked to decide 
this for itself. The result is a flexi- 
bly planned area with consultants 
sitting in lounge chairs under an 


artificial tree, their mobile filing 
trolleys betide them. At the press of 
a button their computer terminals 
descend from the branches to a con- 
venient heig ht 

In the comer a raised caffi area Is 
also used for informal meetings. 
The general decor has bints of the 
golf course, the beach and the gar- 
den: all places where the team said 
they felt at their most creative. 'Hie 
team coordinators (executive secre- 
taries) also work on a dais, giving 
them eye-level contact with stand- 
ing colleagues, a view in-tbe-round 
of what is going on, and emphasis- 
ing the importance of their role. 

Idealistic? Lavish? Not if yon take 
into account a 50 per cent saving in 
space and a 20 per cent increase in 
productivity. The idiot area for 14 


people has now been expanded to 

cater for 200 . 

BTs carefully monitored experi- 
ment with its directory inquiries 
staff in Scotland is another 
approach to the virtual team: the 
static relocation of soma members 
of an in-house work group. 

In BT’S case 11 staff were 
from Inverness nffire* 
and set up to work In their own 
homes. As well as telecommunica- 
tions a nd information technology, 
or “telematics" (which included 
video links with each other and 
with Inverness), BT developed spe- 
cial furniture, which was robust 
enough for work use yet domestic 
in scale. It also considered the 
broader rmpKnatfon s of home-work- 
ing - such as interruptions, secu- 
rity and child-proof equipment 

With the psychology department 
of Aberdeen. University, BT is now 
evaluating the year-long experi- 
ment The initial reaction of the 
workers and their families was very 
positive. The findings - some 
already published - are not only fbr 
BT to nse in its staff deployment, 
hot to help its customers contem- 
plating home -w orking 

What does all this mean for the 
design of tomorrow's offices? Cre- 
ative change is es sential if busi- 
nesses are to survive pressures 
from new technology, from globali- 
sation, from demographic and edu- 
cational chang es in the workforce, 
from concerns about the costs of 

commuting awrl its WTiviT Yin'iTrarrtal 

impact - and changing lifestyles. 

The workplaces of these four com- 
panies show the way. For all their 
technological sophistication, what 
is evident is the humanity; a con- 
cern with the quality of working 
life. They show that offices are 
increasingly becoming: 

• • Meeting places as much as 
workplaces, places for group inter- 
action rather than solitary concen- 
tration; 

• Pleasant places, which attract 
and retain the shrinking number of 
new graduates joining the ranks of 
skilled knowledge workers; 

• Flexible places, far more space- 
efficient and adap tab le, reducing 
both capital and running costs; 

• Humane places, often smaller 
and nearer home (or even at it) but 
still part of a global communica- 
tions network. 

•v 

The authors are London-based archi-. 
teds. ' 


Twelve steps to a 
successful speech 

Talking about the audience you are talking to is the 
key to public speaking, writes Walter Bruderer 

W ho are these people?” them? This and problem-solving it does not interrupt the logic of 
IT yon are preparing are the two best strategies to your speech. Is welcome, bat 

to make a speedi, and catch and hold the attention of humour is no substitute for able 


W ho are these people?” 
ff yon are preparing 
to make a speech, and 

flip anritonm te alnudy chairing 
your confidence, start with that 
question. It is the key to 
pubhc-speeMng success. 

Whether ti»y are strangers or 
co-workers, they have one thing 
in common; they expect you to 
dazzle than for the next 15 dr 
20 mfonfog- And the best way is 
to focus an their favourite subject 
-themselves. Talk about the 
people yon are talking to. 

Begin by defining who these 
people are and what they want 
To help, here are 12 questions: 

• Are these people friends, 
co-workers, customers or 
strangers? Define their 
characteristics and self-interests 
- the work they do, their 
education level, the everyday 
language they use, and especially 

problems miH opportunities 

that concern them. 

• Why are they here? What do 
they expect to get ont of your 
speech? What do they want of 
yon? They expect to benefit 
somehow. Write these 
expectations down. 

• Why were yon invited to make 
this speedi? There must be 
something special about your 
background that is of interest 
to the audience. What exactly 
have you got to offer? You must 
Tmriwr e tand ynnr q n«Hf1«y Hrtti» 
so you can deliver the speedi they 
expect to hear. Audiences are 
easily disappointed when a 
speaker steps out of character 
and ignores the reason be was 
chosen. 

• What problems do these people 
have? One of the best ways to win 
approval from your audience is 
to recognise their problems and 
help solve them. Your knowledge 
of their problems is probably the 
reason yon woe invited to speak. 
They expect fresh insights, a 
different point of view, and ideas 
that may help thou. They do not 
want platitudes and generalities. 
One or two specific ideas that stir 
their minds will send them away 
feeling their time has been weD 
spent 

• What opportunities do they 
hove and how can ytra help realise 


them? This and problem-solving 

are the two best strategies to 
catch and hold the attention of 
any audience. Tour function Is 
to help them see their 
opportunities, open their eyes, 
stimulate their imagina tion, point 
the direction, and encourage them 
to act They came to this meeting 
expecting you to freshen and 
expand their thinking: 

• What is the normal, everyday 
language of this audience? Once 
you have settled on the Mg theme 
idea, the ultimate virtue is to 
express it with absolute clarity. 


UNPfVJPEP ATTQ^niON..- 



If your audience is from a certain 
industry, what terminology does 
it understand best? The audience 
dictates your choice of words. 

The best way to convey an idea 
is to use the language the 
audience knows best, cast in the 
simplest words you can find. 

• Do these people like humour? 
Everybody does. But humour is 
a risky device What strikes one 
listener as dever may strike 
another as inane. The theme of 
your meeting may be serious, and 
humour would be out of place. 
Few speakers are good comic 
story-idlers, aid nothing can be 
worse than telling an old, 
inappropriate or pointless story. 
A light touch here and there, if 


it does not interrupt the logic of 
your speech, is welcome, but 
hnmour is no substitute for a Mg, 
useful idea clearly expressed. 

• How long should the speech 
be? When yon woe invited, you 
were probably given a general 
time limit Tbe best rule is to take 
only as much time as needed to 
make your presentation with 
absolute clarity. The only thing 
worse than befog too long and 
boring is being too short and only 
partially understood. 

• Should you use visual aids? 

If they make your central point 
easier to comprehend, yes. Keep 

them simple and uncomplicated 
because the audience has only 
a moment or two to digest tfom. 
Explain every word, line, graph, 
number, picture; otherwise, if 
you pass on without doing so, 
the audience feels ft has missed 
some- thing. 

• What should your manner of 
speaking be? Speak loudly. Make 
sure your voice carries distinctly 
to the farthest listener, so nobody 
has to stra i n to hear you. The 
whole character of your sp eed i 

- your enthusiasm, conviction, 
emphasis, sincerity - can be lost 
if yon speak with a tentative, soft 
voice that makes listening a chore. 
Nobody ignores a loud voice, and 
there is no conviction in a voice 
that mumbles. 

• How should yon use your eyes? 
Make eye contact Look directly 
Into Ok eyes of individuals, 
shifting from one part of the 
audience to another, from front 
to hack, left to right This has 
tbe compelling effect of keeping 
listeners’ eyes cm the speaker, 
feeling that he is addressing them 
personally. It also makes you, 
the speaker, feel yon have made 
personal contact with individuals 
who are hanging on every wont 

• Should you make an outline? 
Yes, and consult it as you speak. 

It forces yon to organise your 
speedi in a logical, coherent way, 
and keeps you from running off 
the track. 

These questions are just a start; 
add others to fit your occasion. 
Taking a few minutes to 
understand who these people are, 
and what ti>ey want, is the first 
step in making a good speech. 


FINANCIAL TIMES 


SPECIAL OFFER 


FT/Lufthansa "Free European Flights” offer 


The Financial Time* and Lufthansa All You have to do 


ham Joined toget he r to offer 
readers two free E ur opean 
Business Class flights when you 
fly Business or First Class return 
to any of Lufthansa 1 * 80 long-haul 
Inter-Continental destinations. 

How it worfcs 

If you fly one return, or two single, long-had 
Inter-Continental Business or First Class 
flights in the Lufthansa network untfl 

Wednesday, August 31 , 1994, the 
'Free European FHghts" voucher entitles you 
to two free Business Class returns to any of 
Lufthansa’s 87 European destinations valid 
until Friday, March 31, 1995. 


• Collect eight dffleranlly numbered tokens 
jx£>6shed between Monday, February 28 and 
Satuitiay, March 12, 1 994 from the Financial 
Times including one token from the Weekend 
FT on Saturday. 

• V for any reason you have not kept last 
weeks papers, back copies are available 
from the FT Shop on 071-873 3324 

• Send the tokens, together with an 
appflcatkxi form, to FT/Lufthansa “Free 
European Flights" offer, Fenton Way, 
BasHdon. Essex, SSI 5 6SL by Friday, April 
15,1994. 

• You wifl than receive a voucher for two 
free Lufthansa European Business Class 
tickets tor you to retain urrti you have taken 
either one Inter-Continental return flight or 


two single Inter-Continental return flights on 
Lufthansa In Business or First Class before 
Wednesday, August 31, 1994. 

• Retain a copy of your Lufthansa 
Inter-Continental ticket^ and originals of 
your boarding passes and retun these with 
your ticket voucher. These will then be 
exchanged for two free Business Class 
tickets to the European destination of your 
choice (for two people travelling together on 
the same SghQ. 

• The free European Business Gass flights 
can be used until Friday, March 31 , 

1995. 

• Fid terms and conditions, together with an 
application fonn, will appear on Friday, 

March 11 and Sahaday, March 12. 1994. 







D O N 1 T 
CRACK 
UNDER 
PRESSURE 




7 ' TCRCCIIS 

4 f 1 t l t IF* 


*. . . fA .\ : 



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FINANCIAL TIMKS WBONKSUAY MAKCII t> l'NI 


BUSINESS AND THE ENVIRONMENT 


T he Soviet army may be 
withdrawing from eastern 
Europe but it has left 
behind an ecological mess. 
The bill for the clean-up operation 
will be staggering. 

Estonia, Lit via and Lithuania are 
currently sizing up the fallout from 
50 years of sloppiness at more than 
1,000 former Soviet military facili- 
ties. This legacy of Soviet rule, 
ranging from nuclear waste to 
water pollution, should keep policy 
planners and eco-businesses busy 
for years. 

Soviet pilots, for instance, would 
regularly dump jet fuel on the 
ground to minimise flying hours. At 
the Tapa military air base in 
Estonia, 16 sq km arc polluted by 
jet fuel, 7m deep in some places. 

At most Soviet airfields in the 
Baltic region - as in east Germany 
and the Czech Republic - waste 
fuel, while not toxic, has seeped 
into the region's shallow natural 
groundwater reserves and raised 
purification costs. 

The World Bank has examined 
the damage at Latvia's Tukums air 
force base, and is considering fund- 
ing clean-up programmes. Environ- 
ment Canada, a government 
agency, has offered to train Latvi- 
ans in site remediation and assess- 
ment. But institutional lenders have 
yet to commit substantial funds to 
clean-up efforts. 

Meanwhile Baltec, a private Lat- 
vian company, has begun a blore- 
mediation project at Tukums. Over 
five years, it plans to pump out the 
jet fuel, some of which can be sal- 
vaged and resold, and put bacteria 
into the soil to break down the 
remaining fuel. 

Inspectors previously barred from 
secret sites are finding other and 
more worrying surprises. Near 
Zvarde. an eastern Latvian town, 
more than 24.000 ha of farmland 
were confiscated for air target prac- 
tice. The Land was returned to Lat- 
via after independence, leaving a 
trail of pollution, deforestation and 
unexploded bombs after 30 years of 
daily bombing sorties. 

Peteris Ellers, a member of parlia- 
ment. estimates that demining 
might take another 30 years. “It has 
to be done," he says, “but we don't 
have the technology to do it well.” 
An inspection last summer found 
364 bombs, mines and rockets after 
examining just the main bombing 
polygon of 150 ha - and only curso- 
rily to a depth of 20 cm. 

Deadly waste understandably 
raises more eyebrows. In SiUamae, 
a closed military city on Estonia's 
north-eastern coast, a classified 
chemical combine has left a 20m- 
high dam tbat contains, according 
to Murray Feshbach. an expert on 
the Soviet environment at George- 
town University in the US, 4m 
tonnes of uranium ore, 1.200 tonnes 
of pure uranium, 1,000 tonnes of 
radium, 800 tonnes of thorium, plus 




WORLDWIDE WASTE 



Green legislation will 
test Tokyo’s sincerity 

Japan is sharpening up its environmental policy, 
reports Emiko Terazono in the latest in a senes 


Devastation: the remains of a mtosfle firing point in Latvia after 30 years of daily target practice by Soviet bombers 

East counts cost 
of a dirty legacy 

Estonia, Latvia and Lithuania face a big bill after 50 years 
of Soviet army sloppiness, writes Matthew Kaminski 


2m tonnes of calcium sulphide oil 
shale ash and some ground radioac- 
tivity. 

In a big storm, this could go into 
the nearby Gulf of Finland and 
directly affect the Baltic rim coun- 
tries. Feshbach says one safety mea- 
sure, so far not carried out. would 
be to encase the dam in cement. 

Nuclear waste pockets have also 
been discovered across the Baltic 
hinterlands. Last summer in Lith- 
uania. radioactive equipment 
dumped at a landfill in Zokniai, an 
airfield near Siulinae, produced 
alarming geiger readings. 

P aldiski. a big submarine base 
in Estonia, has two nuclear 
reactors, a depository for liq- 
uid waste, another for solid waste 
and underground pipelines for 
radioactive sewage. In troop with- 
drawal talks. Russia has agreed to 
give up the base, remove the 
nuclear fuel rods and take care of 
waste and the necessary ciean-up. 
What should be done with the 600 
tonnes of liquid waste and the two 
reactors is unclear. 

Estonia, which has a fiercely 
nationalistic government, worries 
about the proposed length of a 
Russian clean-up presence until 


2000. It may look west for help 
Instead, says Alar ORjum, a foreign 
ministry spokesman. 

But Feshbach worries more about 
dime thy Ihydrazine, also called 
heptyl, a liquid rocket fuel that is 
supertoxic, volatile, carcinogenic 
and nerve paralysing- Around 270 
tonnes - of the estimated 150,000 
tonnes in the former Soviet Union - 
have been found around Ventspils. 
a large Latvian port city. “There is 
no known technology to get rid of 
it," says Feshbach. “The cheapest 
way is to fire it from rockets.” 

However. Harry Whitacker. chief 
of emergency engineering at 
Environment Canada, hopes heptyl 
can be turned into ammonia or 
methanol by using ultraviolet light 
and peroxide in an advanced 
oxidation process; and nitric acid, 
once pumped to the surface, could 
be converted to fertiliser if mixed 
with ammonium and hydroxide. 

On the Baltic Sea shore, military 
harbours have been left in a pitiable 
state. At Liepaja, a top Soviet Baltic 
Fleet base, the harbour floor, 
polluted by heavy metals and crude 
oil a metre deep, needs to be 
dredged. 

Just off the coast sit sunken 
battleship hulls, stripped of 


non-ferrous iron. Nearby are 
submarines which used batteries 
leaving semi-toxic residue - 
potentially dangerous if built up 
over time. Clean-up would be 
expensive, but a World Bank official 
says the spectacular site of pilfered 
Soviet warships might be a 
profitable tourist site. 

The bank has made the 
conversion of Liepaja from a 
military into a commercial centre a 
priority project in the belief that the 
city's large port could be a key 
trans-shipment point to and from 
the Russian market The bank has 
obtained the Latvian government's 
commitment to support a project of 
water treatment. coastal 
management and tourism. 
Environment Canada would handle 
the military pollution. 

Like any economically depressed 
nation, however, Latvia must make 
hard choices on pollution clean-up. 
A clear economic incentive is 
needed to secure funding. 

Symbolic cost estimates have 
been presented to Russia, the 
inheritor of the Soviet array. Latvia 
has sent Moscow a $U?m t£99ra) 
bill for land use and anticipated 
clean-up. Realistically, however, the 
Balts do not expect Russia to pay. 


In a recent letter 
to more than 600 
Japanese 
manufacturers, 
Wakako Hironaka, 
chief of the 
country’s 
Environmental 
Agency, urged 
business leaders to invest in 
environmental technology to help 
the struggling economy. 

Although the Japanese 
government has embraced the 
green issue over recent years to 
enhance its international image, 
it has done little to lay down 
legislation defining industry’s 
role in environmental protection 
or imposing standards for 
industrial waste. 

Just how genuine the 
government is over its pledge to 
become more green will be tested 
later this year when it produces 
specific legislation to follow up 
the Basic Environmental Law, 
a broad policy statement passed 
by parliament last November. 

After rapid economic growth 
in the 1950s and 1960s, a public 
outcry over the sharp rise In 
pollution forced tbe government 
to lay down strict antl-pollutton 
laws. Cases such as the Minamata 
disaster, where toxic mercury 
was dumped into the coast of a 
small seaside town in southern 
Japan, or the Yokkaichi air 
pollution scandal, in which 
residents of an industrial town 
in central Japan suffered severe 
respiratory problems due to the 
air pollution from chemical 
plants, led to litigation by victims. 

After numerous lawsuits against 
manufacturers and the 
government, tough laws 
controlling air and water 
pollution were passed. Companies 
rushed to spend on pollution 
control. Investing 17 per cent of 
total capital investment at the 
peak m 1975. 

However, green legislation has 
hardly changed since then. 
“Japan’s philosophy towards the 
environmental issue hasn’t 
developed In the last 20 years," 
says Ian Austin, the Tokyo-based 


director of Japan business 
development at Dames & Moore, 
the US environmental 
consultancy. Because Japan’s 
industrial waste policy remains 
lax compared with that of the 
US and Europe, the financial 
burden on corporations remains 
almost non-existent. 

The agency bad initially 
intended the Basic Environmental 
Law to include the 
implementation of a tax to limit 
carbon dioxide emissions and to 
make it obligatory for companies 
to conduct environmental impact 
assessments. But opposition from 
the Ministry of International 
Trade and Industry (Mitt) and 
the construction ministry led to 

From experience, the 
Environmental 
Agency realises that 
clean-up is much 
more costly than 
prevention 

the law being watered dawn. 

Soil pollution from Industrial 
waste landfills is expected to pose 
a problem for the Japanese 
government and companies in 
the next few years. 

Legislation covering user 
charges, which require companies 
to pay for collection and treatment 
of polluted waste, will have to 
be implemented, since the cost 
of closing down and cleaning up 
industrial waste landfills is 
expected to be enormous. 

From its experience with 
Minamata, the agency realises 
that clean-up It more costly than 
prevention. The agency says that 
because Chisso. the chemical 
company responsible for the 
Minamata poisoning, had 
neglected to spend an annual 
YiOOm (£645,000) in pollution 
prevention. Its liabilities, 
including compensation to the 
victims and local fishermen, grew 
more than 100 times to an 
adjusted Yli.Sbn a year. 


Austin says that tootling 
multinational companies in the 
European Union and the US are 
already applying environmental 
management policies to their 
operations in Japan to avoid 
possible future liabilities. 

Japanese businesses, 
meanwhile, have seen profit 
opportunities In the development 
of green technology, and have 
also adopted action plans to show 
that they are already 
environmentally sound, aud do 
not need farther legislation. 

In 1991, the Kcidamen. Japan's 
leading business federation, 
produced a policy statement which 
said companies should put board 
members in charge of 
environmental matters, while 
In 1992 Mlti laid down a 
"voluntary plan concerning 
environmental matters". 

Although such pronouncements 
have mostly sounded superficial, 
some companies claim to be 
sincere. Toyota Motor says It will 
start producing cars in which 85 
per cent of the body and engine 
parts can be recycled, while 
Toshiba has stopped using 
ozone-depleting CFCs to clean 
its computer chips. Kao. the 
detergent and consumer goods 
maker, promises to cut Us 
industrial waste by 50 per cent 
by the end of next year. 

But some companies' behaviour 
overseas may not be consistent 
with the way they do business 
in Japan. Mitsubishi Kasci, the 
chemicals group, was forced to 
close its chemical plant In 
Malaysia after local activists’ 
allegations of radioactive waste. 
Although Mitsubishi overturned 
a decision by the Malaysian court 
in 1992 to terminate operations, 
the case damaged the company’s 
image and it pulled out anyway. 

In seven years, companies will 
run out of industrial waste sites, 
and some Japanese general 
construction companies have 
started to develop industrial waste 
and soil pollution technologies 
ahead of likely controls. 

Next tcee/c Germany. 



PEOPLE 


INDIA’S FORTS & PALACES 

FRIDAY, OCTOBER 7 TO SUNDAY, OCTOBER 23, 1994 


The FT invites its readers to explore the forts 
and palaces of India. Accompany us on a 17- 
day tour of the north, seeing the wonders of 
Delhi, Agra, Gawlior, Jaipur, Jodhpur and 
Udaipur soaking up the sites, sounds and 
splendour of the country. 

In New Delhi, capture the magic of the Red 
Fort at a son-et-lumifere. Take a train across 
country to Agra, home of the Taj Mahal, dine 
in its shadow as the sun sets. C>n a day trip 
to Gawlior explore the 8th century temples 
and palaces. Be received royally in the 
romantic city of Jaipur, spend time 
discovering the wonders of this ,r Pink City" of 
Rajasthan. 

Fly on to Jodhpur and the Meherangarh Fort, 
tour the surrounding countryside and sample 
village life. Relax in Udaipur by Lake 
Pichola. Enjoy a beautiful woodland journey 
to the Chaumukha Tfemple. Return to Delhi 
for that last minute shopping and flight to 
London, with your mind full of the wonders of 
India. 


RHTCT ITINERARY 

Fly from London Gatwick with British Ariwaja. 

Delhi! Arrive in Delhi, transfer to Taj Palace for three nights. Tour 
New and Old Delhi, visit the opulent Red Fort and Rqjghat, 
Mahatma Gandhi's memorial site. 

Agra: Train to Agra. Stay at the Tqj View for two nights. Visit the 

imposing Agra Fort and the Taj MahaL Day-trip to Gwalior. 
Jaipur: Drive to Jaipur via Fatebpur Sikri fa- a three night stay at the 
Hambagh Palace. Trip to Samoda, to see the unique Krishna 
frescoes at the fart. 

Jodhpur: Stay at the Umaid Bhawao Palace for two nights. Visit the 
Meherangarh Fart and tbe surrounding countryside. 

Udaipur: Fly to Udaipur for a four night stay at the Lake Palace Hotel 

Drive through the hills of Rajasthan to the Jain Temples of 
Ranakpurand Chaumukha. 

Delhi: Relax at tbe T^jPaJaoe before departing for a night flight home. 

Price £2^50 per person. (Single room supplement S4P5) 
Readers Arum outside the UK who do not wish to travc l via 
Loudon may join the holiday in Delhi- 

Price ladudec International flights. All (Sternal flights, transfer*, anuniau and 
■pedal wtais stated in the itawaiy, taxes and dpo. Half board e-Ia-cute meals at Baa 
atw data botda. Barmen rf a tonr manager aod guide. 

Price exclude*: Tratri iawnanc a; oamc Uanirfa panaud nxtmn. 

Thii tear a nrganisrd on bthtdf of tfu F in a nci al Time* fry Cox J Jfiagt Tratri Limxltd. 
Addnsat* aupfitiad hr reader* is response Co this iaritatam will be retained by the 
financial flaw* which is rapsterad under the Data Protection Art ISM. 


j INDIA'S FORTS & PALACES 

:Tk Laulaa Cordon- F<wweU,Fin*aaal Timm, Number Ooe Swithwark Bridge, 
j London SSI 9HL F« 071-573 3072. 
j Please aaad » fall detents of the FT Invitation to India. 

iTOfc.,... Initials Surname __ 


| ftwt Town 


..County — 




! Post Code— 


— __ — Daytime Tel 


Earl returns 
to UK via 
Everest and 
Albania 

Peter Earl, the corporate 
financier who last year was 
joint leader of the Rebecca 
Stephens Everest expedition, is 
joining US investment banking 
boutique Fleldstone Private 
Capital Group to set up a 
“mainstream" corporate 
finance function from London. 

Fieldstone was started in 
1990 by a team of structured 
finance specialists who had 
previously worked for Bankers 
Trust in New York and Lon- 
don. While it Is hardly a house- 
hold name, even in the City, it 
was last year ranked second in 
worldwide project finance by 
the specialist publication Inter- 
national Financing Review. 

ft has also had a hand in 
financing every power station 
built in the UK in the past four 
years and it was in the course 
of a similar project in Albania, 
where Earl has been advising 
the government on debt 
restructuring, that the two par- 
ties met. 

Earl’s experience, while 
diverse, has not been with 
mainstream corporate finance 
outfits. His own vehicle. Tran- 
wood Earl, which is remem- 
bered for its audacious but 
fruitless bids for the likes of 
Storehouse, collapsed in 1991. 

For the past couple of years 
Earl has been working out of 
the US, following a compli- 
cated deal In which he put The 
Carter Organization into, and 
then rescued it from. Chapter 
11. As well as his Albanian 
activities he has recently been 
working on a communications 
project in Bolivia, the comple- \ 
tion of which he hopes to cele- 
brate in May by ascending a 
21.000 Coot peak near La Paz. 

He says his wish to return to 
the UK is partly caused by a 
sense that there Is a revival of 
takeover activity. He believes 
his transatlantic experience 
will be valuable and likes the 
idea of the US culture at Field- 
stone. Tve trodden on a lot of 
toes because that is what the 
institutions wanted me to do.” 
he adds, indirectly explaining 
why he might not fit so easily 
into a UK merchant bank. 

Earl is not being made a 
partner - there are none in 
London - but says he “lives In 
hope". He is bringing with him 
to Fieldstone three colleagues 
from Tran wood days. 



& - I 





Sir Brian Pearse (above right), 
who steps down as chief 
executive of Midland Bank 
at the end of the month, is 
taking over from Sir 
Christopher Benson as 
chairman of the Housing 
Corporation, one of the 
government's biggest quangos. 

Sir Brian, who spent most 
of his banking career at 
Barclays Bank, is being joined 
by Peter Cooke (left) as deputy 
chairman. 

Cooke, a member of the 
Housing Corporation since 
1988. is currently chairman 
of the Price Waterhouse World 


■ The CBI has appointed John 
Parsons as chairman of its 
Small Firms Council Parsons 
is chairman and chief execu- 
tive of Time and Data Systems 
International, a Poole-based 
company which makes elec- 
tronic security systems. 

He replaces Richard Bruccl- 
ani who steps down at the end 
of the standard two-year 
period. 

Parsons was a member of the 
British Overseas Trade Board 
from 1985 to 1993 and of a DTI 
national advisory group on the 
Impact of the single European 
market on small and medium- 
sized companies. 

Parsons, who received a CBE 
in 1988 for services to export 
appears to have few illusions 
about what smaller companies 
can achieve in terms of growth 
and Job creation. 

“Small businesses are recog- 
nised as the leading job cre- 
ators and an important source 
of economic growth," he says. 
“However, most of this comes 
from a relatively small propor- 
tion of dynamic firms which 
have Uie potential to grow." 

■ Philip Mallinckrodt, the son 
of Charmaine Schroder and 
George Mallinckrodt, Is join- 
ing the family firm where his 
father is chairman, as co-head 


Regulatory advisory practice 
and is a former head of 
banking supervision at the 
Bank of England. 

The Housing Corporation 
is the public body responsible 
for registering, promoting and 
supervising nan-pro fit- making 
housing associations, which 
own and manage some 700,000 
rented homes in England. 

In 1993/94, £UJbn of public 
resources bas been allocated 
to the Housing Corporation, 
which expects to fund around 
57,600 completions and 55,200 
approvals during the year. 

(See Observer) 


of Scbroders equity capital 
markets. The other co-heads 
are Paul Sauvary and Andrew 
Williams, and the new recruit 
will report to Gerry Grim- 
stone, who heads the new 
international financing and 
advisory team. 

Mallinckrodt, 31, bas spent 
the past eight years at CS First 
Boston in London, where his 
last Job was also as co-head of 
equity capital markets. 

■ NatWest Markets, the corpo- 
rate and investment banking 
arm of National Westminster 
Bank, has moved to strengthen 
an area in which UK commer- 
cial banks have traditionally 
been weak: providing financial 
advice to British companies. 

NatWest Markets has 
appointed Andrew Cartwright, 
a J.P. Morgan investment 
banker, as a managing director 
and head of its UK corporate 
advisory work. He will work 
alongside Gerbrand Hop, who 
concentrates on continental 
European business. 

The two men will report 
directly to John Howland-Jack- 
son. deputy chief executive of 
NatWest Markets, who said 
yesterday that the appoint- 
ment marked “a significant 
strengthening" of the senior 
executive team. 


Insurance moves 

Neil Shaw, chairman of Tate & 
Lyle, is to stand down as chair- 
man of the Association of 
Lloyd's Members, which repre- 
sents about 9.000 of the insur- 
ance market's Names, at the 
organisation's annual general 
meeting this summer. Shaw 
bas been chairman of the asso- 
ciation during a turbulent two- 
year period, building up close 
links with the market’s reform- 
minded leaders. David Row- 
land and Peter Middleton, but 
says that his commitments at 
Tate & Lyle and elsewhere 
mean he can no luuger devote 
sufficient time to Lloyd's. 

The AJLM committee has pro- 
posed Sir David Berriman. 
chairman of the Rose Thomson 
Young action group, as Shaw's 
replacement. 

■ Nigel Edwards and Jeremy 
Lee have been appointed 
directors of Carpenter 
BOWRtNG: Colin Newman and 
Toby Pollard directors of 
Bowring Financial & 
Professional Insurance 
Brokers; Tan Arthur a director 
of Bowring Aviation: and 
Edward Page-Turner a director 
of the atari ne division of 
Bowrvng Marine. 

■ Tint Baker has been 
appointed commercial director 
and to the board of NORWICH 
UNION Healthcare. 

■ Stephen finer has been 
appointed marketing and sales 
director for Europe of 
SEDGWICK Credit: he moves 
Troin Credit Insurance 
Association, part of Hogg 
Group. 

■ Raymond Kite, formerly md 
of Alexander Howden's marine 
& energy division, has been 
appointed md of the marine 
division and to the board of 
JOHNSON & HIGGINS. 

■ Terence Matt hoi te lus been 
appointed general manager 
and secretary of The BAPTIST 
INSURANCE COMPANY on 
then retirement of Maurice 
Punrer. 

■ Andrew Torrance (below 
left), formerly md of its 
commercial ilives operation, 
lias been appointed director. 
8i|oup iiuunmoe operations at 
frr LONDON & EDINBURGH. 

■ Anders Haggo (below right) 
p bwn appointed md of AON 
cJUertaiiuuent (Europe). 











11 





« * 



FINANCIAL TIMES WEDNESDAY MARCH 9 1994 


ARTS 



Mirs Lu, the teacher’s wife, in 'Beyond the Clouds’, Phil Agland’s vivid and engrossing series documenting life In a Chinese country town 

Television/Christopher DunJdey 

So far, it’s still looking good 


Flamboyant 
director of 
Rome Opera 
resigns 

ia m paolo Cresd, controversial 
director of Rome Opera, has 
resigned. ESs sodden depa rtur e 
from die post, two years before 
bis contract was due to expire, aids a 
flamboyant regime marred by a L35bn 
(£14m) deficit, spectacular backstage 
rows and talk of scandaL 

In the latest crisis, Cresd was 
summoned to appear in coart with the 
singer 3os£ Carreras over allegations 
that the opera home paid the Spanish 
tenor an nnanthorised extra Ll30m - 
cm top of the normal fee of L30m plus 
LlOm expenses - for a recital in October 
1992. 

The public prosecutor claims that a 
decision was taken to make an e xtra . 
payment to Carreras and describe it in 
accounts as “sponsorship". Magistrate 
Filippo Lavfano Is seeking to try Cresd 
on charges of abuse of office. Carreras’ 
agent, through Us lawyer, denies any 
wrongdoing on the part of his client, 
saying that the singer was paid rather 
less than his usual fee. The agent does 
not, however, disclose the sum actually 
paid. 

The allegations follow a succession 
of sackings and rehirings and accusations 
of extravagance of heroic proportions 
recalling, according to one Italian, 
newspaper, a Byzantine court in the 
last stages of, decadence. A payment of 
L27m was allegedly made for unnecessary 

Dogged by debt and 
allegations of Byzantine 
extravagance , the opera 
house has been dubbed 
‘Barman s Circus* 


English language courses for the opera 
house Are brigade. L5lm went towards 
a New York production of Aida which 
never took place. Recently, more than 
L 200 operatic costumes were impounded 
by a renovation company, which 
threatens to sell the costumes at auction 
in May If the opera house does not pay 
its bill of LlJUBrn. 

There have also been accusations by 
Roman concert Institutions that the opera 
house filched artists under exclusive 
contract to than (Rockwell Blake from 
the Accademla FUarmonica Romana 
and Georges Pretre from Santa Cecilia, 
who was lata* forced to return). 

So catastrophic was the financial 
situation at toe opera house that the 
“Green" mayor of Rome, Francesco 
Rutelli, appointed himself Rome Opera 
commissioner and delegated toe 
unravelling of the theatre’s finances . 
to Vittorio Ripa dl Meana. 

“We can no longer allow the director 
to continue." said Rutelli. "We have 
already waited far too long as more and 
more terrible stories about toe financial 
mess at the opera emerge every day.” 
Cresd was unperturbed and dismissed - 
the deflrit as “a mere trifle ...no more 
than the cost of a few tanks.” He went 
on to add, with unnerving candour, “only 
an infinitesimal part of it went into 
bribes." , 

Last week, both Rutelli and d! Meana 
resigned in exasperation at Cresd’s 
intransigence and the deputy prime 
minister, Senator Antonio Maccantoo, 
was obliged to step in. By the weekend, 

It was Creed's turn to step down and 
his resignation was accepted, while 
Rutelli and di Meana agreed to return 
to their posts. 

The queue to take over the job of 
director of Rome Opera, dubbed by 
Riccardo Muti as “Barmrra’s Circus”, 
is not enormous. It is viewed by some 
as a poisoned chalice. Mayor RnteDj’s 
choice, Sergio Escobar of the Bologna 
Conranale, has already let it be known 
that he would rather remain whore he 
is. The search for a successor goes on. 

Jennifer Grego 


D uring the last few years as 
the government has driven 
British television further 
and further j ptn the market- 
place - (Well that system 
has triumphed, hasn't it? Socialism is dead 
isn't it? Why should television be unaf- 
fected? No doubt the long march back to a 
sane mixture of market and social econom- 
ics will take a whole generation) - with 
FTV licences being auctioned, Channel 4 
made to sell Its own advertising time and 
compete with ITV. and the BBC's income 
ever more closely scrutinised and con- 
trolled, this column has tended to make 
Cassandra-like warning noises about the 
quality of programmes. 

The argument has been that a fiercer 
tight for audience share would mean 
increasing concentration on populist 
programmes and the reduction or even 
abandonment of those admirable tradi- 
tions which, in addition to populist 
material, Britain’s peculiar television 
“duopoly" had been bringing us far 40 
years: current affairs in mid evening, 
classic drama, properly funded foreign 
coverage, arts programmes, serious 
documentaries on subjects other than 
prostitution and transvestites, and comedy 
which goes beyond “Ding-dong Honey Tm 
home" to push and even kick at the exist- 
ing limits. 

Though the BBC’s problems will probar 
bly never be entirely soluble, as was 
suggested in an oddly ambivalent opening 
programme in a new run of The Galdring 
I Audit on Channel 4 an Sunday, and WV 
has been operating under its auctioned 
licences and its new central scheduling 
system Iter only 14 months, with Channel 4 
fending for itself for the same period, toe 
time has come for a cautious admission 
that - so far, anyway - the sky has not 
fallen. We are not being subjected to an 
unrelieved diet of populism. 

That is not to deny that there is a lot of 
it about From The Big Breakfast on Chan- 
nel 4, aimed at toddlers of all generations, 
to Touting Telephone Numbers on ITV, a 
sort of game show without a from a 
copy of an amoral Brazilian series on 
BBC 1 , Do The Right Thing, with Terry 
Wogan, to the sub-panto game show Dent 
Forget Your Toothbrush on Saturday 
ni ghts on Channel 4, the mindless, 
time-passing bonhommle spreads and mul- 
tiplies. Yet any honest viewer would have 
to admit that British television is still 
offering more good and even excellent 
material than any well balanced individ- 
ual ought to have the tim* to watch. Per- 
haps it is not scheduled as you might 
wish. , but what Is the point of a video 
recorder? 

This new year season has already 
brought us Middlemarch from toe BBC, an 
adaptation which was not as good as some 
devotees pretended, nor as good as the 
best literary adaptations in the past, Bleak 
House for instance, and Brideshead Revis- 
ited. One of the greatest strengths of the 
television Brideshead came from John 
Mortimer's decision to use the authorial 
voice-over throughout Why it was decided 
with Middlemarch to throw away this 
invaluable technique by limiting It to a 
postscript (read in the unmistakeably 
m iims y times of Jodi Dench) is a mystery. 
However, even without it, this was an 
impressive series which showed that the 
BBC can - and will - itUldoiL. 

It now seems highly unlikely, barring 
more radical changes, that ITV will ever 
do another Brideshead but on Monday 
they did begin another batch oE Granada’s 
splendid Memoirs Of Sherlock Holmes, 60- 
minute costume dramas complete with 


A Spanish Arts Festival is upon us 
and dance must inevitably play 
its part So the Cristina Hoyos 
troupe is in Rosebery Avenue this 
week, with the spectacle given the 
unlikely title of “Flamenco Dreams”: any- 
one able to dream through the rattle of 
handclaps and the clatter of feet will 
deserve a medal. It is of course, yet 
another Flamenco show; more »h<»v than 
most - well staged: well danced; well 
vocalised in those arabesques of howling 
that suggest permanent pressure on a 
favourite com - and absolutely the mix- 
ture as before. 

The fascination of Flamenco in the thea- 
tre Is that moment when production falls 
away, the usual posturings are stilled, and 


hansoms, country house locations and, 
this week, a costume ball with form tains 
and fireworks. Best of all Jeremy Brett 
and Edward Hardwicke are still playing 
Holmes and Watson, the best pair ever to 
do so cm screen. Nor are we limited to 
fiction from previous centuries. BBC2 
began another season of “Screen Two" 
with the extraordinary Genghis Cohn, a 
production with the chutzpah to use com- 
edy as a means to look again at the holo- 
caust With wortderflil performances from 
Antony Sher as the Dachau, ghost and 
Robert Lindsay as the former SS officer 
who shot him , it was perpetually watcha- 
ble even if the ultimate purpose was 
obscure. 

So far as current affairs in mid evening 
are concerned, until three weeks ago there 
was as much, as even World In Action is 
still at 830, Dispatches (which offered, an 
interestingly alternative view to the gov- 
ernment’s on Britain’s mining industry 


the sacred fire flares In a dancer. For 
much of Monday night's opening at Sad- 
ler's Wells, predictability was all The 
women, adept at slow-burning glances as 
their skirts stir up the stage dust, look 
lovely - if occasionally miffed by what the 
men are up to. The chaps, in buttock-hug- 
ging trousers and expressions of baleful 
uncertainty, stamp, and go on stamping. 
(“Never live under a Flamenco dancer,” is 
a good rule for flatrdweUers.) Guitars ran 
Hip gamut of tonic/dominant harmonising, 
and voices are raised in what I suppose is 
supplication. I have no Spanish, but sus- 
pect that the texts amount to little more 
than "Watch out, she’s on the war-path”. 

All this is what we have come to expect, 
and it as with Mme Hoyos* troupe, it is 


last week) at 9.00. and Panorama at 930. 
True, at present The Big Story, which 
replaced This Week on ITV, has itself been 
replaced by The Big Race which, lacking 
competitors, ought really to be called “The 
Long Drive". However, ITV has been as 
good as Its word on Network First (a dread- 


fully umnamorable title in place of First 
Tuesday) and two weeks ago screened the 
film about a massacre in East Timor, 
made clandestinely by John Pflger and 
David Munro. As usual with this pair it is 
now causing a huge political row, which is 
presumably just what they wanted. 


polished and well-lit, then audiences are 
happy. They are what theatricalised folk 
dance is always about instant quaintness 
and capers designed for tourists. But in 
u^s packag ing one may, as in a ligh tning 
flash, discern toe real thing. The greatest 
Flamenco artists spontaneously combust 
As Isadora Duncan said after one extraor- 
dinary performance: “The god was with 
me". So with the inspirational flamenco 
style. Carmen Amaya, the truest Flamenco 
dancer I have seen, was, at her most intox- 
icating, a gypsy divinity pursued by 
demons, Cumbre Flamenco, at the Wells a 
few years ago, showed us two other mar- 
vels: Carmen Cortes and La Ghana, whose 
art became incandescent with rhythm and 
the very spirit of the dance. 


We are getting more vivid and engross- 
ing foreign coverage in Phil Agland’s 
Channel 4 series Beyond The Clouds which 
Is documenting life in a Chinese country 
town and coming over as a cross between 
Margaret Mead and Coronation Street, all 
displayed In Agjand's startlingly beautiful 


photography. And on Monday BBC2 began 
Video Nation, a huge “Mass Observation” 
style programme in which 55 video cam- 
eras have been given to 55 widely assorted 
people throughout Britain. Remembering 
the striking success of the Video Diaries 
scheme, this could prove to be very special 


With Cristina Hoyos, I feared that this 
transcendent moment might not arrive. 
Her initial appearance - red flounces; 
arching torso; a star dancer on display - 
told of obviously fine qualities that have 
always been hers: glorious arms; electric 
timing. Yet it was an exteriorised perfor- 
mance, and like most of what we saw, 
brilliantly contrived. Then, in a Taranto, 
Mine Hoyos came on stage in a simple 
grey dress, as if to confront her art and 
her own talent Guitarists and singer 
started to commune with her. Urgent 
rhythms, awkward poses, the dance kick- 
ing and battling, inhabited her totally, and 
we saw the real, the raw and earthy fla- 
menco which is so wonderful - and so 
rare. Her arms curled around the block of 


- particularly if BBC2 can be persuaded to 
show it In bursts of more than two min- 
utes. 

To make us laugh we have The Day 
Today, a series which is not only one of 
toe most original comedies for years, but 
one of toe most effective pieces of televi- 
sion criticism. Trevor McDonald and Jer- 
emy Paxman now appear to be mimicking 
their detractors in a. Madly determined 
effort to. Confirm all those quirks which. 
The Day Today has so accurately identi- 
fied 

Of course I may be speaking too soon. It 
could be that British televirion today is in 
much the same condition as the optimist 
who was pushed off the roof of the Empire 
State building and was heard as he passed 
the 44th floor to be muttering “So far, so 
good”. It does seem only fair, however, to 
acknowledge that - for the moment - the 
best of British television is still looking 
pretty impressive. 


her torso; the music's pulse drove her feet 
and legs; nothing was polite, and every- 
thing was thrillingly true. The god was 
with her, and we rejoiced 

Lest I seem in the least sniffy about toe 
Hoyos troupe, let me say that every artist 
is gifted each number well-staged and 
that prodigies of stamping and rhythmic 
acuity abound Adrian Galia is a most 
stylish soloist - his solo farucca tautly 
elegant The evening runs to 100 minutes 
without an interval 


Cristina Hoyos is at Sadler’s Wells until 
March 12. Sponsored by Hola and BSIS. 
Festival sponsors Include Royal Bank of 
Scotland; Banco Santander; BSIS; BT. 



Sacred fires flare amid quaint Flamenco capers 

Clement Crisp finds the Cristina Hoyos troupe has that uninhibited, raw, earthy energy after all 


We are not being subjected to an unrelieved diet 
of populism despite fears that quality would suffer 
in the fiercer fight for audience share 








| f INTERNA TIONAl \ | 

Ar: 

Gun 

rs 

0® 


■ BORDEAUX 

Palais das Sports Tonight, 
tomorrow: Mosha Atzmon conducts 
Orchestra National Bordeaux 
Aquitaine in works by Messiaen, 
Paganini and Dvorak, with violin 
soloist Rdgfe Pasquter. Sat 
(Grand-Th6atre ): Zlno Vinnikov 
conducts Handel, Mozart and 
Shostakovich (5643 5854) 


■ COLOGNE 
Phflharmonie Tonight, tomorrow: 
Hans Vonk conducts Cologne Radio 
Symphony Orchestra In works by 
Beethoven and Strauss, with piano 
soloist Lars Vogt Fit Franz 
Weiser-Mdst conducts London 
Philharmonic in Haydn, Bartok and 
Shostakovich. Sat Lorfn Maazel 
conducts Bavarian Radio Symphony 
Orchestra in Brahms and Bartok. 

Sun afternoon: Borodin Quartet 
Sun evening: Nikolaus Hamoncotxt 
conducts Chamber Orchestra of 
Bjrope in symphonies by Schumann 
and Brahms. Tues: Andreas Schmidt 

song redtai. Next Wed: Wolfgang 

Sawallisch conducts Vienna 


Symphony Orchestra. March 20: 
Andres Schrff. March 22: Earths 
KJtt March 23: Alfred Brondel 
(0221-2801) 

Opemhaus This month’s repertory 
Includes FkJeflo with Ben Heppner 
and LJsbeth Batelev, Rigotetto with 
Leontina Vaduva as Gilda and Harry 
Kapler's production of 
Shostakovich's The Nose. Heppner 
rings the. title role In a new 
production of Peter Grimes opening 
on March 27 (0221-221 8400) . 

Sdhausplefhaus A stage adaptation 
of James Joyce’s MoHy Bloom 
opens at Westend Theater on Sun. 
Repertory Includes Werner 
Schroeter’s new production of 
Can us’ CaHguia, Shakespeare’s 
As You Like It and GQnter Kramer's 
radical version of Fiddler on the 
Roof (0221-221 8400) 


■ COPENHAGEN 

Royal Theatre Tonight, Mon: new 
baUetsby Anna Laerkeeen and 
Laura Dean. Tomorrow: Cos! fan 
tutte. Fit Oteflo. Sat, Tues: Helgi 
Tomassofl's new production of 
Sleeping Beauty. March 17: first 
night of new production of Fkfelio 
(tel 3314 1002 fax 3312 3692) 


■ DRESDEN 
Semperoper This month’s repertory 
Includes Harry Kupfer's new 
production of Handel's Belshazzar 
with cast led by bis Vermiffion and 
Jochen Kowalski, Salome, Der 
fliegende Hollander, Capricdo and 
Prokofiev's ballet Romeo and Juliet 
(0351-484 2323) 

Kutturpaiast Bans Gref conducts 
Dresden Philharmonic Orchestra, 
on Sat and Sun in an aD- Beethoven 


programme, with Pierre Amoyal 
soloist In the Violin Concerto 
(0351-486 6666) 


■ DUSSELDORF 

Deutsche Oper am Rhein This 
week's repertory is devoted to 
bedel. Tonight two Heinz Spoerfi 
works. Tomorrow: choreographies 
by Balanchine. Van Manen and 
Spoerfi. Fri: mixed bffl including 
Forsythe’s In the middle. Sat 
SpoerfPs production of Giselle 
(0211-890 8211). Duisburg Theatre 
has Aribert Relmam's 1992 Kafka 
opera Das Schioss tomorrow and 
Sat, Salome on Fri and Ariadne auf 
Naxos on Sun (0203-300 9100) 
SchauspMhaus Repertory includes 
Eugene O'Neilt's Mourning Becomes 
EJectra directed by Werner 
Schroeter, Klaus Pohl's play about 
German xenophobia Die schfine 
Ffemde, and three plays directed 
by David Mouchtar-Samoral - 
Gorki's Summer Folk, tOeksfs 
Amphitryon and Shakespeare's 
Troilus and Crasrida (tickets 
0211-369911 Information 
0211-162200) 


■ FRANKFURT 

Alto Oper Tonight Borodin Quartet 
plays Shostakovich. Tomorrow, Fit 
Plnchas Zukwman is conductor 
and viofin soloist with Frankfort 
Radio Symphony Orchestra bi works 
by Mendelssohn, Schumann and 
Neikrug. Sat Wolfgang SawaUsch 
conducts Vienna Symphony 
Orchestra In symphonies Haydn 
and Bruckner. Bat (Mozart Saal): 
Michael Girien conducts Ensemble 
Modem in works by Varese, Cerha, 
Webern end others. Sun, next Tues: 


Richard Goode plays Beethoven 
piano sonatas. Mon: Nikolaus 
Harnoncourt conducts Chamber 
Orchestra of Europe In symphonies 
by Schumann and Brahms. Tues: 
Lilya ZHberstein piano recital 
(069-134 0400) 

Jahrhunderthalte Hoechst 
Tomorrow, Fri: Nederiands Dans 
Theater in choreographies by Van 
Manen, Lightfoot and Kyflan. Sab 
Franz Wefcser-Mfist conducts London 
Philharmonic In Schumann and 
Bruckner, with piano soloist Mitsuko 
Uchida (069-360 1240) 

Oper Tomorrow, Sat, More Simon 
Boccanegra with Jos6 van Dam 
in title role. Sun: Sytvain Cambrefing 
conducts first night of Herbert 
Wernicke's new production of Duke 
Bluebeard’s Castle, with Hentk Smft 
and Katherine CtesircskJ 
(069-236061) 

English Theater Kateerstrasse 
The company’s popular production 
of the gangster musical Chicago 
continues tffl March 19, and wiU 
be succeeded on March 25 by a 
production of Arthur Miner’s 1991 
play The Ride Down Mount Morgan 
(069-2423 1620) 


■ GOTHENBURG 

KonserthuMt Tonight' Neeme Jftvi 
conducts Gothenburg Symphony 
Orchestra in symphonies by 
Schubert and Shostakovich. March 
16: Academy of St Martin in the 
Fields (031-167000) 


■ HAMBURG 

Staatsoper TWs month's repertory 
includes a Ring cycle conducted 
by Gerd Aforecht, with GQnter von 
Karmen, Simon Estes, Gabriefa 


Schnaut and Siegfried Jerusalem 
In leading redes, and a new 
production of Henze's Die 
Bassariden, staged by Christine 
Mlelltz and conducted by Markus 
Stems. Dmitri Hvorostovsky gives 
a song recital on March 21 
(040-351721) 


■ HELSINKI 
Finnish National Opera The main 
event this week Is the first night 
on Fri of a programme of Stravinsky 
ballets, Including the world premiere 
of Jorma Uotinen’s Petrushka 
(repeated March 15, 17, 18, 23, 

24). Repertory also includes 
Yevgeny Onegin and Otello (0-4030 
2211) 


■ LEIPZIG 

Qewandiaus Tomorrow, Fri: Marak 
JanowskI conducts Gewandhaus 
Orchestra In Messiaen's Turangafila 
Symphony. Sun: David Geringas 
is cello soloist with MDR Chamber 
Philharmonic. Sun evening: 
Gewandhaus Wind Quintet Tues 

Daniel Nazareth conducts MDR 
Symphony Orchestra in works by 
Mozart and Mahler (0341-713 2280) 
Opemhaus Tomorrow: Fidelio. Sab 
Bektra (0341-291036) 


■ MUNICH 
Staatsoper This month's repertory 
includes Lady Macbeth of Mtsensk 
with Marilyn Schmiege and Jan 
Bltnkhof, Der fliegende Hofi finder 
with Robert Hale and Julia Varady, 
John Cranko’s ballet Onegin and 
Peter Wright's production of Giselle. 
Richard Jones' new production of 


Giulio Cesare opens onMarch 21 
(089-22131 Q) 

Qastetg Tomorrow: Maurice Andr6 
plays baroque trumpet concerts 
with WOrttemberg Chamber 
Orchestra. Sat, Mon, Tues: Sergiu 
Celibidache conducts Munich 
Philharmortic Orchestra In works 
by Mozart and Faur6. Sun: 
Harms-Martin Schneidt conducts 
Munich Bach Orc hestra and Chorus 
In Handel's Messiah, with soloists ■ 
including AJastair Miles and Edith 
Wrens. Next Wed: an evening with 
Peter Ustinov (089-4809 8614) 


■ STOCKHOLM 

Royal Opera Tonight, tomorrow, 

Fri: Natalia Makarova's production 
of La Bayaddre. Sat, Mom La 
bo heme (tickets 08-248240 
information 06-203515) 
Konserthuset Tonight Gennady 
Rozhdestvensky conducts Royal 
Stockholm Philharmonic Orchestra 
in Brahms’ First Plano Concerto 
(Viktoria Postnikova) and Nielsen's 
Second Symphony. Tomorrow: 
Bengt-Ake Lundin piano recital. Sat 
afternoon: Rozhdestvensky conducts 
Brahms’ Second Concerto and 
Nielsen's Third Symphony (tickets 
08-102110 information 08-212520) ' 


■ STRASBOURG 

Palais de la Muslque Tomorrow, 
Fit David Shallon conducts 
Strasbourg Philharmonic Orchestra 
In works by Dvorak, Rakhmanlnov 
and Stravinsky, with piano soloist 
Tzimon Barto. March 23 and 27: 
concert performances of Roberto 
Devereux with Edita Gruberova 
(8852 1845) 


ARTS GUIDE 

Monday: Beilin, New York and 
Parts. 

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 

Euronewe: 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; 









FINANCIAL TIMES WEDNESDAY MARCH 91994 


12 

Edward Mortimer 


THE FT INTERVIEW: Sir Denys Henderson, chairman of ICI 

Corporate camps 
divide and prosper 



Tony Anchnr 

Sir Denys Henderson: ‘None of ns saw this as a magic wand' 


Is it war or peace? 

Peace, but not the kiss Of peace. 
A patched up affair, if you ask 
my opinion. 

And if you ask me, I think that 
this peace 

Is nothing like an end, nor tike 
a beginning. 

T.S. Eliot - Harder in the 
Cathedral 

Such is most 
people's in- 
stinctive reac- 
tion to last 
week's OS- 
brokered agree- 
ment be- 
tween Croats 
and “Bosniacs" 
(Bosnian Moslems). It came so 
suddenly, after nearly a year of 
savage fighting, in which both 
sides emulated the methods 
used earlier by the Serbs to 
“cleanse" the territory they 
held of other ethnic groups. 

Publicity about the Croat- 
Moslem war has focused on the 
plight of the Moslems in and 
around M a star, and on the 
intervention by the Croatian 
regular army. This partly 
obscured the fact that in cen- 
tral Bosnia the Moslems have 
been winning the war and the 
Croat inhabitants have fled 
from a string of towns: Trav- 
nik, Bugojno, Fojnica, Konjic, 
Kakanj and others. 

That explains the US-bro- 
kered agreement. The policy 
pursued by President Franjo 
Tudjman of Croatia, which was 
to support a separate Croat 
state of "Herceg-Bosna" as the 
prelude to an eventual parti- 
tion of Bosnia-Hercegovina 
between Croatia and Serbia, 
has proved a disaster for the 
Croats. The Croatian army had 
not succeeded in retrieving 
this disaster, but its attempt to 
do so had brought down the 
west's wrath on Croatia’s head. 

In Croatia itself, the increas- 
ingly visible alliance with 
Serbia was unpopular. All over 
Croatia there are refugees from 
the areas, amounting to 
roughly one-third of the repub- 
lic's territory, which were con- 
quered by Serb forces in 1991. 
These refugees, and many of 
their fellow-citizens, were out- 
raged at the sight of their own 
government conniving with 
the Serbs in the carve-up of 
Bosnia. 

So Mr Tudjman was glad 
enough to use US pressure and 
mediation as cover for his 
admission of defeat - just as 
President Slobodan Milosevic 
of Serbia, and the Serb leaders 
in Bosnia, seized on Russian 
intervention to cover their 


Allies’ 

shaky 

footing 

Croats and 
Bosnian 
Moslems make 
uneasy 
partners 

retreat when faced with a seri- 
ous threat of Nato air strikes. 

The Nato action may also 
have helped to swing Mr Tudj- 
man round. Croatia, whose 
whole raison d'etre as an inde- 
pendent state derives from its 
self-image as part of the west 
(in contrast to the “Byzantine" 
Serbs), could not possibly take 
the Serb side once a serious 
confrontation developed 
between Serbia and the west. IT 
the west is now at last getting 
tough with the Serbs, Croatia 
is bound to put itself on the 

If the Serbs did 
not fear a Moslem 
spring offensive, 
they would not 
make concessions 


western side, in the hope of 
regaining control of its lost ter- 
ritory. 

That indeed is the explana- 
tion of his volte-face that Mr 
Tudjman gave to the Croats. 
For him the agreement is not 
really about Bosnia at alL A 
deal with the Bosnian Moslems 
is simply the price the US 
requires Croatia to pay for help 
in recovering Krajma. It seems 
there is some truth in this pre- 
sentation of the matter, since 
US spokesmen have started 
saying that sanctions on Serbia 
will not be lifted until the Kraj- 
ma issue is resolved. 

Meanwhile, it is not entirely 
clear how the Bosnian govern- 
ment interprets the Washing- 
ton agreement Most interna- 
tional reaction has taken it as 
a step towards a “two-republic 
solution" in Bosnia, based on 
the acceptance that the Serbs 
of Bosnia will have a separate 
state of their own, linked to 
Serbia, and that therefore it 
makes sense for the Moslems 


and Croats to pool their 
resources and develop links 
with Croatia. This interpreta- 
tion seemed to be confirmed by 
tbe Bosnian prime minister. 
Haris Silajdzic, when he said in 
Washington last week that 
Russian pressure is needed to 
get the Serbs to agree to a 
negotiated solution. 

But another interpretation is 
doing the rounds in the small 
pro-Bosnian lobby in London. 
According to this view, the 
new Croat-Moslem alliance is a 
step towards the defeat of 
Serbia. The Bosnian army has 
proved itself in battle against 
the Croats, but also against the 
Serbs, for instance near Banja 
Luka where small groups of 
Bosnian partisans have held 
far more heavily armed Serb 
forces at bay. Now. with or 
without a formal lifting of the 
arms embargo, the Bosnian 
army will be strengthened by 
the Croats' change of sides and 
the opening of supply routes 
from the coast 

Such hopes are mirrored by 
Serb fears, as reported in an 
AP despatch from Banja Luka 
at the weekend. The author, 
Jufijana MojsUovic, reports 
Serb fighters as dreading a 
Moslem spring offensive. Supe- 
rior Moslem numbers and 
morale are beginning to tell in 
thickly-wooded terrain where 
heavy artillery is of little use. 

It is tempting to believe that 
the hold of Mr Radovan Karad- 
zic, the Serb leader in Bosnia, 
and his thugs could be broken 
by a short, sharp spring offen- 
sive with western support It is 
tempting to believe that the 
Serbs would then agree to 
peace on similar terms to the 
Croats, joining tbe new federal 
republic, while Serbia itself 
could join the proposed confed- 
eration with Bosnia and Croa- 
tia - thereby recreating a 
loose, confederal Yugoslavia 
such as the Croats and Slo- 
venes were d emanding before 
the war broke out 

Tempting; but dangerous. It 
is good that the Serbs should 
fear a spring offensive, since 
without that fear they are 
unlikely to make the territorial 
concessions which are essen- 
tial for a two-republic solution 
to work. But the Bosnian gov- 
ernment would be taking a risk 
with the lives of its own citi- 
zens if it spurned such a solu- 
tion and staked everything on 
a continuation of the war. And 
those in the west who support 
the B osnian cause would take 
a great moral risk if they 
encouraged the government to 
adopt that course. 


I t is only eight months 
since imperial Chemical 
Industries split itself in 
two, and already the 
world seems almost to have 
forgotten the fact. Two weeks 
ago, the first full-year figures 
from the new ICI passed off 
without fanfare. Last week's 
results from its sister company 
Zeneca were equally routine. 
One of the most drastic 
upheavals in British corporate 
history seems to have passed 
off with scarcely a ripple. 

This arouses mixed emotions 
in the breast of Sir Denys Hen- 
derson, chairman of both ICI 
and Zeneca. On the one hand, 
he argues, silence suggests the 
demerger was a good thing. If 
it had shown signs of going 
wrong by now. “everybody 
would have been jumping up 
and down painting out what a 
balls we'd made of it”. 

So far, the evidence is all the 
other way. ICTs pre-tax profits 
last year were up 78 per cent, 
Zeneca's 42 per cent More fun- 
damentally, since the demerger 
was announced in July 1992, 
the combined value of the two 
companies has risen by two- 
thirds, while the stock market 
has risen only by hall 
On the other hand. Sir Denys 
is plainly irked that so little 
credit has been given for what 
he calls “the greatest manage- 
ment story never written”. As 
he tells it, the main feature of 
the exercise was the sheer 
hard slog involved: not just 
hammering out the basic plan, 
but then sorting out the legal, 
fiscal and commercial tangle of 
splitting up 500 companies and 
130,000 people across the world. 

This prompts an obvious 
question. Before demerging. 
ICI reviewed all its strategic 
options. The one it plumped for 
was the most risky and 
time-consuming. Given the 
drawbacks, what made demer- 
ger so very desirable? 

Sir Denys has the answers 
off pat Consider, he says, how 
the world of the 1990s differs 
from anything that has gone 
before. Economic growth is 
going to be slow and painfuL 
The classical chemical indus- 
try has largely run out of 
ideas. It faces competition from 
new parts of the world, such as 
the Asia Pacific region, and is 
obliged to spend more on the 
environment than it can 
readily afford. The collapse of 
communism has created chaos 
in the markets of eastern 
Europe, and has harmed a 
valuable customer in the form 
of the defence industry. 

Fair enough. But still, why 
was demerger the best answer? 


The answers here are murkier, 
since they concern not only 
external factors but tbe inter- 
nal workings of ICL The truth 
seems to be that demerger was 
the only way to address flaws 
inherent in the ICI culture: and 
Sir Denys, a company man to 
his backbone, is not about to 
criticise ICI if he can help it. 

To begin with, it is dear that 
the abortive raid on ICI by the 
acquisitive conglomerate Han- 
son in May 1991 was more for- 
mative than ICI has previously 
cared to admit It caused Sir 
Denys and his board colleagues 
to address themselves afresh to 
two central constituencies: 
ICI's shareholders, and its 
managers. The response from 
both was unsettling. 

“We bad the naive belief," 
Sir Denys says, “that in the 
heart of every fund manager 
was a little bit labelled ICL" In 
fact, many of the institutions 
proved indifferent or hostile. 
At the same time, the directors 
sounded out their senior man- 
agers. Again, Sir Denys says, 
the reaction was unexpected. 
"They dearly did not wish to 
have Hanson come in, but 
equally they were less con- 
vinced about the cohesion of 
ICI and the synergy across the 
group than we bad imagined." 

The important point here is 
that if Hanson were to bid, it 
would have been on the basis 
of a break-up. The obvious 
defence would be that ICI was 
an indivisible entity. Its man- 
agers were no longer sure 
about that. Nor, on reflection, 
were the directors. 

The purpose of a break-up 
would be to release share- 
holder value. This was a point 
on which ICTs directors were 
becoming increasingly aware 
of their shortcomings. Histori- 
cally, Sir Denys says, share- 
holders had occupied a humble 
position in the ICI scheme of 
things. “A predecessor of mine 
- no names, no pack drill - 
said to me, ‘Denys, you seem to 
spend a lot of time worrying 
about tbe share price. Tm not 
bothered about it I just want 
to get the technology right'." 

Historically, this is unsur- 
prising. The 1950s and 1960s 
were a period of phenomenal 
growth for the chemicals 
industry. “Even when I joined 


ICI in 1959,” Sir Denys says, 
“we had sales control depart- 
ments. You could sell every 
damned tbing you could 
make." 

In spite of oil shocks and 
recessions, traces of this atti- 
tude seem to have survived 
into the 1990s. The chief execu- 
tives of the individual busi- 


‘Be clear on one 
thing. It will be a 
while before each 
company proves 
how It can grow 9 

nesses. Sir Denys says, were 
slow to accept that shareholder 
relations, dividends, tax and 
interest bills at the corporate 
level were their concern. This, 
he says, lay at the heart of a 
further problem: that they 
were unduly optimistic about 
what they could achieve. 

As a result, he says. ICI’s 
investments had not been 
delivering the goods. The rem- 
edy was plain: “The CEOs 


needed to understand that 
there bad to be a corporate per- 
formance and a corporate rela- 
tionship with shareholders.” 

The reaction of these same 
CEOs to the demerger proposal 
was thus crucial. Ten days 
before the demerger was made 
public, they were summoned to 
the head office. The message 
was that the board was 
unhappy with their results and 
wanted them to explain them- 
selves. 

“They all came in. somewhat 
apprehensive," Sir Denys says. 
“I started off by saying: 'we 
aren't happy, that's all true, 
but there's a little bit more 
than that'." On being told of 
the demerger, he says, “they 
were first of all stunned, then 
their reaction was universally 
favourable." 

Ten days later, at the final 
briefing, some were showing 
signs of second thoughts. 
"There was a feeling of 'hmm - 
this is going to carry more 
exposure with it. With greater 
responsibility comes greater 
accountability'." 

According to Sir Denys, 


though, the first reaction 
proved the right one. The 
CEOs, he says, have enjoyed a 
release of energy. “There is a 
better Interaction with the cen- 
tre. They have a better oppor- 
tunity to put across their view- 
point. not just on their 
individual business but the 
company as a whole." 

One practical instance is 
that both Mr Ronnie Hampel 
chief executive of the 
demerged ICI. and Mr David 
Barnes, his opposite number at 
Zeneca, now have regular 
monthly meetings with their 
CEOs. In the old ICL Sir Denys 
says, this was not feasible. 

W hen I was first a 
division chair- 
man, 1 used to go 
to the quarterly 
business meetings which the 
pmin board would have with 
the equivalent of the business 
CEOs. They were pretty us* 
less meetings. Everybody was 
busy showing what a splendid 
chap he was and how well his 
business was doing." 

ICI, in short, was suffering 
from a baronial culture, in 
which the chiefs were more 
concerned with competing 
than, with the corporate good. 
Sir Denys points out, a touch 
defensively, that in any large 
corporation there will always 
be tension between the centre 
and the individual businesses. 
But the real snag about the 
baronial culture, it is clear, 
was that it made it harder to 
allocate capital for investment 
“We were too much con- 
cerned with fair shares for all," 
Sir Denys concedes. As a 
result some of ICTs more geri- 
atric businesses - Sir Denys's 
phrase - were cross-subsidised 
when they should have been 
given the bullet. 

A large part of the argument 
for demerger is that in the 
1990s, speed of response is 
more essential than ever 
before. Hence the case for 
demerger, whereby the sup- 
pression of sectoral interests 
allows faster reaction towards 
a common purpose. 

But as Sir Denys freely 
admits, structural change is 
only the starting point. “Be 
clear an one thing," he says. 
“It will be quite a while before 
each company proves how it 
can grow. None of us saw this 
as a magic wand. It's the open- 
ing of a door, and it's saying to 
each company ‘you have a new 
start, but you've got to get on 
and deliver'." 

Tony Jackson 



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LETTERS TO THE EDITOR 


Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Letters transmitted should be clearly typed and not hand written. Please sec fax for finest resolution 


CAP reforms or protectionism 


Prominent 

criticism 

From Mr Graham J Chambers. 

Sir, Mr Savic (Letters: "A les- 
son for the self-righteous”. 
March 5) suggests that Malay- 
sia “is reacting to the proposi- 
tion that the British and other 
western governments . . . gener- 
ally know better". 

Dr Mahathir said nothing 
like that. The Malaysian prime 
minister's grievance, as the FT 
editorial comment (February 
28) stated, is with the UK 
press, and as the wealthy libel 
lawyers would perhaps testify, 
he is not alone. 

If Mr Savic thinks the Mur- 
doch press is in hock to the 
government, then many hap- 
less members of this adminis- 
tration can draw comfort from 
avoiding the mauling they 
might have received from a 
less sympathetic organisation. 

As for as the government is 
concerned, you quote the 
essential charge as being one 
of hypocrisy. If that is alL then 
we can all sleep easily, as noth- 
ing fundamental has changed. 
Linking money to services pro- 
vided is not new. I understand 
it has even been known to hap- 
pen in journalism. 

However, Mr Savic may wish 
to ponder the premise that. If 
the situation had been 
reversed, would a similarly 
critical letter have received as 
much prominence in Malay- 
sia's New Straits Tunes? 
Graham J Chambers, 

26D Shepherds HUL 
London N6 


From J(jtq Schimmetpfenmg. 

Sir. The warning issued by 
Mr Rene Steictaen, EU agricul- 
ture commissioner ("East 
Europeans warned against 
farm protectionism", March 4), 
reveals the blatant arrogance 
of the Common Agricultural 
Policy. 

As Professor Paul Krugman 
has shown in a seminal article 
published in 1985, in an indus- 
try exhibiting increasing 
returns to scale - such as agri- 
culture - import protection is 


From Mr David Lloyd-Jacob. 

Sir, You report that in 
response to a parliamentary 
question about the Serious 
Fraud Office's investigation of 
matters involving the flotation 
of this company, the attorney- 
general said that the investiga- 
tion was being “pursued rigor- 
ously" (“Call for early Butte 
inquiry verdict", March 
1 ). 

The attorney -general is no 
doubt practised at believing 
the improbable. 

The truth of this matter is 
that the Serious Fraud Office 
investigation, for the first 18 
months, was understaffed and 
ill-directed. 

It has been much improved 
in the last two months, how- 
ever. 

This is not a criticism of the 


in many ways equivalent to 
export subsidisation. 

The intuitive idea is easy to 
grasp: by hindering farm 
inputs, domestic agricultural 
production is increased, per 
unit costs are reduced and, 
thus, export chances enhanced. 
By the same argument, a popu- 
lar fallacy about the CAP can 
be exposed as well: instead of 
assisting developing countries 
by lowering their food prices, it 
cripples their farming indus- 
tries and deprives them of for- 


individual police officers, who 
have behaved excellently; it is 
a criticism of their direction, 
and of the inappropriate 
nature of the resources allo- 
cated by the SFO to investigate 
a £100m fraud. 

It would be a pity if it were 
generally believed that serious 
fraud investigations in Britain 
had to take forever and be 
done badly. 

With proper briefing and 
direction, successful fraud 
investigation in cases such as 
Butte should take months, not 
years. 

David Lloyd-Jacob, 
chairman, 

Butte Mining, 

Abbey House, 

74176 St John Street, 

London. 

ECIM4DT 


eign exchange earnings. 

Consequently, Mr Steichen's 
demands amount to nothing 
else but denying east European 
countries the same weapon the 
EU is employing against than. 
Without any real CAP reforms, 
we shouldn't be surprised to 
see agricultural protection con- 
tinue its disastrous spread. 
Jflrg Schimmelpfennig. 
Department of Economics, 
Umversit&t Osnabriick, 

D-49069 OsnabrOck, 

Germany 


Two-pronged 
trade game 

From Professor Ronald Dore. 

Sir. When US President Clin- 
ton punishes the naughty Jap- 
anese by banning one of their 
lucrative exports, how should 
the Japanese respond in this 
gentlemanly game of tit-tor- 
tat? Instead of refusing to buy 
American soya beans or 
oranges, why not ban the 
export of something - liquid 
display screens, for instance? 

As to how to prevent tins 
slowing recovery from the 
recession, the European Unkm 
has shown the way. Build up 
an LD mountain by govern- 
ment purchases and sell off 
cheap to America's competi- 
tors. 

Ronald Dore, 

tendon School of Economics. 
Houghton Street. 

London WC2A 3AE 


Serious fraud investigations 
should not take forever 


Non-executives’ role was 
the focus of quotation 


From Mr Owen Green. 

Sir, Sir David Plastow's let- 
ter ("Non-executive directors’ 
input is invaluable", March 5) 
appears to be a delayed knee- 
jerk reaction to my Pall Mall 
lecture. 

A reader may prefer my gen- 
erally accepted, though quite 
sparing, use of hyperbole - 
"blunting the edge" - in mak- 
ing a point, to his somewhat 
crude rebuttal - "ill-informed 
nonsense". 

After alL one does not need 
to have been an automotive 
engineer In order to recognise 
the difference between the 
essentials of a vehicle and Its 
trim. 

As a matter of record, the 


quotation related not to non- 
executive directors as such but 
to those requirements of a code 
which over-emphasise their 
monitoring role; their indepen- 
dence from the business of 
the company: and to their 
control over decision-making 
activities. 

Sir David has been fortunate, 
or otherwise, in that his many 
experiences appear to have 
arisen through company needs 
rather than from regulatory 
requirements. 

Owen Green, 

EdgehiU, 

Succombs HiU, 

Warlingham, 

Surrey, 

CR6 9JG 


Cosy club where favours 
can be reciprocated 


From Mr Bill Budden. 

Sir, I am not surprised by the 
praise that Sir David Plastow 
heaps on to non-executive 
directors (Letters, March 5). He 
would say that, wouldn’t he 1 

Of course he wishes to per- 
petuate this cosy club within 
which chairmen may reward 
others for past favours or grant 
retainers and expenses for a 
few days' attendance a year in 
exchange for the same favour 
on the other's board. It is also 
a means of enhancing pensions 
for retired MPs and others. 

Do Americans call them free- 
loaders? 

I recall the high numbers of 
mmcxecs who served on the 
boards of some of our one-time 


great companies like Rolls- 
Royce and Dunlop before they 
went into decline. I remember 
how many times, when the 
Serious Fraud Office has been 
called In elsewhere, the non-ex- 
ecs have departed crying: 
“These facts were not available 
to me." 

Why is it that company 
directors think they should 
receive several concurrent 
incomes at shareholders' 
expense? 

dti the policies of 

BTR, Lonrho and Amstrad. 
Who is Cadbury anyway? 

Bill Budden, 

Smishops. 

Loders. Bridport. 

Dorset DT6 3SA 



13 


WEDNESDAY MARCH 9 1994 


iilli 


* t i « • 


FINANCIAL TIMES 

Number Ooe Southwark Bridge, London SEI 9HL 
Tel: 071-873 3000 Telex: 922186 Fax: 071-107 5700 

Wednesday March 9 1994 


How Europe 
can compete 


T he concrete hunkers 
along the. windswept 
Cumbrian shore are 
some of the most closely 
guarded places In the 
world. Inside the heavy doors, a cor- 
ridor stretches away for dozens of 
yards. Sealed trunks are stacked' 
high on each side, as in a bank 
vault, Each contains a cylindrical 
canister 18 inches hi gh and within 
each canister there are smaller 
ones, like Russian dolls. At the 
heart is a white crystalline powder: 
plutonium oxide. 

That is how civil plutonium, pro- 
duced in the core of the UK's 
nuclear reactors, is stored at British 
Nuclear Fuels’ Sellafleld site. Its 
£L8bn Thorp reprocessing plant - 
given Anal approval to start operat- 
ing by the High Court last week - 
will add 5 tonnes a year to the 
world's supplies of usable pluto- 
nium by separating the material 
from used reactor faeL 
The military aspect of plutonium 
can be seen at the US Department 
of Energy’s Pantex nuclear weapons 
fadttty in Texas, which holds 6,000 
grapefruit-sized spheres of pure 
shiny plutonium metal removed 
from redundant hydrogen bombs. 

Plutonium is one of the most dan- - 
gerous substances created by man. 
taking account of all its political, 
economic, military, environmental 
and radiological implications. It did 
not exist on the earth until the 
1340s, when it was created In the 
laboratories of Los Alamos, deep in 
the US desert, in the race to build 
an atonic bomb. 

Now the world has about 1,100 
tonnes of plutonium - in weapons, 
separated civil plutonium and 
unprocessed used fuel rods from 
nuclear reactors - according to Wi- 
liam Walker and Frans Berkhout of 
the Science Policy Research Unit at 
the University of Sussex, who com- 
pile the most comprehensive world 
inventory of nuclear materials. 
They say the global stockpile is 
increasing by 60 to 70 tonnes every 
year. 

For two decades after it was first 
created, plutonium was expected to 
be the wonder fuel of the fixture. 
Governments expected it to become 
the driving force of an expanding 
nuclear industry, as u ranium grew 
increasingly scarce and costly. 

As recently as 1971, Professor . 
Glenn Seaborg, head of the US 
Atomic Energy Commission, sur- 
mised that “plutonium could even 
replace gold as the international 
monetary standard - at least it has 
real intrinsic value”. 

Yet today plutonium Is widely 
regarded as a menace with a nega- 
tive value. Japan and France, the 
two countries whose enthusiasm for 
the civil use of plutonium lasted 
longest, are now scaling back then- 
plans for fast-breeder reactors 
which generate plutonium by burn- 
ing uranium. 

Last month France announced 
that it was converting Its $4bn 
SuperpMnix fast breeder, which 
has been mothballed for the past 
four years, into a research reactor 
to look at ways of burning up pluto- 
nium - the opposite purpose for 
which it was designed. 


The European Union pic is not 
engaged in a zero-sum struggle for 
economic survival with the US. 
Japan, or even nhrny Tim. On the 
contrary, peaceful economic rela- 
tions with other economies offer 
opportunities for mutual enrich- 
ment. The question Is whether 
Europe can take advantage of 
those upportimifiwg Only thus ran 
it hope to offer a steadily rising 
standard of living to all Euro- 


The EU has much upon which 
to build. Its member states possess 
only 6V4 per cent of world popula- 
tion, but generate 25 per cent of 
global economic output, at market 
exchange rates, and 18 per cent, 
even at purchasing power parity. 
Its disproportionate share in 
global economic activity, though 
bound to foil, demonstrates how 
large is the reservoir of physical 
capital, skills and knowledge on 
which it is able to draw. Nor has 
recent overall performance been 
notably rffgniMi- total EU output 
has risen 30 per cent since 1980, 
the increase being almos t as large 
as China's total gross domestic 
product in 1990. 

Current gloom Is exaggerated, 
this being partly because of the 
recession. But there is reason for 
gloom, all the same, as the FT 
series on European competitive- 
ness. concluded today, has shown. 
Total EU employment is, for 
example, up only 6 per cent since 
1980, against 18 per cent in the US: 
output of manufactures is up 18 
per cent over the same period, 
against 36 per cent in the US; and 
the share of EU external exports 
In world exports of manufactures 
is down from 22 per cent in 1980 to 
18 per cent in 1962. 

Patent filings in Europe have 
not increased since 1987, while in 
the US they have risen by 30 per 
cent European spending on 
research and development has 
declined over the 1980s, relative to 
that in the US and Japan. High 
technology products account for 
nearly a third of US exports, but 
less than a fifth of those from 
western Europe. To this picture 
should be added the odd tolling 
vignette. General Electric of the 
US targets European competitors, 
but avoids Japanese ones, while 
airline operating costs are 48 per 
cent higher than In the US. 

Europe suffers from high unem- 
ployment and poor job generation. 
European firms tend to be weak- 
est in the world’s most dynamic 
industries. And the European 
economy's poorest performance is 
in industries most exposed to 
international competition. 

National champions 

What lies behind the failures? 
First, far too much of the Euro- 
pean economy remains shielded 
from competitive pressures. Sec- 
ond, European monetary policy 
has occasionally been seriously 
misjudged. Third, labour costs are 
too high and the labour market as 
a whole too heavily regulated and 
taxed. Finally, business has too 
often failed to respond to the chal- 
lenges of the market place. 

Solutions must be found partly 
at the level of the EU as a whole, 
partly by the individual member 
states and partly by businesses. 

Too many sectors of the Euro- 
pean economy remain protected 
from effective foreign competition 
and bafleanised by the provision of 
state aids, the promotion of 
national champions, the persis- 
tence of regulatory barriers and 
use of discriminatory public pro- 
curement At least one and often 
several of these limitations on 


competition apply to industries as 
important and diverse as agricul- 
ture, textiles and clothing, steel, 
aerospace and ftefenrw equipment, 
motor vehicles, pharmaceuticals, 

finanrlaT sendees, taiommimiwi ra - 
tions, energy supply and civil avi- 
ation. Virtually all of them need to 
be subjected to greater competi- 
tion. and less protection, a job that 
falls to the EU as a whole. 

' Monetary policy is still a matter 
for member states, but under the 
ERM and now the Maastricht 
treaty, it Is also increasingly a 
matter for the EU. Here serious 
errors have been made, with the 
current recession partly the result 
of an over rigid response to Ger- 
man unification. But now that 
both inflation and inflationary 
expectation In core countries of 
the EU have been lowered, the 
cost of disinflation should not 
need to be repeated. 

liberal approach 
Management of the labour mar- 
ket, training and the welfare state 
is a task for member states. They 
are in a position to choose among 
elements of liberal and corporatist 
approaches to reform. 

The liberal approach, often 
labelled the “Anglo-Saxon” model, 
would he based on labour market 
deregulation and lower taxes. Its 
main benefit is likely to be greater 
growth df part-time service sector 
jobs. Its major defect is likely to 
be less overall investment in skills 
and greater inequality in pay. 

The corporatist approach, some- 
times naifed the “Rhine model”, 
would emphasise a shift in the tax 
burden from unskilled to tunwi 
labour, combined with subsidies 
to tmaMilaH labour and training, 
and an effort to keep the growth 
of real wages below the growth of 
labour productivity. The main 
benefit of this approach is likely 
to be more investment in awn? 
and greater equality among work- 
ing people. The main drawback is 
likely to be less job generation. 

What is needed here is more 
experimentation. Each country 
can learn from others. But it can 
do so only If it is allowed to 
diverge from the others. The dan- 
ger of the EITs social programme 
is that this desirable diversity 
might be prevented. 

Finally, searching out market 
opportunities, exploitation of new 
scientific discoveries, linking up 
with institutions of learning, 
training workers and responding 
to competition fall largely on busi- 
ness itself. Too many businesses 
have remained dependent on the 
state. They must learn to become 
dependent on themselves. 

There is a great challenge con- 
fronting the member states of the 
EU. It is, in. President Clinton's 
phrase to “compete, not retreat”. 
Much has already been achieved, 
in the single market programme, 
in the moves towards privatisa- 
tion and li beralisa tion and in the 
lowering of inflation. But- much 
also remains to be done. 

The temptation to believe that 
Europeans cannot meet the new 
global competition wifi be strong. 
But it must be resisted, since a 
retreat into the cosy world of pro- 
tection would doom Europe to. 
rapid relative decline. Europe will 
never possess the uniform mass 
market of the US or the homoge- 
neous culture of Japan. Its 
strength lies in its diversity, now 
contained within the integrating 
edifice of the EU. The task facing 
politicians is to find effective 
means of exploiting that diversity 
in order to serve the common ends 
of all Us citizens. 


Tilting windmills 


The UK government will shortly 
begin to consider which renewable 
energy projects should qualify for 
subsidies under the latest round of 
the non-fossil fuel obligation. The 
Noffo, as it is known, obliges elec- 
tricity companies to buy some of 
their power from generation 
sources other than coal, oil or gas, 
and it finances the extra cost by 
imposing a levy, currently 10 per 
cent, on electricity bills. 

Although the greatest propor- 
tion of the levy goes to the nuclear 
power industry, about £2Qm a year 
is available to support “green" 
energy. The money is allocated 
through a combination of competi- 
tive bidding by applicants and 
ministerial judgments. 

By all accounts, the new Noffo 
round will be heavily oversub- 
scribed. Applicants are proposing 
a variety of projects ranging from 
solar and tidal power to l a ndfill 
gas and coppicing. But the most 
numerous contenders by far are 
wind farms. 

In the past, the subsidy has 
been seen as a benign element in a 
worthy environmental cause. But 
this time it coincides with an 
upsurge of public concern about 
the proliferation of wind farms in 
some of the country’s most beauti- 
ful landscapes. The allocation of 
contracts wifi therefore be subject 
to close public scrutiny. 

Contrary to the impression envi- 


ronmentalists would like to con- 
vey, the case for renewable energy 
is not very strong. There is no 
shortage o f ener gy (the UK’s afl. 
and gas reserves continue to grow, 
and output is about to set new 
records), and there is little domes- 
tic technology to protect. The 
environmental argument carries 

- some weight, but far greater gains 
could be achieved by raising the 
performance of existing, plant than 
by encouraging uneconomic green 
projects. 

An efficiency gain of only 3 per 
cent in energy use would save 
more electricity than could be pro- 
duced from all the renewable 
energy sources likely to be up and 
running by the year 2000 - and 
would avoid the visual blight of 
much green power. 

Unfortunately, Noffo money can 
only be spent on renewables. 
There is some consolation in the 
fact that the system erf co m petitive 
bidding is a spur to efficiency. But 
■ since the government sees Noffo 
as a talisman of its commitment to 
environmental matters, there is 
doubt about the rigour- with which 
it vets the projects which come 
before it. The only justification for 
subsidising any power project, 
renewable or otherwise, is if it can 
stand on its own feet within an 
acceptable tune, frame. The tax- 
payer owes no favours to green 
power. 



N obody has been hurt 
more by the surge in 
raw materials’ exports 
to die west that followed 
tiie break-up of the former Soviet 
Union than the uranium producers. 
Some are bracing themselves for 
perhaps 20 more tough years 
because military stocks, built up by 
the superpowers during the cold 
war, are becoming available for the 
first time on world markets. 

Russia has agreed that the US 
can convert highly enriched ura- 
nium, used in nuclear weapons, to 
low-enriched uranium. This can be 
blended with other uranium for use 
as commercial nuclear fuel. An 
estimated 500 tonnes of highly 
enriched Russian uranium are 
available, equivalent to 150,000 
tonnes of commercial foel - enough 
to keep the west’s nuclear reactors 
supplied for about three years. 

As a result, uranium mines have 
been closing in Canada, the US and 
even in some former eastern bloc 
countries. 

The uranium industry has been 


Red in tooth 
and Klaus 

■ Vaclav Klaus, the irascible Czech 
prime minister, was in. fine fettle 
at the Adam Smith Institute in 
London yesterday. 

“The Czech republic is no longer 
a post-communist country in 
transition . . . Now we’re a normal 
country adjusting to the 
post-transformation realities.” he 
told his pinstriped audience. “Our 
inflation is 10.9 per cent - but that’s 
annual, not monthly as elsewhere 
in the post-communist world - and 
our unemployment, at Super cent, 
is at levels which Mr Major can 
only dream of.” Splendid. 

Wait a minute. What about the 
notion that Czech unemployment 
is relatively low only because the 
country has yet really to make a 
start on painful economic 
restructuring? 

Steam emerged from Klaus' ears. 
“Nonsense,” he barked. High 
unemployment comes from slow 
restructuring low unemployment 
from rapid restructuring. Ergo, . 
the Czech republic's low 
unemptoymmt is proof of 
successful, rapid restructuring. 

Rp gflthtflWng logic. Rut Kltma 

was reminded that restoring 
government wage controls last year 
seemed to confradict his famed 
loveof laisser fctire capitalism. 
Nonsense again. 

“Part of a rational wage policy,” 
came the huffy reply. And keeping 




Wonder fuel to 
burning question 

World stockpiles of plutonium are growing. 
Clive Cookson and Bronwen Maddox 
examine the problems of keeping it safe 


Although the Japanese Monju 
fast breeder will start up this year, 
several years behind schedule, its 
planned successor has been post- 
poned indefinitely. So has Japan’s 
own reprocessing plant, intended to 
extract plutonium and uranium 
from spent nuclear fuel like Thorp 
and the equivalent French plant at 
Cap de la Hague, Normandy. 

French and Japanese enthusiasm 
has cooled partly because uranium 
has remained plentiful and cheap 
(see below). TO a considerable 
extent, uranium and plutonium are 
interchangeable nuclear fuels - and 

plutonium is so much more danger- 
ous and more difficult to handle 
that it wifi only come into its own if 
gnri when uranium becomes scarce. 

At the same time, large fast 
breeder reactors have proved tech- 
nically more difficult and expensive 
to develop than nuclear engineers 
had expected. 

The plutonium itself has also 
brought new problems, not antici- 
pated when these projects began. 
For a start, it is difficult to store, 
decaying Into other radioactive sub- 
stances which are more difficult to 
handle safely than pure plutonium. 
But particular concern now focuses 
on the threat of weapons prolifera- 
tion, and an ways of safeguarding 
and transporting the growing pluto- 
nium stockpile. 

Most of the world’s plutonium Is 
mixed up with u ranium and other 

radioactive waste in used reactor 
fuel; this cannot easily be made into 
bombs. The greater problem arises 
from the 90 tonnes of plutonium 
that have been separated from civil 
reactor waste, and from the 50 
tonnes of excess military pTntrmiwm 
expected to result from dismantling 
thousands of Russian and American 
nuclear warheads. 

Critics of the UK's Thorp repro- 
cessing plant say that it will 
increase these dangers by separat- 
ing out plutonium that would be 
less of a proliferation hazard If It 
remained mixed in with the nuclear 
waste. 

The US National Academy of Sci- 
ences reported recently that, con- 
trary to popular assumption, civil 
plutonium extracted from reactor 
fuel is adequate for making - bombs 
“of at last 1 or 2 kflotons”, equiva- 
lent in impact to 1JJ00-2JXX) tonnes 
of high explosive. The amounts 
needed are not large - 6 or 7 kilo- 


T he world plutonium mountain 

Civil and military inventories of plutonium 
End o? 1992 (tannest 



grams, or about a bucketful. 

Mr Walter Patterson, an energy 
analyst at the Royal Institute of 
International Affairs, points out 
that plutonium acquired illegally by 
terrorists would probably have 
undergone radioactive deterioration 
and would be unpredictable. “They 
couldn't make small, elegant bombs 
to put on warheads, but if they were 
happy to use a pickup truck as a 
delivery vehicle, they could still 
wipe out much of a city," he says. 

A study carried out last year by 


Awash with uranium 

Kenneth Gooding explains the market’s poor prospects 


In tiie doldrums for a long time. 
Prices peaked at *45 a pound in 
1978, when oil costs were rising 
sharply and demand for nuclear 
energy was expected to grow. (The 
only large-scale application of ura- 
nium is as a unclear fuel.) 

Over-optimistic forecasts of 
demand contributed to the build-up 
of nearly 80,000 tonnes of surplus 
uranium in stocks at power compa- 
nies In the 1980s. The market dete- 
riorated farther when brokers and 
other intermediaries were allowed 
to sell some of this uranium to new 
consumers. 

More recently, brokers also 
gained access to uranium stock- 
piles in the Commonwealth of Inde- 
pendent States, as the new repub- 
lics became desperate for bard 
currency earnings. 


A great deal of uranium is still 
sold directly by producers to con- 
sumers on long-term contracts, but 
enough is sold in the free market 
for the US and Europe to worry 
about the market’s over-depen- 
dence on CIS material. Some coun- 
tries have curbed CIS imports. 

Consequently, a two-tier price 
system has developed. For coun- 
tries with no Import restrictions, 
the uranium price is about $7 a 
pound, its lowest ever level in real 
terms. For those with restrictions 
on CIS uranium, the price 1 b about 
$10 a pound. 

Even at $10, only the lowest-cost 
mines (in Australia and Canada) 
can break even. However, some 
producers have unbreakable long- 
term contracts to supply utilities at 
higher prices, even above $20 a 


Observer 


pound. It has sometimes been 
worthwhile for them to close mines 
and buy uranium in the free mar- 
ket. 

According to the Uranium Insti- 
tute, an International industrial 
association, the total supply of 
freshly produced uranium - from 
mines and reprocessing of used 
nuclear fuel - was only 35,000 
tonnes in 1992, compared with 
demand for 53,000 tonnes. The gap 
was made up from the world's 
large uranium stockpile. 

The institute’s present forecasts 
suggest this imbalance will con- 
tinue. Even if all ur anium mines 
worked at fall capacity, they could 
supply only 55,000 tonnes in 2000 
and 49,000 tonnes by 2010. 

But Mr Peter Wade, managing 
director of North Broken Hfll Peko, 


wages artificially low is of course 
a million miles away from 
maintaining dis guis ed 
unemployment, that typical feature 
of socialist full employment 


In a state 

■ Michael Cottrell may have been 
sipping a bit too much of his own 
product The chairman of Taunton 
Cider announced a deal selling his 
up-market scrumpy into the US 
market, via Molson USA. 

A crowing Cottrell reported that, 
as Molson had an established 
network of distributors across all 
51 states, the fit was perfect “As 
far as I know there are still only 
50,” a puzzled US emtessy 
in London. 


Secrets Anonymous 

■ The new Commons select 
committee on the intelligmne 
services fa proving a useful arena 
for Douglas Hogg, the Foreign 
Office minister, to hone his wit 
on behalf of the Tories. 

Yesterday it listened as Labour 
member Peter Mandetson - 
cudgel-wielding on behalf of the 
UK’s top civil service union, the 
First Division Association - asked 
Hogg what a member of MI6 should 
do if he or she found a divergence 
between their own and the 
government’s definition of 
“the interests of national 
security”. Hogg thought such 



“Do you want a smoking flying 
bishop or a non-smoking (tying 
bishop?’ 

a possibility “inconceivable H . 

But what should intelligence 
officers do if they felt there was 
a genuine conflict between how 
they saw the national interest and 
how government ministers regarded 
it? “See a counsellor,” murmured 
Hogg. 


Crying wolf 

■ The idea that Martin Sorrell is 
about to sell off or float “up to" 

50 per cent of the market research 
entities of his mammoth WFP 
advertising group needs closer 
examination. Not to see If it's 


sensible; with debts of £36 lm it 
clearly is. But Sorrell has talked 
about doing it for the past two 
years - since March 1992 - and 
little enough has happened so far. 
Hav ing worked so hard to build 
up WFP, Sorrell Is not keen to see 
it fall apart He bates the thought 
of selling anything. 


Altogether now 

■ Far from the European Union 
resulting in some boringly 
homogenised bureaucratic idiom, 
it has actually thrown up some 
riveting divergences- Thus British 
proposals about unemployment 
have been published with 
translations adapted to local 
sensibilities. In the English text, 
Europe is referred to as the 
(pre-Maastricht) European 
Community; toe Freaich version 
calls it the (post-Maastricht) 
European Union. Thus are 
sensflnHties soothed. 


Repair job 

■ Putting a couple of bankers in 
charge of the Housing Corporation, 
the government’s biggest quango, 
is going to ruffle a few feathers. 
Midland Bank boss Sir Brian 
Pearse, the new chairman, is not 
a housing man and Peter Cooke, 
his deputy, made his name as the 
Bank of England's first proper bank 
regulator. What do they know about 
housing poorer people? 


“mixed oxide fad", or Max. 

British Nuclear Fuels is pinning 
its hopes on Mox to soak up much 
of the plutmtium coming out or its 
new Thorp reprocessing plant. 
Although Mox foal assemblies have 
been used on a relatively small 
scale In pressurised water reactors 
(PWRs) since 1963, Mr John Gui- 
neas, BNF chairman, predicts that 
the technology is about to take off 
in a big way. 

However, Mr Walker and Mr Ber- 
khout at Sussex University believe 
that BNF is overestimating the 
likely popularity of Mox in the next 
decade, because straightforward 
uranium foel is so much easier to 
handle. They predict the amount of 
separated plutonium will grow by 
at least 50 tonnes in that period. 

More spectacular suggestions for 
disposing of surplus plutonium 
range from exploding it deep under- 
ground to launching it into outer 
space. Although the National Acad- 
emy of Sciences dismisses these os 
impractical, it favours two other 
options: converting plutonium into 
glass blocks mixed with radioactive 
wastes, and burying it in bore holes 
several kilometres deep. 


B ut such measures can- 
not provide the whole 
answer. Nuclear secu- 
rity specialists say the 
international system for 
monitoring and controlling pluto- 
nium also needs argent improve- 
ment The greatest risk comes not 
from plutonium separated by repro- 
cessing in France and the UK, but 
from material extracted from for- 
mer Soviet warheads or produced in 
reactors in third-world countries. 

North Korea’s refusal last year to 
allow inspections of two sites by the 
International Atomic Energy 
Agency, the UN nuclear watchdog, 
highlighted the weaknesses of inter- 
national agreements for monitoring 
plutonium and uranium. It also 
raises questions about whether the 
Nuclear Non-Proliferation Treaty, 
under which signatories must per- 
mit these Inspections, can survive 
when It comes up for renegotiation 
next year. 

The IAEA points out that it will 
need more resources simply to 
carry out its present task of inspect- 
ing the world's radioactive sites, a 
task which is becoming politically 
more controversial and technically 
trickier. 

Although the IAEA does not initi- 
ate policy, it says its preferred 
option is to see international sites 
developed for stocking the world’s 
plutonium - if so, Seliafield would 
be one obvious location. Mr David 
Kyd of the IAEA points out that the 
agency's statutes would allow it to 
play the role of plutonium care- 
taker. 

But the problem is too complex to 
admit an easy answer. Quantities of 
plutonium in the world are increas- 
ing, even though development of 
peaceful uses for the material has 
been frozen. According to Mr Kyd: 
“The point we’ve been keen to drive 
home to people is that there’s a 
problem out there. In the mid-1960s, 
as nuclear weapons are dismantled, 
that problem will get more acute.” 


the Rand Corporation, a US consul- 
tancy, for the Defence Department, 
concluded that within a decade the 
world would have enough surplus 
plutonium to make 87,000 primitive 
nuclear weapons. 

Faced with continued growth in 
the plutonium stockpile, govern- 
ments have been wrestling with the 
question of how to put it beyond the 
reach of would-be bomb-makers. A 
favoured option is to combine pluto- 
nium with uranium to bum in 
evic ting nuclear power plants as 


a group that controls the Ranger 
u ranium mine in Australia, says 
mines would not come back into 
production or new ones be devel- 
oped until prices moved bade to 
between $16 and $18 a pound. 

Meanwhile, demand remains 
sluggish. The institute reckons that 
it wifi be 64,000 tonnes in 2000 and 
no higher in 2010. 

The supply deficit cannot con- 
tinue indefinitely. Eventually the 
stockpile of available uranium will 
be exhausted. 

Prices, however, are not expected 
to recover in the medium term. The 
agreement between the US and 
Russia for converting highly 
enriched uranium into power sta- 
tion fnel specifies it should be 
organised In a way that “will have 
no adverse impact on US consum- 
ers or the mining and processing 
industries”. But some producers 
fear that the existence of the extra 
stock will give consumers the feel- 
ing the world Is still awash with 
excess uranium, and depress prices 
for years. 


True, Cooke has been on the 
Housing Corporation board since 
1988 and Pearse knows a bit about 
the business since he’s been lending 
money to house-builders for a very 
long time. Pearse, a Liverpudlian 
whose face never fitted in the 
patrician corridors of Barclays, 
has more of a social conscience 
than some big banking types. 

Even so, the arrival of Pearse 
and Cooke suggests that the 
government may be more interested 
in pandering to the City than to 
the social housing lobby. With 
government housing handouts set 
to fall, the City is being required 
to fill the increasing shortfall. 

Meanwhile, having an ex-bank 
regulator as a deputy chairman 
may help calm fears that the 
Housing Association movement 
may be becoming a hotbed of 
finflnriai hanky-panky with unpaid 
volunteers handling vast sums of 

money. 


Carping 

■ Clearly the people at Ford who 
invent brand names have run out 
of steam. At the Geneva motor 
show Ford has displayed its latest 
offering, called Ka; really inventive, 
boys. 

Still, what can we expect from 
the company which in the past has 
given us the Tudor (two-door) and 
its sister Fordor, and colours such 
as HuUa Blue, Thanks Vermilion 
and Freudian gilt Nest year? The 
Heap, the Dogg, the Skrapp? 


-•t 




14 


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TRAFALGAR HOUSE 

CtHBTMCTHM^M 


081 6892266 


COMMITTED TO QUAUTY 


FINANCIAL TIMES 

Wednesday March 9 1994 


l A FINANCIAL TIME 

f for change 

I 



US urges compromise on labour 
reform with Europe to create jobs 


By David Goodhart and 
Robert Taylor in London and 
George Graham in Washington 

Washington is calling for a 
US -European compromise on 
labour market reform to create 
jobs, with the US investing more 
in education and training and 
European countries reforming 
inflexible labour policies and 
wage-setting restrictions. 

This is the central argument of 
a paper, mainly written by Mr 
Robert Reich, the US labour sec- 
retary, circulated to Group of 
Seven governments before next 
week's jobs summit in Detroit 

Although the UK government 
claimed yesterday its deregula- 
tory approach should be a model 
for other countries, the US paper 
says “no country has yet found 
the right approach to adjusting 


and succeeding in the new world 
economy”. 

It also emphasises that labour 
market reform is not a substitute 
for creating economic demand. 
‘'Countries that pursue structural 
improvements without taking 
steps to increase aggregate 
demand will see little or no 
return for their efforts,” the 
paper says. 

This reflects continuing US 
irritation with the refusal of 
other G7 countries to adopt more 
expansionary policies. The paper 
says a typical developed country 
with annual productivity growth 
of 1.5 per cent and labour force 
expansion of 0.5 per cent must 
grow at a real rate of more than 2 
per cent a year Just to hold 
unemployment constant 

It says that over the past two 
decades Europe has experienced 


substantial real wage growth but 
stagnant employment. In con- 
trast America has experienced 
buoyant private sector employ- 
ment but with growing wage dif- 
ferentials and declining real pay 
for less-educated workers. 

It add« that the main labour 
market problem in G7 countries 
is a shift in demand foom less-ed- 
ucated workers towards workers 
with problem-solving skills. But 
compared with changes in tech- 
nology, it argues that expanding 
trade with lower cost countries 
has had only a modest role in 
thin shift. 

"Increased globalisation and 
technological change have raised 
the knowledge content of goods 
in which G7 nation* have a com- 
parative advantage. If properly 
managed this shif t in demand 
can lead to rapidly growing econ- 


omies that produce high-wage, 
hi g h ^k ill jobs." 

The paper concludes; "All G7 
countries need to think about 
improvements in policies to facil- 
itate transitions from school to 
work, work to work, and unem- 
ployment to work. All G7 coun- 
tries need to maintain a commit- 
ment to an open world trading 
system, but competition should 
be based on investments in 
quality and innovation with 
workers viewed as assets to be 
invested in and not just costs to 
be minimised”. 

While some in the US have 
argued that their country has lit- 
tle to learn about employment 
policy from Europe, with its 
much higher unemployment 
rates, the Clinton administration 
believes that it can benefit from 
European lessons. 


Republicans demand hearings into allegations of attempts to obstruct probe 

Clinton names Carter official as counsel 


By Jurek Martin in Washington 

President Bill Clinton yesterday 
reached into the upper echelons 
of the Washington establishment 
for assistance over the White- 
water affair by appointing Mr 
Lloyd Cutler as his new White 
House legal counseL 

Mr Cutler, 76, who served in 
the same capacity in the troubled 
last year or the Carter adminis- 
tration. said before the official 
announcement: “I’ve done It 
before, as you know. You don't 
look forward to it, but you do iL 
You're asked to do it and you 
have to do iL” 

The White House has said for 
several days that it was looking 
for “a Lloyd Cutler-type figure” 
of unquestioned stature to 
replace Mr Bernard Nussbaum, 
whose resignation was 
announced last weekend. Mr Cut- 
ler is belieyed to have insisted 
that he be regarded as counsel to 


the office of the president, rather 
than as Mr Clinton’s personal 
attorney. 

News of the appointment did 
not deter Republicans from 
insisting that congressional hear- 
ings be held into allegations that 
the White House has sought to 
obstruct investigations Into 
Whitewater. The affair involves 
Mr and Mrs Clinton's land and 
financial dealings in Arkansas in 
the 1980s. 

Congressman Newt Gingrich of 
Georgia said yesterday the legis- 
lature had “an independent obli- 
gation to investigate and to 
inform both itself and the coun- 
try”. Republicans have already 
threatened to hold up the nomi- 
nation of Ms Ricki Tlgert to run 
the Federal Deposit Insurance 
Corporation if the Democratic 
leadership refuses to agree to 
hearings. 

Mr Gingrich also dismissed 
objections from Mr Robert Fiske, 


the independent counsel investi- 
gating Whitewater, who wrote to 
congressional leaders on Monday 
that hearings on Capitol Hill 
“would pose a severe risk” to the 
integrity of his inquiries. 

Mr Fiske is aware of the Iran- 
Contra precedent, where gr an ts 
of immunity from prosecution 
given by Congress as a precondi- 
tion for testimony ultimately 
resulted In the conviction on 
criminal charges of Lt Col Oliver 
North being overturned on 
appeal. 

But Mr Jim Leach from Iowa, 
senior Republican on the House 
banking committee, said there 
was no reason why anybody 
called to testify over Whitewater 
should be granted immunity. His 
committee already Ha« plans to 
question Treasury officials later 
this month. 

The Democratic leadership in 
Congress, according to Mr Leach, 
is now on the horns of a 


dilemma, not wanting to appear 
to obstruct the investigation but 
also not wanting to embarrass 
the president, thus jeopardising 
his legislative programme. 

Mr Tom Foley, Speaker of the 
House, has warned against the 
legal complications that might 
follow hearings, but has not 
come out flatly against them. 

Mr Clinton himself opened up a 
possible new avenue of inquiry 
on Monday when he said he had 
been told sometime last October 
that federal regulators wanted a 
criminal investigation of Madison 
Guaranty, the Ar kansas savings 
and loan institution at the heart 
of the Whitewater affair. 

He insisted that this informa- 
tion had been routinely passed 
on to him and was the limit of 
his knowledge of contacts 
between the White House and 
other departments. 


Democrat troubleshooter. Page 5 


Abu Dhabi expected to raise contribution and cut claims on failed bank 

BCCI liquidators approve revised deal 


By Andrew Jack in London 

The liquidators to the collapsed 
Bank of Credit and Commerce 
International yesterday provi- 
sionally approved a revised deal 
with the government or Abu 
Dhabi which should pave the 
way for an increased payment to 
creditors. 

Under the terms of the settle- 
ment Abu Dhabi, the majority 
shareholder in the bank, is expec- 
ted to increase its direct cash 
contribution to about $l-8hn. It 
had previously agreed a payment 
of at least $lJ2bn. 

The money available for distri- 
bution to the bank’s hundreds of 
thousands of creditors around 
the world will be increased fur- 
ther as a result of the settlement 
because Abu Dhabi has agreed to 
restructure and reduce a number 
of its claims against BCCL 


It is expected to drop its poten- 
tial claim for $2.2bn of assets It 
alleges was stolen by the bank, 
and in exchange may receive pro- 
tection from future litigation 
which could be brought by the 
liquidators against it. 

Efforts to reach a new deal 
have been under way since last 
October, when the Luxembourg 
appeal court rejected on a num- 
ber of technical grounds a 
previous settlement reached 
between the liquidators and Abu 
DbabL 

The new agreement has been 
modified to address these prob- 
lems and has been considerably 
simplified in an effort to achieve 
an easier and speedier settlement 
for creditors. 

It requires the ratification of 
the BCCI creditors’ committee 
and will still need to be approved 
by the English, Cayman Islands 


and Luxembourg courts, which 
may' delay a first payment for 
several months. The liquidators 
have never revised their original 
estimated total payments of 30 to 
40 cents on the dollar. 

Liquidators from Touche Ross, 
the accountancy firm, were 
expected to unveil details of the 
settlement yesterday afternoon 
but cancelled a briefing after 
promising “an important 
announcement about compensa- 
tion for creditors" by Mr Brian 
Smouha, one of the liquidators. 

It is believed that the 
announcement was delayed 
because a meeting of the credi- 
tors' committee was still in ses- 
sion at the time the briefing was 
due to take place. 

The settlement was concluded 
after final negotiations took place 
between the liquidators ahd Abu 
Dhabi in Zurich last week. 


The government of Abu Dhabi 
indicated last month that it was 
keen to see creditors receive 
increased compensation for their 
losses. It stressed that diplomacy 
was an important factor in the 
negotiations because it was a 
country and not simply a corpo- 
ration. 

Other money available to cred- 
itors wifi come from liquidation 
of BCCI’s assets, up to $150m 
paid by Abu Dhabi to the US 
authorities as settlement of legal 
actions and from any proceeds of 
litigation against the bank's audi- 
tors, the Bank of England and 
National Commercial Bank of 
Saudi Arabia. 

If an agreement bad not been 
reached, the liquidators would 
have had to consider suing Abu 
Dhabi, which risked jeopardising 
any payouts for many years. 


FT WEATHER GUIDE 


Europe today 

A cold front associated with low pressure 
over Finland wNI move across southern 
England, Denmark and southern Sweden 
resulting In overcast skies and rain. South of 
the front, south- westerly winds wiD draw 
mild and moist air over the Benelux, 
Germany and Poland with mainly cloudy 
skies and drizzle. North of the front, cool 
and unstable air will spread over the Britain, 
Norway and Sweden. Ctoods will break, 
however, and frequent showers are 
expected In northern Europe, l-figh pressure 
will keep central and southern Europe dry. 
except for Greece, Turkey and Cyprus 
where low pressure wKt produce showers. 
Spain, Portugal, most of France, the Alps, 
and Italy win be sunny with comfortable 
temperatures. 

Five-day forecast 

A meandering westerly flow win move ocean 
disturbances into northern Britain and 
Scandinavia resulting In changeable 
conditions. High pressure over the Atlantic 
will merge with high pressure over central 
Europe to keep most of the continent dry. 
The western Mediterranean will be mamfy 
sunny. 



TODAY'S TEMPERATURES 


Situation at 12 GMT. Temperatures maximum (or day. Forec a sts by Mateo Consult of the Netherlands 



Maximum 

Belfast 

shower 

8 

Canfiff 

shower 

10 

Abu Dhobi 

Celsius 
sun 30 

Belgrade 

Bertn 

fair 

doudy 

17 

16 

Chicago 

Cologne 

D‘ Salaam 

fair 

ckxidy 

0 

17 

Accra 

Mr 

33 

Bermuda 

Cloudy 

22 

Ml 

32 

AJgiars 

sun 

21 

Bogota 

shower 

20 

Dakar 

fair 

23 

Amsterdam 

drzd 

14 

Bombay 

sun 

34 

□das 

doudy 

8 

Athens 

lair 

13 

Brussels 

cloudy 

16 

Ddn 

hazy 

30 

a Aires 

sun 

30 

Budapest 

cloudy 

15 

Dubai 

SU1 

29 

aftam 

shower 

11 

CJwgen 

rein 

10 

Dublin 

shower 

9 

Bangkok 

fair 

34 

Cairo 

far 

21 

Dubrovnik 

Mr 

17 

Barcelona 

sun 

18 

Capa Town 

fair 

24 

Edntxrgti 

shower 

9 

Beijing 

sun 

8 

Caracas 

Mr 

24 

Faro 

sun 

20 


Our service starts long before takeoff. 

Lufthansa 

German Airlines 



Ftoikfurr 

ckxidy 

16 

Malta 

SU) 

T9 

Rio 

shower 

28 

Geneva 

fair 

IS 

Manchester 

shower 

10 

Riyadh 

sun 

29 

Gtorattar 

sun 

17 

Morris 

fax- 

32 

Rome 

SI) 

18 

Glasgow 

shower 

a 

Melbourne 

far 

20 

S. Frsco 

doudy 

18 

Honbwg 

ran 

13 

Mexico City 

sun 

23 

SeoU 

fata 

2 

Helsinki 

shower 

5 

Moml 

fair 

27 

Singapore 

rein 

30 

Hong Kong 

doudy 

20 

Mien 

hazy 

18 

Stockholm 

fata 

7 

Honolulu 

fair 

28 

Montreal 

fair 

-2 

Strasbourg 

fata 

19 

Istanbul 

shower 

9 

Moscow 

rain 

a 

Sydney 

shower 

24 

Jersey 

drzzl 

14 

Munich 

leta- 

18 

Tangier 

fair 

19 

Kaoehi 

sun 

34 

Nairobi 

sun 

28 

Tal Avtv 

fata 

18 

Kuwait 

am 

29 

Naples 

sun 

19 

Tokyo 

ratal 

11 

L. Angeles 

fan- 

20 

Nassau 

fair 

27 

Toronto 

tair 

0 

Las Petros 

sun 

21 

New Yak 

doudy 

4 

Tunis 

sun 

21 

Lima 

sun 

27 

Nice 

sun 

15 

Vancouver 

shower 

10 

Listen 

sun 

20 

Nicosia 

shower 

16 

Venice 

fair 

17 

London 

ratal 

13 

Oslo 

Idr 

8 

Vienna 

tata 

16 

Lux.bcnag 

fair 

15 

Paris 

far 

18 

Warsaw 

drzzi 

13 

Lyon 

fair 

IB 

Perth 

sun 

30 

Washington 

rain 

6 

Madefra 

aun 

18 

Prague 

doudy 

17 

WeUngtan 

sun 

19 

Madrid 

SW1 

20 

Rangoon 

sun 

35 

Winnipeg 

sun 

-4 

Majorca 

sun 

20 

Reykjavik 

doudy 

-2 

Zurich 

sun 

18 


THE LEX COLUMN 

Manufactured excuses 


Two worries hit UK equities 
yesterday. One was the possibility that 
January's strong industrial production 
figures might deter the authorities 
from cutting Interest rates again; the 
other was that some large rights 
issues were in prospect If true, the 
latter would indeed be cause for con- 
cern. There is limited new cash going 
into the market at present Any that is 
steered towards equities is meeting a 
plentiful supply of new issues. Yester- 
day's 41-polnt fall is thus partly a mea- 
sure of how the equity market like 
gilts, has become prey to fears of over- 
supply. 

By contrast interest rate worries 
look overdone, at least, on the basis of 
the output figures. These showed out- 
put of investment goods rose nearly 
4 per cent in January while that of 
consumer goods fell slightly. That 
hardly represents a trend, and invest- 
ment goods output may simply have 
been snapping back after two weak 
months in November and December. 
Bat at least the picture is consistent 
with a shift towards Investment-led 
growth that is needed to make the 
recovery sustainable. 

That should not stand in the way of 
interest rate cuts. Political pressures 
for lower rates are likely to Intensify 
as next month’s tax increases bite. 
Paradoxically, stronger output figures 
might even help by signalling rising 
productivity. The UK’s actual inflation 
performance is what really counts for 
interest rates. The chancellor's life 
will be harder, thoug h , If gilts and 
sterling weaken further because of 
Germany's reluctance to accelerate Its 
own rate cuts. 

Fisons 

It was something of an achievement 
for Fisons to deliver yesterday's full- 
year results without any more nasty 
surprises. Pharmaceuticals sales 
growth of 7 per cent is respectable 
enough, while the condition of the sci- 
entific instruments division - the 
cause of December's profits warning - 
is not deteriorating. If that record can 
be maintained, Fisons may finally 
deserve to be judged squarely on its 
recovery prospects. A combination of 
modest sales growth, cost savings and 
loss elimination could, after all, 
deliver naming s growth. 

There are still risks. Drug sales rest 
on two asthma treatments - fatal and 
Tflade - for which the outlook is diffi- 
cult to judge, total feces competition 
from cheap generic alternatives. 
TOade’S US launch s nema to be gning 


FT-SE Index: 3264.4 (-41.5) 





well enough, but it is too early to draw 
firm conclusions. Disappointment 
from either drag would undermine 
any profits recovery. Even assuming 
both products perform admirably, 
Fisons' research pipeline remains wor- 
rylngly empty. Licensing potential 
products from outside companies 
could help solve that problem. Since 
Fisons has a mixed' record in develop- 
ment and lacks a chief executive, 
thmigti, the omens for such deal-mak- 
ing are not auspicious. Failure to 
secure a full raft of promising develop- 
ment projects would make the mar- 
riage of cash-generative laboratory 
supplies, instruments and pharmaceu- 
ticals difflnnlfc to justify. TTnleas the 
pipoiiiw can be finad in short order, 
breaking fisons up ai y| finding a part- 
ner in pharmaceuticals may still be 
the best way of unlocking value. 

Mobile phones 

Wolff Olins. the identity consul- 
tants, have expensively mwrindad that 
orange is distinctive, dynamic, open, 
and positive, ft is also, apparently, 
simple, friendly and approachable. 
Most people, however, still think of it 
as fruit Hutchison Telecom’s new 
mobile phone system. Orange, is thus 
open to the crack that lt Is a lemon - 
particularly since Orange comes from 
the company which produced the dead 
Rabbit network. 

The name is doubly unfortunate 
because the Orange network looks 
attractive. Since it will cover the main 
UK metropolitan areas and the con- 
necting motorways at launch, it has a 
si gnificant advantage over its rival. 
Mercury One-2-One. Its expansion will 
also be more rapid. Orange will cover 


70 per cent of rhn population by the 
end of the year and 90 per cent by 
tnid-1995. One-2-One will cover only 
around 30 per cent of the population 
by the year-end. 

Hub pricing of p<Hg and hand sets, 
yet to be announced, will put pressure 
nn marg ins in the rest of the mobile 
phone industry. Coverage is wide 
enough to make Orange a realistic 
alternative to Vodafone and Cellnet. 
They have been pi c kin g up low-use 
ri pmosHr customers, but the old net- 
works' profitability is critically depen- 
dent on their business tariffs. Those 
fat marg ins couM be undermined if 
business users drift to Orange in sig- 
nificant numbers. Wide coverage and 
lower hgnHsg* prices are also a threat 
to One-2-One. It may suffer for its deci- 
sion to constrain capital spending and 
roll Us network out slowly. 

WPP 

WPP may have lost ordinary share- 
holders a bundle of money by paying 
too much for advertising busine sses a t 
the wrong time in the cycle. WPP’s 
bankers, though, are likely to be a 
cheerier bunch after fashing in their 
convertibl e sha res this year. The 
bounce in WPP’s shares since its refi- 
nancing should enable them to make a 
tidy turn on the shareholding acquired 
at the time of the debt-for-equity swap. 
Martin Sorrell may join Rupert Mur- 
doch. as a bankers' pin-up boy. 

J Walter Thompson and Ogilvy & 
Mather are performing soundly. Reve- 
nue growth of 4 per in constant 
currency terms stacks up well against 
comparable agendas. Group operating 
margins have also improved from &9 
per cent to 7.6 per cent before sever- 
ance payments, yet staff costs remain 
high in comparison with those of 
rivals such as Omnicom. That sug- 
gests WPP could well attain its 10 per 
marg in t a r get even thnng h the 
going gets tougher from here. WPP’s 
bizarre balance sheet should also 
regain greater normality if the com- 
pany succeeds in floating its market 
research business. likely proceeds of 
$200m would certainly malm a useful 
dent in average debt of £339m. 

The ma rket seems to have forgiven 
all WPP’s past sins and is discounting 
much of its fiiture promise, too. WPP’s 
shares a gain stand on a fancy pre- 
mium, which znay be feir given its 
margin recovery and pro spec ts for 
advertising growth. Still, WPP's cau- 
tion about the strength of recovery 
and the forthcoming share conversion 
may dull the immediate shine. 



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BRIEF 


CS Holding 
jumps 69% ahead 

CS Holding, the financial services and industrial 
group, has reported a 69 per cent Jump to net 

pr ofit to SFriAgbn (SL4rn) for 1993, mainly because 

of outstamtiug earnings generated by commission 
and trading business. Page 16 

Aztec falls to PosOoM 



The A$287m (DS$206m) battle for Sydney-based 
Aztec Mining, the metals group, came to an abrupt 


up more than three-quarters of its target's shares 
in a stock market raid. Page 19 


Record sales tor Do Beers 

De Beers, the South African company which domi- 
nates the world diamond trade, is hftmg its 1993 
dividend 7 per cent after a tumroond in the dia- 
mond business. The group's Central Selling Organi- 
sation sold a record S4-37bn in rough diamonds. 
Page 19 

Gartmore bests Its forecast 

Pre-tax profits at Gartmore, the UK-based fund 
management company, were £2<LBm (*36m), nearly 
£2ra higher than ftforecast when its shares were 
offered to the public in November. Page 21 

Lqwrte helped by Evade acquisition 

Laporte, the UK speciality chemicals groop, ended 
a three-year decline in earning s per share in 1993 
helped by last February's acqiristtton of adhesives 
and plastics manufacturer Erode. Page 22 

P essim i s m In Tel Awtw 

• .After a bullish run ctf several 

MfeManlm lOOJndiw mouths the Tel Aviv Stock ’ 


■ vT A Y period of pessimism and 

250 jfc^ i ra W h^f.cantian because of political 

• ;1 jand economic uncert a inty. 

the boom of early 
• i January the TASK has 
aii ft ‘ " ' - I* ■■ ^baen through a mini-crash 
; r"- a 125 per cent dechne 

■«*. the Mtehtanim two-sided 

220 ■ i^fM^ index of the 100 most actively 

• r'-' *.'*■* ivv^ traded blue-chip companies. 

BackPage r* " " 


Cteemonttskas over IffugeBan 

Claremont Garments, the UK dothing maker, 
announced a takeover of Magellan Industries, 
the lingerie and s wim we a r company. Page 88 

Companies hi this Issue 


Amec 

Aztac Mining 
BASF 

Bank of Ent Ada 

Barrhead 

Brent Inti 

BumflekJ 

C£Knttilntl 

CS Kokflng 

CVRD 

Cteemont Garments 

Clyde Petroleum 

Continental 

Dah Sing Financial 

Da Been 

Environed 

Expamat 

Hugos 

QM Euopa 

Gartmore 

Gibbs and Dandy 

HK Aircraft Eng-mg 

HTR Japanese Smaller 

Hang Seng Bank 

Hays 

Hoechst 

Hongkong Bank 

IBA 

tCI 

Irwhcape 

Inetem 

krtareotd Tongesal 

Jarrfne 

Jotvson Matttvey 
Ka U/Wi Bank 
Unread 

MR-Deta Management 

-site* Statistics 

^Ararat reports mvfca 2 
Bendanark Govt bomb 
Bond fatarw and options 
Bond prices and ytokb 
OonmoOflu priras 
DhUmta announced, UK 
atSca rr aney ra tes 
Eurobond prices 
Rrad Maras tastes 
FT-A World Mere Back 
FT Gold Unre Max 
FTASIU tod bond are 
FT-SE Admire Mere 


21 MagaMan Industries 
IB McDannel hfo 

15 Mercedes 
17 MofaonUSA 

25 NE Norsk Bekbo 
21 NatWeat Markets 
21 Mne Network 
17 Normandy Poseidon 

16 OpeWSixtial 
16 PacerSyatwne 

2« Paramount Comma. 

23 P«*» 

1B Plantabrook 
-7 Pohang tton & Steel 
19 

“ PmGotd 
ZL QVC Network 
S Queans Moot Houses 
™ SNC-Levafln 
1? Sandvik 
Sctvodera 

*■ Scottish Value !nv 
2? Southern Newspapers 
® Surflt 

V, SuntaW 

*■ Sutar 

16 Teuton Cider 

17 Thom ail 
17 Thorntons 
12 Triton 

2S USA* 

2* USDC 

21 Underatuad Assets 
15 Unton Bank 
21 Verity 
17 WPP 
25 Wares CJty 
23 Wing Lung 


ES4B Fbreign asetanaa 
2D Gtaprica 
2D UBb eqiSy options 
2D London share sarvica 
28 London trad option 
“ Uapaged funds esndee 
f} Uonsy maricsS 
~ New tad bond Issues 
Pag. Recent tallies, UK 
36 Short-term tat rates 
a US Interest rases 
27 Wratd Stuck UBtBte 


yesterday 


Spbkunana 

Me 

GancanHtii 

HcMter cun 

THoartHtaE 

PUHfFftl 


Near York prices at 1230pm. 


580 


17 

JUT Lj**la 

847 

- 

13 

OSS 

+ 

as 

KM 

907 



14 

5535 

3155 

* 

+ 

15 

6-9 

mutex 

14M 

- 

4.7 

568 

+ 

10 

rang* 

2501 

- 

148 

on 

•¥ 

23 

IHootam* 

880 

- 

B 




TOKraiM 




10DM 

* 

2M 

Mm 




Zl* 

+ 

2 

MMhPuhf 

1280 

+ 

110 

5H 

+ 

2* 

AJ fto 

650 

+ 

24 

31* 


2* 

mm 

897 

+ 

32 

24* 

_ 

1U 

MnxpRow 

BBS 

+ 

48 

10* 

- 

3 

Totaott 

680 

+ 

40 

8)6 

4- 

15 

IK Ml 

357 

- 

13 


BunMd - 77+5 

CtreBras » + 40 

QarMbfS) 84+7 

Brerret 77+8 

Gtts&DendyA 83+5 

OttSlfcv 405 * W 

Man in + .23 

Mom Jutitta 122+8 

Unmd 131 + 18 

IM 383 + 10 

Raton) iMri 100+5 

thOMtOsm 27 + 3K 


188 + 11 

225 + 15 

188+8 


BAT Uk 470 - 25 

Brant taD IM - 

BtMwp 418 - 11 

Uports 784-20 

Mpn 288 - 15 

MW 2)03-56 

IMtadBboto 333* - 11* 

MtesC^rloo' 87* - 8» 


FINANCIAL TIMES 


COMPANIES & MARKETS 


o THE FINANOAL TIMES LIMITED I9« 


Wednesday March 9 1994 



Earnings figures from German chemical groups’ suggest slower rate of decline 

Hoechst and BASF cut payouts 


fly Chrtatopher Parkm 
h Frankfurt 

Hoechst and BASF, two of 
Europe’s biggest charnteals con- 
cerns, yesterday announced 
reduced dividends and earnings 
for 1993- BASF cut its payout 
from DlflO to DM8, while 
Hoechsfs was cut from DM9 to 
DM7. 

Although the German-based 
groups provided little more than 
basic 1993 data yesterday, the 
results further encouraged share- 
tradErs who have recently shown 
increasing interest in the recov- 


ery value of cyclical stocks, nota- 
bly chemicals makers. 

Sales and earnings figures from 
both groups suggested that the 
rate <rf decline had slowed during 
the past year, while national eco- 
nomic growth figures, also 
released yesterday, helped reas- 
sure markets that the worst of 
the domestic recession was past 

Hrmrligt aharpf , np DM8.90 tO 

DM31550 at tin* flnrl of nffiriwl 
trading continued rising after 
hours, while BASF rose DM5.70 
to DM311 by the close. 

Group pre-tax profits at 
Hoechst fell 42 per cent to 


DUL23bu, after being SO per cent 
down after six mnpiha. Turnover, 
which was 2 A per cent lower at 
the halfway mark, rose 0.4 per 
cent to DM46bn. The company 

complained of price pressure and 

“very lriw’* European demand, 
which- was evened out by 
i mp roved overseas business. Net 
group earnings were 86 pear cent 
lower at DM75&H. 

The weakness of rionwaHc mar- 
kets was highlighted by a 58 per 
remt ahnop in pre-tax Pgmlrtp g 
and a *L6 per cent fell in sales at 
the German parent, Hoechst AG. 

A similar pattern emerged at 


Colony’s corporate watchdog will not approve 
group’s proposals to supersede takeover laws 

Jardine 
companies 
may delist 
from Hong 
Kong 

By Sbnon Holberton and Louise 
Lucas bi Hong Kong 


The attempt by the Jardine 
group of companies to bypass 
Hong Kong's takeover laws and 
remain listed on the colony's 
stock wriranp a f f ta W I Y d si iI hw - 
Me yesterday, with regulators 
ap pa re n tly unprepared to revoke 
their epp o amon to *«+ compa- 
ny’s plans. 

It is understood that the Secu- 
rities and Futures Commission 
(SFO, the colony's corporate 
watchdog, will not approve toe 
company's proposed scheme 
whereby Bermudan takeover law 
especially enacted for Jardine 
aupenetfaaJgan&Kbng nrifes.' 

This «u ' 1 x«i ik> ha* -beat the. sub- 
ject of negotiatom between Jar-" 
fine and the SFC since the begin- 
ning of this year. A failure of the 
two to agree raises the possibil- 
ity Dm* the Jardine group might 
ddlst its shares in Hong Kong. 

Jartfine pr ecipi ta ted a flight of 
capital from Houg Kong to 1984 
when it announced it would 
move its company registration to 
Bermuda. Hie company does not 
behove that Hong Kong’s legal 
framework will provide suffi- 
cient protection after China 
resumes sovereignty over Hong 
Kong in 1997. 

The Chinese government has 
frequently .attacked Jardine 
because of its stated supp or t for 
Governor Chris Patten’s demoe- 



Nigel Rich: step* down this month to return to UK 


racy plans, and its alleged 
invritvement in toe removal of 
Mr Patten's predecessor. 

Last May, Jardine said Ber- 
muda had agreed to enact laws 
to bring top Jardine group under 
a statutory version of London's 
Takeover Code. The code will be 
arimtniKtPT’ Pri by Bermuda’s Mon- 
etary Authority. 

However the SFC is concerned 
about the credibility of such leg- 
islation. crested at the behest of 
one company. H claims the take- 
over code in Bermuda applies to 
one c ompany in Bermuda - Jar- 
dine - and it believes that com- 


Barry Riley 


pantos oper a ting in Hong Kong 
should abide by Hong Kong 
rules. 

The Jardine group comprises 
Jardine Matfaeson, Jardine Stra- 
tegic, Mandarin Oriental, Hong- 
kong Land^ and Dairy Farm. 
Their combined market capitalis- 
ation accou n ts for about 9.7 per 
cent of the Hong Kong stock 
market. 

Mr Nigel Rich, the c o mp a ny ’s 
managing director, steps down 
this month to retain to the UK. 
His place will be taken by Mr 
Alasdnir Morrison, the 45-year- 
old boss of a Jardine associate. 


The hazards of bringing 
home the harvest 


Distance lends 
enchantment to 
the view - at 
least, it does when 
there is a bull 
market and the 
money is flowing 
freely. Last year 
♦bp further-flung 
. securities markets tended to out- 
perform handsotody. to 1994 so 
for, however, it has paid to stay 
doser to home. 

That is too viewpoint of the US 
investor, anyway. Supposedly the 
recent shakeout to the global 
securities markets has been all 
about a quarter-point rise to 
short-term US interest rates sig- 
nalled cm Febr u ary 4 (admittedly 
with the hint that there Is a good 
deal mare tightening to came). 
The paradox is that although 
short-term rates have risen 
nowhere else (and have fallen, in 
several European countries), the 
damage to the markets has gen- 
erally been worse outside the US. 

While the US equity market 
has only retreated about 3 per 
cent - as measured by the FT-Ac- 
tuaries World Index series - the 
UK index has fallen by twice as 
much, while Mexico is off 11 per 
cent and Hang Kang by 15 per 
cent Only Tokyo has managed to 
show some slight appreciation. 

As for band markets, the tai- 
year US Treasury bond yield may 
have shown a sharp upward 
move of same 56 basis points, but 
once again tilings have proved to 
be tougher elsewhere, with senti- 
ment in Europe taking another 
turn for the worse late yesterday. 
Returns in the UK have risen by 
more like GO basis points, and the 
yield an Spanish ten-year govern- 
ment bands is up by a fun per 
cantage point Interestingly, 
Japan has fallen in line as for as 


bonds are concerned, with a 
sharp back-up in yields (the ten- 
year yield is T9 more than 100 
basis paints store early January). 

The T-attn American debt mar- 
kets, so fashionable and lucrative 
last year, whan the Brady Bond 
index was up 44 per cent, have 
taken a tumble. There are rum- 
blings of farther trouble con- 
nected with Banco Latino, the 
firiiqri Venezuelan bank. 

AH fids presumably says some- 
thing about the speculative posi- 
tions that were built up during 
toe 1993 bull market, as well as 
the relatively poor liquidity of 
some of ♦bp smaller na tional 
securities markets. The stop loss 


Volatility is 
being exported 
from the US to 
other markets 


seDfag of hedge foods and invest- 
ment banks has created more 

darting** to ♦bp mtnnr markets. 

The central banks this week 
decided that the hedge funds 
were not tag enough to pose any 
systemic risks. Nevertheless, the 
changing global pa tia nwt should 
be watched closely. Volatility is 
steady being exported from the 
US through cross-border invest- 
ment Last year the US equity 
market varied by less than 5 per 
cent either side of the midpoint, 
much the same pattern as in 
1992. The action shifted with a 
vengeance to more exotic loca- 
tions. 

When big money is moving in, 
the risks of investment are 


dearly seen to be less, and the 
riskiest markets show the high- 
est returns through a process of 
progression towards the mean. It 
becomes attractive to chase the 
hfah—fe y tekMng paper and there 
is a convergence of returns: curi- 
ously, the government paper of 
European Union member states 
showed narrower yield differen- 
tials after the effective collapse of 
the exchange rate mechanism 
than before. 

When the money moves out, 
however, the marginal markets 
tend to be sold first, as the pric- 
ing of perceived risk tends to rise 
- so that Spanish bonds, far 
instance, are hit harder. Or, you 
could say, the fattest profits are 
likely to be cashed in first 

The global investment themes 
have not been terminated, how- 
ever, but are mare subdued. We 
have seen the exit of the hedge 
foods, which were front running 
the pension funds and mutual 
fonds. The US pensiim funds will 
probably act as a stabilising 
force, seeing higher income 
returns as attractive. 

But the third big group of play- 
ers, the US mutual funds, may be 
another matter. The boom to net 
receipts continued through to 
January, at about $30tm for bond 
and equity funds combined, but 
the February Intake may have 
been more problematical. The 
rfang pr arises from the way that 
mutual fond investors have been 
rhflgtng short -term gams, almost 
as eagerly as the hedge fund 
managers. Already the sharp - 
seHoff to Hang Kang and else- 
where in south east Asia will 
have Inflicted damage and 
prompted profit-taking. 

Global investment can be excit- 
ing, but home is where the 
heart is. 


BASF's parent, where German 
turnover foil 9.6 per cent, and 
pretax earnings were 16 per cent 
lower. Gfronp sales, meanwhile, 
were down 3.3 per cent at 
DM40Ji7ba. after being 7 per cent 
lower after six months Pre-tax 
profits, 50 per cent lower in the 
first half of the year, woe down 
15 per cent at DMlbn. 

Both groups pressed ahead 
with extensive savings pro- 
grammes last year, shedding 
10,000 employees between them. 
Further job losses are expected 
this year. Analysts expect more 
joint ventures, disposals of non- 


core, unprofitable businesses, 
and a continued search for profit- 
able new ventures. 

Important deals last year 
included Hoechsfs effective take- 
over of Sobering's agrochemicals 
business, and its move into the 
gmeric drugs market through its 
purchase of a 51 per cent stake in 
Copley, a US manufacturer. 

BASF, which recently com- 
pleted the purchase of ICTs poly- 
propylene business, last year 
agreed to merge its nylon carpet 
fibre and nylon textiles busi- 
nesses with those ol AtoedSignal 
of the US. 


GM’s car profits 
in Europe fall 
56% to $600m 


By Kavta Dona, Motor Industry 

O o wp B nJwt ta O w w 

General Motors' Opel/Vauxhall 

Car and light r mrrm py pinl vehicle 

operations in Europe suffered a 
56 per cent fall in net profits to 
ISQQmfo 1993. 

Mr Tvmk Hughes, fill Europe 
president, ♦>!»♦ despi te toe 

sharp riar_tin» fl» Opel/Vauxhall 
operations bad remained the 
most profitable volume car busi- 
ness to Europe for the fourth 
year in succession. 

Several of 

GM’s closest ^ 
rivals in Europe Key W 

suffered big remain ’ 

losses last year, - ,, 
including the there IS 0 

among c 

group. Rat, PSA r .~^r 
Peugeat Cttrofta LOUIS til 
and Ford of Europe 

Europe. r ■ 

Mr Hugh.es 

said that' die Opel/Vauxhall 
financial performance had been 
depressed by one-off charges 
totalling around 3800m arising 
from restructuring measures and 
exchang e rate losses. 

The Opel/Vauxhall workforce 
was cut by around 7 per cent to 
81300 at tile end of 1993 from 
91,600 at the end of 1992 and 
there was widespread short-time 
working at several Of Europe 
plants 

Mr Hughes warned that little 
growth was expected in the west 
European car market this year, 
although a stronger recovery 
could begin in 1995 with sales 
forecast to exceed 12m next year. 
According to industry estimates 
new car sales in west Europe fell 
by 15 per cent last year to llASm. 


‘Key economies 
remain weak and 
there is uncertainty 
among consumers’ 

Louis Hughes, GM 
Europe president 


This year “too many key econo- 
mies remain weak, unemploy- 
ment is too high, and there is too 
much uncertainty »mnr>g con- 
sumers irairorning major pur- 
chases such as autombbOes". 

Mr Un gtaw aHH flwit CM w&S 
planning to further international- 
ise its operations using toe Opel 
car operations as the gparhpart 
The Opel technical develop- 
ment centre to Germany was the 
group’s lead riggtg n and engineer- 
ing organisation outside North 
America. 

Opel designed 

, products are 

nonnes already being 

pair and buflt to eastern 

, ^TT Europe, the Mld- 

certamty die East, Asia, 

nsnmers’ Africa, south 

, America and 

ties, KjM Australia. 

resident **?«£*« 

said that GM 

Europe was cur- 
rently planning additional small 
volume assembly projects in 
India, Indonesia and Thailan d 
and eventually to Malaysia. In 
toe long-term, studies are also 
being conducted that could lead 
to Opel car assembly to fflutaa, 
Pmanii 73mhnh wp and the Phflip- 


The Opel/Vauxhall Corse small 
car, which is currently built in 
Spain and in Germany will start 
production soon to Brazil and 
Mexico and is under study for 
eventual assembly in Russia. 

A version of the new Opel 
Omega executive car, launched 
yesterday, will also be sold as a 
Cadillac in the US, and the 
Omega chassis platform will 
be used too in Austra- 
lia. 


Partial 
float will 
reduce 
WPP debt 


By Wane Summers, 

Marketing Correspondent 

WPP, the marketing services 
group, yesterday announced ft is 
likely to float part of its market 
research businesses this year, 
yielding np to 3200m, as part of 
its efforts to cut debt. 

The announcement came as 
the group reported pretax prof- 
its of £54.4m (379.42m) for the 
year ended December 31, 1998, 
up sharply from £7Am in 1992. 
The latest pretax profit figure is 
after charging a loss of £l0Jta 
on the sale of companies. 

A final dividend of 0.65p will 
make a total payout of lp per 
share for 1993 - the first year a 
dividend will have been paid 
since 1990. Folly diluted earn- 
ings per share were S.4p. The 
shares rose 2p to close at 125p. 

Operating profit for the gronp 
- which Includes advertising 
agencies J Walter Thompson, 
and OgOvy and Mather - was np 
34 per cent to £95m, while oper- 
ating margins Increased from 5.6 
pear cent to e.7 per cent Tom- 
over was up 12 per cent to £6bs 
and revenues increased 12 per 
cent to £lAbo. 

Forecasts from the group were 
cautions yesterday. It announced 
that 1994 budgets were based on 
a L5 per cent Improveme n t In 
revenues and, although there 
had been an i mp rovement in con- 
fidence in North America and 
Europe, any recovery was “still 
unstable and uncertain'’. Touch 
controls would continue to 
ensure “that the group is well 
placed when real (as apposed to 
that in the financial markets) 
recovery comes”. Analysts' fore- 
casts for 1994 pre-tax profits are 
now about £85m-£90m> 

The flotation of up to 50 per 
cent of the market research busi- 
nesses on either the US or UK 
stock. markets could yield up to 
3200m, said the g roup. Market 
research revenu e s in 1998 were 
3320m and operating profits 
were 329m. The companies are 
based in the US, UK, Australia 

and Japaru 

If the minority stake were sold 
for the expected sum, average 
net Indebtedness could he 
reduced to £200m from the 1993 
figure of £339m, said WFP. At 
the year end, net debt totalled 
£84m, down from £240m - a 
sharper reduction than some had 
expected. The board said it can- 
tinned “to explore possible asset 
disposals and other opportuni- 
ties to improve the group's capi- 
tal structure, although on a less 
pressurised baste”. 

Lex, Page 14 


This announcement appears as a matter of record only. 


£ 6 , 500,000 

Management Buy-In 
through 

JBS INDUSTRIES LIMITED 


Four Businesses of the Engineering Division 
of 

Triplex Lloyd pic 
Arranged and funded by 

MERCURY 

DEVELOPMENT CAPITAL 

on behalf of its discretionary investment clients. 


Reporting accountants 


s!l Ernst &Young 



(Birmingham) 


Merely Development Capita] is a division of Mercury Asset Management pk, a member of IMRO- 


■t 




16 


FINANCIAL TIMES WEDNESDAY MARCH 9 1W 


INTERNATIONAL COMPANIES AND FINANCE 


Earnings at CS Holding 
leap 69% to SFrl.99bn 


By Ian Rodger In Zurich 

CS Holding, the financial 
services and industrial group 
built around the Credit Suisse 
bank, has reported a 69 per 
cent jump in net profit to 
SFrl.99bn (Sl.4m) for 1993, due 
mainly to outstanding earnings 
generated by commission and 
trading business. 

The group's preliminary 
statement revealed assets 39 
per cent higher at SFr346.5bn 
during 1993, largely because of 
the acquisition a year ago of 
Swiss Volksbank, Switzer- 
land's fourth largest bank. 
Group equity jumped 47 per 
cent to 5Fri5.8bn at the year 
end. 


By David WgMon hi London 

Fisons, the UK pharm- 
aceuticals group which dis- 
missed its chief executive in 
December, yesterday said it 
had identified further scope for 
cost cutting as it unveiled a 
slump in trading profit to 
£37.4m (556 .2m) from £U7m. 

Mr Patrick Egan, chairman, 
said its cost reduction pro- 
gramme would cut overheads 
by an annualised £3Sm over 
two years, compared with the 
latest forecast of £35m. 

The programme, which will 
involve the loss of 1,000 jobs in 
the pharmaceuticals division, 
follows a review by accoun- 
tants Coopers & Lybrand 
which cost £4hl 

Mr Egan revealed that the 
group planned to sell about 30 


By Christopher Parkas 

Pre-tax earnings at 
Continental, the German tyre 
maker, fell more than half to 
DM74m ($43. 5m) last year, 
according to Mr Hubertus von 
GrQnberg, group chairman. 

He blamed the decline in the 
automotive industry. He said 
the company increased volume 
deliveries, but prices had been 
depressed by over-capacity In 
the tyre industry. 

The results had once again 


The figures confirm GS as 
the largest Swiss financial 
group, surpassing Union Bank 
of Switzerland with, assets of 
SFr3ll.3bn at the year end. 
Swiss Bank Corporation, the 
third largest, had assets of 
SFr207bn. UBS remains the 
most profitable of the three, 
with net income last year of 
SFr2.27tm, and is the group 
with the largest equity base, 
SFriU-Tbn. 

Volksbank, which was on the 
verge of collapse before being 
taken over, did not contribute 
to CS group profits last year. 

CS said its operating profit 
from trading in foreign 
exchange, precious metals and 
securities more than doubled 


per cent of its scientific instru- 
ments division which incurred 
losses of £39. 6m, including a 
restructuring charge of £20.7m. 

In December, Ffcons sacked 
Mr Cedric Scroggs, chief execu- 
tive, who had been directly 
responsible for the scientific 
instruments division, and 
warned it would only break 
even for 1993. The City had 
expected profits of £100m. 

The figures were hit by the 
decision to end the practice of 
lifting pharmaceutical sales 
just before the year-end by 
offering customers discounts. 
This reduced profits in 1993 by 
about £3 2m. Mr Mike Red- 
mond, pharmaceuticals manag- 
ing director, stressed: “We will 
be selling in January and Feb- 
ruary what we would have sold 
in December." He added that 


been burdened by losses at 
General Tire, the US subsid- 
iary, which had not f ulfille d its 
promises to return a 
break-even result, he said. 

Unit sales of car and com- 
mercial vehicle tyres increased 
2 per cent and 3 per cent 
respectively, while group turn- 
over fell 3.3 per cent to 
DM9.4bn. 

Last year's profits fall was 
less dramatic than expected, 
while sales and earnings had 
increased in the first two 


to SFr5.2bn from SFr2.3bn 
while net commission income 
advanced 40 per cent to 
SFr4^bn. 

Net interest income grew 19 
per cent to SFi&2bn because of 
the inclusion of Volksbank 
activities. 

Group cash flow expanded 78 
per cent to SFrsiMbn, but pro- 
visions for bad loans and 
depreciation soared 84 per cent 
to SFrS.26bn. Return on equity 
was 14-3 per cent or 13.2 per 
cent after deduction of minor- 
ity Interests. 

The directors will make a 
dividend recommendation fol- 
lowing the closing of the CS 
financial year at the end of 
March- 


only by finding the disruption 
caused by the practice could 
some of the planned savings in 
the pharmaceuticals division 
be achieved. 

Trading profit from pharma- 
ceuticals fell £29 .2m to £42 .2m, 
after £40m of exceptional 
items, with sales from continu- 
ing business up by 7 per cent 
to £446m. Profits from labora- 
tory supplies rose to £27.6m 
from £25.9m. 

Pre-tax profits fell to Elm 
from £124m after losses on 
business to be discontinued of 
£XL9m. 

Thanks to disposals, an oper- 
ating cash outflow of £69m 
after tax and dividends became 
a cash inflow of vifiTm. Gear- 
ing feU to 40 per cent from 67 
per cent 
Lex, Page 14 


months of the current year, he 
said. 

Continental would respond 
to the continuing downward 
pressure on prices by improv- 
ing quality and reducing fixed 
costs rather than cutting out- 
put A further 2,000 jobs would 
be cut this year, following a 
reduction of 4,900 in 1993. 

Mr von GrQnberg forecast a 
positive result this year but 
refused to comment on divi- 
dend prospects. Continental 
last paid a dividend in 1990. 


Turnround 
at Esselte 
despite weak 
markets 

By Christopher Brown-Humes 
in Stockholm 

Esselte. the Swedish office 
products group, swung to a 
SKr301m ($38.1 m) pre-tax 
profit in 1993 from a SKrllm 
loss a year earlier, in spite of 
weak conditions in many 
important markets. The divi- 
dend is SKr2L75 per sha r e, up 
from SKr2.50. 

The turnround was flattered 
by the exclusion of SKr270m 
in one-off costs which hit the 
final quarter of 1992. But 
unproved market conditions in 
the final quarter of 1393, par- 
ticularly in the Nordic coun- 
tries and the UK, also helped. 
The company expects a further 
improvement this year. 

The weaker krona was posi- 
tive for the company, helping 
to lift sales to SKrll-8tm from 
SKr9.9bn. However, the 
impact was mitigated by size- 
able production operations in 
hard currency countries such 
as Denmark, France, Belgium 
and Germany. 

Based on comparable 
exchange rates and units, 
sales were 3 per cent lower 
last year, reflecting weak mar- 
kets in southern and western 
Europe and Japan. 

Puma deficit 
deepens 
to DM69m 

By David Waller in Frankfurt 

Losses at Puma, the 
German-based sports goods 
manufacturer which has been 
reorganised, more than quin- 
tupled last year to DM68£m 
(339m) compared with a 
DM1 2m loss in 1992. 

The group blamed the costs 
of rationalisation measures. 
These gave rise to extraordi- 
nary restructuring charges of 
DM60 ,5m at the parent com- 
pany level. 

Excluding licence income, 
turnover dropped by li per 
cent last year to DM457.6m fol- i 
lowing DM5l2.8m in 1992. j 
Including licence revenue, 
group turnover rose by 1 per i 
cent to DMl.l8bn. I 


Fisons suffers setback to £37.4m 


Continental declines to DM74m 


Foreigners eager for Czech sell-offs 

Shares in 861 groups are on offer, write Patrick Blum and Anthony Robinson 


M r Vaclav Klaus, the 
Czech prime minis- 
ter. offered British 
businessmen a plethora of 
uplifting quotes from Adam 
Smith, the 18th century 
prophet of laisser Store capital* 
ism. in London yesterday. But 
he had little concrete to offer 
those seeking an easier way 
through the Czech bureaucracy 
to potentially lucrative con- 
tracts and participation in the 
privatisation of Czech indus- 
try. 

The Czech Republic, be told 
a luncheon audience organised 
by the Adam Smith Institute, 
British Gas and Bass, the UK 
brewer, bad an embarrassing 
surplus of foreign capital. The 
central bank was having to 
neutralise tire inflow by domes- 
tic monetary manoeuvres. 
Czech companies were looking 
forward to the time when they 
would be investing abroad in 
foreign assets, not just absorb- 
ing foreign capital, he added. 

It was a tongue in died: per- 
formance, and the audience 
loved it. Foreign investors 
have indeed been buying Czech 
companies and shares on the 
rising Prague bourse. They are 
closely following the outcome 
of the second wave of voucher 
privatisation which begins 
next month and Khraiiri be com- 
pleted this summer. 

Shares in 861 companies with 
a book value of Kcsi55bn 
($5.3bn) are on offer, compared 
with about 1,000 companies 
worth more than $7bn last 
time. But interest has been 
lively with over 6m Czechs out 
of a population of 103m regis- 
tering for voucher books. 

Only Czech nationals can 
participate in the voucher 
scheme, but foreign investors 


are poised to move in on tar- 
geted companies once the pro- 
cess has been completed. Mast 
will deal directly with invest- 
ment funds, several of which 
have links with leading foreign 
institutions such as Credit Sui- 
sse First Boston, Cores of the 
US, Austria's Creditanstalt and 
Raiffeisen banks, and Epic, a 
Vienna-based fund. 

The 400-plus funds played a 
large role in the first privatisa- 
tion wave, winning control of 
72 per cent of privatised 
shares. They compete fiercely 
to persuade investors to 
entrust them with the manage- 
ment of their portfolios. 

Incentives for investors 
Include promises of returns 
several times the KcslJXX) cost 
of a voucher book, cheap loans 
and credits and other benefits. 
At least one fund has offered 
an immediate cash payment of 
Kcs7,000 with another Kcsl.000 
promised later to buy the 
rights of voucher book holders, 
thereby getting around a ban 
on investors s elling the books. 

Foreign investors are locked 
out of the initial process, but 
they can buy shares from 
funds and individual share- 
holders once privatisations are 
completed. They can buy 
shares on the stock exchange 
or the rival over-the-counter 
RM- System, although lack of 
market liquidity and listed 
stock reduces opportunities. 
Stakes in companies can be 
bought directly from the gov- 
ernment or the government- 
owned National Property 
Fund, as many large privatisa- 
tions involve a mix of vouch- 
ers, and sale by public tender 
or direct sales. 

Companies to be privatised 
include: 



Vaclav Klaus: embarrassing 
surplus of foreign capital 


• SPT Telecom: 26 per cent to 
be sold by vouchers. The gov- 
ernment will decide shortly on 
a short-list or foreign partners 
to be offered a 27 per cent 
stake, although a partner is 
unlikely to be chosen before 
1995. 

There is strong interest from 
foreign telecommunications 
companies. SPT had net profit 
of Kcs3.5bn on revenues of 
Kcsl8.4bn last year. 

• CEZ: about 4 per cent of the 
its share capital will be sold by 
vouchers; 30 per cent was sold 
in the first wave. CEZ is one of 
the country’s largest compa- 
nies with a quasi monopoly of 
power generation - competi- 
tion comes from a few small 
power plants run by municipal- 
ities. 

It expects pre-tax profits of 
Kcsl8.5bn on operating reve- 
nues of Kcs49bn for 1993. It is 
one of the most popular stocks 
on the market, given blue chip 
status by foreign analysts, 
although the company could 


fbce environmental problems. 

• Chcmopetro and Knucuk 
Kralupy: two refineries which 
have attracted strong interest 
from Shell, and a separate con- 
sortium of Conoco, Agip and 
Total. 

Some 36 per cent to be sold 
by vouchers, and at least 
another 30 per cent to be 
reserved for a foreign partner. 

• fCablu Kladno: cables manu- 
facturer 66 per cent to be sold 
by vouchers, an additional 30 
per cent reserved for Felten 
and Guillaume of Germany. 

• Karosa: bus and truck man- 
ufacturer; more than 50 per 
cent to be sold by vouchers, 
with about 36 per cent sold to 
Renault Vehicuies Industrie Is. 

• Synthesis the country's sec- 

ond largest chemicals company 
manufacturing organic chemi- 
cals and explosives including 
Semtex. Has switched most of 
its exports from former Com- 
econ trade bloc to the West 
Profits of Kcsl99an on sales of 
Kcs4.6bn Last year. # 

W ith the range of com- 
panies narrower 
than in the first pri- 
vatisation, competition is 
expected to be strong for 
favoured stocks. 

For international institu- 
tional investors, the second 
wave offers an opportunity to 
raise their holdings in one of 
eastern Europe's fastest grow- 
ing emerging markets. About 
$200m in portfolio investment 
has moved into the Czech 
Republic since last June, and 
more is expected. 

"There could be another 
$50 0m waiting to come in 
through institutional funds," 
says Mr Peter Galbraith, an 
analyst with Epic. 


Buoyant Sandvik sees market growth in 1994 


By Christopher Brown-Humes 

Sandvik, the Swedish 
speciality steel and carbide 
group, yesterday reported a 30 
per cent increase in profits for 
1993, saying a four-year decline 
in demand for industrial prod- 
ucts was over. 

"There are now clear signs 
that the world market will 
expand during 1994," it said. 

Mr Per-Olof Eriksson, group 
chief executive for more than 
10 years, would be retiring in 
May, it said. He would be suc- 


ceeded by Mr Clas Ake Hed- 
strOm, head of Sandvik Tool- 
ing. 

With market conditions 
again weak last year, the com- 
pany relied on the fall in the 
krona and restructuring to lift 
profits to SKrl.98bn (5253m) 
from SKrL52bn. The improve- 
ment was achieved in spite of a 
sharp drop in financial income, 
partly because of lower inter- 
est rates. 

Sales rose 26 per cent to 
SKtfUbn in 1993. in spite of 
lower volumes in all business 


areas except steel. Excluding 
currency factors and structural 
changes, sales were down 5 per 
cent, largely because of 
depressed demand in Europe, 
which, accounts for 55 per cent 
of sales. 

Orders rose 28 per cent to 
SKr22.lbn, but only process 
systems showed a clear 
Increase in volume terms. 

Star performer last year was 
the steel division, which lifted 
profits to SKr46lm from 
SKrl59m. 

Hie group's biggest division. 


cemented carbide, lifted profits 
to SKrlJMbn from SKr879m, 
helped by currency factors. 
The saws and tools division 
was weakened by the perfor- 
mance of a German unit Sand- 
vik Belzer, hut losses were Cut 
to SKr3m from SKr82m. 

The dividend is being 
increased to SKriL25 per share 
from SKrl.90. Earnings per 
share rose to SKr4.90 from 
SKT4J50. 

The group expects both 
sales and profits to rise this 
j'ear. 


WHAT MADE ONE 
MARKETPLACE GROW BIGGER 
THAN ALL THE REST? 



Ideas. Pattern-breaking, funda- 
mental new financial tools. Tools that 
changed the way world markets work. 

It was the Chicago Mercantile 

Exchange that launched financial 
futures. It was the CM E that developed 
the Eurodollar contract - a single 

instrument that is bigger, in actual 

contracts owned, than any other 
entire futures exchange. A computer- 

ized round-the-world, round-th e-dock 
trading system. The world's largest 


market for equity indexes. The list 
goes on and on. 

New ideas have made (he CME 
the world’s largest marketplace -by ' 

an enormous margin. Four times big- 

ger in performance bond dollars 


deposited than any other futures 
exchange In the world. 

The result? Liquidity dial no 

other marketplace can rival. 
Efficiency that no smaller market can 
match. And...the resources to keep 

on producing the innovations that 

power growth. 

Ideas made the CME the world's 
largest marketplace. And because it 
is the biggest, it serves the whole 
world best 


CHICAGO MERCANTILE EXCHANGE® 

The Exchange of Ideas® 


iiiiiviiiiiiisiiiiiiiiiiiiiiKiimiiiimHMiiiiiiiisiiiiHiiiiiiiimmiiiiiiHiiiiimiiimiii 


71ns announcement appears ji a matter of record ortty 





Japan Finance Corporation for 
Municipal Enterprises 

£100,000,000 

6 % per cent. Guaranteed Bonds due 2004 

tmeondititmalfy and irrevocably guaranteed as to payment of principal end interest by 

Japan 

Issue Price 99.81 per cent. 


S.G.Warburg Securities 


Paribas Capital Markets 
Samuel Montagu & Co. Limited 
UBS limited 
Barclays de Zoete Wedd Limited 
Deutsche Bank AG London 
ffij International pic 
Morgan Stanley & Co. 
Nomura International 
Sotiete Generate Strauss 


LTCB International Limited 
J.P. Morgan Securities Ltd. 

Bank of Tokyo Capital Markets Limited 
CS First Boston 

Hambros Bank Limited 
Lehman Brothers 
Nikko Europe Pic 

Salomon Brothers International Limited! 
Turnbull Securities Limited 


iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiuiiiimmiH 








17 



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FINANCIAL TIMES WEDNESDAY MARCH 9 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Australia 
seeks to 
simplify 
buy-backs 

By NHdd Tail m Sydney 

Mr Michael Lavarch, the 
Australian Attorney-General, 
yesterday released a proposed 
simplification of rules for cor- 
porate share buy-back 
schemes. The changes could 
encourage more Australian 
companies to consider the 
option. 

Although share buy-backs 
are permitted In Australia, 
they are subject to complex 
conditions. Clitics of the cur- 
rent regulations cbmn compli- 
ance costs are heavy, and the 
safeguards against abuse are 
unnecessarily detailed. As a 
result - and in contrast to the 
US, where buybacks are com- 
monplace - few Australian 
companies have at tempt ed to 
Introduce such schemes. 

-Under the new proposals, 
companies would be able to 
buy back shares, other than 
redeemable preference shares. 
However, directors would have 
to sign a written declaration 
stating that, in their opinion, 
the company would be solvent 
Imm ediat ely after the buy-, 
back. They would be person- 
ally liable if the buy-back led 
to insolvency. 

A company would also he 
allowed to buy back more than 
10 per cent of its ordinary 
shares in a 12-mouth period, 
provided shareholders 
approved. 

Restrictions on the source of 
funds far buy-backs weald be 
eased, as would accompanying 
constraints on the timing of 
new Issues - for example, 
under dividend reinvestment 
plans. At present, any com- 
pany operating a dividend 
reinvestment plan is effec- 
tively barred from a buy-back 


Posco senior 
management 
changed again 

By John Burton In Seoul 

POhang- Iron and Steel (Posco), 
the world's second largest 
steel company, has changed its 
senior management for the 
third time in 18 months. 

The unexpected appointment 
of Mr Mahn-je, a former 
deputy prime minister for eco- 
nomic affairs, as Posco chair- 
man at the company's annual 
meeting followed the sudden 
resignation of Mr Chung 
Myunk-sxk as chairman and 
Mr Cho Mal-soo as president 
They are reported to hare 
resigned in protest over gov- 
ernment interference in the 
management of the company, 
whose largest shareholder is 
tiie state with 35 per cent 
Mr Kim is the first outsider 
to head the profitable steelma- 
ker, which was established in 
1967, and his appointment 
may provoke criticism from 
tiie company’s trade unhm. 


Ticklish business of disclosure 

All may not be best for Hong Kong banks, writes Simon Holberton 


T he reporting season for 
Hong Kong’s banks, 
now virtually complete, 
has been notable for the extent 
to which disclosure grabbed 
the attention of investors. 

Two of Hong Kong's local 
banks. Hang Sang Bank and 
Bank of. East Asia, both suf- 
fered, the latter because inves- 
tors got tired of management 
being hi gh - handed . in its 
refusal to part with any infor- 
mation, / and the former 
because investors did not like 
what they saw. 

To add to bankers’ worries, 
there emerged a lobby to end 
past privileges. The Consumer 
Council assailed the banks for 
reaping monopolistic profits 
from rigging interest rates on 
small deposits; It also called foa* 
greater disclosure of banks' 
inner reserves. According to 
Mr Roger Edgley, banking ana- 
lyst at Crosby Securities: 
“Hbng Kong bac tmp pf fjin 
lowest levels of disclosure; 
even banks in Indonesia reveal 
more." 

Bank of East Asia, celebrat- 
ing its 75th anniversary this 
year, got caught by investors’ 
doubts after it unveiled a 
HKglbn (US$129m) after-tax 
profit, same 46 per cent up on 
1992*8 earnings. Given the pau- 
city of information it pub- 
lished, analysts speculated that 
1993 earnings had been bol- 
stered by the use of past 
reserves. 

Mr David I i, the bank’s chief 
executive, was forced to issue a 
denial the day after the bank 
released its results; weds later 
he was still having to 
himself. According to Mr Li, 
1993 profits were augmented by 
the u nwinding of previous pro- 
visions for had and doubtful 
debts. 

Hang Seng's problem was 
the opposite: too much disclo- 
sure for the market’s liking, ft 
bad always been known that 



? Bank - 



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.,’,7 

Haag Seng had a portfolio of 
securities, but not one with a 
value of HK$L2Abn, toctafling 
unrealised gains of HKS9.6bn. 
As one broker wryly observed: 
“Buy Hang Seng as a geared 


* A 2 -~; ~ 


•' -V- 1 — ' ' I’i-'i'T . • :*• . 

firffj trading p ron to on tiie equi- 
ties portfolio of more than 

HKfUm. With tank regulators 
and investors concerned about . 
banks’ exposure to Hbng 
Kong’s property market. Hang 


According to one banking analyst, "Hong Kong 
has one of the lowest levels of disclosure; even 
banks in Indonesia reveal more” 


play on the market" - 

More seriously, analysts 
were concerned that Hang 
Seng recorded virtually no 
growth in its rmdpriy fn g bank- 
ing business, in spite of its 
position as the premier retail 
bank in the colony. 

According to Mr Steven Li. 
hanking analy st with brokers 
Jardme Fleming, Hang Seng’s 
profit growth was attributable 
to lower bad debt charges, a 
one-off reduction in staff costs, 


Australian insurer to 
sell Californian unit 


By NHdd Ttn 

C. E. Heath International, the 
Australian liability insurer 
which was spun off from its 
UK-based parent via local 
stock market flotation in 1992, 
is s etting C-E. Heath Compen- 
sation and Liability Insurance 
Company (or Heath Cal), its 
Californian workers’ compen- 
sation subsidiary, for Afi32m 
(US$943m). 

The purchaser of the busi- 
ness is Care America, a subsid- 
iary of UniHealth America. 
The sale, according to the Aus- 
tralian group, should generate 
a pre-tax profit of about AtfQm 
aid is likely to be completed 
during the next few months. 

C. E. Heath International 
said the funds generated from 
the sale would be ploughed 
back into expanding its inter- 
ests in Australia, the UK and 
Asia. 

ft mentioned growth possibil- 


ities in the Australian workers’ 
compensation market — “both 
Victoria and South Australia 
are expected to provide such 
o pport u nit ies in 1994-95” — and 
In .liability and travel insur- 
ance in the UK. Other areas 
targeted for expansion include 
marine insurance .and the 
Aslan markets. 

News of the sale came as 
C.E. Heath announced a profit 
after tax of A$38m in the 12 
months to end-December. This 
compared with A$16JJm in the 
previous year. Net premiums 
woe Ag37I.lm, up 27 per cent, 
and there was a gmaii under- 
writing profit of A$4.6 ul 

Heath said operating profit 
before unrealised gains on 
investments and tax stood at 
A$40.3m, up from A$3&6m last 
time. Net unrealised gains on 
Investment increased by 
AfSlm before tax. to A$T7.7m, 
and accounted for A$lL8m of 
the aftertax profit 


A reference in Spain's capital markets 


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Mortgage backed 
worths hub at 
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ABASESORES 




Seng is set for a period of soul 
seandnnfche says. 

"Hang Seng has made its 
money the «hhim way as tihg 
rest of Hong Kong, through tiie 
property and stock markets. 
But there are Mmita to property 
lending;" he says. 

The Hong Kong banking sec- 
tor divides according to size. 
Hongkong Bank and Hang 
Seng Bank, its 63 per cent- 
owned listed subsidiary, domi- 
nate the market. Next come 


the mediumsized banks, led by 
East Asia and including Dah 
Ring and Dao Hpng 

The third sector, the min- 
nows, is where the greatest 
number of listed banks lie. 
These small banks enjoyed 
very strong profits growth an 
the tack of expanding balance 
sheets. For most, 1993 profits 
grew by rates in excess of 40 
per cent, compared with the 
majors whose profit growth 
was in the 'teens. 

These high growth rates are, 
however, relatively easy to sus- 
tain for tanks which are -at an 
early stage of the growth cycle. 
Their si» als o allows them to 
behave in ways which regula- 
tors may find unacceptable in 
large banks. 

There is, for example, evi- 
dence that ffiyw of the **n«n 
banks are raising funds outside 
the fo tertawk money market 
They are going directly to 
large corporate clients of com- 
petitors and bidding deposits 
off them, sometimes at rates as 
high one percentage point 
above interbank rates. 

Hong Kong’s benign Interest 
rate outlook is, however, about 
to change. The US Federal 
Reserve Board signalled last 
month a riumg a in ftp direc- 
tion of interest rates; Hong 
Kong cannot remain faummp 
from higher Interest rates for 
long as its currency is linked 
to the dollar. 

B ut Hong Kong is a 
highly profitable place 
for sellers of retail 
finonrini services. This was 
underlined by the results of 

Manhattan Card CO, the 

recently floated credit card 
subsidiary of Chase Manhattan 
Bank in the colony, which 
posted a 73 per cent rise in 
net profit to HK$154.7m last 
year. Hong Kong is a place 
where people like to spend 
money. 


This 4 


[ oppoti as ■ manat of neon only 


SLOVECA 

Slovenska Enichem Augusta 


kwmmnMNmn 


Enichem Augusta 

and 

Novacke Chemicke Zavody 

and 

Slovnaft 

For the construction of an etboxyJadoa plant with a capacity of 30,000 torn per year 

DEM 15,000,000 

LIMITED RECOURSE PROJECT FINANCING 


European Bank 

for Reconstruction and Development 


O 


far Bat 


European Bank 


Januaiy 1994 



De Beers 



De Beers Consolidate 
Mines limited 

(bcovcond toriMlauUieiir&Mb Attm) 

( On » n i Wuhmrtnn No. lUOCWWfl 


De Beers 
Centenary AG 

. a M (L. * — 

irocnpcmcaa won ow mw o* jamtmoar 


EXTRACTS FROM THE UNAUDITED RESULTS FOR THE YEAR ENDED >1 DECEMBER RAH 


Attributable to the De Beers/Centenary linked units 


♦ Improved earnings and dividends 

♦ Strengthened balance sheet 


PRO FORMA COMBINED INCOME STATEMENT 


Rand millions 

1992 1999 


1850 

607 

297 

2093 

644 

1413 

2178 

380 


372c 

573 c 


SLOc 
179.6c 
141 A; 

R 2 S 8 


2388 
563 
212 
2 591 
646 
1955 
2 867 


Diamond account 

Investment income 

Interest Income 

Net income before tandem . 

Taxation ... — 

Aitxibmblc earnings 

Equity accounted eaminy .. 


380 Nwwhcr cfSnked vnia fci issue (vsBions) 


514c 

754c 


111 -Oc 

I75J8c 

2 S 6 Sc 

R3J8 


Btmmjp per linked unit: 

Ew MIn g ffrin d *t > nln y ^ tttodtUM . 
hduefeng retained enminfP of ■ 


DMdendc 

ft* De Been linked deferred abate 

ftetOmtenaty depo sit a r y receipt 

PK DeBeenfCcnreneiy linked wut 

US CtodaiyiUnd avenge excfaanfe eatc* .... 


PRO FORMA COMBINED BALANCE SHEET 


US Cbll*r rodBoni 

i RndmUBm 


US Dollar ndllioni 

1993 

1992 

1992 

1993 


1993 

1992 

727 

644 

24389 

27657 

linked unit hoUen* tncereoj 

8135 

7983 

172 

211 



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358 

334 


98 

117 

65 

1 ® 



Urn#- end medkon-tom Umbtfitk, 





4 552 

4092 

1204 

1490 



29 299 

32083 


9437 

9590 

197 

224 

• 

1 



— 





Represented bp. 





3371 

3 540 


1042 

1 103 



12327 

13310 

Invamenci 

3915 

4035 

389 

380 

11 502 

14020 

Diamond ttoda 

4124 

. 3 765 



1222 

680 

. Trade advance 

200 

400 



331 

290 

Storm and rnttcrtall 

85 

106 

157 c 

129 c 

546 

243 • 

NacsntntHMB 

71 

179 

230 c 

199 c 

29 299 

32 063 


9 437 

9590 





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vatuaxhn of bH Inratmatts 





26819 

41360 

Including mule Invemncnn 

9640 

5418 

32 . 7 c 

203 c 

37023 

53 725 

Net Mice value 

13 270 

8 759 

SU7c 

588 c 



NCTawavhiepeiDcBcCTVOntrnaqr 



84 - 4 c 

79 . 1 c 

9738 c 

14131 c 

Uhhtdimk 

3490 c 

2 304 c 

1028 

RZB 8 

RJ -06 

RL 40 

US DoUn/tand year end exchange ace*.... 

K3A0 

R 306 


Dividends 

Both the De Beers Consolidated final dividend (No. 148) of 
77 SA cents per linked deferred share and the Centenary 
Depositary dividend distribution (No. 8) of 36.7 US cents per 
depositary receipt have been declared payable on Wednesday, 
25 May 1994 to linked unit holders registered at the close 
of business on Friday; 25 March 1994. The registers will be closed 
from 26 March to 2 April 1994. The full conditions relating to the 
dividends may be inspected at the offices mentioned below as well 
as the offices of the transfer secretaries. 


Diamond Sales 

Total CSO sales for 1993 were a record US$4 366 million (R14 166 
million), an increase of 28 per cent over the 1992 figure of 
US$3 417 million (R9 75 1 million). Sales for the second half of 
1 993 increased to US$1 823 million (R6 154 million) compared 
with US$1 630 million (R4 6 66 million) for the corresponding 
period of 1992. 

Comment 

After maintaining a high level in the recessionary years of 1990 to 
1992, preliminary indications are that retail diamond jewellery 
sales resumed a rising trend in 1993. 


Copies of Ag prownonolgnwial financial gfl tewcnc gndifiwdend nodca uifllbe posted to linked i&itholdcncxi or atom JOMmrA 1994 and also be attril&blcfiQtn the 


De Bern CemoBikred Watt Unbed 
36 Stodcdalt Street 
Kfcnhrrfey 
South Africa 


D« Been Centenary AG 
Lwgen tfu dmaae 27 . 
CH-6000 Lucerne 14 

jwm nu u si 


Angb American C o rpor a tion 
df Sooth Aficka linked 
19 Oanerhouie Screet 
London £01 N6QP England 


■- vr-’i.-'P''**— I Ffttwi 


T 


* 'apoaxrtfxamqirnn*--*' - 1 1-?* f m 







WEDNESDAY MARCH 9 1994 



KOREA LIBERALISATION FUND LIMITED 
To the Holders of IDR- Warrants 

Your attention is drawn to toot right 10 subscribe for Ordina ry Shares of USS 
0.01 cadi of KOREA LIBERALISATION FUND LIMITED (’lire Company") 
and such right may be exercised in the *"»■"« set od below form 10 Much 
1994 to 9th April 1994. In order to exercise your subscription rights, your 
insbncuon should he accompanied by a payment equal to USS 10.50 for each 
Ordinary Share for which you arc subscribing. 

The following infbnnatun may help you to decide whether or not to exercise 
your subscription rights tins year. The middle marfcel quotation, based cm The 
Stoc k Exchange Daily Official I -fat, for the Ordinary Shares Of the Conqnny on 
4 March 1994 was USS 1087 per Ordinary Share. 

The new Ordinary Shares resulting (root subscription will be allotted not later 
than 10 May 1994. Such Ordinary Shares win rank pari pa s s u in all res p ects 
with the existing issued Ordinary Shares of the Company eicept that they will 
■rat rank for any dividends or distributions in respect of the year ended 31st 
December 1993. 

Application will be made lo the Council of the Stock Exchange for the Ordinary 
Shares Allotted pursuant to the exercise of the subscription rights to be admitted 
to the Official List. 

Em tn e of your subscription rights should not of itself result in any liability to 
Capital Cams Tax. A liability to CapiuU Gaits Tax or Capital Transfer Tax may 
arise, however, if you subsequently dispose of, or Dominate some Other person 
to receive, the Ordinary Shares arising from subscription. If you am in any 
doubt as to your tax position, you should consult your professional advisers. 

If you subscription rights are not exercised on 9 April 1994 you will still have 
(he right to exercise your subscription rights during the years 1993-1996 
inclusive. 

This notice is sent in accordance with the terms of the Warrant Deposit 
Agreement. U is not to be taken as a recommendation to holders of Waaams lo 
exer ci s e their subscription rights or otherwise. 

BY ORDER OF THE BOARD 

JUPITER TYNDALL MERLIN LIMITED 

SECRETARY 

Morgan Guaranty Trust Company of New York, 

Avenue dcs Arts 35 
1040 Brussels, BELGIUM 


INTERNATIONAL COMPANIES AND FINANCE . 


Paramount and Time for USAir to face the music 

QY^ ^ ShOW bid Labour cuts could be its last chance, writes Richard Tomkins 

Tt is so long since USAir. next four years by investmi 

n /inwart I the sixth biggest US car- ~ r ■: another $450m. Until now 

f|Q TTIP SPJll S _l-tlsr, made an annual profit \y}. : v £*■ ■*-■» ’A'.*:- ' V * USAir’s labour muons have 

UMI'UV kJ A.* niHri hava -Tf ' . n~- ~ J— • • v * ‘ had litflp reason to accent thf 


Oesterreichische 
Investi tionskredit 
Aktiengesellschaft 

Issue of up to US$40,000,000 
Subordinated Collared 
Floating Rate Notes Due 
2004 of which US$20,000,000 
is being issued as the Initial 
Tranche 

Notice is hereby given that the 
notes arill bear interest at 535% 
per annum front ‘J March 1994 to 
9 September 1994. Interest 
payable on 9 September 1994 
will amount to US$26.33 per 
USS 1,000 note. USS268.33per 
USSIO.OOO note and USSZ68133 
per USS 100, 000 note. 

Agent Morgan Guaranty 
Trust Company 


By Martin Dickson 
In New Yaric 

Paramount Communications, 
the film and publishing group 
being acquired by Viacom after 
a JlOba takeover battle, yester- 
day reported a third-quarter 
net loss of $38.6m. due Largely 
to disappointing audience fig- 
ures £or some recent film and 
television shows. 

The loss was in line with a 
forecast loss of 335m to $40m 
which Paramount made last 
month in the final stages of the 
takeover battle between Via- 
com and QVC Network, the 
television home shopping 

rhannpl 

QVC yesterday reported 
fourth-quarter net income of 
$2Bm, or 6 cents a share, down 
from $l&9m, or 40 cents, in the 
same period of last year, after 
taking $34£m of pre-tax costs 
(an $ 18 . 8 m net loss) for its 
unsuccessful Paramount offer. 

However, QVC’s operating 
income in the fourth quarter 
was 34 per cent higher, at 
$KL2m, compared with 339.5m. 
on revenues up 9 per cent at 
$372.5m. compared with 
$341.8m. Fourth-quarter net 


income also jnpinHpH a $i-i™ 
extraordinary charge from the 
accelerated write-off of debt 
placement fees. 

Mr Barry Diller, chairman 
said the results confirmed 
QVC's core business was 
strong and “though obviously 
somewhat distracted while pur- 
suing Paramount, we have not 
been deterred from our strat- 
egy to put in place an aggres- 
sive-plan for growth in both 
our basic business and the 
emerging world of inter-activ- 
ity”. 

For the fall year, QVC 
reported net income of $S9-3m, 
or $L18 a shar e, compared with 
$55.lm, or $L24, on sales 142 
per higher at gl.Rghn. 

Paramount’s third-quarter 
net loss, which worked 
through at 31 cents a share, 
compared with a net loss of 
566 . 8 m, or 56 cents, in the same 
period of last year, when it 
took a $66 5m one-time charge 
for an acooanting change. Rev- 
enues were $L01bn, up from 
3943.7fo. 

For the first nine months, 
agmhtgs totalled 3180 . 6 m, or 
$L50, against $i495m, or 3126, 
the previous year. 


Kenstti Swan fai Erfnburgi 
Tel: 031/220-1133 
Fax: 031/220-1578 


37 Oe*s» Street, 

riMwim nmin 

FT Surveys 


DONG AH CONSTRUCTION INDUSTRIAL CO. LTD 
US$100,000,000 
FLOATING RATE NOTES 1997 
Notice is hereby given that, in accordance with the provisions of the 
above mentioned Floating Rale Notes, the rate of interest for the six 
months period from March 8, 1994 to September 8, 1994 (184 days) 
has been fixed at 5% per annum. 

The interest payable on September 8, 1994 will be 
US S 255.56 In respect of each US $ 1 0,000 Note and 
US 5 6,388.89 In respect of each US $ 250.000 Note. 

Agent Bank 


Fourth-quarter rise 
boosts Varity shares 


By Patrick Harverson 
In New York 

Shares in Varity rose sharply 
yesterday after file US automo- 
tive, agricultural and industry 
machinery group reported a 
big improvement in fourth- 
quarter net income to 327m, or 
59 cents a share, on a folly-di- 
luted basis. A year ago. Varity 
earned 3ll.2m excluding 
extraordinary charges. 

The results were well above 
Wall Street analysts’ expecta- 
tions, and Varity shares leaped 
33'/i to 348 (a new 52-week 
high) in early trading on the 
New York Stock Exchange. 

The strong final quarter took 
1993 profits to 376.3m, up from 
$33.4m a year earlier. After tak- 
ing a non-cash charge to cover 
changes in accounting princi- 


ples, however, the company 
recorded a net loss of $7L5m in 
its latest fiscal year. 

Mr Victor Rice, chair man 
and chi of executive, said frho 
accelerating recovery in the 
North American automotive 
industry - the chief market for 
Verity's brake products - was 
the main factor behind the 
earnings improvement, while 
cost containment measures 
continue to help the group 
weather the impact of the 
recession in Europe. 

Among its three business 
segments, the automotive prod- 
ucts business, Kelsey-Hayes, 
made the biggest contribution 
to earninga growth in the final 
quarter, posting operating 
income of 322 m on sales of 
3297m. Last year, Kelsey-Hayes 
earned 316m on sales of 3249m. 


I t is so long since USAir. 
the sixth biggest US car- 
rier, mario an annual profit 

that shareholders must have 
forgotten what it feels tike. On 
Monday, they Ion mad that this 
is not the year in which their 
memories are going to be 
refreshed. 

Not only did USAir dash 
hopes that it would share in 
the recovery taking other big 
US airlines into modest profits; 
it warned that its six t h consec- 
utive year of losses would take 
it even more heavily into the 
red than last year’s 3349m pre- 
tax. 

The serious question now 
farin g USAir’s shareholders - 
and none more so than British 
Airways, which has spent 
3400m since early last year to 
buy and maintain a 24-6 per 
rant equity Stake in the anrttnft 
- is what fixture awaits such a 
poorly performing company in 
a market suffering so badly 
from overcapacity. 

The precedents do not augur 
well More than 100 airlines 
have gone bankrupt afara fha 
US airline industry was dere- 
gulated in 1978, many of them 
bigger and bettor known than 
USAir. Braniff International, 
Eastern Airlines, Trans World 
Airlines and Pan American 
World Airways are Just a few. 

Nor has the mit-throat com- 
petition in the US domestic 
market shown Shy signs of 
alleviating. If anything, it has 
grown worse, as overcapacity 
has cabled new operators to 
enter the industry by picking 
up redundant aircraft and 
crew s on the cheap. 





Tnwt four years by investing 
another 3450m. Until now, 
USAir's labour unions have 
had little reason to accept the 
need tor drastic cuts because if 
the airline ever got into really 
serious trouble, British Air- 
ways would be there. Now. 
British Airways has taken that 
security away. 

Within hours of these devel- 
opments on Monday, USAir’s 
management had met repre- 
sentatives of its four labour 
iirjirwig and pgkad fiiam to start 
talks- Some indiration of the 
ar flifr of th e cuts that win be 
needed can be gleaned from 


USAir's main markets are in 
the eastern US. Its primary 
hubs are in Charlotte, Pitts- 
burgh, Baltimore and Philadel- 
phia, an of which have di rect 
flights to New York's JFK 
international airport where 
they connect with British Air- 
ways flights. 

USAir has always suffered 
the disadvantage that its 
routes are predominantly 
short-haul in an industry 
where the revenue-to-cost 
ratios are more favourable on 
long-haul routes. Until 
recently, however, it had 
drawn oomfort from the fact 
>-bat many of its routes were 
effective monopolies. 

That started to rimng p last 
year when Southwest Airlines, 
the biggest and most success- 
ful of the new breed of low-cost 
airlines, moved into its market, 
setting up a rival hub in Balti- 


more. Things got worse in Jan- 
uary when Continental Air- 
ways, fresh out of bankruptcy 
with a new, low-cost structure, 
announced that it was introdu- 
cing its socalled Peanuts Faxes 
to many routes in the east 
USAir was left with no alter- 
native but to slash its own 
fares, which it duly did last 
mrmtb. But the inevitable oon- 
seqixence will be that its 
already very serious losses will 
grow still farther, unless it can 
rigntt h an tiy cut its costs - and 
that mAgrrtg getting its labour 
unions to accept drastic cuts in 
jobs, wages and conditions of 

wnplfl y inpnt 

S een against that back- 
ground, it becomes dear 
why British Airways is 
threatening not to fixlfil its 
agreement to take its stake in 
USAir to 44 per cent in the 


of ii a cents per available seat 
mill* in last year’s fourth quar- 
ter were more than 50 pa cent 
higher than those of its com- 
petitors. 

If the experience of other 
large US carriers offers an 
mrampia, one likely outcome of 
the negotiations will be a deal 
under which a substantial pro- 
portion of the airline’s equity 
is sold to its employees in 
return for labour concessions 
over a period of years. Under 
njjpfbrr deals, employees have 
already to ken 375 per cent of 
N o rt h west Airlines and 45 per 
cent of a restructured TWA, 
and are doe to receive 53 per 
cent of United Airlines. 

Such action may be the least 
unattractive alternative. Mr 
Kevin Murphy, an analyst at 
Morgan Stanley, the Wall 
Street investment bank, points 

Out that no US wiritnn yet has 
lost as much as USAir without 
either reaching a deal with its 

rminriH — Of going bankr upt 


Brazilian miner launches ADRs 

cut to C$38m 


By Patrick McCurry 
In Sao Paido 

Brazil’s Companhia Vale do 
Rio Doce (CVRD), the govern- 
ment-controlled mtning com- 
pany and the world’s largest 
Iron ore exporter, yesterday 
launched an American deposi- 
tary receipts (ADR) pro- 
gramme on the US over-the- 
counter marke t. 

The company said the Level 
1 programme was the first step 
towards a Level 3 ADR issue, 
which would involve an 
increase in capital and fisting 
on a US stock exchange, but 


imposed mnch stricter account- 
ing requirements. 

Unto- yesterday's operation, 
each ADR represents 250 
CVRD pref erred shares, which 
have limited voting righte. 

CVRD is Brazil's largest 
exporter, with net sales of 
32.45bn last year. Its share 
price increased 162 per cent in 
dollar termg in 1993 and has 
grown by 43 per cent this year, 
helped by a very strong local 
market. Morgan Guaranty 
Trust, a subsidiary of J. P. Mor- 
gan, is acting as sponsor. 

• Sakura Rank , a iradfaig Jap- 
anese h ank - ■ -baa announc ed 


that it will issue YlOObn 
(3945m) in convertible pre- 
ferred stock to boost its capital 
levels, writes Enriko Terazono 
in Tokyo. 

It wfll be the first Japanese 
bank to issue preferre d stock 
since the finance ministry 
eased restrictions on capital- 
raising programmes using the 
instruments last year. 

The bank said its capital-to- 
assets ratio would rise by 0-5 
percentage points to 9.6 per 
rant: after the issue, which 
would enable it to expand its 
balance sheet by increasing 
lending. - 


Triton, a financial services 
subsidiary of Toronto’s Hees- 
Edper group, reduced its 1983 
loss to C$38m (US$28m), or 74 
cents a share, from C3331m, or 
C3390. in 1992, writes Robot 
Gibbens In Montreal. The 
results include special charges 
of CS107m, against C3433tn, for 
Triton's share of losses by Gen- 
tra, the former Royal Trust Co. 

Before special charges, Tri- 
Ion was profitable in the fourth 
quarter of 1993 and expects to 
remain tn the black through 
1994. The real estate brokerage 
has been restructured, and 

mgrrhant: hanking reduced. 


Notice to the Holders of 

US$ 51,975,000 

Electrowatt Finance (B.V.I.) Limited 

(Incorporated with limited liability in the British Virgin Islands) 

5% Convertible Bonds Due 1998 

Guaranteed by. and Convertible into. Bearer Shares of 


Electrowatt Ltd. 

(Incorporated with limited liability in Switzerland) 


The Board of Directors of Electro watt Ltd. will submit a proposal to the Annual 
Meeting of Shareholders held on 29 March 1994 to conditionally increase the 
capital by an amount not to exceed Sfr. 45 000 000 in par value in order to enable 
Electrowatt Ltd. itself or one of its subsidiaries to issue new convertible and/or 
warrant bonds. In addition, die Board of Directors of Electrowatt Ltd. will propose 
to the shareholders a 10-for-l split of all bearer shares that have been issued, 
and a 1-fbr-T conversion of all outstanding participation certificates into new 
bearer shares. 

If the Annual Meeting of Shareholders approves, holders of shares and of parti- 
cipation certificates of Efectrowatt Ltd. wifi be entitled to subscribe to a new 
bond issue with warrants attached which will enable them to acquire new bearer 
shares of Electrowatt Ltd. The offer will be open from 6 April to noon on 15 April 
1994. The terms of the rights issue will be announced in detail at the Annual 
Meeting of Shareholders. 

In connection with this rights offer, holders of the 5% convertible bonds due 1998 
(the "Bonds”) who, in accordance with the terms of the Bonds, choose to exer- 
cise their conversion rights must deliver their conversion notice, the Bonds and 
any payments required to the conversion agent (Credit Suisse) 

no later than 12JJ0 noon on 18 March 1994. 

Holders of Bonds who elect not to exercise their conversion rights will be com- 
pensated for the resulting loss of subscription rights by a corresponding adjust- 
ment in the conversion terms of the 8onds. No Bonds may be converted from 
21 March to 22 April 199 4 (second date provisional ). 

There mil be an adjustment in the terms of conversion (in particular, the conver- 
sion price may be reduced) for Bonds converted subsequent to 22 April 1994. it 
is anticipated that the new terms and conditions will be published in the news- 
papers designated for this purpose on 22 April 1994. 


Notice to Holders of 

BANDAI CO. f LTD. 

Bearer Warrants to subscribe up to Yen 13,230,000,000 for shares 
of common stock of Bandai Co, Ltd. issued in conjunction with the 
OS. $100,000,000 
414 percent Bonds 1995 
and 

Bearer Warrants to subscribe up to Yen 27.412,500,000 for shares 
of common stock of Bandai Co., Ltd. issued in conjunction with the 
U.$l $250,000,000 
1 per cent Bonds 1997 

In respect of Ihr above Warrants, notice Is hereby givea as follows; 

Hie Board of Director* of Bandai C<x. Ltd- (the ‘Company*) Whs meeting held on 
28th February. 1994 resolved that the Company shall effect on 20tfa May, 094, 
Japan time, a at ockap&l (equivalent to a free dhoibo turn ofaharea) at (be rate of 
L2 shores for l share gfcoouDoa stock of the Cooipaiiy bckj by its shareholder* of 
record as of 31st March. B94. Japan time. 

As a result of such stock split, the Subscription Prices of (he above Warrants will 
be adjusted pursuant ro the provisions of each of the Instruments relating to each 
of the above Warrants as follows; 


Warrants Initially attached to 

4W per cent. Bonds 1995 YenS.040 YenOOQ 

Warrants initially attached to 

1 percent. Bonds 1997 Yen 4.049 Yen 3£?4^0 

The new Subscription Prices w31 become applicable aalnNoMApriLISM. Japan 
time, wfakh is the day Immediately after the record date. 


Dated: 9th March. 1994 


BANDAI CO, LTD. 


6.5% CREDITED DAILY 

GASH DEPOSIT SCHEME FOR PENSION FUNDS 

For details of this scheme for the cash element of pension foods, 
with money invested by a leading UK insurance company in die 
Halifax Building Society, and paying a variable interest rale (c un c n dy 
63% nett of all charges) credited daily, with easy access 
(minimum investment £15,000} please contact: 




73 Woodlands Road. Bookh a m . L eath e r!* ad , Surrey KT23 4HL 
T«t 0372 457965 Fax: 037245*417 
A Member MFIMBBA 


FUTURES £ OPTIONS BriCKtRS 



FIDELITY INTERNATIONAL FUND 

Sociftf dTavestissement & Capital Variable 
Kansallis House 
Place de L’Etoile 
L-XXZ1 Luxembourg 
R.C. Luxembourg B 24054 

NOTICE OF ANNUAL GENERAL MEETING 

N otice is hereby given that the Annual General Meeting of the Shareholders of FIDELITY 
INTERNATIONAL FUND, a sod£t£ tTinvcstissemenr h capita] variable organised under the laws of 
dm Grand Durity of Luxembourg (the “Fund"), will be held at the principal office of the Fund, Kan- 
sallis House, Place de L’Etoile, Luxembourg, at lLOOa.m. on March 17, 1994, specifically, but without 
limitation, for the following purposes: 

1. Present at i o n of the Report of the Board of Directors. 

2. Presentation of the Report of the Auditor. 

3. Approval of the balance sheet and income statement for the fiscal year ended November 30, 1993. 

4. Discharge of the Board of Directors and the Auditor: 

5. Election of six (6) D ir ector s , specifically the re-election of Mesas. Edward C Johnson 3d. Bany 
R. J. Bateman. Charles T. M. CoEs, Sir Charles A. Fraser, Jean Hamllius and H. F. ran den Hoven, 
bring all of the present Directors. 

6. Election of the Auditor, specifically the election of Cooper* & Lybrand, Luxembourg. 

7. Declaration ofa cash dividend in leapcctof the fiscal yearended November 30. 1993, and a u t h orization 
of the Board of Directors to declare additional dividends in respect of fiscal year 1993 if necessary 
to enable the Fund to qualify for ’’distributor*’ status under United Kingdom tax law. 

8 . Consideration of snch other business as may property come before the meeting. 

Approval of hems 1 trough 7 of the agenda wfll require tbc affirmative vote of a majority of ihe shares 
present or t ep res en ted at the Meeting with no mhmn u m number of shares present or represented in otder 
for a quorum to be presera. 

Subjera to the l imit at io ns imposed by the Articles of Incorporation of the Rind with regard to owner- 
ship of shares whidk constitute in the aggregate more than thre e pe re en t (3 % ) of (he outstanding shares 
of die Fond, each share is entitled to one vote. A shareholder may act at any meeting by proxy. 

Dated: February 17. 1994 


BY ORDER OF THE BOARD OF DIRECTORS 


EXECwii :n :‘k 






☆ PROPERTY FINANCE ☆ 

Ksw sources for cot arasr ois f pn oporUo n i up to 80% loan «9 vahHOon; most 
amgMMve and taAto terms: Mb*iune900,000. Contact radiant von Gfitzsn. 
Mchaal Lmirto PMnaraMp Ud (UMbsr of the snq 
Tab 071 493 7090 Fas 071 499 9279 


Zurich, 9 March 1994 


For Electrowatt lid. 

CREDIT SUISSE 


9% BaetrowsK Finance (B.VJ.) 

Limited Convertible USS bonds 1983-98 

Swiss Securities Number 

993835 


(SIN 

CH 000 833 835 6 


Euiocfaar 

Ret. Mo. 3288 


CedeJ S. A. 

Ret. No. 281238 



London stock exchange 


Now*. JnrJ Company 
Announcements 


071 329 -S282 



Weekly Petroleum Argus 

Petroleum Argus 

CALL r-.-OVV lot a F-;EE 7S.AL p-j-.v • 35" 


IVest^pao Banking Corporation 

{Incorporated wfth Bmited fiabffity fn the State of New South Wales, Austrafia) 

U.S. $240,000,000 

Perpetual Capital Floating Rate Notes 

In accordance with the terms and conditions of the Notes, notice 
is hereby given that for the Interest Period from 7th March, 1994 
to 7th September, 1994 the Notes win carry an Interest Rate of 
4.6125 per cent per annum. The Interest Amount payable on 
the Interest Payment Date which will be 7th September, 1994 is 
U.S. $23,575.00 for each Note of U.S. $1,000,000. 

Ufestpac Banking Corporation 

Agent Bank 

Wsstpac House. 

75 King WttSam Street, . 

London EC4N7HA jy 



























III 


ks 

m t«(f 


- V 


. '*i U v> 


rtf***** 


FINANCIAL TIMES WEDNESDAY MARCH 9 1994 


NOTI CE O P REDEMPTION 

to the holders of 

The Industrial Bank ^ »^ft p>n 1 Tjmitwd 

US. $100,000,000 93 per cent Bonds dm 2000 

_ N ? T ^ 5 s F 8 ®? 1 ®VBN Hw; puma* to Condition 5(b) of tfa 
Ba oda, T he htdcatnal Bank of Japan, LaratatUtfaeTasoai'O^ w rlottoc 
to exercise its option to redeem cm 30th March, 1994 {the "Redemnfbn 
ftllofthe OuUfalflJngBttutofa total ermpmal fl n rtnmlin g rfTT ft 
$100,000.000 Bt the Redemption Price of lOoSofSeir principal amronl 
tgether with totareatacaned to the Bedettptoa Date (the “BadAmptifla 
Comnwocmg on the Redemption Date, the Redemption Price 
win ta paid to ttohnltJera of tte Banda upon guxvadm- of their Bonds iu 
the manner provided in the Coa£tkna of the Baoda at the offices of the 
following Paying A gents; 

Tho Industrial Bank of Japan Trust Company 
One State Street . 

Now %tk, New Ybric 10004 

(for principal payment only) 

Ihe Industria l Book of Japan, limited 
Bracken House 
One Friday Street 
London BC4M9JA 

The Industrial Bank of Japan CLuxmnboarg) SLA. 

6, roe JeanMonnet.HO. Box68 
L-2010 Lsxembaaxg 

The Industrial Bask of Japan (SwitE8riand) limited 
Bahnftn&trasse 82a 
GH-802S Zorich. Switzerland 
Indastriebank-ran Japan (Deutschland) AG. 

Niedenau 13-19, 

6032S Prankfijrt/Moin, Germany 

Ihe Bonds should be presented for payment together with all coupons 
appertaining thereto maturing on or flftw 30th March, IPW, ATT 
amnatured coupons relating to die Bonds (whether or not attached) 
shall become vi^d and no peymeotsbaS be made in respect thereof, 
g any Bond is preaented far redemption at the above specified office <rf 
toe Baying Agent in New TSirit Cit® principal only w® be pmd. Interest 
on the Bonds will cease to accrue thereon from 30th March, 1994. The 
coupon for 30th March, 1994 be detached Rw 

payment in the usual manner Bonds and coupons wiQ became raid 
unless presented tor payment within periods of 10 years and 6 years 
resp«riveiy from the Relevant Date (as drtmaS in. Condition 9 of the 
Bends). 

Payment pursuant to the pr e s enta t io n of the Bonds tor re demption 
within New York City, or other payment made within the United States, 
including a payment made by transfer to a United States dollar account 
ma i n t aine d by the payee with, a bank in the United may be 

snlgect to reporting to the United States Internal Bercoxte Service (IRS) 
and to backup withholding of 31% of the grow proceeds ifa payee tofle to 
provide the paying agent with an executed IRS Form W-8 in the caaa of a 
n®-Ud. pereon or an executed IRS Form W-9 in the case of a UBL 
peoon. Those holders who are required to provide thair correct taxpayer 
identiStatibnnmnberand who Adi to do so may also be select to an IRS 
penalty of UJS. $50. Accrndh^y, please provide all a pprop ri ate 
certification when presenting the Bonds tor payment if applicable. 

THE INDUHTBSAL BANK OF JAPAN TRUST COMPANY 
as Fiscal Agent 

Dated: March 9. 1994 


WOOLWICH 
- Building Society - 

£100.000,000 
Floating rate notes 
due 1996 

Atooor is hereby given that the 
notes miO bear interest at 
530625% per annum from 
7 March 1994 to 7 Am 1994. 
Interest payable on 7 June 
1994 m3! amount to S 133.75 
per S 10.000 note and S 1^37.47 
per SI 00, 000 note. 

Agent: Morgan Guaranty 
Trust Company 

JPMorgan 


BANK OF GREECE 
US$300,000,000 
Floating rate notes 2003 

The notes m3l bear interest 
at 4Ji75% per annum for 
the period 9 March 1994 to 
9 September 1994. Interest 
payable on 9 September 1994 
per US$1,000 note will amount 
to US$24 J^Z 

Agent: Morgan Guaranty 
Trust Company 


JPMoigan 


19 


INTERNATIONAL COMPANIES AND FINANCE 


De Beers r aises 
dividend 7% as 
earnings climb 


By Matthew Curtin 
In JohameabimB 

De Beers, the Sooth African 

Company which il nmi n n l ot fh> 

world dfamnnri trade, is lifting 
its total 1393 dollar dhridaod by 
7 per cent The Eft confirms 
the stout tai r nmm ui in the dia- 
mond business from the diffi- 
cult conditions in 1992. 

The dividend is increased to 
84A US carts a share from 79 J. 
carts in 1902. Earnings rose 16 
per cent to 230 cents from 159 
cents a share. 

The shares reacted strongly 
to the news; dfmbfng to a new 
high of RU6 an the Johannes- 
burg stock exchange, before 
retreating to RU5 at the dose. 
Mr Julian Ogflyie Thompson, 
chairman, said he was 
“pleased” with, the results, 
which were underpinned by 
the first increase in four years 
in global retail efawuwui sales. 

The group's Central Selling 
Organisation (CSO) sold a 
record $L3ttm in rough dia- 
monds in 1993, against $3.422m 
the year before, led by good 
demand in the US and east 
Asia. Mr Jeremy Pudney/CSO 
marketing director, said Korea, 


Taiwan and Thailand b«d over- 
taken France and Germany as 
the group’s most important 
markets after the US, Japan 
and Italy. However, demand in 
Japan and Italy remained 
weak. 

Mr Gary Haifa, a director, 
said the group's relationship 

With thmafai 'T wmalTiai f imaas y, 

although sales in Decanter of 

immt iti m nnAi frtrm ffii* coun- 
try's Treasury stockpile - in 
breach of a moriK^ng agree- 
ment between De Bears and 
the government -had not teen 
repeated so far this year. 

Pre-tax income rose to $789m 
from $728m, reflecting the 
overall improvement in the 
jewellery trade and an 
Increased contribution from 
South African operations, 
boosted by the build-up to full 
production at its new Venetia 
mine. 

Mr Ogilvie Thompson said 
results from Centenary, De 
Beers' Swiss-based arm, were 
hit by retrenchment costs at 
Namibian rofni*» and the Irish- 
based industrial diamond divi- 
sion, plus its anflUw* share of 
total diamond sales as Vene- 
tian output Increased. 


Improved margins 
help boost Haeco 


By 


in Hong Kong 


The Hongkong Aircraft 
Bn gi iKmHi i y ff n tn pmy (Haeco), 
the aircraft maintenance sub- 
sidiary of the Swire Pacific 
Group, has reported a 15 per 
cent increase in profits, to 
HK$447m (US$S7Am) for calen- 
dar 1993 from HK$387itm the 
previous year. It a ttributed the 
rise to improved margins. 

Profits rose on the hack of 
good use of MB>E boosted 
productivity and stringent cost 
controls, the company said. 
Line maintenance revenues 
improved as Haeco took in 
hand a 12 per emit Mgger slice 
of aircraft movements at the 
colony's K&i Tak airport. Con-., 
cams over tine. high. level of 


inflation in the colony, of 
around 8.5 per cent, have 
prompted the drive for 
enhanced productivity. 

Earning s per share rose to 
HKJ2.41, against HK$2.09 in 
1992. Shareholders are to 
receive a dividend of 71 cents, 
up from 64 cents the previous 
year. The results were in line 
with ™Hn* expectations. 

The company said it was 
m n i inni ii g fa Tinn with the Pro- 
visional Airport Authority over 
a licence to operate mainte- 
nance faritiMw! at the new air- 
port at Chek Lap Kok. At the 
same time, it is anticipating 
that volumes at Kai Tak will 
continue to rise and expects to 
be able to secure healthy levels 
of work this year. * 


Australian 
TV network 
cautious in 
spite of rise 

By NBddTatt 

Mr Kerry Packer’s Nine 
Network Australia, the coun- 
try’s do minant commercial TV 
operator, yesterday announced 
an aft er-tax profit of A$48JSlm 
(US$3L9m) for the six months 
to en&Deceniber, up by 25.3 
per cent on the same period of 
1992-93. 

However, Nine warned that 
the increased costa 
with co ve r in g overseas sport- 
ing events - including the 
Winter Olympics ^ H i* cur- 
rent South African cricket 
tour - would peg its second- 
half profit at around last 
time’s figure. 

“The directors are not 
anticipating a second-half 
result significantly above last 
year,” said the company. 

Iftne Network said its earn- 
ings before interest and tax 
rose by IS per cent to 
A|72,7m, with TV advertising 
increasing by over 10 per cent, 
mainly in the first quarter. 

Total group revenue stood at 
A$3 12.4m, compared with 
A$288.1m last time — an 
increase of 8.4 per cent Nine 
said the slower overall 
increase reflected the sale of 
the Perth radio stations and 
flat revenue growth at Sky 

phrnp * ] , 

• Ashton Mining , the Austra- 
lian diamond producer, yester- 
day reported a net profit of 
Af36.6m in 1893, up from 
AS35 An the previous year. 

The 1993 figure is scored 
after an AgHAm net abnormal 
item (oil in the previous year). 
Ashton said the performance 
was “particularly pleasing, 
given the lower diamond sales 
revenue resulting from tile 
fall-year Impact of the CSO 
deferred purchases in 1993”. 


SNC-LayaKn strong 

8NC-Lavalin, the 
Canadian-based engineering 
and construction manag e m e nt 
group, posted a 74 per cent 
gain in 1993 net profit, to 
CflftJSm (US$LL9m), on reve- 
nues 6.5 per cent higher, 
writes Bobcat Gibbens in Mon- 
treaL Mr Guy Saint-Pierre, 
president, said international 
volume rose. 


YEAR-END REPORT 


1993 


Investor Group 


Investor’s net worth rose during die year to SEK 37,493 (30,122) m., or SEK 
206 (166) per share. On March 4, its net worth amounted to SEK 37,515 hl, 
or SEK 206 per share. 

The Group’s net financial debt amounted to SEK 4,850 (8,701) ro. at year-end. 

The Investor Group’s consolidated income after financial items amounted to 
SEK 410 (1,482) m. Income for the fourth quarter increased to SEK 194 
(-147) m. mainly due to the improvement in Saab-Scania’s income. 


Strategic Portfolio 


The value of Investor’s portfolio of strategic holdings at year-end was SEK 
27,964 (23,238) ul, an increase of 41 percent during the year. (The Affarsvari- 
den General Index rose by 54 percent during the same period.) On March 4, the 
value of the portfolio was SEK 27,932 ol, unchanged percentage - wise from 
the beginning of the year. (The Afrarsvarlden General Index +8 percent.) 


Saab-Scania ■ • 

Sales by Saab-Scania’s business areas amounted to SEK 27,656 (26,992) m. 
during the year. 

Income after financial items of Saab-Scania’s business areas amounted to SEK 
1,659 (2,126) rrC, of which SEK 729 (573) m- during the fourth quarter. 

Saab-Scania expects an improvement in income in 1994. 


Dividend 


The proposed dividend to shareholders is SEK 5. 25 (5.25) per share. 


This is a summary of Investor’s year-end report 1993. The complete report can 
be obtained from Investor AB, S-103 32 Stockholm, Sweden, telephone +46-8-614 20 00. 



Mite NMatrte, 


law 

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*.15% 

off electricity 


021 423 3018 

Powerline 


PAN -HOLDING 

SociM Anoaywte - 1 ten» | 

As of ftfcnwy 28,1994, too 
unconoofcfatod not moot value 
wasUSD3S1 I 500£4a.7B 1 l*. 
USD 639,09 per stars of USD 200 
parwluo. 

The tertwHaled net asset value 
per ahem amounted soot 
FttnJtyN, 1994 to USD 673A2. 


PosGold market raid ends 
battle for Aztec Mining 


By NHd Taft in Sytotoy 

The AS287m (US22065m) battle 
for Sydney-based Aztec Mining, 
the metals group, came to an 
abrupt end yesterday. PosGold 
Investments, part of Mr Robert 
Champion de Crespigny’s Nor- 
mandy Poseidon group, 
snapped up more than three- 
quarters of Ita 
shares in s stock market raid. 
The victory came just a day 
after PosGold lifted its cash 
offer for Arise from 68 cents a 
share to 74 cents, and waived 
certain conditions, allowing it 
to buy its target's shares in the 

market. 


No sooner had dealing 
opened yesterday, than it was 
announced that Alumax, the 
US group which held a 37 per 
cent interest in Aztec, bad sold 

its shares to PosGold at the 
higher price. By late afternoon. 
PosGold said it had raised its 
interest to around 85 per cent 
of Aztec's equity. 

Aztec directors, who had pre- 
viously recommended an all- 
paper merger with Panconti- 
nental Mining, reluctantly 
urged other shareholders to 
follow suit. They acknow- 
ledged tha t fall in Pancon's 
price since its bid was 
announced meant that offer 


was worth less than PosGdd's. 

“While directors do not 
believe that the revised Pos- 
Gold offer reflects the full 
value of Aztec, in view of the 
fact that control of Aztec will 
now pass to PosGold the direc- 
tors recommend to afiwrwhnM . 
ers that they accept the revised 
PosGold offer of 74 emits per 
share, rather than the Fancan- 
HnwM offer, “ they 

Aztec shares ended the day 
six cents higher, at 74 cents, 
while the bid's success lifted 
PosGold by 14 cents, to Af&20. 
Pancantinental also gained. Its 
shares rose 12 cents to 
A3L82. 


Death of a golden chance 


Robert Champion de Crespigny 
speaks to Kenneth Gooding 


W hile Mr Robert 
Champion de Cres- 
pigny, chairman of 
the Australian Normandy 
Poaeideon. group, yesterday cel- 
ebrated his unexpected victory 
in the hostile and contested bid 
for Aztec Muring, he was also 
quietly burying another impor- 
tant (ton] 

Poseidon Gold, the subsid- 
iary through which the Aztec 
Ud was lannrhed. also hoped 
to build a big gedd business 
outside Australia via a Joint 
venture with Metall Mining, 
the Canadian subsidiary of 
Metallgeaeflschaft erf Germany. 

It was forecast that the new 
PosMetall Gold would emerge 
in three or four years with an 
annual output of 300,000 troy 
ounces of gold from a global 
spread of precious metal inter- 
ests. PosMetall would then 
have been floated in North 
America and Australia. 

This plan, however, has 
crumbled following the recent 
financial collapse of MetaUge- 
sellschaft. Mr Kajo Neu- 
kireben, new chief exe c utiv e. 
tow Tnaria dear he fatonri* to 
sell Metall. Mr de Crespigny 
said it was impossible to go 
fitomfl with the proposed joint 
venture because he did not 
know who would control Met- 
an. “It is safe to assume that 
the diw( ts dead.” be said. 

Nevertheless, a joint venture 
gold project raider way in Tur- 
key with Metall would con- 


tinue. Poseidon had expected 
the Turkish project to be prod- 
ucing in time to fill a predicted 
dip in its gold output How- 
ever, production there had 
been delayed by permit prob- 
lems, so the bid for Aztec was 
made to fill the gap. 

When the Aztec offer seemed 
like failing. Poseidon bought 40 
per cent of the Boddington 
gold mine in Weston Australia 
for US*uem (A$83.45m) from 
Reynolds Metals of the US. 
This deal has been challenged 
by another Boddington share- 
holder, but Mr de Crespigny 
said he was sure Poseidon 
would take the stake. 

Poseidon’s main interest in 
Aztec was its Bounty gold 
mine, half-way between Perth 
and Kalgoortie, where Posei- 
don operates Australia’s big- 
gest single gold mine, the 
Superpit. 

T he bid will also contrib- 
ute to Normandy Posei- 
don’s strategic objective 
of having within five years 
three core divisions - gold, 
base metals and industrial 
min«rai» - uch capable of 
producing awnnai operating 
profits of A$5Gm. 

It will give the group control 
of Golden Grove, which owns 
the Scnddles tine mfa* and 
also brings with it the Wood- 
cutter urine. Between them, 
they have an annual output of 
200,000 tonnes of zinc. 


However, Mr de Crespigny said 
it was not certain that 
Woodcutters would be kept by 
bia group, which would cer- 
tainly sell Aztec’s coal inter- 
ests. 

He said there was no need 
for Normandy to raise new 
capital to cover the Aztec deal, 
and that the group’s net debt 
would be virtually eMmtaafaa 
by the wid of this year. 

Mr de Crespigny feces two 
areas of uncertainty: his rela- 
tionship with the Anglo Ameri- 
can Corporation of South 
Africa, which owns nearly 20 
per cent of Normandy, and 
charges brought by the Federal 
director of public prosecutions 
over tiie 1989 takeover. 

Anglo recently reshuffled its 
assets and handed its Nor- 
mandy stake to Aflnorco, its 
Luxembourg-based subsidiary. 

Mr de Crespigny, who xardy 
gives press interviews, said the 
relationship with Anglo was 
“very special," and he expected 
it to continue that way. How- 
ever, Minorco had only 5 per 
emit of its assets in Australia 
and would obviously want 
more. 

“How that will come out I 
don’t know," he said. 

He also admitted there was 
likely to be some competition 
for global projects between 
Normandy and Minorco. Nor- 
mandy is concentrating on 
Australia, Indonesia, Vietnam 
and Laos. South America was 
too far away and a move into 
Africa, on Anglo's doorstep, 

w milfl lit* writ!, “to litre trifMwg 

sand in your mother-in-law's 
face". 





NOKIA 

SnaMpontad w*h Imtod fab«y ti «w Repubfc at FHMQ 

NOTICE OF ANNUAL GENERAL MEETING 

No&ce ta hersby given to the sharehotiws of Noltia Corporation (Ihe ‘Company’} of the Amual Gensral Masting 
TAGM1 to be heU on^ Thursday, 7 Apii, 1994 at 3.00 pjn. al The Halsinkl Fair Cantm Confess Wing, Congress 
Hsi Cl. Rs urm toB is s nksm 3, lM ri nH , Finland. 

IhB Mowing matters wfl be on toe agenda of the mesltog: 

1. 'nwiTKttare specified to Aitfcde 12 erf the Artttes of Association: 

s) reviaw of tta annual axxxrts.««^xidng the Proft and Um Account, the Balance Sheet, ihe Arvital Report 

of Ihe Board of Drectois and the ConsoSdatBd Accounts, 
b) roytaw of the AixJtofs’ Report, 

e} awroval of the Profit and Loss Aocotait the Balance Sheet, tho Group Piofit and Loss Accoutt Bid the aow» 

Balance Sheet, 

<4 decision on any measure to which the pro» or loss shown in the approved Balance Sheet or &uupBahnce 
Sheet may give rise, 

e) decision on cfecharging the members of the Board of Dlrectora and the President from Rab*ty, 

t) decision on toe number olmentoere to seme on the Board of Krectore and the number of reguterauiitars, 
^ deefetonontoeremtnentfion to be paM to toe members of the Board of Directors and to the audtora, 

h) appointment of members of toe Board ^Directors, and 
Q appointment of the autftors and the deputy auefilora. 

2. A proposal by toe Bowd of Directors to issue bonds with warrant* to the managamert of toe Nokia Group, 
<fisapplytng toe preemptive rights of exisfing sharehoWets. The bonds am Wended as part of an Incentive 
scheme for toe management The aggregate nominai value of toe bonds shall not exceed FJM 20000. The 
term of toe bonds is five yearn. An annual Merest rate of 2% w# be paid on the bonds. ^ The warrants attached 
to the bonds confer the right to subscribe for an aggregate maximum erf 200.00 new preferred shares of per 
value of FW 20 during the period December 1 , 1098 - Januay 31. 2000L 77» subscription price of the shares 
is toe average dosing price for Notts's pretermO starro on toe HeteWd Stock Exchange to Match 1994, 
rounded-up to toe next fu8 marie. 

The accowite for the 1993 Enancfai year aid detab of toe proposal mentioned In paragraph 2 above w* be on 
display from March 29th, 1994 at toe Company's Head Office at EteiSespianad] 12, HataMd, Finland, and toe 
offices of EnsfcMa Corporate. Storndtoaviska EnsKttta Bartcen at 2 Cannon Sheet, London EC4M 0DOC Coptee erf 
the documents in finrtsh. Swedsh end Engish wB be sent to shareholders 14XX1 request to the Registrar- Copies 
of toe eexxxxtto wffl also be wafiabta on request from EnskMaGorporate- Copies of the tol annual report wB be 
avnaobie from BwWda Corporate from 29th Mach, 1994. 

Shareholders who are registered In the Shareholdere register not later then 2Bth March 1994 and who wish to 
exercise their vottog rights at toe AGM must give notice to Ihe Company of their fntantkm to attend not War toen 
5th Apr*, 1994 aft Ate p.m. Notice may be given to the Sharehdderar Registrar to person at the Office of toe 
Company at HeMcBnde 6, Hetetokl. fintand cktong office houre, or by telephone (358) 0 1807 390, or in writing 
to the Shoahoidera Registrar. Nokia Corporation, P-O. Box 117. SF-0Q211, HeteWd, Finland. Written notice 
should arrive no tear them 5th Aprfl, 1994. 

The record date lor tt» OMdend tor 1993 is 13to Aprt 1904. The Board wU propose to toe ASM to* the dMdend 
be prid after toe expby of the settlement period on 18th April 1994. 

Helsinki, March 1994 

Bowl of Dlrectora of Nokfe Corporation 




BatricAmartea 

Corporation 
USS&OOAOOjDOO 

Rooting Rate Note* 

Due September tB95 
For [far period tram Mu c h 9. B94 
tt June 9. t994 tte Notes wffl 
eny «n imerett xOe of 4J8C5% 
per nun with an interest Mi i inT 
of US SOMI per US StoJDOO 
principal amoum of Noca peyabis 
onJme9.I99(. 

■re fcrf* — t rewrae*. Dl 
Umfen-ApMBn* UI 


LONDON 
RECENT ISSUES 

Newtjr bud shares appear tor Mnm 
tarmrecteMtentte London Brant 
t—nnetsHs *i ton and at ft* period. > 
SMk Is normritjr moved m f» 
appropriate category ol the London 
Shten Santa It •» domparqrso 


totwM m a *»/t dttpi a Pt1hnFT. 

piMtoSd on Ttwadny to Fifttoy 
mankig a . too tabu apparea co th* haX 
page of Union Mattel 3HMe* nan 
tiao hdudes So FTAsaartaa Rrod 
Manat Mtaaa and Lento tadatf 
options pricas. 

OnStbHtersIsppaarelnitoUK 

Company Nam pegs, and on ltorrf*ys 

on ton CUrondoa, Uonsy ft CapM 
Mrrtstapaga. 




SBAB 


Uk *200,000,000 
Floedug Bate Notsa due 1995 
In accordance with the pro virtons of 
rbe Notes, notice is hereby given 

that die Rate of Interest for the 
three month period coding 8th 
June. 1994 has been fixed at 
3.89063% per annum. The interest 
accruing tor sudi three month 
period will be U,S. S99.43per U.S. 
SUJ.OQ0 Note awl US. SW4J7 per 
U.S. 5100,000 Note against pres- 
entation of Coupon Number 8. 

Onion Beak of Switzerland 
London Branch Agpm Bank 
4fe Merab. 1994 







INTERNATIONAL CAPITAL MARKETS 


Recovery ends as 


investors reduce their risk 

knife through butter," said a 


By Conner Middebnann in 
London and Patrick 
Harverson in New York 

The fragile recovery in 
European government bead 
markets ended yesterday, with 
10-year bonds shedding about a 
point in most markets. 

“Although markets had con- 
solidated over the last few 
days, investors are still very 
nervous and are using the 
strength to off-load Qongl posi- 
tions while speculative funds 
are re-establishing short posi- 
tions,” said Mr Keith Edmonds, 
chief analyst at IBJ Interna- 
tional. 

"There's a much greater 
awareness of risk in the mar- 
ket," said Mr Jouni Kokko, 
international economist at 
S. G. Warburg Securities. 
"Many long-term investors 
have had their belief in the 
bull market story shattered 
and prefer to reduce their risk 
an any uptick,” he added. 


Market participants are 
keenly awaiting the Bundes- 
bank’s allocation of variable- 
rate securities repurchase 
agreements today. Most trad- 
ers expect a small drop in the 
minimum repo tats to around 
5.90-5.92 per cent from last 
week's 537 per cent. In the 
event of a small reduction, “we 
could see a brief rally, bat peo- 
ple would probably look to sell 
at that level rather than buy," 
said Mr Kokko. 

Weaker US Treasuries and 
rumours of near-term mone- 
tary tightening by the US Fed- 
eral Reserve also put pressure 
on European bonds. 

■ German bunds set the pace, 
with most activity centred in 
the futures pits, where trading 
was very technical. The June 
future broke several key sup- 
port levels ou its way down. 
"Each time we approached a 
support level, the contract 
went through it like a hot 


German dealer. The contract 
hit a low of 96.40 and stood at 
96.60 in late London trade, 
down 033 points on the day. 

Bunds dramatically under- 
performed their Dutch counter- 
parts, which have seen less for- 
eign selling in recent weeks. 


GOVERNMENT 

BONDS 


“Foreign holdings in the Ger- 
man market were massive, 
while at the long end of the 
Dutch curve, domestic hold- 
ings have outweighed," said 
Mr Torsten Bdhier, senior bond 
analyst at UBS. “Dutch domes- 
tics are holding on to their 
paper, while German domestics 
can’t absorb all the paper sold 
by the internationals." 

The Dutch 10-year bench- 
mark yielded some 10 basis 
points below its German coun- 
terpart yesterday, after being 


only 2 basis points below two 
trading days earlier. 

■ The release of stronger than 
expected industrial output data 
got the UK gilt market off to a 
bad start and prices slid fur- 
ther in the afternoon on the 
back of weaker bunds. The 
June long gilt futures contract 
an Lifle fell by about 1ft points 
from Monday's close to 112ft. 

■ French bonds also slid, 
fuelled by domestic setting. All 
eyes are on the Bundesbank’s 
repo, which is seen to set the 
pace for much-needed rate cuts 
in France. 

On the Matif, the March 
bond futures contract ended at 
126,22, down 0,46 from Monday. 

■ Japanese government bonds 
rose on late short-covering in 
Tokyo and continued to post 

small gains in London tr ading 

However, sentiment remains 
subdued by trade tensions 


between Japan and the US as 
well as supply concerns. 

■ After finning at the opening, 
US Treasury prices edged 
lower across the maturity 
range yesterday morning. 

By midday, the benchmark 
30-year government bond was 
down ft at 925, to yield 6311 
per cent The two-year note 
was down ft at 99V*, yielding 
4376 per cent 

Trading was quiet, although 
prices did post modest gains in 
the first few hours of business. 
Analysts attributed the buying 
to a sense of relief among 
investors that the Federal 
Reserve has not raised interest 
rates this week. 

The market could not main- 
tain its early upward momen- 
tum, however, and as soon as 
the buying petered out, prices 
began to decline. In the 
absence of significant eco- 
nomic news, trading was 
described as very thin. 


Turkey postpones 
$750m global offer 


Turkey had considered 
inserting a three-year put 


By Antonia Sharpe 

Recent price weakness in 
government bond markets 
claimed another victim yester- 
day when the Republic of Tur- 
key pulled its $750m global 
bond offering at the eleventh 
hour. Two weeks ago, a heavy 


INTERNATIONAL 

BONDS 


fall in US Treasuries led the 
National Bank of Hungary to 
delay its global offering. 

Joint lead manager Salomon 
Brothers blamed poor market 
conditions for Turkey's post- 
ponement It said US Treasury 
yields had risen five basis 
points since price talks with 
the borrower earlier in the day. 


option into the 10-year offer to 
make it more palatable. 
Although price talk was 
around 250 basis points over 
the yield on 10-year Treasuries, 
the put meant Turkey would 
have to pay 350 basis points 
over three-year Treasuries. 
This was thought too high. 

Although Turkey decided to 
wait for better conditions, syn- 
dicate managers reported a 
wide range of borrowers mak- 
ing enquiries about raising 
funds in the Eurobond market. 

The Inter-American Develop- 
ment Bank confirmed that it 
was considering a Eurobond 
offering in sterling, the pro- 
ceeds of which would be 
swapped into Swiss francs. The 
Id-year bond was likely to raise 


NEW INTERNATIONAL BOND ISSUES 



Amount 

Coupon 

Price 

Maturtty 

Fees 

Spread 

Book runner 

Borrower 

US DOLLARS 

m. 

% 



% 

bp 


UnWen Corp.lo}4> 

160 

ioo 

10a 00 

Mar-1996 

225 


Nomura (ntemstfcnal 

Banco Francte e &ssfclro 

110 

70Of 

ioo.oofl 

Mar. 1995 

O0OR 

+3W-bH1 

CrCLLyortnaiS Em-Secs. 

Bark of Tokyo Trust Co04t 

50 

W 

100225 

Apr 2004 

n.ix 

- 

Bank of Tokyo CapJifitta. 

ONd Corp^djfo^ 

60 

125 

1OO0O 

Mar. 1996 

225 

- 

Fup Bank (SchweizJ 

8TBMJNG 

Criufau Bectrtc Powell 

250 

6.75 

99051 

AU0.199B 

02SR 

♦40 (696-99) 

Sakura Ftrv7 SG Wart**g 

SOW Ftoanca(Ot 

150 

fsd 

9905R 

Mar. 1988 

0.175R 

- 

SG Vtetwrg Secwittes 

ttauan ure 

Deutsche Bonk FtoenceffO 

lOObn 

825 

9906 

Jon-2004 

2-00 


Deutsche Bank London 

SWISS FRANCS 

Sharp Corp(0*^ 

700 

0.125 

100.00 

Mar. 1998 

. 

- 

Credit Surase 

LUXBMBCiuRG FRANCS 
National Bar* ct Hunger 

2&n 

8275 

10100 

AfxJXXTi 

- 

- 

BCEE 


Ftoal terms aid non-cafabfci unless stated The yMd spread (over relevant go vern m e n t bend) at latxich b euppSed by the lead 
manager. A ftto e to p tocament frAfito aqteyerarTaitL SHu attig rate note. * > 1 1 6 a nr a W ooepoa ft ttsed re-fer prtci; tees oe 3hon 
at the m-alhr tonal. a) Hx to g: 10/3/94. b) Oatehto on 14/4/97 and annusty thereefu* m par. 4 B-mth Ltoor *0.4596 tor 1st 3 ym and 
9% txd thereafter. 4 Bring: 14094. 4 Start 1st coupon. Q Putable in Mar.96 at par. g) 3-tnth Ltoor +02%. h) Fungkte wttti 
outstencflng L200fan. Plus 83 days accrual Q Firing: 10/3/94. 


around £125m and could be 
launched this week provided 
agreement could be reached on 
terms. The bank said S. G. War- 
burg was Involved in the dis- 
cussions. Price talk was 10 to 
15 basis points over the yield 
on 10-year UK gilts. 

The main deal was a £250m 


offering of five-year Eurobonds 
from Chnbu Electric Power of 
Japan. The pricing of the 
bonds, to yield 40 basis points 
over five-year gilts, was 
described as generous in the 
light of the borrower's superior 
credit rating. Joint lead man- 
ager S. G. Warburg said realis- 


tic pricing was needed to re- 
open the market after the 
recent fall in bond prices. 

Nevertheless, syndicate man- 
agers said the pricing was not 
enough to ensure swift place- 
ment and estimated that only 
half of the h pnrte haH been sold 
by the close of business. 


Russian 
securities 
licence for 
CSFB unit 

By Tracy Corrigan 

CS First Boston's Russian 
subsidiary has been granted a 
securities licence by the Rus- 
sian ministry of fiwanng. 

The licence allows the firm 
to trade and underwrite equity 
and debt, and Is the first to be 
granted to a foreign-owned 
institution. 

The bank’s main focus will 
be on the over-the-counter 
stock market, where turnover 
Is currently an estimated 
SSOOm a month, according to 
Mr Boris Jordan, co-head of 
the Russian subsidiary. 

Mr Jordan expects Russia’s 
capita! markets to expand rap- 
idly, due to growing interest 
from emerging market inves- 
tors. He predicts financial 
investment of around $5bn in 
Russia thte year. 

Other foreign banks hav e 
been slow to follow CSFB’s 
lead in fawn, citing lack of 
sufficient flows of business 
and in fr astr u c t ure difficulties. 
B ut M r Jordan insists that 
CSFB’s Russian subsidiary 
"has been a profitable opera- 
tion from the start". 

• Merrill Lynch of the US is 
increasing its presence in 
C hina with a second represen- 
tative office, in Beijing, our 
Beijing staff write. 

Mr Li Peng, China's premier, 
urged Mr Daniel Tolly. Merrill 
Lynch chief executive, at a 
meeting in Beijing this week 
to further strengthen his com- 
pany’s involvement in China's 
financial sector. It is already 
operating in Shanghai. 

Merrill Lynch is now a chief 
underwriter of Chinese com- 
pany shares and government 
bonds in the international 
financial markets. It has 
raised more than $4bn for 
China through 23 securities 
issues since 1992. 


S&P cuts ratings 


of Japanese banks 


By endko Terazono In Tokyo 

Standard & Poor’s, the 
International credit rating 
agency, has lowered the debt 
ratings of Industrial Bank of 
Japan and Long-Term Credit 
Ranit of Japan, two of Japan's 
lo+iiing long-term credit banks, 
because of their larger than 
expected exposure to bad 
loans. 

The agency lowered IBJ s 
senior debt rating from AA 
min us from A plus, while 
LTCB’s senior debt ratings 
were cut from A to A minus. 

S&P said substantial write- 
offs will ultimately be neces- 
sary by IBJ to resolve its bad 
to bousing loan compa- 
nies. However, the write-off 
process has been limited due to 
IBJ*s ea r nin g s levels and the 
limi t on the sales of its cross- 
shareholding portfolio. 

LTCB’s downgrade reflects 


the large amount of restruc- 
tured loans, or loans oti which 
*he bank has lowered ar 
n-aived interest to help 
restructuring, on top of 1 731bn 
In twn-perfonahig to®** 

Meanwhile. S&P has also 
jowugrnded the duims-paying 
ability ratings of four nou-llfo 
insurance companies and t wo 

life assurers. Japan's non-life 
insurance sector Is suffering 
torn reduced profitability due 
to higher loss ratios, insuffi- 
cient premium rates and 
rreater catastrophe casts. 
Increased competition is also 
expected to hurt the country's 
Life assurers. 

The clalms-paywg ability 
ratings of Chiyoda Fire & 
Marine. Dal-Tokyo Fire & 
Marine. Nichido Fire & Marine, 
Mippou Fire & Marine. Yasuda 
Mutual Life and Mcijl Mutual 


BCH under review for 
downgrade by Moody’s 


By Tom Bums in Madrid 

Moody's, the US credit rating 
agency, has placed Banco Cen- 
tral Hispano, Spain's largest 
bank in terms of assets, under 
review for possible downgrade. 

The development affects 
about $2.5bn of debt, and 
BCtfs share price fell 33 per 
cent yesterday in Madrid. The 
bank is currently rated A1 and 
Prime-1 for long and 
short-term certificates and 
Prime-1 for commercial paper. 

This is the first move by a 
rating agency on a Spanish 
bank since the Banes to crisis 
broke last year. The Spanish 
central bank sacked Banesto's 
board after finding that it had 
grossly overvalued its assets. 
Banesto is to be sold to a 


domestic bank next month. 

Moody's said it would focus 
on BCH’s core earnings, 
including its reliance on non- 
recurring earnings, on the 
quality of its assets and on the 
progress of a cost reduction 
programme that followed the 
1991 merger between Banco 
Central and Banco Hispano 
Americano that created BCH. 

BCH’s net interest income 
narrowed In 1993 and its oper- 
ating profit margin was signifi- 
cantly boosted by strong trad- 
ing revenues earned during 
last year's volatile interest rate 
and currency movements. 

Bad debts, which were above 
7 per cent of its loan portfolio, 
eased slightly and BCH claims 
now stand at 6.8 per cent, 
below the sector average. 


| WORLD BOND PRICES | 

BENCHMARK GOVERNMENT BONDS 

Red Day’s Week Month 

Coupon Date nice change Yield ago ago 

Italy 

■ NOTIONAL TTAUAN GOVT. BOND (BTP) FUTURES 
(L1FFEJ* lira 200m lOOths <9 100% 

FT- ACTUARIES FIXED INTEREST INDICES 

Pnce Indices Tub Day’s Man Accrued 

UK Ota Mar 8 change % Mar 7 interest 

xd ed) 
yw 

— Low cowan ytaM Ntortam coupon yMd Mgh coupon yield — 

Mar 8 Mar 7 Yr. ago Mur 8 Mur 7 Yr. ago Mer 8 Mor 7 Yr. ego 


Australia 


9000 

08/04 

115.0100 

+0.450 

7.10 

604 

608 

Bdrfum 


7250 

04/04 

101.7500 

-0000 

700 

7.06 

6.60 

Canada* 


6000 

06/04 

940000 

-0.450 

721 

7.03 

602 

Denmark 


7000 

12AM 

1020500 

-aeao 

602 

806 

6.16 

France 

Err an 

3.000 

05/98 

1080000 

-0270 

5.70 

5.42 

527 


OAT 

5000 

04AM 

94.4100 

-a«o 

626 

605 

500 

Germany 


6.000 

09/03 

990800 

-0.040 

6.12 

621 

5.86 

Italy 


8000 

01/04 

859300 

-0.470 

9-13T 

9X2 

8M8 

Japsi 

No ItS 

4000 

06/89 

704.8850 

-0470 

3.70 

3.42 

3.11 


No 157 

4.500 

08/03 

1032430 

+0050 

402 

3J9 

303 

Nether tanda 


5.750 

01/04 

97.4000 

-0480 

6.11 

6.1B 

5.70 

Spain 


10000 

10/03 

1110500 

-0400 

801 

9.09 

706 

UK G«s 


6-000 

08/90 

08-07 

-8/32 

6.40 

6.47 

507 



6.750 

11AM 

37-25 

-33/32 

7.08 

7.1* 

6.48 



9000 

1QAH 

115-23 

-38/32 

724 

701 

6.77 

USTreasuy 

* 

5075 

02AM 

96-20 

-7/32 

604 

6.16 

505 



6250 

08/23 

92-27 

-14/32 

602 

608 

6.40 

ECU (French Gow) 

soon 

04AM 

95.6000 

-0620 

6 01 

6.71 

620 


Jun 

Sap 


Open 

112.95 


Sett price Change 
111.72 -1.26 

111-27 -1.21 


High 

113.15 


Low 

mao 


EsL to) Open tm. 
45878 96486 

0 2 


■ (TAUAN QOVT. BOND {BTP) FUTURES OPTIONS fLFFE) UraZOOm IQQtfa of 100% 
Strike CALLS PUTS 


Price 

Jun 

Sep 

Jun 

Sep 

11150 

2.47 

3.11 

225 

304 

11200 

220 

208 

2.48 

3.81 

112S0 

1.06 

206 

274 

308 


Est vd. tout, cm* 2016 Pub IBM. PMM day's opal tat. cm* 50114 Pi*» 47888 


Lcndtxi ctasWJ. ~Hnm Yori< nid-day 
t (teas annuel yW4 Induing WMiMig ox at 125 par 
Pita* US. UK n 32nd3. <tfnm In tJoeunoj 

US INTEREST RATES 


Yields: LocW martwt render* 
cant paifttta by novenktana) 

Soueac MMS Mwnwforal 


■ NOTIONAL SPANISH BOND FUTURES (MEFF) 


Lunchtime rates 



Trereifyais 

red Band Yields 




(k* north _ 

325 

Ten year 

— 403 

Pitorarab 

8 

Trie mare — 

358 

Dm yww 

— 520 

FedJmda 

5 

5% 

One mordi — 
ShanA 

26D 

387 

Rraiear— — 

KFyra 

— 573 

IL2B 

FedJreft jttntawrttaL. 


taejear 

422 

3mem 

877 


Open Sett price Change rtgh Low Eat wl. Open lm 
Mar 102,54 100.38 -1.60 TOZfll 10085 64,000 74.67 4 

Jim 102-40 100.66 -1.33 102.40 10050 10287 63324 


UK 

■ NOTIONAL UK OB.T FUTURES (L1FFE)- £50.000 32nd» c4 100% 


BOND FUTURES AND OPTIONS 
Prance 

■ NOTIONAL FRENCH BOND FUTURES (MATIF) 



Open 

Sett price 

Change 

Hltfi 

Lon 

Est TOi 

Open int 

Mar 

113-20 

112-23 

-0-30 

113-20 

112-18 

3281 

15080 

Jim 

112-26 

111-25 

-0-31 

112-27 

111-16 

77827 

144263 

Sep 

111-17 

110-31 

-0-29 

111-17 

111-17 

10 

0 


■ LONG OILT FUTURES OPTIONS (UFFg £50300 64ths of 100% 


Open Sett price Change rtgh 
Mar 126.60 12622 -046 12076 

Jun 126.12 125.72 43.44 12026 

Sep 12538 124.96 -0.44 12544 

■ LONG TERM FRENCH BOND OPTIONS (MATT) 


Low Eat wL Open tnt 
128.08 280.685 118343 

125.62 43.705 97361 

125.04 228 10,408 


Strike 

Price 

111 

112 

113 

EsL «oL toot. 


CALLS 


Am 

2-19 

1-49 

1-21 


Sap 

2-20 

1-55 

1-30 


PUTS 


Jun 

1-33 

1- 63 

2- 35 


Sep 

2-22 

2- 67 

3- 32 


Strike 

Price 

Apr 

— CALLS — 
Jun 

S«p 

Apr 

— PUTS — 
Jun 

Sep 

125 

108 

1.89 

- 

005 

1.18 

. 

126 

0.75 

100 

- 

1.00 

1.80 

200 

12? 

006 

007 

101 

1.80 

2.11 

- 

128 

0.11 

007 

- 

- 

2.77 

308 

129 

005 

008 

- 

- 

X46 

- 


CM* 3013 ftas 4447. Pro * lour day's opan In, Cato B3078 Pisa aeon 


Ecu 

■ ECU BOND FUTURES (MATIF) 


Eat ML total. Coes 34J34 Puts 39302 . Previous day's open rt. Crts 343236 Pula 243363. 

Germany 

■ NOTIONAL GERMAN BUND FUTURES (UFFEF OM2BOQOO lOOths of 100% 


Open 
11146 
POS 9 


SMt price Orange 
118-20 -026 
9220 -028 


rt*. 

11056 

92-58 


Low 

118.00 

9220 



Open Sen price 

Change 

High 

Low 

EcL vol 

Open inL 

Jun 

97.40 9603 

-0.90 

97.82 

96.40 

185650 

209063 

Sep 

96.88 96.34 

-0.90 

9806 

9807 

401 

4295 

■ BUND FUTURES OPTIONS (UFFE) DM250.000 points of 100% 





. 





Price 

Jun 


Jun 


Sep 

9650 

102 

1.44 


1.19 


100 

9700 

0.97 

102 


1.44 


108 

9750 

0.77 

1.02 


1.74 


2.19 


Mar 
Jun 

US 

■ US TREASURY BOND FUTURES £CST) 6100000 32n«to oMOOH 


EsL TOL Opan Ira. 
34*30 124380 

329 575 



Open 

Latest 

Change 

Hgh 

Low 

E re tol 

Open Ira. 

Mar 

111-03 

111-16 

+0-09 

111-16 

111-03 

19096 

100,621 

Jun 

110-02 

110-12 

+0-09 

110-14 

110-00 

286,790 

286046 

Sep 

109-05 

109-16 

+0-09 

109-17 

109-05 

732 

36,720 


Eat TOL KJfcA CnHs 14032 Pub 12394. Previous dart, opan SB.. Cs*a 227320 Pub 203037 

■ NOTIONAL MBXUM TERM GERMAN QOVT. BOND 
IBOBLXUFFq- DM250.000 TOOtfK of 100% 


Open Settpnce Change 
10125 100.70 41.46 


HJflh 

10127 


Low 

100.70 


EsL wri Open hnL 
1478 2524 


■ NOTIONAL LONG TERM JAPANESE GOVT. BOND FUTURES 

flJFFE) YiOOm IQQtta of 100% 

Open Ctase Change Hgh Low EsL vol Open inL 
Jun 11005 - - 1 1047 110.13 2715 0 

Sep 106.88 - - 10820 10828 4 0 

- LffFE contracts tredad on APT. AM Opan Marest Hpa. am tar pertoua day. 


I UK GILTS PRICES | 

-Yield- _ l«83AM_ 

tabs ht flat Price E ♦a 1 - Mtfi lew 

-VUtt- -180194- 

Nttoe ta Red MraE +or- Hgh taw 

— YMd— _ 199991 — 

■tatee (1) PI Price E +et- Mgh lew 


Starts- (Urn re to Bn Yaan) 

&diia>2De19W 

Thai 10pc La l»4#_. 
ere xty» is» 

Treat spe 1994ft 

Cfeciw 

Era 3pc Gas 98-35 

10*«Sl8B5 

Tta»121tfClB9Stt 

U«C 1996. 


rftpeissttt- 


Era 13*4* 199813 

OrecnknlOpc 1886 

tani9%pc raar# — 

SOI iota* 189? — 

Tram (Ape 195?# 

ten 16pc 1997 

MU* 1998- — 

Tran 71*019988 

Tire, M«jc 1903-688- 

HpeW-t 

ItaniSteVett 

bJ3l 12pc 1998 
Tiwgjjpei 


Fha to Rtaoa Ttare 

Eh* 12*41*1399 

nWfI0<zMI9» 

TraasSpclDHft - 

omentai loupe use. 

toe 20008 

Tires (3 k 2000 

14K 2001 

78 m 8 

Tpc U 1 *- 

Meeatt 

a prOTnff 

14k em 


ux 

408 

101 A 


MBA 

W7 

451 

IOTA 

.. 

1056 

12jOB 

400 

10H3 


K04 

on 

450 

1026 



1056 

(101 

*85 

106>i 



11113 

U7 

540 

ar\i 

. 

re 

900 

5.12 

1066 


109% 

1140 

527 

111% 

. 

119% 

12.17 

54G 

115* 

, 

120% 

tin 

5£S 

1(9% 

_ 

T25% 

WAT 

506 

115U 

+4 

120,', 

US 

500 

lldd 


112% 

11.15 

604 

UBS 

_ 

122,’. 

838 

604 

112 


11413 

ftO 

814 

108% 

, 

110% 

11.72 

627 

1 Z5A 



1326 

873 

a si 

mu 


11*6 

700 

620103,1*1 

n', *064 

664 

523 

iois 


102% 

KJM 

602 

I2BB 


131% 

1148 

651 13SJW 

ft 1«U 

90S 

804 

121,'. 

-A 

126,5, 

847 

857 

112% 

■ft 

116,1 

903 

674 

123J3 

-A 

640 

888 

IMH 

-A 

121% 

6.10 

138 

086 

ft 

imu 

800 

67* 

us.'. 

-.1 

121% 

808 

600 

111 A 

-A 

118% 

800 

897 

1304 

-A 

1368 

453 

70! 

1(6% 

-% 

1224 

65* 

505 

1006 

-U I06A 

655 

IX 

850 

7.13 

9 

-A 51 /a 

-A 1234 

7£ 0 

704 

106fl 

-A 1136 

807 

7.19 

119% 

ft 1274 


Tubs ll%jc20Cl-4 — 

ioi & nndogainE'OB-*—— 

101 a CBmoriiSi9%pc20Q4— 

ftOU Trees Hpc 200*8 

IKE Mix 2004 ft 

COO* 9 *2 pC 2003 

,.„9* taM«%pe 200-8 — 

KM 71UK2D0B8 

1 "H 85*2002-88 

TlWIlVlK »0-7 __ 

taai8%K2D07tt 

IjK 13'apeiH-B 

lijjJ Trea Ope 20088 

110A 

105tj 

I®, 1 . 

^4 OiwBtareTtan 


U1 7.18 123%al 


4.41 

All 


629 794 

722 I17A 

687 7J04 98*4 

087 7 03 9BA 

8 X 6 723 11711 

923 741 135J, 

T3B 7.19 103 

782 723 IQbaf 

618 789 IZBA 

783 722 lllti 

946 7.43 1421, 

774 72311B.W 




1 Up to 5 ya»(23) 

2 S-15 yens 124) 

3 Over IS years (8] 

4 biedeew r a We s 

5 AD slacks (61) 

Inttax-flnksd 


12708 


127.38 

165 

2.07 

5yra 

607 

803 

649 

659 

657 

675 

672 

670 

632 

154.19 

-0.33 

154.69 

1.78 

313 

IS yra 

7.09 

7.04 

7 St 

7.21 

7.14 

807 

744 

738 

B 7k 

175.48 

-071 

176.72 

0.74 

3.53 

Myra 

7.19 

7.18 

704 

701 

7.14 

804 

7.44 

709 

8U 

2C697 

*0.50 

205.95 

2.46 

1.47 

Irrod-t 

700 

703 

633 







14909 

-009 

150.43 

106 

2.82 

















Inflation 6% 

— 

-tattotton 10 % - 

— 








Mar 8 Mar 7 vr. ago 

Mar 8 Mar 7 Yr. ego 



6 Up to 5 years (Z) 

7 Over 5 years 0 1 ) 

B ADtaodsita 

Debertbaree and Loans 


18803 

18425 

183.73 


-004 

-012 

-0.11 


I68.ro 

184:47 

18384 


0.76 

0.91 

089 


T.4I Up ft) 5 yn 
0-79 Over 5 yis 
0-85 


2.57 2.55 

122 321 


2.02 

3.46 


1.70 

3.04 


1.68 

3.03 


1.19 

3.28 


5 year yield I6yeer yMd as yraer yMd 

Mar 8 Mar 7 ». ago ItaB Mar7 V7. a go Mar 8 Mar 7 Y7. Sgo 


9 Debs 5 Loom (73) 148.47 -003 14830 222 2.37 8.11 6.01 648 821 6.18 

Aserage tyosa wia.vr n ytad* ara Pnn attm. Canon Bonan Lor 0%-7n«v MaAnc 8H-1IRIS; Wgh: 11% and war. t Rat »M1 »«d Tsai to dna 


B.17 8.27 627 


FT FIXED INTEREST INDICES 

Mnfl M ar7 Mar 4 Mar3 Mar 2 Vr ago High' LW 

Govt. Secs. (UK] 10124 101-54 100 69 10U40 100.12 97.96 107^0 9328 Ottl Edged 

Rsed intarest 123^6 12221 121.41 121.19 121.47 113.71 133.87 106.67 5-dsy average 

' ter 1993/8*. GoscRsnani Eecuttes Mgh anoe no np tau i L 12740 (Vl/33. tar 49.13 Find Maw Mgh Btoca 

1008 and Rmd trerad 1228. SE rearty mfaa raoaad fB7* 


GILT EDGED ACTIVITY INDICES 

Mar 7 Mar 4 Mar 3 


Mar 2 


9.40 


1 


128.0 116J 136.8 138.7 167^ 

1373 149.8 1584 157.1 1502 

13387 Blrt-VA . tan 5CLS3 cm/rs . Bosb IQOtCkmsnmamSocuriUslS/ 


FT/ISMA INTERNATIONAL BOND SERVICE 


Listed are Vie letast Msndtonsl faorah tortatoh San is re 
Bd OBv Cftg. 


4 t1eo i 4t ai4hxaid3iy RiraheL 


l i 8w9r|wtrrai at8g5pmeHll reU i8 
bsuBd Bd Oder Chg. 


taraed Bid OOtr Chg. YMd 


U& DOLLAR STRAIGHTS 

Ntay NN Traeaiy 03 1000 96% 

600 106% 

1 8 *J 00 4S 110% 

- 100 106% 

- 250 113% 

- 150 105% 

.1500 11% 

.1000 106% 


&»*DfT(*jo8%flB. 

8dgksn9%98 

BFCE7% S7 

assn Gw02i 

Canadas 96 

CCCE9% 95 


Tire* tae 2009 

7.42 

70UO7Ha] 

-A 

11% 

Irani Vtpc&IOPWN* 

70S 

7.15 

41« 

-B 


Cera to* La 201 1** 

7.98 

706 

117JJ 

ft 

iac 

Tiara Spe 201 2# 

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21 




ut s 




- 1 »ai| 


FINANCIAL TIMES WEDNESDAY MARCH 9 1994 


COMPANY NEWS: UK 


i 

Growth expected to continue at Hays 


i ■ . . .j- 






By Andrew Bolger 

Hays, the business service group, 
increased its pre-tax profits by 33 per 
cent to £33. 6m in Qua six irmnWia to 
December 31 

Mr Remote Frost, executive chairman, 
said the distribution and personnel core 
activities both increased profits by a 
substantial margin while commercial 
activity saw profits increase more mod- 
estly. 

He said; “The improvement in profit 
is expected to continnp in the second 
half, although the percentage Increase 
win be lower due to the stronger perfor- 
mance in the comparable period last 
year.” 

Hays said the trading environment of 
its UK businesses had slowly improved 


since January, 1383, whilst the German 
and French economies remained In 
recession. 

In distribution, operating profits 
increased by 34 per cent to 
£23.4m. 

Mr Frost said the chemical distribu- 
tion profits woe adversely affected by 
over £lm as a result of the weakness in 
the world price of caustic soda, 
although yde* volumes had been well 
maintained. 

He said: “There, was a particularly 
strong performance from packaged 
ehpmiraig which continued to increase 
both market share and margins, win- 
ning a new contract with Shell for the 
distribution of solvents." 

In personnel, operating profits 
bounced back from £2-lm to 26.4m. 


Temporary placements were particu- 
larly buoyant and the number of perma- 
nent placements had also started to 
increase, but at a slower rate. 

Operating profits from commercial 
activities rose from £!06m to flLTm. 
Britdoc, the group's overnight parcels ' 
business, had expanded. However, prof- 
its from records management foil as 
ifamanri ghiftprf ffrtm space managed by 
clients towards Hays fast access star- 


Earnings per share increased by SI 
per cent to &4p (49p). The interim divi- 
dend was Sited by 15 per cent to L95p 
CLTP). 

• COMMENT 

A share price unchanged at 309p 
seemed scant reward for announcing 


this sort of profits increase. But on a 
day that the FTSE lOG fell 4L5 points, 
just holding on to recent gains was no 
mean achievement The results were In 
line with expectations, although ana- 
lysts were disappointed that the share 
of profits coming from the group's 
highly regarded commercial activities 
fell back from 35 to 28 per cent Fore- 
cast foil-year profits of £85m put the 
shares on a prospective multiple of 22, -a 
30 per cent premium to the market The 
shares have outperformed by 16 per 
cent over the pari: year, so they cer- 
tainly axe not cheap at this level. How- 
ever, Hays stm has plenty of recovery 
potential in both personnel and caustic 
soda distribution, even if Ur Frost does 
not expect the chemical's price to Aim 
mm-h before the raid, of 1994. 


* b > Me* 


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Taunton 
and Molson 
in US 
cider deal 

OrPagg/HoOigar 

Americans used to the 
traditional autumnal tipple of 
apple cider may find some- 
thing rather more exotic on 
offer this year with the 
announcement yesterday that 
Taunton Cider has rfWieH a 
distribution deal with the spe- 
cialist drinks importer, Mol- 
son USA. 

.Taunton is aiming at the up 
market drinker, fuclwdiwg the 
“w or king woman who wants 
to stay in control*. She wifi be 
able to enjoy products such as 
Fres, winch is what Taunton 
calls a low alcohol product at 
Just 4 per cent. Other ciders to 
be introduced are Diamond 
White and Red Rock. 

Taunton said yesterday it 
planned to introduce six of its 
brands in four states from Stay 
through Matson's distribution 
network. After an initial trial 
period, one or two brands 
would be chosen' for sale 
throughout the US. 

The group is moving into 
the US as trading in the UK 
appears to have become 
increasingly difficult Taunton 
also announced that competi- 
tion from the supermarket 
economy brands continued to 
affect trading. A substantial 
marketing programme had 
been launched which would i 
result in a lower average | 
selling price for the second 
half. 

An a result, Taunton said 
sales and operating profits 
were expected to be largely in 
line with last year’s £129 3m 
and £19. 7m respectively. How- 
ever, Mr Pdck Pearcb, finance 
director, said there was likely 
to he some benefit at the pre- 
tax level from lower interest 
rates. 

The US deal was not expec- 
ted to show a return for some 
time. All proceeds from the 
first year’s shipment would be 
reinvested in marketing. 

Mr Pearch said the US poten- 
tial was enormous, with the 
beer market some five times 
bigger than in the UK- 


Johnson Matthey chief 
executive to resign 


By MaggtoUny 

Mr Richard Wakeling is to quit 
as chief executive of Johnson 
Matthey, the precious metals 
group, at the end of this 
month. He is expected to 
receive compensation in the 
region of £390.000. 

Mr Wakaling is not being 
replaced, but Mr David Davies, 
chairman, is to take on the 
chief executive role as weD. Mr 
Geoffrey Wilson, a nonexecu- 
tive director, is bpeoxmng dep- 
uty rihwimwm 

Mr Wakeling, 46, joined JM 
as a nonexecutive director in 
1987. when he was finance 
director of Charter Consoli- 
dated which held a 38.5 per 
cent stake in JM. Charter sold 
-its stake a year ago. He became 
deputy chief-executive in Janu- 
ary 1990 and chief exe c utive in 
January 1991. JM said it 
wished MT Wakeling well in 
his “alternative career”. 

JM said yesterday that Mr 
Wakeling's job had been to 
supervise the three year reor- 


Gibbs and Dandy back in 
the black with £850,000 


Reductions in costs and ini* 
- oust charges and a halving of 
bad debts helped Gibbs and 
Dandy, builders merchants, 
turn in a profit for 1993 aft®’ 
three yean of losses. 

The company made a pre-tax 
profit of £8&2J»0 for the year to 
December 31 against a loss of 
£124,000, helped by a 
cut in interest charges from 
£377,000 to £136,000 and the 
reduction ■ of bad debts to 
£208,000. 

Turnover for the year was 
42 per cent ahead at £23£m 


(£22. 6m). Earnings per share 
were 7.4p, against losses of 
1.4p. 

The return to profitability by 
the end of the first half gave 
the company the confidence to 
pay Its first dividend for more 
than three years, m interim of 
lp, and to anticipate a second 
interim of at least lp. 

This is now to be paid at 
L5p, with the payment as a 
second interim instead of a 
final making ea rlier payment 
possible and giving a £sp total 
for the year. 


Amec in Norwegian expansion 


Amec Process and Energy, an 
arm of Amec, the engineering 
and construction group, said 
its Norwegian offshoot had 
entered the Norwegian con- 
tracting and maintenance 
industry through the acquisi- 
tion of ME Norsk Elaktro, giv- 


ing Amec about 5 per cent of 
Norway’s offshore contracting 
and maintenance market 
Norsk Elektro has three 
operating subsidiaries which 
will now trade as Amec-NE 
Contractors, Amec-NE Mekan- 
isfce mui Amec Intronic. 


Southern Newspapers 
surges to £7m midway 


ganisatioa of the group and he 
had now completed bis task. It 
had been the consensus view 
of the board that his job was 
no longer necessary. 

ft said that operational man- 
agement was strong and Mr 
Davies was a handaca execu- 
tive chairman 

Further, the group had 
talked to its institutional 
shareholders about combining 
the dmhmm and rhigf execu- 
tive roles. The changes had 
been approved by two non-ex- 
ecutives representing the 
group's two largest sharehold- 
ers, Johannesburg Consoli- 
dated Investment and Mlmirco, 
which hold 20 per cent between 
them, bought from Charter. 

Mr Chris Clark, executive 
director in charge of materials 
technology, becomes managing 
director, material* technology. 

Colour and p rint Mr Graham 

TTtcombe, executive director, 
precious and catalytic 

system^ becomes managing 
director with the same respon- 
sibilities. 


Profits at Southern News- 
papers, the regional newspaper 
group, surged from £3m to 
£7. 15m pre-tax for the 26 weeks 
ended January 1. The figure 
tiwiiiiiffd a £3 .5m profit from 
tiie sale of the group's share- 
holding in Portsmouth & 
Sunderland Newspapers. 

Turnover improved to 
£36.62m (£35-4im), generating 
operating profits of £3. 58m 
(£L95m). The group had noted 
a “slight improvement” In 
trading conditions gfara July. 

The main contributor to the 
improved trading performance 
was the newspaper division, 
although t he magazine con- 
tract printing division 


increased turnover by a “sig- 
nificant^ amfumt . 

Earnings emerged at 2A28p 
(8.88p) and the interim divi- 
dend is being lifted to 3J>p (3p). 

The directors sa i d the acqui- 
sitions of the Stour Valley 
News, Monitor Business Maga- 
zine and the seven titles of tits 
west country-based Star News- 
paper Group had yet to make a 
real impact on the results. 

They that the benefit 
of rationalisation programmes 
in all cases s hould be in 
the second halt 
The half year pretax result 
virtually matched the £7-51m 
returned for the previous full 
year. 


Thorn EMI in German boy 


Thom kmt , the UK music mil 
rentals group, is to acquire 
In ter cord TVm g»»apiiiiriiaft, the 
largest independent German 
recorded music company 
owned by Veriagsgruppe Georg 
von Holtzbripck. 


Inter cord has an ann ual 
turnover of DMlSOm (about 
£&5m) and about 5 per cent of 
the German market. Artists 
include Retnhard Mey, Pe Wer- 
ner, Pur, Depeche Mode, Era- 
sure and Captain Hollywood. 


Enviromed 
purchase 
and joint 
venture 


By Tim Burt 

Enviromed, the biotechnology 
group, yesterday announced a 
£9m acquisition and joint ven- 
ture plan aimed at expanding 
its distribution and supply of 
research and healthcare prod- 
ucts. 

The company, which came to 
the market last year, said the 
expansion would be dominated 
by the acquisition of Bkayme, 
the private laboratory group, 
for £8.05m cash. 

BIT Peter Townsend, chief 
executive, said Blozyme - 
which specialises In the isola- 
tion and supply of enzymes for 
riiniMi lab o ratories and the 
diagnostics Industry - would 
complement its existing bio- 
chemical monitoring business. 

“ft’s a very exciting prospect 
for ns - Bioxyme’s enzyme 
technology will make an 
imp orta n t contribution to our 
operations,” he added. 

Enviromed has also agreed 
to form a European joint ven- 
ture with Selfcare, the US dis- 
tributor of self-diagnosis and 
self-treatment products. 

As part of the joint venture 
agreement, Enviromed is buy- 
ing a 12JS per cent stake in the 
Massachnssetfs-based com- 
pany for $LBm (Elm). 

The Biozyme acquisition and 
Selfcare share stake will be , 
ftmded by a warn placing 
open offer of &63m new ortfi- < 
nary shares at I25p «wi*- 

Singer and Fried! ander, 
which is handling the offer, I 
said existing shareholders j 
would be offered new shares 
on a 3-for-5 basis. 

Enviromed’s directors, who 
currently hold 52.06 per cent 
of the shares, are expected to 
retain 34 per cent once the pla- 
cing and offer is completed. 


Gartmore higher 
than forecast 


By Norma Cohen, 

Investments Correspondent 

Gartmore, the UK-based fund 
m a n age m ent company yester- 
day reported pre-tax profits for 
1993 of £24.6m, nearly £2m 
higher than forecast when its 
shares were first offered to the 
public last November. 

Banque Indosuez floated 25 
per cent of its stake in Gart- 
more last November in a sale 
whit* valued the company at 
about £338m. 

Profits would have been 
£2.7m higher had it not been 
for non-recurring items relat- 
ing to the disposition of a loan 
and staff retention scheme set 
in place when Banque Indo- 
suez was the sole owner. 

Gartmore’s funds under 
management grew 64 per cent 
in 1993 to £2lbn, with net new 
money up £4^bn. The remain- 
der of the growth was 
accounted for by market move- 
ments and investment returns. 

Mr Paul Myners, executive 
chairman, said the rate of new 
business growth was highly 
unusual for Gartmore or foe 
(he industry generally and is 
unlikely to be repeated. “We 
would discourage analysts and 
others from forecasting this 


rate of growth," he said. 

Mr Myners said the company 
was increasing its share of 
so-called specialist mandates 
as well as its share of balanced 
mandates. There has been a 
net increase of 22 new 
accounts and the average size 
of these is larger. 

Mr Myners said that to han- 
dle the influx of new cash, 
Gartmore had. increased Its 
staff numbers by 36, mostly 
adding fund managers and cli- 
ent service managers. Industry 
analysts have said that the 
greatest difficulty facing Gart- 
more, now one of the so-called 
“Big Four" UK pension fund 
managers, is whether It can 
manage the rapid increase in 
funds under management with- 
out damaging investment per- 
formance or client servicing 
capacity. 

Mr David Watts, managing 
director of Gartmore’s pension 
.fund management business, 
said that the growth in assets 
had made rapid execution of 
portfolio shifts somewhat more 
difficult 

Gartmore has begun to ask 
its clients for permission to use 
derivatives to gain access to 
markets quickly at lower exe- 
cution costs. 


Burnfield tumbles to £0.78m 


Burnfield incurred a loss in the 
second half and for the whole 
of 1993 suffered a profits tall 
from E2.68m to £776,000 pre-tax. 

The total dividend year is 
being cut to 2£p (5.75p) via a 
reduced final of 0£5p. Earnings 
per share were 1.4p (6.5p). 

The second half deficit of 
£493,000 compared with previ- 
ous profits of £L57Hl. 

The directors said, however, 
that 1994 had started well and 
that actions taken would bring 


an early return to earnings and 
dividend growth. The shares 
rase 5p to 77p. 

Turnover rose from 
to £38.53m. The West Mldtands- 
based group manufactures 
industrial controls and mea- 
surement equipment Restruct- 
uring costs of £lm at the Iso- 
pad and Budenberg offshoots 
were charged against profits as 
were aborted acquisitian costs 
and head office restructuring 
expenses of £486,000. 


to ignore, 

Not so long ago, most fund managers thought derivatives 
were purely foe speculators. Everyone else was content 
with buy, sell and hold. 

Today, equity options play a key role in the portfolios of 
every kind of fund manager. Equity options arc established, 
the liquidity is there and the perceptions have changed 
dramatically. 

Equity options have come into their own 
because they make solid sense. To explain 
why. LIFFE has prepared a clear, concise 
report called “Futures and Options: A Guide 
for UK Fund Managers”. To get your free 
copy, call Sandy Phillips on 071-623 0444. 

Because equity options simply can’t 
be ignored- 



LIFF( 


The London International Financial 
Futures and Options Exchange 




— 1’ 


22 


COMPANY NEWS: UK AND IRELAND 


Erode enhances Laporte’s earnings 


By David Wighton 

Laporte. the speciality 
chemicals group, ended a 
three-year decline in earnings 
per share in 1993 helped by last 
February's acquisition of 
Erode, the adhesives anti plas- 
tics manufacturer. 

At the time the City had 
been sceptical of Laporte’s 
insistence that Erode would 
enhance earnings. But Mr Ken 
Minton, chief executive, said 
that all Evode's businesses had 
performed extremely well and 
that the acquisition had more 
than met the commitment 
to shareholders. 

Evode, which cost £228zn 
including debt, made an 11 - 
xnonth contribution with oper- 
ating profits of £27.6m on sales 
of 2250m. That helped group 
pre-tax profit advance 24 per 
cent to £107m (286.6m). 

Group turnover jumped 47 
per cent to £893m (£608m) 


US/ 




UPORTE 




•HEfrSsaat 


K e n Minton: disposals to fund capital spending and acquisitions 


including associates of £16m 
(£86m). Earnings per share 
rose G per cent to 41.4p (392p). 
The dividend is also increased 
by 6 per cent with a proposed 
fhifli of 13 Jp talcing the total to 


20.7p (19 .Sp). 

Mr Minton said that exclu- 
ding acquisitions and favoura- 
ble exchange rate movements 
pre-tax profits would have 
been “just slightly ahead". 


The level of provisions 
against Evode, which surprised 
analysts when first announced 
at the interim stage, has edged 
Up CTm to £2SJm- 

Mr Minton said Evode’s mar- 
gins had more than doubled to 
11 per cent and that there had 
been no benefit from written 
down stocks. 

Profits were struck after 
sharply higher depredation of 
£272m (£17i5m) following sev- 
eral years of heavy capital 
investment Capital expendi- 
ture fell from £74Jxn to £4&3m 
and there was a cash inflow 
from operations of £ 21 . 8m, 
compared with an outflow of 
£81 -2m in 1992. 

After peaking at £190m 
immediately after the Evode 
acquisition borrowings ended 
the year at £135m (£l26m) for 
gearing of 44 per cent Mr Min- 
ton said there would be further 
disposals this year with the 
proceeds “redeployed in capital 


expenditure and add-on acqui- 
sitions”. 

The shares fell 20p to 794p. 

• COMMENT 

The City seems to have 
regained its faith in Laporte 
after two years of doubt. 
Although earnings per share in 
1993 were more than a tenth 
lower than the 46.7p recorded 
in 1989 supporters point to 
Laporte’s achievements over 
the period, not least the exit 
from the Interox joint venture 
which left it a pure speciality 
chemicals company. The Evode 
deal shows once again it can 
make the acquisition numbers 
add up and the company can 
still blame market conditions 
for the lack of underlying 
growth. But that will have to 
change soon if its regained pre- 
mium rating is to be sustained. 
Assuming profits of £120m this 
year, for earnings of about 45p, 
the multiple is now almost 18. 


ADT net income little changed at $11 1.7m 


By Paul Taylor 

ADT, the electronic security 
services and car auction group 
which does much of its busi- 
ness in the US but retains a 
UK quote, yesterday reported 
net income of $111.7m (£7&5m) 
for 1993. 

The result was little changed 
from the SlOS.lm recorded in 
1992, the First year that 
the Bermuda-registered 
group reported under US 
GAAP rules. 

Earnings per share were 
unchanged at 80 cents despite 
a higher $21 . 2 m ($6An) tax 
charge and the Issue of 20.7m 
new shares as part of the 


J1.25bn refinancing package 
completed in August 

Operating income after good- 
will amortisation of $26.5m 
($27.9m) increased by 8£ per 
cent to $197.4m ($i81.9m) on 
net sales of Sl-38bn ($L35hn) 
led by the electronic security 
services business which lifted 
its profit contribution to 5154m 
($141m) on sales of 5937.3m. 
($90Llm). 

Commenting on the results, 
Mr Michael Ashcroft, chairman 
and chief executive, said they 
were M on target with the elec- 
tronic security services divi- 
sion successfully adding 
145,000 new residential custom- 
ers during the year and the 


vehicle auction division having 
continued success in encourag- 
ing new and used vehicle 
dealers to attend the compa- 
ny's auctions on a regular 
basis." 

Net interest costs increased 
to $47. 3m ($42.7m) mainly 
reflecting a decline in interest 
income. 

Mr Ashcroft said the refinan- 
cing, which lengthened ADTs 
average debt maturities to over 
seven years, provided “a firm 
base for the continued develop- 
ment of the businesses.” 

• COMMENT 

ADTs two core businesses con- 
tinue to perform solidly if not 


Accountants investigate Cupid 


Cupid, the beleaguered bridal 
wear manufacturer, is believed 
to have commissioned a firm of 
accountants to investigate 
events leading to this week’s 
warning of substantial losses, 
writes Peggy Bollinger. 

The group is aim expected to 
announce the departure of Mr 
Richard Shaw, chief executive, 
who earlier this week was 
suspended temporarily from 
his duties. 

Staff at Cupid’s Lancashire 
offices said yesterday he had 


already left the company. 

It is believed that Mr Shaw, 
who was on a 12-month rolling 
contract, will receive compen- 
sation of less than £100,000. He 
was brought into the group at 
the request of shareholders fol- 
lowing a profits warning in 
February 1993. His brief was to 
lead Cupid through a series of 
acquisitions. However, this 
programme was never begun. 

In January, the company 
announced interim losses of 
£456,000 and said it was not 


spectacularly with net cash 
flow from operations increas- 
ing to 5271.4m ($221. 9m) last 
year. ADTs residential secu- 
rity operations continue to 
benefit from growing concern, 
about crime cm both sides of 
the Atlantic while the car auc- 
tions business should benefit 
from the revitalised new car 
market. The group has been 
investing heavily to cut costs 
and the few remaining non- 


core operations are slated for 
sale. Offsetting these positives 
are the higher interest costs 
associated with the debt refi- 
nancing and the continued 
increase in ADTs reported tax 
rate, which win leave earnings 
virtually unchanged this year. 
ADTs shares continue to 
underperform the market, 
reflecting investors’ concerns 
about the group’s chequered 
history. 


clear whether it would return 
to profitability for the year. On 
Monday, however, it became 
clear that the losses would be 
substantial after provisions 
needed to restructure the 
bridal business. 

Cupid is not expected to 
replace Mr Shaw. It Is under- 
stood that his responsibilities 
will be shared by Mr Stephen 
Riley, the finance director, and 
Mr Robert Devlin, managing 
director of the Pronup- 
tia/Youngs business. 


Barings leaps to £100m 
helped by securities side 


By Norma Cohen, 
frive at men to Correspo nd ent 

Barings, the closely held UK- 
based investment bank, 
reported pre-tax profits of 
£l00m for 1993, a dramatic 
impro vement over 1992 whan 
they halved to 221.3m from the 
year before. 

The group, whose share capi- 
tal is owned by a charity estab- 
lished by the Barings family, 
did not provide details of 
which activities had contrib- 
uted most to profits. But Mr 
Andrew Tockey, Barings dep- 
uty chairman, said that Baring 
Securities, which had experi- 
enced significant losses on Jap- 
anese equities in 1992, had 
recovered strongly in 1993. 

He also said that the Group 
had benefited from the enor- 
mous surge in interest in 
investing in emerging markets. 
Among Baring’s core busi- 
nesses i b its role as an agency 
stockbroker and trader of 
emerging markets securities 


with, offices In 23 countries. . 

However, emerging markets 
have fallen somewhat since the 
start of the current year and 
Mr Peter Baring, chairman, 
warned that the improvement 
in the group’s profitability was 
unlikely to continue at the 
same pace in 1994. 

"During 1993, a number of 
factors working in dor favour 
helped us produce significantly 
improved profitability. While it 
is unlikely they win persist 
during 1994, the year has 
started well and I believe we 
will face no shortage of oppor- 
tunity,” he said. 

Barings said that its income 
from trading activity grew 
sharply from 265.3m to £L49m 
while fees and co mmi ssions 
rose from£272m to £377m. 

Operating expenses also rose 
sharply to £469m aginst £349m. 
Mr Tuckey said that world- 
wide, Barings has increased its 
staff by about 10 per cent but 
the need to increase bonuses 
had also contributed to the 


sharp rise in costs. 

Mr Baring said: Tt is impera- 
tive for os to remunerate com- 
petitively If we are to atixact 
and retain good people; this is 
especially the case for a group 


tnternafionally, often in dire ct 
competition with US-owned 
houses.” . . 

A reorganisation which inte- 
grated the Baring Securities 
yTid Baring Brothers and Co 
arms of fog business I nto a 
new investment banking group 
is paying off Mr Tuckey said. 
The costs of reorganisa- 
tion, due to be completed this 
year, were absorbed in the 1993 
accounts. 

Also contributing to profits 
were the activities of US 
investment bank DUIod Read 
in which F nriT ig s has a 40 per 
cent stake- Mr Tuckey said the 
bank, which specialises in US 
corporate finance ami munici- 
pal bond underwriting and 
trading, had bad its most prof- 
itable year ever in 1993. 


Ingredient for success pays 
off as Kerry achieves I£35m 


DIVIDENDS ANNOUNCED 


Brant kiU fin 2.4 May 23 5.8 4 7.4 

BunriWd fin 085 Apr 28 4.1 2J& 5.75 

Ctaramont Qaimt — fin 4.5 Juf 4 095 8.1 7.25 

Ex p— - fi n 1.25 May 6 1.16 25 025 

Rsons tin 1 Jul 1 5.4 43 8.7 

Gibbs and Dandy — fin 1.5? Apr 6 rtf 2J5 nfl 

Hays bit 1.95 May 31 1.7 - S3 

Instore § fin 1.8 Jii 1 1.8 3.1 3.1 

Kerry Group fln 1.69* - 1.47 28 226 

Laports fin 103 May 17 125 207 19.S 

Unread fln 235 May 18 2-25 3-92 3.75 

MR Data knt 2076 Apr 15 1.73 - 5.19 

Pacer Systems § fin 3.5* June 15 3J5 6J5 QJS 

Ptantsbnook fin 23 Jul 1 2 3.4 3 

Polypipe Int 071 Apr 25 068 - 21 

Sumit fln 23 May 30 nfl 3 1.4 

Sutsr fin 5.8 June 20 5.6 92 08 

Ti m m tom int 1.45 Apr 29 125 - 3.65 

USDC Inv fln 325 Apr 19 325 AS A5 

Wales City fln nil - nfl nfl 0.77 

WOO Bn 0-65 Julia nil 1 nil 


Dividends shown pence per share net except where otherwise stated. fOn 
Increased capital- §USM stock. ^Payable as second Interim, * cents 
throughout A Irish pence 


By Tim Coons in Dublin 

Strong growth in its food 
ingredients division, -supported 
by a strong dollar, helped 
Kerry Group, the Irish food 
manufacturer, lift pre-tax prof- 
its by 22 per cent to l£85m 
(£34 m) for the year ended 
December 31. 

Turnover grew from I£827m 
to I£880m. Food ingredients 
now comprise 40 per cent of 
turnover, having grown by a 
fifth in 1993. The meat division 
contracted slightly while the 
dairy activities grew only mod- 
estly. 

No divisional breakdown of 
profits was given but the com- 
pany said margins had 
improved across the group. 

The tax charge rose from 11.4 
per cent to 17 per cent, 
reflecting the group’s broader 
geographic spread - especially 
into the North American mar- 
ket 

Kerry now has six food 
ingredient plants in the US, 
two in Canada and, following 
an acquisition in December, 


one in Mexico. The latter is 
expected to boost group turn- 
over by a further I£70m within 
the next two to three years. 

Further acquisitions in tw* 
sector are befog considered in 
both North and South America 
as well as in Europe. 

Capital expenditure more 
than doubled during the year 
to 1241.7m, while a farther 
I£l7m was spent on acquisi- 
tions. 

Borrowings increased by 
I£Sfim to 12142m, giving a gear- 
ing of 56 pa* cent 

Interest charges were cut to 
I£1059m (1213.89m) largely as a 
result of the group’s placing of 
$155m (£l06m) in loan notes 
with US investors last Septem- 
ber at what were described as 
"historically low interest 
rates”. 

Earnings per share advanced 
to l&5p (I5.8p) and a final divi- 
dend of L69p makes a 2.6p 
(226p) total 

• COMMENT 

The strategic expansion of 
Kerry's food ingredients divi- 


sion in the US, Canada and 
Mexico has been dearly Justi- 
fied given the increasingly sig- 
nificant contribution of these 
investments to the bottom line, 
even if the company is paying 
top prices for its acquisitions. 
What is not so dear is whether 
the group’s earlier diversifica- 
tion into the intensely-competi- 
tive and low margin red meat 
processing business was as 
well considered or planned - 
although it has successfully 
built up a strong customer 
base through multiple retail 
outlets in the UK and. Europe 
and. seems prepared to operate 
at tighter tnarg rng than Some 
of its main competitors. Con- 
tinned growth will come 
through the food ingredients 
and convenience meats divi- 
sions and pre-tax profits of 
1239m seem likely for 1994, giv- 
ing earnings of HOp and a pro- 
spective p/e of 16& As the blue 
chip of Irish food stocks this 
looks sustainable, but don’t 
expect it to outshine the mar- 
ket as much as it has in the 
past. 


If you’re fed up 
with going through 
all of these to 
get a decision, 



This advertisement la famed fa compliance with the requfremcnp of, and la oonfenn hare been app ro v e d by. The I nte r na tional Stock Exchange of the l/ntctd IQngdoat 
and the Republic of Ireland Limbed ("the London Stock Exchange”) pursuant to scato u 1 54 of die Rnanrial Services Act ISM. 

This advertisement doe* not contain nay Information about Morgan Grenfell Latin American Co mp a n ies Trust PLC (“the Company") other than the information set out 
below and should therefore be read ta conjunction with the listing particularn relating to the Company dated 9 March 1 994 (the "L is ting Particulars''). 
(t[^ |f^ li w b^iii^Wifa|jidm^En!h»ip^ifoftdtejflanadateiiio,bsieJ«idtthlBU8l|«niasciade<Mh'.ta>tsdateilwdeOffldilU* 
It b expected char adndmkm still become effective, and that separate d e a lin gs In soch Otiliuoty Sharer sod Warrants wffl commence, oo Thnrsdsy, 31 March 1994. 

Morgan Grenfell Latin American 
Companies Trust PLC 

(lacorporated In England and Woks under the Campania Aal 98 5 *bh nghmed lumber 2902424) 

Offer for Subscription 
by James Cape] & Co. Limited 
of 125,000,000 Ordinary Shares of 25p each 
(with Warrants attached on a lfor 5 basis) 
at lOOp per Ordinary Share payable in fall on application 




go to 

Bank of Wales 


At Bonk of Wales we an- cotally comm Sled 10 business 


Wiih this philosophy we aim lo build a personal and long term 


bonking. We provide each and every one of our cuacorners waft a relanonship wfchour diems, ensuring due out services air provided 


personal Relationship Manager who has wide commercial experi- 
ence across every part of ihe corpora le sector. 

Our shore lines of conununicauon ensure that all business 
decisions are made promptly. 


In a simple, straightforward manner. And. all of this is backed up 
wnh the security of being pan JBANKOP 
tif the hiuhiv mnecteil Rank fflSflS-fiWuAT t K*iS 


of the highly impeded Sank 
of Scotland Group. 


O^OBANC CYMRU 

The bs u lne aj people 


Morgan Grenfell Latin American Companies Trust PLC b 
a new Investment trust whose investment objective b to 
provide shareholders with long term capital growth by 
In, eating In Latin American mock markets. The portfolio 
will be diversified bi terms of both country and Industry 
exposure and will be managed by Margin Grenfell Trust 
Managers Limited. 

125.000,000 Ordinary Shares of 2Sp each (with Warrants 
attached) are being offered. IF the Offer b FuOy subscribed 
the odnatted net proceeds of the Offer will be XI 20M 
[niflkra. Irrevocable undertakings have been received by 
James Capri & Co. Untiled ffsnttes CapeP) (as agent Ear the 
Company) from D ire ctors and other p e rso ns so make, or 
procure when to make, applications pursuant Go the Offer 
hi respect of on aggregate of 51.000,000 Ordinary Shares 
(with Warrants attached) at lOOp per share. The Company 
fatten*** to accept i^liruriiuM hi FulL Junes Ctpei b» 
underwritten the Offer to the extent of the Ordinary Sham 
co v er ed by such undertakings; the balance of the Offer has 
not been underwritten. Q nfluai y Shares and Warms will 
be allocated even ff the Offer b not subscribed for fat ML 
James Cape! b a member of the Secu ri t i es & Futures 
Authority and the L ond o n Stock Exchange. 


The Offer opens on Wednesday, 9 March 1 994 and will 
dose at 10.00 us, on We dnes day. 23 March 1994. 
Completed Application Forms should either be sent by 
post to The Royal Bonk of Scotland pic. Registrar's 
Department, CO Box 452, Owen House, 8 Bankhead 
Cro s s wa y North, Edinburgh EH 1 1 4TQ or delivered by 
bond to The Royal Sank of Scotland pic. Securities 
Services — Registrars, £7 Lombard Street, London EOF 
3DL, In each cose to be received by not later than 10.00 
oan. on Wednesday, 23 March 1994. 


Availability of Listing Particular* Copies of the Listing 
Particulars and Mild Pmnurmi (both Inchirfln g (he Appfr- 
catton Forth) are available Fa- collection front the Ccwi^Mtiy 
Announcements Office, the London Stock Exch a n ge, Stock 
Ex c ha nge Tower. Cape) Court Emranu e , off Bartholomew 
Lane, London BC2 an 9 and 10 Match 1994 and, until 
23 March 1994. from: 

1. Morgan GressfeD Trot Manager* Limited, 20 
fiasbary Clrcna, Lcodon SC2M IIVBf 

2. James CapcI A Co. limited, Thames Exchange, 

lO Queen Street Place, London EC4R 1BL| ^ 

3. James Capri & Co. limited, 2F Capital House, 

T esti val Sspsare, EeU n l mi gh EM 3 9SO| * 

4. The Royal Bank of Sen dud pic, Registrar's Depart- 
ment, PO Box 452, Owen House, S B an khead 
Cr uma ivay N north. IWlinhu ag fa EH1 1 4TQ; and 

5 -Hie Royal Bank af S cotl an d pic, Secnridaa Services — 
Registrars, 67 Lombard Street, London EC3P lOL. 

9 March 1994 


APPLICATION FORM 

MORGAN GRENFELL LATIN AMERICAN COMPANIES TRUST PLC 

■ IMPORTANT: Before oomplctfag thb Cota, you should read the Lbring Meabn of Morgan CrenfeU Latin 
American C s m i p a tos Trust PLC. The Tnna and Conditions of Application set our In Part V of the listing 
Particular* apply to assy tpy Uu i io u made on rids form. App li c ati ons meat be for a m inimum of iflOO Ortfimry 
H e rrs (HMQ) and thereafter In im ildpte* of 500 Ordinary Share*. 

PLEASE 

■ Use BLOCK CAPITALS 

■ Make yanr Cheque or bather's drab mu to "the loyal Baric of Scotland pie A/C IMS Odes'* and crossed 
“A/C Payee only* aad Mad the coaplaoad bans year rewdenaoc to TV* Aoyal Bank of Seodsnd pic, 
g i^hiak Pupa r lt n onf , PO Boa 492, Owen H ome. I B an fc b oa rf Orowway Rf qrt ii , Mnhn g i EH 1 1 4TQ 
or ddtnv It by load » Use Royal Bank of Sco tlan d pic, Sec v e M os S er vic e* — Reghcrars, 67 t .uos lii rd 
Ssroet, London EC3P IDL. ia each owe to arrive by IQiiOajs. oa We dnesd a y. 21 Mwcb 1994. 


yWnplfcr to s u bsc ri be far 

ta the Company at lOOp per CMhsoty Shore fwtcb Warrants t 
of Apolictttoo set out ta Pert V of the Usting Partkuhta- 


OriKwwy Shares ( ■ ■ ■ ■ ■ law— JjOOOj 

Ion a I for? hub) on the earns nsdeaodttbms 


1 1/We attach a dseqae or bmfcnrt draft for the amount payable of i — . 
I n~Ms should be die number of Oitgnsry shares (srfdi W am um mtadsed) • 


Mr/Mis/Mkswikla 

form ■»«(■) fhi Ball) 
Addrms (bs ftU} 



TM* bon dbon l J only bo c o t epl attd by Jehu Apphcama 

Applicant 2 

Mr/ldo/Mba or tbla — Sanaa 

Foreosaseft) (to foil) ..... 

A ddr ess (In full) — 

Aosoaode I 

AppHmntl 

Mi/Mia/lfim or title ■ Sanaa 

FutcisiuteW (*» WD ■ 

Addmas On foil) 


Mr/Mrs/Mb. Or title 

FoKSOwUlh fall) 
Address (ta fad) 










FINANCIAL TIMES WEDNESDAY MARCH 9 1994 . 

~ - ~ " COMPANY NEWS: UK 


New group to supply 11% of Marks and Spencer’s clothing 

Claremont buys Magellan Inds 


By Tim Burt 

Claremont Garments, the 
clothing manufacturer, yester- 
day announced an agreed 
£43 ,3m takeover of Magellan 
Industries, the lingerie and 
swimwear company. 

The takeover, bringing 
together two of Marks and 
Spencer's leading suppliers, 
follows' production problems at 
Magellan, which yesterday 
reported increased pre-tax 
losses of £1.26m in the 12 
months to December 31. com- 
pared with £511,000. 

Mr Chris Ryder, Magellan 
chief executive, said the acqui- 
sition by Claremont was an 
attractive option after a year in 
which it failed to recruit 
enough workers or ensure ade- 
quate raw material supplies to 
complete orders for Marks and 
Spencer. 

Under the all-paper offer. 


Claremont is issuing up to 
12.8m new shares, some 23J 
per cent of the enlarged group, 
which are being offered to 
Magellan shareholders on a 
0.48l&fDr-l basis. 

The offer h as already been 
accepted by Magellan directors 
and family trusts associated 
with Mr Oliver Prann. the 
chairman, which together con- 
trol 38J per cent of the com- 
pany. 

Schroder Investment Man- 
agement, Magellan's largest 
institutional shareholder, has 
also agreed to procure accep- 
tances on behalf of investors 
holding a further 148 per cent 

Welcoming the undertak- 
ings, Mr Peter Wtegzmd, Clare- 
mont chairman, said: "The 
acquisi t ion will strengthen our 
product range and trar relation- 
ship with Marks and Spencer.” 

He rfMftnari the group would 
supply up to 11 per cent of the 


retaQer’8 -total clothing stock, 
which in turn would account 
for 95 per cent of Its business. 
Masks and Spencer welcomed 
the takeover and said it was 
happy with the terms. 

Claremont, meanwhile, 
announced a 35 per cent 
increase in pre-tax profits to 
£ll.5m (£8.5m) in the 12 
mcralhs to December 25. 

The improvement was 
spurred by full year contribu- 
tions from two earlier acquisi- 
tions - J&J Fashions and Alex- 
ander MSnea - which helped, 
operating profits increase fay 32 
per cod to £U-9m <£9m). 

Turnover increased to 
£114.4m (£81 ,5m), while earn- 
ings per share came out at 
19.1p (I6.4p) oar I8u!p (l&2p) an 
a fully dilated basis. 

By comparison, turnover at 
Magellan in 1993 was flat' at 
£8&£m (£35 .5m). Losses per 
share of were 47p (2p) or 2.7p 


(02p) excluding exceptional 
items. 

The group's results were hit 
not only by supply and staffing 
problems but also by a £496,000 
exceptional charge following 
the collapse last August of 
Dunkeld, the shirt manufac- 
turer. The charge arose out of 
losses on Dunkeld shares 
which Magellan received in 
part payment for Slix, Its 
swimwear brand, sold In 1992 
for n.OTm. 

It an Wti«i 

dividend of L^r. while Clare- 
mont announced a proposed 
final pay-out of 4.5p (3.95p). 
making S.ip for the year 
(7-25p). 

Claremont is also acquiring 
Bellrlfle Fashions, the Next 
supplier for £l.9m cash, funded 
freon b ank reserves of £&&m. 

Its shares rose 5p to 358p. 
Magellan’s Closed down lp at 
172p. 


Reorganisation costs hit MR-Data 


By Paul Taylor 

MR-Data Management, the data 
transcription and document image pro- 
cessing group, reported lower interim pre- 
tax profits reflecting one-off reorganisatfcm 
costs, lower net interest income and devel- 
opment costs in its Memex software divi- 
sion. 

In the six months to December 31 profits 
fell by 34 per emit to £2. 56m (£4-02m) on 
turnover up 5 per cent to 219.8m (mam). 

Earnings per share declined to 32lp 
(4-89p). However, the interim dividend is 
being raised by 20 per cent to 2ff?6p (L73p) 
reflecting the group's strong balance sheet 
amt cash position. 

Mr John Redmond, chairman, said: 


“During the past months we have reorgan- 
ised our b usines s resulting in gt fptWrgut 
one-off costs which have been absorbed in 
the first half. Additionally profits have 
been affected fay the on-going development 
costs at Memex. 

“However, we are operating in high 
growth markets and, in particular, pros- 
pects far aqr software products and our 
laser printing document «« i « » * h ig ser- 
vice bureau are extremely good. We there- 
fore remain - optimistic about the remain- 
der of the year.” 

Operating profits slipped to £2.63m 
(£3. 02m) mainly reflecting the develop- 
ment costs at Memex. The 1992 figure was 
boosted, following accounting rule 
changes, fay the writing back of £651.000 of 


acquisition provisions. The 1993 figure was 
reduced fay reorganisation costs of 
£382400. 

Mr Redmond said the redundancy and 
reorganisation costs in the document 
image processing division would result in 
armnai savings of £710,000 and were neces- 
sary to reposition the business for growth, 
fa the core data transcription division 
the COM and laser printing bureau ser- 
vices both increased production volumes, 
turnover and pre fi t Margins in both bust- 

- TytflBflB also improved. 

Net Interest receipts fell to £212,000 
(£365400) although the group ended the 

- year with cash balances of £9 .57m, up by 

- £248m from June 30, partly reflecting the 
crystahsation of a £L05m exchange gain. 


Wates City disappoints with £0.1m 


By Simon Davies 

Wates City of London 
Properties, the development 
and investment group, disap- 
pointed the stock market yes- 
terday despite increasing opti- 
mism on City office prices. 

Even though the company 
announced a return to the 
black in the year ended Decem- 
ber 31, with pre-tax profits of 
£113,000 against a loss of 
£74- 9m (after write-downs of 
£7i.9m on pro p e rty valuations 


last time) the share price still 
feU 8%p to 87y,p. 

Disappointment focused an a 
further property provision of 
£2.7m in 1993, and an Wales' 
net asset value per share of 
72L8p, an increase of only 0.4p. 

However, 1993 was a turn- 
round year for Wates, which 
entered the recession with 
27 per cent gearing but saw it 
peak at 102 per cent due to 
slashed pr o pert y valuations. 

. Last year, Wates substan- 
' tiaBy. strengthened its- balance 


sheet, through a rights issue 
and property disposals. 

Total borrowings fell by 
38 per cent to £564m, and 
gearing feU foam 102 per cent 
to 50 per cent ' 

Wates is proceeding with the 
site formation, for a 57,400 sq ft 
office etui retail development 
in Queen’s Street, althoug h it 
is possible that the site could 
be soKL 

It will also demolish. Win- 
chester House during 1994, to 
vmake- way 'for 8^300400 sq ft 

‘ “ »*• '•» 


office development The project 
Is 60 per cent owned by 
Friends Provident 
Wates is unable to renew a 
dividend payment, because of a 
substantial deficit on the com- 
pany's profit and loss account 
There were reduced losses 
per share of 0.71p (59.26p). 

Mr James Dundas Hamilton 
has announced Us retirement 
as non-executive nfaarnnan. He 
will be replaced by Mr Paul 
Wates, the current chfof execu- 
tive/ • .. . . . 


Partco for 
market 
with £59m 
price tag 

By Andrew Bofger 

Partco Group, the biggest 
independent distributor of 
automotive parts and equip- 
ment in the UK, is raising 
about £20.7m through a plac- 
ing and intermediaries offer at 
200p per share - valuing the 
whole company at £59J2m. 

The placing and offer com- 
prises l<L58m ordinary shares 
- lim of which are new-onH- 
naries being issued by the 
company. - 

The remaining 3-58m shares 
are being sold by existing 
shareholders. 

Partco, which was a manage- 
ment buy-out in 1986 from 
Quinton Hazel], trades from 
more than 200 branches in the 
UK and had sales of about 
£124m in 1993. 

Pre-tax profits last year 
were £4J28m, from which pro- 
forma earnings on an actual 
tax basis were 134p a share. 
This gives an historic multiple 
of 15JI times at the 200p offer 
price. 

The notional net dividend 
for 1993 was 5J38p, giving a 
gross yield of 34 per cent' 

The group is being advised 
by Harnbro Magan, with Caze- 
nove acting as brokers to the 
Issue. The closing date for the 
intermediaries offer is March 
15 and dealings are e x pected 
to begin on March 18. 

• COMMUfT 

Improved distribution meth- 
ods, 1(wng fnmfhnr in mtefflng 

and industry, are transform- 
ing the previously fragmented 
business of supplying automo- 
tive parts to garages. Last 
month FtoeUst, a smaller com- 
petitor to Partco, was floated 
successfully. Now investors 
are offered an opp o rtunity to 
back the biggest gro up in the 
field, which has a national 
warehouse and sees scope for 
rapid expansion. With forecast 
earnings of about U.Bp per 
share-in the current year, the 
shares are on a prospective 
multiple of 16A, a discount to 
Finalist, and a prospective 
yield of 3JS per emit - a pre- 
mium to the smaller company. 
The pricing does not look 
aggressive and should leave 
the larger group plenty to. go, 
for. - • 


Higher death rate helps 
Plantsbrook advance 33% 


By David Blackwell 

A significant rise in the fourth 
quarter death rate helped to 
boost 1993 pre-tax profits by 
almost 83 per cent at Plants- 
brook Grou p, the funeral ser- 
vices group. 

They rose from £9.Q5m to a 
record £12 hl Total turnover 
rose from £49.8m to £52m, 
including a contribution of 
£800400 freon acquisitions. 

Mr Peter Bindley, chief exec- 
utive, said the overall rise of 4 
per cent in the death rate for 
1993 was to same extent owing 
to flu towards the end of the 
year. He expected the rate to 
fell back this year. 

Ilia result was also helped 
by a reduction in net interest 
payable from £146m to 
£586,000. This reflected lower 
rates; the repayment of £3-3m 
of fixed rate hire purchase 
debt; a reduction in total bor- 
rowings from mjm to £7m; 
and Hib benefit of a Ph o pri- 
vate placing of 249m ordinary 
shares last June. 


Earnings per share on a fully 
dQuted basis rose from 743p to 
7.77p. in addition to the June 
placing. 25.9m shares were 
issued in October and Novem- 
ber following the conversion of 
the unlisted 1997 preference 
shares. There are now 106.5m 
ordinary shares in Issue. 

The group made five acquisi- 
tions in the year, paying £2. 4m, 
and has opened seven, new 
branches. So far this year it 
has acquired two more busi- 
nesses for £44m cash. 

Further acquisitions were 
likely, said Mr Hlndley. The 
group was also looking at ways 
of returning to the cremato- 
rium market. 

Dignity, the pre-paid funeral 
business had performed satis- 
factorily, said Mr Bindley, gen- 
erating £14m of turnover. An 
autumn advertising camp ai g n 
had resulted in a 42 per cent 
increase in sales in the second 
halt 

Gearing at the end of the 
year was 28 per cent, compared 
with 54 per cent in 1992. 


A final dividend of 24p (2p) 
Is proposed, giving a total of 
3.4p for the year (Sp). 

• COMMftNT 

While tiie unexpected rise in 
last year's mortality rate pro- 
vided an unexpected boost to 
profits, the achievements of 
the present management in 
restoring Plantsbrook to a 
strongly cash generative busi- 
ness should not be overlooked. 
However, profits this year are 
likely to remain static tw flnftg 
the death rate Is unexpectedly 
high. The group's 9 per cent 
market share of funerals looks 
mature, it is way behind mar- 
ket leader Great Southern In 
the pre-paid funeral business. 
Tough new environmental leg- 
islation on crematoriums could 
lead to local authority privati- 
sation or operating contracts, 
but It would be expensive to 
build new ones. At yesterday's 
close of lQQp end a prospective 
P/e of 13L5P the shares look a 
hold - hut keep an eye an the 
deaths column. 


Holders confirm 
QMH £2bn limit 


ByMaOOhUny 

Shareholders of Queens Moat 
Houses, the hotel group In 
folks with its banks over refi- 
nancing its £L3bn of debt, yes- 
terday confirmed 'the group’s 
borrowing limit of £2bn at two 


Some shareholders used the 
meeting to ask questions about 
indemnity insurance for the 
conmanv's directors. 

Mr Stanley Metcalfe refused 
to answer these questions say- 
ing they were outside the scope 
of the meeting, but said it was 
normal for large public compa- 
nies to take out insurance cov- 
ering directors against liabil- 
ity. 

Mr John Bairstow, the 
group's former chafr-man, said 
later that when he was in 
charge at QMH the group’s 
indemnity cover of £l0m cost 
£34400 a year. 

Tfae premium is now reputed 
to be £700,000- This would 
reflect the substantial <4w>ng » 
in the group's position with 


massive losses, the shares 
suspended, a department -of 
trade and industry investiga- 
tion proceeding and threats of 

litigation. 

Mr Bairstow changed his 
vote at the meeting. In advance 
of the meeting he had voted 
bin am shares against the reso- 
lution by proxy but in the poll 
taken at the meeting he voted 
in favour. 

At the meetings Mr Stanley 
Metcalfe, chairman, said the 
group's results for 1993. which 
will incorporate a new valua- 
tion. should be completed by 
the fwiri of April 

He said the restructuring 
talks were progressing, and the 
foundations for a reconstruc- 
tion were being laid. 

Hie said he was sorry it was 
taking so long but there wore a 
number of complex issues 
involved. 

He hoped that the shares, 
which were suspended in 
March last year, would - be 
relisted as soon as nbflrahfaiii- . 
era approved the restructuring. 


Clyde buys oil field 
stake for £12.7m 

Clyde Petroleum, the 
exploration and production 
company, has agreed to buy 
Agip UK's 1748 per cent inter- 
est in CKCS Block 16/X7a 
(south) in the Andrew Field 
for £12.7m. 

The consideration will be 
funded from Clyde's own 
resources end includes a reim- 
bursement of £9m far Agip's 
past costs, which will quality 
for tax rehef. 

Clyde's £S0m share of devel- 
opment costs win be funded by 
a folly non-recourse financing 
underwritten by Chase Man- 
hattan Bank. 


HTR Jap Smaller 

HTR Japanese Smaller 
Companies Trust, the Hender- 
son Touche Remnant invest- 
ment trust which came to the 
market last autumn, reported 
net assets per share of loop 
on January 31 against 96.lp 
on the October 22 launch 
date. 

Earnings per share were 
0.2p. Total net assets stood at 
£100 4m and retained- revenue 
-at £203,000;' ! • - 


Thto notice to towed in compBance'snib the nqubonciui of die Council cf The htenHukKigl Stock B a riwn g c of die United 
Kingdom and the Republic of befamd limited fd* London Suck Exchange*). It don nor coatfjruoc or contain an ofler or an 
invitation to any proton to wbxribe far ot pmchwc any of die txtfinaty iharex of Enviramed pic (" E nvi r omcd*). Applkatkm Em 
been made to the London Stock Exchange for die editing ordfaunr dates of Environed K>1* rwdmined and die propcaed new' 
mflnaty abate* K> be admired n> the Official Lise ("Listing"). Irto metwi tfaat lining aril become dfcetrre and ebat dealings in 
the existing ordinary share* arlll re c o mm ence -and fa the new ordinary ton aBI c ommence OPjjduApril 19SM. 

Enviromed pic 

(Incorporated m England and Woks with registered No. 2815159) 

Placing and Open Offer of 

9,007,250 ordinary shares of 5p each at 125p per share 

Sponsored by 

Singer & Friecflander Limited 

Share capital following die Placing and Open Offer 

Authorised Issued and fully paid . 

Number Amount Number Amount 

30(000,000 £1*500,000 ordinary share* of 5p each 23,020,666' £1,151,033 

Eoviremed's principal activities involve the development and manufacture of various products and the provision of 
various services within the biotechnology, e n vironmental and h eal th care seaac. 

Listing Particular dated 8th March, 1994 are available during normal business horn on any weekdays (Saturdays 
and public holidays excepted) up go arid including 11th Match ,1994, from the Company Announcement Office, die 
London Stock ExchanjpJ, Lccdon Stock Exchange Tower, Capd Court Entrance offBanholotnew Lane, London EC2 
for collection only, and up. to and Including 28th March, 1994 ham the offices o£ 


Singer & Briedlander limited 
21 New Street 

Btshopsgace 

London EC2M 4HR 


Enviromed pic 

1 Butler dose 
Buckingham Gate 
London SW1H OPT 


9th March, 1994 


Garrefaur^f^ 


CAKKKFOl K (JIUHT 

jy»)3 RESULTS ltYT'OHT \OVKH. I KKIM. ITEMS; 

+24.3 T 



93 income before oon-rccurring items. Group share, was FF 
65 mittioii, a 243% increase over 1992- 
t income. Group share, totalled FF 3,010 mffiion, including FF 
45 million in non-recairing items, comprising capital gains 
jized on the sale o£ Carrefour’s interests in Castorama-Dubols- 
estissrments and But. and an estimated charge related to the 
png of two hypermarkets in the Philadelphia area. 
lRREFOUR parent company 

t income of the parent company amounted to FF 820 million in 

». 

the Ordinary General Shareholder Meeting of April 21, 1994, 
: Executive Board will propose the payment of a FF 42 
idend per share (plus a tax credit of FF 21) payable on April 
1994. 

Extraordinary General Shareholder Meeting will also be held 
approve the move to new Paris headquarters and to renew 
frnrhi 8mthnrt«ttions. It wDl also be projxscd to proceed with a 
;-for-one free share issue, starting May 5, 1994. The new 
res will be eligible for dividend aS of January \ 1994. 



tto» «w> repuit an 
tta fcnpo rta nt caatributloa 
mad* to the Mommy by 
•Onto minority b-lnwi. 
In Uio United Kingdom, it 
will ox am In* bow tholt 
More prospect* will bo 
■ H u m) by flo o iptW on at 


bow ttwy are rMpandtag to 
th* rinlwp of *oaaomlo 
revival In tba UK. 

For more Information on 
odUoriW oootMt and data* 
or aawnMflg upfUMuumoa 

oraHaMo In this anrvay; 


ANTHONY O HAYES 
1W;tt2t4M 0922 Ita 0214081 


FT Surv»y» 


FT-1SMA 

INTERNATIONAL 
BOND SERVICE 

[THE FT-ISMA International Bond 
Service, published on Monday to 
Friday in the Financial Times, 
shows daily prices, provided by 
the International Securities 
Market Association, for a 
selection of the most actively 
traded Eurobonds and related 
securities, picked from the 
sectors which best represent 
current market conditions. 

The service sets out to include 
irtain "benchmark" issues within 
the .space available, while still 
to maintain a broad spread 
borrowers and currency 
groups. 

[Selections are reviewed regularly 
by the Financial Times and the 
International Securities Market 


trying 


FIRST BRITANNIA MEZZANINE NV 


European Mezzanine Company advised by: 


MEZZANINE MANAGEMENT LIMITED 

and 


(g 


MERCAPTOVe 


have signed a: 


Joint Marketing Agreement 


to identify and finance development capital 
and debt refinancing transactions in Spain 


March 1994 


This announcement appears as a matter of record only 


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24 


This announcement appears as a matter of record only. 


£120,000 

Zero Coupon Perpetual Bonds 


representing donations to 


THE DEPAUL TRUST 

Housing Homeless Youth 

TkeDepaul Trust 


RELATE 

Relate 


Samaritans 


The Samaritans 


ALLEN & OVERY BA BANKNOTE INTERNATIONAL 

BANK OF TOKYO CAPITAL MARKETS LIMITED BANKERS TRUST INTERNATIONAL PLC 

BOWNE INTERNATIONAL , INC. BMO NESBITT THOMSON LTD. CAZENOVE & CO. 

CLEARY, GOTTLIEB. STEEN & HAMILTON CLIFFORD CHANCE COMPUTASOFT LTD. 

CORPORATE FINANCE MAGAZINE CREDIT LYONNAIS CRAVATH, SWAINE & MOORE 


DAVIS POLK & WARDWELL 
FINANCIAL TIMES 


CREDIT LYONNAIS 

DOREMVS & COMPANY 


GOLDMAN SACHS INTERNATIONAL 


EUROWEEK 
IBJ INTERNATIONAL PLC 


INTERNATIONAL FINANCING REVIEW 
KLEINWORT BENSON SECURITIES 


J. HENRY SCHRODER WAGG & CO. LIMITED 
THE LAW DEBENTURE TRUST CORPORATION PL.C. 


LEHMAN BROTHERS 
MORGAN STANL EY & CO. 
PRICE WATERHOUSE 
SANWA INTERNATIONAL PLC 


LINKLATERS & PAINES JJP. MORGAN SECURITIES LTD. 

NATWEST CAPITAL MARKETS LIMITED NIKKO EUROPE PLC 

SALOMON BROTHERS INTERNATIONAL LIMITED 


SEARCY TANSLEY & CO. LIMITED 


SWISS BANK CORPORATION 
SUMITOMO FINANCE INTERNATIONAL PLC 
S.G.WARBURG SECURITIES 

March 1994. 


SLAUGHTER AND MAY 
SULLIVAN & CROMWELL 


THE WALL STREET JOURNAL EUROPE 
WILDE SAPTE 


• •• ••••-• 


imiimiimiiiiiiiiiimmiimiiiMiimiiiiiiimiiJiiiiiiiii 

TTia j Jm tnrment a in. kJ bi lUnpAwnr mh the repumm-ffli ••fTW fafi-nuniaw / Shift /jr./vwjr nf the 
UiracJ Km& hv n Jad the Republic .y Irrlml ! mutrd Kbc 'ImuJhu Sli.k It dun mil .imililur. jn offer .*• mvibttm m hi thrpnWtc 

hi tubunlir Itr nr purcKac juy tbdrti. AppbfJlioa bjt hm mojr In ikehmdim Shift tei-hiUtf (nr aB ibe Onlvurj Vwn uflSpnxhnl 
furngn cr Cufumd rrwatr f^mry Trior P/.C issurd anil tn he unnf ^urvum In the Pin tu hr jJmillnl tu thr U/fkial I jtt. It D exprrtnl 
(hd lulmg ir3 7 intur effecfwt anti dndmgi m ihr Ordhury Vun i mnmnn ■■ I Mb March. |W4. 

FOREIGN &c COLONIAL PRIVATE EQUITY TRUST PLC 

{Fikiiiqwilexl m FufluJ V)ln mb ihr (mmfijMri W 1 ! 

Placing of 25,000,000 Ordinary Shares of 25p each 
at 

lOOp per share payable in two instalments of 50p each 
with the first instalment payable on subscription and the second 
instalment payable on 30th November, 1995 
sponsored by 

S.G. Warburg Securities Ltd. 

Fnrrfgn & Cbfanuf Private Equity Trust PLC will invest primarily in csraMisfatf small ami mnJium-sizecf unquoted 
companies in rh* United Kingdom. Copies of the Lining Particulars relating to Foreign Be Colonial Private Equity Trust 
PLC and the Placing of the Ordinary Shares will he avjiLablc during normal tnamwa hours on any day (Saturdays and 
puhbe holidays excepted) from the date of this notice up tu and including 23rd Match. 1994 hrnm:- 


TO SAVE ALL m 
THESE TREES WE \ 
•• HELP CHOP • 

• DOWN THIS ONE. • 


Foreign & Colonial Private Equity 
Trust PLC. 

Exchange House, 
Primrose Street, 

London. EC2A 2NY 


Foreign Hi Colonial Vemuro Limited, 
Cvchangc House. 

Prim mac SiTect. 

London. EC2A 2NY 


S.G. Warburg Securities Ltd. 
I Finsbury Avenue, 
London. EC2M 2PA 


V« t 


Copies nf the Listing Particulars are also available during namul business hours for cuMecriun only Irani rhe Company 
Announcements Office, the London Slock Exchange, London Stock Exchange Tower, CapcJ Court entrance, 
off Banholumcw Lane, London EC2 up to and including I ilh March. 1994. ^ 


iiiiiiiiiiiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiil 


DEMOCRATIC AND POPULAR 
REPUBLIC OF ALGERIA 

Thu Miniit rv of Hnmrfny 

Notice of national and international Invitation for the preselection 
ef building companies to construct 2,000 urban public lodgings in 
Algiers. 

The Ministry of Bousing issues a notice of the invitation for tenders 
in order to praoeleet national and foreign companies which will he 
rropomubla for the implementation of a programme to build 2300 public 
Imlglnp Hnnnmri hy the Saudi Dflveloprrwnt Fund. 

This programme wiD be divided as folio wa: 

• 687 lodgings in Verte Kin, Bordj El Kiffnn 

• 324 Iwlg in g u in Rah FjMnm 1 

-300 lodgings in Bab Ezsooar 

- 309 lodgingB in Dar El Beida 

- 380 lodgings in Said Hamdme (Btrithadem) 

The implementation of this programme wiO require the ability' to 
meet building deadlines and provide a high quality construction. 

Suitable companies will be allowed bo tender for one or more 
suction* of the programme. 

National and faarign cnmpsniea will he able fa> ta farm 

a jointly liable group within tLs framework of a partnership. 

This form of procedure is favoured in order to strengthen the 
realization capacities of national companion. 

Interested companies can obtain a brochure specifying the terms 
and conditions from the Ministry of Boosing at 'Direction doe 
Programmes dHabitai et de la Promotion Immobilize"*, 136 rue 
Didooebe Mooznd, Algiers, &«m 9 ajn. tin 11 aasL and 1 pjn. tiD 4 pjn. 

The deadline for tenders is set at 30 days after the publication of 
tide notice inviting for tender preseleetion. 

NB: *Hie preeent notice of invitation for tendm preselection rtplacsB 
the pravi mte notice which was published in the Algerian mtimul f i m nn 

• Supervision of Hugging Programmo* and Pnquuty Devuloianant. 


PERSONAL 

PUBLIC 

SPEAKING 

Training aid speech- 
writing by award winning 
speaker. 

First lesson free. 

Tel: <0727)861133 


APPOINTMENTS 

ADVERTISING 

Appears in die UK edition every 
Wednesday & Thursday and in 
the International edition every 
Friday. For information cm 
advertising in this section please 
call: 

Philip Wrigieyon 
071 873 3351 

Gareih Jones on 
071 8733779 

Andrew Skaxzynski on 
071 873 4054 


• • • • «• 

Tinned hiniwuad trees arc men 
vihable to loggea than other net m tic 
uiifuut- 

High paca tU Lmirox fa ensure dot 


So iWWF project m Cola I 


i arc turd woety. they 


WWF 

Wtorid Wide Fund For Nature 

Fnfl 

hm amn wl Sana a . nMGbnUmotad 


THE BUSINESS 
SECTION 


appeaoflWyTtei&jnSmrtay. 

fkfliruSaa 

MdatiMkaso 071^8733308 or 
‘ Kart lapnm aa 071-0734780 
or«ite to that n H* Hmneid Tines. 
OwSowimst Bridge. 

LooJoaSHl WL 


By Andrew Botger 

A sharp fall in interest 
payments helped Suter, the 
industrial conglomerate, to 
increase 1993 profitability in 
spite of continuing tough trad- 
ing conditions in its main mar- 
kets. 

Pre-tax profits increased 
from £15.21X1, adjusted for 
FfiS 3, to £38-2m. which 
included a £19 -lm gain on the 
disposal of the group’s indus- 
trial valves division for £36m 
last ApriL In 1992 there was a 
£l.lm exceptional charge relat- 
ing to a provision against the 
value of an associate undertak- 
ing. 

Stripping out exceptional 
items left pre-tax profits up by 
17 per cent to £19. lm. 

The disposal cat gearing 
from 70 per cent to 11 per cent 
and interest payments fell 
from £4.1m to £L4m. In Janu- 
ary, the group completed a sale 
and leaseback of an industrial 
estate in Staffordshire and 

e liminating borrowings. 

Group sales fell to £18&9m 
(£l96m) including £6.9m 
(£23.5m) from discontinued 

Thorntons 
surges 36% 
to £9.6m 

By David Blackwell 

Thorntons, the chocolate 
maker and retailer that has 
reorganised its lossmalting 
French businesses, reported 
pre-tax profits of £938m for 
the 28 weeks ended January 8. 

“This is well above anything 
else we have reported before”, 
said Mr John Thornton, chair- 
man and chief executive, yes- 
terday. 

The 36 per cent rise from a 
previous £7.02m reflected the 
benefits from last year’s 
French reorganisation, which 
helped push the group £4.8m 
into the red at the year-end. 

Mr Thornton said the ration- 
alisation was almost complete. 
The French business would be 
concentrated on 20 simps in 
Paris, with 20 outlets being 
dosed. 

At the operating level the 
loss from French operations 
was cat to £93.000 for the half, 
compared with £846,000 last 
time. “We are very confident 
about the future”, said Mr 
Thornton. 

Total group turnover from 
continuing operations rose by 
almost 10 per cent from 
£5 1.4m to £56. 4m, not includ- 
ing £2J27m (£2 35m) from dis- 
continued operations. 

In the UK sales woe boosted 
by a strong Christmas period, 
which accounts for 30 per cent 
of annual turnover. Like-for- i 
like sales in Thorntons own 
shops were 4.1 per cent ahead. 

Total UK sales, which 
include turnover from fran- 
chise outlets, chilled cabinets 
and “own label” sales to multi- 
ples, rose by 10.5 per cent to 
£543m. 

The group opened 46 new 
outlets in the period, compris- 
ing 10 Thorntons shops, one 
fran chise and 35 chille d cabi- 
nets shed in other shops. 

Mr Thornton said the group 
had made general gains in the 
efficiency of its distribution 
system, cutting waste. Overall 
capital expenditure was £5m, 
down from £8. 5m. 

Earnings per share rose 
from 7.38p to 9.82p. The 
interim dividend has been 
raised to L45p (L25p). 


SAMANTHA 
INVESTMENTS PLC 

£15 milSon Subordinated 
Floating Rate Notes 
Due 2001 

In accordance with the 
provisions of the Notes, 
notice is hereby given 
that for the interest period 
from 7th March, 1994 to 
6th September, 1994 the 
Notes wii carry interest at 
the rate at 6.9375 per cent 
per annum. 

Interest payable on 6th 
September. 1994 will 
amount to £3,478.25 an 
each £100,000 Note. 

West Merchant Bank Limited 

AgsmSank 


TO THE UMTHOLDERS OF 
THE DRAGON FUND 
DIVIDEND ANNOUNCEMENT 

Tbc Boarf of Directcrs of the Dragon 
Fund Management Company, «t)»g 
for and on behalf trf tbc Dragon Fuad, 
has decided oo February 3, 1994 to 
distribute > dividend amounting to 
USD 30,- per aniL The ex-dividend due 
Will be on Match 9, 1 994, the p a y m e n t 
dale win be on March 1 6, 1994. 



COMPANY NEWS: UK 

Valves division disposal 
boosts Suter to £38.2m after fan 

ued businesses, rose from 9.4 to tO 
10JB per cent „ jauiu**™, 

Mr David Abell, chairman. By DavW WfflMwi 

S5s tffetavc tEftSffiZSSl 

^i^addS that no decision 

had been made regarding its divide^atorpre^xpr^ 
James Wilkes, the Sheffield its slumpcdfrom £li.am to 

engineer In which Suter £7 - I4 “ l “ 1 ^ m th „ V „ HP 
M Mn Hy rajcg it ri!> t p inj^5 Profits for the year to 
thl chair- December 31 were struck after 
man could not resist saying £289.000 of 
that the two groups offered “a former chief “J 

m as near perfect as you would 

Suter announced a further salary of £135.000. 
bonus issue of warrants of one Mr Keith ^ 

for every 10 ordinary shares mer finance dtnclBr wto tea 
held. Mr Abell said terms been acting chief 
would be structured so as not 1,15 

d Abell: sees gradual to conflict with last year’s war- seale of compensation 
ovetnent continning rant Issue. reflected the fact that Mr 

Warnings per share grew to Cuthbert was over 50. • 

ities. Continuing busi- 22.7p (8.7p) or 21p (8.6p) fully Exceptlonals of 
as grew by 4 per cent to diluted. Stripping out the included £580,000 of costs 
xl, while trading profits, exceptional, earnings rose relating to acquteitious wmeb 
iding the industrial valves by 18 per cent to 11.5p (9.7p) or were aborted eariy to the yew- 
ion, rose by 20 per cent iL3p (9-6p) fully diluted. when the scale of the groups 

£16^m to CTQ-Sm. A recommended final divi- problems became oear^ ^ 

spite of competitive pres- dend of 5.8p gives a total of Earnings per stare dropped 
i on margins, the return 9.2p (8.8p), a rise of 4.5 per from lOp to just S^p. Twee 
ales, winding discontin- cent was a reduced final or — 4p 

(5.8p) leaving a total of 4p 

(7.4p). 

rust launched to seek FSHtSn K 

posal of businesses. 

ldervalued assets | operations rose 5 per cent to 

£li4m. Excluding except! on- 

athan Hutton company in 1990 alter monag- als, operating profits to the 

ing funds for Scottish Provi- continuing businesses fell 
ish Value Management is rfmt, FS Assurance and Tem- from £9^hn to £6m. 

Thing an investment trust pleton. The company said there had 

h aims to seek out under- The company already man- been some improvement to the 
ed UK commercial and ages two listed investment UK and US but not In conti- 
jtrial companies. trusts, both of which invest in nental Europe which accounts 

e Undervalued Assets other investment trusts. It also for 43 per cent of sales, 
t is expected to raise £4Qm- has an insurance fund, SVP However, Lord Lane of Hot- 
i through a placing and Superior Growth, with an sell, chairman, sold, “the 
for subscription. investment remit similar to the lower cost base from which we 

tnpanies will be selected new trust Launched in Octo- now operate should enable us 
ugh value management her 1991. it was among the top to make further progress to 
liques. analysing account- ten performing funds (oat of 1994.” 
lata to find shares which more than 600) last year. Mr Hutchings was yesterday 

1 at a si gnificant discount Undervalued Assets Trust is confirmed as chief executive, 
eir real worth. issuing only ordinary shares, with Mr BUI Jessup, former 

lie UK market Is not an breaking the current invest- finance director of Beanford, 
ent one. Exaggerated mar- ment trust trend for all trusts, the struggling engineering 
sentiment can colour per- except those with a split capi- group, replacing him as 
ons of a company, cloud- tal structure, to attach war- finance director. Lord Lane 
udgment on shares where rants to their ordinary shares, will retire next year and be 
; is value to be found,” The placing is due to close succeeded as chairman by Mr 
Mr Colin McClean, manag- on March 31. and the public Alec Daly, who joined the 
lirector of Scottish Value offer will run from April 6 to board a year ago. 
tgemest, who set up the April 20. The shares fell 15Vap to 105p. 


David Abell: sees gradual 
improvement continning 

activities. Continuing busi- 
nesses grew by 4 per cent to 
£180 nx, while trading profits, 
wminriing the industrial valves 
division, rase by 20 per cent 
from £L6Jm to £19.5m. 

In spite of competitive pres- 
sures on margins, the return 
on sales, excluding discontin- 


ued businesses, rose from 9.4 to 
108 per cent 

Mr David Abell, chairman, 
said: *T expect to see a continu- 
ation of the overall gradual but 
uneven improvement we have 
experienced in 1993.” 

He added that no decision 
had been made regarding 
James Wilkes, the Sheffield 
engineer in which Suter 
recently raised its stoke to 29.5 
per cent. However, the chair- 
man could not resist saying 
that the two groups offered “a 
fit as near perfect as you would 
get". 

Suter announced a further 
bonus issue of warrants of one 
for every 10 ordinary shares 
held. Mr Abell said terms 
would be structured so as not 
to conflict with last year’s war- 
rant Issue. 

Kamingg per share grew to 
22.7P (8.7p) or 21p (8.6p) fully 
diluted. Stripping out the 
exceptional, earnings rose 
by 18 per cent to 118p (9.7p) or 
lL3p (9-Gp) fully diluted. 

A recommended final divi- 
dend of 5.8p gives a total of 
9.2p (&8p), a rise of 4.5 per 
cent 


Trust launched to seek 
undervalued assets 


By Bethan Hutton 

Scottish Value Management Is 
launching an inves tment trust 
which aims to seek out under- 
valued UK commercial and 
industrial companies. 

The Undervalued Assets 
Trust is expected to raise £40m- 
£50m through a placing and 
offer for subscription. 

Companies will be selected 
through value management 
techniques, analysing account- 
ing data to find shares which 
stand at a si gnificant discount 
to their real worth. 

The UK market Is not an 
efficient one. Exaggerated mar- 
ket sentiment can colour per- 
ceptions of a company, cloud- 
ing judgment on shares where 
there is value to be found,” 
said Mr Colin McClean, manag- 
ing director of Scottish Value 
Management, who set up the 


company in 1990 after manag- 
ing funds for Scottish Provi- 
dent, FS Assurance and Tem- 
pleton. 

The company already man- 
ages two listed investment 
trusts, both of which invest in 
other investment trusts. It also 
has an insurance fund, SVP 
Superior Growth, with an 
investment remit similar to the 
new trust Launched in Octo- 
ber 1991, it was among the top 
ten performing funds (oat of 
more than 600) last year. 

Undervalued Assets Trust is 
fasnmg only ordinary shares, 
breaking the current invest- 
ment trust trend for all trusts, 
except those with a split capi- 
tal structure, to attach war- 
rants to their ordinary shares. 

The placing is due to close 
on March 31. and the public 
offer will run from April 6 to 
April 20. 


Sunleigh 
breaks even 
second half 

Sunleigh, the USM-quoted 
leisure products concern, broke 
even in the second half of 1993 
leaving annual pre-tax profits 
at £208.000, against Losses of 
£557,000. 

The result was after taking a 
charge of £397,000 for the loss 
on sale of discontinued activi- 
ties, offset by a £250,000 release 
of provisions. The previous 
year there was a net release of 
provisions of £71,000. 

Turnover for the year was 
£15.7m (£12.9m) of which 
£263800 (£l_21m) related to dis- 
continued activities. Earnings 
per share were 0.05p (losses 

086p). 

Instem 

Improved performance and the 
completion of several large 
contracts during the year 
helped Instem, the USM-quoted 
information systems group, lift 
pre-tax profits for the year to 
December 31 to £1.02m. 


NEWS DIGEST 


This compares with £575,000 
last time, when the figure was 
hit by an exceptional £386,000 
for bod debts. 

Turnover was up from 
£14 3m to £193m and earnings 
per share came out ahead 'at 
143p (8.5p). 

A same-again final of 1.8p is 
recommended, to give a total 
maintained at 3.1p. 

Pacer Systems 

Pacer Systems, the US-based 
electronics group traded on the 
USM, increased turnover from 
$27.6m to ?303m (£2Q.6m) for 
1993 but suffered a fall in pre- 
tax profits from 5531,000 to 
5357,000 (£244*520). 

Earnings per share were 4 
cents compared with 6 cents 
while the dividend is 
unchanged at 63 cents with a 
same-again final of 33 cents. 

USDC 

USDC Investment Trust, man- 
aged by GT Management, lifted 
net asset value by 30 per cent 
to 2SL5p over the 1993 year, 
outperforming the gain of 22.6 
per cent achieved by the FT-A 
World Index. 

The dividend is maintained 


at 43p with a final of 335p, 
paid from net revenue lower at 
£L72m (£2.05mX Earnings per 
share were 4.69p (5.59p). 

Sumlt 

Fully-diluted net asset value 
per ordinary share of Sumit, 
the development and venture 
capital investment trust, stood 
at 154p at the December 31 
year end. That compared with 
103p at the half year stage and 
95p 12 months earlier. 

The announcement yester- 
day of a proposed placing by 
Portico at 200p per share will 
increase S umit's fully-diluted 
figure to 186p. At the placing 
price the trust’s interest in 
Portico, including its holding 
of redeemable preference 
shares, will be valued at £63m 
- a gain of £3m over its Decem- 
ber 1993 valuation. 

Sumit has indicated its 
intention to sell a third of its 
holding in Partico’s ordinary 
equity at the placing price 
which will realise £L7m. 

Available revenue for 1993 
improved from £161,000 to 

£303,000, for ea rning s of 42p 
(23p). A final dividend of 23p, 
compared with a 13p forecast, 
makes a 3p (Up) totaL 


This notice is issued in compliance with the requirements of The tatematiorul Stock Exchange of the 
United Kingdom and the Republic of Ireland Limited ("the London Stock Exchange"). Application has 
been made to the London Stock Exchange for the whole of the ordinary share capital of United Industries 
pic issued and proposed to be issued to be admitted to the Official List 

ft is expected that admission to the Official List will become effective and that dealings will commence 
on 31st March 1994. 

UNITED INDUSTRIES pic 

(Incorporated and rtgiaiend in England and Woles No. 2690031 * 

The principal activities of United Industries pic, following the implementation of the proposals. wiU be 
the manufacture of non-metaiKc bearing materials, specialist polyethylene and polyurcthaneOTmoonents. 
materials handling systems, precision springs and process machinery. ^ 

Proposed acquisition of Holden Hydroman, 
Perplas and Railko 

Placing and Open Offer 

by 

N M Rothschild and Sons Limited 

of 

186,497,695 Ordinary Shares of 5p each at 15p per share 


Authorised 


Share capital following the Placing and Open Offer 


Amount 

£15,635.023 

£1.864,977 


Number 

312,700,461 

37,299339 


Ordinary Shares of 5p each 
Deferred Shares of 5p each 


Issued and now being issued 
folly paid 

, Number 

Vi 1 ’ 1 ® 9 ’ 861 223,797334 

£1,864,977 37399339 


P ' C ** — n™* butino, 

"““rff™ u *^££Sr , ’ , ' 

St Swi thin's Lane Leicester LE4 7LL 

London EC4P 4DU Court Howe 

*0 Famngdon Road 

a ..-W.l I hmI iim, hmiK m Qt+i anil IfllH ,n„. • London EC1M 3NH 


United Industries pie 

Borkby Road 

Leicester LE4 7LL 


and during normal badness hours on 9th and 10th March 1994, for colleen™ , C1M 3NH 

Announcements Office, London Stock Exchange Tower, Cape! Court ° « i™* 11 Company 

London EC2_ entrance, off Bartholomew Lane, 


9th March 1994 










•saK 

M 


FINANCIAL TIMES WEDNESDAY MARCH 91994 


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Heron International Finance B.V. 

(.the “Issuer”) 

Notice of separate Meetings of 

the holders of the outstanding £205*639,869 
754 per cent. Senior Bonds due 1995-1997 of the Issuer 
(the ‘Senior Bondholders” and the “Senior Bonds” respectively); 

and 

the holders of the outstanding; £50*239,743 
10 per cent. Junior Bonds due 2000 of the Issuer 
(the “Junior Bondholders” and the “Junior Bonds” respectively) 


NOTICE IS HEREBY GIVEN 
L that a mcctruRDf the Sci 


L Chat a raceting of the Serdor BondholdezscoDveaed'by Ibe Issuer wiU be beM at The Coafereoce Fonon, The Sedgwick Centre, 10 Whitechapel High 

Su m, Lond on El 8DX on Thursday 3 La March. 1994 ai 10.00 »m. (London dmej for die purpose of considering and, if thought Gt, passing, the 
Exnaaniiirary Resoluiion of Senior Bondholders s« om below which will be proposed by the Issuer as an Extraordinary Resolution; and 
% that a meeting of the Junior Bondholders convened by the Issuer will be held at the above venue on the same date commencing at 10.01 ajm. 
(London time) (or so goon thereafter as the meeting of Senior Bondholders referred to afcowc shall have been concluded or adjourned) for the purpose of 
' considering and, if thought fit, passing the Extraordinary Resolution of Junior Boodhoklm set out below, which will be proposed by the Issuer as an 
Extraordinary Resolution. 

Extraordinary Resolution of Senior Bondholders 

“THAT; subject to the obligation to pay interest due on 3Jsr March, 1994 on tbe Senior Debt, as defined in a Thtsr Deed dated 24tb September, 1993 made 
between the Issuer (IX Heron Imenmjanal N.V. and various other Heroa Head Office Divisioo Companies (2) and The Law Debenture That Corporation pJLc. 

. (the ’'Trustee") as trustee far holders of the Senior Bonds and the Junkr Bonds (3) (the “Trust Deed"), owing to tbe Signatory Banks (as defined in the Trust 
Deed) being deferred by the Signatory Banta until 30th lone, 1994 (.the “DereraP) on the terms described in thc cupy of tbe Explanatory Statement (the 

- ‘^gflanatoiyStalancnO produced ro this meeting and for the purpose of identification signed by the Chairman tfaet^by amendment to snchdocnnarntarioo 
and by such other means as the Tkustee shall agree, this meeting of tbe boUers of the outstanding £205,639,869 W per cent. Senior Bonds due I99S-1997 of the 
Iisuer cOTsduaed by the Trust Deed berebyr- 

0) assents to the modificati on of the terms and conditions of the Senior Bonds as printed bn the reverse thereof and in the Fifth Sch e dule to the That Deed 
ly the ddcrion of the Graisemence of Condition 5(1) thereof and ihe snbsrinnion therefor of the fpUowmg;- 

‘The SenimBtmds b<w interest on dieir iMdstanding principal amonni fioB day U) thy finm and mclnding 30th July, 1993 ai the rate of 7X per 
cent, per anoum.payablc on 30lh June. 1994 (the “First Interest Payment Date") in respect of the period from and indiidnig 30th Jtrfy, 1993 to but 
excJwfing 31st Marti, 1994 (the “Fim Interest Period”) and thereafter in anear on 3l» March in each year in respect of a full year (each such 
dare, together with the Fust Intones Payment Dale, an “Interest Payment Dare’'). In addition to the interest payable in respect of the Senior 
Bonds an tbe First Interest Payment Date in respect of tbe First Interest Period, die Senior Bonds shall bear interest (“Additional Interest") from 
day today from and m r.ln ding 3l5t Match, 199* to but excluding the First Interest Paymen t Pate at a rate of 7B per cent, per annum on tbe amount 
of interest which would otherwise have been payable on 31st March, B>94 but for the modifications made to these Condmcni and the That Deed 
pursuant to an Extraordmaiy Resolution of the Senior Bondholders passed at a meeting of the Senior Bondholders held on 31st March, 1994 and 
such Additional Interest ahall be payable by the issuer on the Fim Interest Psymenl Dane.*' 
and assents to ail such modifications of the terms and conditions of ibe Sa^Bimdsaodoftheprovisaas of the other Relevant Documents (as defined 
in the Trust Deed) consequenriid to such m odifica ti ons ro Corafeioa 5<l) a* arc set odor described in the Ex planator y Sratrracnt: 

(2) assents (re- 
ft) the extension of the term of the Poat-Imp te mcntaJon Date New Money Fatitities (as defined in the That Deed) (in the amount of a 

maximum of £34.5 million! to 30th Jane, 1994 on leans agreed with the New Money Lenders (as defined in the Thus Deed) and set not or 
described in the copy of the Explanatory Statement produced to this Meeting and signed for the purposes of identification by the Chairman 
thereof and on the basis that interest inrespect of indebtedness undersoch facilities will accrue and be charged during the period of such exten- 
sion on the same basis as cturently applies; 

, ftO the deferral to 30th June, 1994ofihepaymentof fees under the Deferred Standfast Fees Arrangements (as defined in the Dust Deed) on the basis 

that interest will be dunged in nagpedpf amounts omstantfing under the Deferred f&anriftM. Fees Arrangements daring the period from and 
including 3Tsr March, 1994 to but excluding 30th June, 1994 at a tats agreed with the persons to whom such fees are due as set out or described in ■ 
the copy of the Expbmauxy Statement produced to (bis Meeting and signed for the purposes of identification by the Chairman thereof and to be 
payable on 30th June. 1994 together with such fees: 

(in) the continuation erf the security and priorky rankings currently afforded to, respectively, the Foet-lm pleinenaiti on Dale New Money Facilities 

and the Deferred Smrtfira frMAmnp i n eiM piiniiim m Office Merihnri T«rn A wag^raen lx (■» defined in rhe Truer need) riming 

the atlemlniif pfriy ^yncntriidi facilities and «rriinymwil« n ermtwn plnted te m^lvjiinigntplff (j) and (ii) ihnvt, the priority and Funking 
afforded lo the Pott-ImplenientHtioaDatt New Money facilities for tbe avoidance of doubt to extend to all fifftber advances made thereunder 
and ibe respective priorities and, cookings for the avoidance of doubt also to extend to interest waning: 
and assents to all modifications of file provisions of the Relevant Documents or the Head Office Medium Term. Restructuring Agreement (as defined in 
the Ttast Deed) as are set out or described in the copy, of tbe Explanatory Statement prodoced to this Meeting and far the purposes of identification 
signed by the Chairman ihereofmchiding without limitation any such modifications as may be necessary to give effect to sui± extension, deferral and 
eantmuation of security and priority rankings; 

(3) assents to the Deferral and to the payment of additional interest at a rate of7H per cent per anhum on (he amount of interest which would otherwise have 
been payable on 31st March, 1994 to the Signatory Banks m respect of the Senior Debt owing to such Signatory Banks bra for the Deferral an the basis 
set oni or described in tbe copy of the Explanatory Statement prodoced lo this Meeting end signed for fee purposes of identification by the Chairman 
(hereof and assents to aEsnchmbdificatiaiisaF the pravfstaasfiT the Relevant Documents and fee HeadOffice Medium Tfcnn Restructuring Agreement 
as are necessary id give effect to the Deferral and such payment of additional interest;' . 

(4) sanctions every abrogation, modification, comp ro mise or arrangement in respect of the rights of the Bondholders and the hokkn of the Coupons 
appertaining to die Booth in bearer form or the rights of any otherpeoon against the Head Office Signatory Companies (as defined in the Dust Deed), 
whether such rights shall arise under die provisions of the Relevant Documents or die Head Office Medium Term Restructuring Agreement or other- 

, wise, involved in or resulting from ihe modifications referred to in paragraphs ft). (2) and (3) of this Rrsohnkm; and 
. (S) . authorises and requests tbe Thistee to concur in the modifications referred to in paragraphs ft) to (4) inclusive of this Resolution and, in order to give 

therein fm i l miirh wwwiw ■ Bwpp lwwwl TmcT TVcri in fWrm nf the rireft pmrinreri tn th'i« nwrirtg nrvi fnr HW> pnTprac, nf iHwirififOfinn 
. signed .by the Chainnm thereof with such amendments ftf any) iheicto as the Thistee shall require, to concur in and execute and do all such ocher deeds, 
irntrum e m s. acts md things as may be necessary do give effect to such ro ot fi fic at ioiM and lo give all snch waivers, consents md approvals under the 
Relevant Documents or the Head Office Medium Tnm Restmcmriug Agreement as may be necessary or appropriate b connection with the assents, 
sanctions and modifications refeged to in this Resolution." 

Extraordinary Reaohrifon of Junior Bondholders 

■THAT ibis meeting of the holders of the outstanding £50.239,743 K) per cent. Junior Bonds doe 2000 of the Issuer constituted by a Thtsr Deed dated 
24th September, 1993 (the “T rust Deed") made between tbe ksuerftX Heroa Intenranomi N.V. and various other HenmHead .Office Division Cotqpanies (2) 
and The Law Debennnt Dust Corporation p-Lc. (the “Thistee") as trustee for tbe boldm of (he Junior Bonds (3) hereby sanctions, pursuant to proviso (i) of 
paragraph lg nf ftw Bightti m h.# TVwt rwH, tint Extraordfoary R*«ftinHnn nf the Senior Bondholder* ner out in foe notice of meeting of Senior 

Bondholders dwwd 9th March, 1994, sanctions each modification, deferral, payment, continuation, abrogation, com p ro mis e and arrangement 

- if dm' and hn«»9w Mithnrkr * anA Tmat^tp tn AyiwnMrt*, htw nnd Himpc ««i are 

^ ftpt y a^-^rBmianBdbvthftSemo ^^hnlri mmpfflagramE^ of lbtf Extras *r / '"..1 

■ • ’ ..... Further Details ‘ ' 

Details of foe badcgnwnd to, md foe reaaons for, the proposed modifications and the Extraordinary Resolutions "and details of any modifications of foe 
provisions of the Retevam Documents or fonHead Office Medium Term Restructuring Agreement will be contained in the Expbmwxy Statement, which is . 
being prepared by the Issuer. Copies of the Explanatory Statement will be available fbrcoUectioa at the specified offices of the Paying Agents set out below 
from Kkh March, 1994 until the (fete of the Meetinga and will be despaifoed lo Senior Bondholders or Junior Bondholders at their request by any of the Paying 
Agents as follows. Copies of foe Explanatory Statement requested on or prior to Ifith Much, 1994 will be despatched on that date. Copies of the Explanatory 
Statement requested after ita Match, 1994 btt before foe date of the Meetings win be despatched forthwith; 

The Mieminn of Senior Bomflioldeix and Junior Bondholders is in partiaihtr drawn to foe^ quotum required for the Meeting and for an adjourned Meeting 
(as defined below) which is set out in paragraph 2 of "Voting and Quorum” below. 

Copies of foe Dust Deed fmclotfing die Hams and Co n ditions of the Seoior Bonds and the Junior Boads) and the draft Suffakmenial Thrg Deed referred 
to in the Extraordinary Resolution of the Senior Bondholders xerost above and of certain ofoeneievmt documents will be available (hr inspection by die 
Senior Bondholders oni foe Junior BondboMea at the specified offices of foe Paying Agents set out below. 

In accordance with normal practice, the Dintcc e xp res s es no opinion on foe merits of tlreproposod modifications but has authorised it to be stated that on the 
basis of tbe information set out herein and on die basis that ibe Explanatory Statement of the Issner will be available as aforementioned md will contain such 
information as will enable the Senior Boodholdera and fob Junior Bondholders to make an informed decision as to the action to be taken by them in relation to 
tbe Extraordinary Resolutions it has no otyection tothe respective ExtraonEmiry Resolutions being subannedto foe Senior Bondholders and the Junior Bond- 
holders for their consideration. 

..." - Voting and Quorum ' 

These notes are applicable u foe meeting of foe Senior Bondholders and to the meeting of the Junior Bondholders convened above: References to "the 
Meeting” shall mean in the case of Senior Bonds or Senior Bondholders die meeting of Senior Bondholders and in tbe case of Junior Bonds or Junior 
B nnrfHnMgn i foe meeting of Junior BondhnliW s. All references in this voting and qu orom s ec ti on shall include reference to tbe Meeting or. if applicable, arty 
adjourned such Meeting unless the context otherwise requires. 

L(a) Bearer Senior Benda or Junior Bonds 

A holder of one or more Senior Bonds or Junior Bonds in bearer form (“Bearer Bonds") wishing to attend and vole at foe Meeting in person must 
produce it tbe Meeting ehber the Bearer Band(s), or a valid voting ceniucme or valid voting certificates issued by a Paying Agent relative to die 
Bene* Bondi*), mrcapecl of which he wishes to voc& 

A holder of one or more Bearer Bonds rex wishing to attend and vole at die Meeting in person may either deliver his Bearer Bood(s) or certificare(s) 
IQ. foe perron whom he wishes in anend on his behalf or give a voting instruction (through Eutodcar or Cede! SA or on a voting imauctiun form 
■ obtainable from the specified offices of the Paying Agents set out below) instructing a Paying Agent to appoint a proxy m a tt e n d and vote at tbe 
Meeting in accordance with his instmaiem. 

- Bearer Bonds may be deposited wife any laying Agent or (to tbe saiisfaciionof snch Paying Agent) held to Usotder or under its control (wfaicb shall 
include being blocked in a securities account at Enroclear or Cede! SA.) mail the time beings 48 bouts before the time appointed for holding die Meeting 
for, if applicable, any adjourned sacb Meeting) but not thereafter for the purpose of obtaining voting certificates or giving voting instructions in respect 
of foe relevant Meeting- Any BcarerBontKs) so deposited or held will be released at ihcco n dnsi o a of the Meeting (nr. if a^licable. any adjourned such 
Meeting) or upon surrender of the voting certificate^) or, not less than 48 hours before foe lime for which the Meeting (or, if applicable, any adjourned 
such Meeting) is convened, the voting insn\Ktioo receipUs) issued in respect thereof. 

(b) Registered Senior Bonds or Junior Bonds 

A bolder of one or more Senior Bonds or Junior Bonds ta registered form ("Registered Bonds") wishing to attend and vote atthe Meeting in person 
may do so whether or not be produces to the Chairman of the Meeting the Registered Bond(g) of which he is tbe registered holder. 

A holder of Registered Bonds not wishing to anend and vote at foe Meeting in person may by a form of proxy (obtainable from the specified offices of 
pw. paying Agent* rer our helowl signed bv the holder or. in the case of a corpora tion , exeemeri under its common seal or signed on its bchaifbv an attor- 
oey or a duly authorised officer of the corporation, appoint my pereon ata proxy to an on Us or its behalf in connection wife foe Meeting (or, If 
applicable, any adjourned such Meeting)- To be valid a form of proxy (together with foe powerjof attorney (if any) or other authority under which it 
was executed or a notariaBy certified copy of such power or authority) must be delivered to the specified office of any of the Paying Agents not Jess than 
48 hours before foe time appointed for hohfing the Meeting (o^ if applicable, any adjourned snch Meeting). • 

Any bolder of Registered Bonds which s a corporation may by resolution of its directore or other governing body authorise any person to act as its 
representative ihereinafter called a "representative") in oormectian with foe Meeting (or, if appficabfe, any amounted aneb Meeting). 

2. The quorum required at the meeting of Senior Bondholde r s and at foe meretogofJiiniorBo nrih o falBCT is in each case two onnoie pence* present hold- 

ing ggniw Rnmi* at Junior Bonds as ite cage may fa or voting certificates or being proxies or representatives and bolding or nmujenting in foe aggre- 
gaie not less dan a clear majority of fee prindpal amount ortbe Senior Bonds or foe Junior Bonds as foe case may be for the timebemg ootstantfing. If a 
quotum is no! present at ti« Meeting thr inquoraie Meeting wHl be adjourned and the Extraonfinaty Resolution intended to be put to tbe inquorate 
Meeting wOl be considered at an adjourned Meeting. (notice of which will be given to the hojdent of foe relevant Bonds). The quorum al such an 
wijoumed Meeting wUl be two or more perrons present hokfing Senior Bonds or Junior Bonds as fob case may be or voting cenificaies'or being proxies 
or representatives whatever the pnncipal amomnof foe bonds so held or represented by them. 

3 Every question submitted to the Meeting^ will be deckled on a show of hands unless apoU is duly demanded by the Chairman of foe Meeting or by the 
Issuo- or foe Thoflec or by any Bondholder present holding Bonds or voting certificai es or being a proxy or representative whatever tbe prindpal 
amount ofihe Bonds so hdd or represented by him. On a show of hands every Bondholder who is present in person and produces a Bearer Bond or 
■noting nr t« n holiter of Rqpaiered Bonds or is a nmxv or representative shall have one vote. On a noli every person. who is so present shall 

haveooc vote in respect of «tth £3 in nominal amount erf the relevant Bonds so produced or r ep re sent ed by the voting certi fi ca te so produced or in 
reaped of which he is the registered holder or* proxy or representative. . _ 

. Tb Ira TTflffT- 1 . an Extracwdinary Resolution of either foe" Senior Bondholden or the Junior Bondholders requires a majority in favour consisting of 
not Iwsfomforee-fourfos of foe^ votes cast. If passed, an Extraardmary Resolution of either the Senior Bondholders or the Junior Boodholdera will be 
binding upon all the Senior Bondholders or Junior' Bondholden as the case may be, whether or not present at such Meeting and whether or not 
voting, and upon all holders of Coupons appertaining to the Bearer Bonds. . 

By Oder of foe Board of Directors 
of Heron faternational Finance B.V. 

Registered Office: 
i Bczuldcnhoutscweg 33 

2594 ACThe Hague . - 

The Netherlands 

Dated: 9fo March, 1994 

Principal Paying Agent ■ 

The Chase Manhattan Bank. MA. . 

Woolgate House 
Coleman Street 
London EC2P2HD 


Qtwtf Manhattan Bank Luxembourg S.A. 
5 Rue Places 

L-2338 Luxembourg Gnmd 

Banque Bruxelles Lambert S A. 

24 avenue Mamix 
B- 1 050 Bruxelles 


Other Paying AgenU 


Chase Manhattan Bank (Switzerland) 
63,roedu Rhfloe 
1203 Geneva 

Deutsche Bank AQ 
Xumosanlage 12 
60325 Frankfurt am Main 


COMPANY NEWS: UK 


Diversification helps 
Polypipe advance 16% 


By Paul Taylor 

Polypipe, tbe Doncaster-tased 

I Tmnrmfarinm r q[ Vnrtnift-HhT arid 

commercial plastic pipes and 
1 fittings and other domestic 
plastic products, yesterday 
reported a 16 per cent increase 
in interim pre-tax profits from 

£fl-4m to £7-45m. 

The profit improvement 
came on turnover wMch grew 
by 23.6 per cent to £60.8m 
(£49 .2m) in fha six months to 
December 31 including a frill 
6-month contribution from 
Allerton Glass which was 
acquired last May and merged 
with GCA Windows. 

Earnings per share advanced 
by IS per cent to 3.2p (2.78p) 
and the interim dividend is 
being raised by 7.6 per cent to 
0.71p (0.66p). 

Polypipe’s shares dosed 2p 
higher at 175p. 

Mr Kevin Mf-TVmalH, chair- 
man, said the results reflected 
“the continuing strength of 
both the group and its 
operations and the continua- 
tion of our strategy of expand- 
ing wherever possible each of 
our businesses, investing in 
plant and tooling and extern- 



domestic plastic products, 
which now include bathroom 
fixtures, windows and garden 
furniture, advanced by 35 per 
cent to rafts™ (£20Bm) while 
operating profits from these 
activities grew by more than 
SO per cent, from £T226m to 
£L91m. 

Overall operating profits 
increased by 14 per cent to 
£7.48m (£6L54m) despite rela- 
tively large increases in the 
purchase price of FVC which 
affect Polypipe's sales of above 
and below ground drainage 



Kevin McDonald: results 
reflected product development 

sive product development” 

The latest figures also high- 
light the success of the group's 
diversification since 1990 into 
non-core products by broaden- 
ing its operating base while 
remaining in the fields of plas- 
tics extrusion and moulding. 

Sales of the group's other 


FVC prices have increased 
by 17 per cent since January 
last year. Since then Polypipe 
has increased its product 
prices twice. Mr Bryan Storik, 
finance director, said the 
higher FVC prices trimmed 
pipe margins in the first half 
by between 1.7 and L8 percent- 
age points but added that mar- 
gins should be mostly restored 
in tbe second half. 

Net Interest costs fell to 
£29 BOO (£132,000) and thegrbup 
again ended the period with 
net cash and nfl. gearing. Capi- 
tal expenditure in the first haw 
totalled £7.69m (£4B6m.) 


McDonnell Information 
joins market worth £260m 


By JUan Cane 

McDonnell Information 
Systems Is coming to the mar- 
ket through a jdaring and pub- 
lic offering at 260p a share, 
valuing the Hemel Hempstead- 
based computing services cran- 
pany at £280m. 

Some 73.1 shares are being 
issued of which 42Jbn are new 

shares with fop hnlanrw tiring 
sold by gristing shareholders. 
Same 35 per cent of the offer, 
which closes on March 17, 
are available to the public. 
Dealings commence on March 
24. 

The Dotation will raise 
£UQm of new equity and £80m 
for existing shareholders. The 
net proceeds, £107 An, will be 
used to repay debt and redeem 
preference shares. 

SJDIS management bought _ 


tbe crnTTpafiy from McTVuiupTI 
Douglas of the US for gigim 
last year. Mr Jeremy Cansley, 
chief executive said he would 
not be selling his shares. After 
the fl pfotinn management will 
hold' 7.6 per cent of the 
equity. 

-There has been si gnificant 
interest In the MDIS Dotation, 
one of the largest this year and 
the single hipest In the infor- 
mation technology field. Some 
12,000 requests from, individu- 
als for details and copies 
of the pathfinder prospectus 
had been received, the com- 
pany said: 

The placing and offer baa 
been tolly underwritten by 
Baring Brothers, which is 
sponsor to the issue. 


..MfilSJs ja ^ jpatore. j aompany 


with revenues of almost £L5(hn 
and a record of management 
competence. Operating profits 
as a percentage of turnover 
have risen from 10 to 15 per 
cent in the past three years 
despite the recession. The com- 
pany specialises in areas such 
as central and local govern- 
ment, the emergency services 
and the health sector which 
will show sound, if not out- 
standing; growth. As a public 
company , it could reasonably 
hope for more success in bid- 
ding for larger contracts. The 
offer price suggests a p/e of 
11L2 which is fractionally 
higher than the sectoral aver- 
age. Notional gross dividend 
yield at the offer price is 3 per 
cent The shares seem fairly 
priced and should prove a core 
hnMtag for com putin g services 
.trficfonado&^ _ 


Expamet 
just in the 
black with 
£17,000 

By Simon Davies 

Expamet International, the 
building, industrial and secu- 
rity components group, yester- 
day announced pre-tax profits 
of £17,000 far 1993, compared 
with a 1992 loss of £20. 6m, 
restated for FBS3. 

The company has completed 
an aggressive restructuring 
progr a mme, and the 1993 fig- 
ures Included a £2.lm write-off 
for redundancy costs, and 
£L5m losses from the sale or 
closure of businesses. 

Expamet said the redun- 
dancy programme would 
achieve overall cost savings of 
£3m in 1994. 

Despite the impact of provi- 
sions on shareholders’ funds, 
gearing fen from 125 per cent 
to 89 par cent, with borrow- 
ings cut from £l7.6m to 
£ll2m. 

The share price reacted 
frivonrably to the announce- 
ment, rising 8p to 77p. 

Turnover fell to £126.9m, 
compared with £139m, bnt 
there was a marginal Increase 
in sales from continuing busi- 
nesses in all three of its main 
sectors. 

The bulldtag and industrial 
businesses suffered from the 
I per f or ma nce of subsidiaries In 
continental Europe, because of 
the effects of deepening reces- 
sion last year. Both sectors 
showed marginal declines In 
operating profit, . .. 

The security sector, how- 
ever, achieved- a 47 per cent 
increase in profit to £2.5m, 
helped by increasing export 
sales and a stronger domestic 
market , 

Mr John Roberts, chairman, 
said the first two months of 
1994 had been encouraging. Be 
added that the cost base of the 
g roup has been cut so that an 
the operating businesses r * n 
be profitable, “irrespective 
of market conditions”, he 
said. 

The company announced a 
final dividend of L2Sp, mak- 
ing a total of 2£p, down from 
3£5p. 

. The company said it planned 
to return to consistently 
higher levels of dividends. 

Losses per share, were much 
.lower at 0L7 5puCWL4 8|d..^-»r- . 


Linread 23% up despite exceptional 


•ntxro re IMPORTANT IF SENIOR BONDHOLDERS OR JUNIOR BONDHOLDERS ARE IN ANY DOUBT AS TO THE 

SHOULD TAKE IN RESPECT OF ANY ASPECT OF THESE PROPOSALS THEY SHOULD CONSULT THEIR 
CTOCKBROf^V SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISER WITHOUT DELAY. 


By Paul Cheeserfght, Mdands 
Correspondent 

Linread, the Midlands-based 
fasteners end precision compo- 
nents group, brought forward 
the announcement of its 
annual results to announce a 
23 per cent rise In pre-tax prof- 
its and an increased dividend. 

This follows a warning last 
December that exceptional 
charges in the second half 
would be double those of the 
first, indicating a total for the 

Battle for 
Barrhead in 
unusual twist 

By Mgel Clark 

The battle for Barrhead 
Sanitary Ware, the Scottish 
workers co-operative, took an 
unusual turn when one class 
of shareholder failed to 
achieve tbe necessary thresh- 
i old to approve one of the 
offers for the bathroom prod- 
ucts group. 

It is thought there may be a 
danger that the other offer 
may also foil to meet the 
threshold set down In Bar- 
rhead’s articles, leaving the 
company in danger of going 
into recexvenHp. 

An extraordinary general 
mee t i n g was called to consider 
the offer from Baxi Partner- 
ship, an emptoye&owned heat- 
ing engineering company 
based in Preston, Lanca- 
shire. 

The meetings of the ordi- 
nary voting and preference 
shareholders agreed unani- 
mously to let the Baxi offer 
proceed but the ordinary non- 
voting received the support 
of only 61 per cent agatet a 
threshold of 75 per cart. 

The votes came despite the 
Barrhead board switching 
their support from Baxi to 
Shires, a Bradford-based bath- 
room products group. The 
board now fears this offer may 
not proceed trader tbe presort 

articles. 

If both offers foil Baxi has 
offered to make a secured loan 

of £450,000 available to keep 
the company going and has 
proposals for strengthening 
the Barrhead board. In the 
event of reaching agreement 
on Ihe Baxi proposals the Bar- 
rhead board intends simplify- 
ing its constitution. 

Barrhead was formed in 
April 1992 by former workers 
of Annitage Shanks following 
the closure of its works at Bar- 


year of about £800,000 to pay 
for restructuring. - - 

However, by bringing 'for-, 
ward restructuring plans for 
this year the exceptional 
charge was higher at £lJjn 
(£748JX)0). But this still left pre- 
tax profits for the 12 months to 
December 81 at £857,000, 
against £697,000 restated for 
FES 3 and to reflect changes in 
the accounting policy for a 
leasehold property. 

Earnings per share were 
3J$p against a restated 2L21p. 


The proposed final dividend is 
lifted to 2A5p CL25p) making a 
total of 3A2p (3.75P). 

Turnover was lower at 
£36.4n (£37 Am) while operat- 
ing profits fell from £L49m to 
£1.08ttL The pre-tax advance 
reflected a sharp redaction' in 
interest payable to £225,000 
(£794,000). 

This fell came because of 
tighter stock controls related 
to tbe greater efficiency of the 
group's manufacturing tech- 
niques. Gearing was cut from 


501 per cent to 28.4 per cent 
The tax charge, at E384JXM 
(£428,000), was again “abnor- 
mally high" . 

The group has now finished 
its immediate restructuring 
programme and expects to ben- 
efit quickly from any upturn in 
its main automotive and aero- 
space markets. “In certain sec- 
tors we anticipate increasing 
our market share, particuloriy 
in North America," Mr Peter 
Tahany, tbe. chairman, 

The shares rose I8p to 134p. 


FT-SE committee refuses to 
change Inchcape classification 


The FT-SE Actuaries Industry 
Classification Committee has 
a gain turned down a plea by 
Inchcape to move its shares 
from the vehicle distributors 
sector to diversified industries, 
writes Maggie Uny. 

The committee met on Mon- 
day, March 7, to discuss quar- 
terly changes to the constitu- 
ents of sectors which will take 
effect cm April L The new Sys- 


tran came into operation at the 
start of this year. 

Inchcape said the commit 
tee’s decision was “a great dis- 
appointment”. It has repeat- 
edly argued that although 60 
per cent of its 1992 profits 
derived from "motors impart- 
ing, distribution and retailing”, 
only 14 per cent came from the 
retail side. 

Inchcape said it made a fur- 


ther submission to the commit- 
tee arguing that factors which 
affect UK motor retailers were 
different to those which bear 
on Inchcape’s activities. 

The group is planning to 
alter the split of profits dis- 
closed when It publishes 1993 
results on March 28. It will 
divide the motor retail profits 
from the i m por t i n g and distri- 
bution activity. 


MEW FT-4 

Company 

BE ACTUAMES INDICES CLASSmCATUMCS 

Current Sub-sector Moves to Sub-sector 

Abacus 

Bectronic Equipment 

Dist of ind Comp & Equip 

Baring Sac. Emwginy - 
Markets Tracker Raid 

Investment Trusts 

Offshore Invast funds 

Petar Black HoMpgs 

Footwear & Leather 

i u, t--i-r Rnf 

MDUsonoia nequramis 

Boustnad 

Distributors, Other 

Vehicle comp & assemblers 

BZW Endowment Raid 

Investment Trust 

Financial, Other 

Cassidy Brothers 

Oft & Costume Jewellery 

Leisure 

Cawerdate Qnoop 

Vehicle Comp & Assemblers 

Dist of bid Comp & Equip 

Coastal Corporation 

08 Exp & Production 

O*, Integrated 

Comae 

Business Supp Services 

Computer Services 

Sbfef 

Gift & Costume Jewellery- 

Furniture & Furnishings 

Engelhard 

Other Serve & Business 

Chsmtatfs, Specialty 

Ex-Lands 

Laiaue 

Property 

nvnnyvofu 

. Food Manufacturers 

Hotels & Caterers 

Ragstone Holdings 

Property 

. Leisue 

Gold Raids Property 

GoU Mining 

Property* 

Ernest Green & Ptnrs 

Bu&dhg & Construction 

Property Agencies 

PhWp Harris 

Bng, Instr, Tods, Mech HdJg 

Distributors, Other 

Hartone Group- 

Cham. Materials Tech 

Distributors, Other 

Headway - 

Chem. Materials Tech 

Other Businesses 

Indb Rmd .* .. . 

Inuestmartt Companies 

. Offshore Inv Comp A Funds 

IS Himalayan Raid . 

Investment Trusts 

. Oflshore Inv Camp A Funds 

Jersey Phoenix .Trust 

Investment Companies 

Offshore Inv Corap a Funds . v 

Unx 

Engineerkig, Dtvereifled 

Electronic Equipment 

KWy Little • ■ 

Household Raqdstes 

Health Care — - 

Korea CMna Super Rmd 

Investment Trusts 

Offshore bw Comp & Funds 

Mauritius Fund 

Investment Trusts 

Offshore Inv Comp & Funds 

Nrth Amrcn Gas Inv Tat 

Financial, Other 

Investment Trusts 

Office & Beet Machine 

Ftetaflere, Chain Stores 

Property 

omtame 

Household Requbliss 

Ratalera, Chain Stores 

Ptasmac 

Chem, Materials Tech 

Electrical Equipment 

Premier Land 

Othr Min Extract & Mines 

Prop«rty ... 


Paper & Packaging 

Bridbig & Construction 

Scapa Group 

Other Businesses 

Chem, Materials Tech 

WMam Sinclair 

Other Businesses 

. Lemon j . i 

Torttey & Cafisle 

□1st of Ind Comp & Equip 

Engineering, Spedaflfles 

vogewnfcbuit Metal 

Gold Mining 

Mining Finance 

WSP Group 

Business Supp Services 

Property Agencies 

Whitscroft 

Bectrioal Equipment 

Divareifled Industrial 

WMtaw 

Briefing Materials 

. Diet of bid Comp & Equip 

IMJiartcmn *1 HwUmkwi 9tmw Stnk» indr SoafiAHceN 






c 


26 


FINANCIAL TtMES WEDNESDAY MARCH 9 1994_ 


COMMODITIES AND AGRICULTURE 


Aluminium cuts 
spread to Mideast 


Aluminium Bahrain. ftp Gulfs 
largest aluminium producer, 
announced yesterday that it 
was cutting annual output by 
20,000 tonnes a year to help 
support the market, reports 
Renter from Manama. 

Further reductions would 
depend to a large extent on a 
concerted approach by the 
entire aluminium-producing 
community, it added. 

"Several discussions have 
taken place among the Middle 
East smelters on ways of sup- 
porting the present interna- 
tional drive to re-establish bal- 
ance between supply and 
ftenifln ri in the primary alumin- 
ium market** according to a 
company statement. "Follow- 


ing these ijisnins iiwm. Alumin- 
ium Bahrain has decided to 
reduce production by 20.000 
metric *«twibs per annum.** 

Alba produced a record 
450,000 tonnes last year, after 
doubling its capacity in 1992. 

Western producers have 
announced output cuts total- 
ling about 850,000 tonnes since 
agreeing the multinational 
plan in January, and prices 
have risen by &5 per cent But 
analysts have suggested that it 
will be difficult to reach the 
cnts target of between 1.5m 
and 2m tonnes a year without 
the participation of producers 
not represented at the January 
talks, which in cl ude those in 
the Middle East 


Canada’s Cambior wins 
Peru copper concession 


By SaBy Bowen hr Lima 

Cambior of Montreal has won 
the concession to develop the 
Peruvian copper deposits 
known as La Granja. in the 
northern department of Caja- 
marca. 

It outbid three other Cana- 
dian companies - Cominco, 
Teck and Placer Dome - as 
well as Cyprus Minerals of the 
OS at public auction in Lima 
on Monday. Cambior will 
invest $25m over a maviwmm 
of five years, with an addi- 
tional payment of $lm a year 
for the exploration option. It 
also offered the Peruvian state 


a 5 per cent royalty on all 
future sales. 

La Granja has mineral 
reserves of around 320m 
tonnes, averaging 0.78 per cent 
copper and four grammes of 
silver a tonne. If feasibility 
studies prove positive Cambior 
could invest 3450m in an initial 
leaching operation to produce 
copper cathodes. A concentra- 
tor plant would follow. 

Mr Raul Otero, president of 
Mineropera, the state company 
that owns the deposit, said 
anticipated sales could top 
3300zn a year. That would 
mean $15m a year in royalty 
payments. 


Oil slides 
as Opec 
hopes fade 

By Robert Gorzim 

OQ prices in London and New 
York slipped below psychologi- 
cal support levels yesterday as 
traders saw little scope for any 
decisive action from this 
mouth’s meeting at the Organ- 
isation of Petroleum Exporting 
Countries. 

In London the benchmark 
Brent Blend for April fell 
below the $13 a barrel barrier 
to $12.99, just 9 emits above 
the five-year low of $12.90 
reached last month. It later 
recovered in late trading to 
about $13.05. In New York toe 
Nymex price for April crude 
fell at one point in early trad- 
ing below $14 a barreL 

A rollover of the present 
Opec production quota of 
24.52m barrels a day was 
“. . . written into toe price", 
according to Mr Lindsay 
Horne, a trader at the London 
branch of Lehman Brothers, 
toe US investment bank. 

He said it was "intuitively 
wrong for toe market to go 
into an Opec meeting below 
$13 a barrel, bat toe price 
coaid spike down to around 
$12 ahead of the meeting". 

The market perception that 
Opec would simply roll over 
its present quota into the sec- 
ond quarter of the year was 
reinforced yesterday by news 
agency reports suggesting that 
Iran was worried that any 
Opec production cuts would be 
offeei by sharply rising pro- 
duction from Independent pro- 
ducers, such as toe UK and 
Norway. 


MARKET REPORT 

Gold steadies after touching 3-month low 


The GOLD price steadied after 
sliding overnight on Japan’s 
announcement that it was 
planning to sell about 90 
tonnes of melted-down surplus 
gold coins. In London the price 
hit a three-month low of 
$375.45 a troy ounce at the 
morning fixing before ending 
at $376, down $1.60 on the day. 

At the London Metal 


COMMODITIES PRICES 


Exchange COPPER was gener- 
ally steadier but seemed con- 
tent to trade within a fairly 
static $1,900-$1,920 a tonne 
range for three months deliv- 
ery- 

London Commodity 
Exchange May COCOA fixtures 
closed $12 up in London up at 
$930 a tonne and traders 
thought fresh buying might he 


triggered if it brake above $937. 
Compiled from Reuter 


S^'SktadaYaSaaT 00 ** 

tonnes 

AkxnMum 

+7.125 

to 2487426 

AkarMum atoy 

-460 

to 4*060 

COppr 

+1,676 

to 5*6 AGO 

Load 

+626 

to 331425 

Metal 

+88 

to 134,004 

2nc 

+2/400 

to14&8450 

Tin 

♦30 

to 22^75 


Market economy bears fruit in Budapest 

A wholesale revolution has brought an array of exotic produce, writes Alison Maitland 


B udapest's wholesale 
market, an the outskirts 
of the Hungarian capi- 
tal. offers a fine example of the 
remnants of the old eastern 
bloc sampling the fruits of the 
market economy. 

A steady stream of battered 
Lada cars processes through 
the rtamp spring morning past 
stalls brimming w ith Im ported 
oranges, grapefruits and kiwi 
fruit. The drivers - grocers and 
traders from the city - pause 
to see who is offering the kee- 
nest price before chugging on. 

The market, which provides 
90 per cent of Budapest's fresh 
fruit and vegetables, is a pio- 
neer in the reconstruction of 
eastern Europe's troubled agri- 
cultural sector, being toe larg- 
est in the region and the first 
organised along western lines. 

Mr Gabor Demszky, the 
mayor of Budapest, was in 
London yesterday to sign a 
$6.7m (Ecu5.9m) loan agree- 
ment with toe European Banir 
for Reconstruction and Devel- 


opment to help provide the 
market with a cold store, big- 
ger parking and service areas 
and facilities for ripening 
bananas. 

Thanks to the market, 
bananas have become an 
everyday fruit in Budapest, 
says Ms Anne Bosche-Lenoir, 
toe EBRD’s project manager in 
Hungary. But toe problem is 
that "the bananas are already 
yellow when they arrive, so the 
value is being added some- 
where else". 

The bank sees competitive 
wholesale markets as the key 
to reducing distribution costs, 
creating efficient pricing and 
breaking the stranglehold of 
Mafia-style operators an tradi- 
tional east European produc- 
tion and distribution networks. 

It has received requests from 
Albania to Alma Ata for help 
in setting up markets. But 
progress has generally been 
slow. Attempts failed in 
Moscow and St Petersburg 
because of problems over laird 


reform and resistance from 
organised criminals. 

Budapest was different The 
dty authorities had set up the 
market themselves in 1991. 
They created a company to 
operate it, with shareholders 
jndii%g a loading Hungarian 
savings bank, an agricultural 
co-oper ati ve, whose land was 
taken over for the market, and 
several small companies, as 
well as the municipality. 

Within a year of opening; it 
had become severely con- 
gested. About 96,000 farmers, 
anxious to break with the dis- 
credited cooperative distribu- 
tion system and sell their pro- 
duce direct, descended on the 
market in the first summer, 
queuing for up to three hours 
to get in. Annual turnover rose 
to 350,000 tonnes, five times 
that of the old wholesale 
operations in the city centra, 
and the market found itself 
handling - half the country's 
fruit and vegetable imports. 

The EBRD, drawing oh 


wholesale systems in France, 
Italy and the Netherlands, 
stepped in to proride advice on 
reorganising operations. This 
included setting up television, 
screens to track prices and 
intzodudng a proper account- 
ing system. Then it agreed to 
fhnd part of the $26.4m exten- 
sion, allowing the city rather 
than thp government to guar- 
antee a loan for the first time. 

"Without our money, they 
wouldn't have been able to 
financ e this infrastructure," 
says Ms Bosche-Lenoir. 
"There's no long-term finance 
available in Hungary." To min- 
imise the company's borrowing 
costs, wholesalers are . being 
achpd to pay a lump sum f or 
leasing rights before construc- 
tion begins in May. 

The market has beexva bless- 
ing for Mr Gabor Czeizler, 
managing director of Wientm- 
p ex, a wholesale operation 
distributing greenhouse pro- 
duce from south-east Hungary. 
He a nr ma l turn- 


over nearly double sinc e he 
moved out from the city cen- 
tre. “This place is reachable 
from all directions," b e say s. 
“Thsu's a very good network 
of roads." 

Mr Lajos Juhass, who wares 
on a stall in the covered part of 
the market, is glad of its exis- 
tence too. He used to be deputy 
manager of a butcher's shop, 
but the state meat com pany 
flint owned it went bankrupt 
and he was out of a job. “The 
money is better hut Urn hours 
are very long," he says. The 


i n a iAC fc hw i aww — 

in other cities, which has made 
the competition tougher. 

For the people of Budapest, 
toe increased availability not 
only of exotic fruits but also of 
peppers, one of Hungary's most 
typical vegetables, is welcome. 
“Now we can buy tomatoes 
and peppers in the winter," 
one woman explained. “They 
come from Holland, but they 
don't have the flavour of our 
own Hungarian peppers." 


India prepares ground for flower sales drive 

Kunal Bose reports on plans for a dramatic expansion in production and exports 

T ndia has served notice that to grow flowers for the world to expand quickly the produc- do not as yet offer “good inter- when little , is grown 


I ndia has served notice that 
it intends to join the ranks 
of the major flower produc- 
ing countries in toe next few 
years. Encouraged by the fed- 
eral government’s decision to 
mflkB floriculture a priority 
area for development, a large 
number of established business 
houses and new entrepreneurs 
have decided to grow flowers 

On a mrrrm#mial erolc for the 

export market 
“lake so many other tropical 
countries, India should have 
taken the initiative to grow 
flowers scientifically on a com- 
mercial scale a long time ago," 
says one industry official. 
“After all TthBh hag plenty of 
land, water and sun to grow a 
large variety of flowers. But we 
ah milri be able to makp up for 
toe lost time." The liberalisa- 
tion of the import of technol- 
ogy and mother stock plants 
wilt make it possible for India 


to grow flowers for the world 
market, he says. 

The Agricultural and Pro- 
cessed Food Product Export 
Development Authority has 
estimated that of the nearly 
34JX10 hectares of land irariw 
floriculture, only about 10,000 
hectares are used to produce 
cut flowers. Experts believe 
that it should be possible to 
commit as much as 500,000 
hectares to floriculture in toe 
next few years. By awanding 
the land ceiling act, which 
allows corporations to acquire 
large tracts of land far horti- 
culture, the government of 
Maharashtra haa set the trend 
for the other Indian states. 

World trade in flowers, esti- 
mated at over $25bn, is grow- 
ing at a highly encouraging 
rate of II per cent a year. This 
has enabled countries like Col- 
ombia, Guatemala, Brazil, 
Kenya, Thailand and Malaysia 


to arparid quickly the produc- 
tion base for flowers. In con- 
trast, India's exports of cut 
flowers, foliage and tissue cul- 
ture plants amounted to a mea- 
gre Rsl30m (£2. 75m) last year. 

But in view of the strong 
interest of the Tndian corpora- 
tions in floriculture. It is now 
felt that the flower expert tar 
get of Rslbn for 1996-97 “is too 
conservative”. 

T he locations identified 
for tite development of 
intensive floriculture 
are Pune and Nashik in Mahar- 
ashtra, Bangalore in Karna- 
taka, Thiruvananthapmam In 
Kerala, Kalimpong in West 
Bengal and Shrinagar in 
Jammu and Kashmir. But 
except for Pune and Nashik - 
which are close to tins Bombay 
airport, where APEDA has 

buflt add rtnragp farilitiwi for 

flowers - the centres identified 


BASE METALS 

LONDON METAL EXCHANGE 

[Prices hem Amalgamated Metal Tnxflng) 

■ ALUMMIUM, 98.7 PURITY ($ per tonne) 


Precious Metals continued 

■ GOLD COMEX (100 Tray az^SItroy cog 


GRAINS AND OIL SEEDS 

■ WHEAT LCE (£ per tonne) 


SOFTS 

m COCOA LCE (E/tonne) 


Sett Daf* 


Open 


Sett Day* 



Cash 

3 note 

Ctosa 

1258-9 

1281-2 

Previous 

1207 j-as 

12905-1 

HflWtow 


1205/1274 

AM Official 

12805-1-5 

12805-4 

Kerb doss 


1278-0 

Opwi taL 

207,747 


Total drty turnover 

35480 


■ ALUMMUM ALLOY (S per tonne) 


Ckwe 

1195-200 

1195-200 

Prautoui 

1221-6 

1216-7 

HQhftcw 


1199/1190 

AM Official 

1195-200 

1195-0 

Kerb ctasn 


1105-200 

Open taL 

4,208 


Total dafiy turnover 

044 


■ LEAD (Spar tame) 



Ckw* 

431 -Z 

445-5JS 

Previous 

431-2 

445-6 

High/low 


451/442 

AM Official 

428-35 

442-25 

Kata dose 


451-2 

Open (nt 

30.022 


Total daily Hanover 

13,232 


■ NICKEL <S per tome) 


Ckwe 

5380‘S 

6430-5 

Previous 

5475-85 

5533-5 

Hgh/law 

5305 

549015410 

AM Otfldal 

5300-5 

5416-20 

Kerb dose 


6460-5 

Open tat 

50.995 


Total dafiy (unewer 

10.759 


■ TM (Spar tonne) 



Close 

5245-60 

5295-300 

Previous 

5292-7 

5342-4 

MgMow 


533015200 

AM Official 

5200-1 

5246-50 

Kart dose 


5305-10 

Open InL 

19.882 


Total (My turnover 

7,615 


■ ZMC. apodal high grade (S per Urine) 

does 

922J-&5 

940-1 

Prevtoue 

918-9 

935-8 

hftghAcM 


940/927 

AM OfficM 

012-3 

929-30 

Kerb dose 


935-7 

Open taL 

109528 


Total dafiy tmwer 

15.196 


■ COPPER, grade A (3 per tonne) 


CtoM 

1S00D-1.S 

1916-7 

Pravfcxs 

1802-3 

1908-9 

HgMow 

189571894 

1917/1904 

AM Official 

1894-5 

1908-8.5 



price 

dang* 


tear tat 9oL 


pri« 

draw Mgk lam 

tel 

W 


prin i 

iftanga 

HWl 

Urn m 

M 


Her 

3757 

+03 

. 

. 

Bar 

10230 

+035 im40 10135 

120 

109 

■ar 

914 

+15 

915 

911 628 

146 

Apr 

Apr 

377J 

+03 

3773 

3763 70.143 10360 

H*J 

104.15 

+030 104.15 10330 

1372 

384 

ny 

931 

+13 

633 

924 23,405 2371 

JUB 

Hay 

3784 

+03 

3783 

3735 

Jan 

10435 

+030 10435 10330 

395 

35 

M 

944 

+14 

945 

937 14322 

888 

Abo 

Jrt 

3793 

+03 

mi 

3731 34328 1,401 

Sap 

90.75 

- • 

192 

- 

Sap 

9G6 

+15 

957 

948 11,164 

107 

Oct 

Am 

3822 

+03 

3023 

3830 5348 5 

Hot 

Qp-Xi 

+035 0230 8230 

1314 

19 

Dae 

968 

*14 

958 

961 17,395 

570 

DM 

Oct 

3847 

+03 

- 

• 4,033 36 

Jan 

94.15 

+040 84.15 94.15 

414 

10 

Bar 

964 

+13 

884 

962 22328 

113 

Fab 

Totri 




144342 12,784 

Total 



4,192 

SB 

TUB 




107323 4,793 

ToW 

H PLATMUM NYMEX {B0 irty at; Srtroy azj 

■ WHEAT car (BJJOObu mta; centa/60fb bushel) 

■ COCOA CSCE (10 tannas; S/tonnes) 


■ LIVE 1 



3943 

+13 

3053 

3933 13.127 

821 

<M 

305.6 

♦1.1 

3B83 

394 a 4378 

123 

Oct 

396.1 

♦1.1 

3973 

3943 1,121 

5 

Jaa 

3963 

+1.1 

- 

. 528 

- 

AW 

3973 

+1.1 

. 

- 528 

3 

ToW 




19382 

752 

■ PALLADIUM MYMEX (100 Tray at; S/tray at) 

Mw 

133.75 

+220 

. 

57 

5 

Jbb 

13230 

+035 13230 

13130 4378 

82 

sap 

13220 

+035 131.00 

13130 384 

8 

Dec 

131.70 

+035 

- 

- 178 

• 

TaM 




AffB 

98 

M 3LVW COMEX (100 Troy 014 Cvrta/tray oz.) 

Mar 

5203 

+33 

mn 

5163 1328 

256 

Apr 

S2I3 

+23 

• 

U 

• 

Hay 

5233 

+23 

5253 

5103 65.416 

9387 

Jti 

5273 

•23 

5235 

5225 17,382 

456 

8«P 

531.4 

+23 

52&0 

5203 4356 

41 

Dec 

5372 

+23 

5383 

5323 8368 

435 


Wm 338ft) -An 342ft) 337*4 SS25 1.740 

Hay 339*2 SIS 3W 3390 77,855 13480 

JH 32012 -312 33010 327 M 94.410 12.145 

Sap 32014 -3/4 332ft) 328ft) 15*55 1785 

Doc 337* -3/4 340/4 337ft) 20.175 200 

mm 34QH -a/4 io 

1W 214.05 2*013 

■ MAIZE C8T ffiDOO bu trtn; centa/56ft> buahaQ 

HBT 275/8 -5ft) 201 A) 275ft) 20,735 21,395 

Hay 283/2 -5ft) 268/6 202/4651.100104,100 

M 285ft! SB 290* 2BS4 348080 <0.600 

Sw 273/4 -4ft) 277/4 Z73/D12SSBO 5015 

Dr 202/2 -2/2 2B44S 282/0273,475 20.885 

Mr 268/2 -2/2 270/4 208/0 17,320 350 

TIM 1M7M19S78D 

■ BARLEY ICE (£ per tonne) 


MEAT AND LIVESTOCK 

m LIVE CATTLE CME (4QQQ0b3; cordate*) 

Sett Day* . . • Opr"" 
price change Hgk Li* H 

78750 -0.150 77.050 7E725 3(006 
75,100 -0.125 75225 74000 22.430 
73300 -0075 73X75 71175 1Z061 
73.000 -0100 73.780 71525 9,131 
71900 -0450 73J00 73400 2425 
71575 - 830 

MtM4 15,524 
■ LIVE HOGS CME (404000a; oontWte^ 


1185 

■2 

1173 

1160 

224 48 

Apr 

48325 +0375 48350 48525 11.400 

2378 

IIS 

-3 

1195 

1161 

38.785 8346 

Jta 

64375 +0250 5533) 54300 

0672 

1350 

1208 

. 

1216 

1204 17364 1320 

JH 

34.125 +0200 54300 53350 

3330 

122 

1227 

+2 

1232 

1225 

8.128 13*0 

Are 

52375 +0300 52300 51350 

2.738 

382 

1254 

-2 

1285 

1257 

6381 79 

Oct 

48300 +0150 48300 48225 

1337 

90 

1288 


1297 

1288 

9312 343 

Dae 

491200 +0125 40373 40150 

1378 

88 





*,<2510352 

TOM 


3030 



ftp 


■ COCOA (ICCO) (SDfl’sAonoa) 


■ PORK BBJJES CME HOJOgbe; oarteWaal 


My 


Mo* Pra*. Say 
.92340 91243 


10 Ay amp* 


.91342 


812.78 Hg 


■ COfTU LCE (S/tanne) 


Tout 


10*310 10,718 


ENERGY 

■ CRUDE OIL NYMEX (42.000 US gate. 3/baaeQ 


Kerb dose 19105-1 

Open ml 243.110 

Told daBy turnover 54.783 

■ LME AM OfficM US rate: 1-48BB 

LME Poring C/S rate? 1,4830 

Spri:1j4675 3 atbal.4031 BMKL4803 900*1.4789 

■ HIGH GRACE COPPER {COMBO 



o*f* 



OPM 



Ctoaa dug* 


to* 

tat 

M 

Iter 

8830 +020 

8830 

88.+0 

4349 

683 

Apr 

8055 +015 

8035 

8030 

1,148 

6 

Hap 

8075 +025 

8930 

8830 36,044 

6325 

Jun 

8835 +020 

US (Ml 

8930 

846 

1 

JH 

8&fi] +CL20 

8935 

9040 

9.168 

588 

Ana 

8885 +025 

- 

- 

388 

- 

Total 




80821 

7,448 

PRECIOUS METALS 



■ LONDON BULLION MARKET 
(Prices euppfred by N M Rothschild) 




Gold (Troy oz.) 
Close 
Opening 
Morning fix 
Afternoon fix 
Da/srtgh 
Day's Low 
Prevtoua dose 
Loco Ldn Mean 


Eequhr. ^ 


2 month s 


S price 

37540-37640 
374.80-37540 

375/45 281480 

376.10 292467 

37840-37740 
37440-374.70 
37740-37740 

Gold Lending Rate* {Ye USS) 

_116 8 months Ml 

—340 12 months 3.82 



Lakat 

Oafa 


Ops 



prica 

ctianpa 

waft 

Low tat 

VH 

Mr 

1434 

-006 

1421 

1335100,755 43726 

tel 

14.21 

-037 

1438 

1417 673Z1 

26,462 


14.40 

-008 

1434 

1435 66340 

7383 

JH 

1434 

-031 

1472 

1456 30377 

5.168 

Ana 

14.79 

-033 

I486 

1481 15248 

«3 

ftp 

1499 

-am 

15.12 

1530 18307 

13*1 

TaM 




448,123 91,508 

■ CRUDE OH. FE (S/banal) 




Latest 

0>f* 


0P« 



prica 

HBapa 

Mpfr 

lam tat 

1W 

Apr 

1337 

+003 

1116 

1299 61201 

17373 

(toy 

13.10 

•005 

1024 

1335 44856 

8375 

Joe 

1323 

-038 

1336 

1322 16227 

1321 

JH 

1338 

-Oil 

1331 

1138 9/56 

839 

ftog 

ISM 

■007 

1333 

1354 5393 

228 

ftp 

1173 

■007 

1378 

13.73 0340 

100 

TatH 




144266 28346 

■ MATING OIL JWHEX (42300 US (pAas* cftJS gate) 


IriNt 

w* 





prica 

rtanpa 

MOlt 

U« lot 

W 

Apr 

4230 

-047 

4178 

4235 48930 14283 

Hay 

4230 

■007 

4235 

4130 48322 

6377 

Jra 

42.15 

+OOB 

4245 

4210 29305 

4990 

JH 

4230 

♦018 

4335 

4390 20390 

1321 

Art 

4075 

+023 

4400 

4385 6395 

781 

84p 

4435 

+036 

4435 

- 7.181 

433 

Total 




1S03BZ 31,141 

■ GAS OH. BE (Sftoanal 




Sett 

□*» 


flpaa 



prica 

cfenge 

•V 

Leas tel 

VH 

Kir 

1302B 

-130 

13730 

13400 21033 

8232 

Apr . 

135JS 

-130 

13730 

13550 27391 

7319 

Hay 

13525 

-125 13050 13S25 14,105 

1323 


13000 

-130 

13730 13630 17320 

1345 

JH 

13750 

-1-75 

13825 13730 11350 

598 

An* 

140,00 

-130 

14130 

13975 5.109 

88 

TotH 




171383 21,498 

■ NATURAL GAS NTPEX (10300 naaBtetSAtaWtaJ 


Latasi 

DtaTl 


Opn 



price 

clraffia 

Mgfr 

tear tat 

VH 

Mr 

2.155 

-0012 

2160 

2135 14395 


Otey 

2.139 

-0310 

2145 

2120 12362 

2055 

Jea 

2.120 

-0.006 

2125 

2110 9398 

432 

JH 

2.110 

-0006 

2110 

2100 9308 

415 

Art 

2117 

-0009 

2120 

2117 8,700 

209 

sap 

2135 

-0008 

2145 

2140 10288 

98 

Total 




118316 iqa 1 


Iter 

104JS 

+025 

_ 

. 

98 

- 

»» 

10530 

+050 

- 

- 

198 

- 

Srt 

9250 

- 

- 

- 

119 

- 

ft» 

943) 

-025 

9450 

9450 

58 

7 

Mb 

9525 


. 

- 

3 

- 

Bar 

9730 

- 

- 

- 

- 


TOW 





474 

7 

■ SOYABEANS CBTpjXJOtej Ota; centsffiCH) boTOQ 

Mar 

6 0312 

-in 

667/4 

862/6 20,785 21395 

Itey 

867)4 

-on 

673/0 

867/033245 82380 

JH 

66910 

-3/2 

674/2 

668/4223,485 27380 

Art 

662 ft) 

-2/4 

668/6 

662ft) 37245 

2395 

Sep 

8492 

-216 

BS3U 

B4W0 

H45C 

1.455 

Mn* 

639/2 

-2/4 

644/4 

638/6138365 10,110 

Total 




7« 396X5631 5 

■ SOYABEAN OOLC8T (603002* centaftb) 

Bar 

2833 

-031 

28T7 

2730 

5335 

1738 

»Y 

2830 

+032 

gam 

2738 35387 

9386 

JH 

273S 

+035 

2818 

2733 25359 

4382 

»rt 

2731 

+039 

Z735 

27.45 

7.452 

710 

Sap 

2733 

+020 

2750 

27.10 

7.141 

682 

Oct 

28.67 

♦020 

2630 

2654 

5377 

82 

Taw 




10W2S 18383 

■ SOYABEAN MEAL CST (100 tons; Sfton) 


Bar 

1903 

•04 

1913 

1893 

3,479 

1,006 

Nrt 

191.1 

■04 

192.1 

1907 32308 

43<E 

JH 

19 12 

-08 

1922 

191.1 

2A222 

2378 

Art 

1903 

-13 

191.4 

1903 

7332 

239 

Sap 

1882 

03 

1903 

188.7 

5,461 

70 

Oct 

1872 

-1.1 

1883 

187.1 

233 

15 

Total 





8*390 

8388 

■ POTATOES LCE (S/torme* 




Apr 

1525 

+15 

1563 

1503 

1370 

153 

Hay 

1883 

♦2.4 

1703 

I860 

1328 

140 

Jaa 

1303 

- 


- 

2 

- 

tew 

803 

- 

. 

- 

- 

- 

HV 

1053 

- 

- 

- 

- 

- 

Apr 

1293 

+25 

1283 

1253 

- 

21 

Total 





*3» 

314 

■ FREIGHT (£8FFEX) LCE (SlOfindex potaQ 


Mta 

1152 

+13 

1155 

1140 

296 

15 

Apr 

1226 

+23 

T230 

1210 

1.180 

153 


1222 

+22 

1230 

1215 

223 

33 

JH 

ms 

+21 

1120 

1119 

533 

18 

Od 

1259 

+29 

12H) 

1280 

»1 

10 

Jan 

1293 

+5 

- 

- 

74 

• 

Tata) 

Ctoar 

frar 



2382 

229 

bu 

1112 

1112 






Hr 

12E8 

+6 

1263 

1260 

663 182 

My 

13S9 

+4 

1274 

12B 15384 3389 

JH 

1260 

+a 

1284 

1255 

9779 1388 

SIP 

12S 

+3 

1251 

1256 

4«60 179 

tiov 

1258 

+3 

1258 

1282 

3,188 31 

Jan 

1253 

+5 

133 

1253 

3384 6 

Total 





38390 V® 

■ COFFEE •C CSCE (37300Ktt; certaflbB 

Mta 

7830 

-035 

7738 

7830 

314 100 

■ay 

76® 

-025 

79.10 

7036 9036510380 

JH 

7930 

-030 

8040 

7936 

7384 1.118 

Sap 

51-20 

-025 

8135 

8090 

5338 307 

Oae 

82.46 

■020 

8275 

8230 

3,*78 an 

KV 

8130 

•O10 

- 

■ 

1,062 0 

Total 





4*11812,186 

■ COPTS flCO) (US carrtstoocax* 


^7 



Prica 


Prev. dqr 

cerodaft 




_ 7440 


7333 

IS day anaga — 


- 7333 


7238 


TOW 


58.125 -+1.325 50.125 50475 
50900 rt.175 50.100 57-500 
90000 +1.100 58450 57700 
50450 +1.150 56.430 55400 
59425 +0425 59425 58400 
58400 +0400 58400 
I 



LONDON TRADED OPTIONS 

price $ tonne — Ceie— - — Puts-— 


m Mo7 PSBHHJM HAW SUGAR LCE feertsto) 


■ UNLEADS GASOUNE 

HYKEX t42400lEoa&. Gftis qai) 


Leteat Bay** 


3 (norths — 

_&2B 



price dang* 

apt 

Una 

M 

HU 

SPrar Rx 

p/tray oz. 

US Cts equta. 

Apr 

4335 

-040 

4400 

4330 

35315 

12346 

Spot 

3*7.80 

51830 

Hay 

4435 

-032 

4430 

4420 

41.178 

5364 

3 months 

35135 

52230 

Jan 

4495 

■042 

4530 

4435 

1B.4Z7 

3300 

8 months 

368.15 

527.75 

JH 

4045 

-020 

4570 

4530 

8387 

917 

1 year 

3B&OS 

54035 

*rt 

4530 

-0.10 

45.70 

4530 

5,900 

780 

Gold Catos 

9 price 

£ equlv. 

Sap 

4520 

<020 

4550 

4525 

2.6T7 

143 

Krugerrand 

378-378 

253-255 

Total 




115,488 34JH7 

Maple Leal 

38835-38930 

- 








New Sovereign 

88-SI 

59-82 









Eiaopean free market Sam Metal SUJebn. 9 
par fa In warehouse, tries* otherwise Ha t e d 
(tost week's in txaHeeta, whets changed). Anti- 
mony- 99.696, S per tame. 1,700-1. 750 (1475- 
1.730). Bismuth: min. 984996. tonne lota 225- 
145. Cwbniunu min. 99496. 63-70 cants a 
pound. Cohen: MB tree marie*. 99496. 2200- 
23. DO (22.00-22. BO* 99.396, 17.00-18.00 
(1640-17.00). Merouv mta. 984996. S per 78 
lb (task, 90-100. Molybdenum: drummed 
molybdlo oxide. 2.30-2.05. ffntenhim: min 
99.596. 3.90-4.65 (340-4.75*. Tungsten One 
na noa rt mn 6596, S per tom urtl pcfcnj 
WO, <*. 28-43 (27-39). Vandhan: rrtn. 989*. 
of, 145-1.45. U ranken; Nuexco exchreige 
value. 7.00. 


Hay 

1235 

+035 

12.10 

1139 

1372 

14 

JH 

1250 

- 

1250 

1250 

2J37 

1 

Out 

1130 

♦032 

• 

- 

130 

. 

Jaa 

11.75 

+032 

- 

. 

- 

. 

Total 





43» 

15 

■ WHITE SUGAR LCE (Sftom) 



•Mr 

38530 

-0.10 33850 

33030 

7317 1463 

Aug 

329.10 

■070 

33130 3ZL50 

433B 

532 

Oct 

30530 

+320 30650 30250 

3487 

185 

Ore 

ypm 

+040 

- 

. 

135 

. 

Ifar 

30730 

+060 

wne annnn 

351 

18 

■W 

30230 

+030 

30330 30330 

202 

7 

TotH 





19344 2 320 

■ SUGAR *11* CSCE (1 12,00Qba; oents/tbs) 


»»y 

1134 

+035 

1130 

1137 62595 9583 

JH 

1234 

♦032 

1237 

1130 31317 5,420 

Oct 

11.48 

+033 

1151 

1158 26370 4245 

Hr 

11.14 

-032 

17-22 

11.10 

8335 1305 

*tey 

11.11 

-031 

11.18 

11.10 

1358 

BO 

JH 

1138 

■032 

- 

. 

1313 

81 

TUH 




1223n213l« 

■ COTTON NYCE £0300toa; cents/Bn) 



7735 

-032 

7130 

7725 

335 

lie 

H»y 

7725 

-0.39 

7735 

76.72 24509 35M 

2* 

7735 

■042 

7730 

7740 12381 

1.144 

Oct 

7555 

■027 

7536 

7535 

2574 

230 

Dee 

7110 

-0.15 

7120 

7230 12.070 

1364 

Mar 

7178 

-0.14 

7190 

7150 

466 

62 

Tatti 





SIPS 6530 

■ ORANGE JUICE NYCE {153004* eenta/fts) 

mm 

109.70 

+0.70 

11030 

10850 

799 

86 

**»r 

11220 

+1.15 112J5 

11140 

6281 

919 

JH 

11420 

+120 11435 

11170 

4736 

263 

Sto 

11635 

+135 

11630 

11630 

1372 

40 

Nov 

11530 

+085 

11420 

11428 

1.167 

13 

Jaa 

11530 

-045 


- 

1448 

12 

TotH 





56 1355 


(99.796) LME 

May 

Aug 

May 

Aug 

1275 

51 

78 

27 

40 

1300 

38 

66 

38 

60 

1325 

Zt 

83 

S3 

63 

■ copper 





(Grade A) LME 

May 

Aug 

Mpy 

Aug 

18S0 

68 

114 

28 

43 

1900. _ 

57 

86 

48 

64 

1890 

36 

62 

77 

90 

■ COPES LCE 

May 

JH 

May 

Jui 

1200 _ 

83 

98 

14 

38 

1260 - 

51 

70 

32 

60 

1300 

28 

48 

69 

89 

m COCOA LCE 

May 

JH 

May 

Jut 

900 

48 

73 

17 

29 

82S 

33 

58 

27 

30 

950 

21 

<8 

40 

52 

■ BRENT CRUDE IPE 

Apr 

May 

Apr 

May 

1300 

29 

07 

18 

61 

1360 

-B 

43 

■46 

80 

1400 

- 

23 

- 

107 


LONDON SPOT MARKETS 

■ enuoe 09. FOB (per UmH/Apt) +or 


VOLUME DATA 

Open tatarest and Volume data shown tar 
wa ar vu a eroded on COMEX, NYMEX C8T, 
NYCE, CME, CSCE and (PE Crude 0( are one 
day in arrears. 


INDICES 

■ REUTERS (Bass: ifl/aOlalOO) 


Mar* 

17934 

■ CRB Rttaee (BBao: 4/9/58=1 OQ) 


Ur 7 month ego year ago 
179a* 1780.0 17834 


Mar 7 

226.14 


Mar 4 north ago year ego 

207.78 


DiftH 

S1131-131W 

+004 

Brant Blend (CbtacQ 

$13.15-3,17 

+0.12 

Brant Blend (Apr) 

51110-3.12 

+0.03 

W.TJ. (1pm tat) 

SI 4.10-4.11 

-0055 

■ OH. PRODUCTS NWEprompt drtwry OF (tonne) 

Premium Qeaolne 

$149-151 

-1 

Os® 01 

$140-141 

-1 

Heavy Fuel OO 

$80-81 


rtiMpnina 

$132-133 

-1 

Jet Fuel 

ftWwn Aipue Ciriirtae 
■ OTHER 

$155-167 

-1 

Goto (par troy ofti 

537100 

-IOO 

SBver (per Boy cs)>$ 

3215c 

-30 

PWiun (per tray or) 

$381.80 

jion 

PaSatAm s»r troy ozj 

$130.76 


Copper (US prod) 

92.00c 


Lerad (US prod) 

36.000 


Tin (Kuala Lumpurj 

14v01r 

-014 

Tin (New Yor)^ 

24450c 


Ztac (US Prime WJ 

Ung. 


Cattle ^ve wotgltOI 

124.78P 

+107* 

Sheep pra weightit* 

12220p 

+206 * 

Pigs ffiw wHtfig 

8357p 

+403- 

Lon. day sugar (ml) 

$28180 

-400 

Lon. day sugar (wte) 

534250 

-200 

Tate 8 Lyle Apart 

£30350 

-300 

BtatoY (Eng- teed) 

£99 Jta 


Matas (US Nc3 Yeton^ 

Unq 


Wheat (US Darir Morttt 

£180Jh 


Rubber (Afxjy 

67j00p 

+0,76 

Rubber (Maylti 

B7J0p 

+100 

Rubber(KL RSS Nol Apt) 

241.00m 

♦050 

Coconut 09 ffW)§ 

$516. Ox 

-IOO 

Farm OS (Matey)§ 

SXTSt 

+2.5 

Copts (Ptia>§ 

$3400 


Soyebaans (U^ 

El 960 


Cotton CMtook A tndsc 

82.16 

-026 

Woolups (64 s Strata) 

383p 


e Ota tonne irtaea oemriae 

sr.wsft 

Dcenta/b 
Hr. 1 Mi 


22648 


227.14 


Sap. x ApOhtay. V London W i ) irtL 9 OF RunettaiL f 
Baton mater doe*. $ Eha i p (Live weight price*). * 
Chagerai week, pravtalbn n prices 


do not as yet offer “good inter- 
national air connections " , 
industry offirfais point 01A. 

The g o vernment, which has 
given a 25 per cent air freight 
subsidy on flowers is talking to 
several foreign airlines about 
securing adequate cargo space 
for flowers, ft also has agreed 
to create the necessary Infra* 
structure at the major airports 
in the country for storing and 
handling flowers. 

The Trull an m rnpa n iai enter- 
ing toe flower business have 
chosen Europe, south-east Asia 
and the Far East as their “prin- 
cipal target markets”. The US 
is the single largest market for 
flowers but “India is not target- 
ting it because of the dis- 
tance". 

The most productive flower 
growing period in India is Sep- 
tember to Mairh This coin- 
cides with the peak seasonal 
demand for flowers in Europe, 


when little is grown locally. 
We want to mate the best use 
of this season,” say the indus- 
try officials, who at the same 
thne admitted of their many 
handicaps. “Our knowledge of 
constructing ideal greenhouses 
is limited We ladk good plant 

TnatBrialx 

"Without foreign technical 
know-how, we will not be able 
to produce flowers for the 
world market. And our know- 
ledge of flower marketing is 
practically nfl.” 

But liberal import of flo- 
riculture and tissue culture 
technologies, greenhouses, 
Tnnthgr stock plants «nd seeds 
are enabling the Indian compa- 
nies to make a confident start 
in flower business. As for mar- 
keting, most Indian companies 
are gReking the a«risfem«> of 
Dutch companies to ensure 
that their flowers realise good 
prices at the anrtimi 


CROSSWORD 


No.8,399 Set by CINEPHILE 



20, 22 - 25 , 15, 3, 21, 28, 27, ft, S, 7-23, 9 and 12, If tafcxm as a group, : 
«pstt wrong 


ACROSS 

1 Cure for piping without num- 
ber (6) 

4 Journal out erf joint to Hamlet 
<&5) 

10 Strong dislike of Scottish ath- 
lete losing head (7) 

11 Exploit classy he a d g ea r cole’s 

in CD 

12 Colours (4) 

13 Meet loco and he will make us 

ahatwinn mutiny (4&4) 

15 A month down on the 
Thames (6) 

16 A month turned a run into a 
flier (7) 

20 Herbert Stanley Perceval CO 

21 Wonder (5) 

24 Melodramatic man’s 3’s not 
quite nice GO) 

26 Colour (4) 

28 Diamonds, at least eight, from 
the fre e zer? (3,4) 

39 See transport number for 
Swiss resort (7) 

SO They ride out what comes in 
geies (8) 

31 Principal fixer (6) 

DOWN 

1 Residence for various othera 
and myself (44) 

2 Computer operator gets gin 
and cheese (9) 

3 Cooked or cheated (4) 

5 Junior doctor (8) 


6 Cooked currant with oil, hav- 
ing a third eye? ( 10 ) 

7, 23 Where Indian com grows 
(S& 

8 Testaceous (6) 

9 Bear stream© 

14 Enter soil far circulation (5,5) 

17 Green, between half and 
three-quarters ripe, going on 
Thames barge? (5,4) 

18 Strongly suggestive of pay- 
ment for home without bene- 
fit (8) 

19 Potter's material with extra 
weapon (8) 

28 Arab ruler (6) 

23 See 7 

25 Weapon© 

27 NB old tax (4) 

Solution 8^98 



Of broking and jobbing the Peiikan's fond. 

See how sweetly he puts your word onto bond. 

SbNkan© 


JOTTER PAD 


<. 







Hid . 




WEDNESDAY MARf!H 9 1994 


" ' Mis 


‘^ Cs dri\t 


ROSSWORD 


■ Ill 

■ III 

» ■ I I 


■| B1 

■V 1 


■ tf ) 

■ s '- 

JL* 


M 

■ «'T 


LONDON STOCK EXCHANGE 


MARKET REPORT 


^ Bond falls hit share prices towards the close 


FT-SErA AU-SIm indue 


1.900 rr- 


Equity SharM-Tradvd . 

Bcdudtog: 

MnuwM burinaoa and woman wnwer 
1.20Q 


By Terry Etytand, 

UK Stock Market Editor 

Leading stocks stumbled badly at 
tha dose of trading yesterday as 
bond markets fell sharply and 
rumours circulated that a large 
rights issue was over hanging equi- 
ties. lira FT-SE 100 Index, which 
had been moving nervously all day, 
extended an earlier loss to close 4L5 
down at JL264.4L 

Hints of a big fund-raising sur- 
faced in the stock market early, and 
market analysts identified several 
possible names among leading com- 
panies due to report profits this 
week. BAT Industries, weak yester- 
day, and Cadbury-Schweppes both 
featured prominently in the list 

A deeper reason for the late set- 
back in equities was a sell-off in 
gilt-edged securities, the second of 


the session. Uncertainty in bonds 
across Europe reflected uncertainty 
ahead of the outcome today of the 
Bundesbank’s variable rate tender, 
which has turned attention once 
again to interest rate prospects. 

Strategists noted that bond mar- 
kets were again exercising the 
power over stock markets which lay 
b ehind the' shakeout of the past two 
weeks. But they said it was too 
early to say whether the equity 
rally of the two previous sessions 
had been seriously challenged. 

Shares opened higher but were 
quickly tripped up as derivatives 
markets turned off when transatlan- 
tic houses sold futures instruments. 
The first bout of selling in bonds 
then hit, driving the Footsie down 
by more 23 points. Selling was 
modest and shares soon steadied as 
losses in gilts were reduced. 


‘fMtMhgn 

F«b 28 


Opfloo DicMtaK 
Mar ID 


Acco n Dm 
M wZI 


DMBng Data* 


Vi Apria 

may M* pise* tram 


UK economic data, showing an 
unexpected jump in manufacturing 
output hi January, ^nrf thus i*»ntwg 
against the likelihood of an early 
cut in base rates, was a discourag- 
ing factor. However, traders said 
that the stock market was content 
to take its cue from bond prices. 

The final setback came very 
quickly arid caused some analysts 
to suggest that market confidence 
was “surprisingly weak”. There was 


little time for selling to spread 
across the range and the FT-SE Mid 
250 Index finished only 14.6 down at 
3#LL 

The FT-SE 100 Index was hit by 
weakness among the pharmaceuti- 
cal stocks, which still command a 

Strong following ainnng flinii man . 

agers. There was also weakness in 
the utility sectors, which hud 
proved resilient during recent weak- 
ness in equities. Property stocks, 
too, took heavy casualties after a 
progress report from a leading City 
of London group cast a ckmd over 
the supposed recovery In the com- 
mercial sector. 

Seaq volume increased to 67&2m 
shares from Monday’s 576.3m, 
which returned a retail business 
worth of £L25bn, at the lower end of 
average daily figures. Traders 
stressed that there was significant 


selling pressure yesterday and ques- 
tioned whether the stock market 
was yet able to free itself from the 
pressure exerted by bond markets 
across Europe. 

The equity market is expected to 
face a test of its attempted recovery 
today, when the outcome of the 
Bundesbank money market repo 
fftnflwr may give a hint on the nnar 
term trend of interest rates in 
Europe. 

A batch of results from leading 
British c o m p^pfpg wQl «7*n under- 
line the latest trends in dividends. 
Equities outperformed against gov- 
ernment bonds during the recent 
sell-off with the help of improved 
dividend payments from file bank- 
ing sector. This Improvement in 
returns to equity investors Is expec- 
ted to continue if the recovery In 
the UK economy takes hold. 


1,750 = -, 


1.700 


1,900 1 1 

Jap. R 

touroK FTOmpba* 19 

■ Kay Indicators 
IikIcm and ratios 



FT-SE 100 3264.4 

FT-SE Mid 250 3923.1 

FT-SE-A 350 165U4 

FT-SE-A AH-Shara 1648J20 

FT-SE-A AIKStraro ytetd 3v48 

-414 

-14.6 

-174 

-1135 

(3.45) 

FT Ordinary Max 2558.0 

FT-SE-A Non Fire p/s 22.11 

FT-SE 100 Fut Mar 3249.0 

10 yr GOt yMd 7.04 

Long gdt/aquity yM ratio: 214 

-25.4 

<22.33) 

-48.0 

(8.94) 

(214) 

Best pm foamkag aactors 

1 Other Brunei*] _ 

*0.7 

Worst performins ■acton 

-4.8 

9 Water . . 

+0.6 



3 Printing, Paper, Pckg — , 

A FT-SE SnwflRap tut IT .. 

- +03 
-ai 

3 0« Exploration & Prod...*.....*.., 

IMI.1I.-2J 

S FT-SE SmaBCao 

-0.1 


-is 

# 




Cash call 
concerns 
hit BAT 

Rumours of a record-breaking 
rights Issue settled on BAT 
Industries, the tobacco and 
insurance conglomerate. Many 
analysts were sceptical but 
BATs share price tumbled 23 
to 470p on heavy turnover of 
8.6m ahead of figures due 
today. 

The speculation was that 
Compagnle de Suez would sell 
its Groupe Vlctotre insurance 


arm. BAT refused to comment 
publicly but was believed to 
have refuted the story to City 
analysts, while Suez denied 
that it was selling its stake. 

One analyst said the specula- 
tion had a "superficial charm" 
because BAT was known to be 
trying to extend its financial 
services operations in conti- 
nental Eurqpe: However, it was 
also pointed out that BAT had 
not made a paper-funded acqui- 
sition for 20 years. 

Some cynical marketmakers 
felt predictions that BAT 
planned a two-for-nine cash 
call to raise £2.6bn had an 
over-precise ring. If true, it 
would be twice the size of the 
existing rights issue record of 


£L3bn set up by Zeneca in 
June last year. Others argued 
that the market rarely reads 
without a reason, and that 
rumours of a link had been 
bunding for time. 

Another market favourite for 
a possible equity fund-raising 
was Cadbury Schweppes, 
which also reports results 
today. The company would 
need in excess of Elba to 
mount a bid for Dr Pepper, of 
the US. The Cadbury share 
price was steady at 494p. 

Boddington busy 

In a busy drinks sector, 
Boddington attracted specula- 
tive interest cm talk that Whit- 


EQUITY FUTURES AND OPTIONS TRADING 


The heavy ted In German 
bonds in afternoon trading 
brought a sharp retreat m 
an already lacklustre 
derivatives sector, writes 


Joe/ Kibazo. 

On the Liffe, early trading 
In the March contract on the 
FT-SE 100 which opened at 
3,296 saw the contract 


■ FT-ae too IMDEX FUTURES (UFFE) £26 per (UH lnd« port 



Open 

Sett price 

Change 

High 

Low Estvrt 

Open Int 

Mar 

32944 

32494 

-464 


3240.0 

15806 

61949 

Jun 

33054 

3200.0 

-484 


32020 

8208. 

22275 

Sap . 

33204 

32820 

-484 

33204 

8320.0 

50 

525 

■ FT-SE MH> 250 B4DEX FUTURES (LffFQ CIO par ful Indax point 



Mar 

30454 

3920.0 

-304 

39454 

38274 

105 

482 

Jun 

39604 

38334 

. -274 

38824 

39004 

200 

- 

■ FT-SE MD 290 MDEX FUTURES (OMJQ CIO par tu| todax poto 



Mar 

3940.0 

3817.0 

-234 

39404 

38174 . 

9 

2873 


Jun 3931.0 6 

M opM MM flguw ar* for prateus <tay. T Exact volim rtrawn. 

■ FT-SE 100 MDEX OPTION (UFFQ (*327(9 E10 par M liMkaac point 

3100 3160 3300 3250 3300 3360 3400 3400 

CPCPCPCPCPCPCPCP 
MV 172 4 122 812 72 18% 38% 38% 10% 69 6 108% 2 153% 1 203% 

Apr 171% 24 18412 37 *8 52 71% 74 48% 101% 31-133% 18 171 11 214 

Mr 196 48% 181% 56% 130% 75 101% 96% 77% 123 68% 151% 40% 188 26% 223 

Jun 213 57 178% 70 147 80 118% Til 05 137 14% 188 6B% 198% 43 235 


170 182 


OKf 293% 114% 232% 148 170 182 _ 132 248 

cam ■■■■■ " -t.- ■ - 

M BUBO STY1£ FT-SE TOO IMDEX OPTION (UFH3 E10 pat Ml Index: point 

3070 3125 3178 322S 8275 3325 3375 3425 

liar 177' 313! 6 85%13%9D%Z7%S50%9%84%3129%1175% 
tor 101% 18% 191% 29% 116 43% 85 83 19 BT 40 117 25 151% 14% 181 

tfey 180 SO 118 85 S7 134% 34 201 

Jui 192% 80 131% 97% 84% 148 . « 214 

Serf 241% 89 - 110% 128% 138 172 . 88% 229 

Mb 377 Ml EB * UndBWw Mb wtaa. Pretteni Mown m Mad ■tpm ta i H u rt cw 
t Long date eplry mcnBo. 

■ EURO STYLE FT-SE UP 260 MP6X OPTION (OMJQ £10 par hJ Index point 

3060 4000 4060 - 4100 4160 4200 4200 4300 

Hr 2S% 68% » 83% 7% 137 3% 184 2% 233 % 282% % " % 

ilpr » « 49% 121 31 156 2D 195 12% 7% 4% 4 

Crib 25 MiO SaHoaeri price* md Mum mtataa at OOps. 


FT - SE Actuaries Share indices 


challenge the 3,300 level. But 
Merest fizzled out at 3£99 
and a selling order from a 
leading (JS house reversed 
the initial advance, leaving 
March to drift lower. ' 

Further selling after the 
release of industrial and 
manufacturing production 
figures dampened hopes of 
a reduction In Interest rates. 
However, it was the reversal 
In German bonds andthe 
early fails In New York that 
brought the heavy sefl-off 
In March in the afternoon. 

It dosed at 3,249, down 
46 from the previous dose 
and at a 12-point discount 
to its fair value premium to 
cash of about minus 8. 
Volume at the official dose 
was 13,632. 

- In the Liffe FT-SE Mkt 250;: 
volume ki'dune exceeded" 
that in Ihe March contract, 
which dosed at 3,290. March 
traded 105 lots, against 200 
In June. On the OMLX, 9 lots 
were traded In the March Mid 
250 and it dosed at 
3^23.10. 

Liffe traded options saw 
volume of 32,399 contracts, 
of which 14,748 were dealt 
in the FT-SE 100 option and 
2,500 In Land Securities. 


bread may be considering a 
hostile bid for the pub retailing 
group. Such a move would cost 
Whitbread In the region of 
£440m. 

Whitbread already owns 
around 20 per remt of Bodding- 
ton, inherited from last year’s 
share restructuring with the 
Whitbread Investment Trust, 
and under the government's 
regulations It must reduce its 
holding or mfllce a bid. 

Analysts were divided over 
the speculation, some arguing 
that Boddtogton’s portfolio of 
public houses, hotels and nurs- 
ing homes would not fit with 
Whitbread's business. Bodding- 
ton shot forward 18 on the talk, 
closing at 294p. 


TRADING VOLUME 


■ Major Stocks yoatonfaqr 

Vol Ckwtng Dq* 
000 » Erica ctenoe 


Ascnamvf ioooo oi% -i% 

Abbey Kstfcsnsjf WJ -480 -* 

ttMtWw 1.300 67 

JWsd-lwmt MOO KM -10 

An0M W*Mt 1,800 BIB +11 

Agee 64 388 -1 

MMt Oraupt 9.000 234% -a 

*!S. M 41 
Amoc BAftsts 819. 573 
HMt 1.700 063 -21 

BAT feKbkt 8,600 Am -23 

BET 3,4W 132% -2% 

a ec 861 484 -a 

BOCf - 444 716 -7 


Bank of Scotendt 

srr 

BbaCkcWf 

Bootanr 

Uootsf 

BOHMMt 
Brftteti AirMMT 
B4MlGMf 
BritMl Land 
BAMaSMt 
Bud 

Bund, CaaMft 
-Bulon 
CabteAMat 


780 340 

3,000 434 

5,030 816% 
3.700 372 

1J600 20*% 
5,300 612 

3^00 629 

3J300 3BS 
273 427 

2600 640 

•42 514 

1J00 600 

IUOO 418 
8400 318 

2.100 414 

2500 140% 
1500 183 

188 818 

8.100 34% 


C*riunCoaima.t 
omsvytet 
OMUL Unlortt 
Coofcsan 
CbwtmHrt 

SO. 

Dbconi 
Cntam Boat 
MUtand Buet. 
bgCMnaCtm 
&*r*pdoo08f 
Bntunrwl UnB* 

m 


3£00 — "476 


2100 

40* 


201 • 

029 

-a 

1AQ0 

*03 

-i 

2000 

072 

*8 

304 

2B0 

-a 

1J0O 

597 

-4 

2700 

273 

-a 

446 

536 

-1 

MB 

470 

-6 

.472 

000 

«6 

3.700 

207 

-4 

086 

043 

•0 

1400 

617 

-7 

440 

510 

■*a 

040 

420 

-17 

711 

boo 

■0 

1^00 

'"ii 

-a% 


FT-SE 100 3264 

FT-SE Md 280 3923 

FT-SE Md 290 «x Inv TVuat* 3838 

FT-S&A 360 1856 

FT-SE SnxdCap 20284 

FT-SE SmaOCap ox Inv Ihwta 20075 

FT-SE-A ALL-SHARE 18485 

■ FT-SE Actuaries AH-Share 


Day's Year 

Mar 8 ctifl*W Mar 7 Mar 4 Mur 3 *QO ) 

3204.4 -1-3 33O&0 3278a 32405 2948a 

3923.1 -0 A 3837J 30275 30O7J 3119a 

3838:2 -05 3852a 3843.0 38233 31313 

105614 -in 1674a 1062.1 1647a 14542 

202060 -0.1 2028.17 2023.35 202083 158297 

2007.07 -0.1 200927 2005.10 2003^1 158345 

104a2O -ia 168435 1653^8 1638^61435^8. 


'he UK Series 


Ov. Earn. P/E Xd k& Tom 
yWdK yMdW ratio yttf Return 


3a7 5JS8 
3.12 432 

3i1 S SB 
3S4 5J0 

2.73 3^46 

2M 3.79 
343 5.30 


Day’s Year Dhf. Earn 

Mar 8 chfl*W Mar 7 Mar 4 Mar 3 ago yte*d% yMdgt 


10 MINERAL EXTRACTION {1^ 2555a2 -ia 2082^0 2559.13 2539^3 218410 3^3 487 2*99 4a0 00932 

12 Extrasttv* tnduatrteaM 3943.33 -0.4 3801.15 3906.48 3888.75 327B.70 316 483 25^0 OM 1061.18 

15 OB WaoratodS) 2468.12 -1.1 2495^7 2472.09 2451.102010.10 3B5 303 2479 BJ36 96482 

16 OM BmtoraMon 8 Prodllll 134372 -33 1892a2 1899.07 188324214310 333 3-88 33.06 0-00 1O40.B8 

20 QEN MANUFAjCTUTtBt&GKHl 2145-96 -0.4 215449 2130^3 2124J» 1752^0 344 378 3420 439 106428 

21 BUkftn & Constructional) 1494.52 -04 1500.08 150ZJ2 150440 91350 237 1-30 80.0Df 2.16 114448 

22 Bufcflro Motto 8 MorehsOO) 2209L19 -0.4 227472 226373 226080 182040 311 248 8332 1.14 1037.07 

23 Chwnteataeffl 2411.55 -0.7242061 241 8. 7B 2409.71 22001 D 383 488 2748 082 103041 

24 DAnraUadlndustiManQ 2009.30 -05 211040 2073212071X0191740 4.24 424 3041 1044 104311 

26 Bactionlc 4 Bad EautaPfl 2111.95 -04 211542 2097^0208545188840 349 &75 21.14 248 100440 

S B^«1rMf72) 197048 -04 197740 18S849 183044 1489v40 377 243 4338 408 110248 

27 E^wartrS VWctoatia 238741 -04 2402.10 2406.10 238487 1B27^J 436 311 42.85 048 1122.13 

28 ftSno. ftpariWblpm 304048 +03 3031^5 300038 287448 234400 247 408 2379 1.00 116306 

2fl TiprSia B 18137T -04192360192040190043188370 341 _312 2448 142 1067JB5 

Sfl CONSUMBI QOODSIB3) 288314 -14 294039 284041 2902.06 294040 345 7.02 1375 1047 S6642 

31 nrnwa^TI 226355 -14 220040 2284042263.72 2177.10 403 7.80.1313 384 99143 

32 SoWtL WtaM & OdaraflOl 3121.13 -14 317387317484 313248 2933X0 349 547 .1949 1033 1022.72 

S3 ftodl ManuSrtureS 238048 -07 2405.07 239845 239318251370 343 7.05 1080 246 87242 

S a 2809.05 -08 2830.08 2832412841.40 243340 345 353 17.73 0.00 961.01 

« 102009 -00183144 183043 183302 101030 237 543 2244 1.48 103147 

37 308370 -13314340316073 308335332440 4.07 7-43 1549 2370 95388 

M 393848 -4.8 41 3542 409307 4005.79 389440 311 308 1443 OOP 84324 

an 2105.40 -O0 211357 2102.63 206340 1835.70 279 548 233! 4.12 101142 

11 * 3097.98 -0.7 311361 31 1 7. B3 3104.10 2632.70 274 447 2442 1.48 1047.12 

232081 *01 232342 230741 229741 180440 340 4J8 27.46 11.09 1124^ 

329334 -14 33Z943 325948 321848 225440 130 336 8020 448 1123.12 

At n^nnm rniviftTl 103389 -1.01003271651.06100949 216240 377 9.75 1Z74 146 96148 

Vt 175142 -041757.73178377173747 160940 2.72 549 2338 4.10 01330 

* 1756.73 -04 1783.60 174532 173302 166740 246 3*9 1740 1.16 1047.73 

250943 -09 2832.73 2815^44 262249 2097.60 322 347 3340 318 100073 

g - STaSteL 8 Budn*aan2) 131139 -04 131309 131318 131352 136340 _.342„ _ 340 4378. . 072 . JI1MJS 

— 248395 -14 251849 2307.14 248245 2187.10 4.01 7.01 1742 540 83047 

” 234748 -1.0 237144 239631 240002 172370 333 1064 11.66 1085 94307 

S SfrSSaL rflnrta 208390 -2.1 212008 2122-08 210346 201840 374 * * 0.00 8207! 

mi 224059 -14 227445423537221049 200380 353 341 2238 008 93240 

^ 187000 +06 185300 186305 188230 180000 *34 1339 365 348 89078 

flB MCT*-FWANClALSf82fll 177338 -14 179072 178047 1,7^.77 1574.77 , 380, _ 533 24 H 4^12^ 

_ raw . M STT~ 1QS . 230240 -14 241038 2379.09 230374 1817.00 307 540 2346 1304 91743 

« 306740 -14 3104.77 303747.301046 236000 340 441 2355 2248 894.19 

H P” ** 10 * 138383 -09 137323 1382.47 138148 134310 440 7.07 1305 844 80643 

S 25731* -14 280941259848 268342 289240 433 4.72 2306 OOO 94345 

306948 -03 308348 303849 302300230540 237 744 1394 1037 90241 

202245 +07 200333 200542 200052138310 219 548 2340 1018 106371 

7« SoqLmISi 23 1741 4g -24176203 1773441769.75115000 338 342 41.10 240 87240 

pnZSSiTmU^itt. 294849 -06 298385 29604 2 MW1 220250 218 

89 fT-SE-A ALL^1AR5%853 ) 184320 -14 188435 165348 163848143638 2« 540 2243 313 128241 

■ Hourlv movements 

1 Qpon 1030 1140 1230 1200 1440 1300 1210 HlahAMf Lw% 

~: T „ — 32304 .rvwo 32904 32834 32037 32824 32600 33131 32644 

PT-SE 100 39328 38344 3934.7 39322 38237 30403 39294 

SSTmO 60 5 J« ^7 IWOI 1^4 16073 16844 18864 16844 16537 10731 16S33 

Was of FT« KM HWi33fai«WW 449pm * 

m rt 4 * AetxiMrles 380 HidMliy basket* * 

1040 1140 1240 134 0 1440 1300 1310 Oo** IWoua ChanQ* 

,-**« "1*939 14394 14324 14383 1436.1 1434.1 14354 14333 -14434 -30 

BUg&Cmtren 14431 14422 14394 1 ^ 30730 30038 30637 30631 31111 -574 

Ptwirsctwact* 31124 30^5 3®04 SOW. !8«44 18714 18864 18514 +122 

SSi J 5 S JS SB SB 31*4 01144 mm mu 

u nMhhfd fa to hw to i I mgM. Lfadi Of IHilfciim on pvaMbhi from Tin MndM Tftnos 
mSSSS^SL S*** nw » rang# otstearonio ana ssaMdd pmdact. 

T>2m9Eion.il>BFf-8EMd2Sl.R : aEA ciu s dw i3aianddiaFPaEABaja«lialnK**y 

wM.« 1W g aI t«u«3Tioa^ 

kntScsi m fluftsd Iff Tnfr ww conffuny. t 


253 437 

218 443 

205 543 

343 348 

3v44 378 

237 140 

211 288 
343 448 

444 444 

249 5.75 

277 233 

446 211 

247 448 

241 5.12 

295 742 

443 7.60 

339 547 

333 7.05 

205 6J53 

297 543 

447 7A3 

211 208 
279 548 

274 447 

206 448 

130 295 

277 9.75 

272 549 

226 2*9 

222 247 

332 230 

4,01 7.01 

253 1044 

274 * 

243 541 

434 1259 

340 543 

267 540 

240 431 

440 7.07 

443 4,72 

237 744 

219 230 

343 222 

216 1.74 

248 -546 


21.48 1048 120219 
2437 1147 142740 
2346 1146 142847 
2219 6.19 124742 
3047 647 154145 
3438 H-9H .152948 
2243 213 128241 

P/E Xd *4- Total 
mao ytd Return 

2549 430 90942 

2548 040 1001.10 
24.70 046 904,02 
3208 040 104648 
3440 449 106428 
80-OOf 216 114440 
8342 1.14 1037.07 
2748 042 103841 
3041 1034 104211 
21.14 228 100440 
4048 4,00 110238 
'4285 028 1122.13 
2278 1.80 1163.08 
24 j45 142 1067JBS 
1875 1047 06642 
1313 284 99143 . 

1289 1833 1022.72 
.1830 246 07242 
17.73 040 901.01 

2284 1.46 103147 
1849 24.70 95350 
1443 OOP 84324 
2342 4.12 101132 
2442 1.40 1047.12 

27.48 11.09 112445 

3020 448 1123.12 
1274 136 06148 

2849 4.18 91330 
1740 1.16 1047.78 
33.40 318 100373 
4278 072 110280 
1742 540 83047 
11.66 1535 94847 

* 200 82378 
2258 048 93240 
36S 348 099 JB 

2211 447 122043 
2346 1344 91743 
2255 2248 894.19 
14.05 844 80648 

2306 300 94345 
1394 1047 90281 
2330 1219 108371 
41.10 280 97226 

57.44 1216 977.73 
2243 5.13 128241 


9nMdn 

SmdBNt 

Qtarof 

«ynwa(J 

srAt 


HHIHM0A 

Htntoaf 

Hardsons CiDtMd 

Hays 

Mdoun 

M 

MwSrtuthay 

■ssa? 


5000 130 

703 2» 

2 »o am 
a+e an 
3400 313 

*JM0 870 
711 387 

3400 640 

3400 478 

1400 582 

4300 1M 
£400 am 
IMO 513 
2300 877 

101 414 

9400 268 

1000 207 

1400 SCO 
2400 177 


LandSMWUMt 

Lapona 

Lagai 4 Oanoodt 

Uoyda Ahbrn 

i ar 

L ondon B*cl 
L on ho 
Lucas, 

MH’Cf 

HP 

li a iwv'h 

Marta&manowt 
MdandiBacL 
Uocrinn (INka) 

NaSLatBakt 

NaHoral Powart 

IM 

Nntti Waai Wnrf 


■ ■■HMI . 

PDWsQMt 

PtudHddf 

fTTZr 


t 



WANMT.t 


BOB IBS 
85 723 

2400 423% 
119 848 

2100 120 
3400 204 

8.100 484 

1400 480 

3400 218 

SL200 527 

234 000 

1400 222 

447 070 

1.100 688 

1400 996 

2400 . 191 


1400 ass 
3400 230 

ao* ms 

502 077 

2400 BOO 
1400 *1T 

3*4 290 

1.700 £103 

0400 170% 
1400 438 

1400 200 

3400 300 

41 1106 

G40 
373 
383 
110 . 
106 

467 391 

1400 3M 
2800 880 
1400 K 2 

225 277% 
187 505 

3400 14*% 
1400 3B7 

. 902 382 


244 500 

m neo 

as ^ 

1400 247 

181 428 

8400 346 

tuna 2 M% 

BIO 429 
1400 107 

2100 201 
1400 SSI 
470 1122 

1400 237 

£400 100 

170 373 

1.100 1100 


tt putfi Em 

MHiWJOA . 
MtitNiFlwt. 

. 8dM BaMhaait 
SnM BssKfam Uts .1 


3ou* VMM BKt. 
SauOiWaatWMr 


etandMt QMrtdt 
8ttMhau*a ^ 
SunAStaioat 

■raw ^ 

T»Qn»4>t 

Tartnao 
TdaBlda 
ItygrWwdw 
-Tmcof 
t hww jiWMrt 
thorn a*f 
Tbaddnat 
ItaWaarHouaa 

aa _ 

UHtad8BQi8Bf 


82* -10 

w ta camar 048 -14 

WaMlWanr 08 067 +9 

Wenex Water ISO 040 +4 

lNNtandf 480 660% -10% 

UMtenMoa-f 2000 400 +8 

WHsCanoon 1400 290 +1 

Vtenpor 816 227 -3 

Wctertiyt 130 BOB -1 

YkatoMaBeeL 1,100 042 -8 

YoHaMaWHte 1,700 530 +11 

Zanaeaf 1,700 782 >40 

BBwdontmfcOwJunafWAMtKdonotmdor • 
aaeuMaa dadt nough On 0EM qdam 
ymntey int 440)gnL Hades ot ana m*ao er 
mere am mndad down, t Ukaw «i FT-SE 
lDQhdaxMM0MM 


However, Whitbread, 
together with some other brew- 
ing stocks, retreated in line 
with the market and also cm a 
cautious note from NatWest 
Securities. The broker argued 
that the weak ear" fag s growth 
potential of the sector pointed 
to short-term underperform- 
ance. Whitbread slid IO'A to 
550Hp, Scottish & Newcastle 10 
to 549p and Allled-Lyons also 
10 to 625p. 

Waters in demand 

Water issues held up well as 
Credit Lyonnais T-afag high* 
lighted their attractions. Ana- 
lyst Mr Robert Giles said that 
on Monday afternoon the 
water shares had moved to a 
yield relative of 150. a level not 
semi since the general election. 

He also pointed out that 
index-linked gilts, which the 
utilities tend to track, had 
picked up. Mr Giles pinpointed 
Yorkshire, 11 higher at 536p 
after 547p, Severn Trent, 
unchanged at 556p after 572p, 
and Anglian 11 firmer at 515p, 
as his prime selections. 

Property shares wilted in the 
weak market, undermined fur- 
ther by disappointing Decern 
ber-end results from Wates 
Ctty of London Properties. 

Analysts said the slight 
increase In the net asset value 
to 72J8p was well below market 
expectations of between 75p 
and 105p, although this was 
tempered by the fact that 
much of the upward valuations 
in properties have been in Jan- 
uary. and February. 

Mr Graham Stanley at Gdd- - 
man Sachs said: “The recant 


NEW HIGHS AND 
LOWS FOR 1993/94 

HEW MOHS M. 

MUMBBI |1) BUN MM. BUM HUTU A 
HCHtSMCnFiThnrwo, CHEMCILS00 
BASF. HQMftte, U HT WOU TO n a n Evan* 
Hath**, HMHI. PCX PWHIi in iP MOL8 
(1) Cootaon, ELBCimO 8 ELBOT BOW* (71 
Abacus. CMaiidB. BnNKH.NsMaM.RMp*, 
Thnpa VMli BMQBMWO (0 Fmmt. 
Unraad, Uoott Mtttf, RaflM MM (MQM 

bun. m, moons to wb b— bw, 

OCnwniVB BIOS n Anob Padfi* R*. 
CHedcrte Op. taanan Hn, NSM, MugM, 
WMM BWw. FOOD MANUI> » DteUi (% KM»y 
A, MBURANCE J1J OotomOo A OanacO. 
imaTMEMT mUBTS 0) MOteini Eon. 
SmMr.MMatfwnM&Bimsnnir 
COMPAMU n) JF FMgtfiao Mam. LB8UM 
4 H01B4 00 B*te« WAT A, RM« OraartteOHn. 
M80IA D0 JCteMao Pra**, IMH BWMtn, 
MB4CHANT BAMKB (1) ClOM BRM. OTHIR 
8WWB 8 8U3H0 w CMnoton. PMnMDw o tt 
PRTHO. MW A PACHD (9 Bdt. PctySian* 
7XOpo PA. 0* U Am. rHoam A. SappL 
PftOCnTY (I) Botlon, RSTAASRI, OMBRAL 
|f) BotHBy* MBS Inc Ore* A. SUFFORT 
8BRV8 n AWI**L CRT, CampuMr Paopl^ 
Coponre San*. 0181514, 1*47 Computing, 

RaH Tkiw CcnacL Sana, THANBMWr |1) 

QATX WATER m Brtrtol VMte. AIMMCANS 
(1) Sin Co. SM. 0OU1M AmOANS 00 Antfa 
Am. Inda. 3ASCX. 

NEWIjOWS 90. 

BULOURl A CH8THN (Q Qapang BtetHlL 

MM u m ir iiwmwtoiBfl top, to* 

Mtetuy WnM Wrtt, PtUBMACEUnCALa (Q 
8c*da. RETMLER2 QBCRAL |f) Btomi A 
Mam. orana, worn a cams m 
Itaoen Cklte. support HM ft) a*mm 

92 TEXTUSB A ACMRB. (1) BbM. 

shake-out among property 
stocks has highlighted some 
areas of value for investors. 
But with the uneertaiwHea in 
the bond market, we remain 
cautious In the short term.” 
Among the leading stocks Brit- 
ish Land fell 21 to 414p, MEPC 
17 to 4B8p and Land Securities 
17 to 703p. 

A trade press report that Air 
France might listen to offos 
for its Meridien hotel chain 
prompted speculation in the 
market that Forte may be one 
interested party. The UK 


group, still smarting from its 
recent failure to land the Ital- 
ian Ciga chain, is known to be 
keen to expand its interna- 
tional portfolio. 

Forte eased a penny to 268p. 
Meanwhile, talk over Forte's 
intentions towards the Savoy 
Group saw the latter move up 
37 to 1075p. 

Standard Chartered was the 
pick of an uncertain vw*«iHwp 
sector with the shares building 
on Monday's strong perfor- 
mance and moving up 16 more 
to 1180p, partly reflecting 
increasing optimism over this 
morning's preliminary figures, 
awi the nil »n raw that the num- 
bers could be accompanied by 
a share split. 

Also helping sentiment in 
stocks heavily exposed to Hong 
Kang and the ter east was a 
story that Morgan Stanley, the 
US investment bank and which 
has triggered big moves in the 
Bang Seng index over the past 
year or so, was preparing to 
increase its weighting in the 
Hong Kong market. 

High street banks also held 
up well against the overall 
market with some leading bro- 
kers said to be preparing the 
case that the banks sector is 
ripe for a re-rating after its 
recent steep decline. The weak- 
ness across financial sectors 
was triggered by fears of big 
losses in trading bonds and 
equities. 

. The takeover/rights issue 
speculation surrounding BAT 
led to renewed talk of potential 
corporate moves in the UK 
composite and life sectors. 
Guardian, up one penny at- 
I96p, was one of only a handful 


of FTSE-10Q stocks to close up 
on the session after speculators 
decided it could be a prime tar- 
get for attack. 

Graham Group, the builders 
merchants hived off by BTR, 
made a scintillating market 
debut Offered for sale at I83p, 
Graham opened at I97p, mar- 
ginally above most expecta- 
tions, and touched ZOSttp 
before easing to 202p by the 
close. Volume reached 34m 
shares, easily the heaviest indi- 
vidual turnover in the market 

Chemicals group Laporte 
were firmer after announcing 
full-year profits of £l07.4m. up 
from £86.6m last time. However 
the stock ticked back with the 
market to close 20 off at 794p 
on uninspired turnover. Hoars 
Govett raised its recommenda- 
tion from hold to buy. 

Reuters lost much of Mon- 
day's gain, sliding 56 to 2103p. 
Results at the high end of some 
expectations sent marketing 
services group WPP up 2 to 
I25p. S.G. Warburg forecast 
that WPP would "exhibit 25 
per cent average eps growth 
between 1992 and 1996”. 

News of losses at US Air in 
which British Airways has a 
24.6 per cent stake left shares 
in the UK carrier off ll at 4L9p. 
after trade of 6J3m. 

Shares in Williams ffniiiinp 
put on 8 to 409p, with Morgan 
Stanley said to have had a big 
buyer of the stock. 

MARKET REPORTERS: 

Christopher Price, 

Joei Kibazo, Peter John, 

Stove Thompson. 

■ Other statistics, Pag* 33 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


— — CMa — — — Ml — — 
Option Apr 40 Od Apr JS Pel 

MhlHjOM 000 38* 50 SB 8K2SM32M 

{*820 ] BSD 12 24H 35 33H 54 60 

240 23 SO KM B 15 19H 
(-255 ) 200 11 10 2M 15 ZB 30 

ASM BO SH 8V4 11 3» 0 0 

(111) 70 2 56K10H12MVM 


Mump 990 3714 48 S3 5H 14M 21 
r<nei 420 17 2BH 37 ISM SOM 35ft 

SrtOdnA 390 23 3014 40 13 2514 3ZH 

(*390 J 420 10)4 Z3W 32)4 31 43 SO 

Bate 600 4714 58 H 4)4 15)4 19)4 

(-539) 550 14)4 27» 4S» 23M 38H 43 

BP ' 380 17 27 34 10 19 24 
(*30*1 390 SUM 28)4 30 38 41 

MM SM 140 8 14 17H 7 12 IS 

(*140 ) 1B0 2 0 9M Z1 2S27M 

Barn 500 41 SB 68 7 18)4 23)4 

(*530 J BO 12* 28 4»4 , 30 43H 48)4 

Otfe&tti 475 21H38K - 13)4 29 - 
{*477 ) 500 12 27 30H 32 45 51 

Curtate) 500*14 90 84 5 1(M 24 

fSM) 550 1414 28 J0 28 44 » 

Cobh (Mon 590 6714 72 77% 3 W 17 

rsn ) . 500 21 am * 18 25M 37)4 

U 780 62)4 85 73 M ZOk 33H 

(748) 750 1744 37 47 3344 47 59* 

Hogttef BOO 9214 48)4 B7H 18ft 35 44)4 

{■Bin 050 1114 25 38 49 85 73H 

Land Saar 700 22)4 S3 42 14)4 3314 37 

[704 ) 750 0 13 2114 49 68 70)4 

Wlrtl 3 S 420 17 20 33 10H2D4 24 
(*423 ) 460 4 11 1BH 38 47 48)4 

NaflMt 460 30 63K 9044 S 17 24 

r*8B ) 500 1M 31 41 28H 35 43H 

Steteay 380 ISM 2B14 3014 1114 24 20)4 

1*368 ) 390 7 1544 24 2944 42M 47 

Shaman. B50 82)4 SB 0R4 5 14 22 

[•599 ) TOO 1214 30 3714 20 334 48 

StoWa*a 220 12 1914 2414 6)4 18)4 IBM 

(*223 ) 240 4 1014 19M IBM 2BH 28H 


Itegtr 97 14 W - SM 714 - 

(-108 ) 108 8U 14 - SH 11M - 

(Haver 1100 2914 SIM 09 31 M 42M B8M 

nt07) 1150 0K 31 «M TOM 75H 07 

Zeneca 750 10 41 54 34 47 BOH 

(752) 800 SM 22M 34 73H 81 92 

OpBotl May Aag Mw Hay Am N» 

band Mai 400 SIM 44M 04 12M 21 2SM 

(*478 | 500 12M 2414 3414 34 42M 48 

Ladtacfca 1BO22M20M33M 4H HM 14M 
(“197 ) 200 1014 10 23 13M .10 25 

Ud Bbote 330 T7H 27 21 15 21 M 27 

(738 ) 360 SM 14M IBM 30 41M 46 

Opfcn Mar Jun 8* Mr Jun Sap 

Rams 130 BM 14 21 5 13 17M 

(730 ) 140 3 10M «M 13 19H 23M 

Option - M*y Aug t>ga M*y Ang Hew 

Mttaa 000 * 00 8144 29 45)4 38 

(-508 ) 55D 20 43 00 66 74M 88 

BAT hvtt 460 20 34M 42H 20M 29 37 

(■470 ) 500 1014 18M am SOM 58 03 

BTR 360 21 31 30 M 19 27 

(771 ) 390 8H 1714 28 32H 37 UH 

BrttTtfacra 42O27H30M 42 7M 17M 23 
erase ) 400- < ISM 23 30 3914 45 

CMUY&* 48S M - - 25 - - 

(-484 ) 042 4M - - 83 — — 

Eaters Bte 600 S7 GO 70 7 20H 29 

(•043) 860 25 38M 47 27 45 51H 

(Hama 000 31 4444 67 21 M 31 38M 

rSIS ) 550 BM 23 34M54MB1H 68 

ffiC . 300 23 27M 32 BM 13H 17 

(-313 ) 330 7 1317M22M 31 34 


97 14 W - 
108 814 14 - 

1100 2944 B2M 09 
1150 0M 31 «M 
750 It 41 54 
800 BM 22M 34 


400 31M44M 04' 
500 12M 2414 3414 
1B0 22K2BM33M 
200 1041 18 23 ' 
330.1744 27 31 
360 BM 14M IBM 


FT GOLD MINES INDEX 


nw> 

Lac* Mi 

(718) 

P 4 0 
(085) 

nodnoten 

n®) 

PiudaoM 

ra28) 

mz . 

fasi) 

Hetead 

rSS2) 

IW taaca 

(282) 

Taaco 

r231) 

Urjlafrjj 

vrauufiD 

reo/j 

UIKans 

r«B) 

Opt)on 

BAA 

(084) 

VmmWr 

rS32) 

Option 

Attar Ml 

raao) 

Anutrad 
(*37) 
Bcretaie 
rsi3 > 

Btaa cate 
(*350 ) 
BriM 6 n 

rais ) 

Dtaona 

raw> 


r*0B) 

Scot Powar 

(*394 ) 


(*879 ) 

ncqpte 

r®9) 


_^.caai PM — 

MW A* Mo* Wy Abq Maw 

250 17 *1 2SM 8 10M 14 
200 7 1144 10 16M 21 24M 

120 1SM2IM2SM 8 13 18 
130 10M 1614 20H 13M 17 21 
200 2M 2BM 33M SM 10M 10 
220 8M 1714 28 15 20H 26 
650 STM 7744 18 13 27M41M 
700 27 8DH 8144 34M S2M 00 
180 10 25 20 5 10H12M 
200 SM 14M IBM 15 2DM 22M 
300 2BM 38 39M 7 11H 17 

330 IBM IBM 2444 25 29 32M 
850 38 00 74M 38M 40M IBM 
800 18M30M 53)4 6914 7954 93 
550 30 41MBIM2SM 35 50 
000 9 21 St B3B8HB0M 
zwamzmam 1921M 27 

300 11 M WaBH 27 3ZMS7H 
220 ISM 24H 30 9 1314 18 

240 7M IB 21 21 M 25 29 
0OO37M 00 70M2SH 43 53M 
860 17 30 54 5B71M81M 
390 29 3SH 42 11 17M 24M 
420 12 H 20 28 34 40 
Apr Oct Apr Jd Pet 

950 B4M 72 01 11H 30 38 
1000 2S44M0S44 33M 52 52 
500 * * 54M 5 10 22 

000 12 20 27M26M 46 50 

Ito Jan 8* Mar Jw Sap 

460 313714 « 4 14(4 22 
500 m 17 20M 28M 35M 42M 
35 344 8 8 1H 3)4 4M 

40 1M 3M OM 4 5 7M 

500 22 38 40H 18 28 SB 
550 414 18 30M 51 50M 88 
380 SOM 37 47M 2 11 18 

380 8M20M 32 11 28 33M 
300 1022M28M 2M 12 15 
330 2 7M 13 20 29 33 

200 11 20 20 4M 11 IBM 
220 2M 11H 10 T7 22 30 

ISO 10 21 24H 1 SM 8)4 

180 4M OM 14M 8 17M IBM 

M019M26M 32 1M 7 tZH 
160 BM 10 22H 0 IS 22M 

450 17M 32 « BM 2IM 20 
500 2 ISM 24 3Z45M 31 

300 13 V 35 7 17 27M 

420 2M 14 22 20M34M 46 
110 Tl 13M 17 1 4 5H 

120 3M 7 OM 4 8M 11 
260 13 IBM 28 3M 15 2044 

an m ii 10 is 2731M 

200 0M 18M 27M 4M 14 IS 
220 2 OM 18M 18 2BM 31 

1100 K 88 87M11M 3* 81 
1150 m « 01 38 59M 87 
240 12 21H 30 4 11M 17M 

200 4 t2M20M16M 33 29 

S4010M2SMS2M 2 7M 13 
280 S 14 21M 8M 10 a 
800 SH 70BIM 3M22M34M 
650 17 * 04M 21 45H 50 
Apr Jri Oot Apt JbI Qd 
050 * 73M BSM 10 31 00 
700 2T44 4844 88 SBM 56M 75M 
890 52 am 114 44H 77 00 
900 32 73 91 74M 109 115 
2100 6SM 133 11* 77 129 148 
2150 * MB 19 109 155 173 

Mr a* a* Mf Ate mu 
160X1M2BH 38 4H 8 12ft 
100 0 16 1914 13 17M21M 


RISES AND FALLS YESTERDAY 

r 

British Funds 

Otter Fixed (merest — — — 

Mfemal Extraction — — 

General Manufactures ....... 

Conaumar Goode . 

Santos* 

Utntkm. 

Hnmd a ta 

Investment Tiuata .. M 

Other* — ■ 

Totafai * 

Data bmad cn ttaaa DOnaaniaa Mad on the London Sham Sank*. 


7 

47 

20 

9 

3 

3 

48 

60 

111 

128 

153 

400 

10 

55 

110 

80 

113 . 

327 

11 

26 

10 

55 

81 

246 

88 

106 

286 

KI 

M 

M 

480 581 1545 


TRADITIONAL OPTIONS 

Fhat Dnteno* Matte 7 Last 0*rt*ra«Jona Jun* 18 

Lsst D oaU n pa Matte 18 For aathemant An*27 

CaB* Albert Rater, Amtoex, Amaco, Beaufbnf, Bkfcdai*, Cartel* Orp. Cmwdato, 
Channel IMfi*. Elawtofc, Otobal Orp, Hmw Wta, Kuriok. Moraritw, M8» d , 
Moariam (J), Pwrer Systems, agnat, Starmbi, Suntotfl, Wcfcm, Vodafture, Euro- 
dsney. Pita: Anthrax, Mw4mi (J). Puta & Cate Etowteh. lW ad ewn Ifldga, Kuntak, 
hB ct na M ao, Sturge. 

LONDON RECENT ISSUES: EQUITIES 


Issue Anri 
price prid 

M& 

cap 

1909AM 

Clo** 

pri-e 


Nat 

0*. 

Grt 

P/E 

P 

H> 

pit) 


Low Stock 

P 

+7- 

dv. 

cm. ytd 

net 

140 

FP. 

2821 

170 

103 Alpha Airports 

174 

41 

RNMB 

2 2 

ZB 

1 M 

_ 

FP. 

1.10 

0% 

1 {CareUKWrts 

5 


- 

- 


- 

105 

FP. 

344 

110 

114 cedontea 

114 

-1 

mi .91 

2 J» 

2.1 

18.7 

150 

FP. 

1014 

149 

140 CNreedsnce 

149 


- 

- 

- 

- 

124 

FP. 

244 

188 

148 CMcal Computing 

150 

-2 

- 

- 

- 

23J 

§90 

F.P. 

8.72 

173 

108 Comp Bn Sol 

143 


M- 

- 

- 

22*3 

50 

FP. 

1374 

50 

47 Edn Naw Tiger 

49 

-% 

- 


- 

- 

50 

PP. 

ItU 

58 

55 Enragy Capital 

58 


- 

- 

- 

- 

— 

- 

141 

28 

4 Do Warrants 

25 


- 

- 

- 

- 

130 

FP. 

320 

155 

130 Flnatet 

147 

-1 

R3-3 

Z3 

2£ 

Iflel 

— 

FP. 

244 

102 

88 Flaming Japan C 

101% 


- 

- 

- 

- 

170 

FP. 

74.1 

170 

159 Qctotfwough Nth 

188 


WN3J 

2.6 

2A 

ias 

189 

FP. 

231.6 203% 

196 Graham Group 

202 


1 M3 

2*3 

2£ 

iaa 

- 

FP. 

04/1 

74 

68% Guangdong Dript 

70^4 

♦1 

- 

- 

— 

- 

- 

FP. 

547 

29% 

18% Do Warrants 

274 

41 

ee 

- 

- 

- 

100 

FP. 

874 

103 

84 Herald kw Tat 

103 


- 

- 

- 

- 

_ 

F.P. 

640 

52 

45 Do WOnanta 

50 

-1 

- 

- 

- 

- 

GO 

PP. 

4574 

49 

40% KMnwort are Pvt 

41% 


- 

- 

- 

- 

— 

FP. 

384 

49 

37 Do Warrant* 

38 


- 

- 

- 

- 

50 

FP. 

20.0 

52 

49 Mthras Invlkt 

51% 



- 

- 

- 

— 

FP. 

208 

28 

25 DO Wteants 

26 


- 

*■ 

- 

— 

110 

FP. 

384 

128 

117 Paricsid* Ind 

118 


ma.o 

1 JS 

as 

m 

_ 

FP. 

521 

200 

196 Ptamdgan HI C 

198 


• 

- 

- 

- 

125 

FP. 

127 

133 

125 Redstone Tach 

128 

-1 

B3 JO 

24 

2B 

ia2 

100 

FP. 

574 

06 

94 Sareoan Vriue 

95 

-1 

- 

- 

- 

- 

- 

FP. 

448 

43 

39 Do VYanwriS 

39 

-1 

- 

- 

- 

- 

100 

FP. 

414 

98 

89 Taiwan bw 

93 

-% 

- 

- 

- 

- 

— 

FP. 

278 

52 

40 Do Watrema 

42 


- 

- 

- 

— 

200 

F.P. 

321 

818 

209 Tritast 

209 

-2 

RU 

22 

3-3 

172 

118 

FP. 

552 

140 

130 Trtng M 

130 


RN3-6 

it 

3.7 

15 A 

153 

FP. 

644 

160 

153 UnSad Ctntora 

160 


- 

- 

- 

- 


n die aide to 


Pferang price. FJ>. FUtMte l 
tba London 8fras Service. 


RIGHTS OFFERS 


Issue 
price 
' p 

Amount 

P*M 

up 

Latest 

Ranun. 

dolt 

1903/94 
High Low 

State 

Closing 

price 

P 

♦or- 

20 

M 

11/3 

36pm 

3pm 

Baaifotri 

5pm 

41 

92 

M 

11/4 

Wpm 

11pm 

Bratoiti 

ISptn 


4*4 

M 

14/4 

6pm 

3pm 

Care UK 

3pm 

-% 

42 

M 

14/4 

18pm 

6pm 

Conrad fftoStt 

6pm 

-2 

16 

M 

2513 

4pm 

3pm 

Craaun Land 

3pm 


12 

fS 

13/4 

13pm 

10pm 

Fifth (GU) 

13pm 

41 

120 

IS 

21/3 

45pm 

33pm 

►pQiosvanor ton* 

40pm 

-1 


pon Prioo bx b prambnia 

RNANCIAL TIMES EQUTTY INDICES 

Mors Mar 7 Mar 4 Mar 3 Mar 2 Yri 




20684 

2504.4 

2S634 

2540.2 

25314 

2294.0 

27134 

2124.7 

Undfflytng ttcurtaf prtet, Pramlum shown n 

Ord. dtv. yield 

262 

348 

342 

3.65 

208 

44S 

442 

3.43 

Mracn 0 Too* wreart* 31^78 crara iB^oe 

Earn. ykLMUl 

441 

4.76 

441 

440 

4.91 

5.04 


342 

Pise 12,780 

P/E redo iW 

2245 

2289 

2245 

2224 

2210 

21.04 

33.43 

19.40 


P/E redo ri 

oara 

23.78 

23.53 

23,18 

23.04 

1048 

3040 

18.14 



Har %ttg 
7 ao day 

Mar Mr Tsar 

4 3 ooo 

Mai At 
iMdK 

a wm 

HA Low 

Ottl Htoa todax pq 

W30JB -05 

1048.11 191043 TttBJS 

141 

230740113140 

■ Digtoato toteaa 





Atoffl (1^ 

yytto 403 

254844 257140 rt29-40 

5,10 

344040132541 

AoWteNR 

234540 +14 

232140 2356.04 110545 

■ 140 

301849 118U2 

North AdMtlca (11) 

167348 -1.1 

169273 109341 1121.10 

058 

«aa«s 108640 


-For lessre*. Ordkray Sriare Ms* skice cawpasBoiE t*Bh 2713.6 &OMM { tour HWBMO 

FT Oidhaiy Snare Max eaas date i/WM. 

Ordinary Share hourly cteogve 

Op*n 040 1040 1140 1200 1340 1440 1540 1(440 Wtfi Low 
26854 25794 25784 2682.7 2573.6 2569.1 25705 25625 2S623 26864 25864 
Mar 8 Mar 7 Mar 4 Mar 3 Mar 2 Yr boo 


. ComrioN. Dm Fkundal Dm Unted 1004. 

Mmlnl»dBteteswfWiitrartaM<|teiteaateittDe0MBMVatM lOOOCO SiflSAHL 
AadaMasw Qc4d Utea kxtee Mv 0 ; 2044 : dVa ctenoa: -14 pone Y*ar ma OILD t MU 


SEAQ bargains 33409 

Equity tunwrar (2n4T 

Equity bargalnat 

Stwea traded {rid)f 

t Bxd u a>ng tnaarii raw budnaas and i 


Mar 7 

Mar 4 

Mar 3 

Mar 2 

Yr ago 

31428 

25482 

27428 

32487 

44.492 

1249.6 

1444.7. 

14114 

1845.4 

1525.4 

34*408 

29447 

30423 

35497 

50490 

4629 

5214 

6714 

0684 

7344 


n •- 





28 


FINANCIAL TIMES WEDNESD. 


ay march ‘> 


LONDON SHARE SERVICE 


*7 14.1 
15 147 

il a? we 

4.9 ea r 
in ias 

Zb 20.1 du 
15 ISO 
10 i*o 
15 241 
- 511 ABU 
i.7 am Ac*, 
as 212 /cm 

2.4 14.8 
23 168 
14 17.5 

1.9 110 
20 230 
19 IU 


1.4 

203 

11 

220 

ZD 

— 

as 

ias 

AS 

so 

10 

no 

2.7 

250 

ii 

290 

io 

20.1 


WardHdp PC 


Ensor 
Eprin 

cm. 

gxnaga LV 
Ffeenan. 
OU»&I»ndrA_ 


SiapelfWir 

taH- 


% & 

717 389 

725% 399 

733% 404 


582 273 

480*i 304 

467 285 

135 213 

821 469 

748 420 

SS £ 


Brt 

WE 

2.4 

IU 

2 0 

602 

1.4 

- 

I.I 

270 

1.4 

300 

10 

260 

ns 


Gr*l 

WE 

20 

914 

11 

143 

20 

2*3 

12 

17.1 

16 

# 

4.1 

211 

16 

260 

16 

- 

40 

15 

2*1 

5J 

IU 

15 

447 

13 

114 

20 

210 

4.4 

IU 

20 

18.7 

40 

163 

22 

: 

40 

IU 

20 

— 

Z2 

112 

4.7 

540 

30 

* 

13 

195 

12 

22.4 

16 

170 

30 

172 

14 

3 15 

4.7 

17 

1.7 

40 

22$ 

13 

222 

23 

203 

23 

IU 


1093W M4 
task m Capon 
m 108*3 418J 
W 2*3 DU 
119 73 119 

388 78*3 6BU 

500 414 7850 

45 18 8.77 

73 44 401 

820 395 1270 

77 48 107.7 

1885 805 IMA 

340 07*3 2 409 
35 I0*i 310 
33% £15*2 1708 
M 32 380 
an *42 3515 
778 *99 277.1 

ffl 33 142 
270 61 117 

224 13*2 705 
73*3 2701100 

67*2 264 SOM 

TS1 103 3487 
199 132 12L7 

Eft £«2*i T8AM 
■52 35 207 

in IIS 614 
MS 128 6360 
19 S 301 
196 260 I flfl 7 

805 469 2620 

209 TOO 111 

9 44 402 

300 209 160 

272 202 460 

231 175*2 I89L3 

38*1 23*i 210 

87% 241 7066 

a 39 100 

M 16 435 

72A £38* 18,194 
695 317 8L979 

«A 21 0A IjKB 
91 SB 129 
30 55 1000 

1BU E7V 5087 
04% £B® 130 

39 171*i 310 

325 151*3 34 

m 76 283 

00 25 177 

S3 53 245 

261 81 614 

261 147 8588 

70 33 186 

9 15 198 

294 233 870 

88 49 314 

210 117 704 

£310 £22614829 

48 28 142 

411] 01*1 <47Z3 
94 37 IB 

140 50 810 

27% £18 4913 

364 168 600 

27 4>z 102 

29% £17% 1721 
ISO 80 1115 
68 28 144 

232 178 870 

183 96 220 

GOG 312 15.710 
■303 186 990 

324 164 2013 

38*2 17 SU 

18 6 250 

•483 368 1211 

103 SO 2041 
■a* 1% 310 

lit 27 413 


1993/9* 164 

Hch in Capon 

IBS 123 217 

136 08 3845 

238 B1 T29J 

29 10 155 

71 17 370 

120 73 118 

175 1*3 450 

87*2 488 570 

41*i £25% 4711 

77 13 480 

50 25>i 2010 

221 147 830 

81 48 104.1 

138 102 47 1 

■300 23 308 

39 25 7.12 

16 3'« 208 

312 129 146 

11 % 2 100 

15*4 Ell/. 1,123 

329 230 WO 

61 39 1.72 

20 12% 117 

163 64 880 

SM IBS I JED 

128 85% 3214 

<7*1 54 1810 

125 <8 808 

18 6*2 6.16 

186 91 1080 

180 48 214 

20 12 170 

293 178 W10 

251 158 SU) 

IBS 113 113 

380 20) 670 

150 55 272 

*280 114 111 

490 295 302 

40 26 114 

203 188*2 1344 

310 120 OM 

121 43 341 

361 200 814 

290 193 1644 

TO% 48 171 

97 50 1120 

•442 358 1317 

46 17 119 

■80 43 300 

40*2 8*a 200 

87 47 480 

2)1 106 8811 

306 211 2170 

145 47 990 

29 9 201 

•a st. is 

82 S3 417 

85 70 32j0 

134 78 47B 

64*] 245 8007 

43 20 MB 

14% 7% M7 

88 30% 700 

102 44 701 

320 116 830 

SB 101 4648 

71 30 370 

130 78 132 

*221 146 111 

61 20 170 

2BJ 112*2 557 

63 30 460 

31 ZB 12.1 

103 54*2 2KM 

*285 173 23BO 

MB 86 66.7 

513 369*2 1317 

m 247 1047 

83 69 22.1 

64 35*2 023 

016 425 1076 

a 19 7.t9 

— 207 105 709 

-% 220 147 4087 

2S 97 119 


S 18 205 

22*2 15 485 

*49 14% 080 

87 27 170 

161 181 71 280 

910 -2 938 379 4041 

15*2 +3 120 88 3464 

131 131 96 1012 

119 — 1W 79 114 

648 — 579 368 1712 

384 *1 400 262 8317 

KB HI 126*2 504 

1MI *1 210 134 SO 

44 81 18 100 

121 «8 121 310 

BB — 69 42 205 

66 __ 64 21 248 

a — a 10 200 


18 100 
121 310 


Mw 

- 

H8% 


290 

+2 

78 

-» 

in 


37x1 

-*2 

48 


X 

_ __ 

89*2 



266 


<54 

-* 

147 

-2 

zn 



16 


nan 


347 

-3 

16 



14% 



zn 

_ 

61 



X 


449 

+i 

<10 



Gfj 

WE 

2.4 

_ 

42 

103 

19 

112 

40 

no 

30 

11 

41 

IU 

20 

116 

40 

17 

11 

114 

18 

9.7 

23 

140 

30 

111 

17 

140 

17 

110 

41 

IU 

42 

14 

40 

a/ 

42 

in 

» 


•m 

r 

YM 


or* 

WE 

13 

380 

22 

27.1 


315 

12 

213 

1.7 

_ 

20 

10.4 

U 

I 

1.4 

913 

11 

— 

73 

- 

43 

170 

— 

573 

23 

110 

23 

230 

DO 

- 

23 

118 

17 

ZU 

1.4 

290 

46 

* 


a io 2oo 

*# 109 1710 

376 272 S1J 

0 4 304 

16*2 318 
iso no 
127 700 

a is 


50 310 

206 mi 

55 HA 
58 900 
S3 312 
98*i 2,160 
131*1 WO 

89 3TA 
77 3510 

235 267 

427 2062 
87 2309 
35 220 

Wt 7968 
33D IASI 
314 3162 
1» SU 

90 118 

21 130 

279 1,686 

24 in 
E1ZB M7A 
70 UB 
61 (80 

120 1040 
5% IAS 

22% 406 
9 153 

613 mo 
6% 330 

95% 8011 
20 1380 
283 2BU 
10 OOD 
07 MU 
969 m2 
124 310 
2S2 9280 

io aoo 

6% 904 

121 3380 
455 1240 
Sit 7U 
44 XM 


1993794 lOt Wl 
high In Cajfin Bri WE 

■CIO IB 1U 180 19 

283 233 IS - - 

IS 95 102 30 11.1 

*®8 434 1890 8.4 Zl.l 

*2» 147 8130 47 - 

01% 105% 1212 19 - 


193351 MU 
etfj tw cues 
_ *86% SO 2070 
_ 27% 14% no 

_ 231 120 350 

2 4% 319 

-rf] DUB £210% 14933 

332 IS 320 

MB 101 462 

.1 *601% <20*4 VOS 

*180 87 250 

-a «2Z 266 4500 

-3 SB IS 10*4 

88% 11% *5 
•64 a ma 

ra 29 s&a 

376 257 4U 

11 6% 700 

IK 13 264 

249 164 UH 

300 163 mo 

IDS. (90% 4064 
B8& £30% 2066 


<93394 MM 
XT> tn CxEm 
2 0% M 

2 9 111 

S 4 206 

D8% POA 4662 
£36% £11% 7041 
EBBd £18 IJ» 
M 8% 284 

£19,’. £10% WO 
5 0% 106 

162 2 142 

33 18 - 

405 115 AB 

539 150 3019 

S 16 307 

1ST 33 327 

10 4% HO 

45 13 421 

44 33 200 

890 253 780 

149% a 241 
0 I 102 
SXi, 946 4979 
100% 12% 21A 

54 11 370 

n H! 245 
» 16 449 

a 4 - 

07% £7% 6320 

387% 200 3.H 

227 49 2223 

160 37% IU 

B » 424 

S 13% 880 

98 7 MO 

13% 2% 221 

BM 383 I486 
786 120 128 

201 <7 SU 

81% 5*2 HI 

175 33 ItU 

66 16 414 

136 71 HU 

OM 117 32U 
175 a IU 
•5*8 33« 1A*6 

18 3% 122 

30% 0 270 

57 15 Zkl 

1239 20 1002 

SO a BOB 
00% 25% 300 

a% II 683 
120 a 4113 
150 62% 1068 

a 6 7.16 
187 49 110 

37% >1 217 

2% 9 115 

202 IS IU) 

M 30 748 

418 73 965 

430 S7 3662 
£6% £3% 0163 
BOA £41] 5674 
31% 6-s 104 

OH 123 SU 
57 31 221 

86 !4 421 

£12% £B% 1191 
16% 5 110 

16% 0 IU 

174 EO 2125 
a 9 432 
Old E3A 1721 
013 3)9 9162 

137 a 121 

353 13 317 

149 80 2039 

115 44 4890 

27 12 207 

190 87 SM5 

27 1* 101 

8% «% 627 

1512 830 1M7 

13% 2 279 

250 66 1142 

a 6% SJ9 
60 19 189 

32 14 140 

216 51 370 

191 a 48L1 
182% S 222 

223 96 SLt 

289% 79 2360 

129% 90 4704 

264 04 730 

201% 91 1,1*1 

MS% £6% 8230 
05 28 867 

78% 27 

34 3% 106 

«7I 36 m2 

117*. 43 7805 

86 8 547 

33 16 741 

4Z 80 827 

180% 58 8110 

1BZ% *5 255 
238 65 7628 

a 7 172 
9% 2% 145 

42S 2a 1832 
OH 607 SUM 
9 a 70 
a 4 081 

Z23 106% mo 

801% 150 3480 

80 5 210 

295 115 4474 

118% 18 1910 

£13B £6% 1/934 
3% i% 250 
100 14 

790 191 OBJ 

73% 4% 200 

488 190 1419 

£28% E4% 48*4 

B% 1% WO 
119 18 IU 

51% a% 143 
201 SO 267 
£76 £18 7,291 

80 49 116 

X 2% 210 

8% 2% 800 
490 360 1010 

76 12% 158 

813 154 2090 

80 45 266 

OH a 22U 
£33% £9% 720.1 

18% 4 402 

113 71 238 

73 16 428 

£12% £3£ 880 

M I 111 
M 49 723 
88 18 67.7 


1993/94 im 
Mgb In Cap£m 

*8 170 1115 

80 55 40M 

-2 5B7 456 2,487 

166 103 1234 

TO 1 , £94% 6763 

270 1» 723 

*02 305 040 

*85 58 112 

<81 357 8HO 

£10* £13% 1JZ38 

B8% 35 320 

*545 407 4 HO 

2a 102 340 

232 78 140 

198 133 200 

335 245 894 

384 118 137 

643 4» 

M 27 

384 141 

134 60 

H 3 

94 64 

20% 7 

120% 55 

68 43 

376 249 

203 139 

196% 131 

M 49 

131 42 

14% 9 

209 63 

315 250 

359 170 

113 41 

46 34 

6530 £450% 

246 177 

281 207% 

* 20 % 8 

■43 31 

119 58 

a 17 

n a 

226 60 

487% 355% 

713% 156% 

239 101 

434% 300 

1340 938 

£8U £59% 

3Z* 

*24% 18% 

ta 104 770 

*38 J0% 174 

an 325 184 

141 IDS SU 


ltd 

ft WE totC 
IO IU 1#* 

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16 - Fort 

41 227 Fat 
13 IU Fat 

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24 14.1 m 
U Ml hr” 

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40 14JS ci 


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180 

144 


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419 

240 

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84 


170 

133 

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799 

438 

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190 

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76% 

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48% 

32 

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1882% 

676 

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237 

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IO 

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381 

204 

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M3 

131 

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231 

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98 

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156 

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140 

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272 

174 

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£149% 

£128 

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33 
































































































CURRENCIES AND MONEY 


markets report 


POUND SPOT FORWARD AGAINST THE POUND 


Markets take a breather 


The Spanish peseta was under 
pressure yesterday after Mr 
Pedro Solbes, the economics 
minister, said Spain would not 
be able to meet the Maastricht 
convergence criteria for eco- 
nomic union, writes Philip 
Gawith. 

The peseta fell to Pta 8233, 
down Grom Pta 8139 on Mon- 
day, after Mr Solbes said Spain 
would be unable to reduce its 
public deficit to three per cent 
of GDP by 199 7 - a condition 
laid down by the Maastricht 
treaty for monetary union. 

The news was hardly a sur- 
prise, but it was enough to 
dampen sentiment on a day 
when markets were stricken by 
a near paralysis of inactivity. 
Mr Nick Parsons, chief econo- 
mist at CEBC, said a "very 
large magnifying glass” was 
required to discern signs of life 
in the market. 

Mr David Barrett of NatWest 
Treasury commented: “The for- 
eign exchange market doesn’t 
have too many ideas of its 
own. It is looking for some sort 
of outside impetus to give it 
direction." The calm in foreign 
exchanges also reflects a 
return to stability in bond mar- 
kets after the turmoil of last 
week. 

The main currency crosses 
were ail stuck in very narrow 
trading ranges. Dollar/D-Mark 
traded in the DM1.7125 to 
DM1.7190 range: Sterling/Dol- 
lar in the $1.4865 to $1.4915 
range and Dollar/Yen in the 
Y10438 to Y10551 range. 

Sterling failed to gain sup- 
port from figures showing Brit- 
ish industrial production and 
manufacturing to be stronger 
than anticipated in January. It 
finished weaker in London 
against the dollar at $1.4875 
from $1.4906 on Monday. 

■ The Spanish economics min- 
ister's comments unsettled the 
Spanish bond markets and 
pushed yields higher. With a 
close relationship between the 
currency and bond markets, 
this weakness spilled over into 
the peseta. 

Analysts said there was per- 
haps also an element of 
delayed reaction to last week’s 
50 basis point cut by the Rank 
of Spain in its key money rate. 
The market also clearly 
believes that the Spanish gov- 
ernment is keen to cut rates to 


Peseta 

Against the DM (Pta per DM) 
00.0 - v — • >•' — . 

80S 



81-5 — \~A-/- 


4 Fob 1894 

Source: FT Graphite 


■ Pound la Haw York 


Mar 8 — Latett — - Pm. don - 

£ spot 1.48/5 1.4900 

1 ran 1.4855 1.4880 

3 nth 1.4829 1.4655 

1 yr 1.4778 1.4805 

stimulate the weak economy. 

Also weighing on sentiment 
was the announcement by 
Moody's, the credit ratings 
agency, that it might down- 
grade the paper of Banco Cen- 
tral Hlspano. 

Mr Chris Turner, currency 
analyst at BZW, said this had 
reminded the markets of the 
problems or another leading 
Spanish bank, Banesto, which 
ran into trouble in December. 

■ UK economic data releases 
showed industrial production 
up by 03 per cent, in January 
for a year-on-year four per cent 
increase, and manufacturing 
output up 1.1 per cent from 
December. 

Sterling, however, gained no 
support from this and ended 
the day at DM23516, a pfennig 
down on Monday's close. Most 
of this weakness came in a 
spate of late afternoon selling. 

Mr Mark Austin, treasury 
economist at Midland Global 
Markets, said the "slight rum- 
blings’' about prime minister 
John Major’s leadership had 
been a negative. “The leader- 
ship talk has focused people’s 
minds on the political prob- 
lems that might occur later in 
the year." 

Mr Turner said sterling 
appeared still to be suffering 
from the negative fall-out that 
followed last mouth's rate cut 
Many in the market chose to 
interpret that easing of policy 
as Indicating a government 
view that sterling should not 


be allowed to rise too high on a 
trade-weighted basis. 

■ The D-Mark was fairly 
steady ahead of today’s repo 
announcement when the Bund- 
esbank will announce the 
terms at which it is prepared 
to put money into the system. 
Banks are expected to have bid 
lower rates, encouraged by the 
view that the Bundesbank will 
continue easing credit 

The lowest rate at today's 
allocation is expected to be in 
the 5.90 per cent to 535 per 
cent range. Last week the 
Bundesbank switched to a vari- 
able rate repo for the first time 
since mid-November. 

It had been setting tenders at 
a steady fixed rate of six per 
cent since December. The cen- 
tral bank allowed the repo rate 
to fall by 3 basis points to 537. 

■ The dollar traded quietly 
ahead of today's German repo 
announcement. It finished 
slightly firmer against the 
D-Mark at DM1.7155 from 
D Ml. 7184. Compared to the yen 
It finished slightly lower at 
YI05325 from Y105.S50. 

Affecting the dollar's for- 
tunes is the view that, on the 
one hand, the Bundesbank will 
only cut rates cautiously. On 
the other, although there is lit- 
tle dispute that the next move 
in US rates will be up, the tim- 
ing of this is less certain. 

Mr Parsons argues that hav- 
ing destabilised markets with 
its last move, the Fed will be 
anxious to avoid a repeat per- 
formance when it next tight- 
ens. This may require a more 
cautious approach. 

■ The Rank of En gland did not 
operate in the early morning 
round yesterday after forecast- 
ing a liquidity shortage of 
£800m in the UK money mar- 
ket. 

In the afternoon the Bank 
put £93m into the market 
through bill purchases at the 
established rate of 5% per cent. 
It provided £5 15m of late assis- 
tance. 

■ OTHER CURBEHOEa 

Mar B £ S 

Hungary 158999 - 154200 101550 - 101650 
kn 260590 - 2611.00 174800 - 175000 
IftMK 04435 • 04444 02982 - 02987 

RttD 328092 - 328202 220605 - 22061.5 
Efasfe 251388 - 2531.73 189080 - 1702.00 
UAE 5.4561 - 5.4673 38710 - 38730 


Mar 6 


Ckafng 

rid-pofait 

Bnpi 



Austria 

(Seh) 

172510 

Brighter 

(BFrl 

522219 

Danmark 

(OKi) 

9,3565 

Flntard 

(FM) 

62354 

France 

(FFfJ 

8.6702 

Germany 

(EBri) 

25516 

Greece 

(Dr) 

369.789 

Ireland 

0£) 

1.0433 

hriy 

W 

251238 

Uoiembaurg 

(LFr) 

525Z19 

Naiherijnds 

(F8 

28648 

Norway 

(NKr) 

11X048 

Portugal 

fta) 

262312 

Spain 

(Pta) 

210.110 

Sweden 

(SKr) 

112914 

Switzerland 

(SFr) 

21375 

UK 

m 

- 

Ecu 

to 

12190 

SORt 

Americas 

- 

0236258 

Argentina 


1.4860 

Brazil 

ICr) 

1039.78 

Canada 

(CS) 

20168 

Mexico (Now Peso) 

42387 

USA 

(5) 

1.4875 

PacMc/MMdle East/ Africa 

Auatraba 

(AS) 

22739 

Hong Kong 

(HKS) 

11/4958 

India 

(Ha) 

48.6576 

Japan 

(V) 

156217 

Malaysia 

IMS) 

4.0486 

Now Zealand 

l*U3) 

22791 

Ptefippinas 

(Paa9 

41.0909 

Saudi Arabia 

(SH) 

52771 

Singapore 

(SS) 

22562 

5 Africa (Com.) (FI) 

5.1827 

S Africa (F%v) 

{FO 

5.8311 

South Korea 

(Won) 

1202J24 

Taiwan 

rrs 

392208 

Thafland 

(B6 

37.6474 


03 17.9518 02 

- 1.0 S 25669 -14 509819 -OS 

- 1.1 92821 -09 10.0168 -08 

-14 06357 -14 8.7248 -08 

-14 2-5569 -08 24588 -03 


FINANCIAL TIMES WEDNESDAY MARCH 9 


Money Market 
Trust Funds 


C*F Manor JtanatwM Co l 

rthK*ot»fe*. lutrwa l»ZX 


-14 14463 
-3.4 2833.13 
-1.0 524809 
-0J3 24882 

0.6 11.0817 
-44 285,232 
-34 211455 
-20 114489 
14 2.1326 


-1.1 14331 -09 

-3-3 2583.73 -2.8 
-1.1 524819 -0.9 
-04 24829 0.1 

-02 11.0328 0.0 

-44 

-34 218.175 -24 
-14 12.0559 -1.4 
04 2.1117 14 


-I A 1423 -14 14294 -04 


(AS) 24739 *04017 723 ■ 749 2.QSCO 20657 20707 


14 24202 1.1 2017B ad 
14 1.4862 14 1.4811 0,0 


04 2.0983 0.7 20684 04 
T.d 114014 04 11.4523 0.6 


04 157455 1.1 155.58 1.4 

-14 25877 -1.1 24963 -08 


TSOR in tor 7. BkVOfler spread* *i On Ftound Sac: ram thorn OTy n tert nraa ria cju i 
but nn^UaiiwiM aural ram. Storting catautaled by B« Bars cl England. Bawa 
dto Qatar Spot nfcfca dCMd from THE WWNBJTBtS CLOSING SPOT RATES Serna otoa 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


pboet. Forward nut nt not dMcdy quoted to die 
■saga 1933 « lOOBd. Offer and IHwto in bob i 
mm ramfea by At F.T. 


Closing Change Bid/offer Da/* mid On* month Tin* months Oim yew JJ> Morgan 
mid-point on day spread high taw Rate %PA Ram SPA Rata MPA index 


Europe 

Austria 

Brigfcsn 

Denmark 

Retold 

Franca 

Germany 

Greece 

Ireland 

(toy 

Luxembourg 

Netherlands 

Norway 

Portugal 

Span 

Sweden 

Switzerland 

UK 

Ecu 

SDRf 

Ameri ca* 

Argentina 

Brazil 

Canada 


(Sell) 120750 -04125 725 - 77S 12.1070 120475 1209S2 -20 121225 -14 12148 -04 

fBfr) 354100 -a 04 9DD-3G0 353900 352680 3X39 -27 3S.S1S -24 35845 -14 

(DKr) 6-6350 -0.0075 925 - 975 6 7140 6.6898 6.71 -27 6.731 -22 6.7775 -14 

(FM) 54366 -04022 316 - 416 54626 54260 54aiB -1.1 544SB -14 5.5866 -25 

(FFrt 54289 -0-0076 275 -302 56477 54200 58432 -29 5863S -24 54032 -14 

(Q) 1.7155 -04029 152 - 157 1.7210 1.7135 t.7192 -26 1.7242 -20 1.7314 -Q.9 

V» 248.600 *0.15 500 - 700 249490 248450 25225 -T7.6 259.1 -16.9 2874 -157 

(IE) 14255 -0.0034 240 - 270 1.4312 1.4240 1.4222 28 1.4171 24 1.402 1.6 

(L) 1689.05 +0.12 630 - 980 169325 1687.92 169625 -5.0 170845 -4.5 1748.05 -3.5 

(Lft) 354100 -4. 04 900 • 300 353900 352880 3549 -27 35415 -23 35.B4S -1.5 

(FI) 1.9258 -0.0028 253 - 263 1.9353 1.9235 1-9288 -14 14326 -1.4 1.937 -0.6 

(NKr) 7.4320 +04008 295 - 345 7.4585 7.4290 7 4402 -14 7 453 -1.1 7.4595 -0.4 

(Ea) 176450 +0.6 200 - £00 176550 175.770 17749 -6.4 17845 -59 1844 -45 

(Pta) 141455 +0495 230-280 141.350 140760 141 855 -5.1 142.85 -44 146455 -OS 

(SKr) 75945 -00008 9C8 - 981 50303 79808 50188 -3.6 5056 -3.1 5157 -20 

(SFr) 1.4370 -0.0017 365 - 375 1.4399 1.4335 1.4377 -OS 1.4377 -64 1.4295 OS 

(E) 1.4875 -09031 872 - 677 1.4913 1.4870 1.4855 IS 1.483 14 1.478 OS 

- 1.1277 +O0G06 272 - 282 1.1297 1.1247 1.1249 34 1-1203 26 1.1087 IS 



» r — » - J MO -I 

C*HL8d.olR*.«rfCt»urtho1to^«d* 

nsuDwh Bin™ 

CatFtod +51 tB J* *~*g 

7-dnAnd + 52 03* *W MM 

SwonPrad- +» Ifi 13E 

Defer taa \m am a-wn 

1EHM* +n *» *-+■* 


(Peso) 09990 -00002 930-000 1 COCO 09980 

ID) 695035 +10.7 030 - 040 693.100 699430 

(CS) 1.3558 -0.0031 55S - 560 1 3563 1 3555 


1456 -04 13566 -04 1.3606 -54 


Masco (New Peso) 34530 *0415 480 ■ £80 34580 3 2480 34548 -0.6 34574 -OS 3466 -OS 

USA (S) - - - - • - - 

PacHcTMkkfle EaatfAMce 


Australia (AS) 14942 +0.004 937 -947 14966 ! 3868 13952 -09 1.3981 -1.1 1.4056 -OB 

Hong Kong (HKS) 7.7285 +0 0003 280 - 290 7 7299 7.7280 7 7292 -0.1 7.7333 -04 7.752 -03 

India (Rsl 31467S -00038 650 - 700 31.3700 314650 31.4325 -25 31 5875 -28 

Japan (V) 10542S -0625 190- 260 ICS. 750 105 070 10S.1I 14 104 8 18 103.025 21 

Malaysia (MS) 27225 +00008 220 - 230 27230 27170 27165 28 27 34 2772S -1.8 

N«w Zealand (NZS) 1.7339 +0.0027 331 - 348 1 7348 1.7280 1.7356 -1.1 


PhAppnes (Peso) 27.6250 +0425 500 - 000 27.8500 27.4000 

Saudi Arab* (SR) 3.7495 -0.0005 492 - 497 2 7498 3.7492 

Singapore (SS) 1.5640 -0 0008 835 - 645 1S854 1.5833 

S Africa (Com.) p=q 3.48*3 -0.0035 836 - 850 3 4955 3.4720 

S Africa (Fin.) 01] 4.5925 -0.0475 875 - 975 4.&4G0 J 5650 


105.11 

12 

1048 

1 6 

103.025 

2.1 

146.0 

2.7165 

2.6 

2.7 

32 

2.7725 

-1.8 


1.7355 

-1.1 

1.74 

-1.4 

1.7542 

-12 


3 7519 

-08 

17563 

-0.7 

3.775 

-0.7 


1.554 

00 

1284 

ao 

1.6075 

-15 


3-4388 

-13 

3.5276 

-60 

3.8248 

-40 


4.6235 

-8.T 

4 6875 

-8.3 

- 

- 


81125 

-42 

814.75 

-3 2 

83325 

-3.1 

- 

262375 

-4.7 

26685 

-3.8 

- 

- 

- 

25 38 

-32 

25.52 

-33 

2526 

-1.4 

- 


eposs RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 


tSDH rale Hr Ua 7. Bd offer spreads n Die Oo3 >r Spc fetto vx» orfy toe last ciree deem paces. Forward raw are not dtaedy quoted to toe msrkM 
but are iinpSed by amr meiM rates. UK. Ireland A FCu are zuofed at US curacy. -IP Motpn moots ohawi tm Mar 7. Ban twa gt 1990-100 


EMS EUROPEAN CURRENCY UNIT RATES 


Bank of Maui Hob tatnaat Okiim Acc „ 
cum* |3Joa ittslisrel » 

tUMHUH lAISllK+i » 

Bank of Scotland 

38 rawefeto tois+tapaw on-eoi+uo 

wnuDtooai. ( iso :es I mb 

csj»-«+a.sa» — 1 in ati I scrl t*« 

rauum* lut ini s.tzl 

Bvcteys Setoct 

raita IA.WMMOBI to Pk, Conte raau+oowa 

(2MM9.H 400 300 + U4 fee* 

tia.aoo-cw3M +ra 390 + Wi 

mmo-cow*-.. sw n too from 

in w 

(MOOaOk sso +.11 ssa wartr 

BardaM Mint Account KLCJL 
rni»i, fn irnimtu tmn.w 

nooo-c.199. . _ |r» i» rw » 

R5co-n.«M — _ I ?js ira] i;.'j wr 

riou»-o+^«i I are me iraj 

IZVMIr.. - _ I 3 33 25> I Mil OV 

Brown Sbipfcy 8 Co ltd 

rwen dutLenw* unto US on-Wd MU 

MCA — 1 +00 100 1 +07 1 00 

PMDaflUMAY .1+00 IDO I tori to 

Catofentan Bank Me 

■ aMMaMw+EMnnocae otissasus 
mca _l+« uoal -liwitr 

Cato Allen ltd 

a todm lax*. Lenta ici/HU 0fi-6.‘lMfH 

MCA— 1.1 2*1 I Jilt MB 

CmoRra.au am- .[+« 337 I 499 MU 

awnwe-. - ... 1+97 - l +901 Ml 

CfcarfariMotaBjok Limited 
H’atmmtitar.iC+umi o;i z+i+oh 

C2J00-CI9.M9 ITS 2*1 392 HO 

_ +M 300 +97 HU 

rsoooo-siMitoa +29 ] ia ++i Uto 

CIOC.OOO- +30 33* +9* M* 

I5uuoto.ra IH i.n 151 HU 

SSMM»4m.1»J JOB IJHJ 202 WB 

sroaoexk- jiao ran . :a in :s w 

92IAIHU+. 2sa m n 


CMs9d*te Bank IWM SoteHon Ace 

30 SI Wocwl PUc*. Unqm G1 3C MI-3+9 ra.91 
nO.lMO-tS.9M.--. I till 3iB I 3/3) (V 
130*00-199.999 — , [ 3 79 291 [ 1*0 1 Or 


trcMUatr +rc (5000+ ]H 79> 

rtaarj, 1+50 1A( 

UT.3W. . _ _ iSOO 279 f 
tM.«UO+ - - -| 3*0 +13 1 
ltS4A ... l 329 - I 

Knflomikte BUg Soc - BatemaatowatK 


Mar8 


BFr 

DKr 

FFr 

DM 

K 

L 

Ft 

NKr 

Es 

Pta 

SKr 

SIV 

£ 

CS 

S 

Y 

Ecu 

Brigham 

(BFr) 

100 

1826 

1621 

4.899 

1288 

4783 

5.455 

2124 

499.4 

4000 

22.84 

4.071 

1.904 

3240 

2233 

298-0 

2211 

Danmark 

(DKr) 

52.74 

10 

8.706 

2263 

1248 

2522 

2277 

11.10 

263.4 

2112 

11.94 

2.147 

1.004 

2.025 

1.484 

157.1 

1.324 

France 

(FFr) 

6028 

11.48 

10 

2243 

1204 

2697 

3204 

1 £75 

3022 

2422 

13.71 

2.488 

1.153 

2.326 

1.716 

1602 

1221 

Germany 

(DM) 

2028 

3202 

3287 

1 

0409 

984.3 

1.123 

4230 

1022 

8223 

4259 

0838 

0392 

0790 

0283 

61.32 

0517 

Ireland 

(W 

50.31 

9239 

8205 

2.444 

1 

2408 

2.744 

1058 

2512 

2012 

1126 

2.048 

0958 

1232 

1.425 

149.9 

1263 

Italy 

W 

2.091 

0298 

0245 

0.102 

0242 

100. 

0114 

0440 

1044 

8.364 

0473 

0285 

0.040 

0280 

0059 

6230 

0.053 

Nefterianris 

(R 

1823 

3A7B 

3226 

0291 

0384 

8708 

1 

3257 

91.55 

7323 

4.150 

0746 

0248 

0704 

0519 

54.62 

0460 

Norway 

(NKr) 

47.53 

9.013 

7248 

2210 

0245 

2273 

2293 

10 

237.4 

1901 

10.78 

1.935 

0205 

1225 

1247 

1412 

1.194 

Portugal 

(E9) 

20.02 

3.797 

3205 

0.973 

0398 

957.7 

1282 

4213 

100. 

8010 

4233 

0815 

0281 

0.769 

0567 

59.66 

0503 

Spain 

(PW) 

2500 

4.740 

4.127 

1215 

0487 

1198 

1284 

5258 

1242 

100 

5.659 

1.018 

0476 

0250 

0.708 

74.49 

0628 

Sweden 

(SKr) 

44.17 

8278 

7292 

2.148 

0878 

2113 

2.410 

9294 

2206 

1707 

10 

1.738 

0.841 

1.698 

1251 

1312 

1.109 

Switzerland 

(SFr) 

2427 

4258 

4255 

1.194 

0488 

1175 

1240 

6.168 

122.7 

9027 

5261 

1 

0466 

0943 

0.096 

7320 

0617 

UK 

« 

52.52 

9.959 

8270 

2252 

1244 

2512 

2285 

1125 

2B22 

2101 

1129 

2.138 

1 

2.017 

1.488 

1562 

1219 

Canada 

(CS) 

26.04 

4238 

4298 

1255 

0518 

1245 

1.420 

5.478 

1302 

1042 

5.805 

1.060 

0498 

1 

0738 

77.99 

0.654 

US 

« 

3520 

6.683 

5.827 

1.715 

0.703 

1888 

1225 

7.420 

1782 

1412 

7.991 

1.437 

0672 

1256 

1 

1052 

0886 

Japan 

(Y) 

335.6 

83.64 

55.40 

1031 

0871 

10051 

1821 

7061 

1878 

1342 

75.97 

1326 

6290 

1229 

9208 

1000. 

8.428 

Ecu 


39.82 

7.SS0 

8273 

1235 

0792 

1904 

2.172 

8278 

1982 

1592 

9.014 

1.621 

0.758 

1.529 

1.128 

1107 

1 


MarS 

Ecu con. 
rates 

Rate 

against Ecu 

Change 
cn day 

K+/-lr om 
can. me 

% spread 
v weakest 

Intend 

0808628 

0790853 

♦0002589 

-220 

527 

Netherlands 

2-19672 

2.T7355 

-0.00192 

-1.05 

4.35 

Germany 

1.94864 

1-93557 

-000189 

-072 

4.00 

Belgium 

402123 

39.8517 

-0.0352 

-090 

4.18 

Franco 

523883 

6.57835 

-00045 

080 

2.82 

Denmark 

7.43679 

7.55770 

-000346 

1.63 

128 

Spain 

154250 

158228 

-0341 

2.84 

029 

Portugal 

192-854 

199.112 

+0.849 

324 

0.00 

NON EHM MEMBERS 





Greece 

264213 

280429 

♦0095 

622 

-2.61 

Kriy 

1793.19 

1907.11 

+325 

825 

-222 

UK 

0786749 

0757B32 

+0.001586 

-328 

7.18 


CIOO.lXU'ClMiSM.- .1 }09 £93 1 3991 to 

Dm to-oparath* Bank 

raiimaaa.SMinwsiwt.im9 omstsmm 

ItSSA (325 -I -IfeWI* 

SStfli ^- B ?IR59** , M* 1 332la-*ta 
cuoD-c+am. - +sa mo I +Mjd-tai 

tiaj»-C 2 +.<na— . +oo am +*tlo-M«i 

re.000-C9.KH I 279 225 I 3i»l0-UI> 

Wollw-tato i A rr t fetobra 

C5IVDOO+ .7m. 75 291 I 17B B-+m 

£?3300-e«^W 129 24+ 32S S-+OK 

IS.009-a.9W _ I 223 1 99 I 229 Into 


C2S0W9+- ... 

eso.om-cjw.W9. . 
ciaom-ra9ffi — 

CSOO-SM99 

jo-gacbrntoi 


.. ^T+M^ 3 

w*. . am 2 

B 27S 2 

.1 225 1 


239 I +95 mm 

2 30 1 am fl-+m 

20* I 277 0-MR 

ml z» t+m 

M991+B9U29 


ra«AU> 3+0 +ia 3*0 +MMl 

□0.mi4MH. ... 300 ira ino fewn 
rraa» _ . « so ua +u fee* 
crenu^tun. _. am :*a am few* 

i2.3dd-ia.9M. ... 250 1M 790 feW> 

Bw Bro fttra UwttaO Btetk— __ 

MdenuniWML LWOWICZU90I 0rt+Eni>9+ 
ftiniw arCmiArawtl +71 J»] <03 m 

MWMK OBfeAoM | + M 339 +93 to 

MitooWtotoa t +73 3 IB I 4is! « 

Royal Bank d SeeVand rtc ftunlun tea 
«:5+MMwy*idtaamiDcnr oi-wiw 

nanu- . *eo in +m to 

csjra-rnM... +aa m jh uh 

naefu.rM.na9. soo :zs I tot I w 

ra.»MM-ra.Q«., .. am t so aoM to 
IZ.JOO - lA'JVS 190 111) 1511 to 

CMWAdtoM . , I 273 201 IE Oto 

ItSSAfaedl few . —1 1BU - +00 Mil 

USOAfertuM 1403 -I +79 1 Ml 

MMBflNnttMlrMlI 3923 2>I9 mnl Or 

MMwnhaaMict I am sata aaai( to 

MMfuro,.. . . 3*73 2909 UK] to 

NMACioouoto .... I can atm +om to 
tyeMiccM 1 +379 - +++rl to 

uuCTnitt United 

t Qe+tCa n fe dfe d W. LatatWlH 7AL 07I-2S90CM 
crama-fUdfetoka I ora 3U« s« i w 
iio+’oo-imMWKe- 1 790 sju tmIamh 

C23M0- 1 mwr Ira 3+4 I -lltalf 

UnBod DooMm Tm*t Ltd 

TO tat I m CootoMn m. Baen. hwik t w oto 

CulMranCHWwAoaMf 

CI*0B+_ f + 75 339 I «**l to 

J. Htray Schrodor Mnl Co LM _____ 
120CMMMR London HTBSOS On-jeZWMH 

SbkMAcc ^.| +M 330] 4S7] (to 

tHUMOwHaMn — 1+79 3H I +5)1 Mm 

tlMOO.- 1+3 339 +*+] « 

rajnMi+9t»_^-|*» an I «a to 
njOOO-C+WI .. . -I 4 23 319 1 4321 to 


■ms- Oraac UMMM im of Mwd mm, m 


Btot ISM ke we * 

BU WZUM Of OUWWlFWMM a* mm 
one* a yur. xanpawtof MW Rut' MCnrntowafe 


Ten per I .*». Oanisti Kroner, French Franc; N orweg ia n Kn 
■ D-MARK FUTURES (lMM) DM 126.000 par DM 


I SwadWi Krenor per ' 


i Franc. Eacudo. Lira i 


I Yen 124 per Yon 100 


Open 

Latest 

Change 

High 

Lew 

EsL yoi 

Open bit 


Open 

Latest 

Change 

fflgh 

Low 

Est. vd 

Open int 

0.5809 

0.5828 

+02020 

02833 

02809 

51249 

88,5916 

Mar 

02473 

09496 

+02038 

09505 

02443 

53,724 

72.798 

02780 

0.5800 

+0.0019 

02805 

02780 

48,153 

49.130 

Jun 

09514 

0.9538 

+00040 

0.9543 

02498 

22293 

23268 

- 

02780 

- 

05780 

- 

44 

2v489 

Sep 

02587 

02585 

+02035 

02587 

02585 

54 

1,153 


Ecu central raws set by tbe European Cornrawon. Cuienoesaie ki descendng maOve toenglh. 
Ptruroage chargea ore tar Ecu; + pcsawi change denotes a wot* annney. Credence snons Bro 
rate between two ur c ada ; die pwiagr dJIwence between ine actual irahra aid Ecu central rotoe 
tor a cunrtcy. ard me meenun p+mstad paroenoge dorinoon of Du curacy 1 * mortar race item da 
Ecueararalnu. 

(i7to3Q Surang and ttaun Ua suspended ton EfM. A«*m nert colciAaM by Dw Ftn andJ Tiroes. 
■ PHILADELPHIA 38 C/BI OPTIONS E31J250 (cents per poraid) 


SWISS FRANC FUTinma (IMM) SFr 125400 per SFr 

x 0.6950 0.0960 +0.0019 0.6671 08960 1S£67 38451 

in 0.6939 0.6960 +04022 04968 04936 20^41 17,784 

V - D4965 - 08965 - 3 94 


fQRtD 'INTEREST -RATES 


MONEY RATES 

March B Ovm One Three Six. One lamb. Ota. Repo 

night month mths mtha yoar Intar. rate rate 

Belgium - 8J 84 0* 7.40 5.00 

week aga - 6( 6j 614 7.40 540 


France 

6% 

6% 

6W. 

64 

SB 

8.10 

_ 

7.75 

woek ago 

6% 

6% 

6 V. 

8% 

5% 

6.10 

_ 

7.76 

Germany 

625 

620 

525 

5.72 

5.48 

6.75 

5.25 

527 

week ago 

6.13 

8.00 

5.85 

5.65 

5.42 

8.75 

525 

6.00 

Ireland 

6i 

6K 

61 

64 

6% 

_ 

_ 

6.75 

week ago 

6i 

6M 

61 

64 

61 

- 

- 

6.75 

Italy 

8% 

83 

8K 

B4 

61 

- 

a oo 

6.S2 

week ago 

9iJ 

8i 

84 

8% 

61 

- 

8.00 

822 

Netherlands 

5.53 

5j41 

524 

5.16 

5.11 

- 

025 

_ 

week ago 

5.61 

5.41 

520 

520 

528 

_ 

525 

_ 

Switzerland 

414 

414 

44 

4 

33 

6.625 

4.00 

_ 

week ago 

4V. 

4V4 

4fe 

44 

4 

6.625 

420 

_ 

US 

JU 

34 

33 

44 

4M 

_ 

3.00 

— 

week ago 

3% 

3i 

3% 

3% 

4V4 

- 

3.00 

- 

Japan 


2i 

2M 

2H 

2H 

_ 

1.75 

- 

week ago 

2i 

21 

2'A 

2Mi 

2% 

- 

1.75 

- 


■ STHUNQ WmtHteSQMM)E62^00p8rC 

Mar 1.4896 1/1894 +00002 1.4900 1.4880 9,706 27,100 

Jun 1.4856 1.4848 -00002 1.4856 1^836 11460 14,067 

Sep 1-4830 1/1830 +04008 1.4830 1.4830 131 570 

Dee - 1.4804 -00008 - - 10 18 


a (UFFQ* DM 1m polnta cd 100 % 

Wgh Low Eat vof Open Int 

94.20 94.15 15864 151431 

94.60 94.51 27964 227446 

94.86 94.78 25724 161627 

95.00 94.89 31131 152462 

HiTUHteS (UFFE) LI 000m polnoi of 100% 
High Low Eat vd Open Int 

91.80 91.70 3703 28594 

92.15 91.93 7274 54811 

9235 92.18 2998 22S38 

95L48 9226 4642 38262 

wnilHteS (LFFE) SFrlm points of 100% 


Stnko 



- CALLS ~ 




— PUTS — 



Plica 

Mar 

Apr 

May 

Mar 

Apr 

May 

1.400 

6.70 

a 57 

828 

0.02 

- 

aie 

1A25 

625 

825 

S42 

0.02 

an 

0.44 

1AS0 

3.7B 

4.08 

4A7 

ao2 

0.44 

ass 

1j475 

1.43 

225 

225 

0.06 

1.14 

122 

1200 

029 

1.12 

1.71 

122 

Z41 

3.06 

1225 

- 

0.45 

0.82 

320 

4.16 

4.78 



Sen price Change 
94.16 -043 

94.52 -047 

94.78 -008 

9490 -0.10 

EUHOURA UfTJTATH 
Sett price Change 
9171 -0.09 

61.88 -0.14 

9222 -013 

9241 -015 



Open 

Sett price 

Change 

High 

Low 

Est vat 

Open Int. 

Mar 

95.96 

95.94 

-021 

9526 

9523 

3678 

23752 

Jun 

9022 

96.20 

222 

9824 

96.18 

4377 

28157 

Sep 

96.25 

96.22 

-0.02 

9626 

9022 

933 

6751 

Doe 

9620 

98.12 

-a 03 

9020 

96.12 

318 

4060 


! ItOtelfH KU HIT1M5 PJFFE) Eculm points Of 100% 


Ponfoua duyfe ML. CtBe S.ffiO Puts +.163 . Pro*, day’s open nu Qffa 820.174 Pun SS7J001 


UK INTEREST RATES 


LONDON MONEY RATES 

Mar 8 Ovw- 7 days One Three Sh One 

night notice month months moottia yex 

(nterijank Staling 6 ^ - S 5V - 5 5A - 5 * 9-5 5*a - 5 5'+ - 5*a 

Staling COs - 4* -5, 1 , 5* - 5i 5i - 5£ 5^,-5^ SA - 5A 

Treasury E 8 la - - 40 - 4^ - 4fJ 

Bank BBa - 40-4^ 40-4^ 4]j - 4^ 

Local aumorty daps. 5% - 5^ 8*4 - 5^ 5A - 5j« 5,’e - 6 ^ 5d - 5« S’* - 5(i 

Dfscount mate dope. 5k - 5k 5% - 5& 

UK deering bank base tending rate 5k per cent fron Febnjoy 8 > 1994 

Up to l 1-3 3-6 6-6 9-12 

inumh m onth imortha months ntoolha 

Cote of Tax dap. (Eiaa,ooc) H 2 4 3k 3L 

Carti of Tan dap. indarCIOdOOOit 1 *apc. Deposits ra B u t+n m far ernfl kpc. 

An lander rata ol OfacouU AjTBlpo. ECQO fcsod rate 30 jl EnpoR Ftanea. Malta up tar/ Febmuy 2B. 
189+ Agreed ran tor parted Mar 26 1894 to Apr 29. I89+. Schemes ■ A HI (UHpc. Ratorencerue tar 
potod ftb 1 . im+nPebZO. 1994. Schwnea WAV Sjaespe. Hronca Hauaa Swra Ftaa S* 2 pc ton 
Mari. 1994 

■ THRU MONTH S I BHU KO FUTURES (UFFE) £500400 Ptorta ol 100% 


Are you dealing in over $lm? 
Fast, Competitive Quotes 24 Hours 
on 071-329 3333 or fax 071-329 3919 


INVESTORS - TRADERS - CORPORATE TREASURiatS 
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38 DOVER STHEKT, LONDON WIXSR8 , 
TEL: 071 839 1133 FAX: 971 495 0022 


FOR TRADERS ON THE MOVE 

Watch the markets mow with the sown in your pocket Out receives 
Currency, Futures. Indices and News update* 34 hours a day. For your 7 day 
free Mai , call Futures Pager Lid on 071-835 9400 now. 

futures PAGERmmmm m 


m S LIBOR FT London 
Interbank Fixing 
week ago 
US Dollar CDs 
weak ago 
SDR Linked Da 
week ago 


3% 3» 4% 4J 

3% 3a 33 <4 

3.48 3-86 304 4.32 

3.48 3.57 3.85 4.21 

3% 3% 3% 4 

3% 3% 3% 4 


Open Sett price Change 
9272 9272 -0.01 

94.12 94.10 -0.03 

94.32 94 JO -003 

94,43 94.41 -0.04 

: Urns traded on APT 


Wgh Low Eat m* Open Int. 
03.74 9271 877 11376 

94.13 94.08 1347 11682 

94.34 94.30 744 S772 

94.44 94.40 312 6672 



Open 

Sett price 

Change 

High 

Low 

EsL val 

Open bit 

Mar 

9429 

94.87 

- 

9429 

94.88 

7221 

64289 

Jun 

9425 

9421 

-022 

9426 

94.89 

17245 

110361 

Sep 

9424 

9420 

-0.03 

9425 

94.79 

11474 

69626 

Dec 

94.65 

94.80 

■025 

94.68 

94.69 

20114 

99780 



■<te1|k9i(UteIte^ 


TAX-FREE SPECULATION 
IN FUTURES 


To meta yow tee Guide io bow yoor Ftoutd Bmtoratom MU 

r».oa Mchro t Mirny or bnjct*ta«» 0718 a 73 » otwibe 


ECU Untied Da ndd mum: 1 mdc a|: a mds 64; 8 ndta; 04: i year S3- S UBOB Intertonk Rdna 
cam ere odered rotes lor 910m queud u tho mertew by tour raiwance benka at 11am each woridna 
dory. The banka am Sankara Treat, Bank ol Tokyo, Barclays md Nadonal W ea trnk UM r. 

Abd ran wo Vum tor die daiwsdc Money Rauo. US 9 COs tod SOU Unkad Dapcato PsL 


Traded an APT. Afl Open intwesr figa. an lor pnvtoud day. 

■ SHORT STBOJHO OPTWHS (UFFE) £500,000 polnta Of 100% 


■ TM MOWTH BUROPOLLAB (BUM) Sim pgkite of 100% 










Open 

Latest 

Change 

Wfltl 

Low 

Eat. ml 

Open ird. 

EURO CURRENCY INTEREST RATES 



Mer 

96.13 

96.13 

♦021 

98.14 

96.13 

47,027 

309204 

Mur 8 

Shan 

7 days 

One 

Three 

Six 

One 

Jun 

95.88 

9671 

+ 0.03 

95.72 

96.68 

96295 

447.966 


term 

nodes 

month 

months 

moreha 

yaar 

Sep 

9521 

9524 

♦ 0.03 

96.35 

9921 

78270 

360233 

Belgian Franc 

6,i - B,» t 

Bi< • 6,1 

9,1 - 6,1 

6^-014 

6 Jb- 8% 

8A-8A 









Dan on Krone 

-s\ 

6>2 -8 

8I2-8 

BA - Bw 

BA - 51 } 

5 %- 5 H 

■ US TREASUHY BILL PUTUm (IMM) Simper 100% 



D-Mark 

Sit -6 

6lo-6 

BA - 5 i 2 

ft-SV 

5 H • SA 

613 - 5 % 







— 1 


Dutch GuUar 

S% -SJs» 

5,1 - 5 ii 

5 k - 5 h 

SA -6,1 

Si* - 5 l« 

sA-bA 

Jun 

96.12 

96 . 1 ? 

♦003 

sa 14 

96.13 

3228 

28282 

French Franc 

0,« - 6 \ 

8,1 - sA 

6 % -Oft 

6U-6I9 

BA - SB 

Bit -511 

Sep 

95.78 

95.78 

+0.02 

96.72 

9628 

96 

5.746 

Portuguaae Esc. 

9*4 -9 

9 >a-Wa 

6 \- 9 k 

9*8 -»A 

913 - 9 H 

94 + >9 

Doc 

- 

95.45 

+025 

95.35 

9521 

22 

2,826 

Spanish Peseta 

BA ■ 8*9 

Blg-BA 

Bt 7 . - B(« 

BA- 8 V 

84 -ai* 

BA ’« 










Strife 

Price 

Mar 

- CALLS - 
Jun 

Sep 

Mar 

— PUTS - 
Jun 

Sep 

9475 

0.13 

022 

025 

001 

006 

020 

9600 

022 

0.09 

0.13 

015 

0.18 

033 

awn 

0 

003 

0.08 

038 

028 

051 


Di:‘! -or'i'-o,!: and Market Myths (or 1994 

h J ' a " de!la,l « n wl -' corM.nijc, sow's rr.otl commacJillcs 

" J ;U' Jopan’s economy S slock raa.kol will bo weak. Yea bid 
: n ■ (ho iccnoc(3;t: c invasrrrenl !ei!ei. 

■ - "-y W'ciyhadon (a- a '-,,-cr. only-, a 

' - V0 " Civ ^ ' 7“0. ’a: (oricn >’ -449 «+'f ' 


Onto son Puu 2159. Piwatoua toyfe apan Int, Cafe 305806 Puts 10+391 


Staling ; 

Swiss Franc * 

Can. CWtar ; 

US Ddlra : 

Julian lira 
Tan ; 

Asian SSovg ; 

Short i arm talcs lira ■ 


5 le - 5 ,*, 5 H . 5 ,’, 
4*9 “ 9 4 - 3 * 

*h - 3il 4^ - 4(4 
W 41# - 4 
8 I 2-8 - 8 

Z A ■ ZV 2 A ■ 2 it 

4-3 4.3 

mu day* node*. 


Al Opon tofennt Iff*, am tar pravtou* day 
■ RHtOMMPK OPIIOM DJFFE) DMIm pointe oMOOH 


?^ 5 SS 5 g^ 5 SgSBES 5 g^ 


Currency Fax - FREE 2 week trial 


BASE LENDING RATES 


STrfcf) 


- CALLS - 



— PUTS 

Price 

Mar 

Jlte 

Sep 

Mer 

Jun 

9400 

0.17 

0.63 

081 

021 

OOI 

9438 

002 

032 

059 

OH 

025 

9460 

OOI 

015 

040 

020 

013 


IMOOTH PBOfl FUTUR&S (MAT1F) Paris Interbank offered rata 



Open 

Sett price 

Change 

Hflti 

Low 

EsL vri 

Open ML 

Mar 

93.87 

9382 

-023 

93.87 

9182 

10602 

80278 

Jun 

9422 

9426 

-024 

94.33 

9425 

16290 

79.465 

Sep 

94.59 

9422 

-0.03 

9420 

94.50 

8230 

45.667 

Dec 

94.75 

0425 

-004 

94.75 

94.64 

10220 

29.869 

■ THREE MONTH EURODOLLAR (UFFE)* $1m potato of 100% 




Open 

Sett price 

Change 

High 

LOW 

Eat. voi 

Open ML 

Mar 

96.13 

96.12 

- 

9014 

96.13 

78 

5353 

Jun 

95.70 

96.68 

-0.02 

85.71 

85.68 

310 

4285 

Sep 

9523 

9520 

-004 

9523 

9523 

63 

2341 

Dec 

9421 

94.87 

-004 

94.93 

94.91 

227 

1508 


EoL aak total. Cafe 6011 Puts 3092 Pmtout toy'e op«n it, Cafe 30+332 Puls 194017 
■ BUBO BWI1SB PRAHC OmOBB (UFFE) SFr Impoinwo) 1QQ% 

Strike CALLS PUTS - 

Price Mar An Sep Mar Jim Sep 

9B7G 020 0.48 OJ52 0.01 003 005 

6600 a03 0.26 233 0.09 0.06 211 

9825 201 0.10 218 232 215 221 

EOL KtL mat. Cats 0 Putt 2 fV owoua day*! aptn mt, 0H> 2118 Putt 3808 


Adan&Conpany — 523 

ABadTiuatSenk -523 

AI8 Bft* 525 

•HanryArabachor 525 
Bank of Bomb 525 

Barco EHbaolfesjya- 525 

BarfcofCypnis 525 

BankofMand -.525 

Bark Of todta 525 

Baric of Scotland _52S 

BflrtteySBte* — 525 

MBkcfMdEaat.... 525 

•Brown SHpfey .525 

CLBarkNeasriaiO— 525 

OtfcartcNA 225 

Qydesdaia Bank -525 

The Cbopentoe Bar*. 525 

CcwfeACo 526 

Credt Lyonnais 525 
Cyprus PogulS' Bank -525 


□uncteiLawria.. 525 

Bata Bank LWtod_ 625 
FVwnciai* Q«iBor*„ 6 
•Bobcat Fientog&CO- 525 

Girobank — S25 

•Qulraiesa Mahan — « 525 
Habto Bank Afi Zurich. 525 

•Hantoos Baric 529 

HarfeMa & Gen bw Bk. 525 

•HaSwnuel. ->S 2 S 

C. Houma Co..-. 526 

Hongkong AShfeighaL B2S 
■khan Hodge Bank ..„ 525 
•UapokfJassNi & Sara 523 

Lloyds Baric 525 

Moghfsj Bank Ltd 523 

UdtendBank -525 

* Mount Banking- 6 

NflMMminster 623 

•flMBttfwa 625 


"Badurghe Guarantee 
CarporaHnumtelisno 
tongurauthorisodaa 
a baking i raauaon. 8 
BoyalBkafSoafand- 526 
•Stoli & VWbran Sees . 525 

Standard Chartered S25 

TS8 — 525 

•UribOd Bk Of KWo*-_ 525 
UnbyTiuB Baric Pt_ S2S 

Western Tiust 525 

WHfeaaqtLririM..-. 525 
YorhshbaBark 526 

• ManbWB of British 
Merchant Banking 5 
Securities Houses 


Ire , ti Char; Aral, -sis trd 
7 S'.',;!|a,v Strecr. London '.VlR 7KD. UK • 
exchange re'e specialists lor over 20 


o:/ Anno Whitby 
Tel 07) -734 7 : 73 
fax: 071-439 4946 

a r -V.39A Vo+.Rui 




CURRENCY MANACKMIiNT 
CUKPORATKIN flc 
W bxhcunHoaK 
77 London WaK 
LoofeaECMSKD 
Tot 071.183 4743 
Pta 0114824487 









WEDNESDAY MARCH 9 1994 


TT 


.W- 


** 


7TTTTT 







aso 

-18 

8U 

496 

822 

-48 

77S 

484 


7?E 


~ pat/ mm -iso 


2JS0 +10 

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Dow Jonas InL Div. YMU 

8 a P M Ota. yWd 
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36 


FINANCIAL TIMES WEDNESDAY MARCH 9 1 W 


* pm dose Man* 8 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


mm 


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lyriiM 00616230 2ft 


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a. 


aa -. aitV .- v ’ f , r 1- -71 

































FINANCIAL 



AMERICA 


Dow eases as airline 
stocks turn lower 


Wall Street 


US share prices were flat to 
weaker in light trading yester- 
day morning as stock market 
investors took their cue from 
an uninspired bond market. 
writes Patrick Harverson in 
New York. 

By 12^0 pm. the Dow Jones 
Industrial Average was down 
4.50 at 3,851.72. but off its tow 
for the session of 3,842.72. The 
more broadly based Standard 
& Poor's 500 was also little 
changed near the half-way 
mark, off just 0.63 at 466.28. 
while the American Stock 
Exchange composite slipped 
0.74 to 468.32 and the Nasdaq 
composite shed 3.29 to 791.76. 
Trading volume on the NYSE 
was 159m shares by 12.30 pm. 

After achieving impressive 
gains on Monday - when the 
Dow climbed M points - the 
stock market was unable to 
maintain its upward momen- 
tum when trading opened yes- 
terday. This was in spite of a 
Arm start for bonds, which 
edged higher in the expecta- 
tion that the Federal Reserve 
would not raise interest rates 
soon. 

Analysts said that, in the 
absence of fresh economic sta- 
tistics, there was little motiva- 
tion for Investors to buy 
stocks. 

Consequently, as soon as 
bond prices started to decline, 
turning an early quarter-point 
gain on the benchmark 30-year 
bond into a quarter-point loss 
by midday, stocks quickly fol- 
lowed suit 


The declines were most pro- 
nounced among Nasdaq issues, 
primarily because they have 
outperformed the wider market 
in recent days and so were due 
for some kind of sell-off. 

Among individual sectors, 
leading airline stocks were 
notably weaker after Pruden- 
tial Securities, the Wall Street 
brokerage house, lowered its 
1994 earnings estimates for the 
five airline companies it cov- 
ers, citing a new round of fare- 
cutting in the industry. 

The news left Delta SI lower 
at $47%, AMR (parent of Ameri- 
can Airlines! dawn $1% at 
$61 %, UAL off $% at $127%, and 
Atlantic Southwest (which is 
traded on the Nasdaq market), 
$1% weaker at $32. The only 
stock to buck the trend was 
USAir, which held its ground 
at $9, having already suffered 
from heavy selling on Monday 
when it issued a profits warn- 
ing. 

Varity jumped $3% to $47% in 
busy trading after the automo- 
tive, agricultural and Indus- 
trial machinery maker 
announced a surge in fourth 
quarter profits to $27m, a 
result that exceeded analysts' 
expectations. 

Some of the bigger cyclical 
stocks were mixed. Alcoa fell 
$1% to $74%, Minnesota Mining 
& Manufacturing eased $% at 
$104% but International Paper 
put on $1% at $73%. 

On the Nasdaq, leading tech- 
nology stocks weakened, with 
Microsoft slipping $% to $80%, 
Intel easing $% to $70% and 
Apple Computer falling $% to 
$37%. 


Canada 


Peace talks obstacles trip 
up the bulls’ stampede 

Julian Ozanne on Tel Aviv’s change in fortunes 


A fter a bullish run of 
several months, the Tel 
Aviv Stack Exchange 
has entered a period of pessi- 
mism and caution as the mar- 
ket goes through a crucial 
period of adjustment driven 
by political and economic 
uncertainty. 

Since the boom of early Jan- 
uary the TASE has been 
through a mini-crash with a 
12.5 per cent decline on the 
Mishtanim two-sided index of 
the 100 most actively traded 
blue chip companies. The more 
speculative Karam index of the 
smaller capitalised companies 
has fallen about 27 per cent 
From a high of almost 259 
points in mid-January, buoyed 
by over-optimism about the 
peace process, the Mishtanim 
index closed yesterday at 
221.11, a fall of 0.6. Analysts 
predict that the market will 
take several months to recover. 

Driving this decline of the 
market are four major factors: 
fear or further increases in 
interest rates: a general feeling 
that the market was over- 
bought and making the shares, 
particularly on the Karam 
index, seriously overvalued: 
the exposure of some of the 
worst insider trading and 
share price manipulation since 
the 1983 bank shares scandal; 
and the political uncertainty 
surrounding the peace process 
and the stability of the fragile 
coalition government. 

"The market was long over- 
due for a correction," said Mr 
David Rosenberg, a market 
analyst at Pacific Mediterra- 
nean Investments. "But unfor- 
tunately several things came 
at once." 

The conditions for a decline 
in the market were set last 


December when the central 
bank, concerned about meeting 
an inflation target of 8 per cent 
for 1994, lifted interest rates to 
1Z.5 per cent as inflation 
reached 11.2 per cent. 
Although the market did not 
respond immediately, fear of 
further rate increases has 
haunted investors. Those fears 
will have been boosted yester- 
day following the publication 
of an International Monetary 
Fund report warning of the 
possibility of further rises 


Israel 


Mishtanim 100 Index 
260 



in interest rates to combat 
inflation. 

However, the real decline in 
the market started In February 
as big institutional investors 
announced that many shares 
were overvalued, the relation 
between financial results of 
companies and their market 
value was disproportionate, 
and the market was over- 
bought 

The movement or many large 
investors away from small 
Karam stocks towards larger 
capitalised Mishtanim stocks 
coincided with the revelation 


of an investigation by the 
Securities Authority of share 
price manipulation by brokers 
and fund managers and the 
subsequent arrest of three 
portfolio managers and the 
investigation of at least a fur- 
ther six. The impact of both 
these developments was felt 
most heavily on the Karam 
index, where shares were most 
overvalued and also more eas- 
ily subject to manipulation. 

Also, the peace euphoria 
which characterised trading 
throughout the August-Janu- 
ary period finally ran out as 
talks with the PLO became 
bogged down. The massacre of 
Palestinians by a Jewish 
fanatic in Hebron two weeks 
ago, followed by the suspen- 
sion of PLO-Israeli talks, deliv- 
ered a final crushing blow to 
investor confidence. 

"This is a peace market," 
said Mr Goldberg. “Everything 
hinges on that The future eco- 
nomic development of Israel is 
contingent on the peace pro- 
cess and the market closely 
reflects that” 

Although recent new issues 
just about mustered a subscrip- 
tion, poor conditions on the 
market have led the govern- 
ment. to postpone for five 
weeks the sale of Shlkun ITPi- 
tuach. a state-owned property 
development company valued 
at Shklbn, until later this 
month. 

However, many analysts 
believe the market has swung 
too low and that the recent 
decline is only temporary and 
should be put in the context of 
the fact that the Mish tanim 
Index has climbed 785 per cent 
In the past five years, having 
weathered four major falls but 
then quickly recovered. 


FT^ACfUARIES WORLD INDICES 


EUROPE 


Weaker bonds unnerve bourses 


Toronto was lower at noon as 
the market awaited the govern- 
ment of Canada's T-bill tender, 
which was expected to set a 
higher B ank of Canada key 
rate, later In the day. 

The TSE 300 composite index 
shed 1R86 to 4,417.79 In volume 
of eased 3.70 points to 4432-90 
in volume of 34.3m shares, 
against 35.8 the previous day. 

Rogers Communications 
class B was up C$% to C$22% 
ahead of the group's annual 
meeting later in the day. Rog- 
ers said on Monday it would 
respond a timetable set by the 
US Federal Communications 
Commission for its proposed 
bid for Maclean Hunter. 


SOUTH AFRICA 

Industrial stocks stormed to 
their third successive peak in 
hectic trade yesterday, taking 
the index 108 higher to 5JJS0, 
as bullish sentiment was 
driven by strong demand from 
foreign investors, notably 
newly established South 
Africa funds in the US, writes 
Matthew Curtin in Johannes- 
burg. 

The industrials sector car- 
ried the overall index to a new 
high of 5,118, np 46 on the 
day, as major mining financial 
counters also notched up 
sharp increases, led by Anglo 
American, which added Rl at 
R228.50 for a cumulative R38 
advance since Monday last 
week. The gold shares index, 
however, shed 27 to 1,884. 


Bond market weakness 
troubled a number or bourses. 
writes Our M arkets Staff. 

FRANKFURT tried to ignore 
bunds as it majored in chemi- 
cals and banks, but in the end 
equities had to concede a small 
defeat. The Dax dosed the ses- 
sion 15.1 higher at 2,124.04; this 
was actually 8-11 down from 
Monday’s post bourse close: 
and yesterday's attempt at an 
after-hours rally failed, the 
Ibis-indicated Dax ending at 
2,125.47 after an afternoon peak 
of 2,140.05. 

Turnover climbed from 
DM9. 4bn to DMIObn. BASF 
rose DM5.70 to DM311 and 
Hoechst by DM6.90 to 
DM315.50, respectively gaining 
DM4.50 and DM2L50 more after 
hours. Mr Harry Jaarsma of 
Dresdner Bank In Frankfurt 
said that dividend cuts of DM2 
from both companies compared 
with consensus expectations of 
DM3, and that there were 
strong recovery hopes for the 
sector from the second half of 
this year. 

Banks lost some of their fer- 
vour in the late afternoon but 
Commerzbank still ended at 
DM357, after DM361, following 
a session gain of DM8 to 
DM355. 

Expectations, ahead of 
today's repo tender, were that 
the rate could come down into 
the 5.90 to 5.95 per cent 
bracket, after last week's fall 


FT-SE Actuaries Share Indices 


Mar 8 

Hearty asciges 


Cret TC2U 11.00 1100 


THE EUROPEAN SERIES 
1X00 14.00 15.00 Qoso 


FT-SE EuctaCk ICS 145134 1453.19 MM. ao >45857 1458.57 1450.48 1481.18 14S9J3 

FT-2Efcrara*2K 151115 1513.00 151455 151067 1508.77 1511.60 1512.04 151116 


7 


Mar 4 


Ur 3 


Hjt 2 


Mat I 


FT-SE tartaric 100 M6&44 1428.41 1414JS 139360 1431 16 

FT-SE Emftack 200 151619 1488.48 1473.40 146308 148007 

Ebb cfca 1000 5&1C.9R- Xgt.'Sr IB - 1481.0. 3M - 1J11S9 tatt* W - 14JMJ - rSBS? 


from 6 to 5.97 per cent in the 
first variable bid tender for 
three months. 

PARIS drifted, waiting for 
the outcome of today's German 
repo tender. The CAC 40 index 
fell 3.46 to 2,216.43 and turn- 
over rose slightly to FFrtJJbn. 

Suez rose FFr8.20. or 2.4 per 
cent to FFr349.70 although the 
companied denied rumours 
that its insurance subsidiary. 
Croupe Vvctoire. was about to 
be sold, this time to BAT 
Industries of the UK. 

In the retail sector, Carre- 
four climbed FFr75 to FFr4.145 
after producing strong results 
following Monday's market 
close. Remy recovered FFr4 of 
Monday's losses to close at 
FFr233. following comment 
that Hong Kong’s higher taxes 
on spirits and champagne were 
less damag in g that bad been 
assumed. 

AMSTERDAM saw sellers 
coming into the market but 
generally managed to keep at 
hay the persistent nerves trig- 


gered by a weakness in bonds. 
Most shares managed to cling 
on to the sharp gains they 
made on Monday. 

The AEX ended the day 1.85 
points lower at 422.91. 

A significant amount of the 
action came from US traders, 
according to one broker. 

KLM took a knock from US 
selling and fell back 80 cents to 
FI 49.70. Conversely. US dealers 
were keen on Philips and their 
buying edged up the stock 30 
cents to FI 52-90. 

Hunter Douglas, which 
enjoyed positive sentiment on 
Monday, fell back on vague 
forecasts although results that 
although were in line frith 
expectations. Profit-taking 
weakened the shares further, 
and they slid FI 3.10 to FI 87.70. 

MILAN continued higher but 
the mood remained tentative 
ahead of the elections at the 
end of the month. The Comit 
index added &24 or 1.3 per cent 
to 609.23. 

Pirelli put in a strong perfor- 


mance but analysts said there 
was no nows to account for a 
rise of L71, or 3.3 per cent to 
L2.3JI. Benetton added LS99 or 
3.5 per cent to L26.728. 

The banks saw profit-taking. 
Credito Italiano shedding L4? 
to L2.629 and BCI easing L36 to 
L6.2S5. Telecoms issues contin- 
ued higher on hopes that the 
privatisation programme might 
be speeded: Sip rose L62 to 
L4.256 and Stet was L86 ahead 
at L4.756. 

MADRID followed the bond 
market lower, the general 
index e asing 2.64 to 338.46 in 
turnover of Pta29bn. BCH fell 
Pta85 to Fta2£30 on Monday 
evening's news that Moody's 
was considering a debt ratings 
downgrade for the bank. 

WARSAW advanced 2 per 
cent to a record high amid con- 
tinuing demand for local brew- 
eries in which German groups 
have taken stakes. The Wig 
index rose 299.6 to 20,760.3 
although overall trading was 
described as subdued. 

ISTANBUL slid 3.9 per cent 
in thin trading with many 
investors unwilling to take 
fresh positions due to uncer- 
tainties over the outlook for 
the economy. The composite 
index Tell 582.32 to 14.506.39, for 
a two-day loss of 7 per cent 


Asea, BBC 
shares up 
on rumours 


Written and edited by William 
Cochrane, Michael Morgan and 
Christine Buckley 


Shares of Asea and Brown 
Boveri, the founding compa- 
nies of engineering group ABB 
Asea Brown Boverl, have 
surged on the annual pre-press 
conference speculation that 
their directors will do the 
decent thing and order the 
conversion of their paper into 
a single unified ABB share, 
writes Ion Rodijer in Zurirt l 

This time, the speculation 
originated in Stockholm, driv- 
ing the Asea "A" shares up 
SKr20 to SKr53l on Monday, 
and by a further SKrf to 
SKr587 vesterdny when the 
Affirsvitrlden index dipped 
IO.0 to 1.527.6. Zurich arbitra- 
geurs mode sure that BBC 
bearers followed yesterday, 
showing a SFrl9 rise to 
SFrl.129 as the SMI index fell 
16.23 to 2.902.4. 

ABB officials yearn for a 
single share to bolster the 
group's multinational image, 
but the controlling families 
are in no hurry to create one. 

The Swedish Wallenbergs 
now cast 33 per cent of the 
Asea votes with only 20 per 
cent of the capital, while the 
Swiss Sctamidheinys speak for 
14 per cent of BBC with only 4 
per cent of the capital. 

In other Stockholm trading, 
Gambro was marked SKrlS 
lower to SKr399 in reaction to 
results. 


ASIA PACIFIC 


Taiwan sinks 3.4% as Kuala Lumpur rebounds 


Tokyo 


After gaining substantial 
ground on active buying by 
domestic financial institutions 
in the morning session, share 
prices met large-lot arbitrage 
selling and profit-taking, leav- 
ing the market only mar ginally 
higher on the day, writes 
Errtiko Terozono in Jbkyo. 

The Nikkei 225 index closed 
86.51 up at 19JS&39 after open- 
ing at the day’s low of 19,826.28 
and peaking at 20,090.71 in the 
early afternoon on active buy- 
ing of Nikkei 300 stocks by a 
UK brokerage. 

Traders said profit-taking 
ahead of the March book clos- 
ing seemed almost at an end, 
while some domestic institu- 
tions were starting to buy 
shares. 

“The supply demand situa- 
tion is becoming quite posi- 
tive," said Mr Nobuhiro 
Kaneda, general manager of 
Daiwa Securities’ equity divi- 
sion. He expects the Nikkei 225 
to close the month - the end of 
the current business year - 
within the range of 19,000 and 
21 , 000 . 

Volume totalled 320m shares, 
against 343m. The Topix index 
rose R22 to 1,616.32, while the 
Nikkei 300 edged up 1.92 to 
298-39. Advances led declines 
by 565 to 423, with 197 issues 
unchanged. In London the 1SE/ 
Nikkei 50 index was 1.31 firmer 
at 1,339.98. 

Mounting concern over the 
rice shortage prompted specu- 
lative buying of foods stocks. 
Hopes that Japanese consum- 
ers would eat more bread sup- 
ported bakery and flour mill- 
ing shares, with Yamazaki 
Baking rising Y50 to Y2.190 
and Nisshin Flour Milling gain- 
ing YTO at Y1.290. 

Frozen food and processed 
food makers were also firm, 
with Ajinomoto, the leading 
food company, moving up Y10 
to Y1.320 and NIchlrel, a large 
frozen food maker, advancing 
Y12 to Y719. 

Banks, heavily weighted in 
the Nikkei 300. gained ground, 
with Industrial Bank of Japan 
adding Y30 at Y3.280 and 
Sanwa Bank Y20 at Y2.190. 

Profit-taking depressed the 
motor sector, which was previ- 


ously higher on foreign buying. 
Nissan Motor, the most active 
issue of the day, dipped Y10 to 
Y874 and Toyota Motor 
declined Y10 to Y2.070. 

In Osaka, the OSE average 
rose 5.73 to 21.957.94 in volume 
of 99 _2m shares. 


Roundup 


Regional markets took diver- 
gent paths. 

TAIWAN plunged 3.4 per 
cent on stop-loss selling trig- 
gered by the market's failure 
to rally on Monday, the first 
day of trade after the central 
bank raised the ceiling on for- 
eign investment. 

The weighted index opened 
lower and sank for most of the 
session, ending 19091 down at 
5,456j>8. Turnover shrank to a 


moderate T$55.45bn from Mon- 
day's T$80.75bn. 

The financial sector, which 
had surged in recent days on 
speculative buying by big 
investors, dropped 4.3 per cent, 
with China Development los- 
ing TS7.50 at TS123. 

KUALA LUMPUR staged a 
strong rebound in the after- 
noon to close higher, helped by 
gains in overseas markets and 
news that the British High 
Commission in Kuala Lumpur 
had denied reports that Lon- 
don was contemplating retalia- 
tory action against Malaysia's 
trade ban. 

The composite index was 
finally 10.58 up at 1,056-30 after 
setting a low for the day of 
1,035.62 in the morning. 

Petronas Dagangan made its 
debut, the shares rising to a 


high of MS795 before closing at 
M$6.95. compared with the 
MS2.80 offer price. 

SINGAPORE recouped some 
losses on late bargain hunting 
after a slight recovery in 
Malaysian shares traded over 
the counter. The Straits Times 
Industrial index ended 3.56 
lower at 2,240.18 but after a 
day’s low of 2,221.96. 

HONG KONG finished 
sharply higher, aided by bar- 
gain hunting, but trading was 
thin as sentiment remained 
cautious. The Hang Seng index 
was finally 233.03 ahead at 
10,294.58, having jumped more 
than 270 points in early trade 
after an overnight rally of 
Hong Kong stocks in London. 

AUSTRALIA strengthened as 
556m shares were traded, with 
the All Ordinaries index fin- 


ishing 27.0 ahead at 2.171.7. 

NEW ZEALAND took its lead 
from Wall Street and the 
NZSE-40 capital index ended 
30.75, or 1.4 per cent, up at 
2.226.08. But turnover of 
NZ$39ni was only about half 
the level seen earlier in the 
year. 

MANILA turned back after a 
firm opening as weakness in 
Benpnes sparked other stock 
sell-offs. The composite Index 
shed 17.25 to 2.637.03. Benpresj 
lost SO centavos at 9.70 pesos. 

SEOUL slipped lower, the 
composite index declining 10.77 
to Shares made a slight 
recovery on a bout of selective 
buying of blue chips and issues 
with low price-earnings ratios 
towards the close, after drop- 
ping more than 14 points in the 
early afternoon. 


■WuSy compiled by The Financial Times Ud., Goldman. Sacha & Co. and MaWea i Secures Ltd. In con Junction with the Institute c I Actuaries and the Faculty of Actuaries 


NATIONAL AND 
REGIONAL MARKETS 
Kflurw 81 oorenOwMS 
show number of fnea 
of stock 





RCH71C 

DM 

Index 





FRIDAY MARCH. 
Pound 

Staffing Yen 
Index Index 



DO 

1993/94 

High 

LLAR INC 

1993/94 

Low 

IEX 

Year 

*9° 

(approx) 

US 

Dotiar 

Index 

Day's 

Change 

hi 

Pousd 

Sterling 

index 

Yen 

Index 

Local 

Currency 

Index 

Local 
% chg 
on day 

Grass 

Dhr. 

Yield 

US 

DoSar 

index 

Local 

DM Currency 
index Index 

Auet/afrj (£91 . 

...174.60 

22 

173.67 

11ELB3 

155.99 

161.44 

T.S 

380 

17082 

18095 

11384 

152.73 

15987 

189.15 

13018 

134.13 

Austria H7) 

186.61 

07 

185.60 

124.68 

166.71 

166.58 

07 

0.93 

135.34 

18488 

12382 

185.71 

165.44 

195.41 

139.63 

14578 

SeSgken (42) 

166.48 

12 

165.59 

111.39 

148.73 

145.13 

1.1 

3.93 

104.44 

163.69 

109.68 

147.02 

143.69 

759.08 

141.68 

141.88 

Canada (t07) — 

135.63 

09 

135.10 

90.88 

121.34 

133.SG 

0.9 

2.52 

134.62 

13382 

6579 

12086 

132.47 

14031 

121.46 

12220 

Denmark (32) . .. 

.......28907 

2.0 

287.62 

16003 

24038 

24528 

1.8 

084 

263.71 

26285 

17589 

235.78 

241 .04 

275.79 

195.66 

201.71 

Finland (22) 

... .152.88 

2.8 

152.05 

10128 

136.57 

177.70 

2.1 

0.67 

149.00 

140.23 

9538 

13381 

17388 

16572 

7002 

74.94 

Franco (99l 

176.96 

1.9 

176.01 

110.40 

158-09 

162.01 

1.7 

2.87 

173.75 

17286 

11589 

155.35 

159.32 

185.37 

14580 

108.42 

Germany IW) 

132 25 

31 

131.54 

88.49 

118.14 

118.14 

2.0 

180 

129.46 

12883 

8537 

115.78 

115.78 

142.38 

10758 

111.49 

Hong Kong (SfiJ 

410.07 

1.6 

407.67 

274.38 

36035 

40087 

1.6 

2.58 

403.60 

401.63 

26980 

36086 

40042 

50558 

233.84 

262.08 

(retond (Id) 

189.09 

0.4 

188.06 

126.52 

168.94 

18047 

0.6 

318 

18028 

18780 

12567 

16833 

18561 

20033 

137.81 

137.81 

Italy (69) 

74.86 

34 

74.46 

5009 

0068 

94,43 

2.4 

1.76 

73.13 

72.75 

4578 

85.38 

»» 

7593 

5521 

63.06 

Japan (469) 

152-30 

-1.2 

151.40 

101 M 

138.06 

101.90 

-0.9 

0.79 

154.17 

153.38 

10283 

13784 

102. S3 

105.81 

107.98 

107.98 

Maloywo (63) - 

.... -491.91 

-1.8 

489-27 

329.14 

439.47 

515.63 

-1.9 

1.44 

50098 

498.40 

334.14 

447.92 

52588 

621.83 

274.40 

277,76 

Mfcdco (IQ 

..228928 

OJ 

2257.07 

1618.35 

202731 

6033.83 

03 

063 

2261.31 

2249.87 

150523 

2021.78 

801058 

2647.08 

1431.17 

150512 

Motherland P6) ...... - .. 

20128 

2.1 

200.18 

134.67 

179.81 

177.14 

2.0 

3.00 

197.16 

19516 

13180 

17528 

173.87 

207.43 

161.44 

181.44 

Now Zealand (14) 

66.60 

-02 

6023 

45.90 

6128 

63.06 

-1.0 

3.60 

68.72 

8537 

46.83 

61.44 

6570 

77 JM 

4534 

4534 

Norway (23) 

199-42 

07 

198J5 

133. 43 

178.16 

201.14 

0-5 

1.58 

197.97 

10886 

132.04 

1 77.00 

200.23 

206.42 



Sngapore (4$) — 

334 07 

07 

332.27 

223.52 

280.45 

243.88 

07 

1.65 

331.86 

33015 

221.34 

298.71 

242.32 

37592 

213.67 

222-73 

South Africa (60) 

2S6.B1 

0JB 

255.23 

171.70 

22925 

26025 

13 

2.13 

264.26 

2S596 

16559 

22783 

25589 

28026 

161.89 

164.66 

Spain (42) 

146.66 

2.0 

145.66 

86.12 

131.01 

15038 

1.0 

3.74 

14380 

14008 

9591 

12557 

153.64 

155.78 

11533 

128.76 

Sweden (36) 

218.35 

1.2 

217.17 

146.09 

196.07 

258-44 

08 

1.45 

215.76 

21483 

14381 

192.91 

256.01 

230.02 

154.79 

16512 

Swittertand (49) 

184 90 

IS 

164.02 

11034 

147.32 

147.08 

1.8 

1-53 

16187 

161.13 

10503 

14481 

144.79 

175 SB 

111.01 

111.01 

United Kingdom (216) — 

....202.19 

08 

201.10 

13528 

180.63 

201.10 

08 

3.81 

20054 

19951 

733.76 

17930 

19561 

21496 

16548 

17031 

USA (SIB 

189.92 

05 

188.90 

127.07 

109.67 

189.92 

05 

2.78 

189.04 

18507 

12508 

160.01 

189.04 

10504 

17591 

18513 

EUROPE (745) 

17029 

1.5 

169.37 

113.94 

152.13 

163-60 

1.4 

280 

18780 

16834 

111.92 

15003 

18106 

178.58 

13588 

139.95 

M0rt8c(113) 

212.82 

1.6 

211.88 

142.40 

19013 

21B.33 

13 

122 

20984 

20546 

13576 

18735 

21558 

22060 

14085 

152.07 

Padftc Borin (722) 

16221 

-09 

161.34 

108.53 

144.92 

112J0 

-06 

1.07 

163.63 

162.79 

100.14 

14530 

11559 

10580 

11599 

11599 

Euro-Padflc (1467) 

165.42 

0.1 

164.53 

110.88 

147.78 

132,63 

0 2 

1.81 

18581 

18488 

110.19 

147.71 

132.34 

17078 

124.45 

124.45 

North America (B25) .... 

.....188.56 

05 

186.56 

124.83 

10067 

186.03 

08 

2.78 

18568 

184.70 

12383 

165S9 

185.13 

182.73 

17570 

17542 

Ewepfl Ex UK (530) .... 

14081 

1.9 

149.01 

10024 

13344 

14105 

1.8 

229 

14782 

14528 

9506 

131.44 

13591 

15573 

12002 

121.12 

Pad be Ex. Japan (253) ■■ 

....258.54 

1.1 

267.15 

172.99 

23088 

23061 

08 

286 

2SS82 

254-SI 

17083 

22573 

234.70 

29521 

164.34 

172.73 

World Ex. US (1652) ..... 

.166.91 

02 

188.01 

111.08 

149.11 

135.94 

02 

1.82 

16564 

16578 

111.14 

14599 

13059 

17051 

125.88 

125.66 

Wortd Ex UK (1955) — 

....170.00 

02 

168.66 

114.26 

162.68 

148.19 

08 

281 

17043 

169.66 

11387 

15038 

147.78 

176-58 



World Ex So. AJ. (21 10) 

. — 173.06 

03 

172.13 

115.79 

164.61 

131.98 

03 

2.17 

172.00 

171.71 

115.12 

15482 

151.49 

17538 

14571 

143.71 

World Ex Japan (170!) . 

.....188.71 

09 

185.70 

124.92 

168.80 

182.70 

08 

2.72 

18685 

184.10 

123-43 

185.45 

181.23 

19520 

18352 

163.08 

The World index (2170) . 

17355 

03 

172.81 

116.12 

16644 

162.83 

03 

2.17 

173.07 

17218 

11544 

164.74 

16533 

17587 

143.74 

143.74 


Cowan. The Financial Turns Unriea Qtftfriun. Sachs am Co. aid NatWast Seautou Umeod. 1887 
Latest orteas were wijratoMe tor Ms msoon 



ENCOURAGING SIGNS 


Latest results demonstrate the strength of the Hays businesses and the success of our 
policy of seeking leadership in our markets. 

Our established distribution networks in the UK and those acquired in France and 
Germany make Hays a leader in European logistics. The Commercial operations continue 
to grow, with Britdoc remaining acknowledged leader 
in business mail services. Our Personnel activity has 
grown vigorously and has been further strengthened 
by the acquisition of Modus, a key niche specialist 
in the placement of IT staff. 

We face the future with confidence. 



If you would be Intereaird in i copy of the 1994 Interim Suunnentirteaae contact David B«Wey. Hay* plx Hay* Homf.MIUnumil. Guildford. Surrey t-, 

Thi* ■dwrtwMWBi tuu deem approved by Touche Rom A Co. who arc authorised to corn- on Investment twain*** by the lulitiuc of Chartered Acem.L. Tl 302203. 

’vnianu in t.nifiand and Wale*. 



» -* «L £ 

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